§ 7.12 p.m.
§ The Minister of State, Scottish Office (The Earl of Mansfield) rose to move, That the order laid before the House on 6th July be approved.
§ The noble Earl said: My Lords, from the detailed debate which we had on 7th April on the Valuation (Scotland) Order 1982, I know that your Lordships are already acquainted with the history of the proposal to hold a partial revaluation next year and I do not therefore propose to dwell on that at length. The order which we considered then gave effect to the Secretary of State's decision that the rating revaluation to be held in Scotland in 1983 should apply to non-domestic property only. We acknowledged at that time that there were a number of problems inherent in holding a partial revaluation, and, indeed, the noble Lord, Lord Ross of Marnock, and other noble Lords, drew attention to many of them.
§ Subsequently, my right honourable friend the Secretary of State met representatives of the Convention of Scottish Local Authorities to discuss the resolution of the practical problems associated with the partial revaluation. The convention's representatives made strong representations that they considered the likely results of a partial revaluation to be sufficiently difficult to work with that it would be better to delay revaluation to a later year than to hold a partial one. In the light of these representations the Secretary of State reconsidered his decision, and announced on 18th June that he intended to revoke the order which prescribed a partial revaluation in 1983–84 and, in its place, to introduce an order deferring the next Scottish revaluation for two years; in other words, until 1985–86.
§ In implementation of this decision the Valuation (Postponement of Revaluation) (Scotland) Order 1982, which we are considering today, was laid before Parliament. It is, of course, a very simple order 291 indeed, as it does only two things. First, it prescribes 1985–86 as the next year of revaluation in Scotland, and, secondly, it revokes the previous order. Given the concern which was expressed in our earlier debate over the proposal to hold a partial revaluation, I would think that your Lordships will welcome this order. The concept of the partial revaluation was introduced to enable valuation rolls to be kept up to date while the Government consider the future of the domestic rating system. It is still important that rolls should be kept up-to-date for as long as the rating system is with us, and that is why this order postpones revaluation for only two years, thus allowing the next revaluation to proceed seven years after the previous one, which is, of course, the same period as occurred between the last two revaluations in 1971 and 1978. Assessors now have over two-and-a-half years' notice of the intention to proceed with a new revaluation in 1985, and this should be time enough to make a fresh start and complete a revaluation then.
§ I would say that the fact that my right honourable friend is not proceeding as he originally proposed is proof of his willingness to heed the views of the Convention of Scottish Local Authorities and, if he is persuaded that they have a good case to make, to go along with those views. I trust, therefore, that your Lordships will agree that it is sensible to postpone for two years, abandoning the 1983 partial revaluation. I commend this order to the House and beg to move.
§ Moved, That the order laid before the House on 6th July be approved.—(The Earl of Mansfield.)
§ Lord Ross of Marnock
My Lords, we have to thank the Minister for his explanation of this order. I have been sitting here waiting, wondering what the explanation was going to be: whether it was that they had found some legal snag, because, remember, the last order came before us only on, I think it was, 7th April. I am the last person who should forget that date, because it happened to be my 71st birthday. But that order was no birthday present, because it was departing considerably from what we in Scotland had prided ourselves on; namely, that apart from the one period that the Minister mentioned, which really was created by the reorganisation of local authorities, we have a very good record in maintaining the quinquennial revaluations in Scotland. That is essential, because unless you keep the rolls up-to-date, and unless you give the opportunity (many people would argue that five years is long enough for that) to get rid of the anomalies that come to light during those five years, then you get into very considerable elements of unfairness. It was disappointing to me, though not surprising, that we got this partial revaluation promised us for 1983.
We have to bear in mind, too, the work of the valuation officers. We do not call them that in Scotland; we call them assessors. Whereas in England and Wales this is done by the Inland Revenue department, in Scotland it is done by assessors who are appointed by the local authorities—easy to appoint but very difficult to sack, for the simple reason that they must have a measure of independence. But these assessors in Scotland have another job as well. When there is an election—and I am sure my noble friends 292 from Northern Ireland will be interested in this—they become the electoral registration officers. I could see building up, following a year of revaluation and the necessary appeals that follow that, a considerable amount of work for them. We have been told fairly recently that the Prime Minister would like to have an election next year, and I think this would run into some difficulty. Indeed, I wondered whether that was the reason for this order. But, no, the reason is that there are difficulties, and these difficulties have been brought to the notice of the Government by the local authorities, by COSLA.
