2829 STANDING COMMITTEE ON SCOTTISH BILLS. Thursday, 1st July, 1926.

[Sir CYRIL COBB in the Chair.]

RATING (SCOTLAND) BILL.
[OFFICIAL REPORT.] CLAUSE 8.
—(Apportionment of expenses of-district boards of control, &c.)

(1)The apportionment of expenses of a district board of control under Section fifty-four of the Lunacy (Scotland) Act, 1857, as amended or applied by any subsequent Act or under Section sixty-two of the Prisons (Scotland) Act, 1877, upon the landward parts of counties and upon the burghs respectively within the district of such a board shall, except in the case of the first year after the commencement of this Act, be according to the rateable valuations in the valuation roll of the lands and heritages within such landward parts of counties and burghs respectively insteal of according to the real rent or the total value of the said lands and heritages in terms of the Lands Valuation (Scotland) Act, 1854, and the sums apportioned as aforesaid and the sums apportioned in the case of the first year after the commencement of this Act under the provisions of the said Acts upon the landward parts of the counties and upon the burghs shall annually on or before the fifteenth day of July be certified to the rating authorities of the counties and the burghs respectively.

  • The rating authority shall as they collect the rate applicable to the expenses of the district board, pay it over to the district board of control up to the amount specified in the certificate, or where the rate is also applicable to other expenses pay over to the district board up to the amount aforesaid as they collect the rate the proportion thereof applicable to the expenses of the district board, in either case at such times as the rating authority and the district board may agree and failing agreement as the Secretary for Scotland, after consultation with the General Board of Control for Scotland may determine, and so far as the amount specified in the certificate has not been paid over by that time the rating authority shall annually on the fifteenth day of April pay over the balance to the district board, notwithstanding that it has not then been collected.
  • 2830
  • Sections fifty-four and fifty-five of the Lunacy (Scotland) Act, 1857, and Section sixty-two of the Prisons (Scotland) Act, 1877, shall have effect subject to the provisions of this Section.
  • For the purposes of this Section a district board of control shall not include a parish council acting as a district board of control.
  • Major STEEL: I beg to move, in Sub-section (2), to leave out the word "fifteenth" ["on the fifteenth day of April"], and to insert instead thereof the word first." The object is simply to postpone the date on which the rating, authority pays its final instalment from 15th April to 1st May.

    The LORD ADVOCATE (Mr. William Watson): This and the next Amendment really correspond to one already accepted and given effect to in an earlier Clause.

    Amendment agreed to.

    Further Amendment made: Leave out the word April, "and insert instead thereof the word May."—[Major Steel.]

    Clause, as amended, ordered to stand part of the Bill.

    Clauses 9 (Abolition of average rate) and 10 (County councils not to assess in police burghs) ordered to stand part of the Bill.

    Clause 11.
    —(Burial grounds to be liable for rates.)

    Section one of the Rating Exemptions (Scotland) Act, 1874 (which contains provisions whereby churches and certain other lands and heritages are not liable to local rates), shall cease to have effect in the case of ground exclusively appropriated as burial ground where such ground belongs to a local authority or to a company or persons selling the exclusive right of burial in lairs therein, and Section three hundred and seventy-three of the Burgh Police (Scotland) Act, 1892 (relating to exemptions and savings), shall have effect as if the provisions of this Section had been in operation at the commencement of that Act.

    Mr. STEPHEN MITCHELL: I beg to move, after the word "effect" [shall cease to have effect"], to insert new paragraphs: "(a) as regards local rates payable by owners in the case of any church, chapel, meeting house, or premises exclusively appropriated to public religious worship in respect of which the owner receives rent 2831 therefor and does not himself occupy such church, chapel, meeting house, or premises; and (b)as regards local rates payable by both owners and occupiers." As the Clause now stands, proprietors who let shops and other buildings for the purpose of meeting houses are not liable to rates and taxes. We have many examples of this in my county, and we think it is unfair that proprietors who let these houses and properties from which they derive profits or rents should not pay local taxation. We do not suggest that the people who occupy these rooms for the purpose of religious meetings should pay local rates, but we certainly think that the proprietors ought to pay.

    The LORD ADVOCATE: We propose to accept the Amendment. There does not seem any reason why an owner who is not using his property for religious purposes himself, but is letting it for a rent and making a profit out of it, should get the benefit of an exemption which is given to people because of the religious and other uses to which they are putting the building. The owner, really has nothing to do with the religious use at all. He draws rent for his property, and there seems no adequate reason why he should escape the rates.

    Amendment agreed to.

    The LORD ADVOCATE: I beg to move, after the word "therein" ["right of burial in lairs therein"], to insert the words or trading as cemetery owners for profit." This is a drafting Amendment to make sure that we cover all the cases we really want to cover. There is one case where a company have ceased to sell the exclusive right of burial in lairs, but are still trading for a profit, and forty years after the last burial the ground will revert to the company, and they may again begin to sell the right of burial. We think it is right that that company, in so far as it is making a profitable use of the subject, should be subject to rating.

    Amendment agreed to.

    Sir WILLIAM ALEXANDER: I beg to move, at the end of the Clause, to add the words "Provided that the foregoing Sub-section shall- not apply to a burial ground the profits 2832 derived from which form part of the income of an incorporation, institution, or trust for charitable or benevolent purposes and whose income is applied to such purposes."

    The LORD ADVOCATE: I am afraid we cannot accept this Amendment. It is a somewhat novel proposal, and I should have expected to get some reason for it being put forward. The Glasgow Trades House, which occupies a very valuable portion of the subject in Glasgow for the purpose of a necropolis, makes a profit by selling land. It is true that, having made a profit and got an income, I believe it applies that income to charitable purposes, but it is an entirely novel suggestion in the law of rating, as distinct from the law of Income Tax, that the purpose to which you apply the income you derive from the property gives a ground for exemption at all. All the existing exemptions, total or partial, so far as I know, are given on the ground of the use to which the subjects themselves are put, and if we were to admit this exception, we should not only let in an entirely novel doctrine in the subject of rating exemption, but we should also at once raise the question of many other institutions which do not get exemption at present—a good illustration is infirmaries—and whose exemption really rests on their use of the buildings and not on their application of the income which they derive from the subject. Therefore, however gladly one may welcome the application of the income after it is earned, we cannot possibly accept the Amendment.

