Rates

Oral Answers to Questions — Scotland – in the House of Commons at 12:00 am on 19th June 1985.

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Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West 12:00 am, 19th June 1985

asked the Secretary of State for Scotland what is his most up-to-date assessment of the numbers of (a) domestic and (b) commercial ratepayers in Scotland who will benefit from the terms of the Rating (Revaluation Rebates) (Scotland) Bill; and what is his latest estimate of the total cost, taking reductions on appeal into account.

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

The Convention of Scottish Local Authorities has now obtained returns from all the Scottish rating authorities which show that some 133,000 domestic and 62,000 non-domestic, including commercial, ratepayers will qualify for revaluation rate rebates at a total cost in 1985 of around £30 million. These figures are a reasonable measure of the likely demand for rebate.

Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West

Will not the final figure be known only when all the appeals have been resolved? Is it not true that all those most substantially affected, whose rateable value has risen more than three times, will be assisted by the Bill, and that the commitment is open-ended?

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

My hon. Friend is quite correct. The final figure will not be known until the last eligible ratepayer has been paid. [Interruption.] I agree that the scheme is most generous. I am surprised that Opposition Members should laugh at the provision of £30 million when many of them were asking for much less only four weeks ago. I find it hard to understand why they do not appreciate the scheme as much as Scottish ratepayers do.

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

The hon. Gentleman has just revealed what he was unable to reveal two weeks ago. Should he not now recognise that the cut-off point has been set too high and that many small businesses which still face extinction should have the benefit of a greater reduction than he has allowed for? Does the hon. Gentleman not realise that there is still very considerable discontent among small businesses in Scotland? If he thinks that the rates issue is dead in Scotland, he should bear in mind that it is not as dead as his party will be at the next election.

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

I am glad that the hon. Gentleman has been converted from the view—expressed only eight weeks ago in the House—that this is a warped priority, but I fear that, like all converts, his zeal has taken him further than his common sense might do. If he studies the scheme, he will discover that we set the level of a three times multiplier because we appreciated that we could not undo revaluation altogether and, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, we had to set it at a level that would help those who were hardest hit. That is what has been achieved by the scheme, and it is much appreciated in Scotland.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

The Bill is still going through Parliament and is now before the House of Lords. As about £20 million might be available for distribution, will the Minister consider amending the legislation so that all the funds that the Secretary of State has won from the Treasury can be used?

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

I do not know whether the hon. Gentleman was here when we debated the issue the other night, but I made it clear that the scheme was demand-led. I explained that the three times multiplier gave adequate protection without undoing the revaluation. We are distorting revaluation, but we are not claiming that those who have gained should give anything back. According to the latest figures available, that demand-led scheme will cost about £30 million.

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

Does my hon. Friend agree that even after the three times multiplier has been used there will be an increase of over 50 per cent. in the cash to be paid for rates in the Angus district, and only a little less in Perth and Kinross? Does my hon. Friend agree also that we must apply pressure to get rid of this iniquitous system, which has produced such a massive increase in rates in that part of the country?

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

I appreciate that under this scheme, even with the help provided by domestic relief, some ratepayers in Scotland are faced with high rate increases. The Government are studying the whole system of local government finance. We hope to be able to make proposals towards the turn of the year.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I welcome the Under-Secretary's admission that he knew, but would not admit in Committee, that there would be a substantial shortfall—probably of about £20 million — on the £50 million package about which the Secretary of State boasted at Perth. Can the hon. Gentleman confirm press reports that of the sum that would be available for the small business man and other non-domestic ratepayers, about £3 million is likely to go to the owners of poster sites in Scotland and not to small businesses?

Does the Minister accept that an element of flexibility must be built into the legislation and that if that £20 million is not paid out as advertised it will be seen by many who face rate increases of 50 or 60 per cent., with not a penny of aid, as the political equivalent of a serious breach of the Trade Descriptions Act?

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

I do not like to accuse the hon. Gentleman of deliberate political cynicism, but as £30 million has been made available by the Government to help those who are hardest hit—the phrase that he used in the House when he said that he would co-operate with the legislation—I find the last part of his question hard to understand.

The figures have become increasingly robust as the analysis of the revaluation has continued. The figures that I have given today were made available by COSLA on 12 June and were confirmed to an extent by the Minister of State in the debate in the House of Lords on Monday.

We have no central information about the poster sites. I understand that in the one area that has been considered in respect of poster and advertising sites they represent a small proportion in terms of numbers, qualifiers and cost.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

Did the Secretary of State not claim that he had negotiated with the Treasury an extra £50 million to spend on domestic and non-domestic ratepayers? Does the Minister agree that if he does not change the multiplier he will gratuitously hand back to the Treasury £20 million which otherwise would be available to those badly affected by rate changes in Scotland? Does he agree that to fail to claim the money for Scotland would be iniquitous?

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

The hon. Gentleman is on record as saying that revaluation is good and I am sure that he will not withdraw that opinion. The agreement with the Treasury was that it would provide new money to underwrite the scheme, which is demand-led. At the time that the announcement was made in May, the best estimate of the cost of the scheme was £50 million.