Rates Rebates

Clause 1 – in the House of Commons at 5:20 pm on 5th June 1985.

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Photo of Donald Dewar Donald Dewar , Glasgow Garscadden 5:20 pm, 5th June 1985

I beg to move amendment No. 1, in page 1, line 5, leave out 'may' and insert 'shall'.

The amendment has the virtue of being short and simple.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I knew that that would immediately appeal to the hon. Member for Banff and Buchan (Mr. McQuarrie). We constantly think of him, particularly when we are looking for some old-fashioned Tory independence, as we are in this debate.

The Bill says that the Secretary of State may provide for revaluation rebates. We suggest that the discretionary "may" should be made a mandatory duty on the Secretary of State and that he should operate a similar system in future years.

We are returning to a point with which the Committee is familiar. It is the problem of what is to happen in the remaining part of the quinquennium once the rescue package for 1985–86 is behind us. We say that there is considerable merit in trying to ensure that the Government are committed to continuing relief—I shall deal later with the objections that are likely to be made by the Minister—during the remainder of the quinquennium. It would be thoroughly unsatisfactory if there were help in 1985–86, but nothing in subsequent years. The Bill does not preclude the possibility of further help, but there is no guarantee that it will be forthcoming. It is common sense that Parliament should put that right. I note that the Under-secretary of State is messenger boy for the Secretary of State again today — the right hon. Gentleman is not here; he is quite a stranger in Scottish debates these days. We regret that fact.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I should be happy if the right hon. Gentleman were doing a job in Scotland, though if he were, he would, once again—because of his policies— be out of step with everyone else in Scotland.

If it is necessary to have the rescue package, which was not contemplated a few short months ago, in the current financial year, why is such a package not necessary for future financial years? Give or take one or two minor adjustments, we shall have the same valuation roll for the next five years. If we do not get a guarantee that the system will continue, there will be considerable help in the current financial year and the full force of the revaluation will suddenly fall on those who are getting some assistance, limited though it is, under the Bill.

The Under-Secretary might argue that rates could decrease if local authorities would cut their expenditure and reduce their services to the public. I might say that rates could be reduced if the Government would restore the rate support grant that they have filched over the years. A third party looking at the exchange might say that it was an arid argument—and I might have sympathy with that view.

Let us compromise by saying that it is almost self-evident that the possibility of a substantial decrease in rates in the next year or two is one on which, to say the least, we cannot count. We can apportion the blame for that on another occasion.

The Bill seeks to deal with what are seen as inequities arising out of the revaluation. However, is it fair that a householder should be faced with a threefold or fourfold increase in his rateable value while others face increases only twofold? Why should a business suddenly be faced with an enormous sevenfold or eightfold increase in its rateable value while its competitors are more lightly treated?

The Government have said that they will remove the peaks and even out the effects of the revaluation. They are aiming to alleviate the wide variations. However, if the Bill is aimed at dealing with the individual disasters and horror stories that have arisen from the vagaries of the revaluation process, the exercise should be repeated each year.

The Under-Secretary may say that our proposal is unfair and is far too rigid, because it would commit the Government to maintaining a system based on a multiplier of three times the pre-valuation rateable value. If that stops hon. Members supporting the amendment, they should turn their attention—their support would be welcome— to amendment No. 3, which would allow a variation of the multiplier in the Bill. Putting the multiplier in the Bill, rather than leaving it to the statutory instrument, itself creates inflexibility, but the Government have decided on that course and we have to live with it.

The other argument that may be used by the Minister is that these matters should be left to the discretion of the Secretary of State and that we can rely on his good judgment and his perception of what makes political, social or economic sense in Scotland. The sad truth is that this matter is not within the discretion of the Secretary of State. As I pointed out on Second Reading, that fact was brutally brought to our attention by the Chancellor of the Exchequer on his foray to Perth for that gathering of the faithful which the Tories dignify with the name of a conference. The Chancellor then made it clear that he was —I use his phrase—"bailing out" the Secretary of State. He said that there were no more moneys likely for Scotland next year and added:

I do not think the Secretary of State will find me in the same compassionate, open-handed and generous mood next time. 5.30 pm

It is clear, therefore, that the Treasury will have a considerable say in what happens in future. I give Conservative Members credit for wanting to see this system continued for the rest of the quinquennium. The trouble is that the Treasury might mount a punitive expedition against the Scottish Office on this matter, and the Treasury often wins.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

Is the hon. Gentleman aware that it is possible for the Secretary of State to meet the obligation as part of the rate support grant, without the Chancellor having to bail him out? The problem this year was that the rate support grant had already been determined.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I accept that the hon. Member for Stirling (Mr. Forsyth) is producing a solution, but in doing so he is inviting the Secretary of State to find the money at the expense of local government services, and that is not acceptable to my hon. Friends and me. It would be going back to the so-called "first help from the Secretary of State" scheme, when the domestic element was raised to 5p in the pound.

I do not know how many Conservative Members have bothered to look up the details, but the hon. Member for Stirling will remember how the Secretary of State made a great virtue of the help that he was giving, when in reality £19 million came from the Secretary of State and £31 million came from the unfortunate local authorities. The remainder came from the proceeds of industrial derating from 50 to 40 per cent.

If it is said that we can make progress by cutting services in that way, the hon. Member for Stirling must realise that such a suggestion is totally unacceptable to Labour Members. The whole point about the £50 million —I wish to be fair to Ministers because they made a tremendous virtue of it at Perth and elsewhere—was the claim by the Government that it was new money and that it represented a victory at the expense of the Treasury. We can on occasions be generous, and that is why on this occasion Opposition Members are fighting to preserve the victory of the Secretary of State and want to help him beat off a counter-attack by his rapacious colleague, the Chancellor of the Exchequer.

Conservative Members would do well to consider the impact of a sudden withdrawal of the concession. Consider what would happen if the Treasury won the battle for the financial year 1986–87 and instead of £30 million—or whatever the figure may be that will be paid out of the £50 million; we shall debate that whole issue later — suddenly nothing was available.

In those circumstances, the electoral impact would be considerable. I trust that nobody will suggest that Conservative Back Benchers are above such political considerations; too many of them are looking nervously over their shoulders at their electoral prospects, and discouraging they are. I recommend them to consider the practical impact of allowing this help to be discontinued after the current financial year.

There is, therefore, political common sense in what I am arguing. However, it is also a matter of equity, particularly for commercial ratepayers, who are the main beneficiaries under the scheme. There is much to be said for people knowing that they will have this help for the remainder of the quinquennium, because uncertainty will leave them contemplating potential increases in rating bills of perhaps £10,000.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

How does the hon. Gentleman think that the amendment would achieve the purpose that he has described?

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

The Minister will have an opportunity shortly to put his case, and, as is often the case with Opposition amendments, he may have some clever points to make. He may try to defeat it on the grounds that his lawyers and back-room boys have come up with interesting points on how it would fail to achieve the purpose that I have described. I am led to believe that that will be the case as I see the Minister examining a carefully typed script.

There may be something wrong with the drafting of the amendment. If the Minister accepts it in principle and promises to introduce an amendment in another place to give effect to what we have in mind, I will willingly withdraw it. But if the Government will not give a guarantee that they are committed to the principle of maintaining this situation throughout the quinquennium, we shall mark our view on the matter. That is why we wish to place a statutory duty on the Secretary of State to continue the system for the remainder of the quinquennium.

As I said at the outset, we are discussing a simple issue. The amendment, which would be supported by the general body of ratepayers in Scotland, should be accepted by the Minister.

Photo of Gavin Strang Gavin Strang , Edinburgh East

I support the remarks of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). Many people in Edinburgh will benefit from the Government's concession. This is the first opportunity that I have had in the House to welcome the concession. I welcome the Government's action in providing for ratepayers at the extreme end of the spectrum in terms of revaluation. Unfortunately, however, the concession does not go far enough.

It is crucial for the people of Edinburgh to know that this protection, limited though it is, will be maintained for some years to come, because we must raise local authority expenditure in Edinburgh to levels more comparable with those of other authorities. Our services in Edinburgh— our recreational assets, housing and so on—have been screwed down intolerably and have been allowed to deteriorate in recent years to an extent which may be unique in Scotland. Indeed, that is the basis of the present confrontation with the Government, who are intent on imposing a Tory budget on the majority Labour council in Edinburgh.

Edinburgh's services and general standards will be raised sooner or later. I believe that that will happen sooner, even before Labour wins the general election in two or three years from now. As my hon. Friend the Member for Garscadden pointed out, we must consider the period between now and the end of the revaluation period. That is why it is important to know that this concession, which does not go anywhere near far enough—it is a blunt instrument and is no alternative to the real solution, which is reversing successive Government cuts in local government expenditure — will continue to the end of the quinquennium.

I do not expect the Minister to show sympathy or understanding for the plight of the people of Edinburgh, who have suffered under Tory rule in recent years. I hope, however, that he will at least respond on the narrow issue of the future protection which hard-hit ratepayers would obtain as a result of the amendment.

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

This is a tempting amendment. I listened with interest to what was said about it by the hon. Member for Edinburgh, East (Mr. Strang). My hon. Friend the Under-Secretary of State for Scotland will, I hope, confirm that neither the amendment nor the clause will affect my constituents, many of whom will be registering appeals against the new valuations. My hon. Friend will be aware, as he has received all the papers, that I have carried out a detailed study of the matter. The study shows clearly that many of my constituents will be successful in their appeals. The question is how long it will be before decisions on those appeals are reached.

The Bill will to some extent mitigate hardship this year, and we are grateful for that help, but appeal decisions may not be reached until next year. That is causing considerable concern, particularly in Angus. Expenditure in Angus has never been at a very high level, nor, for that matter, has it been very high in Perth and Kinross. The expenditure programmes of these authorities have been very carefully worked out. The changes that have taken place, particularly in Angus, are the direct result of the revaluation anomalies. Therefore the Opposition amend-ment is tantalising and I look forward to hearing what my hon. Friend has to say about it.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Energy and Climate Change)

May I follow up the point made by the hon. Member for Tayside, North (Mr. Walker). Some small businesses will look at this package and think that it will solve their problems, but eventually they will find that it has solved their problems only for this year. The very large rate increases that they fear will still apply next year, unless the Government enter into a commitment to continue the present arrangement. If small businesses do not realise this and do not lodge an appeal this year, they will find that next year it is too late. Either the Government must be prepared to continue this arrangement or, if they are unable to make that commitment, they must use their good offices to ensure that people appeal against the valuation if they believe that it is too high. We have heard of circumstances in which people might be persuaded not to appeal because they are to receive the full benefit of the adjustment this year— an almost exact adjustment in terms of their valuation. However, the consequence is that next year they will suffer.

Although we welcome this measure in principle, it could be just a stay of execution. If the Government are not prepared to accept in principle the amendment of the hon. Member for Glasgow, Garscadden (Mr. Dewar) they should at least make it clear that they intend to continue the arrangement, if they possibly can, and that people should appeal, regardless of the present arrangement, in order not to forfeit their right to future adjustments.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling 5:45 pm, 5th June 1985

If my hon. Friend the Under-secretary of State is not prepared to accept this amendment, I hope that, having embarked upon a scheme for providing relief for small business men, he at least recognises that it is essential for any small business to know what its position in future years will be and to be given at least some indication of its likely overheads. Just as the principle which guided his hand in introducing this Bill was the nature of the uncertainty and the nature of the impact on cash flows of a sudden and unexpected rates increase, so, equally, I ask my hon. Friend to recognise that businesses will be looking for certainty.

I hope that my hon. Friend will be able to say whether this scheme is expected to continue. My constituents would prefer to know now whether they will receive no relief next year rather than to be faced with a nasty surprise later. If my hon. Friend is not prepared to accept this amendment, which would be binding upon him, it is important that he should say what is to happen next year.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

The Committee is indebted to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) for moving this amendment. I have to admit that even after 20 years as a Member of Parliament I do not know the difference between "shall" and "may", but I do not suppose that is a matter of fundamental importance in terms of the information that we are trying to obtain from the Minister. It is accepted generally that annual provision is now made for the relief of domestic ratepayers. As relief for commercial ratepayers is to be introduced, it ought to be possible to assume that annual relief will be provided for them, too.

The Government have been rushed into introducing this legislation. I do not know whether businesses which will go out of existence unless relief is provided for them this year will be able to continue in business if relief is not provided for them next year. I hope that the Minister can provide information about what prompted the Government to introduce this measure. Were they prompted to introduce it because of genuine hardship and because it was suspected that without relief certain businesses would go out of existence, or were other factors involved?