    Sir ROBERT HORNE: I hope the Lord Advocate will not finally shut his mind to this proposal. I think there is a much better case than he is admitting for such institutions as the Glasgow necropolis. The situation, as I understand the law, is that cemeteries have been hitherto free from rates, and this Bill proposes to bring within the purview of assessment subjects which were previously exempt. It is obvious that there is no unfairness in rating cemeteries which are used entirely for the purpose of profit for the shareholders. That is a necessary alteration of the law. At the same time it would have been going far enough if the Bill had rated those that are used for public property, and, on the other hand, exempted those that are not being used for the purpose of 2833 making dividends. The position of the Glasgow necropolis is exceptional in this respect, that it was instituted by the Merchants' House of Glasgow, which had a private burying ground for a long space of time. It is true they make sometimes a profit, and very often a loss out of the use of those premises, but all that is made is devoted to purposes of public charity. I do not think I can accept the view of the Lord Advocate that it has never been the practice in the past to exempt anything from rating on the ground of the destination of the profits that were made. I understand there may be difference of opinion about that, but at least this principle has been recognised, that charitable institutions have been free from rates, and accordingly, whether I am right or wrong in disputing the Lord Advocate's statement, it does not seem to be any strain on that principle to say this is not to be regarded from the point of view of the actual use to which the subjects are being put, but we might at the same time take into account the destination of any profits derived from these institutions. Accordingly, while not pressing the matter to a vote at the present stage, I ask the Lord Advocate to take what I suggest into consideration, and perhaps by the Report stage he will be ready to give it a more sympathetic view.

    Mr. COUPER: I wish to associate myself with the Amendment. The necropolis occupies a unique position among the burying grounds in Glasgow and the neighbourhood and is not in any way associated with profit, but the results are applied entirely for the benefit of charity. There is a strong feeling in this connection that the necropolis should be treated on a special footing, and I appeal to the Lord Advocate to give the matter more careful and kindly consideration.

    Mr. MACQUISTEN: The novelty is putting a tax on people who have not had it before. Naturally, it is not a novelty to suggest that these people should be exempt. It is a novelty to impose rates on this cemetery.

    Mr. SULLIVAN: I hope that the Lord Advocate will not be misled by the arguments from certain quarters. I also wish him to note that the right hon. Member for Hillhead (Sir R. Home) 2834 admitted that they may have made profit, although they sometimes made a loss. We have been hearing about profits and losses, and I have a great amount of suspicion in regard to these. It would be unfair to give special treatment to some particular place in Glasgow while we are legislating for places outwith the City of Glasgow.

    The LORD ADVOCATE: I really cannot accept this Amendment. Under this Clause, local authorities' cemeteries are being rated, although they do not operate them for a profit. Under what is proposed, the local authorities would have to scrutinise the balance sheet and see if they have applied profits to charity. I do not know a case in which local authorities have to do that. Under Income Tax, that is quite familiar, and there you have got to see how income is spent, but I cannot see any reason for this in the case of local authorities. The Dunedin Report says: "We think that the origin of the exemption of churches and churchyards is to be found in the position of the national churches and churchyards, where really there was no one to tax. It was natural that, when the idea of the exclusive rights of the Established Church was no long paramount, to extend the exemption to the churches and churchyards of other denominations; but there was no justification for allowing other properties, because they answered to the description of the burial ground, to share in the exemption. We see no reason why cemeteries conducted as profit-making concerns or owned by public authorities should continue to be exempt from assessment. Both should be assessed on the same principles as other subjects, allowance being made in valuation for the exhaustible nature of their asset. We consider further that the exemptions should not be extended."

    Sir W. ALEXANDER: Having made our protest, we are willing to withdraw this Amendment.

    Amendment, by leave, withdrawn.

    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 12.
    —(Rateable values of certain classes of lands and heritages.)

    (1)Subject to the provisions of Subsection (2) of this Section, the annual value of the lands and heritages set out in the first column of the First Schedule to this Act shall, for the purposes of all rates leviable under any public general Act except as otherwise specified in the said Schedule, be held to be the gross annual value of the lands 2835 and heritages, subject to deduction of the percentage thereof set out in the second column of the said Schedule opposite to the lands and heritages to which it relates, and the provisions of any public general Act inconsistent with the provisions of this Subsection shall cease to have effect but nothing herein contained shall be deemed to affect the provisions of Section two hundred and thirty-three of the Burgh Police (Scotland) Act, 1892.

  • The provisions of the foregoing Section shall apply for the purposes of all rates (other than water rates) leviable under any local Act, and of all rates leviable under any public general Act with respect to which special provisions are made in any local Act, subject to such exceptions, modifications and adaptations as may be prescribed with respect to any such rate by Order made by the Secretary for Scotland on the application of the authority by whom such rate is leviable, and the provisions of any local Act inconsistent with the provisions of this Subsection and of any such Order shall cease to have effect.
  • The Secretary for Scotland may, on the application of an authority having power to levy a water rate under- a local Act, by Order, direct that the provisions of Sub-section (1) of this Section, shall apply for the purposes of such water rate subject to such exceptions, modifications and adaptations as may be prescribed in the Order, and such water rate shall be levied subject to the provisions of the Order.
  • Save as otherwise provided in any local Act, if the amount of the rateable value of any lands and heritages in a county includes a fraction of five shillings, the amount of the rateable value shall be increased or reduced as the case may be to the nearest complete five shillings, or if the fraction is two shillings and sixpence the fraction shall be disregarded.
  • The provisions of any Act under which a rate is to be charged in equal proportions to owners and occupiers or to be equally divided between owners and occupiers or to be leviable from owners and occupiers in equal proportions shall be deemed to be complied with in the case of agricultural lands and heritages if an equal rate per pound is levied upon owners and occupiers.
  • Nothing in this Section shall affect the total exemption from rates of any lands and heritages.
  • Mr. W. GRAHAM: On a point of Order. May I ask, for the guidance of the Committee, for a ruling on the Amendment to leave out Sub-section (l)? This Clause, in the opinion of many of us, raises by far the largest problem in the present Bill, and I venture to suggest that if we could take our discussion on the present Amendment, raising the large general issue, that would in the long run be a real economy of time.

    2836

    The CHAIRMAN: Yes, I think that would appear to be the best way, if the Lord Advocate agrees.

