HL Deb 23 March 1999 vol 598 cc1258-60

10.30 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty) rose to move, That the draft order laid before the House on 24th February be approved [11th Report from the Joint Committee].

The noble Lord said: My Lords, this order amends the rateable value of the British Railways Board in England and Wales to ensure that it does not pay rates on property which it no longer owns.

The rateable value of the board is prescribed by the Secretary of State. It was last set on 1st April 1995, at the start of the 1995 rating list, at about £11 million. That was done by the Railways (Rateable Value) Order 1994 and is known as prescribed assessment.

Since that date, as your Lordships will know, the board has sold a lot of its property including its rail freight and maintenance operations to Railtrack, among others. A recalculation mechanism contained in the 1994 order has reduced its rateable value from £11 million to about £7.5 million. This recalculation was intended to reflect the property disposals of the board but, in reality, the reduction has been too small. The Valuation Office Agency, which is responsible for rating valuations, now estimates that the board has overpaid in excess of £3 million in rates since 1995 and that a more accurate rateable value would be about £6.5 million.

It is, of course, necessary for the Government to correct this rateable value and compensate the board for the overpayment. The order would achieve this by reducing the Board's rateable value for the next year to £100, 000. I commend the order to the House. I beg to move.

Moved, That the draft order laid before the House on 24th February be approved [11th Report from the Joint Committee]. —(Lord Whitty.)

Baroness Thomas of Walliswood

My Lords, I must apologise to the House and to the Minister. The debate, having been extremely long-winded all through the afternoon, speeded up to such an extent that I was caught napping.

As far as I have been able to hear from the noble Lord's introduction, the order corresponds precisely to what I had partly worked out for myself and partly been informed about through the kind offices of a member of his department. My only slight worry is the very sharp down valuation of the BRB arrangements. The Minister told us a good deal about that. Now is not the moment to go into detail as to what the £5 million—I think it is—of diminution comprises. That will be for another day. At the moment, I am content with the order as presented.

The Earl of Courtown

My Lords, I thank the Minister for his explanation of the order which, as usual, was concise and to the point. It raises a number of issues and I quite understand if the Minister wishes to reply by letter at a later stage.

I understand that the Secretary of State prescribes the rateable value in these issues. However, could the Minister tell the House how Railtrack properties and the railway lines are evaluated for rateable purposes?

In addition, an issue was raised in another place which I do not think was covered by the Minister. I refer to shops on platforms or on property covered by the order and how they are dealt with. Are they rated by the valuation office or under the jurisdiction of the Secretary of State?

Another issue relating to Scotland has become apparent. I refer to the intention to phase out the system there. Is there the same intention about the future of the system for England and Wales?

Lord Whitty

My Lords, I believe that, by and large, the noble Earl was referring to Railtrack's rateable value rather than that of the British Railways Board, and, in so far as I understood his intervention from a sedentary position, no, it is not the same thing. Immediately on privatisation Railtrack invested in certain properties. The British Railways Board has sold on some other properties, but Railtrack is the organisation which, by and large, runs the stations and owns the land which is there for transport and railway purposes.

The British Railways Board is a residual organisation which retained certain land from the old British Rail and hence disposed over the period since privatisation of certain areas of land. As noble Lords will know, the present Government imposed a restriction on such sales. Prior to that—effectively, prior to the election—35 sites had been exchanged since the last rateable value figure and sales of 65 to 70 were so advanced that it was necessary to continue those sales. Another 40 sites have been sold on for transport purposes, in line with the present Government's policy. We have disposed of substantial parts of British Rail's residual land. However, the properties to which the noble Earl referred are Railtrack's and have been so since privatisation. Their rateability and rateable value are therefore determined with Railtrack as the operator and in line with business rates elsewhere and are not really relevant to this order. If the noble Earl would like further details, I can give them to him, but that is not relevant to this debate.

The noble Baroness alluded to the fact that British Rail had dramatically reduced its assets over the period since privatisation in line with the past policy and, to some extent, in line with present policy in terms of disposing of land for transport purposes. What remains of British Rail's assets will, as I understand it, in the future be subject to rateable value in the normal sense, whereas previously both nationalised and post-nationalised organisations, if I may put it that way, had a prescribed rate laid down by the Secretary of State. That proved too high over a period of four years. In order to compensate for that, we have reduced it to the notional £100, 000 this year. Next year, and for as long as British Rail continues in existence, it will be subject to the normal rateable value assessments and not to prescribed rates. As noble Lords know, the Government intend to introduce legislation to bring the British Railways Board into a strategic rail authority. Within a couple of years, that matter will therefore be resolved differently.

However, for the moment, this order compensates for overpayments in a mechanism which the Secretary of State lays down. That will not have any knock-on effect on other organisations. I commend the order to the House.