TRANSPORT BOARDS (ADJUSTMENT OF PAYMENTS) ORDER, 1964 (Hansard, 20 February 1964)

§ THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS)

My Lords, I beg to move that the Transport Boards (Ajustment of Payments) Order, 1964, be approved. The Local Government Act, 1948, exempted the nationalised railways and canals from rates, and made the British Transport Commission liable for payments in lieu of rates to the Minister of Housing and Local Government and the Secretary of State for Scotland, which they then distribute to local authorities. These payments were calculated from 983 standard amounts based on the rates paid by the industry before nationalisation. There were two standard amounts, one for England and Wales and one for Scotland. These were adjusted each year for changes in the average rate poundages levied in the respective countries and also for changes in the trading circumstances of the Commission from year to year as compared with the base year, 1947.

Under the Transport Act, 1962, the Commission's liability passed to the Railways Board, the London Transport Board and the British Waterways Board, and the Commission's standard amount for England and Wales, as revised to take account of the 1956 revaluation, was divided among these three Boards. The Act left the Secretary of State to certify the standard amount for the Railways Board in Scotland. This is the only Board required to make payment to him. The Act also required both the Ministers to make an Order prescribing the way in which the standard amounts were to be adjusted each year to take account of changes in the circumstances of the Boards.

Article 3 of the Order prescribes these adjustments. They follow the pattern of regulations made in 1951 which governed the adjustments for the Commission's changes in circumstances. The traffic carried by each Board is taken as a measurement of its activity and one-fifth of the change in traffic as compared with the base year, which has now been brought forward to 1961, is used as the yardstick for the adjustment.

Article 4 adjusts the standard amounts for the Boards to take account of the general revaluation in England and Wales in 1963. The average rate poundage for 1963–64 (which affects next year's adjustment of the standard amounts) is 9s. 0d. compared with 22s. 6d. in 1962–63. If the standard amounts were not increased, the Board's payments would fall by about 60 per cent. next year. This would be a purely fortuitous fall in payments and it is necessary to increase the standard amounts to compensate for the fall in average rate poundage. The three stan 984 dard amounts prescribed in the Transport Act, 1962, have each been increased by 87.6 per cent. That was the estimated increase in the net annual value at the 1963 revaluation of property which is neither domestic nor industrial. This same factor was approved by your Lordships in 1962 for application to the Gas and Electricity Board's basic values, which are analogous to the standard amounts of the Transport Boards.

Both these measures are without prejudice to the outcome of a review, at present in progress, of the rating arrangements for gas, electricity, and railway and canal transport. Article 3 has been accepted by all those concerned as an interim measure. Article 4, changing the standard amounts, is in the nature of a compromise between the Boards, who would have liked no change, and the local authorities, who would have liked a bigger increase. The Order will have the effect of reducing the Boards' payments for 1964–65 by about 25 per cent, compared with this year's. Most of the local authority associations and all the Boards have said that they will not demur at this compromise on the understanding that it does not prejudice a long-term settlement after the review now in progress. My Lords, I beg to move.