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

The hon. Member for Glasgow, Provan (Mr. Brown) is making a very important point which must be discussed. The evidence I have submitted to my hon. Friend the Under-Secretary of State includes evidence which shows clearly that in the past five years the net profits realised by businesses were less than the increase in rates that they will be forced to pay. There is no way, therefore, in which those firms could remain in business and be viable.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

As upholders of the capitalist private enterprise system, perhaps they should not be in business. I do not have access to the information held by the hon. Member for Tayside, North (Mr. Walker), but the Government should be in possession of this information by now. I am assuming that the Government have been given a great deal of evidence about businesses that have suffered rates increases that are so savage that they will have to go out of business because the increases are greater than their profits.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

That is true not only in the commercial sector which the hon. Member for Tayside, North (Mr. Walker) is delighted to support. Those who are engaged in the teaching profession in my constituency will receive no relief under the Bill because their rates increases are not sufficiently large, but the increase in their rates will be higher than the increase in salary that this Government are prepared to concede.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

I do not intend to follow up that point. It goes a little wide of the amendment. I should be grateful if the Under-Secretary of State would provide the information that I seek. I should be grateful for evidence upon which the change for this year is based so that we may judge whether such a change would be desirable next year and in subsequent years.

If the Minister cannot or will not say, can we assume that it is because there is some possibility of totally abolishing liability in the commercial sector? Is that part of the review now being undertaken, and is that why he cannot say what might or might not happen next year?

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

The hon. Member for Glasgow, Garscadden (Mr. Dewar) is to be congratulated on his gallant effort to attack the Government on their future intentions towards the scheme. But whether the amendment is effective is neither here nor there. After all, a principle is at issue. The Government have been bounced into producing this scheme for good reasons that are partly political but partly due to the howls of discontent that have come from the commercial sector.

If the Government propose to make use of the scheme only for this year, there will be substantial problems next year, and the Government will have succeeded only in buying time for a year. However, they will have left a time bomb ticking away, and that could have deleterious consequences for small business men. Indeed, the Government owe it to the Committee to come clean and to say whether they intend to continue the scheme. If so, that will come as some relief to those in the commercial sector. It would also help if the Government could say whether, if they intend to continue it, they will also want a tapering effect so that the scheme will disappear during the current quinquennium or when the Government have produced an alternative scheme for financing local government.

If the Government proceed with their local government fund-raising reforms, they may well apply them to the domestic sector while leaving the commercial and industrial sectors untouched. If so, that is all the more reason why the bad effects of this revaluation should be diluted by the Government over a period.

In practice, the Government will not get many thanks from the commercial sector next year when the rates bills come tumbling in. People's memories can be very fitful, and although the Government may get some thanks for the relief that they are giving this year, they will run into a tirade of anger and abuse, such as they have had this year, if they fail to follow through with a coherent and consistent system to give aid to the commercial sector. The Government should come clean this afternoon and tell us exactly what they have in mind. It may not be▵ possibleto specify figures, but it is important that they should give some information about their future intentions.

Photo of Mr Paul Dean Mr Paul Dean , Woodspring

Mr. George Home Robertson.

Photo of John Home Robertson John Home Robertson , East Lothian

I think, Sir Paul, that you have just called a composite hon. Member, but on this occasion I shall, if I may, take precedence over my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes).

The amendment seems to be attracting quite widespread support, and I think that all those who have spoken have supported the spirit of it. Consequently, we all look forward to what the Minister will have to say about it. I feel that the amendment is right, because I do not want to give the present Secretary of State for Scotland any additional discretion. He is always only too willing to impose constraints of every kind on local authorities, yet when he wants to stick his nose in and to take direct action in the affairs of local authorities, he wants those powers to be purely discretionary.

There seems to be a manifest need for this relief not only this year but in succeeding years, and Parliament should therefore legislate accordingly. Incidentally, some of the constraints that the Secretary of State has imposed on local authorities in recent years have probably led him into this very morass. It is his actions in cutting rate support grant year after year that have put so many ratepayers in Scotland in such a parlous situation that the Government have been forced, through political pressure, to respond in this way. All hon. Members must recognise the dificulties that the Government have imposed on ratepayers and must be concerned about it. We must seek ways of alleviating the problems of ratepayers while at the same time preserving the quality of essential local authority services for those whom we represent.

Photo of Mr Barry Henderson Mr Barry Henderson , North East Fife

The Bill will considerably help those whose valuations have increased threefold or more, but is it not true that for the great majority of ratepayers in Scotland, and particularly in Fife, the spending policies of local authorities have had more to do with increased rate bills than any revaluation?

Photo of John Home Robertson John Home Robertson , East Lothian

I do not have detailed figures at my fingertips, but I suspect that the hon. Gentleman's statement is inaccurate. If my part of the world is anything to go by, the rate increases imposed in recent years are related far more directly to cuts in the rate support grant than to anything that local authorities may have done. For example, in my constituency East Lothian district council has reduced the rate-borne element of its expediture in the current year, but as a result of the latest round of rate support grant cuts, the rates have nevertheless been forced up. The hon. Gentleman could not ask for a clearer example than that.

There is a case for this formula, flawed as it may be. But if it holds good for this year, it must also hold good for next year and the succeeding years. If there are anomalies and problems this year, those same problems will exist next year and the year after that. The Government may think that they have bought off Sir James Goold and all the others who have been making such a noise in recent months. Indeed, it may well be that this sum that the Chancellor of the Exchequer has been prepared to cough up as a one-off contribution can buy a little peace and quiet for Conservative Members this year. However, questions flow from that, to which we shall no doubt return. First, is that full £50 million actually going to be disbursed through this mechanism? Perhaps we should press the Government further on that.

However, the problem will be with us next year. Far be it from me to express too much concern about the future of Conservative Members, but yesterday I saw a prediction that was based on figures from recent opinion polls, which showed that only nine Conservative Members of Parliament for Scotland were likely to be elected at the next general election.

Photo of Mr Albert McQuarrie Mr Albert McQuarrie , Banff and Buchan

On a point of order, Sir Paul. We are debating amendment No. 1, which was selected by Mr. Speaker. With the greatest respect I think that the hon. Gentleman has drifted away from it.

The Second Deputy Chairman:

I have been listening carefully to the hon. Member for East Lothian (Mr. Home Robertson) and I hope that he was making no more than an incidental reference.

Photo of John Home Robertson John Home Robertson , East Lothian

I was trying to help the hon. Member for Banff and Buchan (Mr. McQuarrie), as he is not one of the nine Conservative Members who is likely to survive. However, if "shall" was substituted for "may", he might have a better chance—

Photo of John Home Robertson John Home Robertson , East Lothian

I have been reselected, but I do not know whether the hon. Gentleman has been. Indeed, it is interesting to note that the Secretary of State and the Minister could be casualties if they do not get the formula right. Even if they do not accept the obvious merits of the case for getting this business right now, perhaps they will accept them in the interests of self-preservation.

6 pm

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

It is a great pleasure to follow my honourable and patrician Friend the hon. Member for East Lothian (Mr. Home Robertson) on this matter.

I found the concern of the hon. Member for Stirling (Mr. Forsyth) for his constituents who have been affected very touching, especially as I have been reading reports — no doubt untrue—that because of the MORI poll findings he is looking for a seat in another part of the United Kingdom, unlike the hon. Member for Banff and Buchan (Mr. McQuarrie) who will fight to the bitter end in his area.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

I cannot imagine the source of those reports. I should be grateful to know where the hon. Gentleman read them.

The Second Deputy Chairman:

Order. There is nothing to do with polls in the amendment. We must stick to the amendment.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

It is interesting to note that the hon. Member for Stirling did not deny the reports. However, I shall change my tone because I am not a controversial person, as hon. Members know.

I thank the Minister for receiving a deputation earlier today, which I led, on behalf of the co-operative movement in Scotland. I declare my interest as a sponsored Co-operative Member. The Minister received the deputation with the greatest courtesy. He listened carefully to what was said and was diligent in answering our points.

The representatives argued strongly on a point that my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) argued cogently when he moved the amendment —that help should be continued in successive years. The representatives warned the Minister—I think that he took the point because they mentioned stores in his constituency—that societies such as Scotmid co-op are having seriously to consider closing stores. It will interest my hon. Friend the Member for Edinburgh, East (Mr. Strang) to know that one store that may be closed is a modern supermarket in Granton, which was opened only a few years ago when I was on the board of the St. Cuthbert's co-op.

The representatives argued strongly for the continuation of this help to try to alleviate—and it is only a small alleviation — the problem. I do not think that it is improper to quote the Minister because he made his remarks in public. He said that the question of continuation would be considered in the autumn when such matters were generally reviewed.

I want to put some questions to the Minister. If the answers are outside his prepared text, I hope that he will deviate from it and answer them. It would be even better if he did not have a prepared text. In the discussions in the autumn, what will be his view and that of his right hon. Friend the Secretary of State for Scotland? Will they fight for a continuation of help? The House would like to know, as would the commercial ratepayers of Scotland. What will the Scottish Office do?

My second question is the most important: what will be the basis of any decision? What will be the criteron for continuing the help in future years? Will it depend on whether the money is made available? Will it depend on whether that money can be prised out of the Chancellor? I used that phrase when I met the Minister earlier today. Will it be based on the current year's experience? If there is any shortfall this year, will it be carried over to next year?

My hon. Friends and I suspect that the decision will be based on whether the heat has gone off the Government —whether Sir James Goold has forgotten about it and is not jumping up and down. Indeed, by then he might be Lord Goold. That is the traditional way of buying off people. Will the Government wait to test the temperature at the run-up to the next party conference? We need to know the criteria for the decision. I hope that the Minister can answer those genuine, serious and, I hope, to some extent, intelligent questions.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

When I listened to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), I was slightly undecided whether to support the amendment. From a political point of view, the amendment is pure altruism on our part. We have discussed what will happen to Conservative Members if the money is not continued in successive years. If it is not continued next year, when the Conservative party faces the regional elections in 1986, it will find that the ratepayers of Scotland are yet again up in arms against it.

I am tempted to say that I welcome that prospect because, unlike most of my hon. Friends, I have two Conservative regional councillors in my constituency. Of course, we shall take both those seats at the next election, but it would be much easier if the ratepayers of Newlands were up in arms against the Conservative Government.

However, I shall prove my altruism by giving my support to the amendment. Although it may not be the most beneficial action for the Labour party in Scotland, it is certainly beneficial for Scottish ratepayers.

I want to take issue with the hon. Member for Stirling (Mr. Forsyth) about his intervention in the speech of my hon. Friend the Member for Garscadden. He sugggested that next year the problem might be solved through the rate support grant rather than by continuing the rebate system. We would object strongly to that because that could be achieved only by a cut in the services provided by local authorities. Conservative Members keep saying that local authorities are overspending. They should come to my constituency and see the deterioration in housing, in cleansing and in other services provided by the local authority. They could not then say that the increases are down to high-spending authorities. That is nonsense.

The intervention by the hon. Member for Stirling was surprising. I assume that he still thinks that local authorities that he believes are overspending—including his local authority, Stirling district council—should be hit and receive less rate support grant than those authorities that he believes to be good authorities. If the Government were to adopt his scheme, his constituents who are paying high increases in their rates will not benefit next year because, presumably, the rate support grant will be cut. However, the constituents of the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) may benefit because they have a good local authority that does not overspend.

I do not know what the hon. Gentleman thinks may be the solution. The rebate scheme is for the benefit of all ratepayers, no matter which local authority serves them. Surely that is what the hon. Gentleman wants, rather than using the rate support grant.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

Those of my constituents who suffered an increase in rateable value of more than three times would still benefit because the money would be available. The point about a reduction in rate support grant is perfectly apparent, and I am glad to have the hon. Gentleman's confirmation of that. The cuts in the RSG in Stirling district and Central region came about because those authorities decided to spend hundreds of thousands of pounds on striking miners and other political causes. The cuts in rate support grant are a result of their spending decisions, which will no doubt be reflected in my constituency in the regional and district council elections.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

It is obvious that the hon. Gentleman does not listen. I am not supporting cuts in rate support grant for Stirling district council. It has spent money on families of miners in desperate need, not on miners themselves, and many other local authorities rightly spent money in that way. Stirling district council should not have a cut in its rate support grant, but the hon. Gentleman thinks that it should. He said to my hon. Friend the Member for Garscadden that his constituency would suffer because of his Government's policies.

This scheme is fair and should be continued for the full five years of the revaluation period so that there is not a sudden dramatic increase in the rates. So far, we have not heard whether the Government will concede that point. We heard nothing from the Secretary of State when he made his statement or on Second Reading when the point was pressed. Today, no guarantee has been given that the scheme will continue. It will be interesting to see whether the Minister will give one.

If no guarantee is given, we shall have to say that the money was given this year for purely political purposes, and not with any real regard for ratepayers in Scotland. I am waiting with interest to hear what the Minister has to say.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

I am sure that the hon. Member for Glasgow, Garscadden (Mr. Dewar) was greatly relieved to hear that the hon. Member for Glasgow, Cathcart (Mr. Maxton) is to support the amendment, because not only is the hon. Member for Cathcart the Scottish Whip, upon whom the hon. Member for Garscadden depends to ensure that his troops do as they are told, but the hon. Member for Cathcart's name is on the amendment. Therefore, the House has the right to presume that he believed in what the hon. Member for Garscadden was saying.

