HL Deb 16 March 1961 vol 229 cc956-63

3.23 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.—(Lord St. Oswald.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair.]

Clause 1 agreed to.

Clause 2 [Contributions by Postmaster-General in lieu of taxes, &c.]:

LORD LATHAM moved, after subsection (3) to insert: () The Postmaster General shall pay such sums at such times as may be agreed between him and the Treasury to be requisite to secure that year by year there is contributed to the rating authorities of the United Kingdom as nearly as may be what would be contributed by way of rates but for the exemptions which by law are enjoyed by him from liability for the payment of rates".

The noble Lord said: I beg to move the Amendment standing in my name. This Amendment and the other Amendment in my name have been put down for the purpose of securing as between two social activities—namely, the Post Office and local government—that there should be a parity of fair treatment and that the Post Office, as regards its liability for rates, should be treated in the same way as the other nationalised industries.

I am in some little difficulty because, under the procedure of your Lordships' House, a new clause must be taken at the end of a clause. The new clause as appearing on the Order Paper is designed to do what the local authorities really want to have done; that is, to remove the exemption which at present exists as regards the liability of the Post Office for rates, notwithstanding that that exemption is, of course, modified in some important regard by a payment in lieu. So the situation is that I have to argue and ask the Committee to decide upon what is less desirable in the mind of the local authorities before we reach what the local authorities would really wish to have—namely, the removal of this exemption. I should say that both Amendments have the support of all the local government associations in this country; the County Councils Association, the Association of Municipal Corporations, the Urban District Councils Association, the Rural District Councils Association, the London County Council and the Metropolitan Boroughs Standing Joint Committee—a formidable and I think impressive array of support.

I may perhaps be permitted to deal with both of the Amendments, in order to meet the convenience of your Lordships and to save time. The new clause Amendment seeks to abolish what I think it must be admitted is an archaic exemption of the Post Office from liability for rates. In 1685 and subsequently, the Post Office was—I will not say a possession of the Crown, but at any rate the Crown was entitled to have the enjoyment of its revenues. The Bill before the Committee is a Bill designed to place the activities, control, administration and management of the Post Office upon a commercial basis, and it admirably so does. If that be the case, if the Post Office is to be put on a commercial basis as regards its operations, it seems to me that it should be put upon a commercial basis as regards its responsibilities. One of them, of course, is that it should pay rates in the same way as other undertakings, whether they be private or public.

If the noble Lord will refer to paragraph 14 of the White Paper, Cmnd. 1247, he will see under the heading of "Financial Policy" the following statement: These provisions are modelled on those applying generally to Nationalised Industries. The practical intent is stated in paragraph 20 of the March White Paper. I will come in a moment to that paragraph of the March White Paper, Cmnd. No. 989, but it is the case as regards the liability for rates that the provisions are not modelled on those applying to the nationalised industries, because the nationalised industries pay rates and are liable for rates in the same way as any other undertaking or resident. It is true that the nationalised industries, like other specialised industries, have special formulae by means of which the liability for rates is ascertained. But they are liable for rates. In point of fact, at the present time in the Rating and Valuation Bill, which is still being dealt with in another place, there are provisions for modifying the formulæ by which the liability for rates of the Coal Board is to be ascertained; and that is the case also as regards water supply undertakings. So the statement in this White Paper as to the provisions of the Bill is not entirely accurate.

When we go, as we are invited, to paragraph 20 of the White Paper of March, Cmnd. 989, we find that it is there stated: In practice a standard of performance appropriate to a publicly-owned organisation run on a sound commercial basis would be expected. As I have said, if the Post Office is to be put on a commercial basis there really is no reason why it should not carry its commercial obligations. The situation, I submit, is different as regards tax. There, as my noble friend Lord Crook said when speaking on the Second Reading of the Bill, it is a question, perhaps, in a rather loose way, of taking money out of the right-hand pocket and putting it into the left. That is not the case as regards rates and local authorities. It is a different suit, worn by a different person—namely, the local authorities; and it is not a question of taking it out of one pocket of the suit and putting it back into another. In my submission, there is no reason why the Post Office should escape liability. As I have said, electricity, gas, transport, water and all other nationalised or statutory undertakings are liable for rates in the ordinary way. The Hull telephone system, for instance, owned by the City and County of Hull (or Kingston-upon-Hull, I think is the proper description), is liable for rates upon its profits. Cable and Wireless, Limited, were liable until they were taken over by the State; and the local authorities consider that they have lost considerably in their rate income as a result of that.

