HL Deb 12 May 1959 vol 216 cc299-320

3.52 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(The Earl of Dundee.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair.]

Clause 1:

Postponement of new valuation lists, and restriction on proposals for altering current lists

(3) Notwithstanding anything in section forty of the said Act of 1948 (which enables proposals to be made for the alteration of valuation lists) a proposal for altering a valuation list in force at the passing of this Act (not being a proposal made by the valuation officer)—

  1. (a) shall not have effect if served on the valuation officer after the passing of this Act, and
  2. (b) shall be deemed never to have had effect if served on the valuation officer before the passing of this Act but on or after the twelfth day of February, nineteen hundred and fifty-nine,
unless (in either case) it is or was a proposal made by the owner or occupier of the hereditament to which it relates, or a proposal made by virtue of subsection (2A) of the said section forty (which enables a rating authority to make proposals with respect to hereditaments not included in the valuation list).

LORD LATHAM moved in Clause 1 to leave out subsection (3). The noble Lord said: Having returned from the rarefied atmosphere of the mysteries of space, we may now perhaps deal with a matter which is certainly very earthy. Whether there will come a time when assessments and valuations will be necessary in outer space is a matter which is not, at all events, dealt with in the present Bill. Rating and valuation is not an attractive subject and its very complexity rather militates against brevity. It is, however, a very important element in the local government of this country, for rates produce some 38 per cent. of the total local government expenditure; that is to say, rates produce some £555 million, which is based upon a rateable value of some £601 million after deduction of de-rating for agriculture, industry and commerce.

The Amendment in terms is a simple one, but it is important. It asks that the situation which presently exists should be left and that the proposal to remove the right of local authorities and ratepayers to lodge what is known as third party proposals should be left unimpaired. The purpose of this Bill was not to deal with the fundamental provisions of rating. It is a Bill the purpose of which is to postpone the next valuation from 1961 to 1963. There are no grounds arising from that postponement, if in fact it is justified, which justify a fundamental change in the procedure of rating. This right of lodging third party proposals is long established; it goes back at least as far as 1925. It was and is an essential element of the procedure of quinquennial valuations that if it happens that during the period of the quinquennium there is an unfairness or an incorrection in regard to any particular assessment, then the local authority as the rating authority and any ratepayer is entitled to raise the question on the grounds that comparison may show that unfairness exists. Subsection (3) of Clause 1 of this Bill takes away that right until March 31, 1963. The purpose of the Amendment is to retain that right. It will be seen, therefore, that there is a fundamental difference between the Bill and the Amendment.

By Section 40 of the Local Government Act, 1948, any person who is aggrieved by the value ascribed to any, hereditament in the current valuation list may at any time make a proposal for the alteration of the list so far as it relates to that hereditament. The person making the proposal need not necessarily have any interest in the hereditament to which the proposal relates, although he must specifically be aggrieved in some way by its assessment in the list. As I have said, such proposals are known as third party proposals, and they extend to include the right possessed by local rating authorities. It is a basic and indefeasible principle of rating that as between different classes of property and as between properties in the same class the valuation lists shall be fair and equal. The only remedy open to a ratepayer who is assessed unfairly by comparison with other properties but who cannot show that his own assessment is incorrect of itself is to make a third party proposal. As regards local authorities, under-assessment of one class of hereditament throws an unfair rate burden on the occupiers of others. Over-assessment is also, of course, unfair to the individual ratepayer.

The Minister, opening the debate on the Second Reading of the Bill on 23rd February of this year, sought to justify this proposal in Clause 1 (3) on the grounds that if there is to be a general postponement of new valuation lists a door ought not to be left open to secure partial revaluations by means of proposals for alterations of lists, and he went on to state that there is a precedent in Section 22 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955. It is important to note that this provision was operative only from the passing of the Act in July, 1955, until the new lists came into force in April, 1956. That suspension of power endured for only eight months, whereas the proposal in the new Bill is to operate from the date the Bill was introduced—namely, February last—until March, 1963, which is a period of four years. I submit that the analogy is quite invalid, for the present circumstances are quite different. In 1955 the pre-war valuation lists were still in force, and even then the general level of values was below 1939 rents. Accordingly, continuing delay in making new valuation lists caused some local authorities to carry out partial revaluations of their areas, in particular of non-residential property. This had the effect of considerably upsetting the incidence of the rate burden between one class of hereditament and another, particularly in view of the high rate poundages which were then being levied.

