VALUATION AND RATING (EXEMPTED CLASSES) (SCOTLAND) BILL [Lords]

– in the House of Commons at 12:00 am on 25th October 1976.

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Order for Second Reading read.

6.56 p.m.

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Craigton

I beg to move, That the Bill be now read a Second time.

The Bill follows my announcement on 14th April that I intended to introduce legslation, first, to clarify the rating position of offshore oilfields, oil rigs and installations, and, secondly, to establish that the toll bridges continued to be exempt from rating liability.

With regard to oil installations, three North Sea oil fields lying many miles offshore have already been entered in valuation rolls by local assessors and the action of the assessors is being challenged by the oil companies in the courts. Since the question is sub judice I can say only that the seaward limits of local authority areas are not clearly defined. In consequence, the assessor can establish the rating position of a property only by entering it in his roll, and letting the courts decide the matter on appeal.

Whatever the outcome of the appeals which are pending on the offshore cases, or others which may arise, there is a strong risk that they will do nothing to establish the position generally. In other words, it is possible that, for the time being at least, the courts may have to decide the rating question field by field and pipeline by pipeline, without the benefit of the Bill. Moreover, local authorities might have differing ideas on the seaward projection of their boundaries and there might be conflict over who should collect the rates. Clearly, we must provide a sure and simple alternative to continuing uncertainty and the expense of litigation for local authorities and oil companies alike.

It is, I think, generally accepted—I know that the view is held in the House—that oil fields and installations should not be liable for local rates. Petroleum operators pay their fair share of taxes in the form of corporation tax and petroleum revenue tax which can amount to 75 per cent: of revenues. They also pay local rates on onshore installations.

The Government have also seen that the public interest is fully protected in offshore exploitation by the establishment of the British National Oil Corporation and by the arrangements made for public participation by BNOC in existing and future licences. Therefore, there is no question but that overall the offshore oil industry pays its fair share of taxation. If we find any defects in existing legislation on these matters, there is ample opportunity to put them right by amendments to corporation tax, petroleum revenue tax and the rest. It has always been my view, and it is certainly the Government's view, that rates should not be paid on offshore installations. The purpose of the Bill is, first, to put that matter beyond legislative doubt.

The exempting powers in the Bill are not limited to petroleum subjects. They will be exercisable in relation to property of any description which lies, at least in part, below low-water mark at ordinary spring tides. This means that the powers will allow the second purpose of the Bill to be implemented, namely, the correction of an error in the Local Government (Scotland) Act 1973.

Section 225(8) of that Act nullified all local Act provisians relating to valuation and rating and so deprived the Forth and Tay road bridges, which are local authority undertakings, of rating exemptions. That was not intended by the 1973 Act. It was one of those mistakes which sometimes happen, and it has to be rectified if we are not to find the Forth and Tay road bridges subject to local rates.

I am sure that no hon. Member would welcome the effect which that would have on the tolls for those bridges. There is a good deal of agitation for the removal of tolls, and, so far as I am aware, no substantial pressure group either in the House or elsewhere for the increase of tolls. If the exemptions are not restored, the tolls might have to be about doubled to meet the rate bills which might eventually ensue. We do not want that to happen, and the Bill provides a vehicle to enable me to ensure that it does not.

I have explained the provisions of the Bill only briefy since it is, I think, uncontroversial. There may be points about the drafting and particular provisions which hon. Members will wish to raise in Committee, and my hon. Friend and I will be happy to deal with such matters then.

I come now to the general structure of the Bill. Clause I confers on me as Secretary of State the power to prescribe by order types of rateable property which are to be excluded from the valuation roll, with the result that they will be exempt from rates. In other words, it gives me a flexible power, but an order may affect only lands and heritages which lie wholly or partly on, over, or under the bed of the sea. Hon. Members will note that that definition covers not only offshore oil installations but the two bridges as well.

Photo of Mr John Corrie Mr John Corrie , Ayrshire North and Bute

Would this cover an oil rig being built in a rig building yard out in deep water and so below low-water mark—at Hunterston for instance?

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Craigton

The normal process is that the initial stages of building, whatever kind of structure it may be, take place onshore, or certainly at the edge of the shore, and it would not be my intention that that would be excluded from rating liability. However, once the structure had been moved out, whether to be completed or to be installed eventually somewhere in the North Sea, it would be my intention that the structure should not then be rated. I am not trying to deprive local authorities of rates which they should legitimately have. The Bill is drafted to enable me, with the approval of the House, to deal flexibly with particular circumstances. It would be difficult to write all such matters into the Bill and be sure that we had the correct answer. That is why the procedure of prescription by order has been decided upon.

I was saying that I may make one of these orders for lands and heritages which lie wholly or partly on, over or under the bed of the sea. In the order I can also prescribe complete or partial exemption.

There has to be an element of retrospection in the Bill as the House will recognise, because there are oilfields already on the valuation rolls. They are subject to dispute, but they are there, and the order-making power will in the first instance, therefore, allow exemption to be extended to the year 1975–76, which means going back a bit. Subsection (2) adjusts the power to back-date exemptions to the power of the assessor to back-date valuation roll entries under Section 2 of the Local Government (Scotland) Act 1975.

The only other point I should mention about Clause 1, which I hope is reasonably self-explanatory, is that the exempting power is subject to strict parliamentary control under the affirmative resolution procedure. That is provided for under subsection (7).

Clause 2 contains a procedural provision which will allow me to direct assessors to refrain from valuing a property which might be covered by a proposed exemption. This is to prevent unnecessary complications arising by having property valued, and a whole lot of procedures gone through to nugatory effect because it is intended that there should be an exemption. Under Clause 2 I can give a direction to prevent that happening, but in so doing I am under a commitment, in the terms of the clause, as soon as possible after giving such a direction to tell the assessors whether an order is to be made; and, if no order is to be made, I have to revoke the direction. In other words, Clause 2 is a holding provision to prevent unnecessary work and to allow the question of exemption to be considered before matters have gone too far.

I think that the Bill has been generally accepted as a sensible measure. It will, I hope, put a complicated piece of valuation law on a firm footing, though doing it in a flexible way. I commend the Bill to the House.

7.6 p.m.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

Our view on this Bill is the same as our view on the Retirement of Teachers (Scotland) Bill—that we do not oppose it in principle, although, since it is a complicated measure, there are several questions to be raised.

No doubt, when right hon. and hon. Members heard reference to offshore structures, a good many had the word "hybrid" cross their minds. I am sure that this is not a hybrid Bill, but I want an explanation of Clause 1(8). This is a most unusual subsection. I imagine that there may be a precedent for it, but I should like to know, since it provides that, if an order is made exempting a particular category of oil rig, oilfield or bridge from rating, and that might well be within the category of private legislation which should be referred to a Private Bill Committee, whereas the subsection provides that, irrespective of that, the order would go through the Public Bill procedure.

In such circumstances—one recalls here what happened over the Aircraft and Shipbuilding Industries Bill—one side of the House might take the view that there was a case for suspending Standing Orders, and it seems unusual that we are, in effect, providing that Standing Orders are suspended in all such cases before matters are considered. Why do we have subsection (8)? Is it necessary, and is there a precedent?

