Rating (Revaluation Rebates) (Scotland) Bill

HL Deb 24 June 1985 vol 465 cc609-36

6.52 p.m.

The Minister of State, Scottish Office (Lord Gray of Contin)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Gray of Contin.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MURTON OF LINDISFARNE in the Chair.]

Clause 1 [Rates rebates]:

Lord Morton of Shuna moved Amendment No. 1: Page 1, line 5, leave out ("may") and insert ("shall").

The noble Lord said: It may be convenient to take, with this amendment, Amendments Nos. 2, 3 and 4.

Amendment No. 2: Page 1, line 8, leave out ("such") and insert ("each").

Amendment No. 3: Page 1, line 8, after ("year") insert ("until the first year of the next revaluation").

Amendment No. 4: Page 1, line 8, leave out ("as is prescribed in the order").

This should perhaps make the sense clearer. The purpose of these four amendments is to write into the Bill that, instead of there being a one-year rebate, this rebate should extend for the length of time that the valuation remains in force: in other words, that the Secretary of State shall make an order for each year until the first year of the next revaluation. The purpose of this amendment is to ensure that the people who are entitled to a rebate should be entitled to it for the length of time that the valuation remains. There is general agreement that certain people have had a very high increase in their assessments, some of them up to five or more times the previous assessments. According to the Government, this has put an unacceptable burden on them.

If it is unacceptable for one year, then my suggestion is that it is unacceptable for the following years also. It is noteworthy, from an Answer given in another place that this revaluation has apparently caused the Inland Revenue to change its approach. Where a person is in a house where he receives the accommodation by reason of this employment, the tax charge used to be on the basis of the revaluation; but apparently, from an Answer give on 22nd May of this year, that is no longer to be the case because it is unfair. My submission would be that these amendments should be accepted because they will make the situation fair for those who are entitled to the rebate for the whole period of the revaluation. I beg to move.

Lord Gray of Contin

It is not often that one has the privilege of being able to congratulate a speaker on his maiden speech and on his first appearance on the Front Bench in successive weeks. I am happy to do so on behalf of my colleagues on this side of the Chamber. The powers in the Bill are designed to meet a very real situation in the current year. In proposing the Second Reading I described that situation. As I made clear then, it has developed as the outcome of revaluation has unfolded. The situation that we currently face could also include the various measures introduced by the Secretary of State in the rate support grant settlement for 1985–86, not least of these being the increase in domestic element.

Since the settlement, there has been a further increase in domestic element. In short, the powers in the Bill allow the Secretary of State a very desirable degree of flexibility to deal with whatever the situation is at the time. This should include the ability to make an order or not to make an order. My right honourable friend the Secretary of State and my honourable friends the Ministers for Home Affairs and the Environment have made it clear in another place that decisions for future years are properly taken in the autumn of the year before the year in which they take effect.

These include very important matters such as the total amount of rate support grant and how it is to be distributed among its various elements and among local authorities. Quite simply, it will be more helpful to the Secretary of State if he can make these decisions which involve a very great deal of public money with the discretion to follow on with an order under the Bill rather than make all these decisions knowing that year after year, no matter how the situation may turn, he must make an order under the Bill.

I want now to say a word or two about Amendments Nos. 2, 3 and 4, which we are discussing along with Amendment No. 1. Again, I explained when resisting the first amendment (which we have now dealt with) the desirability of leaving the Secretary of State flexibility to meet the circumstances relevant to a particular financial year, either by making an order or, as the case may be, by refraining from making one. It is perhaps also worth pointing out that the time limit which is suggested would restrict the power to the period of up to the next revaluation, due in 1990, while the power in the Bill, if left unamended, could be used beyond that, should that turn out to be necessary.

While it is to be hoped that the need would not arise there is, I submit, little real point in complicating and restricting the measure in the manner proposed. Therefore I hope that the noble Lord who moved the amendment may be prepared to withdraw it.

7 p.m.

Lord Ross of Marnock

I should apologise for not being in my place when noble Lords discussing the marathon English Local Government Bill decided to finish early. They could have done that a few months ago, I think, and it might well have been that an important Scottish Bill would have been dealt with in this crowded House at a time suitable and appropriate to its importance in Scotland. However, I have been robbed of my complaint because, as I can see, we can go on as long as we like; so that there is no need for my noble friend Lord Morton of Shuna or me to restrict our remarks on this.

Let us make perfectly clear exactly the importance of this in Scotland. Nobody knows that better than the noble Lord, Lord Gray of Contin. He was at the celebrated assemblage at Perth and he will know exactly how important it is seen to be by his own party in Scotland. What I am concerned to do is to try and get a little more certainty as to the help that was so freely promised there, and to ensure that so long as the unfairness remains on the present valuation roll, that unfairness will be met by a measure of support from the Government. We want certainty, and one does not get certainty with the use of the word "may".

I was very glad that the noble Lord, Lord Gray, was frank about this aspect. He wants freedom for the Secretary of State either to bring in an order or not to bring in an order. He said also that the right time for the Secretary of State to make up his mind about this is in the autumn. Of course, we are not all that far away from the autumn now—it seems like winter, but we have had quite an important day marking the summer anyway. Your Lordships are due to rise sometime in the next few weeks and then the Secretary of State will go round the Islands and Highlands—maybe. I do not know who will be the Secretary of State by that time.

There is another matter that enters into our minds about all this. The man who has given all the promises and pledges is the present Secretary of State. A few months in politics is a long time, and can bring changes. No one knows that better than the Minister of State himself. But the point is that there is a last day for the receiving of appeals by the assessors, and then there is the business of the assessor trying to sort the matter out himself—that is September. It is pretty well into the autumn, and so there is going to be no change in the valuation rolls this autumn. If the noble Lord, Lord Gray of Contin, disagrees with me, I should be delighted to stand down and be corrected. I do not know whether even yet the last valuation roll has been made final but I do know that last year there were some cases decided. That is a considerable length of time after the last revaluation, and that was not five years but seven years ago. It is far more desirable, if we are going to promise the certainty of a sympathetic Government acting favourably towards those people who have been unfairly dealt with by the assessor, that (a) we should have certainty, and (b) that the certainty should last for more than one year.

If the valuation roll is changed after the second or third year, then it means that the Government will spend even less money, but still there will be some people unfairly dealt with according to the formula of the Secretary of State himself. In other words, you can pass all these little bits and pieces of patchwork quilts to keep them warm in this chilly revaluation year; but until such time as that valuation roll is changed the unfairness continues. Indeed, if we have any knowledge and can draw on our experience of what happens after revaluation in respect of rates, the unfairness will be greater. Some of your Lordships have experience of local government. It does not matter what kind of council it is: the tendency is for rates to go up after revaluation. When the appearance has been given of "Don't worry about unfairness: the Government have looked after that and they have accepted it: it is their responsibility", it is much more likely that the rates will go up. And the higher the rates go up, the greater the unfairness will be; so we must really cover not just this one year but we have to cover the years of this present revaluation. That is why we have until the first year of the next revaluation. I did not put down five years; I did not put down four years. I would ask the Committee to remember that the revaluation to which we have just said farewell was, by the Government's own action, extended from five to seven years. This revaluation should have taken place two years ago. Your Lordships passed an Act extending it. Indeed, we made two changes, because first we said there would be only partial revaluation and it was only to be the non-domestic valuation that was to be changed. That was changed by yet another Act of Parliament—we have been busy on this—for a general revaluation in 1985.

Therefore I say that in the first place we must have certainty, and in the second place we should not leave it to the Secretary of State, who has gone wrong so often on figures especially in relation to this particular problem. The first action that he took on the earlier occasion was to increase the domestic element within the rate support grant to 5p: it had been 1p before that. Now, according to his own figures, that was a considerable sum of money. Of course, that was done easily within the rate support grant formula, which is determined virtually by the Secretary of State himself.

He then thought that the increase was not great enough and he increased it by another 3p to a total of 8p. He admitted that he was wrong the first time and up it went again. He thought everybody was happy then. After that, he changed it again. At that celebrated conference, he said, "I will give relief and it will cost at least £50 million"—I repeat, at least £50 million. We were told in another place last week that it is not £50 million at all but £29.5 million, or approximately £30 million. So some of us get very worried when we are asked to leave a discretion to the present Secretary of State, who can make a 40 per cent. mistake in respect of sums of that size. Therefore, first we want certainty, and, secondly, we want certainty for the financial years that are covered by the present revaluation.

