3005 STANDING COMMITTEE ON SCOTTISH BILLS. Tuesday, 20th July, 1926.

[Sir CYRIL COBB in the Chair.]

RATING (SCOTLAND) BILL.
[OFFICIAL REPORT.] FIRST SCHEDULE.
—(DEDUCTIONS FROM ANNUAL VALUE OF CERTAIN CLASSES OF LANDS AND HERITAGES FOR THE PURPOSES OF RATES.)

Class of Lands and Heritages and Amount of Deduction.

  • Lands and heritages used exclusively as a railway constructed under the powers of any Act of Parliament for public conveyance, including all stations, depots, harbours, piers, ferries, and other lands, and heritages valued as part of the undertaking —Twenty-five per cent.
  • Lands and heritages used exclusively as a tramway constructed under the powers of any Act of Parliament for public conveyance, including all depots and other lands and heritages valued as part of the undertaking.
  • Twenty-seven and one-half per cent.
  • —(a) Works used wholly or mainly for the manufacture of steel ingots or wrought iron in conjunction with processes incidental to the manufacture of steel or wrought iron products or for the manipulation of semi-finished steel or wrought iron products into plates, sheets, sections, hoops, strips or bars.
  • Thirty per cent.
  • Lands and heritages forming part of the undertaking of any local authority, body or company supplying electricity for public purposes or to members of the public and exclusively used in connection with such supply Thirty per cent.
  • Agricultural lands and heritages—for the purposes of the owner's share of rates.
  • Twenty-five per cent
  • Agricultural lands and heritages, for the purposes of the occupier's share of rates Seventy-five per cent.
  • The CHAIRMAN: I shall put the first Amendment in such a way as to exclude any other proposed Amendments to the amount of deduction, and, therefore, any hon. members who were desirous of moving such Amendments must say what they have to say on this first one.

    3006

    Captain WEDGWOOD BENN: I beg to move, in paragraph (5), to leave out the word "Twenty-five," and to insert instead thereof the word" Twenty." I propose that the deduction allowed to a railway dock shall be assimilated to that allowed to harbours, piers, and ferries, and my contention is that it is the duty of the Lord Advocate to justify the differential treatment accorded under the Bill. I am speaking, with some experience, for the Leith Dock, which is a public undertaking. It is not a profit-making undertaking, but a public utility service discharged by Commissioners in the public interest, of course without payment. They have to face the competition of the railway owned docks, such, for example, as Grangemouth. First of all, they are met by a scale of rates charged by those docks which do not meet the outgoings of the docks. The reason why railway owned docks can afford to charge less for their services than the Leith docks is that the railway owned docks can throw back on the railway any losses they incur, whereas the Leith Dock has no railway undertaking on which losses can be imposed. They have to make such charges as will make ends meet. It is not fair that we should have to meet the competition of people who are able to make good their losses from other sources. In addition to that, the Lord Advocate proposes that these railway owned docks shall get a second advantage, and shall receive 5 per cent, more deduction in respect of rating than we get. I contend that it is the duty of the Lord Advocate to justify that, if there be a justification, because I believe it is in the public interest that both docks shall be put on an exact equality, so that the best managed and most efficient should receive the business. Unless the Lord Advocate can make out a case for this preferential treatment for the railway owned docks, my Amendment should receive unanimous consent on the mere ground of fairness as between the undertakings.

    Mr. STEPHEN: I support the Amendment. At our last meeting the Lord Advocate pointed out that if the increase with regard to harbours moved by the hon. Member for Maryhill (Mr. Couper) were carried, it would mean that a burden of £9,000 would be placed upon shopkeepers and householders and others and £1,300 on 3007 factories and mills and so on, and he made that a ground for refusing the Amendment. He also pointed out that he had been trying to preserve the status quo with regard to these concerns, and he drew attention to the fact that the arrangement he proposes would give a little advantage to the harbour companies as compared with the railway companies, and he gave certain figures. But the railway companies in the past have got more than they should have received. They have been too generously treated in the past, and this is a good opportunity to put them on to a better footing. A Member of the Committee has been telling me about the position of the railway companies in 1913. While they were getting these big deductions, their workers were getting such a small wage that they had to go to the parish council to get relief to enable them to maintain their families. There is a very wide-spread feeling amongst the Committee that this discrimination in favour of the railway companies should come to an end. The right hon. Gentleman, the Lord Advocate, himself suggested that this was the way to deal with this discrimination. If the railway companies are put on this basis, corresponding to the harbour companies, it might mean so much relief to the smaller shopkeepers and householders, who have been bearing in the past more than their share of the concessions that have been made to concerns like railway companies, and it would be just as well for us to have the interest of shopkeepers and householders in view in the attempt to put Scottish rating upon a better basis than hitherto. Those people have been carrying on under very great difficulties all along, and I want to say a word in their favour, because I feel that, if the concession that is asked for from the harbour companies is going to throw a burden of £9,000 on to shopkeepers and householders and £1,300 on to mills and factories, this deduction with regard to the railway companies would give these people a certain amount of concession, which, I am confident, is due to them. We have treated the Lord Advocate very kindly. We have not been the least bit obstructive, and so far we have got practically nothing in the way of concession to our views. Seeing that there is so much support for us among the 3008 Members of his own party in connection with this discrimination that has been exercised against harbour companies and so on, this is a good opportunity for the Lord Advocate to meet the opposition, and to meet also the viewpoint of his own supporters, who have been very loyal to him under very great difficulties.

