§ Order for Second Reading read.
§ The MINISTER of HEALTH (Mr. Chamberlain)
I beg to move, "That the Bill be now read a Second time."
Hon. Members who took part in the discussion on the Rating and Valuation Bill of 1925, and who recollect our prolonged debates on the intricacies and perplexities of the whole subject, will, I think, share my satisfaction that, if I have to present another Rating and Valuation Bill to-day, it is at any rate on a very small scale. This Bill arises out of various undertakings that I gave during the passage of the 1925 Measure. It contains only five operative Clauses, and though, no doubt, within those Clauses and the Schedules to the Bill hon. Members will find something to ask questions about, I do not think it will be necessary for me to trouble the House at any great length, or to enter into any great technical details in order to make clear the several purposes of the Bill. The 1925 Measure contained, when it was introduced, a Clause dealing with London, which was dropped on the Report stage, and, in moving its omission, I stated that I had been discussing its provisions with representatives of the London County Council and the Metropolitan Boroughs Standing Joint Committee and, as some rather serious differences of opinion arose between them as to the way the Clause should be framed, they agreed that it would be better to postpone the question of London to a later date. I hoped at that time that by that later date, which I expected to be before the end of the present year, it would have been possible for an agreement to have been reached within those two bodies, and that we might have introduced a Bill which would have brought London up to the latest developments as embodied in the 1925 Act, and brought about uniformity of valuation. I am sorry to say that that hope has not been realised. It has not been found possible to come to any agreement between the London County Council and the metropolitan boroughs, and though, of course, I might have introduced a Bill which would have 836 embodied my own ideas as to the proper solution, yet it would have been a long Bill. It would necessarily have been a controversial Bill, and, in the limited time at my disposal during the present Parliamentary Session, there was no likelihood of such a Bill ever reaching the Statute Book. I had to postpone the prospect of completing the reform of rating and valuation as far as London is concerned, and in the present Bill I have confined myself merely to what was necessary in regard to London if rating and valuation were to go on at all.
The first thing that is necessary is to extend to London that relief in regard to the rating of machinery which was given to the rest of the country in the 1925 Act. I remember that on the Report stage, when this London Clause was dropped, my hon. Friend the Member for the City of London (Sir V. Bowater) pointed out that unless some legislation was introduced London manufacturers would be put at a considerable disadvantage because the next quinquennial valuation in London was not due until 1931, whereas the first valuation in the rest of the country to which the new provisions as regards rating and machinery would apply would come either in 1928 or 1929, and there would therefore be a period during which manufacturers in other parts of the country would find their process machinery exempt while those in London would be rated. I promised my hon. Friend that I would do my best to try and find some method by which we could relieve London of any injustice of that kind, and extend to them the benefit of the rating of machinery Clause in the 1925 Act. The first Clause of this Bill amply carries out that undertaking. The first Subsection applies to London the provisions of the Section of the 1925 Act which applies to rating of machinery, and the second Sub-section causes them to come into operation on the 6th April, 1929, which is the same time as the Measure will come into force in most other parts of the country.
The next point with which I am concerned is one affecting valuation. I suppose that most hon. Members know that valuation in London is founded upon an Act passed in 1869, which provides that London is to be valued every five years. In ascertaining rateable value, the 837 assessment committees, first of all, have to ascertain the gross value, but, of course, the gross value is not the value upon which rates and taxes are levied. That is the net or rateable value, which is found by deducting from the gross value certain allowances for repairs and insurance. Those allowances are governed in London by the Statute of 1869, which, in a Schedule, classifies the various kinds of properties and sets against each classification what is a proper allowance to be made in order to arrive at the rateable value.
The last valuation was made in 1926, and the next falls to be made in 1931. When the valuation of 1926 was being considered, it was perceived that, unless some amending legislation were passed, it would necessarily result n a very sharp rise in rateable value for certain classes of property, namely, those classes affected by the Rent Restrictions Act. The 1926 valuation was the first occasion on which there had been taken into account the increase of rent permitted under the Rent Restrictions Acts, that is, an increase of 40 per cent. upon the standard rate. If no change had been made in the permissible deductions from gross value to arrive at rateable value, the increase in the gross value consequent upon that increase of rent would, of course, have meant an equivalent increase in rateable value. That increase would have been disproportionate to the increase of rateable value of other kinds of property, and, moreover, while there had been an increase of rent there had, of course, also been an increase in the charges for repairs and insurance, which these deductions are designed to cover. Therefore, the House, in 1925, passed this necessary legislation called the Valuation (Metropolis) Amendment Act, under which a new scale of deductions, a temporary scale, applicable only to the quinquennium between 1926 and 1931, took the place of the old scale of 1869. The new scale, of course, gave higher deductions, and, therefore, made a reduction in the rateable value. But, as I say, that was only for five years and applied only until the next valuation in 1931.