It is perfectly clear. I think it is wrong that we should state that it is desirable to leave flexibility to the Secretary of State to make or not to make an order. That does not represent the feelings of people in Scotland; it is not the feeling of the ratepayers in Scotland, who think they are going to get minimum help. We will come to how much help we think we should get in later amendments, but what we want is certainty, and certainty while this present revaluation troubles the people of Scotland.

I hope that my noble friend does not so readily withdraw this amendment. It is a vital point—a far more important matter than some of the things down on the Order Paper for the rest of this day. This is going to be a testing time for the Government. I hope that they will accept this. As to the idea that it should remain on the statute book, surely we are going to sort things out. We are giving four years to the Government, and they have already promised they are going to do it. The Prime Minister has said herself that it is going to be done and that changes will be made in the rating system. Are we to slap the face of the Prime Minister and say, "We don't believe you"? We must have this power to help the hard-pressed ratepayers of Scotland: the businessmen and people with shops and offices. We are going to make no change in the next four years in the valuation and rating system in Scotland—that is what is said. When the Government say, "We want time for this to carry on beyond that. We are not promising any help, but give us the power", I say, "Do not give them the power beyond the four years, and during that four years insist that it shall be not discretionary but mandatory".

Lord Wilson of Langside

I share the disappointment of the noble Lord, Lord Ross of Marnock, that the Government have not shown themselves to be a little more flexible in their approach to these amendments. Indeed, my Amendment No. 5 was designed to achieve more or less the same object as the amendment moved by the noble Lord, Lord Morton of Shuna. But against the whole background which was reviewed so effectively by the noble Lord, Lord Ross, I should have thought that surely there was something to be said for extending this power into the future rather than pleading flexibility as a reason for doing nothing.

Lord Gray of Contin

I shall try not to weary the Committee by reiterating what I said a little earlier when replying to the initial group of amendments moved by the noble Lord from the opposition Front Bench. I would only point out that, where Amendments Nos. 2, 3 and 4 are concerned, the proposed discretionary powers in the Bill to make orders is for any year and is not time-limited. Amendments Nos. 2, 3 and 4 would cut off the order-making power at the next revaluation.

Taking these amendments by themselves, the Secretary of State would have to decide whether to make orders for each year until the next revaluation, or not at all. Taken together with the first amendment, these amendments would oblige the Secretary of State to make an order for each year until the next revaluation. I am surprised that the noble Lord, Lord Ross of Marnock, should argue for not giving the Secretary of State flexibility. I should have thought that with his experience he would understand that there are many instances where it is desirable that the Secretary of State should have flexibility. Indeed, I should say that this is one of them.

I apologise to the Committee for going back to what I said earlier, but it is a fact, as the noble Lord, Lord Ross of Marnock, knows very well, because he has engaged in these exercises many times, that autumn is the time of year when decisions are taken affecting the various elements of the rate support grant for the following year. I should have thought that it would be important for the Secretary of State to have as much flexibility as possible when he is reaching those decisions.

I want to say just a word or two about what the noble Lord, Lord Ross of Marnock, said in connection with the changes in values from appeals. It is stated: Where any alteration is made in the rate levied by the rating authority or in the pre-revaluation rateable value or in the revaluation rateable value, the question of the grant of a rebate and the calculation of any such rebate shall be determined anew and the amount of any rebate already paid or allowed or of any rebate or balance thereof found to be due, shall be paid or allowed by or as the case may require be paid to the rating authority accordingly". Nothing in the order to which reference was made affects any right of appeal in respect of any entry in the valuation roll. That is absolutely clear. So the concern of the noble Lord about the valuation roll is unnecessary. There is nothing in the order which will affect any right of appeal so far as the valuation roll is concerned.

The noble Lord, Lord Morton of Shuna, raised an interesting point earlier when he suggested that the Inland Revenue recognises that the revaluation is unfair. If someone was provided with rent-free accommodation to go with his job, the annual value of the house was chargeable to income tax. After the revaluation, the annual values of houses in Scotland at 1985 levels were well out of line with annual values of houses in England at 1973 levels. The income tax authorities recognise that it would be unfair to use annual values unadjusted in Scotland, when the old values are still in use in England. Therefore they are devising a notional adjustment purely for income tax purposes. I wanted to make that point quite clear, so that there would be no confusion. It was a very valid point which the noble Lord raised.

Amendment No. 5, which is the amendment of the noble and learned Lord, Lord Wilson of Langside, seeks to undertake a very similar exercise to the grouping which we have already discussed. All the arguments which I used in my original contribution and in answering the noble Lords, Lord Ross of Marnock and Lord Morton of Shuna, apply equally to the argument which the noble and learned Lord. Lord Wilson, has submitted to your Lordships' Committee. Therefore I must reiterate that I am not able to accept the amendments and I trust that noble Lords will consider withdrawing. If they are not prepared to withdraw, and if they wish to force a Division, obviously I must oppose.

7.15 p.m.

Lord Ross of Marnock

I think that is very disappointing indeed. The Minister has failed to recognise exactly how unique is this occasion. I cannot remember an occasion when, after a revaluation, the Government had to step in and make special help available because they recognised an unfairness and an injustice somewhere. They thought that £50 million worth of injustice at least had to be reckoned with. That is why I do not accept the argument about there being many such instances.

I have spent much of my life as a Back-Bencher in another place arguing about "may" and "shall", and I could speak for a long time on the subject. I think that if there is an occasion when it should be "shall" and the Secretary of State should introduce an order, it may well be for a different measure of help covering what I hope is a diminishing number of people. I hope that when we eventually get the result of the appeals, a very considerable number of burdens which people have unfairly had placed upon them will be removed. So from that point of view I think it should still be "shall". The position is unique.

The noble Lord is troubled because I suggest limiting the enabling powers of the Secretary of State. I am limiting his enabling powers and increasing his mandatory powers. It may be that my confidence in the Government to put right and deal properly with the rating and valuation system in Scotland is misplaced. I know that the Minister of State and the Government think it is basically sound. That is what they said in their White Paper just over 18 months ago. But there is no one in Scotland who agrees with them. The Secretary of State does not agree with it now, despite the fact that he made that statement in his White Paper. Surely we will have something done within the next four years. We are making it easier for them to go beyond the four years.

The fact is that we are encouraging the Government to provide a solution to this problem, which hitherto they have said was insoluble and of which the Minister of State a year ago said, "There is no use looking at the rating system again." They are looking at it. Surely we will have a solution by that time, and when they introduce the Bill they can scrap this one because it is purely a temporary expedient to get over the difficulties we have had.

The Minister said something about calculating the rebates anew. Nobody mentioned rebates. We have not yet come to them. I do not know what was the point of that bit in his brief. It may be something that he had not read out before and he thought he had better read it, in case somebody in Scotland thought that he did not have a right of appeal. I have been encouraging people to appeal and they have until September to do so. I have not made up my mind whether to appeal in respect of myself.

But I am prepared to be frank with the Committee, if the noble Lord, Lord Gray, will also be frank. Will he tell me what is his valuation? I will tell him mine and the factor by which mine has gone up. It is over £2,104 and it has been increased by a factor of about 2.3. I am not arguing for myself, at the present time. I will also tell him what are the rates for me, a poor retired politician. I bet that I am paying more in rates than the Secretary of State. I do not know whether the noble Lord pays rates in Scotland, and I have my doubts about that, so he had better keep quiet for a minute or two.

We are not talking about rights of appeal. Everybody knows that he has a right of appeal. What I am talking about is how long it will take for an appeal to be settled, so that there can be a change for any individual who is on the valuation roll. When the roll is settled, there will be some people, who presently are to receive some help under this formula, who will be disappointed that the assessor will not reduce his valuation. We are talking about valuations in this instance. We are not talking about rateable values. I am sure that the Minister will explain the difference in rateable values on which all these calculations are made. They are not made on valuations; they are made on net rateable value, which is based upon gross rateable value to which is applied a formula.

I do not know the present formula, though I know what it used to be. If your valuation was over £100, you had to reduce the gross rateable value by £20 plus 16⅔ per cent. of the excess over £100. If I am wrong, I am sure that the noble and learned Lord the Lord Advocate will put me right. It is not an easy calculation that people have to make in respect of what help they will get, and I have seen quite a lot of figures from people which, I am sure, are based on valuation rather than on net rateable value. It would be interesting to have some comments on that. So I hope that people are aware of their right of appeal.

