I desire to move the Second Reading of the Local Government (Rates on Small Dwellings) Bill. In dealing with the incidence of rates, there are two rather important matters that have to be kept in mind. One is in order that the local administration may be responsibly carried out those who vote for the election of representatives will also be persons who contribute to the rates, so that there will be an element of responsibility both in the voters and the elected representatives. The second matter is that for the purpose of facilitating economy in the collection of rates persons who shall be ratepayers shall be people of some substance and permanency of domicile. The Local Government Act of 1898 took cognisance of the first matter when it put primary responsibility for the poor rate on the occupiers of dwellings. In fact certain landlords did continue to pay the rates, either by agreement with the tenant or otherwise. Recently certain developments have taken place which affect very much the second matter. In the first place, the Restriction of Rent Acts prevented landlords from raising their rents beyond a particular point, and the landlords began to transfer to the occupiers of small dwellings the onus of paying the rates. In the second place, a judgment was given in the case of Bradshaw against McMullen to the effect that if even there was a contract that the landlord would pay the rates which were legally due to be paid by the occupier such contract was void. This particular judgment and the effect of the Rent Restrictions Act began the movement by which the landlords allowed to go back to the occupiers of houses the onus of directly paying their rates.
The result has been that rates became due to be paid by very small holders, persons of not very great substance, and local rating bodies have experienced a considerable amount of difficulty in collecting rates from such persons. There has been an agitation on the part of the local rating authorities for the purpose of getting legislation passed to make the landlords responsible for the payment of rates in respect of small dwellings. Quite a large number of rating bodies have appealed to the Minister for Local Government on the matter and the Association of Muncipal Authorities has passed a very definite resolution. It is desirable to facilitate the collection of rates and to make the collection of rates as inexpensive as possible. The Department of Local Government have had to consider the question from the point of view of reconciling the two important principles that we have referred to, and the result is the Department and the Government are quite clear that it would have a very bad effect on the carrying out of local administration if any large section of the people were freed from the responsibility of paying rates, or were allowed to get into a position in which the rates did not matter to them. The present Bill, however, reconciles these two principles, I think. It extends to all rating authorities with the exception of town commissioners. The reason for excluding town commissioners is, in the first place, that in the areas where town commissioners exist there are two rating authorities, the county council and the town commissioners. The rating powers of the town commissioners are small; their rate cannot be more than 2/- in the £ where water is not provided and cannot be more than 2/6 where water is provided. Invariably the town commissioners strike their rate at a different time from the date of striking the rate by the county council. It has been found desirable to leave the town commissioners out of it so as not to complicate the scheme.
I think it might be said in passing that it is inevitable that the whole question of rating will be gone into with a view to simplification. There are very great complications in the whole business of rating at present and it is probable that in any rearrangement of the system of rating, instead of town commissioners being a direct rating authority, matters would be arranged so that they would make their demand on the county council in the same way as the county council makes its demand on the urban district, or in the same way as the Board of Health makes its demand on the county council. However, the town commissioners have been left out of the scheme.
In respect to the other rating bodies, county councils, county boroughs, boroughs or urban districts, this Bill applies. It proposes that owners of small dwellings not exceeding £6 in valuation will be the persons responsible for paying the rates. The figure of £6 has been chosen as being a fair average among the figures that have been suggested to the Department by local bodies. It is taken as rather too low a figure than too high. On discussion of the matter it may be found that in the case of county boroughs it may be desirable to modify the proposals so that a higher valuation can be quoted, but generally £6 is quoted as the most satisfactory figure.
Owners will be responsible for the rates, and in the case of owners not paying the rates before they pass on ownership to a subsequent owner, the subsequent owner can be made liable for the rates with a two years' limit. Where an owner is not now paying the rates and becomes under this Bill responsible for the rates, he is authorised to increase what I shall call the original or contract rent as distinct from the standard rent that is mentioned in the Rent Restrictions Act.