Second, bearing in mind that the Bill covers a wide range of subjects, although the Minister said that he intends to use it only in a certain respect, it would be helpful to know the extent of the rateable value which could be affected by the Bill. Certain things which have been entered on valuation rolls will be removed. On the other hand, as my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) said to me earlier today, it seems that the Bill could be used as a device for taking out of the valuation roll things which have been there for many years and about which there has been no contest or dispute—for example, moorings, wharves, quays and even salmon fisheries, to which we shall come later. It seems that this provision could be used as a means for taking out of the valuation roll things which are there now, and this could seriously affect the rate poundage in areas where such land or properties appear on the valuation roll.

I raise that matter with special force because there is a desperately serious rating problem in Scotland today. On Thursday last, the Secretary of State told me that the average householder in Scotland is paying £123 in rates this year compared with only £64 five years ago. The burden of rates per head of population has risen from £42 to £86, and all the indications are that this year there will be a further substantial rise. We know that the Secretary of State intends to exempt certain oilfields, oil platforms and bridges, but what other things, which are included in the valuation rolls, could be exempted?

It has been made clear both here and in another place that the object of the Bill is to ensure that the benefits of oil revenue accrue to the nation as a whole and not to particular areas of Britain or to particular regional or district authorities. I wonder whether the Secretary of State might not have a major problem in implementing the orders because of the Government's proposals to establish a Scottish Assembly. The congestion of parliamentary business has caused this possibility to recede a little, but the Government are committed to introducing legislation and I should like to know whether the Assembly will have to approve the orders. If the Assembly refuses to approve an order, would the Government have power to overturn that decision?

There are some people in Scotland and some political parties who do not believe that oil revenues should accrue to the benefit of Britain as a whole. If the people of Scotland are deluded into giving them substantial support in the Assembly elections, we might have misguided assessors and Scottish National representatives in the Assembly ensuring that the oil companies have to pay substantial sums in rates—which could cause considerable damage to the industry and to Scotland as a whole. Are the Government not creating a very difficult problem for themselves in view of the legislation which appears to be coming forward on the Assembly?

Are these orders entirely matters for Parliament and the Secretary of State or would the Assembly be involved? If the Assembly refused to approve an order, could Parliament or the Secretary of State do something about it? Serious problems might arise if a local assessor decided to rate all oilfields, platforms and associated works and the Government order to overturn his decision was rejected by the Scottish Assembly.

The Secretary of State said that the seaward limits of local authorities had not been closely defined. I was surprised to read in Clause 3(2): Nothing in this Act or in any order made or direction given thereunder shall be construed as extending the limits of the area of a local authority for any purpose. How do local authority boundaries extend into the sea? Is this made clear in the Bill or in previous legislation? Some items in or partly in the sea are rated and will continue to be rated, but how do rate charges extend into the sea?

There are a number of possibilities. A straight line might be drawn into the sea from the ends of the local authority areas, or the boundary between areas could be extended into the sea. Some people, such as the Scottish nationalists, talk about the possibility of independence for Scotland, which many of my hon. Friends and I would resist bitterly, because we believe in a united Britain. However, the question of boundaries in relation to North Sea oil is very important. If the Scottish boundary with England were extended into the sea in a straight line rather than following the curve which the actual boundary follows, it would result in a different share-out of North Sea oil between the two countries. Have the Government got this problem of local authority areas sorted out? If not, will they make sure that it is done in Committee?

Do the Government intend to exempt fish farming? That would be possible under the Bill. The Secretary of State indicated that he would be exempting only oilfields and bridges, but there is a strong case for the exemption of fish farms. Because of the Government's inadequacy in protecting British and Scottish fishing interests, there has been a dramatic rise in the price of fish and there is the possibility of major problems in future. We have had to concentrate increasingly on fish farming in Scotland. I understand that it is now very big business. About 900 tons of trout a year are produced in Scotland by fish farming and one of these splendid companies is producing 200 tons of salmon by intensive methods.

More than £1 million has been spent by the Government on research into fish farming. I understand that these unfortunate fish have to live in floating cages or fenced-off enclosures. I should not like to live in such places, but fish is being produced in that way because it is considered to be a good way of providing food for the nation and food will be a major problem for us in future, as I have constantly warned my hon. Friend the Member for Dumfries (Mr. Monro) and others.

I understand that agricultural land and even agricultural dwellings have special treatment for rating purposes. When I visited the island of Luing, I found it very difficult to establish what was an agricultural dwelling. It seemed that almost every place on the island was an agricultural dwelling. No doubt the hon. Member for Argyll (Mr. MacCormick), who is not here at the moment, could explain this situation. If we give special treatment to agriculture, can we not make a similar provision for fish farming, which will be a major and expanding industry in Scotland and which should be safeguarded?

Although I am making what appear to be criticisms, I point out that no one on this side of the House will disagree with the principle that the oil industry has had about all it can take from this Government and that the imposition of an additional rate burden could do great damage. My hon. Friend the Member for Ross and Cromarty (Mr. Gray), who has spoken so eloquently about the oil industry on so many occasions, knows that the development of oil would have been improved, with more beneficial effects for Scotland, if the burdens and threats imposed upon the industry by the Government had been removed.

Oil companies have been working under the uncertainty and threat of nationalisation and participation. They have had a substantial petroleum revenue tax imposed upon them and also have to pay corporation tax. The net result has been that the people who believed that oil would be a cash and jobs bonanza now see that in some tragic instances there are oil platform yards without orders and a great feeling of anxiety among the oil companies about the future and about Government policy.

With all the uncertainties being faced by the industry, it would be wrong to allow another uncertainty by insisting that rates should be paid on oilfields and platforms. We support the Bill in principle, but there are many questions which we shall be hoping to ask the Government in Committee.

7.20 p.m.

Photo of Mr Jo Grimond Mr Jo Grimond , Orkney and Shetland

I have serious objections to the Bill as drafted. I agree with the Secretary of State that rating in the sea needs clarification. I also agree that oil platforms and installations far out to sea are already adequately taxed. But the Bill would appear to go far beyond that.

I understand that the long established principle of rating is that the general principle is laid down by Parliament and that the matter is then handled by the assessors as purely independent administrators, subject to the courts. The Bill gives power to the Secretary of State for a particular purpose. I ask the House to think very seriously whether we should overthrow a long established principle of rating because we run into difficulty in a particular matter. The repercussions may be great.

The Bill applies not only to lands and heritages which lie below the bed of the sea beyond low tide, but to lands and heritages which lie partly below the bed of the sea at low tide. Therefore, some of the Sullom Voe jetties in my constituency could be excluded from rating. Oil installations and oil-related installations which have pipelines and other parts below low water mark could also be exempted. For example, all the single buoy moorings and many other installations within Scapa Flow would be exempted.

