Sixth Standing Committee on Statutory Instruments, &c.




Wednesday 8 July 1992


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The Committee consisted of the following Members:

Chairman: Mr. David Knox

Adams, Mrs. Irene (Paisley, North)

Arbuthnot, Mr. James (Wansteadand Woodford)

Bonsor, Sir Nicholas (Upminster)

Brazier, Mr. Julian (Canterbury)

Canavan, Mr. Dennis (Falkirk, West)

Chisholm, Mr. Malcolm (Edinburgh, Leigh)

Connarty, Mr. Michael (Falkirk, East)

Davidson, Mr. Ian (Glasgow, Govan)

Fairbairn, Sir Nicholas (Perth and Kinross)

Gallie, Mr. Phil (Ayr)

Graham, Mr. Thomas (Renfrew, West and Inverclyde)

Maxton, Mr. John (Glasgow, Cathcart)

Michie, Mrs. Ray (Argyll and Bute)

Ottaway, Mr. Richard (Croydon, South)

Pawsey, Mr. James (Rugby and Kenilworth)

Porter, Mr. Barry (Wirral, South)

Stewart, Mr. Allan (Parliamentary Under-Secretary of State for Scotland)

Whitney, Mr. Ray (Wycombe)

Dr. C. A. Shaw, Committee Clerk.

3 Sixth Standing Committee on Statutory Instruments, &c. Wednesday 8 July 1992

[MR. DAVID KNOX in the Chair]

Draft Caledonian MacBrayne Limited (Rateable Values) (Scotland) Order 1992

4.30 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move, That the Committee has considered the draft Caledonian MacBrayne Limited (Rateable Values) (Scotland) Order 1992.

The Chairman: With this it will be convenient to discuss the draft Forth Ports plc (Rateable Values) (Scotland) Order 1992 and the draft Oil Related and Petrochemical Plants (Rateable Values) (Scotland) Order 1992.

Mr. Stewart: The purpose of the first two orders will be familiar to hon. Members on both sides of the Committee. The orders prescribe the rateable values for 1992–93 for the operational lands and heritages of the Forth Ports plc and Caledonian MacBrayne Ltd. Forth Ports and CalMac are treated separately from other ports authorities because in each case the lands concerned span more than one valuation area. The valuations for these two undertakings are therefore calculated by officials, but follow the same method as is applied to the other statutory port authorities and for that reason each year we must have these orders. In respect of the Oil Related and Petrochemical Plants (Rateable Values) (Scotland) Order, hon Members will know that the Government are committed to achieving harmonisation of valuation on both sides of the border. That has been achieved for the vast majority of properties at the simultaneous revaluations of 1990. However, problems have remained on the method of valuation for some properties which were valued under the contractor's basis for specialised property, especially recently constructed oil-related and petrochemical plants where there was a large difference between Scotland and England and Wales. The valuation of such plants under the Scottish system might in some circumstances be as much as two and a half times the level of the valuation under the English system. We concluded, therefore, that some interim adjustment was necessary and we have therefore returned to derating and maintained it at the level that existed before the 1990 revaluation. The disparity of valuation of oil-related and petrochemical plants appears to be limited to those constructed recently, which are those to which the order applies. There has, of course, been the usual extensive consultation on the orders and it is generally accepted that they are correct. I emphasise to the serried ranks of the Opposition Front Bench, who have turned up in unusual strength for these orders, that the local authority income will be unaffected, since every local authority receives a given level of aggregate external finance, of which non-domestic rates are only one element.


Sir Nicholas Fairbairn (Perth and Kinross): Should not my hon. Friend be more generous to those who are sitting on the Opposition Front Bench? The Caledonian MacBrayne order contains the concept of a non-domestic water rate. Does he think that that sums up those on the Opposition Benches?

Mr. Stewart: In the interests of progress, I say that on the Opposition Benches are Members who are interested in and concerned about the issue and how have considerable expertise. They will not wish to detain the Committee, but if they have any questions I shall be happy to answer them.

4.35 pm

Mr. John Maxton (Glasgow, Cathcart): I shall be brief. I thank the Minister for writing to me to explain the orders. I do not know whether Conservative members of the Committee, apart from the Minister, were present a fortnight ago when we dealt with 12 of these orders. I regret that we have had to come back today. It would not have made much difference to the work of the Committee had we dealt with 14 instead of 12 last time. It seems ludicrous that we are back here yet again. I shall repeat the point I made two weeks ago: Members of Parliament waste their time dealing with such orders every year. Some English Members may not be aware that we have to do so every year. They will see that this is a revocation order. Such time-wasting should be a matter of concern to the House. I understand why the Caledonian MacBrayne order is like this. The hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) must have stayed up far too late last night on the Bankruptcy (Scotland) Bill, because I did not understand his joke.

