Orders of the Day — Rating and Valuation

– in the House of Commons at 10:15 pm on 26 January 1983.

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Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East 10:15, 26 January 1983

I beg to move, That the Valuation (Plant and Machinery) (Scotland) Order 1983, a copy of which was laid before this House on 17 January, be approved. As hon. Members will be aware, the purpose of the order is to exclude from valuation certain external plant and machinery in Scotland. Its general effect is to bring about broad parity of treatment for external plant throughout Great Britain.

The House will wish to have a general account of the background to the proposals in the order and of the Government's reasons for giving a high priority to this change in the valuation system. I shall come to that in due course. It may be for the convenience of hon. Members if, in the first instance, I explain briefly the way in which the order achieves its objectives.

Articles 1 and 2 are formal and require no comment from me. The main substance of the order is contained in article 3, which makes two amendments to section 42 of the Lands Valuation (Scotland) Act 1854. Section 42 describes the lands and heritages that are subject to valuation for rating. The first amendment substitutes the words.

so far as it relates to lands and heritages for "any building". Essentially, that is consequential on what follows, and allows the proviso to deal with plant outside a building.

The second amendment removes the existing passage relating to machinery and similar items, one effect of which was to bring within valuation the items that we wish to exclude. It substitutes a new passage that affects those exclusions without disturbing the beneficial effect of the old passage.

If any hon. Members have any detailed questions about the manner in which the new passage achieves those objectives, I shall be happy to respond at the end of the debate. Initially, it may suffice if I summarise the effects of the order.

Electric motors will continue to be excluded from valuation. Plant for producing or transmitting first motive power will remain in valuation, thus maintaining the position obtained by the Lands Valuation Amendment (Scotland) Act 1982, which the House approved on 13 December.

Plant for heating, cooling, ventilation, lighting or draining of, or the supplying of water to, the lands and heritages, or the protection of the lands and heritages from fire will remain in valuation, except for external plant that is used in an industrial or trade process". Other removable plant within a building continues to be excluded from valuation. The major change is that other external plant will remain in valuation only if it has an external capacity of more than 200 cu/m or is so fixed that it cannot be removed "without substantial damage".

Also excluded is associated pipework—I notice that the hon. Member for Dunbartonshire, East (Mr. Hogg) is following this closely, because he raised the subject during our debates on the Local Government and Planning (Scotland) Act— within the curtilage of premises … used for an industrial or trade process". That leaves cross-country pipelines in valuation.

The effect of the provisions of articles 4 and 5 is to ensure that assessors shall take account of the substantive provisions of the order with effect from their operative date—1 April 1983. They enable the necessary alterations to be made to the valuation role and, in effect, provide for the issue of valuation notices, appeal rights and similar matters.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline

There is some dispute about the wording in the order on the vexed matter of pipelines. Will the Minister assure us that he is not relying on the courts to solve the problem eventually and that the wording agrees with the interpretation that he has given?

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

Ultimately, all matters of law are subject to interpretation by the courts. I assure the hon. Gentleman that the only pipes that are to be excluded from the valuation are those within the curtilage of premises used for an industrial or trade process. For example, pipelines leading into petrochemical plant would be rateable until they entered the immediate vicinity of the plant—generally, by crossing the boundary fence.

I shall deal with the background to the order and the Government's objectives in introducing it. I shall take the opportunity of commenting briefly on a number of criticisms made by the Convention of Scottish Local Authorities, some of which have been referred to by Opposition Members in recent debates, notably on the rate support grant order.

The Government's main purpose is to remove a serious anomaly which has imposed a severe disadvantage upon industry in Scotland, and which, if continued, would constitute a serious impediment to industrial development.

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

Can the oil companies set off against taxation the rates which they pay upon outside installations?

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

Yes, that is correct. The effect of rating on corporation tax payments is unchanged by the order.

The removal of this impediment will be welcomed by many hon. Members, a number of whom in the past have referred to specific examples that interested them. My hon. Friend the Member for Perth and East Perthshire (Mr. Walker) and the right hon. Member of Orkney and Shetland (Mr. Grimond) have mentioned oil companies, but the point does not only cover oil companies. The hon. Member for Dunbartonshire, East mentioned a company in his constituency which had made representations to him, and I believe that he will confirm that that was not an oil company. We are talking about 1980–81. He said that the company was paying £132,000 in rates in Scotland, whereas it paid £40,000 only for a similar plant in Wales. That is an example of the scale of the problem.

It has generally been common ground between hon. Members on both sides of the House that high priority should be given to promoting industrial development in Scotland. We must take all reasonable measures to ease the severe problems of unemployment which are of anxiety to all hon. Members, and to promote the increased level of industrial activity on which continued economic recovery largely depends.

The disadvantage of which I have spoken stems from the restrictive wording of the Lands Valuation (Scotland) Act 1954. When those provisions were first framed, and for many years thereafter, the problem did not arise because there was little external plant and machinery. In recent years, mainly, although not solely, with the development of the oil and petro-chemical industries, external plant has become a prominent feature of the industrial scene. Such plant falls to be valued for rating in Scotland under the out-of-date provisions of the 1854 Act, as amended in 1902, although it is generally not liable to valuation in England and Wales. That is the point of the order. Consequently, on 1982–83 figures, industry in Scotland has borne a rates burden of about £31 million more than it would have had to bear if the relevant statutory provisions had been in line with those south of the border. The figure of £31 million is a severe additional burden.

I am sure that if we had not taken action to rectify the anomaly, the liability to rates on external plant would have been sufficient to tilt the balance against the development of new enterprises or, in some cases, the expansion of an existing enterprise. Indeed, at a time of economic recession when, regrettably, companies can be forced to rationalise capacity, that position could well count against Scottish plant when the merits of retaining one plant as against another are being considered by companies.

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock and Port Glasgow

I sympathise with the general proposition, but one or two propositions must have been made by companies to determine the Government to introduce the order, with which I sympathise. I would like the Minister to tell us what large establishments would have been prejudiced without the order.

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

The right hon. Gentleman has been in government. He knows perfectly well that I will not rise to that bait.

The case in favour of removing the anomaly is overwhelming. I hope that the Opposition agree at least with that part of the Government's case. If not, they should recognise that they are arguing against a measure that is intended to maintain industrial activity and jobs. That would sit uneasily with their claims to be concerned about these matters. If, on the other hand, they agree with the principle of the order—the hon. Member for Glasgow, Garscadden (Mr. Dewar) was quoted in this morning's newspapers as agreeing with the principle—we can confine our debate to the ways and means of giving effect to it and the question whether it would have been right to tackle further anomalies at the same time.

As regards further anomalies, it has been put to my right hon. Friend and myself that at the same time the Government should have brought the valuation of internal plant and machinery into line with the practice in England and Wales. That might have partly offset the overall effect on industry as a whole of derating external plant and machinery. The proposition does not have the support of the Convention of Scottish Local Authorities.

At the level of the individual enterprise many would experience a sharp increase in the rate burden without compensating reductions. Mainly for that reason, the Government decided that it would not be appropriate to provide for re-rating internal plant at present. But the anomaly that has arisen on external plant and machinery is so severe and potentially damaging in its effects that it merits separate and decisive treatment, as proposed by the order.

