HL Deb 11 July 1955 vol 193 cc554-89

3.36 p.m.

Order of the Day for the Second Reading read.


My Lords, I beg to move that this Bill be now read a second time. The measure which I have the honour of presenting to the House to-day is, admittedly, somewhat complicated but I shall endeavour to explain the purpose of the Bill and its main clauses without delving into too much detail. The great majority of your Lordships will be aware that this measure follows on the Local Government Act, 1948, which, amongst other matters, transferred responsibility for valuation for rating from the local rating authorities to the Board of Inland Revenue. That Act also provided that the first post-war revaluation should take place in 1952, but unhappily that proved to be impracticable, and the revaluation was twice postponed and now comes into operation on April 1, 1956. This will be the first revaluation which has occurred since 1934, but hereafter it will take place quinquennially.

Noble Lords who are interested in this subject may recollect that dwellings are to be assessed on their 1939 value but that all other properties throughout the country will be assessed at current values. The valuation of all property will hence-forth be on a uniform national basis and undertaken by the Board of Inland Revenue. At this stage it is appropriate that I should remind the House that the Bill does not in any way affect the rating of site values or the re-rating of industry or agriculture; nor does it interfere in any way with the present equalisation grant. The Bill has been subject to various Amendments during its passage through another place and I shall endeavour to draw the attention of the House only to the more important Amendments. The main purposes of the Bill are: to alter the procedure for bringing the new valuation lists into force; to introduce a new method of assessing Gas Boards; and to provide relief for church and chapel halls, charities and certain other educational and philanthropic institutions.

I will now turn to the Bill and explain its principal clauses to the House. Clause 1 abolishes the draft valuation lists and alters the arrangements for bringing the new valuation lists into force. The valuation officer, under the terms of this clause, must send the lists to the rating authorities not later than December, 1955, and from then onwards the lists will be open to public inspection. The ratepayer, however, will have no right to appeal against his assessment until April 1, 1956, the date on which the new valuation lists come into force. Subsection (7) of this clause provides that, in certain circumstances, if the ratepayer has proposed any reduction in the new assessment, he cannot be required to pay in rates in the first and any subsequent year more than he paid in the last year before valuation until, of course, the assessment is finally settled. Moreover, naturally enough, if he secures a reduction in his assessment it will apply from April 1, 1956.

Clause 2 and the First Schedule deal with appeal procedure. If the ratepayer objects to his new assessment he will be able at any time to make a proposal to reduce it. This proposal he will send to the valuation officer who is bound to forward a copy of it to the rating authority and to the occupier of the property affected—unless, of course, the latter has made the proposal himself. Under the principal Act—that is to say the Local Government Act, 1948—the copies of the proposal had to be sent to the rating authority and the occupier within seven days. In this Bill that period is extended to twenty-eight days. The valuation officer will naturally do his best to conform to the seven days, but if there were a whole flood of new proposals when the lists came into force it might not be possible to complete the operation in so short a time. Power is given by the First Schedule for the valuation officer to object within a period of five months to any proposal made to alter the assessment. This period may appear to be unusually long, but there may be a very large number of proposals; and it may, and probably will, take a considerable time for the valuation officer to discuss them with everyone concerned. But he will, of course, deal with all these proposals as expeditiously as possible.

Clause 3 deals with evidence in valuation proceedings, and was inserted during the passage of the Bill through another place. Under the principal Act of 1948, the valuation officer was empowered to require occupiers of rateable property to submit rent returns to him for the purpose of the revaluation. For the same purpose, in assessing houses, he has used those rent returns which were made to the rating authorities before the war. The assessments in the new lists will therefore be based upon these returns, and it is obvious that the valuation officer must have power to use these returns when dealing with any proposals which may have been made to him for altering his assessments. It is the purpose of Clause 3 to give this power, and at the same time to give the ratepayer and the rating authority equal facilities. The clause, therefore, enables them to inspect any returns which the valuation officer proposes to use. It also entitles them to inspect returns in respect of other properties of their own selection, equal in number to those chosen by the valuation officer. I agree that this clause is complicated, but I feel certain that any noble Lord who understands appeal procedure will regard these proposals as fair and equitable to all concerned.

Clause 4 deals with technical matters connected with the making and levying of rates, and I think that here I need only refer the House to subsection (5), which, again, was inserted in another place. Under existing legislation, the occupier of the property pays the rates, but in certain circumstances the local authority may, by resolution, provide that the rates of properties below a certain value shall be paid by the owners, who will recover them from the occupiers. This is known as "compounding of rates." This subsection enables the local authority to pass a resolution which will have the effect of keeping within compounding some or all (as they may think fit) of the properties which, although within compounding before revaluation, after revaluation will have rateable values which may be well above the statutory limits.

Clause 5 of the Bill deals with technical matters, but in most respects leaves the law virtually unaltered. I should, however, draw the attention of the House to subsection (8). This concerns the allowance of sinking fund provisions in the assessment of public utility undertakings—of which the largest class, now that special arrangements apply to electricity, transport and gas, are the water undertakings. This subsection proved highly controversial in another place, and, in accordance with a promise which my right honourable friend gave at that time, I shall put down an Amendment on the next stage of the Bill in order to alter these proposals. I would, with respect, suggest to the House that, knowing this to be a controversial issue, it might be better if we deferred discussion on this subsection until the next stage of the Bill.

Now I pass to Clause 6 and the Third and Fourth Schedules, which introduce a new method for the rating of Gas Boards. Provision is made it this Bill that, instead of being rated in respect of premises which it actually occupies, each Board shall be rated in respect of a notional hereditament in each area in which it manufactures or supplies gas. The rateable value of this notional hereditament will be a share of the total rateable value of all the properties occupied for gas purposes in the Board's area on May 1, 1949, the date on which the industry was nationalised. This total of rateable values is to be adjusted from year to year, to take account of the increases ill the sale of gas, and shared among the rating authorities concerned in proportion to the amounts of gas manufactured and sold in their respective areas. This clause is extremely complicated, but at least it has the agreeable feature that it has been agreed between the associations of local authorities and the gas industry.

Clause 7 deals with places of religious worship. Under the existing law, as your Lordships know, churches and chapels used exclusively for public and religious worship are exempt from rates. This clause extends that exemption to church and chapel halls so long as they are not let for profit. This proposal has been agreed to by the Churches' Main Committee and by the associations of local authorities.

I intend to deal with Clause 8, which deals with the rating of property in three separate categories, at considerable length. The three categories are, first, property occupied by charitable bodies and other similar organisations which are not run for profit; secondly, almshouses; and thirdly, playing fields occupied by bodies not run for profit so long as no charge is normally made for the admission of spectators. There is no provision in the present law for any relief from rates for these three categories, but at present many of them have the benefit of sympathetic or nominal assessments which have been fixed in the past by the rating authorities. The valuation officers who are now responsible for valuation must, however, assess all property at its true value; therefore the first object of this clause is to enable rating authorities to continue to give relief from rates where they consider it to be deserved. Clause 8 gives them power to reduce or remit rates pay able by these bodies.

