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Rating And Valuation Bill

Volume 640: debated on Wednesday 10 May 1961

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As amended ( in the Standing Committee), further considered.

Clause 3—(Valuation Of Hereditaments Hitherto Valued By Reference To Profits, Etc)

3.31 p.m.

The Minister of Housing and Local Government and Minister for Welsh Affairs
(Mr. Henry Brooke)

I beg to move, in page 2, line 22, to leave out from "to" to the end of line 34 and to insert:

  • (a) any hereditament occupied by the National Coal Board,
  • (b) any other hereditament which consists of or includes a mine or quarry or the whole or part of which is occupied together with a mine or quarry in connection with its working, or the treatment, preparation, storage or removal of its minerals or products of its minerals or the removal of its refuse,
  • (c) any hereditament occupied by the persons carrying on, under authority conferred by or under any enactment, a dock or harbour undertaking, and
  • (d) any hereditament occupied by the persons carrying on an undertaking for the diffusion by wire of sound or television programmes.
  • Any reference in paragraph (b) of this subsection to a mine or quarry includes a reference to a well or bore-hole or a well and bore-hole combined, but except as aforesaid expressions used in Chat paragraph and the Mines and Quarries Act, 1954, have the same meanings in that paragraph as in that Act.
    (3) Any order under this section applying to any hereditament falling within any paragraph of the foregoing subsection, or any class or description of such hereditaments, may provide for determining rateable value by the application of different methods of valuation to different parts of the hereditament.
    This Amendment—if I can make my voice heard above the turmoil——

    This Amendment implements an undertaking which I gave in Standing Committee, as I think the hon. and learned Member for Kettering (Mr. Mitchison) will recollect. There was criticism of Clause 3 on the ground that the order-making powers were too wide. Fears were expressed that classes of undertakings of all kinds which are at present valued on the profits basis might find themselves brought within the scope of an order to change the basis of valuation to a formula. I explained that there was no intention of making orders quickly in respect of all sorts of categories, but there were certain types of undertakings which, the Government understood, were interested in pursuing the question of whether a formula basis could be arrived at which would be less difficult and less liable to give rise to hard litigation than the existing method.

    In Committee, I said that to meet this criticism—and my words, I think, were favourably received on both sides—I would move an Amendment at a later stage to narrow these powers to a certain number of categories of undertakings that might, within the next few years, desire to change over, after the necessary consultations, to a formula basis. That would still the fears of those who found themselves not on the list but were valued according to the profits method, and no harm would be done in any way because, quite clearly, so much work would be involved in arriving at a formula basis that there would be no likelihood of orders being made within the next few years except, at best, for a limited number of categories of undertakings. That is the purpose of the Amendment.

    Instead of giving a wide order-making power, it limits that order-making power to those classes of undertakings set out in categories (a), (b), (c) and (d). Category (a) relates to the National Coal Board. That was in the Bill originally, and I understand that the Board welcomes the opportunity of discussion to see whether suitable formula can be devised for at least some of its property.

    Here let me emphasise, what I said repeatedly in Standing Committee, that this Clause is not designed either to increase or diminish the overall liability to rates. That overall liability will be left substantially unchanged. The only question is whether a valuation can better be done by a formula than on the basis of the profits method. That applies throughout.

    Category (b) refers to mines and quarries. I have no idea whether a formula basis will be discoverable which will be satisfactory for any sections of the mining and quarrying industries, but I know that some sections of those industries are attracted by the idea of pursuing the possibility of working out a formula that might be acceptable. I have no preconceived ideas about that one way or the other. I know, however, that after the Bill was published I received several enquiries from mineral companies, wanting an assurance that they were within the scope of Clause 3. It seems, therefore, on that and other grounds, desirable to include them.

    Category (c) refers to dock and harbour undertakings. Again, that seems a suitable field for examination. Most of the public utilities are already valued on a formula basis—the railways, the gas industry, the electricity industry—and the Bill adds the water undertakings. So, at any rate, it is not unreasonable to include the docks and harbours as another category for which the change may or may not be made.

    Does what the right hon. Gentleman is now saying mean that when the Bill becomes an Act negotiations will be entered into with the various undertakings to negotiate a formula?

    It does not mean that necessarily. The fact is that a certain amount of work has been done, I understand, in some directions within the industries to see whether it would be practicable to work out a formula. The motive usually, in the first place, is that the profit basis has not been operating satisfactorily and has given rise to a great deal of dubiety and litigation with the result that uncertainty has been prolonged for years as to what should be the real valuation.

    No one wants uncertainty, neither the Inland Revenue, which is responsible for the valuations nor the industries which will have to pay, nor the local authorities which will be the recipients of the rates. Therefore, if it is possible to work out a formula that is generally accepted and which leaves the total valuation substantially unchanged that would seem to be a useful step in streamlining the somewhat complicated process of valuation.

    Category (d) is one which I do not think was mentioned at all in Committee, and relates to wireless and television rediffusion undertakings. In this case an association which claims to represent companies serving 95 per cent. of the relay subscribers has indicated that it would like to see whether a formula method of valuation which would be acceptable to the Inland Revenue could be worked out for relay services. Again, I do not prejudge that. I have no idea of the answer. If the present system is not working to the satisfaction of everyone, there seems to be no reason why, in that sphere, too, which is rather different from the ordinary industrial undertaking, further inquiries should not be made.

    It may be that the examinations and negotiations which might take place under these four headings will show that only certain parts of any class of hereditament are suitable for formula treatment. That is the reason for subsection (3) which, if possible, will enable an order to be made determining the rateable value by different methods for different parts of a hereditament. The simplest example of that which I can give is an undertaking which may own a cement works and a pit, it may be a chalk pit—[HON. MEMBERS: "Careful!"] This is entirely hypothetical.

    The formula method of assessment might apply to the pit, the actual extraction part of the property, and exclude the cement works which would then continue to be assessed by the present method. That, again, is one of the points which could be decided only in the course of consultations, but it would seem desirable to make a provision of that kind in the Bill now that we are considering this Clause.

    I want to make it clear that by asking the House to accept this Amendment I am not saying that any orders will actually be made. All that will be done is to take power to make orders if a general degree of agreement is arrived at that any one of these classes of undertaking could be more satisfactorily assessed on a formula basis. I should like to take this opportunity to express my gratitude to hon. Members from both sides of the House who served on the Standing Committee which considered the Bill. I hope that they will feel that the Government have made a genuine attempt to meet the criticisms expressed in the Committee and to bring forward a practical Amendment. I will willingly answer questions which hon. Members may wish to raise, but I shall not now trouble the House with a further explanation.

    May I, first, thank the Minister for complying with the wishes of hon. Members on both sides of the House who served on the Standing Committee? Our apprehensions about the Clause were partly as to its scope, that it might apply to any industry—it is to that point that this Amendment is directed—and partly to the generality of the powers. I doubt whether subsection (3) in the Amendment adds very much to the very wide words of subsection (1). However that may be—we may have to consider it in connection with the next Amendment—the scope is limited.

    On 31st January, during the Committee stage, the right hon. Gentleman mentioned the first three of the categories of hereditament to which this Clause is now to be limited. He did not mention the fourth hereditament, but he did say that there might be other cases and that he would make inquiries. This addition, presumably, is the result of those inquiries. I think it an addition which may raise some difficult problems as between one local authority and another and as to the proper substitution of a claim under this Clause for the ordinary profit basis.

    I call the attention of the right hon. Gentleman and of the House again to what he said on 31st January:
    "… it might be appropriate to proceed in this way, if there were general agreement between undertakings concerned and the local authorities …"
    That is the first point, and then:
    "… if it were understood that the new formula was designed not to make any material change upwards or downwards in the amount of rates payable but rather to produce a more satisfactory and simple method of arriving at assessments."—[OFFICIAL REPORT, Standing Committee D, 31st January, 1961, c. 208.]
    3.45 p.m.

    After what he has already said, I feel sure that the right hon. Gentleman will be able to confirm that those conditions for the use of the powers under this Clause will still apply, and particularly that they will apply in the category which has been added, which I call the rediffusion stations. To me, it seems most important that it should be done in a case where such wide powers are being taken. I feel sure that the House will note that any scheme made under this Clause, with the very wide power it gives to the right hon. Gentleman, even as it is now limited, must be subject to the affirmative Resolution of the House. Again, I thank the right hon. Gentleman for meeting the criticisms made in the Standing Committee which, I thought at the time, and, I still think, were well founded.

    I also wish to thank my right hon. Friend for putting down this Amendment to meet the doubts and criticisms which were felt and made by hon. Members on both sides of the Standing Committee. As one who used strong language in describing the Clause then, I am grateful to my right hon. Friend for meeting some of those criticisms.

    Originally, I was worried about the Clause for two reasons. One was the wide ambit of the Minister's powers under it and the other that I was afraid, even though there might be agreement between associations and the Inland Revenue or the rating authorities on some formula desirable for the rating of hereditaments which fell within their class, that nevertheless injustice might be done to individual owners of hereditaments inside the class. In other words, the class as a whole, represented by an association, might agree to something which would prove oppressive to individuals within the class.

    My right hon. Friend's Amendment has dealt with the objection about the very wide range of the Clause. He has not met the second objection, but, in fairness to him, I must say that he never pretended that he would be able to do so. Therefore, I am particularly glad that there is a further Amendment to line 40, which we are not now discussing but which, perhaps, I may mention, because it will help in that respect. I feel that my right hon. Friend has gone a long way to set at rest the anxieties which we felt during the Committee stage discussion.

    Having taken part in the debates in the Standing Committee, I appreciate the technical complexity of this matter. At the same time, I do not think that we should pass to the next stage of our proceedings without making some comment upon a matter of principle as distinct from the question of technical detail.

    The matter of principle is that we have become so tied up, or bogged down—hon. Members may choose their own metaphor—with all the machinery of valuation that we are rapidly reaching a stage where there cannot be real equality between different ratepayers. That is a matter of principle which ought to concern this House.

    One of the principles of good government is that when legislation requires the levying of taxes locally or nationally, there should be no doubt as to what has to be paid by the individual. We are reaching a situation, in my submission, in which we give certain alternative powers to a Minister to apply different formulae in different circumstances, and, in the end, this may produce inequality between different ratepayers.

    I am not concerned for the purpose of this argument with whether those ratepayers are individuals, corporations, or groups of people in nationalised or private industry. It ought to be said in this House that where we have a system of local taxation which is so obscure, so capable of refinement and adjustment as to produce no clear picture in the minds of those concerned as to the ultimate requirement, it is bad legislation. As I understand these procedures, a lot depends on the skill of the person appointed to negotiate the transactions. A particularly powerful or influential authority which could employ the best counsel or negotiator, and pay high fees for his services, would be at a great advantage compared with a humbler individual not so fortunately placed.

    I am not saying this in any unkind or unfair criticism of the Minister. He understands the point involved and has tried to do his best to meet it. I hope that serious note will be taken in this House, when we are embarking on legislation, that the further we get away from certainty on a tax the further we get away from the principle of good government. Naturally, I am not opposed to this Amendment. It is an attempt to meet a criticism advanced so powerfully in Committee by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), but I hope that what I have said will be noted by the Minister.

    The Minister will recollect that during the Committee stage I raised a number of points in connection with the china clay industry, which was very apprehensive about the effects which the Bill would have on the costs of its production. I wish to place very briefly on record that I feel sure my constituents will be grateful for this Amendment. It will go a long way to meet the points that they have in mind.

    I wish to join in thanking my right hon. Friend for this Amendment. I criticised the Clause very severely on Second Reading and in Committee. My right hon. Friend has made a genuine attempt to meet the views expressed at that time and to bring the Clause more into line with straightforward valuation practice. I am glad to see that the Amendment gives all the appearances of not reversing a decision of a court of appeal at some later date by an order.

    I think that the attempt which has been made has been good. The only reservations I might have are about the consultations likely to take place between such people as quarry owners in arriving at the formula method. This Amendment is not designed to increase or decrease substantially the valuation of a hereditament, and that puts a lot of fears at rest. The Clause should work effectively in future and do all that is required.

    I am grateful to hon. Members on both sides of the House for the way in which they have received the Amendment.

    I say straight away to the hon. Member for Westhoughton (Mr. J. T. Price) that if an order is made under this Clause its principal purpose will be to impart certainty into a field where there has been a degree of uncertainty which has been unacceptable to both sides. I am glad that my attempt to demarcate the field in which orders may be made appears to commend itself to the House generally. I certainly reinforce what I said in Committee, first, that it is not intended that the application of an order under this Clause to any class of undertaking should be regarded as either a privilege or a punishment.

    I cannot guarantee that it would leave the rateable value of every individual hereditament unchanged, but the formula would not be acceptable to the Government if it made any substantial upward or downward change in the rateable value of a class of undertakings. Furthermore, it is not the intention of the Government to use this Clause to impose a formula basis on to an unwilling class of undertakings. There would need to be general agreement that the formula method was worth trying. There again, I cannot guarantee that every single undertaking in the class would welcome the change any more than I can guarantee that every single one of the 1,400 rating authorities in England and Wales would welcome the change.

    The order-making power would be used only if there were general agreement between a class of undertakings, or the Coal Board, on the one hand, and local authority associations, on the other, that a formula method should be applied because, by common consent, the existing method was not working satisfactorily. In a moment, we shall come to a further Amendment which bears on the same point. I want to express my appreciation to the House for the way in which it has received this Amendment.

    Amendment agreed to.

    I beg to move, in page 2, line 40, at the end to insert:

    (4) In the year following the coming into force of the first valuation lists to come into force after the coming into operation of any order under this section the Minister shall, in consultation with such associations, local authorities and persons as aforesaid cause investigations to be made into the effect of the operation of the order; and the Minister shall cause to be laid before Parliament a report on any investigations made under this subsection and their result.
    This Amendment also fulfils a pledge I gave in Committee. The working of one of these formulae can be reviewed at any time without statutory provision. It was pressed in Committee that there should be written into the Bill a statutory requirement for review after a certain time when the new formula method had been well tried out and had settled down, when the transitional period was over and it would be appropriate to take a new look at it to see whether it was working well or not. That is what this Amendment provides. It will require an investigation to be made into the operation of the order. It will require the Minister of the day to lay before Parliament a report on the investigation and on its result.

    As to the date when the investigation takes place, it will be made during the year following the coming into force of the first valuation lists which take effect after the coming into operation of the new order. Let us assume that an order is made to come into effect on 1st April, 1963, when the new valuation lists take effect. In that case, this Amendment would provide that the review would be made during the year 1968–69. There would have been a full five-year period during which the transitional provisions would have run out and a new quinquennial valuation period would start in 1968. In the first year of that new valuation period the investigation would take place.

    If an order came into operation, not in 1963 but in 1964–65, it would still be reviewed in the year 1968–69. On the other hand, according to this Amendment, if the order did not come into operation during the currency of the next valuation lists—that is to say, did not come into operation before 1st April, 1968—the review would take place in the year 1973–74, presuming, of course, a revaluation every five years.

    It is desirable that there should be such a period before the statutory review takes place, but I repeat the important point that if, clearly, the new system is not working to the general satisfaction, a review can be put in hand at once. There is no need to wait for the year laid down for the statutory review.

    This is a safeguard for all concerned, and, in particular, for Parliament, that after a period there must be a statutory review, and a report on the investigation must be laid before Parliament. That is how Parliament will ensure that it does not lose sight of the matter. When Parliament has approved the order it can be certain that after the order has been working for a reasonable time, it will receive a report.

    4.0 p.m.

    This, too, is an Amendment resulting from the Committee proceedings. We had put down an Amendment going rather beyond this, in that it tied the Minister to the undertaking which he has just repeated not to allow schemes which would result in a substantial increase or decrease of the total rates paid by the industry and in that it provided for continued reviews at five-year intervals. I share the Minister's somewhat cynical view that Rating and Valuation Bills come more or less regularly at five-year intervals, and I therefore regard this Amendment as sufficient compliance with our request, coupled with what the right hon. Gentleman has just said. In the circumstances, I once more brace myself to thank him for meeting our criticisms.

    I, too welcome the Amendment and thank the Minister for it. It may well be, as the hon. and learned Member for Kettering (Mr. Mitchison) said, that its effect will be anticipated by the next Rating and Valuation Bill and that we shall never see its effect, but, in part, it meets the anxieties which I had that an individual inside a class might be unfairly dealt with by the procedure, and it will make sure that in due course we have a Parliamentary review to see how it is working.

    Amendment agreed to.

    I beg to move, in page 3, line 2, to leave out "relating" and to insert:

    "so far as that enactment relates".
    This Amendment, in its present form, can be regarded either as a drafting Amendment or as preliminary to the next Amendment. It seems desirable as a drafting Amendment, and I have moved it on those grounds.

    The Parliamentary Secretary to the Ministry of Housing and Local Government
    (Sir Keith Joseph)

    My right hon. Friend understands the purpose behind the Amendment as being to ensure that the power in the Clause is limited as the hon. and learned Member for Kettering (Mr. Mitchison) wishes. He is advised that the power is, in fact, limited in the way in which this Amendment would reinforce, but he is also advised that the addition of the words would not obscure that in any way and, therefore, at the risk of appearing to give way only with ill-grace, he advises the House that the Amendment is entirely acceptable.

    Amendment agreed to.

    I beg to move, in page 3, line 3, to leave out from "relates" to "and" in line 7.

    The Amendment raises a point of general importance. If hon. Members look at the subsection they will see that the effect of the Amendment would be to remove from the scope of the order power to deal with the existing law about proposals for alterations of valuation lists and appeals in connection with such lists and the withholding of rates—that is to say, with the whole appeal machinery which is at present part of the law of valuation and rating.

    The order would then be left such that it could "repeal or amend any enactment" and it could have
    "effect notwithstanding anything in any such enactment".
    I suggest to the Minister that he is becoming rather greedy. Those powers are already very sweeping. In the circumstances contemplated by the Clause, and having regard to the Amendments which have been accepted, we cannot demur to some change of that kind being within the scope of an order, but when it comes to removing repeal machinery we are on rather different ground. We had a short discussion on this in Committee on an Amendment which would probably not have carried out the purpose which we had in mind. We were told by the Parliamentary Secretary that it was a matter of arithmetical formula, that one ought not to be allowed to appeal because somebody had done the sum wrong and that there could be no other possible ground of appeal.