    The LORD ADVOCATE (Mr. William Watson): I have been waiting with interest to hear what the justification for this proposal was. The figures in the Schedule reproduce almost exactly the existing position in 1923–4 as regards the rates of deduction which were being given, and that is the justification for them. The suggestion now, as I understand it, is readiness to accept that, but to say that the existing state of affairs was unfair in a particular point. But the only unfairness suggested is as regards railway harbours, and this Amendment strikes at the whole of the railway undertakings. The railway harbours only form 6·6 per cent, of the whole railway valuation. That, of itself, does not seem a very strong justification, but I am prepared to meet this suggestion on its merits. The suggestion is that you should rectify an unfair balance by reducing this 5 per cent. The truth is that the only way you could rectify it as regards railway harbours, if it were railway harbours alone, would be by increasing the percentage to 35 or 40. Railways as a whole, and ordinary docks as a whole, are valued on the revenue they get for the year. But in allocating the railway revenue, the first thing the railway assessor has to do is to make out of it 5 per cent, on the cost of construction of the docks, stations, bookstalls, and so on, and in effect the value that appears, we will say at Grangemouth, for the railway in that parish is 5 per cent, on the original cost of construction of the Grangemouth harbour, plus a mileage proportion of the balance of the receipts, which is a very small thing. What ordinary dock at present, or for years past, has been earning 5 per cent, on its original cost of construction? I have the average net earnings, comparable with the railway earnings, for the Clyde Navigation Trust for the last three years. I have also, not the original cost of construction, but the appreciated cost of construction on the average for 3009 these three years. Therefore, the figures I am giving are in their favour, if anything. I can give the actual figures if necessary, but it works out at 2·7 per cent, on their appreciated cost of construction, and that means that the railway docks are being valued at 5 per cent, on their cost of construction, while the others are valued at 2·7 per cent. That far more than equates the difference of the 5 per cent, if it were referable only to the railways and harbours. I am justified in saying that, if you are to equate the position, the only way you could do it would be by increasing instead of decreasing the percentage. I tried to get the particulars regarding the Leith Docks, but their figures are not so easily available; the accounts are not quite so clear. I tried to get the figures from the Ministry of Transport yesterday. What I have been able to get was that the Leith Docks were valued by the Railway Assessor up to 1912, and that for the last two years, 1910–12, the valuation, applied to the depreciated value, came out at 3·4 per cent. That confirms that, if you are going to equate the position, you must provide that the railway docks are to be separately valued in the ordinary way—in the same way as other docks—or you must leave this position as it stands. The preference is given to the other docks, not to the railway docks. A separate valuation of the railway docks is impracticable under this Measure. The railways would welcome a separate valuation, because the valuation of their docks, if they were separately valued, would come down enormously. The average percentage of railway earnings is almost exactly 2½ per cent., and that means that the valuation of the Grangemouth Dock, which is at present valued at £55,000 would, if it were valued at 2½ per cent, be halved. The result would be to leave more to be spread over the permanent way. That would disappear out of the burghs, and the railway companies would far rather be rated in the country than in the town. But what about the docks in the burghs? They would have a lesser valuation; it would be the country districts that would get it. That would hardly be in the interests of the docks which the hon. and gallant Member for Leith represents. That, however, could not be done except by independent legislation. It is important to know that this Amendment strikes at the whole of the 3010 railway undertakings, and that for 6·6 per cent, of the whole valuation. I am prepared to leave the matter at 25 per cent., because that reproduces the position which existed, without disturbing the incidence between the various subjects in this Schedule.

    Mr. COUPER: I am going to support the Amendment, for if injustice is being done now, the railways and dock owners do not desire that. They wish equality for all. What I claim is merely uniformity in deductions and equity in dealing with concerns that supply the same services. If, as suggested by the Lord Advocate, the docks are separately valued, or could be separately valued, that is all that we want. We want to be on the same footing. We do not want preference. We want a fair field and no favour between parties dealing with the same kind of work. I was encouraged to hope that the Lord Advocate would accept the Amendment, because of what he said on the last occasion. I am not going to repeat the arguments I brought forward at the last meeting. It is not entirely on behalf of the docks and harbours, but in the interests of the whole community, that I press this matter. The community would benefit by such a basis, and the docks and harbours belonging to different people would be rated on the same basis.

    Mr. BUCHANAN: I also am going to support the Amendment, but on grounds somewhat different from that taken up by other hon. Members. The Lord Advocate, as I expected, could only bring forward in justification the present basis of 1923–1924, that certain rates were then allowed to be paid, and that they ought to continue. I find in the Memorandum that the railway companies pay at present in the burghs £302,000, and that under the proposed alterations they will actually pay £303,000 in rates. In the counties they at present pay £378,000, and under the new Bill they will pay £364,000, which, for practical purposes, is the same amount. The argument, therefore, is that, having paid that sum for so many years before the passing of this Bill, they should continue to pay it, whether it is just or unjust. It would, however, be well to take cognizance of what were the facts of the past basis. I am not here concerned with the docks as against the railways, but with the rail 3011 way companies as against the general body of ratepayers. If it can be proved that the railway companies have received an unfair advantage under former Acts, the matter should be dealt with. The practice under former Acts was for the Railway Assessor for Scotland to take the income of the railway companies and deduct every possible charge—wages, depreciation and every charge. That is the present method. There are three methods of valuing property. The first method is to take a percentage of the cost of the construction of a building, and make that the rateable value. Another method is to take the valuation of property in conjunction with the value of similar properties in the locality. The third method is the revenue basis, applied to the railway companies. The Railway Assessor for Scotland takes the total income of the Scottish railways, and he then applies all deductions to that income. Assuming for the moment that the total income of the Scottish railways is £3,000,000, he then comes along and says that wages, interest charges, and all these things amount to £2,000,000, and he deducts the £2,000,000 from the £3,000,000 of the railway companies, who have already got every possible deduction to which they are entitled. Having got all the present deductions, the railway companies found a loop-hole in an Act. It was the Act of 1845 or 1854. Under one of these Acts, they found they would be entitled to an extra deduction, and they went to the parish councils. They said: "Look here; we want more deductions." "The parish councils said: "You have already got from the Railway Assessor every possible deduction." The railway companies replied: "We do not care, we have found a loophole in an Act." The railway companies having found a loop-hole in an Act, now ask us to continue a practice which was never meant to be established by the earlier Acts. There is no justification in fact for this under the Valuation Acts. What I would like the Lord Advocate to face is not whether the docks at Leith should have a higher, or lower, rating, but whether the railway companies, in relation to other citizens, are paying their due proportion.

