Northern Ireland (Rates)

– in the House of Commons at 12:00 am on 19th October 1972.

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11.50 p.m.

Photo of Mr David Howell Mr David Howell , Guildford

I beg to move. That the Rates (Northern Ireland) Order, 1972, a draft of which was laid before this House on 9th August, be approved. This draft order provides essentially for a re-enactment of the existing law on rating and valuation in Northern Ireland with amendments and improvements which are necessary for the continuation of a workable system of rating and valuation after 1st April, 1973, when local government reorganisation in Northern Ireland becomes effective.

The Northern Ireland Advisory Commission and other interested parties, including local government representatives, professional associations and the main churches, have been consulted about the bring the matter back to the Floor of the House to give us his considered opinion. This is why I say this method of operation is contemptuous.

Question put:

The House divided: Ayes 52, Noes 6.

legislation. So far as rating is concerned, the major new proposals in the draft order were announced in "Report on Progress—Reorganisation of Local Government and other services"—published by the Government of Northern Ireland in November, 1971, and well received. Part I of the draft order is introductory and deals with title and commencement, interpretation and temporary provisions necessary while the Northern Ireland parliament is prorogued.

Rating is dealt with in Part II of the order. The major new provisions are as follows, first: a uniform regional rate to be struck by the Ministry of Finance and separate district rates to be made by each district council; second, a scheme of rate rebates on much the same lines as that operated by local authorities in Great Britain; third, powers to make transitional arrangements to ease the impact of the change in the rating system on the ratepayers. For the convenience of both ratepayers and administration the regional and district rates will be collected together by the Ministry of Finance which will also operate the rate rebate scheme and will pay over to each district council the product of its district rate. At present, rate poundages in Northern Ireland vary widely from one local area to another so that the change to a uniform regional rate would result in large increases and decreases in certain cases. The order therefore provides power to introduce a scheme for cushioning the impact of large increases. It will also be used to phase out special discounts and reliefs given in some local areas but which will have no justification under the new centralised rating system.

The present system of local government finance in Northern Ireland will be completely dismantled when local government is reorganised. As a result it will be impossible, certainly beyond 1973–74, to calculate the regional rate by reference to what the services transferred to central government would have cost in terms of a rate after grants and other adjustments had been taken into account. It is, however, important that the Northern Ireland ratepayer, who will pay his regional rate into the Northern Ireland Exchequer, like any other tax, should have a burden of rates which is equitable by comparison with his counterpart in the rest of the United Kingdom. The principle of parity should apply to rating as it does to other taxes. At present, it seems that the best means of attaining future parity is to compare the Northern Ireland rate with the rate level in areas of Great Britain which have a similar structure of household incomes. It is intended to derive the Northern Ireland regional rate from such a comparison.

The introduction of a rate rebate scheme similar to that which operates in Great Britain is desirable on grounds of parity in the social services. The scheme is made possible by the proposed centralisation of rate collection which will allow previous administrative difficulties, particularly related to the small size of local authorities, to be overcome.

Part III of the draft order deals with valuation. This part contains important new provisions for the introduction of continuous revision of valuations for rating in place of the present system of annual revision, the removal of rate exemption from certain properties on which rates would in effect be paid by the government and revision of the law concerning charitable properties which are used for domestic purposes.

Continuous revision of valuations has operated in Great Britain for many years. By reducing the delay between application for revision and the consequent change in valuation which is a feature of the present system, this would remove a source of inequity between ratepayers and will be welcomed. The removal of rate exemption from properties such as the Ulster Museum and the Ulster College on which the Government would pay rates is intended to add to the financial independence of district councils by making them less dependent on Government grant; there are powers to add by subordinate legislation to the bodies listed in Schedule 15 as excluded from rate exemption and additions will be made to the list when consultations with interested parties are completed.