    Considering the very wide powers given by the Clause and the way in which it is intended to use them—to get agreements between the undertakings concerned as an industry, as it were, and between associations of local authorities—it seems to me that there ought to be room for more than that. It is impossible to say what form these schemes will take without seeing them. All one can say is that the Clause is wide enough to cover everything.

    To take power to remove appeal powers without knowing what the schemes will be, and in the confident assurance that the Parliamentary Secretary said that they would be much the same as other schemes already on the Statute Book, is asking much too much of the House, and, I might add, much too much of the individual ratepayer. These appeal powers are exercised in some cases which would be unlikely to arise under schemes of this sort, but in others an appeal power is used to raise questions which border on matters of principle and certainly to raise points which are far more than a mere calculation of the sum, one way or the other.

    I can give no better instance than to mention, simply as an illustration, some of the difficulties which have arisen under the provisions dealing with the gas and electricity undertakings to which the Parliamentary Secretary referred as he indicated that there could be nothing left as the subject of appeal but arithmetic. In some of those cases—we had this here the other day—it has been found that as a matter of practice the statutory schemes they are statutory for they are in the Acts—worked out in such a way that certain undertakings, broadly speaking, the older undertakings in connection with electricity and gas, found themselves suffering a very considerable loss of value, and in this case profiting by a considerable loss of value, year by year.

    The local authorities concerned, where they have an undertaking of that kind in their area, have found that their rateable value has changed very sharply. It ultimately comes down on the other ratepayers in the area, particularly on the domestic ratepayers. Therefore, it is a matter of real public concern, though it arises in the form of a question limited to a value as between the undertaking, on the one hand, and the rating authority, on the other.

    No Minister should take power to remove appeal provisions, particularly when, in the nature of the case, he does not know exactly what kind of scheme will appear as a result of the very wide powers which have been taken in the Clause. If the scheme is such that there is nothing but arithmetic and no possibility of appeal, the worst that will happen is that the appeal powers will be rarely used and, when they are used, the decision will be very easily foreseen.

    What we are asked to do here is to agree to giving the Minister this power in a case where we do not know what the possible points of appeal are. It is abandoning the rights of other ratepayers, particularly domestic ratepayers. It is abandoning the rights of the appeal courts to look into matters of this kind. It is an excess of power in a case of this sort. I therefore hope that I shall have the support not only of my hon. Friends, but of hon. Members opposite who are concerned to see that rights of appeal are not lightly taken away.

    I do not know why the Minister went out of his way, in connection with a previous Amendment, to take a chalk pit as an illustration, when the one thing which the Amendment did not deal with was chalk pits. However, even people concerned with chalk pits may occasionally wish to appeal. It has happened. There are many other cases more within the ambit of the Clause than the case which the right hon. Gentleman, for a special reason chose last time. It is clear that the complicated provisions which will be necessary to deal with the four categories of hereditament here in question are likely, unless the scheme is remarkable and unusual, to present some doubts and, consequently, give rise to appeals. It is not a good thing to get rid of the ordinary processes of justice beforehand when it is not known whether they will be needed or to what extent they will be needed.

    The hon. and learned Member for Kettering (Mr. Mitchison) has rightly said that this touches upon an important matter. I do not want to skimp the answer to what he has said. This is consequential upon the power which the Clause, as amended gives to my right hon. Friend to establish by order, after consultation and on an affirmative Resolution, a formula method for limited classes of hereditaments.

    The essence of the formula method is that the art or science of valuation, which is based largely on expert opinion, is to a greater or lesser extent, sometimes wholly and sometimes in part, supplanted by a method which depends upon the application of arithmetic to certified facts. That is the essence of a changeover from the existing valuation method relating to profits or accounts to a formula method. Where the valuation depends upon expert opinion, it is absolutely right and proper that there should be an appeal procedure.

    The appeal procedure in rating involves, first, a proposal by any of the parties, to which objection can be taken, after which an appeal takes place. As the hon. and learned Member very fairly said, there can be, and indeed normally will be under a formula method, no dependence at all upon expert opinion. I shall deal with the objections the hon. and learned Gentleman raised, but if there is no dependence upon expert opinion the retention of an appeal procedure has a number of disadvantages.

    4.15 p.m.

    The hon. and learned Gentleman spoke as if the only disadvantage would be that some ratepayer or local authority would invoke the proposal and appeal procedure only to find at the end a court saying to him, "There is no point here. There is nothing to appeal about". That would be one of the consequences of retaining the appeal procedure in a formula context where there was nothing to appeal about, but there would be other consequences.

    I will enlarge upon the consequence which the hon. and learned Gentleman confesses. It would not be altogether fair to leave the citizen with what appears to him to be an appeal procedure of substance when, in fact, my right hon. Friend knows very well that in most formula methods—indeed, I go so far as to say in all formula methods to which the Clause will apply—the appeal procedure would be merely a facade, a charade, an illusion. The ratepayer who had based expectations upon it, and who might have gone to some considerable expense in relation to it, would rightly feel angry if he was allowed to spend his energy, hopes and money on what my right hon. Friend knew all along could do him no benefit.

    Apart from that, there are a number of other disadvantages. I am only enlarging upon the weakness which the hon. and learned Gentleman confessed. First, to retain the proposal and appeal procedure in a case where it is not needed involves the valuation officer in having to go through a number of formalities to get what is purely a calculated value into the valuation list. If his proposal to change the valuation list as a result of a calculation may be, because of the retention of the appeal procedure, objected to by the ratepayer or the local authority, the valuation officer will have to allow time for an objection to take place. Therefore, the whole procedure, which is meant under the proposals in the Bill—for instance, in that part of it dealing with water—to be smooth and regular, would be interrupted by an unnecessary appeal.

    I make only a small point about this, but there is also the consequential flood of paper which is bound to occur when an appeal procedure is retained when it is not necessary. The House should recognise that there are more consequences than the hon. and learned Gentleman recognised of retaining an appeal procedure when it is not needed.

    The Parliamentary Secretary has said that the appeal procedure is unnecessary where the formula applies. Does he claim that the formula method will, of its very essence, be infallible, and that there can be no injustice? If injustice arises, it is not much use telling me or any other hon. Member that people will still not feel angry about it. There must be some machinery for dealing with it.

    I was coming on to deal with that point next.

    I was about to say that the hon. and learned Gentleman rightly pointed out that there might be a mistake in the arithmetic. I suppose that even Chinese mathematicians make mistakes sometimes. There certainly might be a mistake. The procedure to ensure that the formula allows scope for correcting any arithmetical mistakes will be one of the subjects of consultation required by the Clause, which provides for consultation with ratepayers and local authorities, and will also be a part of the method which will be subject to the Affirmative Resolution of the House. It would be quite right for the House and all the people concerned to ensure that there is a provision for rectifying any arithmetical error. We have in the Bill the example of the application of a formula to the Statutory water undertakers as a category.

    I want, briefly, to draw the attention of hon. Members to Clause 16 (5) and Clause 17 (4), where a specific period of two months is given after the ratepaper has received the details of how the valuation officer arrives at his valuation based upon certified figures and before the next stage of the valuation process. It is a period of two months on every occasion which is given precisely for this informal communication on any errors which might be in the calculation. I think that that should be covered by the consultation procedure.

    A further valid comment was made by the hon. and learned Gentleman that while that was all true of, he says, some, and, I say, all, formulae, a certain formula might be suggested for one class of hereditament where it was not necessary to take away the appeal procedure. I agree that that might be so. In that case, presumably, during the consultation stage, my right hon. Friend would agree that the appeal procedure did not need to be modified. There is nothing here obliging him to modify the appeal procedure, but the fact is that the appeal procedure will normally fall to be modified as the direct result of the formula being consulted about and proposed. Again, I remind the House that the formula method proposed will be subject to the affirmative Resolution procedure.

    I think that that makes the case against accepting the Amendment. There is the other small and technical point that my right hon. Friend also proposes to have power, if necessary, to interfere with the right to withhold rates. That is true. The right to withhold rates is tied up with the right to make a proposal and the power to interfere with the withholding of rates would have validity only if a particular formula had retained something of the proposal procedure, but if the formula had retained part of the proposal procedure it might flow from that that there might be some need in some way to alter the right to withhold rates.

    I hope that I have persuaded the House that the formula procedure in itself will, in all foreseeable cases, make it unnecessary and, indeed, illusory to retain the appeal procedure, but there is nothing mandatory on my right hon. Friend to interfere with the appeal procedure in any particular formula method should that not be necessary. Finally, to retain the appeal procedure when in the vast bulk of, if not in all, cases it will not have any place at all, would, to some extent, be a fraud on the ratepayer.

    I must confess that I am much attracted to the Amendment and I ask my right hon. Friend to think about it again. I see the force, as I think the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) sees the force, of the argument that appeals will be more rare under a formula method procedure, and that if the formula is of a certain character the proceedings of appeal may not be very complicated; but I do not think that it is right that we should give an unfettered power to the Minister to alter the appeal procedure, even though that power is limited to the four categories mentioned in the Amendment.

    Those four categories are largely bodies of a semi-public nature, but not entirely public bodies, and in the case of mines and quarries they may not be public bodies at all. Even to the extent that they are public utility companies still it is desirable that there should be an appeal procedure in every case if a ratepayer wants to have recourse to it.

    It is raising a matter of principle to say that, because it is agreed to have a formula, the decision of the valuation officer must be final. That is what it will come to if the appeal procedure is abolished. I appreciate that there is a discretion, and that there is no need for the appeal procedure to be abolished in all cases. If my right hon. Friend were to think that one of these formulae was of a character where there might be differences of opinion, he need not abolish or even modify the appeal rights.

    My hon. Friend rightly pointed out that the matter would come before the House under the affirmative Resolution procedure. My difficulty about that is that we will have an agreed formula with some industry and it will be embodied in a draft order laid before the House. In the same order will be the provision modifying the right of appeal, so that we will have the one draft order embodying the formula and the modification of the right of appeal.

    The difficulty with which we are always faced with Statutory Instruments, whether there is a negative or affirmative procedure, is that they cannot be amended and have to be accepted or rejected in toto. Furthermore, as a matter of Parliamentary practice we all know from experience that these things come on rather late at night, when not many Members are present and when the Government Whip of the day always prevails—or very often.

    Those are practical considerations, but in dealing with modification of the appeal procedure it is relevant to point out that it will not be an order dealing only with the modification of the appeal procedure, about which there might be a great deal of fuss and which the Minister might be prevailed upon to withdraw, but a whole scheme with an agreed formula. The chances of that kind of order being withdrawn because there is a bit of a fuss in the Chamber are correspondingly greatly reduced.

    If we pass the Clause in its present form, we shall part with control over any modification of the appeal procedure. The Government are saying that in some of the formula cases it shall be open to the Government to decide that an aggrieved ratepayer must accept the decision of the valuation officer. That is a bad principle about which we should hesitate long before passing it into law.

    Of course, there are genuine inconveniences and paperwork and delays and there are appeals which are rather hopeless, but one has to balance one evil against the other and my instinctive approach is to say that, on balance, we should accept the evil of the unnecessary appeals and the delays and the paperwork rather than take this constitutionally doubtful step of putting this power in the Minister's hands.

    I appeal to my right hon. Friend, on this admittedly rather even balance of argument, to reconsider his decision and perhaps to accept the Amendment.

    The Parliamentary Secretary has not learned his lesson. I had to tell him in Committee that this was suave tyranny cloaked as reason, and that is exactly what it is; and let us have no doubt about it.

    First, let us consider the formula method. There is the profits method and the contractor's basis and all sorts of ways which have been suggested for dealing with what boils down to the difficulty about the hypothetical tenant. I told the Minister in Committee that there was a great deal of difficulty about assessing the monkey cage in the zoo on the basis of the hypothetical tenant. There has to be some other basis, as there has for the kind of basis contemplated in the Clause. To say that we are necessarily tied to what is called a formula basis, and that the only remaining question then is a matter of arithmetic, is going far beyond what the Clause provides.

    4.30 p.m.

    It is because the Clause gives the Minister the most comprehensive powers that it is scandalous to try to take away a right of appeal. What I said about arithmetical cases, and information of that sort, was that if there were cases where there was nothing left but an arithmetical question, a person who appealed, or who tried to appeal, would get short shrift. As the Parliamentary Secretary said, this would be encouraging the ratepayer to appeal when there was no protection for him. As the Parliamentary Secretary put it, all this would afford him would be a "mere facade".

    Since when has one party to a litigation, or even the judge, been able to tell someone who desires to put forward a case that he cannot possibly do so because the rights given to him are only a facade? Is it really the intention of the Government to bring forward a scheme of such a character, and that there is no possible question of an appeal on which any ratepayer can possibly succeed? Whatever the answer, that is what hon. Members are being told.

    At the end of the day, what does it all mean? The answer is that the Ministry is certain that it knows best, and that when there is a question about a scheme, agreed between the parties concerned, it is quite confident that no possible ground of appeal can remain, that the ordinary rights of appeal—because that is what they are in these rating cases—can and should be taken away.

    The Minister is not merely telling us that this will be of little use, because he cannot really say that until he knows what the schemes will be. He is not telling us that, in fact, they will only be used on quite minor matters. The Minister is saying that the kind of scheme is bound to be evolved in such a way that there can be no real ground for appeal.

    If that is the limitation which he desires to impose on the schemes, and if that is what the formula basis means, are we to have anything but a formula basis? Instead of taking the wide powers contained in this Clause, the Minister should have set out quite clearly what he means by a formula basis, and that should have been put in such a way as to prevent any other question arising. But a question will arise, not merely on the total assessed to the industry—say, the National Coal Board total—but the division of that total among the various undertakings and local authorities concerned.

    The right hon. Gentleman moved an Amendment a few minutes ago which raised a similar point in connection with even one undertaking—not a whole mass of undertakings under the wing, say, of the Coal Board. The Minister took power to have a different method of valuation in connection with one part of the undertaking; but what might be done in another part of the undertaking? I think that this is inherent in the Clause and that the Minister will agree that that is so.

    In that case, what will these two methods be? Are they both formulae? If one will be a formula, what will be the other? Where is the hypothetical tenant? Is he disappearing down the road of tyranny? We have forgotten about the poor man who is concerned. And the principles of rating—if such things exist—have gone completely by the board. What is being substituted for these principles, not only in this Clause, but in other parts of the Bill?

    All we can have is the Minister's judgment about this, that or the other. It is the Minister's judgment about what forms these schemes that we are being invited to accept as an excuse for abandoning the ordinary rights of the ratepayer. The party opposite should have some regard for the kind of principles which inspired the Franks Committee Report, and the liberty of the subject in these sort of matters. How hon. Gentlemen opposite can support the Minister in the Lobby in this matter I have no idea and, therefore, I hope that we can divide quickly.

    I remind the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) that the weak cases are normally said to be built on water. I think that I can most forcibly and easily reply to the hon. and learned Gentleman by drawing his attention to the water part of this Bill. Here, we have a precise example of what might happen under the formula.

    In the part of the Bill dealing with the formula to be applied to the rating valuations of hereditaments of statutory water undertakings, the appeal procedure is modified, but only for part of the formula. The valuation of statutory water undertakings hereditaments will depend, first, on their output of water—and this is defined in the Bill as the cumulo-value—and, secondly, on the apportionment of that value between the different rating authorities concerned.

    The cumulo-value is arrived at purely by applying mathematics to certified facts, the output of the undertakings, and to that extent—and only to that extent-is the appeal procedure modified. But the apportionment of cumulo-value between the areas does not depend only on mathematical calculations, but also, to some extent, on judgment, and in the apportionment part of the valuation procedure the appeal system is retained.

    This shows that the hon. and learned Gentleman's fears, even under the Bill, can be completely answered. The discretion that is possessed by the Minister in dealing with four classes of undertakings covered now, as amended by Clause 3, is instanced in how he has dealt with statutory water undertakings. My right hon. Friend has taken power to modify only the appeal procedure where the valuation proposed depends entirely on arithmetic.

    Does not the Minister realise, when making reference to water undertakings, that when the last assessment increase took place, tens of thousands of ordinary ratepayers could not understand why their assessments had been increased and why their water rate automatically went up?

    The hon. Member did not have the privilege of being with us for seventeen sittings of the Committee. He is confusing domestic ratepayers' water rates with the rates paid by the water undertakings themselves. They are two different levels of rates.

    I wish now to deal with the arguments adduced by my hon Friend the Member for Buckinghamshire, South (Mr. Ronald Bell).

    Before the Parliamentary Secretary leaves the points that I raised, does he realise that he is really Claiming Ministerial infallibility? The old cloak of oppression is worn, but it is still sufficient to hide the truth.

    The hon. and learned Gentleman, having failed with his main argument, has gone in for invective.

    My hon. Friend the Member for Buckinghamshire, South spoke of ratepayers under a formula method as using an appeal only rarely, or perhaps going to appeal with a hopeless case. That, if I may inform my hon. Friend, is not the point. The point is that if the valuation about which an appeal might be held is based purely on arithmetic, then there is nothing whatever to appeal about—except if the arithmetic is wrong.

    We are dealing with arithmetic based on certified fact; certified output in the case of a water undertaking. As I have instanced to the House in the water undertakings procedure, a period of two months is allowed for the correction of the arithmetic. It is not just that the appeal might be hopeless or rare. It is that there would be nothing to appeal about.

    I am sorry to have taken up so much time of the House, but I thought it only right to answer some of the points that have been raised.

    The hon. Member must ask for the leave of the House if he wishes to speak again.

    I did say "Before my hon. Friend sits down", Mr. Deputy-Speaker.

    If I may have the leave of the House, I should like to say that I appreciate some of the points which my hon. Friend has made, but I do not think that I have got hold of the wrong end of the stick at all. The point is that if the Amendment is not accepted the ratepayer will have no appeal. He may or may not agree that there is nothing but arithmetic at stake, but the fact that there is arithmetic at stake, and that there is an interval in which he can get into informal contact with the valuation officer and say, "The mathematics are bad", is no reason why he should be deprived of an appeal if he wants to change the mathematics.

    I can think of appeals under the private street works codes and under the National Insurance Acts where it is very difficult to see how the appellant can possibly succeed or say anything because there may be a rigid time limit which there is no power to extend. Certainly, that was the case earlier. But still the person had his appeal, because it was thought wrong that he should be bound by the decision of an administrative official and have no right to challenge it in the courts.

