Clause 2

Clause 1 – in the House of Commons at 8:30 pm on 5th June 1985.

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FINANCE

Question proposed, That the clause stand part of the Bill.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

I should like the Minister to tell us something about the working of the clause. It relates to the reimbursement to rating authorities of the payments that they make under the scheme. We tabled an amendment about administrative costs, but it has not been selected. However, perhaps the Minister will reply to some of the points that I and other hon. Members made on Second Reading, but to which he did not have the time or opportunity to reply in detail.

For example, I note that the Secretary of State will be determining the conditions as to records, certificates, audits and other things over which the payments will be made. Will the audit be at the end of the financial year? Will local authorities be involved in outlays earlier in the current financial year, for which they will not be reimbursed until the end of the financial year?

On Second Reading, we raised a number of points about interest charges to local authorities. Clearly, although the Government are proposing to reimburse local authorities for the payments that they make under the scheme, the payments themselves may involve local authorities in extra costs. I think that the Secretary of State referred to the payments not involving local authorities in any breach of guidelines. However, in his winding-up speech on Second Reading, the Minister did not answer my question as to whether the costs that rating authorities would incur in administering this scheme would bring them into difficulty in complying with the Government's guidelines over rate support grant and expenditure.

Will the Minister take the opportunity today to answer a point that has been left in the air? Nobody knows precisely what the position will be. Therefore, I should be grateful if the Minister will dispel some of the lingering doubts and anxieties.

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

I am always keen to dispel the doubts, lingering or otherwise, of the hon. Member for Glasgow, Maryhill (Mr. Craigen). The hon. Gentleman will find that on Monday I answered one of his specific questions about the difficulties that might be faced by local authorities which might have to wait for reimbursement. I said that we would consider whether there was some way in which we might help them by making advance reimbursement before final certification was completed.

In regard to administrative costs, I listened carefully on Monday to my hon. Friend the Member for Stirling (Mr. Forsyth) and to other hon. Members. Having given the matter consideration, my right hon. Friend proposes, in exercising powers already available to him, to disregard for guideline purposes certain local authority expenditure on the administration of the rebate scheme in 1985–86. My Department will be discussing with the Convention of Scottish Local Authorities the exact terms of the disregard.

The hon. Member for Maryhill was rightly concerned that in some circumstances authorities might find themselves penalised for the cost of the administration of the scheme. I hope that I have clarified that point to the satisfaction of the hon. Gentleman. In view of what my hon. Friend the Member for Stirling said on Monday, I hope that he will feel that we have responded to the valid points that were made.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

I am grateful to the Minister for reassuring me about the disregard in respect of payments incurred. This is not really the time to raise the matter, but I still think the Government are being unfair in burdening rating authorities with the cost of administering the scheme. Although the Bill refers to £1 million, that is only an estimate. In view of the earlier discussion about the take-up of £50 million, I wonder whether the calculation will be any more realistic.

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

If the hon. Member is right in his first estimate, compared to the estimate that we made, he will find that the cost of administration will go down commensurately.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

I wonder. I was about to say to the Minister that in view of the fact that there will be reclaims of rebates already made, where a person has succeeded in his valuation appeal it seems that the rating authority will be involved in a second set of expenditure. The Government have rightly left it to the rating authorities to identify those ratepayers who will be eligible under the scheme. As rating authorities are being given this direct responsibility, it would make more sense for the Government to acknowledge that they should have direct responsibility for the administration of the scheme.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.