    Lieut.-Colonel THOM: May I be allowed, in view of what you, Mr. Chair- 3012 man said, to move the Amendment standing in the name of my hon. Friend the Member for Linlithgow (Mr. Kidd), to leave out the word "Twenty-five," and to insert instead thereof the word "Thirty"?

    The CHAIRMAN: The discussion, I think, must be taken on the present Amendment. If the Committee decides that "Twenty-five" should stand part of the Bill, all the rest of the Amendments dealing with the percentage deduction fall.

    Captain BENN: Would not the right thing be for the hon. and gallant Gentleman, if he wishes to insert 30 per cent., to vote "No," when the word "Twenty-five" is put?

    The CHAIRMAN: That is hardly a point of Order; that is for the hon. and gallant Gentleman's discretion.

    Lieut.-Colonel THOM: Although I have been only three or four months in the House of Commons, I am not going to fall into a trap of that sort. In view of the fact that I am not to be allowed to move the Amendment in the name of my hon. Friend the Member for Linlithgow (Mr. Kidd), to the effect that the deduction be increased from 25 per cent, to 30 per cent., I wish to support the Lord Advocate against the Amendment which has been moved. My reason is that, if you take the year 1925–26, and compare it with the year 1926–27, when this Bill will be in force, you will find that the railway companies are to pay £18,500 more in rates that they are paying at the present moment.

    Mr. BUCHANAN: The official Memorandum by the Scottish Office shows that the railway companies will have to pay, in counties and burghs, only up to something like £10,000.

    Lieut.-Colonel THOM: If the hon. Member had studied the figures properly, he would have found that the year for which these calculations are made is 1923–24. For the year 1925–26 the companies are to pay £18,500 more. Although I do not represent any railway companies I would remind the Committer that these companies perform a great public service, and that they are not out primarily to make dividends. Most of the railway investments are held by quite poor people, and the railway companies pay their employés handsome 3013 salaries compared with what are paid in mining and other industries. I would like the Lord Advocate to explain to the Committee why he has taken 1923–24 instead of 1925–26. I have discussed this with the Lord Advocate, and I think he is right, and I will support him, although it is even against the Amendment in my own name. I have attended this Committee pretty regularly, and I have seen Members sitting round the table writing letters, and taking no interest in what is going on—[HON. MEMBERS: "Order"],—and I think the Lord Advocate would do well to explain to them why he has taken the year 1923–24.

    Mr. BOOTHBY: The last time this Committee met, the Lord Advocate stated, in refusing a concession to the harbours, that there was a great argument for bringing down the railways, and he conveyed to my mind that if he was to be hard on the harbours, he also intended to be hard on the railways. Now I find he is not going to be hard on the railways.

    Sir ALEXANDER SPROT: We are dealing not with harbours alone but with railway undertakings. The Lord Advocate states that he is maintaining' the status quo as regards rating, but I have received a letter from a very high official in one of the railway companies, who says that the companies will have to pay more under the present proposals than they are doing now. He contends that the deduction in the case of railways ought to be raised by 5 per cent., and that that would put the matter right. I would like to ask the Lord Advocate whether the railway companies are to be asked to pay more under these proposals.

    Mr. SULLIVAN: I would like to congratulate the Lord Advocate upon his versatility. At the last meeting he was able to convince a small majority of the Committee, and he quite clearly threw out the suggestion that we could get another rate for the railways. Then he tried to smother us with words that carry no weight whatever. The only thing I see in his remarks this morning is that he has become clearer as to the effect on the railway companies. I told him last time that the railways were using all their influence to get greater advantages. They have badgered every rating authority 3014 and brought counsel from Edinburgh in order to get deductions. Will the Lord Advocate tell us how much more the people who occupy the houses and the people who are running businesses will have to pay under this Bill than they have paid before? If you reduce the amount payable by the people who can afford to pay, you are adding to the burdens of the other people who keep shops and who are on the verge of bankruptcy, if they are not already bankrupt. I hope this Committee will try to keep their faces to the wind in this matter. If we do not make these people level, we are giving an undue advantage to those who may be their competitors. Prior to this Bill, rating authorities had power to grant deductions, and the railway companies took full advantage of it. The Lord Advocate is now out to stereotype that power, and to make it law.

    The LORD ADVOCATE: It is perfectly true that up to now the rating authorities, particularly the parochial authorities, have had power to deal with these deductions, and they have exercised that power. What we claim to reproduce in the Bill is the actual exercise of that power by the authorities. What better guide could we have than that? The hon. Member for Gorbals (Mr. Buchanan) was under a misapprehension when he suggested that the railway companies get double deductions for maintenance. They do not. Under the Act of 1867 the only deduction made for maintenance is as regards the permanent way, and only on half the cost. On all the other things, including harbours, no deduction is allowed in respect to maintenance under the Act of 1867 in arriving at net revenue. All he said about the principle of arriving at valuation on a net revenue basis is equally applicable to arriving at the valuation of the other docks at the present moment. I never intended suggesting a reduction or increase in the case of the railways. I accept the figure given by the hon. and gallant member for Dumbartonshire (Lt.-Col. Thorn) of £18,500, as I understand the railway companies do. What we have done is to take the year 1923–24 as the basis for this Schedule. The Committee will remember the circumstances which arose out of the Etna Foundry litigation. The Etna Foundry produced figures to show that, while their rates were £1,300, 3015 the deductions they could claim amounted to £5,400, which made the valuation on that basis considerably less than nil. If advantage had been taken of that decision by ratepayers generally, the whole law of rating would have been thrown into confusion, but the rating authorities and the assessors appealed to people to hold their hands till the law could be put right. My right hon. Friend, the Secretary for Scotland, issued an appeal to them not to press that judgment to its logical conclusion till the law was put right, and we are putting it right by this Bill. Among those who did not respond to that appeal were the railway companies. The effect of the Bill on the railway companies of Scotland is that they will gain some £13,500 on the basis of 1923–24. I agree that, if we were taking the 1925–26 basis, the railway companies would be losing £18,500 under the Bill. As a matter of fact the railway companies have been working in this matter before 1923–24, and they have got the benefit of some slight deductions. Since the Etna Judgment, the London and North Eastern Railway Company have got, on an average 9·5 per cent. increase on the deductions they already had, and the London, Midland and Scottish Railway Company have got an average increase of 7 per cent. Now I decline to take this increase into account, and we have not done so in the Bill. If we were to take that into account, the 25 per cent. would appear to be too little, and it is just because of that that I decline to accept the suggestion of the railway companies that they should get more. What they are getting in the Schedule reproduces as near as may be the position in 1923–24, which applied to everyone else, both those who did not move after the Etna Judgment and those who did. They are treated on the last year which is really undisturbed by that judgment. While I cannot accept the suggestion that the railway companies should get an increase, I am equally unable to agree that what they are getting should be lowered.

