Local Government (Scotland)

Part of the debate – in the House of Commons at 6:32 pm on 24th January 1985.

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Photo of Sir Nicholas Fairbairn Sir Nicholas Fairbairn , Perth and Kinross 6:32 pm, 24th January 1985

It is a pleasure to take up the remarks of the hon. Member for Glasgow, Garscadden (Mr. Dewar). If I may say so without spoiling the hon. Gentleman's reputation, he always increases his standing in the House by the fluency and reason with which he advances his argument. I am happy to pay tribute to the way he does so, irrespective of whether I agree with all that he says.

I wish to discuss in the presence of my right hon. Friend the Secretary of State the equity of the system by which we have arrived at the order. I am bound to tell my right hon. Friend that, being almost entirely uneducated. I do not understand now the meaning of simple words. I have always understood that if we talked about an assessed need, it meant that someone's needs had been assessed, but it appears that that is not the meaning of "assessed need". Having assessed the need of a local authority, the Scottish Office offers it something different. I stand to be corrected, but it seems that the sum offered by the Scottish Office is always less than the assessment. Either an authority needs the amount which has been assessed or it does not. If a sum has been assessed as necessary, it seems strange that the Scottish Office should put a certificate under the assessment to the effect that the assessed sum is unnecessary.

The local authorities in my constituency are struggling desperately to obey the intelligent thrift which my right hon. Friend has urged upon them. When he assesses their need to be what they say it is, it is strange that he should then give them less than they need which has been assessed.

It is acknowledged that the House has a right to constrain, investigate and scrutinise the spending of other people's money by either elected representatives or officials. That is the essence of political responsibility. I should be the last to do other than congratulate my right hon. Friend on preventing local authorities from extravagant expenditure. As one who has the fortune or misfortune to live both in Fife and in Lambeth, I know the extent to which that power can be exercised. The amount of money spent on the adoption by lesbians of little girls and on male homosexuals who wish to adopt little boys makes the rating of my pinhole in Lambeth greater than the sum which Fife extracts from me for what is termed a grander residence. I understand that there is no difficulty for a local authority in the exercise of its egotism and arrogance to say, "The more we spend, the more potent we are." I am happy with the intention of my right hon. Friend, but I do not believe that it is possible to make the present system equitable. Therefore, I believe that the rating system should be changed.

I take that view because I believe that the system is massively and inevitably inequitable and not because of statements in manifestos or commitments. If those who contribute, apart from the Government, to the revenue of a local authority are categorised, they fall into three. The three categories are industrial, commercial and domestic. Industrial managers and their work forces have no vote on the rating of the premises in which they function. Likewise, those who own shops or commercial undertakings have no vote in the areas in which their businesses lie if they live outside them. As for domestic ratepayers, only the house owner who pays the rates is likely to be concerned about the matter.

I do not want to speak for my right hon. Friend the Secretary of State for Scotland, but I would be surprised if Mrs. Younger, Master Younger or the Misses Younger were greatly concerned about the cheque which my right hon. Friend has to write in payment of his rates. Knowing where he lives, I imagine that he is concerned. Members of the public over a certain age have a vote and rating increases affect the majority of them only socially. Only the householder who pays the rates is affected directly, although I accept that the other members of his household might be affected vicariously.

A huge number of domestic ratepayers receive a rate rebate and the majority of the public benefit from increased expenditure without having to contribute to it. I understand that about 70 per cent. of the population of Greater Manchester are in that position. That is thoroughly inequitable. It is no good saying that if a local authority increases its rate to an unacceptable level it can be thrown out at the next election. That cannot happen, because those who are contributing to the increased expenditure are not those who can vote out the authority. In my opinion, the system is so inequitable that I urge my right hon. Friend to tell the Government that such inequity cannot continue.

When my right hon. Friend attempts to prevent the robbery of the paying ratepayer and indulges in orders, rate capping, restrictions, guidelines and needs assessment, he finds himself alienating everyone. It does not matter whether the individual is a supporter of the Labour party, the Communist party, the Liberal party or the Conservative party. Every local authority in Scotland is upset by the position in which it finds itself. Some authorities are upset because of their pig-headed extravagance in the past, but some of them, such as Perth and Kinross, are upset because, having been thrifty, they are punished for taking that line because of the effect of needs assessment and guidelines. They are punished while those authorities which have been extravagant are rewarded for being extravagant, and are only partly punished. My poor, dear right hon. Friend the Secretary of State discovered that he had set off to be Florence Nightingale and had come back as Jack the Ripper. The system is the reason why that happened.

People write to me asking, "Why don't the English revalue? Why do the Scots have to revalue if the English don't?" God help the English if they put off revaluing, because a volcanic effect will overwhelm them when they eventually do.

Let us consider what happens if the three categories of industry, domestic ratepayers and commerce are derated. I have never understood why industry should be derated. I have always understood why ancient monuments, such as the one in which I live, should be derated. The Opposition keep telling me that my building is not fit for human habitation.

I remember arguing a case — I may have been instructed by the hon. Member for Glasgow, Garscadden — before the Lands Valuation Appeal Court about whether the ripening of a banana was an industrial process. It was held to be an industrial process on the basis of a case in which it was held that the maturing of an object used for birth control was an industrial process.

Why should industry, which cannot put its rates bill against its tax bill, be derated when the domestic ratepayer, who is not derated, cannot put his rates bill against his tax bill? That is thoroughly unfair.

In this revaluation, industry, which is derated, benefits. Commerce and small offices and shops, which are most likely to employ people and affect unemployment figures, are punished most. Those businesses receive no relief and are not derated. The rating of offices and shops in every large and small town in Scotland has prevented a great deal of employment.

The domestic ratepayer will have to pick up from industry what was handed to industry in the last two valuations. Where is the fairness in handing this to the ratepayer? Where is the logic in saying, "We want everyone to be a householder," and then saying, "Make sure, if you are mug enough to become your own householder, that you have the money to pay for it."? That places an inequitable burden on some householders. A great many householders receive rate rebates, so this rating becomes a false tax. The burden will fall on those who cannot afford it—not the very rich or the very poor, but the mugs in between.

I am not criticising my right hon. Friend the Secretary of State. I am appealing to him to change an indefensible system. My right hon. Friend is like the Dutch boy, except that in this case there are many holes in the dyke. My right hon. Friend is attempting to plug the holes with his elegant finger.

I believe that the system is not capable of being contained by my right hon. Friend's procedures. Every year, it has been demonstrated that the system is probably unfair to everyone. The system does not tame the extravagant or reward the thrifty. If does not do justice. It certainly does not—I am sure that this would never be a consideration of a Secretary of State—gain votes or keep votes. My right hon. Friend is in an impossible position. He has grandly defended his order, but there is only one answer to the problem: the system must be reformed, because taxation without representation is contrary to our constitution and our principles. The rating system does just that, and it does so unfairly.