But the dangers of 1955 do not now exist, since dwelling-house assessments are frozen at their 1939 values and all other hereditaments were recently revalued for the first new lists under the 1948 Act. Therefore, I submit that the 1955 precedent is not a valid one. It is a pretty tenuous excuse for taking away a right which is of the very essence of the rating and valuation system of this country. On the Committee stage there was general opposition to this clause from the members of all Parties in another place, supported by the opposition of the local authority organisations. Amendments were moved on the Committee stage in another place and the Government survived with a fugitive majority of no bigger than 22 or 23.

In the course of the debate in another place the Minister abandoned the 1955 precedent argument and fell hack on what I feel I must describe as another excuse—it certainly was not a justification. It is novel, it is engaging and of course it was intended to be diverting; but it is no more real than the precedent of 1955. It is that the valuation officers, who of course have now taken the place of the old assessment committees, have discovered—it seems to me rather late than early—that there is ambiguity as to whether fresh assessments can be made between the periods of general revaluation. It would be interesting to know when this was discovered and by whom. Of course the power has existed ever since 1925 to make third party proposals under an Act passed by a Tory Government. By and large, it was a useful and sensible Act. But if it be the case that there is this ambiguity, why has nothing been dope to remove it?

As I have already said, this power of correcting valuations during the quinquennium was an essential part of the reorganisation of the bases of assessment and valuation given effect to by the Act of 1925. I remember being a member of one of the early assessment committees appointed by the Middlesex County Council after the passing of the 1925 Act. If that be not the case, it means that valuations once made are frozen unalterable for a period of five years. I repeat, why has nothing been done to remove this doubt? Since 1951, five Acts of Parliament and one Order have been made relating to valuation assessment and rating, all by the present Government or its predecessor. That does not include the present Bill. If, in fact, there is a defect in law, it should be remedied at once, and the Government should not, as it were, skate around it, as it does in this Bill, by suspending the power until March, 1963, for this power goes to the very roots of the valuation system and the local authorities are most concerned about the results of its withdrawal.

The Minister said in another place on the Second Reading that this ambiguity was of limited importance until after the war. Apparently, then, it was known to exist before the war. It was of limited importance, so the Minister said, because rents did not move very substantially before the war. But rents, especially of commercial and industrial hereditaments, have increased markedly since the war, as we all know. This gathering increase in rent started as far back as 1946, and by 1955 it was in full flow, if not in full flood. Why was nothing done to correct this alleged doubt or ambiguity? The only thing which was done was to suspend the power for eight months between July, 1955, and March, 1956. Moreover, since the valuation of 1956, which of course was actually made in 1955, three years have clapsed, and valuation officers, local authorities and ratepayers generally have been acting upon this power to make third party proposals, unaware that there was any doubt about the legality of so doing; and suddenly, without any notice whatsoever, ratepayers and local authori ties are informed that from February 12 of this year this power, which they have enjoyed since 1925, is to be withdrawn.

I should like to ask the noble Earl whether, in his reply, he will be good enough to state whether this subsection is to be construed as an admission by the right honourable gentleman the Minister that he accepts the proposition that this power to raise fresh assessments is really doubtful. I know that in the course of his speech on the Committee stage in another place he said that the matter was difficult. No doubt it is. Most elements of rating and valuation are difficult. But that is no reason why Her Majesty's Government, if they are aware of a legal defect, should not take steps to clarify the situation and legalise what is being done; because valuation officers, presumably, are acting on the assumption that what they do is lawful. If this reading of the law is correct, I suggest that it strikes at the very roots of the valuation system. It transcends, although it includes, the withdrawal of the third party proposal to which I have referred.

In this important connection I should like to read what was said by the right honourable gentleman the Minister on April 16, on the Committee stage of this Bill in another place. He said first [OFFICIAL REPORT, Commons, Vol. 603 (No. 94), col. 1165]: There is a concealed ambiguity in the present power to make fresh assessments during the period between general revaluations. Then he went on: The ambiguity is in deciding the level of values at which new or revised assessments should be made. I will give an example, not unlike an example quoted earlier. It is that of a shop correctly valued in the present list, drawn up in 1955 and put into operation in 1956, at £100, by reference to the rental values then current. Let us suppose an identical shop now being built and coming into rating later in 1959 or 1960 and that shop rents in the area rise by, say, 20 per cent. from the date of the last valuation. Should the new shop be assessed at £100 because it is identical with the one correctly assessed at £100 or should it be assessed at £120 on the ground that rental values have risen by 20 per cent. since the last revaluation? The Minister went on to say: Frankly, the law gives us no clear guidance on that issue. In all likelihood an assessment of £120 could be sustained under the law but it would create anomalies and indefensible inequity between the two shopkeepers concerned. What is the valuation officer to do? Is he to increase the first assessment to £120 as well? If so, he will remove the inequity between those two shopkeepers but create inequity among many other people. There would be unfairness between those two shopkeepers and all the other shopkeepers in the area. Is he to re-value all the shops in the area? If so, all the shops in that area will be valued on one basis, whereas all the rest of the property will be valued on another basis.