    That is the point here. The reference to Ministerial infallibility which the hon. and learned Member for Kettering (Mr. Mitchison) made is quite sound. Suppose that one of these formulae is not of a purely arithmetical kind, but incorporates an element of judgment and it is agreed that the formulae can vary in their nature. Suppose that my right hon. Friend or a successor in office were, in relation to a formula which was not purely arithmetical, to make a substantial change in the appeal rights of the ratepayer. That is quite possible. How are we to deal with that by means of an affirmative Resolution? That is the difficulty. It cannot be amended. Either the agreed formula plus the objectionable part about the appeal procedure goes through, or else it is totally rejected.

    That seems to me to be the serious difficulty about this kind of Statutory Instrument procedure. It is unavoidable in many cases, but do we have to entrust to it questions of the right of appeal of the subject in these matters? Let us leave the right of appeal as it is, and if the formula is basically arithmetical very little recourse will be had to it, but I think there is a constitutional ground of objection to leaving it to the Minister to abrogate or modify the right of appeal.

    It may be that my right hon. Friend does not feel that he can accept this Amendment today. There is another place to which this Bill will go, where the matter could be looked at again. I ask him to regard this as a matter of principle of considerable importance which he should consider again and

    Division No. 166.]


    [4.43 p.m.

    Allason, JamesGoodhart, PhilipMore, Jasper (Ludlow)
    Arbuthnot, JohnGoodhew, VictorMorgan, William
    Atkins, HumphreyGough, FrederickMott-Radclyffe, Sir Charles
    Barlow, Sir JohnGower, RaymondNicholson, Sir Godfrey
    Barter, JohnGrant, Rt. Hon. WilliamNoble, Michael
    Batsford, BrianGrimston, Sir RobertOrr, Capt. L. P. S.
    Bennett, F. M. (Torquay)Grosvenor, Lt.-Col. R. G.Orr-Ewing, C. Ian
    Bingham, R. M.Gurden, HaroldOsborn, John (Hallam)
    Birch, Rt. Hon. NigelHall, John (Wycombe)Page, John (Harrow, West)
    Bishop, F. P.Hamilton, Michael (Wellingborough)Page, Graham (Crosby)
    Black, Sir CyrilHarris, Frederic (Croydon, N.W.)Pannell, Norman (Kirkdale)
    Bossom, CliveHarrison, Brian (Maldon)Partridge, E.
    Bourne-Arton, A.Harvey, John (Walthamstow, E.)Pearson, Frank (Clitheroe)
    Boyd-Carpenter, Rt. Hon. JohnHastings, StephenPeel, John
    Boyle, Sir EdwardHay, JohnPickthorn, Sir Kenneth
    Brewis, JohnHeald, Rt. Hon. Sir LionelPike, Miss Mervyn
    Bromley-Davenport, Lt.-Col. Sir WalterHeath, Rt. Hon. EdwardPitt, Miss Edith
    Brooke, Rt. Hon. HenryHendry, ForbesPott, Percivall
    Brown, Alan (Tottenham)Hiley, JosephPrice, David (Eastleigh)
    Buck, AntonyHill, J. E. B. (S. Norfolk)Prior-Palmer, Brig. Sir Otho
    Bullard, DenysHinchingbrooke, ViscountProudfoot, Wilfred
    Burden, F. A.Holland, PhilipPym, Francis
    Butcher, Sir HerbertHornby, R. P.Quennell, Miss J. M.
    Butler, Rt. Hn. R. A. (Saffron Walden)Hornsby-Smith, Rt. Hon. PatriciaRamsden, James
    Campbell, Sir David (Belfast, S)Hughes-Young, MichaelRawlinson, Peter
    Campbell, Gordon (Moray & Nairn)Hurd, Sir AnthonyRedmayne, Rt. Hon. Martin
    Carr, Compton (Barons Court)Hutchison, Michael ClarkRees, Hugh
    Carr, Robert (Mitcham)Iremonger, T. L.Renton, David
    Cary, Sir RobertIrvine, Bryant Godman (Rye)Ridley, Hon. Nicholas
    Channon, H. P. G.Jackson, JohnRidsdale, Julian
    Chataway, ChristopherJames, DavidRobertson, Sir David
    Chichester-Clark, R.Jenkins, Robert (Dulwich)Ropner Col. Sir Leonard
    Clark, Henry (Antrim, N.)Jennings, J. C.Russell, Ronald
    Clark, William (Nottingham, S.)Johnson, Dr. Donald (Carlisle)Sandys, Rt. Hon. Duncan
    Clarke, Brig. Terence (Portsmth, W.)Johnson Smith, GeoffreyScott-Hopkins, James
    Cleaver, LeonardJoseph, Sir KeithSeymour, Leslie
    Cooke, RobertKerans, Cdr. J. S.Sharples, Richard
    Cordeaux, Lt.-Col. J. K.Kerby, Capt. HenryShaw, M.
    Cordle, JohnKershaw, AnthonySmith, Dudley (Br'ntf'rd & Chiswick)
    Corfield, F. V.Kimball, MarcusSmithers, Peter
    Costain, A. P.Kirk, PeterStanley, Hon. Richard
    Couison, J. M.Langford-Holt, J.Stodart, J. A.
    Craddook, Sir BeresfordLeavey, J. A.Stoddart-Scott, Col. Sir Malcolm
    Crosthwaite-Eyre, Col. O. E.Legge-Bourke, Sir HarryStorey, Sir Samuel
    Cunningham, KnoxLewis, Kenneth (Rutland)Studholme, Sir Henry
    Dalkeith, Earl ofLindsay, MartinSumner, Donald (Orpington)
    Dance, JamesLloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)Taylor, Sir Charles (Eastbourne)
    d'Avigdor-Goldsmid, Sir HenryLongden, GilbertTemple, John M.
    de Ferranti, BasilLoveys, Walter H.Thomas, Leslie (Canterbury)
    Digby, Simon WingfieldLucas-Tooth, Sir HughThornton-Kemsley, Sir Colin
    Doughty, CharlesMcAdden, StephenTiley, Arthur (Bradford, W.)
    Drayson, C. B.McLaren, MartinTilney, John (Wavertree)
    Duncan, Sir JamesMcLaughlin, Mrs. PatriciaTurner, Colin
    Eden, JohnMaclean, Sir Fitzroy (Bute & N. Ayrs.)Turton, Rt. Hon. R. H.
    Elliott, R. W. (Nwcstle-upon-Tyne, N.)McLean, Neil (Inverness)Tweedsmuir, Lady
    Emery, PeterMcMaster, Stanley R.van Straubenzee, W. R.
    Emmet, Hon. Mrs. EvelynMacmillan, Maurice (Halifax)Vosper, Rt. Hon. Dennis
    Errington, Sir EricMacpherson, Niall (Dumfries)Wakefield, Edward (Derbyshire, W.)
    Farey-Jones, F. W.Maddan, MartinWakefield, Sir Wavell (St. M'lebone)
    Farr, JohnMaitland, Sir JohnWalder, David
    Fell, AnthonyMarkham, Major Sir FrankWalker, Peter
    Finlay, GraemeMarlowe, AnthonyWard, Dame Irene
    Fisher, NigelMarshall, DouglasWatts, James
    Fraser, Hn. Hugh (Stafford & Stone)Matthews, Cordon (Meriden)Webster, David
    Freeth, DenzilMawby, RayWells, John (Maidstone)
    Galbraith, Hon. T. G. D.Maxwell-Hyslop, R. J.Whitelaw, William
    Gammans, LadyMaydon, Lt.-Cmdr. S. L. C.Williams, Dudley (Exeter)
    Gardner, EdwardMills, StrattonWilliams, Paul (Sunderland, S.)
    Glyn, Dr. Allan (Clapham)Moore, Sir Thomas (Ayr)Wills, Sir Gerald (Bridgwater)

    about which he might think it appropriate to give some assurance to the House this afternoon.

    Question put, That the words proposed to be left out stand part of the Bill:—

    The House divided: Ayes 213, Noes 154.

    Wilson, Geoffrey (Truro)Wood, Rt. Hon. RichardTELLERS FOR THE AYES:
    Wise, A. R.Woodnutt, MarkColonel J. H. Harrison and
    Wolrige-Gordon PatrickWorsley, MarcusMr. Gibson-Watt.


    Ainsley, WilliamHamilton, William (West Fife)Popplewell, Ernest
    Allaun, Frank (Salford, E.)Hannan, WilliamPrentice, R. E.
    Allen, Scholefield (Crewe)Hart, Mrs. JudithPrice, J. T. (Westhoughton)
    Bacon, Miss AliceHayman, F. H.Probert, Arthur
    Bence, Cyril (Dunbartonshire, E.)Healey, DenisProctor, W. T.
    Benson, Sir GeorgeHerbison, Miss MargaretRankin, John
    Blackburn, F.Hill, J. (Midlothian)Redhead, E. C.
    Boardman, H.Holman, PercyReid, William
    Bowden, Herbert W. (Leics, S. W.)Holt, ArthurRhodes, H.
    Bowen, Roderic (Cardigan)Houghton, DouglasRoberts, Albert (Normanton)
    Brockway, A. FennerHowell, Denis (B'ham, Small Heath)Robertson, John (Paisley)
    Broughton, Dr. A. D. D.Hughes, Cledwyn (Anglesey)Robinson, Kenneth (St. Pancras, N.)
    Brown, Rt. Hon. George (Belper)Hunter, A. E.Ross, William
    Brown, Thomas (Ince)Hynd, John (Attercliffe)Royle, Charles (Salford, West)
    Butler, Herbert (Hackney, C.)Irving, Sydney (Dartford)Shinwell, Rt. Hon. E.
    Callaghan, JamesJeger, GeorgeSilverman, Sydney (Nelson)
    Castle, Mrs. BarbaraJenkins, Roy (Stechford)Skeffington, Arthur
    Chapman, DonaldJones, Dan (Burnley)Slater, Joseph (Sedgefield)
    Collick, PercyJones, J. Idwal (Wrexham)Small, William
    Craddock, George (Bradford, S.)Kelley, RichardSmith, Ellis (Stoke, S)
    Crosland, AnthonyKenyon, CliffordSoskice, Rt. Hon. Sir Frank
    Cullen, Mrs. AliceKey, Rt. Hon. C. W.Spriggs, Leslie
    Darling, GeorgeLee, Frederick (Newton)Steele, Thomas
    Davies, Harold (Leek)Lee, Miss Jennie (Cannock)Stewart, Michael (Fulham)
    Davies, Ifor (Gower)Lever, L. M. (Ardwick)Stonehouse, John
    Deer, GeorgeMcCann, JohnStones, William
    de Freitas, GeoffreyMacColl, JamesStrauss, Rt. Hn. G. R. (Vauxhall)
    Diamond, JohnMcInnes, JamesStross, Dr. Barnett (Stoke-on-Trent, C.)
    Ede, Rt. Hon. C.McKay, John (Wallsend)Swain, Thomas
    Edwards, Rt. Hon. Ness (Caerphilly)McLeavy, FrankSylvester, George
    Edwards, Robert (Bilston)MacMillan, Malcolm (Western Isles)Taylor, Bernard (Mansfield)
    Edwards, Walter (Stepney)Manuel, A. C.Taylor, John (West Lothian)
    Evans, AlbertMarquand, Rt. Hon. H. A.Thompson, Dr. Alan (Dunfermline)
    Fernyhough, E.Marsh, RichardThomson, G. M. (Dundee, E.)
    Finch, HaroldMendelson, J. J.Thornton, Ernest
    Fitch, AlanMillan, BruceThorpe, Jeremy
    Fletcher, EricMitchison, G. R.Tomney, Frank
    Foot, Michael (Ebbw Vale)Monslow, WalterWade, Donald
    Forman, J. C.Morris, JohnWarbey, William
    Fraser, Thomas (Hamilton)Moyle, ArthurWatkins, Tudor
    Gaitskell, Rt. Hon. HughNeal, HaroldWeitzman, David
    Galpern, Sir MyerOliver, G. H.Wells, Percy (Faversham)
    George, Lady Megan Lloyd (Crmrthn)Oram, A. E.Wells, William (Walsall, N.)
    Ginsburg, DavidOswald, ThomasWilkins, W. A.
    Gooch, E. G.Owen, WillWilley, Frederick
    Gordon Walker, Rt. Hon. P. CPannell, Charles (Leeds, West)Williams, Ll. (Abertillery)
    Gourlay, HarryPargiter, G. A.Williams, W. R. (Openshaw)
    Greenwood, AnthonyParker, JohnWillis, E. G. (Edinburgh, E.)
    Griffiths, Rt. Hon. James (Llanelly)Pavitt, LaurenceWoof, Robert
    Griffiths, W. (Exchange)Pearson, Arthur (Pontypridd)Zilliacus, K.
    Grimond, JPeart, Frederick
    Hall, Rt. Hn. Glenvil (Colne Valley)Pentland, NormanTELLERS FOR THE NOES:
    Mr. Rogers and Mr. Lawson.

    Clause 4—(Valuation Of County And Voluntary School Premises)

    I beg to move, in page 3, line 14, to leave out "valuation" and to insert:

    "any valuation lists coming into force after the passing of this Act, being".
    I do not think that this Amendment will give rise to the contention which the last one aroused. It is put down in fulfilment of an undertaking which I gave in Committee.

    This Clause empowers the Minister to make regulations specifying the formula method for valuing county and voluntary schools. Some fear was expressed that, perhaps, the Government had the idea of rushing the formula method into statutory effect forthwith, without giving people time to think about the making of an order.

    I said in Committee that I had no intention whatever of seeking to make an order under Clause 4 during the currency of the present valuation lists. This Amendment, if accepted, will ensure that result and will mean that any order made under Clause 4 cannot take effect before 1st April, 1963.

    I think we can all agree with this Amendment and derive some amusement from the right hon. Gentleman's anxiety to defend formula methods after the previous debate.

    Amendment agreed to.

    Clause 8—(Reduction And Remission Of Rates Payable By Charitable And Other Organisations)

    :I beg to move, in page 5, line 20, after "by" to insert "or by trustees for".

    I think that it would be convenient if the House were to discuss with this Amendment the Government Amendment in page 7, line 10, after "occupied" to insert "(otherwise than as trustee)", and the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison) and his hon. Friend in page 7, line 10, after "authority" to insert:

    "(other than a parish council occupying the hereditament as a trustee and having no beneficial interest therein)"

    As you have said, Mr. Deputy-Speaker, this Amendment is linked with the Government Amendment in page 7, line 10. I trust that the hon. and learned Member for Kettering will grant that it meets the point raised in his Amendment in page 7, line 10.

    We had a short debate in Committee on and Amendment to Clause 8 moved by the hon. and learned Gentleman when he directed attention principally to the case of a village hall which is owned by the parish council as trustee. He pointed, quite rightly, to a later provision of Clause 8, namely, subsection (7), which would prevent the hall, in that case, from having mandatory relief even though it was actually used for charitable purposes. My hon. Friend the Parliamentary Secretary said that he would look into that further. Our researches into the matter have led us to put down Amendments which, as I think the hon. and learned Gentleman will appreciate, have a rather wider effect. I hope that he will agree that it has been done rather neatly by these two Amendments.

    The first Amendment is not intended to extend the scope of mandatory relief. It is intended, rather, to remove doubt about entitlement to relief when a property is occupied by trustees for a charity. In a case like that, perhaps occupation by the trustee constitutes occupation by the charity, but there is at least room for doubt. The Amendment would remove the doubt and the anomaly which might exist if the mandatory rate relief for a charity were found to depend upon the status of the trustees of the charity.

    The Amendment to subsection (7) precisely meets the point made by the hon. and learned Gentleman about the village hall, and it extends the concession to any other type of property which might be occupied by any type of local authority as trustee. I commend the Amendments to the House.

    I agree, for once, with everything that the Minister has said and I have only to thank him for what he has done.

    The difficulty here, in the case of village halls, was that they would almost always be charities, but where they were held in the name of parish councils as trustees—a very common practice—they would be caught by a provision debarring local authorities from what I will call charitable relief, although that was never the intention behind the Bill. Clearly, it was a case where one ought to look at the beneficial interest in the village hall.

    Parish councils throughout the country have been urged to take on this function, and I am sure that they will recognise the approval which we in the House have given to their doing so. They are the best trustees, in most cases, for village halls, as I am sure the right hon. Gentleman will agree.

    Amendment agreed to.

    5.0 p.m.

    I beg to move, in page 6, line 20, to leave out from the beginning to "science" in line 22 and to insert:

    "philanthropic or religious or concerned with education, social welfare".
    This Amendment is tabled to discharge an undertaking which I gave in Committee to my hon. Friend the Member for Haltemprice (Mr. Wall). He referred to the question of the contemplative orders. It is doubtful whether a contemplative order can be held to have as its object the advancement of religion.

    My hon. Friend sought to leave out the words "the advancement of". I pointed out that this would leave the Clause reading in this way:
    "… organisations…whose main objects are … concerned with … religion …"
    Some violently anti-religious bodies might claim to be concerned with religion and, therefore, say that they were within the scope of this discretionary relief. I promised my hon. Friend that I would seek to meet his point.

    The Amendment does not require a local authority to give mandatory relief to a contemplative order, but makes it clear that it will be intra vires for it to do so if it so wishes.

    It never occurred to me in my wildest dreams that I would find myself thanking the Minister on behalf of contemplative orders.

    Amendment agreed to.

    Further Amendment made: In page 7, line 10, after "occupied", insert "(otherwise than as trustee)".—[ Mr. Brooke.]

    I beg to move, in page 7, line 11, at the end to insert:

    "or to any hereditament occupied for the purposes of an approved school (as defined in the Children and Young Persons Act, 1933)"
    This Amendment arises from a constituency point in South Wales. It was raised in a rather different and perhaps not quite suitable form in Committee by the hon. Member for Swansea, West (Mr. Rees).

    The point, shortly, is this. Many approved schools are managed or occupied for rating purposes by local authorities. However, others are managed or occupied by voluntary bodies which play the part which local authorities would play in managing the schools. The substance of the matter is that approved schools, although they are managed and occupied in this way, are really bodies set up for Home Office purposes and, I believe, contributed to and certainly surpervised by the Home Office and are in a substantially different position from that of other schools.

    The point raised by the Amendment is whether, in those circumstances, where the schools do not get the exemption which derives from the peculiar position of local authorities under the Bill, they should also be exempt from rates. As I understand, the Bill would give them exemption as charities to the extent that charities get exemption, namely, a 50 per cent. mandatory relief and an additional discretionary relief in the hands of the local authorities. The question is whether they will get that, or whether there is any real reason why they should not pay full rates.

