HC Deb 04 March 1987 vol 111 cc929-42
Mr. Ancram

I beg to move amendment No. 2, in page 1, line 7, leave out '1992' and insert '1989'.

Mr. Deputy Speaker (Sir Paul Dean)

With this it will be convenient also to discuss the following amendments: No. 3, in page 1, line 7, leave out '1992' and insert '1991'.

No. 4, in page 1, line 7, leave out '1992' and insert '1997.'.

No. 5, in page 1, line 7, at end add 'and shall be phased out from 1989.'. Government amendments Nos. 6 and 7A,

Amendment No. 8, in clause 2, page 1, line 11, leave out '1992' and insert '1991'.

Government amendments Nos. 9 to 12, 93, 97 to 106, 108 to 120, 107, 121 to 129 and 13,

Amendment No. 14, in clause 3, page 2, line 15, leave out '1991–92'.

No. 15, in clause 3, page 2, line 38, leave out '40 per cent.' and insert '30 per cent.'.

No. 16, in clause 3, page 2, leave out line 39.

Government amendments Nos. 19, 21, 27 and 33, Amendment No. 165, in clause 5, page 5, line 22. at end insert— '(2) There shall be an annual revaluation of non-domestic subjects from and after 1993'. No. 177, in clause 5, page 5, line 30, at end insert— '(3) In any revaluation of lands and heritages consisting of a caravan site, there shall be disregarded any value attributed to any caravan stationed thereon and section 3 of the Rating (Caravan Sites) Act 1976 shall thereupon cease to have effect.'. Government amendments Nos. 34 to 40, 45 to 47, 88, 150, 152, 89 and 90.

Mr. Ancram

This large group of amendments seeks to give effect to the Government's decision that the community charge should be brought fully into operation with effect from 1 April 1989. The broad purpose of the amendments is therefore to remove from the Bill the provisions relating to the transitional period that was due to last from 1 April 1989 to 31 March 1992.

It was originally envisaged that during the three-year period domestic rates would be steadily phased out while the community charge was being phased in. However, the advantages of a clean break introduction of the community charge have been put to us by a number of organisations which were concerned about the administrative difficulties local authorities would face in running the community charge and domestic rates side by side during the transitional period. Bodies such as the Chartered Institute of Public Finance and Accountancy, the Scottish forum of the Rating and Valuation Association and COSLA came out clearly in favour of the clean break rather than a transitional period, while others, including a number of individual local authorities, expressed their concern over the cost and complexity of going ahead with the transitional arrangements. As my right hon. and learned Friend said earlier, pressure was put on us by my hon. Friends in Committee and not least by the hon. Member for Glasgow, Cathcart (Mr. Maxton) in a famous amendment that he moved on the basis that it was probing and then withdrew. In that amendment he presented arguments to which we may return later.

Mr. Dewar

What column was that?

Mr. Ancram

I can tell the hon. Member that the reference is column 284 of 15 January. He will find there that the hon. Member for East Lothian (Mr. Home Robertson) described the amendment as probing and the hon. Member for Cathcart withdrew it. The point was made during the course of that debate and we decided that there was a great deal of force in those views.

The advantages to local authorities will not simply be in terms of removing the burden of running two systems in parallel. Authorities will also be able to plan more effectively for the introduction of the new community charge as they will no longer have to consider the interim arrangements to cope with the transitional period. The: clean break will also make life simpler for individuals who will get a single community charge bill rather than two bills, calculated on quite different principles.

The amendments that are necessary to dispense with the transitional period are essentially technical. Many simply consist of changes in dates. Clause 3, which made provision for domestic rates in the transitional period, is dropped, as is clause 5 which dealt with the effects of future revaluations on domesgtic subjects. Both are no longer necessary. Schedule I can be considerably shortened and simplified as it no longer has to make provision to identify the subjects on which domestic rates were to be charged during the transitional period.