The Minister poses the question: "What is the valuation officer to do?" The valuation officer, of course, is expected reasonably to assess the new hereditament by reference to rental levels which are current. If the rent has gone up because the value of similar premises in the district has gone up since the level of 1955, then, the rent having gone up, the assessment for rates should go up. Why should there be one value for rating and another for rent, especially as rent is the prime element in the basis of assessment of all rateable property? If this is unfairness then it is equally unfair for a landlord to charge a higher rent for similar premises in the same district performing the same function; and there have, of course, been thousands of cases of this kind, especially where leases have fallen in and the landlord has been able to put up the rent. But where the lease of a similar property has not yet expired the landlord has not been able to put up the rent.

We thus have the situation that two similar properties are rented at two different rents. The valuation officer should take account of that—or are we to assume and accept the proposition that disparity of rent is all right but disparity of valuation for rates is all wrong? After all, the one is based on the other. And when the right honourable gentleman the Minister poses the question: "What is the valuation officer to do?" one is entitled to answer, "He should do what the local assessment committee did before 1948—deal with the situation." That is, lodge third-party proposals and relate the rating and assessment of the properties by reference to the rents which they are commanding. After all, that is what the local assessment committees have done. One is also entitled to inquire, in relation to this question, what the valuation officer has been doing: what has he been doing since the last valuation? This situation has existed for three years, and we know—indeed the Minister expressed some concern about it—that for quite proper reasons a number of third-party proposals have been lodged in certain places by local authorities and by ratepayers in connection with the assessment valuation operative from 1956. If the valuation officer feels aggrieved or if the local authority or a private ratepayer feel aggrieved, they have a right to go to the local valuation court. If they are not satisfied with the decision there, they have the right to go to the Lands Tribunal. Under the proposals of this Bill, those two rights, with the right of lodging a third-party proposal, will go. This is no new problem which was propounded by the Minister in another place on April 16. It has existed ever since 1925, and up to 1951 it was dealt with by the assessment committees.

Then we inevitably and inescapably reach this position. If, in fact, the Minister is right with regard to the legal doubt as to new assessments between two general revaluations, what is the position of the ratepayer whose assessment has been altered as the result of a fresh assessment made between general revaluations? Is it the case that those new assessments are null and void? In any case, it seems to me to be very inequitable that a local authority or a private ratepayer who was fortunate enough to lodge a third-party proposal prior to February 12 of this year should be able to have a new revaluation of a property, whereas a ratepayer or a local authority after that date is precluded until March 31, 1963, from so doing. It seems to me to be quite unfair that the arbitrary line should be drawn at February 12 without any prior notice to ratepayers that this old-established power was to be taken away.

I should like the noble Earl, Lord Dundee, to say what is the situation of a ratepayer whose property has been re-assessed since it was valued in 1956. If the reassessment is void, illegal, has he not the right pro tanto to a return of the extra rates he has paid as a result of that new, fresh assessment? I notice that the Minister, answering the question. "What is the valuation officer to do?" said this [OFFICIAL REPORT, Commons, Vol. 603 (No. 94), col. 1166]: What is the right way of handling this? The commonsense solution is to disregard changes in rental levels since 1956 …". That implies an acceptance of this doctrine that there is no power when assessing new or altered properties for the purpose of the existing list to take into account current rent levels. He went on to say: To be logical, if one does that, one has to hold back from any revision of values before the next revaluation …". There again it seems to me to be in plain terms an acceptance of this proposition to the intent that the revision should not take up any part of any increase in rental values since the last valuation. He continued: In general terms, that is the practice of valuation officers. So the valuation officers have accepted the proposition that it is not legal to have fresh assessments during the period between general revaluations. The Minister went on to say: When making a valuation, they ignore an increase in rental values since the last valuation. If that is so, it seems to me that the valuation officers have acted quite contrary to all accepted practice and procedure and tradition and understanding of the situation, and to the rights of the local authorities and ratepayers to lodge third party proposals.

