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7.15 pm
Mr. Owen Paterson (North Shropshire): This is the first debate on the countryside that the Government have held since the foot and mouth crisis began. We have had three such debates in Opposition time and we have had statements from the Government, but we have not had a full day's debate, and that is appalling. The problem concerns not only farming but the whole rural economy.
I had a meeting with my county council chief in the early days of the crisis, when I also met the chief executive. In Shropshire, 12 per cent. of the population is engaged, directly or indirectly, in farming activities and 15 per cent. is engaged in tourism and related industries. I went to a crisis conference in Telford. My hon. Friend the Member for Ludlow (Mr. Gill) and I were the only MPs present, but 200 people came along at short notice to stress the immediate crisis that they are facing.
The Government set up the taskforce, but before that the Secretary of State for Culture, Media and Sport came to the Chamber to make a statement. I had already had letters and phone calls from people who were desperate because their business had simply stopped. I asked the Secretary of State whether he had talked to banks about loans or to the
Chancellor about rates and what he had done about promoting tourism. I was accused of being partisan and of ranting, which I hope you think is an uncharacteristic feature of my performance in the Chamber, Mr. Deputy Speaker.
Mr. Paice: My hon. Friend is never knowingly under-ranted.
Mr. Paterson: I am touched by that endorsement from my hon. Friend.
Three weeks later, the Minister for the Environment, came to the Agriculture Committee. He talked about the very same interest-free loans, rate relief and promotion and marketing, but he was only talking. The Government are "considering" and saying that they are "sympathetic", and the taskforce is "meeting", but where is the action? We have had an announcement on rate relief for businesses affected by foot and mouth. Businesses in my area went to Oswestry borough council about that, but the council had not been informed. Months after the crisis began, we have this puny little measure. It would be churlish to deny that it will help, and it will provide some small help to some businesses, particularly those which will have to diversify away from basic farming. However, it is too little, too late.
I would be grateful if the Minister paid attention while I give a few examples of local people who are absolutely desperate. I can see that she is in deep conversation with the Whip.
Ms Armstrong: My hon. Friend is very sensible.
Mr. Deputy Speaker (Mr. Michael Lord): Order. We must not have interventions from a sedentary position.
Mr. Paterson: Thank you, Mr. Deputy Speaker. I was just trying to get the Minister's attention. I want to be brief because I know that other hon. Members want to speak. I want to talk about the second largest industry in the rural sector, which is the equestrian business. It has a turnover of £2.5 billion, 2.4 million riders, 900,000 horses and 20,000 businesses employing 40,000 people, and that is excluding racing. In April, the industry lost about 50 per cent. of its turnover. In May, it is likely to lose 60 per cent. The revenue lost in April was £57 million, and the industry reckons to be losing about £29 million a week. Those losses are simply unsustainable by small country businesses, and the decelerator effect in the countryside will be massive. Farriers, horseshoe manufacturers, tack shops, saddlers, retailers, equestrian magazine publishers, specialist equipment suppliers, feed merchants and competition organisers will all be affected. They are short of cash.
The other day I went to a large, successful riding school whose name might make the Minister's ears prick up. It is called the Prescott equestrian centre, having the same name as the great Jaguar owner. The school is based in Baschurch near Shrewsbury. It was involved in classic diversification; large barns, originally set up for agriculture, were converted by Mrs. June Haydon. In the past 14 or so years, the school has created a successful business; it owns about 70 horses and employs 20 full and
part-time staff. When I went there the other Friday, it was quite dead, which is shocking. When one drives past, one can see that there are not many cars around; but to go to such a large establishment, with a huge indoor school, an outside showjumping arena and a dressage arena, and find no activity on a beautiful sunny morning in the run-up to Easter is shocking and brings home how devastating the crisis is.The business has weekly overheads of about £3,000, but is nowhere near getting that back. Such businesses will not carry on without an immediate injection of cash to help cash flow, as we have suggested in our interest-free loan proposal, which is considerably better than the Government demanding 8.75 per cent. interest and collateral. As one farrier, whose business is down from 150 horses to just eight per week, told me, that is just a shovel to dig a bigger hole for one's grave.
Without being churlish, what is offered on rates on new businesses is welcome. However, Mrs. Haydon cannot touch it, as her business has been going for 14 years. Surely, it is iniquitous to create a division in the equestrian business. It cannot be fair that established businesses cannot take advantage of that fairly puny measure. The cost of business rates can make or break diversified business.
Another constituent of mine, Mr. Richard Matson from Twemlows Hall, had a substantial dairy and pig business, and has diversified. He set up an equine therapy pool for exercising injured race horses; a highly enterprising idea which required considerable investment. However, because of the racing season, it was open for only six to eight months a year and it simply could not bear the cost of business rates. In future, that sort of business would perhaps benefit from this fairly stingy measure. Sadly, however, it is too late for Mr. Matson, who had to close his business because he could not afford the business rates. He is bitter about the fact that the measure will apply only to new equine developments.
Mr. Matson also made the point that agricultural colleges pay no rates on riding stables, arenas or indoor schools, although they can use them for all sorts of purposes to do with horses. That seems to be another pernicious effect of a two-tier system of rating. It is not fair that established businesses should have to compete, first, with educational establishments that do not have pay rates and, secondly, with a new tranche of people coming in. There has to be a level playing field; if there is going to be a rebate, it must be available to all.