Therefore, we have now to consider what is to be done in 1931, and what scale of deductions is to be permitted for the quinquennium that will succeed 838 that year. It is generally agreed that the scale of deductions which was sanctioned by the Valuation (Metropolis) Amendment Act is now too high, but here comes in the question of uniformity. In the provinces before 1925, the method of valuation was different from that in London. In the provinces, there was no statutory scale of deductions. Deductions varied throughout the country in different assessment areas, and they varied very considerably. But in 1925 when we passed the Rating and Valuation Act, the whole object of which was to obtain a uniformity in valuation throughout the country, we did follow the example of London, having laid down in the Act a new scale of deductions which was made applicable to the whole country excepting London. Of course, it is desirable that uniformity should not stop with London and that we should get London in line with the rest of the country.
The first and most obvious course as to what shall be done in 1931 is to apply the conditions which apply to the rest of the country to London. What will be the result? I find that there is a very considerable difference between the scale of deductions which now exists in London and the scale which will exist in the country under the 1925 Act. The deductions are much lower in the country than in London. If, therefore, we jump from the present scale in London to the scale laid down for the rest of the country, in 1931, the rateable value of house property in London would be very considerably increased. I find that in regard to a house in London of the gross value of £40, if the scales of the 1925 Act were applied to London, the rateable value would increase by £5. A house of £60 gross value would be increased in rateable value about £8; a house of £80 gross value would be increased by £9 and one of £100 would be increased by £10. Those rises are too big to happen suddenly. I think it is too big a jump to take all at once, and I have had to search about for some intermediate scale which, without accentuating the want of uniformity with the rest of the country, would ease the process of transition in London and not be too great a burden upon those responsible for the rates on this property.
My attention was drawn to what was happening under the Act of 1925 in the 839 country. I have explained to the House that under the Act of 1925 the rating authorities were given an option as to whether they should have their first valuation in 1928 or in 1929. Most of them have opted for 1929, but a few have opted for 1928 and already we have been able to obtain from them some figures which, at any rate, give us an opportunity of testing what will be the results of the application of the Act. These figures indicate something of this kind, that here again in the country the effects of the net increase of rents under the Rent Restrictions Act will be taken into account for the first time. They will be put on gross values, and where that happens and where the non-statutory deductions which were enforced before the Act were very much higher than those in the Act, there will be a very sharp rise in rateable value. The result of all these considerations is to be found in Clause 2. I have not yet succeeded in achieving complete uniformity between London and the rest of the country, but I have aproached near to it, and I have approached it by a double stage. I have at the same time found, in Clause 2, a new temporary scale for London and a new temporary scale for the country, Subsections (1) and (2) deal with London and Sub-sections (3) and (4) deal with the country. In the first part of the first Schedule, will be found the scale which is applicable to London, while the second part of the scale is applicable to the country. Those scales are identical up to a certain point, up to houses of the gross value of £20, but after that they diverge, and they will have to diverge for the next five years, after which I hope it will be possible to find a scale which can be made uniform for the whole of the country, including London.
I come now to Clause 3, which deals with a somewhat different matter. I suppose hon. Members are familiar with what is known as the compounding system. Local authorities have power of compounding certain classes of houses, and rating the owners of these houses instead of the occupier. Where the owners are so rated they are allowed a commission, which covers them for the cost of collection of the rates from the occupier and also against the risk that the tenant may fail to pay either rent or rates, in which 840 case the loss falls on the landlord. The commission that has been allowed to the landlord under the Statute has been at the rate of 15 per cent. in the case of the poor rate and from 20 to 33⅓ per cent. in the case of the general district rate. When we passed the Rating and Valuation Act, 1925, all these rates were consolidated into one general rate, and at the same time we reduced the commission payable to the landlord from the varying amounts which I have mentioned to a uniform 10 per cent. It might be supposed that that was matter which only affected the landlord, because this was really a commission to the landlord for services rendered: but in 1921 a case was taken to the House of Lords, known as Nicholson v. Jackson, which put a different aspect on the matter. That was a case which turned on Section 2 of the Rent Restrictions Act, which says that a landlord may increase his rent byan amount not exceeding any increase in the amount for the time being payable by the landlord in respect of rates over the corresponding amount, paid in respect of the yearly, half-yearly or other period which included the third day of August nineteen hundred and fourteen.In other words, if the landlord had his rates increased he was able to pass on that increase of rates to the tenant. In this particular case. Mrs. Nicholson, a compounding landlord, who had an allowance of 25 per cent., had had her rates increased, and she proposed to pass on to the tenant the full amount of the rates. The tenant, Jackson, on the other hand, maintained that all she was entitled to pass on was the net increase in the rates payable by the landlord. and that as the landlord had received 25 per cent. allowance, all that the landlord was entitled to pass on to the tenant was three-fourths of the full amount of the rates, instead of the whole. The House of Lords, by a majority, decided in favour of the tenant. Since then, whenever landlords of rent restricted houses have had their rates increased, the tenants have had the benefit of the increase in the commission. That was something which I should imagine was never in the mind of those who framed the Rent Restrictions Act, 1920. Anyhow, there it is, and the tenants have the benefit of it. Then comes the Rating and Valuation Act, 1925, which reduces the landlord's commission to 10 per cent., and that puts the boot on the other leg, because a reduction 841 in the landlord's allowance means that the net amount of rates he has to pay is larger, and under Nicholson v. Jackson the landlord is entitled to pass that on to the tenant. It would appear, therefore, that under the Rating and Valuation Act where the allowance to the landlord previously was much higher than the 10 per cent. which is now allowed, there might be a considerable increase in the rent paid by the tenant.