It seems to me not unreasonable to suggest that, faced with this problem, the Minister, rather than face up to a solution of the difficulty, taking legal steps to remove doubt and to validify action which had been taken under this ambiguous legal power, has preferred to tinker with it by suspending the power until March, 1963.

I want to ask the noble Earl to address his attention very seriously to this situation, which is of much greater importance than the suspension of this power for the next four years. As I have said, it is of the essence of the valuation system; and there arises in one's mind a haunting doubt as to whether the Government will not seek to resolve this problem by permanently withdrawing the right to lodge third party proposals. In the Bill, of course, the withdrawal is up to March 3l, 1963. But if this power to make fresh assessment does not exist, then the whole procedure of third party proposals is nugatory and it is unimportant whether the power is, as it were, reconferred after March 31, 1963, or not—that is, if it is illegal to make, as the Minister has suggested, fresh assessments within the period of general valuations. It is for those reasons that we on this side of the Committee regard this proposal in the Bill as being of very great importance. It is one which strikes at the very essence of the rating and valuation system of this country, which has been in operation for a great many years. We hope that the Government will accept the Amendment, but if they find themselves unable so to do we shall feel bound to test the feeling of the House.

Amendment moved— Page 1, line 16, leave out subsection (3).—(Lord Latham.)

4.29 p.m.

THE MINISTER WITHOUT PORT FOLIO (THE EARL OF DUNDEE)

On the Second Reading of the Bill, the noble Lord, Lord Latham, was good enough to give notice that he would raise this question on Committee stage in the form of the Amendment which has now been tabled and which is now before the Committee. I think that the natural concern which is felt by local authorities about this subsection in the Bill arises, perhaps inevitably, out of the main purpose of the Bill, which we all agree is a regrettable purpose, to postpone the next quinquennial valuation from April, 1961, to April, 1963, so that the interval of time between the last valuation period and the next one will be seven years instead of five.

The decision to legislate to this effect has been taken very reluctantly by the Government on the advice, which they felt bound to accept, of the Valuation Office—namely, that for 1961 there would not be enough genuine examples of free market rents of dwelling-houses to enable a new valuation to be made which would inspire public confidence, whereas two years later, they estimate, there will be a sufficient number of such cases to have a proper valuation which will carry the confidence of the people with it. That means that it is essential to extend the period during which rateable subjects are rated on the values prevailing at the last quinquennial date—that is, 1956. Now we certainly do not want to remove the powers which were given to third parties in 1925 to make proposals for remedying individual anomalies or cases of injustice as between one rateable subject and another—which can be done, of course, at the instance either of another property owner or of the local authority itself as an owner of rateable property. The trouble is that this power can be used not only to correct anomalies and to correct mistakes in the valuation list but also to alter the whole rateable valuation under the control of the authority.

May say one word about ambiguity, to which the noble Lord, Lord Latham, referred? He quoted what my right honourable friend the Minister had said in another place, during which passage my right honourable friend several times, I think, used the word "ambiguity". But I think that possibly the word "ambiguity" in this connection may itself be ambiguous. What my right honourable friend meant, was that this power given in 1925 to make proposals for the revision of individual assessments was intended by Parliament to correct individual anomalies; it was not intended to be used to raise the entire rateable value of the whole borough or the whole county, or whatever it might be. I am afraid that there is no ambiguity at all about the law, so far as that goes.

There is no doubt whatever that, under the powers given in 1925, a third party can make a proposal that the rateable value of a subject should be raised to the figure which it would fetch at that time in a free market; and the ratepayer has no legal redress on the ground that there is some legal doubt about the power to do that. There is no ambiguity in that sense at all; and I think that perhaps "ambiguity" is not the right word. It is simply that when this power was given in 1925 it was never contemplated that it would be used in order to bring about a general increase in the assessments within a rateable area. It was contemplated only that it would be used to correct individual anomalies, and nobody thought that it would ever he used for anything else. Unfortunately, it has been, and there is no legal redress. Very shortly before the last quinquennial valuation one local authority used this power to raise as many of the assessments in its area as could be raised. There were no fewer than 11,500 proposals put forward, and they all had to be accepted because they were perfectly valid under the law: there was no ambiguity about them. Another authority brought forward about 1.400 proposals; and there were others. It was only a very small minority, of course, of the local authorities in the country, but it was still enough to make it desirable to prevent it from being done during the present interval between the two quinquennial valuations.