But what I am concerned about is the unfairness after they have exercised their right of appeal—unfairness not in my point of view, but in the Government's point of view, because the rateable value will be more than three times what it was before. If it is unfair this year, it will be unfair next year and the year after that, until such time as there is a change in the valuation. The only time people will be able to exercise their right is at the next revaluation, so that is why we have put in the word "revaluation".

I am still unconvinced by the Government. The Minister tells us that the Inland Revenue in England has discovered that it would be unfair. Was it unfair last year after the previous revaluation? Our revaluation has been way ahead of England. There is a very considerable point there, in respect of some of the arguments by people paying commercial rates in Scotland and comparing them with valuations in England. So I do not think that the noble Lord's friends at the Inland Revenue in England—certainly, this is being done on an income tax basis—have given any help to the Government in trying to quell the rebellions in Scotland about unfairness. The valuations in England are done by the Inland Revenue, but in Scotland they are done by our own assessors, and so we have a lot of sorting out to do. I do not know how my noble friend feels, but I am far from happy that we have had an answer that meets the case at all.

Lord Morton of Shuna

The answer from the Minister, the noble Lord, Lord Gray of Contin, was very full, but I regret that it did not satisfy me. Perhaps I may give the example of a shop in Pollockshaws Road, the old rateable value of which was £1,247, while the new rateable value is £7,500. Under the Bill, as it is at the moment, the shop will get a rebate on everything over £3,741 this year, but the proprietor will want to know what he will get next year and the year after that. If one is running a shop, one wants to know with some certainty what one's expenses will be. I regret that I shall not withdraw the amendment.

7.26 p.m.

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

Their Lordships divided: Contents, 42; Not-Contents, 80.

DIVISION NO. 2
CONTENTS
Airedale, L.	Cledwyn of Penrhos, L.
Ardwick, L.	Crawshaw of Aintree, L.
Aylestone, L.	David, B.
Beaumont of Whitley, L.	Davies of Leek, L.
Birk, B.	Dean of Beswick, L.
Brockway, L.	Elwyn-Jones, L.
Brooks of Tremorfa, L.	Ennals, L.
Carmichael of Kelvingrove, L.	Gallacher, L.

Galpern, L.	Morton of Shuna, L.
Graham of Edmonton, L.	Nicol, B.
Grey, E.	Ogmore, L.
Hall, V.	Ponsonby of Shulbrede, L. [Teller.]
Heycock, L.
Houghton of Sowerby, L.	Ross of Marnock, L.
Irving of Dartford, L.	Stewart of Fulham, L.
Jeger, B.	Stoddart of Swindon, L. [Teller.]
Kirkhill, L.
Llewelyn-Davies of Hastoe, B.	Taylor of Gryfe, L.
McIntosh of Haringey, L.	Taylor of Mansfield, L.
McNair, L.	Whaddon, L.
Melchett, L.	Williams of Elvel, L.
Monkswell, L.	Wilson of Langside, L.

NOT-CONTENTS
Auckland, L.	Lawrence, L.
Bathurst, E.	Layton, L.
Bauer, L.	Lindsey and Abingdon, E.
Belstead, L.	Long, V.
Brabazon of Tara, L.	Lucas of Chilworth, L.
Brougham and Vaux, L.	Lyell, L.
Caithness, E.	Macleod of Borve, B.
Cameron of Lochbroom, L.	Malmesbury, E.
Campbell of Alloway, L.	Marsh, L.
Carnegy of Lour, B.	Massereene and Ferrard, V.
Carnock, L.	Mersey, V.
Cathcart, E.	Morris, L.
Clitheroe, L.	Mountevans, L.
Coleraine, L.	Mowbray and Stourton, L.
Colville of Culross, V.	Murton of Lindisfarne, L.
Colwyn, L.	Napier and Ettrick, L.
Cork and Orrery, E.	Northesk, E.
Cottesloe, L.	Orkney, E.
Cox, B.	Poltimore, L.
Craigavon, V.	Radnor, E.
Craigmyle, L.	Reay, L.
Davidson, V.	Renton, L.
Denham, L. [Teller.]	Renwick, L.
Drumalbyn, L.	Saltoun of Abernethy, Ly.
Elliot of Harwood, B.	Sanderson of Bowden, L.
Elliott of Morpeth, L.	Sandford, L.
Elton, L.	Selborne, E.
Faithfull, B.	Sharples, B.
Geddes, L.	Skelmersdale, L.
Gray of Contin, L.	Swinton, E. [Teller.]
Grimston of Westbury, L.	Teviot, L.
Harmar-Nicholls, L.	Trenchard, V.
Henley, L.	Trumpington, B.
Home of the Hirsel, L.	Vaux of Harrowden, L.
Hylton-Foster, B.	Vickers, B.
KaberryofAdel, L.	Ward of Witley, V.
Kimball, L.	Whitelaw, V.
Kinnoull, E.	Wynford, L.
Kitchener, E.	Young of Graffham, L.
Lane-Fox, B.	Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 2 to 6 not moved.]

7.34 p.m.

Lord Morton of Shuna moved Amendment No. 7: Page 1, line 13, leave out ("3") and insert ("2.75").

The noble Lord said: This amendment makes the multiplier 2.75 rather than 3. The amendment is very generous to the Government because it enables them to keep their promises. I should have thought that it would be accepted. Both at Perth and in this House on 14th May it was estimated that the relief would probably cost at least £50 million. The present figure, on the multiplier of 3, is that it would cost £29.5 million. On the 2.75 figure, my information is that it would cost about £50 million. The amendment is very simple and straightforward. It gives the Government an opportunity to adhere to what they said they were doing. I beg to move.

Lord Gray of Contin

Perhaps I may first of all refer to the Bill. The noble Lord will notice that on the first page of the Bill, below Financial and manpower effects, there is printed: The total amount of rebates given by rating authorities in 1985–86 may be as much as £50 million, which is to be wholly reimbursed by central government". What we have aimed at, and what the Bill will put into practice, is the removal of the worst cases of hardship due to sudden revaluation changes.

The threshold multiplier of 3 is not intended to nullify or to neutralise the effects of the revaluation. There are good reasons for the changes in valuations which professional men, the assessors, have felt able to defend. But the range between 2.33, the average revaluation multiplier for all property in Scotland, and 3 seems to us broad enough to allow the necessary and fair adjustments in values that a revaluation is meant to produce, bearing in mind too that there are those whose values go up by less than average, many of whom will have lower rate bills as a result. Above 3, we judge the results unacceptable.

There is another point which I must particularly emphasise to the Committee. The nature of the scheme proposed in the Bill is that it is demand-led. It is not the allocation of a fixed sum of money. Our decision to focus on a level of valuation above which rebate is to be given reflects the judgment, which I have explained, that about three times the 1984–85 valuation is about the right level to intervene and reduce the effect of revaluation. Doing it this way means that every ratepayer will now have a good idea and shortly will know the extent of his entitlement, if any. The total amount of rebate will not of course become known until every rebate has been granted.

I am sure that noble Lords will agree that when my right honourable friend the Secretary of State for Scotland made his initial announcement—I want the record put absolutely straight on this because my right honourable friend the Secretary of State for Scotland has an excellent record in these matters, despite what the noble Lord, Lord Ross of Marnock, has suggested—he made his assessment on the best estimates available to him at that time. It is only since then that, with the aid of COSLA, there has been a complete computer run with their assessment.

We are now in the position of accepting that the £30 million assessment by COSLA is fairly near the mark. I am sure that Members opposite would have expected that had the ultimate figure been £60 million instead of £50 million, the Government would have honoured their commitments. There has been rather a lot said about this matter and I wanted to put the record right as far as my right honourable friend is concerned. I am afraid that I cannot accept the amendment moved by the noble Lord, Lord Morton of Shuna, and hope that he may be prepared to withdraw it.

Lord Wilson of Langside

I did not rise to my feet after the noble Lord, Lord Morton of Shuna, moved the amendment because I was as certain as one can ever be that the Government would accept it. I find their response utterly astonishing—and the noble Lord laughs—but not on the basis that the Government have committed themselves to the sum of £50 million, although many people thought they had. I am not making that suggestion. I too can read. I have read the Explanatory and Financial Memorandum and it states that the provision, may be as much as £50 million". It is the common sense of the matter that disturbs me—the appalling muddle into which the rating system has fallen over the years under successive Governments.