I would not accept either that it would have been appropriate to complicate matters by seeking to deal with a variety of other anomalies in the valuation system on which representations have been and are being received by a number of hon. Members—[HON. MEMBERS: "Caravans."]—in relation to caravans and to a number of other subjects. I hope hon. Members will not drown me out by voicing the number of anomalies that they are considering.

These wider proposals are of a different kind. My right hon. Friend is considering a number of possibilities of resolving particular anomalies and we shall advise the House when we have firm proposals to make. But in the meantime we consider it essential to press ahead with the narrow but important proposals embodied in the order.

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East

When considering these wider matters, will my hon. Friend ensure that we consider whether a mechanism might be devised by which the decisions of assessors may have some further court of appeal in a way which would save having to keep legislating precisely to tell them what to do in these various circumstances?

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

I note what my hon. Friend has said. I can assure him that it would be the Government's intention, in considering action on these anomalies, to introduce a comprehensive package so that the House would be able to consider the total effect on all ratepayers.

Hon. Members will wish to have an assessment of the effects of the proposals in the order on the level of rates. I advise the House that it is desirable to keep the changes in perspective. Over the whole of Scotland, the proposals would result in a reduction of 2·4 per cent. in rateable value. On the other hand, in recent years rateable value has increased by about 1·7 per cent. annually. What is proposed can therefore be regarded as a check on the expansion of the rate base rather than a reduction.

Photo of Dennis Canavan Dennis Canavan , Stirlingshire West

What about Central region?

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

I am coming to Central region.

Without compensating savings elsewhere in their budgets, present estimates suggests an increase of 0·75p in the average rate of about 122p for authorities other than Orkney, Shetland, Central and Falkirk. [Interruption.] I have given the total cash figure.

I shall deal briefly with the four authorities—Orkney, Shetland, Central and Falkirk. For Orkney, the information available at the time of the rate support grant Settlement showed a reduction of £6·5 million, or about 42 per cent. of total rateable value. That would have had a pronounced effect on rates. We therefore concluded that, although average domestic rates bills in Orkney are significantly below the Scottish average, an increase in the rate support grant payable to Orkney of £1 million was warranted. That of course will be reviewed in the light of further information about the authority's rating resources in 1983–84.

For Shetland, the need for compensation is uncertain because of the effects on local rating resources of unpredictable changes in the valuation for rating of Sullom Voe. Hon. Members may have seen some press comment about the scale of the prospective changes. We are therefore prepared to listen carefully to any representations the council may make. The level of grant for future years will be reviewed during 1983.

In reaching a decision not to divert additional grant to Central region, we had to pay particular heed to the level of rating resources for Central and Falkirk. The rating resources for both authorities are, and have been for some years, significantly above the level of the local rating resources per head, as augmented by the resources element of rate support grant of authorities generally. Those two authorities have had and still have rating resources per head significantly above the average. In the current year, the advantage is about 4 per cent. for the regional council and 15 per cent. for the district council.

We estimate that the effect of the order will be to bring rating resources per head for those councils to about the same level as those for authorities generally. We therefore concluded that it would not have been justified to transfer grant from other authorities, many of which have average domestic rate bills above, and local rating resources below, the levels in Central region.

An important point on which several Opposition Members have already expressed concern is whether a separate sum should have been provided within the rate support settlement to offset wholly or partly the reduction in total rate income resulting from derating external plant and machinery.

I am aware of the views that have been expressed by Labour Members and by COSLA. We considered the matter carefully before the terms of the RSG settlement were announced. My right hon. Friend's primary concern in making an RSG settlement is to ensure that, having regard to all relevant circumstances, its terms are equitable and appropriate. A broad judgment is made on the overall level of expenditure which it would be appropriate for authorities to incur. That is followed by a judgment of the amount of grant to be provided by the Government and its distribution to authorities having regard to local circumstances. That is how the grant settlement for 1983–84 was determined.

My right hon. Friend and I remain firmly of the view that that was an equitable settlement. The grant quantum was £1,924·25 million. It was significant that the right hon. Member for Glasgow, Craigton (Mr. Millan), speaking from the Opposition Front Bench, said that rate increases for the following year were likely to be modest. On that basis, I see no justification for the claim that the settlement as a whole was inadequate or that the grant totals insufficiently took into account the change in the rate base for which the order provides.

The remaining question is whether the total grant has been distributed equitably. During consultations before the settlement my right hon. Friend asked whether the convention wished to suggest any change in the distribution of grant to individual authorities to take account of the effect of derating external plant and machinery. The convention chose to offer no advice and one can understand why. As I have said while commenting on the position of authorities in Central region, diversion of grant would have meant a reduced level of support for authorities with higher domestic rate bills and lower rating resources than most of those affected by the order.

My right hon. Friend would have been willing to consider any proposals by the convention on grant distribution but as none was forthcoming he had no alternative but to exercise his own judgment, which was to provide some compensation only to Orkney, a small authority liable to suffer particularly severe effects.

I believe that the object of the order—to ease a severe anomaly which is liable to impede industrial development in Scotland and to make Scotland a more attractive location for a range of key industries—should command wide support in the House.

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth 10:37, 26 January 1983

I have never regarded the Under-Secretary of State for Scotland as anything like convincing and the House has seen him at his least convincing tonight. I know that in his heart of hearts the hon. Gentleman does not agree with the order. When he says that a number of my right hon. and hon. Friends have argued that the Government should have borne the cost of the operation, he forgot to tell us that when he was a Back Bencher in February 1981 he, too, argued that the Government should bear the cost. Moving a new clause as a member of the First Scottish Standing Committee that was considering the Local Government (Miscellaneous Provisions) (Scotland) Bill, the hon. Gentleman said: If it is accepted that there is an anomaly, the cost must be borne by other ratepayers or by central Government. Precedents suggest that financing changes in the rating system are met by central Government."—[Official Report, First Scottish Standing Committee; 24 February 1981, c. 681.] The hon. Gentleman quoted the 1929 precedents, in which there was a substantial exemption of agricultural and industrial subjects for rating. Also, in 1956, there was a full exemption of agriculture in Scotland and in 1974, plant and machinery of the type that we are discussing was exempted in England and Wales and the complete cost was met by Parliament. No more than two years ago, the Minister argued that if that measure was to be introduced it should be financed wholly by central Government. Ministerial office has changed the hon. Gentleman. It is an unseemly and unenjoyable sight to see him standing on his head.

I shall now deal with the principle of the order. When the subject was first discussed in February and March of 1981 and subsequently, the Opposition made it clear that we favoured the principle. We do not favour the practice that the Minister is adopting in introducing that principle.

When the subject was discussed in February 1981, it was the only so-called anomaly that was apparent in the rating system. Since then, caravans have been included. Is the Minister saying that the caravan issue that has been introduced is not an anomaly? My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and I were given to understand today that not only is the hon. Member for Perth and East Perthshire (Mr. Walker) introducing a caravan rating Bill but that the Scottish Office is drafting it and giving him assistance and will ensure that it goes on the statute book.

