Skip to main content

Clause 2

Volume 886: debated on Wednesday 19 February 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Alterations To Valuation Roll Which Is In Force

I beg to move Amendment No. 3, in page 2, line 42, leave out "may" and insert "shall".

The amendment deals with a point which was raised in Committee. As the Bill is drafted, in both Clause 1 and Clause 2 the changes that may be made in the valuation roll by the assessor are expressed in terms that the assessor may make changes. We wish to retain "may" in Clause 1 because it seems to be necessary there, where one is dealing with a situation before the roll is finalised, that any amendment shall be made in as flexible a way as is possible by the assessor. When we come to Clause 2 and deal with the circumstances in which an amendment may be made after the roll is drawn up and we prescribe the various circumstances in the clause it seems right, on consideration, that we should place an obligation on the assessor—for example, if he discovers an error—to make the alteration in the roll.

I said in Committee that I was rather worried about placing an absolute obligation on the assessor for all the matters in these paragraphs because I felt that might impose an unfair or impossible burden on him. I said that I would consider whether we could not discriminate between the various provisions in the clause and make some of them mandatory, and in others use "may". Having considered the matter again it seems to us that we can safely replace "may" by "shall" without imposing unnecessary disabilities.

That is the purpose of the amendment. I am grateful to those who raised the matter in Committee. I am glad that I have been able to meet the point.

I am grateful to the Minister for this concession. I hope that he will appreciate the worth of the other suggestions we made in Committee.

Amendment agreed to.

I beg to move Amendment No. 4, in page 3, line 3, at end insert—

"(aa) to give effect to any alteration in the rateable value of any lands and heritages to make allowance for any alterations carried out thereto prior to the time when the roll was made up and which had not been declared to the assessor."
The amendment relates to what may appear to be an omission in the provisions requiring the correction of the valuation roll at the hand of the assessor. Under subsection (2)(a) an obligation is now placed upon the assessor to correct the roll where an error has been made. I believe that in times past the assessor's power to make this change was limited to where a mathematical error had been discovered in the course of the calculation of the various factors which made up the gross annual value, whereas if the error had occurred at the instance of the assessor through a fault in survey, for instance, the assessor was unable to make the change. That seems to have been changed by subsection (2)(a), and subsection (2)(b) deals with any other changes which might have occurred
"since the roll was made up".
The amendment takes in another instance, one which arose frequently during the time of the last revaluation when I acted as the secretary of a valuation appeal committee. That was where it was discovered, in the course of the proceedings during that revaluation year, that an error had been made, not through the fault of the assessor, but once the roll had been made up, and could not be corrected. It occurred in some disturbing circumstances, because in valuation affairs, in proving that a valuation may be incorrect, it is customary for the appellant to produce evidence of comparison with other properties. He looks at the valuation roll and sees that the house opposite, which he thinks to be the same as his own, has a lower valuation than his, and he therefore says to the appeal committee that his valuation is too high.

8.15 p.m.

Frequently, when reference is made to the analysis of the other property, it is found that there is some feature about it which is not similar to the house under appeal. The reason for that is that in the annual return which is made by a householder no reference is made to a change such as an extension—a bathroom, new toilet facilities, or a garage. Ratepayers and appellants cannot understand why those who have failed to make their returns should get off scot free. One of the unfortunate rules was that no change could be made in the valuation until the next period of revaluation which could be five years hence or, in the case of reorganisation of local government, in this instance, seven years.

The effect of the amendment would be to allow the assessor, on obtaining information of that sort, to correct the roll. The amendment seems to fit what has been proposed by the Government in an effort to correct some of the disadvantages that have arisen in the past. I assure the House that appellants cannot understand that somebody who has not made a return should profit from his failure to make a return, whereas somebody who has made a return has his valuation increased because of information he has disclosed.

It may be argued on behalf of the Minister that the phrase "owing to error" in subsection (2)(a) could take care of the circumstances I have outlined. In view of the law on the subject there may be doubt about whether that construction would be put upon the use of the phrase. The specific circumstances outlined in the amendment could take care of the problem, which frequently arises in practice.

I am not absolutely sure that I followed everything that the hon. Member for Dundee, East (Mr. Wilson) said. Some of the points he made and the wording of the amendment would suggest that he is dealing with a situation more closely allied to what happens under Clause 1 rather than under Clause 2. I am not sure why he has chosen to table the amendment to Clause 2 rather than to Clause 1. The amendment speaks of

"alterations carried out thereto prior to the time when the roll was made up".
That brings the matter rather more into Clause 1 than into Clause 2.

