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Mr. Speaker: Order. Those are matters for debate and are nothing to do with the Chair.

Ms Armstrong: If the hon. Member for Lichfield had been listening, he would have heard the explanation. Tea shops are not necessarily seen as essential to the local community, so would not automatically qualify for relief under the Bill. However, if the local authority thought that a certain tea shop qualified for hardship relief, it could get relief under existing rate relief exemptions. If a shop selling food to villagers had a subsidiary business serving coffee at two or three tables on the premises, it would obviously qualify, as the food shop was the main business. I hope that the hon. Gentleman is content with that answer.

Several hon. Members rose--

Ms Armstrong: Before giving way, I want answer the question asked by the right hon. Member for Skipton and Ripon, as I have not yet been able to do so. He asked how many businesses would benefit and I gave the number of farms and food shops that will benefit. Precise figures are not available, but we estimate that there are about 3,000 food shops in rural parishes with populations below 3,000.

Mr. Curry: I am grateful for the right hon. Lady's tolerance; we are seeking to clarify matters in this debate, not necessarily to dispute them. She talked about contributions to the local community and their importance. Is a facility important because it offers a service to local people or because its economic impact is achieved by attracting and servicing visitors?

Ms Armstrong: As a Minister, the right hon. Gentleman introduced the original legislation, and I remember having similar debates with him then. He will therefore know that that is a matter for judgment and has been the subject of serious debate over the years. The number of such facilities has now expanded and I do not want to say that either route is right for a particular village. In some villages, the service provided is important. The intent of the Bill and of the legislation in general is to make sure that communities in rural areas are sustainable in the long term, which is why we must also take account of their tourism potential, their visitors and the service that they get. I therefore talked about other hardship relief for which such businesses may qualify.

As the right hon. Gentleman knows, and as he mentioned earlier, there has been an increase of up to 95 per cent. in the hardship relief that the Government are giving to premises such tea shops. That is why it is difficult to say that such businesses will not be eligible for rate relief; many will be, if not directly under the Bill. That is the point that I was seeking to make earlier.

Mr. Geoffrey Clifton-Brown (Cotswold): I am grateful to the right hon. Lady for giving way, and I draw attention to my declaration in the Register of Members' Interests. The right hon. Lady will be aware that I have

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written to her right hon. Friend the Minister for the Environment about Stroud district council's rate relief, and the fact that the council cannot recover part of the 75 per cent. rate relief from the non-domestic rate pool. Three weeks ago, that amounted to some £250,000 and many hundreds of applications. Can the right hon. Lady tell us whether the Bill will impose an extra burden on local authorities that cannot reclaim the full amount of rate relief given under the terms of the Bill? If so, it will impose a general burden on all council tax payers in a local authority area.

Ms Armstrong: We agreed in Committee--of which the hon. Gentleman was a member--that councils would not have to pay over their non-domestic rate now and claim it back, so the problem to which he alludes should not arise. They will have to do so eventually, but that will be dealt with at the time. We agreed in Committee that it was right for councils to make some contribution to the hardship relief.

Mr. Clifton-Brown: The right hon. Lady says that councils should make some contribution to the hardship relief. Is she saying that the same applies under the Bill? If so, can she say what the total amount will be that local authorities cannot reclaim under the Bill?

Ms Armstrong: The Bill will enable businesses to claim 50 per cent. rate relief, not 100 per cent. The 100 per cent. relates to hardship relief. The local authority has the discretion to raise the relief to 100 per cent., but the mandatory level of relief that will be funded by the Government is 50 per cent.

Mr. John Bercow (Buckingham): I am grateful to the Minister of State for giving way. Given that clause 4 declares that the power to make further orders under the Local Government Finance Act 1988 is unaffected, can the right hon. Lady tell the House whether any such orders would be subject to the House's negative procedure or its affirmative procedure?

Ms Armstrong: The hon. Gentleman should know that we have dealt with orders in the past few weeks: we discussed them in Committee. I am sorry that he was not a member of the Committee.

Mr. Bercow: Negative or affirmative?

Mr. Speaker: Order.

Ms Armstrong: I am trying to be helpful. I assure the hon. Gentleman that orders will be made under the negative procedure. That was agreed when the Government whom he supported passed the original legislation. We discussed such orders upstairs. We made it clear that should evidence emerge that the support was insufficient, we would be happy to return to the matter within the three-month period to which the orders relate.

Mr. Fabricant: I am grateful to the right hon. Lady for her generosity in giving way. She may inadvertently have misled the House when she answered the question from my hon. Friend the Member for Buckingham (Mr. Bercow). She said that the previous Administration had decided the provisions to which clause 4 refers.

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However, as clause 4 deals with the functions of the National Assembly for Wales, and devolution was effected under the present Government, how on earth could that have been possible?

Ms Armstrong: I apologise to the hon. Gentleman. The Bill as a whole affects the whole of England and Wales, as does the 1988 Act. Orders made under that Act will also affect England and Wales. The National Assembly is responsible for implementing the provisions that affect Wales, but we in the House are responsible for the Bill overall. I hope that that helps the hon. Gentleman.

Mr. David Heath (Somerton and Frome): Will the Minister help the whole House by spelling out the reason why there is a need for primary legislation in respect of agricultural premises and premises used for the supply of food, but not hot food, while public houses and other shops can be dealt with in secondary legislation? That is crucial to our understanding of why the Bill is being introduced.

Ms Armstrong: The hon. Gentleman should return to the Local Government Finance Act 1988. As that Act defines the nature of shops, we must introduce primary legislation to change the definition of eligible shops.

Mr. Evans: On clause 4--I know that this provision has always been a bit of a problem for the Labour party, but then so has clause 3--what discretion will the National Assembly for Wales have once the Bill is enacted? Will it be able to vary its application in any way?

Ms Armstrong: On the interpretation of the Bill in Wales, I have already said that Wales is responsible for specific rating issues. It must, however, act within the terms of the overall legislation. In that respect, subsequent orders are up to the Welsh Assembly.

The relief will operate on terms similar to those which already apply for village shops. Mandatory relief of 50 per cent. will be paid by the Government, and local authorities can use their discretion to increase that to 100 per cent. The relief will be limited to properties of below a certain rateable value, which we intend to set initially at £6,000. That will be reviewed at subsequent national revaluations to ensure that it keeps in line with general changes in rateable values. For a property of that size, the mandatory relief will be worth £1,290 in 2001-02, and 100 per cent. relief would be worth £2,580.

The scheme will initially run for five years, but we will keep it under review and extend it if necessary. If it were to be extended, however, businesses would be limited to receiving relief for five years after they diversified, because its purpose is to help farmers to diversify, rather than to provide a long-term subsidy.

I should make clear how the Bill impacts on some forms of farm diversification that already qualify for rate relief--an issue that was raised by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). The premises of small-scale bed-and-breakfast businesses and similar businesses are treated as domestic rather than non-domestic properties. Thus, under the current system, they are liable for council tax, which tends to be lower than business rates. That applies to bed-and-breakfast businesses with no more than six beds in a property

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where the proprietor also lives, and to self-catering accommodation that is available for letting for no more than 140 days a year. The new scheme extends rate relief to agricultural premises that are converted to those uses on a larger scale and therefore do not qualify for the existing rating exemption.

A rating concession is already given to stud farms that are situated on agricultural land. Such farms currently receive a flat-rate reduction in their rateable value of £2,500, which amounts to a reduction of £1,075 from their bills for 2001-02. For the smallest stud farms, the concession amounts to a complete exemption from rates. The scheme is not time limited.

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