For a moment, I wondered whether the hon. Member for Garscadden was having the same trouble as I had of not quite understanding what the amendment is meant to do, but that might be a minor matter. I ask that question out of interest because I wished to understand the amendment. I am sorry that the hon. Gentleman took it the wrong way and did not give me any answer, but perhaps he will consider doing so.

We have had a fairly wide-ranging debate. I always listen with interest to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). He spoke about people moving round looking for constituencies, but I remember his travels round Scotland before he finally settled in Carrick, Cumnock and Doon Valley. Both he and the hon. Member for East Lothian (Mr. Home Robertson) referred to polls. Given your strictures, Sir Paul, I shall not mention them, except to say that we heard precisely the same speech in precisely the same terms in 1981, but in 1983 some of the predictions made by Labour Members lay rather heavily upon them.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

I am sure that the Minister will confirm that, once I found a constituency where the people wanted and elected me, I stayed there, and I shall continue to stay there. The Minister will recall that he used to represent another part of the country, but, when it gave him leave of absence, he flew elsewhere. However, we should get on to the subject rather than dwell on these political points.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

I agree. I merely regret that the hon. Member for Carrick, Cumnock and Doon Valley is no longer a constituent of mine, living in the nice, splendid and expensive house in which he used to live in my constituency.

My hon. Friend the Member for Tayside, North (Mr. Walker) spoke about appeals. In this connection it is important to reiterate what my right hon. Friend the Secretary of State said on Monday—that the Bill does not alter or affect valuations. If there are unfair valuations, or valuations that the ratepayers believe to be unfair, they should take advantage of the appeals procedure, because it is only through that that we can alter revaluations.

6.15 pm

As to the effect of appeals, some may take longer than it takes to bring the scheme into effect. I suspect that that will happen in the majority of cases. The scheme will relate to the valuations as at this time. If there is a successful appeal and a valuation is reduced below the three times multiplier, that case will fall out of the scheme in the future, and, if any adjustments are required to be made, they will be made at that time.

Mr. William McElvey:

Will any repayment to the Secretary of State for Scotland be required from someone who has benefited from the scheme?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

In particular circumstances adjustments may need to be made. That will depend on the lime at which the appeal takes place and on the time that the valuation is changed.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I am sure that I am on the same point as my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey). If a ratepayer is paying in 10 monthly instalments, the first instalment of which is due in May, on the assumption that he has an appeal pending — unfortunately, valuation appeals take a long time to resolve—he may have had the benefit of the rebate on several instalments already paid. If at a later date he succeeds with his appeal, for unpaid instalments he would not have a rebate. However, would he have to pay back any money to the Secretary of State for a rebate to which he was not entitled earlier?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

The hon. Gentleman is talking about the same matter as I was in speaking of adjustments that might have to be made. This matter will be dealt with in the draft order. Adjustments will be made as a result of an appeal where the appeal has brought the valuation down below the three times multiplier. In effect, we would seek to ensure that no one unfairly benefits from the scheme. Therefore, where he has, in effect, been rebated, because of the success of his appeal he would have to make a payment back or an adjustment in some other way.

The various ways and timings under which this can arise do not allow for a simple answer. The important point, which I reiterate, is that ratepayers should not think that, just because they qualify for relief, they do not need to appeal if they have an unfair valuation.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

The Minister seems to have confused me, if not the rest of the Committee. Is he saying that timing has something to do with when the decision on the appeal is made? I cannot understand the logic of this. If someone qualifies now under the Bill, and if there is a reduction in the rateable value on appeal, why should he not have his entitlement? Is the Minister trying to fudge that point, or does he not understand it?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

I understand the point, and I think that the hon. Gentleman will find, when the draft order is published, that it is covered. Where, after a rebate has been granted by the rating authority, any alteration is made in the rate value or in the pre-revaluation rateable value or in the revaluation rateable value itself—[Interruption.] The hon. Gentleman asked for a clear answer, and if he will let me finish my sentence, he may learn something —the grant of the rebate and the calculation of any such rebate would have to be determined anew, and the amount of any rebate already paid or allowed or of any rebate or balance thereof found to be due should be paid or allowed or repaid to the rating authority accordingly. There is no simple or clear way of dealing with this. The general effect that we are trying to achieve is that where someone has benefited, but because of an appeal does not require to have benefited and has actually made a surplus, a repayment would have to be made.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

I understand what the Minister has said. Would he go as far as the National Federation of Self-Employed and Small Businesses in saying that all applicants for relief must have lodged a formal appeal against the valuation?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

I would not go that far, and I am sure that on consideration neither would the hon. Member. What that suggests is that people who may well have a multiplier of more than 3, but who feel that the assessor's valuation is correct and who would therefore have no grounds for appeal, would be required at their own expense to make appeals to qualify for a rebate. I am sure that the hon. Member for Glasgow, Maryhill (Mr. Craigen) would not consider that sensible, in terms either of administering the scheme and trying to make sure that the appeal procedure is not bogged down or of the financial interests of those who were to undertake that course. I take it from the fact that the hon. Gentleman is nodding, however gently, that he appreciates that that would cause chaos and achieve no useful purpose.

Photo of Sir Nicholas Fairbairn Sir Nicholas Fairbairn , Perth and Kinross

I am worried about this. Let us take three cases: a person who has a multiplier of more than 3 who does not apply for any rebate; a person with a multiplier of more than 3 who applies for a rebate, who appeals and whose appeal is granted some time; and a person with a multiplier of more than 3 who appeals unsuccessfully and gets a rebate. What is the system under which these rebates are to be granted? Will one person have to repay? If ever there was an idiocy of a system, those three indications give it.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

The first case would not arise. Those eligible will be identified by the rating authority. They will be notified, and rebates will be paid where they are due. Therefore, there will be no question of someone qualifying, but not applying. If the rating authority leaves out someone, it is our intention that that person should be entitled to point out to the rating authority that he has been left out. There would be an application only in that sense.

In regard to the other two cases, in any scheme where relief is granted — not necesssarily by a successful appeal—and the ratepayer benefits overly, adjustments and repayments may have to be made. That may be done not by repayment but by adjusting the amount required to be paid over the rest of the year. I go back to what I said earlier to the hon. Member for Garcadden. The precise way in which adjustments would be made would depend on the circumstances and timing of the appeal.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

Another slight complication could arise. If someone is appealing, there is a statutory disregard which is a certain percentage of the increase. Presumably that would become an adjustment and would be called into play in the final reckoning. I cannot remember what the percentage is. Perhaps the Minister would remind me and explain how that would fit into the complicated scenario that he is outlining.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

I do not think it is a complicated scenario. It may be complicated in how it has to be phrased within the order, but the principle behind it is very simple. The figure is 10 per cent. In balancing the effects of a successful appeal, that would have to be taken into consideration to reach a fair result. In the case of those who have benefited but who do not require to have benefited because they have appealed successfully, an adjustment may have to be made. I am sure that principle would be agreed by both sides of the Committee.

The hon. Member for Edinburgh, East (Mr. Strang) referred to expenditure in Edinburgh—a matter that we should probably not be debating in Committee. However, there is one relevant point to which I must reply. The spending decisions of Edinburgh district have increased the district rate by 80 per cent. In terms of the figures produced by the administration, that accounts for a considerable amount of the rate increases facing both domestic and commercial ratepayers in Edinburgh. In view of the concern displayed not only by the hon. Member for Garscadden but by the hon. Member for Edinburgh, East, I hope that the hon. Member for Edinburgh, East will support the Government in their attempts to persuade that district authority to reduce expenditure and to return money to the ratepayers.

Photo of Gavin Strang Gavin Strang , Edinburgh East

I am grateful to the hon. Gentleman for the manner in which he made the point. I know that we cannot dwell on this at length, but if the Under-Secretary were to accompany me around my constituency he would see the dereliction and deprivation that exist because of the low level of provision by Edinburgh council over the years. He knows the position. There is no housing support grant; there is only a trivial contribution from the rates to the housing revenue account; and there is a very low level of expenditure on recreation compared with what is spent by some Tory authorities. We must be able to tackle the problems in Edinburgh. It is wrong for the Under-secretary to suggest that I am not supporting the council in beginning to tackle them.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

We shall have other occasions in coming months to debate those matters. I do not wish to debate them in the context of this Bill. If the hon. Gentleman is concerned about the ratepayers and the effects of rates on businesses, I find it hard to appreciate that he is content to see an 80 per cent, increase in the district rate merely to meet the expenditure decisions of Edinburgh district council.

The main point raised by the hon. Member for Garscadden was dealt with in a sense on Second Reading on Monday when both my right hon. Friend and I attempted to make clear that decisions as to future years are taken properly in the autumn of the year preceding the year in which they are to be effective. Decisions on rate support grant and on the domestic relief element of the rate support grant are taken then. I do not think that the hon. Member for Garscadden or the Committee could expect me to pre-empt those decisions. Hon. Members should not attempt to draw me into giving commitments about figures or any other details.

It was made clear on Monday, and I reiterate today, that the Bill is drafted as an enabling measure. By use of an order or regulations, it can be applied in any year. As I said on Monday, we intend to introduce the order relating to the current year as soon as the Bill has Royal Assent. We are entitled so to do.

Going back to what my hon. Friend the Member for Tayside, North said, there is nothing in the Bill to prevent the Secretary of State, if he so decides when he takes these decisions in the autumn, from providing relief in future years. That is an important and fundamental part of the Bill. I hope that my hon. Friends will accept that the Secretary of State has the power. He has had other powers to help ratepayers in the past and he has used them. We have shown our concern for Scottish ratepayers, but the Bill provides the proper way, and I hope that my hon. Friends will accept it.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley 6:30 pm, 5th June 1985

The Committee knows that the Bill gives the Secretary of State that power. Will the Minister answer my question: what criteria will be used and on what basis will the decision be made to continue the provision in future years?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

The decisions are taken in the autumn in the light of current circumstances. Relief to ratepayers is examined on an annual basis and decisions are announced in due course to Parliament. As my hon. Friend the Member for Stirling (Mr. Forsyth) said, businesses should have some idea of what is to happen. We shall let ratepayers know of our intentions in good time, as we do about other elements of the rate bill each year.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

The Minister says that he wants to let ratepayers know in good time. The closing date for appeals against valuation will be September. Is the Minister saying that he will announce his decision in October? If so, people who have put in an appeal will not have had the opportunity to examine his decision.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

The hon. Member for Maryhill is muddling two matters. The appeal will be to reduce a valuation. Those who feel that their valuations are unfair should appeal. The Bill does nothing to alter valuations, so the closing date for appeals has nothing to do with the argument.

I tell my hon. Friend the Member for Stirling that businesses will have some idea of the burdens that they are likely to face because we intend to make the decision as soon as possible, consistent with the timetable that I have outlined. They will have some warning of their position in future years.

Photo of Sir Nicholas Fairbairn Sir Nicholas Fairbairn , Perth and Kinross

I should like to be clear about two matters. First, I assume that there will be no appeal against any assessment of abatement or non-abatement under the ordinary rating valuation procedures. Secondly, when the scheme is started, should I assume that, however unjust any part of the scheme is thought to be, we must vote for the whole or against the whole?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

My hon. and learned Friend will see from the face of the Bill that the regulations come under the affirmative procedure.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

The answer is yes. I understand that my hon. and learned Friend was referring to appeals by those who feel that they should have received relief but have not. The normal type of appeal applies to the Court of Session. The hon. Member for Garscadden laughs, but he got the answer right. He appears to find that humorous.

We want to maintain a degree of discretion and flexibility for future years by giving the Secretary of State the power, year to year, to make regulations which can provide relief under the Bill.

Opposition Members seem suddenly to have a tremendous desire to promote relief schemes for commercial ratepayers, particularly in the long term. I recall that in 1978, when the last revaluation took place, when the Labour party was in government and the commercial sector was disadvantaged, the differential between the average multiplier and the commercial multiplier was greater than it is today. There was no sign then of promoting schemes to help the commercial or domestic ratepayers who were most severely hit. The only reaction of the Labour Government to the plight of domestic and commercial ratepayers was to reduce domestic relief by about 75 per cent.

We are grateful to Opposition Members for supporting the scheme, but some of their enthusiasm owes more to the politics of the situation than to a deep concern for the ratepayers.

The Bill provides a system which will not only help ratepayers this year, but is capable of providing help in future years, if required. I ask my hon. Friends to reject the amendment which does not achieve what the hon. Member for Garscadden wishes it to achieve. In many ways it does not make sense. If the hon. Member for Garscadden wishes to press the amendment to a Division, I ask my hon. Friends to reject it.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I confess that the look of pain upon the face of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) as the Minister smoothly referred to an appeal to the Court of Session as a normal appeal lightened my afternoon.