Fears have been expressed that if the discretion of the rating authorities were entirely unfettered they might decide, in some cases, when the revaluation comes into force, not to grant any remission at all to a body which had previously enjoyed a sympathetic assessment. The effect of such a sudden change on the finances of that organisation might well prove disastrous. Therefore the clause provides, as its second object, that in the year 1956–57—that is to say, the first year of the revaluation—the amount of rates payable is not to exceed the sum paid in 1955–56. Where this involves a remission of rates, the rating authority must give the same proportionate remission in subsequent years, unless they have given three years' notice that the remission is to be either reduced or discontinued. Any further reduction in the remission also requires three years' notice. The initial delay of three years before any changes occur will enable my right honourable friend to find out how the rating authorities are exercising their discretion in this matter, and to report to Parliament, so that further legislation can be introduced if it should prove necessary. I understand that this clause has been generally welcomed on all sides in another place, and will be, I imagine, in all parts of your Lordships' House; and it is acceptable to the local authority associations.

There was one point on which controversy arose—namely, on the application of the clause to schools. As drafted, the clause covers universities and most of the public schools in the country, but it does not apply to schools which are run by local education authorities. It is not thought that public schools will get much benefit from this clause in any event, for I understand that at present most of them do not have sympathetic assessments and that in any case, apart from the initial period of three years, the rating authorities will have the discretion to decide whether they are deserving of any remission or not. Local authority schools are maintained out of rates and taxes, and the local authority associations have not asked for them to be included in this clause. It does not appear that the local education authorities would derive any benefit from this clause if their schools were included. In the case of a county borough the local education authority will simply be paying rates to itself, and in the case of the county council, rates on the school will be paid to the county district council and about two-thirds will come back to the county council as county precepts. The principal effect of any reduction in the rates paid on these schools would be a reduction in education grants paid by the Exchequer. I believe, and my right honourable friend believes, that this clause will be of importance to universities. Most of them are now assessed on a sympathetic basis, and substantial rises in their rateable values are probable on the revaluation next year. In particular, this clause should go a long way, if not the whole way, to meet the apprehensions which have been expressed by the colleges at Oxford and Cambridge.

I turn to Clause 9 of the Bill, which deals with miscellaneous reliefs from rates. Among the proposals contained in this clause is the exemption of sewers from rates. Doubts have arisen about the London County Council outfall sewers and at a later stage I shall be moving an Amendment which will cover that point.


Can the noble Earl say whether he will he consulting the London County Council on the particular Amendment?


I am sure my right honourable friend will consult the London County Council to see whether they approve of the words which I hope we shall be able to insert during the Committee stage of the Bill. Clause 10 enables police authorities to make contributions to rating authorities in lieu of rates. Here, again, I am advised that the courts have held for some considerable time that police premises are regarded as Crown premises and, like property occupied by Government Departments, are not rateable. Noble Lords may well know that the Exchequer makes contributions in lieu of rates in respect of Government property, and police authorities will now be able to make corresponding payments which, like all other police expenditure, will be subject to an Exchequer grant.

Clause 12 prevents hardship which might be caused either to the landlord or to the tenant of a rent-restricted house let for a rent inclusive of rates by reason of the Rent Restrictions Acts where the amount of rates payable is increased as a result of the revaluation but is temporarily limited by the provisions of Clause 1 (7) of the Bill, pending the settlement of a proposal to reduce the assessment. The only other clause with which I think I need weary your Lordships is Clause 17. This Bill does not apply to Scotland, but Clause 17 (4) makes certain financial provisions for Scotland. I have endeavoured to explain to the House in a few words a somewhat complicated Bill. I have no doubt that many noble Lords who are interested in, and acquainted with, the working of local authorities will be well aware of all the principal points which are contained in these seventeen clauses and eight Schedules. I hope I have explained them sufficiently to the House to enable an interesting discussion to take place on the proposals contained in the Bill, and I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read 2a.—(The Earl of Munster.)

4.4 p.m.


My Lords, the House will be grateful to the noble Earl for the extremely clear way in which he has explained this admittedly complicated measure—and I use his own words, which he repeated. It is a complicated measure. The noble Earl will not mind my saying that he has had some assistance in preparing his remarks.


A good deal.


Those of us who sit on this side of the House have had no assistance. Therefore, I feel entitled to complain that we did not receive this Bill until Saturday morning. It passed its final stage in another place on Thursday night, having been considerably amended on Thursday, on the Report stage. It would have been useless to study this measure before we received it in its present form, because of the large number of important Amendments which were introduced at a late stage and which have completely revolutionised the Bill. Those of us who, unfortunately, have to take part in this debate have had to waste one of the few beautiful week-ends we have had, or are likely to have, in delving into this complicated measure. It is not as if one is in any way an expert on rating valuation; that made the matter even more difficult. I understand that the situation is made worse by the fact that a considerable number of Amendment are to be moved.


Not a considerable number; a few.


Well, a few on one side; but there may be more on the other. I understand that the Committee stage is to be taken next Tuesday, and if we have another fine week-end, that will be another week-end gone. Therefore, I feel justified in making the complaint that we have not been given a reasonable amount of time in which to make ourselves acquainted with this measure and to do justice to it. It may well be that I am complaining at the wrong door, and tint the fault does not lie with anybody in this House. But the fact remains that it is a great pity that business should be organised in such a way that we in this House, who have a duty to perform, should he put 1n the most difficult position of not being able to do our duty properly, except at great sacrifice.

This Bill, as I believe the Minister said in another place, is a temporary measure; and he indicated that there would be several further measures coming forward within the next few years. I think it is a pity that this important subject should have to be dealt with in a piecemeal manner, and in a hurry. There is need for a complete overhaul and reconsideration of our rating system. It has grown up somehow by a series of measures very much like this one, and the result of it all—and it will he even more so after the passage of this Bill—is that it is illogical and unfair. It is not based on any defensible or intelligible principle.

Perhaps we may consider the various methods by which rates could be levied. They could be raised according to the ability to pay. Well, our present rating system has nothing whatever to do with ability to pay. Or they could be levied according to services rendered. That obviously is not the case at the moment, and, apparently, the more services rendered to an individual, the less he has to pay. Nor are rates based on the profits one makes in the use of premises —if you make a loss you still have to pay. Nor are rates in any way levied upon the value of the land occupied. The present rating system is simply a tax on a building which is erected on the land, and the rates are increased every time you carry out improvements to that building. It seems to me that that is not a rational basis at all. It is a pity that we have not had the opportunity of giving fresh consideration to this matter when introducing the Bill, but I hope—possibly it is a vain hope—that when we get the promised reorganisation of local government that may afford an opportunity of tackling the whole rating system fundamentally, as it needs to be tackled.

Now this Bill confers one big benefit. It is one step forward, in the sense that we are at last to have the advantage of a uniform standard of valuation throughout the country. That is an immense advantage and it is a result of the Local Government Act, 1948. But this advantage is considerably wasted by perpetuating the anomalous method of raising local finances and by actually increasing the inconsistencies in, a number of respects. That is what I want to talk about for a short time. The Bill discriminates between residential and nonresidential premises. It leaves residential premises for the purpose of valuation substantially as they are. Admittedly there may have been an increase in valuation between 1934 and 1939, but if so the increase would be relatively small as compared with the increase in the valuation which will take place as regards all other premises and which will, of course, take in the enormous increases resulting from the war. This will affect shopkeepers, large and small, the tenants of offices (which I very much regret, being a tenant myself) and all other commercial and industrial premises. Admittedly the effect on industrial premises will be less, but their valuations will be increased in the same way as others, although they will not have to pay the full rates.