The Bill is not only concerned with oil. Every pier and installation on or connected to that pier from a point above high water mark to a point below low water mark could be exempted from rating. I hope that the House will not think that it is all right because the Secretary of State says that he will not use his power in this way. We should be drafting precise legislation. Something unforeseen may happen. We know that experiments are going on with the use of the waves and tides for generating energy. These may extend below low water mark and come under the Bill as drafted. Fish farming has been mentioned. That, too, might come under the Bill. The provision that the Bill applies to heritages and lands which lie partly on the bed of the sea below low water mark is extremely wide and should be resisted.

We are told that any order will be subject to the affirmative procedure. But Parliament should not pass what I regard as sloppily drafted legislation aimed at a particular purpose, but going much wider and then get out of it by providing that it will be subject to the affirmative resolution procedure. That is a bad way to legislate. We know about the affirmative procedure—the Government put down a motion, puts on the Whips and that is the end of that. I am not reconciled to the Bill by that provision.

I understand that the Crown Commissioners charge a wayleave for oil pipes on the bed of the sea below low water mark. I do not know what happens above low water mark. In my part of the country, any operations above low water mark come under a udal law and the proprietors control the bed of the sea. I am informed that the Crown Commissioners levy a wayleave up to three miles and that three miles is accepted as the general jurisdiction, except in the matter of fishing rights as far as territorial waters are concerned. I think that the Government should have brought forward a Bill which exempted from rating the bed of the sea beyond three miles. That would have been perfectly satisfactory. It would exempt all the installations, platforms, pipes and deep water operations which they want to exempt. The only objection is that it might not cover the Forth and Tay bridges. However, I am informed that could be done by an amendment to local government Acts.

I beg the House to consider long before passing the Bill. It is extraordinary that the Bill should have been introduced at the end of July in the House of Lords. It introduces an entirely new principle in Scottish rating and will have a wide effect in my constituency and elsewhere. The Bill is badly drafted to achieve the purpose which the Secretary of State has in mind. I recommend that he takes away the Bill and reintroduces it in the next Session when it can be properly considered. It should be made much simpler to exempt installations beyond three miles or, if the Government wish, to make it two miles and make special provision or the Forth or Tay bridges.

7.27 p.m.

Photo of Mr Peter Doig Mr Peter Doig , Dundee West

I welcome the Government's intention in introducing the Bill. It is necessary that they should reassure the oil companies that they will not be further penalised for the gamble that they took which, at the end of the day, will probably be in the interests of all our people.

I welcome the Secretary of State's reference to the fact that the Bill will cover the rating of toll bridges. What puzzles me is the way in which the Bill is worded and its implementation by means of statutory instruments. It would have been simpler to have a straightforward Bill exempting these two matters. That would have been clear and easily understood by everyone. But this way it becomes complicated.

If the main purpose of the Bill is to reassure the oil companies that they will not in future be charged rates, why is it necessary in Clause 1(9) to provide that the Secretary of State shall have power to revoke or alter it in any way? That is not much of a reassurance to people who want to explore for, to find and to market oil. They may not be reassured by being told that there is a Bill exempting them from rates, but which can be revoked or changed at any time.

I was reassured at the thought of the remote possibility of rating the Tay bridge, for example. If the Bill can subsequently be revoked or altered by a statutory instrument, it does not seem a very clear assurance. We should make the matter clear beyond doubt and make it as simple as possible.

In Clause 1(4) we find: In this subsection 'rates' includes domestic water rates. What is the purpose of that provision? If there is any danger of these people being charged for domestic water rates, it brings up the question: what happens now? I know some people near where I live who have garages with no water supply other than a rain water barrel. Yet they are charged water rates. If they can be charged in those circumstances—namely, that it is assumed that at some time they will use water to wash their cars—is it not an equally fair assumption that the people on an oil rig will use water? If we are to charge one group, why not charge the other group?

Everyone should get the same treatment. That does not happen at present. Some, places charge water rates and others do not. An oil rig probably uses quite a large amount of water which will, presumably, come from Scotland. Is the oil rig to get that water completely free of charge? The company to which the oil rig belongs might not pay rates anywhere in Scotland. Is it right that it should be completely exempt from water rates?

Far from making the Bill clearer and simpler, as it is supposed to do, the interpretation clause makes it more difficult. For example, I read in Clause 3(1): 'the sea' means any area seaward of the lowest point to which the tide ebbs at ordinary spring tides and includes any estuary, arm of the sea and the waters of any channel, creek, bay or river seaward of that lowest point". I wonder how many people understand that and know what it means in any given area.

During the passage of the Freshwater and Salmon Fisheries (Scotland) Bill I asked a similar question. No one seemed to know where the tide started and where it stopped or about high tide, spring tide and any other tide. I doubt whether anyone knows what the interpretation clause means. Lawyers might be able to settle differences of opinion in court, but the legislation we produce should not make it necessary for lawyers to be engaged and money to be wasted in going to court. That is all very well when something unforeseen arises but the purpose of the interpretation clause is to make matters easily understood, and hardly anyone understands it.

If we exempt from rates oilfields and toll bridges, why not go the whole hog and exempt from rates all buildings in Scotland? The Government already pay 75 per cent, of the total rates, and it costs a great deal of money to administer the rating system, which is in any case unfair. A person who leaves his car in the street pays no rates but if he builds a garage to take it off the streets he has to pay rates on the garage. A person who installs double glazing to save fuel, as the Government want, has to pay higher rates. Why not go the whole hog and abolish rates? The Government's contribution to the rates has crept up from 50 per cent, to 75 per cent. Will their contribution have to reach 99 per cent, before they decide to abolish rates and thereby make greater savings?

Property owned by the Government is exempted from rates. For instance, hospitals pay no rates—at least that is the theory. They make a contribution in lieu of rates. The only difference is that the contribution in lieu of rates is not fixed by an assessor and cannot be appealed against if it is thought to be unfair. In my constituency the Treasury valuer calculated that the contribution in lieu of rates made by Ninewells Hospital should be on a rateable value of 3 per cent, of the capital cost. The rateable value is £405,000 and the amount paid in rates is £660,000. That works out at £20 per patient per week. This is a serious disincentive to building new hospitals or other buildings. If a building is replaced by one of better design which will make savings, those savings are wiped out by the rate increase. There is no incentive to replace old buildings.

I give an example. A laundry was built in Ninewells Hospital to cater for all the big hospitals in the area. The rateable value of the laundry alone was £15,000. The total rateable value of the Dundee Royal Infirmary—comparable in size to Ninewells Hospital—was only £11,000.

It is high time that the Secretary of State examined the entire rating system with all its anomalies and, not necessarily in this Bill but in another rating Bill, removed the anomalies and made the rating system fairer. The easiest way to do that is to abolish the entire rating system.

7.37 p.m.

Photo of Mr George Younger Mr George Younger , Ayr

I suppose that this is the best time to enter my protest that the Bill should come to us so late in the Session. I cannot recall a Bill starting its way through the House of Commons at the tail end of the Session. It might have happened before but I have not found a precedent. If the tables were reversed between the two parties, there would be no chance of a Conservative Government's being allowed to put through a Bill, however beneficial, if it were introduced at this late stage in the Session, because Scottish Labour Members would make sure that they were not. We are being remarkably accommodating in agreeing that this measure should go through. Those few sentences in future years may be useful for me to quote to Labour Members if ever the situation should be reversed.

