(1) For the year 1967–68 and subsequent years, an authority to which this section applies shall, notwithstanding anything in Part V of the Local Government Act 1948 section 24(2) of the Valuation and Rating (Scotland) Act 1956 or section 3(1) of the Gas Act 1965, be liable to be rated in respect of any office premises occupied by the authority which are not situated on operational land of the authority; and accordingly any such premises shall be included in the valuation roll for the area in which they are situated.
(2) This section applies to the following authorities, that is to say, the British Railways Board, the British Waterways Board, the Gas Council, any area board constituted for an area in Scotland under the Gas Act 1948. the North of Scotland Hydro-Electric Board and the South of Scotland Electricity Board.
(3) in this section—
'Office premises' means lands and heritages which are used wholly or mainly as an office or for office purposes; and
'operational land', in relation to an authority to which this section applies, means land which is used for the purpose of the carrying on of the authority's undertaking and land in which an interest is held for that purpose, not being land which, in respect of its nature and situation, is comparable rather with land in general than with land which is used, or in which interests are held, for the purpose of the carrying on of statutory undertakings;
and for the purposes of this subsection 'office purposes' includes the purposes of administration, clerical work, handling money, telephone and telegraph operating and the operation of computers, and 'clerical work' includes writing, book-keeping, sorting papers, filing, typing, duplicating, punching cards or tapes, machine calculating, drawing and the editorial preparation of matter for publication, and 'statutory undertakings' has the same meaning as in the Town and Country Planning (Scotland) Act 1947.—[Mr. Ross.]
The nationalised industries pay sums in lieu of rates which depend more on the level of production—or in the case of the railways the number of miles travelled—than on the quantity of premises they possess. There has thus been complaint in Scotland and England, that if, say, an Electricity Board or British Railways construct large offices in a particular local authority area this brings virtually no additional rateable resources to the local authority, while comparable commercial offices would be fully rated.
The determining factor is whether the offices are on operational land. The object is to draw a distinction between general administrative offices, which would be rated, and such things as station-masters' offices and managers' offices at gas and electricity works. The definition used in the Clause is one which has operated for some time in the town and country planning sphere; operational land is defined as not including land with the buildings on it, which is comparable with "land in general".
The rating liability for administrative offices will be a net addition to the liabilities of the nationalised industries. There will be no reduction in the "standard amount" to offset it. Although it is obviously desirable not to add to the rating burden of publicly-owned properties if this can be avoided, the Government take the view that local authorities should not be denied this reasonable extension of rateable resources. We have at present no estimate of the amount of rateable value involved; this will depend on negotiations between the nationalised industry boards and the local assessors.
The Secretary of State, in presenting the new Clause, has dealt with a long-standing grievance felt by many local authorities for some time. Although it is apparent that he has no estimate of what this might involve, we all know from our practical experience that the sums will be very substantial. There are, however, a few obvious questions which we must ask about how the Clause will be applied and what its effect might be.
One obvious question concerns the total rating liability of the public corporations. I think that we are well aware that while certain local authorities have complained rather bitterly about the exemption of commercial premises from rates, there is a feeling on the part of some Scottish nationalised industries that they are carrying a heavier total burden in their payment in lieu than similar nationalised industries in England.
Let me take the example covered in the Clause, the electricity boards. The Secretary of State will no doubt be aware that it was stated in the annual Report of the South of Scotland Electricity Board that the Board considered that it was paying too much in local rates by comparison with electricity boards in England and Wales and with Scottish industry generally, and its feeling was that its rate payment in total was excessive to the extent of about £750,000 a year. To this extent, therefore, if it is the Secretary of State's intention that these office premises should be rated without a comparable adjustment in the payment in lieu, there will be a very heavy burden in addition to what it feels is an unjustified sum.
It is clear that if the Clause is applied along the lines indicated by the Secretary of State, there will be a very substantial addition to the costs of the public corporations and this will add to the problems of the Scottish nationalised industries. We are all aware of the longstanding grievance in Scotland concerning certain nationalised industries, particularly coal, which is not covered by the Clause. In the gas industry there is a substantial differential cost in the gas supplied to people in Scotland. Clearly, the Clause might well make the position more difficult.
The second question, which is quite important, is this. As this addition is to be applied to local authorities, would it make a practical difference in the amount which they would be able to receive in rate support grant in relation to the resources element? Clearly, if the rateable value is to go up it is possible that the grant in respect of the resources element will be reduced.
There are a number of other points. One of them is how the Clause will apply to certain commercial premises. The ones which immediately come to mind are various developments which have taken place recently in railway premises, particularly commercial developments within the railway stations. Are we to assume that this Clause will cover, for example, shops and office premises located directly within railway premises or very near to them? We appreciate that each case will be considered on its merits, but a broad undertaking on offices and shops within railway stations would be of great help to us.
By and large, we on this side of the House very much welcome the Clause, although we are a little concerned about the additional liability which will devolve on certain nationalised industries in Scotland which are already in serious financial difficulties and are charging a higher price for their product compared with the rest of the country.
I should like some clarification of the new Clause. It provides in line 14, that
'operational land' … means land which is used for the purpose of the carrying on of the authority's undertaking and land in which an interest is held for that purpose …
Does that include, or should it include, pylons and boosters or transformer stations? If it excludes pylons and boosters and transformer stations, is not this an injustice to the local authority on whose land they are situated? If they are excluded, the only local authorities which will get the benefit of the Clause are those in which the principal undertaking of the electricity board is situated. That would be grossly unfair.
The setting up of pylons throughout the country decreases the value of the agricultural holdings through which they go and, therefore, ultimately decreases their value as rating units to the local authority. I ask my right hon. Friend whether the items to which I have referred are covered by the Clause.
Pylons and boosters, to which my hon. Friend the Member for West Stirlingshire (Mr. W. Baxter) referred, are not covered by the new Clause. He might have been concerned if I had said that the additional cost of the valuation were to be taken out of the standing grant. It might well be that people already receiving certain sums might be concerned at a reduction thereof, but that is not the case.
I come to the point raised by the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor). The standing grant aspect is not covered. If there is any injustice—and I am not prepared to say an injustice at the moment, although I have heard the claims made—it could not be dealt with in this Clause. One cannot have it both ways. This is what the hon. Gentleman really wants, particularly in connection with the rate support grant.
The purpose of the rate support grant is to support the rates in respect of the weakness or otherwise of the valuation. If the valuations are raised, an authority is much more self-supporting. It would be unfair to all others who receive rate support grant that a particular local authority which received the benefit of the Clause also received the benefit of extra rate support grant.
It is recognised that this matter has caused trouble over the years. We can all recollect instances within our own local authority areas, especially in connection with the development over past years of special new showrooms which, for all practical purposes, are the same as other commercial private ventures. It is right that they should be put on this new footing.
I am glad there is no obvious animosity to the new Clause and a recognition that what the Government are doing is right.
Would my right hon. Friend elaborate on why parts of an organisation such as those I have indicated which, if they were part of a private undertaking, would be subject to the appropriate proportion of rates should not be subject to the same proportion of rates if owned by a public authority? The principle seems to be conceded in respect of office or workshop accommodation. Why is it not conceded in respect of pylons, boosters and transformer stations?
My hon. Friend will appreciate that these are taken into account with all the other land considerations and are worked out in a formula in relation to the electricity itself. This has been passed in Statute and recognised as the fair way of dealing with the matter.