Industrial Rates

Oral Answers to Questions — Scotland – in the House of Commons at 12:00 am on 9th November 1988.

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Photo of Mr David Lambie Mr David Lambie , Cunninghame South 12:00 am, 9th November 1988

To ask the Secretary of State for Scotland whether he has any proposals for changing the method of calculating Scottish industrial rates.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

From 1 April next year the maximum possible increase in business rates will be indexed to the rate of inflation. The Government are, moreover, committed to moving to a common non-domestic rate poundage in all areas.

Photo of Mr David Lambie Mr David Lambie , Cunninghame South

When will the Secretary of State be in a position to respond to the recent representations that he has received from the Chemical Industries Association and the United Kingdom Petroleum Industry Association that he should use his existing powers to set centrally a formula for calculating the decapitalisation rates to be used in dealing with the contractors' principle of valuation?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I assure the hon. Gentleman that that is being actively considered.

Mr. Andy Stewart:

Will my right hon. and learned Friend reaffirm that, unlike the Opposition, the Government have no intention of introducing rating of agricultural land?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I recollect that at the last election the Labour party proposed that agricultural land should be rated for the first time. I have not the slightest doubt that that would be devastating to the interests of Scottish agriculture or that those in the rural community would be aware of a proposal to that effect.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

When the Secretary of State arrived at the absurd poll tax figures for next year, did he assess inflation for business rates by local government rises in costs, or by the standard rate of inflation? What account was taken of the number of people who will be in arrears? Does he agree with the Scottish Consumer Council that 50 per cent. of those who receive rebates will be in arrears three months after the tax coming into force? Did he take that into account when he arrived at the local government poll tax figures?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I understand the hon. Gentleman's embarrassment at the fact that we published figures based not on cuts being made by local authorities but on their existing level of expenditure. The non-domestic rate has been increased by the rate of inflation and the revenue support grant is being increased by almost double the rate of inflation. The simple fact that may cause discomfort to the hon. Gentleman and his local authority friends is that the figures that we published last Friday were based on the level of expenditure that local authorities are incurring in the current year. The non-domestic rate has been indexed to the rate of inflation and the increase in revenue support grant is substantially more than the current rate of inflation. The only explanation for local authorities choosing higher community charges is that they are going for growth in expenditure. Under the new system of local authority finance, for the first time local authorities will be accountable to their electors, all of whom will be asked to contribute to the cost of that excessive spending.