Like the right hon. Member for Orkney and Shetland (Mr. Grimond), I am unhappy at the circumstances of and the principle behind the Bill, although I appreciate that its narrow purpose is desirable and that we must therefore help it on its way.

With the Government's being in their present position with the financing and taxation of the North Sea oil, there can be no question of our allowing a great extra burden of rating to be put on oil companies and oil rigs. By introducing petroleum revenue tax and other fiscal measures, the Government of their own choosing have put such a large burden of taxation on the oil companies that there can be no question of our agreeing to increase that burden by allowing them to be rated.

By their sweeping taxation policy on the oil companies the Government have pre-empted to themselves all the available revenue from the oil drilling rigs at sea so that there is nothing left for the nearby local authorities. This may be the right principle but we have not arrived at it in the right way. We have arrived at it because the Government have imposed all the taxation they can on these oil installations and there is nothing left for the local authority, even if we should all decide tonight that it was right that some form of rating should take place.

We have got here the wrong way, but having got here I feel that they cannot be expected to pay heavy sums in rates as well. The conclusion I draw from this, which I hope the Minister will note for future reference, is that the Government—having now pre-empted to themselves all the available blood which could be sucked from the oil companies in their drilling operations—have all the greater obligation to provide assistance to local authorities who have exceptional types of expenditure in connection with oil development. This gives us a very strong moral argument to use on the Government if there is any question of their being laggard in the provision of extra special assistance to local authorities who have vast housing problems to deal with or extra road problems or whatever. I hope that the Minister will note that he can expect to receive pressure from us from time to time, and I shall use this as evidence.

Nor am I happy about the principle, mentioned by the right hon. Member for Orkney and Shetland, of openly bringing in this legislation with the intention of applying it only, as far as I can make out, to very limited categories. I have made clear how I feel about the oil rigs and I entirely agree that the Forth and Tay road bridges, and the Erskine bridge, should be exempted because we never intended that they should have to pay rates. It is not a happy way to proceed. Why should we introduce legislation to exempt particular installations which are on or above the sea and include many others in the rating system? I cannot see that, as a matter of principle, it is proper to exempt bridges or oil rigs and still expect fish farms, for instance, to be rated, because they are just as much over or under the waters of the sea as other installations.

Moorings have been mentioned. Moorings in certain parts of the country—perhaps not to the same extent in Scotland but certainly in many places south of the border—are heavily rated. They are very expensive. What is the position regarding houseboats? Although we do not have many boats in Scotland, there are some, and people who live in houseboats, or make a boat their permanent home, are certainly on or above the water. One hopes that they are also above the low water mark if they want to float satisfactorily. They will have cause to think that they are being discriminated against if the big, powerful oil companies, or the Government themselves, should exempt themselves while a few small people who inhabit houseboats find themselves having to pay rates.

The same goes for the fish farmers, some of whom are doing very well, and are reasonably prosperous, but others of whom may not be doing so well. Why should they have to pay rates while their neighbours, because they are big and powerful and part of the oil industry, do not? Why should they be picked on in this way?

I do not know whether the Minister has thought through the question of bridges and whether these toll bridges are the only bridges involved. Are there any other bridges in Scotland which are not owned by the local authority, or whatever, but are privately owned and rated? I can think of some circumstances in which there could be, and I wonder whether these bridges, if they are over water, which is tidal, will be exempted or not.

I hope that the Minister will also make the position quite clear regarding piers. Legislation affecting piers is already in a muddle. Every pier in Scotland seems to be affected by a different Act of Parliament. During my time at the Scottish Office I was anxious to see whether I could do something about it but the number of different Acts was very great and it was a massive job. I hope we can now get some clarity from the Minister about whether piers are likely to be included in an order under the Bill or whether he has decided that no piers will be included. Perhaps he could also indicate to us what a future Secretary of State, who may be somebody quite different, will be able to do under this Act in respect of piers. Would he be able to pick on certain private piers and make them pay rates and exempt all those which are publicly owned, or vice versa?

This legislation is riddled with small questions of detail and I wonder whether it has been properly thought out. I would also express my concern at the point made by the right hon. Member for Orkney and Shetland about the matter of principle involved. I have never been a great friend of the rating system. I have always thought—and still think—that the rating system has reached a stage where it is unrealistic and difficult for ordinary people to understand and that it is time it was brushed aside.

That apart, I think that to tamper with the impartiality of the system is something which should be carefully undertaken and only after very careful thought. Surely the role of Parliament in this respect is to lay down the general principle that properties domestic, properties commercial and properties industrial will be rated under certain principles. To introduce legislation without the most careful thought, and to pick and choose certain types of installations which will be differently treated, or not rated at all, seems to be a major interference with that principle. Once the general law is laid down, the assessors, and those who work with them have a completely impartial role to perform. As a result of this legislation we are now likely to have assessors, or their local authority masters, looking through the installations in their areas trying to find installations which might be rated. Other interests press the Secretary of State to exempt further particular types of installation under this legislation.

I am certain that in the short time we have had to debate the Bill tonight we shall not have thought of all the examples. We have thought of houseboats, moorings and fish farms but I am sure many others will crop up. We ought to have some idea from the Minister whether he has looked into this in depth and whether he has satisfied himself that he can limit this legislation, or the effects of it, to the relatively small number of items he has outlined to us. It is a dangerous idea to produce broad legislation like this to deal with specific detailed problems. It should not be done unless it is thought through.

I would end on a slightly less sour note and hope that the long delay in coming to the House is because the Government have taken all this time to think the Bill through. I should be optimistic to think that.

7.48 p.m.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

I can see the Government's point in trying to clarify the valuation and rating position of the oil companies. After all, it is important that there should not be a plethora of tax-collecting bodies dealing with those companies. None the less I sense that we are feeling our way in talking about bad valuation problems.

Although we tend to talk about oil companies at the moment, there is little doubt that in the years to come, with the discovery of more mineral deposits on the seabed, this problem will grow. At the moment the South of Scotland Electricity Board is already looking for uranium deposits near the Orkney coastline. My hon. Friend the Member for Dundee, West (Mr. Doig), with his knowledge of local government finance matters and his past experience as a city treasurer, put his finger on the very real problem by asking when are we to embark on the reorganisation of local government finance?

That inspires one of the three points that I want to make. Unfortunately, no oil has yet been discovered in the Firth of Clyde, where it could obviously have a beneficial effect on industrial prospects. However, in the areas which have onshore installations there is considerable pressure on the rating system and on the infrastructure, which must add to local authority costs. If local authorities, mainly on the eastern seaboard, face increasing costs for this reason, it must follow that there will be less money for areas like Clydeside on the western seaboard.

At the best of times, the division of the rate support grant among regional and district authorities is a mystery. Local authorities coping with problems such as those I have mentioned should have some financial recompense.

My second point concerns jurisdiction. The Secretary of State said that there had been some disputes or uncertainties about the areas for which the assessors might be responsible. As an official of the region, an assessor comes within the same authority as the police. What about the burden placed on the rates because of extra calls by police forces to deal with incidents on North Sea installations?