    The LORD ADVOCATE: Yes.

    Mr. GRAHAM: I beg to move, to leave out Sub-section (l). I think all members of the Committee, whatever view they take of this Bill, will agree that this is by far, and in many respects, the most important Clause in it, for it raises the whole question of deductions from the valuation for the purposes of local rating. When this Measure was under consideration during Second Reading in the House, we recalled the fact that this went back to Section 37 of the Poor Law (Scotland) Act, 1845, under which certain deductions from gross valuation were given for the purposes of the poor rate—for the purpose of repairs, maintenance, and other outlays on the property. The Committee will recall that it was indicated that, right from that date, there had been a growth of this practice of deduction. A very considerable amount of deduction from gross valuation from rates has been given under various local Acts of Parliament, and the practice of the Poor Law and the parish councils themselves, in the matter of deduction for poor rates, has been of an almost infinite variety, and has led to a vast amount of expensive litigation of all kinds, and anomalies in the rating of property. Now the Committee has to decide this morning whether it is going to stand by the plan recommended by the Dunedin Committee in this matter, or whether it proposes to fall in behind the Government. I do not think there can be any doubt that the ideal course is to proceed upon the gross valuation and to give effect to that recommendation of the Dunedin Committee. The argument which was employed at one time was that these properties, which are very largely business properties, do not derive anything like the benefit from the expenditure of local authorities that other properties derive. For all practical purposes, they get the benefit of the expenditure of the local authority and they ought to make the appropriate contributions to the local rate. The principle which is very widely, almost universally, adopted is that this is a duty and a burden on the whole of 2837 the locality, and that this class of property must make its contribution on a proper basis along with the others. There is another reason why we should strongly support an Amendment of this kind, which is designed to raise the whole question quite clearly. If any exemption or privilege is going to be given to this class of property in respect of maintenance, or depreciation, the concession should be given to the undertaking under Income Tax practice. The Royal Commission on Income Tax laid down a programme for the express purpose of dealing with depreciation, repairs, obsolescence, and the rest, and it is under a heading of that kind that the true remedy should be found. The Dunedin Committee made it perfectly clear that the proper system was to place local rates upon gross valuation, and they only added the second proposal in case the first scheme was not adopted. The Lord Advocate, during the Second Reading of this Bill, apparently founded himself on the second part of the Dunedin Committee's recommendation—that if you do not apply the local rates to gross valuation, you should fall back upon some schedule or scheme of unification in treating the different classes of property. That, apparently, would be pleaded by the Lord Advocate in defence of the Schedule to this Bill, but that does not entitle any Scottish Member to fly away from the leading and plain recommendation of the Dunedin Committee. I do not think I need further argue that part of the case. Undeniably if we experiment with any other course, we land in a mass of anomalies. The only possible basis is this gross valuation. Let us turn to some of the objections which will be alleged by hon. Members to this course. During the Second Reading the hon. Member for Linlithgow (Mr. Kidd) said that you will impose a most heavy burden on certain classes of industrial property, because you will withdraw the deductions which they enjoy at the present time, and you will make it more difficult for them to compete in the distressing times through which the country is passing. That may be true from some points of view, but the fact remains that the aggregate amount has got to be arranged from the local rates and that you do not meet that situation by giving a benefit or concession to this kind, or any 2838 class, of industrial property. Moreover, you will land yourself in this, that there are certain other classes of property which are exposed to the same difficulty and which will get exemption under this Schedule, but which get no concession at this time, and are freely exposed to the industrial difficulties through which the country is passing. This property gets no deduction, but they make a contribution to the rates which is higher because of the concession and exemption given to property in this Schedule. From the strict point of view of business, there can be no real defence for a device of this kind. May I repeat what I said about Income Tax—that your real remedy is in that sphere and not in the sphere of local rating at all. These are some of the reasons which have led us to put this Amendment on the Paper. There are other difficulties to be taken into account. There are, in fact, the exemptions which local authorities themselves enjoy for certain classes of property. We have now arrived at a substantial agreement that a thing like sewers should not be taxed. They have been taken outside the range of Income Tax, and we think they should not be rated for local purposes. They are necessary services of public health; they are obviously a burden, and in no sense a profit-producing thing at all, and they should be kept clear of burdens of this kind. When it is a mere case of a cross-entry in the books of the local authorities, there can be no particular point in imposing taxation, and your problem of exemption tends to disappear. That, I think, can be laid down as a broad principle for the clearly onerous class of property of local authorities. But where you have a local authority which is running an undertaking in competition with ordinary business, then, so long as the present industrial system obtains, it is only fair that you should put that class of property on the same basis for Income Tax and local rates. That, I think, is a proposition no one would deny. For all practical purposes, as the Chancellor of the Exchequer argued on another occasion in the House of Commons, you are, by a device of this kind, giving a certain bonus or subsidy to some properties at the expense of others. It is our duty to take the step 2839 which is clearly the intention of the leading part of the Dunedin Committee's Report. It may be said that I have raised a very large issue, and that industrial conditions are not propitious for such a change, but this is a Bill dealing with rating in Scotland, and, even if we take the most optimistic view of the volume of legislation we are likely to get in the future affecting Scottish conditions, it is clear that it will be a long time before we have another rating measure. Are we to lose this opportunity of dealing with the problem, which has been present to the minds of all the Committees which have dealt with this matter, and which can only be solved by taking gross valuation for the purposes of local rates?