I intend to press the amendment to a Division and I hope that my right hon. and hon. Friends will support me. If we carry the day the other place might have to do some tidying up, but I imagine that that can be done with ease if the view of the Committee is clearly established. I wish to press the amendment because it has all-party support. We agree that certainty is a virtue and that equity demands that the Government make it clear that they intend to carry the aid throughout the remainder of the quinquennium.

It is not good enough for the Minister to stand at the Dispatch Box with no supporting argument, detail or explanation and to say that the Government will take a decision in the autumn. He did not try to answer my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) about the criteria.

There is a good reason why we should expect the scheme to continue. I accept that the domestic element is different because that applies to all domestic ratepayers. In that sense we are talking about an omnibus provision. Whether the domestic element should apply might be a matter to be considered according to the circumstances in October. However, the proposed form of rebate is an attempt to equalise or at least to reduce the discrepancies within a particular category. Nothing that happens in October will change that picture. The valuation roll in October will be exactly the same as the present valuation roll. If it is offensive—we gather that the Government rightly think that it is offensive—and inequitable that certain people should suddenly see an enormous gap opening up between their rateable value and the rateable values of other people, that gap will still be there in October. No change of circumstance will affect that situation.

If that is the injustice with which the Bill is dealing, it is an injustice which by definition will continue throughout the quinquennium, and there can be no reason for refusing to give an undertaking that at least in principle this help will be continued. If there were some caveat about the level, we might be prepared to listen to that, but at least but there should be an undertaking that the discrepancies that will still exist will be dealt with as set out in the scheme.

Therefore, it seems to me clear, logical and entirely consistent that we should express our displeasure at the totally inadequate response of the Minister, and invite the Committee to divide.

Question put, That the amendment be made:—

Division No. 227][6.40 pm
AYES
Abse, LeoKaufman, Rt Hon Gerald
Archer, Rt Hon PeterKennedy, Charles
Ashdown, PaddyKinnock, Rt Hon Neil
Atkinson, N. (Tottenham)Kirkwood, Archy
Banks, Tony (Newham NW)Lamond, James
Barron, KevinLeadbitter, Ted
Beckett, Mrs MargaretLewis, Terence (Worsley)
Beith, A. J.Litherland, Robert
Bell, StuartLloyd, Tony (Stretford)
Bermingham, GeraldLoyden, Edward
Boyes, RolandMcCartney, Hugh
Bray, Dr JeremyMcDonald, Dr Oonagh
Brown, Gordon (D'f'mline E)McKay, Allen (Penistone)
Brown, Hugh D. (Provan)McKelvey, William
Bruce, MalcolmMacKenzie, Rt Hon Gregor
Callaghan, Rt Hon J.McTaggart, Robert
Callaghan, Jim (Heyw'd & M)Madden, Max
Campbell-Savours, DaleMarek, Dr John
Canavan, DennisMarshall, David (Shettleston)
Clark, Dr David (S Shields)Martin, Michael
Clarke, ThomasMaxton, John
Clay, RobertMaynard, Miss Joan
Clwyd, Mrs AnnMeacher, Michael
Cocks, Rt Hon M. (Bristol S.)Meadowcroft, Michael
Concannon, Rt Hon J. D.Michie, William
Cook, Frank (Stockton North)Millan, Rt Hon Bruce
Cook, Robin F. (Livingston)Morris, Rt Hon J. (Aberavon)
Corbyn, JeremyOakes, Rt Hon Gordon
Cowans, HarryO'Brien, William
Cox, Thomas (Tooting)Paisley, Rev Ian
Craigen, J. M.Patchett, Terry
Crowther, StanPavitt, Laurie
Dalyell, TarnPendry, Tom
Davis, Terry (B'ham, H'ge H'l)Penhaligon, David
Dewar, DonaldPike, Peter
Dormand, JackPowell, Raymond (Ogmore)
Dubs, AlfredPrescott, John
Duffy, A. E. P.Radice, Giles
Dunwoody, Hon Mrs G.Randall, Stuart
Eadie, AlexRichardson, Ms Jo
Eastham, KenRoberts, Ernest (Hackney N)
Evans, John (St. Helens N)Robertson, George
Ewing, HarryRobinson, G. (Coventry NW)
Field, Frank (Birkenhead)Robinson, P. (Belfast E)
Foot, Rt Hon MichaelSheerman, Barry
Foulkes, GeorgeShort, Ms Clare (Ladywood)
Freud, ClementSilkin, Rt Hon J.
Gourlay, HarrySkinner, Dennis
Hamilton, W. W. (Central Fife)Soley, Clive
Hardy, PeterSpearing, Nigel
Harrison, Rt Hon WalterStewart, Rt Hon D. (W Isles)
Hart, Rt Hon Dame JudithStrang, Gavin
Hattersley, Rt Hon RoyThomas, Dr R. (Carmarthen)
Hogg, N. (C'nauld & Kilsyth)Thompson, J. (Wansbeck)
Holland, Stuart (Vauxhall)Tinn, James
Home Robertson, JohnTorney, Tom
Howells, GeraintWarden, Gareth (Gower)
Hughes, Dr. Mark (Durham)Wareing, Robert
Hughes, Robert (Aberdeen N)Welsh, Michael
Hughes, Roy (Newport East)Wigley, Dafydd
Hughes, Sean (Knowsley S)Williams, Rt Hon A.
Janner, Hon GrevilleWilson, Gordon
Jones, Barry (Alyn & Deeside)Winnick, David
Wrigglesworth, IanTellers for the Ayes:
Young, David (Bolton SE).Mr. Frank Haynes and
Mr. James Hamilton.
NOES
Adley, RobertHirst, Michael
Alexander, RichardHogg, Hon Douglas (Gr'th'm)
Alison, Rt Hon MichaelHolland, Sir Philip (Gedling)
Amess, DavidHolt, Richard
Ancram, MichaelHowarth, Alan (Stratf'd-on-A)
Arnold, TomHowarth, Gerald (Cannock)
Ashby, DavidIrving, Charles
Baker, Nicholas (N Dorset)Johnson Smith, Sir Geoffrey
Baldry, TonyJones, Gwilym (Cardiff N)
Bellingham, HenryKnight, Gregory (Derby N)
Benyon, WilliamKnight, Mrs Jill (Edgbaston)
Best, KeithKnowles, Michael
Blackburn, JohnKnox, David
Bottomley, PeterLawrence, Ivan
Bottomley, Mrs VirginiaLennox-Boyd, Hon Mark
Bowden, Gerald (Dulwich)Lester, Jim
Boyson, Dr RhodesLewis, Sir Kenneth (Stamf'd)
Braine, Rt Hon Sir BernardLightbown, David
Bright, GrahamLilley, Peter
Brinton, TimLloyd, Ian (Havant)
Bruinvels, PeterLloyd, Peter, (Fareham)
Bryan, Sir PaulLuce, Richard
Buchanan-Smith, Rt Hon A.Lyell, Nicholas
Burt, AlistairMcCurley, Mrs Anna
Butcher, JohnMacfarlane, Neil
Butterfill, JohnMacGregor, John
Carlisle, John (N Luton)MacKay, John (Argyll & Bute)
Carttiss, MichaelMaclean, David John
Channon, Rt Hon PaulMcNair-Wilson, P. (New F'st)
Chope, ChristopherMcQuarrie, Albert
Clark, Hon A. (Plym'th S'n)Major, John
Clark, Dr Michael (Rochford)Malins, Humfrey
Clarke, Rt Hon K. (Rushcliffe)Malone, Gerald
Clegg, Sir WalterMather, Carol
Cockeram, EricMaxwell-Hyslop, Robin
Colvin, MichaelMayhew, Sir Patrick
Conway, DerekMellor, David
Coombs, SimonMerchant, Piers
Cope, JohnMeyer, Sir Anthony
Cranborne, ViscountMiller, Hal (B'grove)
Critchley, JulianMills, Iain (Meriden)
Crouch, DavidMills, Sir Peter (West Devon)
Dickens, GeoffreyMoynihan, Hon C.
Dicks, TerryMurphy, Christopher
Dorrell, StephenNeale, Gerrard
Douglas-Hamilton, Lord J.Needham, Richard
Dunn, RobertNelson, Anthony
Durant, TonyNeubert, Michael
Evennett, DavidNewton, Tony
Fairbairn, NicholasNicholls, Patrick
Fallon, MichaelNorris, Steven
Favell, AnthonyOnslow, Cranley
Finsberg, Sir GeoffreyOppenheim, Phillip
Fookes, Miss JanetOppenheim, Rt Hon Mrs S.
Forman, NigelOttaway, Richard
Forsyth, Michael (Stirling)Page, Richard (Herts SW)
Fowler, Rt Hon NormanPatten, Christopher (Bath)
Fox, MarcusPawsey, James
Fraser, Peter (Angus East)Peacock, Mrs Elizabeth
Gale, RogerPollock, Alexander
Galley, RoyPorter, Barry
Garel-Jones, TristanPortillo, Michael
Glyn, Dr AlanPowley, John
Gower, Sir RaymondProctor, K. Harvey
Gregory, ConalRathbone, Tim
Gummer, John SelwynRhodes James, Robert
Hamilton, Hon A. (Epsom)Rhys Williams, Sir Brandon
Hamilton, Neil (Tatton)Ridsdale, Sir Julian
Hargreaves, KennethRoberts, Wyn (Conwy)
Harris, DavidRobinson, Mark (N'port W)
Hawkins, Sir Paul (SW N'folk)Roe, Mrs Marion
Heathcoat-Amory, DavidRowe, Andrew
Henderson, BarryRumbold, Mrs Angela
Hicks, RobertRyder, Richard
Hind, KennethSayeed, Jonathan
Shaw, Sir Michael (Scarb')Thompson, Patrick (N'ich N)
Shelton, William (StreathamThornton, Malcolm
Shepherd, Colin (Hereford)Thurnham, Peter
Shersby, MichaelTracey, Richard
Sims, RogerTwinn, Dr Ian
Skeet, T. H. H.Walden, George
Smith, Tim (Beaconsfield)Walker, Bill (T'side N)
Speller, TonyWaller, Gary
Spencer, DerekWard, John
Spicer, Jim (W Dorset)Wardle, C. (Bexhill)
Stanbrook, IvorWatson, John
Steen, AnthonyWatts, John
Stern, MichaelWells, Bowen (Hertford)
Stewart, Allan (Eastwood)Wells, Sir John (Maidstone)
Stewart, Andrew (Sherwood)Wheeler, John
Stradling Thomas, J.Whitfield, John
Sumberg, DavidWhitney, Raymond
Taylor, Teddy (S'end E)Wolfson, Mark
Tebbit, Rt Hon NormanYeo, Tim
Temple-Morris, Peter
Terlezki, StefanTellers for the Noes:
Thatcher, Rt Hon Mrs M.Mr. Ian Lang and
Thomas, Rt Hon PeterMr. Tim Sainsbury.
Thompson, Donald (Calder V)

Question accordingly negatived.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Energy and Climate Change)

I beg to move amendment No. 2, in page 1, line 13, leave out '3' and insert '2·5'.

The Second Deputy Chairman:

With this it will be convenient to discuss the following amendments: No. 3, in page 1, line 13, after 'value', insert 'or such other figure as shall be set by statutory instrument which shall not have effect until approved by resolution of the Commons House of Parliament'. No. 4, in page 2, line 11, at end insert— '(3A) Where at any time it appears to the Secretary of State that the expenditure for rebate under this section will not reach the sum of £50 million for which provision is made, he may by order reduce the multiples set at 3 under subsection (2) hereof so as to ensure that the said sum is utilised.'.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Energy and Climate Change)

The purpose of the amendment is self-evident. It is to ensure that the relief gets to the people who need it most. That has been the intention behind all the amendments tabled by Liberal Members.

It has emerged from our debates so far that no one seems to have accurate figures. The Under-Secretary of State made some play of the fact that at the time that the Liberal party was campaigning for exactly this kind of relief package we were asking for only about £4 million. He knows that that criticism of us was as much a criticism of the Scottish Federation on Small Businesses and Self Employed which had assessment information available to it that that is what would be required—[Interruption.] It has emerged since that such organisations as the Liberal party and the federation, without the aid of computers, are no more inaccurate than the Government, who have the aid of computers—[Interruption.] The braying of the hon. Member for Banff and Buchan (Mr. McQuarrie) is a matter that I may come to later.

The Minister is aware that the figure of £50 million was not the first-aid relief of Mafeking, as was suggested at the Tory party conference, and a definitive figure produced by the Scottish Office on the basis of a detailed analysis. It appears now that it was at best a guess that it was hoped would cover the requirement, and that it was a generous guess. We are not ungrateful that the Scottish Office managed to squeeze a generous sum of money out of the Treasury. However, we want to ensure that the money is used for the purpose for which it was intended and that those who need the relief most will get it.