My third point relates to the changes taking place in the law of the sea. Presumably there will be additional calls on the police and various local services when the territorial waters are extended from three to, presumably, 12 miles. Minerals and other deposits of wealth on the ocean bed form an important economic zone around these shores which must be policed. This will put more pressures and responsibilities on local authorities. The Minister should therefore say something about how some revenues from the ocean bed will find their way into local authority finances. This will become a much bigger problem in future than many of us now realise.

7.55 p.m.

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

The hon. Member for Glasgow, Maryhill (Mr. Craigen) was right to say that this is an important Bill. My hon. Friend the Member for Ayr (Mr. Younger) was even more right when he said that the reason for its late introduction was the congested state of the Government's programme. I associate myself with those remarks.

If the Bill is important today it was equally important six months ago; the only reason that it was not introduced then is that the Government had totally congested their legislative programme with vile legislation which is only now receiving its just desserts in another place. One can only hope that the Government will learn their lesson on this occasion and that next Session they will restrict their legislation to important Bills such as this.

It has been the custom in the past for valuations to be made by assessors. The Bill probably came about because one or two assessors decided to include on the valuation roll some oil-related offshore features. The matter could have been decided only by legislation or by a court, and the Government are probably right to choose the legislative course.

The Continental Shelf is a very difficult subject and will no doubt be discussed here many times in future. We note with interest that the Bill will be virtually controlled by affirmative resolution procedures. I sympathise with the queries of the right hon. Member for Orkney and Shetland (Mr. Grimond) about this procedure.

When it comes to oil fields and platforms, the oil industry is already well provided with taxation. I took part in debates on the Bill which introduced the petroleum revenue tax. The oil companies also face corporation tax and 12½ per cent, royalties. It would have been outrageous to subject them to yet another tax in the form of rates. I therefore agree with the principle of the Bill.

When we talk about oil companies, we think mainly of multinational concerns which have very little interest in the country in which they operate. But that has not been our experience in Scotland. The companies which have explored the North Sea so far have played a vital role in not only the repopulation but the rejuvenation of Scotland. Many jobs have been created—not only by the British National Oil Corporation or any nationalised body but by private enterprise. That trend should be encouraged. I hope that later tonight hon. Members will join me in an attempt to achieve the investment of £150 million of private capital in the Highlands.

The companies which have so far set up in Scotland and played their part in developing North Sea oil have brought benefits to a considerable area of the country. However, the hon. Member for Maryhill was quite right when he said that it was all very well for us to accept what these revenues are at a national level but that when people know that oil is being discovered and extracted not too far away from their coastline, they naturally like to see just how much of the benefit of that is reaching their part of the country.

While I have sympathy with the hon. Gentleman when he says that no oil has so far been found in the Firth of Clyde—I am sure that we hope it will not be too long before that area participates as well—we must realise that at the same time the demands of ratepayers in areas in which oil has been discovered are considerable. The Government do not always contribute as much to those authorities' overheads as we should like.

We must also accept that the areas most affected in this way have very often been sparsely populated rural areas. Therefore, the amount per capita that they have had to contribute has been that much higher. We must bear that in mind when talking about the rates in oil-related areas.

Like other hon. Members who have spoken in the debate, I am disappointed that the Government did not use the opportunity presented by this small Bill for covering the much maligned fish farming projects in Britain. There is no doubt that fish farming is accepted by the national farmers' unions and by practically everyone other than the Government as similar to agriculture, and why it should be penalised as it is is beyond our reckoning.

I want to ask the Minister some questions. The first is about platforms under construction and their rating. When a platform from, for example, Kishorn in Wester Ross is floated out, at what point does it cease to be liable for rates? In the event of a steel platform being floated out from Nigg Bay to a point a few miles offshore and being completed at that point, is it free from rates from the moment that it goes offshore? Perhaps the Minister will deal with the question of the three-mile, 12-mile, 50-mile or even 200-mile limit that has been discussed.

The right hon. Member for Orkney and Shetland referred to jetties at Sullom Voe. In my constituency we hope in due course to have jetties of a similar nature. It would be interesting to hear the Minister's comments about those.

I broadly welcome the Bill. We accept that it was necessary. I reiterate that it is a pity that the Government were not able to introduce it some months ago However, basically we welcome the principle of the Bill.

8.3 p.m.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

I welcome in particular the part of the Bill dealing with the exemption of toll bridges from valuation. There was quite a shock to those users of the Tay and Forth road bridges when it became apparent that the assessors intended to try to ensnare those two bridges and those who use them within the rating framework, because that would undoubtedly have led to an increase in the tolls. Admittedly, the money raised would have gone to the local authorities on either side of the bridges, but, in view of all the pressures placed upon them, there is no guarantee that the money collected would be put back into the same account and would thus keep the toll charges at the pre-valuation figure.

I am, however, rather more unhappy about some aspects of the Bill relating to offshore constructions. I can accept that there is no logic in trying to extend the valuation system to mineral deposits such as oilfields or the platforms that are exhausting those oilfields or, indeed, to submarine pipelines—although I admit that the nearer a pipeline gets to the shore, the more it is arguable that that pipeline should or could be included in the valuation roll as a heritable subject. The reason why I accept that the subjects should not be included in the rolls is that they are serviced very distantly from the land. Those local authorities which, if they were lucky in pressing their cases, managed to get them on their valuation roll might be getting a benefit for which they had provided no service.

Let me take as an example the Forties oilfield That can be serviced from Dundee, as it is, yet by being nearer to some other region, perhaps, the benefit from the rating could go to a region that had no connection whatever with that field. That would lead us into all sorts of peculiar circumstances and, as the Seccretary of State has rightly said, into problems of demarcation.

One of the problems is that each assessor would attempt, perhaps at different times, to carve out a share of the action for his or her particular local authority. These cases would come before the lands valuation court at different times. It might not be possible for that court to consider all the cases at the same time and lay down the rules under which the oilfields or platforms concerned could be equitably shared among the regional councils concerned. Therefore, I accept the first part of the intention of the Bill.

Assessors, however, are very enterprising people. They conduct a continual war to get as many subjects as they can on to the valuation roll. It is not often appreciated that they are independent officers. Indeed, in the past assessors have tried to take into the roll subjects that local authorities would have been perfectly happy to have seen excluded. Here I take the example of the two toll bridges, where the local authorities concerned were horrified at the prospect of these bridges being on the valution roll and of getting additional revenue, because they could see the lunacy of that business.

On the other hand, the assessors have the job of interpreting the valuation Acts. If they are up to the job, they should try to get what can be defined as "heritable" placed on the roll. When the news first broke in the Press that oilfields and the huge platforms beside them would possibly be rated, many folk immediately thought that here was a bonanza. We are all paying very high rates these days. The thought that a substantial source of new revenue could come to a local authority must have lifted many a heart just as the bills for last year's rates were being paid.