I am surprised that they were not brought to the notice of the local authorities by the Scottish Valuation Advisory Committee—and, remember, we have been waiting. We have just had the first order. Your Lordships will remember that when we passed the 1981 Act, which was only just about this time last year, it was provided that if there was to be a revaluation in part then that was to be done by order. We had that order, which was to come into force on, I think it was, 8th April. We were then expecting another order, because under, I think, Section 2(b) the Government had to come to the House with an order telling us how they were going to do it, the method of revaluation of these properties—not in this case the specified properties but (because they had done it the other way round) the unspecified properties. They also had to tell us how they were going to do the impossible: to have this revaluation of only part of the subjects—and the subjects were industrial properties, commercial properties and the miscellaneous properties. But when that had been done, they had to produce a formula that meant that the domestic properties that were unvalued had not to pay any more than the share of rates that they had been paying previously.
It was pointed out to the Government, both when we passed the Act of 1981 and when we discussed this matter in April of this year, that partial revaluation is not a simple process—and these words should ring in the ears of the Minister because these were the words that were used by Mr. Rifkind who, since he dealt with this matter in the Statutory Instruments Committee in another place, has now gone to sort out the Foreign Office.
I think that this is what the Government are now discovering. It is usual to give for revaluation about two years' notice to those who have to do the work. I think it was in January 1981 that the Secretary of State announced that there was going to be partial revaluation. My colleagues in another place pressed him then and kept on pressing him as to what was going to be done. We must remember that this is to come into operation in the beginning of April next year. This means that the Government and everyone else concerned will want the estimates by November of this year; because even the rate support grant calculations depend upon the assessments, and if not the rate support grant itself, the division of rate support grant among the local authorities depends upon what the estimates are. The estimates are then divided out, and one of the very considerable factors affecting this is the actual assessments for each valuation area.
Now here we are. We have been waiting for this second necessary order to come. Let us remember 293 that we told them about its difficulties and complexities. We discussed them, the Minister agreed but he brushed them aside and said that it was going to be quite easy; that, after all, there are fewer properties and plenty of time. After passing that in April—two months ago now—we have got this; just revoking that one altogether and going back to a general revaluation, and that a postponed one. It had to be postponed now because it was far too late to do the statutory one for 1983–84. My Lords, what does that mean? It means that where I complained that in respect of the domestic properties there were unfairnesses that had arisen over five years, and where people had the opportunity of appealing in a year of revaluation the fact that there was going to be only partial revaluation meant that they were being dealt with unfairly, now, they have to wait for another two years before they get that opportunity.
But the other point is this. I wonder whether the Minister can remember the justification that was given for the partial revaluation. This is the Minister responsible speaking on 31st March this year:It is generally accepted that for as long as the rating system remains with us, the rating base should be kept fairly up to date. That can be achieved only by having regular revaluation "—well, we are not having regular ones but having it postponed for two years. He continues:It is, for example, quite likely that a revaluation at this time "—that is, this year—may tend to shift the rating burden away from some of the older property occupied by traditional industries and commerce. It would not be fair that those sectors should continue to shoulder a burden that is no longer properly theirs".But, whether we like it or not, the Government have done not a U-turn but a double somersault with twists—and these people who, a few months ago, could not be left to shoulder this burden have got to shoulder the burden until 1985–86. How can that be justified?
Let us remember that we have also the complications of this alternative domestic rate. We were given the impression that something was going to be done about it within the lifetime of this Parliament. One of the reasons we could not have a general revaluation in Scotland was given in these words:We could not embark on genuine reform if that had been pre-empted by a major step to preserve the existing system "—that is, a general revaluation. The reason is that if you revalue it takes years to sort the thing out in respect of appeals and of appeals to the courts. As a matter of fact, it was only last March that people in a certain part of Troon had their valuations heard and upheld. This is true. That was a revaluation which took place several years ago—over four years ago—so that if you are going to have a revaluation in 1985–86, it is going to be about the end of the decade before it is settled; and you are not going to get any major reform within that.
Obviously if you are going to have a general revaluation in 1985–86, that will be after the next election. My Lords, to put the blame for all this muddle and this floundering around in the very deep and murky waters of valuation and revaluation on the local authorities is just a little unfair. I know that the Minister is having a heavy day and I have tried to help him as much as possible by not interfering in this House. He has had to help in the announcement to the people 294 of Invergordon that there will be no smelter there; that the Government have failed to get a new operator. He has had the job of giving the local authorities in Scotland today the bad news about the rate support grant, how Government manipulation has been continued in respect of that. Now he comes along and says, "Ah, but we listened to the local authorities about their difficulties and it is they who are responsible for this order". It is not. It is the muddled thinking of the Government, eventually facing up to the practical difficulties of revaluation, even partial revaluation, and realising that it cannot be done.