    Captain BENN: I should like to clear myself of the charge which was made against me by the hon. and gallant Member opposite of the use of guile. There are five Members of the Conserva- 3016 tive party who have put down an amendment saying that they do not want 25 per cent. to stand as the deduction, but the question which is now going to be put is that 25 per cent. stand part, not that 20 per cent, stand part. That is a subsequent question. The whole purpose of Parliamentary questions in the form in which they are put from the Chair is to give hon. Gentlemen an option. If hon. Gentlemen make a charge against those who vote against 25 per cent. standing part and say that anyone who votes in that way is in effect voting for the Amendment, will they believe me when I say that they are against the whole course of Parliamentary procedure? I invite those hon. Gentlemen who declare 25 per cent. to be unsatisfactory to vote for the Amendment.

    Colonel CROOKSHANK: I do not see how the argument of the hon. and gallant Member for Leith (Captain Benn) is borne out. I am in favour of supporting an increase to 30 per cent., but I do not see why I should vote in this case for a reduced figure.

    Sir ARCHIBALD SINCLAIR: Unless the hon. and gallant Member votes for the Amendment which is about to be put from the Chair, he will have no opportunity of moving his Amendment if he wants to.

    Colonel CROOKSHANK: There is no opportunity.

    Sir A. SINCLAIR: Yes, certainly there is; that is what hon. Members do not appreciate. If they support the Amendment of my hon. and gallant Friend, the word "Twenty-five" will be taken out of the Bill, but the word "Twenty" will not be added. Then when my hon. and gallant Friend's Amendment to insert "Twenty" is moved, they will be able to vote against it. Therefore, the only way they can support their own Amendment is by voting first for the Amendment of my hon. and gallant Friend.

    Question put, "That the word 'Twenty-five' stand part of the Schedule."

    The Committee divided: Ayes, 28; Noes, 12.

    3017
    division No. 7.] AYES.
    Barclay-Harvey, C. M. Ford, Sir P. J. Smith, R.W.(Aberd'n & Kinc'dine, C.)
    Berry, Sir George Gilmour, Lt.-Col. Rt. Hon. Sir John Sprot, Sir Alexander
    Boothby, R. J. G. Graham, Rt. Hon. Wm, (Edin., Cent.) Steel, Major Samuel Strang
    Broun-Lindsay, Major H. Hope, Sir Harry (Forfar) Streatfeild, Captain S. R.
    Cayzer, Sir C. (Chester, City) Hunter-Weston, Lt.-Gen. Sir Aylmer Stuart. Hon. J. (Moray and Nairn)
    Chapman, Sir S. Hutchison,G. A. Clark (Midl'n & P'bl's) Templeton, W. P.
    Charteris, Brigadier-General J. MacAndrew, Major Charles Glen Thom, Lt.-Col. J. G. (Dumbarton)
    Cochrane, Commander Hon. A. D. Maclntyre, Ian Thomson, F. C. (Aberdeen, South)
    Crookshank, Col. C. de W. (Berwick) McLean, Major A. Watson, Rt. Hon. W. (Carlisle)
    Dalkeith, Earl of
    NOES.
    Barr, J Johnston, Thomas (Dundee) Stephen, Campbell
    Benn, Captain Wedgwood (Leith) Murnin, H. Sullivan, J.
    Buchanan, G. Scrymgeour, E. Watson, W. M. (Dunfermline)
    Couper, J. B. Sinclair, Major Sir A. (Caithness) Windsor, Walter

    Sir A. SPROT: I beg to move, in paragraph 8, to leave out the word "Twenty-five," and to insert instead thereof the word "Seventy-five." We have now come to that part of the Schedule which deals with deductions on agricultural land. We have the case of agricultural land which is let by an owner to a tenant, and also the case of agricultural land which is owned and farmed by the same person—that is to say, by an owner-occupier. I must admit at the outset that the new system is going to be a great improvement upon the existing one. An owner in the case of a farm which is let to a tenant has to repay to the tenant half of what he has paid in rates. That is a very awkward system in estate management, and I am pleased that it is going to be done away with. With regard to my Amendment, may I allude for a moment to the system which is pursued in England and was settled only last year by the Rating and Valuation Act? In England, the tenant is the person who is responsible for the rates; the owner does not pay rates. Agricultural land in England is subject, first of all, to a deduction of 5 per cent, on the gross value, to arrive at the net value, and then that value is subject to a further deduction of 75 per cent. But in England houses are rated separately from the land. I am going to ask the Committee to consider how we are situated in Scotland with regard to this matter. It will be evident that the Scottish landowner is in a very much worse position than the English landowner. He has to pay half the rates, but, according to these proposals, the occupier only has to pay subject to a deduction of 75 per cent., which is given in England, whereas the owner has 3018 to pay subject to a deduction of 25 per cent. only. Thus the owner in Scotland is unfairly situated as compared with his own tenant. I think there is no justification on the face of it for that. If the rates are divided equally into two halves, there is no justification for a system under which one party is subject to a 75 per cent. deduction and the other party only to a 25 per cent. deduction. I am quite aware that we must go into the history of this matter in order to account for it. Some years ago the grant which was made by the Treasury to Scotland for the purposes of the Agricultural Rates Act was earmarked, so far as the tenants' half was concerned, and went to the relief of the tenants in Scotland, whereas the landlords' half was taken for some other purpose altogether, and that is how the matter arrives at its present position. But I am not going to argue this on the case of the landlord and the tenant at all; I am going to argue it on the case of the owner-occupier, and try to show that he is much worse off in Scotland as regards this rating matter than he would be if his farm had been situated on the other side of the Border. I have here a brief calculation. I will take a farm of the gross value of £200 a year, and we will suppose that it belongs to the farmer who farms it. Therefore, he pays both rates.