The provisions revising rate exemption for charitable properties are intended to remove uncertainties in the application of the existing law which have arisen out of certain court decisions. At present, the qualifications for charitable exemption are very similar in both Northern Ireland and Great Britain but the rates are very different. Domestic properties occupied by charities in Northern Ireland, if they qualify, can obtain up to 100 per cent. rate exemption. In Great Britain, if they qualify, they can obtain 50 per cent. exemption with a further 50 per cent. at the discretion of the local authority and there is a special provision for clergymen's houses to receive a mandatory 50 per cent. exemption.

In Northern Ireland recent case law has tended to extend the range of properties which qualify for exemption and it has become extremely difficult for the Commissioner of Valuation to devise a readily comprehensible working rule. In the case of clergymen's houses it is possible that because of the different terms on which incumbents occupy residences, some religious sects would obtain exemption while others would not. The order provides therefore for a change in the Northern Ireland law in relation to domestic properties which will give exemption on much the same scale as is available in Great Britain—50 per cent. This will be a move in the right direction. No change is made for other charitable property except, as I said, in certain cases where the Government would bear the burden of rates.

Although much of this order is consolidation of what went before and reformation of it in the new pattern to make it workable under the new local government system, there are new and important provisions in it and I shall be happy to answer, either in the debate or by letter, as many details about them as I can. However, the general underlying pattern of the order is sensible in the context of rate reform and thinking about rates throughout the United Kingdom. I think that it is widely welcomed in Northern Ireland and throughout Great Britain, and I commend it to the House.

11.57 p.m.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

Over the years there has been much discussion on the question of the suitability of rates as a local government tax, but, as with the future shape of local government finance which has emanated from the Department of the Environment in this part of the United Kingdom, it always comes back to the rates. It is argued that rates give each authority a certain autonomy and that they are easy to raise. But the question which arises with the differential rate which there is to be in Northern Ireland is why it is not possible to raise the regional rate, or monies from the region as a whole, via taxation. It is said that if there is a rate for the whole of an area there is no need to depend on the argument that the rates are easy to raise and that they give a certain autonomy. I accept that this argument does not hold when we come to the question of the district councils.

I should like to ask a number of questions. Article 6 is the cornerstone of the order because it makes provision for a regional and a district rate. The Minister was good enough to give certain information about it, but there is one point on which I am not clear. Which of the rates is to be declared first? Will the regional rate be announced first and then the district rate? What sort of sum is it intended to raise from the combined tax? At the appropriate time, not tonight, written information will suffice. What is the present variation in rate poundage between the two, and what maximum percentage variation in rate poundage is envisaged once the provisions of the order are fully in force? Parity of treatment for Northern Ireland as compared with areas of Great Britain is to be introduced; which areas of Great Britain are to be selected as having income ranges similar to those of Northern Ireland?

Article 28 introduces a rate rebate scheme and the income test as set out in Schedule 10 is identical with that used in this part of the United Kingdom and there is no need to go into the details of that. But the problem with means-tested benefits is that the take-up rate is low, especially in the early days of the introduction of a scheme. May we have an assurance that there will be a large publicity campaign in Northern Ireland about the right to the rate rebate scheme once it comes into effect?

Article 58(2)(b) requires the Commissioner of Valuation, or his representative, to give at least 24 hours' notice of intended entry upon land. This is a small but important matter. Does that mirror legislation over here? Is 24 hours' notice enough? What constitutes notice?

Schedule 7 defines the expression "material change of circumstances", and the definition is crucial to the order. Is it identical with that used in comparable Acts in Great Britain?

The Minister twice mentioned exemptions from rates—if he did not do so twice, perhaps the force with which he did so has impaled it upon my mind. I remember that he mentioned four bodies, two of which were the Ulster Folk Museum and the Ulster College. Perhaps the changes will close most of the gaps between Northern Ireland and Great Britain in the matter of exemptions, but important differences remain, especially with charities. Is the Minister able to explain why there is that difference?

Schedule 18(2) makes all sorts of complicated provisions for the rating of playing fields. Why is there a temporary limitation on rates and what is the significance of the date 1st April, 1956?

