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Mrs. Dunwoody: The point that I sought to make--obviously, I did not do so with sufficient clarity to get it across to my colleagues--is that, although there comes a moment at which planning laws mean saying yes or no to particular developments, the Bill is meant to support businesses. At some stage, the House will have to decide on the ranges of business that are suitable and unsuitable for rural areas. As we are currently anxious to develop any sort of employment, people are not prepared to confront that question, but it will be a significant problem at some future time.
Mr. Heath: I understand the hon. Lady's concerns, but I believe that the matter must be determined by local authorities, which must fulfil their planning function in respect of what is appropriate to their local areas. The House cannot determine such matters, but we can set out
the support that we can offer when a business is determined by the planning authority to be appropriate to an area. Perhaps that is where the hon. Lady and I have a difference of opinion, but it is only slight, as we are dealing with essentially the same point.On food shops, we must consider the key issue of the rateable value threshold. I do not think that the £6,000 threshold is appropriate. The matter was the subject of substantial argument in the statutory instrument Committees that have dealt with related issues concerning pubs and petrol stations. It is a matter that has caused some concern in terms of hardship relief, in respect of which there is a great disparity between what is being offered in England and what is being offered in Wales. I think that the Welsh are right to ask for an increased deal.
On food shops, some basic issues need to be addressed and the Government need to clarify their thinking. We were told that the matter could be reviewed whenever there were revaluations. We have had revaluations since 1977 but have seen no change, despite the fact that the revaluations have mostly been upwards and have often been challenged by businesses that are subject to the business rate. I have no confidence that the threshold will ever move; it will simply stay at a grossly inadequate level.
Evidence from the shops themselves shows that the level is grossly inadequate. I have a letter from the Association of Convenience Stores, which might be said to know the nature of the business of its members. It argues that, although there are exceptions to the rule, in general, a convenience store needs about £4,000 a week minimum turnover in order to be viable. That is a very different figure from the £6,000 rateable value mentioned in the Bill, which suggests a turnover of less than £1,346 a week. Thus there is a huge disparity between what the Association of Convenience Stores says is a viable level and what the Government say is the maximum allowable. We must get to the bottom of that.
It is argued that pubs and filling stations are being given an enhanced level of £9,000 because many of them share large premises, but so do many food stores in rural areas.
Mr. Bercow: I do not dispute what the hon. Gentleman says about sharing premises with larger outlets. However, as he has just referred to the Association of Convenience Stores, does he accept that in the overwhelming majority of cases, those stores occupy a space of under 3,000 sq ft and, almost invariably, occupy a space of about 2,000 sq ft or less? Will he also factor into the equation in support of his general argument the fact that those stores operate on substantially smaller margins than their big business counterparts?
Mr. Heath: The latter point is self-evidently the case, and I am happy to accept the hon. Gentleman's figures on the first point. Although I have no evidence that his figures are correct, I feel intuitively that he is right, so I am grateful for his general support for my proposition.
Those businesses must cross not only the rateable value threshold, but two other thresholds. First, there is the Government's definition of a rural area. As we know, some rural areas are defined by order of the Secretary of State, while others which happen to be on the periphery of conurbations and which are clearly rural areas, are not defined as such. We have had this debate in terms of the
hardship funding. It is difficult to stand on the banks of the lower estuary of the Severn, in an entirely rural setting with not a vehicle or house to be seen, and explain to someone--as my hon. Friend the Member for Northavon (Mr. Webb) has had to do--that they are not in a rural area because the Secretary of State says so, and simply because of the definitions being used. That anomaly must be dealt with.The third threshold is the limit of the population of a settlement to 3,000. I accept that a limit must be set and that 3,000 is towards the upper end of a village size, but in my part of the world we have many small settlements of around that size. Broadly speaking, it is a very rural county, but our population pattern happens to be in settlements of about 3,000 every three or four miles.
It is a townie's conception of rural life to think that only shops in small villages serve rural populations and are suffering from a downturn in the present crisis. It is principally the shops in the market towns that serve the rural population. That is where those people go to shop, and those are the shops that are feeling the squeeze at the moment.
Mr. Lembit Öpik (Montgomeryshire): This is the key issue for me in the Bill. Is my hon. Friend aware that the "big smoke" in Montgomeryshire--indeed, in mid- Wales--is Newtown, whose population is 11,000? The Bill will be extremely helpful for the shopkeepers there, yet they might in part be excluded because of the limitation that my hon. Friend has described.
Mr. Heath: I am grateful to my hon. Friend. That it exactly the kind of illustration of which we should take careful note.
Surely it is possible for there to be either an assessment based on local circumstances or a taper of some sort? The hon. Member for Ashford (Mr. Green) mentioned the original £8,000 level suggested in the Green Paper. The Government's response to that has, as I understand it, been that 50 per cent. of all small businesses fell into that £8,000 rateable value category. That is not true: it was 50 per cent. of all hereditaments, including telephone boxes and the like. Those were not all genuine small businesses. However, there should be some sort of tapering arrangement to enable a sensible assessment to be made.
