Rating and Valuation (Amendment) (Scotland) Bill

HL Deb 24 May 1984 vol 452 cc336-90

11.32 a.m.

Report received.

Lord Ross of Marnock moved Amendment No. 1: Before Clause 1, insert the following new Clause— (" . The Secretary of State shall establish within six months of the passing of this Act, a committee to enquire urgently into the Scottish rating system and its need for reform and to make recommendations to that end.")

The noble Lord said: My Lords, before I begin my remarks on this amendment I should refer to the fact that we have a new face on the Government Front Bench and I certainly welcome the young Earl of Caithness to work in the Scottish Office. I hope he is not asked to take any penalty kicks or to try and stop any of them because I can assure him that on this side of the House we are a little better at taking penalty kicks. But of course there is a face absent too. We have to remark on the fact that Lord Mackay of Clashfern has trodden the well-known path from the Crown Office to the Judicial Bench in Scotland. We shall certainly miss him because he had authority and I think he enhanced the reputation of Scots in this House by the way he handled not only Scottish business but other business as well.

Noble Lords

Hear, hear!

Lord Ross of Marnock

So, my Lords, what we have on the Government Front Bench is pretty well a second XI. They may surprise us. I trust they are going to surprise us by accepting this first amendment. The House will remember that I was asked to withdraw this new clause. I think it was not so much on the merits of the clause but that the Government thought they were going to be defeated. Except the Minister, every single person who spoke supported the clause: the noble Earl, Lord Perth, from the independent Benches; the noble Lord, Lord Stodart of Leaston; the noble Lord, Lord Drumalbyn, and I think there were at least two other speakers on that side of the House. From this side, the noble Lord, Lord Mackie of Benshie, the noble Lord, Lord Grimond, the noble and learned Lord, Lord Wilson of Langside, and my noble friend Lord Carmichael supported the clause.

If the Minister of State had been in Perth on the same day, he would have discovered that things were being said about exactly the same subject that we were talking about and which is in this new clause: that is, reform of the Scottish rating system. There were no fewer than 19 resolutions drawing attention to the need for reform of the Scottish rating system at the Scottish Tory Party Conference in Perth. They selected one resolution. I think it was Mr. Boyd from Dumbarton who was given the honour of having his resolution selected. After the usual genuflexions towards the Scottish Office and how well it was doing in hammering the local authorities, the resolution said: but considers these efforts to be interim to the whole question of reforming Local Government finance". Of course the Minister who spoke in defence of the Government tried his best, but even the Tory Party Conference meeting in Perth carried this resolution.

So everyone in Scotland wants this. They are not satisfied with what the Government have said in respect of their White Paper on rating and valuation where they came to the surprising conclusion that fundamentally the rating system was all right and all it required was a little bit of amendment here and there. I was interested too, to receive from the National Federation of Self-Employed and Small Businesses in Scotland, a similar recommendation that there ought to be complete reform. They carried on with this by sending me a very interesting report that they had had drawn up independently on the subject of their particular position vis-à-vis the rating system in Scotland. They came to the conclusion that it was archaic.

It is not only archaic, it is crumbling. Where you have a very narrow basis for taxation— which is the rent or assessed rent of a property— and you constantly make changes, so that more and more is heaped up on a narrower and narrower basis, anomalies and unfairnesses crop up. The more you put anomalies right, as the Government are doing in this particular Bill, in respect of empty properties, or partly empty properties, anomalies and unfairnesses crop up. We have another new clause in this Bill which further takes away from someone the burden of paying rates. If there is no reduction in the general amounts that have to be raised by rates, it means that if you take the burden of paying rates away from particular people there is a greater burden on those who are left to bear it. This is what has been happening with Scottish rates since 1956 and even earlier and it has reached the point of being completely impossible and farcical.

Now the Government are trying to meet complaints in Scotland by giving people a right to refer to England. But the system in Scotland is different from that in England. The assessment in Scotland is different. The assessment in Scotland is done by independent assessors appointed and paid by the local authorities but who are virtually independent because they cannot easily be sacked by local authorities. In England it is done by the Inland Revenue, paid for by the Government. The formulas on which they work are entirely different. So to claim that everything is basically right in the law of Scotland, in relation to rating assessment and valuation, and then have to resort to giving people the right to compare what is happening to their rating with what is happening in England, is a contradiction in terms.

I do not want to make a long speech. I have quoted the position about the football stadium in Scotland. Why should Glasgow Rangers have to pay £127,000 in rates and Liverpool football club £58,000? Why should Scottish football clubs pay anything like up to 28 per cent. of their actual revenue in rates but in England and Wales 2 to 3 per cent?

The whole thing creaks, and small businesses—people in domestic premises and people in shops—are suffering. You have just to look at Glasgow and see the number of shops that are closing down and the number of banks and building societies that are flourishing. This is crying out for reform. The more the Government try to do something about a glaring situation, the more they narrow the base and make the burden greater for those who are left to carry it.

We have said enough, and we had sufficient support on the last occasion. The Government asked us to withdraw the amendment. The Minister of State said that he would be discussing the matter with the Secretary of State. I do not know when he found time to discuss it. The Secretary of State has been busy at the Tory Party conference, with Bathgate, and with other matters. I should have thought that, in view of the pressure in this House and the pressure from his own conference, he would be wise to accept the amendment. The Minister said that we offered no solution. If you have the solution, you do not set up an inquiry to find a solution. We could make long speeches about possible solutions. I invite the Minister to examine the report I have here, which deals with the manner in which local expenditure is financed within the European Community. There is plenty of scope for an authoritative committee to consider what is an urgent problem. I beg to move.

Lord Mackie of Benshie

My Lords, I rise to support the amendment yet again. Unless the new clause is accepted, the whole case of the Government regarding interfering with local government falls to the ground. If they do not do anything about the rating system and about putting responsibility on to the electorate, we shall continue in a manner that will eventually lead to local government becoming worse and worse, the less responsibility it has. The whole question has irritated, annoyed and perturbed people all over Scotland, including people in the Tory Party.

The Government—I say this again— stated in their manifesto that they would do something about it. How can they say, on coming into government, that nothing can be done? The report, commissioned by the National Federation of Self-Employed and Small Businesses, from the Economist Intelligence Unit, examined local taxation in Europe. All the EC countries—each and every one: Denmark, Germany, the United Kingdom, Luxembourg, France, Belgium, the Netherlands, Ireland, Greece and Italy—have a different system of raising local government finance. There are some similarities. Some systems are extremely different.

Surely to goodness, with the rating system in the mess that it is in today and with local government consequently in the mess that it is in, the Government cannot say that they are not going to set up a committee to look into it. This is not taking anything away from what I hope is the temporary action that the Government are taking on rate capping and the control of local government. It is a step towards a solution. I cannot see why the Minister should be unable to accede to this modest step that would give some credibility to the course that the Government are taking towards what I believe would be the destruction of responsible local government.

Lord Taylor of Gryfe

My Lords, I know that the Minister is a very reasonable man. I hope that, having heard arguments submitted from all parts of the House, he will accede to the request contained within the amendment. I have an abiding interest in this subject. I entered Glasgow Corporation at the age of 22. My first motion before that distinguished chamber was that the city of Glasgow should petition the Government to revise the local rating system. A long time has passed since then. There has been a continued accumulation of anomalies, with the changing pattern and responsibilities of local government. I sat for six years in the valuation appeals court in Glasgow and spent many a dreary day listening to appeals submitted by traders and private house owners about the valuations that had been placed on their properties by the assessor. I can vouch for the fact that it is an extremely difficult job because of the anomalies that have been outlined by the noble Lord, Lord Ross of Marnock.

It can be said that there is a very strong case for the Government looking at this amendment and trying to devise a system that has greater credibility. The noble Lord, Lord Ross of Marnock, has quoted a case that is close to his heart—the interest of Scottish football clubs. It is an interest that I share. There is also the case of the trading community. I mentioned in an earlier debate, and I have since confirmed it, that Marks and Spencer's property in Glasgow is assessed at twice the valuation of its property in Oxford Street, London. This suggests that there is a serious imbalance in the assessment procedures in Scotland as against those in England.

I would plead with the Minister that he should not resist the amendment. I know that we have spent a good deal of time on this matter. I know that the Government have circulated interested bodies and that there has been a fairly interesting but diverse response to their White Paper on the subject. Surely, however, the time is now right for some independent authority to look at these anomalies in order to give some credibility, as well as some logic, to the rating valuation system in Scotland.

Viscount Massereene and Ferrard

My Lords, I should like briefly to support the amendment. I agree with noble Lords that there are far more anomalies in the Scottish rating system than there are in that of England and Wales. I cannot really see why the Government should object to a committee examining the matter. It would appear to be the obvious thing to do. I understand, anyway, that a committee of inquiry into the rating system of England and Wales is probably to be established. I cannot see why the same cannot be done for Scotland.

11.49 a.m.

Baroness Carnegy of Lour

My Lords, I do not wish to go over all the arguments again. They were discussed at Committee stage, when I did not speak. I did, however, listen to the arguments that were put. All of us know that the fairness of the rating system as it stands in Scotland is increasingly questionable. It is trivialising the matter, in my view, to mention only football pitches. It is recognised widely, and not just by people at the Tory Party conference, to which the noble Lord, Lord Ross, had time to listen in, that either the system needs alteration, or we need a new system. Many groups have taken long and earnest looks at the problem over the last few years. I am sure that many of your Lordships took part in those groups, and you will know as well as I do the problems that exist in finding the best means of altering the system so that we do not end up with something which people dislike even more than they dislike the rating system and which is even less fair that the rating system is at present.

There may well have to be changes. The noble Lord, Lord Mackie of Benshie, skipped through a number of countries, all of which have different systems. Indeed, one could make a strong argument, if one wished, for a block grant system for local authorities. But it seems to me absolutely the wrong approach to put at the beginning of a Bill a clause which says that as the Bill is enacted a committee will be set up to do away with it. That seems to me an easy way to make difficulties for the Government. It is a bad way of sorting out a problem of which all in this House, and the people of Scotland, are aware. This technique of suggesting a clause at the beginning of the Bill has been tried in legislation on England and Wales. To my mind, it has, fortunately, not made any headway so far. I hope that your Lordships will not swallow this one and that you will pursue much more sensibly, and in depth, the question of how we can get the right answer. That will not be done by putting a clause such as this at the beginning of the Bill.

Lord Ross of Marnock

My Lords, before the noble Baroness sits down, will she give me her reaction to the Government's statement in their White Paper reply to the Green Paper and the discussions that followed, that the rating system is basically right? Does she accept that?

11.50 a.m.

Baroness Carnegy of Lour

My Lords, having studied the COSLA papers and the recommendations from Tayside region to COSLA, and having discussed it with many local government people in Scotland, I can tell your Lordships that those people are saying the rating system is basically sound but so far we have not found a way of collecting local government taxes which is as cost-effective as the rating system and works as smoothly as the rating system. What was said was that it is basically sound but needs alteration.

It may be that there is a better way, and increasingly as the debate about local government goes on in this country the people of Britain and of Scotland may come round to the notion that a block grant is the right way. We are told that the rating system, with rate capping, cannot involve local democracy. I think the ground is shifting. That is what people mean when they say that the rating system is basically sound but they have not yet found a better way. I am not opening up that argument. I am saying simply that a clause like this at the beginning of a Bill is just a trick and it is a very unsatisfactory way of approaching a question which is most important to the people of Scotland. If people realised the way it was being handled they would not be very pleased.

Lord Burton

My Lords, I had not intended to speak on this amendment but it is a rather unique occasion because, I think for the first time ever, I have been able to agree entirely with what the noble Lord, Lord Ross of Marnock, has said. On the other hand, as the noble Baroness has said, putting in this amendment could cause difficulties. Might it not be a solution for the Minister to give an undertaking that he will do what the noble Lord, Lord Ross, wants, instead of writing it into the Bill?

Lord Gray of Contin

My Lords, we have had a very useful debate this morning. During the Committee stage, when we discussed the amendment put down by the noble Lord, Lord Ross, in which he proposed an immediate inquiry into the Scottish rating system, I said I would take this away and discuss with colleagues what he had said. I said I would make my colleagues aware of the views which had been expressed from all parts of the Committee on the question of rates and on the question of the setting up of a committee in order to look into the whole matter.

As I undertook, I have discussed the amendment with my colleagues. In the light of the views of noble Lords, we have considered it very carefully indeed. However, I am bound to say that despite this the view which I expressed to your Lordships during the Committee stage remains the same. Before I deal with some of the past, let me just take one or two of the points which have been made during this debate. The noble Lord, Lord Mackie of Benshie, dealt at some length with the report which has been produced by small businesses. Let me say straight away that that report does not give any justification for change. There is a wide variety of patterns of support for local government throughout Europe and there has been far more intensive examination by Government of local government finance than by the economist unit which produced that report.

What this Bill does is to take steps to amend the anomalies mentioned by noble Lords this morning. For example, in this Bill we deal with football grounds, and shops in Glasgow and elsewhere. This is not a new problem. The noble Lord, Lord Ross, was quite frank about that. He has referred to it going back as far as 1956. In passing, it is worth mentioning that since 1956 the noble Lord himself had two spells as Secretary of State for Scotland but he was unable to come up with a solution.

I do not think for one moment that the setting up of the sort of committee which the noble Lord now suggests would have reached a solution, because this has already been done. The rating system was subjected to very close scrutiny indeed by the committee chaired by Sir Frank Layfield which investigated local government finance. This committee reported in 1976 and its members were highly qualified and covered a wide range of experience. Scotland was generously represented on the committee with Professor Gordon Cameron, then Professor of Planning at Glasgow University, Mr. Bushnell, then County Clerk and Treasurer of Perth County Council, and Sir George Sharp, who the noble Lord will remember as Convener of Fife Regional Council and President of the Convention of Scottish Local Authorities.

As anyone who has looked at the Layfield Report will appreciate, it is an exhaustive study, not only of the rating system in the United Kingdom but also of local government finance as a whole. I do not believe that there would be any merit in setting up yet another inquiry to look at the Scottish rating system at this time. The system has already been studied in detail. Another inquiry would just go over the same ground again. This, of course, does not mean that we will never again consider such matters, but I am quite clear that there is no need to set up another committee of inquiry now. Let us wait until the provisions of this Bill have had a chance to work.

The work of the Layfield Committee was drawn on in drafting our Green Paper, Alternatives to Domestic Rates, which we published in December 1981. This considered the main alternatives to rates and set out the pros and cons of other methods of local taxation, some of which were suggested by noble Lords during the Committee stage of this Bill.

I am sure that noble Lords will be familiar with the serious disadvantages associated with the various alternatives which at first seem attractive. Indeed, if I might return to what was said by the noble Lord, Lord Mackie, I would point out that some of these alternatives in operation would probably create for the small businessman for whom he seeks to speak as many difficulties as they take exception to at present. Local sales tax presents real problems of unpredictability of yield and cross-border shopping. Local income tax would be similarly unpredictable and quite unsuitable for small authorities. These matters are not confined to Scotland. I should like to correct my noble friend Lord Massereene and Ferrard in a misapprehension that he revealed. There is no question at the present time of a committee of this sort being set up for England.

My noble friend the Minister of State at the Department of the Environment, Lord Bellwin, in reply to a question from the noble Lord, Lord Chelwood, reminded noble Lords that in 1982 the Select Committee on the Environment had reinforced the conclusion we had come to that there was no consensus on an alternative to domestic rates. In the face of such problems—and I have mentioned only a few—the Government have decided to reform the rating system and I believe that this Bill provides real improvements in the system. I found myself in complete agreement with the noble Baroness, Lady Carnegy of Lour, when she suggested that it was not right at the very beginning of a piece of new legislation to say that we must look at the whole structure for the future. We are clear that in the light of the work already done no purpose would be served by a further review of the rating system.

My noble friend Lord Burton, who I would congratulate on his splendid victory in the recent local elections, asked whether instead of writing it into the legislation we could not give the noble Lord, Lord Ross, an assurance that we would do this at some future time. I cannot give that assurance, but I think I can go along to some extent with what my noble friend suggested by what I have already said—that is, naturally we shall look carefully at how the provisions of this Bill operate in practice, and in the future there may be a time at which it would be suitable to make changes. But I do suggest to your Lordships that this is not the time; that it is not appropriate at this moment to set up another committee to inquire into the rating system in Scotland when we do not believe that such a move would result in positive and acceptable proposals coming forward. For that reason—

Lord Mackie of Benshie

My Lords, I follow the noble Lord's reasoning. Is he basically saying: "We have examined the situation and our examination is, therefore, better than that of other people's. We have given up the struggle and now we have this Bill giving central control of any misdeeds of local government"? Is the noble Lord saying that that is the final answer? If so, that is the point that I was trying to make. The noble Lord has made my point.