    I do not propose to develop the matter at length, because I think that it arises particularly on this constituency point. The local authority which seeks to have the approved school rated met with considerable support from both sides in Committee and, no doubt, will have some support in the House.

    Is there any real reason why an approved school of this kind should be exempt from rates? It may be said that we must stick to what is said in the Pritchard Report. I am wondering how far this matter was considered by the Pritchard Committee and how far the Government or those who made this valuable Report have reflected on the point that if this were simply a Home Office institution there seems little doubt that it would pay no rates, but would make a contribution in lieu of rates to the full extent. I should have thought that that followed. Also, whatever is said about an approved school, it perhaps falls into the category of those things which are legal charities, but are not commonly regarded as charities either by their occupants or by other people concerned.

    I rise with considerable trepidation to speak on this very abstruse Bill. I have not had the privilege—I do not know whether the word should be "punishment"—of serving on the Committee of which, it seems, every hon. Member who is present this afternoon was a distinguished member. I am greatly obliged to my hon. and learned Friend the Member for Kettering (Mr. Mitchison) for moving the Amendment and for explaining it to me. I have an interest in it—at least, I believe that I have an interest in it. The Penarth Urban District Council is the body which has been most active in this problem. I ask the Minister in his capacity as Minister for Welsh Affairs, to give a fair wind to the case which Penarth has asked me to put forward It is a simple one.

    The National Children's Home is a charity. The Penarth Headlands Approved School is run by it and it occupies the school for the purpose of a charity. However, I think that it would not be unfair to the National Children's Home if I said that this is merely a shell. The reality is that the school is occupied by the Home Office for the purposes of an approved school. The Home Office provides, not part of the finance, which my hon. and learned Friend said happens in the case of some approved schools, but all the finance for running this school. There is a local body of managers who are appointed by the National Children's Home and who. I know, from personal experience, have rendered considerable help in running the school. I am sure that the Home Office has welcomed the assistance which it has had from them. This is for all practical purposes a Home Office approved school, but for technical purposes it is a charity.

    I have read in great detail what was said in Committee on this and many other subjects, because I thought that it was an interesting Committee. The Minister relies on a technicality. He says, "The Pritchard Report says that we should stand by the technical definition of a charity. If something is technically a charity, then never mind the merits of the case. This is a simple and clear definition and, therefore, let us stick to it and thereby avoid many anomalies". In saying this, the right hon. Gentleman is creating other anomalies. A particular anomaly is that within a stone's throw of the approved school about which I am speaking, and which is to be relieved of 50 per cent. of its rates, there is another approved school run jointly by the Glamorgan County Council and by the Cardiff Borough Council. It is financed jointly by Glamorgan and Cardiff. It is not to be relieved of rates. It is to pay the whole amount.

    I said that I have read with considerable interest what was said in Committee. I should like to quote the Parliamentary Secretary against himself. Speaking on another Clause, he said:
    "It is common ground that no one wishes ratepayers as a whole to be obliged to help bodies that are not in financial need".—[OFFICIAL REPORT, Standing Committee D, 9th February, 1961; c. 360.]
    I know of nothing to suggest that the Home Office is in financial need. If this were the National Children's Home, there might be a case to be made for it, and I would not argue against it, but this is the Home Office disguised as the National Children's Home.

    Therefore, I say to the Minister that although he has not found it possible up to the moment to grant this request because he has relied on the Pritchard Committee, which I am sure was an exceedingly expert Committee—from what I have read of it, and what I understood of what I read, it seems to me that the Committee has gone into a number of matters in great detail—nevertheless, when I looked at it from the simple point of view with which I approached it, which was whether the Committee considered whether a school in this connection should be rated, my conclusion was that it did not consider that matter.

    I hope that the Minister will not rely on the Pritchard Report as covering him, that he will not claim that the Committee did, in fact, consider it. I do not think that any unprejudiced person—and I have tried to be unprejudiced about this matter—could really say that the Pritchard Committee considered the anomaly which would raise between these two types of schools one occupied by the National Children's Home and wholly financed by the Home Office and the second financed and occupied by a local authority.

    I ask the Minister, even at this late stage, to consider whether the Amendment in my name, or a similar Amendment, would not meet with his favour. Perhaps he might give us an indication that Penarth, which feels very strongly upon this matter—so strongly, in fact, that it went to the Court of Appeal on a rating issue recently; admittedly, it was a rather different point, but the same basic issue—should have the relief which it is claiming, namely, be entitled to rate this school and claim the sum that would be involved. I understand that its rateable value is about £498, quite a sizeable sum.

    In Committee, the Minister said that this can be made up by the rate deficiency grant, and it is quite true that Penarth is in receipt of a rate deficiency grant, but the whole object of the Bill is to make local authorities more independent, and, therefore, it is not sufficient to say that Penarth can have it made up by a rate deficiency grant. What the local authority wants to do is to levy rates in the way which they think is proper, and, looking at it as a non-expert, in accordance with the merits of the case, as disclosed by the facts I have given.

    I was not aware that the rateable value of the school in Penarth was as high as the hon. Member for Cardiff, South-East (Mr. Callaghan) indicated, but I think that we must decide these matters on general grounds of principle. I hope that the House will accept from me that in this complex field of rating and valuation it is not possible to iron away every single anomaly or seeming anomaly, and the Pritchard Committee quite definitely recognised that.

    As Minister for Welsh Affairs, I am particularly sorry to be in any way opposing a Welsh local authority. I know how keenly the Penarth Urban District Council has addressed itself to this matter, and how anxious it is that what appears to it to be an anomaly should be removed. In our interesting proceedings in Committee, we had considerable debate on whether we should move the demarcation line a bit one way, to take in certain bodies not charities, or a bit the other way, to leave out certain bodies which were, in fact, charities, but which were, it was argued, not deserving of relief. The Government stood firmly on the line that if we seek to do even better justice by moving the demarcation line this way or that, in order to remove some seeming anomalies, we will, in fact, only create more anomalies, and further requests that the line should be shifted a little more.

    5.15 p.m.

    It is quite true that this school which the hon. Member for Cardiff, South-East has in mind is financed from public funds, apart from parental contributions. His argument is that if that happens, it makes it unreasonable that a local authority should be required to give any rate relief. He prayed in aid of that argument the fact that there was no evidence, and I accept this, that the Pritchard Committee had examined the specific case of the approved schools.

    I do not suppose it did, but it certainly did, in paragraphs 96 to 99 of its Report and elsewhere, address itself to the question whether there should be exceptions to the general rule that that which was a charity should have mandatory 50 per cent. relief, and that which was not a charity should not, though it might, in certain circumstances, get discretionary relief. The Report said, in paragraph 99:
    "We have, therefore, had little difficulty in agreeing that, with regard to charities in general, there should be no exclusion from relief on the ground that the body is national or on the ground that it is in receipt of Exchequer grant or of fees, or because its voluntary income is small."
    The Government must stand on that. It is, I believe, the only firm ground here.

    The position in regard to approved schools, I know, creates an apparent anomaly. There are 117 approved schools in England and Wales, and I think that about three-quarters of them are run by voluntary bodies and about one-quarter by local authorities. The hon. Member for Cardiff, South-East has referred to two neighbouring schools, one The Headlands, run by a voluntary body, and another school run by the local authority.

    I entirely grant that from the point of the Penarth Urban District Council, or any other urban district council or any other local authority at all, which has an approved school run by a voluntary body in its area, it is annoying and vexatious that there should be any mandatory relief. At the same time, I must put it to the House that if we do not stand by this principle that, whether or not an organisation is a charity is the determinent whether or not it shall receive the mandatory relief, we shall find ourselves in deeper and deeper water.

    It is not only a case of the approved schools; other things will come along, and the Pritchard Committee clearly addressed itself to some of them. The Pritchard Committee examined whether there were, so to speak, good charities and bad charities, whether there were bodies which were technically charities, but which were not supported, or substantially supported, by voluntary contributions. Having carried out that examination, the Committee said quite firmly and unanimously that the only test which it could recommend Parliament to apply was the charity test, and on that I must rest my argument.

    I am sorry to disappoint the hon. Member for Cardiff, South-East and the Penarth Urban District Council. I would add that the hon. Gentleman rather scoffed at the idea of the rate deficiency grant, though he had at an earlier stage said that he had some financial interest in this. I can confirm that, unless the position of the Penarth Urban District Council and the County of Glamorgan changes substantially in the next few years, what we do by this Amendment will make no difference at all to the ratepayers of Penarth or Glamorgan, because both of them are in receipt of rate deficiency grants, and I have no reason to suppose that the position will change.

    Consequently, the fact that Penarth has to give, under the Bill, when it becomes an Act, 50 per cent. mandatory relief to an approved school run by a voluntary body, will not, in fact, damnify in any way the ratepayers of Penarth or Glamorgan.

    I quite accept what the hon. Member says, that it is a financial satisfaction but not a full satisfaction. Nevertheless, it is some satisfaction. I do not think that there is a sufficiently strong case here, in trying to remove one apparent anomaly, for us to be led as a Parliament off the main road. I am sure that the main road is clear and plain: what is a charity should have a mandatory relief, whether it is a good charity, a bad charity or any other sort of charity, and what is not a charity should not.

    Unless it happens to be a university. The right hon. Gentleman, after stating that he had found a principle and wished to cling to it, omitted to mention that the Government themselves had departed from it in one respect which is much more important financially and, I should have thought, just as important socially as the question of this particular school and others like it.

    I sympathise with the Minister. This is a matter of principle. If anybody is so fortunate as to find a matter of principle in questions of rating, the tendency to cling to it is almost irresistible. There is another principle, too. It is in a Latin proverb, which I put as follows: that he who adheres to the letter adheres to the surface. That is really what is happening in connection with the Pritchard Report.

    The Pritchard Committee did not consider approved schools, as the passage to which the right hon. Gentleman referred shows. What the Committee was talking about was charities that got Exchequer assistance. This is a case, not of assistance, but of the whole thing, rates and all, being financed by the Home Office. That is not a case which the Committee considered. If there is a principle to be found in the Pritchard Report—and to some extent there is—the question which we have to consider is whether this is a principle which must be applied to a case which the Committee never considered. We do not know what the Committee's answer would have been.

    Sir Frederick Pritchard is a hard-headed and sensible person. He might have looked at the reality of the matter. If one looks at the reality of the matter, it is quite simple. The Home Office finances this school. The institution that is in possession of it for rating purposes is, as regards finance and the payment of rates, a mere shadow.

    If the question was who really pays the rates and who ought to pay them, the answer in this particular case must be the Home Office. As my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) pointed out, how can we distinguish between this case if we are dealing with the substance of the matter and the case of the neighbouring school, where a couple of local authorities are in technical possession for rating purposes and actually managing the place so far as the Home Office does not do it? These are really Home Office institutions.

    The Pritchard Committee recognised that there were some cases of legal charities which an ordinary man would not call a charity at all. If I may mention one other instance, Eton College, Windsor, Buckinghamshire, is technically a charity, but no ordinary man would regard it as such. An approved school is technically a charity, otherwise the question in the Amendment would not arise. No ordinary man would regard it as anything but what it is, an institution on the borderline between the provisions of our criminal law or quasi criminal law and our educational system.

    To deal with that, when the Pritchard Committee obviously had not considered the case, simply on the technical ground that it is a legal charity, and to result in dealing quite differently with two neighbouring schools that are doing exactly the same job, is totally absurd.

    Division No. 167.]


    [5.26 p.m.

    Ainsley, WilliamHayman, F. H.Popplewell, Ernest
    Allen, Scholefield (Crewe)Healey, DenisPrentice, R. E.
    Bacon, Mitt AliceHenderson, Rt. Hn. Arthur (Rwly Regis)Price, J. T. (Westhoughton)
    Bence, Cyril (Dunbartonshire, E.)Herbison, Miss MargaretProbert, Arthur
    Benton, Sir GeorgeHill, J. (Midlothian)Proctor, W. T.
    Blackburn, F.Holman, PercyRankin, John
    Boardman, H.Holt, ArthurRedhead, E. C.
    Bowden, Herbert W. (Leics, S.W.)Houghton, DouglasReid, William
    Bowen, Roderic (Cardigan)Howell, Denis (B'ham, Small Heath)Rhodes, H.
    Boyden, JamesHughes, Cledwyn (Anglesey)Roberts, Albert (Normanton)
    Brockway, A. FennerHughes, Hector (Aberdeen, N.)Robertson, J. (Paisley)
    Broughton, Dr. A. D. D.Hunter, A. E.Robinson, Kenneth (St. Pancras, N.)
    Brown, Rt. Hon. George (Belper)Hynd, John (Attercliffe)Rots, William
    Brown, Thomas (Ince)Irving, Sydney (Dartford)Royle, Charles (Salford, West)
    Butler, Herbert (Hackney, C.)Jay, Rt. Hon. DouglasShinwell, Rt. Hon. E.
    Callaghan, JamesJeger, GeorgeSilverman, Sydney (Nelson)
    Chapman, DonaldJones, Dan (Burnley)Skeffington, Arthur
    Collick, PercyJones, J. Idwal (Wrexham)Slater, Joseph (Sedgefield)
    Craddock, George (Bradford, S.)Kelley, RichardSmall, William
    Crosland, AnthonyKenyon, CliffordSmith, Ellis (Stoke, S.)
    Cullen, Mrs. AliceKey, Rt. Hon. C. W.Sorensen, R. W.
    Darling, GeorgeLee, Frederick (Newton)Soskice, Rt. Hon. Sir Frank
    Davies, Harold (Leek)Lee, Miss Jennie (Cannock)Steele, Thomas
    Davies, Ifor (Gower)Lever, L. M. (Ardwick)Stewart, Michael (Fulham)
    Deer, GeorgeMacColl, JamesStones, William
    de Freitas, GeoffreyMcInnes, JamesStrauss, Rt. Hn. G. R. (Vauxhall)
    Diamond, JohnMcKay, John (Wallsend)Stross, Dr. Barnett (Stoke-on-Trent, C.)
    Ede, Rt. Hon. C.Mackie, JohnSylvester, George
    Edelman, MauriceMcLeavy, FrankTaylor, Bernard (Mansfield)
    Edwards, Rt. Hon. Nest. (Caerphilly)MacMillan, Malcolm (Western Isles)Taylor, John (West Lothian)
    Edwards, Robert (Bilston)Manuel, A. C.Thompson, Dr. Alan (Dunfermline)
    Edwards, Walter (Stepney)Marquand, Rt. Hon. H. A.Thomson, G. M. (Dundee, E.)
    Evans, AlbertMarsh, RichardThornton, Ernest
    Fernyhough, E.Mellish, R.J.Thorpe, Jeremy
    Finch, HaroldMendelson, J. J.Tomney, Frank
    Fitch, AlanMillan, BruceWade, Donald
    Foot, Michael (Ebbw Vale)Mitchison, G. R.Warbey, William
    Forman, J. C.Monslow, WalterWatkins, Tudor
    Fraser, Thomas (Hamilton)Morris, JohnWeitzman, David
    Gaitskell, Rt. Hon. HughMoyle, ArthurWells, Percy (Faversham)
    George, Lady Megan Lloyd (Crmrthn)Neal, HaroldWilkins, W. A.
    Ginsburg, DavidNoel-Baker, Rt. Hn. Philip (Derby, S.)Willey, Frederick
    Gordon walker, Rt. Hon. P. C.Oliver, G. H.Williams, LI. (Abertillery)
    Gourlay, HarryOram, A. E.Williams, W. R. (Openshaw)
    Greenwood, AnthonyOswald, ThomasWillis, E. G. (Edinburgh, E.)
    Griffiths, Rt. Hon. James (Llanelly)Owen, WillWilson, Rt. Hon. Harold (Huyton)
    Griffiths, W. (Exchange)Panned, Charles (Leeds, W.)Woof, Robert
    Grimond, J.Pargiter, G. A.Zilliacus, K.
    Hall, Rt. Hn. Glenvil (Colne Valley)Parker, John
    Hamilton, William (West Fife)Pavitt, LaurenceTELLERS FOR THE AYES:
    Hannan, WilliamPeart, FrederickMr. Rogers and Mr. Lawson.
    Hart, Mrs. JudithPentland, Norman


    Allason, JamesBidgood, John C.Bromley-Davenport, Lt.-Col. Sir Walter
    Arbuthnot, JohnBingham, R. M.Brooke, Rt. Hon. Henry
    Atkins, HumphreyBirch, Rt. Hon. NigelBrown, Alan (Tottenham)
    Barber, AnthonyBishop, F. P.Buck, Antonys
    Barlow, Sir JohnBlack, Sir CyrilBullard, Denys
    Barter, JohnBossom, CliveBurden, F. A.
    Batsford, BrianBourne-Arton, A.Butcher, Sir Herbert
    Baxter, Sir Beverley (Southgate)Boyd-Carpenter, Rt. Hon. JohnButler, Rt. Hn. R. A. (Saffron Walden)
    Bell, RonaldBoyle, Sir EdwardCampbell, Sir David (Belfast, S.)
    Bennett, F. M. (Torquay)Brewis, JohnCampbell, Gordon (Moray & Nairn)

    I must ask the Government to pull themselves together—I agree that not much money is concerned—have a real shakedown of their intellectual notions and accept for once that, as a matter of common sense, they have no alternative except to accept the Amendment.

    Question put, That those words be there inserted in the Bill:—

    The House divided: Ayes 152, Noes 222.