    The LORD ADVOCATE: We always listen to the right hon. Member for Central Edinburgh (Mr. W. Graham) with very great pleasure, but he has produced no argument that was not submitted, as far as my recollection goes, on Second Reading, and I hope he and the Committee will forgive me if I content myself with very brief remarks. The Royal Commission which reported in 1902 was very clearly in favour of the course which we have taken in this Bill. The Dunedin Committee in their Report, published in 1922, recommend, in their fourth conclusion, that Section 37 of the Poor Law (Scotland) Act, 1845, should be repealed and all rating placed on gross valuation, and, failing this, that the deductions permissible to parish councils under that Section be fixed on a .uniform scale by a central authority. In their fifth conclusion, they recommend that differential rating, applicable to burgh rating, under which certain properties are assessed on 25 per cent. of their annual value, is only permissible for "beneficial" rates. So they did not go for clean gross valuation. But we have something more recent than that. We have the Report of the Committee on Machinery and Plant which came out last summer, in which the Committee say: "We do not consider it necessary to express any definite opinion as to the theoretical desirability of the first of these proposals. We feel that in the present state of industry it is now, and probably will be for many years, impossible to adopt this course without imposing an intolerable burden upon many industries whose plant and machinery are costly to repair." 2840 If the right hon. Gentleman had gone on and taken out figures to show what the shifting of the incidence would cost to the various classes of ratepayers, I think he would agree that, briefly speaking, the most important changes would have been a very large lightening upon houses and shops and a pretty large increase in the burdens upon industry. I do not know if he contemplated that the agricultural rating relief should be abolished altogether; that would make a big shifting of the incidence; but, in view of the striking recommendation of last year's Committee and the previous history of the subject, we have felt bound to take the practical method, and the wise method, according to the Royal Commission, which is, rating on the net valuation with a system of fixed deductions in place of the variable deductions under the Poor Law Act of 1845.

    Mr. W. M. WATSON: I support the Amendment. This is undoubtedly the most important and vital part of the Bill, and I am disappointed at the attitude of the Lord Advocate, because I would have expected that, in a new Rating Bill for Scotland, an attempt would have been made to have a uniform system all over the country. If it be argued that certain interests are to be adversely affected by this Amendment, the same arguments could be applied to burgh and county rates. Why should there be a difference between burgh and county and parish rates? There is no deduction given with respect to county or burgh rates, and it is difficult to see how the Government can justify a system of deduction for parish rating. The deductions made by parish councils in the past and claimed by certain interests have become a perfect scandal in Scotland. While I agree that this Bill will wipe out a considerable number of anomalies that have arisen recently, still, it is going to leave certain industries in not as favourable a position as others. If it be argued that agriculture requires a deduction of 75 per cent., what are we to say about mining, which is given a deduction of 5 per cent, in the Schedule? It will be agreed that mining is a distressful industry, and I think it has as much right to a 75 per cent, deduction as agriculture. If equity is observed, there should be something like uniformity, and the only way to get rid of anomalies is 2841 by adopting this Amendment. If this Bill be passed as it stands, we shall have fresh trouble so far as rating and deductions are concerned. You will have pressure brought to bear upon Parliament for increased deductions because of the state of industries at certain times.

    Sir ALEXANDER SPROT: As I understand it, this Amendment would do away with deductions altogether, and I think we ought to support the Lord Advocate and leave the process of valuation as it is in the Bill. I have been for a long time a member of a county valuation committee, and I have consulted those who are well up in those subjects, and we have agreed that the deductions proposed in the Schedule will, on the whole, produce a very fair and equitable system. In the English Act there are deductions to a much larger extent than in this Bill. I do not mean that the English system is better than ours—very far from it—but valuation in England is subject to deductions, and it would be putting a handicap upon industry in Scotland if we did not approximate in some measure to the English system.

    Mr. KIRKWOOD: Home Rule for Scotland!

    Mr. SULLIVAN: The proposal made by my hon. Friends is that we should take gross valuation and that anomalies should be swept away. These anomalies are exceedingly difficult. I agree that the Bill is making an improvement, but

    Division No. 1.] AYES.
    Alexander, Sir Wm. (Glasgow, Cent'l) Elliot, Major Walter E. Mitchell, S. (Lanark, Lanark)
    Barclay-Harvey, C. M. Fanshawe, Commander G. D. Moore, Lieut.-Colonel T. C. R. (Ayr)
    Berry, Sir George Gilmour, Lt.-Col. Rt. Hon. Sir John Smith, R.W. (Aberd'n & Kinc'dine, C.
    Bourne, Captain Robert Croft Hamilton, Sir R. (Orkney & Shetland) Sprot, Sir Alexander
    Broun-Llndsay, Major H. Hope, Sir Harry (Fortar) Steel, Major Samuel Strang
    Cayzer, Sir C. (Chester, City) Home, Rt. Hon. Sir Robert S. Streatfeild, Captain S. R.
    Chapman, Sir S. Hutchison, G.A. Clark (Midl' n & P' bl' s) Stuart, Hon. J. (Moray and Nairn)
    Charteris, Brigadier-General J. MacIntyre, Ian Thorn, Lt.-Col. J. G. (Dumbarton)
    Cochrane, Commander Hon. A. D. McLean, Major A. Thomson, F. C. (Aberdeen, South)
    Couper, J. B. Macquisten, F. A. Watson, Rt. Hon. W. (Carlisle)
    NOES.
    Barr, J. Murnin, H. Sullivan, J.
    Cowan, D. M. (Scottish Universities) Rose, Frank H. Watson, W. M. (Dunfermline)
    Graham, Rt. Hon. Wm. (Edin., Cent.) Scrymgeour, E. Welsh, J. C.
    Henderson, T. (Glasgow) Shiels, Dr. Drummond Windsor, Walter
    Klrkwood, D. Stewart, J. (St. Rollox) Wright, W.

    The LORD ADVOCATE: I beg to move, after the word "Section" ["Subsection (2) of this Section"], to insert the words "and also subject to the provisions of Subsection' (4) of this Section or of Section 45

    2842

    it is giving exemptions ranging from 5 per cent, to 75 per cent, on various kinds of property. The Lord Advocate has overlooked meeting the only real argument that can be put in favour of it, even from his own side. If certain industries are getting a difficult time, they appeal to the assessor and get relief in connection with Income Tax, but in addition to that we have them pulling all the influence they can bring to bear upon local authorities in order to get a higher revision. I regret very much that the people interested in this matter are getting big remissions, and getting them by a separate measure of this kind. A demand was made recently by a colliery company, and they wanted a remission of 100 per cent. I have no doubt that that colliery company could prove a better case than any landlord that I know, in Scotland, at any rate. They could prove that they had been carrying losses, not only for one year, but for a big number of years. There has been no argument put up against our point of view; the only thing the Lord Advocate says is that it would create a. difficulty for the time being. That must be admitted, but the cure is to make it a year or two late in coming into force, and then things would be evened up in a way which would make them more acceptable.

    Question put, "That the words 'subject to the provisions of Sub-section (2),' stand part of the Clause."

    The Committee divided: Ayes, 30; Noes, 15.

    of the Burgh Police (Scotland) Act, 1903, or of the corresponding provisions of any local Act."