It is that situation which we are trying to meet in these two Clauses. Under Clause 2, where there has not been any substantial difference in the allowance, probably the increased scale of deductions which that permits wilt prevent any particular rise in the tenant's rent, but in cases where there has been a considerable difference between the old commission and the commission that will be allowed in future, the operation of the Act might put upon the tenant a larger increase than we should desire to see him faced with. Accordingly, in Clause 3 we have provided that in such a case the local authority may increase temporarily, but only for five years, the allowance to the landlord from the 10 per cent. which is set forth in the Act to as much as 15 per cent. I do not think I need say anything about Clause 4, which gives to the Minister a power which is earnestly desired for him by the Central Valuation Committee. I should like to say that the Central Valuation Committee, which was set up by the Act of 1925, without any executive powers and in a purely advisory capacity has been doing most valuable service and has more than fulfilled my anticipation as to the useful work it would accomplish. We are under a great debt of gratitude to the gentlemen who have formed this Committee, and who have been giving a great deal of time to this work to the great benefit of the whole country.
§ Mr. CHAMBERLAIN
The Central Valuation Committee is only an advisory body, and all that it has to do is to issue general recommendations for the guidance of assessment committees throughout the country; there is no obligation on the part of anybody to take its advice. It has no statutory or executive powers over anybody, either in London or anywhere else. The Central Valuation Committee, 842 whose purpose it is to promote uniformity in valuation throughout the country, have found that there is a considerable difference in practice arising from the fact that there are different interpretations of existing Statutes, and they have great difficulty in getting a binding decision as to what is the correct interpretation. Appeals from a decision of the Asssessment Committee lie to the Court of Quarter Sessions, but, of course, the decision of one Court of Quarter Sessions is not binding upon another, and as the amounts in question are as a rule comparatively small it is not worth the while of the appellant party to go further than the Court of Quarter Sessions and get a binding decision from the High Court. The result is that there has been no binding decision and this lack of uniformity continues.
What the Central Valuation Committee desires is that there should be some inexpensive method of obtaining a definite decision on points of law, and the Clause carries out this desire by providing that on their representations the Minister of Health may state a case for the consideration of the High Court and obtain their ruling on it. The Central Valuation Committee will have the power to appear themselves before the Court and give evidence as to what is their view of the proper interpretation, and, in order that the case may be thoroughly argued, they will also have the power to contribute to the costs of any party who represents the opposite view.
There is only one other Clause, Clause 5, which is what we may call the Economy Clause. It is introduced on the representation of certain local authorities who find that they have been put to what they consider unnecessary expense owing to the operation of Section 37 of the Act of 1925, and it provides that in future they may dispense with the provision to serve certain notices upon occupiers where the occupiers are not themselves concerned, or, if they are, when they have another opportunity of stating their case. In Sub-section (2) of this Clause it will be seen that this dispensing with the serving of notices on occupiers only applies where the owner is seeking to obtain a reduction in valuation. If he is seeking to put up the rateable value it is a different matter, but where he is seeking to reduce it, where 843 the tenant's case is the same as the owner's—and there may be thousands of occupiers to whom notices have to be sent although not a single one of them would have any grievance but only benefit if a reduction is obtained—it seems altogether unnecessary to go to this expense. I am informed that in some cases local authorities have had to spend thousands of pounds in order to serve these unnecessary notices, and this Clause will save that expense.
I only want to thank the House for the patience and the attention with which they have listened to what I feel is rather a tedious exposition, but I can assure them that this Bill, although it may not attract so much attention as other Bills which will be introduced, is of some value and importance to local authorities and will certainly conduce to the smooth working of the process of local valuation and assessment.