    Mr. STEPHEN: Is this an actual case?

    Sir A. SPROT: This is, I suppose, an actual case, and I am sure one could be very easily produced. The gross rent is £200, the occupier's deduction is 75 per cent. and the owner's 25 per cent.; that is, 100 per cent. Therefore, this farmer is rated on £100. A similar farm in 3019 England, excluding the 5 per cent. between the net and the gross valuation, and excluding the fact that the house is rated separately, would be rated on £50, or exactly a half what it would be rated on in Scotland. Now that discloses an injustice to those who are engaged in farming their own land in Scotland as compared with the similar class in England. I submit that we are very deeply interested in this matter, because we do not desire to make any trade or occupation less favourable for people to pursue in our country than it is on the other side of the Border. That is a matter which, I think, we ought to keep in view. We have, of course, to keep in view the effect of rating as between individuals in Scotland, but I go further, and say that we ought to consider whether a system is just if it imposes a higher burden upon those who are engaged in a certain occupation in Scotland as compared with those who are engaged in that occupation in England.

    Mr. SULLIVAN: My name is down to an Amendment to leave out "Twenty-five" altogether.

    The CHAIRMAN: That would be out of order.

    Mr. SULLIVAN: Then I could make it 1 per cent. I think this attempt is one of the most barefaced the Committee have made. People who own land, drawing revenue from it, in some cases refusing to work it or to let other people work it, holding it up in order to blackmail the community, taking advantage of all public improvements to raise the value of it, are actually asking the Committee to give them a reduction of 75 per cent., and they suggest that the terms are better on this side of the Border. If that be so, we shall have the Scottish landowners shifting their land to this side of the Border. If they moved themselves, Scotland would not be poorer but richer, but if they took away their land, it would be a very serious thing. There are Members of the Committee who know something of the system of land tenure in England, and I put it to them that the landed class in England have more sympathy with people who want land than the landed class on the other side of the 3020 Border. Any man who wants land in this country has very little trouble in getting it. In Scotland, they will neither work it nor allow others to work it. I think 1 per cent, would be giving the landed class an advantage that they are not entitled to get. I often wonder what the Committee would say if we, who directly represent the working classes, came forward with an Amendment to say they should get a reduction of 75 per cent. If we came forward with an Amendment of that kind, it would be treated hilariously, and I ask the Committee to turn down this attempt to give people who are already getting too much a greater advantage than they have at present.

    The LORD ADVOCATE: I think the Committee would be wise to stick to the figure in the Bill. In the first place, the effect of the Amendment would be to put on houses and shops an additional amount of rates of nearly £300,000. It would require very strong justification to do that. My hon. Friend's argument in favour of the Amendment rests on rather a fallacious basis. It is really impossible to compare the English rating system and its effects with ours. In the first place, they only rate occupiers. The basis of the valuation generally is very different from ours, and if you were going to make the comparison, the first thing you would require to do would be to add 20 per cent. on to the deduction given in the Schedule, because the Schedule starts at 20. That would give at once 45 per cent. to the owner and 95 per cent. to the occupier. If you want to make the calculation even on that unsatisfactory basis, you must start with that. But the truth is that, accepting that we want a uniform rate for the country, both in burgh and in county, we have gone as near it as possible by the percentage we have given in reproducing the existing deductions. We have incidentally obviated the hardship or difficulty or expense that exists at present in recovering part of the relief under the Agricultural Rates Act from the landlord, which involves considerable labour and trouble. One result of the Schedule will be that the relief will be obtained direct. With regard to the Amendment, which I understand is not going to be moved, differentiating between burghs and coun- 3021 ties, it is true that while agricultural land in counties on the whole is going to gain under the Bill, agricultural land, which is much less in extent, in burghs is going to lose. That is one of the results of adopting a uniform scale throughout the country. Probably, what those, of whom there are a good many, who own land not only inside the burgh but outside it lose on the roundabouts they will gain on the swings, and the thing will work out fairly level, but this is one of the cases where, when you are taking a uniform rate on an average, there are bound to be some who will surfer and some who will gain. I ask the Committee, therefore, not to accept the Amendment.

    Sir A. SPROT: I ask leave to withdraw my Amendment. I am very glad to have had the Lord Advocate's explanation, and I have been very glad of the opportunity to put my views before the Committee. I do not withdraw any of the opinions I have expressed. I admit that the trouble arose from the disposal of the Government grants some years ago, and I quite see that that matter could not be put right in this Bill without imposing a charge upon other people, and I have no desire in the world to add to the grievance and injustice that exists.

    The LORD ADVOCATE: I meant to deal with that point. My hon. Friend is rather under a misapprehension. The shortage of the Agricultural Rates Grant is only 24 per cent., and that shortage is

    Division No. 8.] AYES.
    Alexander, Sir Wm. (Glasgow, Cent'l) Ford, Sir P. J. Sinclair, Major Sir A. (Caithness)
    Barclay-Harvey, C. M. Gilmour, Colonel Rt. Hon. Sir John Smith, R.W. (Aberd'n & Kinc'dine, C.)
    Berry, Sir George Graham, Rt. Hon. Wm. (Edin., Cent.) Sprot, Sir Alexander
    Broun-Lindsay, Major H. Hope, Sir Harry (Forfar) Steel, Major Samuel Strang
    Cayzer, Sir C. (Chester, City) Hunter-Weston, Lt.-Gen. Sir Aylmer Streatfelld, 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. MacAndrew, Major Charles Glen Stuart, Crichton-, Lord C.
    Cochrane, Commander Hon. A. D. Macdonald, R. (Glasgow, Cathcart) Templeton, W. P.
    Cowan, D. M. (Scottish Universities) Macintyre, Ian Thom, Lt.-Col. J. G. (Dumbarton)
    Crookshank, Col. C. de W. (Berwick) McLean, Major A. Thomson, F. C. (Aberdeen, South)
    Dalkeith, Earl of Moore, Lieut.-Colonel T. C. R. (Ayr) Watson, Rt. Hon. W. (Carlisle)
    Fermoy, Lord
    NOES.
    Barr, J. Scrymgeour, E. Sullivan, J.
    Buchanan, G. Stephen, Campbell Watson. W. M. (Dunfermline)
    Johnston, Thomas (Dundee)

    Sir A. SPROT: I beg to move, at the end of the Schedule, to add a new paragraph: "(10) Houses rated separately of twelve pounds annual value and under Four pounds on each house."