I should like the House to consider for the moment what are likely to be the effects of large-scale increases in regard to premises other than residential, as against hardly any increase in the valuation of residential premises. Assuming that the local authorities will not increase the total amount to be levied merely because of this Bill—and that is an assumption which ought to be axiomatic but which, I am afraid, is not; some of them may well be tempted to raise more money than they have been doing because obviously the rate poundage will become less—and will content themselves with levying the same amount of money as they have been doing hitherto, the result will be that shops and other premises will have to pay a much larger proportion of that levy, and residential accommodation will pay much less. Therefore, we may expect as one of the outcomes of this Bill a considerable reduction in the amount which the householder will pay and a heavy increase in the amount which will be assessable on business premises. I suppose all of us welcome any relief which we get from rates, but we have to consider what are going to be the effects on business premises, and they may well be very grave indeed.

I indicated in my earlier observations that rates are not levied on the basis of profits, and there may well be a number of businesses which are running on slender profits where an increase in the rates will make all the difference between making a profit and a loss. I think the House should be under no illusion as to the magnitude of what may be involved. Premises which might be at present assessed at £100 a year may well be assessed at £400 a year as the result of the new valuations. Rents will be increased in that proportion, and the unhappy tenant of a shop or offices may find himself paying several times as much rates as he has been doing in the past. One of the effects of that may well be that rents of business premises will come down because of the high rates. People who are about to embark on a lease will have to consider the joint effect of the rent and the rates, and owners of shops may well find that they are not able to get the rents they have been getting on the basis of the existing assessments. So we may find that, after the first quinquennium, rents of shop premises will come down.

But we then have to look forward to the next quinquennium, to 1961. Then dwelling-houses will be rated at their full value, and the result of that will be that they will have to pay a much larger amount of rates than they have been doing. Again on the assumption that the total amount of rates levied will not be increased, the share of the householder will become increased in 1961 and the share of the shopkeeper and other people decreased. That is all very well, but it creates a great amount of uncertainty. It would have been of help if the noble Earl could have given us some forecast of what he expects to be the outcome of these violent changes in assessment over the next few years. It would have been even better if he could have suggested some way of cushioning these violent changes, because they are most undesirable.

I have given my guess as to what I think is likely to happen: that the householder will be paying much less and shopkeepers and others will be paying much more in the next five years, but that in 1961, the second quinquennium—if one can project one's mind so far as that—the situation will be reversed. The citizen is entitled to know where he stands. Have the Ministry of Housing and Local Government made any calculations at all of what is likely to be the effect of this legislation? Surely they are not legislating in the dark, without any idea of the effect it is going to have. Perhaps the noble and learned Viscount when he replies will tell us something about the views of the Government and how the citizen is likely to be affected both by the valuation next April and by the valuation after that.

There is not a great deal I wish to say about the details of the Bill, but there are one or two things I think worth mentioning. One is that there was obviously a strong feeling in another place, on both sides of the House, that the time had come for the re-rating of industrial hereditaments. The question was not raised so acutely about agriculture which, I think, stands in a rather different position. If I may dismiss agriculture for the moment, I would point out that there is the Annual Review which takes into account any increases in cost; and any increase in respect of rates for which the farmer became liable would merely be reflected in the increased prices which the Government would probably have to meet. I can see a case, therefore, for leaving agriculture alone.

But so far as industrial hereditaments are concerned, I car see no justification today for relieving them of three-quarters of their rates. Let us see what the case was in 1928. I was curious enough to look at the speech made by Mr. Neville Chamberlain on November 26, 1928, justifying relieving industry of rates. It was then a very controversial step and it has remained so ever since. He talked about the inequitable system of rates which under modern conditions has been subjecting our agriculture and industry to a slow process of strangulation. He went on to say: By the effect of this inequitable rating system "— and the emphasis is on "equity"— carried on under circumstances of modern competition, we have actually involved in ruin some of our greatest industries. The burden of his speech was just this. He went on to develop the point that it was inequitable that industry should be required to pay full rates because it did not get all the services which the ordinary citizen had. I could understand that argument if we decided that in future rates should be levied on the basis of the services rendered to the citizen, but that is not so. Why do the Government single out the industrialist and give him exemp- tion front rates which is not given to many other classes of citizen?

I am sure the State makes a handsome profit on the bachelor, who has no children to educate. The State makes a handsome profit on other individuals of that kind who do not make a call on the services which are available; yet these people cannot come along and ask for 75 per cent. reduction in their rates. Therefore to suggest, as was suggested in 1928, that the case for de-rating rested on the fact that industry did riot get the services was, in my view, quite a false basis on which to give that reduction. If that principle was thought right, it should have been applied generally, and a new rating system, based on the services rendered, should have been substituted.

The other justification advanced in 1928 was the very serious position in which industry was then placed—what was called "a slow process of strangulation." I. never thought at that time that that was a good reason for exempting industry generally. This did not apply to all industry. If it had been desired to give sympathetic treatment to industries which were in a bad state, surely it could have been done in some more effective way and on an individual basis. After all, industry need not be ashamed of the means test. Industry is like anybody else. If it had been in difficulties and had sought relief, there might have been a case for giving it; but to give it indiscriminately, whether or not the assistance is necessary, seems to me all wrong. But what is the position to-day? Surely industry is not claiming that to-day it needs this assistance. Why should it? Why should an industrialist be exempted from paying three-quarters of his rates, whereas a shopkeeper has to pay his full rates? This is a matter which could have been dealt with in this Bill. I am very sorry that it was not. Whether I should be in order in putting down an Amendment on this basis, or whether I am competent to draft an Amendment, I do not know, but I feel that it is a matter which is deserving of much more consideration than has been given to it. I do not know whether the noble and learned Viscount the Lord Chancellor will be able to say a word on the policy of the re-rating of industrial hereditaments. It would he welcome if he could tell us something about it. I am quite sure that I am not taking him by surprise in raising this matter.

I want to say a word about charities. Let me say at once that I think the Minister has done a good job in drafting this provision. It was exceedingly difficult and tricky; there are all sorts of complications. I have just two criticisms to make. One is that the provision opens the door to uneven and unequal treatment as between one local authority and another for exactly the same kind of charity. A local authority may be sympathetic in one area and less sympathetic in another, and the result will be reflected in the differing amounts of rates levied. That is a pity. It would have been far better if we could have devised some method by which we gave the same kind of charities the same kind of relief throughout the country. I know the difficulties, and the Minister made it quite clear that one of the main ones was that of defining what is a charity. But once a particular charity has been defined as coming within the clause, it is a pity that it is open to a local authority to give no relief at all, or to give a different relief from that given by its next-door neighbour.

Nor is any guidance given to local authorities as to the way in which they should deal with this matter. It may be that the Minister could issue some—I will not say "directions," because local authorities do not take kindly to directions; but some advice as to the kind of charities that should be considered as being eligible, and the kind of relief that would be regarded as reasonable, with a view to harmonising treatment as between one authority and another. Whichever way it is done, I think that that is a defect of this method of treatment, recognising as I say, that the Minister has certainly done all he could to deal with this very tricky problem.