Lord Gray of Contin

My Lords, that is certainly not the impression that I intended to give. I say in all sincerity that this Government have done everything they reasonably can do to examine the whole rating system and to see if they can come up with something which would be an improvement and which would not create as many anomalies as it resolved. We have to admit that we have not been able to do so and we have now produced a Bill which we believe goes some way towards rectifying the wrongs. We accept that it is not perfect. But as I have explained, we do not believe that we could have done anything better at this time; nor do we believe that the setting up of yet another committee to look into the rating system of Scotland is desirable. For that reason I cannot accept the amendment.

Lord Ross of Marnock

My Lords, I find the Minister's reply very disappointing indeed. When we were asked by the Government to withdraw this clause there was no suggestion then that our clause was a trick. But the noble Baroness, Lady Carnegy, has suggested that it was a trick. I am not given to tricks like that. I have been in politics a long, long time and I take it very ill when a noble Baroness comes along and tells me that I have put this amendment in here just as a trick. The noble Baroness cannot escape her own words.

This proposal was accepted in Committee as something worth discussing and worth considering and it had support from every part of this House. It has support outside. I suppose it was a trick for Mr. Boyd of the Dumbarton Conservative Association to move the resolution that I have read out and embarrass the Government, and then have it carried by the floor of the conference against the wishes of the Government? Was that a trick too?

Baroness Carnegy of Lour

My Lords—

Lord Ross of Marnock

No, my Lords; I am not going to give way. The last time that I invited the noble Baroness to expand on something, we got another speech from her. The Government tell us, "Oh! We have looked at this. We have looked at Layfield". What was the date of Layfield?—1976. What was the date of the Conservative manifesto in which they said they were going to carry out reform?—1979. That was when domestic rates were going out. Why did we in Scotland postpone our revaluations which should have taken place in 1983–1984? We did so because the Secretary of State had in mind to change the rating system. He had his mind made up. I can read out what he said. On 9th December 1980 when talking about revaluation, Mr. Younger said: But clearly there is no point in revaluing property if shortly thereafter rates are no longer payable on it, and it therefore seems sensible to introduce some flexibility into the arrangements for revaluations"—[Official Report, Commons, 9/12/80; col. 1219.] We were asked to pass an order in this House in the January after that Bill went on the statute book—1982—to enable the Secretary of State to revalue, but not to revalue domestic property. Three months later he changed his mind. If there is anything that we require it is an outside authority—a committee—to look into the matter. It is no good telling us about the White Paper. The White Paper was a departmental White Paper. They asked for views from outside. But we will not change something as fundamental as the rating system on the basis of an inter-departmental committee.

This is the only way in which we can do it. If we have the opportunity, we take the opportunity. Everyone in Scotland realises that the whole system is crumbling and unfair. We have had the example of Troon in the last revaluation. They have just settled their appeals and the result of those appeals will have a knock-on effect on other appeals in other parts of Ayrshire and Scotland. That was at the start of revaluation in 1978. The whole thing is crazy—it is unfair. I could list all sorts of examples, but I do not want to do so. I appeal to the House to take the view that the Government must be asked to do this and that it must be done by statute. It is a shame that we have to do it this way. It is not a trick, but it is something we sincerely believe should be done.

12.7 p.m.

On Question, Whether the said Amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 67; Not-Contents, 72.

DIVISION NO. 1
CONTENTS
Annan, L.	Llewelyn-Davies of Hastoe, B.
Aylestone, L.	McIntosh of Haringey, L.
Boston of Faversham, L.	Mackie of Benshie, L.
Bottomley, L.	Mishcon, L.
Brockway, L.	Molloy, L.
Bruce of Donington, L.	Mountevans, L.
Burton, L.	Mulley, L.
Carmichael of Kelvingrove, L.	Nicol, B.
Chitnis, L.	Oram, L.
Cledwyn of Penrhos, L.	Peart, L.
Collison, L.	Pitt of Hampstead, L.
David, B. [Teller.]	Roberthall, L.
Davies of Leek, L.	Robson of Kiddington, B.
Diamond, L.	Rochester, L.
Donaldson of Kingsbridge, L.	Ross of Marnock, L.
Donnet of Balgay, L.	Sainsbury, L.
Elwyn-Jones, L.	Seear, B.
Gaitskell, B.	Sefton of Garston, L.
Gallacher, L.	Serota, B.
Gladwyn, L.	Simon, V.
Gormley, L.	Stallard, L.
Graham of Edmonton, L. [Teller.]	Stoddart of Swindon, L.
	Stone, L.
Hale, L.	Strabolgi, L.
Hampton, L.	Taylor of Blackburn, L.
Hankey, L.	Taylor of Gryfe, L.
Hatch of Lusby, L.	Tordoff, L.
Hunt, L.	Underhill, L.
Jacques, L.	Wallace of Coslany, L.
John-Mackie, L.	Wells-Pestell, L.
Kennet, L.	White, B.
Kilmarnock, L.	Wigoder, L.
Kintore, E.	Wilson of Langside, L.
Leatherland, L.	Winterbottom, L.

NOT-CONTENTS
Alport, L.	Caithness, E.
Bauer, L.	Campbell of Croy, L.
Belstead, L.	Carnegy of Lour, B.
Bessborough, E.	Cockfield, L.
Brookes, L.	Coleraine, L.

Constantine of Stanmore, L.	Long, V. [Teller.]
Cottesloe, L.	Loudoun, C.
Dacre of Glanton, L.	Lucas of Chilworth, L.
Davidson, V.	McFadzean, L.
Denning, L.	Macleod of Borve, B.
Dundee, E.	Margadale, L.
Eccles, V.	Mersey, V.
Effingham, E.	Molson, L.
Elliot of Harwood, B.	Montgomery of Alamein, V.
Elton, L.	Morris, L.
Fortescue, E.	Moyne, L.
Fraser of Kilmorack, L.	O'Brien of Lothbury, L.
Gardner of Parkes, B.	Onslow, E.
Gisborough, L.	Portland, D.
Glenarthur, L.	Quinton, L.
Gormanston, V.	Renwick, L.
Gray of Contin, L.	Saltoun, Ly.
Greenway, L.	Sempill, Ly.
Gridley, L.	Skelmersdale, L.
Hailsham of Saint Marylebone, L.	Spens, L.
	Stamp, L.
Halsbury, E.	Strathspey, L.
Hayter, L.	Suffield, L.
Henley, L.	Swinfen, L.
Hood, V.	Swinton, E. [Teller.]
Hornsby-Smith, B.	Terrington, L.
Hylton-Foster, B.	Teynham, L.
Ironside, L.	Trumpington, B.
Jessel, L.	Vaux of Harrowden, L.
Kinloss, Ly.	Whitelaw, V.
Lane-Fox, B.	Yarborough, E.
Lindsey and Abingdon, E.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 1 [Basis of apportionment of needs element of rate support grants]:

12.15 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 2: Page 2, line 3, after ("guidance") insert ("properly").

The noble Lord said: My Lords, this amendment asks the Secretary of State to tighten up the guidance that he issues to local authorities. At an earlier stage of the Bill we tried to introduce an amendment to the effect that the guidance should be legal, and it was suggested by the Minister in reply that the Secretary of State always gave legal advice. But it seems rather wide to say: with any guidance issued by him"—

the Secretary of State— before the start of the year".

Therefore, the amendment asks that the guidance be "properly" issued by the Secretary of State. Merely to say "guidance" seems so wide that it could include a detailed examination of items and expenditure, and the subject of estimated expenditure as well as the expenditure itself.

We discussed this question at considerable length when last time we tried to insert the word "legally". I hope that with the slightly more modified and less rigorous word "properly", instead of the word "legally", the Minister will feel able to accept this amendment. I beg to move.

Lord Gray of Contin

My Lords, I am a little surprised to see a further attempt to amend this clause, which has received very full consideration and is generally regarded as an improvement on the current position. The clause as it stands is designed to allow my right honourable friend the Secretary of State the power to distribute any general abatement of rate support grant, having regard to the extent to which actual and estimated expenditure conforms with the guidance he had issued before the start of the financial year in question. "Guidance" is the general legal term which in practice means the guidelines which have been issued each year since 1976 to local authorities in Scotland.

Guidelines are among the matters about which the Secretary of State consults the Convention of Scottish Local Authorities. After a period where they declined to discuss guidelines and although they remain opposed to the concept, the convention are now involved in detailed discussions about guideline methodology. The guidelines that issue each year are not agreed figures, but are the Secretary of State's judgment, taking account of any views expressed by COSLA as to the appropriate figure for each authority within the total expenditure provision available for local services.

The noble Lord now proposes to amend this clause in a way which, far from clarifying or improving a system which is generally understood and regarded as fair, could result in endless confusion and litigation about whether or not the guidelines had been properly issued. I can see no merit in the amendment which the noble Lord has moved, and I would respectfully suggest to him that he might consider withdrawing it.

Lord Ross of Marnock

My Lords, this amendment has been tabled because the Bill refers to, "any guidance issued by him"— that is, the Secretary of State. It says "any guidance", no matter how stupid. That is what it means. Guidance and guidelines have floated around local government for about 10 years. Perhaps I may draw the Minister of State's attention to what his witness from the Scottish Office said to the Parliamentary Joint Committee on Statutory Instruments on 14th July 1981. He said: The Secretary of State has made it clear repeatedly that guidelines are indicative, not definitive, and in no way mandatory". Here they are becoming mandatory. This is why I want to get some check on guidelines—because the Government have moved away completely from guidelines as first introduced as guidance; something of which some would be above and some would be below. Now you dare not be above it. It has departed from what they themselves thought a matter of three years ago.

I do not know that the Minister of State has been all that long in Scottish affairs to appreciate just what this means to local authorities. It is unfair of the Secretary of State to start with a term and say, "This is not indicative, it is not mandatory. Some people will be above it, and some people will be below it," and now to come to the point where you have to conform to guidelines. If you have to conform, that is mandatory.

I know that the clause is itself intended to be an improvement on the present position. I think it is only a matter of dealing a little more equitably with certain clawbacks. But to introduce this term, and to introduce it in this way to give legal form to something that never was meant to be mandatory, and to include the words "any guidance", means that the local authorities have no room for manoeuvre there at all. They do not even have a point at law. Once you put into statute "any guidance issued" by the Scottish Office, it is not an order that has to go through Parliament, it is not a statutory instrument, it is just a letter to local authorities. That is now given the status of law. I object to it, and that is the reason why I introduced this amendment.

I hope that the Scottish Office will have a look at this again to see just what they are doing. It may well be that there are some better lawyers in Scotland than I am who will find that there is a flaw in this. I would not be surprised by that. It has happened before with the Scottish Office. I do not propose to withdraw the amendment at the moment. We will have it negatived.

On Question, amendment negatived.

Clause 3 [Power of Secretary of State to control rates]:

Lord Ross of Marnock moved Amendment No. 3: Page 3, line 8, after ("consult") insert ("each local authority affected and").

The noble Lord said: My Lords, so far as I can understand it this clause gives a tremendous power to the Secretary of State to interfere with local authorities. The procedure under Section 5 of the Local Government (Scotland) Act gives power to the Secretary of State to control rates.

The Earl of Caithness

My Lords, will the noble Lord give way? Is the noble Lord on Amendment 5 or Amendment 3? I am not clear.

Lord Ross of Marnock

My Lords, this has been changed since I first saw it printed, because Amendment No. 5 was in the place of Amendment No. 3. Anyway, we shall deal with the amendment referring to "consult each local authority". If a local authority is going to be dealt with in this way, it is entitled to be heard and not to be heard more or less in proxy by the convention. That is the point I am raising here. If local authorities are going to be dealt with in this particular way, before the Secretary of State tells them that as they have not conformed with guidelines or guidance (which has been issued to them I do not know when) then the rates shall be determined in a particular way by him, he should consult all the local authorities affected.

Of course, this is going to be a general power, and it means apart from what ever exceptions have been reached. I do not know whether the exceptions are going to be reached after the exercise of the power and on the basis of an appeal, or whether he is going to make his announcement of his general hit list. But it may be that the Government will think it is wrong that the Secretary of State should be put to the trouble of seeing and hearing every local authority. Why not? He is interfering with the elected council. That is more than anyone in his House has been. We have not been elected to this particular place, but the local authorities have been elected.

Indeed, since this Bill was drawn up, in Scotland the local authorities have had yet another election. I begin to wonder why. The Government were defeated all over the place. I think the only place where they won a seat was in Ayr, and then they proceeded to lose the provost and the supporter with the result that the net gain of one turned out to be a net loss of one. Mind you, that was the Secretary of State's own seat, so we shall leave him to sort out his Conservative troubles there.

Our concern about this is that the local authorities are entitled to be consulted. It is no good the Minister of State saying, "But we always consult the Convention of Scottish Local Authorities". Of course that is so on general points; but here are individual authorities one by one being told what their rates will be. They are entitled to be consulted. I beg to move.

Lord Mackie of Benshie

My Lords, I should like to support the noble Lord, Lord Ross of Marnock, in this amendment. What it means is that the accused are given no right of individual reply. We know that the Scottish Office will be dealing with them, but they should have a right of appeal to the Secretary of State. It seems wrong that they should have to rest their case through the convention of local boroughs, or whichever body it is. I may be slightly out of date with the convention of local boroughs, but whichever consultative body it is it seems only right and natural justice that the elected representatives of a local council should be able to appeal against an order direct to the Secretary of State. This is right and proper, and I hope that the Minister will be able to give us a satisfactory reply to this.

Lord Gray of Contin

My Lords, this amendment proposes that before making a rate limitation order the Secretary of State shall consult each authority affected by it. Now all authorities will be affected by the order, whether they fix a rate in accord with the order or seek a derogation. Consequently, the amendment, if carried would require the Secretary of State to consult each and every authority before making the order. This is clearly impracticable and completely at variance with the procedure accepted over many years for consultation on the rate support grant order, which also affects every authority. There is a well-established principle of collective consultation with the convention on matters that affect all authorities.

The noble Lord, Lord Mackie, is suggesting that local authorities have no right of hearing here. They have the right of hearing through the convention, and that is the established practice. The Secretary of State has regular meetings with the convention. He hears their views; the view of the individual authority is represented through the convention; and it simply would be impracticable for the Secretary of State to attempt to have consultation with every authority.

If noble Lords are concerned about the exceptional cases, then these are fully provided for under the derogation procedure where exceptional individual circumstances can be taken into account. There would be no justification for discussing the general limits with each authority individually, but there is the procedure for the exceptional case. If an authority falls into that category there is a generally accepted procedure for that. Otherwise, it seems to me that the normal and accepted procedure of consultation through the convention has worked satisfactorily in the past, and it would be quite impracticable to try to have consultation with each individual authority. I cannot accept the amendment, and perhaps the noble Lord would consider withdrawing it.

Lord Ross of Marnock

"It is the accepted form", my Lords? When did it become "the accepted form" for the Government to take over the rights of local authorities and to fix the rate of every district, every region, and every island authority? That never has been accepted. That is a constitutional monstrosity that has been thought up by this Government. How will they determine the rates without getting information from every local authority?

Every local authority will have to bend to the Secretary of State, but the Secretary of State will not consult them. The Minister talks about the Secretary of State meeting COSLA regularly. Will he tell me, as I have asked before, how many times he has met them since he took up his present office? The answer is none: he has not met them. Will he tell me how many times the Secretary of State met them last year? I bet your Lordships that he does not know, but I could venture a guess and it would cover the thumbs on one hand. That was not a consultative meeting; it was something that was handed down to him. He told them what the reckonable expenditure was and told them what their share would be.

Officials meet, yes. The Fifth Cavalry will soon learn. I could have told the Minister that; he did not need to run to the Box to get the information.

Lord Gray of Contin

My Lords, the noble Lord must have an awful lot of thumbs, because the Secretary of State met COSLA six times last year.