I was intrigued to find that the amount of rates leviable in respect of a playing field in any year was to be calculated in accordance with the formula: A=R(1—). Why is it so complicated as to make differential calculus look easy? I am questioning not the complications of rating finance, but why such complication is necessary for rating playing fields. Is that to be found only in Northern Ireland?

Rates are returned to businesses affected by the disturbances. At present the scheme applies only to small areas of Belfast, Londonderry and Newry. It provides that 75 per cent. of the rates may be reclaimed. Should not the areas be extended? For example, in Belfast it should probably apply to a two-mile radius around the centre of the city. Would it not be easier to deduct the rebate at source than to pay it and then have the firms reclaim a portion?

I have one or two questions about the current rent and rate strike. May we have current information about the numbers involved? How much is involved? In my post bag and during my visits to Northern Ireland I find many questions about the method of deductions from social service benefits. The major question I should like to ask is: what is the situation in this respect?

The whole of Northern Ireland is a development area with special aids to industry. It has been put to me that it is not sufficient to treat the Province as a whole and that there should be differential treatment of different areas of the Province with a differential in favour of areas west of the Bann.

Could not rates be used in this respect? Could not derating or lower rating be used as a sort of adjustment? Given that there is this regional rate which is enshrined because rates differ in different parts of the country, could this not be used to deal with the real problems of different parts of Northern Ireland?

As with the previous order, many questions could be asked. There is no need for the full treatment which could have been used for the planning order, but the procedures which will be arranged in the new Session mean that we should be able to give more time to this.

Given the order, and the need for it, we on this side support it.

12.6 a.m.

Photo of Mr Rafton Pounder Mr Rafton Pounder , Belfast South

The House is indebted to the Government for the explanatory document to the order, which is essential if anyone but the rare group of rating experts is to have any comprehension of the order. One main theme I detect in the document is the manner in which it is seeking constantly to refer to ways in which the changes in the existing system in Northern Ireland are largely being made to bring it into line with the system in the rest of the United Kingdom. There are repeated references to this. For example, in paragraph 3(b) of the document it says: A rebate scheme based on the Great Britain system is desirable on grounds of parity in social services. Then in paragraph 4 it is stated: … the introduction of the continuous revision of valuations on much the same lines as in Great Britain. In paragraph 5 is written: Reorganisation presents an opportunity to move much nearer to the Great Britain system and thus to increase the amount of property from which councils can draw rates as of right. So one could go on in this constant reiteration of the idea that much of this order is to streamline the rating system on lines comparable with that in the rest of the United Kingdom.

Although I am generally critical of this order and of the thinking behind it, nevertheless, this might be an opportune moment to comment favourably on two points. I welcome the continued 75 per cent. industrial derating which has been in operation in the Province for a number of years and which has undoubtedly been satisfactory and successful in attracting new industry to the Province. I welcome the proposed reduction of rating exemption for charities, because the net was pretty wide. I should be careful in what I say because I used to work for an organisation which may be caught within the ambit of the new regulations, but it was bordering on the ridiculous when a number of large organisations were enjoying rating relief when they were well able to afford to make a contribution and thus relieve some of the business rates, particularly as with Government concerns it was a mere contra-entry in the book.

I welcome the endeavour to bring this more into line with British practice. The most important point in the explanatory document and in the order is to be found in 3(a) of the document, where it is stated that the principle of parity of treatment for Northern Ireland ratepayers should be introduced by using the average rate burden per household in areas selected as comparable in Great Britain. That is the yardstick of what the fair average Northern Ireland rate poundage should be.

On the face of it, that may seem reasonable. Rating reforms were urged on the former Northern Ireland Government for many years by local authorities. One such reform was the one to which I have referred, the pruning of rate exemptions for charities. However, it is when we come to article 7 that we arrive at the nub of the problem. There will undoubtedly be discontent in the method of determining the regional rate. Article 7 is crucial to the entire order. It is mysterious, but one has only to read article 8, which clearly sets out the position of the district councils in determining rates, to note that article 7 is strangely silent on the regional rate.