The assessor has power, which we are strengthening, to obtain information bearing on valuations. We are amending the appropriate provision in the 1854 Act by the provision in paragraph 1 of Part II of Schedule 6, under which it will be possible for the assessor to call for information bearing on valuations which is likely to result in changes in the valuation.

The hon. Gentleman seems to be saying that there should be an arrangement whereby every alteration that is made should be volunteered and declared to the assessor. I have a good deal of sympathy with the hon. Gentleman. This point of unfairness was raised on a number of occasions on Clause 2. I have sympathy with the view that omissions which arise from a deliberate intent by the ratepayer to avoid giving information are very troublesome and unfair to other ratepayers. But the trouble about imposing an obligation to give information on every alteration is that it is difficult for the layman to define a material change of circumstances.

If we were to impose such an obligation, assuming that the ratepayers adhered to it, which must be a matter of doubt, a considerable number of additional pieces of information might be given to the assessor which would not be relevant because they would not represent a material change of circumstances. Therefore, he would be bogged down by a great deal of unnecessary information.

If we cannot make the obligation which the hon. Gentleman has in mind stick, we cannot accept the amendment, which turns on whether a declaration had been made to the assessor. If a declaration had been made, one provision about the timing of a change would apply and if a declaration had not been made another provision would apply. That could deal not only with an increase but with a reduction in value. It is not therefore simple to get the matter right. We cannot achieve a fool-proof system by writing everything into the legislation. We must give the assessor powers and responsibilities to correct errors and to make changes. We cannot place absolute obligations on the assessor or the ratepayer.

Does the assessor have powers to incorporate valuations for rateable values during the interval between revaluations?

Yes, he does.

We are setting out the powers in the clause in a much more comprehensive way. We provide in Schedule 6 increased powers for the assessors to obtain the necessary information. Therefore, we have gone as far as we can reasonably go to get the matter right and to maintain fairness and equity between ratepayers. I cannot recommend the House to accept the amendment, though I recognise what the hon. Gentleman is attempting to do and I have sympathy with it as a matter of equity. However, he wishes to write into the Bill an equity which is not identifiable.

I am surprised at the Minister's reply. The effect of the amendment is that there should be power to rectify the situation if an alteration is carried out before the property is valued and it is subsequently discovered that it has not been declared. That power does not exist. There is only power to make an alteration if the additions have been made after the property has been valued.

It is well known that the assessor annually sends a notice to everyone with a request to state whether any change has been made since the property was last valued. If someone makes a change which clearly involves the property in carrying a higher rateable value but does not declare it on the form, the assessor values it not knowing the situation. It may be a garage, which normally would carry an extra valuation of £8 a year. If the person falsely failed to declare it and subsequently the assessor discovered what the situation was, perhaps because somebody had complained, it is wrong that the assessor should not have the power to do what he would have done had he known about the garage.

I have a great deal of sympathy with the amendment, and the Minister should think again about this matter.

I thank the hon. Member for Dundee, West (Mr. Doig) for completing the partnership on the amendment. He has put his finger on the point. Inequity results from a false declaration. The person who has made the false declaration benefits, not for one year but for five years. The law is that if the lands or heritages are in existence before the date of revaluation they should be incorporated in the valuation. If any material change occurs thereafter, it can result in the roll being changed. But if no such change occurs the assessor cannot change the roll until five years have elapsed.

One can imagine what would happen if a person, having gone to an appeal tribunal, has his case turned down because the assessor points to five similar houses but a mistake had occurred in relation to the example which the appellant chose. The assessor is right, but it is wrong that the person who enjoys that benefit should get away with it. The amendment would take care of that situation.

The assessor does not rely simply on the information which comes through the annual return. He obtains information from the dean of guild courts and building regulations about applications which have been granted. But from time to time changes occur in properties which are not notified to the local authorities since the work may have been done privately. Even when the form is filled in, it may be a question not of a false declaration but of inaccurate reading of the form when the householder may be unaware that the bathroom, toilet or whatever it is should be treated as a new subject and be included in the assessor's records and valued.

I am prepared to accept that perhaps the phrasing of the amendment is not right, although the Minister did not say anything about that matter. If he does not agree to consider the matter more closely before the Bill is dealt with in the House of Lords, I shall have to force a Division. However, I hope that he will have sympathy with what I am trying to achieve.

With permission, I should like to say a few words in reply.

The amendment is directed to the date on which the alteration can be made. In the amendment the hon. Member for Dundee, East (Mr. Wilson) is proposing a different date from that which would be applied in terms of the clause generally. I thought that the purpose of his amendment was specifically directed towards the date on which the change should apply rather than to the circumstances of the change itself. I hope I have made that clear.