It was claimed by the Government that they were behaving with speed and efficiency when they stepped in to put matters right. It was claimed by the Government in the course of debates that they had behaved generously. May I ask the Minister, first, what representations he has received as to the consequences of this situation from retailers, other commercial interests and domestic ratepayers? What representations have he and the Government received from those interests, which are so grievously affected by what has happened? To what extent have the Government taken those representations into account?

The way the Government put it at the outset, once they saw the evidence of what was called damaging and unacceptable valuation changes, they decided that a limit must be set. They looked at the average revaluation multiplier. This they took as a multiplier of 2.33 for all property. They decided to plump for a limit of three times. I am not sure why they plumped for that figure. Perhaps the Minister will tell the Committee. Did the Government consider any alternatives? If so, what consideration did they give to them? Did they think that the figure of three was a sensible starting point, using as a base the average revaluation multiplier? It was inevitable, as anyone could have told the Government, that this figure would throw up many inequalities and anomalies in the scheme.

Those anomalies were all explored in another place. At this time of night, when everyone had expected to be getting home early, I shall not weary the Committee by rehearsing those anomalies again. They were all rehearsed very effectively in another place by the official Opposition and others; the anomalies and inequalities were all explored there.

The long and the short of it was that there were swingeing increases in rates for both domestic and commercial ratepayers and no relief for most domestic ratepayers, and certainly not for most retailers in the retail trade sector. That is according to the information reaching me through the post. For most of those ratepayers there is no relief. That is what they tell me. I assume that those interests have made the same kind of representations to the Government. Perhaps the Minister will tell us if that is so.

The Government say that they were being generous. Let me rehearse some of the information concerning this situation that has come to me. The common sense of the matter, I would have thought, would have been for the Government immediately to say, "We have this commitment to £50 million, so let's use it up". I should have thought that that was common sense. I should not have thought it was particularly generous; I do not consider that generosity comes into it. It is just that the Government have got themselves into a mess and are taking £50 million of taxpayers' money and giving it to Scottish ratepayers. Or to some of them, not all of them—not even most of them.

7.45 p.m.

The Retail Consortium, which informs me that it represents more than 90 per cent. of retailers in the United Kingdom through its six constituent members, is most anxious and concerned about the situation. It states: Shops in Scotland are within the occupancy group whose rateable values have increased by more than any other but still average out at under 2.8 times those previously applying". It goes on to state: Thus it seems reasonable to presume"— and I must say it seems reasonable to me, too— that only a minority of shops will be among the 50,000 commercial ratepayers [who it was originally claimed] would benefit from the £50 million". I see that the figure has now gone up, according to the Government, to more than 60,000. The Retail Consortium presumes that only a minority of its members will benefit.

The British Retailers Association, representing multiple shops in all trades, supermarkets and various types of stores, estimates that 65 per cent. of its membership will not be covered by the Bill if three is to be the multiplier. The Retail Consortium's other members share the view that the three times threshold is arbitrarily too high. In a spot survey carried out by the British Retailers Association, only 31 stores out of the 75 stores surveyed, and 84 from a total of 279 small food shops and supermarkets of varying size, were entitled to claim rebate. These bodies present a variety of other figures which are certainly startling and disturbing from any view.

I shall not weary the Committee with any further figures, except to the extent of one illustration which I thought was interesting. It derives to some extent from the suggestion made that the rebate will be limited to £10,000 per unit. The consortium states that: Some store operators facing mammoth rate increases for 1985/86 will enjoy only minimal rebate in monetary terms, under the Bill". It illustrates this by reference to two companies operating 23 variety stores which would be entitled to claim rebate in respect of only 12 of them because of the three times threshold. They are due to pay almost £2 million more in rates for 1985–86. With the limit of the rebate at £10,000 per unit the resultant saving would be only 6.26 per cent. of the additional rate burden. They conclude that without relief from the 1985–86 rate burden—and they take the view that the amount of up to £50 million for both domestic and commercial ratepayers may be inadequate—the picture of retailing in Scotland can be expected to change dramatically. They say that the closure of shops, a reduction in the number of people employed and a fundamental reappraisal of investment programmes, will be almost inevitable. Some traders may have to consider the undesirability of differential pricing if they are "locked in", as they put it, by having to keep open and trading under the terms of the lease.

Of course they acknowledge that the offer of the rebate scheme was a welcome palliative; but they say that it is nothing more. After all, what is at stake is important to the Scottish economy. A similar picture has come to me and I can only look at it and rehearse it to the Committee. I cannot vouch for the accuracy of all the conclusions of these interests; but what I must stress is that in the face of this kind of picture the Government are stubbornly insisting that the multiplier will stay at a figure of three.

A typical illustration of other representations which I have received is that of C. and J. Clark Retail Properties in Scotland which controls and operates over 100 retail shoe shops throughout Scotland. The company sees grave dangers for itself. It estimates that the increased rate burden across all its Scottish shops will be in the order of an additional £300,000 this year. It estimates that the relief available to it on the basis of the scheme will be £75,000. This means that, over-all, Clark's shoe shops in Scotland will have to find an additional £225,000 in rates this year. The company's anxiety is that unless a greater measure of relief can be made available, the rate burden on many shops will be such that there will be little option but to consider either shop closures, with the consequent effect on employment, or a general increase in prices in Scotland; and that would not be very good, I should have thought, for the Scottish economy.

Surely the Government must know all this. They must know of the concern that is felt by the trade. They must know of the swingeing rates increases that are being suffered by so many who in some cases will not receive any relief and in others—such as the cases I have quoted to your Lordships—will get too little. It seems to me that the Government are shrugging off their responsibilities and taking a silly point about whether or not they have committed themselves to £50 million. Certainly it is significant that in correspondence the Retail Consortium obviously thought—and they are not simple chaps, like me—that the figure was to be £50 million. They refer to that figure and say that only a minority of shops will be among the commercial ratepayers who, it was announced recently, would benefit from the £50 million. That may just be a simple misunderstanding on the part of a business man; but do the Government accept the responsibility of facing up to this situation? Have they received these representations from the various interests? If so, what do they think about them and what are they going to do about the position? Would not the sensible answer be, whether it is a matter of good faith or commitment, at least to take the multiplier at 2.75 as proposed in the amendment? Indeed, I have an amendment down for a figure of 2.5, but I would settle for 2.75.

Lord Kirkhill

A few minutes ago the Minister quite properly pointed out to all of us who were listening to him that, referring to the financial effects of the Bill, "The total amount of rebates given by rating authorities in 1985–86 may be as much as £50 million." That of course is the position as printed in the Bill. But as I attempted—I thought reasonably successfully, at least from my point of view—to point out during the Second Reading debate (I ask the Minister to address his mind to this major point) the politics of the situation in Scotland are that Government spokesmen, despite the Minister's disclaimer a moment ago on behalf of his right honourable friend the Secretary of State for Scotland, spoke about £50 million. Therefore, the impression is abroad—indeed, the noble and learned Lord, Lord Wilson of Langside, referred to correspondence he has received on this point—that there is £50 million to disburse. We know that there will be around £30 million, and I said at Second Reading that if there is a factor of 2.75, or thereabouts, informed actuarial professional opinion in Scotland takes the view that although at the moment some shops, a few commercial properties and almost all licensed premises will get some measure of relief (very few domestic properties will do so), if a factor of 2.75 is used it will widen the net. Moreover, it will not take the Government past their earlier public position of £50 million. Why will the Government not do so?

Lord Taylor of Gryfe

I, too, should like to join in the chorus of appeals to the Government to have second thoughts on this matter. Whether or not the Government like it, the figure of £50 million is the figure quoted and accepted as being the figure of relief to be granted to rectify some of the very serious problems that have arisen.

It is not often that we on these Benches encourage the Government to grasp an opportunity to save their own face and credibility. I know of no issue in recent politics in Scotland which has created more indignation and which has more alienated the traditional supporters of the Government than has this particular case. It is in the Government's own political interest to heed some of the advice that they have been given.

8 p.m.

A case like this, where people say that there is a serious injustice in Scotland which is not matched by a similar one in England, creates the basis for a rebirth of Scottish nationalism which we all hoped was dead and buried. But there it is, and it is real. There is a new impetus because of the obvious disadvantage of Scotland.

