HC Deb 19 May 1986 vol 98 cc152-60

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]

12.3 am

Mr. Michael Forsyth (Stirling)

I wish to raise the important matter of the burden of rates on Scottish amateur sports clubs. I want to begin by expressing my gratitude to Alex Kilgour of the Kirkcaldy rugby club, Alan Grosset, the chairman of the Scottish Sports Association, and Bill Mann of Glasgow Academicals and Western Baths. They have been tireless in providing help and assistance to me and I pay tribute to the way in which they have campaigned in the interests of small clubs throughout Scotland. Scottish clubs are being suffocated by the rating system. The burden on them exceeds £5 million and to put that in context, it compares with the total Government subvention to the Scottish Sports Council of £4.3 million. These rates are a tax on the development of the sporting potential and the recreation of young men and women in Scotland.

Clubs north of the border are disproportionately hit because of the valuation methods being used. It has been estimated that clubs in Scotland pay six to seven times as much as those in England and Wales. Perhaps I could give some examples. Kirkcaldy rugby club, a small club in the middle of a council park, is paying rates of £5,500 per annum. Bristol rugby club is England's largest with a ground capacity of 15,000 and it pays £4,500. Northampton and Leicester, which are major clubs by any standard, are paying £2,651 and £3,500 respectively. A comparable club to Kirkcaldy would be Keighley, and it pays £640 less a 50 per cent. rebate granted by the local authority.

It is worth noting that in England clubs enjoy derating regardless of whether they have licensed premises, and local authorities seem to take a more enlightened view. Kirkcaldy pays more in rates in one month than Keighley pays in a year. To put it further into context, Watford football club in the English first division pays only £1,000 more than Kirkcaldy amateur rugby club. The Perthshire cricket club is also in a council park and pays £18,500 per annum in rates. Lords cricket ground, the headquarters of the game, has a huge pavilion, a dining complex, an indoor cricket school, squash courts, a museum and seating for 25,000 spectators. It is located in a 15-acre site in central London and pays £25,700, a mere 30 per cent. more than Perthshire cricket club.

The Western Baths club in Glasgow is paying £19,500, yet the RAC in Pall Mall is 10 times as large and pays £35,000. Glasgow Academicals has three rugby pitches and pays £16,500. London Scottish in Richmond has seven pitches and premises twice the size of Glasgow Academicals and pays only £5,900 in rates. I am not speaking just about the well-known activities. Ardrossan indoor bowling club pays £16,500 while Darlington indoor bowling club which is approximately the same size pays £5,500. Abercorn tennis club in Edinburgh pays £6,500 and has five tennis courts, three squash courts and a pavilion. Winchester tennis and squash club has 19 tennis courts, eight squash courts and a pavilion and pays £3,000.

According to some sources in Scotland, there is little rental evidence and assessors are inclined to use the contractors' principle to determine valuations. An estimate is made of the capital value of property and a percentage is taken to arrive at a rental value. The effect of the application of this principle in Scotland is devastating. In England, some weight is attached to revenue factors. For example, infrequent use because sport by its very nature is a part time activity, the effect of climate on use and the number of people who derive benefit from the facilities are all taken into account. In Scotland, no account is taken of these factors, nor is account taken of how the capital is raised, whether by fund raising, grants or donations. People making donations to sport do not look for a return on their capital, yet the assessors look at the assets with the view that they do.

So far I have quoted rates payable and no doubt my hon. Friend will point to the responsibility of high-spending Labour councils. As he knows, I share his view on that matter, but that cannot account for clubs having to pay five to six times as much as their counterparts in the south. Even if rateable values are considered and an adjustment made for the absence of a revaluation in England, the injustice is manifest. Troon tennis club has six courts and a rateable value of £2,250. Grove tennis club in Essex with five courts has a rateable value of £95. The indoor bowling club at Lanark has a rateable value of £22,500. The indoor bowling club in Carlisle, which is similar and which was built at the same time, has a rateable value of £2,000. Those examples show variations of 10 times and 20 times, where variations of four times might be expected as a result of the fact that there has been no revaluation in England.

I hope that my hon. Friend the Minister will accept that the method of revaluation in Scotland has produced rateable values that are unfair, unrealistic and wholly out of line with the rest of the United Kingdom.