Regrettably, the Government's cut-off point of three times the increase in net annual value means that many people who need the relief will not get it. I have received a number of representations from people who face very considerable increases in their rates bills and will qualify for no relief.

I quote the example of someone living in New machar, just outside the city of Aberdeen, who faces a 288 per cent. increase in rateable value and an increase of 26·2 per cent, in the rates that he must pay. He asks me to make representations to the Government to give him relief from that. The Government are pushing through this Bill which will give him no relief. He will have to pay the full increase.

The hon. Member for Glasgow, Cathcart (Mr. Maxton) spoke earlier of a comparison with teachers. I can assure the Minister that it is not lost on teachers who are also ratepayers that they face rate increases of 25 per cent, or 30 per cent, in circumstances where at the moment they are getting no salary increase and what the Government are offering them will not cover their rates bills.

One of my constituents lives in Ellon in a house which may have been sold to him by the hon. Member for Banff and Buchan. He faces an increase in his rateable value from £457 to £1,247. That is 273 per cent. The increased cash payment that he must make is 30 per cent. He, too, will get no relief under the terms of the Bill, and nothing that I or the Minister can tell him will make him feel very well disposed to the circumstances in which he finds himself.

The third example that I quote is that of someone living in Bridge of Don who is asked to find an additional £250. My calculation is that that might be reduced to £220, and he points out that that is just £30 less than the rates bill that Balmoral castle will have to find, which suggests that living in a big house in the country may be cheaper than living in a small house in a town.

I hope that those examples demonstrate to the Committee that the cut-off point that the Government are applying means that many people who, understandably, are incensed by their increased rates bills and worried about how to find the means to pay them are to get no relief.

It could be argued that the 2·5 suggested in the amendment did not go far enough but not that it went too far. I accept that, because it was essentially a compromise based on my understanding of the kind of shortfall that might be available and the intention to concentrate the money available a little closer on the people who needed relief.

On more than one occasion the Minister has implied that I, as distinct from my colleagues, did not appreciate the Government's offer of help. He knows that my colleagues and I have campaigned hard for a first-aid package. At a press conference in Edinburgh on 9 May, before the Government's announcement, I said that I thought that the relief necessary would be of the order of tens of millions of pounds because it was apparent to me that the figures would be fairly substantial.

I welcome the Government's package, but I make two comments about it. The first is that the package is not concentrated hard enough where it is most needed. It is applied across the board, and many people will still have dramatic increases in their rate bills with no additional services, and relief for one year only. If we are talking about real politics, I can assure the Minister that those people will not be better disposed towards the Conservative party after the passage of the Bill than they were before. They will be looking for more help than they have had to date. The Government will have to restore some of the rate support grant to local authorities next year to enable them to cushion their ratepayers.

Photo of Mr Barry Henderson Mr Barry Henderson , North East Fife

If the hon. Gentleman thinks that the Government's introduction of the Bill demonstrates a warped sense of priorities, surely by this amendment he is seeking to warp the priorities even more. Is not that curious? Would it not be less necessary if Liberal councillors on Fife regional council had voted against expenditure policies exceeding the Government's guidelines put forward by the Conservative members of that council?

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Energy and Climate Change)

I am sure that the hon. Gentleman's constituents are well aware of the value of having Liberals on the local council, which is probably why about the safest Conservative seat on the district council is now in Liberal hands. That suggests that when people have Liberal councillors they appreciate them and elect more of them, as no doubt they will in other parts of the country.

On the question of warped priorities, I freely admit that I might have chosen my words better in response to the statement. Let me therefore make my point clear. The Government managed to find £50 million of new money. It was not scientifically calculated, but a figure that they thought would be adequate.

Photo of Mr Donald Stewart Mr Donald Stewart , Na h-Eileanan an Iar

It was not calculated at all.

7 pm

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Energy and Climate Change)

I agree with the right hon. Gentleman on that. Secondly, the Government rightly recognised that the money was necessary and managed to find it, having told us that there was no new money available for other priorities in the Scottish economy, such as investment in education. The Government are not going far enough. If they can find £50 million for ratepayers, they should be able to do so for teachers. I assure Conservative Members that my constituents recognise, as the Committee will recognise, that the Government's priorities are peculiar to them. They do not accord with what many people believe, that is, that we should be protected from these ridiculous rate increases, which have been brought about as much by cuts in Government rate support grant as by revaluation, and that the Government should invest in other priority services, such as education. It is valid to make the point that if the Government can find money for rates, they can find it for education.

I have attended meetings in my constituency, which were extremely well attended by ratepayers, who will now campaign consistently for a restoration of justice within local government finance to enable local authorities to operate effectively and to carry out what they should do with proper support from central Government, which they are not receiving at present. Those people recognise the true colour of the Government's priorities.

The Minister should acknowledge that the £50 million was not calculated scientifically, that its application is not getting it through to those who most need it, and that some people who face substantial rate increases will not be helped by the legislation.

The amendment would lower the threshold and give more people assistance. To quote the hon. Member for Cathcart, the political altruism of my party is that the amendment may help some of the Minister's disaffected supporters, who are outraged and no doubt wrote to him about the iniquities of the rating system, to feel that the Bill will benefit them, which it does not do as it stands. I would have thought, therefore, that Conservative Members would be anxious to ensure that the relief is spread as widely and among as many ratepayers as possible. To lower the threshold would achieve that end. It must be desirable both for general equity and, indeed, for Conservative Members in marginal constituencies.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

As three amendments are grouped together, it may be helpful if I speak to amendment No. 3 in my name and the names of my hon. Friends.

We are dealing with the same point as that raised by the hon. Member for Gordon (Mr. Bruce)—the mystery of the £50 million. The headlines told us that the Government had found £50 million, which was new money and would be used to help Scottish ratepayers. When the Prime Minister spoke at Perth about the commercial element in the package, she went out of her way to say that the scheme would cost "£40 million, at least." A great deal of political credit was claimed for having produced that £50 million. We are making the straightforward point that the goods should be as advertised. If the package was £50 million, it should be used for relieving the burden of the rating system at the point where that system creates most pressure.

When the hon. Member for Edinburgh, South (Mr. Ancram) replied to the debate on Monday, he said of the scheme:

It is not easy to calculate how much that will cost, as hon. Members have realised. I believe that we shall not know the full answer to that question until all those who are eligible have been paid."—[Official Report, 3 June 1985; Vol. 80, c. 112.] That is a highly questionable statement.

I accept that there may be some play on the estimates and that we may have to come and go on the £29·5 million or £29·6 million which COSLA calculated. However, it is extraordinary that, during the preparation of the scheme, COSLA was not consulted. COSLA holds the computer records and has the capacity to identify those who will benefit and the amounts that will have to be paid to them. Its figures are likely to be accurate within a small tolerance. COSLA strongly suggests that the shortfall will be about £20 million.

In the debate the Secretary of State said:

While it looks as if the total cost should indeed be contained within the £50 million figure attached to the Bill and may be a bit less, it is not possible yet to be sure what it will amount to". —[Official Report, 3 June 1985; Vol. 80, c. 66.] We must make provision against the possibility — indeed, the strong likelihood — that COSLA's figures will be correct, and the suggestion that the sum may be a little less than £50 million is a euphemism. There appears to be a genuine danger that £20 million of the £50 million rescue operation will not be given to Scottish ratepayers, but will disappear into the ever-hungry maw of the Treasury.

I like amendment No. 3 because it allows a sensible degree of flexibility. It is a genuine attempt to help. The hon. Member for Gordon fairly suggested—in the sense that it was a genuine suggestion—that we should bring more people into the ambit of the scheme. He suggests reducing the multiplier from 3 to 2·5. I cannot support that because it is too arbitrary a figure and too inflexible in its effect. 1 cannot say what would happen with a multiplier of 2·5, but COSLA has informally suggested to me that it would include an enormous number of people and that the £50 million would have to be increased many times. In a sense that is desirable, and I understand the temptation to do that. However, 1 have tabled an amendment which I genuinely hope the Government will accept, and Conservative Back-Bench Members will support.

Amendment No. 3 is much more modest than amendment No. 2. We are not demanding an arbitrary reduction; we are seeking, in case our suspicions turn out to be right and £20 million is to return to the Treasury and not spent as intended, to introduce a provision to give the Secretary of State the machinery to do something about the shortfall. When he has calculated at leisure how best to proceed by varying the multiplier or whatever, he may say, "I am sorry chaps, but I cannot do anything about the shortfall. I would have liked to, but the primary legislation was drawn in a way that did not allow it." For a long time he sheltered behind that proposition regarding the scheme itself. I am anxious to help by providing him with such a means, if it becomes clear that that is right because of the enormous shortfall caused by the present multiplier.

The amendment allows the multiplier to be varied by statutory instrument in the same way as the other details of the scheme. We are not being unreasonable; we are merely giving the Secretary of State a power. The amendment is permissive. We are allowing the Government to cope with what would be a sad let-down if the figures fall far short of the promised support.

Conservative members have already commented on the extremely limited impact of the scheme in their constituencies. The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) reported, sadly, on the disappointments for Bearsden. To some extent, I appear at the Dispatch Box as a penitent because in the early days of the scheme I suggested that the Eastwoods and Bearsdens would be the principal beneficiaries. That has not turned out to be true, and I concede that. The figures show a much wider scatter than I thought likely, although the level of help is marginal.

I discussed the figures with the hon. Member for Eastwood (Mr. Stewart), the Under-Secretary. They were supplied to me by the finance division of Strathclyde region. I give them to the Committee because they are interesting. In Glasgow, for example, 11·95 per cent, of all domestic ratepayers will get some benefit, although probably marginal, from the scheme. In Eastwood, only 197 householders will qualify for assistance, which represents less than 1 per cent, of the domestic ratepayers in that area. There is a great contrast between Glasgow at almost 12 per cent, and Eastwood at 0·98 per cent. The total of £59,000 that will be available in Eastwood shows how marginal the assistance is.

It is interesting to note that, in Glasgow, 23 per cent, of non-domestic ratepayers will obtain some assistance from the scheme, whereas in Eastwood only 1·06 per cent., or 21 properties, will benefit. When the Eastwood Gazette, or whatever the local newspaper is called, gets its hands on those figures, the Under-Secretary of State may have an uncomfortable time explaining why there has been such a minimal impact in his area. In Argyll and Bute, which is represented by another Under-Secretary of State for Scotland, 1· 35 per cent, of domestic ratepayers will be helped, compared with an average in Strathclyde of more than 6 per cent. That suggests that the help for Argyll and Bute will not be received with massive enthusiasm.

I make those points because I believe that the record should be put straight, and because I wish to underline the fact that, if the scheme is extended, it will be extremely popular in areas that are important to Ministers, especially Eastwood and Argyll and Bute. I have obtained only the figures for Srathclyde, but perhaps if I obtained those for Angus, the portly frame of the Solicitor-General for Scotland might bounce a little more happily, given the electoral pressure from (which he suffers, when the multiplier was lowered and the present scheme extended.

It will be frustrating and irritating for constituents to have to say to their representatives, "Not only are we getting only a marginal benefit from the scheme and being left with substantial rate increases, but we know that another £20 million is available, which will be handed back to the Chancellor and will not benefit Scottish ratepayers. Why can you not take up that extra £20 million by adjusting the scheme?" At that point, the Under-secretary of State—the hon. Member for Eastwood— and other Ministers will be grateful for the fact that this amendment has been accepted, because they will have the machinery to vary the scheme and to use all the available money. They need not go again to the Treasury, because the money is there. It must be good sense to change the scheme so that the Scottish Office can use all the available money.

I hope that that simple, but persuasive and compelling, case will commend itself to Conservative Members. We know from Second Reading that the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), the hon. Member for Renfrew West and Inverclyde (Mrs. McCurley) and others believe that the £50 million should be spent in the interests of Scottish ratepayers. Unless the Committee accepts the amendment, there will be no machinery to change the scheme, and real difficulties will occur.

I am not talking about natural rebels on the Conservative Benches. The fact that the hon. and learned Member for Perth and Kinross and, I suspect, the hon. Member for Banff and Buchan (Mr. McQuarrie) take a strongly independent line about getting the maximum help for the ratepayer from the sum allocated by the Treasury is significant. What is even more significant is that on Second Reading the hon. Member for Strathkelvin and Bearsden said:

I appreciate that eligibility should be set down in the Bill, but is the revaluation of three immutable? Could some other figure, which used up the money, be applied?" — [Official Report, 3 June 1985; Vol. 80, c. 80.] He also said that he stood by his threat, if I can call it that:, in the Evening Times that he will throw all his weight behind effords to ensure that the entire £50 million is applied to rating relief in Scotland.

