§ Mrs. Margaret EwingTo ask the Secretary of State for Scotland what progress has been made in the talks between the rating assessors in Scotland and the Inland Revenue with regard to harmonisation of rating valuation and practice north and south of the border; and if he will make a statement.
§ Mr. LangThe talks between the Scottish Assessors' Association and the Inland Revenue valuation office have made significant progress. The major areas of cross-border difference have been identified and the underlying causes analysed. The discussions have concentrated on identifying areas where progress could be made in the 1990 revaluation, broadly within the present statutory and case law framework, and on identifying where subsequent changes in the law will be necessary. Powers to allow the Secretary of State to prescribe methods of valuation for particular subjects were taken in the Local Government Finance Act 1988 specifically to promote harmonisation.
In the case of the majority of subjects valued on the basis of rental evidence, the outcome of the harmonisation discussions will be to ensure that the handling and interpretation of the evidence north and south of the border is in line.
The discussions have identified certain classes of subjects where there have been more fundamental differences of practice north and south of the border. There will now be moves towards a more common approach, within the constraints of statute and case law, and the result of this is expected to be the closing of many of the major gaps which have existed between valuations under the two systems. We are giving serious consideration along with my right hon. Friend the Secretary of State for the Environment to the use of powers taken in the 1988 Act to allow prescription of common decapitalisation rates north and south of the border for properties valued on the 748W contractor's basis. One area of difficulty relates to the valuation of plant and machinery, which is carried out in accordance with different statutory rules in Scotland and in England and Wales. Analysis of the differences in terms of the effect on valuation is complex. The harmonisation discussions have concluded that it would be impracticable to seek to make changes before the 1990 revaluation but, as we have already announced, we are to set up a committee to advise on this matter with a view to achieving harmonisation as soon as possible thereafter.