If the Government do not accept the advice from these Benches, at least they might have accepted the advice of Sir James Gould, the chairman of the Conservative Party in Scotland. Whenever the impact of the revaluation became apparent in Scotland he made his voice abundantly clear advising the Government that this was a disaster for them. That was not heeded at the time, but there were second thoughts at the Perth conference and a figure of £50 million or something like that emerged.

The revaluation will seriously hit the smaller shopkeeper. The bigger stores with branches throughout Scotland can spread their costs, but the small shopkeeper is being worst hit. He will not be able to spread his costs when the new burden is imposed. I attended a meeting in Glasgow this morning of a sizeable property company of which I am a director. I asked the property manager just what impact this was having on some of the company's properties. There is no doubt that a large number of small shopkeepers will be seriously affected and it will be made impossible for them to continue in business. I always thought that the Government had some sympathy for the initiatives of small people running their own businesses, but that is not too evident in these proposals.

A major injustice is created in the whole scheme, but if a multiple of 2.75 is used it will help to relieve it to some extent. It would mean an additional relief of around £20 million in this case, and that would be welcomed. If some £50 million was thought of and was allocated, it would be a mistake not to use it to the full. It would be quite a sizeable contribution to relieve the stress created by this imposition.

Lord Ross of Marnock

The Government's response has been very disappointing. Noble Lords say that they want to help the Government and save them from themselves. They want to help the Government to keep their promises. Let us look at the promise. I have a copy of the Statement which was repeated in this House by the noble Lord, Lord Gray. It says: The new relief is intended to ease the immediate burden arising from the high valuation increases which took effect at 1st April and will apply in the year 1985–86. I estimate that the relief will probably cost at least £50 million. This will be new money from the taxpayer". That was when the Chancellor made his statement that he had bailed out Mr. Younger but he would not find him a soft touch again.

That is important from a Scottish point of view: £50 million at least. That was on 14th May. The Bill was printed on the 23rd, I think. That was certainly when it came to us. The probable cost was then still £50 million. Then somehow or other the Government discovered better figures. According to the Minister of State, the Secretary of State had dealt with the figures that were available to him before he made that Statement on 14th May and I presume later when the Bill was printed. Where did he get the new figures? Am I right in thinking that he got them from the Convention of Scottish Local Authorities?

Lord Gray of Contin

I have said so three times.

Lord Ross of Marnock

The noble Lord can say it four times.

Lord Gray of Contin

I shall.

Lord Ross of Marnock

I just want one answer: when did the Minister get them? What was the date the Government went to the only people who could give them the right figures? When? Was it before the Statement was made on 14th May? The Committee should remember that the valuation roll came into force on 1st April. The Minister of State should have known that. He gave us the information at that Dispatch Box on that day. When did the Government go to COSLA, which is the only body of people which could have given them the information? I should like an answer to that.

I know a little about the Scottish Office. I know how it works formula and anything else. It is clear to me that on 14th May when the Secretary of State made the Statement the one figure of which he could be sure was £50 million; and the department worked back from the £50 million to the multiplier of three. The Secretary of State or his officials having made a mistake the first time and the second time, they have now made a mistake again. Would it not be far better to admit it? Was it not rationalising a mistake to say: "We always thought that the multiplier of three would be the right sort of tolerance that should be allowed here"? They actually worked it out. They started with the £50 million and eventually reached the three times.

I know that the Lord Advocate will not know anything about this. He has never been at a rate support grant preparation of calculations as to what formula to reach. One always starts with the answer and works back to the formula—how much money the Government will save; how they will squeeze this and squeeze that.

The only figure of which the Government were certain on 14th May was the £50 million. Now they are reneging on that. They are not going to spend the £50 million for whatever reason—whether it was an official's miscalculation or the Secretary of State had a brainstorm. But it has to be explained. There is more than just the mistake in the arithmetic. There is the fact that it was proclaimed throughout Scotland that £50 million would be spent by the Government. They did not need to be pressed. Mind you, they threw aside Sir James Gould on his journey down to London just the week before. But as I said the other night, it was a jump from complacency to panic, and they produced the £50 million.

If the Minister is now going to tell the people of Scotland that he will not produce the £50 million there will be dire political consequences. Every noble Lord from Scotland has had communications from retail societies, footwear retailers and small shopkeepers, who all feel let down that somehow or other a shortfall of £20 million has been taken from them—something that would have helped to relieve their hardship. The Government cannot get away from it. It is not good enough to say that the Secretary of State worked on all the available figures. I think that the statement he gave to the Daily Express at the time was that it was a guess. My point is that the figures were available from COSLA. I want an answer from the Government as to when they actually consulted COSLA.

This matter is important from the point of view of people who expected help but are not going to get it, and underlies our suggestion that 2.75 as a multiplier would be better. What I think will happen is that there will be a massive number of appeals. Many of these appeals will be allowed. It will not affect the local authorities this year because the rebate that will be given will be met in full by the Government. However, by next year many of the appeals will have been settled because that will be done between the assessor and the ratepayer. Cases may well go to the local valuation appeals committee and may be settled there too.

What will be the effect? The effect will be a reduction of the aggregate valuation but it will not affect the amount that the local authorities must spend. This means that the rates will go up automatically next year. They must go up because the aggregate valuation to meet them will have gone down. That is why we suggest that this help should be available for at least another three or four years.

Another point that worries me about the three times multiplier is this. What effect does the Minister of State think that using this, and the speech that he made when he said that he reckoned that this was fair, will have? What effect will that have on the assessor arguing with somebody who is not satisfied with his valuation? He is going to say, "The Government think three times is all right". What effect will it have on the valuation appeals committee?

To my mind this is a case of the Government interfering in the worst possible way with what is supposed to be an independent sector of Scottish local government: the assessor. The assessor is supposed to be independent. The only order I know that was given by statute in respect of the independence of an assessor was the Act of 1981 or 1982 that was passed through this House, where there was only going to be non-domestic valuation. It stated there, and I have never seen it stated anywhere before, that the ratio between domestic and non-domestic valuations existing at that time had to remain. In other words, as regards any changes in the non-domestic field increases had to be balanced by decreases but the effect between the one and the other was to be the same.

This will have a very considerable effect and people will have a very considerable grouse at the way the Government have handled this by even mentioning the figure three, giving the appearance that three is all right. Who can wear that? There may be a kind of block abandonment of appeals because this figure three has been used. It may well be that some people who have a case will not appeal because their figure is maybe only 2.5. Remember that rates vary in different parts of the country in Scotland as they do in England. This means that there may be people where the multiplier is less than three who will be harder hit in respect of an increase in rates than people who have a multiplier of three times or more.

We have had all the figures and the Government have all the figures. Why do they not admit that they were hasty in respect of their three times multiplier? The one thing that they were sure of was the £50 million. They should reduce the multiplier and ensure that that £50 million is now properly disbursed to protect people from higher rates. Remember one gets it only if one's rates are higher. If the rates are lower, one does not get it at all. The rebate is related to the rates paid and the amount apportioned in respect of the three-times multiplier relates to values which are over three times the previous annual value.

8.15 p.m.

I wonder what the Chancellor of the Exchequer thinks about this—that £50 million has been taken from him that was not spent? I presume it will go back to him. It is now going to be claimed. However, what will be the effect of this the next time the Scottish Office really needs maybe £10 million? What will the Chancellor of the Exchequer say? He may say, "I cannot trust the figures I get from the Scottish Office and Lord Ross has been going about saying how good they are!". I have been praising the Scottish Office for the past week, and the quality of the civil servants, because this is the centenary of the Scottish Office and every ex-Secretary of State has been asked to give his ideas about the Scottish Office, and the quality of the civil servants. However, if they make a mistake to the tune of £20 million out of £50 million with the Chancellor of the Exchequer, how credible will they be the next time they go to the Treasury asking for a sum of money? The Treasury will say, "We cannot believe your figures. We will automatically reduce it by 40 per cent."

This is what has happened with this sort of panic measure. This is what has happened as a result of the mess that the—I am not going to blame the Minister of State. Who shall I blame? Who is the Minister in charge of this? I think it has been Lord Ancram in another place who has been handling this. I am sorry for him. However, according to my book, they should face up to the fact that it is going to cost at least £50 million. They should rework their formula. When they do so, they will get a figure of 2.75. That will meet the amount of money that they managed to persuade the Treasury to part with.