Another point is that there is no right of appeal: the decision of the local authority is final. So far as I can see (1 hope the noble and learned Viscount will be able to correct me if I am wrong), there is no way by which a charity can raise the matter in the courts or elsewhere. It can, of course, make a complaint to the Minister, but that does not help the charity, because the local authority has complete discretion and the Minister is helpless. Is there any way in which the matter can be tested if a local authority decides that it is not going to give any relief, say, to any charity or that it is not going to relieve very deserving ones? In the other place there was a good deal of discussion about appeals against valuation.

On the whole, the Bill it right. It will need further examination, which, unfortunately, for reasons I gave at the outset, I have not at this stage been able to give to it, to see whether the ratepayer is given enough time in which to appeal against his valuation. But I think the Minister did his best to meet the legitimate objections against what was in the Bill in the first place, and certainly the Amendments effect a considerable improvement. I should like to ask the noble and learned Viscount a question about Clause 12. It arises on what happens if the assessment of controlled premises is increased to a point which brings the assessment above the rent control limits. Assume the rent control limit in the country is £75 a year and that the assessment is increased to £85: will that take the premises out of rent control? I think that is a very important matter, because we do not want by means of a valuation Bill to begin the process of decontrol of premises. If we are going to do it, let us do it in a straightforward way, by a separate measure introduced into Parliament. I should like to be reassured on that point; otherwise it may be necessary to make the matter certain at a later stage. Then I should like to ask the noble and learned Viscount what is to be the effect on Schedule A. Is it automatically the case that if one's assessment is increased one pays Schedule A on the higher basis?




I am most comforted to hear that, and if it were put in the Bill I should be even happier. But I am bound to say that I have some doubts. I read the debate in another place and I do not think those doubts were resolved. But since the noble Earl is so definite about it, probably the noble and learned Viscount will be able to give me some assurances on the matter. I think that is all I want to say on the Bill as it stands at present. In the concluding stages in another place the Minister was praised by all sides of the House for the accommodating way in which he had dealt with the Bill. I hope he will continue his methods here. He has not always been so, but I hope he will be equally accommodating when we come to deal with the Bill at a later stage. If he is, then I shall have great pleasure in making remarks about him similar to those made in another place, for what those remarks may be worth.

I am sorry that advantage has not been taken in this Bill to improve and put on a satisfactory basis our system of local finance. This Bill constitutes a mere temporary step in the direction of making an unworkable and indefensible system of rating work—I suppose that, like most indefensible and unworkable things in this country, somehow it does work. But in that unsatisfactory task this House will give the Bill close arid detailed consideration; it will carry out its duty in the traditional way, and I hope that, so far as our criticisms arc concerned, we shall get at least as sympathetic treatment as was given in another place. Having said that, we will not put any difficulties in the way of getting the Bill through as soon as the Government desire it.

4.35 p.m.


My Lords, the clause to which I wish to refer follows that devoted to the Gas Boards—absit Omen! I hope that my own observations will be so short as not to require the implied criticism of that curious collation. All I wish to do is to express a feeling of welcome and appreciation for what this Bill proposes for the Churches. I should like to do that not merely in my capacity as Bishop of London and a member of the Church of England, but also in my capacity as chairman of the Churches' Main Committee. As your Lordships are no doubt aware, that Committee represents for certain purposes the whole body of the Churches, and we all alike wish to unite in expressing our appreciation.

The noble Earl, Lord Munster, in initiating the discussion this afternoon, pointed out that hitherto the Churches themselves have been exempt from rating. That, I think, has been the case ever since the Poor Rate Exemption Act, 1833. There has been no similar exemtion for church halls that have not been used solely for religious purposes, although they have been subject to certain discretionary powers under the Sunday and Ragged Schools Act, 1869. A long period has elapsed since that time, and of course the work of the Church has adapted itself to constantly changing needs. At the present time there are a large number of places of worship which are not used exclusively for that purpose, particularly in the new towns, where we are putting up what are called dual-purpose buildings, and the particular relief proposed under the Bill will be of tremendous assistance to us. I have no doubt that there will be certain difficulties over matters of detail, but we are all the more appreciative of what is being done, because at the moment this matter appears to be entirely non-controversial. But if there are difficulties to be worked out by way of explanation, I have no doubt that we shall receive the same considerate treatment from the Inland Revenue and the rating authorities as we have received from the framers of the Bill.

I should like particularly to ask some explanation from the noble and learned Viscount, if he is able to give it, on Clause 7 (2) (b), which gives relief to any church hall, chapel hall or similar building used in connection with any such place of public religious worship… What is the precise meaning, in the terms of the Bill, of the word "building"? I hope that it does not mean merely a permanent building; I hope that a temporary building is included within the meaning of the term. For instance, is a Nissen hut a "building" within the meaning of the Bill? It would be disastrous to us if temporary buildings of that kind were excluded by the use of the term "building." Then I should like to ask what is the precise meaning of the phrase "in connection with." I hope that it means in connection with the purposes, and does not imply any necessary local association with the place of public religious worship. I hope that it does not mean "adjacent to" or "in contiguity with." I hope that I am not unduly pernickety in asking for this assurance, but from long experience one knows that one can hardly be too careful in a matter of this kind.

With regard to Clause 8, the Churches are also interested in buildings which are sometimes owned by charitable trustees and other religious bodies that have no actual close association with a place of religious worship. We are very glad to note that there is some possibility of a reduction or proportional remission of rates for buildings of that kind, and we are particularly glad that three years' grace is to be granted before the rates imposed on such institutions are increased. In sitting down I should like, once again, to say how much we appreciate the relief given to Churches under this measure.

4.41 p.m.


My Lords, I want to make certain comments on Clause 8 of the Bill, to which great attention was paid by the noble Earl who opened this debate. I agree with the noble Lord, Lord Silkin, that the noble Earl made a very clear statement on that clause and on the rest of the Bill. I trust that the hopes he expressed with regard to that clause will be fulfilled. As one who has had a good deal to do with Oxford most of my life, and who regards it as of the utmost importance that the future of our great universities, as well as of other charities, should be assured, I welcome the concession made in their favour and embodied in the new Clause 8. Nevertheless, that clause, if I interpret it correctly, has one undesirable feature: it buys time for charities, universities and schools, but it does no more. It lays down no permanent principle. As very large sums are involved, this matter is of great importance. Taking the universities alone, I believe that a sum of about £1½ million is involved. Your Lordships will easily understand that to leave such large sums entirely to the discretion of local authorities must inevitably introduce a most undesirable instability into the finances of the affected charity, perhaps a college already very hard pressed.

I know that in the clause three years is allowed in which to settle this matter; but it remains true that no principles are laid down about how the decision shall be arrived at. Nation-wide charities as well as universities pay rates, mainly, I take it, in one area and to an authority that has only a local interest; but universities and colleges are of great importance in far wider regions. Oxford and Cambridge colleges and other universities draw their undergraduates from all over the world while they pay rates locally—in the case of Oxford, for instance, to the Oxford City Council. While that part of the Bill dealing with this particular problem is welcome and, so far as it goes, is of great value, it leaves a permanent solution of the problem still to be found.