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

I shall not give way to the hon. Member. If the Minister wants to deny that, I shall give way to him. Does he want to deny what the hon. Member for Perth and East Perthshire told me and my hon. Friend the Member for Garscadden?

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

I assure the hon. Gentleman that the private Member's Bill that I understand my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) intends to introduce is his private Bill and it will be drafted by him.

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

I am glad that the Minister has cleared up one point because the hon. Member for Perth and East Perthshire gave my hon. Friend and me to understand—

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

I shall give way to the hon. Gentleman in a moment. I should like the Minister to clear up the other point. Is the Minister saying that the Government will not support the hon. Member for Perth and East Perthshire and that his Bill will not therefore reach the statute book?

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

I suggest that the hon. Gentleman uses the—

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East

On a point of order, Mr. Deputy Speaker. The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) keeps raising questions that he must ask hon. Members on this side of the House to provide information about, but he will not give way to them. Is that not an abuse of the procedures of the House?

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

I understand how the hon. Member for Fife, East (Mr. Henderson) feels, but it is entirely up to the hon. Member who has the floor whether he gives way.

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

I see our apprentice Chairman trying to become Chairman and I doubt whether he will ever achieve it. I shall now give way to the hon. Member for Perth and East Perthshire so that he can say whether he told my hon. Friend the Member for Garscadden and me that the Scottish Office is drafting the Bill and will assist it on to the statute book.

Photo of Mr Bill Walker Mr Bill Walker , Perth and East Perthshire

I thank the hon. Gentleman for giving way. I trust that he will realise that, to put it mildly, he was harassing me on the stairs. He was attempting to put words into my mouth when I replied to questions that he asked me. I said that I would give the hon. Member for Glasgow, Garscadden (Mr. Dewar) the details of my Bill in the same way as I have given them to my Friend the Minister and that I would welcome advice.

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

The hon. Gentleman is entitled to allow his imagination and memory to play tricks on him. We shall leave the caravan Bill where it is, on the basis that the Minister has given an undertaking that the Scottish Office is not drafting it and will not assist it on to the statute book.

The Minister argued that the derating of external plant and machinery will assist industrial investment in Scotland. He took no account of the damaging effect that the increase in rates will have on existing industry in Scotland, especially in Central region. When the Minister gave his figures, it was noticeable that he did not quote the assessment in the Scottish Office document of 16 April that the effect of the measure that he is pushing through tonight will be a 10·5p in the pound increase in the Falkirk district.

The Minister must surely know that industry in the Falkirk area has been devastated in recent months by the Carron company and a host of others going out of business and by job losses in the petrochemical industry. If the Minister thinks that the reduction in rates for the petrochemical industry will stop British Petroleum from paying off workers, he has another think coming. It is already planning to unload another 200 people in the knowledge that the order will reach the statute book. How on earth the Minister can argue that the order will stimulate industrial investment in Scotland is beyond my comprehension, and also that of the industrial companies thinking of expanding their enterprises in Scotland.

The order will be especially damaging to industry in Central region in general and Falkirk district in particular. The Minister must know also that it will prove damaging to commerce as shopkeepers will have to pay enormous increases in their rates bills. Even domestic ratepayers will face enormous increases.

The Minister had the impertinence to come to the House and tell us that he is not compensating Central region and Falkirk district because they are good housekeepers—they have done exactly what he wanted them to do and kept their rates at a reasonable level. He does not see the need to compensate them for the £8 million that they will lose because of the order. He said that he is not compensating them also because of their rate income. It is important to note that Central region does not receive any higher percentage rate support grant than any other region. Neither Central region nor Falkirk district qualifies for the resources element. The rates available to them are the income they receive from rateable subjects.

The Minister said that he is using the measure to reduce the income from the rateable subjects to bring Central region and Falkirk district broadly in line with the remainder of Scotland. That is an outrageous suggestion.

The Minister knows perfectly well that Central region has suffered a great deal of pollution and inconvenience—a whole host of things—because of the industry there. That happens in any region, not just Central region. One does not get industrial rate income for nothing. One gets it because there is industry in the region. It is as simple as that. Industry brings with it advantages as well as disadvantages. The idea of the rates is that the rate income can be used to level off the disadvantages. Any advantage that Central region or Falkirk district had has been removed by the Minister in introducing the order.

The Minister cannot defend what he is doing. Two groups are gaining from the introduction of the order. One is the petrochemical companies in Grangemouth in my constituency and in other areas in Scotland. The Minister was not generous to the Shetlands when he recently included £1 million for them in the rate support grant settlement. That £1 million came from other authorities, not the Government. It was a reallocation of the resources element in the rate support grant settlement.

The Minister is the Freddie Laker of the Scottish Office. He is doing favours for British Petroleum, Imperial Chemical Industries, BXL and other companies, using domestic ratepayers' money—housekeepers' money and shopkeepers' money—and other industries' money. The Scottish Office is not providing a penny piece to put into practice what the Minister regards as one of his favourite principles, coming as he did from the Confederation of British Industry before he came to the House.

The way in which the local authorities have been treated is an absolute disgrace. The Minister talked about consultation. The records of the meetings with the Convention of Scottish Local Authorities show that COSLA asked for industrial rate comparisons. When the comparisons were given, they were completely ignored. The Minister did not even regard those comparisons as relevant to the discussion. The Minister will say that they were not ignored. He will have to explain how he comes up with the formula in the order. If he had not ignored the comparisons, he would have come up with a different order.

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

If, as the hon. Gentleman suggests, COSLA was so dissatisfied, why did it not make a recommendation?

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

The Minister is using COSLA to shirk his responsibilities. The Minister told COSLA that the Government were not prepared to put a penny piece into this exercise to back up their principles. He turned to COSLA with that pure white image that he is supposed to project to the country, and said, "You make a recommendation and tell us where to take the money from and from which other local authorities to take the money." The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) has departed the scene after his intervention. He should understand that his district council will have to contribute to the loss of rate revenue in some parts of Scotland. His district council will lose money from the resources element as a result of this exercise.

Therefore, the Minister had no right to say that to COSLA. It was improper to do so. He should have had the courage of his convictions and told it, "We are not prepared to put any money in. We will go ahead and introduce the order."

The other people who will gain from the order are the Government. They have hidden that fact.

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

The Minister shakes his head with the innocent hurt look that he puts on from time to time. He knows that the profits of the companies that he is helping will be increased, and that as a result the corporation tax from the companies will be that much higher. Not only are the ratepayers of my constituency and my hon. Friends' constituencies paying to implement the Government's policy, and to back up the Minister's principles—no wonder that I described the Minister as the Freddie Laker of the Scottish Office—but by a back door method the Government are taking some of the ratepayers' money from them in the form of taxation on the increased profits that those companies are bound to show.

My hon. Friend the Member for Dunfermline (Mr. Douglas) is here, as is the hon. Member for Fife, East (Mr. Henderson), which is a good thing, because Fife stands to lose a substantial future rate income from the order. At the moment it stands to lose about £500,000, but in the future, because the plant at Moss Morran—which will have appeared on the valuation roll at about £13 million until now—will, under these proposals, appear at £8 million, there will be a loss of £5 million of rateable value.