The object of this temporary suspension—and it is meant to be only a temporary suspension—of the third party right to move for alteration of the valuation list is quite simple: it is to prevent anyone from undertaking a local revaluation for rating purposes before the next new lists come into force: there is no other motive behind it. Your Lordships will agree that the reasons which make it impossible to undertake a general revaluation having effect before 1963 would also make it impossible for any local revaluation to be more than partial; and Her Majesty's Government, and also, I think, probably most local authorities, would consider it unfair if particular ratepayers or groups of ratepayers were reassessed at full current rental values—whether they be the rental values current in 1959 or, say, 1962 or 1963—while all other ratepayers escaped reassessment and continued to be rated at either 1939 or 1955 rental values. The noble Lord quoted an example of two different shopkeepers, both having shops which were worth exactly the same, and said that one could be reassessed at £120 while the other had to be assessed at £100. Supposing that the shop which had been assessed at £100 was brought up to £120, so as to correct the anomaly between those two shops, there would still be an anomaly between those two shops and other shops. Then, if all the shops were brought up to the higher level, there would still be an anomaly between shops and houses, and so on; and we think it unfair that local authorities should be allowed to do this before general reassessment becomes possible in 1963.

We do not want permanently to remove this power: and I think I explained to your Lordships on the Second Reading debate that, although there has already been a period of three years during which the new lists have been in the hands of local authorities (which will probably have been enough time for most of them to correct any mistakes), we have nevertheless taken steps to strengthen the existing co-operation between rating authorities and valuation officers. We have instructed valuation officers to give full weight to any representations made by local authorities, even to the extent of making proposals which would enable local authori ties to have the issue determined on appeal. The valuation officer would, of course, have to be satisfied that there was a reasonable case for the local authority's views before going to that length but; in any case, when a local authority considered that a valuation officer had unreasonably refused to take action at their instance, they would, as always, be able to pursue the matter within the Valuation Office and, if they thought fit, through their association and the Chancellor of the Exchequer. Of course, the criterion of the valuation officer and of the Treasury in this matter would be that any changes which were proposed should be at what is called the 1956 "tone"—that is, in accordance wtih the general level of values prevailing in 1956—and this procedure should not he used in order to assess certain individual properties, or certain types or classes of property, at a higher valuation than that at which they would have been valued in the year 1956.

Finally, the problem of solving—I do not like the word "ambiguity", because I do not think it is quite right, but the discrepancy between the existence of the powers and the actual use of them which has been made by one or two authorities, is a very difficult one. It is now to be considered by a Working Party, which will be asked to undertake a general review of the whole field of rating and valuation. It will be a Working Party of local government and departmental representatives, who can take outside advice as necessary, and who will be asked to recommend a proper basis for changes of assessment between general revaluations, which normally take place every five years. The reason why the problem is particularly difficult at the moment is that under this Bill we are changing the normal period from five to seven years; and that makes it even more necessary that we should be careful that the powers given in 1925 should not be used for what we believe to be a wrong purpose. I am sorry, therefore, that we cannot accept the Amendment. As I have tried to explain, however, we will do everything possible, first to meet the legitimate views of local authorities with regard to any changes that may be necessary, and, next, to take steps through this Working Party as soon as possible to work out a permanent solution of this difficult problem which has arisen.

4.42 p.m.

LORD DOUGLAS OF BARLOCH

I follow the arguments which the noble Earl has put before the Committee. Essentially, I think it is quite simple. It is that the ratepayers ought to be all in the same relative position. Some should not be valued according to the level of values prevailing, let us say, in 1959, and others valued on the level of valuation prevailing in 1955. But what is contained in the Bill does not achieve that. What it does is to prevent local authorities from making proposals for alteration of valuations. It does not (and this is expressly stated) prevent a valuation officer from making such a proposal, nor does it prevent the owner or occupier of the property from making such a proposal.

If this is going to be applied, why should it not be applied all round? If the solution of the problem is extremely simple, why should it not have been included in the Bill, instead of there being the appointment of a committee to discuss something which is not really very difficult? The whole object would be secured if it were provided that alterations in valuations made between the quinquennial valuations should be based upon the level of values prevailing at the time when the last quinquennial valuation was made. If that were written into a Statute dealing with local rating, the problem would be solved for ever. There would be no need for this temporary suspension of the power of local rating authorities coupled, as I have said just low, with power for the valuation officer to do exactly the thing which is objected to.