Some hon. Members were concerned that the dropping of the transitional period would put an undue burden on individual payers of the community charge. As the debate progressed, it was felt that the transitional period was not going to make that much difference. Indeed, on 15 January in Committee the hon. Member for Cathcart said : The administration of a big bang would be easier and the difference that it would make to the taxpayer would not be great." — [Official Report, First Scottish Standing Committee, 15 January 1987; c. 281.] I felt that in a nutshell that was an endorsement of the principles that are to be adopted. Throughout the Committee stage, the hon. Member for Cathcart accused me of not listening to him and I am sure that he will now welcome the fact that I am giving positive proof that where he spoke sense — which I cannot say that he did frequently—I listened to him closely.

I commend the amendments to the House. They will be welcomed by those involved in administering the new system and they will be widely welcomed by people in Scotland who will now be able to get the full benefits of the community charge at an earlier date than would otherwise have been the case and who may have noticed that that will happen with the full support of the Opposition.

Mr. Dewar

The hon. Member for Edinburgh, South (Mr. Ancram) enjoyed himself making that speech. I am always pleased to see someone who drudges getting a little pleasure out of life. That is good for all of us.

These amendments deal with the phasing that has disappeared. They deal with the transitional provisions which are no more — "Now you see them, now you don't". I must confess that I approach this concession with mixed feelings. We see the administrative advantages of a clean break. We became convinced slowly over a period during discussions with various people in local government that probably the balance of advantage was in favour of the clean break.

An amendment to that effect was tabled by my hon. Friends in Committee. It was certainly a probing amendment and there is nothing dishonourable in that. As my hon. Friend the Member for East Lothian (Mr. Home Robertson) made clear, it was a probing amendment that was paving the way for later discussion. There was no doubt that the arguments were fairly and effectively put by a number of my hon. Friends. This clutch of amendments is clearly something which the Opposition welcome. The amendments reflect an area about which we expressed considerable alarm and disquiet.

There was a great deal dismissive and unpleasant criticisms of the Committee stage of the Bill, especially during the debate on the timetable motion. That criticism was made the more irritating when we consider its source —but there you are, we all put up with that kind of thing.

The hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) produced a rather startling test of the effectiveness of a Committee stage. It was apparently the number of concessions and amendments that the Government had to table. She rather triumphantly proved that because the Minister had been obdurate to all argument and had given not an inch—well, perhaps two inches, as there were two very small concessions — in some way the Committee stage had been a disaster and the Opposition had been totally ineffective. I am delighted that the hon. Lady will now be happy to know that it was a very much more productive Committee stage than she had anticipated. Presumably the Opposition can wear this thicket of amendments as a badge of pride. The hon. Lady's theory is somewhat unlikely. Perhaps I can preserve it for posterity by calling it "McCurley's law".

I am reminded—perhaps irrevelantly, but only briefly —of a brilliant piece of Opposition work, by the hon. Lady's standards, during the passage in another place of the Matrimonial Homes Act 1967. The Minister may also remember the passage of that Act during which a noble peer—I do not even know who the hero was—objected very strongly to the use of the word "titled". You may remember, Mr. Deputy Speaker, that the Bill dealt with conveyancing matters and referred to "titled" and "non-titled" spouses. That was objected to on the grounds that a "titled" spouse was clearly the wife of a Member of another place. It was extremely unpleasant that that should then be imported into a Bill that dealt with such matters as battered wives and broken marriages. As a result of that brilliant stroke, several hundred amendments appeared on the Order Paper changing "titled" and "non-titled" to "entitled" and "non-entitled". I suppose that if we apply "McCurley's law", that was one of the great parliamentary triumphs of the decade. I am not sure that it will hold as the proper test, but I record it in passing.

We have these concessions and amendments which we pressed for and I must not be ungracious about them. However, it is fair to remind the Minister that in Committee the amendments were strongly resisted by the Under-Secretary of State, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), who looks after Scottish industry in his spare time. He was in fine form. He described the hon. Member for Caithness and Sutherland (Mr. Maclennan) as being as "pellucid as opaque glass". I suppose that is how they talk down in Galloway. I must go down some time to find out.

7.30 pm
Mr. Ancram

I do not want the hon. Gentleman to get the wrong dialect. My hon. Friend was giving an example of Caithness dialect as used by the hon. Member for Caithness and Sutherland (Mr. Maclennan) on every other occasion in Committee.