    This is really a drafting Amendment, although it looks rather mysterious. In the burghs at present there are certain 2843 provisions for rounding up the figures to 10s. in most cases. In Sub-section (4) of this Clause we are rounding up to 5s. as a general provision, but we wish to preserve the figure in those places where they have got it already. Glasgow, for example, has 10s., and we wish to preserve that.

    Amendment agreed to.

    Lieut.-Colonel THOM: I beg to move, to leave out the words "except as otherwise specified in the said Schedule." This is more or less a drafting Amendment. Our submission is that these words are unnecessary, because the Schedule provides for all the rates being levied upon the gross value.

    The LORD ADVOCATE: I am afraid I cannot agree with my hon. and gallant Friend. These words are essential, because of what occurs in the last two items in the first Schedule, where the owners' and occupiers' shares of the rate are separately dealt with. Therefore, you must have these words in Clause 12 in order to keep that right.

    Lieut.-Colonel THOM: In view of what the Lord Advocate has said, I beg leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    Mr. COUPER: I beg to move, to leave out the words "subject to" ["and heritages, subject to "], and to insert instead thereof the words "after the."

    The LORD ADVOCATE: I accept this Amendment.

    Amendment agreed to.

    Further Amendments made:

    Leave out the word "thereof" ["percentage thereof"].—[Mr. Couper].

    After the word "Act" ["any public general Act"], insert the words "so far as."—[Sir J. Gilmour].

    Major STEEL: I beg to move, to leave out the words "but nothing herein contained shall be deemed to affect the provisions of Section 233 of the Burgh Police (Scotland) Act, 1892." My hon. Friends and I have put down this Amendment at the request of the county councils in Scotland, who do not understand why these particular words containing this proviso are necessary. 2844 I am, therefore, moving this Amendment in order that the Lord Advocate may give us an explanation.

    The LORD ADVOCATE: There is a provision in Section 233 of the Burgh Police (Scotland) Act, 1892, which relates to people like distillers, manufacturers, and others, who have noxious effluents which cannot be accepted in the ordinary sewer. These effluents have to be provided for by a reservoir provided at the firm's own cost, and it was thought in the Burgh Police Act that it was a bit hard that when the general sewer refused to take their effluent these people should be rated on the very thing which they had made to take the place of the service of the general sewer. We think that is very unfair. If my hon. and gallant Friend's proposal were given effect to, not only would these firms be refused the right to use the general sewer, but after making a reservoir they would be rated on that reservoir for a part of the cost of the general sewer.

    Major STEEL: I beg leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    Amendment made: In Sub-Section (2), leave out the word "section", and insert instead thereof the word "sub-section."—[The Lord Advocate.]

    Sir HARRY HOPE: I beg to move, to leave out the words "(other than water rates)." This Amendment has been put down because it is felt that agricultural subjects should be assessed for water rates on the same basis as for other rates. As the point is a little ambiguous, the Amendment has been put down so that the Lord Advocate might make a statement, which would satisfy those interests that no departure prejudicial to agriculture is being made.

    The LORD ADVOCATE: I think my hon. Friend, or those who are asking him to promote this Amendment, would be rather disappointed if it were given effect to. The reason of this exception is simply that water rates are dealt with under the next Sub-section. We are dealing here with local reliefs and so on, and are excluding from Sub-section (2) water rates and putting them into Subsection (3) under a separate heading.