Mr. Dennis Canavan (Falkirk, West)

The hon. Member makes a good case in relation to the grotesque inequalities between the rating valuation of sports grounds in Scotland and in England. No one can deny that fact, and the injustice has been perpetuated and possibly reinforced by this wicked Tory Government, but will the hon. Gentleman at least have the decency to congratulate some local authorities, including his own — Stirling district council—on using their income from the rating system to try to improve sports facilities in their areas? For example, Stirling council has supported the excellent Stirling district sports council and a range of sport facilities in the district.

Mr. Forsyth

I am grateful to the hon. Gentleman. I should emphasise that there are no party divisions in this matter, which enjoys support across the board. I shall come on to the record of Central region.

My hon. Friend the Minister recognised the unfair nature of the methods of valuation in Scotland in section 19 of the Rating and Valuation (Amendment) (Scotland) Act 1984, but, as he must know, the weight of opinion expressed by the Assessors Association, the Sports Council and professional advisers is that section 19 is ineffective. While my hon. Friend adopts a wait-and-see policy, clubs are reaching onerous settlements with valuers, making it harder for others to use section 19 which restricts the use of English comparators to circumstances where there is no comparative evidence in Scotland or where such evidence is not adequate — whatever that means.

While clubs run by volunteers and their professional advisers struggle to find meaningful comparisons with England and Wales, taking into account the effects of revaluations, they continue to suffer serious financial problems.

Wade Academy FP had loans from the Scottish rugby football union rescheduled. Its clubhouse consists of two cottages knocked together and its rates are £2,500. Strathmore rugby club has laid off staff and has riot yet paid its rates. Many others are in the same boat, with staff being laid off and the energies of leaders being diverted to fund-raising rather than training our youngsters. Be in no doubt, Mr. Deputy Speaker, that, if we lose these amateur clubs, the whole recreation structure in Scotland, which has already been damaged by the teachers' strike, will collapse and the burden will fall on local government and the state.

I welcome the commitment in the Green Paper, which I hope that my hon. Friend will reiterate, to eliminate cross-border anomalies, but our clubs cannot wait that long. Interim help is required. Discretion is given to local authorities to give relief up to 100 per cent. to amateur sports clubs, and in case my hon. Friend is worried about opening Pandora's box a clear definition of that term has been produced by the sports associations.

Unfortunately, few local authorities grant relief for sports clubs if they have a licence. In answer to the point made by the hon. Member for Falkirk, West (Mr. Canavan), that is particularly true in Lothian, Fife, Central and Strathclyde regions. Ironically, only miners' welfare clubs enjoy 50 per cent. derating as of right. The local authorities argue that they would be subsidising alcohol and that it would be unfair competition.

The clubs are in a Catch-22 situation. If they give up their bars they will upset their members who wish to have a social drink after a game and lose income that they need to pay the rates, even if those are reduced as a result of their sacrifice.

As for unfair competition, few, if any, clubs could be considered as competing with other licensed premises, especially following the Licensing (Scotland) Act 1976 which removed any advantage in opening hours. Most clubs probably open their bars only on training nights and after matches at weekends. In any case, clubs are rated far more highly per square foot per pound of turnover than are commercial licensed premises. Small wonder that the representatives of the licensed trade in Fife have expressed their support for derating. In England, where derating is common place, the clubs have an advantage when it comes to opening hours. In Northern Ireland, sports clubs are granted relief of 65 per cent. of the value of the property associated with the sporting element of the club, excluding the bar area. This might be a compromise for my hon. Friend to consider.

I ask my hon. Friend to meet COSLA to secure agreement from the local authorities to exercise their discretionary powers for 50 per cent. derating of sports clubs, or 65 per cent. if they wish to follow the Northern Ireland example. I am led to believe that the cost will be about £2 million, but the cost of inaction will be very much higher and will be met by the youth of our country. Given good will and flexibility on my hon. Friend's part in considering the rate support grant, I am sure that an interim solution could be found.

Mr. Roy Jenkins (Glasgow, Hillhead)


Mr. Donald Dewar (Glasgow, Garscadden)


Sir Hector Monro (Dumfries)


Mr. Deputy Speaker (Mr. Harold Walker)

Order. Earlier in this Parliament Mr. Speaker established that any Member who seeks to contribute to an Adjournment debate should have the consent of the Member who initiated the debate and that of the Minister who was to reply. Does the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) have the consent of the hon. Member for Stirling (Mr. Forsyth) and that of the Minister?