§ Miss LAWRENCE
I want to express my great disappointment with the Bill itself and also at the absence of any definite assurance by the Minister as to the Bill which is to be introduced later. To explain that, I must go back over the history of 1925. The Rating and Valuation Act of 1925 was an exceptionally good Measure. There was one point in it with which some of us did not agree, but on the whole it was an excellent Measure and received, I think, general applause. London was in that Act at the beginning, and the London County Council from the first and throughout was desirous that the principles of the Act should be applied to London. It is true that they fell out with the Minister on the question of single valuation, but I will not go into that now. In the course of lightening that Bill the Minister dropped the Clause dealing with single valuations, and from that moment the London County Council expressed its passionate desire to come in, and so did the standing joint committee of the Metropolitan borough councils. In Committee stage, after the single valuation Clause had been dropped, they attempted to come under the Act. That was in July. The Bill was a very heavy one, and the Session was crowded. The Minister held conferences with the representatives of the borough councils and the London County Council. He told them that solely in 844 view of the lateness of the Session he was taking London out of the Bill. Finally, a deputation from the standing joint committee of Metropolitan borough councils and the London County Council met the Minister of Health and urged upon him that the provisions of the Bill should be applied to London generally, with a view to the desirability of securing uniformity throughout the country. The Minister explained the difficulties and, finally, the London County Council passed the following resolution:That the council do acquiesce in the Rating and Valuation Bill being amended so as not to apply to the Administrative County of London, provided that the Minister of Health gives an assurance that he will use his best endeavours to secure the introduction of a Bill dealing with Rating and Valuation in London, and the passage of such Bill through Parliament, preferably and if possible, in 1926, but, at any rate before the end of the Session of 1927.A rider is attached to that Resolution which says:The Minister of Health when announcing the decision to omit London from the Bill at the Report stage, stated that he would use his best endeavours to see that the Bill dealing with London was introduced at the earliest practicable moment, if possible in 1927, at the very latest in 1928, and that he himself hoped that it would be possible to bring in the Bill in 1927.4.0 p.m.
The representatives of the borough councils were also extremely anxious that the Bill as a whole should be applied to London, but they were in disagreement with the London County Council about certain technical matters, which I will not detail now. That quarrel continued for some time, and at the end the Minister said that the quarrels had not been composed, but that the county council, though it had never agreed with the metropolitan borough councils, did agree that every one of the points in dispute should be referred to the Minister to do exactly as he liked. I believe I am right in saying that a similar offer was made by the borough councils. I could not get the standing joint committee's resolution, but my council's resolution was:That the Council is prepared to accept the decision of the Minister of Health upon the points of difference which have arisen between the Council and the Metropolitan Boroughs' Standing Joint Committee as to the proposed Rating and Valuation Bill for London, and agree not to take steps with a view to amendments of substance being moved affecting such points.845 The borough councils made the same proposal, that is to say, the bodies who represent London, though they differ amongst themselves, are so much in unison in the desire that the Rating and Valuation Act, 1925, should be applied to London, that they mutually agree to let the Minister do what he likes with regard to points in common, and agree to move no Amendment of substance if a Rating and Valuation Bill should be introduced for London. We know how technical and how difficult these Bills are. If the borough councils and the county council are agreed, what London Member dare wag his finger against a Bill in such terms? I say to the Minister that it would have taken him hardly more time to have introduced a Rating and Valuation Bill carrying out the strong desire of the whole of those concerned in London and received our blessings, than to sit here and listen to our reproaches. It would have been the easiest Bill imaginable to get through the House, for I repeat that not one of us would have dared to move an Amendment of substance when the borough councils and county council had agreed not to do it.
Why is it that the county council and the Metropolitan borough councils are so anxious for this? The Minister made other pledges in 1925, and those pledges he has carried out. If I had been in the House, I should have opposed the special provisions for the rating of machinery, but, after having been carried in the country, I admit it would be intolerable that London manufacturers should be under a special handicap, and I understand that the Minister in 1925 made a promise to the manufacturers, as well as to the local authorities, that he would deal with their grievances. He has dealt with those grievances, but rather inconveniently, because the Bill having had so short an announcement, and being introduced at this date, we shall have to hurry up to do something about the valuation of machinery in London by June next, which is heavy work, though I do not complain.
The local authorities in London desire this Bill for many reasons. Let me take some of the minor points. The compounding for rates business is very much better under the provisions of the Rating and Valuation Act, 1925, than it is under the 1869 Act which governs London. The 846 question of appeal is very much easier in the country. If the value of your property declines between two assessments it is easier to get an appeal in the country than in London. In London, a ratepayer may be left for some time under considerable disadvantages in such a case. But that is not the main thing. The main thing is the question of the county committee for valuation. In the country there is a county committee for valuation. In London, the borough council determines gross valuation. That is a very important thing, indeed. There is no power in Heaven and earth—not the Minister, not the advisory central committee, not the County Council, not this House of Parliament—which has any control over the borough councils in fixing the gross value.
Last winter, I am told on good authority, there was a very wide difference of practice with regard to the amount of percentage to be added to the gross value of house property. I am told, on good authority, that in some boroughs it was 40 per cent. and in some a great deal less. That does not matter a great deal as far as rating value is concerned, because the Minister's officials had made a most ingenious double list of deductions. The kernel of the matter was that if you put on as much as 40 per cent., you were allowed to make a very large deduction. If you put on less than 40 per cent., you had to make quite a small deduction. So that, really, whether you put on 40 per cent. or 25 per cent., it made surprisingly little difference last time in the rateable value. But this time it will not be so. This time we have a single scale, tempered by reference to the old Act, so that any wide difference of practice in determining gross value will have a proportionate effect in the determination of rateable value. It was a very ingenious, elegant and pretty device of the Minister's officials for the quinquennial valuation of 1926. The practice which has already crept in, however, of giving a different deduction, may in 1931 produce differences of rateable value in the boroughs, and that in London is a very important point.