    Carr, Compton (Barons Court)Hinchingbrooke, ViscountPowell, Rt. Hon. J. Enoch
    Carr, Robert (Mitcham)Holland, PhilipPrice, David (Eastleigh)
    Cary, Sir RobertHopkins, AlanPrior-Palmer, Brig. Sir Otho
    Channon, H. P. G.Hornby, R. P.Proudfoot, Wilfred
    Chataway, ChristopherHornsby-Smith, Rt. Hon. PatriciaPym, Francis
    Clark, Henry (Antrim, N.)Hughes-Young, MichaelQuennell, Miss J. M.
    Clark, William (Nottingham, S.)Hutchison, Michael ClarkRamsden, James
    Clarke, Brig. Terence (Portsmth, W.)Iremonger, T. L.Rawlinson, Peter
    Cleaver, LeonardIrvine, Bryant Godman (Rye)Redmayne, Rt. Hon. Martin
    Cooke, RobertJackson, JohnRees, Hugh
    Cordeaux, Lt.-Col. J. K.James, DavidRenton, David
    Cordle, JohnJenkins, Robert (Dulwich)Ridley, Hon. Nicholas
    Corfield, F. V.Jennings, J. C.Ridsdale, Julian
    Costain, A. P.Johnson, Dr. Donald (Carlisle)Robinson, Sir Roland (Blackpool, S.)
    Coulson, J. M.Johnson Smith, GeoffreyRopner, Col. Sir Leonard
    Craddock, Sir BeresfordJoseph, Sir KeithRussell, Ronald
    Critchley, JulianKerans, Cdr. J. S.Sandys, Rt. Hon. Duncan
    Crosthwaite-Eyre, Col. O. E.Kerby, Capt. HenryScott-Hopkins, James
    Cunningham, KnoxKershaw, AnthonySeymour, Leslie
    Dalkeith, Earl ofKimball, MarcusSharpies, Richard
    Dance, JamesKirk, PeterShaw, M.
    d'Avigdor-Goldsmid, Sir HenryLangford-Holt, J.Smith, Dudley (Br'ntf'rd & Chiswick)
    de Ferranti, BasilLegge-Bourke, Sir HarrySmithers, Peter
    Digby, Simon WingfieldLewis, Kenneth (Rutland)Smyth, Brig. Sir John (Norwood)
    Doughty, CharlesLindsay, MartinStanley, Hon. Richard
    Drayson, G. B.Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)Stodart, J. A.
    Duncan, Sir JamesLongden, GilbertStoddart-Scott, Col. Sir Malcolm
    Eden, JohnLoveys, Walter H.Storey, Sir Samuel
    Elliott, R.W. (Nwcstle-upon-Tyne, N.)Lucas-Tooth, Sir HughStudholme, Sir Henry
    Emery, PeterMcAdden, StephenSumner, Donald (Orpington)
    Emmet, Hon. Mrs. EvelynMcLaren, MartinTaylor, Sir Charles (Eastbourne)
    Errington, Sir EricMcLaughlin, Mrs. PatriciaTemple, John M.
    Farey-Jones, F. W.McLean, Neil (Inverness)Thomas, Leslie (Canterbury)
    Farr, JohnMcMaster, Stanley R.Thomas, Peter (Conway)
    Fell, AnthonyMacmillan, Rt. Hn. Harold (Bromley)Thompson, Kenneth (Walton)
    Finlay, GraemeMacmillan, Maurice (Halifax)Thornton, Kemsley, Sir Colin
    Fisher, NigelMaddan, MartinTiley, Arthur (Bradford, W.)
    Fletcher-Cooke, CharlesMaitland, Sir JohnTilney, John (Wavertree)
    Fraser, Hn. Hugh (Stafford & Stone)Markham, Major Sir FrankTurner, Colin
    Freeth, DenzilMarlowe, AnthonyTurton, Rt. Hon. R. H.
    Galbraith, Hon. T. G. D.Marshall, DouglasTweedsmuir, Lady
    Gammans, LadyMatthews, Gordon (Meriden)van Straubenzee, W. R.
    Gardner, EdwardMaudling, Rt. Hon. ReginaldVosper, Rt. Hon. Dennis
    Goodhart, PhilipMawby, RayWakefield, Edward (Derbyshire, W.)
    Goodhew, VictorMaxwell-Hyslop, R. J.Wakefield, Sir Wavell (St. M'lebone)
    Cough, FrederickMills, StrattonWalder, David
    Cower, RaymondMore, Jasper (Ludlow)Walker, Peter
    Grimston, Sir RobertMorgan, WilliamWard, Dame Irene
    Grosvenor, Lt.-Col. R. G.Mott-Radclyffe, Sir CharlesWatkinson, Rt. Hon. Harold
    Gurden, HaroldNicholson, Sir GodfreyWatts, James
    Hall, John (Wycombe)Noble, MichaelWebster, David
    Hamilton, Michael (Wellingborough)Oakshott, Sir HendrieWells, John (Maidstone)
    Harris, Frederic (Croydon, N.W.)Orr, Capt. L. P. S.Whitelaw, William
    Harrison, Brian (Maldon)Osborn, John (Hallam)Williams, Dudley (Exeter)
    Harrison, Col. J, H. (Eye)Page, John (Harrow, West)Williams, Paul (Sunderland, S.)
    Harvey, John (Walthamstow, E.)Page, Graham (Crosby)Wills, Sir Gerald (Bridgwater)
    Hastings, StephenPanned, Norman (Kirkdale)Wilson, Geoffrey (Truro)
    Hay, JohnPartridge, E.Wise, A. R.
    Heald, Rt. Hon. Sir LionelPearson, Frank (Clitheroe)Wolrige-Gordon, Patrick
    Heath, Rt. Hon. EdwardPeel, JohnWood, Rt. Hon. Richard
    Henderson, John (Cathcart)Percival, IanWoodnutt, Mark
    Henderson-Stewart, Sir JamesPickthorn, Sir KennethWorsley, Marcus
    Hendry, ForbesPike, Miss Mervyn
    Hiley, JosephPitt, Miss EdithTELLERS FOR THE NOES:
    Hill, J. E. B. (S. Norfolk)Pott, PercivallMr. Gordon-Watt and
    Mr. Chichester-Clark.

    5.30 p.m.

    I beg to move, in page 7, line 18, at the end to insert:

    "and a hereditament an interest in which belongs to a charity or any ecclesiastical corporation and in which (in right of that interest)—
  • (a) the persons from time to time holding any full-time office as clergyman or minister of any religious denomination, or
  • (b) any particular person holding such an office,
  • have or has a residence from which to perform the duties of the office, or in which (in right of the said interest) accommodation is being held available to provide such a residence for such a person, shall be treated for the purposes of this section as occupied by a charity and wholly or mainly used for charitable purposes, whether apart from this provision it would be so treated or not".
    I hope that this Amendment will commend itself universally to the House. We had some debate in Committee on the application of Clause 8 in relation to the residences of ministers of religion, and the hon. Member for Huddersfield, West (Mr. Wade) moved a new Clause on which we debated the matter. The hon. Gentleman pointed out, quite rightly, that it was generally accepted that because of the different forms of tenure in the case of the different churches and denominations there would certainly arise doubts and that there might well arise anomalies.

    I said on behalf of the Government that I should like further time to examine the matter. It was a difficult one. I did not want to enlarge the definition of "charity", but, at the same time, I felt quite certain that Parliament would not wish to pass into law a Measure that treated the official residences of ministers of religion in a different way for rating purposes simply because of differences in forms of tenure which for this purpose were not really relevant at all.

    The Government have studied the matter further and have come to the conclusion that there is a great deal to be said for amending the Bill so as to secure as great a measure as possible both of certainty and of clarity in the matter and also to remove any fear that different churches or denominations might be treated differently merely because of their constitutional arrangements.

    The effect of this Amendment is, as I say, to bring within the scope of mandatory rate relief the official residences of ministers of religion. That does not include a minister's holiday cottage, or even a holiday cottage presented to him by a grateful church, but it covers the official residence from which he carries on his pastoral or other ministerial work.

    If the House wishes I will explain the Amendment in full detail, but perhaps the House will be content if I say that it has been studied and approved by the Churches Main Committee which, as the House knows, is representative of all the churches in this country. It has also been seen by the local authority associations since it has been on the Order Paper, and I have received no adverse comment at all from them. In these circumstances, I hope that the House will feel that we shall be doing right if we approve the Amendment.

    I welcome the Amendment. I think that it will rectify an anomaly arising out of the uncertainty as to whether dwelling-houses occupied by clergy and ministers of religion should be regarded as being occupied by a charity within the meaning of the Bill. As the Minister has said, the Amendment has the support of the Churches Main Committee which represents the denominations.

    I do not quarrel with the difference in wording between the Minister's Amendment and that which was tabled in my name, supported by the right hon. Member for South Shields (Mr. Ede). At the conclusion of a debate in Committee on an Amendment which I then moved on the same subject, the Minister promised to look into the matter and to consider what could be done. This is one of those rare and gratifying occasions when a Minister's consideration leads to a satisfactory conclusion. I think that the Government Amendment carries out the intention of my Amendment, and I am content with the outcome.

    I do not think it is necessary to discuss the Amendment at great length. I dealt with the matter at length in Committee and the Committee listened very patiently. I emphasise that the purpose of the Amendment is not to create special privileges but rather to remove anomalies and to ensure that all denominations are treated alike. If there were no Amendment, some manses might have qualified and some might not have done so. It would have been difficult to say how the Clause would have been interpreted and it might well have had to be settled by the courts.

    In Committee I ventured the opinion that, as the Clause was originally worded, the presbyteries of the Roman Catholic Church, the houses of deans and canons, and probably Methodist manses, would qualify for relief, whereas the majority of parsonages and most of the other Free Church manses would not, and obviously that would have been an unsatisfactory state of affairs. I do not think that will arise any longer. It is clear that all these dwelling houses will be put on the same footing, that is to say where they are occupied by clergymen or ministers of religion whose office is full-time.

    The only point of detail on which I would ask a question of the Minister refers to subsection (1, a) of the Amendment which contains the words
    "… holding any full-time office as clergyman or minister of any religious denomination …"
    whilst paragraph (b) refers to
    "any particular person holding such an office."
    I presume that "such an office" implies a full-time office.

    I hope that there is no misunderstanding about that. It seems reasonable that it should apply to full-time and not part-time office, and I assumed that that was the intention.

    As to the main issue, one of the legal difficulties that arose was due to the fact that an incumbent of a parsonage in the Church of England was a "corporation sole" and it was doubtful whether a corporation sole could be regarded as a charity. This difficulty is not limited to the parsonages of the Church of England. Free Churches were in considerable doubt about their position, and I am sure that they will be thankful that this problem has been clarified. It is also fitting that in the Finance Bill a somewhat similar problem and anomaly is being rectified in connection with the liability of manses to Schedule A tax. I would prefer to see Schedule A abolished altogether, but we cannot discuss that now.

    The effect of the Amendment will be that parsonages, manses—and I include presbyteries of the Roman Catholic Church—will be automatically entitled to 50 per cent. relief on the rates, but that will not affect the power of local authorities to grant more relief if they so wish. It so happens that Huddersfield is one of the boroughs which grants 100 per cent. relief, and recently the council has decided to continue the granting of 100 per cent. That will be in no way affected by the Amendment, which I think carries out the intention and spirit of the Pritchard Report. I am glad to have the opportunity of supporting it.

    5.45 p.m.

    My name appeared with that of the hon. Member for Wimbledon (Sir C. Black) and that of the hon. Member for Huddersfield, West (Mr. Wade) on the Amendment which this Amendment replaces. On behalf of my denomination, I should like to thank the Minister for having placed these words on the Order Paper. I bow not to the Minister's superior wisdom but to the superior wisdom of the official draftsman, because I am certain that we are more likely to get what we want from his words than from any effort of our own.

    The Amendment removes anomalies within denominations, particularly those like my own which have a mixed origin, partly Presbyterian and partly Congregational. Putting everyone on the same basis will avoid a good deal of difficulty in the placing of ministers and in other matters in dealing with the financing of some of the really free churches.

    I am grateful for what the hon. Member for Huddersfield, West (Mr. Wade) and the right hon. Member for South Shields (Mr. Ede) have said. I assure the hon. Member for Huddersfield, West that the words "such an office" in paragraph (b) refer back to the reference to full-time office in paragraph (a). Though I did not bring out the point, because this is the last of a series of Amendments on the Clause, I can also confirm that while requiring a local authority to give 50 per cent. rate relief the Clause leaves the authority entirely free if it so wishes to remit all or part of the remaining 50 per cent.

    I agree with the hon. Member for Huddersfield, West that this is not to be regarded as an act of generosity by Parliament but as an act of justice. It is just that all these official residences should be treated alike. That is within the spirit of the Bill and the spirit of Parliament in dealing with all matters that affect different churches and denominations.

    Amendment agreed to.

    Clause 11—(Abolition Of Rate Books)

    I beg to move, in page 9, line 29, to leave out from first "of" to "any" and to insert:

    "the rates payable or paid in respect of the hereditament for".
    Under Clause 11, with the disappearance of rate books as such, there disappears also the ratepayer's right to inspect the rate book, the Clause replaces that right to some extent so as to serve the ratepayer in his legitimate needs. Subsection (4) entitles the ratepayer to a statement of the rates payable and paid for the hereditament in respect of which he is or has been liable.

    The hon. Member for Southampton, Itchen (Dr. King), who was Chairman of the Standing Committee, drew my right hon. Friend's attention to a difficulty here. A number of local authorites have made the same representations. They made it plain to my right hon. Friend that it would be very difficult for them in many cases to identify for a past period as long as nine years the particular person who had made payments in respect of a particular hereditament. This would be especially difficult if cash payments had been made in one or more of those nine years.

    The Amendment seeks to overcome the difficulty by relating the certificate which the ratepayer can demand no longer to the rates payable and paid by the individual but to the rates payable and paid in respect of the hereditament with which the ratepayer making the request is concerned.

    I hope that that will seem a constructive way of dealing with the difficulties that would otherwise have been felt by many local authorities.

    Amendment agreed to.

    Further Amendment made: In page 9, line 30, leave out "he" and insert "the person".—[ Sir K. Joseph.]

    Clause 14—(Refund Of Overpayments)

    I beg to move, in page 11, line 23, after "rates", to insert:

    ", and not recoverable apart from this section,".
    In Clause 13 it is laid down that a ratepayer who appeals against his assessment must pay half the amount of the demand pending determination of his appeal. Clause 14, from its form, deals with the refunding of overpayment of rates, but repayment of the part payment made by an appellant would, it seems, be within the discretion of the local authority, even if the ratepayer had succeeded in his appeal. I believe there are grounds for thinking that the matter is sufficiently covered by other provisions outside the Bill, but my Amendment would finally dispose of any doubt.

    My right hon. Friend is advised that the fears of my hon. Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) have no substance and that the Clause could not be interpreted in the way he fears. Nevertheless, since the modification he wishes to make could do no harm, my right hon. Friend suggests that, fox the removal of any doubt which there might be in the minds of laymen, the Amendment should be accepted.

    Amendment agreed to.

    Second Schedule—(Transitional Provisions As To Valuation Of Statutory Water Undertakings)

    I beg to move, in page 23, line 30, to leave out "June, nineteen hundred and sixty-one" and to insert:

    "the month beginning with the passing of this Act".
    In order to get ready for applying the water formulae to the first new list in 1963, paragraph 6 of the Second Schedule requires statutory water undertakers to certify to the Commissioners of Inland Revenue the amount of water supplied in the years 1956 to 1960, and requires the certificate to be in the hands of the Commissioners by the end of June, 1961.

    This seems, as we are now progressing, to be a little too early. It would leave the undertakers perhaps with no time but, at best, with less than a month in which to provide the certificate. The Amendment proposes that the date by which the certificate should be in the hands of the Commissioners should be one month beginning with the passing of this Act. My right hon. Friend is advised that that month would give ample time to the undertakers. The information already exists and it only needs to be collected and certified before being passed on.

    Clearly, the Government have under-estimated the Opposition, but I would not wish to visit that on the statutory undertakers—unless they would undertake to bury the Government.

    Amendment agreed to.

    Fourth Schedule—(Minor And Consequential Amendments)

    I beg to move, in page 30, line 6, at beginning to insert:

    1. Subsection (1) of section twenty-one of the Act of 1925 (which relates to the contents of valuation lists) shall have effect, in relation to valuation lists coming into force after the passing of this Act, as if after the words "the value thereof" there were inserted the words "and such particulars with respect to totals of values, both in respect of the whole rating area and in respect of any parish or other area which is liable to be charged separately in respect of any expenses".
    This is a technical matter. It does not enlarge the Minister's powers of prescription, as it might appear to do. As far as I am aware, it is entirely non contentious. At present, prescription is by rules made by the Minister under Section 58 (1) of the 1925 Act. In addition, there are powers of prescription under Section 1 (2) of the 1955 Act.

    As the powers will have to be used afresh, it seems a pity to do so by two separate sets of regulations under two separate Acts. The purpose of the Amendment is purely and simply to specify all the particulars which are to be included in the list in one enactment, and enable them to be prescribed by one instrument. These will be the rules made under Section 58 of the 1925 Act.

    Amendment agreed to.

    I beg to move, in page 30, line 6, at beginning to insert:

    (1) A building shall be treated as an agricultural building for the purposes of the Rating and Valuation (Apportionment) Act, 1928, if it is used solely in connection with agricultural operations carried on on agricultural land and is occupied either—
  • (a) by the occupiers of all that land, or
  • (b) by individuals who are appointed by the said occupiers for the time being to manage the use of the building and of whom each is an occupier of some of the land or a member of the Board of directors or other governing body of such an occupier, being a body corporate:
  • Provided that this sub-paragraph shall not have effect if the number of the occupiers of all the said land exceeds twenty-four, two or more persons occupying jointly being counted as one (but as a separate person from any of them who are occupying any of the land severally).
    (2) Land occupied with a building as respects which the foregoing sub-paragraph has effect and used solely in connection with the use of the building shall be treated as agricultural land for the purposes of the said Act of 1928.
    This deals with a matter which has attracted some attention and which gave rise to a leading article in The Times. I do not think I need go over it in detail. A case came into the courts where a co-operative syndicate was formed by a number of farmers occupying different farms. In addition, there was in the syndicate the managing director of a limited company which owned and occupied a farm. The object of it all was to purchase and work a grain dryer to dry grain of the various members of the syndicate.

    It was found in the courts that the grain dryer did not comply with the definition of an agricultural building. I am not raising, in moving this Amendment, the question of whether agricultural buildings should or should not be rateable, but it seems anomalous that we should leave the law unchanged, because it would mean that a farmer who provided himself with a grain dryer on his own farm to dry only his own grain would pay no rates on it, whereas two farmers who individually could not justify the acquisition of a grain dryer but, quite sensibly, got together to provide one jointly, would not be able to get exemption from rates on the dryer.

    This Amendment is designed to enable a limited group of farmers, joining together in what would be a perfectly sensible agricultural undertaking, to be able to claim exemption from rates, as any individual farmer could with a similar building. In case anyone thinks that this is extending exemptions, I must point out that my right hon. Friend the Minister of Agriculture knows of only three buildings that could take advantage of this Amendment. There may, of course, be others, but it is in line with modern farming that farmers should get together to provide themselves with equipment of this kind, and I am sure that the House would not wish the law to operate arbitrarily against them.

    6.0 p.m.