The hon. Member for Fife, East should think about the investment that Fife regional council, Kirkcaldy district council and Dunfermline district council have put into the site at Moss Morran and the Braefoot Bay complex. Ratepayers are just as entitled to a return on their investment as big businesses, but Tory Members always forget this. The ratepayers in Fife will not get any return on their investment. They will lose from this.

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

The hon. Member should know better than to say that. I have proven beyond any shadow of doubt that the petrochemical industry is better at shedding jobs than creating them. In the past two years at Grangemouth, we have lost about 10,000. Even at the moment, the petrochemical industry there is shedding jobs. If 200 jobs are created at Moss Morran, that will take up jobs lost at Grangemouth. There will be no additional jobs in Scotland.

This order will cost Scotland jobs. I have already told the Minister, and I shall tell him again, that when, as we expect in the not-too-distant future, there are closures in Central region, we shall put the blame where it belongs—on the shoulders of the CBI, the central Scotland chamber of commerce, and the Minister. They will all have their share of the responsibility for the families whose future has been wrecked by the action that the Minister is taking tonight. We shall vote against the order.

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East 10:57, 26 January 1983

The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) has given part of the reasons why some of the arguments that might have been put forward by Falkirk district council have not had the hearing that they should have had—if the hon. Member's speech this evening is anything to go by as to the attitude with which he has sought to win friends for any argument.

The anomalies of the district valuation system, one of which we are discussing, and it is the most important one for jobs in Scotland, have existed for a long time. They existed when the hon. Member for Stirling, Falkirk and Grangemouth was in government. What did he do about any of them then? Nothing. He has the nerve to come along and put on my hon. Friend the Minister the blame for a great many things.

However, as my hon. Friend said, and no one has denied it, there has been broad agreement throughout Scotland, in Parliament and in local government that the anomalies that the order seeks to cure have been needing to be dealt with for some time. That is a helpful starting point.

Photo of Mr Norman Hogg Mr Norman Hogg , Dunbartonshire East

Will the hon. Gentleman tell the House who, and which organisations, have made the representations that he claims are the view of local authorities and others?

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East

I heard COSLA say that it wanted to see the anomaly cleared up, as did the hon. Member for Glasgow, Garscadden (Mr. Dewar) in Committee. These seem to be reasonable voices to have listened to as having been representative of a broad group of feelings.

Photo of Mr Harry Ewing Mr Harry Ewing , Stirling Falkirk and Grangemouth

At which time did COSLA say to the Scottish Office that it wanted to see that anomaly cleared up in the way that the Minister is clearing it up? COSLA is clearly on record as being strongly opposed to this measure. COSLA met the Scottish Conservatives this afternoon to tell them that.

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East

The hon. Gentleman makes no point at all. He simply tries to make further enemies. I have stated clearly that COSLA wanted the anomaly cleared up. Does the hon. Gentleman deny that COSLA wanted the anomaly cleared up?

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East

I am willing to give way to the hon. Member for Stirling, Falkirk and Grangemouth if he is prepared to say that COSLA does not want the anomaly cleared up.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Central Fife

The hon. Gentleman should have read the letter from COSLA dated 21 January which states that it had no objection to external plant and machinery"— and other anomalies— being derated if local authorities were compensated for the loss of rate income. That is the point.

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East

I am grateful to the hon. Gentleman. He supports my point entirely. COSLA wanted to see the anomaly cleared up.

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East

COSLA says that it would like to see it cleared up by a particular method. It is not the method in every respect, that my hon. Friend has brought before the House. That is the issue on which sensible discussion should take place. We have wasted a fair amount of time getting to that point. There is still agreement in the House, I hope, that there was a need to clear up the anomaly. The only argument—it did not require all the heat brought into the debate by the hon. Member for Stirling, Falkirk and Grangemouth—is how best this long-standing anomaly, which the Labour Government did nothing about, can be cleared up most effectively and fairly for the people of Scotland.

Photo of Mr George Foulkes Mr George Foulkes , Ayrshire South

The hon. Gentleman is a long-standing anomaly. Sit down.

Photo of Mr Barry Henderson Mr Barry Henderson , Fife East

The implications for Fife, have been mentioned. I venture to suggest that if the statutory power to bring forward the order had not been introduced by the Government, we might not have the Moss Morran complex, Braefoot Bay and the rest, with the substantial implications for jobs and rating valuation.

I can understand COSLA saying that it would prefer taxpayers as a whole to find the replacement for money that local authorities have been accustomed to receive as a result of an anomaly in the rating and valuation system. That is understandable. COSLA represents local authorities that have been accustomed to certain goodies coming their way, which will not come quite in that manner in the future. It is, however, for the House to make a judgment on the best way to meet the needs of the people as a whole.

In correspondence with the Minister some time ago on the method for changing the burden, I understood my hon. Friend to say that the average rate in Scotland was £1·20 and that outside the four authorities most directly affected the effect on the average domestic ratepayer will be 0·75p. Whatever the arguments, which might have been more sensibly presented had the case not been made by the hon. Member for Stirling, Falkirk and Grangemouth, that kind of figure does not suggest a need for the kind of heat and lack of light displayed from the Opposition Front Bench.

The resources element in the rate support grant achieves a considerable spreading of the load throughout Scotland as a whole. I do not wish to detain the House. It is possible that other hon. Members will produce more rational arguments—[HON. MEMBERS: Hear, hear]—than those heard from the Opposition Front Bench. I am grateful to the Minister for completing the clarification. This was an anomaly that would have endangered jobs in Scotland. I am more grateful still for his assurances that the Government are facing up to other problems in the valuation system. I hope that when they come to preliminary conclusions they will publish a consultative document to enable hon. Members and others with a direct interest to examine the issues in a calm and sensible manner and reach conclusions that benefit the people of Scotland as a whole.

Photo of Mr Jo Grimond Mr Jo Grimond , Orkney and Shetland 11:04, 26 January 1983

I have already spoken twice on this proposal. There is no rule against making the same speech three times in the Houses of Parliament—and when I say "three times" I mean three times. However, I shall refrain from repeating the whole of my speech.

I am bound to repeat that this is a most damaging and pointless order. Apparently, it was introduced at the behest of the CBI, but even the CBI now has cold feet about it. The whole Government case is shot from under them by what was said by one of their own members—the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who was then a Minister at the Scottish Office. This is what he said in the Scottish Standing Committee on 11 February 1982: The sums involved arise because of the high degree of external plant in those areas"— those areas being Orkney and Shetland. If they are excluded from any such change, there will be little point in making that change".—[Official Report, First Scottish Standing Committee, 11 February 1982; c. 413.] He was saying distinctly that this order is aimed at Orkney and Shetland, and that were it not for Orkney and Shetland, there would be no point in making it—even for this Government, who have introduced some pretty footling orders in their time. That is out of their own mouths.

The effect on Orkney and Shetland will be extremely damaging to the ordinary ratepayer. It will be very damaging to ordinary industry, which will be of importance when the oil is over. However, it will not do the oil companies any good at all, because, as the Minister just said, they set off rates against other taxation. Therefore, the effect on Orkney and Shetland will be great damage to local industry and local people and no good to anyone—except possibly the Exchequer.