In relation to hot food, I cannot believe that the Government intend to disqualify all the little food shops that happen to have a pasty counter in the corner from benefiting from this relief. However, that is clearly there in black and white in the Bill at the moment. The qualification is not that the business consists
- "wholly or mainly of the sale by retail of food for human consumption".
- "the supply of food in the course of catering".
A large element of discretion still forms part of the arrangements. There will still be patchiness across the country. We have already seen that, wherever
discretionary rate relief applies, some local authorities are able and willing to do a lot to support smaller businesses; some are willing but not able to do so; and some are neither. I am not arguing against local discretion. The Bill will help to provide a bedrock of mandatory relief, but anomalies will still exist between different areas, sometimes over quite a narrow grid. I hope that they will eventually be ironed out, because the people who have the courage to carry on small businesses in rural areas at the moment need all the help that they can get.This is an inadequate Bill. It moves in the right direction, but it is not part of the larger package that I would like to see and that we have discussed on many occasions, which would include the interest-free loans that the hon. Member for Ribble Valley (Mr. Evans) mentioned. Incidentally, I think that the banks should play a part in providing those loans, perhaps by being responsible for the interest element. I see no need to use Treasury money for that.
These issues need to be treated with an urgency that the Government have so far failed to display. This is not an urgent measure of the kind that we need, but it is welcome none the less. I hope that it will have a swift passage through the House, but I also hope that it will be followed by something much more substantial that will give real support to the businesses that are failing at the moment and will continue to do so over the next few months.
5.38 pm
Mrs. Gwyneth Dunwoody (Crewe and Nantwich): Napoleon was supposed to have said, "Let me have lucky generals" when he was asked to appoint a particular man to be in charge of his army. In agriculture, perhaps the one question that should be asked is, "Is this farmer lucky?" In my constituency a number of farms have been put through enormous hell--there is no other way of describing it--and have sought to alleviate their condition by moving into some form of diversification. Some of them seem to have suffered simply because they got their timing wrong.
I welcome the Bill because, perhaps for the first time in my career, British agriculture faces barriers that are genuinely so great and soul destroying that those affected are under tremendous pressure. For most of my working life, I have listened to the moans of farmers on greater and lesser incomes. The common factor, usually in direct proportion to their affluence, is their ability to complain bitterly about the amounts of money that they receive from various sources. I have therefore not always been as sympathetic as I might have been.
After many years of subsidised farming, however--there have been two different forms of subsidy, but farming has clearly been supported by taxpayers' money--we are paying an enormous price for the growth of agribusiness and damaging methods of farming. It is therefore important to seek any possible means to help farming communities and rural areas to maintain their services and the facilities that we are discussing today.
The Bill is useful. Of course it is possible to argue, as several hon. Members have done, that if one draws a line, someone will be to the right of it and others to the left, and that that creates anomalies. However, anyone who runs a farm shop successfully, for example, in my constituency, competes with my rural butcher in the middle of Nantwich or Crewe. We are therefore not
immune from the charge that, by helping one rural community, we are damaging people in the same line of business elsewhere.The Bill tries to subsidise particular businesses that are under enormous pressure because they provide an essential service. We should be clear about that. The House has not suddenly decided that the whole of agriculture should be reformed, but we realise that village communities cannot exist without shops and schools. Without village communities, there is a rash of gorgeous but empty villages, which incredibly but continually turn into dormitory areas for people who work elsewhere. That is sterile and cannot be supported.
Many farm shops will experience some difficulties. I have in mind two farm shops in my constituency. I shall do my advertising bit, and say that I hope that anyone in Cheshire will support Snugberry ice cream, which is home made and of excellent quality, and Mrs. Miranda Shufflebottom's best sausages, which I buy on every possible occasion. Those products are of high quality and the shops provide good service. However, the amount of relief for which the Bill provides, although necessary and welcome, is small.
We must acknowledge that the sort of support that we can give any business is finite, can continue for only a specific amount of time and can provide only temporary aid. We cannot support rural shops without affecting rural towns; we might otherwise distort competition. Vast distortion already exists because many rural shops pay more for their goods wholesale than supermarkets pay retail. If we are to consider methods of supporting rural industries, we should also examine supermarkets' impact on agriculture, buying patterns and subsidies for business. Those considerations are essential because of their effect on the people whom we are discussing.
Farm diversification is interesting because I suspect farming communities, especially families who have initiative and do not want to be left in an intolerable position, try to diversify. Many diversify into related businesses such as food. I hope that the comments of the hon. Member for Somerton and Frome (Mr. Heath) about hot food are wrong, because many farm shops will not only sell some heated food, but will try to expand that provision.
I am thinking in particular of a business that grew out of the destruction of an entire pig herd. It diversified first into butchery, and then into the provision of teas and light refreshment. Presumably, it might not be able to claim relief. That would be unkind and unfair, and would cause the business great difficulties.
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