LORD SILKIN

Are not the Government using a sledge hammer to crack a nut? Let us admit that there is an evil which they want to prevent. What is the evil? One or two local authorities, is the noble Earl himself said, have gone beyond the policy of the Government and have sought to effect wholesale changes in valuation, and they might do this again. In order to prevent this, the government are preventing all local authorities from coming forward and asking to remedy individual anomalies. That is going much too far. As my noble friend Lord Douglas of Barloch has just said, would it not have been possible to prevent that evil, even if it was a major evil, which it is not, without going to the other extreme of preventing all applications for revaluation? It may be that the suggestion of my noble friend would not be absolutely effective, but there should be no difficulty in finding a form of words which would enable a local authority to apply for the removal of an individual anomaly and not enable them to make wholesale applications. I think that this is a matter which the Government ought to reconsider.

The argument is not based upon Party views. I think that I am right in saying, without the book, that originally in another place an Amendment to secure what we have in mind was moved by a supporter of the Government and that in the actual voting it had the support of a good many members on the other side. So that there is nothing political about this. It seems to me to be plain common sense, and I hope that it may be possible for this point to be reconsidered and see whether something acceptable to all sides cannot be provided in the Bill.

LORD LATHAM

Perhaps it is fair that I should make one or two comments on the statements made by the noble Earl that this power has been—I will not say "abused", but excessively used by certain local authorities. That was stated in another place during the Committee stage. Liverpool was cited. In a judgment in connection with the appointment by Liverpool Corporation of a valuer to carry out revaluation within the period of general revaluations, the noble and learned Lord, Lord Goddard, said that the Liverpool Corporation had a duty to make proposals to correct any equality or under-assessment of which they knew. The facts are that before valuation was passed over to the valuation officers through the Valuation Office, the local assessment committee had completed a revaluation of a fairly large section of the centre of the city of Liverpool, and they took the view—and I think that they were right—that they could not have half the centre of the city valued on one basis and the other half valued on an entirely different basis. Therefore they lodged a large number of proposals in order to correct these anomalies.

The other case mentioned was that of Hertfordshire, which has been the recipient of a large number of people from other parts of Greater London. It has been the recipient of "overspill" running into some tens of thousands of persons, in new towns, in expanded towns, and in housing estates. Because of the increased demand flowing from that increase of population—and, after all, it is the needs of the population which determine and in the end make rateable value—the value of shops, the rents of shops and of commercial buildings, have increased considerably. The Hertfordshire County Council took the view that it was proper to relate the valuation of a large number of properties to the increased rent level flowing from the influx of this additional population. And that was perfectly just. Anyone who has been concerned with local government knows that when a new population comes into an area it does not pay for itself for a long time. For instance, schools have to be provided.

I remember that when the London County Council built the Watling Estate at Hendon—I was not on the Council then, but I was living in Hendon and taking a fairly active part in municipal affairs—the Hendon Borough Council had to build five new schools, and the Education rate of the Hendon Borough Council was doubled on that account alone. The rateable value of small property of that kind does not pay for itself. It is only the ancillary activities, such as new hops and all the other and similar activities which the increased population calls into being and into function. which lead to new buildings and, therefore, new assessments, or lead to rises in the rental value and therefore the rateable value of the premises. After some ten, fifteen or, maybe, twenty years a new estate may, in terms of rate, be paying for itself. And if that is the case, you can count yourself lucky.

So the Hentfordshire County Council have had to build schools and roads, and provide for lighting of roads, cleansing, sewers, libraries and all the other municipal facilities. Is it unfair that, since rateable properties benefit from this influx of population, they should be asked to pay something towards it by way of appropriate valuation levels which take account of those circumstances and those facts? I do not believe (that the average local authority have abused this power which they have, or that they will abuse it in the next four years. I do not believe, therefore, that it is necessary to take the power away from them. Perhaps I may quote from a letter written by the Town Clerk of Norwich—and I do it with some satisfaction, because Norwich is my native city. The Town Clerk, writing to the Tory Member for one of the Divisions of Norwich, said: Whilst my committee appreciate that the Minister has introduced this clause in order to prevent a rating authority securing a partial revaluation of properties within its area, they feel that the clause should be redrafted in such a way that where on merit there is justification for the rateable value of an individual hereditament being altered the rating authority should be entitled to submit a proposal. That is the spirit in which the local authorities and their associations approach this matter, and it is a spirit which I do not think has been reciprocated.