The other point about the Government's case is that they argue that this order brings the law of rating in Scotland into line with that in England. Of course it does not do that. The law of industrial rating in England is still totally different from that in Scotland, and if the Government do not know that it is time that they did. The local authorities may have been extravagant, they may have too many staff, and perhaps they should take note of Government policies, but it cannot make sense suddenly to alter the whole rateable base, particularly of two rather small rateable areas such as Orkney and Shetland.

We are of course grateful to the Government for the offer of £1 million or so to Orkney, but that is only about half of what it will cost Orkney, and so far we do not know what is to be given to Shetland.

This order is to be brought in by the Government as a result of no pressure that I have been able to discover. We are told that there are widespread demands for it. In my opinion, that is nonsense. I have found no widespread demand that a deliberate blow should be aimed at Orkney and Shetland. I have met no one who supports that.

Who is to pay? It will be not the Government, but the rest of the local authorities in Scotland, for some obscure reason. Why the Exchequer, which will benefit, should not pay, I do not understand.

In the last debate the Minister said, as a great concession, that Orkney and Shetland had been allowed to exceed their guidelines. The point is not exceeding the guidelines. The point is that we wish to persuade ordinary people to live in Orkney and Shetland without being rated out of existence. We want to help industry, and to do that we must be allowed to rate the main payers of rates in the area.

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

I want to correct the right hon. Gentleman on that point. I certainly did not say that Orkney and Shetland were being encouraged to exceed their guidelines. I pointed out that the guidelines for 1983–84 were being increased over those for 1982–83. That is a different proposition.

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

At any rate they are being encouraged to spend more money. We want to know where the money is to come from. I hope that the Government will rapidly make up their mind what they will do to assist Shetland out of the muddle into which it has been put by the Government, and by no one else.

Finally, what is the significance of 200 cu m? Why was that figure chosen? No doubt the Government have given careful consideration to this matter and it is of great significance, but I think that we should be told about it.

If I were the Government, I should withdraw this order, and, if they cannot do that, at least they should make the burden fall on the Exchequer, not other local authorities, and see that Orkney and Shetland are adequately compensated.

Photo of Mr Norman Hogg Mr Norman Hogg , Dunbartonshire East 11:08, 26 January 1983

The order, or rather the intention behind it, has been around for some time. Indeed, the Minister has made some play of points that I made in the Scottish Standing Committee when we previously debated it. I shall bring his figures up to date in a moment.

Companies with external plant have been lobbying, mainly through the CBI, but it is not without significance that the Cumbernauld Business Association in my constituency does not agree with the CBI and has made strong representations to me. As has been said, the principle behind the order was certainly supported by Labour Members when the Local Government and Planning (Scotland) Act 1982 was debated. What has happened since then brings into doubt the principle on which we were founding our point of view. Indeed, when the practicalities are examined the problems begin to appear and they are worrying.

The Minister has said that in my constituency there is a large plant belonging to an international company engaged in the liquification of gas. It has invested a great deal of money in Cumbernauld. It employs many local people and that puts wages into the local economy. It pays £170,000 in rates to the two local authorities, which makes it important to the local community and the local council. I can understand its case and I can support it in principle, but when it comes down to how the Government have decided to handle this, I am afraid that I must come out against the order, along with my hon. Friends. [Interruption.] I did not hear what the hon. Member for Banff (Mr. Myles) said, but if he was disagreeing with me and has something to say I am sure that he will intervene. We can normally hear him clearly.

Labour Members want to be certain that the order is in the interests of industry and local government as a whole. That is not what is happening. If the Government were to do something about the energy costs of the company to which I have referred, and similar companies, it would be more to the point. That is something I can pursue on another occasion. If the Government get their way and the company to which I am referring is derated, the shortfall will have to be found by other people, local authorities and traders in my constituency. It may be because of the resources element that the blow to local authorities will be less than that, say, of Central region. I dare say that we shall hear further about that from those hon. Members who represent that region. The implications for my local authorities are such that I could not in any way support the order.

When the Minister replies I hope that he will say something about the effect of implementing the order and its effect on Strathclyde region and Cumbernauld and Kilsyth district council. What would be the overall loss of revenue to local government in Scotland? The Minister fielded many percentages but never referred to hard cash and, being an Aberdonian, hard cash has a great deal of attraction for me. I hope that he will say specifically what this entails. As I understand it, COSLA has suggested that we are talking about £31·1 million, and its figures are usually right. We know from long experience in dealing with rate support grant orders that COSLA gets its sums right and that the Minister gets his wrong. Can we clarify exactly how much money we are talking about? What would it mean in rating levels for Central region, Strathclyde region and the district councils? We know what COSLA says, but we must have the hard facts from the Government.

Can the Minister tell us—I am sure that he has been advised by his civil servants—whether there will be a problem with companies quickly converting covered plant to external plant if the order were to go through? Will they take the roofs off some buildings to make them external plant and, therefore, have them derated. I hope that the Minister can clarify the point when he replies.

What discussions has the Minister had with the regional assessors? Does he believe that an attempt will he made by the assessors to make up the shortfall by altering the bases on which they rate plant and the buildings attached thereto? My local authorities are asking those questions. The Cumbernauld Business Association called a special meeting of its members last month because it was seriously worried about what the proposals would mean. I hope that the questions can be answered and that we can have some demonstration of what the proposals mean for domestic ratepayers, shopkeepers, other businesses and factories in the communities that I represent.

I have already heard what the Minister proposes for financing the consequences of the order. Although the Labour party spoke up for the order in principle when we debated amendments to the Local Government and Planning (Scotland) Act 1982, having heard what the Minister has proposed tonight I cannot join him in the Government Lobby. I shall vote with my right hon. and hon. Friends.

Photo of Mr Albert McQuarrie Mr Albert McQuarrie , Aberdeenshire East 11:15, 26 January 1983

This statutory instrument seeks to remove the anomaly between the law of Scotland and that of England and Wales, to which there would have been no exception if local authorities were to be fully compensated for the loss of rate income. Unfortunately, the Government have apparently not decided whether the affected local authorities are to be compensated, and it is not made clear in this instrument what action will be taken to compensate those authorities. That must be determined by the Government rather than by the ratepayers.

As hon. Members have said. any steps taken by the Government will affect the ratepayers in those areas and in all Scottish local authorities if the Secretary of State decides to reimburse the affected authorities by means of an increase in the rate support grant resources element. That will naturally reduce the overall sum that will be available to other local authorities, and can lead only to a general increase in rates in many areas that do not receive an additional rate support grant. [Interruption.] There is very little time left in this debate, and I wish to say my piece. I am prepared to give other hon. Members the opportunity to do that, so perhaps they will be fair and let me have my say.

It is strange that it was the Government's intention to bring the legislation on external machinery into line with that of England and Wales and thus remove the anomalies. However, that is not being done, as internal plant in Scotland is at present derated, although that is not the case in England and Wales. I hasten to add, however, that I do not press the case for internal plant in Scotland to be derated, because Scottish industry has enough financial problems without adding another.