However, I should have thought the main attempt of the assessors to include these subjects on the roll doomed to failure. We may find out that they were capable of being included if the assessors maintained the entries in the rolls and the cases were fought through. However, I think that these cases will be abandoned now in view of the Bill. We shall never know whether those subjects could have been included. I have serious reservations about that.

My principal doubts about the effect of the Bill are in relation to the definition that has been employed. I accept the view put by the hon. Member for Dundee, West (Mr. Doig) that the simplest way of tackling the two road bridges would have been to have a specific exemption by name of those two structures. Had that been done, it would probably have been of help to the parliamentary draftsmen when trying to deal with the other subjects that the Government had in mind.

I suspect that trouble could ensue when we come to deal with the word "partly". It is a word on which assessors and courts will latch in a flash. It is similar to the word "reasonable". Once lawyers come into the picture, the meaning of such words can be argued in many different ways. A similar problem arose in the 1930s over the Workmen's Compensation Acts and subsequently when dealing with the law of reparation there were difficulties of interpretation over the word "reasonable".

I give a few examples of the difficulties involved in the use of the word "partly". What is "partly under water", "partly on shore", and "partly off shore"? Many piers and jetties have already been rated, so far with little objection. This may be a Committee point, but I hope that the Government will seriously examine the possible effects of the word "partly".

The word may have been included in the Bill to take care of the situation involving the two bridges. But if the subject of the two bridges is dealt with specifically, the word "partly" may be capable of omission. If the word exists in the Bill for some other reason, it behoves the Government to explain why and to say what sort of property they hope to catch under the Bill. I presume that the word must have been included for a reason, and therefore the answer should be readily available.

A genuine point has been made concerning the benefits to be given to regions which have to deal with the problems involved in catering for the build-up of the oil industry. Some benefit is given by means of additional employment gained in certain regions, but it is also true that a number of regions are adversely affected by some developments. For example, Tayside until recently has not done well in employment terms, and, indeed, has suffered because of the incidence of heavy traffic rumbling through the area and carrying materials to northern areas. That traffic follows the Perth-Forfar route, despite gallant efforts by the Scottish Office to steer it in other directions. The roads in question have not been trunked, and therefore the cost of repairs has been met by the regional council. That will mean a heavy cost to be borne by ratepayers.

There are other examples of extra costs, such as policing and the build-up of housing. At least the Government must be given credit, because in certain instances they have channelled additional resources through the SSHA to cover some of the extra expenditure. There are many other aspects related to oil development where the benefits do not return to the residents and where help could be afforded by specific Government grants. In these circumstances some thought should be given to assistance being afforded by the Government.

I wish to refer to structures which are—I shall not use the word "partly"—marginally offshore. I am not thinking of platforms which have been completed in a loch, such as on the Sound of Raasay, which will only be in position for a short period. I am referring to installations of a more permanent nature that will be in position possibly for more than a year.

A floating dock may be moored to the sea bed offshore and be serviced from a base, again offshore. Additional expense could be caused to the local authority by the existence of that feature offshore, and it is only right that part of the cost of servicing that object should be borne through the raising of additional rates by inclusion of such a structure on the valuation roll.

The principle of rates when first evolved was to allow local authorities to meet the cost of local services, but as local government has become more sophisticated that first principle has been left behind. Nevertheless, in valuation questions that is still a sound approach.

I wish to draw attention to Clause 2(1) the provisions of which could be considered to be unacceptable. Normally, Acts lay down specific definitions, powers and terms of which the subject is aware. Frequently such provisions are not capable of easy explanation or understanding, but the principle has been accepted that Acts of Parliament should be as specific and detailed as possible so that the individual citizen may be aware of his rights. However, I fear that Clause 2(1) is intended to be a blanket clause, so that if any new subject emerges that is not covered by the legislation, the Secretary of State may enter immediately, slap on a directive, and follow it later by an order. I do not think that is the best way of tackling legislation.

I turn to costs in respect of the oil companies. I suspect that if this Bill had not appeared, the oil companies would not have ended up by paying rates on the major part of their installations. The Government have rushed in in an attempt to tackle the situation. If rates had been payable to the local authority, I am sure that they would have been capable of being set off against a company's petrol revenue tax, corporation tax, or whatever it may be. The loser at the end of the day would probably be the Treasury.

Perhaps the Bill is intended not to protect the oil companies, which are well able to defend their own interests in the courts, so much as to protect the Treasury from having to pay out more money to local authorities at a time when, unfortunately, their plans are being cut back because of the Government's failure correctly to manage the economy.

8.18 p.m.

Photo of Sir John Gilmour Sir John Gilmour , Fife East

As the southern end of the Tay bridge is in my constituency, and as every time I conic to Parliament I cross the Forth bridge. I am delighted that the Government are taking steps to ensure that rates are not to be paid. However, I join in the protests made by other hon. Members about the way in which this is to be done.

We are now engaged in the operation of trying to cut down unnecessary administrative work involving the recruitment of more civil servants. But the main part of this Bill lies in Clause 1(1) which refers to an order made by the Secretary of State under this section This will mean that people will be required to undertake the work of making such orders which are to be laid before Parliament, and all the rest of it.

Some hon. Members suggest that all that is necessary in regard to the bridges is to pass an Act providing that the status quo should be resumed. They suggest that that would put the situation right in one stroke. But will the Government have to pay large sums of money to subsidise uneconomic passenger transport crossing a railway bridge? That seems to be an anomaly.

Other hon. Members have spoken about fish farming and other areas of activity. My hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) mentioned platforms built under the water. I have visted a rig building yard and have seen one construction being built below high water mark. I should have thought that such a construction would qualify, whereas the construction in my area at Methil built by Redpath Dorman Long well above high water mark and floated out would be outside these provisions. I hope that consideration will be given to this question and to what happens if oil is found onshore as opposed to offshore.

We already hear of oil being found fairly close inshore off Brora and there seems to be no reason why, in a few years' time, we should not be finding oil below the surface of the land. If we get exemption from rating for those installations offshore, will the same thing apply to them on the land? I hope that in Committee the Government will be receptive to the idea of making alterations to the Bill which will do everything possible to cut down the administrative costs stemming from its present wording.

8.20 p.m.

Photo of Mr Iain Sproat Mr Iain Sproat , Aberdeen South

I welcome the final words of my hon. Friend the Member for Fife, East (Sir J. Gilmour) and I was pleased to see that at least we are not to have any more public expenditure or extra civil servants as a result of this Bill. These days that is always welcome.

In welcoming the Bill broadly, like all my hon. Friends, I emphasise two points. First, of course we support the Bill because not to do so would be to place yet a further burden upon the oil companies. That might well be the final straw to break their backs or it might discourage others. They have had a lot to put up with from the Secretary of State for Energy.

Rating would be an intolerable burden for the companies because of the financial measures which have already been placed upon them by the Government. My hon. Friend the Member for Ayr (Mr. Younger) made a good point when he said that the effect of all this has been to centralise financial control in Westminster. As some hon. Members may know, I intend to oppose the proposals for a Scottish Assembly when they come along. I would have preferred to see an act of genuine decentralisation here which might have been effected by giving to local authorities the power to spend the revenue raised by rating rigs and so on—had this been possible, which of course it is not because of the economic burdens already placed upon industry. If it had been possible, it would have been an act of genuine decentralisation and devolution which would have taken the power from Whitehall and nut it back into the regions, which is what we ought to be striving for. In other words—decentralisation, yes; Scottish Assembly, no.