Mr. Michael Forsyth

indicated dissent.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram)

indicated dissent.

Mr. Roy Jenkins

No, Mr. Deputy Speaker.

Mr. Deputy Speaker

Does the hon. Member for Glasgow, Garscadden (Mr. Dewar) have their consent?

Mr. Dewar

I understand so, yes, but I shall pass, Mr. Deputy Speaker.

Mr. Deputy Speaker

Does the hon. Member for Dumfries (Sir H. Monro) have the consent of the hon. Member for Stirling and that of the Minister?

Sir Hector Monro

Yes, I have, Mr. Deputy Speaker.

Mr. Deputy Speaker

Very well.

12.17 am
Sir Hector Monro (Dumfries)

I am delighted to support the strong case that has been made by my hon. Friend the Member for Stirling (Mr. Forsyth), who has highlighted the major anomalies of clubs in Scotland, England and Wales. For over 20 years I have been pressing the case for mandatory derating of 50 per cent. in Scotland. There is derating in Northern Ireland and a voluntary system is frequently found to exist in England and Wales. I had great hopes that the Rating and Valuation (Amendment) (Scotland) Act 1984 would remove the anomalies, but they appear still to exist.

My hon. Friend the Member for Stirling has referred to the enormous differences in rating between similar clubs in Scotland and England. We must accept that the hopes for the 1984 Act have not yet been realised, and I hope that tonight my hon. Friend the Under-Secretary of State will try to explain why they have not. Rugby, cricket, bowls, tennis and other sports clubs are now in a desperate plight and facing a real financial crisis.

Where has the procedure failed? The assessors are entirely independent, but they must have guidance on the operation of the 1984 Act. Does the fault lie with the appeals procedure? Has anyone reached that procedure? Unless the Act is shown to work, our efforts in Committee —many Members on both sides of the Committee spoke in support of the intended change—will have been in vain and we shall all be very disappointed.

Even though there is an allowance of 10 per cent. while a case is being considered for appeal, 90 per cent. of the demand must be paid, and much of that percentage will be overdue by now. In the time that is left to him, I hope that my hon. Friend can explain in detail how the clubs should proceed if they are to obtain any benefit from the Act. I hope that he will tell us what advice the Government have been able to give to the assessors and local government generally, with local appeal courts being run by local authorities. Have the land courts been given advice on how the legislation should work? It has not worked yet and many of us are desperately concerned, as are those who represent sport and recreation. We know that sport and recreation do so much for Scotland and local authorities are absolved from providing the most excellent facilities that are presently provided by private enterprise.

12.19 am
Mr. Donald Dewar (Glasgow, Garscadden)

First, I congratulate the hon. Member for Stirling (Mr. Forsyth) on raising this important topic, which commands concern in every part of the House. The fact that many of my colleagues are in their places to listen to the debate underlines that concern. There is a long history to the matter. I have always felt that section 19 of the 1984 Act was a doubtful ally for sports clubs in Scotland. In a letter to me of 22 April the Minister took a cautious line about the prospects for that legislative innovation. The Minister said that it was largely untried and made it clear that it was up to the courts to decide. He ended his letter on a hopeful note—I stress this—by saying: If adjustments are shown to be needed further changes in the appeals system will be considered. It is clear that there is no likelihood of redress for a number of reasons, which I cannot go into in the brief time at my disposal, but I hope that the Minister will look carefully at any changes which might be necessary, because a solution must be found to some grotesque anomalies.

I endorse the plea by the hon. Member for Stirling that negotiations be opened with COSLA about some form of immediate and short-term help, perhaps by using the discretionary powers open to local authorities for rating relief.

I hope that the Minister will not think that I am being partisan when I say that it is essential that further Government support be given in this climate of financial stringency. Some accommodation will have to be made in the rate support grant, or in some other form of Government aid. I hope that the Minister will look generously on any approaches.

The Opposition would offer the Government strong support if they tried to find a solution. The search for that solution should be pushed energetically, given the difficulties facing so many sports clubs at present.

12.22 am
The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram)

I am grateful for the opportunity to respond to representations about the valuation and rating of sports clubs in Scotland. This is of considerable concern to my hon. Friend the Member for Stirling (Mr. Forsyth) and I congratulate him on securing this debate. I am aware from personal discussions and from the numerous letters which my right hon. and learned Friend the Secretary of State for Scotland has received that hon. Members on both sides of the House are worried about the rates burden on some sports clubs.