I was directing my argument to some extent to the point the hon. Gentleman was making, which has been clarified by my hon. Friend the Member for Dundee, West (Mr. Doig), who takes a very close interest in these matters—as Ministers know to their cost from time to time.

I think that the point that is being made is already covered by Clause 2(1)(f). If it is not covered there, I think that it is covered by subsection (1)(a), which refers to
"lands and heritages which were in existence … when the roll was made up"
but which were not included because of error.

The point made by the hon. Member is, as it were, that unless the error is taken up before the roll is complete, the assessor will not have a chance to make an alteration at all, if there is an omission, until the next valuation. I am almost certain that that is not so and that the wording in paragraphs (a) and (f) covers the point.

If the hon. Member will agree to withdraw the amendment—in any event it is not properly drafted; I think that it is directed to a slightly different point from the one he wishes to pursue—I shall look at the wording of Clause 1 and see whether the point he makes is covered. If it is not covered, I agree that there is a deficiency in the clause and I shall try to put it right at a later stage of the Bill. My advice at present, however, is that it is covered. If the amendment is withdrawn, I shall be very glad to write to the hon. Member and to the hon. Member for Glasgow, Cathcart (Mr. Taylor).

8.30 p.m.

With regard to the Minister's suggestion about the clause, I am a little worried that we might not find a solution here. On page 4 subsection (2)(d), there is reference to the timing arrangements for subsection (1)(f). It says that the change should have effect as from the date of the erroneous entry or the beginning of the year, whichever is later. Therefore, is it the date of the entry and not the date of the event?

While we are grateful to the Minister for his assurances, I do not think that we shall find a solution there, but as he has given an undertaking to the hon. Member for Dundee, East (Mr. Wilson) that a change will be made, this is a satisfactory solution.

Amendment, by leave, withdrawn.

I beg to move, Amendment No. 5, in page 3, line 23, at end insert—

'(ee) to give effect to any alteration in the rateable value of any lands and heritages whether or not an appeal under the Valuations Act is pending with respect thereto, in order to achieve uniformity of valuation with any other lands and heritages in the same valuation area with respect to which an appeal to the Lands Valuation Appeal Court has been determined'.
This amendment relates to another problem which has arisen in relation to valuation court procedings. I confess at this stage that the particular district for which I was secretary to the appeal committee was that of Renfrewshire, which has a very substantial reputation for obtaining large numbers of appeals every time there is revaluation. I think that the hon. Member for Paisley (Mr. Robertson), who is in the Chamber at present, would rush to confirm this.

What happened in the 1971 revaluation was that there were a certain number of appeals taken against the basic level of valuation. The basic level is the notional rental which a particular property might fetch according to a scale relating to the type and class of property, its age and its environment—in fact, in relation to any given property which the assessor might fix.

Basic level is one of these things which, if overturned, could affect the valuation of premises throughout the area of valuation authority. This happened in Renfrewshire in 1970–71. There was an appeal taken against basic level in Dunbartonshire as well, although, eventually, that did not lead to any change in valuations.

To give an idea of the problem, there were about 29,000 individual appeals in Renfrewshire, and large numbers of local authority houses were also affected. Indeed, it was the local authorities in Renfrewshire which took two out of the four test cases which resulted on basic level. The local authorities were successful on basic level in overturning the valuations which had been made by the assessor, so that there was a general reduction.

But, in terms of this amendment, I want to point to one of the practical consequences of such a large number of appeals that were lodged. People in the county knew that there was to be this general appeal against basic level. Because of that, encouragement was given by various organisations, as well as by the Press, to people to mark appeals. The intention was not to mark an appeal affecting an individual house in relation to the amenities that that house had, the area in which it was located or any lack of amenities which might affect it, but more to gain the benefit of a local authority test case.

Many people tied their cases to the local authority test case, but there were others who, for reasons of their own, perhaps, did not get around to appealing, and who were, perhaps, satisfied that in relation to the area in which their house was situated or its capacity, it was fairly valued. They did not mark an appeal. As a result, they did not get their benefit for the following year, after the Lands Valuation Appeal Court, in the fullness of time, got around to making a decision on proof taken before the appeal committee.

If there had been some sort of arrangement whereby basic level could have been automatically adjusted in the event of a major change taking place as a result of the decision of the valuation appeals committee of the area, or of the Lands Valuation Appeal Court, that would have saved a tremendous amount of trouble in organisation and administration in relation to unnecessary appeals—unnecessary in a sense—which were lodged. But the assessor had to regard all such appeals, and two things resulted. First, there was a waste of effort because of the need to appeal. Second, those who did not go to the trouble of appealing did not get the benefit of a valuation. It was only later, in the next subsequent year, that that lower value was passed on to those who had neglected, probably for very good reasons, to appeal in the first instance.