    3022

    borne by agricultural land. Over 44 per cent, is borne by houses and shops, and, therefore, it is wrong to speak as if it were agricultural land that is bearing the shortage.

    Amendment, by leave, withdrawn.

    Mr. SULLIVAN: I beg to move, to leave out the word "Twenty-five," and to insert thereof the word "One." I want to thank the Lord Advocate for helping our case. He has reminded us of the high price that is got for land inside burghs. By no stretch of the imagination can the land inside a burgh be agricultural land. It is held up by the people who claim to own it in order to get a big price, and when a public authority makes a park or recreation ground, or spends money in order to improve the amenities of the place, the people who own the land put up the value. They have spent nothing in the way of improvements, and they have done nothing at all to justify the excessive price. The action of the public authority has raised the value, and they come in and demand blackmail from those who have spent the money. Even 1 per cent. would give them more than they have expended.

    Question put, "That the word 'Twenty-five' stand part of the Schedule."

    The Committee divided: Ayes, 34: Noes, 7.

    My Amendment does not refer to houses that are attached to a farm. Those are rated along with the farm. There are in the country a great many small houses owned and occupied by quite small people, workers on the farms, 3023 old age pensioners, and people of that description. The £4 a year is no more than is necessary to keep these houses in repair, and I think it is very unfair that they should be asked to pay any rates at all. The £4 house, under my Amendment, will pay no rates, and those up to £12 would have £4 deducted from their annual value. I think this would be a very great relief to very small people.

    The LORD ADVOCATE: I am afraid we cannot accept this Amendment, because it applies not only to occupiers' but owners' rates, and I know of no justification for such houses being relieved of rates altogether. That has never been the practice in Scotland, and these houses have never had any special treatment. We are giving them the same terms as at the present time. My hon. Friend has not given any special reason for this Amendment, unless it is that they are low-rented houses. This is a country question. You will find few houses of this rental in burghs, and we showed our appreciation of that in excluding them from the compounded rentals.

    Amendment negatived.

    Lieut.-Colonel THOM: I beg to move, at the end of the Schedule, to add new paragraphs: "10. Heritages used exclusively as dwelling houses … … Twenty-five per cent. 11. Heritages used exclusively as shops, warehouses, or offices Sixteen and one-half per cent." I move this Amendment formally, for I do it with a feeling of hopelessness. I do not expect the Lord Advocate to accept it; and if I were the Lord Advocate, I would not accept it either. He has defended the fort with great resource, and now sees the attacking troops retreating in disorder. On the other hand, there is a good deal to be said for this Amendment. If railway companies and docks are entitled to deductions, surely houses and business premises are entitled to some deduction also. Of course, I see that if he accepted this Amendment, it would upset the whole balance of his Schedule, but I should like to hear why these subjects are not entitled to the deduction.

    The LORD ADVOCATE: I have mentioned on more than one occasion 3024 that houses in fact do get a deduction. I could not possibly accept this Amendment, as it would upset the whole incidence of the Schedule and would mean an overturn of over £1,000,000 in the Schedule. The hon. and gallant Member was right in anticipating that I was not likely to agree, and that, having objected to minor disturbances of the Schedule, I was not likely to accept this one.

    Lieut.-Colonel THOM: I beg leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    Schedule, as amended, agreed to.

    SECOND SCHEDULE
    —(PROVISIONS AS TO THE DETERMINATION AND PAYMENT OF COMPENSATION TO OFFICERS OR SERVANTS ENTITLED THERETO.)

