Valuation (Higher Rents)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 25th January 1972.

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Photo of Mr Frank Allaun Mr Frank Allaun , Salford East 12:00 am, 25th January 1972

asked the Chancellor of the Exchequer whether valuation officers fixing rates at the next valuation will take into consideration the higher rents fixed for council and private rents under the Housing Finance Bill before deciding their valuations.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

Fair rents under the provisions of the Housing Finance Bill will not in practice be determined in time to be taken into account by valuation officers for the new rating valuation lists, which have to be completed well before the end of this year.

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

That is very good. May we take that as a clear declaration by the Government that the doubling of rents under that Bill will not be allowed to influence next year's rating valuations? Otherwise private and council tenants will suffer a double blow both in higher rents and in higher rates. I hope that we can take this as an absolute declaration.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I think that this derives automatically from the system. Local authority housing, like every other form of housing, is assessed for rates on the basis of the rent which the property would fetch in the open market at the time of the assessment, not of the rent which is being charged. That, therefore, covers the hon. Gentleman's point.

Photo of Mr Reginald Freeson Mr Reginald Freeson , Willesden East

On the contrary, this is a complete contradiction to the first answer that was given. Is the Minister not aware that what he has said just now is that the valuations will be based upon the market rents that could be assessed on the best available information for these properties if they were all on the open market? A moment ago the Minister said that these higher rents will not be operative before the valuation is established and that, therefore, the issue does not arise. He cannot have it both ways. Can he say which way he is choosing?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I am afraid that the hon. Gentleman is under a misapprehension. Any changes in the rates of coun- cil houses at the revaluation depend upon rental evidence in the private sector and on the rate poundage.

Mr. J. T. Price:

Is not the Minister avoiding the main issue involved in this question? Does not the mere fact of doubling the rental of houses in private ownership also have a fundamental effect on the capital value of those properties? Will not property companies, which are speculating in the purchase of old properties in anticipation of a fat dividend in increased rents under this Government's policy, cash in on the capital value of those properties before the new valuation puts an extra rating burden on them for these properties? Are not the Government evading the fundamental issue and deceiving the House in doing so?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

No, that is not the case. If the hon. Gentleman reads HANSARD, he will find that it is not so.

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek an early opportunity of raising the matter on the Adjournment.