I should have been grateful if the Minister had been honest about it. The Government were told about it in another place, they were told about it in March of this year. They were told about it in this House; but, no, they went ahead. When I consider how valuable is parliamentary time and how it is here being wasted by the Government in this way, with their coming forward with an ill-considered order and then within a couple of months or so, revoking that order and completely changing their policy, there is no vote of thanks from me for this "Mansfield miracle" tonight—rather a lack of confidence in Ministers and doubt about whether they know what they are doing in this or any other local government field. I will not be opposing it.
§ 7.30 p.m.
§ Lord Kilmany
My Lords, if I may intervene—only for a minute or two—I certainly undertake that I shall not stand in the way of my noble friend Lord Mansfield in replying to the noble Lord, Lord Ross. I have only one small complaint to make. I readily accept I have an interest in this matter—it is not a financial one but it is an important interest—and this is in the general sport and enjoyment of the whole of Scotland. But in particular I have an interest regarding the racecourse at Ayr. As the noble Lord, Lord Ross, will know, it had been counting upon a revaluation because those connected with the course were led to believe that there was very good hope of having a reassessment of their rate burden which would allow those concerned to continue with Ayr racecourse on the same high class lines that they have learned to show to all who attend the races, notably those who attend the September meeting when the Ayr Gold Cup takes place. This attracts so many good horses, trainers and owners. It has a good attendance of people who count on seeing the best at a very good time of year for Scotland.
Then again, talking about my own particular interest (for which I hope your Lordships will forgive me), Ayr is also the site of the Scottish Grand National. Whenever doubts are voiced—I hope they are not serious ones—about continuation of the Grand National at Liverpool, it has always been at the back of my mind that at any rate the Ayr Grand National, a four-mile steeplechase of very high class, would go some way towards preserving what I regard as a national sport from an English point of view and also from a Scottish point of view, too.
I must not waste time, which is limited, but the point that I endeavour to make is the gross unfairness between the situation of that racecourse and the situation with comparable English racecourses. The racecourse of Newcastle, I think most people would 295 agree, is just about comparable to Ayr. What are the rates they are required to pay? They are required to pay between £7,000 and £8,000 a year. What are the rates that Ayr is required to pay? It is required to pay between £80,000 and £90,000 a year. I say quite frankly to my noble friend that that is a figure which, if allowed to continue indefinitely, could kill dead the racecourse at Ayr and with it the finest racecourse in Scotland, and I—
§ Lord Kilmany
Yes, my Lords; I readily agree with my noble friend about that. But does he really understand how serious this matter is? The noble Lord opposite—with whom I disagree about very many things—feels that what I am saying on this point is worthy of support. I want to beg of my noble friend to bear this in mind and see what can be done. Looking at what we are now discussing, I cannot see it being made any easier to do. But that does not prevent my hoping and urging my noble friend and his right honourable friend the Secretary of State for Scotland to realise the danger and do something without too much delay—indeed, without any delay at all—to set it right.
§ 7.35 p.m.
§ Lord Hughes
My Lords, I do not wish to follow what has been said by the noble Lord, Lord Kilmany, in this matter which is of great interest to himself and obviously equally to my noble friend Lord Ross—
§ Lord Ross of Marnock
My Lords, and also to the Secretary of State for Scotland, who is the Member of Parliament for Ayr.
§ Lord Hughes
Yes, my Lords, but it is enough for me to keep it to members of this House at this stage. I particularly would not want to follow it in view of the intervention by the Minister when he, I thought, made a rather oblique reference to Scone in comparison. So I will leave that alone.
I must apologise to the Minister because a meeting in another part of the building delayed me from getting here and so I heard only the last part of his remarks. I gathered enough from what my noble friend Lord Ross said to understand that the noble Earl did not persuade 100 per cent. my noble friend that everything was being done as it ought to be done.
My noble friend is obviously right that, if you depart from the quinquennial valuation, anomalies will persist and there will be people who feel that they are being unfairly done by. I should like to add that when the valuation takes place there will be a new group of people who will feel unfairly done by. I think I can say quite truthfully that those people whose properties have not been altered in any way since the last valuation—and they generally are by far the greatest number of people concerned—feel badly done by, because I think it is a matter of knowledge that at each valuation that takes place the local authorities take advantage of it to get more money out of the ratepayers. Theoretically, it ought not to change anything. As the value goes up, 296 the rate poundage should go down. All experience shows that the rate poundage does not go down sufficiently to balance the rise in the actual value. So out of (perhaps my noble friend would say) the evil of deferring this for two years will come the bonus for some people that it will at least remove from local authorities the opportunity of creating a surreptitious rate increase.