I hope that I shall be forgiven for mentioning Belfast specifically, but under the reorganisation of local government, 80 per cent. or more of the rateborne expenditure by the city of Belfast is being transferred from local government to the regional administration. It may be a comparable pattern for the rest of the Province but I am not in a position to comment. It is crazy that we should have 20 per cent. spelt out and 80 per cent. left in a vacuum.

According to the Family Expenditure Survey, the North East of England, Yorkshire and Wales have incomes roughly comparable to those in Northern Ireland. Therefore, it can be presumed that one of those areas will be selected to calculate the average rate burden per household which will then be applied to Northern Ireland. Rates in Great Britain and Northern Ireland have up to now taken into account Government grant and local expenditure. Each authority has known in advance the approximate amount of money which it can expect from the central Government fund by way of rate support grant. It will have considered the estimates of expenditure on each of the various services which it provides, the difference between the two amounts being the amount to be borne on the rates by the ratepayer. But the ratepayer, when he receives his demand note now, has itemised the services upon which his rate demand is based.

Additionally, the estimates will have been provided and submitted to the elected representatives of local government to consider the rate of expenditure, the priorities and the order of those priorities. Unfortunately, that will be changed by the order, and the Northern Ireland ratepayer will no longer know the amount of the rate support grant. He will no longer know the cost of the services which are being provided. Instead, he will be called upon to pay the same amount as his counterpart in Teesside, Wales, or whichever area is chosen. He will have no say in the expenditure in those regions, which must have a bearing upon the demand being made upon him. This is taxation without representation in anyone's language.

In the present situation pertaining in Northern Ireland, that is doubly the case. We are going ahead and carrying out the idea of restructuring the rate system in the Province which was originally envisaged in what I regard as the infamous Macrory Report. We are now in a situation that presupposes a Stormont, a regional administration but which no longer exists, yet the reorganisation is going to come into being on 1st April, 1973, with a disrupted district council structure and probably no regional administration in operation.

If one gets the principle wrong it is awfully hard to get some of the details right. We are in the position that the order is changing not only the means of levying rates, the calculations thereof, but the whole concept of rating, a local tax on property levied to meet expenditure on services as determined by elected representation, which is a fair definition of a rate. However, there are no elected representatives to comment or scrutinise the rate demand which will be made.

There might be some rough and ready financial equity in this proposal provided that one could be sure that the standard of services provided was similar. In other words, I am sure that the Northern Ireland ratepayer would have no ground for complaint about paying the same amount of money as was paid by, say, a Welsh ratepayer, if his roads, his schools, his clinics, his old people's homes and so on were provided and maintained to the same standards. Parity of treatment is not the same as parity of payment.

The only possible way of comparing standards is by calculating the expenditure per head of population, and this will be just impossible in Northern Ire-land now under the new system. This is admitted in the explanatory document, and in a comparable document accompanying the draft Drainage Order it is said: It is not intended that parts of the regional rate should be specifically earmarked to pay for individual services". In my view, that is a considerable admission, and it alters the whole basis of the concept of rating as we have hitherto understood it.

The Northern Ireland ratepayer will not know what is being spent on the various services. Neither will he know whether he is getting good or bad value for his money. How many hon. Members would accept a procedure for their own area under which the rates were based not on the requirements of that area but on some fairly meaningless comparable yardstick drawn from a place perhaps several hundred miles away? It is rather like paying for someone else's groceries because one does not know the cost of one's own.

As the rate is to be fixed by reference to that payable in another region of the Kingdom, the other factor contributing to expenditure and, consequently, to standards of services is Government grant. How will this be determined? Presumably, the Ministry of Finance and the Treasury will jointly determine what sum of money shall be allocated to Northern Ireland as the equivalent of the English rate support grant. But it is most unlikely that this will be separately itemised, and it could well find itself lumped together with other transferred revenue. Perhaps my hon. Friend the Under-Secretary of State can help here. Is there at this stage any indication of an agreed formula between the Treasury and the Ministry of Finance as to how this is to be calculated?