    Hon. Members on this side welcome the Amendment, which follows the lines of a new Clause, which naturally was not selected, because the Amendment does the same thing. That new Clause, in the name of my hon. Friend the Member for Lincoln (Mr. de Freitas) and two of my other hon. Friends, refers specifically to the agricultural co-operative machinery syndicates. That is the kind of case which the right hon. Gentleman mentioned and which he and his right hon. Friend the Minister of Agriculture had in mind.

    I feel that hon. Members on both sides of the House, and certainly my hon. Friends, wish to give all possible help and encouragement to ventures of this kind. Farmers, even to my knowledge, co-operate a great deal in lending one another machinery and things of that sort. A syndicate for the purpose is merely a development of that, and clearly syndicates ought not to be penalised. The short question is whether the land of any particular farmer would be concerned. Short of legislative provision, there is great difficulty in contending otherwise on appeal from a decision. My hon. Friends who put down the new Clause and I are very glad that the Minister has so fully appreciated the point and has done something which, though it might not at present be extensive in its operation, certainly presents possibilities to the farming community of which we on no account wish to deprive them.

    Amendment agreed to.

    I beg to move, in page 32, line 18, to leave out paragraph 8 and to insert:

    8.—(1) The purposes for which the Minister may make regulations under section seventy-one of the Act of 1948 shall include the making of provision whereby hereditaments which are within the same curtilage, or are contiguous and in the same occupation, but (in either case) not in one local valuation panel area, shall be treated for the purposes of the provisions of that Act relating to appeals to local valuation courts as both or all being within such one of the local valuation panel areas in question as may be determined by or under the regulations.
    (2) In this paragraph "local valuation panel area" means an area from which a local valuation panel is constituted by a scheme under section forty-five of the Act of 1948.
    (3) Regulations made by virtue of this paragraph may revoke so much of schemes under the said section forty-five as makes provision for treating as in the same area hereditaments which are within the same curtilage or contiguous and in the same occupation.
    I understand that this Amendment meets with the Minister's approval. The fact that it is starred does not altogether mean that it is a new Amendment, for I have withdrawn one Amendment and replaced it with this, which is more likely to meet with the Government's favour and is more suitable for its purpose.

    The purpose is to do a little tidying up. There are certain difficulties where hereditaments are within the area of more than one valuation panel, within the same curtilage or with contiguous curtilages, and are in the same occupation. This has caused difficulty under the present machinery.

    Under the Amendment the Minister can designate one panel to deal with the whole property when it has to be dealt with in a certain way, thus avoiding the present difficulties. I need say no more about it. It looks rather more complicated than it is.

    My right hon. Friend is grateful to the hon. Member for Southall (Mr. Pargiter) for this Amendment which, as he said, has been put down in more acceptable terms. It would achieve the same purpose as paragraph 8 of the Schedule but by a simpler method, and my right hon. Friend advises its acceptance.

    Amendment agreed to.

    Fifth Schedule—(Enactments Repealed)

    9 & 10 Geo. 6. c. lii.The Birmingham Corporation Act, 1946.Section fifty-four.

    This is a consequential Amendment upon our acceptance of a new Clause entitled "Valuation of hereditaments which are partly occupied".

    Amendment agreed to.

    Further Amendment made: In page 34, line 47, column 3, at beginning insert:

    "In section one, in subsection (2), the words from 'and (in addition' to the end".—[Sir K. Joseph.]

    6.4 p.m.

    I beg to move, That the Bill be now read the Third time.

    The Bill and its purposes have been detailed fully on Second Reading and in no fewer than seventeen sittings of the Committee upstairs. Its main purpose is to ease the return in 1963, provided for in previous legislation, of the domestic ratepayer to a rating assessment on the basis of full current values. But for the Bill the impact of this return after twenty-four years on pre-war values might be unduly heavy on the householder.

    The Bill provides two compensating features. First, industry will join the other main classes of property in full rating on current values and in 1963 will lose its 50 per cent. derating. If it were not for this provision, industry, which depends so much on local services, would find in 1963 that its share of the total rate burden had probably been halved at the same time as the householders' share, but for the Bill, might have been substantially increased.

    The second relief to ease the return to current values for the householder is that my right hon. Friend has power by order, after consultation and on the affirmative Resolution of both Houses, to apply some measure of derating to houses for the period 1963–68. As a result of these two provisions the return to full current value for householders should be much eased.

    The Bill also establishes, on the advice of the Pritchard Committee, a uniform basis for the treatment of charities by-applying to all a 50 per cent. mandatory relief, while giving local authorities discretion to grant further remission. Discretionary power is also given to local authorities to relieve other bodies which are on the fringes of charity.

    Because the present method of valuation by reference to profits or accounts often leads to litigation or uncertainty and sometimes to major anomalies, the Bill provides that my right hon. Friend shall have power for limited classes of hereditaments to prescribe by order a method of valuation by formula to simplify the assessment of those classes of hereditament. A whole part of the Bill is devoted to placing statutory water undertakings on just such a formula basis.

    The Bill makes a number of useful improvements in our system of rating and valuation. In Committee, a number of valuable Amendments were made, and the discussions there were helpful and constructive. My right hon. Friend has already paid tribute to the contributions made from both sides of the House and, in particular, to the constructive assiduity of the hon. and learned Member for Kettering (Mr. Mitchison).

    In Committee, twelve Amendments were made, six of which were supported by both sides of the Committee and five of which were based on Opposition suggestions. These were mainly drafting improvements. Several of them related to the relatively esoteric provision of the formula method for statutory water undertakings. During Report a further number of useful Amendments have been made. Apart from minor procedural matters, these have been almost equally divided between suggestions from both sides of the House. The improvements on Report have included the restriction in the scope of the order-making power in Clause 3 and the provision for a review of any order made; safeguarding the relief of village halls occupied by local authorities as trustees: and discretionary relief for the contemplative orders. There was also the widely welcomed Amendment to secure rating relief for the official residences of all ministers of religion. The Bill has been fully discussed and useful improvements have been made.

    6.8 p.m.

    May I thank the hon. Gentleman for telling me that I was helpful and constructive? I like being constructive. It depends a good deal on what one constructs. I am not quite certain how far I like being helpful over the Bill.

    Assiduous, was it? That is better. However that may be, it is perfectly true that from both sides of the Committee we had a great deal of criticism, applied in an assiduous and constructive spirit. I am sure that it has improved the Bill.

    I want to say, not for the first time, and, therefore, not in detail, a few words about the main provisions at the beginning of the Bill. On this side of the House we welcome without any reservation at all something for which we have long pressed, that is, that industry should pay its full share of rates, and that it should not get off with 25 per cent. or 50 per cent. as it has in the past.

    We have, however, something to say about Clause 2. Clause 2 gives the right hon. Gentleman the very widest discretionary powers, and they are asked by him, as he tells us, because otherwise the ratepayers would receive, as he said. "a very severe jolt." Of course, that is the present state of the law, and the Government's contribution towards it at present is simply Clause 2 of the Bill. There is no doubt about the severity of the jolt. I can agree on that with the Minister.

    All I am uncertain about, and he may be uncertain about it, too, is how far domestic ratepayers at present realise the severity of the change which, in any circumstances, is likely to fall upon them. There is no doubt, of course, that any Government of any complexion would have had to do something about it, and Clause 2 represents this Government's contribution, and at present their only contribution, to resolving the peculiar difficulties of the domestic ratepayer.

    When I say their only contribution I agree at once that the assessment of industry to the full and the lapse, under legislation, of the 20 per cent. concession which was made to offices and shops some years ago, do, of course, have an effect on the position, but it remains the case, even if these two are taken into account, that there is no doubt whatever that the domestic ratepayer would have had, and, as we believe, still will have, to bear the greater part of the burden imposed by the impending changes.

    It seems to me to be arguing by the book to say that the Bill does not put the changes on. Of course, it does not put the changes on; they are there; but it does attempt to relieve them, and I feel bound to say, once again, that Clause 2 is not, in our view, either a suitable or a sufficient provision for the purpose.

    I cannot go back and say what we said on Second Reading, that much wider measures would have been suitable, and a wider inquiry, but I can say that what we heard from my hon. Friend the Member for Westhoughton (Mr. J. T. Price), in general, criticism of the rating system today certainly appeals to a very great many people, and that it is not thought to be a complete or sufficient answer nowadays to say, "Well, if you cannot have rates, what else do you suggest?" Nor do we believe the rating system to be as rigid as some of the provisions of this Bill would lead us to suppose.

    We conclude, as we said in detail on Second Reading and in the Standing Committee, that the domestic ratepayer, even with the application of the cushion, will stand to bear the greatest part of the change, and that will be a very nasty shock to him; because I believe that a very large number of domestic ratepayers do not fully realise that they are not at present rated on present day values but on pre-war values under a very curious hypothesis which does not appear in the Bill and which, therefore, I cannot go into any further. But, be that as it may, there is no doubt that a very large increase in the share of the rate burden will fall upon them.

    What is the right hon. Gentleman doing about it in the Bill? He takes power to limit to an absolutely indefinite extent the burden which, by reason of these changes, will fall upon the domestic ratepayer. It rests entirely with him whether he is to relieve the domestic ratepayer of 5 per cent. of his liability for rates or of 95 per cent. It is true that that is only for the first period, but that is really the main point of the Bill and that with which it is principally concerned.

    I must repeat to the right hon. Gentleman that the only mistake I made, when saying that the effect of the Bill was to make him "I am the rates", was to attribute that remark to Napoleon instead of to Louis XIV. I would not have thought the Tory Party, in rating matters, has got quite so far as Napoleon yet. That is really the burden of Clause 2 of the Bill. The right hon. Gentleman will know perfectly well that it is only his political past to which I am referring when I say that we on this side of the House and, I think, the average ratepayer, are not content to leave the question of the amount of relief so completely to the right hon. Gentleman himself as that Clause does.

    We feel, in short, that he and the policy of his Government are very largely responsible for something else; that is, that apart from the provisions in the Bill, and apart from the effect, in other respects, of existing legislation, there has been a very marked increase in the value of land, and perhaps particularly of domestic property. No doubt, that applies to offices, too. How far it goes beyond that I need not speculate today, but there is no doubt about it that all classes of property, and again, perhaps particularly, domestic property, have suffered a considerable change from the rise in values which has occurred in recent years.

    That has occurred perhaps—again, I cannot go into that at this stage of the Bill—as a result of questions about betterment and compensation, as a result, at any rate, of the Government's failure or unwillingness to stop it. Therefore, both as regards the course of Clause 2 and its actual content we are not at all satisfied with what is proposed. It is far too wide a discretion, and it arises in circumstances which we think should have been dealt with in other ways which I cannot go into any further now.

    As to the rest of the Bill, there is much in it besides Clause I, to which I have referred, which we certainly welcome, and, therefore, on Second Reading we did not divide against the Bill as a whole. We divided on a reasoned Amendment directed to the point which I have just been stressing. Nobody, I think, would do anything other than welcome the number of quite minor improvements, the removal of out of date provisions and things of that sort, which are all to the good.

    Broadly speaking, the other large question on the Bill arises in connection with Clause 8, and the following Clause to a minor extent. Clause 8, in effect, carries into legislative effect the provisions of the Pritchard Committee. My feeling is that during the course of the Bill we have broadly, on both sides, accepted the lines of the Pritchard Committee, but we have from time to time found, as I think we did today, cases which the Pritchard Committee had probably overlooked and which seemed to indicate possible exceptions.

    The Government themselves, in the Bill, made one important exception, in the case of universities, and I see the reason for it. If the Pritchard Report had been applied literally—and it did consider the question—to universities the effect would have been unfair to some local authorities as against others, and we have made no serious criticism of that, but it is not open in these circumstances for the Government to say, "In all questions we must be bound by the Pritchard Committee".

    I shall not go back on the comparatively small matter we raised today, but I do want to mention the broad question, because it is a broad social question of considerable importance, whether because large public schools are technically legal charities they should now be exempt as to 50 per cent. as a matter of right from rates and get such further relief as the local authorities may allow. Some of my hon. Friends may wish to say something on the same point. It arises directly out of the provisions of the Bill. It is their application, and we say that the result of it is that bodies which are, no doubt, legal charities, but which no ordinary man would regard as charities, the large public schools in this country and other similar institutions get an exemption from rates which, morally and socially, they ought not to have.

    I hope that the House will remember—I am sure it will—that when we are dealing with this it is not really a question between an abstract, rather harsh local authority, on the one hand, and some individual ratepayers, such as in this case a public school, on the other. It is a question between that individual ratepayer and the body of other ratepayers in the area.

    Eton College is to get an exemption from rates which it has not had before. The people who will suffer will be the other ratepayers in that comparatively small district. I will not trespass on what my hon. Friend the Member for Eton and Slough (Mr. Brockway) may wish to say on this matter. I simply repeat, on the broad aspect of the thing, that if that is what the Pritchard Report recommends then it is up to us as a House, as representatives of the people, to say that on that point the Pritchard Report is too narrow, too technical, and does not give sufficient effect to the broad social and moral considerations which ought to govern us in dealing with a matter of this sort. After all, rating is a technical business, but there are times when common sense and social justice should override too close an adherence to a narrow rule, and this I believe is an instance of that sort of thing.

    I end by saying a word or two about the valuation of hereditaments of statutory water undertakings. Let me reassure the right hon. Gentleman that I have no intention of going into that very technical matter in any detail, but I have two comments to make. First, it discloses arrangements in respect of water undertakings which are in some ways analogous to, and in others different from, assessments on similar undertakings dealing with gas and electricity. Those latter are statutory provisions.

    When one looks at these provisions—and points were raised about them in the course of our discussions on the Bill—it seems clear that the other arrangements need looking into, and I repeat the welcome I gave to the right hon. Gentleman's undertaking the other day to look into these other provisions. In the same way, I am glad that he has been able to accept what amounts to a statutory undertaking to look into these provisions in their actual effect.

    I am beginning to be rather frightened of formulae. They seem to indicate the Government's desire to take refuge in arithmetic and avoid common sense. I am, therefore, the gladder that if formulæ emerge, as they do here, the Government will look at their practical effect.

    I should like now in all sincerity, and I am sure that I speak for all hon. Members, to say how much we appreciate and value the way in which the Bill has been drawn as a matter of technical draftsmanship. It really has been an astonishingly difficult job, if one knows the way in which it must have presented itself. We are very well served in these matters by skilful public servants, and I think that occasionally we may be allowed to say that we appreciate how difficult their task is and how extremely well they perform it, not only in drafting the original Bill but in catching up points as they come along.

    The right hon. Gentleman and the hon. Gentleman the Parliamentary Secretary will not misunderstand me. I am thanking them, and, through them, the public servants in question, for what they have done, but I must not be taken to agree in any way with the result or with the policy of the Government any further than I have already shown. We agree with much of the Bill. We did not oppose it on Second Reading, and we shall not divide against it on Third Reading.

    6.24 p.m.

    Representing as I do a constituency which stands on the borders of both Kent and London, I have two complaints against this Measure as it stands. First, I am sorry that my hon. Friend was not able to accept the Amendment to Clause 2 (2), which would have given the Minster power to vary the percentage of derating between districts within an administrative county.

    The demand for houses in Beckenham and in the neighbouring boroughs on the outskirts of London is immense, and it is likely that the rateable value of these houses will increase by a far greater proportion than elsewhere in Kent, particularly in the rural areas. The percentage of derating which would be fair to people in other parts of Kent would probably not be fair to my constituents, and the percentage of derating which would be fair to my constituents would probably be over-generous to those living elsewhere in the county.

    I am sorry that my right hon. Friend rejected this ability——

    Order. I did not stop the hon. Member before. He may discuss the effect of the provisions in the Bill, but not Amendments which were not incorporated in the Bill.

    I was leaving that point anyhow, Mr. Speaker, but I thank you for your guidance.

    The Bill will cause considerable concern among a number of sporting organisations in my constituency. I have again read the arguments put forward by the Parliamentary Secretary for rejecting certain Amendments. My hon. Friend's arguments seem entirely convincing, but the Bill as it stands will cause considerable concern among members of small sporting clubs which provide a valuable service to the community.

    I am sorry that the financial relations between the Government and local authorities are at the moment so blunt or so blocked that the Government appear incapable of giving practical support to this desirable objective.

    Although the sporting clubs and organisations within my constituency which are supported by large industrial firms and insurance companies will no doubt be; capable of bearing their full burden of the rates, I believe that the Bill as it stands will cause considerable concern among members of the smaller organisations.

    On those two grounds I criticise the Bill which in other respects, will, I think, be of great service to the community.

    6.30 p.m.

    I entirely agree with what has been said about the effect of the Bill on athletic and sporting clubs. That, however, will not be the main consideration that I shall put before the House. I shall be very critical of Clause 8. I therefore begin by saying that I am very appreciative of Clause 1. The ending of derating for industrial establishments will be of tremendous value to my constituency of Slough. It was from that constituency that some of the earliest demands came for the rerating of industry. It has a great trading estate, and the rates of the town have suffered heavily because of the relief given to that estate. I sincerely thank the right hon. Gentleman for including this proposal in the Bill.

    I now turn to Clause 8. This will give a relief of 50 per cent. to charitable organisations. I do not think that any of us would disagree that relief should be given to institutions which are genuine charities and which represents efforts by sections of the community to assist those whose position is particularly hard. But the Clause goes very much further than merely assisting such institutions. Indeed, the relief of 50 per cent. will be given to some of our wealthiest institutions, whose main purpose is to assist not those who are poorest but those who are most wealthy.

    The Clause is likely to affect 99 schools which are registered as public schools. I admit that many of those schools may deserve relief. On the other hand, many do not. My constituency contains the largest and—with apologies to Harrovians and Wykehamists—most famous public school in this country, namely, Eton College. I want to explain quite clearly that what I am going to say this evening is not an attack upon the college. It is not a criticism of the headmaster, for whom I have the highest admiration, or of the provost, the deputy-provost or the members of the school teaching staff, with many of whom I have the most friendly relations, and it is certainly not a criticism of the boys, with whom I get on very well indeed. I am making this speech because I believe that this issue involves principles of equity, justice and public good.