    2845

    Sir H. HOPE: I beg leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    The LORD ADVOCATE: I beg to move, to leave out the words "subject to such exceptions, modifications and adaptations as may be prescribed with respect to any such rate by Order made by the Secretary for Scotland on the application of the authority by whom such rate is leviable, and the provisions of any local Act inconsistent with the provisions of this Subsection and of any such Order shall cease to have effect." and to insert instead thereof the words "together with the provisions of the local Act subject to such modifications and adaptations thereof as may be prescribed with respect to any such rate by Order made by the Secretary for Scotland on the application of the authority by whom such rate is leviable or of any person interested. Provided that in any case in which total or partial relief from any such rate is given by the local Act the Order shall secure that in such case the relief from the rates under the provisions of this Section and the Order shall be in effect not less than that given by the local Act." I must apologise for having put this Amendment down at rather short notice, but I hope the Committee will be able to follow it quite well. It raises a topic which is dealt with in a good many of the Amendments on the paper, and it involves the re-drafting of Sub-section (2). I will read it as it is proposed to be amended: "The provisions of the foregoing Subsection shall apply for the purposes of all rates (other than water rates) leviable under any local Act, and of all rates leviable under any public general Act with respect to which special provisions are made in any local Act, together with the provisions of the local Act subject to such modifications and adaptations thereof as may be prescribed with respect to any such rate by Order made by the Secretary for Scotland on the application of the authority by whom such rate is leviable or of any person interested. Provided that in any case in which total or partial relief from any such rate is given by the local Act the Order shall secure that in such case the relief from the rates under the provisions of this Section and the Order shall be in effect not less than that given by the local Act." It is rather a complicated point of drafting, but I will explain what is in the mind of the Government. We have dealt already, under Sub-section (1), with the rates that are imposed under public general Acts, without complications about the provisions of local Acts, and we are 2846 now coming to the application of the Bill to cases where we are confronted with the provisions of a local Act, either where there is only a local Act or a local Act qualifying the provisions of a public general Act with regard to the rates. The original drafting of this Sub-section rather suggested that in order to get the thing into form the power given to the Secretary for Scotland was to be a power to amend this Bill to bring it into line with the local Acts. That was not the intention. The words were not happily drafted. What we intend by this Subsection is to give the Secretary for Scotland power, on the application of any one interested, to alter the local Act so as to make it workable on the basis of this Act; in other words, not to give the Secretary any power at all to alter the deductions in Schedule 1, as an instance, and I think the re-drafting of the Subsection has made that point clear. There was the small point that originally the power to apply was confined to the local authority. There appear some Amendments, including one of our own, extend-it to any one interested. Then there is a very important point about a relief, either total or partial, from a particular rate which is given, we will say, in a local Act. I can make this most clear by taking an illustration. The case of the Leith Dock Commission is a very simple one. Under a local Act they get relief from burgh rates to the extent of 80 per cent. There are many other instances. They are not peculiar in that respect. The intention of the Bill is to preserve the benefit of that relief and, therefore, it was necessary to put in a safeguard against the Secretary so exercising his power to modify and alter as to bring out less than the equivalent of that relief to the Leith Docks. Now it is expressed in the form of a direction to the Secretary that he must not make the Leith Dock Commissioners worse off, and if- he did happen to do so, the Order would be ultra vires and it would not work. It may be said, "Why did you not simply preserve these reliefs as they stand?" The reason is that Schedule 1, which applies in that case is made up in this way. We have tried in Schedule 1 to reproduce as nearly as we can the status quo, the present average deductions—we had to average them, as we were getting a uniform rate—which were enjoyed by these various classes of 2847 subjects. The result of averaging the deductions was that houses came out at approximately 20 per cent, average deductions. There was nothing material below that, and all the rest were above, and, therefore, we took houses and shops as zero. So Schedule 1, in comparison with the old deduction, starts at 20. When you are considering the relief given to the Leith Dock Commissioners against only one kind of rates, namely, the burgh rates, of 80 per cent., you have to get it on the same basis as Schedule 1 is on before you can get the equivalent. Further, you have to take into account that in Schedule 1 the deductions are spread over all the rates, and naturally the deduction is a lower one than in the old times, because it covers more rates. Those two elements would mean that you could not simply preserve the 80 per cent, deduction, but you would have to get the equivalent, basing it on Schedule 1, and I think the form of the order in the case of the Leith Dock Commissioners would be that they would get their 20 per cent, deduction on all their rates, plus an additional percentage over and above 20 as regards the burgh rates. That is what the effect of this re-drafted Clause will be. There are various ways in which the local relief is given. If you are going to bring these cases under the operation of this Bill, you will best express it, I think, as applying Schedule 1 with the standing deduction which every one in the class gets, and, as regards the particular ratepayer, giving him over and above Schedule 1 an addition as regards the old rate from which he gets the relief, so as to preserve the right that he enjoys at present. There is one point that I am not quite sure is sufficiently expressed in the Clause as drafted, and I want to make clear what our intention is. It may be necessary to reconsider the drafting on this point. Under the Burgh Police Act, 1892, the five big burghs were excepted. They were in the Schedule and are known as the scheduled burghs. They were not affected by that public general Act, largely because they already had to a great extent similar provision under their own local acts. Under Section 347 of the Burgh Police Act differential rating is given to things like railways, under- 2848 ground pipes, and so on—three-fourths of the valuation. Glasgow and Edinburgh have an identical provision, but it is in a local Act and not in a public general Act. Some of the other burghs ,have it too. In getting at the status quo, we have already taken into account that 75 per cent, deduction, not only under the general Act but under the local Act as well, and it is certainly not intended 3 that under this Clause they are to get it a second time over. Therefore, we may probably have to make that clear in a further drafting of the Clause. Perhaps I may say a word or two as ,regards some of the Amendments. A good many of them are superseded by this draft. Hon. members proposing those intended to secure that the amount of relief shall be fully preserved will, I hope, be satisfied that they are sufficiently safeguarded under what I have drafted. There is one Amendment relating to a type of case, of which the recent Glasgow Boundaries Act is perhaps the best instance, where certain areas that are brought in are given what is called differential rating for a period of years. I do not think it is necessary to have an express declaration, because it is clearly covered by what I am moving, that is, the existing right to relief, and the equivalent of that must necessarily be given by the Secretary for Scotland, even if it is only for ten years.

    Sir GEORGE BERRY: Would Glasgow University get their exemption preserved?

    The LORD ADVOCATE: I am not familiar with all the reliefs that are given. If they have a right under a local Glasgow Act to relief, it will be preserved as in every other case.

    Sir G. BERRY: It will not make any material alteration?

    The LORD ADVOCATE: I am afraid it is difficult, without knowing the facts of the case, to answer directly, but in a case where there is a right to relief from a rate given by a local Act, it will be preserved, and they will get the relief under this Clause. The only other Amendment I might refer to is in the name of the hon. Member for Maryhill (Mr. Couper) and others, to insert the words: "(1) Nothing in this Section shall authorise the Secretary for Scotland to 2849 alter any percentage deduction set out in the second column of the First Schedule to this Act.

  • Before any Order is pronounced by the Secretary for Scotland under Subsection (2) of this Section, the person or persons whose valuation is proposed to be affected shall have the right to be heard by the Secretary for Scotland."
  • Nothing in this Section shall affect any exemption, abatement, deduction, or relief granted in any local Act from rates leviable in respect of any lands or heritages set out in the first column of the First Schedule to this Act."
  • The Amendment I am moving covers the first head, and, as far as application is concerned, it covers the second. We could not accept the third. They cannot get the identical relief, because of the basis on which Schedule 1 is made up. You must get an equivalent, and that is clearly preserved. There are some Amendments with regard to the procedure which is to take place on an application for an order under Subsection (2). Of course, that is not in any sense a judicial proceeding. It is an administrative inquiry, and it would be without precedent to have counsel, agents and witnesses, and, as regards this question about rating, it would be unusual, because invariably the Secretary for Scotland has to get local information. We would be prepared to consider that point, but we should demur to turning this into an elaborate inquiry with counsel, agents and witnesses. It is an administrative act and is not a court proceeding in any sense at all.

    Sir R. HORNE: I am sure the Committee is indebted to the Lord Advocate for the explanation, because, undoubtedly, there were many features in this Clause which excited difficulty. I am not surprised that it has been found very difficult to draw such a Clause. A person dealing with all the complicated features of Scottish rating will find it very difficult, and one of the elements in the case is that it is almost impossible to find two people who are agreed about the express meaning of the Clause. I am not entirely satisfied myself that the Lord Advocate has succeeded in expressing in written language what he has stated to the Committee.

    The LORD ADVOCATE: We certainly would be perfectly willing to reconsider the drafting before the Report 2850 stage, if agreement could be got as to the lines on which it may be done.

    Sir R. HORNE: I have no doubt the Lord Advocate will give all consideration and courtesy to the suggestions made. However, it is a task which presents great difficulty to those who confront it. There are one or two questions I should like to ask. I think it is quite clear, from what the Lord Advocate says, that any exemption to be given under the latter part of the Clause is in addition to a remission under the first Schedule of the Bill. It is possible to read the previous Clause as if these things should not be cumulative. Let us take the case of a dock or railway company. They would be entitled under the first Schedule to exemption, and exemption under the local Acts.

