§ 5.7 p.m.
§ LORD HUGHES
My Lords, I beg to move that the Draft British Railways Board (Amendment of Certified Amount) (Scotland) Order 1967, laid before the House on July 5, 1967, be approved. The British Railways Board are not subject to normal valuation and rating, but make annual contributions in lieu of rates. These contributions are paid to the Secretary of State and distributed by him among the rating authorities in accordance with a statutory formula.
The Board's contribution each year is calculated by applying to a "standard amount" statutory adjustment factors, or multipliers, which take account of changes in the general level of rates in Scotland and in the activities of the Board, measured by reference to numbers of passenger journeys and freight tons carried. The standard amount is, therefore, a basic element in the calculation of the Board's annual contribution and it is, in a sense, analogous to a rateable value. As a result of the general revaluation of property in Scotland last year, the average rate poundage dropped by about 2s. 5d., and if the standard amount is not revised the effect of the rate adjustment factor would be to reduce the Board's contribution in lieu of rates for the current year by about £23,000.
The effect of this Order, which amends a figure from which the Board's standard amount is derived, will be that the amount payable by the Board in lieu of rates for 1967–68 will be approximately the same as the amount paid for 1966–67; that is, about £211,000. In proposing that the Board should be given a rates standstill for the current year, rather than that the standard amount should be increased in line with the general increase in valuations, the Secretary of State has taken into account the following considerations.
First, following on the 1961 revaluation in Scotland the Local Government (Financial Provisions etc.) (Scotland) Act 1962 provided that the standard amount for 1962–63 and subsequent years should 246 be such as to secure that the amount payable in lieu of rates for 1962–63 was as nearly as possible the same as for 1961–62. Secondly, following the 1963 revaluation in England and Wales, the Minister of Housing and Local Government increased the standard amount for the Railways Board in England and Wales by less than the general increase in valuations, and this reduced the amount payable in lieu of rates for 1964–65 and subsequent years on this side of the Border. Thirdly, in the past five years of continuing operating deficit there has been a further major contraction of the whole of British Railways, which in Scotland has halved the number of stations and marshalling yards and reduced by a quarter the number of route miles open to traffic. Fourthly, while the annual value of the average rate multiplier over the last five years has increased from 1.297 to 11.543, the activity multiplier has had only a marginal effect, declining only from 0.984 to 0.973, despite the marked contraction in railway operations, and the payments in lieu of rates by the Board in fact increased in the period from £181,000 to £211,000.
The British Railways Board and the Scottish local authority associations have been consulted about the Order. The Railways Board and the Association of County Councils in Scotland have accepted its terms: no comments have been received from the Counties of Cities Association and the Convention of Royal Burghs. Taking all this into account, the Secretary of State is of the opinion that it would be reasonable to give the Board a standstill in their rate payments in Scotland in 1967–68. How payments will move in Scotland in subsequent years will depend, of course, on the interaction of the rising average rate poundage factor and the declining activity factor, but a gradual increase seems likely. I commend the Draft Order to your Lordships.
§ Moved, That the Draft British Railways Board (Amendment of Certified Amount) (Scotland) Order 1967, laid before the House on 5th July, 1967, be approved.—(Lord Hughes.)
My Lords, your Lordships will know that I personally have no connections with Scotland, except that a noble relative of mine invented the Goschen formula. All the same, I should like to thank the noble 247 Lord, Lord Hughes, for the very clear way in which he has dealt with the two Regulations and one Order, and I am sure that noble Lords on this side of the House wish them well.
§ On Question, Motion agreed to.