It is important to remember that some of the smaller sports clubs, be they rugby, football, cricket, bowling, or whatever, have a significant social role to play in providing facilities which promote recreation in the communities which they serve. I wholeheartedly endorse that and applaud the efforts of the many ordinary club members who give voluntarily of their time, labour and money to help run amateur sports clubs. Their contribution to the well-being of local communities is not to be valued lightly, and we in the Government have no wish to see these clubs hindered or prevented from functioning by an over-high burden of local taxation.

The Government's practical concern for ratepayers has been shown, apart from the emergency measures that we took last year to introduce revaluation rebates, by our commitment in the Green Paper, "Paying for Local Government" to a better, simpler and fairer system of local government finance.

The consultation period in which we invite responses to this Paper does not end until 31 July. I shall be particularly interested to see the comments which sports clubs submit. The fact that the present valuation and rating systems in Great Britain can lead to differences of the kind that my hon. Friend the Member for Stirling has highlighted today was one of the reasons why the Government have tackled the very difficult task of doing something about local taxation. I am confident that the Green Paper proposals will help sports clubs in Scotland, and we are moving as quickly as possible to bring them into effect. Although it may not be immediately apparent that the Green Paper addresses itself to the problems faced by sports clubs, it does address itself to the widespread complaints voiced by various groups of non-domestic ratepayers over recent months. In particular, the Scottish chapter of the paper explains that the Government see advantage in moving in time to a common non-domestic poundage in all areas and suggests that it may be desirable to harmonise valuation procedures to provide for a common standard, thereby meeting one of the sports clubs' complaints and the points raised by my hon. Friend tonight.

Inevitably this will take some time to achieve, but in the interim the Government propose to control increases in existing non-domestic rates by linking them to some general index of price movements. This will protect all non-domestic ratepayers by removing control of their rate poundage from high-spending local authorities and offering a guarantee of stability in the scale of future rate demands upon them.

I appreciate that there is a much more immediate problem. We are very concerned with the difficulties presently facing sports clubs. We are watching the situation closely and looking to see whether anything can be done. However, Government action would require primary legislation. Even were that possible, it would not provide an immediate solution. We must ask ourselves: what are the options available now?

The problem of rates on sporting facilities has been with us for some time. Hon. Members will recall that, during the passage of the Local Government and Planning (Scotland) Act 1982, the question arose of extending mandatory rating relief to genuine voluntary organisations. That initiative led to a thorough review of the provisions pertaining to mandatory and discretionary rating relief, with particular reference to the position of local clubs which provide facilities for participation in recreational activities.

Discussions took place at that time with bodies representative of sporting organisations, including the Scottish Sports Council. The review also involved the Convention of Scottish Local Authorities and a working party of Scottish Office and local authority officials. The conclusion, which was accepted by my right hon. and learned Friend's predecessor in office, was that the provisions for discretionary relief worked reasonably satisfactorily and should not be altered. The decision was influenced by the advantages of leaving discretionary relief in the hands of local authorities, which are. after all, best qualified to administer it. Another strong argument against making the relief mandatory was the practical difficulty of turning a local discretion to favour some deserving clubs into a uniform obligation to relieve a whole class.

It is as well to be clear that the present provisions for discretionary rates relief are just as wide today as they were when the review was concluded in 1983. Section 4(5)(c) of the Local Government (Financial Provisions, Etc.) (Scotland) Act 1962 enables Scottish rating authorities to reduce or even to remit in full rates in respect of any lands and heritages occupied for the purpose of a club, society or other organisation not established or conducted for profit and which are wholly or mainly used for the purposes of recreation. In simple language, that allows each Scottish regional and islands council to remit part or all of the rates paid by non-profit-making recreational clubs in their area.

Mr. Roy Jenkins


Mr. Ancram

The right hon. Gentleman knows that I normally give way to him, but the debate is constrained in terms of time, and I have a lot of ground to cover. I shall not give way.

Rating authorities are already statutorily empowered to reduce or completely remit the rates payable by rugby, cricket, bowling, and other clubs. The authorities must simply satisfy themselves that the clubs are not established or conducted for profit and are wholly or mainly used for the purposes of recreation. Each rating authority has total discretion as to how it applies the provision within its own area. It is hoped that the case for relief, which was so well made in the House tonight, and the good work done by local sports clubs, will be brought to the attention of rating authorities and that they will give the matter serious consideration.