Mr. Dewar

I am always careful about Conservative Ministers who talk about glass and mental capacity. I remember the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) referring to his mind as being like a pond in winter frozen over. I suppose that it is a matter of taste.

I thought that the hon. Member for Galloway and Upper Nithdale made a brave speech on that occasion. Indeed, he got completely out of line with his master's voice, because he started by saying that all the talk about difficulties for COSLA and the local authorities were exaggerated. He said : There are a number of able and experienced professionals staffing Scottish local authorities, and they should be able to make the necessary arrangements to cope with the transitional period. That was a startling statement, because it was praise for local government and local government officials. It shows that there is still some realism lurking at least in the junior parts of the Scottish Office.

The Minister went on to say: I repudiate the prediction of the president of COSLA— that is fighting talk— that there will be five years of chaos if the Bill is enacted and implemented as we propose. To me that is nothing more than a strong criticism of officials in finance departments up and down Scotland."—[official Report, First Scottish Standing Committee, 15 January 1987; c. 283.] He was taking up the cudgels on their behalf. He then asked that the amendment be withdrawn or he and his hon. Friends would bury it with the block vote.

Perhaps the Under-Secretary of State still believes that there would not have been five years of chaos. But the fact that he has tabled these amendments shows that he accepts the argument that there would have been a period of considerable difficulty and that we are better off without the transitional arrangements, which is what the Opposition argued in Committee.

It is important to clarify our position for the record. We believed that great difficulty would be caused by running the rates and the poll tax in tandem. We thought that it would cause much public confusion and much complication for officials already under pressure. Indeed, it was not just a matter of them running in tandem; the proportions of the tax take contributed by each form of revenue-raising would vary during the period. For example, if one considers the one-day period, as I did in a moment of enthusiasm, one sees the problems of running the rebate and housing benefits systems, with authorities that have different responsibilities following two forms of taxation. It became clear that great difficulty would be caused, so we came to the conclusion that there was a strong administrative case for moving in the way that the Government have chosen. That was the basis for our amendments.

The trouble is that it is purely an administrative argument and does not touch our basic objections to the Bill as drafted and the scheme as envisaged. Those objections remain.

The Under-Secretary of State was a little less than frank when he managed to give the impression—it may have been unintentional, but he may he under a misapprehension—that most of those who had lodged technical objections as to the practicality of the poll tax were safe abed, relieved that their fears had been swept away with the disappearance of the phasing arrangements, and he quoted the Scottish branch of the Rating and Valuation Association in that context. I have here a comprehensive series of comments on the scheme from the Rating and Valuation Association—dated 13 February 1987, so it does not have cobwebs on it yet.

The letter contains much adverse comment on the phasing arrangements in clause 3, so no doubt the association will warmly welcome the fact that they have disappeared. It would not be fair to the House to quote at length from this sophisticated and lengthy document, but hon. Members will take my word for the fact that it still contains plenty of reservations, caveats and criticism of matters that will continue to be essential parts of the scheme, if it is implemented. The association describes the retail prices index test in clause 4 as inappropriate, and it calls the collective community charge machinery "unnecessarily cumbersome" and says that it should he scrapped. It says that parts of clause 20 are unworkable in their present form. In summing up, the letter states: The Government should be in no doubt that the relative yield from the community charge will be considerably less than that from domestic rates. The community charge will be easily avoided and considerably more expensive to collect than domestic rates. The association makes a sustained case for that conclusion.

I hope that the Minister accepts that he put a gloss on the matter when he seemed to suggest that the opposition to the Bill has been defused and that there were no doubts among the professionals. The Rating and Valuation Association represents professionals. It is not a gaggle of Labour councillors plotting the downfall of the free market economy and the prosperous future of the hon. Member for Stirling (Mr. Forsyth). It represents people who have examined, in a narrow professional sense, the nuts and bolts of the system and found it wanting.

I make those points because it is important that our position and the position of those who have criticised the Bill should not be misinterpreted later. The amendments will provide some improvement. They will simplify the introduction of a bad scheme, but unfortunately we have failed to improve it in any way with other amendments. In a sense, the change sharpens the divide between the parties. It removes the blurring and the period of confusion. It means that suddenly in 1989 a fully armoured, 100 per cent. poll tax will be sprung upon us. Although I give the amendments a qualified welcome, I do not wish to leave anyone under the impression that our opposition to the Bill has been decreased by this concession. I would much rather—there is a strong case for this—that the Minister had decided to introduce the clean break at the end of the planned phase-in period in 1992 instead of in 1989, when there will be many administrative difficulties. The authorities will have to organise collection and compile registers before April 1989.