In effect, the standards of service will he determined by the officers of various Government Departments. This Order gives the widest possible powers to the Ministry of Finance in Northern Ireland. The striking of the regional rate has all the appearance of unmistakable similarity to the marine navigation formula of "By guess and by God".

In my view, in this age of the computer, there is no reason why it should not be possible for local government and central Government expenditure to be kept separate. I know that, under certain headings, it could be complicated, but there is no reason why it should not be done. What, for instance, will be the procedure now with regard to expenditure on roads? I have understood the former procedure to be that the central Government paid for trunk roads and local government paid for maintenance and so forth of subsidiary and side roads. What will happen now? Will the regional rate take account of all road expenditure, or will there be some which will fall within the district councils' orbit of responsibilities?

What has been the result of the consideration given by the Secretary of State to the representations made to him on 1st August when he met a deputation from the Belfast Corporation which outlined many of the points which I have sought to raise tonight?

In a letter from Stormont Castle dated 15th August to the Town Clerk of Belfast with reference to this draft order, it was said—I quote the paragraph for the sake of fairness— … the decision not to include actual details of the method for determining the regional rate in the order itself was taken because to have done so would have been unnecessarily restrictive, particularly if there are to be changes in the system from time to time". What is meant by the words "unnecessarily restrictive"? Surely, it is the essence of any system of taxation that it be spelled out in such a way that those who unfortunate enough to have to bear the burden of the tax, be it local or national, know what they are being let in for.

Therefore, we are in the situation that the Northern Ireland ratepayer will be obliged to pay on the basis of decisions taken in some other region and the standards of the services, which will be centralised and constitute perhaps 80 per cent. of the rate, will be decided by officials when considering Government subvention towards the cost of such services.

The order clearly shows that the re-organisation of local government in Northern Ireland was proceeded with in such haste by the former Administration that insufficient attention was given to its full financial implications. Even at the back of the order there are nine pages of repeals of existing Statutes. The order is a further example of bureaucracy in Wonderland. No mention is made of the method of calculation of the regional rate. The Ministry is obliged neither to explain, nor to justify the rate fixed. It is virtually a licence to print money.

The order is unacceptable to me unless clear lines of definition concerning the levying of the regional rate and the basis and calculation thereof are included in it.

My hon. Friends and I from Northern Ireland are as opposed to the procedure adopted for this order as for the last one. Having registered our protest against the procedure on that occasion by voting, I am content on this occasion to register my protest by my voice.

12.22 a.m.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

Again, we are dealing in this draft order with a very complicated piece of legislation. I am sure that when hon. Members study Schedule 19 and consider all the Acts that will be completely or partly repealed, they will understand just how far-reaching this legislation is. When we consider that the order makes a complete change not only in the rating system as heretofore practised in Northern Ireland, but in the way the rates were struck, we find that it is revolutionary in dealing with complicated legislation affecting the lives of all people in Northern Ireland.

Yet at this early hour in the morning, on a Thursday when the House is always thinly attended as hon. Members go to their constituencies for Friday meetings, we are asked to give a blank cheque to the Government on legislation that is not amenable. We are giving a Second Reading, a Committee stage and Third Reading to this draft order, which is really a complicated Bill.

Although it will no doubt fall on deal ears within the Government, I must again solemnly protest, on behalf of the people of Northern Ireland, that legislation should be brought before this House in this manner. We were to have a Committee to consider such legislation. This afternoon the Leader of the House could not even tell us when that Committee will be brought into being or how it will operate. Therefore, we must deal with this matter by Order in Council, after being given an assurance that only those Bills which had been discussed in Stormont, before its prorogation, would be brought in in this manner.