4.46 p.m.


My Lords, like the noble Lord who has just spoken, I will be brief, particularly as the noble Lord, Lord Silkin, has already covered many points of view which would have been expressed from this side of the House. First, following on what the noble Lord has said in regard to Clause 8, I would raise two points to which perhaps the noble and learned Viscount will reply. The first is the exact meaning to the reference in Clause 8 (1) (a) to certain institutions and organisations. I have in mind the co-operative societies of this country who, apart altogether from trading purposes, deal with educational, social and welfare matters. I am wondering whether co-operative halls which, essentially, are used for these particular purposes, will receive the benefit of this clause. The second point arises in regard to paragraph (c). I am wondering whether amateur football, cricket and other clubs not run for profit will also have the benefit of exemption under this subsection. It seems to me that, if certain playing fields are excused, then playing fields used in connection with town or village clubs, if they happen to be rated, may also be exempted in this way.

The Parliamentary Secretary to the Ministry of Housing and Local Government said, at the conclusion of the Third Reading of this Bill [OFFICIAL REPORT, Commons, Vol. 543 (No. 22), col. 1238]: This is not a big or inspiring measure. I think that all noble Lords can agree on that. Like the noble Lord, Lord Silkin, I had hoped that at this stage, and after so many years of consideration, the Bill would have been more effective and would have dealt more completely with the rating system of this country. The Parliamentary Secretary also said that the Bill would make a radical change in regard to rating and local government authorities and their income. It makes radical changes in the position of some ratepayers—very radical changes indeed. It appears that, when this Bill comes into operation, very great onus and expenditure will be cast upon the main body of ratepayers of this country, who are the householders. I have before me certain figures regarding rates which may be expressed in your Lordships' House and may, perhaps go outside the confines of, this House. The figures show that domestic ratepayers (that is, householders and the like) contribute £200 million in rates, which is practically 60 per cent. of the total rates paid in this country. Shopkeepers contribute about £68 million which is 20 per cent., and the industrial hereditaments contribute £14 million, which is only 4 per cent. So your Lordships will see that the difference in the rate payments made by various bodies of ratepayers is very considerable. And I am advised that the rate charges on shops, and such like premises, under the new arrangements will not stay at 20 per cent., but will increase to 30 per cent., which, of course, will be a heavy burden upon that particular class of business people.

For my own part, I should have preferred—I may not be voicing a general opinion here—not to have different years of valuation such as the Bill provides, with houses being assessed on their 1939 value. 1939 is sixteen years ago. The basis of valuation must be a matter of difficulty, but I should have preferred the whole system to be on a basis of 1955. I think if that system had been adopted it would not be found, as I believe will be the case now, that there would be numerous appeals from shopkeepers. And if they had it in mind that they were assessed on the same year valuation, the outcome, I think, would be better. It has been said that the 1939 basis will operate only until the near quinquennium. As Lord Silkin remarked, we shall, no doubt, he met with numerous appeals from the householders of this country at that particular time.

I am very sorry that the method of the lodging of the draft valuation list which operated in the old Act goes by the board in this Bill. I think it is essential that when a new valuation list comes into being, or is about to come into being, the ratepayers who are affected by that particular list should have the right of appeal at that time. In this instance they must wait until the rates are levied in April. They can look at the list and may be able to lodge their appeal, but they cannot be heard until they receive their rate demands. In the old days numerous appeals were made on valuation lists. It has been within my experience to carry out a valuation of a town according to the old Act, and to be faced afterwards with numbers of appeals; but we got rid of those appeals very quickly when they came up. And, having once dealt with a certain number of appeals, the operation of the appeals afterwards became more or less automatic. I therefore hoped that, in fairness to everyone, we should have a similar basis of assessment on a similar year. I think that would benefit the community and make it easier all round.

I was glad to hear from the noble Earl who moved the Second Reading that there will probably be Amendments forthcoming from the Government in regard to Clause 4 (8)—the waterworks clause. I am also encouraged by the fact that it was said in another place, and has been said here again this afternoon, that the Government are hoping to put down further Amendments. I hope that those Amendments will be produced and issued as quickly as possible after this sitting, in order that they may be considered. I agree with what the noble Lord, Lord Silkin, has said about the time we have had in which to consider this Bill. I did not spend many minutes during the week-end looking up what Mr. Neville Chamberlain said; but the fact that this Bill reached us only during the week-end made it difficult to look into relevant matters. I hope that the Amendments which are to come from the Government will help us in that connection. And may I add one personal word? As a member of the Royal Institution of Chartered Surveyors, I understand that there will be in the hands of the Government a suggested Amendment in regard to Clause 4 (8) for their consideration.


The noble Lord means Clause 5 (8).


Yes, that is so. I am sorry I had the wrong clause. In regard to Clause 5 (8) it is desirable that the Government should have a look at the memorandum from the Institution which I have mentioned, before the Government's own Amendment is put on the Paper. The Institution has already sent to the Government memoranda based on their experience—and their experience is naturally very great in regard to rating matters of this sort. I hope the Government will give the consideration to them which I think is due to memoranda coining from that professional body.

4.56 p.m.


My Lords, I will be as brief as possible. I feel that, at the outset of my remarks, I ought, perhaps, to disclose my interest. I have just come from Bisley, where some hundreds of marksmen from all over this country and the Dominions are now engaged in their final matches; and I also have the honour to be chairman of the National Rifle Association. There is a point with regard to the interpretation of Clause 8 of this Bill which is causing grave concern, I think I may say correctly, throughout the country. In the past, the National Rifle Association, which is certainly not a profit-making body, has been classified for income tax purposes as a charitable institution. If that is to apply to the valuation, well and good. But, if it is not (I can speak only with regard to Bisley and the National Rifle Association but, of course, this applies to rifle clubs throughout the country), so far as Bisley and the N.R.A. are concerned, we are informed by the valuers that we shall be threatened with an increase of from £1,500 to £8,500 a year.

If that were to eventuate, the National Rifle Association would have to close down at once, and that would have repercussions throughout the country. In fact, it would, at one blow, kill rifle shooting and marksmanship throughout the country, and there would also be repercussions in the Dominions. From reading the Report of the proceedings in another place, I gathered that archery as an outdoor sport would probably be included in this clause as eligible for relief. Without wishing to say anything derogatory about that ancient and historic sport, I might, with all respect, suggest that rifle shooting is perhaps a little more important. I hope that the noble and learned Viscount who sits on the Woolsack will be able to reassure us with regard to the interpretation of the clause as affecting charitable institutions and the N.R.A. and rifle clubs.

5.0 p.m.


My Lords, I had no intention, when I came down from Yorkshire this morning, of intervening in this debate. But the noble Earl, Lord Munster, has made such an interesting Second Reading speech that I should like to put to the noble and learned Viscount who sits on the Woolsack one or two questions which might affect some of the smaller cricket clubs. I would ask this specific question. Under this Bill, would Fenner's, at Cambridge, where I believe charges are made for county cricket matches—and most enjoyable functions they are—be rated as a profitable venture or as a non-profitable undertaking? The right reverend Prelate spoke with satisfaction of the exemption of church halls. But church halls are not always used for purposes of worship: they are often used for other purposes, not so important but still useful. For instance, will a church hall be rated when a debt-ridden parish or chapel congregation decide to have a bazaar in order to replenish their coffers so as to be able to pay the vicar or minister? In short, will they be rated if part of the premises is used for what are called secular purposes? I know that a certain amount of apprehension is felt on this matter, and I hope the noble and learned Viscount the Lord Chancellor will be able to make the position clear.

