| Previous Section | Index | Home Page |
7.45 pm
Mr. Nicholas Winterton: I declare my interest as chairman of the Manufacturing and Construction Industries Alliance. I congratulate my hon. Friend the Member for Batley and Spen (Mrs. Peacock) on new clause 2 and register strong support for what it seeks to achieve. My hon. Friend advised the House that the cost to the housebuilding industry of making showhouses subject to uniform business rate rather than council tax is estimated to be some £5 million. I am sure the House will agree that that is not a huge sum in the context of the size of that important sector of our economy, but I emphasise that the small to medium-sized building firms and companies are hit disproportionately by the tax, at a time when--as my hon. Friend said--profit margins have been squeezed by the recent severe recession in the housing market for which the industry itself was not to blame in any way.
Newly built showhouses awaiting sale are simply the stock--I emphasise the word "stock"--of the housebuilding industry or, at worst, are unoccupied residential premises. Their prime purpose and their prime use is simply display so that potential purchasers of a new home can see the product that they are considering buying. It is inevitable that in some showhouses there may be a receptionist to greet visitors or perhaps even a salesman or saleswoman available, on a part-time basis or by appointment, to negotiate a sale, but that is not necessarily typical of many of the showhouses on the many small developments where the local building company or firm has neither the resources nor the inclination to maintain the cost of a sales team. We need therefore to assess the tax liability of such premises not on the basis of what minor activities may on occasion be undertaken in showhouses but on the basis of their prime purpose which is, as I have already said, as the stock of the building industry.
Some people have expressed the irrational fear that the new clause's amendment to the local government tax regime would set a precedent for other industries seeking to widen the benefit. I do not accept those arguments.
23 Jan 1997 : Column 1134
Simply because a housebuilder might on occasion undertake limited secretarial or administrative work in a showhouse--as Members of Parliament sometimes do in their homes--should not mean that suddenly the prime purpose of the premises is considered to be the commercial conduct of secretarial and administrative work. The prime purpose of the property is its sale. If that were not the case, in the interests of justice all right hon. and hon. Members who cannot escape paperwork, correspondence, filing, meetings and even media interviews at home would have to be charged the uniform business rate as well as the council tax.
I sincerely commend the new clause to my right hon. Friend the Minister of State and I hope that he will listen carefully and sympathetically to what has been said tonight and accept that the unjust anomaly should be addressed. I hope that he will undertake to make acceptable proposals of his own for putting the matter right. We have spoken briefly but to the point and I hope that the Government will make proposals to put right the current unjust anomaly.
Mr. Curry:
As my hon. Friends will know, we can add to the list of eligible properties and businesses under the order-making powers that are attached to the Bill. We would look to use that mechanism in any additions we made to the Bill and on those grounds I will ask my hon. Friends to withdraw the new clause.
I wish to state clearly, so that there is no misunderstanding, that I am in two minds on the issue. There is a good case on both sides of the argument. As my hon. Friend the Member for Batley and Spen (Mrs. Peacock) said, the land tribunals have defined the problem recently so the legal uncertainty is now at an end. She also admitted that the way some builders use the showhouses has a business element. When showhouses lie empty for a while, we must also take into account the tax treatment of empty properties under the council tax regime.
Equally, I can see that placing show houses on the business rate list--even for a short time--and moving them on to the council tax list once they are sold as dwellings would place an administrative burden on the council tax payer and the Valuation Office. Therefore, on the grounds of deregulation, there is a case to be listened to. I can tell my hon. Friends the Members for Batley and Spen and for Macclesfield that I am ready to listen to that case and I am willing to receive representations to balance the arguments. If they can persuade me that this is the correct move, I will use the order-making powers in the Bill to bring it into effect and I shall do so conterminously with the discussions on the legislation.
Mrs. Peacock:
My right hon. Friend the Minister of State has obviously listened to what I and my hon. Friend the Member for Macclesfield have had to say, and I hope that he will be able to introduce a measure along the lines that we have suggested. I therefore beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
23 Jan 1997 : Column 1135
Mr. Calum Macdonald (Western Isles):
I beg to move, That the clause be read a Second time.
The intention of the new clause is to remove the liability for non-domestic rates from voluntary sports and recreation clubs and associations. The effect of this would be to bring the treatment of clubs in England and Wales into line with the treatment of clubs in Scotland. I hope that the Government will recognise that this is an important issue, and that it is a fair and reasonable proposition to which they should respond positively.
The Government should make a positive response for two reasons; the first being the importance of sport to our national life. The Government have explicitly acknowledged that, and the Prime Minister made his contribution last year in a document called "Raising the Game". The document was all about the need to improve the access of British people--particularly young people--to sporting facilities. We all acknowledge that an important part of that is the role of voluntary clubs and associations, and particularly the role of the thousands of volunteers who devote much of their time trying to involve young people in sport and recreational activities.