Lord Ross of Marnock

My Lords, it shows just how disappointing the Secretary of State has been to COSLA, when they have demanded meetings of that nature. Normally, I only had to meet them once and they agreed with what I suggested to them. But there is such confrontation now in local government. He will have to meet them two or three times over this Bill when it becomes an Act of Parliament, about how they will do it, because the Secretary of State will not just determine the rates but will virtually run the local officials as well. He cannot determine any rate without getting information from the local authorities, so the local authorities will have to bow to the will of the Secretary of State at the same time as he is telling them to employ fewer people and to cut down the work.

This is absolute nonsense. This is the first time that it has ever happened. If he is very fond of his valuation and rating Green Paper, by the way, I could give him a paragraph of that to read where he said that if there was no proper change and all that was left was for the Government to hammer and press on local authorities to cut and cut, and to take more direct control, that would cause considerable constitutional difficulty. That is what is happening. We are in a new situation where the Government decide that they will fix the rates and they think that they can do it with the same procedure as before by meeting a small committee representing 63 local authorities in Scotland, all of which have different problems.

This is a different matter from fixing, first, the aggregate expenditure and then the reckonable expenditure, and then the Government telling them what percentage of RSG they will have to meet. That has come down from 69 per cent. to 60.5 per cent.—nearly a 10 per cent. decrease in the share that the Government meet of local government reckonable expenditure in Scotland. That is why rates are up. The Government have done it, but he will fix the rates for every local authority in Scotland and, no, we should not expect the Secretary of State to meet them. He expects every local authority to tell him and to give him all the information. They are all working for him, or, rather, for his officials. I should like to know how many officials will be employed in the Scottish Office once this comes into operation.

The least that can be done is to concede to local authorities the right to consultation on the outcome of all their calculations. This was originally the amendment of the noble Lord, Lord Mackie of Benshie, in Committee. I thought it was so good that we should put it down on Report. I think we should move to a Division.

12.35 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 60; Not-Contents, 93.

DIVISION NO. 2
CONTENTS
Amherst, E.	Leatherland, L.
Aylestone, L.	Llewelyn-Davies of Hastoe, B.
Bottomley, L.	Lloyd of Kilgerran, L.
Brockway, L.	McIntosh of Haringey, L.
Brooks of Tremorfa, L.	Mackie of Benshie, L.
Bruce of Donington, L.	Mishcon, L.
Carmichael of Kelvingrove, L.	Mulley, L.
Chitnis, L.	Nicol, B. [Teller.]
Collison, L.	Oram, L.
David, B. [Teller.]	Pitt of Hampstead, L.
Davies of Leek, L.	Roberthall, L.
Diamond, L.	Robson of Kiddington, B.
Donaldson of Kingsbridge, L.	Ross of Marnock, L.
Elwyn-Jones, L.	Sainsbury, L.
Fitt, L.	Seear, B.
Gallacher, L.	Sefton of Garston, L.
Gormley, L.	Serota, B.
Graham of Edmonton, L.	Stallard, L.
Hale, L.	Stoddart of Swindon, L.
Hampton, L.	Stone, L.
Harris of Greenwich, L.	Strabolgi, L.
Hatch of Lusby, L.	Taylor of Blackburn, L.
Hunt, L.	Tordoff, L.
Irving of Dartford, L.	Underhill, L.
Jacques, L.	Wallace of Coslany, L.
Jeger, B.	Wells-Pestell, L.
John-Mackie, L.	White, B.
Kennet, L.	Wigoder, L.
Kilbracken, L.	Wilson of Langside, L.
Kilmarnock, L.	Winterbottom, L.

NOT-CONTENTS
Airey of Abingdon, B.	Boothby, L.
Alport, L.	Brookes, L.
Auckland, L.	Burton, L.
Bauer, L.	Buxton of Alsa, L.
Belstead, L.	Caccia, L.
Bessborough, E.	Caithness, E.

Campbell of Alloway, L.	Lewin, L.
Campbell of Croy, L.	Lindsey and Abingdon, E.
Carnegy of Lour, B.	Lloyd of Hampstead, L.
Cockfield, L.	Long, V. [Teller.]
Coleraine, L.	Loudoun, C.
Constantine of Stanmore, L.	Lucas of Chilworth, L.
Cork and Orrery, E.	McFadzean, L.
Cottesloe, L.	Macleod of Borve, B.
Craigavon, V.	Mancroft, L.
Dacre of Glanton, L.	Margadale, L.
Davidson, V.	Massereene and Ferrard, V.
Drumalbyn, L.	Maude of Stratford-upon-Avon, L.
Dundee, E.
Eccles, V.	Merrivale, L.
Effingham, E.	Mersey, V.
Elliot of Harwood, B.	Milverton, L.
Elton, L.	Molson, L.
Faithfull, B.	Montgomery of Alamein, V.
Forte, L.	Morris, L.
Fortescue, E.	Moyne, L.
Fraser of Kilmorack, L.	O'Brien of Lothbury, L.
Gainford, L.	O'Neill of the Maine, L.
Gardner of Parkes, B.	Onslow, E.
Gisborough, L.	Orkney, E.
Glenarthur, L.	Quinton, L.
Gormanston, V.	Renton, L.
Gray of Contin, L.	Renwick, L.
Greenway, L.	Romney, E.
Gridley, L.	Saltoun, Ly.
Hailsham of Saint Marylebone, L.	Sempill, Ly.
	Skelmersdale, L.
Halsbury, E.	Spens, L.
Hankey. L.	Stamp, L.
Hayter, L.	Strathspey, L.
Henley, L.	Suffield, L.
Hood, V.	Swinfen, L.
Hornsby-Smith, B.	Swinton, E. [Teller.]
Hylton-Foster, B.	Trumpington, B.
Jessel, L.	Vaux of Harrowden, L.
Kintore, E.	Whitelaw, V.
Lane-Fox, B.	Yarborough, E.
Lawrence, L.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 4 not moved.]

12.44 p.m.

Lord Ross of Marnock moved Amendment No. 5:

Leave out Clause 3.

The noble Lord said: My Lords, this clause is the one which I think is a constitutional monstrosity. I do not know whether the noble Viscount the Leader of the House was going to instruct the Minister of State for Scotland to accept this amendment. I think that if he had the good of Scottish local government at heart he would have done that. I go back to the other point that I mentioned, the Alternatives to Domestic Rates. This is the Government's Green Paper. This, their great and searching examination into the rating system, is, of course, just a cobbled-up piece of interdepartmental jargonese. In paragraph 1.14 it reads: It could be argued that the Government should supplement the existing arrangements by seeking powers to take direct action where necessary to restrain public expenditure". That is what they are doing in the clause. Nothing could be more direct than the Government taking the power to fix the rates of every local authority in Scotland. To continue: The weaker the influence of the local tax system in restraining expenditure, the more pressure will develop on central government to impose direct controls on levels of local government expenditure. For example, statutory upper limits could be imposed on local authorities' income and expenditure". That is what we are doing. Then there is this phrase: The case for the Government taking such powers has to be judged against the very considerable constitutional and practical difficulties that would be involved". That is Clause 3. I heard someone discussing this—I think in an English context—and saying that there was nothing unconstitutional in respect of what the Government were doing. But here are the Government themselves telling us that what they are doing causes "considerable constitutional and practical difficulties".

On the last amendment we heard the horror in the voice of the Minister of State when it was suggested that local authorities who are going to be dealt with in this particular way should have the chance to see the Secretary of State. He said that it was impractical, that it coud not be done. Will he tell me how practical it is for a Secretary of State, among all these other things—because the responsibility eventually is his—to fix the rates for every single local authority in Scotland? There are certain practical difficulties there. But the whole thing is nonsense.

This is the worst thing that has ever happened to Scottish local government; and it is done by this Government which themselves proclaimed in their Green Paper the difficulties. It has already been turned down not only by the electorate nationally in Scotland but also centrally in local elections. Every local authority that the Government are pillorying in the present limited form has made gains against them in the district elections. So they are not doing this at the will of the people. And then they tell us in relation to Clause 3: "We may never use it. It will never be used". I can remember that there was a power in the 1929 Act and it was that power that was taken by them, in the early part of this decade when they became the Government, to start on this road of repression of local government. It lay unused; but they took it, they changed it and they are now changing local authorities in respect of it. I think that this is the worst clause that I have seen in local government in my nearly 40 years in another place and in your Lordships' House. I am not going to make a long speech about it. It is so bad that I think it should be thrown out, and thrown out quickly.

Lord Mackie of Benshie

My Lords, I must support this amendment to leave out Clause 3. This is the core of the Bill. This is rate capping and this, in my view, is the destruction of local government as a valid force in Scotland. The Government might have said, "This is a temporary measure because there are rogue authorities in Scotland in relation to whom we cannot find a method of making local democracy work quickly; so we have this temporary measure". But they have not said that. They have said, "We have examined with enormous care all the alternatives—and there is no alternative but central Government control". For that reason I must vote for this amendment to leave out Clause 3. We are well aware of its wrecking capacity, but that is what we want to do. We want to wreck this Bill which is going to wreck local government and which already has had the opposite effect from what the Tory Party had wanted. It has driven more voters into the hands of the Scottish Labour Party. I say this with diffidence in the presence of the noble Lord, Lord Ross of Marnock, with whom I am closely united in our opposition to this, although perhaps for slightly different reasons. The Government would do well to consider what they are doing to local democracy and to democracy in Scotland by their actions.

The Bill is a bad one. The Government's declared intention to make the Bill permanent makes it even worse, in my view. I must oppose Clause 3 and I suggest that people who are interested in local government, in the future of local democracy, and indeed in the future of the Conservative Party in Scotland, really ought to support this amendment.

Lord Gray of Contin

This amendment has one simple but quite unacceptable purpose—to remove the power to control rates. Our intention to take this power was clearly stated in our manifesto and in the White Paper published in August of last year. There was never any doubt about it, and there was never any question about it. So it was clearly spelt out in advance.

The purpose of Clause 3 is to give my right honourable friend the Secretary of State power to control the rate levels of all authorities. The Secretary of State made it clear in his speech on the Second Reading of the Bill in another place and to the Convention of Scottish Local Authorities that he hopes that he never needs to use the power and that other measures, in particular selective action and general abatement, will bring local authority expenditure and rates into line with the Government's plans. We very much hope that the selective action and general abatement powers will be successful. Selective action under Section 5 of the Local Government (Scotland) Act 1966 has been used for three years and has achieved significant reductions in the expenditure of high spending authorities, with real benefits to ratepayers in the form of reduced rates.

I need only mention that, by selective action, Stirling, which after more than doubling its rates between 1980–1981 and 1981–1982, had its rates frozen in 1982–1983, then reduced in 1983–1984 and held at that level in 1984–1985. Lothian's rate was initially fixed at 116p in 1982–1983 but by 1983–1984, following selective action, it was at 86p. Glasgow, having had its 1983–1984 rate reduced, finds the same rate adequate for 1984–1985. There is no doubt that the Government's action has brought substantial relief to ratepayers who were finding it difficult to meet the higher rates imposed upon them. For instance, the cumulative effect of our action in Lothian has been to reduce the rates of a departmental store by around £84,000. A similar store in Glasgow would have saved around £4,000 last year by our action.

General abatement of grant is recognised by noble Lords opposite as an acceptable way of influencing local authority expenditure. We propose by means of the powers in Clause 1 to make this both fairer and more effective, with the heaviest grant losses being concentrated on those authorities furthest above guidelines. The pressure on high spenders to reduce will therefore be much increased.

The constitutional argument against this clause is not strong. Local authorities operate within a framework set by central government who have an overall responsibility for the economy. Central government also have a responsibility to ensure that the tax which local government levies is fair and does not place undue burdens on the ratepayer, and especially on the wealth creating sector. For these reasons we considered it essential to have the reserve power offered by Clause 3. Whether it has to be used is in the hands of the authorities themselves.

The noble Lord, Lord Ross of Marnock, a little earlier asked me how many additional Scottish Office officials there might be as a result of this Bill. There could be between five and 10 extra, but only if Clause 3 powers are ever used. Otherwise, I am very pleased and proud to say that we continue in the Scottish Office to reduce numbers, with a 15 per cent. reduction in numbers in the Scottish Office since 1979. I only wish that local authorities would do as well.

There is no doubt that this power has been generally welcomed by those who speak for ratepayers—for example, the CBI, the Federation of Scottish Ratepayers, and the Federation of the Self-Employed. I commend it to your Lordships and ask noble Lords to withdraw their amendment.

Lord Ross of Marnock

My Lords, I could not withdraw this amendment. I listened with interest to the speech of the noble Lord, Lord Gray of Contin. It had nothing to do with the amendment. The noble Lord talked about Clause 1: general abatement, general clawback and how that clawback will be met. That was Clause 1. He talked about Glasgow, Kirkcaldy, Stirling, and Lothian. With all due respect, that is not Clause 3; that is power which he already has. This is a general power he is taking which will affect every single local authority and he now suggests that there is no constitutional difficulty about it. May I read again what the noble Lord himself said as a member of the Government? He was then a member of the Government although he was looking after energy at that time, but he is committed to this as well. He said: The case for the Government taking such powers has to be judged against the very considerable constitutional and practical difficulties that would be involved". I would suggest that, if he is going to do the job properly and not just think of a number and see how people react, the practical difficulties will involve the employment of far, far more than 10 people. Do not come here with lectures about the Scottish Office and how successful it has been in cutting down numbers. Government expenditure in Scotland has gone up by about 15 or 16 per cent. since 1979. Local government expenditure has gone up by only 1 per cent. in real terms. The expenditure of local authorities is static. The people who are out of control are the Government themselves, so no lectures, please, on the efficiency of national government as compared with local government.

This thing can do only injustice even to the Scottish Office. I know that civil servants have got to do as they are told, but anyone who is brought up in the traditions of the Scottish Civil Service must be appalled at the kind of powers that they are being asked to adopt in the name of the Secretary of State. This kind of legislation is so crude. It is crude, and it is going to be even more crude in application if they are going to employ only 10 people to determine what the rates will be in the 63 local authorities and in the regions. Half the population of Scotland lives in Strathclyde. Their whole financial structure is dependent on their rates. Supposing that half the additional people are going to be employed in that connection, five people, five faceless individuals, are going to determine, under the Secretary of State and our energetic Minister of State, just exactly what their rates will be.

It is no good the Minister of State coming to tell us what was in the manifesto in Scotland. His manifesto was turned down in Scotland. There are 72 Members of Parliament in Scotland, only 21 or 22 of whom are Conservatives. His very presence here is such that he should not talk about the manifesto, because it did not commend itself to the people in his former constituency. That is not a justification for doing wrong. I think it is a justification for thinking again, and indeed taking this out. The Government do not need it. The noble Lord says that they will never use it, but the danger is that they will use it because it will be easier to do things that way.

The power that the Secretary of State is taking upon himself is so evil that we have no option but to vote against it. This is no trick. It may well be that things have changed since the noble Baroness, Lady Carnegy, left local government. I wonder, if she had been in local government, how she would have felt about this kind of thing. But she would have found some excuse for the Government doing it. She would have said, "Ah, yes, the Government, with the best of intentions, are doing this for the great good and the glory of the people and the ratepayers of Scotland". This is nonsense; indeed, it is worse than nonsense.

1 p.m.

On Question, Whether the said amendment (No. 5) shall be agreed to?

Their Lordships divided: Contents, 54; Not-Contents, 85.

DIVISION NO. 3
CONTENTS
Amherst, E.	Jenkins of Putney, L.
Aylestone, L.	John-Mackie, L.
Brockway, L.	Kilbracken, L.
Buckmaster, V.	Kilmarnock, L.
Carmichael of Kelvingrove, L.	Llewelyn-Davies of Hastoe, B
Collison, L.	Lloyd of Kilgerran, L.
David, B. [Teller.]	Mackie of Benshie, L.
Diamond, L.	Mishcon, L.
Donaldson of Kingsbridge, L.	Mulley, L.
Elwyn-Jones, L.	Nicol, B. [Teller.]
Ewart-Biggs, B.	Oram, L.
Fitt, L.	Pitt of Hampstead, L.
Gaitskell, B.	Rochester, L.
Gallacher, L.	Ross of Marnock, L.
Gladwyn, L.	Sainsbury, L.
Hale, L.	Seear, B.
Hampton, L.	Serota, B.
Hanworth, V.	Shackleton, L.
Harris of Greenwich, L.	Stallard, L.
Hatch of Lusby, L.	Stoddart of Swindon, L.
Hunt, L.	Stone, L.
Jacques, L.	Strabolgi, L.
Jeger, B.	Taylor of Blackburn, L.