The proposd legislation will affect several authorities in Scotland—as the right hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) said—if it is estimated that the total reduction in rateable value throughout Scotland—as the hon. Member for Dunbartonshire, East (Mr. Hogg) said—would be about £31 million, of which £24·5 million can be accounted for in the three areas that I have mentioned.

This is a serious matter for local authorities. Several hon. Members from the affected constituencies have already caught your eye, Mr. Deputy Speaker, and no doubt others will hope to do so. I want to concentrate my remarks on the effect this proposal will have on the east Aberdeenshire section of the Banff and Buchan district council where the proposals in the statutory instrument have an on-cost effect on the ratepayers. It must be remembered that even a small loss in rateable value can have a serious effect upon small local authorities and the regions in which they are located.

In my constituency is the vast oil and gas complex located at St. Fergus. It is estimated that if this statutory instrument receives the approval of the House the rateable value of Banff and Buchan district will be reduced by £1,043,000, because of the amount of plant, machinery and pipes which are in the open. If we are to work on the 1982–83 rate poundage for that authority the loss of rateable value will result in a loss to the district council of £114,730.

In addition, Grampian region, which takes in sections of the constituencies of my hon. Friend the Member for Banff (Mr. Myles) and of my hon. Friend the Member for Moray and Nairn (Mr. Pollock), will suffer to the degree that, based on the 1982–83 rate poundage, the actual loss in rate income would be £570,000. It can be seen, therefore, that the ratepayers in these areas will stand to have increases on their rates from which they will have no right to derive any benefit.

Is it the Government's intention wholly to offset these losses by giving additional sums to the affected authorities from the rate support grant resources element? If not, what steps do they propose to take to remove the burden from the ratepayers in Banff and Grampian region, and particularly in east Aberdeenshire, where the people are suffering enough because of the high rates of unemployment and the seemingly never-ending notifications of redundancies in many industries, and where they have no hope of alternative employment?

I appeal to my hon. Friend to consider reimbursing wholly the losses either by direct Government aid or from the rate support grant resources element. It is well known to my hon. Friend that many Scottish local authorities are having considerable difficulty in meeting the 1983–84 guidelines set by the Secretary of State for Scotland and in arriving at the rate poundage most authorities are having to give consideration to cutting essential services.

The impact of this statutory instrument on the authorities which come within the area I represent is such that there is an obligation on the Government to compensate them in full for the loss in rateable value. I trust that when my hon. Friend winds up the debate he will be able to advise the House how he intends to mitigate the additional strain on the resources of the local authorities which will be affected.

I must take issue with the right hon. Member for Orkney and Shetland, who condemned the Confederation of British Industry as being one of the bodies responsible for this order. In a letter of 9 November 1982, of which the right hon. Gentleman no doubt has a copy, the CBI says: Any modification would involve a potential change in the rateable valuation of an authority in which such equipment is located. Since we initially approached the previous administration we have made clear out belief to the government, to MPs and to the authorities principally affected that the costs resulting from the change should not fall upon neighbouring ratepayers. And, because the anomaly results from legislation, our representations proposed that the cost should be met by Parliament. This is still our view and we believe that it is important to maintain this objective while being prepared to discuss the various alternatives outlined in the Scottish Office paper LGFS (M) (82) 8 attached to your letter. Indeed we have quoted a number of close precedents where such action was taken by Parliament. That is a powerful argument for some action to be taken in respect of this statutory instrument. If my hon. Friend can say that the affected local authorities will be reimbursed in some form so that our ratepayers will not be so seriously and adversely affected, as pointed out by the hon. Member for Stirling, Falkirk and Grangemouth, that will give some satisfaction to the House. I hope my hon. Friend will be able to give that assurance.

Photo of Dennis Canavan Dennis Canavan , Stirlingshire West 11:25, 26 January 1983

This order is yet another example of the absolute hypocrisy and duplicity of the Government. Their declared policy on rates is quite simple—keep them down—yet the effect of the order will increase the rate bill for many ratepayers in many areas of Scotland. The Government are refusing to give any compensation to the local authorities as a result of this change, with the exception of Orkney and Shetland, where I understand the compensation offered is hopelessly inadequate to deal with the situation there.

In the Central region of Scotland, part of which I represent, the rate increase will amount to about 5p in the pound for the regional rate and 4p in the pound for the district rate in the Falkirk district. Thus, the Falkirk ratepayer will face an increased rate bill of 9p in the pound.

No doubt the Government will try to blame the Labour-controlled councils for rate increases, but they and the Minister are directly responsible for the rate increase that will inevitably result from the order.

I always understood that the Government's policy on industry was to try to bring more industry and jobs to Scotland. The order has come about as a result of a CBI lobby, because it is supposed to help bring industrial development to Scotland. In fact, it will give a massive rate rebate of millions of pounds to large multinational companies such as BP.

Central region alone will lose £7·78 million. Who will foot the bill? The Government expect other ratepayers, both domestic and industrial, to pay for the massive rate rebate that those multinational companies will receive. According to the COSLA statistics, other industries in Falkirk district will have to pay an extra £1·34 million to foot part of the bill for the massive rebate that will be handed out to the likes of BP. That could have a devastating effect on jobs in other industries in the Central region, where 20,000 people are already registered as unemployed.

That region has faced crises such as Glynwood, Caron and British Aluminium, now Alcan. Other industries such as Smith and Wellstood in Bonnybridge and places such as Denny, with unemployment of more than 30 per cent., are facing difficulties because the Government are refusing to intervene. The order is, therefore, a serious threat to industry and jobs in the Central region and, possibly, in other areas of Scotland.

I cannot understand why the local chamber of commerce has not raised its voice in louder protest. It seems to me that this order has been hatched up between chambers of commerce and the CBI, which is now absolutely incapable of defending Scottish industry. So is the Minister, who was a former paid lackey of the CBI before he was elected to this House.

It is interesting to note that the initial amendment emerged during the passage of what is now the Local Government (Miscellaneous Provisions) (Scotland) Act 1981. It was the Minister who first introduced it in a new clause.

I have a letter from his predecessor, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), dated 3 March 1981 and addressed to me. It states that in replying to the debate on Allan Stewart's new clause in Standing Committee on 24 February I made clear that it would not be right to go ahead with a legislative amendment in the absence of any consultation with COSLA and with those authorities which would be most seriously affected … These consultations will be taking place as part of a continuing official investigation into the matter, which will be paying particular attention to the financial effects of any change in the valuation code, including the effects on the distribution of rate support grants. Yours ever. Malcolm". Malcolm has never been mine, and now he has been promoted, or relegated, to the Foreign Office.

One of the worst effects of Galtieri's invasion was a reshuffle in the Scottish Office, which resulted in the Minister getting his wee bit of promotion and his hon. Friend the Member for Argyll (Mr. MacKay) being put in charge of the Health Service. They have both wreaked havoc in Scotland. They have destroyed more industry in Scotland than the Luftwaffe did during the last world war. It is serious, yet the Minister is laughing while jobs flit out of Scotland.

The order will destroy more jobs in Scotland and increase rate bills, not just for industrialists, but for domestic consumers. I hope that even at this late stage the Minister will see sense and withdraw the order and throw it in the bucket so that we can all go home before midnight without having to vote.