Many people in Northern Ireland tonight will be saying, "Why do not the Government apply themselves to gathering in the millions of pounds owing to them by the rate strike which is still on in Northern Ireland?". Instead, we are asked to revolutionise the whole rating system when the present rates cannot be gathered in. So I repeat, the Government's priorities are wrong.

Will the Minister enlarge on the provisions of the draft order and explain how he will carry out the part dealing with agricultural property? In Part II of Schedule 14 it says: The net annual value of a house occupied in connection with agricultural land and used as the dwelling of a person—

  1. (a) whose primary occupation is the carrying on or directing of agricultural operations on that land; or
  2. (b) who is employed in agricultural operations on that land in the service of the occupier thereof and is entitled, whether as tenant or otherwise, so to use the house only while so employed,
shall, so long as the house is so occupied and used, be estimated by reference to the rent at which the house might reasonably be expected to let from year to year if it could not be occupied and used otherwise than as aforesaid. That means that a house upon a farm will be valued by the rent that would be paid for it if it was not a farm house. I suggest to the Minister that that is almost impossible to operate. Does he understand the vast difference in rents in Northern Ireland? Has he any idea what rents are being asked in Northern Ireland? Has he any idea what people are paying for property with neither water nor amenities? The order says" reasonably be expected". Upon what standard will that be based? Will it be upon an average standard of what is paid across the board for rents in Northern Ireland? Is he aware of what local authority rents are at the moment and what rents are expected to be on the new housing estates?

The Minister said that in England clergymen's residences were 100 per cent. derated. That has never applied in Northern Ireland. Is he now suggesting that clergymen's houses will be derated by 50 per cent? Church halls in Northern Ireland which are used in many cases for dancing, bingo and for sports with profit are not rated but in England they are rated. Under the order church halls in Northern Ireland will continue to enjoy 100 per cent. derating. If a church hall is not used primarily for charitable purposes but is used for making money it should be rated like any other hall.

Will the Minister explain the position of houses connected to churches? Will they get 50 per cent. derating. I would oppose that, because it is not necessary. The derating of churches and church halls is a good enough concession and clergymen's houses should not be derated 50 per cent.

I am worried about the position of agricultural properties in Northern Ireland. Will the Minister enlarge on how these properties will fare, both in the striking of the regional rate and of the district rate. This is a long and complicated draft order. It represents a revolution in the rating system. It will be a rating system operated by comparison with other parts of the United Kingdom, and while the people of Northern Ireland want to carry their full load they want to carry an equitable load in comparison to the services they have. I have a farming district in Rashenkin where the people pay a water rate but have never had water. Is it any wonder that they demand water when they have paid rates for it and are paying the same water rate as people who have water? Some hon. Members will no doubt be amazed to hear about this, but these are the problems we face. What can I say to a person who asks, "Why must I pay a water rate when I have to carry my water over a field, for 20, 30 or 40 yards?" These are the sort of problems that concern us, especially in agriculture.

Other matters in the draft order deserve careful consideration. The more I look at it, the more I feel that the Government would be wiser to make it a Bill and present it to the House so that we could table a series of Amendments and discuss them and make the points that it is necessary to make for the people of Northern Ireland.

But I should not like it to go out from this House that we in Northern Ireland do not want to carry the load. We are prepared to carry an equitable load, provided the people who are paying it are getting value for their money. We do not want to be different from any other part of the United Kingdom in that, but there are parts of Northern Ireland which deserve careful consideration.

We have already made a protest tonight by dividing the House, though not because we believed that the previous draft order was all wrong, as I made clear. We do not believe that the order before us is all wrong. There are many good things in it. We believe that the rating system needs to be looked at, that many of the Acts being repealed are obsolete, and that there is need for new legislation. But we feel that revolutionary legislation of this nature should be dealt with in the way in which the House deals with other legislation. I wonder what any Member from Scotland, Wales or England would say if the House decided in an hour and a half to revolutionise their whole rating system. The people in Northern Ireland are saying—and I came from Northern Ireland today, "Why is it that the Parliament at Westminster can spend hours fighting about whether you go into a museum free, but has not time to give hours to dealing with very important legislation that affects our everyday life?" That is the reality of the situation.

