Local Government and Transport Committee, 08 Feb 2005

Meeting date: Tuesday, February 8, 2005

Official Report 121KB pdf

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Subordinate Legislation

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Road Traffic (Permitted Parking Area and Special Parking Area) (South Lanarkshire Council) Designation Order 2005<br />(SSI 2005/11)

The second agenda item is on a series of statutory instruments to be considered under the negative procedure. No points have been raised with regard to the Road Traffic (Permitted Parking Area and Special Parking Area) (South Lanarkshire Council) Designation Order 2005 (SSI 2005/11). Do members agree that the committee has nothing to report on the instrument?

Members indicated agreement.

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Road Traffic (Parking Adjudicators) (South Lanarkshire Council) Regulations 2005 (SSI 2005/13)

No members have raised any points on the Road Traffic (Parking Adjudicators) (South Lanarkshire Council) Regulations 2005 (SSI 2005/13) and no points have been raised by the Subordinate Legislation Committee. Again, do we agree that the committee has nothing to report on the instrument?

Members indicated agreement.

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Non-Domestic Rate (Scotland) Order 2005 (SSI 2005/14)

No members have raised any points on the third instrument before us, which is the Non-Domestic Rate (Scotland) Order 2005 (SSI 2005/14). No points were raised by the Subordinate Legislation Committee and no motions to annul have been lodged. Can I confirm that the committee has nothing to report on the order?

Indeed, no motions to annul the order have been lodged by any party. It would be rather difficult to come to any conclusions on the particular piece of paper before us, however, given the scant information that has been made available. The explanatory note on the order runs to four lines. That does not tell us much about the financial implications of the order for the business community. We do not have any examples of what individual companies of various sizes might be expected to pay by way of business rates in future.

I am not surprised that there have been no motions to annul, but there cannot be great enthusiasm for the measure. Not enough information has been made available to allow us to come to an appropriate conclusion on the order. I would have thought that more detailed financial information about the potential impacts or benefits of the measure should have been made available. Examples could have been presented to us, saying that X business might be expected to pay £X more or £X less, whatever is the case.

I realise that annulling the order would have the result of denying local authorities the cash that they require to run services. It could also have an impact on the council tax and a politician would pursue that course of action reluctantly. Nevertheless, I believe that we should have been provided with more detailed information, so that proper consideration could be given to the statutory instrument.

It is not unfair to suggest that there should perhaps have been more background information for members about the level of resources to be raised from the rate that has been proposed. However, I point out that, if members had raised the matter in advance of the meeting, a request could have been made to the Executive for more information or for the relevant minister to attend, although I do not disagree with the general point that more information could have been provided.

The rate for the tax that we are discussing has been set at a national level. The tax is distributed at a national level, but it is collected locally and is referred to as a local tax. Is that the committee's understanding of the situation?

I do not want to go into any definitions here. I suspect that you hope to use that issue as an argument in support of your member's bill and I am sure that it is one that you will deploy adequately on your own behalf in due course. The tax dates from before devolution and the Parliament has continued it and not amended it to date, other than by altering the level of the rate charged. I am sure that you will adequately deploy the political point that you wish to make.

I apologise for being a minute or so late. It is unfortunate that the order is not accompanied by a more detailed memorandum, as Bruce Crawford has said. As we all know, the rates bills that businesses and voluntary organisations receive are based on a multiplicand of the rateable value and the poundage. For example, if the rateable value is £1,000 and the poundage is 49p, the rates bill will be £1,000 times 49p, or £490—subject to two relief schemes, which I will not go into now.

I hope that, when we are considering our future work programme, the committee will wish to consider how rateable values are calculated and whether smaller businesses in particular are fairly treated. The practice that the Scottish Assessors Association follows for assessing rateable values seems to be based on a pattern of business that has long since disappeared into history—the corner shop has disappeared and been replaced by the supermarket.

I am not at all convinced that the burden is fair. Today is not the time to examine that, but I register the fact that it would be extremely useful for the committee to consider that aspect. I know that the committee has examined local government finance before, but that inquiry, in which I was involved as a non-member of the committee, never really considered how assessors do their work—or, if it did, it did not do so in detail. That is not to criticise assessors. In any event, shopping patterns have now changed so drastically that I wonder whether supermarkets and hypermarkets should meet a larger share of the burden than they do under the current system.

This is not the time to debate the overall merits of the current form of business taxation in Scotland. People have an opportunity to become involved in that as part of the overall review of local government finance, which provides the appropriate vehicle through which to make such points.

I will allow other members to comment, because I have allowed one or two to do so already. The general point is that it is inappropriate to have a broad-based debate on the back of the order. If people had major concerns about the Executive's proposal, the appropriate course of action would have been to lodge a motion to annul, which would have required the presence of a minister and subjected the instrument to full scrutiny, after which the committee could have taken a view on whether the Executive's proposals were appropriate. I do not want to prolong the discussion; if people had strong objections, they should have lodged a motion to annul.

I have a point of information rather than a contribution. I say in response to Fergus Ewing that, long before undertaking its local government finance inquiry, the Local Government Committee in the previous parliamentary session held a lengthy and detailed inquiry into non-domestic rates. That was one of that committee's first inquiries in the first session. It was factually inaccurate for Fergus Ewing to claim that rates had not been examined.

Do any other committee members want to make brief comments?

I put my hand up to speak now because I am not a committee member.

I will make three brief and simple points that the committee might consider as it decides its future work on non-domestic rates. First, non-domestic rates in Scotland are 7.7 per cent higher than those in England. The order will make them 9.2 per cent higher in Scotland than in England. Some evidence and satisfaction are needed that the revaluation accounts for the difference.

Secondly, the revenue that is collected from non-domestic rates has increased by 46.5 per cent since 1999 to £1.951 billion. That is a significant increase. Finally, since 1999, £376 million of funds have been collected through non-domestic rates additional to what the Scottish Executive expected to be raised. It is clear that business in all its forms has paid significantly more than expected. I argue on a political basis that that means that those rates could have been reduced. I raise those three matters as useful points of information for the committee.

I will not respond in detail, because many of the member's points are items for political debate that we could go on about all afternoon. I merely note that the Executive proposes a reduced poundage rate from 48.8p in the previous year to 46.1p. We could have had considerable debate about whether that was the appropriate rate if any member had decided to lodge a motion to annul. I merely note the fact that no member lodged any such motion. It would not be competent for a member to move such a motion at this stage. Are members therefore content to note that we have nothing to report on the instrument?

Members indicated agreement.