    Under the Bill, Eton College will obtain relief of over £7,000 a year in respect of the rates which it pays. In Committee the Joint Parliamentary Secretary used these words:
    "The fact is that no school which is not a charity will qualify for the 50 per cent. mandatory relief."—[OFFICIAL REPORT, Standing Committee D, 16th February, 1961; c. 489.]
    I therefore ask to what extent Eton College is a charity. Historically, the answer is in the affirmative. It was originally endowed through alien priories, which were suppressed by King Henry VI as far back as 1414. I have looked up the original documents and have been very interested to find that King Henry's statutes provided for the establishment of a college consisting of a provost, 10 fellows, 70 scholars, a schoolmaster, an usher, 10 clerks, 16 choristers, and 13 poor, infirm men. This was the original object of the college. The 70 scholars were not to be fee-paying pupils; they were to be given free education.

    But in the Statute establishing the college King Henry also provided for the education of boys other than scholars, that is, fee-paying pupils who were
    "the sons of noble and powerful persons".
    From the very beginning, therefore, the college had a double rôle. From the first
    "the sons of noble and powerful persons"
    were known as Oppidans, and they are still known by that name at the college.

    As time has gone on the charitable rôle of the college has become smaller and smaller and its service to the Oppidans greater and greater. Until 1923 the 70 scholars had free education, and the cost of their maintenance was entirely met from the college endowments. Now the scholars are charged, under a means test. The minimum grant of £245 a year may seem generous, but it still leaves £250 of those fees to be paid. Thus, even the first charitable attribute of the college—free places for 70 scholars—does not now exist.

    I want to complete the picture of the charitable nature of Eton College by mentioning other charitable features which still exist. Twenty-six choristers are still given free education, and the college maintains an alms house in Eton, which is the inheritance of the "13 poor, infirm men" for whom King Henry VI established the endowment. I was interested to find that the college revenues still endow the vicarage of the parish of Eton. But these are the only attributes of the college which can be regarded as of a charitable nature.

    There is no doubt that Eton College is maintained mainly by income from endowments or out of fees paid in respect of the pupils. In contrast to the 70 assisted scholars there are 1,100 boys at the college whose parents pay on their behalf an annual fee of £495 each year. That means that a total of £544,000 each year is received in fees by the college. In addition, there are many extra charges—for example, the entrance fee of £21 and the games subscription of £14. I have been a little astonished to find that the parents of the boys are even charged for the paper which they use when they are sitting for their examinations. Supplementing this vast income that is obtained from the fees which are charged for the boys, there are very heavy endowments. The figure is secret and the last that I have been able to obtain is dated sixty years ago.

    Sixty years ago, the endowments yielded £20,000 a year for the upkeep of Eton College. The college now owns large properties at Hampstead, as the right hon. Gentleman well knows, throughout London and the Home Counties, and the right hon. Gentleman has already contributed greatly to the advance and value of its endowments by his Rating Act, which has probably sent up the value of this property by at least double. If there was an annual income from endowment of £20,000 a year sixty years ago, I should very much doubt whether it is less than four figures at present.

    When one sometimes argues about Eton College, it is said that the costs of maintaining the college are very high. I admit that its wonderful old buildings must be very costly to maintain, and none of us would desire to see them falling by the way. There are 90 masters. I have been a little surprised to find that although the housemasters at Eton College are well paid, many of the assistant masters—I do not mean the usual term of "assistant", but those who are not house masters—are receiving not more than £600 a year, and have to find their own accommodation. The education at Eton College is probably as high as in any educational institution in this country, but for the masters it is not so much a matter of pay as of prestige. Very many of these junior masters have to work during the vacations in order to be able to meet their need. I think that I have made it clear to the House that Eton College cannot possibly be described as a charity, as all of us understand the word.

    I want now to turn to the effect of the rebate of half the rates which is proposed in Clause 8. Eton College already receives 20 per cent. relief of the rates under the 1957 Act. That relief is on the four main groups of college assessments, on the boat housing, on the sanatorium and on the kennels. Now, under the proposed new relief, it will benefit to the extent of another £7,000 a year.

    Eton College is in the area of the Eton Urban District Council. It is one of the largest public schools in one of the smallest urban districts. Nearly one-third of the total rates of the Eton Urban District Council come from the rating of the college. I wish to admit this at once. I have been in correspondence with the right hon. Gentleman on this matter. He has written to me stating that Eton Urban District Council can be assured that this proposed relief for charities should not have any damaging effect upon its finances because the loss of rates on the college will be wholly made good to the council by the increase of its rate deficiency grant from the Exchequer.

    That information has been received with some relief by the Eton Urban District Council, but I should like to have from the right hon. Gentleman when he replies a further assurance upon this matter. What he has said so definitely in his letter to me was contradictory to what the Joint Parliamentary Secretary said in Committee.

    On 16th February, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) asked whether the rate deficiency grant as a whole would be more or less. The Joint Parliamentary Secretary said, in reply:
    "… the rate deficiency grant cannot be calculated and defined in this way. It depends entirely on the dispersal about the mean of all the current rate resources at the time the rate deficiency grant is calculated. Not even the Chinese mathematicians who have been invented by the hon. and learned Gentleman's fertile brain could do that."—[OFFICIAL REPORT, Standing Committee D, 16th February, 1961; c. 470.]
    Yet it would appear from the very definite assurance given by the right hon. Gentleman in his letter to me that his fertile brain is capable of it, and I very much welcome that fact. It would seem from the statement made by the Joint Parliamentary Secretary that whereas the Minister says that any loss of rates through the mandatory relief will be fully made up by the rate deficiency grant, the Joint Parliamentary Secretary says that he is not able to anticipate what, if any, rate deficiency grant will be payable under an entirely new dispersal of rate resources. I should be grateful if the right hon. Gentleman would repeat in the House the assurance that he has given me in correspondence upon this matter.

    Even if the Chancellor of the Exchequer is to make up to the Eton Urban District Council the loss which it suffered by the relief of 50 per cent. on Eton College rates, the taxpayer will still have to pay it. It will still have to come from public funds and I ask why the taxpayers should subsidise this wealthy college of the wealthy which prides itself upon its independence from our national system of education. That is not the end of the matter.

    It is not only Eton Urban District Council which will suffer a loss of £7,000. I have had a letter from the Clerk of the Buckinghamshire County Council who says that the loss to it would amount to £7,700 a year. Why should the county rates bear this amount? Why should there be relief for Eton College of 50 per cent. of its rates when the Buckinghamshire County Council cannot afford to replace the condemned schools in some of the Buckinghamshire villages? It is not only a matter of Eton College. Stowe School is also in the area of the Buckinghamshire County Council, and I am informed by the Clerk that the relief to Stowe School under the Bill will amount to £2,250 a year.

    I speak with great friendliness to the Principal and to the masters and the boys at Eton College. No one can know Eton College without having some love for it, its history, its buildings, its chapel, its playing fields. It has nurtured many great men in the story of Britain. I hope that whatever changes are made in our educational system Eton College, democratised and open to all, with entry by ability rather than by wealth, will remain. But I submit that a public school with the largest number of pupils paying the highest fees in the country and which has almost certainly the richest endowments in our land, has no case for relief of half its rate contribution to the welfare of the community of Eton and of Buckinghamshire, of which it is part.

    6.52 p.m.

    I wish to direct my remarks to one part of the Bill to which I referred during the Second Reading debate and also during the Committee stage discussions, that is, the question of the rateability of plant and machinery in the industrial hereditaments. The purpose of this Bill, we have been told—and I think it quite right—is to bring the rating of all classes of hereditaments on to a uniform basis of valuation. But I suggest that the terms in which the Bill is drawn at present concerning industrial property do not achieve that end.

    Quite rightly, industry has been brought on to a basis of full assessment. It has lost what was previously called its derating provision. But at the same time this Bill, by Clause 5, seeks to amend the law regarding the rateability of plant within an industrial hereditament. The provisions of the Bill have been drawn following consideration of the report of the Ritson Committee on the Rating of Plant and Machinery. The Minister set up this Committee some time ago to advise and report on the rateability of plant. But its terms of reference were very limited and it was not given an opportunity to advise on any substantial change in the law since the introduction of the 1925 Act.

    Over the years more and more plant has tended to become rateable in an industrial hereditament, and, naturally, it has set up anxieties in the minds of industrialists about how far their liability will spread. This Bill has done little to ease that anxiety. I do not believe it right that a man should be rated on his tools of trade. It matters little how big or how small they are. They may consist of a small hammer or a large steam hammer, or something of that kind. There are respectable precedents for saying that. The Ritson Committee quoted the then Minister of Health at the time of the passing of 1925 Act as follows:
    "What is the principle of rating? It is that it is the occupier who is rated, and the basis on which he is rated is the rent which a hypothetical tenant would pay for a particular hereditament. The rent he would pay for the factory is not affected, or is only affected to a limited extent, by the machinery he is going to put into it. It is precisely similar to the case of a man who rents an office. If a man rents an office it is open to him to put in what furniture he likes. He can put in cheap furniture or fancy furniture. He can furnish his office, if he chooses, as if it were part of a Royal Palace, but he is not for that reason to be rated any higher."
    I suggest that the other respectable precedent for agreeing with my view is contained in a further extract from the Ritson Committee Report, on page 14, where two members of the Committee, Mr. Dulake and Mr. Pickworth, expressed the view that they wished.
    "to place on record their view that the proposal to exempt (like tools of trade) all process plant and machinery has great merit."
    They were debarred from commenting on that any further because of the Committee's terms of reference.

    I suggest that if we are to continue logically along the line we are now taking it is possible that in the foreseeable future some of the big computer plants in commercial offices would become rateable when that is far from the intention of this Bill. In endeavouring to create a uniform basis of valuation for all, we should consider what plant enhances the letting value of the factory as a building and not what enhances that value as an industrial unit. In that way a lot of the plant and machinery referred to in the Third Schedule to the 1925 Act would be still covered. But a large amount of the process plant referred to in paragraph 4 of that Schedule would be exempted. In that way we should relieve industry of the burden of being rated on plant and machinery which is in the nature of tools of trade or, for want of a better term, process plant.

    In 1925, the Minister did not envisage a wide extension of the rateability of plant as has happened over the years. I fully appreciate that in Clause 5 of this Bill powers have been taken for the Minister, by Order, to define what plant shall be rateable and what plant shall not. But that does not take out processed plant as such. It is too late at this stage to propose Amendments to the Bill, and, unfortunately, I was not successful in getting one of my Amendments selected. But I urge my right hon. Friend to comment on this matter and, if possible, to give us some encouragement by saying that at a date in the not too distant future he may consider extending the terms of reference of the Ritson Committee and calling upon that Committee to investigate the merits of the argument that process plant should not be rateable.

    6.58 p.m.

    I shall detain the House only for a few moments, but the subject matter of my speech is none the less important. The decision to bring the rating of industry to an end was, I think, a right decision, and long overdue. I am doubtful about its original value, but, at any rate, the time had certainly come when the derating of industry should end.

    I am conscious of the effect of the Bill and the coming into effect of the new valuation lists for the occupiers of dwelling-houses and flats. Both the Minister and his Parliamentary Secretary have expressed the intention of the Government to ease the burden falling on householders. We do not know how much this derating of households will be. We do not know how much householders' rates will go up. All we know is that it is to be carried out by ministerial order and that it will be for a period of five years.

    It seems clear that at the end of that five years, whatever the extent of derating there may be, there will be a very steep increase in the rate burden falling upon housholders. We have given very little thought to that. As I understand it, the attitude of the Minister has been:
    "Sufficient unto the day is the evil thereof",
    but the time will come when the order is about to run out. I anticipate great pressure being brought upon the Government of the day to introduce another order for a further period. It would be felt very unpopular to allow the order to lapse and householders to bear the full burden under our present rating system. There will, therefore, be pressure for another order.

    If that comes to pass, we shall have established the principle of varying the rate burden by ministerial order. I mentioned this in discussion of an Amendment on Report last week. I am still of the opinion that we may be establishing a precedent which we shall regret. It seems that the only way to overcome this is to make use of this period of five years to review the whole of our rating system. I do not think that anyone can say that it is free from anomalies.

    On Third Reading, obviously it would be out of order for me to advocate a particular reform. All I say is that the period of five years while this order is in operation will provide an opportunity for some radical reform of our rating system, I hope that that opportunity will not be missed.

    7.2 p.m.

    I imagine that the Minister will sigh with relief tonight when he sees the Bill pass on its way to another place. It has occupied the attention of the House for some months, both here and in Standing Committee. However much we may have disagreed from our various viewpoints about the merits of the Bill, I can testify to the fact that it has had the most thorough scrutiny in Committee. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) has already discharged his usual courteous acknowledgement of the personal behaviour of the Minister and the patience and courtesy that he has shown throughout discussions on the Bill. I can endorse that quite sincerely.

    I am not very good at bestowing bouquets, because I have quite different feelings on the merits of the Bill, but I think that it is something in the traditions of this House of which we can be proud that we can dispute about the merits of legislation without in any way departing from our personal regard for the way in which legislation is dealt with. I have also said, and I hope that I may keep in order by saying it again briefly, that I regard the whole British rating system as completely ludicrous.

    I know that this is not the Bill by which to alter that, but I honestly hold the opinion that the steps which have now been taken, from certain logical premises which can be argued about, to vary the valuation basis and to vary the system in some respects, will only create worse anomalies and inequities than those we have had unchanged for generations. I condemn the rating system on the broad, general ground that it bears no relationship to ability to pay of the individual ratepayer and also places a severe penalty on occupiers of houses and dwellings in respect of every improvement they make in their homes by attracting an increased valuation to them.

    These are not matters to discuss tonight, but I think that they ought to be referred to in this House. Every continental observer of our rating system to whom I have spoken has regarded the British rating system as something quite "out of this world". It is quite unique among systems of local taxation. I shall welcome the day when we can get a breath of fresh wind playing on these questions instead of occupying ourselves with all the tortuous and technical problems which are involved.

    On the main purpose of the Bill, I acknowledge that it is high time that we applied 100 per cent. rating to industry. That is the declared purpose of the Bill, to bring in the remaining 50 per cent. of which industry has been relieved for many years and that the full quota of 100 per cent. of valuation should apply to industry. I am in some difficulty, however, about the effect and I am not sure whether I agree with my hon. and learned Friend on this. He referred to the beneficial effect of attracting a bigger rate contribution from industry.

    I find this dilemma. A few days ago, when we were discussing these matters on another occasion, a number of hon. Members opposite, including the hon. Member for Sunderland, South (Mr. P. Williams) and the hon. Lady the Member for Tynemouth (Dame Irene Ward), were speaking—as they were in honour bound to speak—for their constituencies. They were pleading that the Minister should give special relief to shipbuilding areas. That plea was pursued with a great deal of vigour and logic. They said that it is no use placing an additional burden, under the provisions of this Bill, on an industry which is already suffering a very serious depression.

    The Parliamentary Secretary replied to the case which had been presented for a special concession to shipbuilding areas. You must forgive me, Mr. Speaker, for not quoting his actual words, because I have not a copy of the OFFICIAL REPORT by me. The gist of what he said was that it was quite wrong to assume that industry would necessarily pay more rates. I do not think the hon. Gentleman will deny that that was what he said. I am beginning to wonder whether this provision in the Bill which requires industry to pay 100 per cent. in rates will work out, so that industry is called upon to pay more rates. There is to be a redistribution of the balance of rates payable by householders and shopkeepers and the balance payable by industry.

    Some time ago, when the Bill was published, The Times made an examination of the incongruities involved and suggested that the probable effect of the Bill would be to increase the valuation basis for dwelling-houses, owner-occupied or rented, by at least 300 per cent. That has never been denied. I agree that it is a speculation. It is a speculation founded on the known values of property in the market and based on rack rent and constantly rising value of land and property.

    If it is 300 per cent. I can well understand that the right hon. Gentleman, for purely political and not for economic, reasons will come forward with some kind of political cushion to abate the incidence of the hardship of rating with such a spectacular rise. That would be done to get him nicely over the next General Election, in 1964. This probably will not be discovered by the ordinary ratepayers until 1963. When the new lists are published ratepayers will go to the town hall or the council office and "play alleluia" about them.

    If these lists were allowed to stand as expected, they would mean a tremendous increase in the rate payable by householders, including owner-occupiers who are occupying houses on which already many of them are committed up to the hilt in paying mortgage interests at a very high rate. They will have a steadily increasing liability from 1963 to 1968. No Government, whatever its colour, dare allow such a spectacular increase as these valuations lists would create for certain types of householder.

    Following the line of argument which I am trying to put forward, I hope temperately, The Times came to the conclusion that even under present arrangements the householder is contributing about 47½ per cent. of the total rate fund of the country. Householders pay about 47 to 48 per cent. of the total product raised by local rates. It might be thought that once industry is rerated, industry will pay a larger proportion as its contribution, but nothing of the kind will happen, because if the assessments of domestic property are raised from the 1939 basis to the 1963 basis a very heavy increased liability will fall on the domestic householder.

    The hon. Member is saying that houses have been derated up to now even more than has industry, which means that all this nonsense about industry not paying its fair share has been beside the point.

    I am obliged for that intervention. The hon. Member is a lawyer and he knows how to present a lawyer's argument. I say that in no derogatory sense. But if anyone suggests that, even with these remissions, the householder has had a better deal out of the national "kitty" than has industry, I cannot agree with him.

    The hon. Member no doubt often acts professionally for industrial concerns, and I hope that he continues to do so. He knows that with certain exceptions the great industrial corporations, with 50 per cent. remission of rates, have never before had it so good as they have for all these years, when they have been making enormous profits. This is a situation which even hon. Members opposite can tolerate no longer. In many debates they have agreed that the time has long past for these remissions to be given.

    I suggest that the mere inclusion in the Bill of some form of partial remission of rates for householders, which will last five years, is significant. What shall we have at the end of five years? May I refer the right hon. Gentleman and his hon. Friends to what took place on the last revaluation in 1954? We had a partial revaluation, and for convenience the 1939 valuations of houses were substituted for those of earlier years which had previously formed the basis. The immediate impact, in 1954, of the 1939 valuations of these houses was to double them.

    Thank you. It was 1956. We adopted 1939 valuation for houses in 1956 and the immediate result was to double the assessments of those houses. [HON. MEMBERS: "No."] Where I live, on the fringes of Manchester, and in most large towns the general effect was roughly to double the valuation of domestic houses.

    When I raised this question in Committee, some weeks ago, the right hon. Gentleman said, "Suppose the valuation doubles. There is no need for the local urban or borough council to maintain the same rate poundage. It can bring the rate poundage down." Of course it can. If the rateable value is increased, then, looking at it mathematically, we can reduce the rate poundage, but that does not happen at all. In 1956, in the borough in which I live, south of the City of Manchester and in Cheshire, the valuations having been increasing by 100 per cent., the rate poundage was reduced by 1s. 6d. on the then existing rates. But in three years it was back to where it had been previously.