Thus I hope the Minister of State will answer some of these questions, and particularly the one I asked first: when did he consult COSLA and receive the figures he should have received before any statement was made?

Lord Gray of Contin

We have had a fine old-fashioned political knockabout this evening. The Opposition have been in their element. They have had a whale of a time but they have not made very much of it. Their arguments have been weak. Their facts have been wanting in some areas. In my replies I propose to try to make them see the folly of their ways in criticising the Government for what by any standards has been a great gesture on the part of the Government to try to help those who have been most adversely affected by revaluation.

As for the noble Lord, Lord Ross of Marnock, talking about any Secretary of State and how much money he has been able to get from the Chancellor, when we look back at the record of his own Chancellor when his party were in Government I think it is pretty rich for a member of that Government to criticise the present Conservative Government about the amount which the Treasury—I shall give way in a moment to the noble Lord; he has had a fair kick at the ball tonight. It really is pretty rich, considering what he experienced himself during the period when his right honourable friend Mr. Healey was Chancellor of the Exchequer and the restrictions which he put on his Cabinet colleagues. It really does not ring all that true for the noble Lord to criticise so vigorously the Secretary of State for Scotland for his achievement in getting a very generous contribution from the Treasury to help with this problem. I willingly give way to the noble Lord.

Lord Ross of Marnock

I shall ask the noble Lord for just one figure. He has plenty of people and plenty of cavalry around him to go and get the figures. Will he say what was the percentage of relevant expenditure by the local authorities that was met by the Scottish Office, by the Government, in rate support grant in, say, 1975–76 compared with today? If he does not have the figure and wants to get it, in order to save him any embarrassment I am prepared to talk on until such time as he gets it. I have done it before, and I will do so again. We have all night. I am asking for just one figure, and what it means. If you take the figure in respect of 1978–79 to the present time, it amounts to a loss to the Scottish local authorities of £1,000 million. That is why the rates are high. This Government have not been going out of their way to help local authority expenditure. They have been cutting all the way back. So let the noble Lord be careful about saying that something is pretty rich, because his Government are pretty mean.

Lord Gray of Contin

I knew that I should not have given way to the noble Lord. He finds it impossible to intervene without making a speech. We become so accustomed to his speeches that he tends to become a little tedious at times. The noble Lord has given his own answer to his own question. I have no intention of being drawn into an argument with him. I reiterate what I said before. The record of his Government is that of the Chancellor going cap in hand to the International Monetary Fund and being told to do what the present Government have done on a voluntary basis, and in so doing they have managed to keep inflation down. If his Government had acted a little earlier when inflation was running at 26 per cent., they might have had some success. So, please, do not give us this. It will not wash. We are not accepting it. I shall come back to the noble Lord, Lord Ross of Marnock. There were other noble Lords taking part in the debate. They are every bit as worthy of some recognition as the noble Lord, Lord Ross of Marnock.

The noble Lord, Lord Wilson of Langside, among a number of questions that he put to me, asked what representations the Government had received from retailers and from various trade associations. I can probably best answer his question by saying that we have, I believe, received most of the representations that he himself has received. Indeed, I have examined the representation that he received from the Retail Consortium and to which he referred at a previous stage of the Bill. I have sent the noble and learned Lord a copy of a letter that I sent to my noble friend Lady Carnegy of Lour, who had received the same representation. I also sent a copy of the letter to the noble Lord, Lord Ross of Marnock, and to the noble Lord, Lord Carmichael of Kelvingrove, who had also received representations.

I should like to deal with some of the merit of these representations. As the noble Lord pointed out, all related to the multiplier of three. I have said this before at the Dispatch Box and my right honourable friend has said it in another place. A multiplier of three was selected because it was never the intention to nullify or to neutralise the effect of revaluation. By using a multiplier of three, those who had been most adversely affected by the revaluation would receive a measure of compensation. If we were to reduce the multiplier to a lower figure to take in a larger group of people, we would neutralise to a considerable extent what we sought to keep; namely, the revaluation, the principle of which is not in dispute. All of us, I believe, accept that a revaluation was desirable. Indeed, one noble Lord from England, at our last sitting, called for a revaluation in England. He considered that values in England had become so out of date because of the time lag between the last valuation and the present day. That is why the multiplier of three was selected.

The noble Lord also suggested that the representations that he had received indicated that many retail organisations would suffer adversely with a multiplier of three, but that they would be included under his proposal for a multiplier of 2.5. I do not deny that. It would not matter where we drew the line. There would always be some which would be included and some which would just be missed. That is not the purpose of the argument. The Retail Consortium, quoted by the noble Lord at our previous sitting, despite its reservations, welcomes what these measures seek to achieve.

I turn back to the question put directly to me by the noble Lord, Lord Ross of Marnock. The noble Lord seemed to think that there was some great ploy afoot. He asked me about the various dates. The Bill, as he rightly said, was printed on 23rd May. The date on which we received the information from COSLA, which he requested, was 12th June. The complete figures for all Scottish rating authorities were first given to Scottish Office officials at a meeting with COSLA officials on Wednesday, 12th June. I mentioned these towards the end of the Second Reading here on the following Monday, 17th June. The basis on which the £50 million was announced was on the best available estimates to the Secretary of State at that time. After the COSLA computer run we were able to obtain a more accurate figure which the Government now accept as being nearer to the final figure than the £50 million estimated initially. We are perfectly satisfied that the information given to us at the time was the best information available. There is no question of any con trick as has been suggested in certain quarters. It was a perfectly fair estimate. The Government acknowledged, when the more detailed survey on the situation was done, the new figure.

The noble Lord, Lord Kirkhill, was very concerned about the 2.75 multiplier. He was satisfied, quite rightly, with the calculations that he presented to the House at our last sitting. I am not arguing with him about what multiplier would use up £50 million. That is not the object of the exercise. The object of the exercise is to ensure that a multiplier of three, which professional people are prepared to stand by in their advice to Government, is the figure which is realistic so far as the most disadvantaged group is concerned.

Lord Kirkhill

I am not in dispute with the noble Lord the Minister on that point. I accept what he says. The point that I was trying to make, though I probably did not make it as effectively as I had hoped, is this. One could go on all night giving examples. But very few domestic properties—I give this as a prime example—have been increased by the factor of three. My point is that informed actuarial opinion in Scotland says that if the Government would make it around 2.75, this would bring in substantial numbers of domestic properties. You will at the same time use the £50 million, and the point I have been trying to make to the Minister is that publicly the Government are always committed to this £50 million. That is the politics of the situation on the Scottish scene, and that is the major point.

8.30 p.m.

Lord Gray of Contin

I accept that the noble Lord is making his points sincerely. I do not happen to agree with them. It is the politics of the situation on the Scottish scene because members of the Opposition are making sure that the general public have this £50 million firmly in their mind, and in no way are they going to let that £50 million be removed. But the basic fact is that the £30 million figure is nearer the actual estimate on a muliplier of three. Had the figures worked out at £65 million, the members of the Opposition would have been demanding that the Government be as good as their word and come up with the extra. When it works out at rather less, then I do not think their argument is very strong.

I was quite touched by the concern of the noble Lord, Lord Taylor of Gryfe, for the future of the Conservative Party. It seemed to me that he really did have a genuine fear for our future. I can assure him that the Conservative Party in Scotland and the rest of the United Kingdom is in good heart; but nevertheless I am grateful for his concern.

That concern is not shared by all members of the alliance. When my right honourable friend made his announcement there was one alliance Member of Parliament who accused the Government of having warped priorities. Is it having warped priorities to help those business people, those shopkeepers, who have been most severely affected? He must consider the priorities of the noble Lord, Lord Taylor of Gryfe, as warped as those of the Government, because the noble Lord wants a greater number of people to be helped than will be possible under the present conditions.

The noble and learned Lord, Lord Wilson of Langside, raised a number of other issues which I think I have covered in my wind up. I am afraid that the arguments which have been put forward to me by members of the Opposition in no way convince me that it would be right to accept the amendment, and I trust that they may consider withdrawing it. If they insist on voting on it, I must ask my noble friends to vote against it.