I am glad that, despite the snorts and the cries of repudiation in Committee, Ministers listened to our argument. I can only express the pious, and 1 fear unfounded, hope that even at this late stage it will be a catching habit and that there will be signs of movement in other areas.

Mr. Allan Stewart

The purpose of amendment No. 3 and the related amendments standing in my name was to shorten to 1991 the phasing-in period of the community charge, with appropriate changes in the percentages. In a sense, they were fall-back amendments. He will know that because he has expressed concern, as has the hon. Member for Glasgow, Garscadden (Mr. Dewar), about the practicability of the phasing-in period. I tabled the amendments as a fall-back in case my hon. Friend found himself unable to accept the case for the direct introduction of the community charge in 1989. Obviously I am not pressing the amendments, and I warmly welcome his decision.

My hon. Friend's decision is welcome on two quite different grounds, first, on the grounds of practicability. That was the theme in the speech of the hon. Member for Garscadden who rightly referred to the Rating and Valuation Association, and the welcome and well-considered points that hon. Members from all parties have received from that body. I do not want to rehearse those arguments. However, I should like to add that the second major ground for the direct introduction of the community charge in one year is the acceptability and credibility of the entire system. There is no doubt that many people were concerned about the acceptability of bringing in a community charge over such a long period which, in political terms, could cover not only the beginning of the next Parliament but, arguably, into the Parliament after that.

During the period 1989–1992 there would not only have been considerable complications but a lack of the advantages of the community charge, in terms of acceptability and the benefits for the democratic control of local authority expenditure. Considerable confusion would have resulted. Therefore, I congratulate my right hon. and hon. Friends on their decision, which is sensible, not only in practical terms, but in terms of principle.

Mr. Maclennan

The alliance is in favour of the Government's proposals, in the sense that we have been persuaded that the practicalities of administering a poll tax make it sensible to have a clean break. That was not always our view, but we have been persuaded by the arguments that have been addressed by those who are most likely to be closely involved with its implementation.

However, it was also our view that the date on which the translation to the new system would take place seems too soon. The need for careful preparation and proper debate of many of the matters which have not yet been decided and which are covered by the subordinate legislation that will depend on this Bill mean that the date should be later than that which the Government have in mind.

The Minister will recall that in Committee I proposed a different operative date. I suggested 1994. That was designed not only to give the proper time but to ensure that there was a settled opinion that the change should be made. It is not sensible to introduce a tax system that does not enjoy the support of the taxed public. To follow the point that has just been made by the hon. Member for Eastwood (Mr. Stewart), that would require the interposition of more than one general election.

There is great advantage in having a settled view as to what local taxation is appropriate before we break up the system with which we have lived for about 200 years. Cleanliness for that break is to be preferred to trying to run in tandem two systems that are both complex. I am glad that the Minister arrived at the conclusion that he did.

7.45 pm
Mr. Bill Walker

I welcome my right hon. and hon. Friend's amendments. Amendment No. 1 brings forward the date. As every hon. Member who has spoken has said, the practical advantages in doing that are to be commended, partly because operating the two systems in tandem would have imposed a heavy work load on the local authorities. The amendment should be welcomed, if only for that reason.

However, I welcome it for another reason. The earlier that we bring such matters into operation and make them effective, the more we shall see the benefits in the way in which the population at large responds to them. I sincerely believe that the system will be welcomed once it is seen to be operating because, contrary to the views expressed from the Opposition Benches, the Scottish public like to know what is happening. The rating system has never been properly understood and has been a hostile form of taxation with no friends, other than those who seem to be running it, and councillors who see benefits to themselves in being elected under a system in which there is little real accountability.

Amendment No. 33 deletes clause 5. My amendment, amendment No. 177, is an amendment to the clause. On the assumption that clause 5 will be deleted from the Bill I should like to say a few words about why I have tabled amendment No. 177. History and experience show that Scottish assessors often view things substantially differently in different regions.