Tordoff, L.	White, B.
Underhill, L.	Wigoder, L.
Wallace of Coslany, L.	Wilson of Langside, L.
Wells-Pestell, L.	Winterbottom, L.

NOT-CONTENTS
Airey of Abingdon, B.	Hood, V.
Alport, L.	Hornsby-Smith, B.
Ampthill, L.	Hylton-Foster, B.
Auckland, L.	Jessel, L.
Bauer, L.	Kintore, E.
Belstead, L.	Lane-Fox, B.
Bessborough, E.	Lawrence, L.
Boothby, L.	Lindsey and Abingdon, E.
Brookes, L.	Long, V. [Teller.]
Broxbourne, L.	Lucas of Chilworth, L.
Burton, L.	McFadzean, L.
Buxton of Alsa, L.	Macleod of Borve, B.
Caccia, L.	Mancroft, L.
Caithness, E.	Margadale, L.
Campbell of Alloway, L.	Massereene and Ferrard, V.
Campbell of Croy, L.	Maude of Stratford-upon-Avon, L.
Carnegy of Lour, B.
Cockfield, L.	Merrivale, L.
Coleraine, L.	Mersey, V.
Constantine of Stanmore, L.	Milverton, L.
Cork and Orrery, E.	Montgomery of Alamein, V.
Craigavon, V.	Morris, L.
Daventry, V.	Mowbray and Stourton, L.
Davidson, V.	Moyne, L.
Drumalbyn, L.	O'Brien of Lothbury, L.
Dundee, E.	Onslow, L.
Ebbisham, L.	Renton, L.
Eccles, V.	Renwick, L.
Effingham, E.	Saltoun, Ly.
Elton, L.	Skelmersdale, L.
Fortescue, E.	Spens, L.
Fraser of Kilmorack, L.	Stamp, L.
Gainford, L.	Strathspey, L.
Gardner of Parkes, B.	Suffield, L.
Gisborough, L.	Swinfen, L.
Glenarthur, L.	Swinton, E. [Teller.]
Gormanston, V.	Trumpington, B.
Gray of Contin, L.	Vaux of Harrowden, L.
Greenway, L.	Vickers, B.
Gridley, L.	Westbury, L.
Hailsham of Saint Marylebone, L.	Whitelaw, V.
	Yarborough, E.
Hayter, L.	Young, B.
Henley, L.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 6 [Power of Secretary, of State to limit estimated rate fund contributions to housing revenue account]:

1.8 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 6: Page 6, line 13, at end insert— ("( ) The limit referred to in subsection (1) above shall only take effect where the rate contribution proposed is above 25 per cent. of expenditure on the housing revenue account.").

The noble Lord said: My Lords, I beg to move Amendment No. 6. Its purpose is to return to the situation in which local authorities were given any aid in their housing account only if they paid a minimum of 25 per cent. and the Government gave a grant thereafter. In order to catch the Government grant, a local authority had to lay out a bait of a certain figure; it was frequently 25 per cent. and sometimes more. That is what we propose here.

It was all discussed at some length on Second Reading and during the Committee stage, when my noble friend went back as far as the slum clearance Act of 1935. It starts there because Scotland has always had this very big housing problem for a whole host of historic reasons. The 1935 Act included provisions on slum clearance, and it referred to what I think was called the "intermediate house" as well. That was a slightly different type of house, and it was not easy to make a distinction unless you were very knowledgeable or knew which was a "slum" and which was an "intermediate house". Local authorities were able to build "slum clearance houses" and get a grant per house from the Government only if they first of all paid a certain amount of money. Gradually the Government undertook to pay a grant and those Scottish local authorities with very serious housing problems took it up with some enthusiasm. Therefore there was a very high proportion of local authority housing. The grant which the Government give for housing support has gradually been whittled down, as was said on Second Reading both here and in another place, from well over £200 million to about £52 million this year.

I welcome the noble Earl to the Front Bench opposite for the first time; but, in a way, I am disappointed by the noble Lord, Lord Gray of Contin, who spoke about the Scottish Office curtailing its expenditure when local authorities have difficulty. My noble friend Lord Ross of Marnock pointed out that that was not absolutely and literally true. But one of the reasons why there has been additional encroachment on the freedom of local authorities, and why local authorities are needing to look at increasing the rents, is precisely that the Government grant on housing alone has dropped from £215 million to £52 million.

We still have a very bad housing situation in Scotland, and the noble Baroness, Lady Carnegy of Lour, referred to the number of empty houses. Again, it is not only the fault of this Government: many Governments before, including Governments of my party, and local authorities of my party, became involved in the housing boom, not just in Scotland but all over the country. Noble Lords may have seen on television in the past few days the catastrophe of some of the housing that was built because local authorities all over the country accepted the arguments of the planners and the architects of the '60s and '70s. They went in for all types of building, and I fear that there will be a great many vacant offices in London in 10 or 20 years' time, because the system of building has still not been perfected by any means.

We are asking that the limit shall be applied only where the rate contribution is above 25 per cent. of expenditure on the housing revenue account. If the limit can be imposed in any way the Secretary of State thinks fit, he can set the limit at zero. That would be absolutely catastrophic and would mean that there would be a total end to local authority house-building. Therefore, it seems modest to ask that we should go back to the original figure, and that there should be a fair limit on contribution in relation to bad housing conditions. We believe that the figure of 25 per cent. before the limit is set is reasonable. I beg to move.

The Earl of Caithness

My Lords, first may I say that I am grateful for the welcome that noble Lords opposite have given to me. Indeed, I look forward to many discussions with them on Scottish matters. I have listened carefully to what the noble Lord has said. He will not be surprised, however, that I am not persuaded by his arguments.

The purpose of Clause 6 is simple. It is to ensure that housing authorities do not pre-empt scarce resources to provide subsidies from the rates to tenants who do not need them. It replaces the system of housing expenditure limits under which authorities who budget for unreasonably high rate contributions are required to make reductions in their capital expenditure. It will, in the Government's view, protect the interests not only of ratepayers but also of local authority tenants themselves. The noble Lord has spoken as if local authorities had a right to contributions from the taxpayer and the ratepayer towards their housing costs, irrespective of whether they could reasonably be expected to meet those costs without subsidy. Whatever the position in the past, I see no virtue in continuing to subsidise the costs of authorities which can reasonably be expected to balance their books; nor do I see why ratepayers should be expected to step into the breach.

Where resources are limited, the Government have a duty to ensure that they are used where they are most needed. The noble Lord's amendment assumes that, provided the contribution from the rates is not more than 25 per cent. of housing expenditure, the Government ought not to concern themselves. Needless to say, this is not a view which we accept. The contributions from the rates to subsidise housing expenditure have increased steadily since 1979; and in the current year 26 authorities have exceeded their limits, leading to a reduction in the capital expenditure available to them of some £22 million, of which a full £5.5 million is accounted for by Glasgow. This sum could otherwise have been applied to dealing with some of the present problems of the housing stock, which the noble Lord mentioned and about which noble Lords opposite tend to wax so eloquent.

Nor is it fair to suggest that reductions in rate contributions could not be made without unreasonable rent increases. In the first place, local authorities will remain responsible for determining the level of expenditure on management and maintenance, and I believe that there is considerable scope for savings through greater efficiency in local authority repair and maintenance services. But, secondly, the average rent of a council house in Scotland in 1983–84 was £9.87 per week—less than 7 per cent. of the average weekly earnings of a male manual worker in full-time employment. Information which we have from local authorities shows that average rents in the current financial year will increase to £10.45 per week. This does not seem to be an excessive amount for people to pay towards their houses. And of course if a tenant has genuine difficulty in meeting his housing costs, then support is available under the housing benefit system.

Local authorities are not entitled to subsidies from the rates irrespective of need. The new arrangements introduced by Clause 6 will limit the extent to which scarce resources are pre-empted to subsidise tenants who do not need such subsidies. They will discourage authorities from taking short-term political decisions at the expense of their housing stock; and they will maximise the proportion of the available resources which is applied to meeting real needs.

The noble Lord, Lord Carmichael of Kelvingrove, mentioned the housing support grant which was introduced to bridge the differences between what authorities could reasonably be expected to receive by way of income and what they might realistically be required to spend on their housing account. It is true that the housing support grant has fallen from a level of £228 million in 1980–81 to £52.5 million in 1984–85. However, in comparing the total of housing support grant paid now with that paid five years ago, one must take into account the substantial fall in interest rates over the period, since loan charges account for such a high proportion of local authorities' current expenditure.

Whatever the position in the past. I can see no justification for subsidising the costs of authorities which can reasonably be expected to balance their books. Nor do I see—and I will repeat this once again—why ratepayers should be expected to step into this breach. I hope the House will agree with me that we ought to resist this amendment.

Lord Carmichael of Kelvingrove

My Lords, the noble Earl used two unfortunate examples when replying. He spoke first about rent as a percentage of main manual workers in full-time employment in Scotland. This is almost a sick joke when one realises that the number of unemployed in Scotland is more than 350,000 and rising. The number of main manual workers in full employment as a percentage of the population is going down and down.

The Earl of Caithness

My Lords, if the noble Lord will kindly allow me to intervene, I am sure he would agree that wages for the average manual worker are now higher in Scotland than in England.

Lord Carmichael of Kelvingrove

Yes, of course, my Lords. It was the proud boast of my Government that the rate for manual workers was slowly increasing. This has happened now because of the relatively large number of people involved in the oil industry compared with five years ago— not because the oil industry has necessarily grown, but because the rest of the working male population has declined. Therefore, the weighting towards the highly-paid oil industry has considerably pushed up the average wage.

I am delighted that that average wage in Scotland is approaching, or is perhaps even slightly better than, the average wage in England. Until a few years ago, it was 97 per cent. to 98 per cent. of the average English wage. But if one deducts the large number of unemployed in Scotland and at the same time takes into account the oil industry with its considerably higher average wage (paid for working in very severe conditions) then there is more of a balance. I am sure that is one of the statistical reasons why the noble Earl was able to give the figure he did. If only the 350,000 unemployed were able to look forward to anything like that average wage, it would be something.

People outside cannot understand the economics of the present Government. The noble Earl spoke about the scarcity of resources. People ask, with understandable puzzlement, "What scarcity of resources?" Cement is manufactured in this country and is not imported. The brickworks are closing down or they are overstaffed; there are plenty of bricks available. When it comes to labour, we hear not only from the building trade unions but also from the building trade employers that they are sometimes in a state of panic. We have heard this when we have met with the building trade associations or the employees' and employers' joint groups. They say, "For goodness sake, get the Government to do something in this industry". It uses very little in the way of imports. Glass is also home-produced. There is plenty of land available in Scotland for building. The only material that is imported in any volume for house building is timber—and even that represents only a small part of the total cost.

We have to be careful when we speak about scarce resources. We are really talking about the fact that we have been caught up in a ridiculous, crazy and mad system of economic control. In a few years' time, when the economic situation has changed slightly, and when the attitude of the present Government has changed—and such changes are already beginning to swell up both here and in another place—the noble Earl and his colleagues will look back and say, "How crazy we were, when we had all that material available and all that labour available, and no import costs".

When I was ejected from another place, I made a point of going to the labour exchange. I had been telling people for years that there was no shame in so doing. I went to the labour exchange and signed on. Believe me, it is not a pleasant experience to sign on at the labour exchange. But one sees there building trade workers being paid inadequate social security who, with all the materials which are available, could, for very little more money, be helping to build houses. That situation seems to be crazy.

There is no argument for what has been spoken of as corner shop economics. I am sure that the noble Earl and his colleagues will be horrified when they look back in five years' time. Because of these corner shop economics, we have to curtail the building that is desperately needed, and many other things, because of silly financial restrictions. Although the noble Earl tried hard to meet the points contained in the amendment, I feel that, as an example, we must put it to the House and let the House take a decision on it.

1.27 p.m.

On Question, Whether the said amendment(No. 6) shall be agreed to?

Their Lordships divided: Contents, 37; Not-Contents, 85.

DIVISION NO. 4
CONTENTS
Brockway, L.	Hatch of Lusby, L.
Carmichael of Kelvingrove, L.	Houghton of Sowerby, L.
Collison, L.	Jacques, L.
David, B. [Teller.]	Jeger, B.
Davies of Leek, L.	John-Mackie, L.
Elwyn-Jones, L.	Kilbracken, L.
Ewart-Biggs, B.	Llewelyn-Davies of Hastoe, B.
Fitt, L.	Longford, E.
Gaitskell, B.	Milverton, L.
Gallacher, L.	Mishcon, L.
Gormley, L.	Mulley, L.
Hale, L.	Nicol, B. [Teller.]

Peart, L.	Stone, L.
Pitt of Hampstead, L.	Strabolgi, L.
Rea, L.	Taylor of Blackburn, L.
Ross of Marnock, L.	Underhill, L.
Serota, B.	Wallace of Coslany, L.
Shackleton, L.	Wells-Pestell, L.
Stoddart of Swindon, L.

NOT-CONTENTS
Airey of Abingdon, B.	Hornsby-Smith, B.
Alexander of Tunis, E.	Hylton-Foster, B.
Alport, L.	Jessel, L.
Auckland, L.	Kintore, E.
Belstead, L.	Lane-Fox, B.
Bessborough, E.	Lauderdale, E.
Boothby, L.	Lawrence, L.
Brookes, L.	Lloyd of Hampstead, L.
Brougham and Vaux, L.	Long, V. [Teller.]
Burton, L.	Lucas of Chilworth, L.
Buxton of Alsa, L.	McFadzean, L.
Caithness, E.	Macleod of Borve, B.
Campbell of Alloway, L.	Mancroft, L.
Campbell of Croy, L.	Margadale, L.
Carnegy of Lour, B.	Massereene and Ferrard, V.
Cathcart, E.	Maude of Stratford-upon-Avon, L.
Coleraine, L.
Constantine of Stanmore, L.	Merrivale, L.
Cork and Orrery, E.	Mersey, V.
Cottesloe, L.	Morris, L.
Craigavon, V.	Mountgarret, V.
Cullen of Ashbourne, L.	Moyne, L.
Daventry, V.	Newall, L.
Davidson, V.	O'Brien of Lothbury, L.
Drumalbyn, L.	Onslow, E.
Dundee, E.	Quinton, L.
Ebbisham, L.	Renton, L.
Eccles, V.	Renwick, L.
Effingham, E.	Saltoun, Ly.
Elliot of Harwood, B.	Shannon, E.
Elton, L.	Skelmersdale, L.
Faithfull, B.	Spens, L.
Fortescue, E.	Strathspey, L.
Gardner of Parkes, B.	Suffield, L.
Gisborough, L.	Swinton, E. [Teller.]
Glenarthur, L.	Trefgarne, L.
Gray of Contin, L.	Trumpington, B.
Gridley, L.	Vaux of Harrowden, L.
Hailsham of Saint Marylebone, L.	Vickers, B.
	Westbury, L.
Hayter, L.	Whitelaw, V.
Henley, L.	Yarborough, E.
Home of the Hirsel, L.	Young, B.
Hood, V.

Resolved in the negative, and amendment disagreed to accordingly.

1.35 p.m.

Lord Gray of Contin moved Amendment No.7: After Clause 14, Insert the following new Clause:

("Common parts of shopping malls not to be entered separately in valuation roll.

. After section 8 of the Valuation and Rating (Scotland) Act 1956 there shall be inserted the following section—

"Common parts of shopping malls not to her entered separately in valuation roll.

8A. There shall not be entered separately in the valuation roll any part of a covered shopping mall, being a part the sole or main purpose of which is to serve two or more of the lands and heritages comprised in the mall.".").

The noble Lord said: It may perhaps be for the convenience of the House if we discussed Amendment No. 16 with Amendment No. 7, if that is acceptable to the noble Lords. Amendment No. 16: Clause 20: Page 13, line 21, after ("11") insert ("(common parts of shopping malls not to be entered separately in valuation roll)").

This amendment is really required for the removal of doubt, of which there is a slight amount. There is every possibility that, given time, its effects would be achieved through litigation, but the Government consider it preferable to put the position of shopping malls beyond doubt by this amendment.