Lord Ross of Marnock

I am grateful to the Minister of State for his information. They produced the Bill on 23rd May, but they had a meeting with COSLA on 12th June so they did not consult COSLA about the Bill. I am not accusing the Government of a con trick, or anything else. I am just accusing them of panic and not doing the right thing. The only people who could have given them reasonable figures were COSLA. They did not get the information from COSLA until after the Bill was printed. That is negligence. They have dug their own hole so far as this financial mess is concerned. They have nobody to blame but themselves.

I am glad to know that they are in good heart. Mind you, you could have deceived me when I heard a Member of another place, Mrs. McCurley, saying that as a result of what they were doing on this rates business they would have only four Members left from Scotland. Everybody should know how this happened. It was not the Opposition, or the Alliance, who shouted abroad, "£50 million". It was the Scottish Office Front Bench Ministers in Perth who shouted abroad the £50 million. Every Tory left that conference proclaiming, "£50 million" The Boy George had come across. You go and tell them now, "It is not £50 million, it is only £29.5 million; and your rates next year will go up even higher, and we are not pledged to do anything".

The noble Lord suggested that I had not room to talk. Rate support grant percentage of relevant expenditure met by the last Labour Government—and this was lower than it was when I was Secretary of State—was 68.5 per cent. What is it this year? It is 56.6 per cent. That accounts for more than double the rate increase in any part of Scotland. The people to blame are the Government. They are only facing up now to the mess they have made in respect of this revaluation because this time they cannot blame the local authorities. This time it was a result of their own particular action.

Do not let the noble Lord lecture me about this. He knows more than anyone else what happened at the last election. He is only here because he lost in the last election. That is how convincing he was to the people of Scotland. I am sure that the fate that was his—sadly because they do not listen to us here; they do not accept our advice about this amendment, or any other one—is going to be shared by some of his colleagues.

8.36 p.m.

On Question, Whether the said amendment (No. 7) shall be agreed to?

Their Lordships divided; Contents, 31; Not-Contents, 57.

DIVISION NO. 3
CONTENTS
Airedale, L.	Houghton of Sowerby, L.
Aylestone, L.	Irving of Dartford, L.
Birk, B.	Kilmarnock, L.
Blease, L.	Kirkhill, L.
Brockway, L.	Llewelyn-Davies of Hastoe, B.
Carmichael of Kelvingrove, L. [Teller.]	McNair, L.
	Morton of Shuna, L.
Cledwyn of Penrhos, L.	Nicol, B.
David, B.	Ponsonby of Shulbrede, L. [Teller.]
Davies of Leek, L.
Dean of Beswick, L.	Ross of Marnock, L.
Elwyn-Jones, L.	Shackleton, L.
Ennals, L.	Stoddart of Swindon, L.
Galpern, L.	Taylor of Gryfe, L.
Graham of Edmonton, L.	Whaddon, L.
Grey, E.	Wilson of Langside, L.
Hacking, L.

NOT-CONTENTS
Bathurst, E.	Elliot of Harwood, B.
Bauer, L.	Elliott of Morpeth, L.
Belstead, L.	Faithfull, B.
Brabazon of Tara, L.	Geddes, L.
Bridgeman, V.	Gray of Contin, L.
Brougham and Vaux, L.	Grimston of Westbury, L.
Caithness, E.	Henley, L.
Cameron of Lochbroom, L.	Home of the Hirsel, L.
Carnegy of Lour, B.	Hooper, B.
Carnock, L.	Hylton-Foster, B.
Cathcart, E.	Kimball, L.
Clitheroe, L.	Lane-Fox, B.
Cork and Orrery, E.	Lawrence, L.
Cox, B.	Layton, L.
Davidson, V.	Lindsey and Abingdon, E.
Denham, L. [Teller.]	Long, V.
Drumalbyn, L.	Lucas of Chilworth, L.

Lyell, L.	Sandford, L.
Macleod of Borve, B.	Selborne, E.
Masham of Ilton, B.	Sharples, B.
Massereene and Ferrard, V.	Skelmersdale, L.
Mersey, V.	Swinton, E. [Teller.]
Murton of Lindisfarne, L.	Vaux of Harrowden, L.
Napier and Ettrick, L.	Vickers, B.
Radnor, E.	Ward of Witley, V.
Reay, L.	Westbury, L.
Renton, L.	Windlesham, L.
Renwick, L.	Young of Graffham, L.
Sanderson of Bowden, L.

Resolved in the negative, and amendment disagreed to accordingly.

8.44 p.m.

Lord Wilson of Langside had given notice of his intention to move Amendment No. 8: Page 1, line 13, leave out ("3") and insert ("two and a half").

The noble Lord said: In view of what was said from the Government Benches, I am sorely tempted to put this amendment to the vote as well because I thought that the Government's response to what was said from this side was quite pathetic as a matter of political and financial judgment. Perhaps I take these proceedings too seriously, but to hear the Minister of State working himself up into a frenzy about Denis Healey when his Government had reached a decision on this matter, which all of us on this side—no one on the opposite side supported it—found absolutely pathetic! It will be noted by the people of Scotland. The Minister talked about neutralising revaluation and bickering over £19 million or £20 million in a bill the total of which is £1,500 million, which is the total rates bill in Scotland. But there it is. The Committee have taken a decision. This reflects badly upon the competence of the Government.

I wonder how the decision was taken. If I ask I expect the Minister would say that it was not the practice to give these details to the House. I do not know whether the Minister is screwing up his face about what I am saying but I should like to know how this fatuous and pathetic decision was taken. I suppose I am not allowed to ask who consulted whom, but I find the thought just another disturbing reflection upon the competence of the Government, which has been getting worse and worse particularly since 1983. In view of the vote on the previous amendment, I shall not move Amendment No. 8.

[Amendment No. 8 not moved.]

Clause 1 agreed to.

[Amendment No. 9 not moved.]

On Question, Whether Clause 2 shall stand part of the Bill?

Lord Ross of Marnock

We have here a reference to the rebates and the fact that local authority rebates will be met in full by the Government. The one matter that concerns me is the cost of administration of this scheme which will be quite considerable. When we first heard of this Bill the rebates were to be paid in response to claims. Now I understand that there are not to be any claims. It is up to the local rating authority to go through the valuation roll, pick out those whose valuations have risen by three times or more and to calculate whether or not there is an increase in respect of the rates paid on that property. If it is more, the portion of the increase of rates related to the three times annual rateable value will be met by a rebate. There will be some people who will be disappointed in regard to that. They will appeal, I presume, in the first instance to the local authority.

The local authority will have to check all this. All the work is being done by the local authority. The local authority has to employ people to go through the valuation rolls. If persons are entitled to a rebate, officials have to write to the individuals to let them know and eventually they have to make the rebate as well. That means more correspondence, more calculations, more work for the local authority, and in regard to finances there is no indication in this clause that the local authority will in any way be reimbursed for the additional work.

We must remember that the rate support grant has already been calculated in respect of the local authority for this present year. So somehow or other the Government have to be authorised to pay additional sums of money to the local authority; or are they not going to do it? Are they going to tell the local authority, "You have got to absorb this within your general expenditure"? That will be pretty unfair to the local authority because it means they will need to cut some other services by the amount of money that they are going to spend on the Government rebate scheme. That is the only point that I want to raise under this Motion on clause stand part. I am perfectly sure that the noble Lord, Lord Gray of Contin, will have a ready answer for me.

Lord Gray of Contin

The noble Lord asked about this particular question. I can tell him that subsection (1) imposes a new duty upon the Secretary of State to reimburse rating authorities out of voted money for the full amount of the rebates granted under the Bill. The Bill does not contain any power to reimburse any expenses by the rating authorities of any other kind, including administrative costs or interest costs of extra borrowing to cover delays in cash flow. Subsection (2) of the Bill allows the Secretary of State flexibility as to how the actual reimbursement is made to the rating authorities and deals with what conditions they will have to satisfy to be reimbursed.

The Treasury has to consent to any such conditions laid down. The intention is that the conditions should be set out administratively in a circular. A statutory instrument will not be required. I can tell the noble Lord that the consultations which have taken place and are taking place with COSLA have been very satisfactory and that the co-operation which the Government are receiving from COSLA is very good. The Government have taken note of a number of points which COSLA has made and have accepted some of them already.

