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Sir Roger Moate: I am not aware of any such consultation; nor do I want it to be thought that I am suggesting that this is a simple matter when it is not.
The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): Perhaps I can help my hon. Friend. The definitions of rurality are different in the Principality from those applied in England. In Wales, a concept of population density is used which draws on an Organisation for Economic Co-operation and
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Development definition. In England, we use the concept of a settlement, a well known Rural Development Commission definition of rurality.
When we introduced the housing legislation, questions were raised about the right to buy in rural settlements. Those settlements were drawn up on the RDC definition, and we published detailed maps and explanations of the areas concerned. We did not want to be stuck with the concept of a parish or a village as that was often a less generous definition of a settlement than the one that we had.
I shall be happy to try to expand on the matter when I wind up the debate. If my hon. Friend wishes to explore it further, I have no doubt that conversations will take place in Committee about definition problems.
Sir Roger Moate:
I am grateful to my right hon. Friend, because he has confirmed that the Government will seek to interpret the definition generously and flexibly, whether or not it meets people's requirements. That is the right spirit and I hope that the legislation will eventually reflect that sensible and helpful objective.
The definitions are important if we are to make the legislation work well for villages and create good will rather than animosity and jealousy. We desperately want to get them right because this is a splendid Bill which will be helpful and provide genuine assistance to the rural community.
That point leads me to the bigger issue which prompted me to write to my right hon. and learned Friend the Chancellor of the Exchequer and urge that the burden of the business rate eventually be lifted altogether. The problems facing market towns and high streets have already been mentioned. The hon. Member for Holborn and St. Pancras is an amiable chap, but some of his comments were nonsense. We all know that enormous changes have taken place in the retail world and that tremendous social pressures have created great problems in many of our communities. Supermarkets, whether in the heart of town or out of town--we all have many examples in our constituencies--have had a tremendous impact on our market towns and high streets. We have to face that fact rather than make the kind of nonsensical accusations in which the hon. Member indulged.
In my area--I am sure that others have the same problems--the small high streets are fighting the battle for survival, not because of politics and the performance of the economy, but because of the changing pattern of shopping. Many of those shops will struggle to survive and the greatest help that we could give them is relief from the unified business rate.
Mr. Tim Smith (Beaconsfield):
Is my hon. Friend suggesting that we should give business rate relief to the high street shop but not to the out-of-town superstore? If we do away with business rates for every shop, that will not advantage the high street stores.
Sir Roger Moate:
I believe that we must, and will, eventually get rid of the system of business rating completely. It is an anomalous and outdated system. I welcome the Bill, because it creates exemptions from business rates, and we have not had many exemptions in the past. Once we pull out one brick, the whole edifice will start to crumble.
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We must build on the propositions in the Bill. The business rate is not an efficient or sensible system of taxation although, alas, it raises a lot of revenue now and will not be easy to abolish. It is not a local tax, which was its original concept, and the fact that it is based on property values and notional rental values means that it is fundamentally nonsense. All the evidence shows that it is an unfair tax, and I have figures to show that it hurts smaller businesses much more than bigger ones. My figures suggest that less than 6 per cent. of total rateable value is accounted for by properties with a rateable value of less than £1,000, which suggests that we could lighten the burden on those business without losing too much revenue. I have other figures which show that, in terms of profit and turnover, a small business pays 10 times as much, on average, in business rate as the largest of firms.
If we consider the impact of rates as a percentage of overheads, we see that the unified business rate bill for small businesses is 13.7 per cent. of overheads, but for large businesses the figure is 3 per cent. of overheads. By reducing or eliminating the business rate, we would give disproportionate help to smaller companies. Clearly, it would help larger companies if we eliminated business rates, but in practice the price war between the big stores would probably mean that much of any saving that they made would be passed on in concessions to their customers. However, high street businesses would receive major help.
That is why I hope that the Government will consider any suggestions for reducing the burden of business rates on the retail sector and replacing it, ultimately, with much fairer systems of corporate tax, which are more acceptable to the general public and to business. The Bill is only the beginning, but I welcome it for that reason. If it is well handled, the proposal for rate relief will help my constituents and those of most other hon. Members.
Other proposals in the Bill will strengthen the role of parish councils. In some respects, the proposals amend the Local Government Act 1972. I served on the Committee stage of that legislation, which went on for many months. I have no nostalgia for that, but I look back with some pride on the battle that I and other hon. Members fought then to strengthen the roles of successor parishes and community councils. It was not generally accepted by the Government at the time, but I believe that parish councils are a crucial part of local government because they represent the local community in a way that other councils cannot.
Some of the proposals in the Bill, albeit relatively small, will be important to those who control our parish councils, especially the right to levy greater rates and more powers on transport, roads and crime prevention. Of course, it is one thing to give people powers and another to find the resources. That is a problem at any level of government. Nevertheless, the Bill will be a catalyst and will provide extra power for parish councils, so that, in co-operation with local authorities and other institutions, they will be able to tackle challenges that they cannot tackle now.
Because I believe in parish councils, I especially welcome the proposals in the Bill to facilitate the creation of new parishes, which is currently a cumbersome procedure. Most of us know areas in our constituencies which do not have parish councils, but the current procedures to create them are difficult. The Bill will make it easier to create parish councils, and I welcome that.
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I conclude with a more general point. The Bill, the White Paper and the speeches that we have heard have emphasised time and again our belief in the countryside and the rural economy, but those of us who live in or represent rural areas--my constituency is both heavily industrial and heavily rural, so I have a bit of everything--worry when we see the inexorable demands placed on the countryside by the housing growth figures endorsed by central Government.
Unless we get the planning guidance right, there is little point in defending the countryside. Despite all the fine words about building on brown land and reclaimed land, we see the inexorable threat of more developments around our villages, orchards and farmlands. The planners tell us that, in the next 20 years, some 4.4 million new households will be required; I forget the exact figure, but somehow those planners have become family planners and have gained powers of infallibility in the process. I do not understand why we accept those assertions as though they were written on tablets of stone.
We are also told by the planning guidelines, which have already been mentioned, that 45 to 50 per cent. of the new housing has to be built on reclaimed land, but there is no reclaimable land in many rural areas. If those high target figures for housing are accepted as gospel truth and the houses have to be built on reclaimed land when in fact we have no reclaimable land, in the end they will be built on agricultural land. The Ministry of Agriculture sometimes enters objections, but those objections seem to melt away like the snow and disappear. The result is continuous and unacceptable growth.
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