Speaking quite broadly, taking the whole of the local and central rates together, the central rates in London are now 70 per cent. of the expenditure, and the rates raised locally and spent locally, 847 taking the boroughs together, are somewhere about 30 per cent., in round figures. Any inequality in the assessment of gross value by the borough councils therefore means that contributions to the central rates may be in very unjust proportion. Let me take the borough of Westminster. I can do that with a good heart, because the borough of Westminster is beyond reproach with regard to the question of valuation. There is no municipal gossip about Westminster being a little shady with its valuation, if there is gossip about some other London boroughs. I am, therefore, taking for illustration a borough above reproach. If Westminster were to play about with its valuation a little bit, if it were to put its gross valuation a trifle lower than it ought to be, it would get out of enormous sums with regard to the county rates, the Metropolitan asylums' rate, the London Poor Law rate, and, I think, though the equalisation rate is difficult, it would get out of something there. In the same way, it is to the interest of every London borough to put its assessment a little bit lower than that of its neighbours, so as to escape the burden of the central expenditure. There is this temptation in the way of every borough. There is not at the present time, and there was not at the last quinquennial valuation, the uniformity there used to be, and if that goes on for the quinquennial valuation of 1931, there may be a very considerable effect on the rates.
For all these reasons, and other reasons I have not mentioned, most of us who watch London rates carefully are very anxious that the Minister should complete his work. But he held out no hope at all. I do not know what assurances London can give him beyond the cry of "Kamerad!" which the borough councils and County Council put up when they said that they would not object to anything with regard to the disputed points in the last Bill. I ask the Minister whether he cannot add something to what he said in his introduction, and will hold out some hope that before 1931 we shall have the Rating and Valuation Act applied to London in its entirety. He said he would try in 1926. He said he hoped to do so in 1927, and he said that almost certainly he would get it done in 1928.
§ Miss LAWRENCE
We shall be in then. I do not know that the Minister can promise anything about 1930. I ask him to undertake to fulfil his promise, so as to get the Act in force before the quinquennial valuation of 1931. I do not very much want the time of my Front Bench occupied with a very formal Measure when we are in in 1930 and when we shall have our hands full. In any case, it would be manifestly improper to ask the Minister to pledge himself beyond the existence of the present Parliament, and I would ask him whether he cannot hold out any hopes that he will carry out what the County Council and borough councils asked for in 1925.
§ Colonel VAUGHAN-MORGAN
I am quite sure that the House listened with interest to the explanation of the Bill given by my right hon. Friend. It is not so much that I have, personally, any disagreement with him with regard to the contents of the Bill, but I regret that it does not deal with certain matters of a more comprehensive character, which those of us who took an active part in the Committee stage of the 1925 Bill certainly had ground for hoping would be matters for legislation at an early date. I do not agree with the hon. Member who has just sat down, that no London Member could have any case for presentation of any alternative point of view from that which might be held by the Metropolitan Boroughs' Standing Joint Committee and the London County Council. Personally, I have a point of view in regard to London rating and valuation which, I think, is shared, if not by the whole of the metropolitan boroughs, certainly by the great majority of them and by the London County Council, and it is certainly a matter of disappointment to myself that there is no provision in this Bill which tends at all to advance the day when London shall have the advantage of separate valuations and thereby enjoy the benefits now at the command of the rest of the country.
That is a point on which I have no hesitation in expressing my own personal regret, and no doubt my right hon. Friend, when he comes to answer some of the questions which have been put to him, will give the House a reason for 849 his inability to introduce a Measure at this moment, or to include in this Measure provisions of that character. I think nothing could more rapidly advance the provision of uniformity over the whole country as uniformity in that essential principle, that there should be a separate valuation for rates and taxes, and that the act of 1869 should no longer be the governing factor in the Metropolis as it is to-day. As a London Member, and as one who took some active part, as I say, in the Committee stage of the Bill of 1925, I would like my right hon. Friend to give us some assurance, if possible, or at any rate, some enlightenment, on the difficulty or the circumstances which preclude him from including in the Bill this great question of uniformity as applied to valuation, in view of what I believe to be the practical unanimity of the London boroughs and the undoubted unity of the County Council. Perhaps my right hon. Friend will be good enough to deal with that point when he comes to answer. May I ask whether he will also give the House such assurance as he can in regard to the prospects of a comprehensive Bill which shall deal with the question of rating and valuation for London on a thorough and comprehensive scale?
§ Mr. GATES
I am afraid that I agree with neither of the last two speakers, but as one who has had 30 years' experience of London government, including 15 years as chairman of an assessment committee, I can say that the one thing we did appreciate in London was the benefit conferred by the Valuation Act of 1869, in its three fundamental principles—one single valuation for both Income Tax and rating purposes, a new valuation list every five years, and that valuation list conclusive for five years and to be amended only under certain specified conditions. Those three cardinal points, which were laid down by the Act of 1869, were of undoubted advantage to all ratepayers. Ratepayers knew where they were. They had one assessment for Schedule A and for rating purposes. They knew that their valuations, subject to structural alterations or anything special turning up, stood for five years.