Photo of Mr Hector Monro Mr Hector Monro , Dumfries 11:30, 26 January 1983

The Opposition's intemperate and irresponsible attacks have done nothing for their reputation, and should not sway the Minister in his determination to put the order through the House. We are dealing with external plant. Surely Opposition Members can see that any help we can give to industry will be of benefit during these difficult economic times.

There are a great many industries in Scotland, not just in the central belt, which have a great deal of external plant and they will gain from the order. They will have an opportunity to increase employment, which is something that we want desperately throughout Scotland. The Opposition have failed to see that the purpose of the order is to help industry. One would have thought that Opposition Members had not been sitting here listening.

To be fair to industry with external plant, we must approve the order. I anticipate that industries in my constituency and that of my hon. Friend the Member for Galloway (Mr. Lang), including ICI which has external plant, will benefit from it.

It is unfair to attack the Minister. He has had consultations. However, it does not mean that one must reach a compromise that is suitable to all. The Minister has to decide, after fair consultation, what is in the best interests of industry. If he had not received a great many representations from industry in Scotland presumably we should not be putting forward the order.

We have to keep this matter in a proper perspective and consider the impact generally on rates in Scotland and not just in the central belt, which is not the only part of Scotland that is affected. Will the Minister confirm that areas such as Dumfries and Galloway should have an increase of only 0·75p in the pound? We must equate that with the help it might provide in attracting industry or maintaining jobs in existing industry.

There was an extremely good settlement in the rate support grant that we debated last week. The Minister obtained a substantial increase in difficult economic times, close to the important announcement of last December's inflation rate. If, indeed, we can maintain inflation at around 5 per cent., the rate support grant decision will be seen in a very much better light than the Opposition tried to put it last week.

I would like my hon. Friend, too, if he has a moment in winding-up, to comment a little further on the hint that he gave of his interest in harmonisation of rating relative to certain important issues at present, which he knows that I have raised with him in regard to caravan sites and to—

Photo of Dennis Canavan Dennis Canavan , Stirlingshire West

On a point of order, Mr. Deputy Speaker. This has nothing to do with the order. The hon. Gentleman is cutting other hon. Members out of the debate.

Photo of Mr Hector Monro Mr Hector Monro , Dumfries

The matter was raised by the Opposition Front Bench, perhaps when the hon. Member for West Stirlingshire (Mr. Canavan) was not in the Chamber or certainly when he was not listening. There was an exchange of argument across the Chamber with my hon. Friend the Member for Perth and East Perthshire (Mr. Walker). The hon. Gentleman is spoiling an already shockingly bad case that he has put forward.

I am glad that my hon. Friend the Under-Secretary is at least giving thought to the issue of rating caravans and other issues that are causing a great deal of contention relative to sports facilities at football grounds and to racecourses. It would be useful if, in the long run, such issues were not a disadvantage to Scotland.

I think that it is important that my hon. Friend, in winding up, emphasises again that we are dealing with industry throughout Scotland—not only in Orkney and Shetland and central Scotland but in my constituency and elsewhere, where there is external plant. Those areas will benefit, at an overall cost to the ratepayers of most regions, which is virtually insignificant in exchange for the possibility of increasing employment, which is our prime wish at present.

I am very glad that my hon. Friend has brought forward the order. I hope that it goes through tonight.

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East 11:35, 26 January 1983

On the whole we have had a well-informed debate on this important order, but the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) did the House and himself a considerable disservice in his exchanges with my hon. Friend the Member for Perth and East Perthshire (Mr. Walker).

Photo of Mr Bill Walker Mr Bill Walker , Perth and East Perthshire

Is my hon. Friend aware that the hon. Gentleman is known as the Walter Mitty of the Labour Front Bench? This evening clearly illustrates why.

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

The House will note my hon. Friend's views. He made the position clear in response to the hon. Gentleman. All hon. Members will be very careful indeed about having any conversation at all in the Corridors with the hon. Member for Stirling, Falkirk and Grangemouth.

My hon. Friends the Members for Fife, East (Mr. Henderson) and for Dumfries (Sir H. Monro) raised the question of the Government's consideration of other anomalies in addition to the one that is the subject of the order before the House. My hon. Friend the Member for Fife, East made a valuable suggestion, that the Government should not introduce a coherent package on the anomalies without full discussion and a discussion document.

Photo of Mr Martin O'Neill Mr Martin O'Neill , Stirlingshire East and Clackmannan

If the Minister is suggesting that by a piecemeal process we are to have the erosion of the rate base of Scottish local authorities, how does he expect the local authorities to provide the infrastructure that will be the means whereby industry can be attracted and kept within the area? That is the problem that Falkirk and the Central region face and that is why we are opposing the order.

Photo of Mr Allan Stewart Mr Allan Stewart , Renfrewshire East

I assure the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) that it is precisely because of issues affecting the rate base that we concluded that we should introduce a coherent consideration of the various anomalies that right hon. and hon. Members have brought to our attention. There will be a full opportunity for the House to consider any such proposals when our consideration is completed.

My hon. Friend the Member for Dumfries was right to remind the House that we should put the detailed points that have been made in the context of the general aim of the order. The general aim is simple—it is to bring the position on external plant and machinery north of the border into line with that south of the border. No hon. Member has suggested that the rating burden on internal plant and machinery should be increased in Scotland to bring it into line with that in England and Wales. If the hon. Member for Kilmarnock (Mr. McKelvey) is suggesting that, I suggest to him that he will find little support.

With regard to the general effect of the order, the hon. Member for Dunbartonshire, East (Mr. Hogg) mentioned the COSLA figure of £31 million and said that I had not given a figure. My notes suggest that I gave the figure of £31 million twice in my opening speech. I am sorry that the hon. Gentleman's attention was temporarily diverted at that moment.

Hon. Members have referred to consultations. My hon. Friend the Member for Dumfries was correct when he said that consultations had been extensive. Of course there has not been universal agreement as a result of those consultations but the consultations have been extensive.

With regard to the point of general principle, compensation or additional resources, I should like to emphasise that the Government's intention was made clear more than a year ago by my hon. Friend who is now the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), in Committee on the Local Government and Planning (Scotland) Bill when he said: I think that we have emphasised all along that this is a question of the rateable consequences within a particular sector or within the whole Scottish rating system … But overall there is no such disparity or discrepancy. No convincing case has been put to the Government to suggest that this should not be seen as a redistribution of rating liability, as opposed to any other form of change."—[Official Report, First Scottish Standing Committee, 11 February 1982; c. 415.] That is what my hon. Friend said in putting that principle to the Committee. It is worth noting that, on that point of principle, the Opposition chose not to divide on the clause.

I should like to deal with some of the points of detail that were put by right hon. and hon. Gentlemen. My hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) asked about the effects on Banff and Buchan. Both authorities qualify for support through the resources element of rate support grant. The reduction in rate income will therefore be made good in part. It is estimated that for the districts, Banff and Buchan, the effect of the order will be to increase rates in 1982–83—the only figures that we actually know about—by 0·1p. The same figure applies to my hon. Friend the Member for Fife, East in respect of north-east Fife. In 1982–83 the effect of the order on Grampian region will be to increase the rate by about 0·75p.