My hon. Friends on the Front Bench will have recollections of reed beds and caravans, matters in which I had a constituency interest, because the caravan and leisure industry is an important part of the tourism that is so vital to the well-being of constituencies such as mine. Therefore, I tabled my amendment to spell out quite clearly to the assessors what the legislation would mean. Unless one spells that out clearly one runs into problems. Amendment No. 177 deals with "the revaluation of lands and heritages" consisting of caravan sites. That is important because caravanners and caravan sites have had the ghastly problem of not enjoying the discounted rebate that everyone had thought had gone through in an earlier Act. However, we discovered that the Scottish assessors did not see it quite that way, and in the end primary legislation was required to rectify something that everyone, including the Minister who put the Bill through, believed already applied to caravan sites. It was believed that they would enjoy the same benefits as in England. However, that turned out not to be the case and the discount never materialised in Scotland.

The amendment gives me the opportunity to draw attention to the assessors in some detail. District valuers in England and Wales operate quite differently from the assessors in Scotland. I am always fascinated by the way in which the assessors arrive at their valuations, and how they arrive at quite different conclusions in adjacent regions. From the point of view of the Rating (Caravan Sites) Act 1978, the district valuers in England applied the Act as it was intended.

However, that did not apply to Scotland, and that situation had to be remedied by the Rating and Valuation (Amendment) (Scotland) Act 1984. My hon. Friend the Under-Secretary of State will remember that I was involved in several private Members' Bills, early-day motions and all the other devices that we use in this place to draw attention to a matter that we feel is wrong. I was delighted that my hon. Friends understood that and brought forward measures to put things right. However, it was about eight years before the correction was made. I did not believe that we would want to face that position again before the Bill was enacted. I had horrible feelings about what could happen if we did not spell out clearly to the assessors what the legislation meant.

I did not serve on the Committee because I was ill when the Members who served on it were selected. It is the first major Scottish Committee on which I have not served since coming to the House, so it has been a bit of a holiday for me. However, I understand that in Committee Ministers said that they understood clearly the worries and problems of the caravan and caravan site industry, and I thank them rather belatedly. I am pleased that this evening they have tabled amendment No. 2 with related amendments and amendment No. 33 because it will not be necessary for me to take any action on my amendment No. 177.

Mr. Gordon Wilson (Dundee, East)

First, I shall deal with the Government amendments. Given the horrendous implications of phasing in a new system and maintaining the old, the Government are right to introduce these amendments. However, if one does not agree with the nature of the poll tax, one regrets that it will be imposed so much faster. All hon. Members will probably agree that in practical terms the Government have taken the only possible course, but I am less sure whether they have chosen the correct year in which to introduce the system. Considerable difficulties will be met by those who must prepare the various registers, and they will be hard pushed to bring the new system into effect on the date that the Government have chosen.

Without slighting the amendment selection, I am not sure why amendment No. 165 in my name and that of my right hon. Friend the Member for Western Isles (Mr. Stewart) has strayed into this sequence of amendments. Perhaps it qualified because it included a date and the Government amendments were largely altering dates. But since many of my excellent new clauses were cut down by the scythe of selection, far be it from me to complain.

The amendment provides for a change in the arrangement for the valuation of commercial property. It may well be that I have not taken on board fully the Government's intentions in this regard, but, like the hon. Member for Tayside, North (Mr. Walker), I did not serve on the Committee. A reason why there was such a huge outcry at the time of the revaluations almost two years ago was that many who had shops or hotels or who operated businesses were hit by a heavy increase in their valuations at the end of the septennial revaluation. Because of the delay factor in revaluation they were clobbered by unexpected demands in cash terms on their businesses.

It has always been a matter of public notice that those who own premises or operate businesses have frequent disagreements with local authorities about the scale of their rates payments. That is a matter for on-going discussion. They have found difficulty in budgeting where, apart from any inflationary increase in rates which may have taken place under the commercial rate, they have been met on revaluation by a quantum leap, sometimes of 300 per cent., which in cash terms has meant a substantial increase in the sums that must be paid.