I think that the hon. Member for East Ham, North (Miss Lawrence) did not quite represent the situation from the London point of view, as it was when the Minister brought in the Bill of 1925. 850 The original Bill, if I remember rightly, was to establish a single valuation for the whole of the country, and that was an idea which, of course, commended itself to representatives of London, because it was a copy of what had been in force in London for 60 years. In the 1925 Bill it was coupled with the giving to a Revenue officer of an exceedingly powerful position in dealing with local assessments. The representatives of country districts quite naturally thought that they had had quite enough of Revenue officers and did not want one to be interfering in assessment matters. It was only because of the single valuation that the London boroughs gave that Bill a certain amount of support. But they did say that there were many things which might with advantage be applied to London, provided that the Bill did not entail the application to London of other provisions which would be either unnecessary or objectionable. When they found, as the rest of the country did, that the Bill gave enormous powers to Revenue officers, they were immensely relieved that the Minister, in consequence of the opposition that was given, dropped the Revenue officer and excluded London from the Bill. They welcome the Bill which has been laid before the House with such clearness this afternoon.
I am empowered to say, I think on behalf of all the boroughs and Metropolitan assessment committees, that they appreciate the way in which this Bill has been drafted. In the main it does meet their views. Of course, I am sorry that in this case the views of the Metropolitan boroughs do not coincide with those of the London County Council, but, after all, it is the Metropolitan boroughs who do the work, who appoint the assessment committees, and collect the money, and upon whom are levied the precepts of the London County Council. I submit that the views of the borough councils and the assessment committees on matters of rating are of infinitely greater value than are those of the London County Council. I am glad that the Minister has paid more attention at the moment to the views of those who are more capable of judging.
With regard to the rating of machinery, the Minister carries out the promise that he made to the Metropolitan Standing Joint Committee. It would indeed be inequitable if certain fixed machinery 851 were exempt from rating in the country and were not exempt from rating in London. I do not agree with the hon. Member for East Ham North that to carry out these exemptions in practice need occupy a long time or great expense, either for the ratepayer or the rating authority. I think the work could be carried out in a comparatively short time. With regard to the question of the exemptions from gross to arrive at rateable value, I should imagine it must be plain to anyone that the exemptions in the case of house property in London would naturally be more than they would be in the country. There must be a much larger wear and tear of property, what with the acid in the air and the greater amount of traffic, and it is only fair and right that there should be a slightly larger measure of exemption. The exemptions that the Minister has put into the Bill are those which meet the views of the assessment authorities for whom I believe I am speaking on this occasion. As regards compounding, equally again that is quite satisfactory to the assessment committees:The rate shall be 10 per cent. of the amount payable, or such greater percentage, not exceeding 15 per cent. of that amount, as the rating authority may by resolution determine.There is one point on which I am not certain. As the central valuation authority was set up under the 1925 Act to apply to the country, London was exempted from the provisions of the 1925 Act. If that is so, is London subject to the advantages or disadvantages of dealing with the Central Valuation Committee? At the present time each borough makes its own valuation. There is as a rule, before each quinquennial valuation, a meeting of all the authorities sitting at Westminster City Hall, followed as a rule by a joint conference, called by the London County Council, of their representatives and the representatives of assessment authorities. I should doubt whether the Central Valuation Committee will operate or has any need to operate in London. There is only one other point that I ought to mention. The hon. Member for East Ham North hinted that the gross valuations of Westminster might be tightened up.
§ Miss LAWRENCE
No. I said I particularly took what Westminster might do because there was no suspicion of anything of the kind with regard to the valuation of Westminster.
§ Mr. GATES
I am much obliged to the hon. Member for that explanation, for I understood her differently. As the hon. Member knows, the assessment committees in London have the advantage of sitting with the Inspector of Taxes. He sits not only with the rating committee but with the assessment committee, and the co-operation of the two is very useful in preventing any under-assessment. I have in my hand the figures for the assessment appeals of 1927, and these show that there were in Westminster 37,000 assessments and only 164 objections by the Inspector of Taxes. Thirteen of these cases were withdrawn by the Inspector, 50 of the gross figures were increased by the assessment committee, and in 101 cases the figures were confirmed. That shows that every care is taken by the City of Westminster authority to deal fairly with the very large assessments that come before that committee. I desire to express once again the thanks of the Metropolitan Standing Joint Committee and the assessment committees who have to do the work in London for the consideration that they have been shown at the hands of the Minister of Health.
