HL Deb 25 March 1975 vol 358 cc1166-9

5.47 p.m.

Lord MELCHETT rose to move, That the Rating (Water Hereditaments) Order 1975, laid before the House on 12th March, be approved. The noble Lord said. My Lords, the Order before your Lordships' House is a simple one. It may appear very complicated, but I can assure your Lordships that it achieves a simple purpose. To make it simpler, I intend to use the word "installation" instead of "hereditament", which I find impossible to pronounce. I also intend to use the word "total" instead of the word " cumulo", which sounds more meteorological than having something to do with rating.

My right honourable friend the Secretary of State for the Environment was given powers in the Local Government Act 1974 to make provisions for the rating of certain public utilities—gas, electricity, transport boards and others, including statutory water undertakings. Provisions already exist for rating these industries, and these provisions have had to be reviewed, in consultation with all the interested parties, before any change can be made. My right honourable friend the Secretary of State will make a Statement about these matters in another place in due course. The rating of statutory water undertakings is still being considered but a special problem has arisen that demands an immediate solution.

The existing provisions for determining the rateable value of the rateable installations of statutory water undertakings are contained in Section 31 and Schedule 4 to the General Rate Act 1974. These provisions lay down a method for determining a total rateable value, called a cumulo value, for each statutory water undertaking. This total is then apportioned to rating districts and the apportioned amounts become the rateable values of the undertakings' installations in each district. If an undertaking is changed by acquisition, merger or division, there are provisions for reapportioning its total value. As my right honourable friend has recently indicated in the Report he laid before Parliament, the formula has worked well up to now. But difficulties would arise if the formula were applied without amendment to the situation created by the wholesale mergers of undertakings which have recently taken place.

Under the formula these mergers would require in 1975–76 extensive reapportionments to rating districts of the total values of the present undertakings. The task would be enormous, and all the time and effort would be useful for only a year if the whole basis of rating these undertakings were changed as a result of the review of the rating of public utilities, of which I spoke earlier. The purpose of this Order then is to avoid these complicated reapportionments. This is achieved in Article 4(3) of the Order. The effect of Article 4(3) is to require the total value of each undertaking to be appor- tioned from 1975–76 on, pro rata with the apportionments of the total of that undertaking or the former undertakings on 31st March 1975.

This does not mean that the apportionment of rateable value to each rating district will necessarily remain unchanged. There are provisions in the 1967 Act whereby the total rateable value of an undertaking can be increased because its throughput has increased by more than 10 per cent. over a specified period of five years. These provisions are to continue. This means that where the total rateable value is increased in 1975–76 each district's apportionment will be increased proportionally. Local authorities as a whole will, therefore, get the increase in rateable value due under the existing formula. Noble Lords can rest assured that local authority interests have not been forgotten. Indeed the local authority associations have been consulted fully on this Order.

The other main provisions of this Order, in Article 4(1) and (2), simply recognise that the Commissioners of the Inland Revenue and the valuation officers will not be able to comply with certain time limits laid down in the 1967 Act, in relation to adjustments under this Order. My right honourable friend the Secretary of State has consulted all those affected and they in no way object to what is proposed. I therefore commend this Order to your Lordships' House, and beg to move.

Moved, That the Rating (Water Hereditaments) Order 1975, laid before the House on 12th March, be approved. —(Lord Melchett.)

Lord MOWBRAY and STOURTON

My Lords, we must all be grateful to the noble Lord, Lord Melchett, for the way he has explained what appeared on paper to be an extremely complicated Order, and for the simple explanation of "hereditaments", which I, in my rather great ignorance, thought belonged exclusively to the Kingdom North of the Border and I now find has a good English home down here in the Civil Service. I was also very grateful for the explanation that "cumulo value" means total value. Although one had come to that conclusion, it makes an enormous difference having it explained so well in your Lordships' House.

This is an Order which I think any Party in power would have to bring in to implement the changes in local government that have taken place. I can only thank the noble Lord and say that we give the Order our blessing.

On Question, Motion agreed to.