Therefore, in terms of the amendment, power should be given to provide for some holding of the position empowering the assessor to give effect to any alteration in the rateable value of any lands and heritages, whether or not an appeal is pending. This gives a degree of flexibility. It means that those who have not marked an appeal are not necessarily disallowed what their neighbours are obtaining.

This was probably a very special case. Certainly it did not occur anywhere else in Scotland. But it could have occurred, particularly in Dunbartonshire. If basic level cases can be taken in the future, the same problem may arise in any area. We should take advantage of this Bill to make sure that this gap is covered.

I hope that I can convince the hon. Gentleman the amendment is not necessary, because the point that he makes is already covered by the Bill. As Clause 2 stands at present, an alteration is to be made where that is due to any material change of circumstances. Under the amendment that I have already made to make that a mandatory responsibility of the assessor, there is no discretion allowed to him. He has to make a change now due to a material change of circumstances which comes to his notice.

If the hon. Gentleman will refer to the definition in Clause 35 of "material change of circumstances" he will see that that includes any relevant decision not only of the Lands Valuation Appeal Court but of the valuation appeal committee as well. Therefore, in any case in which a decision was made, as it were, on a test case, where the particular valuation concerned raised considerations which were absolutely analogous to all the other houses and properties concerned, the case having been decided, that would be a material change of circumstance and the assessor would then be under an obligation, under the provisions of the clause, to make the corresponding changes elsewhere.

Therefore, there would be no need for the various matters to be covered by individual appeals and no discrimination between those who appealed and those who did not appeal.

The Minister has misunderstood the situation which I described. A material change of circumstances is usually a case which can be presented in the year following that in which the change has taken place. I shall paint the picture of an appeal marked at the beginning of September. That is taken before the valuation appeal committee at any time within the following six months. Perhaps it is not then decided for eight to ten months by the Lands Valuation Appeal Court in Edinburgh.

Anyone who has failed to mark an appeal in 1970–71 will not receive the benefit of the material change which has occurred until 1971–72. That was the exact circumstance in Renfrewshire where the committee took a decision to reduce the valuation of local authority houses for which an appeal had been marked by local authorities, and those of many thousands of other properties which had had appeals marked in relation to the local authority test case. The appellants in respect of the other houses, for which no appeal had been marked for 1970–71, had to come back in 1971–72 and show that there was a material change of circumstance.

There was an appeal in relation to certain houses in the Williamwood test case, which substantiated, through the action of the Land Valuation Appeal Court, that there was a spread of benefit which would extend to other houses in the country. Even if it is not necessary to go to the length of the Lands Valuation Appeal Court, under the Williamwood case, it is necessary for us to try to cut out the unnecessary holding appeals in the year of the revaluation. If we do not do so, people must put in a holding appeal for revaluation, otherwise they lose one year's reduction, which can be unfair to them and cause a tremendous amount of trouble to the assessor and to the valuation appeals committees, which are flooded out with appeals.

I understand the point made by the hon. Gentleman. My main answer is still correct. The appeal decision is based on a material change of circumstances, which then attracts the mandatory provisions of Clause 2. The hon. Gentleman may agree that that is so. However, in the case of persons who make the appeal, the reduction in the valuation will commence from a date which may be earlier than that which will apply in the other cases which are affected by the definition of material change of circumstances, including the decision of the appeal committee or the Scottish Lands Valuation Appeal Court.

However, I do not think that that is the circumstance. The intention is that we should make the date of the change the same for all the properties concerned. If we have not achieved that, I shall look again at the matter. But I believe that that is what we have achieved with the Bill as at present drafted. If I am wrong, I will inform the hon. Gentleman and consider whether we should put down an amendment in the other place. The hon. Gentleman's amendment is defective and will therefore not do the job which he has in mind.

I had not intended to press this amendment because I realised that this was a special case. However, I am happy that we have now broached the question with the Minister and that he has agreed to look at the matter again. When he does so he will find that there are good grounds for action, although it is a specialised case.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move Amendment No. 6, in page 3, line 29, leave out:

'the assessor considers to be' and insert 'are'.
This point was raised in Committee and it shows that the time spent in Committee was not wasted by the Opposition, which felt that the provision regarding the deletion from the rule gave too much discretion to the assessor and that the scope went wider than necessary. This amendment deletes the words
"the assessor considers to be"
and inserts the word "are" which makes the provision more definite, since it makes it clear that the assessor is not a free agent in a matter of this kind but is bound by the general law on valuation, which was always the intention.

We are grateful for this further indication of the Minister's flexibility. I am glad that he has accepted the Opposition's point.

Amendment agreed to.