HL Deb 30 June 1988 vol 498 cc1763-4

The Earl of Dundee rose to move, That the draft order laid before the House on 7th June be approved [28th Report from the Joint Committee].

The noble Earl said: My Lords, the need for these two brief amendment orders is a straightforward one. They are both technical amendments necessitated by a change in the base year for calculation of the retail prices index from January 1974 to January 1987. Such a change was not anticipated at the time the original orders were made. Therefore, they now require to be amended to take account of this change. Failure to do so would result in very sizeable and completely unwarranted increases in the rates bill of the two undertakings concerned.

As your Lordships will know, conventional valuation methods are not appropriate for certain undertakings such as the electricity supply industry, British Gas and British Telecom. These industries are valued according to formulae set out in orders made under Section 6 of the Local Government (Scotland) Act 1975. The lands and heritages of the statutory docks and of the British Waterways Board in Scotland also fall in this category; but the formulae applied in determining their rateable values differ in that they include an adjustment factor based on the retail prices index.

The change in the base year of the retail prices index to 1987 means that these formulae require to be amended to take account of this change; otherwise we would have the situation where the rates bill of the British Waterways Board in respect of its canals in Scotland would double through no fault of its own. The position of the statutory dock undertakings would be even worse with an average fourfold increase in rates. This is clearly unacceptable.

We have consulted widely on these amendment orders. The Convention of Scottish Local Authorities, the British Waterways Board, the British Ports Federation and statutory dock undertakings outside the federation have all agreed on the need for these amendments to the orders setting out the formulae in question. I commend these orders to your Lordships. I beg to move.

Moved, That the draft order laid before the House on 7th June be approved [28th Report from the Joint Committee.]—(The Earl of Dundee.)

Lord Carmichael of Kelvingrove

My Lords, I thank the Minister for the explanation that he has given of the orders, which will relieve the two bodies of the need to pay the additional moneys which they would have paid in rates if the adjustment in the method of calculation had not been necessary. I have not received representations from either of those bodies or from the business community. However, the Minister has said that there has been a great deal of correspondence and a number of meetings with the bodies.

It is worrying that, in a system long experienced in the practice and method of valuation, there should be what I agree is a minor hiccup. Perhaps I may ask the Minister what will happen if, when the poll tax legislation is introduced, alterations in non-domestic rates are required? Will we have a succession of orders such as this for all statutory undertakings? Will there be a way in which they can be brought into line more quickly? Perhaps the Minister, if he is not able to answer my questions tonight, will let me know in due course whether there will be any problems when poll tax evaluations are made and how comparability between the Scottish method of calculation and the new method which will be used in the UK for non-domestic property will be maintained.

The Earl of Dundee

My Lords, I am grateful to the noble Lord, Lord Carmichael, for his comments. I wish to reassure him that there is no connection between the orders that we are considering tonight and the community charge legislation. As regards the position of formula-valued subjects affected by the 1990 revaluation, a major review is now being undertaken both north and south of the Border of all the present formula-valuation orders in time for the 1990 revaluation. That review is being carried out by various working groups which include representatives of the undertakings affected, as well as of assessors of local authorities. Reports have been requested from the working groups by the end of this year, and we shall study them carefully before taking any decisions relevant to 1990 and beyond.

On Question, Motion agreed to.