    The LORD ADVOCATE: An equation.

    Sir R. HORNE: I rather understood from the Lord Advocate's explanation that you took the deduction under the first Schedule and then considered what exemption they were entitled to under the local Acts. Am I wrongly interpreting it?

    The LORD ADVOCATE: Yes.

    Sir R. HORNE: Then it requires further elucidation of this very intricate Clause. The language which the Lord Advocate used in his proposed Amendment, along with the explanation which he has just made, shows that this is not a matter with which it is very easy to deal. I will ask another question. How does the Lord Advocate propose to deal with the reliefs which are to be granted? Are they to be done by way of a diminution of valuation I If the Secretary for Scotland grants relief of a proportionate sum to that to which they are accustomed, is it going to be done by relief in rates or deduction in value?

    The LORD ADVOCATE: By way of particular relief in rates.

    Sir R. HORNE: I am sure the Lord Advocate realises that there are particular rates upon which various authorities, such as the Clyde Trust, and the Leith Docks Trust, obtain certain reliefs of rates. These reliefs only apply to particular rates, and, as I understood the explanation given to the Committee, the relief that was to be granted was to be 2851 granted over all rates and not over particular rates, as at present.

    The LORD ADVOCATE: Quite wrong. The 80 per cent, relief from the burgh rates which the Leith Docks get at present will remain a relief from the burgh rates, except so far as it is covered by the 20 per cent, deduction under the Schedule. For instance, you have some subjects which at present get 60 per cent, deduction from the parish rates, under the Poor Law Act, and get a local deduction under the burgh rates of 50 per cent. The effect of that is that under Schedule 1 they will get the benefit of that 60 per cent. They will also get their local relief against the burgh rates. In fact, they will get full effect given to their reliefs. The result will be to have your rateable valuation brought under Schedule 1, and that valuation applicable to all rates. Then you take the case of a particular person who has this special relief. Regarding burgh rates, he will get that relief over and above what he has got already. He will get the necessary additional relief on the burgh rates so that he has not got less than he got prior to the Act. The intention is to preserve the status quo as nearly as we can.

    Sir R. HORNE: While I have no doubt the Lord Advocate's explanation is lucid, my mind is not so well informed at the end of that explanation as I would like it to be before I come to a final conclusion on the matter. In the first place, will any of these old exemptions from rates remain until an order is pronounced by the Secretary for Scotland, or are they cancelled by this Clause of the Bill, and required to be replaced by the corresponding relief which the Secretary for Scotland is to give!

    The LORD ADVOCATE: Clearly, the Act does not apply until the Order is made by the Secretary for Scotland.

    Sir R. HORNE: They will come into operation together?

    The LORD ADVOCATE: That is the intention; I think it is the effect.

    Sir R. HORNE: The last question I have is this: The Lord Advocate has referred to the difficulties of making the Secretary for Scotland into a court in 2852 this matter, before whom evidence will be led and counsel may speak. Of course, it is perfectly obvious that he would be exercising functions that sometimes would be to the advantage of the local authorities and sometimes to their disadvantage. It altogether depends upon what is raised by the words "modifications and adaptations," which seems to cover almost anything the Secretary for Scotland would do, except the percentage of deduction under the first Schedule. Otherwise, the whole field seems to lie open to him. It seems to me that the community should have its right preserved by appearing to urge, preparatory to consideration by the Secretary for Scotland and before he proceeds to make such Orders as would affect very large interests, and would indeed operate sometimes to the benefit of the community and sometimes to its detriment. Finally, I would venture to urge the Secretary for Scotland, in view of the great difficulties of this Clause, that we should have an opportunity to consider this very important Amendment and what the Lord Advocate has said in elucidation, and that this Clause should be postponed to a later occasion.

    Mr. W. GRAHAM: When two outstanding members of the Conservative party are not agreed about what is the meaning of this Clause, the difficulty of the ordinary Labour member will be appreciated. The argument which we have had is a very good illustration of the strength of our argument some time ago that you would have been well rid of deductions altogether. Taking the questions raised by the right hon. Member for Hillhead (Sir R. Home), and the replies given by the Lord Advocate, I think it is substantially clear that we arrive at this position, that we have a Schedule of deductions on certain classes of property, and unless we have quite misinterpreted what the Lord Advocate said on a former occasion, these deductions are arrived at after the circumstances applicable to this particular class of property have been taken into account, and that these are equated figures. The whole problem arose, like many of our problems in Edinburgh, in Leith. In point of fact, in this case, because Leith Docks undertake their own scavenging and police and certain other duties, they are entitled to 80 per cent, deduction, for 2853 the purposes of burgh rates, from the gross annual valuation. The difficulty which arises is to frame this Clause in such a way, if you are to have deductions at all, as to give the Secretary for Scotland power to insert the figure which will continue Leith Docks substantially in the position it is entitled to occupy, and the equation figure would come out at something like 47½ per cent. Surely it is plain that what you are to have is a substantial uniformity in the Schedule contained in the Bill, and, running alongside of that, for the purpose of protecting your rights under local Acts of Parliament, you are to have a supplementary Schedule fixed by the Secretary for Scotland. It seems very undesirable to give a power of this kind without at least some reference to Parliament, because I entirely agree that very large interests may be involved. Before you vary anything, you should submit it in some form to the House of Commons, even if it is only possible, under the Rules of the House, to raise the question after 11 o'clock at night. The whole thing is an admirable illustration of the tremendous complication into which we are drifting because of the failure to adopt the simple method recommended by the Dunedin Committee.

    Mr. SCRYMGEOUR: I must say that the Lord Advocate's statement puts another face on the Clause and on the Schedule. Do I understand that, in the case of Dundee harbour property, which is a separate undertaking, the rates from which at present substantial deductions are made are now, instead of being brought to the 20 per cent, deduction only, under the powers of the Secretary for Scotland, to be readjusted to something like uniformity to what they were before? We are entitled in Dundee to be alongside Leith, to say the least of it. Are we to get an equalisation of rates by the deduction of 20 per cent, being amplified by the Secretary for Scotland's powers, as suggested?