Now with regard to the first Amendment, which deals with the question of the Post Office being exempt but, nevertheless, making a payment in lieu of rates, I would say that the local authorities have lost some considerable measure of faith in the Treasury and in the methods which have been adopted for ascertaining what the payment should be if it is a payment in lieu of a responsibility or liability which does not statutorily exist. There has been a long correspondence between the Treasury and the local government associations. It has been going on for years. Ultimately, a situation was reached when it was thought by the local authorities that agreement could be found for the method of ascertaining what was the payment in lieu. Then, suddenly, the whole situation is changed in a way which I think is a little unworthy, even of the Treasury.

Questions have been raised as to what is normal rateable property, and the Treasury are now insisting that a good deal of the property occupied by the Post Office is not normal rateable property and therefore should not attract any consideration or any contribution by way of rates. I should like to say in this connection that that point of view was taken up as far back as 1954 with regard to Territorial Army property, which is still excluded from the global sum, as it were, to ascertain the amount to be paid in lieu. Ultimately, it has been agreed that the property, the premises of the Territorial Army, shall come into consideration as being liable for rates as and from April 1, 1963—nine years after the local authorities were led to believe that the Treasury would agree to its inclusion.

Now questions are being raised as to posts, overhead wires, kiosks and various other properties, and it is being contended that they are not normal rateable property and should therefore be excluded. I ask your Lordships to contemplate what is a normal rateable property. Overhead wires have been assessed since almost time immemorial—overhead wires for a tramway system, or overhead wires for a trolley-bus system. It is suggested that the under- ground railway owned by the Post Office and operating in London should be excluded; but the underground railways and Tubes of London Transport are within the consideration of the liability of London Transport for tax. Then we have kiosks. The Royal Automobile Club is assessed at £2 a year on each kiosk, and so is the A.A. Then, when we come to the water mains, we find that the water mains of the Metropolitan Water Board are not excluded from consideration when they are settling what is the rateable liability of the Metropolitan Water Board.

Really, this suggestion that only normal rateable property—the normality to be determined by the Treasury—should rank as an element in the ascertainment of the liability for rates is, if I may put it this way, "a bit thick". After all, the first cinema which had to be rated was an abnormal problem: it was the first one. There was an abnormal rateable property with the first atomic power station. The first of everything is abnormal, for the most part; and it is a little late in the day, after years of negotiation, for the Treasury now to throw the whole matter once again into the melting pot.

I hope that your Lordships will be able to approve the new clause, which will, as I have said, make the Post Office liable for rates in the same way as any other nationalised undertaking, or, indeed, any other private undertaking; but if that cannot be done, then I hope that your Lordships will pass the first Amendment, which will give a statutory right to local authorities to have a payment in lieu, that payment in lieu to be ascertained by agreement between the local authorities, the Treasury and other Government Departments concerned. I beg to move.

Amendment moved— Page 3, line 40, at end insert the said subsection.—(Lord Latham.)

3.40 p.m.

LORD ST. OSWALD

I am grateful to the noble Lord, Lord Latham, for arguing both his Amendments together; I am sure that was the best method for the convenience of everybody. All the same, I hope that I shall persuade the noble Lord to withdraw them, in view of the fact that, as I hope to explain to him, they are really not needed to achieve the purpose he has in mind and which he has so clearly explained. Every year, as the noble Lord said, the Treasury pays to local authorities sums in lieu of the rates which would be payable on Crown properties if the Crown were not exempt. Such payments are not arbitrary, and although the noble Lord suggested that they merely modified in some regard the exemption which exists, they are in fact the result of a determined attempt to arrive at what would be the true rateable value of the properties; and they are discussed, and I believe, in general, agreed, with representatives of the local authorities. What the noble Lord refers to as a loss of confidence in the Treasury's assessment is something entirely new to me and of which I have not before heard. The payments include some £3½ million a year in respect of Post Office property. We think that this is a payment appropriate to the size and character of the Post Office viewed as a whole.

