Clause 3. — (Rating Liability of Area Gas Boards.)

Part of Orders of the Day — Rating and Valuation Bill – in the House of Commons at 12:00 am on 20 February 1957.

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Photo of Mr Reginald Bevins Mr Reginald Bevins , Liverpool Toxteth 12:00, 20 February 1957

I hope that I may be able to help the Committee a little on this rather technical Amendment. Although a relatively unimportant proposal is embodied in the Amendment and also in the Amendment to the proposed Amendment, I am, nevertheless, aware that many local authorities, and not all of them big authorities, are very sensitive to any financial deprivations, however they arise. That is one such case.

As the hon. and learned Member for Kettering (Mr. Mitchison) quite rightly said, it is the practice for gas boards to pay their rates direct to the local authorities. In that respect, they are unlike the British Transport Commission and the Central Electricity Authority. The factors which determine the rateable value in any one area are the amount of gas made and sold in that area during the penultimate year. It is perfectly true that in some cases it is the practice for the gas boards to buy gas from other bodies and purify it, that is to say, they do not engage in the process of manufacture themselves.

The aim of the Amendment is that gas which is purified, as opposed to being manufactured, should be taken into account in the formula, the idea being that every therm purified should be treated as equivalent to half a therm manufactured. It is perfectly true that in some areas purification only may take place and that in existing circumstances those rating areas are likely to suffer on that account.

Again it is true, as the hon. Member for Stalybridge and Hyde (Mr. Blackburn) pointed out, that there is an increasing tendency in some parts of the country to concentrate 'production, and, as storage in itself is not a factor which comes into the formula, certain local authorities are penalised.

Reference has been made to the proceedings on the Rating and Valuation (Miscellaneous Provisions) Bill in June, 1955. I have looked up the reference to what was said by one of my predecessors at the Ministry. It is true that the impression was given to the Committee, at that time that it was the intention that these two suggestions should be considered in due course, when the Ministry had its discussions with the local authorities but, with great respect to the hon. Member for Kettering, I must recall what I said in moving the Second Reading of this Bill.

I was speaking of the contribution made by nationalised industries to local authorities, and I said that Clauses 2 and 3 of the Bill deal exclusively with the consequences of recent revaluation, for these are the really urgent issues on which action could not wait until the completion of the more general review."—[OFFICIAL REPORT. 7th February, 1957; Vol. 564, c. 631.] Hon. Members will recall that when my right hon. Friend made his announcement to the House, on the reform of local government finance, about a week ago, he also made it plain that further consultations were to take place with both the nationalised industries and the local authorities on the future of pool payments by the nationalised industries to the local authorities.

I want to be perfectly frank with the Committee and say that before these interim proposals were embodied in the present Bill quite obviously discussions took place with representatives of nationalised industries and local authorities. But those conversations were not with the local authority associations as such. They were merely with certain gentlemen who were deputed to attend conversations with the Ministry and the nationalised industries.

We have not yet begun our full negotiations and talks with the local authority associations and the nationalised industries, and I assure the hon. and learned Member for Kettering that when we start to do that—and we shall be doing it very soon indeed—the ideas embodied in these two Amendments will be put to them. I do not know what their reaction will be. It may be that they will be prepared to accept these ideas. I can go no further than that. I reiterate that we are fully sensitive to the claims of local authorities who feel that they have had a raw deal because of a formula which is rather too hidebound, as this may be.

The hon. Member for Aberavon (Mr. Cove) asked whether my right hon. Friend would be prepared to see a deputation on this point. I am sure that I speak for my right hon. Friend when I say that we shall be only too happy, at any time, to have the fullest information possible on this topic.