Sir Nicholas Fairbairn: It was not a joke, it was serious.

Mr. Maxton: I am grateful to my colleagues for coming to Committee this afternoon. They are young and keen and they may learn something. This may be one of the last occasions on which I will be in this position. [Hon. Members, "Shame!"]. I assure hon. Members that it is entirely voluntary. The rates paid to the local authorities seem very small when one considers the properties owned by Caledonian MacBrayne. My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) may wish to say something about their fairly large headquarters at Gourock in his constituency. If they are included in the order, the sum of £25,000 that the company has to pay to Inverclyde district council seems very small.

Mr. Allan Stewart: I can confirm that the orders refer to certain defined port activities. Offices would be rated in the normal way.

Mr. Maxton: I am grateful to the Minister for that information. So the orders deal with Caledonian MacBrayne's piers and whatever might be on them. However, they are quite extensive. For example, Ardrossan on the Isle of Arran has porting facilities, as do other areas. The sums specified in the orders seem quite small. If the organisations were rated under normal non-domestic rating systems, would they have to pay more or less than they do under the orders? The answer to that question is of some importance to our local authorities. 5 I have a sneaking suspicion that I asked this question last year or the year before. I thought that Caledonian MacBrayne operated services to the Isle of Skye, but Ross, Cromarty and Skye local authorities are not mentioned and receive no money. It may be that Caledonian MacBrayne do not own any of the pier facilities on either side of the water. The Western Isles receives the very small sum of £5,000. I do not know why we spend time apportioning such sums. Does Caledonian MacBrayne pay marginally less to the Western Isles because it cannot operate Sunday sailings?

Mr. Phil Gallie (Ayr): I am a little perturbed at the hon. Gentleman's idea of increasing the rateable value for Caledonian MacBrayne, especielly when I consider the vital services that the company provides to Arran, Bute and the islands. Any increase in rates will have to go on ferry charges.

Mr. Maxton: Unlike many people, I admire Caledonian MacBrayne and the services that it provides to the islands. One of the daft aspects of the issue is that much of the money that the company pays in rates comes from Government subsidy. Money goes to the Company as subsidy from the Government and is then passed to local authorities. That is a roundabout way of providing local authorities with money. However, I do not want to enter into controversial issues. Does the company pay slightly less in the Western Isles because it does not operate on a Sunday?

Mr. Thomas Graham (Renfrew, West and Inverclyde): I am delighted, Minister, that Caledonian MacBrayne—

The Chairman: Order. The hon. Member must address the Chair, not the Minister.

Mr. Graham: I am most grateful, Mr. Knox. I agree with my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) that the figures seem very small. I strongly support Caledonian MacBrayne, which provides an essential service, but the local councils are also strapped for cash. Will the Minister comment on that?

Mr. Allan Stewart: I can reply to both hon. Members, who are, in effect, asking how rateable values are calculated. They are derived from the accounts of the 6 undertaking—the method is applied to other statutory docks and harbours—and are charged at 9 per cent. of the relevant income of the undertaking. That is defined as the total income for the year, less that for certain defined activities not related to the property or connected with property separately assessed—the offices point. The same method is used for assessing other statutory ports, in Scotland and south of the border. The reason for the orders is that more than one rating area is involved. In so far as Sunday operation affects the income, it would affect the total, so the 9 per cent. would be lower. With regard to Skye, the Kyle and Kyleakin facilities are owned by Highland regional council, so are not subject to this order, which is limited to the facilities owned by CalMac.

Mr. Maxton: I am grateful to the Minister for giving me that answer. I think that he wrote to me with that answer last time.

Question put and agreed to.

Resolved, That the Committee has considered the draft Caledonian MacBrayne Limited (Rateable Values) (Scotland) Order 1992.


Resolved, That the Committee has considered the draft Forth Ports plc (Rateable Values) (Scotland) Order 1992.


Resolved, That the Committee has considered the draft Oil Related and Petrochemical Plants (Rateable Values) (Scotland) Order 1992.—[Mr. Allan Stewart]

Committee rose at seventeen minutes to Five o'clock.


Knox, Mr. David (Chairman)

Arbuthnot, Mr.

Bonsor, Sir Nicholas

Brazier, Mr.

Chisholm, Mr.

Davidson, Mr.

Fairbairn, Sir Nicholas

Gallie, Mr.

Graham, Mr.

Maxton, Mr.

Michie, Mrs. Ray

Ottaway, Mr.

Pawsey, Mr.

Stewart, Mr. Allan

Whitney, Mr.