It is significant when someone such as the hon. Member for Strathkelvin and Bearsden takes that line, not because I believe greatly in his political weight — I hasten to reassure the Committee on that—but because he is an identikit Tory. He is not one of the world's rebels; he is the loyalest of the loyal. He is the sort of young man that any hon. Member would like to chair his Young Conservatives branch. When the hon. Gentleman comes to the House and says that the £50 million must be used in the way that was trumpeted at the Scottish party conference, and which brought peace to that conference, the Minister should listen to such persuasive arguments. If the hon. Gentleman was here to listen to the arguments —he has not yet appeared for the debate — I like to think that he would vote with us tonight, because it is a sensible amendment that does not commit the Government to a specific figure. It gives them some flexibility instead of leaving them in the lurch, when they would be in the most uncomfortable position of saying: "We have the money, but we shall give it back to the Treasury."

That would be wrong in equity and would be bad for the morale of Scottish ratepayers and for the political system. The Government should keep their clear promise that £50 million will be available. However, there is a grave danger that that promise will be breached unless the Bill contains some flexibility along the lines set out in amendment No. 3.

Photo of Mr Donald Stewart Mr Donald Stewart , Na h-Eileanan an Iar 7:15 pm, 5th June 1985

In speaking to amendment No. 4, which is in my name and that of my hon. Friend the Member for Dundee, East (Mr. Wilson), I shall draw attention to a small printing error on the amendment paper. The penultimate line uses the word "multiples" instead of "multipliers". I do not suppose that any of the intelligent members of the Committee were confused by that error, which probably arose from the haste with which the amendment was drafted on Monday night.

I should stress that it has become clear that, if only those whose revalued rateable values are greater than three times their pre-revaluation rateable values will benefit, it has been calculated that considerably less than the £50 million given by the Treasury will be used. The Scottish National party believes that all that money must come to Scotland for the purpose of rates relief. It is little enough compensation as it is, and the Government must not be allowed to get away with skimping on it.

I agree with the hon. Member for Glasgow, Garscadden (Mr. Dewar) that amendment No. 3 is flexible—indeed, any of the amendments in the group would meet my purpose—but amendment No. 4 states that if the full sum has not been used, the multiplier should be reduced to whatever figure is necessary to ensure the use of the full amount allocated by the Treasury.

The Chancellor of the Exchequer said that the plug will be pulled on this life support next year and that there will be no cash in successive years. It is essential that Scottish ratepayers, domestic and commercial, benefit to the full from the £50 million. Anything less will be regarded as a climbdown and a sell-out of the commitment given to Scottish ratepayers by the Secretary of State at the Perth conference. If he wants to save his political skin and that of other Conservative Members, he would be well advised to accept the amendment. If he does not, he will suffer a renewed backlash in Scotland.

Photo of Mr Albert McQuarrie Mr Albert McQuarrie , Banff and Buchan

The Committee will welcome the presence this evening of the hon. Member for Gordon (Mr. Bruce) and his contribution to the debate, because he did not bother to appear for the Second Reading of the Bill or to contribute in any way on behalf of the ratepayers to whom he pays lip service when he believes that he can make a political point. He said that no one had done any work to arrive at the factor of 3, but it is worth asking him how he arrived at the figure of 2·5. He said that he had no computer.

The hon. Gentleman tried to hide behind the cloak of the Scottish Federation of Small Businesses and Self Employed when he said that it would have to take its £5 million from the figure of £40 million. Yet he had the audacity to say to the Secretary of State on 14 May that the money was

of the warped priorities of a Government threatened with extinction in Scotland."—[Official Report, 14 May 1985; Vol. 79, c. 178.] It is strange that he described £40 million of relief as a warped priority when he asked for only £5 million. Would the alliance have allowed less?

Photo of Mr Albert McQuarrie Mr Albert McQuarrie , Banff and Buchan

I shall not give way because the hon. Gentleman has had his say. I should like to get rid of amendment No. 2.

The hon. Member for Gordon asked that the load should be spread fairly. I agree with that. In Grampian region, the rateable value before revaluation was £30·72 million for the private domestic ratepayer. After revaluation that figure rose to £86· 71 million. The figure was therefore increased 2· 82 times, or by 182 per cent. That is well above the 2· 5 factor called for by the hon. Member for Gordon. For the local authority domestic ratepayer the figure before revaluation was £13· 5 million. After revaluation it became £36· 45 million. In that case the figure was increased 2· 7 times or by 170 per cent. That is still not down to the factor of 2· 5.

The most important element of the £50 million relates to the commercial ratepayer. Before revaluation, the rateable value was £38· 51 million and after revaluation it rose to £86· 71 million—an increase of 2· 82 times or by 182 per cent. We still have not dropped to the denominator of 2· 5 which exists in the warped mind of the hon. Member for Gordon. Those are the average figures given by the local authority. There are plainly other increases between 2·7 and 3.

In Grampian region—the hon. Member for Gordon plainly does not know this — it is estimated that approximately 25,000 people and businesses will benefit from the Bill to a total of £2·8 million. Broken down, the figures mean that 21,128 domestic ratepayers and 4,416 commercial ratepayers will benefit.

I support the view that the whole of the £50 million should be used. I prefer amendment No. 4 to amendment No. 3 because I believe that amendment No. 4 covers the point more widely. The two amendments, however, are comparable because they want to achieve the same result —that the £50 million is used.

I hope that when my hon. Friend replies he will give a firm undertaking that the £50 million will be used. We are all aware that the Scottish Office and the local authorities did not know how much would be required to pay on a factor of 3. Computers have to do their work, and they have not yet been able to complete it. We may therefore find that there will be some £20 million in the kitty. I give my right hon. Friend the Secretary of State great credit for having obtained the money from the Treasury. I take no notice of the rubbish about its being to gain an electoral advantage. It was a first-class job done by an honourable and first-class Secretary of State. [Interruption.] There will never be a Liberal Secretary of State, that is for sure.

Will my hon. Friend guarantee that that £50 million will be spent? To take the arbitrary figure that the hon. Member for Gordon and his two colleagues, the hon. Members for Roxburgh and Berwickshire (Mr. Kirkwood) and for Orkney and Shetland (Mr. Wallace) have suggested is not the best way to achieve that. Neither of those two colleagues of the hon. Member for Gordon are present; nor are any of the other Liberal Members. There is not even a member of the Social Democratic party present.

Photo of Mr Albert McQuarrie Mr Albert McQuarrie , Banff and Buchan

As I said before, he is in Scotland. He has not tabled an amendment. The hon. Members for Roxburgh and Berwickshire and for Orkney and Shetland have.

If there is to be £20 million in the kitty, the best thing to do is to reduce the factor from 3 to 2·9. If we still find that the £20 million has not been used, the factor can be reduced to 2·8. That is a fair and reasonable way to work. I am sure that the hon. Member for Glasgow, Garscadden (Mr. Dewar) will admit that, if we accept the figure of 2·5, there is no guarantee that the total will amount to £50 million. With that factor we might need more than £50 million. We must be grateful for having £50 million of new money, and we must take advantage of it. I hope that my hon. Friend will take note of that, because I do not agree that we should hand the balance of the money back to the Treasury.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

The hon. Gentleman is making a series of reasonable points which he would expect me to support. There is virtue in amendment No. 3, which provides machinery for achieving what we want. Amendment No. 4 merely provides that the Secretary of State would have the power to alter the factor. Amendment No. 3 provides that the figure can be altered by statutory instrument, as is provided in other parts of the Bill. We can then have a debate in the House and watch what is happening. If we do not receive assurances, I hope that the hon. Gentleman will join us in the Lobby on that point.

Photo of Mr Albert McQuarrie Mr Albert McQuarrie , Banff and Buchan

I am grateful to the hon. Gentleman, because he has brought the point home to me. I must confess that I had slightly overlooked it. Amendment No. 4 had appeared to me to be more suitable. I accept that amendment No. 3 is probably more in the interests of the Committee, because we do not know the correct factor at the moment.

I regret that I cannot support my hon. Friend if he is not prepared to give an undertaking to the House that the £50 million will be allocated to Scotland in some form or other.

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Govan

The logic of the speech of the hon. Member for Banff and Buchan (Mr. McQuarrie) is that he should vote for amendment No. 3. An assurance from the Minister will not mean anything unless a facility for doing something about it is written into the Bill. There is no flexibility with the way that the Bill is presently drafted. Amendment No. 3 has the advantage of giving flexibility. The factor could then be adjusted to whatever figure is considered appropriate to produce the sum of £50 million.

With the Bill as presently drafted, the relief granted will not amount to £50 million. We have figures from COSLA. The hon. Gentleman gave us some figures from Grampian region. I have figures for other regions of Scotland. They total slightly less than £30 million. There is a little over £4 million on the domestic side and something over £25 million on the commercial side. We were promised that the domestic relief would amount to £10 million. The available figures show that the relief is less than half for domestic ratepayers. On the commercial side there is a considerable shortfall from the £40 million that we were originally promised. I do not think that there is any dispute about the figures. If there is, no doubt the Under-Secretary will let us know.

7.30 pm

The Government rushed into the legislation without doing any calculations. The announcement was made in the House on 14 May, the consultation meeting with COSLA was not held until 29 May and now that the figures based on the Government's proposals are coming forward, we see that there is a considerable shortfall.

Even now, the Government seem to be making no effort to get additional information. I tabled four questions for answer on Monday, with the idea of getting replies in time for the Second Reading debate on that day, so that hon. Members would have a sensible basis on which to conduct that debate.

I had considerable difficulty getting the answers on Monday at the normal time. I do not want to make too much of it, but the answers arrived considerably later than they should have done on Monday — literally a few minutes before the debate started. The answers were extremely illuminating. One said:

This information is not available. It had taken the Government nearly a fortnight to tell me that they could not answer my question. The other answers were equally uninformative.

I asked the Secretary of State

if he will give the total number of domestic and commercial ratepayers, respectively, for each rating authority in Scotland and for Scotland as a whole and his estimate of the number and percentage …who are likely to benefit". The Secretary of State replied:

Complete information in the detail requested is not yet available. I was not even told the number of ratepayers in Scotland. I also asked what the cost would be if the factor were 2·5 or 2·75. I am sure that with a factor of 2·5 the cost would be considerably more than £50 million. The Scottish Office and rating authorities have computers that have been used to make calculations, but the Secretary of State told me:

I do not have the information on which to base a reliable estimate, and to ask the rating authorities to do the calculations specially does not seem to me a worthwhile use of resources." —[Official Report, 3 June 1985;'Vol. 80. c. 81-2.] The administrative costs of the Bill will be £1 million, but the Government will not even ask local authorities to use their computers to calculate what would happen if different factors were applied. It is a ludicrous position.

The Government do not deserve to get their Bill in the time proposed, because they have not taken the trouble to do essential research to find out what the Bill will cost and what other methods would cost.

Applying a single factor of 3 to every rating authority in Scotland is bound to produce anomalies. Without being specific, the hon. Member for Banff and Buchan drew attention to the problem. The impact of the factor of 3 will vary from authority to authority, depending on the revaluation increase for each category of ratepayer. The hon. Member for Banff and Buchan said that the percentage increase on the commercial side in Grampian was 182. The increase in Shetland was only 50 per cent., in Orkney it was 70 per cent, and in Lothian and Strathclyde it was 110 per cent. Different increases will lead to different results when the factor of 3 is applied to every local authority.

It would have been possible to have a more sophisticated system providing for different factors and allowing greater equity between ratepayers in various rating authorities. It would take account of the different results of revaluation, not, of course, of the different rate increases that are taking place in 1985–86 anyway. However, the Government rushed in with a crude calculation and did not take the trouble to do other calculations to find out whether a more sophisticated and fairer system could be devised.

Even within regions, there are considerable differences in the minimum rates increases above which ratepayers will qualify for relief. For example, domestic ratepayers in Eastwood will have to pay at least a 43·9 per cent, increase in 1985–86 before getting any relief. Commercial ratepayers in Eastwood will have to pay 62·9 per cent, more before getting relief under the Bill. That is an extraordinarily high threshold and that is only one example.

In Glasgow, relief will be given to domestic ratepayers only after they have paid a 39 per cent, rates increase, and commercial ratepayers will have to pay 52·9 per cent. more before relief is payable. There are a variety of figures in Strathclyde and other regions. I do not have the figures for districts in other regions, but no doubt COSLA and the individual regional authorities will have produced them.

All the information is available, but it has not been given to us. When I ask comparatively simple questions, I am told that the information is not available and that the Government will not even bother to find it. I suppose that they do not want us to know, because such information would enable us to raise intelligent questions in debates such as this.

Unless the Under-Secretary introduces some flexibility into the Bill, there will be a considerable volume of complaints from people who thought that they would get relief, but will have to pay massive rate increases and will get no help. They will also find that other ratepayers paying smaller increases will get help because of the way in which the Bill has been drafted.