    We are all men of the world and have a practical knowledge of these things, and we know that if the money is there to spend, somebody will spend it. There are many worthy projects which are waiting in a queue of priorities. It is not only a question of what the local council does with the rates raised; it is also a question of what the Government do over the head of the council which involves the council in expenditure. For example—and I say this in no critical spirit of what was done for the police—what happens if the Government are to set up Commissions such as the Danckwerts Commission and others, which impose very heavy liabilities on local authorities which they can only pass on to the ratepayers? I suggest that the new valuations will add heavy new liabilities to the ordinary householders. I hope that this will sink into the public consciousness in due course, and that the public will realise that this suggestion that there will be a relief of rates for a short time is merely a political device.

    In 1963, I expect the valuations of houses to increase by 200 per cent. at least and probably by 300 per cent. There are other factors. We are dealing not only with the value which professional people put on bricks and mortar erected on a piece of land; we are also dealing with the value of the land on which the buildings are erected. I should like this on the record, because there has been much discussion in the House in recent months about the spectacular rise in land values and the effect of the speculation in land, which is one of the most anti-social tendencies in this country today. All sorts of figures have been quoted. I have heard it said from the Government Front Bench that in some cases land values have risen by 300 to 400 per cent.

    In parts of my constituency, during the last ten years, marginal land on the fringe of a conurbation has risen in price by one hundred times. Land has been sold in my constituency during the last twelve months for over £3,000 an acre which, ten years ago, would have been bought for £30 an acre. This may be exceptional, but when we are considering valuations we must never forget that one of the major factors in valuation is the constantly soaring price of land on which houses and industry and every other form of building must be erected.

    I do not wish to bore the House by saying many things which I have said before, but I regard this Measure as a logical outcome of a bad system and as an attempt to tidy it up and to give us a uniform basis of valuation. It means very little to me, because by the Minister's own admission we cannot have a uniform basis of valuation. He must amend the basis, in some cases, for five years, because the immediate impact of the introduction of 1963 values on the householder would almost cause a social revolution if allowed to take place unchecked.

    I do not know what my hon. and learned Friend the Member for Kettering thinks of the rather trite way in which I have dealt with the matter. He is more methodical than I and more concerned with details. I think that on Third Reading we ought to be concerned with general principles and the general social implications of what we are doing. As I see it, we are transferring a substantial liability to rates from industrial hereditaments to the domestic householders. The Minister knows that as well as I know it. I could quote many facets of Government policy in pointing out that the whole tendency of legislation has been to shift the burden of taxation from the taxpayer, and the large taxpayer at that, and to shovel a good deal of it on to the domestic ratepayer.

    Order. I think that the rules of order for Third Reading debates would have to be changed before that could be done.

    I ask your pardon, Mr. Speaker. I went a little beyond the bounds of order then. However, I thought that it was an appropriate point to make.

    We had substantial debates in Committee on the position of learned societies, which were previously exempted from rates by an Act of 1843 which is repealed by the Bill. A large number of learned societies, including the Royal Society, the Royal Geological Society and other learned and scientific societies which have made a large contribution to our national life, have enjoyed full remission of rates under that old Act.

    The right hon. Gentleman gave us certain assurances in Committee. Under the Bill, these societies will be technically liable for 50 per cent. of their rates, as against no liability for rates under the old dispensation, but the Minister said that he expects that they will be scheduled, in most cases, as charities and entitled to special relief. I ask him when he winds up the debate to repeat the promise he made that special consideration will be given to them if any hardship is experienced. I hope that he will carry out his promise to the letter.

    I have taken up more time than I expected. I regret that, for the reasons I have stated, I cannot give my blessing to the Bill. It may tidy us a few loose ends, but it still leaves a great deal to be desired from a Socialist point of view, which is the point of view from which I address the House.

    7.22 p.m.

    I am sorry that I have not had the opportunity of following the Bill through all its stages. Unfortunately, I had to leave the Committee during the Christmas Recess owing to circumstances which started within my control in Switzerland, but afterwards turned out to be beyond my control.

    I agree with one point made by the hon. Member for Westhoughton (Mr. J. T. Price) with regard to the acts of local authorities when they see a new valuation list coming into existence. I hope that the Minister will suggest to local authorities that they should not seize this as an opportunity to demand a great deal more in rates from the community simply because the rate poundage will be going down. It would be an excellent idea if local authorities when publishing their new rating proposals in the 1963 valuation lists also showed what the rate poundage would have been had it been based on the old valuation lists. Citizens could then easily see that their rates were, for example, being increased by 1s. or 2s. in the £. Local authorities might then be discouraged from playing that very natural little trick of spending money which comes their way.

    On the assumption that they will all be extremely honest and ask for no more than they would ask for if the old valuation lists were kept in being, industry will be paying more or less what it has been paying under 50 per cent. derating. That is the answer to the suggestion that industry has been subsidised by the ratepayers. Now that 50 per cent. derating is disappearing, industry will pay roughly the same.

    The hon. Member for Westhoughton said that the householder was now paying about 47 per cent. That has been a falling percentage. Forty-seven per cent. is about the lowest that it has been for a long time. Industry has been paying considerably more. Under these proposals I fear that the householder will again pay more than 47 per cent.

    One section will pay less, namely the owners of commercial premises. Industry, if anything, will pay slightly more. Owners of commercial premises will pay considerably less. I hope that those concerned will take this opportunity of reducing their prices or contributing something to the community when they find that they are paying less in rates.

    I support what my hon. Friend the Member for Beckenham (Mr. Goodhart) said about sports grounds. I hope that the Minister will urge local authorities to be generous in this matter. If sports grounds are to have only a voluntary rate concession, the local council may feel, "Why give it to them?" I hope that local authorities will in future be generous to sports grounds, which are now to be fully rated.

    My hon. Friend the Member for Swansea, West (Mr. Rees) dealt with the rating of plant and said that it was somewhat out of date. I support him to the extent that there is one use for plant now which will entirely disappear. Under derating of industry it was very useful for commercial premises. If an owner of commercial premises was fully rated or receiving only 20 per cent. derating, there was a way of receiving 50 per cent. derating simple by installing one or two machines, which did not necessarily have to be used, and then claiming that they were industrial premises and receiving 50 per cent. derating. With the disappearance of industrial derating, the need for plant has disappeared. There is now good reason why plant should not be separately rated.

    When the Minister applies Clause 2 he should be very generous in his decision on the fraction, because it means a great deal to householders. It would be wrong to ask them to pay a great deal more in rates.

    7.27 p.m.

    I should have liked to follow the promising line of general criticism of the Bill opened up by my hon. Friend the Member for Westhoughton (Mr. J. T. Price), but that would not be in order. Moreover, I do not want to delay the House for more than a few minutes, because most of us who are here now have lived with the Bill, in general or in detail, for quite a time and I do not think that we can bear the excitement very much longer.

    I want to mention only two points of detail. The first is to endorse very strongly, but without repeating, the case made by my hon. Friend the Member for Eton and Slough (Mr. Brockway). There is not the slightest reason why a school which is outside the public system of education and which is used very largely, though not entirely, by wealthy people should expect to receive any kind of subsidy, direct or indirect, from public funds. If it wants to claim to be independent it should pay the full price of independence.

    My second point concerns the operation of Clause 8. A number of learned societies and institutions, which previously have not paid rates or have paid only a fraction of what would otherwise have been their rates, are now in a position in which they might, if the local authority takes such a view, have to pay 50 per cent. of their rates. To some of them it may make a very great difference.

    The Minister gave us an undertaking in Committee, for which we were very grateful, that he would ensure that this matter was discussed with his right hon. and learned Friend the Chancellor of the Exchequer and with his right hon. Friend the Minister of Science to see whether help could be given to these bodies from the Exchequer, which, after all, would be the proper channel for it. He said that he would receive representations from the learned societies.

    I ask the right hon. Gentleman to bear in mind one institution which I do not think we mentioned in Committee. It is the John Rylands Library at Manchester. I do not know if the Minister had that institution in mind when we discussed this matter in Committee. For some years the Library has paid about 30 per cent. of its rates. Unless the local authority comes to its aid it will now have to pay 50 per cent. I am told that will mean a considerable additional demand on it which may seriously damage its work. When the Minister deals with this point, in accordance with what he said in Committee, I hope that the definition of "learned societies" which will be able to make representations to him will not be drawn too narrowly and that the needs of the John Rylands Library will be borne in mind.

    Before my hon. Friend sits down I should like to reinforce his plea for the John Rylands Library. I confess that it had not occurred to me that this was a special case. In support of what my hon. Friend has said it might be worth putting on record that the John Rylands Library has not only made a great cultural contribution to our intellectual life, but that, after the First World War, when the great library at Louvain, in Belgium, was completely destroyed by German shells, the John Rylands Library donated a quarter of a million books——

    7.30 p.m.

    I was grateful to the hon. and learned Member for Kettering (Mr. Mitchison) for the tribute which he paid to the Parliamentary draftsmen. I hope I may extend that tribute to all those officials—particularly in my own Department, but in others elsewhere—who have worked on the preparation of this Bill. They work without any thought of party. They are ready to serve every Government equally, and, without question, when there is a desire to meet a point raised by the Opposition they draft the Amendment much better than the Opposition could do in order to achieve the Opposition's purpose. An immense amount of work is done behind the scenes in the preparation of a Bill like this and all the time it is going through Committee, and it is right that Parliament should express appreciation of that work.

    I shall not speak for long, because relatively little has been said by way of criticism of the Bill. The hon. and learned Gentleman said that he regretted a number of other things that are not being done, but he and I would have been out of order if we had pursued those matters. I know that he wished for a full-scale investigation. My answer simply is that what we had to do as a Government—and, indeed, as a Parliament—was to put on the Statute Book this year a Bill that would tackle the problems of 1963. All kinds of other things might have been done, there might have been other approaches, but there was certainly not the time for that

    When the hon. Member for Huddersfield, West (Mr. Wade) expressed the hope that in the five years between 1963 and 1968 we should overhaul our rating system I rather suspected that he hoped for an overhaul in the direction of site value rating. All I can say is that, judging by the fact that we have had six rating and valuation Bills in eight years, anything may happen between now and 1968, anything short, that is—perhaps it would be unkind of me to say so—of a Liberal Government at Westminster.

    The hon. and learned Gentleman said that criticism of the rating system is rife among great numbers of people. Of course it is—so is criticism of the tax system, so is criticism of the railway system, and so is criticism of most of the political parties. There is no getting away from that. If anyone could think of a better rating system, I am quite sure Governments would be ready to adopt it. An enormous amount of examination has been made into possible alternatives, and no alternative has been discovered.

    The rating system that we are improving in this Bill raises annually something over £600 million in England and Wales. It does it not without difficulties, not without some litigation and not without a good deal of vexation, but it does it, and does it with reasonable fairness, and I submit in the concluding speech on this Bill that it will do it with greater fairness and fewer anomalies as a result of this legislation.

    Perhaps I may now pick up certain points made in the debate. My hon. Friend the Member for Beckenham (Mr. Goodhart) would have wished derating powers to be rather more detailed, but I must not go into that. I explained the Government's views in Committee. Both he and, I think, my hon. Friend the Member for Hemel Hempstead (Mr. Allason) spoke of the sporting associations and clubs. We now have defined in Clause 8 the terms on which a body that is
    "… not established or conducted for profit and is wholly or mainly used for purposes of recreation …"
    may be able to obtain discretionary relief.

    It would be wrong to go further than that. Playing fields and sports clubs are of an infinite variety, from those that we all should wish to see helped in every way to those belonging to banks and wealthy institutions where considerable questions could be raised as to whether they should have relief from rates. I do not think that it really is for Ministers to tell local authorities what they are to do in these matters, though I myself hope that local authorities will exercise all their discretionary powers under Clause 8 with understanding, discrimination and sympathy.

    I should be very sorry if any local authority just looked at Clause 8 and said, "We do not intend to make any use of our discretionary powers here." That would certainly be contrary to the will of Parliament. A local authority should certainly examine what powers it has under Clause 8 to give discretionary relief and consider, on its merits, every application that is made to it.

    As was said by my hon. Friend the Parliamentary Secretary in Committee, the playing fields, for various technical reasons, are likely to bear a rather smaller share of the total rate burden after the next revaluation. I therefore think that fears that there will be sweeping increases in the actual rate liability of sports clubs and the like are probably ill-founded. Quite frankly, the best way of making sure that justice is done for sports grounds and all other organisations that may be applicants for discretionary relief under Clause 8 is to ensure that the right people get on to local authorities.

    There are local government elections tomorrow. I do not say that those standing in them will be reaching the decisions that will operate in 1963, but I must say that one cannot but look at the matter slightly cynically when one finds within a certain council area a bitter complaint that the council is not acting fairly to someone or other, and then sees that at the last election only 27 per cent. of the people troubled to vote.

    The hon. Member for Eton and Slough (Mr. Brockway) made a long speech, which I followed carefully. Parliament is a wonderful place. Who would have guessed that probably the most detailed speech of the twentieth century to be delivered in the House of Commons on the subject of Eton would be delivered on the Third Reading of a rating Bill. Whether the hon. Gentleman was correct in all he said, I do not know—at the moment, he is not in his place—but I must reiterate what I said in Committee and on Report, that it really is not possible, and would not be right, for Parliament to seek to discriminate between one charity and another. The Pritchard Committee examined that and considered various tests of drawing a dividing line among charities, dividing them into the sheep and the goats, as it were. The Committee turned down some of those tests which had been urged on it, largely because the application of those tests would discriminate against educational charities, and that it did not want to do.

    Eton has been mentioned today. If one searched through the lists of charities I am sure one could find charities which some hon. Members would intensely wish to receive 100 per cent. relief from rates, and other charities which some hon. Members would think deserved nothing at all. But we cannot approach the matter of rating of charities in that way. The hon. Member for Eton and Slough asked me about rate deficiency grants. Certainly, at the present time, if this Bill were coming into force immediately, it would make no practical difference to the rate fund of Eton Urban District, because that district is in receipt of a rate deficiency grant. It would, however, make a tiny difference to Buckinghamshire.

    If there is as strong a feeling about this as the hon. Member suggests, it would be possible—'and I am speaking hypothetically—for the Eton Urban District Council to ask that its boundary should be redrawn to exclude Eton. It would then, perhaps, be possible for Buckinghamshire County Council to make application that Eton should be put into Buckinghamshire. The real truth is that I am quite certain that the Eton Urban District is proud to have Eton College within its boundaries, just as Buckinghamshire is proud of its possessions, and in all these things one has to take the rough with the smooth in matters of rating, particularly if one is proud of the institutions in one's area.

    My hon. Friend the Member for Swansea, West (Mr. Rees), to whom I should like to pay a particular tribute because he has been of great value to us in our Committee proceedings with his expert professional knowledge of these matters, said that the Bill had done little to allay the anxieties of industry. I hope that the Bill, together with the 1960 Order, has helped substantially because, together, they should have allayed the anxiety which existed lest the scope of rating was going to expand—was going to creep, as it were—further and further over small process plant.

    We have now defined what is rateable and what is not. My hon. Friend said that process plant should not be rateable. I cannot go into that matter now. I would only say that the 1925 Act, to which my hon. Friend referred, made specific reference to the rateability of structures like blast furnaces, coke ovens, tar distilling plant and the like, which, of course, are process plant. It cannot be maintained, therefore, that it was the intention of the authors of the 1925 Act that process plant should not be rateable.

    There is a difference of approach within industry. I cannot hold out any hope that at this time, when the main need is to cushion the blow to the householders which they might otherwise suffer under existing legislation, this could be taken as an opportunity drastically to reduce the rateability of industry—which would be the effect of derating all process plant.

    If, on the other hand, industry as a whole were to come forward with constructive proposals for redistributing the rate burden more fairly among industries, then, of course, the Government would be prepared to examine any such proposals, but they cannot possibly come into effect before 1963.

    This is a matter which must be followed up by industry as a whole between 1963 and 1968, as I am quite sure many other questions relating to rating and valuation will be. I think I have referred to almost every point raised, except that of the learned societies. I am afraid I cannot give an answer on the spur of the moment about the John Rylands Library, or about any other individual institution. I should like hon. Members to know that since this matter was last discussed during the proceedings on the Bill my noble Friend the Minister for Science and my hon. Friend the Financial Secretary to the Treasury have had an opportunity to discuss the situation of the national learned societies with a deputation from the Royal Society and the British Academy, speaking on their behalf.

    It was generally felt that the needs of these societies should be considered outside the framework of this Bill. It was agreed that after the Bill had become law, and as soon as material was available, there should be a joint review of the finances of learned societies of national importance—taking into account, among other things, any new liabilities for rates. It was recognised that there could be no question of simply making up deficits, but that there would be a full examination of the whole situation on the facts as they appear.

    I feel sure that all hon. Members who brought this matter forward in our Committee deliberations will be grateful for that statement by the Minister and I hope that the learned societies felt reasonably satisfied at the interview, to which the Minister referred, and with the outcome of it.

    I am obliged to the hon. and learned Gentleman for those remarks.

    The Bill is about to have its Third Reading and go to another place. The effect of the Bill, in conjunction with existing legislation, will, of course, be to increase the total rateable value and, thereby, increase the rate resources of local authorities. I join with my hon. Friend the Member for Hemel Hempstead (Mr. Allason) in the hope that local authorities will use these new resources wisely and not in any profligate way. I believe that they will.

    It would not be a good plan to adopt the suggestion of the hon. Member for Hemel Hempstead—but any of these wise men whom I should like to see elected to local councils could ask what the rate poundage would have been on the old valuation and the old product of a penny rate.

    The Bill as it stands, and as I commend it to the House, is designed to protect the householder. Far from putting new burdens on him, it will serve to defend him through its Order-making power against the certainty which would otherwise result from existing legislation of a very considerable increase in his average rate liability. A year hence we shall be able to see at what level a derating Order shall be made. It must be made, and the information that will be available then will be far more extensive than the information available to us now.

    I should like to express our good wishes to those in the Valuation Department of the Board of Inland Revenue, on whom we are putting new duties by means of the Bill. I hope that the new system will work as smoothly as any rating system can work and that local authorities, who have advantages from it, will use the new rateable value with wisdom and foresight.

    Question put and agreed to.

    Bill accordingly read the Third time and passed.