    Captain WEDGWOOD BENN: I could not quite gather from what the right hon. Member for Central Edinburgh (Mr. Graham) said, whether he was leading an attack against the proposed exemption of Leith Docks or not. These deductions are not given as ordinary deductions at all. These are given because the Dock 2854 Commission in Leith are performing services which the community performs in other connections. Neither is Leith Dock a private enterprise run for private profit; it is a public enterprise upon which the prosperity of the Port of Leith largely depends. Therefore, I am glad to hear from the Secretary for Scotland that this Bill is to preserve the status quo. But what about the interim period? This Bill does not come into operation until 1927. Do I understand that during the interim period the exemptions presently enjoyed by the Dock Authority will be continued? There is another point. In the Schedule, I observe that there is preferential treatment given to railway docks. That has always been an unfair handicap to the Leith Docks. I should like to learn whether the Secretary for Scotland is to take the opportunity of equalising the burden as between railway docks, which can shift their share of the burden on to others, and docks which are docks only. We have the greatest admiration for the Secretary for Scotland, but we do not consider that a Government office is necessarily the best place in which to settle the rates that have to be paid. I associate myself with what has been said by the right hon. gentleman the Member for Hillhead (Sir B. Home), that some of these Amendments should be accepted in some form, so that the matter can be represented to the Secretary for Scotland properly by those who are directly concerned.

    Mr. COUPER: Certain references have been made to subjects upon which I have Amendments upon the Paper, and I do not know whether these should be discussed at this time, but we certainly cannot accept this substituted Sub-section, in view of the Amendments that I have on the Paper, without having it more fully discussed. The wording of this proposed Sub-section does not altogether meet our wishes, because we desire to have inserted the words or the body or person by whom the rates are payable." The persons interested and the persons who pay are not in all cases identical.

    The SECRETARY for SCOTLAND (Lieut.-Colonel Sir John Gilmour): With reference to the point which has been raised by the right, hon. Gentleman the Member for Hillhead (Sir K. Home) about access to the Secretary for Scotland, I think it would always be recognised by 2855 any Secretary, when he was settling questions of such importance, that direct access to him by means of deputation should always be acceded to. That, undoubtedly, would be the view that I should take. If it is thought that some reference to that should be definitely included, that may well be done. What I deprecate is that counsel should be brought in and a kind of court made of it. That, I think, would be impossible; but the other and quite common-sense method of procedure is one which I think any Secretary for Scotland would follow. With regard to the other point, raised by the right hon. Gentleman the Member for Central Edinburgh (Mr. Graham), as to whether, when any decision which might be an important one is arrived at, it should be laid before the House of Commons, I am perfectly willing to consider that. Although these things lead to some delay, still I think that is a point that I would be willing to consider. I suggest, in view of the discussion we have had, that we should now proceed to get this Clause put on the Paper in the form in which we have suggested, so that between now and the Report stage we can see what additions might be made to meet the various points that have been raised. With regard to the interim period, as far as I understand, there will be no change.

    Mr. STEWART: I beg to move, "That the Committee do now adjourn." The Lord Advocate has given us a lengthy explanation, which I am certain has made the thing easily understood by the average Member of the Committee; but there are some of us who are not quite up to the average, and we are not quite able to grasp all that he said. Following on that, we had some remark? 2856 from the right hon. Gentleman the Member for Hillhead (Sir R. Home) in which he indicated that his grasp of what the Lord Advocate had said was somewhat different from what the Lord Advocate intended. My right hon. Friend the Member for Central Edinburgh (Mr. W. Graham) also took another view, and in view of that, and because of my desire to understand completely, I think it would be better that the Debate should be adjourned.

    Mr. WATSON: I hope the Secretary for Scotland will agree to this suggestion. When we have two keen legal minds, such as that of the Lord Advocate and that of the right hon. Gentleman the Member for Hillhead (Sir R. Home), failing to agree as to what is intended by this Amendment, I think we should adjourn the Debate and see the speech of the Lord Advocate in print. We require to consider this Clause very carefully, not only from the point of view of the big concerns, but from the point of view of the ordinary ratepayer.

    The LORD ADVOCATE: The whole object of the Clause, in this Sub-section which we are re-drafting here, is to make sure that these benefits shall be preserved. Of course, we have a certain interest in making good progress with this Bill, but I have no complaint at all in regard to that. I would say, however, that I hope that we shall not go over the discussion again. With that in view, I am quite willing to accept the suggestion that the Debate should be adjourned.

    Question, "That the Committee do now adjourn," put, and agreed to.

    Committee adjourned accordingly, at Fourteen Minutes before One o'Clock, until Tuesday, 6th July, at Eleven o'Clock.

    2857

    THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

    Cobb, Sir Cyril (Chairman)

    Advocate, The Lord

    Alexander, Sir William

    Barr, Mr.

    Benn, Captain Wedgwood

    Berry, Sir George

    Bourne, Captain

    Broun-Lindsay, Major

    Cayzer, Sir Charles

    Chapman, Sir Samuel

    Charteris, Brigadier-General

    Cochrane, Commander

    Couper, Mr. J. B.

    Cowan, Mr.

    Elliot, Major

    Fanshawe, Commander

    Gilmour, Lieut.-Colonel Sir John

    Graham, Mr. William

    Hamilton, Sir Robert

    Harvey, Mr. Barclay-

    Henderson, Mr. Thomas

    Hope, Sir Harry

    Home, Sir Robert

    Hunter-Weston, Lieut.-General Sir A.

    Hutchison, Mr. Clark

    Kirkwood, Mr.

    MacDonald, Mr. Robert

    MacIntyre, Mr.

    McLean, Major Alan

    Macquisten, Mr.

    Mitchell, Mr. Stephen

    Moore, Lieut.-Colonel

    Murnin, Mr.

    Rose, Mr.

    Scrymgeour, Mr.

    Shiels, Dr.

    Smith, Mr. Robert

    Sprot, Sir Alexander

    Steel, Major

    Stephen, Mr.

    Stewart, Mr. James

    Streatfeild, Captain

    Stuart, Mr.

    Sullivan, Mr.

    Templeton, Mr.

    Thom, Lieut.-Colonel

    Thomson, Mr. Frederick

    Watson, Mr. Maclean

    Welsh, Mr.

    Windsor, Mr.

    Wright, Mr.

    2858