The noble Earl, Lord Munster, said that there will be a delay of five months in the hearing of appeals. He almost prophesied that there would be a tornado of appeals thundering down upon the poor valuation officers. If that is going to happen, perhaps the noble and learned Viscount will tell us what will happen to appeals made by private individuals with static incomes who appeal about their own houses. Are they to be let in for more expense, as has been the case during the past few years? And while the valuation officer goes through the appeals with his small toothcomb I hope there will be no alteration upwards in the valuation before an appeal is heard. Notwithstanding the fact that I followed with great interest and attention the speech of the noble Earl, I did not gather who are the persons who will hear appeals. Who are these nebulous people who are to take over valuation appeals? I presume that they will be alive, and not automatons, and that they will have some bowels of human kindness in their make-up. I remember that in the good old-fashioned days, on which I look back with a certain amount of nostalgic pleasure, we could make an appeal to the local authority; and as an overseer of the poor in my parish I could remit the rates of some of the downtrodden, hard-pressed persons who pleaded dire poverty. I should like the noble and learned Viscount to assure us that this Bill, which only one person in 100,000 can understand, is not going to bring fear and apprehension to poor people with static incomes, and that they will not be worse off under it than they have been so far.

5.7 p.m.


My Lords, I am sure that Her Majesty's Government have no reason to be dissatisfied with the debate which this measure has provoked. I am sorry that the noble Lord, Lord Silkin, should have been short of time to consider such fascinating mental pabulum. I can only say that if, like me, he did his work sitting in a deck chair in a sunny garden yesterday afternoon, even this subject would acquire an attraction which it sometimes fails to possess. But I am really sorry that he should have been limited in time. All I can do is to answer his points with as great a particularity as I can. If I fail to give a complete answer on any one, I invite him most sincerely to come and see me and I shall try to enlarge upon it; but I hope I shill be able to deal with most of the points he raised.

I do not think the noble Lord would expect me to follow him too far into his intensely interesting criticism of our rating system, because that is a little wide of this Bill. It reminded me of an old friend of mine, the late Theo. Matthew, known to many of your Lordships as the author of Forensic Fables, who began his remarks in one case with these words: This is a rating appeal, with all the sordid factors which are usually connected with that class of legislation. I could not help feeling that the noble Lord, Lord Silkin, somewhat shared that view, although he expressed it in a manner more suitable to your Lordships' House. I would only say that I happen to disagree fundamentally with the late Mr. Matthew and the noble Lord on rating litigation. I have always found a great fascination in the problem that our rating laws set—namely, what would a hypothetical tenant pay for the hereditament? In whatever form one asks it—whether by an ordinary comparison with what one pays for other premises, or in the form of receipts and expenses, allocating how much a person would pay in rates out of that, or even in the more rarified system of the contractor's test in which one imagines an efficient capital structure substituted for the building actually under consideration—I have always found these problems of immense intellectual pleasure. So I cannot entirely follow the noble Lord in the criticisms he has voiced. However, I should like to consider that point in more detail, because the noble Lord has certainly put forward some thought-provoking suggestions in this field, and I hope the opportunity may come for us to consider them.

On the second point he raised—namely, that the effect of the Bill will be to increase the rate burden on shops and offices in the first quinqennium, and then to bring up the burden on houses in the second—I would remind him that my right honourable friend the Minister has given an assurance that the Government will review the position as soon as the effects of the revaluation can be measured. My right honourable friend reaffirmed this on Second Reading in the other place on June 17 [OFFICIAL REPORT, Coms., Vol. 542 (No. 9), cols. 916 and 917]. I would remind the noble Lord that the Bill does not affect the basis of valuation. The pre-war basis for houses was provided for in the Local Government Act, 1948, which was introduced by the Government of which the noble Lord was a member, and was retained in the Valuation and Rating Act, 1953. Therefore I think we are dealing with the remains of a position with which the noble Lord is well acquainted; that is to say, the problems set by the fact that at present it is impossible to see a true current value for houses in the conditions we have been faced with in the years since the war. I need not elaborate that argument, because the noble Lord initiated a housing debate the other day and I listened carefully to what he said.

The noble Lord asked whether some forecast could be given as to the effect of the proposals in this Bill. I want to deal with that point, because it is a point which is clearly one to be made. I should like the noble Lord to appreciate that we have considered it carefully, and it is not because we have just let the matter slide that no forecast has been given. I believe that any forecast would be unhelpful in the extreme. There are so many anomalies in the current lists, both as between individual properties and as between rating areas, that any conclusions as to the general trend would be more likely to be invalid than valid in particular instances. I am sure the noble Lord will see that I am really making a sound point. I am not going into differences between individual properties—they are obvious—but, as the noble Lord knows, different areas have taken different views in putting their duty with regard to rating into effect. I am not going to criticise, to praise or blame, but that is the fact. One may find that in two great cities in one case they have tried over the years, with great labour, and often with great difficulty on the part of their officers and their assessment committees, to get a fair approximation to value; in the other case they have deliberately, as a matter of local policy, undervalued. That is why I say there are existing to-day these anomalies between areas, and any attempt to give a forecast would meet with that difficulty.

But it does not stop there. Even if it were possible to generalise about possible changes in they assessment of different categories, it would be quite impracticable to make any useful forecast of movements in the other variable factor determining rate liability—that is to say, rate poundages. Again, I should like to take a little time on that matter, so as to show the noble Lord that there is a substantial point in this connection. In county districts the rate poundage will be greatly affected by the elimination of anomalies, so that rateable values throughout the county are on a uniform basis, for this affects the way in which the burden of county expenses is shared. The elimination of similar anomalies throughout the county will similarly materially affect the Exchequer grants; and again I need not go into detail, because the noble Lord has the general problem in that regard in mind, and I think he will see the validity of my point. I do not want to criticise the words of the noble Lord, Lord Silkin, until I have had an opportunity of reading them in the OFFICIAL REPORT. But generally, in the preliminary part of his speech, which personally I found most interesting, I do not think he gave sufficient emphasis and weight to the fact that, broadly, when the assessments increase the poundage should diminish, although I know he had that point in mind. I should like to reserve any further remarks on that until I have had an opportunity of reading the noble Lord's speech.

I would now pass to some of the more specific points raised by the noble Lord, and I hope that if, when I have finished, there are any I have missed, he will not hesitate to remind me, because my whole desire is to answer the points, so far as I can. He asked me to deal with the question of re-rating, and especially in regard to industrial hereditaments. I want to remind the noble Lord that my right honourable friend, in saying that the Government had undertaken to make a general review of local government finance, deliberately did not exclude the question of re-rating from that general review. But I want to point out to the noble Lord some of the difficulties that obviously arise. I think he will agree that it is not a matter which can be dealt with in isolation from other matters concerning the finances of local government. The noble Lord has gone into the history of the matter, and has given us some interesting quotations from the debates at that time. I should like him to consider this point. Clearly, the re-rating, in part or whole, of agriculture and industry would make a big addition to the rate revenue of local authorities. Of course that would be quite a pleasant thing for local authorities, but I am sure that he would agree, as a former Minister of Town and Country Planning, that such an important change ought not to be made without a simultaneous review of Exchequer grants, the other major source of revenue for local authorities. Having gone into the history of this matter, the noble Lord will remember that in 1929, when the present de-rating provisions were made, there was a general review of local government finance. These provisions, it seems to me, should not be changed without a similar review.