My hon. Friend the Member for Stirling asked whether I would be prepared to talk to COSLA. I should be happy to talk to COSLA about the way in which authorities are operating their discretionary powers to grant rate relief, and the matter could be placed on the agenda for the next round of regular meetings to be held in about a month's time.

The Government consider it right that the rating authorities should retain the discretion to give this relief. The authorities are, after all. best placed to judge whether and how much relief should be given to individual clubs in their own areas. The legislation does not specifically disqualify from relief those clubs with licensed bars on their premises, although I understand that some rating authorities do not grant relief to such clubs.

It may be that rating authorities also feel that, as some clubs derive considerable income from their bars, the statutory requirement that relief be available only to premises wholly or mainly used for the purposes of recreation should persuade them not to offer such clubs relief. Certainly, if this local discretion were to be replaced by a prescribed level of mandatory relief, I have no doubt that the class of recreation club to qualify for it would have to be more strictly defined. No doubt the possibility of seeming to promote unfair competition for the local licensed trade would weigh heavily in hon. Members' minds. Also to be borne in mind in any considertion of changing from discretionary to mandatory rating relief is that any increase in the total amount of the relief is likely to increase other ratepayers' bills. Revenue lost through rating relief has, after all, to be made up in other ways.

During the past year or so, sports clubs of various kinds have expressed anxiety about rates burdens. For example, Scottish senior football clubs, under the able leadership of the late Mr. Desmond White, chairman of Celtic football club, publicised the level of their rates bills and compared them with those of English league clubs. The Government had in the meantime acted to help by means of section 19 of the Rating and Valuation (Amendment) (Scotland) Act 1984, which enabled Scottish ratepayer valuation appeals to make comparisons with subjects in England if inadequate rental evidence for the type of subject in question existed in Scotland.

Hon. Members who experienced the long and sometimes difficult passage of what is now the 1984 Act may remember that the main reason for section 19 was that a strong case had been made to the effect that premises valued other than by comparison with rental values were more harshly treated in Scotland than south of the border. My hon. Friend the Member for Stirling illustrated that again tonight. Ultimately, the relevance of section 19 to any appeal case must be for the appeals court to decide.

Any complacency that I might have been tempted into has been overtaken by the representations made by other sporting bodies. Rugby clubs have been particularly and understandably vociferous recently, and I am sure that many hon. Members will have been impressed, as I was, by the representations made by the Kirkcaldy rugby football club and Glasgow Academicals club. I am sorry that I was unable to attend a meeting organised by the Kirkcaldy club's treasurer, Mr. Alex Kilgour, in March. I sent my regrets.

There is one small note of caution that I should like to add about appeals which have yet to be heard. I understand that many of the sports clubs involved in representations to my right hon. and learned Friend the Secretary of State or me, including Kirkcaldy RFC and Glasgow Academicals, have lodged appeals with the assessor against their rateable values. Clubs that have appealed will have an opportunity to argue their case fully before, in the first place, the local valuation appeal committee and, if they are still dissatisfied, the Lands Valuation Appeal Court.

It is important to maintain the essential independence of the appeal system, and since appeals which have not yet been heard are in effect sub judice, it would not be proper for me to comment on particular cases. Some clubs which have appealed have told me that it might be some time before their appeals are heard. I have advised them, and I do so again tonight, to use, if necessary, a provision which was introduced in 1984 to accelerate appeal hearings — regulation 5(3) of the Valuation Appeal Committee Procedure (Scotland) Regulations 1984.

The regulation enables an appellant to request the local appeal committee to hear his case within a specified period, which, for practical purposes, must be not less than 35 days from the date of the request. We expressly designed the regulation to help those who might suffer from a long delay. Until an appeal is determined, only 90 per cent. of rates are payable, but a rating authority is allowed to enter an agreement with a person bringing an appeal to pay less than 90 per cent., and appellant clubs under financial pressure might be advised to press their rating authority to exercise its discretion in that way.

I hope that rating authorities, in their desire to promote the well-being of communities in their area, will welcome the opportunity which the discretion gives them to encourage the activities which amateur sports clubs provide.

I welcome the debate because it has given us a chance to examine the position—

The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-seven minutes to One o'clock.