There is no reason why, even at this late stage, we should not introduce some flexibility. It is impossible to do that in a thorough and sophisticated way, because none of us has enough information to allow us to draft amendments to change the Bill and be confident that we shall achieve a satisfactory result. However, amendment No. 3 would at least write in the minimum amount of flexibility.

The £50 million was trumpeted as a great victory for the Secretary of State. If the Government were serious about helping ratepayers, we could adjust the factor and ensure that all the £50 million was used. That is all that we are arguing for in the amendments.

I understand why the 2·5 factor has been suggested, but, depending on the revaluation in some areas, that could be extravagantly expensive. However, we are entitled to have answers and it seems that we are not to be given the figures.

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Govan

It is never nonsensical to ask for information. Amendments Nos. 3 and 4 are sensible, but I prefer the drafting of No. 3. I hope that the Minister will either accept one of them or give us the necessary assurances. If he does not, I hope that Conservative Members will support us in the Division. Otherwise, there will be a breach of faith over the original announcement, because it is clear that the £50 million will not be reached. In view of all the trouble and argument about revaluation in recent months it would be intolerable if concessions were apparently made and then not used to the full.

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

The right hon. Member for Glasgow, Govan (Mr. Millan) clearly showed that if one attempts to provide rough justice by using just one figure, there are bound to be areas of injustice.

I believe that I am the first hon. Member to declare a personal interest in the Bill. The cash increase for my domestic dwelling in Blairgowrie is a horrendous 64 per cent., so I shall benefit from the Government's proposals and I welcome that benefit. When I made my plea for action by the Government I proposed that no one should have to pay more than 50 per cent, above the previous year's cash value, and I made that special plea largely for the commercial ratepayers of Angus. With a multiplier of 3, the increase in cash value will be about 52 per cent, for those people, so the Government have come very close to meeting my request in that context and I am grateful for that.

In making that request, I added the qualification that this should apply until those people's appeals had been heard and had been successful, because on the figures given to me by the Government, I judged that many of the shopkeepers and others substantially affected by the revaluation would succeed in their appeals. I based that judgment not just on the previous rateable values but on the rents actually paid by those shopkeepers who paid rent for premises on main streets in Angus. As valuation is supposed to be based on the rent that could be obtained, it seemed clear from those figures that many of the appeals would succeed.

Amendment No. 2 is about as wise and sensible as the nonsensical comments and figures bandied about by alliance Members before the Government's proposals were made, When asked by members of the Press Gallery how much money I believed would be required, I suggested that it would be between £90 million and £120 million if my survey in Angus was representative of the whole of Scotland. I could not say whether it was representative because I could not carry out a survey of the whole of Scotland. In my view, amendment No. 2 is the usual exercise in kite-flying designed to obtain publicity rather than to solve difficult and complex problems.

Ratepayers in Scotland are facing savage increases. We may differ politically about the reasons for those increases, but we must agree that the increases are so savage that they cannot be allowed to remain. The Government have accepted that and have moved very quickly, but I shall be interested to hear their response to amendment No. 3, which seems to provide the kind of flexibility that could not be achieved within the time scale in which the Government brought their proposals forward. I make no criticism of the remarkable speed with which the Government acted—indeed, I am eternally grateful for it because the situation in Angus was even more appalling than that in Perth and Kinross.

7.45 pm

I appreciate the reasoning behind amendment No. 4 and I do not argue with it because I believe that it is probably right in principle, but the wording is not all that it should be and I believe that amendment No. 3 achieves the same objectives. I hope that my hon. Friend the Under-Secretary of State will tell us why the Government cannot accept the flexibility proposed in amendment No. 3. Ratepayers in my area would certainly like to believe that the speech made by my right hon. Friend the Secretary of State in Perth means that ratepayers will receive the full value of the £50 million. I am not especially concerned about how that result is achieved but if that sum is available we need to assure ratepayers in Scotland that it will be used in full to mitigate the difficult circumstances in which they find themselves. I believe that many of my constituents will succeed in their appeals against the increases. If that is the case and they do not require the assistance generously proposed by the Government, I shall be delighted.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

I do not know whether the hon. Member for Tayside, North (Mr. Walker) was present earlier in the debate to hear his hon. Friend the Member for Banff and Buchan (Mr. McQuarrie) laying into the hon. Member for Gordon (Mr. Bruce) with vilification and personal abuse. We in the new, emerging Labour party do not intend to become involved in such dogfights between the old Whig and Tory parties. We intend to concentrate on the merits of the argument and to put a few questions to the Minister.

No explanation has been given publicly or to the House as to how the factor of 3 was arrived at. According to The Scotsman, the Under-Secretary of State for Scotland said: when the scheme was drawn up a decision had been made on the level of revaluation increase that would create an unacceptable burden and: We decided that level was three times the existing rateable values". On what basis was that decided? Why should there be such integer worship in this age of computers? If a factor of, say, 2·9 were more appropriate, the calculation could be made just as easily. The Minister has a duty to explain why he decided on a multiplier of 3. [Interruption.] I see that the other half of the alliance has arrived, in the shape of the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy)—better late than never, I suppose.

The Prime Minister has promised at least £50 million. What will happen if COSLA is right and only £30 million is spent under the Bill? Will the remainder go back to the Treasury? Will it go into other areas of over-expenditure such as the bottomless pit of fortress Falklands? We need to know. That is why, among many other reasons, I support amendment No. 3 proposed by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), because it provides the flexibility needed to make adjustments in the light of experience when we see the proposals in operation.

The Minister said that the purpose of the exercise was to assist hard-pressed ratepayers, not to undo the changes that had taken place as a result of revaluation. That makes sense. Presumably the purpose of revaluation was to move the burden from certain ratepayers in the commercial sector to others. If so, who in the commercial sector is gaining? The Under-Secretary referred to a hotel in Dumfries and Galloway. Apart from that one example, who are the gainers?

It has been said that a 14 per cent, additional burden is falling on the commercial sector as a whole and that the vast majority of people in that sector are suffering. On the other hand, when we discuss reducing the figure—for example, under the Liberal amendment to 2·5, the Minister says that over half the domestic ratepayers would get relief if there were a 2·5 multiplier. Does that not show that the revaluation has resulted in over half of domestic ratepayers having an increase of more than 2·5 times?

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

Of course, but why 2·5? I would not have expected that to be the average. A retired school teacher, now masquerading as an Under-Secretary, may correct me, but may we be told why, at 2·5, half should be above and half below?

Why are there so many regional variations? There seems to be a total difference between Strathclyde on the one hand and, say, Tayside, Lothian and Grampian on the other. There seems to have been no co-ordination or collaboration between the assessors. Nor can I understand how the assessors made their comparisons. I understood that the exercise was supposed to be based on rentals that might be achieved for the premises. One gathers, however, that a whole range of matters come into the calculation, including — dare I mention it?—private houses in Ayr such as the one in which I live, the posh type of house that the Minister described earlier. But there are no houses such as that being rented in the area with which we are concerned. In other words, I do not understand how the bases of comparison were worked out.

It has been said that, because revaluation has taken place north, rather than south, of the border, shops which are branches of United Kingdom multiples can obsorb the increases much better than Scottish-based firms, so that the former can rejoice in the fact that in most of their shops south of the border they do not have the same burden. That is not the case for the Co-ops in Scotland or for all other Scottish-based companies.

I hope that the Minister will take the Labour amendment seriously. Power would remain in the hands of the Minister and at the end of the day, in the light of experience, the Secretary of State would be free to decide what, if any, action to take. If, as COSLA has predicted, £20 million will not be taken up, the amendment will be necessary, and the hon. Member for Eastwood (Mr. Stewart), if no one else, should support it.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

We have had another interesting debate on this important topic. The remarks of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) underlined some of the confusions that have arisen in the public mind as a result of the revaluation. Indeed, they underlined also the reason why we are keen to look again at the system of financing local government so as to find a better way of doing that. We are delighted to note that at least he among Opposition Members is with us on that, and we look forward to hearing further from the occupants of the Opposition Front Bench about their views on the subject.

There has been some misunderstanding over this issue recently as was clear from the Second Reading debate on Monday. The scheme arose initially from an appreciation by the Government — and by the hon. Member for Glasgow, Garscadden (Mr. Dewar), as he made clear at Scottish Question Time recently — that ratepayers had been hard hit by revaluation.

I do not want to rub it in, but the hon. Member for Garscadden has in the past welcomed revaluation. He appreciates, however, that a number of ratepayers have been severely affected at the margins of revaluation. He offered the Government co-operation in introducing a mechanism to help the hardest hit. If he did not use those exact words, he used words to that effect. The scheme sets out to do that. It aims—this is what the Bill puts into practice—to remove the worst cases due to the sudden revaluation changes that have occurred.

The threshold multiplier of 3, which the Government have selected, is not designed—and it would have been wrong had it been designed—to nullify or neutralise the effects of revaluation. It is designed to deal with the harsh and difficult cases on the margins but not, as it were, to re-write the revaluation. Indeed, we should not do that, because if we were merely to re-write it in favour of those who were losers as a result of revaluation, without doing anything for the gainers, we should create a very strange and distorted pattern indeed. We all accept that there are good reasons for changes in valuations, and if those reasons do not apply in the cases of any valuations, the assessors must defend those valuations in the court.

Thus, we looked at the range between 2·33, which is the average revaluation multiplier for all property in Scotland—that is the level in general or average terms, so that if one is below that level one gains from revaluation and if one is above it, one loses—and ranges beyond that, through 3 to 4, as suggested by the Federation of Small Businesses and the Self-Employed, and at some of the other ranges of revaluation affecting properties in Scotland.

The difference between 2·33 and the 3 times multiplier leaves a range which allows revaluation still to be effective in the terms that it is supposed to be effective, yet at the same time allows us to protect the hardest hit. Above a multiplier of 3—given that there are variations; the right hon. Member for Glasgow, Govan (Mr. Millan) was right to point to regional variations — the results of the revaluation in terms of the rate effect would have been unacceptable.

For that reason, we chose a multiplier of 3, and on to that we have built a scheme which is simple and straightforward and, most important, which enables people to understand whether they do or do not qualify. We hope that, as a result, we are meeting the target that we sought to cover in the first place.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I wish to be clear about the implications of the Minister's remarks. Is he saying that the Government are satisfied that in working the scheme based on a uniform multiplier of 3, they have done enough? Should the scheme cost only £25 million, leaving the other £25 million unallocated, would the Government then not want to use that other £25 million? In other words, is not the impression that £50 million was being found to help Scottish ratepayers a mistaken impression? Are the Government saying that the scheme is complete and that, no matter how big the shortfall, they will not make it up?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

I shall be dealing with that. If we reduced the multiplier trigger in the scheme down towards the average multiplier, we should in effect be removing the effects of revaluation. If the hon. Gentleman believes that revaluations should take place—he pressed us to carry out this revaluation—he will accept that we must set a trigger point which will leave an effective revaluation while at the same time protecting the hardest hit. The scheme is demand led. Once the eligible category has been denned, the amount that the scheme will cost will depend upon how many people fit into that category. There will not be an allocation of fixed money.

8 pm

On a decision to focus on a level of valuation above which rebate is to be given reflects the judgment that approximately three times this year's revaluation is about the right level at which to intervene and reduce the effects of revaluation. The amount of money that it will cost has been the subject of a number of conjectures, both high and low, during the last two months. As I said during the Second Reading debate on Monday, I do not believe that we shall know the total amount of money that will be expended on the scheme until the last eligible ratepayer has been paid.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

I shall give way to the right hon. Gentleman in a minute.

At that time we shall know precisely what the outturn figure is. As the analyses of the revaluation take place those figures will become more accurate, but I do not believe that we shall know the exact figures until the last ratepayer has been paid.

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Govan

I do not suppose that we shall know the exact figure down to the nearest pound, but we know that it will not be £50 million. It will be nearer £30 million, and perhaps even less than that.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

The right hon. Gentleman presided over the last revaluation and we saw its effect upon commercial ratepayers. At that stage the right hon. Gentleman never suggested that any scheme of relief should be provided. He is now complaining about what, on any view, is a very generous scheme in terms of both money and eligibility. The people of Scotland have looked carefully at the Government's proposals. They accept that both the financial commitment and the scheme underline the concern felt by the Government for those who have been hardest hit by revaluation.

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Govan

The Under-Secretary of State is surely not disputing the COSLA figures, which amount to less than £30 million. We know that there will be a shortfall of £20 million.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

As I said on Monday, my understanding is that those figures are not yet complete. We cannot begin to give figures until we know which ratepayers are eligible under the scheme.