The second reason why the Government should accept the fairness and common sense of the new clause is that clause 2 of the Bill aims to correct the anomaly that currently exists between the treatment of sporting rights in England and Wales and the treatment of sporting rights in Scotland. However, I wish to point out to the Minister that a second anomaly--between the treatment of sporting clubs in England and Wales and the treatment of such clubs in Scotland--still exists. That anomaly is no different in principle from that which the Government are trying to tackle in clause 2 affecting sporting rights. If it is right to do away with one of those anomalies, I suggest that--by the same logic--the Government should do away with the other. That is what I am trying to do in new clause 5.
One of the reasons why the Government could not include the measure at the outset was that they were apparently unaware of the existence of the anomaly. Certainly the Minister seemed to be unaware of the matter when I raised it in Committee, although he has since checked and found that it does exist. He wrote to me on the matter and sent copies of the letter to all other members of the Committee. I hope that he is now prepared to take a fresh look.
The question of costs must be addressed, and the Central Council of Physical Recreation--the umbrella body that covers all voluntary clubs and associations--has looked at this. Its most recent study of the effect of the new clause suggested that the cost to the Exchequer would be £14 million a year. That sum, I suggest--although it is not negligible--is relatively modest when
23 Jan 1997 : Column 1136
The Government estimate that the cost of removing the sporting rights anomaly will be £4 million to £5 million. That anomaly affects only 6,000 holders of sporting rights in England and Wales. By comparison, the sporting clubs anomaly affects over 150,000 clubs and associations--25 times as many clubs--and will affect the 6.5 million people who enjoy and use these clubs. Given that the additional costs of removing the anomaly dealt with by the new clause are only £14 million--compared with the £5 million costs of clause 2--the Government will be getting good value for money.
I represent a Scottish constituency, and I am aware that I am speaking on an issue affecting England and Wales, but that is entirely within the rules of the House. I have tried to be brief, and I shall conclude by quoting briefly some of the clubs and associations that have been in touch with me to allow them to have their say directly--as it were--on the importance of the issue. The National Cricket Association has been in touch with me through the firm of chartered surveyors that acts as rating adviser to the association, and it pointed out that most of the individual members of the association are small voluntary cricket clubs
At the same time, the association said that a
23 Jan 1997 : Column 1137
'In Schedule 5 to the 1988 Act there is inserted--
15A. A hereditament is exempt to the extent that it consists of property used wholly or mainly by a club, society or other organisation not established or conducted for profit for purposes of sport or recreation.".'.--[Mr. Macdonald.]
Brought up, and read the First time.
"who survive purely on the income that can be generated from their individual members. Over the last few years . . . many of the clubs have fallen into severe financial difficulty".
This has occurred as a result of the generally difficult economic background of the past few years. Inevitably, the association said, a number of clubs will not survive.
"substantial increase in rate liability . . . has fallen on the clubs as a result of the rating revaluations in 1990 and 1995, and the generally unsympathetic attitude of Local Authorities to the applications which have been made for . . . rate relief".
The association's letter continued:
"The first effect of this is usually that the club will halt any expenditure on maintenance or equipment. Club premises fall into disrepair, reducing the attraction of the club to new members. The falling standard of facilities such as nets and practice equipment also deters parents from encouraging their children to participate in the youth activities at clubs which in turn will have a knock-on effect in the next few years on the number of talented youngsters rising to the top level of our--
meaning the English--
"national summer game."
Given the state of English cricket today, that seems to be a cry from the heart to which the House should respond. The association then stated:
"A straightforward and very tangible benefit which could be provided for clubs would be mandatory rate relief . . . clubs would undoubtedly view this as a significant encouragement to their activities which would help strengthen the long term future of the game throughout the United Kingdom."
I should like to mention a letter that I received from the secretary of the English Indoor Bowling Association to illustrate the different types of sport that are affected by the rating liability. He pointed out that a lot of capital investment is needed to provide the basic facilities for indoor bowling. The association believes that it has a strong case for arguing that those facilities should benefit from rate relief. He made an important relevant point when he stated:
"Indoor bowls is played by people of all ages, there is no advantage in gender, size, age, and within reason, physical fitness. It is played by many people with disabilities with the majority of clubs providing sessions each week for the blind and partially sighted, wheelchair bound bowlers and other mentally and physically handicapped people . . . the operation of the bowls hall is often left to the clubs themselves and in common with the majority of the members clubs, they are run mainly with voluntary labour since without this they would not be viable."
| Next Section
| Index | Home Page |