It has been alleged by many interested parties and by honourable Members in another place that in the light of the current situation whereby the common parts of a shopping mall in Livingston are valued separately from the shops, it is distinctly possible that in Scotland, but not in England and Wales, there may be a growing "double rating" problem where the common parts are both separately valued and taken into account in the valuation of the shops to which they give access. This amendment seeks to remove this possible problem by preventing separate entries being made in the roll for such common parts. This would accord with the usual practice south of the Border. I beg to move.

Lord Ross of Marnock

My Lords, can the Minister tell us whether this has been considered by the Scottish Valuation Advisory Council? I do not think that it is the happiest of solutions to any problems in relation to Scottish law, certainly from an assessor's point of view, that we set aside the custom of Scottish law and apply that of England. I see that the Fifth Cavalry is here. I know that the assessors themselves have been very concerned about this. It does create a bit of a muddle, and we cannot keep on doing this kind of thing.

Lord Gray of Contin

My Lords, I have to tell the noble Lord that it has not been considered by that body. However, we believe that it removes an anomaly which now exists and that it is in the long-term interest of those who occupy shopping malls in Scotland.

Lord Ross of Marnock

Will it make any difference at all to the aggregate of the assessment?

Lord Gray of Contin

What in reality will happen, my Lords, is that the facilities afforded by a mall will be considered when the individual assessments are made for the shops benefiting within that mall.

On Question, amendment agreed to.

Lord Gray of Contin moved Amendment No. 8: After Clause 14, insert the following new clause:

("Relief of rates in respect of non-domestic lands and heritages not in active use.

. After section 243 of the Local Government (Scotland) Act 1947 there shall be inserted the following section— Relief of rates in rates in respect of non-domestic lands and heritages not in active use. 243B.—(1) For the purposes of—

1. (a)section 243 of this Act, lands and heritages to which this section applies shall be treated as unoccupied and unfurnished;
2. (b) section 243A of this Act and sections 24 to 27 of the Local Government (Scotland) Act 1966 (rating of unoccupied property), lands and heritages to which this section applies shall be treated as unoccupied

if, apart from this section, they would fall to be treated as occupied (or, as the case may be, occupied or furnished) by reason only of there being kept on the lands and heritages plant, machinery or equipment—

1. (i) which was last used on the lands and heritages when they were last in use; or
2. (ii) which is intended for use on the lands and heritages.

(2) This section applies to lands and heritages which are not a dwelling-house, a private garage or private storage premises; and in this subsection—

1. (a)"private garage" means a building having a floor area not exceeding 25 square metres which is used wholly or mainly for the accommodation of a motor vehicle; and
2. (b) "private storage premises" means lands and heritages which are used wholly in connection with a dwelling-house or dwelling-houses and wholly or mainly for the storage of articles of domestic use (including bicycles and similar vehicles) belonging to persons residing there.

(3) For the purposes of subsection (2) of this section lands and heritages that are not in use shall nevertheless be treated as a dwelling-house, a private garage or private storage premises if it appears that, when next in use, they will be lands and heritages of that description.".").

The noble Lord said: My Lords, before I deal with Amendment No. 8 perhaps I should mention that I understand that consideration is being given to an amendment to the Rates Bill to introduce derating for certain types of moorings. If we consider that the change has implications for the law of Scotland, we may wish to introduce some form of parallel amendment on Third Reading. I say this for the information of noble Lords opposite.

The responses which the Government received from industry and commerce to the Green Paper Alternatives to Domestic Rates showed how serious a problem rates can be for businesses, and this Bill already contains several measures which are designed to help alleviate the burden of rates on that very important sector of ratepayers. I refer of course to the measures for consultation with representatives of non-domestic ratepayers and the measures to free empty industrial property from rates. Since the introduction of the Bill, we have continued to consider how some relief could be given where it could be most needed. It was with that object in view that we introduced, during consideration by your Lordships in Committee of the Bill, a measure to allow rating authorities in Scotland discretion to relieve rates on lands and heritages partly occupied for a short time.

The measure in the new clause which I have just proposed should be inserted into the Bill would allow non-domestic property to qualify for remission of rates where the property is used only for keeping plant, machinery and equipment which was last used, or is intended for use, on the property.

The measure would widen the conditions under which rates are not leviable where property is unoccupied. For example, relief would be extended to premises currently entirely unused for which rates are payable because plant remains in place, but would not be available for premises used for storage of unused plant which remained in use in other respects. Relief at the discretion of rating authorities would also be available under the measure introduced in Committee for parts of property used only for storage of plant. The proposed relief would remove any need to strip premises of plant in order to qualify for rates relief and could significantly improve the position of industrial ratepayers and provide some benefit to other non-domestic ratepayers.

It is not known what the relief proposed in this measure would amount to, but it should not be substantial overall, although it could be significant for individual firms. Insofar as the cost of the relief is attributable to widening the provisions for mandatory rate relief, the cost will be taken into account in determining total rate support grant and in the distribution of the resources element. I beg to move.

Lord Ross of Marnock

My Lords, as I understand it, this provision is to allow relief of rates in respect of, it may be, factories or sheds of some kind where there is some kind of machinery, that machinery having previously been part of the business that was in those premises. Probably the hope is that the operation will resume at some time or indeed that someone may take it over. But the provision cannot benefit those who use the premises purely as storage and bring machinery into the premises which was not used there before. I understand that, and I gather from the Minister of State's nodding his head that he is agreeing with me rather than that he is asleep.

The question arises as to what check there will be. There is bound to be some register kept in respect of premises and the machinery in them. Will a return have to be made at a particular time when the business is not being carried on but the machinery is there? Is there any obligation on someone at that time in order for them to get the relief to register vacated premises but with machinery still in them? The provision could be abused. The premises could be used to store machinery of some kind which was never used there and probably never would be. I can think of all sorts of plant that might be lying around in that way. That is the first question.

My second question is: did I understand the Minister to say that this was discretionary and a matter for the local authorities to make up their mind about? It is very difficult to understand the amendment without having it in the context of the Act of Parliament that is being amended. I am afraid that I cannot quite remember the Local Government (Scotland) Act 1947, although I was on the Committee stage of that Bill as a Back-Bencher.

Is this a discretionary power or is it now mandatory? If it is mandatory, a question arises. The Minister says that not very much will be involved in all. It might not mean a lot to an industrialised district or to a region. I cannot imagine it meaning very much to a district in the Highlands. But the last change that was made in this respect gave rate relief on external machinery. It meant that Shetland and the central districts of Scotland lost millions and the Government did not make it up. They gave no relief to them, despite the fact that it meant a considerable change in their whole rating system. Can the Government tell us how they plan to meet the problem? It is not good enough to say they will meet it through rate support grant unless they can show that it will be funnelled down appropriately to those councils that will lose particular sums.

Lord Mackie of Benshie

My Lords, I wanted to ask the Minister particularly whether he meant what he said when he said that the loss of revenue would be replaced by rate support grant. I obviously have a particular interest in an affirmative reply. With regard to the general stimulus of the economy, it is not always a good thing to give rate relief on empty property which might otherwise be sold cheaply to businesses starting up. It is not always necessarily a good thing to make it easy for people not to use assets. It is often better that the assets circulate. Nevertheless, in the case of a firm which may well have underused plant, machinery and general capacity which it will use again when it picks up, it is a reasonable relief.

The Earl of Kintore

My Lords, when the Minister replies, can he tell me the position of oil companies and the storage of pipes, machinery and so on, which is often dumped ashore in various places? There are times (perhaps when changing ownership) when they have a lot of equipment lying about which may be sold, may not be sold, may change ownership or something else of that sort. Not being a lawyer, I find this clause difficult to understand. If the Minister would be kind enough to put me right on that, I should be obliged.

Lord Gray of Contin

My Lords, I shall try to deal with the points which your Lordships have raised. The noble Lord, Lord Ross, asked me what check there will be. The rating authority will decide. It could be after application by a ratepayer. The noble Lord may also like to know when the relief will end. The rating authority obviously would monitor the situation. Under Section 243 of the Local Government (Scotland) Act 1947 rates are not payable on lands and heritages unoccupied and unfurnished throughout the financial year or from the time of first entry in the valuation role. Where lands and heritages are unoccupied and unfurnished continuously for more than three months, rates must be remitted pro rata to the period of vacancy within the financial year.

It is proposed in the Bill—this was inserted in your Lordships' Committee—to introduce a discretion for rating authorities in Scotland to relieve rates on lands and heritages partly occupied for a short time. If property is unoccupied for more than six months, the rating authority has discretion under Section 24 of the Local Government (Scotland) Act 1966 to levy rates for any period of vacancy beyond six months. Powers are being sought in the Bill (in Schedule 2, paragraphs 7 and 11) to enable the Secretary of State by regulation, which it is intended should be applied in respect of industrial property, to free lands and heritages from liability for rates for a period of vacancy of less than three months and to set aside rating authorities' discretion to rate industrial property that is empty for more than six months.

The noble Lord, Lord Mackie of Benshie, asked me whether I could clarify the question of rate support grant to which I had referred earlier. I shall go back to what I said initially when I referred to the fact that it is not known what the relief proposed in this measure would amount to. It should not be substantial overall, though it could be significant for individual firms. In so far as the cost of the relief is attributable to widening the provisions for mandatory rate relief, the cost will be taken into account in determining total rate support grant and in the distribution of the resources element. So that was the reference which I made to rate support grant.

My noble friend Lord Kintore asked me about the question of plant, relating it to the oil industry. This applies to external and internal plant only when not being used. Therefore no problems are foreseen when transferring assets between companies. It is only when these are not in use that the matter arises. With those explanations I hope that your Lordships might see fit to approve this amendment.

On Question, amendment agreed to.

1.52 p.m.

Lord Ross of Marnock moved Amendment No. 9: After Clause 14, insert the following new clause:

("Abatement of rates in respect of football and sports stadia. . Without prejudice to any discretionary relief available under any other enactment the rates levied on football and sports stadia shall be abated by 33⅓ per cent.".

The noble Lord said: My Lords, when the Government produced their White Paper on rating and valuation in Scotland they specifically mentioned football stadia. They said that they recognised the difficulty and the unfairness, and they decided that they were going to deal with the problem by way of abatement of rates. I think many people were very heartened by that. I know that people in the football world were heartened by it and they thought that the Government would follow it through when it came to legislation. Therefore, they were indeed surprised later to find no mention of it. The Government had said what they were going to do, and they had promised specifically to give this particular abatement.

On previous occasions I have quoted very fully the disadvantage at which Scottish football clubs have been in respect of the rates paid, as against the rates paid in England. I do not want to repeat it all. I think earlier today I mentioned the fact that from the point of view of the proportion of the revenue of football clubs in England and Wales, it is about 2 per cent. In Scotland it goes up as high as 28 per cent., and for some of the smaller clubs it is a killing proportion of their revenue that is taken from them.

I took the differences between the various clubs and I sought to subtract the relief of 33⅓ per cent. that is proposed in the amendment. It would mean a considerable change, but it would not go all the way in terms of fairness between Scotland and England.

For instance, Rangers pay rates of £ 127,000. If you deduct a third, they would still pay about £85,000. So far as I know from the figures I have received, that would be higher than anything that is paid by any football club in England. I think that the highest figure I have is about £68,000, which is paid by Arsenal. Compare that, my Lords, with what Glasgow Rangers pay at the moment, which is £127,000. Nobody can justify it. The Government promised that they would deal with it by direct abatement, but they have not done so. So I have done it for them, and I have fixed on 33⅓ per cent. In most cases it brings it very much nearer, and I think it would be very much fairer.

Of course I recognise that everything that is done—what we did in the last clause, what the Government do in relation to clauses concerning reed beds, and what they did last year in respect of external machinery—all means that somebody else has to pay. At best, all palliatives produce further anomalies. But remember, my Lords, that here we start with an unfairness which is so blatant in respect of football clubs. It applies also to sports stadia, racecourses and bowling clubs. I think I gave an instance at one point; I believe it was Auchinleck. There is no justification for allowing this unfairness to continue. Of course any loss of revenue can always be met, as the Government have suggested, through a reconsideration of the rate support grant, in regard to the resources element. But that is not a method I like. The Government have made very considerable changes in respect of the formula for rate support grant. The Government always start with the result they want and work their way hack to the formula, rather than build it up in some way that would be generally acceptable. But I have given this opportunity to the Government to give some measure of justice to the authorities.

I notice the Minister said he is going to bring in another new clause about moorings. There have been very considerable changes in respect of this kind of thing, certainly in the West of Scotland around Troon and right up that coast. I do not know whether or not it is this he has in mind, but it will be rather difficult, because we shall be able to speak only once. So we will not have a chance to argue properly and reply to the Minister if something which he suddenly produces means that we have to ask questions, even after an explanation has been given to us.

I am sorry, but I do not suppose anyone else will be, that I shall not be with your Lordships when you debate the next stage of the Bill, which I gather is to be on 7th June. But I shall think of you and I shall think of all the questions that I could have asked.

Baroness Trumpington

We shall think of you.

Lord Ross of Marnock

Do not worry; I shall be back, and my eyesight will be a lot better. I sincerely hope that the Government will think about giving us advance information of what they are proposing to do, so that we shall be properly prepared and not have it sprung upon us, as we tend to have when things are done more or less at the last minute, with starred amendments at Report stage. It seems to me to be all right to grant a one-third abatement. This would only be fair. It certainly would be in line with what the Government themselves promised to do.

The Government will reply that they are dealing with football stadia in Clause 15. With all due respect, they are not. The words "football stadium" are not mentioned there. There is a considerable question, certainly among those who are expert in valuation law, as to whether anything at all will arise out of the new power to cite as comparisons football stadia in England. Looking again at what the Government did at Committee stage, I am more and more uneasy as to how it will turn out. I believe that the Government have so rigged it that by the time the 1973 values in England are uprated we shall be going back into a circle. That is one of the things that the assessors or the tribunal have to keep in mind. I doubt very much whether there will be any advantage eventually for Scottish football clubs. I say this seriously. It is for that reason that I have been driven back to putting down this direct abatement of one-third.

Baroness Elliot of Harwood

My Lords, I should like to draw the Minister's attention not only to football but to another sport that is extremely popular in Scotland; namely, bowling. I happen to have some interest in a small bowling club in the Borders, although I do not bowl myself. Because it is new, that bowling club, formed entirely by local effort, pays rates six times higher than those paid by clubs that have existed in the Borders for a great many years. I have taken this matter up with the rating authority, the district council, the regional council—with everyone. All come back with the same answer: that it is new and therefore has to be rated higher. In my opinion, this has nothing to do with it. If the bowling club—this applies also to football stadia—is engaged in the same game, engendering the same enthusiasm and the same community spirit and community life, it should not be judged six times more expensive because it happens to be new. Otherwise, one will never have anyone introducing anything new; one will have to make do with the old. I hope that the Minister will consider this in his discussions with the rating authorities.

Lord Gray of Contin

My Lords, may I first thank the noble Lord, Lord Ross of Marnock, for giving us the opportunity to discuss this issue, and also for giving me the opportunity to set out the Government's position, as I see it, in relation to these problems. I am sure, too, that I speak for everyone when I say how sorry we are that the noble Lord will not be with us for the final stages of the Bill. We know of his eyesight problem. All of us hope that the operation that he is to undergo will be 100 per cent. successful and that he will be back with us in the very near future.

I take note of what was stated by my noble friend Lady Elliot of Harwood. I hope that as I explain the situation and the reasons why I cannot accept the amendment proposed by the noble Lord, my noble friend will see that we are trying to tackle the very problem that she has raised.

It has been represented by a number of sporting bodies that the rateable values or valuations placed on their premises by the Scottish assessors is considerably higher than those assessed for comparable English hereditaments by the valuation officers who are responsible for the valuation of property south of the Border, by virtue of the different methods used to assess these values. Football grounds are among those numerous examples where, because of a lack of rental evidence in Scotland, the assessor has adopted what is known as the contractor's principle in fixing the value. It has been represented that this method inevitably leads to a higher valuation than the method used in England and Wales, which, I understand, takes more account of the revenue generated by the football club, racecourse or whatever.