This House, by its own vote, took on a load. I warned it that the ghost of the old Irish Party would haunt it. I was laughed at, but the ghosts are rising tonight and will continue to rise until we have an opportunity of discussing the matter in a full and proper manner.

12.33 a.m.

Photo of Mr David Howell Mr David Howell , Guildford

I am grateful to hon. Members for the points they have made on the draft order. I shall answer as many of their questions as I can.

I begin with the points made by the hon. Member for Leeds, South (Mr. Merlyn Rees). He asked which rate would be announced first as between the rate struck by the district for district expenditure and the uniform regional rate The answer is that it will be the district rate. The question of which areas will be taken for comparison of comparable income structures and household incomes is a point mentioned in the explanatory document. I am grateful to my hon Friend the Member for Belfast, South (Mr. Pounder) for his kind comments about that document. Such a document is valuable as background to a subject as complicated as rates, even when many of the provisions in the order are consolidation, although there certainly are innovations in the order.

Publicity for the new rebate scheme we will certainly give on a very strong and powerful basis. I give that full assurance. That is essential. There is no point in having these schemes, which inevitably involve fairly complicated calculations, if people are not aware of their rights and cannot take them up. So publicity we will certainly put behind the new scheme.

The next question concerned variations It is a little difficult to give figures which would be reliable, but variations in rate poundage for 1972–73 might be between something like £1·03 for Cookstown Rural District Council up to £2·93 for Banbridge; there will be less variation under the uniform rate plus district rate system.

The hon. Member asked about the complexities of the calculations for playing fields. This provision is copied straight from the English system and is based on the valuation of playing fields. It is complex but it is a system throughout the United Kingdom and it seems to be the accepted system.

The hon. Member went on to the question of city centre rate repayments, which is not strictly a matter raised in the draft order but is important. The Government have been giving a good deal of thought and effort, and indeed assistance, to city centre traders and are in the process of further considering how help can be brought particularly to the big stores in the city centres, to enable the life of the city centres to continue and to neutralise the declared aim of IRA killers to take out and destroy the economic life of city centres. For that reason the rate repayments were designed to be limited to the centres of certain cities, particularly Belfast, also Londonderry and, I think, Newry.

Of course there have been arguments for extensions but the difficulty here is where to stop. It is all too easy, once one moves away from the objective of preserving the life of city centres, to find that the argument arises for general rate repayment throughout the whole Province. I do not think that would be right and the Government are not prepared to accept it.

We also believe that the machinery of rate assessments should go forward separately and that the repayments of 75 per cent. should come afterwards and when the necessary proof has been provided that there has been loss of business, and so on. I think that after the initial difficulties—because there were certain administrative problems—the system is now working fairly well and is welcomed by many people, and the Government have been considering further measures to help city centres. I hope that this gives the picture on the whole of that issue, which extends far further than the question of rates and rate assessments.

As regards the withholding of rent and rates, my current figure is that 17,800 people are still withholding rent and rates. This is substantially lower than in the past but it is still a big number. About £1·1 million is still outstanding. That is the present position.

The hon. Member asked why there could not be differential rates for different areas of Northern Ireland—say, west of the Bann or as opposed to the east side of the Province. The answer must be that if there are to be differentials—and of course there are—much the best way to develop these is through the existing industrial incentives and inducements and not to use the rating system as yet another system with a differential effect throughout the Province. To do that would merely create yet another vastly complicated, elaborate, variable system throughout the Province. It makes sense to go for administrative simplicity concerning the rates and to use other methods, as we do—and powerful methods—for differential inducements to attract industry to the places where the jobs are really needed, which is a major aim of Government policy.

