Mines and Quarries (Valuation) Order 1983 (Hansard, 30 March 1983)

§ Lord Skelmersdale
My Lords, I beg to move that the draft Mines and Quarries (Valuation) Order 1983, which was laid before this House on 15th March, be approved. The purpose of the order is to do away with the special provisions for the valuation of tin, lead, and copper mines for rating purposes. These provisions were conceded to the mines in 1874, to take account of differences in the basis of royalty payments, on which rateable values are based, between these and other mines.
Uniquely, the price of tin is reflected in the rateable values of tin mines, which are reassessed annually. This special arrangement has resulted in a very substantial rise in the rates liability of the tin mines since the last general revaluation in 1973. Indeed, the rateable values alone of two of the mines have, I understand, increased respectively by five and 10 times over the last 10 years. This is quite an unintended effect of the method of valuation, and so the order which I am moving today attempts to remedy the situation by placing tin, lead, and copper mines on exactly the same basis as other mines for valuation purposes.
Perhaps I should explain, briefly, that mines and quarries are all rated by special formulae, as contained at present in the Mines and Quarries (Valuation) Order 1971 and the National Coal Board (Rateable Values) Order 1977. The first order—the 1971 order—sets out two different bases for valuing mines, other than National Coal Board mines. All mines except tin, lead, and copper mines are valued in accordance with the normal provisions of rating law. Rateable values are based on rental values, as reflected in royalty payments, and are reassessed annually to take account of changes in production levels which affect the royalties paid. Ancillary buildings and other structures, including shafts and adits, are separately valued and do not change annually.
Tin mines—for lead and copper are now mined only as by-products of other mining—are valued on the same basis, but with two important differences successfully negotiated by the mines in, as I said, 1874. The royalty payments which provide rental evidence are based on the value of production, so they change with changes in the price of tin; and underground workings and other structures are included in the rateable value based on the royalty payment, rather than separately valued.
Rate bills are the product of the rateable value base and the rate poundage set by local authorities. Of 1599 course, many industries have suffered from increases in poundages, but I am not aware of any instances, other than tin mines, in which rateable values have moved so significantly out of line between revaluations. The consequences are obvious in an industry that is of great importance in Cornwall. It is the function of the rating system to ensure that the burden of rates is spread fairly between ratepayers, and it is clear that in the case of tin mines this is no longer so. Therefore, after consulting the mining industry, local authority associations, those local authorities most concerned and other interests, the Government decided that we should remove this anomaly by making the changes contained in the order that we are debating today.
The order places the valuation of tin, lead and copper mines on exactly the same basis as other mines. This will reduce substantially the value placed on tin in the calculation of the rental evidence, bringing it down to 1973 prices from the current price of around £9,000 a tonne to some £1,700 per tonne. The benefits from this will be offset to some extent by the separate valuation of underground workings and other structures which will now be necessary. The local authorities most closely concerned have raised no objections to the—to them—minimal loss of rateable value that will result, since they clearly recognise the benefits to the area of relieving the tin mines of unjustifiable and substantial costs. If your Lordships today approve the order, it will have effect from the beginning of the 1983–84 rating year. I hope that the order will commend itself to your Lordships' House. My Lords, I beg to move.

§ Lord Bishopston
My Lords, I am grateful to the Minister for having explained the order, which is concerned with rateable value, and not the rate poundage, but, as he has implied, the two are very much connected and influence the total amount of the rates paid. I notice that under Section 19 of the Local Government Act 1974 the Secretary of State is required to consult local authorities and others, and from what the noble Lord has said I understand that that has been done. I do not know what "consultation" normally means to the Government—more often than not it means that they tell people what they have actually decided—but I gather that in this case there may have been true consultation, in so far as there was an exchange of views, which the local authorities welcomed.
I should like to ask the Minister what appeals exist against the level of rateable value levied on various rateable hereditaments. I presume that, as rateable values are going down, there may not be any appeals. I notice that the Minister says that local authorities welcome the proposal. However, if the rateable value goes down, it means that the local authority has correspondingly less in rates. It may be the case in some areas where mines are situated, especially Cornwall—I think of the Wheal Jane mine and others which have been in some difficulty—that the effect of the order will be to help the industry and also help the 1600 authority if the result is improved productivity in the mines concerned.
The Minister has mentioned the connection with royalty payments. Perhaps he can say what this means in present day terms having regard to the fact that he is changing legislation that dates from 1874. I should like to ask finally about the effect on mines. As the rateable value is being cut, do they still make royalty payments? At the end of the day will the mines, especially the tin mines of Cornwall with which I am sure we are concerned, be better off or otherwise? With those remarks, I think the House should give a welcome to the order.

§ Lord Skelmersdale
My Lords, I am grateful to Lord Bishopston for his reception of the order which will bring about a change to one small aspect of the rating system and will affect only a small area of South-West Cornwall. Nowhere else will be affected. Nevertheless, it is of considerable importance to the tin mining industry. The prosperity of that industry will have repercussions on the economy and the employment prospects of that part of Cornwall. I am satisfied that the benefits of the order for the area as a whole will far outweigh the costs to the local authorities concerned. It will, I fear, not be possible to provide accurate figures until the valuation officer has been to the mines and assessed their rateable values on the new basis. However, the total of the current rate bills of the four mines amounts to only just over the product of a penny rate in each of the three district councils after including the Cornwall County Council precept. The mines will, of course, still have to pay rates, although I would expect that the rates that they have to pay will be slightly smaller. I can confidently say that the cost to ratepayers generally will be minimal.
The tin mines will have the same rights as any other ratepayer to appeal against rateable values set under the new method of valuation. But since it is a benefit that the mines themselves specifically asked the Government to provide and since I am giving them, if your Lordships agree the order, a welcome Easter present, I hope, as the noble Lord says, that appeals will not be necessary in this case. I beg to move.