This Bill would have been an opportunity for the Government to put flesh on that principle of decentralisation. But yet again we are centralising in Westminster the financial apron strings by which the industry is to be controlled. This point has particular application to my own constituency and to the Grampian Region in which it lies. Grampian is extremely short of money. No other region in Scotland runs its economic affairs better than Grampian but we all know that at this time everyone is short of money and particularly Grampian, with all that it has to provide by way of infrastructure to support the oil industry.

The region could have used extra revenue, and who better to provide it than those who were the cause of the revenue being needed, namely, the oil companies? The hon. Member for Dundee, East (Mr. Wilson) mentioned the problem that arises with the roads, and related that to Tayside. I know that he would not deny that this continues into Grampian. If the hon. Member has been in Aberdeen recently he will know that there are certain areas of the city through which it is impossible to travel at any reasonable speed because of juggernauts, oil-related traffic and so on. Yet the city of Aberdeen and the Grampian Region have not been able to deal with these problems because the cash is not available. We are talking not just about roads but about housing, schools and all of the social problems that spring from a sudden influx of people whose roots are not in the community.

These issues create problems for the police whom the hon. Member for Glasgow, Maryhill (Mr. Craigen) mentioned. We have a severe problem in Aberdeen. For a long time the chief constable has been responsible for maintaining law and order on the oil rigs. This places an enormous burden upon the Grampian police force. It is coping extremely well, but this is a burden which extra finance could have lessened. Yet the finance which the Government are providing to oil-affected areas is derisory.

I am sure that my hon. Friend the Member for Ross and Cromarty (Mr. Gray) would agree. He has exactly the same sort of problem in his rural areas as I have in the rural areas of the Grampian Region. We also have the urban problems in Aberdeen and in places such as Peterhead where, often, the problems ssem greater in comparison with the calm which preceded them. That is my first point—the financial non-implications of this Bill.

Secondly, my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor), with his characteristic lucidity, pounced on the point, as is his wont, that if the Scottish Assembly were to be set up, it would be possible for it to reverse what we are doing here and say that instead of the money coming to Westminster it should go to a Scottish Assembly. [Interruption.] There we have the voice of confusion speaking. [Interruption.] I was referring in that comment to the hon. Member for Western Isles (Mr. Stewart) and not to my hon. Friend the Member for Cathcart. I spoke of my hon. Friend's characteristic lucidity. I was referring just now to the mutterings coming from a sedentary position from the Leader of the Scottish National Party who said—if I heard him right, and if I am wrong I shall give way to him—that of course it would be the object of a Scottish Assembly to take these revenues to itself.

Here is a classic example of precisely the confusion which will reign if this or any other Government were stupid enough to set up a Scottish Assembly on the lines at present proposed. One of the first things it will do—I have no doubt of this—is to try to take these revenues. Westminster will oppose it and there will be a constitutional row. The people of Scotland will somehow be given the impression—no doubt by means of the eloquent persuasion of the SNP, helped by the media—that they are being done down. The hon. Member for Western Isles is nodding his head. I do not see how this House—would that it were fuller—can shut its eyes to this. This is what we mean when we speak of the classic recipe for confusion and constitutional division which will follow as night follows day as a result of the setting up of a Scottish Assembly.

Here we have what in normal circumstances would be a perfectly straightforward Bill. I would have liked to see more revenue going to the affected areas. We welcome the Bill. But what is, in effect, a simple Bill in normal circumstances becomes a red rag to the SNP bull. We are, in effect, challenging the SNP to take this revenue away from the House of Commons. Its leader has admitted that that will be the aim.

I ask the Under-Secretary of State, therefore, to comment on how he proposes to see that such conflict does not arise, since we have already had evidence from the SNP that it will make it its business, if a Scottish Assembly is set up, to see that it does arise. I hope that all hon. Members, and not least the two Front Benches, will take note of this factor and will reconsider the question of a Scottish Assembly, which the Government hope to bring before us, since such an Assembly will undoubtedly lead to constitutional divisions and rows between this House and the Assembly, which, if carried too far, could lead to the break-up of the United Kingdom.

8.30 p.m.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Queen's Park

This is a short but important Bill, and its importance has been underlined by the many contributions we have had to the debate, especially from hon. Members opposite. I have a large pile of papers containing priceless information, and I hope that I have the skill to translate that information to hon. Members opposite and to satisfy everyone on the many questions that have been put to me.

Primarily the Bill has been introduced to deal with two particular problems. The first is the derating of the Tay and Forth bridges—and I think that the Government have the full support of all hon. Members in the view that these bridges should be derated—and the second is the derating of the oil pipelines and oil rigs and other parts of the oil industry which lie out to sea. That is surely not in question.

Photo of Mr George Younger Mr George Younger , Ayr

I hope that the order, when it comes, will include the Erskine bridge in case someone should have the bright idea of rating that as well.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Queen's Park

The Erskine bridge is Crown property, vested in the Secretary of State, and therefore does not enter into this matter. The hon. Gentleman will know that the Secretary of State does not pay rates for the undertakings under his control. As I was saying, the two main parts of the Bill deal with the Tay and Forth bridges and the derating of the offshore installations and pipelines. No one in the debate has doubted that proposition.

The hon. Member for Glasgow, Cathcart (Mr. Taylor) asked many questions, including one about hybridity. That is an important and complicated subject which caused a great deal of trouble with the Aircraft and Shipbuilding Industries Bill. As it is so important, I shall give as full an answer as possible.

Clause 1(8) is precautionary. It is intended that the order should describe installations in general terms. The possibility of affecting private interests differentially is remote, but cannot be ruled out altogether. The idea of subsection (8) arose from the Government's experience with the definition of what is a ship. With the possibility that the exemption of a stated type of property might affect different private interests in different ways, it is necessary to allow time for people who might be affected to make representations when an order is laid, but there must be a limit to possible delays, so subsection (8) allows 20 days for that purpose. We are allowing 28 days for the order to lie on the table, as it were, in order that people who think that they have a particular private interest may make representations and we can sort out the problems before we run into difficulties such as those we have experienced in the past.

The right hon. Member for Orkney and Shetland (Mr. Grimond) has great experience and knowledge of the oil industry. The most important of his questions was, "Why not cut off at the three-mile limit?" With oil exploration moving nearer to the coast, such a move would create unevenness. More and more, technology is moving oil exploration nearer to the coast and partly, indeed, even on to the land. That is the reason for the inclusion of this provision. He objected to the exemptions created by order—a reasonable argument—but the power to exempt under order involves the most stringent parliamentary control. On any order 1½ hours is given to debating the subject, so it can be gone into in great detail. The affirmative resolution procedure in both Houses is a guarantee that nothing will escape the notice of hon. Members, who are particularly vigilant in these oil matters. The right hon. Member will, I am sure, accept that these are reasonable precautions.