The provisions of Clause 16 will allow ratepayers, in the process of a valuation appeal, to cite English values as comparisons, and particularly will provide that that value shall be regarded as a rent. I believe that this will inhibit Scottish assessors from immediately applying the contractor's principle to such lands and heritages, and a valuation on comparative principles will be made possible. This would meet the original grounds of the case made against the use of the contractor's principle. To ensure that the overall tone of values in Scotland is maintained, the valuation appeal committee or the Lands Tribunal for Scotland will have to have regard, among other things, to the date at which any comparable English hereditament had its value ascribed to it.

This provision is being provided to afford league football clubs, racecourses and others in a similar position the opportunitty to prove their case in relation to cross-border comparisons, and if these are found to point towards lower valuations, subjects valued on the contractor's principle should benefit to the extent that their individual circumstances merit.

This amendment, by providing that all such subjects should obtain a reduction of 33⅓ per cent. in their rates bill regardless of individual circumstances, is unnecessary in the light of the appeal rights now afforded, whereby such benefits as rightly accrue should be forthcoming on appeal, and where circumstances indicate a greater or smaller alteration in value then the final assessment will be fair and equitable. To impose an arbitrary percentage reduction could only lead to an imbalance in the scheme of valuations, thus creating a further anomaly. In the light of these explanations, I trust that the noble Lord might consider withdrawing the amendment.

Lord Mackie of Benshie

My Lords, before the noble Lord sits down, can he explain whether the contractor's principle has been applied in the case of the bowling green to which the noble Baroness, Lady Elliot, referred, and whether the club, rated six times higher than other clubs, could apply under this Bill for abatement on that principle?

Lord Gray of Contin

Yes, my Lords. The contractor's principle would have been applied in relation to the bowling club to which the noble Baroness has referred. Of course, that club would be affected by this legislation and could apply in that way. When the appeal was being heard the club could cite other examples to prove or to try to indicate that its assessment was unreasonable.

Lord Drumalbyn

My Lords, do I understand that it is a general rule regarded by all the district valuers that something new is to be assessed at six times the amount of something old? When does the new become old? Does the amount at which it has been assessed originally stick until somebody appeals against it?

Lord Gray of Contin

My Lords, it is difficult to answer my noble friend's question, "When does new become old?" The revaluations would alter the situation from time to time; but anything which is new would be assessed on the contractor's principle pertaining to the value at that time. As I was explaining to the noble Lord, Lord Mackie of Benshie, this covers the point made by the noble Baroness.

Lord Drumalbyn

Everywhere?

Lord Gray of Contin

Everywhere.

2.10 p.m.

Lord Ross of Marnock

My Lords, I find that disappointing. I was hoping to save the face of the Government. This is pretty clear. In the Command Paper, Valuation and Rating in Scotland: Proposals for Reform, issued in August 1983, reference is made to caravan sites, commercial reed beds, spectator sports stadia, and valuation appeals. In relation to spectator sports stadia it says that different valuation methods adopted North and South of the Border have led to particularly heavy burdens being placed on the stadia for spectator sports in Scotland. In conclusion the Government say: The Government's policy is in summary to provide immediate relief through a measure of derating to the above categories of non-domestic ratepayers". There is nothing indefinite about that; it speaks of immediate relief through derating. Instead of that we have a suggested clause which allows a comparison with England. Many people think that will not work. One cannot compare a valuation assessment that has been reached validly through the law of Scotland with a valuation that has been reached by a different body—that is, the Inland Revenue, who do the assessment in England—legally through the law of England. To try to get this across and then, as was done by amendment at the last stage, to update this valuation—in other words, take one part of it out and update it—is not going to lead to any valid comparison at all.

The noble Lord, Lord Drumalbyn, and the noble Baroness, Lady Elliot, raised a question about bowling facilites. The point is made that to be able to get this comparison accepted there now has to be no comparison at all within Scotland—with all due respect, there is comparison within Scotland—or that that is inadequate. As far as I know there is bowling in Prestwick, there is bowling in Auchinleck, there is bowling in Glasgow, there is bowling in the Borders. It is going to be very difficult to argue on appeal that there is not adequate comparison in Scotland.

If the tribunal says there is adequate comparison then the whole thing falls; one is left in the position one is in. There is a certain relief for charitable sports grounds. I think there is discretionary relief up to 50 per cent. from the local authorities. We are talking about something different. The Minister says, "Yes, they can be covered". Everyone is covered by the clause; but to get the benefit (if benefit there be) one must satisfy the fact there is no comparison or there are inadequate comparisons in Scotland. That is the weakness and that is why it would have been far, far better if the Government had kept their promise and had said that these matters would be dealt with purely and simply through a measure of derating. Of course there are difficulties about derating. But we have derated industry. Industry in Scotland is derated to 50 per cent. Agricultural land is derated to 100 per cent. All these things have narrowed so much the whole basis of valuation that they make it incongruous for the Government to suggest that this is a sound basis for the rating system in Scotland—it is not. I deplore the fact that we did not carry the earlier amendment and lost it by just five votes.

However, I have told your Lordships what the Government promised. We will come later to the particular clause which deals with this matter, because I have an amendment down as regards the weaknesses. The straightforward course is for the Government to accept the amendment. Have the Government thought about it? Will they think about it again? I think that they ought to do so.

Lord Gray of Contin

I explained in considerable detail that we would not be prepared to accept the noble Lord's amendment because we take the view that we are going a considerable way towards what the noble Lord seeks to do in the Bill which is before your Lordships. The noble Lord was quoting from the August 1983 White Paper. I, too, should like to quote from that White Paper. On page 5 the last sentence in paragraph 13 clearly states: The extension of appeal rights should greatly assist these stadia", and that was in regard to league football grounds. I quoted the White Paper purely because the noble Lord has been quoting from it as well. That is precisely what we are doing. It will be suggested to the valuation appeals committees—and, indeed, they would automatically do it anyway—that they pay attention to the most recent legislation when they come to their conclusions in respect of valuations.

I really feel that the noble Lord's amendment is unnecessary in this case and I believe that the proposals which the Government have put forward and which I have outlined, will be satisfactory. I cannot agree with the noble Lord. I do not think that he is intentionally trying to decry what the Government are seeking to do here. But I think that he is being unnecessarily pessimistic when he suggests that he does not see any real benefit for Scottish football clubs so far as this is concerned. We believe that that will not be the case and that there will be a levelling here. Therefore, I believe that what we are doing is desirable and that the noble Lord's amendment is unnecessary. I suggest that the noble Lord might consider withdrawing it.

Lord Ross of Marnock

My Lords, my amendment would do what the Government promised that they would do. Everyone knows that it would bring an immediate benefit of one-third rate relief to the authorities. For the Government to place their reliance on the possibility of an appeal and the possibility of a successful result of that appeal, is asking a wee bit too much. If the noble Lord has put his faith upon that then I point out to him that this will take effect from 1985–86. I am not alone in my pessimism. I am not alone in my regret that the Government did not carry out the promise that they made to many people.

The noble Lord has not answered the point that I made about other sports facilities. There are a very considerable number of such facilities in Scotland and we are comparing the one with the other. It might be that the Lands Tribunal would say, "No. The comparisons are there. We do not need to go to England and see what is happening there". The noble Lord has not answered that point. I should like to hear what he has to say about that. Can he give an absolute assurance that an appeal will be allowed on that basis in respect of indoor bowling facilities?

Lord Gray of Contin

My Lords, with respect to the noble Lord, I think that I made the position clear when I said that so far as comparisons are concerned, to provide a comparison in Scotland there must be a let subject for comparison. In cases in which there are no comparisons in Scotland, then there is encouragement to cite English examples for comparison. So there is no question of an appeal not being allowed on that. It will be entirely up to the local valuation appeal committee to decide on the relative merits of the cases which are put to it. But comparisons there will be, whether they are from north or south of the Border.

As regards the comparisons about which the noble Lord is concerned, certainly the comparisons with English football clubs can be cited now as regards Scottish clubs. This is very largely the point about which the noble Lord has been complaining, as have many others up till now.

Lord Mackie of Benshie

My Lords, perhaps I may raise the question of the noble Baroness's bowling club. Will the noble Lord the Minister tell me whether her bowling club may now appeal against a contractor's valuation on the basis of Scottish comparisons in her own district?

Lord Gray of Contin

My Lords, yes, it may appeal against it.

Lord Ross of Marnock

My Lords, that is a very interesting point.

Lord Gray of Contin

My Lords, I beg your pardon. I am already being corrected. As regards the example which the noble Lord, Lord Mackie, gave, it cannot appeal against a contractor's valuation in Scotland. But I shall await the advice which I hope to receive in a few minutes, and will elaborate on the point for the noble Lord, Lord Mackie.

Lord Sandford

My Lords, I do not often intervene in Scottish debates and, so far as I can remember, never to help the noble Lord, Lord Ross of Marnock, But I am provoked to do so now because surely all this points to the need for a very early revaluation of everything in both kingdoms of England and Scotland. There is not much benefit to be had from England because we have not had a revaluation for 11 years.

Lord Gray of Contin

My Lords, on that point, I would not disagree with my noble friend. It is hoped that the revaluation in Scotland will take place in 1985–86.

Lord Ross of Marnock

My Lords, by leave of the House, I shall withdraw this amendment and ask my noble friend to reconsider a suitable amendment at the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lady Saltoun moved Amendment No. 10: After Clause 15, insert the following new clause:

("Rating and shootings.

. In respect of the year 1984–85 and of any subsequent year no rates shall be payable in respect of shootings where no income is derived from such shootings.").

The noble Lady said: My Lords, at the Committee stage I moved an amendment to remove shootings which were not let from the valuation roll. The noble and learned Lord, Lord Mackay of Clashfern, rejected my amendment on various grounds. May I say now how truly sorry I was to hear that the noble and learned Lord had retired from the post of Lord Advocate. We shall miss him very much.

One of the grounds on which the noble and learned Lord rejected the amendment was that much shootng was let out under informal arrangements and that those shootings might slip through the net. I believe that this new amendment takes care of that problem, and particularly of the case of the house party of paying guests, because the sums charged for these house parties are considerable and there is no way in which these house parties can take place in secrecy. The whole countryside knows what is going on, and a host who tried to pretend that he received no income from that form of entertaining would render himself liable to prosecution by the Inland Revenue.

The noble and learned Lord also quoted the Sporting Lands Rating (Scotland) Act 1886 which created the present situation. I have looked up the Hansard report of that Bill's progress through Parliament and it is most interesting. The Bill was not debated at all and was quite unopposed at Second Reading in another place. In your Lordships' House it was introduced by the noble Earl, Lord Elgin, and Second Reading occupied one column in Hansard. The Committee stage occupied half a column. Not one Scots Member of Parliament or Scots peer—mostly big landowners and the very people whose pockets would be affected—said a word against it. Now, why? Because in those days money was plentiful, wages were low, and proprietors could afford to pump large sums of money into sporting estates, which is no longer the case today.

Moreover, that Bill was to bring the law of Scotland into line with the then law of England, which was then what the law in Scotland now is. Later, the law in England was changed. so again we have an anomalous situation. In fact, for a long time we have been playing Cox and Box, and it is time we ceased to do so. As I have just said, no longer can proprietors afford to pour money into their estates. All big estates that I know of let their shooting, stalking, and fishing. They have to. And even then it is almost impossible to make a sporting estate wash its face. You have to have other sources of income.

Now, when you get bad years and, as has happened recently, the grouse desert a moor which has formerly had thousands or hundreds of brace and therefore been able to command a considerable rent, the owner really can be in trouble. He cannot let it, but if it is ever going to be any use again he must continue to look after it, burn heather, et cetera and, above all, keep down vermin, both for his own sake and for that of his neighbours, many of whom may be farmers. Therefore, he must continue to pay the keepers, and the liability to rating is often the last straw which prevents him doing so, and the poor keeper is out of a job, which does nothing for the unemployment situation.

Scotland's shootings not only generate employment in the more remote areas but they earn foreign currency, and Her Majesty's Government benefit through taxation, VAT, national health insurance contributions from keepers, et cetera, and the employees of associated trades like gunsmiths, vehicle manufacturers, hotel employees, shop assistants, to mention but a few. Shooting is now business. If a shop or factory is vacant you can get rate relief. I suggest that the same should apply to shootings, for I consider that they are now the equivalent of business premises.

Rates are not payable on lands and heritages unoccupied and unfurnished. I suggest that grouse are the furniture of a grouse moor, and that if there are no grouse so you cannot shoot, the moor is unfurnished and unoccupied. The sums involved in rating are peanuts, but those peanuts represent hardship, loss of jobs, and encourage poor land management in individual cases.

First, the Government do not want to alter fundamentally the law of Scotland. This amendment does not. Secondly, they do not want to alter the position that shootings are heritable, can be severed, and can be bought and sold. This amendment does not. Thirdly, they do not want to alter the valuation lists. This amendment does not. They do not want to alter the position that shootings have a value and can be valued. This amendment does not. They do not want to create an additional anomaly between Scotland and England and Wales. This amendment does not; it removes one anomaly.

I have been told that this would open the door to other claims for exemption from rates. This has not happened in England and Wales and such claims could be resisted. Therefore, I commend this amendment to your Lordships. I know that it has the full support of the noble Lord, Lord Northfield, who I am sorry to say is ill and unable to be here today, and also of the noble Earl, Lord Minto, the noble Lord, Lord Polwarth, and the noble Viscount, Lord Ridley, and others, who are also unable to be here on this rather inconvenient day just before the holiday. I beg to move.

2.29 p.m.

The Earl of Dundee

My Lords, I should like to support the amendment which the noble Lady, Lady Saltoun, has just moved, and I have put my name to it accordingly. Before doing so, however, I should declare an interest, since on my own farm in Scotland the shooting rights are in hand. This amendment seeks to remove altogether the rates on in-hand shootings where no income is received. At the same time any shootings, whether in hand or let, where income is received would continue to be rated in the normal way and would thus be unaffected by the wording of the amendment.

Therefore if this amendment, or any similar one, were to be adopted the new system would be different from both the present Scottish and the present English systems. It would not favour an owner who in England is able to make money out of a shoot without paying rates and equally it would not penalise an owner who in Scotland always has to pay rates even if he does not let out his shoot and even if he does not directly use it himself.

Following from that the reasons why this amendment is worth supporting are, first, that it attempts to solve the Scottish anomaly whereby rates are always assessed even if shootings are not used. Secondly, it does so without introducing the present English anomaly where income from in-hand shootings does not lead to rates while a similar level of income from let shooting would lead to rates. As a result these respective anomalies and of the disparity of systems between the two countries, out of total shooting rates for the United Kingdom in 1981–82 Scotland contributed 77 per cent. while England paid only 23 per cent.

Thirdly, this amendment would have a beneficial, although marginal, effect on employment in the countryside. At present in the United Kingdom about 85,000 people are employed in one way or another in the countryside. Thus, if Scottish shooting rates were not always obligatory, then the Scottish proportion of this United Kingdom job total would be more secure.

In summary, I think that this amendment can help solve present Scottish anomalies in rates, and can help countryside employment and conservation. It would also give good guidance to the English.

Viscount Massereene and Ferrard

My Lords, I heartily endorse this amendment. I am sorry to hear that the noble and learned Lord the Lord Advocate, Lord Mackay of Clashfern, has retired. Among other things, apart from being such a charming person, he has a very good brain. If shootings were not rated because they were not used, the Lord Advocate was frightened that some landowner would charge guests staying with him for shootings who would pay. As the noble Lady said, if he did that he could be prosecuted. It would be highly unlikely. I do not know any crooked landowners in Scotland. They may exist but I have not come across them.

The point I am worried about is the matter of conservation. I expressed all my interests on the Committee stage, but some estates in the Western Highlands are extensive areas, but there is very little game on them. Apart from deer, which I understand do not come under the Bill, grouse and other game are so sparse that the shootings could not be let. You could go out with a friend or two and shoot something for the pot, but conservation is what I am worried about.

If you are going to continue to rate these extensive areas of land on a shooting basis, it is going to be very difficult for proprietors to pay keepers. The average person seems to think that a keeper is only there to rear game, but you cannot rear game like grouse, ptarmigan, snipe and woodcock; you can only rear pheasants, which are plentiful in the Western Highlands. But the point is that in those areas we have some rare birds, such as the red-throated diver and others. The most accursed of birds there is the hooded crow, which is officially the Norwegian crow. I have seen these crows dive and skim young ducklings off the water. They will decimate the nests of the rare birds.