The hon. Member for Dunbartonshire, East asked about Cumbernauld and Kilsyth. The effect there will be an increase of 0·4p. He also asked about Strathclyde, where the effect will be an increase of 0·7p. My hon. Friend the Member for Dumfries asked about Dumfries and Galloway. He is correct. The effect will be a 0·75p increase. The hon. Member for Stirling, Falkirk and Grangemouth mentioned 10·5p. My figure is 10·6p. I can confirm his understanding of the figure, and my point about rating resources per head stands.

We have agreed with COSLA that officials will review the effects on all authorities of the changes in valuation as figures become available from assessors. We shall review the arrangements for compensation in the light of that information during 1983. If COSLA brings forward agreed proposals for redistribution of grant, they will be reviewed extremely sympathetically by my right hon. Friend. There is no doubt that the order will be of assistance to key industries in Scotland and to those who wish to attract industry to Scotland, and I commend it to the House.

Question put:

The House divided: Ayes 118, Noes 74.

Division No. 51][11.45 pm
AYES
Alexander, RichardGray, Rt Hon Hamish
Ancram, MichaelGriffiths, Peter (Portsm'th N)
Aspinwall, JackGrist, Ian
Atkins, Robert(Preston N)Grylls, Michael
Banks, RobertGummer, John Selwyn
Beaumont-Dark, AnthonyHampson, Dr Keith
Berry, Hon AnthonyHannam, John
Best, KeithHawksley, Warren
Bevan, David GilroyHeddle, John
Biggs-Davison, Sir JohnHenderson, Barry
Blackburn, JohnHogg, Hon Douglas (Gr'th'm)
Boscawen, Hon RobertHunt, David (Wirral)
Bottomley, Peter (W'wich W)Hunt, John (Ravensbourne)
Boyson, Dr RhodesJopling, Rt Hon Michael
Brooke, Hon PeterKing, Rt Hon Tom
Brotherton, MichaelLamont, Norman
Bruce-Gardyne, JohnLang, Ian
Bulmer, EsmondLennox-Boyd, Hon Mark
Carlisle, John (Luton West)Lester, Jim (Beeston)
Carlisle, Kenneth (Lincoln)Lloyd, Peter (Fareham)
Carlisle, Rt Hon M. (R'c'n)Luce, Richard
Clark, Hon A. (Plym'th, S'n)Lyell, Nicholas
Clarke, Kenneth (Rushcliffe)MacGregor, John
Cope, JohnMacKay, John (Argyll)
Cranborne, ViscountMcNair-Wilson, M. (N'bury)
Dorrell, StephenMcQuarrie, Albert
Douglas-Hamilton, Lord J.Major, John
Dunn, Robert (Dartford)Mather, Carol
Dykes, HughMaude, Rt Hon Sir Angus
Eggar, TimMellor, David
Fairbairn, NicholasMeyer, Sir Anthony
Faith, Mrs SheilaMiller, Hal (B'grove)
Fletcher, A. (Ed'nb'gh N)Mills, Iain (Meriden)
Fletcher-Cooke, Sir CharlesMoate, Roger
Fox, MarcusMonro, Sir Hector
Fraser, Peter (South Angus)Morrison, Hon C. (Devizes)
Goodlad, AlastairMurphy, Christopher
Myles, DavidSpeed, Keith
Neale, GerrardSpeller, Tony
Neubert, MichaelSpicer, Jim (West Dorset)
Newton, TonySpicer, Michael (S Worcs)
Onslow, CranleySproat, Iain
Page, Richard (SW Herts)Stanbrook, Ivor
Patten, John (Oxford)Stevens, Martin
Percival, Sir IanStewart, A.(E Renfrewshire)
Pollock, AlexanderStradling Thomas, J.
Prentice, Rt Hon RegTaylor, Teddy (S'end E)
Proctor, K. HarveyThomas, Rt Hon Peter
Rathbone, TimThompson, Donald
Rees-Davies, W. R.Thorne, Neil (Ilford South)
Rhodes James, RobertWaddington, David
Rhys Williams, Sir BrandonWalker, Rt Hon P.(W'cester)
Ridley, Rt Hon NicholasWalker, B. (Perth)
Roberts, M. (Cardiff NW)Waller, Gary
Roberts, Wyn (Conway)Watson, John
Rossi, HughWheeler, John
St. John-Stevas, Rt Hon N.Wolfson, Mark
Shaw, Giles (Pudsey)
Shepherd, Colin (Hereford)Tellers for the Ayes:
Sims, RogerMr. Archie Hamilton and
Smith, Tim (Beaconsfield)Mr. Tristan Garel-Jones.
NOES
Adams, AllenJanner, Hon Greville
Alton, DavidJohnston, Russell (Inverness)
Beith, A. J.Jones, Rt Hon Alec (Rh'dda)
Bennett, Andrew(St'kp't N)Lambie, David
Bray, Dr JeremyMcElhone, Mrs Helen
Brown, Hugh D. (Provan)McKay, Allen (Penistone)
Brown, Ron (E'burgh, Leith)McKelvey, William
Buchan, NormanMacKenzie, Rt Hon Gregor
Campbell, IanMaclennan, Robert
Campbell-Savours, DaleMcNamara, Kevin
Canavan, DennisMcTaggart, Robert
Clarke,Thomas(C'b'dge, A'rie)Marshall, Dr Edmund (Goole)
Cocks, Rt Hon M. (B'stol S)Martin, M(G'gow S'burn)
Concannon, Rt Hon J. D.Maxton, John
Cowans, HarryMorton, George
Crowther, StanO'Neill, Martin
Cryer, BobPalmer, Arthur
Dalyell, TamParry, Robert
Davidson, ArthurPenhaligon, David
Davies, Rt Hon Denzil (L'lli)Powell, Raymond (Ogmore)
Dean, Joseph (Leeds West)Prescott, John
Dewar, DonaldRobertson, George
Dormand, JackRoss, Ernest (Dundee West)
Douglas, DickRowlands, Ted
Eadie, AlexSkinner, Dennis
Ewing, HarrySoley, Clive
Foulkes, GeorgeSpearing, Nigel
Freeson, Rt Hon ReginaldSpellar, John Francis (B'ham)
George, BruceSteel, Rt Hon David
Grimond, Rt Hon J.Strang, Gavin
Hamilton, James (Bothwell)Tinn, James
Hamilton, W. W. (C'tral Fife)Wainwright, E.(Dearne V)
Harrison, Rt Hon WalterWelsh, Michael
Haynes, FrankWhite, J. (G'gow Pollok)
Hogg, N. (E Dunb't'nshire)Wilson, Gordon (Dundee E)
Home Robertson, John
Homewood, WilliamTellers for the Noes:
Howells, GeraintMr. Lawrence Cunliffe and
Hughes, Robert (Aberdeen N)Mr. Hugh McCartney.

Question accordingly agreed to.

Resolved,That the Valuation (Plant and Machinery) (Scotland) Order 1983, a copy of which was laid before this House on 17 January, be approved.