Finally, I would make one comment on the suggestion that because the valuation officers will be told by the Chancellor of the Exchequer or his Department that they are, if you please, to be reasonable to local authorities in this matter, the local authorities ought to be satisfied. First of all, the valuation officer must carry out his duties according to law, and I should have thought that it was not a desirable method of administration or of government that a Minister or a ministerial Department should interfere with a local authority, whether to help it or not, in connection with a particular third party proposal in respect of a particular hereditament. You really cannot expect local authorities to be satisfied with this kind of grace and favour proposal. And then, if the valuation officer is not amenable—and he is not required to be amenable—the local authority through their own association can make a complaint to the Chancellor of the Exchequer, and it is hoped that the difficulty will be overcome. Really, that is not self-respecting administration or self-respecting government. It is undignified.

Moreover, I submit it is not legal. Pressure ought not to be brought upon the valuation officer. The local authority should have the right, as they now have, if they disagree with the valuation officer, of going frankly, openly and without any back-stairs method through the Chancellor of the Exchequer, or otherwise, to the valuation court; and then, if they are not satisfied with the decision, on to the Lands Tribunal. Happily, that is the proper and accepted way of administration in this country. For those reasons, I think the local authorities are quite right not to be satisfied with the proposal. I am sorry the noble Earl finds himself and the Government unable to accept the Amendment, which I think we must press to a Division.

THE EARL OF DUNDEE

The noble Lord, Lord Latham, has correctly described the circumstances which surrounded the Liverpool revaluation which he mentioned. I do not think those circumstances applied to Sheffield, Banbury, Solihull or other local authorities which used this 1925 power in a similar manner. But the noble Lord, Lord Silkin, suggested that it was really a simple problem. He asked why we were using a sledgehammer to crush such a small nut. I suggest to your Lordships that it is a pretty hard nut, and a good deal harder than the noble Lord suggested.

As I think I explained to your Lordships on Second Reading, the Government have held long discussions with representatives of the local authority associations in an attempt to find a simple amendment which would save these error-correcting powers. Unhappily, no solution has presented itself. We found that the problem needs long and careful review, and probably much re-writing of present statutory provisions. I think that perhaps the noble Lord, Lord Latham, indicated one or two of the difficulties in what he said about the results of new schools being built, and new industries or overspill populations moving into an area which may produce rapid changes within the quinquennial period.

I do not, I am afraid, agree with the noble Lord, Lord Douglas of Barloch, in the suggestion that this power of local authorities to make proposals should be on quite the same footing as the power of the occupiers themselves or of the valuation officer. After all, an occupier has always had the right to represent that he is being over-assessed. He is the man who pays the rates, and he must have that right; and it is the duty of the valuation officer to try to see that he is correctly assessed. But this power given to the local authorities in 1925 was not given to them as local authorities, but as third parties. The idea was that any owner of property who thought that his neighbour was assessed too low in comparison with himself should have a right of remedy by asking that his neighbour should be assessed more highly. Since the local authorities are, of course, owners of property, they have that right as owners of property and not as local authorities. I do not think there is anything particularly sacrosanct about it, but we want to preserve it.

LORD LATHAM

It is the case that the local authorities have it as third party. They need not necessarily be owners of the property.

THE EARL OF DUNDEE

Yes, they have it as owners of property. They are always owners of property in the district. It is not part of their governmental powers, but part of their rights as an owner of property. It is not quite on the same footing as the right of the owner himself.

As I have tried to explain, we have not found this matter as simple as the noble Lord has suggested; and that is

Resolved in the negative and Amendment disagreed to accordingly.

Clause 1 agreed to.

Clause 2 [Postponement of termination or reduction of relief for charitable and other organisations]:

On Question, Whether Clause 2 shall be agreed to?

the reason why, we having failed to get the simple Amendment we tried to get in agreement with the local authority associations, a Working Party has now been asked to work out a solution which will deal, we hope, with all the very difficult problems to which the noble Lord, Lord Latham, referred in the course of his remarks.

I am grateful to noble Lords opposite for having enabled us to have such an exhaustive and comprehensive review of this difficult problem. I think it is a good thing that it should be done. It has been exhaustively discussed, and I hope your Lordships will now be willing to come to a decision.

On Question, Whether the said Amendment shall be agreed to?

Their Lordships divided: Contents, 22; Not-Contents, 61.