If this amendment went though—I imagine the Government will not accept it, but if they should accept it—you will then have more proprietors able to afford keepers, who would keep down the vermin, such as hooded crows. There are also other vermin, such as weasels, stoats and polecats. I think that the pure polecat is protected, but you do get a lot of escaped ferrets that revert to polecats. I think that from the point of view of conservation this will be serious, because you will lose more keepers as landowners will not be able to pay them if they have to pay these shooting rates on these large areas of land which have very little game. Therefore, I support the amendment.

Lord Home of the Hirsel

My Lords, I find myself in agreement with the amendment of the noble Lady, but I must tell the House that I would feel unable to vote for it because if it were passed it would be of considerable financial gain to me, and I do not feel entitled to vote in such circumstances. I do not imagine that the Government are able to accept the amendment, but I wonder whether I may suggest something else. When one was able to make some money from grouse shooting, no-one minded being rated to some extent; but now, over wide areas of Scotland there are no grouse left at all, or virtually none. The owner is therefore put in the position that if he lets to tenants he is probably destroying his stock on his moor. So we are rated exactly the same as we were 10 years ago. Why cannot the assessors be told that they should take into account the size of the bag when they are putting forward their rating proposals? I think that would be fair, and it would be done without legislation.

The Earl of Kintore

My Lords, I want to support the amendment but I want to be clear, to renew my memory. The valuation that is placed on shootings—and fishing also, I think—is the average bag over the last five years. If that is correct, if you do not use shootings—and I am thinking of the dog-and-stick farmers who are poor men and whose bag over the last five years will be nil—then it is surely difficult for the assessors (and I speak with feeling about this because I served on a valuation appeals committee for quite a long time) if you put in a nil bag for the last five years, because the average of nil is nil. Therefore, I do not see what justification you have for rating a nil value.

There are safeguards on these things. If you kill game, you have to have a game licence, and that is quite right; but game licences are easily checked, and everybody knows what is going on if there is shooting in these odd districts. Therefore, while I agree with the main arguments that this is an unjust imposition as it works out, I feel the answer lies in a nil return.

Lord Burton

My Lords, the Front Bench have played a very defensive game over this matter and drawn a number of red herrings across the very unsatisfactory state of affairs which exists at the moment. I now only hope that what appears to be an eminently reasonable amendment from my noble friend will be accepted.

I feel that it cannot be appreciated what a very bad effect the current system is having on wildlife as a whole in Scotland. In an attempt to pay the rates, many shootings are being over-exploited. There is unfortunately a steadily creeping increase in commercialism. Shootings which should be left unshot, as my noble friend Lord Home of the Hirsel has said, are now frequently being over-shot in an attempt to produce some revenue to pay these rates. Entirely thanks to what is anyway a most unfair tax, the system is steadily strangling the goose which lays the golden egg.

This amendment should be of interest not just to owners of shootings. Indeed, I am surprised that the noble Lord, Lord Melchett, is not in his place as the chief spokesman for the Royal Society for the Protection of Birds. This rating of the lives of wildlife must be anathema to bird-lovers.

2.41 p.m.

Lord Gray of Contin

My Lords, given the concern that has been expressed on this subject, I hope noble Lords will bear with me if I set out the position in some detail so as to explain clearly the Government's attitude to this amendment.

In England and Wales, sporting rights are entered in the valuation list as such only if they are severed from the land over which they are exercised—that is, let out. Much has been made of the fact that sporting rights account for a very small rateable value in England and Wales compared with a higher rateable value in Scotland, and attention has been drawn to this difference. But sporting rights may contribute to higher total valuations in England and Wales than show in the list, by virtue of the fact that the rights may be taken into account in the valuation of the land over which they are exercised, if this is not agricultural land, and so may be in effect in valuation though they will not be shown separately in the list. More significantly, until recently the view has been taken that rights could be entered in the list only if they were severed by means of a formal deed. This has led to many sporting rights being let under more informal arrangements and thus not being entered in the valuation list. There are cases now waiting to be heard in England and Wales that may alter this and lead to more subjects being brought into valuation. This would not, however, alter the position concerning rights that are kept in hand.

The position certainly is different in Scotland. At one time it was similar to that in England and Wales, but it was—rightly, I think—found to be unsatisfactory. Shootings were not entered in the valuation roll unless they were actually let, and this peculiarity was removed by Section 6 of the Sporting Lands Rating (Scotland) Act 1886, which placed a duty on the assessor to enter separately the yearly value of shooting over lands and deer forests, thereby placing shootings in the same position as all other rateable subjects which clearly have an inherent value. Let us imagine similar neighbouring estates in Scotland where one is let out and the other is not. I am sure your Lordships can quite easily conceive of such circumstances. They have similar shooting potential and similar bags. Surely they should not have different valuations and make different contributions to local rating resources. But, if this amendment is approved, then the tenant of the let shoot will continue to pay rates while there will be no similar burden on anyone associated with the other estate where, perhaps, the landowner runs paying house parties and so still derives considerable income from the shoot. Surely this discrepancy is not fair. While I appreciate the strength of feeling on this issue—and I have listened very carefully to what was said by the noble Lady, Lady Saltoun, and by my noble friends who contributed in considerable numbers in this debate—I am afraid that I cannot accept the amendment. The basic arguments were well rehearsed by my noble and learned friend Lord Mackay of Clashfern when we considered a similar amendment in Committee.

The essential point is that the primary purpose of the valuation system is to apportion the rate burden in any one area, so like subjects must be treated alike. Shootings must have the same value whether they are let or used as a pertinent to a sporting hotel, or kept for the personal enjoyment of the landlord. The method of management does not alter their intrinsic worth and so it cannot alter what the hypothetical tenant would pay in rent to the hypothetical landlord, and that is the basis of rating valuation.

Looking at the detail of this amendment, it does leave in valuation shootings in certain circumstances that were excluded by the amendment proposed by the noble Lady, Lady Saltoun, in Committee. Where shootings are retained by the proprietor but operated to generate income on a commercial basis, they would now remain in valuation. But this surely leaves a difficult problem area. For example, how is the assessor to determine where income is derived from shootings, if they are managed along with a hotel and act to enhance the charges that are made for staying at the hotel? Or what is the position if no cash is paid for the right to shoot but it is granted as a quid pro quo for some benefit granted to the owner elsewhere? That route would be fraught with difficulty. However, that is almost incidental to the main objection to this amendment. As I have already said, like subjects must be treated alike; and that is just as important for shootings as for other lands and heritages.

The noble Lord, Lord Home, made a very important point which I shall try to answer. He made the point that where bags are falling that should be taken into account by the assessors. In general, only a major physical change would be accepted as a material change, but Clause 17 of this Bill will allow ratepayers to cite a drop in rents for their class of property below the tone set at the last revaluation as a material change in future. If it can be demonstrated that falling bags lead to such a drop in rents, this provision may be of help to some estates.

My noble friend Lord Kintore also made a very good point. He asked why five years' bags are taken into account in fixing values. Assessors must try to fix a level of values that represent the sustained value of any shooting. It is therefore reasonable to look at factors over a number of years which might affect the rent anyone would pay at the date as at which he is striking a value. The exact approach he adopts is a matter for professional judgment, and he must be prepared to defend it on appeal. I understand that the approach adopted by assessors at the last revaluation was fixed after consulation with shooting interests.

I have listened very carefully to all that has been said, and I do have a considerable sympathy with some of the points which have been made; but, with regret, I must tell the noble Lady, Lady Saltoun, that whatever my personal sympathies may be I cannot accept her amendment.

Lord Burton

My Lords, before the noble Lord sits down, may I put two questions to him? Neither woodlands nor rough grounds are rated in England. How then do they include an element for shooting rent, as I think was said in the reply just now? Furthermore, if a hotel uses neighbouring ground for ski-ing, riding, or other recreation, it is not rated on ski-ing, riding or even walking on other people's ground. Why, then, should it be rated for shooting?

Lord Gray of Contin

My Lords, I think my noble friend will agree with me that when the assessment is made by the assessors various factors are taken into consideration. If a hotel has ski-ing facilities, or is located in an area which is extremely handy to the ski slopes, then I think my noble friend can be fairly sure that that is taken into account in arriving at the actual valuation of the hotel.

Baroness Elliot of Harwood

My Lords, the noble Lord has not answered one question, which is: Why can one be rated for shooting which no longer exists? On my estate, there used to be shooting 20 years ago, but there is no shooting now. It is surrounded by trees and forests, and the shooting has completely gone. I have applied every year to have the rates changed, but I am told that it cannot be done because there was once shooting there, although there is none at all now.

Lord Gray of Contin

My Lords, I have great sympathy with my noble friend and I can tell her that she can, of course, appeal—

Baroness Elliot of Harwood

I have.

Lord Gray of Contin

—under this legislation, and the grounds which she submits will certainly be considered in that appeal. I should go so far as to suggest that I think under this legislation she would have a very much better chance of achieving her objective than she has had in the past.

The Earl of Lauderdale

My Lords, I have no interest to declare. I do not shoot, and I do not suppose that I ever shall, except for shooting a line. But I have listened to the arguments and I noticed that my noble friend himself admitted to considerable sympathy with the aim of this amendment. I should just like to appeal to him to say that he will have another look at this point before Third Reading. Very cogent arguments have been put. If I may say so, with the greatest possible respect, the brief which he has just read out did not really answer the points which were put—at any rate, not to me as an outsider. So I appeal to him. Will he consider this between now and Third Reading, so that we can get off for our Whitsun holiday in a happier frame of mind?

Lord Gray of Contin

No, my Lords. I had many dealings with my noble friend Lord Lauderdale in my last job as an energy Minister, where his very great knowledge was often of use to me. I am sorry that he could not be more helpful this afternoon. Nevertheless, I shall answer his question. The answer is, I am afraid, in the negative, because I do not believe that it is right to take something back unless you genuinely believe that there is a possibility that you might be able to do something about it. I am afraid, with the greatest respect to the noble Lady, Lady Saltoun, that I do not consider there is a likelihood that I would be able to do anything between now and Third Reading. I have explained as fully as I can why it is not possible to do something.

Perhaps I may make just one point, which I think is the key to the whole issue. It is the one which was made so effectively by my noble and learned friend Lord Mackay of Clashfern, the former Lord Advocate. The rating of shooting—whether land is used for the purpose of shooting, whether it is let, or whether it is merely enjoyed by the proprietor—must be done on a similar basis. Therefore, I cannot, I am afraid, consider the amendment further, and for that reason I regret that I cannot accept the advice of my noble friend.

Lady Saltoun

With your Lordships' leave, I believe that my amendment would take care of the problem of the house parties, for which people pay, and of the hotels which provide shooting as part of the amenities.

I presume that the assessor would value those shootings on the basis of the average bag, as has been done in the past. Very few landlords can keep shooting in hand for their own enjoyment, for the financial reasons I have given. If one has had no game on one's land for three or four years, then five years is a very long time to wait before being reassessed. It is a very long time to go on paying rates when one is receiving no income at all.

The noble Lord mentioned the possibility of appealing under Clause 17 of the Bill. I wonder whether he can clarify one or two points? What evidence will be permissible? What kind of evidence would one have to produce in order to appeal on the basis that there has been a material change of circumstances? Would one have to produce receipts? Presumably, one could not produce negative evidence; one cannot produce no receipts from a game dealer.

The Earl of Caithness

My Lords, if the noble Lady will give way, when winding up at this stage it is not normal to ask further questions. I beleive that is the normal procedure of the House.

Lady Saltoun

My Lords, I am very sorry that the Minister cannot offer any hope. I think he will appreciate there is genuine concern about unfairness. It would be a great help if he could provide us with some idea of how he envisages this scheme working. In the circumstances, my Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 11: After Clause 15, insert the following new Clause:

("Domestic property.

. Where a property has been rated as domestic in the valuation roll it shall continue to be so entered even when the occupancy is shared by up to four unrelated adults and no features distinguish the property as a family house.").

The noble Lord said: My Lords, we are very aware of the fact that the wording of this amendment is not immaculate; it is really the sentiment of this amendment that I am hoping to convey to the Minister. I hope that he will be able to help me with it.

It would appear that there are certain anomalies in respect of valuations placed upon hostels, in that they are rated much higher per resident and quality of accommodation provided than is the case with domestic property. The subjects issued in the valuation roll as hostels include large hostels, lodging houses and night shelters—as well as certain shared flats and houses with two to four occupants. No features distinguish them from family houses. In fact, they are frequently properties which were family houses before.

Such accommodation is nowadays very popular with young, single persons, and with others such as the mentally handicapped—and this is a group which particularly concerns us—or young people leaving care who require the support that they can gain from living with one another.

In order to overcome the anomaly that exists, legislation came into force on 1st April 1983, which enabled most houses lived in by unrelated adults to be valued domestically. But since the autumn of 1982, the joint committee on local government finance has been deliberating on the wording and implementation of the orders associated with that legislation. The advice given to the committee by the assessors' association was based on what is considered by many people to be outdated perceptions of housing and social conditions and an over-rigid interpretation of the law.

It seemed that assessors were reluctant to implement the new order made by Parliament or to be prepared to enter into the spirit of the legislation. The assessors themselves insist that they have to rely upon the decisions of the courts to determine the precise meaning of the law and its application in new circumstances. In many cases they are unwilling to use their own initiative and be reasonably within the bonds of legality. Instead, they rely in total on the courts to say what is reasonable. In other words, the assessors appear to view the courts as a system of first resort when new circumstances arise, rather than as a final safeguard against injustice.

I understand that in order to try to ensure the smooth running of approved procedures and avoid new problems arising, any definition that the Government look at should be compatible with that used in housing, planning, building control and social work practice. Apparently there is no clear compatible definition in Scottish legislation of what is a house. This appears to be one of the problems causing great difficulty in understanding the orders that are made to clear this up. It would be helpful if the Government could lay down, in the form of an order, a definition of a dwelling house that is compatible with the other things I have mentioned.

The importance of this legislation, as the Minister will well know, is that there are a growing number of responsible organisations—MIND, and the probation organisations—which find that the best way to set on the road to recovery people who have had difficulties of either a social or medical nature is not to put them into a big hostel but, in some cases, to take over property and install them with, perhaps, distant supervision—not resident supervision. That is what mainly distinguishes a property from what we normally consider a hostel. There should not be resident supervision, but rather someone who is available and on call to help these people.

Living together gives them a certain support. They have probably been through the same, frequently unhappy, very traumatic experiences and have recovered sufficiently to be able to go into the wider world, but still need the support of one another for a period. If the property can be rated and valued on the same basis as it had been until the moment the organisation took it over and made it into a hostel for adults who are not in the one family, that would help the many organisations which are doing a very good job in this field, and help also the many people who come out of institutions of various kinds. I beg to move.

3.2 p.m.

Lord Wilson of Langside

My Lords, I hope that the Minister will look carefully and sympathetically at everything said by the noble Lord, Lord Carmichael of Kelvingrove. It is clear that because of the practice of assessors anomalies have tended to grow up. The noble Lord confessed that the drafting of the amendment was not, perhaps, ideal, but I hope that that will not blind the Minister to the fact that clearly there are anomalies which need to be considered from the point of view of the humanity of the situation. Some steps should be taken to meet it. I hope that the Minister will not, as he did on the previous amendment and on many other sensible and good amendments, content himself simply with expressing sympathy, but will undertake to do something about the situation.

Lord Gray of Contin

My Lords, I am most grateful to the noble Lord, Lord Carmichael, for giving me the opportunity to say that the measure he proposes to introduce to ensure fairer valuation for rating for accommodation shared by unrelated adults is very substantially the same as the measures introduced by the Government in the Local Government and Planning (Scotland) Act 1982 and the Valuation (Communal Accommodation) (Scotland) Order 1983. The order was approved by your Lordships' House on 30th March last. The noble Lord suggested to me that assessors were reluctant to implement that order. It is true that, like many such new orders, it had certain teething troubles, but we now have those sorted out, and the provisions are being implemented largely as a result of advice taken from the Scottish Office. I can give the noble Lord that assurance. The order prescribes that the values of those lands and heritages—

Lord Carmichael of Kelvingrove

My Lords, I am very sorry to interrupt. But a letter to me from the Scottish Council for Single Homeless suggests that, although the communal accommodation order came into operation 13 months ago, up until 1 st May it was not aware of any premises that had yet been revalued. I should be pleased if the Minister could say that since that time the department and the assessors have been getting together. I think it is important to reinforce the fact that it has taken at least 13 months before there has been any movement or apparent movement in that field.