  • The provisions of section one hundred and twenty of the Local Government (Scotland) Act, 1889, shall apply to the determination and payment of compensation to officers or servants subject to the following and any other necessary modifications:—
  • References to the county council and the Treasury shall be construed as references to the rating authority liable in payment to the officer or servant of compensation (in this Schedule referred to as the "compensating authority") and the Secretary for Scotland respectively, and the reference to the convener or vice-convener shall be construed in the case where the compensating authority is the town council of a burgh as a reference to the lord provost, provost or acting chief magistrate of the burgh;
  • The reference to the Acts and rules relating to His Majesty's Civil Service shall be construed as a reference to the Acts and rules which were in operation at the date of the passing of the Local Government (Scotland) Act, 1889;
  • References to "the passing of this Act" shall, except in the case of abolition or relinquishment of office, be construed as references to the date when the loss arose, and in the case , of abolition or relinquishment of office, as references to the date of such abolition or relinquishment;
  • Expenses incurred by a rating authority in pursuance of section twenty-four of this Act and of this Schedule shall be defrayed in the case of a town council out of the general improvement assessment or such other rate payable by owners and occupiers in equal proportions as the council may determine, but shall not be reckoned in any calculation as to the statutory limit of that assessment or rate, and in the case of a county council out of the general purposes 3025 rate, but notwithstanding anything in the Local Government (Scotland) Act, 1889, a police burgh shall not be liable to contribute towards any such expenses of the county council:
  • Provided that if any compensation is payable by way of a capital sum the payment of that compensation shall be a purpose for which the rating authority may borrow upon the security of the assessment or rate aforesaid, and any sum so borrowed shall be repaid within a period of five years from the date on which the sum is borrowed.
  • Sub-sections (8) and (9) shall not apply.
  • In computing the time of service in any capacity of any officer or servant for the purpose of the award of compensation, the compensating authority shall take into account all the service in any capacity of that officer or servant if an officer or servant of a parish council under any parish council, and if an officer or servant of a county council under any county council, whether he was appointed annually or otherwise:
  • Provided that if in pursuance of the power conferred by this Act an office is abolished by a rating authority, otherwise than at the expiration of a complete year of service of an officer, the portion then expired of that year shall be treated as a complete year where such portion exceeds six months, and shall be ignored where such portion does not exceed six months.
  • The compensation payable to an officer or servant who immediately before the commencement of this Act held two or more offices under any parish council or parish councils and who devoted the whole of his time to the duties of such offices, shall not be reduced by reason of the fact that he has devoted only part of his time to each of such offices.
  • If any officer or servant was temporarily absent from his employment during the late War whilst serving in His Majesty's forces, or the forces of the Allied or Associated Powers, either compulsorily or with the sanction or permission of the parish council, or the county council, as the case may be, such period of temporary absence shall be reckoned as service under the council in whose employment he was immediately before and after such temporary absence, and the amount of his salary, wages and emoluments during such temporary absence shall be deemed to be the amount which he would have received from the council during that period if he had remained in their actual service:
  • Provided that, in the case of an officer or servant who, after the armistice, voluntarily extended his term of service in the forces, no period of absence during such extension shall be reckoned.
  • The compensating authority may, in their discretion and in consideration of the fact that any officer or servant was appointed to his office as a specially qualified person, add any number of years 3026 (not exceeding ten) to the number of yean which such officer would otherwise be entitled to reckon for the purpose of computing the compensation to which he would be entitled under the Acts and rules relating to His Majesty's Civil Service as applied by this Act.
  • The compensation shall not exceed two-thirds of the annual pecuniary loss suffered by virtue of this Act, or of anything done in pursuance or in consequence of this Act, or if the compensation is payable by way of a capital sum, two-thirds of the capital value of such annual pecuniary loss.
  • No officer or servant shall be entitled to receive both compensation for pecuniary loss and a superannuation or retiring allowance in respect of the same period of service and the same pecuniary loss.
  • The LORD ADVOCATE: I beg to move, in paragraph (1,d) to leave out the words "in the case of a town council out of the general improvement assessment or such other rate payable by owners and occupiers in equal proportions as the council may determine, but shall not be reckoned in any calculation as to the statutory limit of that assessment or rate, and in the case of a county council out of the general purposes rate, but notwithstanding anything in the Local Government (Scotland) Act, 1889, a police burgh shall not be liable to contribute towards any such expenses of the county council"— and to insert instead thereof the words "In like manner as the expenses of levying and collecting rates." This is a drafting Amendment with regard to the expense of levying rates. This was to be paid by the counties and burghs out of their own rates.

    Amendment agreed to.

    Further Amendment made: Leave out the word "aforesaid" ["upon the security of the assessment or rate aforesaid"] and insert instead thereof the words "out of which the said expenses are to be defrayed."—[The Lord Advocate.]

    Mr. WILLIAM GRAHAM: I beg to move, in paragraph 2, to leave out the words "if an officer or servant of a parish council under any parish council, and if an officer or servant of a county council under any," and to insert instead thereof the words "under any parish council, town council, or." My Amendment has reference to that part which deals with the computation by the authority of the services of those officers who will be displaced under this Bill. It can, I think, be explained in 3027 a very few sentences. Under the paragraph which appears on the Paper in the Schedule the Committee will observe that the authority may take into account the period of service under a parish council or under a county council, but I think it is plain from the reading of the paragraph that it would cut service into two compartments. If you had a servant of a county council who had been for a time under a parish council, or a servant of a parish council who had been for a period with a county council, that service with another authority would be excluded, and all service to a town council would be excluded as the paragraph is drawn. Now it must have been the plain intention of the Government to adopt substantially the provision of the Rating and Valuation Act, 1925, and if hon. Members will turn to that Act, they will see in Section 2 of the Schedule that there is clear provision for all service rendered under any local authority. I am at a loss to understand why there should be that plain provision in the Act applying to England, and this segregation of the services into compartments in our Rating Bill of 1926. I am advised by competent authorities that that is exactly the position which would arise under this paragraph, and I cannot think that that is the intention of the Government or the Scottish Grand Committee.

    The LORD ADVOCATE: I think this question really allies itself with the question raised on Clause 24, on which the right hon. Member drew attention to the fact that whereas under this Bill 3028 we only propose compensation to servants or officials of authorities from whom they were transferred, and that any officer or servant of the authorities to whom they were transferred were excluded, under the English Act servants transferred to or from were included. In the English Act all were covered. There was no intention on the Schedule to segregate the two services. I do not know whether I am indiscreet, but we have already decided to bring the Bill into conformity with the provisions of the English Act in respect of Clause 24, and at the same time to bring this particular paragraph of the Schedule into conformity with the English Act. It will be more convenient to do both these things at the same time on the Report Stage.

    Mr. GRAHAM: That is a complete concession to our plea, and the whole object of our Amendment. On that understanding, I beg leave to withdraw the Amendment.

    The LORD ADVOCATE: That is so.

    Amendment, by leave, withdrawn.

    Amendments made:

    After the word "officer" ["a complete year of service of an officer"], insert the words "or servant."

    In paragraph 5, after the word "person" ["specially qualified person"] insert the words "or of the fact that he had prior to his appointment served as a deputy, assistant or clerk to any officer not holding a temporary appointment."—[The Lord Advocate.]

    Schedule, as amended, agreed to.