§ Mr. RYE
I am glad to take this opportunity of thanking the hon. Member for East Ham North (Miss Lawrence) for her references to the City of Westminster and its method of assessment. I do not suppose anyone has ever suggested that the City of Westminster has faked or ever would fake the assessments, but it is very satisfactory to find coming from the benches opposite recognition of the excellent work done by the assessment committee of the City of Westminster. I am not going to suggest that there are offenders in any of the other boroughs. I hope there are not. Certainly those who represent Westminster can say that on no occasion has it wilfully reduced assessments so as to avoid payment to the authorities to whom contribution has to be made. The figures given by the hon. Member for North Kensington (Mr. Gates) bear out everything that the hon. Member for East Ham North said with 853 regard to Westminster. I was interested to hear the reference made by the hon. Member for North Kensington on the subject of deductions, and his suggestion that there should be a substantial reduction for the wear and tear of London properties. The hon. Member referred to the damage that is done by the traffic in London. I do not think that the schedule of deductions deals with that point, and I hope that the Minister will at some future time take that matter into consideration and see that an adequate allowance is made for the undoubted damage done by traffic in London. In certain parts of London the streets are very narrow and the lorry traffic is extremely heavy. It is within my own knowledge that in a street adjacent to Regent Street a number of houses, admittedly old, have become in a dangerous condition, and there is every reason to believe that that condition has in the main resulted from the heavy traffic in the street. I hope, therefore, that at some future time that fact will be recognised and that adequate allowance will be made to the owners of such property. I do not think it is fair to leave the position as it is now and to allow houses in effect to be disintegrated by the very heavy traffic that passes.
I would like to have an explanation from the Minister of Clause 4 of the Bill. A few nights ago I was present at a public dinner at which, in the presence of two of His Majesty's Judges, I heard a very distinguished gentleman who is connected with rating, and on whose opinion I believe the Minister places considerable reliance, say that the draftsman of this Clause was either a madman or a bureaucrat. I thought it my duty to bring that statement to the attention of the right hon. Gentleman and to ask him what is the meaning of this Clause. The side note to the Clause is:Decisions of doubtful points of law.What does that mean? Does it mean that before any question arises between a rating authority and a ratepayer, the Minister for the time being can, in effect, issue an originating summons and go to the Court in advance to settle a point of law? If it means that, then it is a novel principle, and I am not sure that it is not a very dangerous one. I can 854 understand the usual course, by which if either the ratepayer or the rating authority is dissatisfied with the decision of a point of law, an appeal is made. But here, apparently, in advance, and without waiting for anything to be done, the Minister is to be allowed to go to the Court and ask for the decision of the Court. As far as I know that principle has never been introduced before in the history of this country. I hope, on the other hand, it does not mean that when there has been a decision, from which in the ordinary way an appeal would be lodged by the dissatisfied party, that the dissatisfied person or authority, as the case may be, is not to be in a position to lodge an appeal in the ordinary way but that the Minister is to go above the heads of the parties and take the decision of the Court.
The only other point to which I wish to refer is the question of deductions as applied to the owners of short leasehold premises. It has always seemed to me that those who own short leasehold property—I am referring of course to London—and who have to pay their Property Tax on Schedule A, on the gross assessment, are in reality paying tax on part of their capital. I had hoped that some provision would have been made in this Bill to deal with the question, and I hope that on some future occasion such provision will be made in order to do away with this anomalous and unfair position. If one buys a leasehold property held for a term of, say, 14 years, then year by year during that period one is paying away a tax upon one's capital, because, obviously, whoever purchases not only wants a reasonable percentage return on his money but must get back year by year, by way of redemption, capital to replace the money which he has put into the property. I should have thought that in this schedule of deductions, some special allowance would have been made for a case of that kind. The question of course does not arise outside London, but it arises in London, and, there again, as in regard to other matters, I hope the Minister will one day see that that unreasonable and unfair position is abolished. If the right hon. Gentleman is able to give the House an assurance on that point I, for one, shall be very grateful.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood)
My task this afternoon is a very light one, and I think these proceedings will be remembered at least for the fact that the hon. Member for East Ham North (Miss Lawrence) is, I think for the first time in this Parliament, in agreement with my right hon. Friend the Minister of Health. The hon. Member is not only in agreement with my right hon. Friend with regard to the provisions of this Bill, but, what is more remarkable still, the hon. Member for East Ham North desires that the provisions of another Measure which my right hon. Friend introduced and which is on the Statute Book, should be applied to London. I am sure that must be very gratifying to my right hon. Friend the Minister of Health. As many of my hon. Friends know full well, when the original Measure was introduced, provision was made for London. I have no wish to comment on the circumstances in which London came out of the Measure, or to go into the varying points raised and the varying attitudes taken from time to time in connection with that important matter. The fact remains that it was at the request of London that London was not included, and to-day we are confronted with the fact that, when there is very little Parliamentary time available, certain Members representing London Divisions are asking for an extensive Bill for London, but I note that my hon. Friend the Member for North Kensington (Mr. Gates), as anyone would expect who has been dealing with this subject, is expressing the contrary view and is saying that, at any rate from the point of view of the metropolitan borough councils, this Bill is satisfactoy, and that he does not want any more.
§ Mr. GATES indicated assent.
§ Miss LAWRENCE
Is it not true that the representatives of the Metropolitan borough councils have offered to allow the Minister to decide on all the points at issue, and have repeatedly expressed their desire for a Bill?