Lord Gray of Contin

My Lords, I can confirm to the noble Lord that my information is that the teething troubles in implementing the order have now been largely resolved. I shall look into the matter more closely within my department and write to the noble Lord to confirm that; but my information is certainly that that is the case.

As I was saying, the order prescribes that the values of those lands and heritages which are not used for profit-making purposes, which are wholly or mainly used as residential accommodation for persons living separately from any family, in which certain facilities are shared by those persons and of which the total area does not exceed 300 square metres measured externally over walls, shall, for the purpose of making up any valuation roll, be ascertained in accordance with Section 6 of the Valuation and Rating (Scotland) Act 1956, notwithstanding that there may be in the lands and heritages structural adaptions which would not normally be found in a dwelling house.

Those terms are designed to ensure that premises akin to dwelling houses and used for the purposes and under the conditions prescribed in Section 5 are valued according to the principles prescribed in statute for dwelling houses. We are advised that the limit of 300 square metres will include premises up to those similar to comparatively large houses and of which there is no lack of evidence available to enable assessors to fix a valuation as if the property were a dwelling house. The order also prescribes that an assessor shall alter the valuation roll in force in so far as such alteration is required to give effect to the order.

As the noble Lord rightly pointed out, the order came into operation on 1st April 1983. As your Lordships will have noted, the order goes further, and is more realistic, than the measure proposed by the noble Lord. For example, there is no restriction on the number of people who live in the house, nor that there should be no features to distinguish a house shared by unrelated adults from a family house. I hope that that point will be noted by the noble and learned Lord, Lord Wilson of Langside, who also spoke in support of the amendment. As I have pointed out, this goes further than the amendment requires. It is not infrequently a feature of shared accommodation that there are adaptions not normally found in a dwelling house. Further, the order covers houses not previously used as a family house.

In view of the fact that the Government have already taken measures very similar to those which the noble Lord, Lord Carmichael, has suggested, I wonder whether he might be prepared to withdraw his amendment.

Lord Carmichael of Kelvingrove

My Lords, yes. As the Minister knows, the purpose of the amendment was really to draw the attention of the Government and particularly, if I may say so with respect, the assessors, to the anomalies which seemed to have been continued. I am most grateful for the Minister's reply and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 [Comparison with hereditaments in England and Wales]:

Lord Mackie of Benshie moved Amendment No. 12: Page 11, line 40, at beginning insert— ("( ) After subsection (2) of section 10 of the Local Government (Financial Provisions) (Scotland) Act 1963 there shall be inserted the following subsection— (2A) The Secretary of State shall by order provide that in respect of the year 1985–86 and subsequent years the rateable value of the total business premises of each individual business in Scotland shall be the amount produced by deducting from the net annual value thereof no less than 50 per cent. of the first £500 of that value as may be specified.".").

The noble Lord said: My Lords, I am very encouraged by the fact that the Minister has started giving favourable replies and indeed is geeing-up past legislation to do the job it was intended to do. But this amendment is one on which I put down a probing amendment at the last stage and received a great deal of genuine sympathy from the Minister for the purpose of the amendment, which was to help the small business. We then proceeded, in company with the National Federation of Self-Employed and Small Businesses, who of course are extremely interested in this, to try and find a vehicle. We looked at the simple fact that their industrial premises have a 50 per cent. abatement and we thought that obviously this ought to be extended in part to the small business which is not an industrial business.

Indeed, if we had a complete revision of the rating system, one would not be asking for all these exceptions to be taken into account. But as already today we have had a relief for industry on empty factories, we have notice of the relief on moorings, we have a relief on reed beds and a whole lot of exceptions all over the place, I do think this very important and very hard-pressed section of the valuable service community should get some small measure of relief.

It seems inequitable that large and prosperous industrial concerns should, along with others who are struggling, get a 50 per cent. abatement, while in the service industries the small shop-keeper who is so valuable to so many people is under such pressure from the large and new methods of trading. Very attractive and valuable as these large concerns are, they are putting under tremendous pressure the much more specialised service given by the small shopkeeper, in some areas often to old people and others who cannot get to the large and bustling supermarkets, which are such beautiful, splendid palaces of commerce and so attractive to go around.

The small shopkeeper is still giving a tremendous service. I cannot see why the noble Lord should find it a subject of amusement because the small shopkeeper is a very important element in the whole life of Scotland. The noble Lord, Lord Gray, has expressed his sympathy. So what we have done in this amendment is quite simply ask if he would make an amendment to the 1963 Act, along the lines on which there is an amendment for industrial premises. All we are asking is that 50 per cent. of the first £500 of that value be abated—this is on a single set of premises. It appears to us that this would be a concession to the small businessman which would be valuable to those who are hanging on. It would give a measure of the Government's concern, along with many other concerns they seem to have, and it would be an encouragement to the service industries which I think is very much needed if you consider the pressure they are under.

It is of course narrowing the rate base a little but only a little. It is nothing like the narrowing by removing the rates from agricultural land, with which I agree entirely for purely personal reasons, but it is like the 50 per cent. abatement on industrial premises. The noble Lord has already said that the abatement of rates on empty industrial premises holding plant temporarily abandoned could be taken care of in the rate grant to the particular council. I look forward to the Minister accepting this amendment, continuing the process of improvement that we noted on the last amendment and doing the small business community a genuine service. It may not be much, but it would be a great help to a number of hard-pressed small businesses. I beg to move.

Lord Wilson of Langside

My Lords, I too, venture to hope that the Minister will give the most sympathetic and careful consideration to everything that the noble Lord, Lord Mackie of Benshie, has said in support of his amendment. All that is proposed is a very modest measure of, if you like, derating to an important section of the Scottish working population. I find it difficult to believe, having read and carefully considered everything that the Minister said in response to a similar amendment moved by the noble Lord, Lord Mackie, at Committee stage, that he will find it possible to resist this one.

Offhand, I can think of no other reasons why he should accept it than those several upon which the noble Lord, Lord Mackie, has touched, except perhaps this. Earlier, there was some discussion between the noble Lord, Lord Ross of Marnock, and the Minister which rather upset the noble Lord, Lord Ross of Marnock, with regard to the manifesto of the Minister's party. My impression is—and the Minister will correct me if I am wrong—that this publication made much play, in pursuit of votes, with the Government's deep concern for the problems of small businessmen. Here, the amendment proposed by the noble Lord, Lord Mackie, has provided them with an opportunity to show that in this context, at least, whatever may be their position in others, they meant what they said.

Lord Gray of Contin

My Lords, the noble Lord, Lord Mackie of Benshie, has raised again the question of providing more help by means of rate relief for small businesses. The amendment now before us is a revised version of that which we had in Committee, but its scope is narrower than before. As I made clear when we discussed this issue in Committee, the Government are very sympathetic to small businesses and are aware of their importance in the economic life of the community. In every sphere of the Government's activities, we have looked at ways of helping small businesses.

It would, I think, be for the benefit and edification, of the noble and learned Lord, Lord Wilson of Langside, if, at this point, I mentioned the principal initiatives that the Government have taken in this direction. The noble and learned Lord seemed to have some doubts. The Government have introduced a number of schemes specifically to help growth in the small firms sector, including the small firms' loan guarantee scheme, introduced in 1981 for a three-year experimental period to help loan finance to viable ventures with limited security. Then, the business expansion scheme, formerly the business start-up scheme, through favourable tax concessions to investors, has made available sources of venture capital to help develop growth in small firms and improve their equity base.

Since coming into office in 1979, the Government have dramatically reduced the burden of paper work on industry, which particularly benefits small businesses with their limited manpower resources. There has been a physical reduction of over one million forms sent annually to firms by Government departments, and additional efforts have been made to ensure that those that are necessary are more intelligible. Relaxation of building control and regulations such as abolishing the need for planning permission in order to extend industrial buildings or to change from light industrial to warehouse use has encouraged the growth of small firms. The Government have introduced legislation which takes care to minimise the burdens on small businesses. Small firms are exempt from having unfair dismissal or maternity reinstatement complaints referred to industrial tribunals where the qualifying period of employment is less than 52 weeks.

The Government have reduced the amount of detailed financial information small companies must file with the registrar of companies and have simplified the arrangements for approval of company names. We have made it easier for small firms to gain access to Government contracts by simplifying certain of the tendering and approval procedures. Suppliers to most Government departments are now exempt from normal approval procedures for contracts under £10,000. The Government will allow non-approved firms to tender for non-urgent contracts, subject to approval afterwards, and departments will regularly review the approved lists, encourage new suppliers and rotate among suppliers invitations to tender, in so far as this is consistent with obtaining good value for money. I hope that the noble and learned Lord, Lord Wilson, will realise that this Government, above all other Governments, have been determined to try to help small businesses.

The Government are also conscious of the problem of the rates paid by small businesses. It is for this reason that since they came to office the Government have pursued a policy of reducing local authority expenditure in order to reduce the burdens on all ratepayers. The selective action powers have successfully brought down the rates and expenditure of a number of local authorities. The proposals in this Bill will allow further pressure to be put on high-spending authorities and also for the very first time give non-domestic ratepayers a statutory right to be consulted each year before any local authority can fix its rates.

Any proposal to reduce the rates of small commercial firms—I make this point because I think it is of paramount importance—must face the issue of how this is to be paid for. It is either the remaining ratepayers or else the taxpayers who have to make up the difference. This means that other ratepayers will have to face significant increases in their rates bills or taxpayers will have to pay more taxes. In the Government's view it is more important to take action of the kind I have described to help small businesses in a more discriminating way rather than in a way which merely transfers a burden from them to another sector of the community.

I do not doubt the intention of the proposal by the noble Lord, Lord Mackie of Benshie. I know that it is his intention to try genuinely to help the small business sector so far as rates are concerned. But I would say to him that if he were to succeed with his amendment he would merely be transferring the burden of rates from those he seeks to help to others who in due course I am sure he would also wish to help. And so it would go on—a transfer from one group of people to another. It is also more effective to tackle the problem of rates at source by reducing total expenditure rather than transferring the burden to another sector of the community. For those reasons I am afraid that I cannot accept the noble Lord's amendment and I would ask him to consider withdrawing it.

Lord Mackie of Benshie

My Lords, I need hardly say that I am deeply disappointed, both by the sentiments expressed and by the logic therein. We have spent most of today transferring the responsibility for payment to other sections—to wit, empty industrial premises, as I quoted before, reed beds, and then moorings and various others. But in this case we stick to the great principle. I must say that it is not at all logical.

The disappearance of the small shop from so much of our life in urban and rural areas is a very serious matter. To a small shopkeeper the sum of £250 probably makes all the difference between survival and packing up and adding to the great list of unemployed. Furthermore, this proposal would keep open a whole section of rateable property—even if only at 50 per cent.—which would otherwise go out of use and therefore be an added burden on other ratepayers.

I must say that the Minister has not really taken in the arguments I have been trying to adduce. To put this into practice would be a matter of extreme simplicity and it has been done over a wide range of less deserving industries. However, I do not think that I have sufficient reason for taking this amendment to a vote, and therefore, for that reason, I unashamedly beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 13 not moved.]

3.26 p.m.

Lord Ross of Marnock moved Amendment No. 14: Page 12, line 30, leave out from ("comparison") to end of line 39 and insert ("take account of the actual sums paid in rates in the current year or the latest year for which figures are available.").

The noble Lord said: My Lords, when we had a look at this clause during the last stage the noble and learned Lord, the then Lord Advocate in response to questions by me, suggested that undoubtedly the actual amount paid in rates (which is the real burden, be it on small shopkeepers, football clubs, bowling clubs, or domestic people) was the thing that really mattered. In other words, what matters is the actual amount paid in rates. The noble and learned Lord suggested to me that, under the clause as drawn, the actual amount paid in rates would be taken into consideration.

I read, re-read, and again re-read, the clause as it had been amended at the last stage. I had very considerably difficulty. It just did not make sense, and I am very glad to see that I was not alone in taking that view, because the Government themselves decided to put in a vital word so that it would make sense. I also discovered that there was no question, so far as I could see, that the Lands Tribunal would take into account anything other than valuation. I do not think that it will probably answer the problems of the Scottish football clubs, the Auchinleck Bowling Club, or the one on the Border, about which the noble Baroness spoke with such feeling, if we update the annual rent in the valuation rolls in England (which go back to 1973) in order to get values for the present day. I do not think that it will inevitably lead to a great change as regards the Scottish hereditaments about which we are talking.

The real thing that matters to all ratepayers is the amount that they pay in rates. It is as simple as that. There lies the injustice between the Scottish ratepayers in respect of these particular subjects and the English ratepayers. The Government themselves, in their White Paper, admit that there is an unfair burden upon them. The Minister has nailed to the mast his opinion that this Bill is going to help them. I wish that I could be assured of that point. I would be more assured if, in considering this particular matter, the appeal court of the Lands Tribunal, the tribunal, or whoever is hearing the appeal, were to bear in mind the actual money value of the rates that have to be paid. That is what matters. Will the Minister of State try to convince me that this point is already covered? I shall listen and prepare to be optimistic, rather than pessimistic, but I think that it will take a better man than he to convince me. I beg to move.

Lord Gray of Contin

My Lords, I am in little doubt that it would take a very much better man than me to convince the noble Lord. I have been trying for years to convince him.

Lord Ross of Marnock

My Lords, perhaps I may interrupt the noble Lord even before he has begun his reply. In accordance with rules that are more familiar to us, please will he give us only information relevant to the actual amendment and the actual clause? In the last case he went all round the situation and eventually he came back to rating and valuation.

Lord Gray of Contin

My Lords, I have always realised the desire of the noble Lord to seek learning and information, and so I felt that any extra information that I was able to provide would be welcomed by him. However, I must ask your Lordships to reject this amendment because it removes from the Bill the necessary and just provisions which require valuation appeal committees and the Lands Tribunal for Scotland to take into account the date as at which the values of the comparable English properties were fixed, and substitutes totally inappropriate provisions requiring the valuation appeal committees and the Lands Tribunal for Scotland to take into account, in considering the valuation placed on a property, the rate poundages in different areas.

The level of rates is not something which is relevant to the ascertainment of rateable values in either country, and it would be a mistake to introduce it now. The valuation system is designed to apply a uniform method and methods of valuation throughout the country, so that comparable properties are given similar values.

Having established a proper value, or tone, of rateable values throughout an area, so that the overall rate burden is distributed fairly, it is for the local authority to determine its actual rate poundage in accordance with its expenditure plans. Thus a high-spending local autority will require to raise more from each rateable property than will a low-spending authority. It would be quite wrong if, in a high-spending authority area, a property owner could reduce his share of the rate burden, thereby increasing the share of his neighbours by comparing his property and his rate burden with a comparable property in a low-spending area. For those reasons I trust that the noble Lord may consider withdrawing his amendment.

Lord Ross of Marnock

My Lords, I shall withdraw, but not for the reasons given; rather because I think it would be a waste of time to go on. The noble Lord will appreciate that the noble and learned Lord the Lord Advocate said—and it is in Hansard of a fortnight ago—that the point I am making here was covered and that they would be able to take this into account. Having read the Bill, I discovered that it was not covered, and that is why I tabled this amendment again. I do not want to risk asking the noble Lord to make another speech. I do not think that any of us would be enlightened, and none of us would be very pleased about it. As my next train goes in about an hour's time—

Noble Lords

Hear, hear!

Lord Ross of Marnock

My Lords, my last train is the 11.30 p.m.!—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Gray of Contin moved Amendment No. 15: Page 12, line 31, leave out ("to").

The noble Lord said: My Lords, this amendment corrects a drafting error of grammar in subsection (1C) which this clause inserts into Section 15 of the Local Government (Financial Provisions) (Scotland) Act 1963. The word "to" is unnecessary and should be omitted. I beg to move.

On Question, amendment agreed to.

Clause 20 [Citation, commencement and extent]:

Lord Gray of Contin moved Amendment No. 16:

[Printed earlier.]

On Question, amendment agreed to.

Lord Gray of Contin moved Amendment No. 17: Page 13, line 21, after ("11") insert (" (relief of rates in respect of non-domestic lands and heritages not in active use)").

On Question, amendment agreed to.