Lord Ross of Marnock

I am grateful to the Minister of State for that. Will he answer this absolutely clearly. Is there any power here to pay the local authority moneys in respect of the administration expense? I can read. Subsection (1) says: equal to the total amount of the rebates". Then subsection (2) refers to, payment under subsection (1)". That is in respect of the rebate which shall be made at such times, and so it goes on. But the Minister has not given me a direct answer. Have the local authorities got to bear the administrative expenses of this scheme on their own without further moneys being paid by the Government?

Lord Gray, of Contin

Yes, they have.

Lord Ross of Marnock

This is highly unsatisfactory. It really is getting quite beyond it—the scheme is brought about by unfair assessments, and hardship is caused to individuals who are paying rates in Scotland—that the local authority has got to meet the additional costs. I am very glad that the Minister mentioned them because he also mentioned interest charges. The local authority will not know what on earth they are going to get. Everyone should be paying their first half year's rates by the end of June. I do not know how many people are going to do that. I am not paying mine, not at that time, unless I see some certainty about what the rates are going to be.

There is going to be a tremendous shortfall for the local authority. In order to meet it—they have to pay people, they have to pay salaried staff and the rest of it—they will have to borrow more money than they normally would. It is going to cost them money to borrow money. The Minister of State says, "We know that. We are talking to them about it, but we are not going to give them any other money". This is most unfair. Not only are they going to deny the ratepayers the £20 million of the promised £50 million, but they are going to put up the rates as well, through the local authority having to pay the extra charge and getting no help from the Government in respect of it. The only way they can do that is by raising the rates. That will be so if they are going to allow them to carry the deficit forward; or perhaps they will tell them that they have got to save money elsewhere—sack a couple of teachers here and there—in order to meet this latest burden that has been placed upon them.

This is what has happened time and time again. We ask the local authority to do things—I have seen this House do it in respect of mental health—but we do not come forward with the money in order to help them to do it. This is one of the most unfair things that the Government have confessed to tonight: that they are not going to pay an extra penny to the local authority in respect of carrying out this scheme which is the Government scheme.

Clause 2 agreed to.

Clause 3 [Citation, commencement and extent.]

Lord Ross of Marnock moved Amendment No. 10: Page 2, line 39, leave out from ("on") to ("the") in line 40.

The noble Lord said: Perhaps the Leader of the House would like to help us over this amendment.

Lord Denham

I beg the noble Lord's pardon. I was looking at the Bill, as printed. I had not realised that there was a misprint in it.

Lord Ross of Marnock

The noble Lord would learn a lot if he came into Scottish debates at the right time. One of the things he would learn would be not to be haphazard, to jump to conclusions and to interrupt Scottish speakers, be they on his own side or on the Opposition side, far too readily. He is far too impatient and ill-informed.

Once again I want to help the Government. We have been given the impression all through in respect of this Bill that it is urgently needed. The Government said, "Help us". So we helped them. We took the Second Reading in the dinner hour—the dinner hour for one of the most important Bills that we have had before us for a long time in respect of Scotland! We did that to give all this generous help to the people of Scotland. We wanted to do it, to get down to it quickly. So we took it in the dinner hour. Not only was the Committee stage taken in the dinner hour: we also cut it down. All my friends were dying to make speeches, but I had to count them and say. "No. We must get this Bill through and on to the statute book".

Then what do we read here? I am sure that the Leader of the House will be interested in this. The Bill does not come into force until two months after it is passed—two months! What on earth are we waiting for? Once again I am being helpful to the Government. The effect of my amendment will be, by cutting out these words, to provide that this Act, which may be cited as the Rating (Revaluation Rebates) (Scotland) Act 1985, shall come into force on the day on which it is passed". We do not need to wait for two months.

I do not know what experience the noble Lord has in respect of citation, commencement and extent of Bills. But he said at another stage of the Bill when this point was raised that this was common form. With all due respect to him—it will be news to him I expect—that is not true. I could speak on until my noble friend Lord Carmichael goes down to my room and brings back a great bunch of Acts of Parliament. The noble Lord would then discover that there are some Acts of Parliament where the actual date is put in. There are some where the figure is six months; there are others where it is three months. I would not say that there are some which say "two months", but there are some where the time is given as eight weeks. I know he is troubled because if he accepts this amendment the Bill will need to go back to another place. Would the noble Lord prefer to wait two months rather than send it down to another place and have it back within a few hours? I think the common sense move is to accept this amendment so that as soon as the Bill is passed it becomes law. Then there would be no argument about when the statutory instrument is produced.

9 p.m.

I know that there is power for a Government to arrange a period between the passing of an Act and its commencement by the, I think, 1887 Interpretation Act. That gives a Government power to introduce a statutory instrument in respect of that. But in order not to confuse people, would it not be far better if, as soon as a Bill is passed it comes into force? Then the Government could get on as quickly as they like with all the administrative business connected with this valuable £50 million Act of Parliament. They could get set to give the people the rebates to which they are entitled. I beg to move.

Lord Gray of Contin

I am most grateful to the noble Lord, Lord Ross of Marnock, for his advice and help. He is always extremely generous in that way, and I am sure we are all deeply aware of his great knowledge of the subject, certainly so far as Scottish legislation is concerned. He has been around for so long that he has practically invented most of it and certainly he is an authority on it.

At present the Bill, in accordance with normal practice, comes into force after a period of two months. Much requires to be done before effect can be given to the Bill, and to give local authorities and ratepayers a period of two months in which to make the necessary arrangements seems only sensible. The order setting out details of the scheme must be brought to another place for approval after the Bill has been enacted: that is by virtue of Section 13 of the Interpretation Act 1978 and it can be done within the two-month period. If the Bill comes into force immediately it will not advance the granting of rebates, which are dependent on the passing of the order and the calculation by local authorities of the rebates.

If we were to accept this amendment the noble Lord would actually be achieving something which I am sure he does not seek to achieve. The amendment simply would not work. It would bring the Act into force immediately on Royal Assent, and there would be no time for the Secretary of State to make an order. The order-making power is meaningless, and for that reason I am sure the noble Lord will be prepared to withdraw his amendment.

Lord Ross of Marnock

The noble Lord is prepared to argue with the Minister of State about whether or not he is talking sense because as soon as the Bill is passed, irrespective of whether it says two weeks or six months, the Secretary of State can go ahead in respect of his order-making power that is within the Bill. But for the noble Lord to suggest that this will hold things up in any way! He knows as well as I do that the order has already been drawn up. I have seen the latest draft order and I shall tell him what is in it. So if anything, rather than holding up anything, it would expedite the matter; and for the noble Lord to say that it is common practice, I can tell him it is not common practice. There are many statutes in which there is no mention at all: a Bill automatically comes into force when it is passed. There are other statutes where it says one month: there are others where it says six months; there are some which say three months and in some cases a particular date is given. Simply because he has said it once, there is no reason why he should keep on saying it when it is wrong. That is what gets me: it is the smallness and the triviality of this. Here is something which really ought to have come into force as soon as it received Royal Assent. There is no reason for this figure of two months.

I have here just a selection of Acts. One says six months. That is the Valuation and Rating (Scotland) Act 1956—that is the basis of all the things we have been doing at the present time. What does it say? It says: This Act shall come into force at the end of a period of six months beginning with". There is the Bankruptcy (Scotland) Act: that is six months. The Housing (Financial Provisions) (Scotland) Act of 1968 says: This Act shall come into force at the expiration of a period of three months. Where is all this "general practice" nonsense? Whoever wrote that for the Minister—I raised this at the last stage of the Bill—it is time that he was taken aside and somebody had a few words to say to him. I have also the Mental Health (Scotland) Act of 1960 and that came into force on a day which was appointed by the Secretary of State. There is also the Roads (Scotland) Act, the "James Mackay Memorial" Act over which we laboured long and hard, night and day. They actually put a specific date in that one to make it come into force on the 1st January, 1985. I could go over all these Acts. Here is another housing Act with a period of one month: these are just one or two Acts. I had five minutes to spare and I thought I would have a little fun.

I hope the Minister of State will learn something from this and not use words that are just not true. It is not common practice to put in two months. I am surprised at the noble and learned Lord the Lord Advocate sitting there and allowing his noble friend, whom he knows quite well is not all that familiar with these Acts of Parliament that we have been discussing, to say that. He should know better, that it is not common practice. He disappoints me deeply. I do not know what his father would think of him. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

House resumed: Bill reported without amendment: Report received.

House adjourned at ten minutes past nine o'clock.