§ Sir K. WOOD
I believe that statement has been made, but it shows how difficult it is to rely upon such statements 856 in a matter of this kind. It is not that I question, for a moment, the statement which was made on behalf of the Metropolitan borough councils, but the hon. Member for East Ham North asks us to rely upon a bargain of that sort in bringing in a big Bill relating to London. How can we rely on the assurances of the London County Council and the Metropolitan boroughs that there will be no controversy if a Measure of that kind is introduced? How can we confidently accept the view that no Members of this House will rise to say anything about the matter if such a Measure is introduced? We have a striking example of the difficulty of such a situation in the speech of the hon. Member for North Kensington this afternoon. He says that he is going to place his views before the House, and I believe that a good many other hon. Members would do likewise. While it may be true that the two authorities, namely, the London County Council and the Association of Metropolitan Boroughs, have come to some understanding such as that indicated, I do not think it can be accepted that every Member in the House will remain silent if legislation is introduced. That is my own experience, and therefore, as far as this particular matter is concerned, the House will see that it would be quite impossible at this stage in the Session to introduce a Bill which would mean the amendment of some two-thirds of the Sections of the Act of 1925, and would obviously take up a considerable amount of time.
While it may be true that both parties are agreed on the matter to the extent which has been indicated, it is useless for us to attempt to disguise the fact that there are considerable divisions of opinion on matters of principle. That circumstance ought to be recognised, and I think that is a very good answer to the hon. Member for East Ham North, who is now reproaching us for not dealing with London. It may be that London will be able to come to a real agreement and, in that event, my right hon. Friend the Minister would then be in a position to consider the matter once again. It may be that in another Parliament, my right hon. Friend will be able to do something for London. But at any rate, the first Clause of this Bill provides for the application of Section 24 of the principal Act to London, and, as far as that is 857 concerned, it gives London the same benefit as has been given elsewhere. That is done in pursuance of an undertaking that was given by my right hon. Friend, and I hope that the first Clause of the present Bill will be found to fulfil his pledge. My hon. Friend the Member for North Kensington asked a question about the Central Valuation Committee. As he knows, that is a purely advisory body in the first instance. It was set up by an Act which did not apply to London, but I believe on the committee there are two members from London or with London experience, and if any of the recommendations of that committee are found to be applicable, they can be applied to London in the same way as to the provinces. There is no obligation on anyone to accept the views and opinions of the Central Valuation Committee. It is, as I have said, purely an advisory body, and both London and the provinces can take its advice if they care to do so.
In regard to the points raised by the hon. Member for Loughborough (Mr. Rye), the last one is a Committee point. This is a temporary Bill, and the matter to which the hon. Member has quite rightly drawn attention is rather matter for permanent legislation. In any event, it is a matter which we can, if necessary, discuss when we take this Bill in Committee. The only other point on which I was asked to give information was as to the explanation of Clause 4 of the Bill, which deals with decisions on doubtful points of law. One of the express objects of the Rating and Valuation Act of 1925 was to promote uniformity in the valuation of property for the purposes of rates, and in furtherance of that object the Act made provision for the constitution of the Central Valuation Committee. That Committee consists mainly of persons who have been nominated by the five chief associations representing local authorities. There arises from their deliberations a situation which this Clause is designed to meet. There are a number of points with regard to which practice differs materially in different parts of the country, the diversity being due in some cases to different interpretations which have been placed upon some of the statutory provisions. No one knows better than my hon. Friend that appeals against 858 decisions of assessment committees are liable to go to Quarter Sessions, and that the decision of one Court of Quarter Sessions on a point of law is not binding upon another Court of Quarter Sessions. As a rule, in all these cases the amount involved is not sufficient to induce either the ratepayer or the assessment committee to carry the matter to the High Court and obtain an authoritative decision which would be binding on all Courts of Quarter Sessions.
The Central Valuation Committee have urged us—I think with great force and justice—that if real progress is to be made towards uniformity in valuation, the provision of some simple procedure for obtaining the decision of the High Court upon doubtful points of law is essential. This Clause enables the Minister to state a point of law in the form of a case for the opinion of the Court, and, as the hon. Member has asked for precedents, I refer him to three precedents in which provision on somewhat similar lines is made, namely, Section 29 of the Local Government Act of 1888, Section 70 of the Local Government Act of 1894, and Section 29 of the London Government Act of 1899. Under this Clause, the Central Valuation Committee are empowered to argue in favour of the view which they consider to be correct and, in order that the case may be argued on both sides, they can contribute to the costs of any person or association who may desire to submit the contrary view to the Court. By this means, neither the ratepayer nor the authority is put to any expense. The rights of any individual ratepayer or assessment committee to go to Court on any point are in no way involved. Access to the Courts always remains open to them. This provision will, I think, prove to be a valuable means of obtaining decisions concerning matters on which there is diversity of opinion from time to time, and should be a valuable addition to the provisions relating to rating and valuation. May I thank the House for the reception they have given to this Bill and express the hope that it will do something to assist the law and practice in relation to this important matter.
§ Question put, and agreed to.
§ Bill read a Second time, and committed to a Standing Committee.