Photo of Gordon Brown Gordon Brown Shadow Spokesperson (Trade and Industry)

Can the Under-Secretary of State explain why he chose the figure of 3 instead of 2·9 or 2·8? Can he also explain why the figure of £50 million was announced? Were the Scottish Office figures based only upon a random look at the Strathclyde valuation roll? Was there no consideration of the situation facing Fife, Central, Lothian, the Highlands, the Grampians and the Borders?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

The hon. Gentleman has not attended the greater part of our debate today. His question has already been answered. I have already made it clear that, if one reduces too far towards the average multiplier, one effectively writes off revaluation. An element of judgment is involved. The difference is between an average multiplier of 2·3 and a multiplier of 3. Within that area we believe that revaluation will have its full effect. The increase that will be paid by those who are above the multiplying factor of 3 will be rebated to them under the scheme. The people of Scotland appreciate, by and large, that it is those who are over the multiplier of 3 who are the hardest hit. Multipliers of 4, 5 and even 6 have been given to me. Those people are very hard hit and they appreciate what the Government are doing for them. The Opposition are doing themselves no good by cavilling over figures when we are talking about sums of money which are so much bigger than anything that they suggested when they said that there ought to be a scheme of this kind.

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

No, I have already given way to many hon. Members during both this debate and the last debate.

The Government's proposals are reasonable and simple. That is important if the scheme is to operate effectively and quickly. The amendments would take rebates beyond the level that we think is reasonable and would complicate the operation of the scheme. The amendment moved by the hon. Member for Garscadden would create vast areas of uncertainty. One of the benefits of the Bill is that those who are eligible will know that they are eligible. That eligibility will continue. According to the amendment moved by the hon. Member for Garscadden, the multiplier could, on occasion, be increased as well as reduced from year to year. Those who are eligible would not know whether they would continue to be eligible under any future scheme. That is not the right way to proceed.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

The Minister has said something which I believe is quite important. Is he saying that, as it is drawn, the scheme can be continued if he exercises his discretion next October and that it would have to be continued in the same way and at exactly the same level?

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

It would not necessarily be continued in the same way, because the manner of the scheme is contained within the order. Those who are eligible are defined in the Bill in terms of both their category and of the multiplier that is required to trigger their eligibility. The simplicity of the Bill, which is important to its implementation, is helped by dealing with it in this way. Therefore, I ask the Committee to reject the amendments and to support the Government.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

Having heard what the Under-Secretary of State has had to say, I am now more than ever convinced of the virtue of amendment No. 3. Irrespective of whether it is the Liberal party's 2·5, or the Scottish National party's £50 million, or our amendment No. 3, which proposes a variable but with a full take-up of the £50 million, we want the package that was announced in Perth to be spent for the benefit of Scottish ratepayers. It is clear that the revaluation relief package that was announced was both a platform confidence trick by the Secretary of State for Scotland and an exercise in back-stage bungling. The more time that has elapsed the more evident it has become that the Scottish Office computer is not working. As my right hon. Friend the Member for Glasgow, Govan (Mr Millan) pointed out, all the rating authority computers are busily churning out the kind of information that was quoted earlier by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar).

I hope that the hon. Member for Gordon (Mr. Bruce) will withdraw his amendment. It was not scientificallycal-culated. He admitted as much earlier. I do not blame him for that. The Government are even more guilty. They have been unable to provide precise figures. I hope that the right hon. Member for Western Isles (Mr. Stewart) will also withdraw his amendment, because we are at one with him. We want the £50 million to be spent in Scotland. Amendment No. 3 provides the mechanism which would make it possible to achieve the lower factor.

Several hon. Members have asked the Under-Secretary of State how the magic figure of 3 emerged. I know that the hon. Member for Stirling (Mr. Forsyth) thinks in threes. Several hon. Members served on a Standing Committee in which he always spoke of three, or 30 or 300. I wonder, therefore, whether the Stirling factor had something to do with this. When the Secretary of State made his statement to the House on 14 May I asked him how many people would come within the 2·7 and the 3 factor on the domestic side and the 2·2 and the 3 factor on the commercial side. He did not tell. It is now quite obvious that he did not know. Furthermore, he could not even give the number of people on the commercial and domestic side who would benefit from the factor of 3.

On 16 May I wrote to the Secretary of State about the Government's revaluation relief scheme. I was trying to be as practical and constructive as possible, and I wrote:

If, by the end of June, the take-up by domestic and commercial ratepayers is nowhere near the £50 million allocated, will you consider reducing the threshold from three tunes the rateable value to 2-·7 times in respect of domestic ratepayers and 2·2 times in respect of the commercial sector? As I understand your aim, it is to neutralise the effect of the 1985 revaluation increases and you did indicate that 2·7 and 2·2 respectively represented neutral average increases arising from the revaluation. On 23 May, the Minister replied, and in his long letter, which did not tell me much, he said:

we now think there might be up to a quarter of a million properties which could stand to benefit, including both domestic and non-domestic. When the Secretary of State for Scotland announced this scheme in all the paraphernalia after the Perth conference on 14 May, we were led to believe that about 300,000 would benefit from the scheme: 250,000 domestic ratepayers and 50,000 businesses. But the more time goes by, the more the beneficiaries seem to disappear. The Minister still cannot tell us how many beneficiaries there are under the scheme. Indeed, it is quite evident that when the statement was broadcast at Perth, the Secretary of State just did not know. It was all political camouflage

The delegates at Perth had to be told something. The Secretary of State had to assure them that the Scottish Tory Members at Westminster were not an extinct breed. Consequently, he came up with the £50 million figure. To compound everything, the Chancellor of the Exchequer was then telling the Scottish press that the Secretary of State would not get his £50 million next year. [Interruption.] As has been pointed out, we shall not even get the money this year. Indeed, the figures from the local authorities and the business sector show that the figure is more likely to be about £30 million.

The Government have put a lot of effort into their revaluation rebate scheme, but it must be seen against the background of Monday's social security review. The same Government who have kidded all their Back Benchers about there being a reform of the rating process propose to get 750,000 Scots on housing benefit to pay rates. The Government say that in order to ensure that those people know what rating is all about, they will have to pay at least 20 per cent, of their rates. On the one hand the Treasury says that it will give £50 million this year to help over the revaluation, but on the other hand the DHSS says that it will begin to bring 750,000 people into the rating network. In the euphemistic terms of the Civil Service, I believe that that is called departmental log-rolling. I refer to the idea that if one Department gives, another has to take away. At the end of the day there are sufferers from all those administrative changes.

I hope that the hon. Member for Gordon and the right hon. Member for Western Isles will ultimately agree to support amendment No. 3. More importantly, I hope that all those Tory Back Benchers who make speeches to ratepayers want to see that £50 million spent, and will be in the Lobby with us. I hope that they will not sit on the fence and abstain, but will support amendment No. 3.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Energy and Climate Change) 8:15 pm, 5th June 1985

Having been at the receiving end of an unprovoked and unexpected attack from my neighbour, the hon. Member for Banff and Buchan (Mr. McQuarrie), I was interested to note that the Minister did not say why 2·5 was unacceptable, or what it would cost. Presumably, he was unable to do so. I accept that it would bring many more people into benefit, which was the point of lowering the threshold. Indeed, that was the point of the amendment. If the Minister was anxious to suggest that the figure is unacceptable, I should have thought that he would have some arguments to support him. However, he was unable to produce them. He could not say whether the £50 million would be underspent and if so, by how much, and by how much my proposal would put the figure over £50 million.

The hon. Member for Banff and Buchan seems to think that the Government's proposals will be greeted with rapture by ratepayers. If he goes to areas in my constituency, including parts that he used to represent, he will find the reception less than enthusiastic. If Banff and Buchan is compared with Gordon, hon. Members may understand why the hon. Gentleman can afford to be slightly more complacent. The average increase in domestic valuations in Banff and Buchan is 260 per cent, compared with 280 per cent, in Gordon and 290 per cent, in the city of Aberdeen. In cash terms, the average increase in the domestic rate element for Banff and Buchan is 6·7 per cent., but in Gordon it is 15 per cent, and in Aberdeen 1·1 per cent. When the commercial factor is considered, the figures are even more interesting. The increase is 230 per cent, in Banff and Buchan, 260 per cent, in Gordon and 280 per cent, in Aberdeen. In cash terms, that is 9·1 per cent, in Banff and Buchan, 27·5 per cent, in Gordon and 27·1 per cent, in Aberdeen. I am sure that the hon. Gentleman must recognise that people facing such rate increases are looking for much more relief than the Government are offering.

It is a cause for concern that the Government have now implied that if the Bill is enacted unamended there will be no opportunity to adjust, in the way that the hon. Member for Banff and Buchan implied would be acceptable, if the full allocation is not taken up. Clearly, the best way of allocating any extra cash is to lower the threshold to ensure that more people benefit. But that possibility will not be open to the Government if they do not accept any of the amendments.

In the interest of ensuring that we unite behind one amendment that gives the flexibility that the Bill needs, and that the Government will need, I am willing to withdraw my amendment and to urge my colleagues to vote for amendment No. 3. However, if the Government resist it, they will find that the outrage of this year will be as nothing compared with next year, because the people will realise that they have been conned and bought off for a year. Those Conservative Members who have said that they are keen to ensure that there is a full take-up should vote with us and demonstrate that they are not prepared just to use weasel words for the benefit of their constituents but are also prepared to stand up and fight. Accordingly, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 3 in page 1, line 13, after 'value', insert

'or such other figure as shall be set by statutory instrument which shall not have effect until approved by resolution of the Commons House of Parliament'.—[Mr. Dewar.]

Question put, That the amendment be made:—

The Committee divided: Ayes 108, Noes 181.

Question accordingly negatived.

Photo of Mr Paddy Ashdown Mr Paddy Ashdown , Yeovil 8:30 pm, 5th June 1985

On a point of order, Mr. Walker. I apologise for interrupting the flow of this important debate, but I have a matter that needs to be drawn to the attention of the House and which touches on the safety of those who work in the House and of those who visit us. The facts are as follows. Midway through yesterday afternoon, the secretary of a colleague of mine was taken seriously ill in Norman Shaw South and immediately moved to Westminster hospital where she was put into the intensive care unit. I understand that word filtered back that part of the reason for her condition was, to use the word received, the "poisoning" of the water supply system at Norman Shaw South. Early this morning, before staff had arrived, an announcement was made on the public Tannoy system in Norman Shaw South saying that the water supply should not be used for drinking, but no further steps were taken and none of the staff who arrived later than 9 o'clock was so informed, although in due course notices were put on the taps.

About midday, my secretary, who was involved in the incident yesterday, informed me that there was considerable concern among hon. Member' secretaries in Norman Shaw South; they were unclear about what had happened and of the danger in which they stood. I asked the Serjeant at Arms to provide information as to what had happened and to assure me that appropiate steps had been taken to ensure that our staff were being adequately informed so that they could protect their health.

I was informed that investigations into the water supply were going on, but that they would not achieve any results until later. Meanwhile, I received assurances that staff would be informed. The Chief Whip of my party, my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), received similar assurances that it was not known what had gone wrong with the water supply but that investigations were underway.

It has now come to my notice that the press has been told that what happened was that at 11·30 yesterday morning, some 22 gallons of anti-corrosion liquid, intended for the central heating system in Norman Shaw South, were poured into the water supply system by accident, and that that liquid contained certain unpleasant chemicals. I am also told that the press was informed, although hon. Members—in particular my hon. Friend for Berwick-upon-Tweed and I — were not, that these facts were known at 8.50 last night. The facts will be published tomorrow morning.

It is important that we should know why this has happened, why such hopelessly inadequate steps were taken to inform our staff this morning, why the situation was not explained to us, and why were we not told the facts. Further than that, why were we positively misled? Some of our staff and some who visit the House may have been endangered by the appalling accident that occurred yesterday, but some of them may also have been endangered by the fact that such inadequate steps have been taken. I have no doubt that if the facts that I now have are true and if we were formal employers, we would be liable to action under the Health and Safety at Work Etc. Act.

We must now have a clear statement on the current position and clear instructions that will provide for the safety of our staff and others who visit the House. We need assurances that there will be a full investigation of the matter. I hope that you, Mr. Walker, agree that it will be appropriate for the responsible Minister to come to the House to give some assurances.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

There is one difficulty—we are in Committee at the moment and, strictly speaking, we should not be discussing such a matter. However, in view of the seriousness of what the hon. Gentleman has told the Committee, I felt that it was proper to allow the hon. Gentleman to go on. I see that the Leader of the House is present and wishes to speak.

Photo of Mr John Biffen Mr John Biffen , North Shropshire

I should like to respond to the points that have been raised, which I realise have caused great anxiety. I am sure that hon. Members in all parties will be anxious for Mrs. Jacqueline Winter, hope that she will make a speedy recovery, and feel concern about the incident. The hon. Member for Yeovil (Mr. Ashdown) has made a number of accusations and raised a number of points that are clearly of substance. I shall arrange for a statement to be made at the earliest possible moment.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

I think that it will be sensible for us to leave the matter at that now and return to the debate.

Clause 1 ordered to stand part of the Bill.