As I have said on the other point, upon revaluation next year there are bound to be changes in the relative levels between different areas, and between different types of property. In some areas there is at present a bias in favour of industrial property, and the elimination of this bias will, of necessity, mean an increase in the rates paid by industry in those areas. These changes will need to be taken into account in considering the case for and against de-rating.

As I have told your Lordships, it will not be possible to complete the general review of local government finance until we have seen the effect of the revaluation, but I should like to deal squarely with the other point which the noble Lord raised, because it is an important one. That was, broadly, the question of the need on the part of industry for the three-quarter relief which industry at present receives. The noble Lord's point, broadly, was that although that may have been all right for 1929, when industry was in a bad way and unemployment was becoming prevalent, why should it operate to-day? I have dealt with the point of view of the local authorities, but I think the effect on industry must be considered more closely. Before they could agree to the repeal of de-rating the Government would need to be satisfied that it could be done without harm to the national economy, and I do not think that is clear at the present time.

Where I differ from the noble Lord —it may be in emphasis, but I think it is important—is that it is not enough that industry as a whole is in a prosperous and healthy condition to-day, and that over the whole of industry the rates, on average, amount to only a small proportion of the net costs. It is necessary to take into account the effect on individual industries, and there is some evidence—and we have considered this matter—that the burden would fall most heavily on the basic industries and on some of the most important export industries. If this is so, the effect on the national economy might be serious. I think this aspect requires the most careful consideration. I should like to assure the noble Lord that this is a matter to which I personally have given some thought, and that is one aspect of it. I put it no higher than that. I do not want to overstate the case, but it is an aspect which, in my opinion, does require the most careful consideration. I am sorry to take up so much time, but the noble Lord asked me to deal with this point, and I think it is right that a statement should he made on it.

I should like to deal for one moment, very briefly, with what are called, in rating parlance, freight-transport hereditaments. I think one might just as well call them transport hereditaments, but they have always been known as that. The noble Lord will appreciate that the return to full rating of transport property would apply only to property not owned by the British Transport Commission, beta use that is dealt with specially. But that is a relatively small part of the total. Again, it is clear that it would hardly he fair to do this without a corresponding increase in the payments in lieu of rate made by the Commission—the noble Lord will remember that they make a payment in lieu of rates. This increase in the Commission's payment would amount to some £6 million a year, and I do not think anyone, whatever his Party politics, would suggest that this is an opportune moment to put an additional burden of that sort on the railways.


May I ask the noble and learned Viscount a question on that point? Is it not a fact that the amount which the railways received in deductions for rates under de-rating had to be passed on to the traders, so far as certain selected traffic was concerned? If that is the case, if de-rating is abolished surely there is no case for that additional payment by the British Transport Commission.


I have, some recollection of that, but, speaking from memory, I do not think it covers the whole field. I think my point is a good one that if the increase were made in freight-transport hereditaments, and a corresponding increase of some £6 million had to be made in the British Transport Commission's contribution, it would mean imposing a heavy burden on the British Transport Commission. That is the point. I am making.


I do not want to argue the point. The only point I wanted to make was that the British Railways made nothing out of the transaction. They had to pass on the benefit to the traders, and now that there is to be a new method of charging, surely the point does not arise, and de-rating could, without injustice, be looked at again.


I should not like to accept the noble Lord's point without considerable thought, but I assure him that what I have in mind is the benefit of the British Transport Commission. I will willingly consider it. I think we are approaching the matter from the same angle, and we both agree that if the result were to lay an additional burden of £6 million a year on the British Transport Commission neither the noble Lord nor I would want to see it happen at the moment.

The noble Lord, Lord Silkin, to revert to his speech, made the argument the other way, if he will allow me to say so, with regard to agriculture, and I do not think pressed that very hard—indeed, no-one has pressed it very hard. There are two points. One point the noble Lord made was that, at a time when considerable subsidies are being paid, to put back on agricultural land a liability for rates would be a somewhat circuitous method of dealing with the situation. The other point is that, in contrast to industrial hereditaments, agricultural hereditaments have not been rated at all. It will take some years—the noble Lord may take that from me—to get the valuations into being and to make the rating of agricultural properties a practical thing. I have raised these subjects because I think that the points I have made, as to the incidence of rates on basic and export industries, the question of freight-transport hereditaments and the position of agriculture, are very serious matters which have all to be taken into account before one comes to a conclusion. I felt it was only right, in deference to the noble Lord's speech, that I should deal with it rather more fully, but the answer which I think will give him most comfort is the answer with which I started: that my right honourable friend, in his review of local government finance, will not exclude this matter from his consideration.

Perhaps I may now come to some of the other points made by the noble Lord, Lord Silkin, which I am glad to be able to assure the House will not take so long to answer. The noble Lord raised a question with regard to Clause 8, that there was no provision for appeal. There are two aspects of this. I should like to reassure him on one of them, and that is with regard to the leaving out altogether of the charitable hereditament, if I may so call it. The noble Lord may like to know that the clause as originally drafted contained provisions for enabling bodies who are not given what I may call the "standstill" in rates provided for by the clause, or are not given the standstill to the requisite extent, to appeal to the justices. On investigation, however, it was found that the provision of Section 4 of the Poor Relief Act, 1743, which is still in force in connection with the making and the levying of the general rate, by virtue of the Act of 1925, enables any person who is aggrieved by any rate or who has any material objection to being put on the rate or to the sum charged, or is aggrieved by any act or thing done or omitted by the rating authority, by giving notice to the next court of quarter sessions to appeal against the rate, whereupon quarter sessions are empowered to hear and finally determine the same.

Section 53 of the Local Government Act, 1948, which precludes an appeal against a rate if the valuation list is conclusive on the matter in relation to which appeal is sought to be brought, does not apply here, because the valuation list is not conclusive for the purpose that is material here. The amount of the rate depends on the express provisions of the new clause which, in effect, say that, whatever may appear in the valuation list as the rateable value of the property, the provisions in regard to the rate provided for by the clause are to be enjoyed. Therefore, there is no need for an appeal provision on that point. On the other question of the policy of local authorities, I should like to say a word in a moment, because that is the point which was raised by my noble friend Lord Brand. I should like to deal with that separately.


Before the noble and learned Viscount leaves the question of appeals I would make this point: that it is a little difficult to formulate, and still less to succeed in, an appeal against the manner in which a local authority exercises its discretion. And although conceivably it is possible to appeal under the Act of 1743, would not the answer be, "A local authority is entitled to exercise its discretion. It has done so. That discretion is quite unfettered. Appeal dismissed with costs"?