My hon. Friend the hon. Member for Belfast, South made some valid points about the propositions in the order. He is attacking the basic principle of the Macrory Report and the way it should be financed. It is true that district councils will be concerned with a smaller proportion of the expenditure and will be striking a rate to cover it. It is true also that the uniform rate for the whole region will be struck centrally and cover a very much higher proportion of the expenditure throughout the localities. It is true too that under the Northern Ireland (Temporary Provisions) Act that uniform rate is subject to a negative Resolution of this House, which he would argue—and it would be difficult to challenge him—is not as full and satisfactory a democratic process as he would like.

It is the aim of the Government, and my right hon. Friend's constant objective, backed by ceaseless efforts, to bring about political developments which will allow the Macrory proposals to develop towards a system of government which will command the support of the community in Northern Ireland and which will again make it possible for this kind of development to be subject to proper scrutiny at the centre at the regional level. That is what we want, but meantime it is subject to negative resolution here, so it is not entirely true to say that there is no control or democratic say at all.

Before Stormont was prorogued, the proposal was that there should be an affirmative resolution there. The hon. Member for Belfast, South can accept that or attack it, but in attacking it he is attacking the basic proposition of Macrory, which was that there should be regional centralisation of the organisation of financing of a large range of activities which hitherto have been vested in local councils. This was the spirit in which it was proposed and rating reform backed up and underpinned these proposals.

I turn now to the substantial points made by the hon. Member for Antrim, North (Rev. Ian Paisley). He pointed to the many Acts mentioned in the order. It covers a wide range of past legislation. It is to a very large extent consolidation. I am not excusing the fact that we are under the regime of the Temporary Provisions Act, but it is a little misleading to imply that all these Acts are in some way being swept away and replaced. In many cases it is merely consolidation.

The hon. Gentleman mentioned the valuation of agricultural property. This simply repeats the English provisions. The arrangement which exists in England is that the estimate of rent will be made on the basis that a house or farm is subject to a perpetual covenant to be used only for that purpose and let only to a farm worker. This repeats in its entirety the provision which also exists throughout the rest of the United Kingdom. It has been found in practice there that it creates no difficulty.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

I think the hon Gentleman will agree with me that the whole farming system of Northern Ireland is entirely different. As a result of the old land agitation, there is a completely changed system of farming in the whole of Ireland. Many of the farms to this day in England are rented. But the farms in Northern Ireland are no longer rented. I know of no farm in Northern Ireland which is. These farms were bought out under the old system of buying out farms, so they do not pay rent. No one knows what one would have to rent a farm house at. That is the difficulty I am pointing out.

Photo of Mr David Howell Mr David Howell , Guildford

It may be that in practice these difficulties will be fundamental; I am advised that they could be overcome. Despite difficulties historically in the way in which agriculture has evolved, we shall be able to deal with the situation when it arises. I note the hon. Gentleman's warning and will bear it in mind.

The hon. Gentleman asked for specific answers about clergymen's houses. It is not true—and I do not think he meant to imply it—that I had said that in the rest of the United Kingdom such houses got 100 per cent. rebate. They do not. In fact they get 50 per cent. What is proposed for Northern Ireland is that they will now all get 50 per cent. rebate. I think the hon. Gentleman said he was opposed to that, but that is what is now proposed for Northern Ireland—particularly in light of recent court cases which have threatened to throw into chaos the whole business of charitable dwellings. The order is necessary to bring fairness and equity into the system by an across-the-board 50 per cent. provision for clergymen's houses.

In respect of church halls, if used for charitable purposes by a charity they will be exempt from rates. That is the situation in the rest of the United Kingdom and it will be the case under the order, if we now approve it. That is the arrangement implied by the order.

I think I have covered nearly all the points which have been made. If there are others, I will write to hon. Members filling in the details. I regard this as an important development in methods of rating. It can be argued that it moves the question of rating away from the local level, but the whole spirit and purpose of Macrory was to set up a stronger regional system. That is reflected in the draft order. I therefore ask the House to approve it.

Question put and agreed to.


That the Rates (Northern Ireland) Order, 1972, a draft of which was laid before this House on 9th August, be approved.