My amendment suggests that from and after a given date annual revaluations shall be introduced. That would probably not have been feasible when assessors had to deal with domestic properties, but that problem has now been removed by the Bill, so assessors will have time to pay a little more attention to commercial rating. Indeed, it could be said that the number of properties affected is much less and there is no reason why an annual revaluation should not be feasible.

Furthermore, the Government intend to introduce a national business rate, but that may not come into effect before the turn of the century. The Minister is shaking his head, but he knows full well that in the sister kingdom of England there has been no revaluation for a considerable time. It would be a painful exercise if his English colleagues had to introduce a valuation which inclined both systems to work more closely together. He would take some pleasure from that because English Ministers would have to wriggle, scream and screech in the same way as he and his colleagues in the Scottish Office had to during revaluation.

Be that as it may, I am suggesting an annual revaluation which would take into account current trends. If it appeared that the rates of any given commercial property were increasing beyond what the business could bear, early notice would be given to the owners so that they could look for alternative premises in good time.

My amendment has a great deal to commend it and I urge the Minister to give it due consideration and to disembed it from all the other amendments taken with it.

Mr. Michael Forsyth

The people of Scotland should be dancing in the streets tonight. These amendments make a tremendous difference to the impact of the Bill. The fact that the burden of domestic rates will disappear in 1989 rather than 1992 will be widely welcomed.

I praise my hon. Friend the Minister for his genius in introducing the amendments and getting all Opposition spokesmen jumping on the bandwagon and saying how much they support the amendments, although they have been wholly opposed to the community charge. He may have looked for a phasing-in period to introduce the community charge and to abolish domestic rates because he may have been taken in by the statements of the hon. Member for Glasgow, Garscadden (Mr. Dewar) and his various colleagues in the Labour party and, indeed, by hon. Members in other parties that they would fight the Bill to the last ditch, that they would fight it and fight it again and that it was the worst thing that had ever happened to Scotland. On the Opposition Benches I see three Labour Members, one Liberal Member, one SDI' Member and one SNP Member. If that is fighting to the last ditch—

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Gentleman to count incorrectly? He has already made one mistake.

Mr. Deputy Speaker

That seems to be a point more of arithmetic than of order.

Mr. Forsyth

I am not sure whether the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) is referring to his normal schizophrenia or whether I have missed one of his colleagues.

Mr. Foulkes

One cannot have normal schizophrenia.

Mr. Forsyth

The hon. Gentleman and his party pledged to fight the Bill. We are advancing the introduction of the abolition of domestic rates which is a historic decision, and if this is the opposition that we were promised, it is feeble.

I cannot but believe that my hon. Friend the Minister thought that there would be stronger resistance both from the Opposition and in Scotland to his proposals than there has been. The way in which he has doggedly pursued the argument and explained how the tax will operate to the benefit of the majority of the people in Scotland has brought us to the position where the abolition of domestic rates ahead of time is not a matter of controversy.

The hon. Member for Dundee, East (Mr. Wilson) tabled amendment No. 165. This must be the biggest piece of cheek from any party this Parliament. On television, in the newspapers and in this Chamber the hon. Gentleman complained about the last revaluation and said that Scotland was uniquely disadvantaged. He argued that that was an outrage and an example of how the Government did not care about Scotland which had to endure this revaluation while England did not. Now he is suggesting, not that Scotland should have regular revaluations, but that it should have more revaluations, that they should be annual, thus creating a markedly different situation from that which exists in England. However, just a few months ago, for his own political advantage, he was arguing that there was an injustice in Scotland. How can the hon. Gentleman square that? I will gladly give way to him if he cares to explain how he reconciles his previous position with the position that he takes now.

8 pm

Mr. Wilson

The hon. Gentleman ought to be aware that I have never attacked the fundamentals of revaluation. In times past the Minister has pointed that out. I said that a septennial revaluation suddenly heaping huge increases upon people is bad for business and bad for Scotland. Secondly, there are differences in valuation law relating to the valuations of properties in England and Scotland, and they operate to our disadvantage. That is one reason why I put down some new clauses on this topic. Unfortunately, they were not selected.