Yes, I was going to deal later with the question of a local authority's use of its discretion, but perhaps it might be more convenient if I dealt with it now. I have not the slightest hesitation in so doing. One can summarise the speech of my noble friend Lord Brand in this way: that he welcomed the provisions of the Bill which postponed the problem for a period of three years, but he still said that the problem was not solved but only postponed. In a sense that is true. But again one comes back to the point which I made in another connection, that my right honourable friend the Minister has agreed to review the position when he has seen the general effect throughout the country of the revaluation which this Act will bring about. And by that time, in the course of the year or two after April, 1956, he will be able to see how local authorities are exercising the powers that are given them under Clause 8—because noble Lords will remember that they have to give thirty-six months' notice as to any change. So that one should know in not too long a time whether local authorities are going to use their powers in order to help these educational and other charities which are dealt with by Clause 8.

If it appears that they are not going to assist educational and other charities in the way in which assistance has been given in the past, then my right honourable friend, after his review, will have the opportunity of dealing with the matter in the subsequent legislation which must be brought before your Lordships' House. Your Lordships may say to me, "Then why wait? Why have this period of postponement?" I do not think that anyone who has not had to consider the position throughout the country realises how many anomalies exist in regard to valuation at the present time; and until my right honourable friend has had an opportunity of considering how things will be changed, and how we hope that a number of anomalies, at any rate, will disappear in the two or three years after 1956, I do not think it would be right for him to bring forward a scheme to deal with this particular problem of the charities and put them on a permanent basis. I sympathise with Lord Brand's point. Of course, I ought to have declared my own interest. Like the noble Lord, Lord Brand, I am an honorary Fellow of a college of the same university, and I am a Visitor at two other colleges at that university. So, having frankly declared my interest to your Lordships, I hope you will feel that the point has not been missed by Her Majesty's particular servants at the present time.

The noble Lord, Lord Silkin, asked me, with regard to Clause 12, what happens if the effect of revaluation is to bring the assessment of a house above the rent-controlled limit. I am glad to be able to inform him that the answer is that a rise in the assessment on revaluation will not affect the rent control position in any way. The material figure for rent control is the rateable value in 1939 or, in the case of a new property created between 1939 and 1954, the first rateable value placed upon the property. So that is not altered, and think that meets the noble Lord's difficulty on that point.

The noble Lord, Lord Silkin also asked me whether Schedule A would be affected. Perhaps he would allow me for the moment to read him the answer that my right honourable friend the Financial Secretary gave in another place. Mr. Brooke said [OFFICIAL REPORT, Commons, Vol. 543 (No. 18), col. 478]: The new rating valuation will not automatically result in a revision of assessments for Income Tax, Schedule A. No such revision could be made without fresh legislation. The Royal Commission on the Taxation of Profits and Income made certain recommendations in its Final Report, but my right honourable friend has not yet completed his consideration of the matter. So that without legislation there will be no automatic effect.

Now may I pass to the two main points made by the right reverend Prelate the Lord Bishop of London—and may I say that the right reverend Prelate has expressed his regret to me and, through me., to the House that he has had to go on an important occasion. He asked me whether the church hall provision extends to temporary structures. The answer is "Yes." Then he asked me whether the church hall used in connection with the church has to be physically joined or adjoining. The answer is "No." Then, as an alternative to that, he asked whether it was sufficient that it was being used for the purposes of the church. The answer is "Yes." So that the right reverend Prelate is satisfied on both of these points.

I tried to deal with the point raised by my noble friend Lord Brand, but I should like to add this in regard to his point: that the clause is a compromise between the need for stability in the finances of charitable bodies and the wish to preserve the discretion of local authorities so far as possible in what is, after all, a local matter of great importance to them. The requirement of the three years' notice of any change still provides a measure of stability, and the initial period will provide a breathing space during which the charities and the local authorites can consider their positions. I should say to the noble Lord that during that period my right honourable friend the Minister will review the position, and I have tried to give the reasons why I think it is better that that review should come later rather than at the present time. I am aware that that cannot entirely satisfy my noble friend, but I think that he will see that from the point of view of Government and local authorities it is a position which is logically respectable and tenable.

The noble Lord, Lord Wise asked me whether co-operative societies came within Clause 8. I am afraid that my answer will not satisfy him. Your Lordships will remember that the point was raised in another place. The difficulty is that their main object is not educational. In special circumstances, if the main object were educational, I should reconsider it. But that is the difficulty which faces the noble Lord there. Amateur football clubs have the benefit of the clause; but this does not excuse them of rates—they will benefit only by the three years' remission provision, or if the rating authority at their discretion make further remissions in the future.


Does that affect cricket and similar clubs?


Yes, they would be in the same position. The noble Lord raised an interesting point with regard to rating at current—1955—values. I am quoting the round figures which he used, and I think they are good enough to make the argument clear at present: about £200 million in rates—60 per cent. of the total—comes from householders; £68 million, or 20 per cent., from shopkeepers, and £14 million, or 4 per cent., from industrial sources. First, assuming that we are going to revalue them all on the 1955 basis, any estimate of the change in the incidence of the rate burden would be pure speculation be- cause of the anomalies which I mentioned earlier. Secondly, my right honourable friend the Minister made quite clear in another place that he personally had the same feeling as the noble Lord, Lord Wise, in favour of current values. But as I said a few moments ago, this is impracticable now, for the same reasons that it was in 1948. There is virtually no evidence of free market house rates on which one can base current assessments. I had that point drummed into me over and over again by colleagues of the noble Lord in another place when I was dealing with the Landlord and Tenant Bill. It is a problem which we all admit, and the difficulty is one which I think is insurmountable in regard to that case.


The position may have altered in five years' time—in other words, we may get on to a steady basis. We shall not be indefinitely on a 1939 basis.


I quite agree. I do not wish to make any Party point about building houses. Let us say that we all hope that the housing problem will be greatly eased by that time, and that it may be possible to approach it and get over what is still a difficulty.

The noble Lord, Lord Tedder asked me about rifle clubs. The answer, broadly, is that if for income tax purposes these clubs are charitable they are probably within the scope of Clause 8. I cannot do more than generalise on a point like that, because of the special conditions of each club. If the noble Lord would like to discuss it further with me I shall be happy to discuss any particular points that may arise. The noble Lord, Lord Calverley, asked me a question with regard to church halls. The answer is that the fact that a church hall is used for secular purposes of the church—for instance, a bazaar to help church funds, which is what the noble Lord put to me—will not make it rateable for that reason alone, because the hall is not "let," which is the word used in Clause 7 (3). Of course a church hall is caught by that provision when it is let and the rent of the letting does something more than cover the expenses, looking at it reasonably and allocating a portion of general expenses towards them. So on that point I think I can give the noble Lord, Lord Calverley, and his friends some comfort. I am sorry to have detained your Lordships so long, but I have tried, as clearly as I could, to answer all your points. If I have missed some points through my writing being too bad for me to make out the note which I had taken, I hope that noble Lords will not hesitate to come and see me.


What about Fenner's?


I am afraid that I sport another kind of Blue, and I shall have to get instructions upon that from the noble Lord on the Cross-Benches and others who have not had my good fortune. I thank your Lordships for the kind way in which you have received the Bill, and I hope that you will now give it a Second Reading.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

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