LORD LATHAM

May I assist the noble Lord with some information, which he apparently has not got? The rates for trunk wires or wires acquired in January, 1912, are still based on an assessment of June 30, 1911.

LORD ST. OSWALD

Yes, I know. In all fairness, I have not come to that point yet. I Was not forgetting it, and I shall deal with it in the course of the very few words I have to say. As I said, these payments have been made for some years and will continue on the same basis as hitherto. Once it gains its new status, the Post Office will repay to the Treasury whatever the latter pays in lieu of rates on Post Office property, but no statutory provision is needed for that. So the Post Office will not in fact escape liability, as the noble Lord supposed and suggested in his speech. The payment will be one of the numerous cash settlements between the Post Office and other Departments which do not need to be expressly provided for in this Bill.

LORD LATHAM

The tax is specially provided for.

LORD ST. OSWALD

What I am saying is that the payment requires no special provision in this Bill. The payment will continue to be made on the same basis. It will be paid to the local authorities by the Treasury, and the Treasury will be reimbursed by the Post Office. Therefore, without any change in the law, the Post Office will effectively pay, and, as I say, local authorities will receive, appropriate sums in lieu of rates on Post Office property.

The noble Lord made reference to the fact that provisions were to be brought as far as possible into line with the provisions made for nationalised industries. But I would remind him that in fact, although the Post Office will now have certain similarities to the nationalised industries, it will not cease to be a Crown property, and, therefore, we do not feel it should be made an exception to the general exemption of Crown property. It is true, as the noble Lord said, that the Telegraph Acts have obliged Postmasters General in the past, and still oblige my right honourable friend to-day, to pay rates at a frozen valuation on telegraphs acquired from private undertakings in 1868 and 1912, and intermediate years. So far as he continues to make such payments in addition to the £3½ million, which I have already described as a fair payment for the Post Office as a whole, I should have said—and I think any fair-minded attitude would say—he is being generous. Nevertheless, he has no intention of seeking to be relieved of these payments, and I think he can fairly claim that the local authorities are receiving their due revenue from the presence of the Post Office in their respective areas. The noble Lord shakes his head, but I believe the majority opinion would be in agreement with that.

The noble Lord mentioned property which was regarded as non-rateable property by the Post Office, and he specified telephone kiosks and the Post Office railway. He has expressed a point of view, of course, but I suggest that telephone kiosks are there for the convenience of the public. They were one of the things which were most admired in the debates we had recently, both on this Bill and on Lord Crook's Motion on the telephone service. They are provided more generously in this country than in any other, and they are run at a very considerable loss. I should have thought, that being so, that there was a perfectly reasonable case for exempting them from paying rates. The Post Office railway running underneath London does a great service to the city, as I am sure anybody would agree. It does a great service to the city in the infinitely faster distribution of the mails to, from, and within London, and it also takes an enormous amount of traffic which would otherwise be clogging the roads of the city.

LORD LATHAM

So do the Tubes.

LORD ST. OSWALD

The noble Lord says: "So do the Tubes". That is again another question, and I think we really cannot argue outside the Post Office Bill for the moment. The Government cannot agree that we should, in regard to the second Amendment, now, alter the position of the Crown in this way, and more especially since, as I have explained, it would not in fact benefit the local authorities or anybody else in any way. I hope I have persuaded the noble Lord to withdraw his Amendment.

VISCOUNT HAILSHAM

It is a little difficult to know exactly what point has been reached, as I have just come into your Lordships' House, but perhaps it would be convenient Ito the Committee if I moved that the House do now resume.

Moved, That the House do now resume.—(Viscount Hailsham.)

On Question, Motion agreed to, and House resumed accordingly.