CONTENTS
Amwell, L. Latham, L. Pethick-Lawrence, L.
Chorley, L. Lawson, L. Shackleton, L.
Crook, L. Lucan, E. [Teller.] Silkin, L.
Douglas of Barloch, L. Macdonald of Gwaenysgor, L. Stansgate, V.
Faringdon, L. [Teller.] Morris of Kenwood, L. Stonham, L.
Granville-West, L. Ogmore, L. Taylor, L.
Greenhill, L. Pakenham, L. Williams, L.
Henderson, L.
NOT-CONTENTS
Aberdare, L. FitzAlan of Derwent, V. Merrivale, L.
Ailwyn, L. Fortescue, E. Meston, L.
Albemarle, E. Gisborough, L. Milne, L.
Allerton, L. Goschen, V. Milverton, L.
Amulree, L. Gosford, E. Onslow, E. [Teller.]
Atholl, D. Grantchester, L. Perth, E.
Baden-Powell, L. Grenfell, L. Rea, L.
Bathurst, E. Hampton, L. Rockley, L.
Birdwood, L. Hereford, V. St. Aldwyn, E. [Teller.]
Bridgeman, V. Home, E. Saltoun, L.
Buckinghamshire, E. Howard of Glossop, L. Selkirk, E.
Clitheroe, L. Iddesleigh, E. Sinha, L.
Colville of Culross, V. Jeffreys, L. Strang, L.
Conesford, L. Jessel, L. Strathclyde, L.
Denham, L. Kilmuir, V. (L. Chancellor.) Stratheden and Campbell, L.
Dundee, E. Lambert, V. Swansea, L.
Dynevor, L. Lansdowne, M. Tweedsmuir, L.
Ebbisham, L. Lothian, M. Waldegrave, L.
Elliot of Harwood, Baroness Lyle of Westbourne, L. Waleran, L.
Erskine, L. Mansfield, E. Wolverton, L.
Ferrier, L.
LORD SILKIN

I should like to say a word about Clause 2, which deals with the position of charitable organisations. The noble Earl will know that under Section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955, certain advantages were conferred upon charitable organisations. Particularly they were given the benefit of not having their rates increased beyond what they were before the passing of the Act, and in subsequent years they were also given the advantage of having a reduction in their rates, corresponding to the reduction in the first year. I do not want to elaborate on that matter, but it is the case that the 1955 Act did confer advantages such as I have outlined on charitable organisations. This Bill seeks to continue that, but it makes no provision—indeed, the 1955 Act made no provision—for new charities; and the result of that is that charities which are created after 1955 do not get the same advantages.

I am sure that it would be unfair to ask the noble Earl to give me a reply "off the cuff", but I should be grateful if he would consider the possibility of ensuring that new charities are treated in a similar way to those charities that were existing at the time of the passing of the 1955 Act. It would mean that a charity which was created, say, to-day, would, as from the date of its creation, get the advantage by relation to the value of the property in 1955 as if it had been in existence at the time of the passing of the Act, but with the advantage deferred until the creation of the charitable trust. This point has been put to me by a number of charities. It is unfortunate that it was never put forward in another place, and, indeed, was raised too late to put down some sort of Amendment to this Bill. It is for that reason that I am taking the opportunity of raising it to-day on Clause 2. If the noble Earl does not feel disposed to give me an immediate reply—and I doubt whether he will—I should be grateful if he would have the matter looked into before the next stage.

THE EARL OF DUNDEE

I am grateful to the noble Lord for raising this point. Of course, the object of Section 8 of the 1955 Act with regard to existing charities was to meet the fear which had been expressed by many of those institutions that they would suddenly suffer all at once a tremendous increase of rates over and above what they had been accustomed to pay. Obviously that would not apply to new charities, but I will gladly consider the point.

LORD SILKIN

I would say that the noble Earl is quite right, and I am glad that he has got my point. But it is only part of my case, because, in addition, if he would look again at Section 8 he will find that it also confers specific benefits in subsequent years. Charities have a two-sided benefit; on the one hand, they have a guarantee that their rates will not be exceeded, and secondly they have a guarantee that in successive years their rates will be actually reduced by a certain proportion. It is the second benefit that I am asking should be examined.

THE EARL OF DUNDEE

The noble Lord may be aware that a departmental committee is considering the question now, but I do not know whether it has considered the position of new charities in particular. However, I shall be glad to look into the matter and let the noble Lord know what the position is.

Clause 2 agreed to.

Remaining clauses and Schedule agreed to.

House resumed: Bill reported without amendment.