Mr. Gray: Does my hon. Friend not agree that, when the Government say that giving zero rating to equestrian establishments such as those that he has described will cost them £3 million, £5 million or £10 million, they are being slightly misleading? The moment that they get no business rates from a building because it is being used as a farm, which is zero-rated anyhow, all that they will be doing is giving up a potentially much larger figure. The cost to the Government would be nothing at all if they were to give such businesses a zero rate as well.
Mr. Paterson: I am grateful to my hon. Friend for his prescient comment. I was just about to go on to a similar point made by my constituent, Mr. Matson. My hon.
Friend gave an excellent speech and went into great detail about the impact of the measure on the horse industry; what he said is endorsed by Mr. Matson, who said:
- "The most damning point of the document is the reference to cost. Other than administration costs this will cost the Government nothing. If it attracts new equine enterprises the Government/local authority will be in receipt of more business rates--albeit at 50 per cent.--than it would have been without the scheme."
There is therefore not much risk to the Government. The measure demonstrates that they do not take the rural economy seriously. After three or four months of the crisis, this is the first Government debate that even touches on the rural economy; Members now have a chance to come to the House and debate the issue. It is interesting that only two Labour Back Benchers are present; throughout our debate, only one Liberal Democrat has turned up to make a brief intervention for a press release, and he has now bailed out. By contrast, numerous Conservative Members have participated, intervened and made valuable comments such as those made by my hon. Friend the Member for North Wiltshire (Mr. Gray).
Mr. Gerry Sutcliffe (Bradford, South): He is a Whip.
Mr. Paterson: He may be a Whip, but there are great merits in being a Conservative Whip with a country background.
I shall conclude as I know that other Members wish to contribute. I welcome the idea behind the measure, which is that there has to be some diversification--which must, however, be uniform. Clearly, the equestrian sector is the largest area of activity in the countryside which will benefit from rate relief, but that relief must be uniform across the entire sector.
7.25 pm
Mr. Tony Baldry (Banbury): There was an outbreak of foot and mouth in my north Oxfordshire constituency which had a devastating impact not just on the farming community but on the tourism industry in north Oxfordshire.
Many people were confused about just who in Government had responsibility for responding to wider concerns about foot and mouth. For a long time, there has been a Cabinet Sub-Committee, chaired by the Minister for the Cabinet Office, but at no point in the disaster has she appeared on the scene. The Minister of Agriculture, Fisheries and Food then sought to answer questions on a wider brief, but he was overtaken by the Secretary of State for Culture, Media and Sport, who came to the House on a couple of occasions to make statements. Latterly, responsibility was given to the Minister for the Environment, and we were told that the Government had set up a rural taskforce.
My concern about the Bill, and my reason for wishing to speak this evening, involves the fact that, with the rural taskforce and the Bill, the Government are seeking to give the impression that they are doing an enormous amount for the rural community, rural tourism, village shops, and garages and pubs, when in fact they are doing precious little. The Bill is the sort of measure that will be spun by parliamentary candidates at public meetings in rural
constituencies in the next few weeks as an indication of what the Government are doing for the rural economy, when in fact they are doing nothing whatever.I have constituents whose livelihood and business have been all but destroyed by foot and mouth. The Oxford canal, a beautiful and attractive canal, runs through my constituency, and goes from Oxford up to the Grand Union canal. Oxfordshire Narrowboats at Lower Heyford hires out narrowboats to people on holiday. However, at the outset of the crisis in early March, the board of British Waterways, rightly and understandably, closed all the towpaths. Effectively, no narrow boats could go up and down the Oxford canal or, indeed, any other canal, which of course meant that, almost overnight, Oxfordshire Narrowboats closed down, since it had no customers. Easter is its busiest time for bookings, but it received practically none until Easter week. I am glad to say that, from that week on, things started to improve slightly as the towpaths began to open. However, the closure of those paths was pretty devastating.
I wrote to Ministers asking whether the Government could explain what the rural taskforce would do for businesses such as Oxfordshire Narrowboats. The Under-Secretary of State for the Environment, Transport and the Regions, Lord Whitty, who, as junior Minister, wrote on behalf of the Minister for the Environment, telling me about things that the Government were doing that could assist my constituents--including providing
- "in depth consultancy support via the Small Business Service helpline."
I was also told that my constituents would receive
- "a sympathetic approach to deferred and rearranged payments to Inland Revenue and Customs and Excise."
Then there was the suggestion that there would be
- "extra cash support to enable rural local authorities to provide hardship rate relief--up to £1,290 for three months for a business with a £12,000 rateable value."
The Bill does not do much more. It extends the 50 per cent. mandatory rate relief to all food shops in rural settlements of fewer than 3,000 people. I do not know about my colleagues' constituencies, but most of the villages in north Oxfordshire have more than 3,000 people; or the shops, pubs and filling stations that are left tend, by definition, to be in the larger villages and to serve several smaller villages. So I expect that the proposal will benefit practically no shops, no pubs and no fillings stations in north Oxfordshire.
Practically all the village shops, village post offices and filling stations in my constituency are in villages of more than 3,000 people, because that is the only way those
businesses have managed to remain viable at all. It will be interesting to see how many shops, post offices and pubs across the country are helped by the Bill--precious few, I suspect.Why 3,000? If the Government really want to help village post offices, village shops and filling stations in rural areas, why not extend or give local authorities far greater discretion to extend rate relief to them? After all, local authorities know and should be able to decide locally which village post offices, which village shops and which village filling stations are worth supporting. The Bill gives local authorities scant discretion and will give--[Interruption.] If, instead of chuntering, the Minister of State would like to intervene, she is welcome to. I realise that we may be detaining her from her dinner, but there are many of my constituents whose businesses are in dire straits.
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