Rating Reform (Hansard, 2 July 1986)

§ 2. Mr. Hirst
asked the Secretary of State for Scotland what representations he has received on the Government's proposals for rating reform; and if he will make a statement.

§ The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram)
Over 300 representations have now been received from individuals and a wide range of organisations.

§ Mr. Hirst
Does my hon. Friend agree that there has been a broad welcome from the business community, which sees the reforms as helping to redress the appalling imbalance in business rates north and south of the border? Is he aware that the business community also warmly welcomes the protection which will be given to it during the transitional period of rating reform? Will he contrast 991 the worth of the Government's proposals with the fact that the Labour party will do nothing to reform the rates, and with the rather loopy idea which is circulating in alliance circles that rates should somehow be linked to the profits of a business?

§ Mr. Ancram
I am pleased to confirm that we have had a broad welcome for our proposals on non-domestic rates from a wide sector of commerce and industry. In particular, they have welcomed the proposal that, following the legislation which we intend to introduce in the next Session, non-domestic rates will be controlled within the rate of inflation by my right hon. and learned Friend. This will enable them in their cost projections to take account of the rate settlement, and will give them a stability which has not been possible in the past.

§ Mr. Wallace
As I understand the Government's proposals, students attending Scottish colleges and universities will be liable to a community charge at their place of residence. Do the Scottish Office, the Scottish Education Department and, indeed, English local authorities which have students attending Scottish universities and colleges intend to make appropriate provision in the university grant to meet the community charge which may be levelled?

§ Mr. Ancram
As the hon. Gentleman knows, at present the Green Paper is out for consultation, and obviously no firm decisions will be taken on its details until after that consultation period is completed.

§ Mr. Douglas
The smack of firm government.

§ Mr. Ancram
The hon. Member for Dunfermline, West (Mr. Douglas) talks about the smack of firm government, but he would be the first to criticise us if we were to take firm decisions before we had finished the proper consultations that we are at present carrying out. Obviously my right hon. and learned Friend will carefully consider the position of students in Scotland who become liable to pay the community charge and will do so against the background of progress with the comprehensive review of all aspects of financial support for students which was announced on 18 June.

§ Mr. Henderson
Is my hon. Friend aware that there will be a warm welcome, especially among less well-off ratepayers, for his reiteration of the Government's commitment to introduce legislation next Session? Does he agree that students are already paying substantially for local government in that through the rents for their residences they are paying rates?

§ Mr. Ancram
I can confirm my hon. Friend's last point. As students benefit from local government services I am sure that most of them would accept the fairness of making a contribution towards them, together with every other adult in the Scottish community. These proposals have been warmly welcomed by those who, in the past, have suffered under the inequitable and wholly discredited rating system which at present operates and which appears still to be Labour party policy.

§ Mr. Dewar
With so many important points still subject to consultation, will the Minister give an undertaking that before legislation is introduced he will produce a firm account of how the scheme will work, so that we know exactly what the implications will be? Why does the Secretary of State insist on pressing ahead with a scheme 992 against all the advice from the very bodies whose advice he sought specifically on its practicality? Is it not true that COSLA has described the poll tax as sheer folly? If, in the Minister's view, it is a suspect organisation, will he dwell on the fact that the Society of Local Authority Chief Executives, which is in a position to know, has urged a final rethink because it believes that the scheme is unworkable? Surely the Secretary of State should retreat from forcing this measure through and consider whether it would not be wiser to desist from introducing a tax which is not related to the ability to pay and which will inevitably result in individual injustices for very many people in Scotland.

§ Mr. Ancram
Once again the hon. Gentleman has failed to come forward with any alternative to the existing rating system. From what he has said today and on previous occasions, I think we can take it that he stands by the present rating system and that he will be prepared to land on the domestic ratepayers of Scotland further revaluations of the sort that we saw last year. I hope that the domestic ratepayers of Scotland are aware of that.
The hon. Member asked about the ability to discuss this in detail. I assure him that before this becomes law there will be plenty of occasions to discuss the full details. He also mentioned two bodies which he said were against these proposals, the first of which was COSLA. As I have said before, it would be a great surprise if COSLA were to recommend getting rid of a system that suits high-spending Labour authorities in Scotland, to the disadvantage of their ratepayers. As for SOLACE, my understanding of its criticisms is that it says that the present rating system is simple, straightforward and easy to manage. The same argument could have been made about a window tax in the past, but that would have been no justification for keeping it.