Mr. Forsyth

At the time of the last revaluation I do not recall the hon. Gentleman going around Scotland saying that England was uniquely disadvantaged because it had not had a revaluation for 12 years. He did not go around saying that businesses in England were facing a tremendous threat. On the contrary, he said that the Tory Government had introduced a revaluation and after seven years there was none in England and Scotland was uniquely disadvantaged. He is now arguing for annual revaluations in Scotland and saying that every Scottish business man should be faced with considering an annual appeal against his assessment, with all the expense and burden that that would impose. That is typical of the opportunism that we see in Scotland from the hon. Gentleman's party. Once again it shows that only the Tories are prepared to take seriously the rating system and its running, rather than just going in for the political mudslinging and opportunism that this amendment represents.

Mr. Wilson

Would the hon. Gentleman care to say where great satisfaction is to be found in the way in which the Government are currently treating commercial ratepayers? The evidence that I have had is that business men are not at all happy with the Government's proposals.

Mr. Forsyth

The business men who advised the hon. Gentleman that they would be better off with annual revaluations must not understand the rating system or its impact on them. Does he think that the business men in Callander in my constituency or in his constituency would welcome the prospect of filling in forms or going to appeal every year if they think that they have been treated unjustly? If he thinks that, he does not have much understanding of business men.

Business men to whom I have spoken welcome the decision to maintain commercial rates and to put a ceiling on the increase. That is because they will know where they are and will not get the sort of huge increases which, in arguing for annual revaluations, the hon. Gentleman said were a burden on business. If he recognises that unpredicted and sudden increases are a burden, why does he not welcome these proposals about commercial rating? Once again the hon. Gentleman is trying to exploit people's understandable fears and worries about change but he is not doing anything constructive. His party mouths that it is in favour of a local income tax but, like the hon. Member for Caithness and Sutherland (Mr. Maclennan), it has yet to come up with a workable scheme or to participate in a meaningful way in discussions about one of the most important issues in Scottish politics.

I welcome the Government amendments. I am overcome with admiration for the Scottish Office for being able to abolish so quickly a hated tax and for being able to draw so much support from Opposition Members who previously committed themselves to open hostility towards my hon. Friend's opening position.

Mr. Ancram

I find myself in the rather unusual position of responding to a debate on a series of Government amendments which have been welcomed by all parties in the House. I wondered whether to describe that in card-playing terms as a full house, but perhaps that would be rather overdoing it. A royal flush was the other thought that came into my mind, but I am not sure whether that is appropriate either. I am grateful to hon. Members for welcoming the Government's decision to do away with the transition period.

I shall deal first with the amendment dealt wih by my hon. Friend the Member for Tayside, North (Mr. Walker). He is a persistent and hard-working defender of people with caravan interests. He said that this was discussed in Committee and he will see in the record of the Committee for 15 January at column 322 that my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang) quoted at some length from a letter that I wrote to the chairman of the Scottish caravan industry joint liaison committee. That letter was written on 27 November last year and set out the position. I shall summarise that position for the House.

The Bill gives a choice on how caravans, which are not allowed to be occupied for human habitation throughout the year and are occupied by individuals and not the caravan site operator, are to be treated. Either they come out of rating, which seems to be the purpose of the amendment proposed by my hon. Friend, although I appreciate that, effectively, it is a probing amendment, and the individual occupiers would become liable to the standard community charge, or they remain in valuation and are subject to the modified arrangements for levy of non-domestic rates proposed in the Bill.

The caravan industry was concerned, as were the Government, that a change in the standard community charge would increase the burden on caravanners. Therefore, it is proposed that an individually occupied static leisure caravan should continue to be valued under the present arrangements where it is assessed along with the site as a single unit and entitled to 40 per cent. derating or, where it is not situated on a caravan site subject to single unit valuation or where the occupier so elects, is individually valued and rated. This is the course preferred by representatives of the caravan industry with whom the Government have consulted.

The provisions in the Bill are considered to be better for caravanners than if they became subject to the standard community charge. I am sure that my hon. Friend appreciates that most people in the caravan industry have accepted that this is so. I hope that on that basis he will be prepared not to press his useful amendment, which has given us a chance to place on record the thought that has gone into this part of the Bill.