The right hon. Member also objected to the exemption of property only partly below the low-water mark—that again could be a convincing argument—but it is necessary for the two bridges and for pipelines. The Zetland County Council Act 1974, with which the right hon. Member is very familiar, provided such an exemption. The matter came up at that time in relation to a similar problem, and the Zetland County Council Act 1974 was put through for that purpose.

I could not, obviously, agree with my hon. Friend the Member for Dundee, West (Mr. Doig) at this stage that we should abolish the whole rating system. There may be some merit in his suggestion, but I remind him that we already have the Layfield Report with 500 pages of evidence. I know that my hon. Friend is an expert, having been a very distinguished treasurer in Dundee Corporation. He has great knowledge of rating and valuations and of the manner in which the system works. I believe that he still has until November to submit views to the Layfield Committee. If he wishes to see the abolition of the rating system, I hope that he will have some alternative to put forward.

I understand his argument about the addition to rating value if central heating is installed in a home. I have experienced that myself. I am also familiar with his argument concerning Ninewells Hospital, although I am somewhat alarmed at the cost per bed. I hope that my lion. Friend will put his views on paper and submit them to the Layfield Committee in the hope of converting the members to his way of thinking. I accept some of his contentions, but I cannot accept what he said about the abolition of rates.

Photo of Mr George Younger Mr George Younger , Ayr

I think that the Layfield Committee has already reported. I hope that what the Minister means is that representations on the Layfield Report can still be made to the Government.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Queen's Park

Perhaps I was not as clear as I should have been on that point. I gather that my right hon. Friend the Secretary of State is taking views on the report. If my hon. Friend the Member for Dundee, West cares to submit his views to my right hon. Friend, they will be most welcome in the light of his skill, knowledge and local authority experience.

With regard to the points made by the hon. Member for Ross and Cromarty (Mr. Gray), the facts are that a petroleum production platform has been under construction at a site on Loch Kishorn, a specialised and very large construction site with dry dock, workmen's accommodation, storage facilities and so on. There is, as far as I am aware, no doubt that the site as a whole is rateable. The rateability of the production platform, which has been removed to Loch Carron, is another matter. It is for the assessor and, in the last resort, the courts to consider whether the platform is rateable, but I am prepared to state my view of it.

In spite of the platform's great size, it is clearly moveable. No one will deny that. I would not expect the question of valuation to arise until it is brought to a permanent location within a valuation area—and then only if Parliament declines to approve the making of an order affording an exemption which would cover it.

Rating is a very complicated subject, but a great deal of skill and knowledge has been aired in this debate, and perhaps I may deal shortly now with some of the specific matters put to me. First, what is rated and what is not rated? Hon. Members have mentioned jetties, moorings and various other pieces of apparatus which may be partly under the sea or sitting on top of the sea. How does a local assessor decide whether a subject is rated? They can be broken down into two categories: normal subjects which are only incidentally wholly or partly offshore, and subjects of a martime character which do not usually lie much above low-water mark.

I hope that I can include in this section of my remarks the subject of fish farming. I am astonished by the number of hon. Members who have raised questions about fish farming. When I saw the list, I was most surprised. I did not think that there was such a great interest in fish farming in Scotland.

The first of the categories includes piers, docks, harbours, jetties, coal mines whose shafts extend beyond the low-water mark, quays, wharves and so on. The Government have stated that they have no intention of using their powers under the Bill to confer an exemption on any of these subjects. That takes in a fair number of subjects and should make the position clear.

In the second category, there are a number of lands and hereditaments which in the past have been held to be rateable and which, similarly, the Government have no present intention to exempt. These include yacht moorings, recently held to be rateable by a decision of the Land Valuation Appeal Court, fishings and the right to them as vested in private individuals, and oysters and the right to fish, drag or dredge for them. It goes on to mention dredging for sand and other matters.

So right hon. and hon. Members may take it that the Government have no wish to de-rate fish farming. The House will be aware that there was an attempt to move an amendment during the recent Agriculture (Miscellaneous Provisions) Bill which was rejected. It was also tested in the Scottish courts to try to make fish farming analogous to agriculture. Again, it was lost. For these reasons, the Government cannot accept fish farming to be a de-rated subject.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Queen's Park

It may be a shame, but we have to make a judgment, and I think that that is a fair one.

The hon. Member for Dundee, West (Mr. Wilson) asked how I made an assessment of the word "partly". He went on to say quite fairly that lawyers had made a great deal of money putting forward cases in court about how the words "reasonable" and "partly" should be interpreted. I accept that, and I accept his condemnation of his profession.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

If it is a condemnation of my profession, it is probably one of my profession now as a Member of Parliament, because it was parliamentarians who first employed the language which caused the trouble.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Queen's Park

My views on lawyers are well known. I share George Bernard Shaw's view that they are the Devil's disciples. All my experience as a Member of Parliament dealing with constituents' problems has done nothing to change that view.

The hon. Member for Dundee, West then asked about the power of the Secretary of State to direct an assessor not to assess. This is regarded as a limited delaying power. The hon. Gentleman questioned that. I should perhaps tell him that there is a close liaison between the Scottish Office and assessors. This is only a delaying subsection. It is a precautionary measure until such time as the customary informal consultations have taken place. There is constant consultation between officials in the Scottish Office and the assessors. Therefore, I think that the hon. Gentleman can rely on the good relations between these different bodies. It has never been disputed that in their discussions they can always get agreement. Assessors will know that this Bill is going through the House, and they will not go to the great trouble of putting forward subjects which the Secretary of State will obviously reject.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

Does the Minister accept that although these consultations took place, if they had been as effective as he suggests, there would have been no effort by certain regional assessors to put oil-related installations on the valuation roll? If they find that there is a subject which is heritable under the definition of an Act, they might feel bound to proceed, regardless of consultation.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Queen's Park

One of the reasons for the Bill is that two assessors were taking the law into their own hands and putting the various parts of oil platforms and pipelines on to the valuation roll. Now it will be done by order. Constant consultation takes place between the Secretary of State's officials and the assessors and if the Bill goes through I believe that there will be a reasonable working relationship between those two groups.

Great stress was laid on the word "partly". The best example that I can give is of a pipeline, because that can be partly above and partly below the water line.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

The Minister has made no effort to answer questions about seaboard boundaries or about whether the orders will go to the Assembly if it is set up. Will he please drop a note to hon. Members on those subjects before the Committee stage?

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Queen's Park

I shall be delighted to do that. Seaboard boundaries have in the past been related to the old parish boundaries and although there has been no difficulty in the past with the new technology, there could be difficulties in future. I shall write to hon. Members more fully about that matter.

Rating and valuation is a complicated subject and I do not advance myself as an expert on it. I have had discussions with assessors and I find them to be skilled. I hope that I have answered hon. Members' questions satisfactorily and I assure them that my officials, who will read Hansard carefully, will ensure that any matter which I have not covered will be dealt with by letter. I hope that hon. Members will give the Bill a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time. Bill committed to a Committee of the whole House.—[Mr. Coleman.]

Committee tomorrow.