§ 7.38 p.m.
§ The Earl of Mansfield
My Lords, I am grateful to noble Lords who have taken part in the debate. I wondered when the noble Lord, Lord Ross, was speaking what was the point to which he was gradually drawing. Eventually it was a mixture of "I told you so" and "having it both ways", accusing the Government of acting, at best, with incompetence and, at worst, in bad faith. So there was nothing new about that.
The House will recall that the Green Paper was issued and thereafter my right honourable friend started to have consultations—and I refer now to the autumn of last year. The detailed consequences of having a non-domestic partial revaluation could not be realistically discussed with local authorities until the Secretary of State announced—and it happened in January—that he was going to hold a partial revaluation. It was then important as a matter of urgency to bring forward the order defining the lands and heritages to be revalued as assessors, as the noble Lord, Lord Ross, said, in effect only had a year to complete revaluation before 1983. So during that period, of course, our consultations concentrated on the scope of revaluation rather than on its details. Then it became apparent that there were real difficulties, and these were put up by the convention.
And here is where the noble Lord, Lord Ross, seeks to have the matter both ways. If the Government make up their minds to govern and provide a lead, we are then told that we do not pay attention to the democratically-elected local authorities, that the Secretary of State acts as a dictator or gauleiter, or some such expression, and that the Government in fact have no mandate and therefore are ill serving the people of Scotland. When we do consult the convention, take very seriously what it says and act accordingly then, once more, we are acting wrongly. I do not think that in all the circumstances the matter could really have been taken further or faster than it has been.
The noble Lord, Lord Ross, once more directed our attention to Troon. If the partial revaluation had taken place it would have made not the slightest difference to the householders of Troon in any event. As I understand it, the final decision in the original Troon case was taken only in 1981 and there is still a further consequential appeal outstanding; so their position has not been changed at all.
The people whose position has been changed are the non-domestic ratepayers who would have been taken into account, so to speak, within their own sector. Here I come to the matter raised by my noble friend: Ayr racecourse. May I say that my purpose in intervening to say that Ayr was only one of many outstanding racecourses in Scotland was by no means to provide a "puff" but merely to set the record straight. I am no great racing man, I am afraid, but I 297 have had the odd extremely pleasurable afternoon in Kelso, which is set in beautiful grounds, and I do not think my noble friend, however keen he is to extol the delights of Ayr, should quite make that claim.
There are a number of cases which are very similar to Ayr, and not only racecourses. My right honourable friend has received a number of representations from racing interests, among others, to the effect that racecourses do have unduly high valuations considering how few days in the year they are used. Of course, one has to say two things to my noble friend. First, certainly their circumstances have changed for the worse since the 1978 revaluation took place. The second thing is that the rate poundages have gone up enormously, and not least in Strathclyde and Kyle and Catterick. Therefore I know that my noble friend will be applauding the efforts of my right honourable friend to contain the local authorities in their general extravagance—because it is this which represents one of the reasons why such places as Ayr racecourse now have to pay such a very high rate.
At any rate, what my right honourable friend did when he received these representations was to advise the racecourse proprietors to discuss their predicament with the assessors' association with a view to the assessors adopting a scheme of valuation at the next revaluation which would result in a lightening of the burden on racecourses. I believe this is a process which has started, but I do concede to my noble friend that because of what has happened they must now wait a further two years for any benefit. I need hardly say that my right honourable friend and indeed I, in my personal capacity, are very sympathetic to the problem which comes about and which is only too clearly exemplified by Ayr racecourse; but neither my right honourable friend nor local assessors can do anything to bring about what I might call an amendment of a valuation roll in between revaluations, unless of course there is a change of circumstances—and I do not anticipate that there has been, so far as Ayr is concerned. For that I am very sorry.
§ Lord Ross of Marnock
My Lords, if the Minister will allow me, he is quite wrong there. They could introduce points into an Act of Parliament, as indeed they did in respect of certain aspects of revaluation in the last local government Act we had.
§ The Earl of Mansfield
Yes, my Lords; of course we could bring in primary legislation, and Parliament can do whatever it likes in primary legislation. What I was saying was that, short of such drastic action and bearing in mind that the revaluation will be within two and a half years, there is nothing that can be done short of a change of circumstances. As I have said, I do not think I can take the matter further. It is unfortunate that the period between revaluations is going to extend for this extra period but I hope I have convinced the House that it has been done with good reasons and from the best of motives. On that note, I commend the Motion to the House.
On Question, Motion agreed to.
§ Lord Lyell
My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
§ Moved accordingly and, on Question, Motion agreed to.
§ [The Sitting was suspended from 7.46 until 8 p.m.]