Amendment No. 165 stands in the name of the hon. Member for Dundee, East (Mr. Wilson). My hon. Friend the Member for Stirling (Mr. Forsyth) was a little unkind in his speech, because the hon. Member for Dundee, East always protected himself by saying that he was a great believer in revaluations. The strangest comment that he made, and which he reiterated in this debate, is that his main argument is about the anomalies between Scotland and England because of the different rating systems.

I find it hard to understand how a Scottish nationalist, whose whole political purpose, as I understand it, is to ensure that Scotland is separate and that its interests are dealt with in a Scottish way and by the Scottish legal system, should say when the system that he is seeking is in place—as it is in terms of the Scottish valuation system—that, because it works in a different way from the system in England and the English seem to be paying less, he is unhappy about it. Suddenly, Scottish nationalism goes out of the window and the cry is for harmonisation. That is one of the more strange positions that the hon. Member adopted during the period of revaluation. Indeed, he still adopts that position.

I think we all accept that regular revaluations are necessary to keep the tax base up to date. As the Green Paper envisaged, it is planned to have simultaneous revaluations of non-domestic property north and south of the border in 1990. Statements have been made to that effect. In a sense, this is part of the process of harmonisation of valuation and rating between the two countries. A simultaneous revaluation is an essential part of any process of harmonisation.

Mr. Wilson

1 am aware that there was a reference in the Green Paper to simultaneous revaluation. Does the Minister think that that will be carried into effect because the history of valuation and revaluation in England shows that when Ministers are confronted with the problem they retreat? Does he not agree that it is more likely that revaluation in England will not take place? How will the provisions in the Bill help those who occupy commercial subjects in relation to those premises that pay less in England than in Scotland? What changes in valuation law does the Minister propose? The Minister is aware that the basis of valuation in Scotland, which may be based on the same terminology as in England, is different in practice.

Mr. Ancram

First, it is planned to have simultaneous revaluation of non-domestic properties north and south of the border in 1990. That must be part of any process of harmonisation and it is regarded as such. The Inland Revenue and the Scottish assessors have met to discuss how harmonisation with regard to revaluation may be achieved in practice. The hon. Gentleman is right that there are differences between the two systems. I believe that there are differences in practice and differences in law.

Therefore, we must seek to eliminate the differences in practice before a revaluation—if possible before the 1990 revaluation. Until we have simultaneous revaluation based on a similar practice we shall not be able to judge where the differences of law exist and set about correcting them.

The process of harmonisation, by its nature, is not one that can be carried out swiftly. However, the Government have launched that process and I believe that it will be of advantage to ratepayers in Scotland. An argument in principle can be made for having a revaluation each year. That is covered in the Green Paper with reference to the reduction in turbulence that is normally associated with revaluations over a long time and keeping a tax base up to date. Those matters were canvassed. However, to move from the system of quinquennial revaluations to annual revaluations over a few years—as implied in the amendment—represents a considerable undertaking.

To bring about such a fundamental change in a relatively short time it would be necessary to pay particular regard to the work of the local assessors. Developments that are taking place—such as advanced computer technology—may make that a possibility in the future. I would not wish to preclude or confirm that development at this stage. We wish to listen to further representations about that. If we retain the rating system as the base of non-domestic taxation, it is obviously in all our interests to ensure that we have the fairest and most acceptable system in its place.

The purpose of these amendments is to get rid of the transitional period. They have been widely welcomed. It is interesting that at the end of the debate in Committee the hon. Member for East Lothian (Mr. Home Robertson), who I am glad to see in the Chamber, said: If the Government believe that the poll tax will be such a tremendous improvement and so much fairer and attractive to the people of Scotland, why on earth did they not have the courage of their convictions and introduce it immediately''—[Official Report, First Scottish Standing Committee, 15 January 1987; c. 284.] That was the hon. Gentleman's argument for supporting the amendment moved by his hon. Friend. I hope that the hon. Gentleman, other hon. Members and those outside the House understand that we are committed to the abolition of domestic rates. We are confident that the system we propose in this Bill will work. It is in that spirit that I move these amendments and I am grateful to my hon. Friends for supporting them.

Amendment agreed to.

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