    THIRD SCHEDULE
    ENACTMENTS REPEALED.
    Session and Chapter.
    Short title. Extent of Repeal.
    8 & 9 Vict. c. 83 … The Poor Law (Scotland) Act, 1845. Sections thirty-four to forty-live inclusive, sections forty-nine, fifty-one, eighty-eight and eighty-nine.
    17 & 18 Vict. c. 91… The Lands Valuation (Scotland) Act. 1854. In section twelve the words from "and as "soon as such valuation roll has been "authenticated as aforesaid" to "their "respective parishes," and in section eighteen the words from "shall cause "such amount" to "the current year "within such parishes respectively or".
    In section forty-one the words from the commencement of the section to "I terms of this Act; and"

    3029

    20 & 21 Vict, c 71 … The Lunacy (Scotland) Act, 1857. In section fifty-five the words "within eight "months after notice by the commis"sioners aforesaid and in the manner "directed by the said last-mentioned "Act".
    35 & 36 Vict. c. 62 … The Education (Scotland) Act, 1872. In section forty-six the words from "and "the town council of every burgh shall" to "for the purpose of promoting higher "instruction".
    48 & 49 Viet. c. 16 … The Registration Amendment (Scotland) Act, 1885. In section eleven the words "or a collector "of poor rates".
    52 & 53 Vict. c. 50 … The Local Government (Scotland) Act, 1889. In sub-section (2) of section twenty-seven the words "Subject to the provisions "hereinafter contained".
    Sub-section (4) of section twenty-seven and sub-section (5) of section sixty.
    55 & 56 Vict. c. 55 … The Burgh Police (Scotland) Act, 1892. In section two hundred and sixty-seven the words from "and provided also that" to the end of the section.
    Section three hundred and forty-seven.
    57 & 68 Vict. c. 58 … The Local Government (Scotland) Act, 1894. In sub-section (1) of section twenty-seven the words "as ascertained for the purposes "of the Poor Law (Scotland) Act, 1845."
    In sub-section (1) of section thirty-eight the words "as ascertained for the purposes of "the Poor Law (Scotland) Act, 1845."
    Sub-section (7) of section: forty-four.
    In sub-section (3) of section fifty-one the words from "including the collection of "rates" to "or burgh commissioners," except so far as applied by any local Act.
    1 Edw. 7. c. 24 … The Burgh Sewerage, Drainage and Water Supply (Scotland) Act, 1901. In section two the words from "Provided "also that for shops" to "in the manner "provided in the principal Act."
    2 Edw. 7. c. 25 … The Lands Valuation (Scotland) Amendment Act, 1902. The whole Act.
    3 &4 Geo. 5. c. 38 … The Mental Deficiency and Lunacy (Scotland) Act, 1913. In sub-section (2) of section sixty-five the words "and provided also that the consent "of the Board shall be required to any "assessment levied by the parish council "acting as a district board."
    8 & 9 Geo. 5. c. 48 … The Education (Scotland) Act, 1918. Sub-sections (2), (3) and (5) of section thirteen.
    The proviso to paragraph 5 and paragraph 6 of the Fourth Schedule.
    13 & 14 Geo. 5. c. 39 … The Agricultural Rates Act, 1923. Sections eight and twelve.

    The LORD ADVOCATE: I beg to move, in paragraph beginning 20 and 21 Vict. c. 71," in column 3, at the beginning, to insert the words "In section fifty-four the words expenses of assessment, collection, and remittance, and,' wherever these words occur." This and the next two are purely drafting Amendments.

    Amendment agreed to.

    Further Amendments made:

    In paragraph beginning "57 and 58 Vict. c. 58," after the words: "thirty-eight the words as ascertained for the purposes of the Poor Law (Scotland) Act, 1845 '",insert the words" and the words 3030 in terms of section eighty-nine of the said Act.'"

    At the end, insert new paragraph:

    "59 & 60 Vict. c.67. The Agricultural Rates Section Congested Districts and Burgh Tax Relief (Scotland) Act, 1896. Section one"

    —[The Lord Advocate.

    The LORD ADVOCATE: I beg to move, to leave out the words:

    "2 Edw. 7.c.25. The Lands Valuation (Scotland) Amendment Act.1902 The whole Act"
    There was a rating and machinery Clause in the original Bill, and this repeal followed on that Clause, but when 3031 that Clause was dropped out and the Bill was reissued, that was accidentally overlooked. It is only a drafting Amendment.

    Amendment agreed to.

    Schedule, as amended, agreed to.

    Ordered, "That the Bill, with Amendments, be reported to the House."

    The SECRETARY for SCOTLAND (Lieut.-Colonel Sir John Gilmour): I am sure I shall be voicing the thanks of 3032 all members of the Committee, irrespective of party, when I desire to accord to you, Mr. Chairman, on their behalf, our hearty thanks for the manner in which you have presided over this Committee.

    The CHAIRMAN: I am very much obliged to the Secretary for Scotland and to all the members of the Committee for the way in which the Committee has conducted itself towards me.

    Committee rose at Half-past Twelve o'Clock.

    THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

    Cobb, Sir Cyril (Chairman)

    Advocate, The Lord

    Alexander, Sir William

    Barr, Mr.

    Benn, Captain Wedgwood

    Berry, Sir George

    Boothby, Mr.

    Broun-Lindsay, Major

    Buchanan, Mr.

    Cayzer, Sir Charles

    Chapman, Sir Samuel

    Charteris, Brigadier-General

    Cochrane, Commander

    Couper, Mr. J. B.

    Cowan, Mr.

    Craik, Sir Henry

    Crookshank, Colonel

    Dalkeith, Earl of

    Fermoy, Lord

    Ford, Sir Patrick

    Gilmour, Lieut.-Colonel Sir John

    Graham, Mr. William

    Harvey, Mr. Barclay-

    Hope, Sir Harry

    Hunter-Weston, Lieut.-General Sir A.

    Hutchison, Mr. Clark

    Johnston, Mr.

    MacAndrew, Major

    MacDonald, Mr. Robert

    MacIntyre, Mr.

    McLean, Major Alan

    Moore, Lieut.-Colonel

    Murnin, Mr.

    Scrymgeour, Mr.

    Sinclair, Major Sir Archibald

    Smith, Mr. Robert

    Sprot, Sir Alexander

    Steel, Major

    Stephen, Mr.

    Streatfeild, Captain

    Stuart, Mr.

    Stuart, Lord Colum Crichton

    Sullivan, Mr.

    Templeton, Mr.

    Thom, Lieut.-Colonel

    Thomson, Mr. Frederick

    Watson, Mr. Maclean

    Windsor, Mr.