Rating (Agricultural Premises and Rural Shops) Bill

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Mr. Green: I have a degree of sympathy with that part of the case put by the hon. Member for Somerton and Frome that attempts to secure greater clarity and therefore greater perceived fairness in the Bill's definitions. We can all have fun at the Government's expense with the definitional problem of what is and what is not rural. Apparently, north Somerset is not rural—I agree that that is absurd. It is also absurd that the rural group of Labour MPs has 168 members; it would be interesting to know how many of that group represent seats that their own Government do not regard as rural.

Mr. Gray: My hon. Friend may be amused to know that the Labour party counts both North Swindon and South Swindon as rural seats. Those who, like my hon. Friend, know Swindon well will see the absurdity of such definitions. There is also the more serious question of whether or not a Secretary of State would be tempted to twist the definition of rurality to suit purely political purposes rather than to establish objective indicators.

If the Government are dividing the country into urban and rural areas and giving specific privileges to areas according to status, the House should insist that those definitions are clear, open and evidently fair, so that those who fall one side of the line or the other can accept that that happens as the result of a fair and transparent process. That need for clarity and fairness is greater than ever in view of the fact that we are increasing the reliefs available to certain types of business in rural areas.

One accepts that there will be places that fall narrowly on one side of a line or another. The hon. Member for Somerton and Frome said that it was absurd to classify farms as being in non-rural areas. However, some farms are inside the area of the Greater London Authority, for example, and it would be tough to argue that that was a rural area. Some of our most urban areas contain businesses such as farms that are generally found at the heart of our rural areas. Thus there will always be definitional problems.

Mr. Heath: Does the hon. Gentleman accept that the Greater London area would not be a settlement of less than 3,000 people? There are two qualifying elements for the Secretary of State.

Mr. Green: Indeed, so; and even the constituent boroughs of Greater London—Bromley contains a number of farms—would not qualify under that criterion. Nevertheless, definitions are needed and some settlements will fall just to one side of the line or the other. However, I seek to support the point made by the hon. Gentleman that it is important that the matter is not left purely to the discretion of the Secretary of State, because that will inevitably introduce an element of suspicion that political considerations may hold sway over more objective considerations. That would be unfortunate and would cast doubt on the legitimacy of the improvements that the provision might bring about.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Robert Ainsworth): The amendment would alter the means of designating rural areas and settlements for the purposes of the village shop rate relief scheme. It would not affect the farm diversification relief provided for by clause 1, which is not limited to such designated villages. However, it would affect the existing village shop rate relief scheme and the extension to it under clause 3.

The amendment would remove the requirement for settlements identified and listed by local authorities as eligible for the relief to be in rural areas designated for the purposes of the scheme by the Secretary of State. There would be no way of defining the areas within which the village shop rate relief scheme would apply. Nothing would stop councils identifying as settlements eligible for the relief areas with populations up to 3,000 in towns or cities, demarcated, for example, by ward boundaries or main roads.

The hon. Member for Somerton and Frome says that the Secretary of State could make the relevant decisions in other ways, but his amendment would remove the Secretary of State's ability to decide what a rural area is.

Mr. Heath: The Minister is construing the word ``settlement'' in an extraordinary way. If the Secretary of State failed to challenge a local authority's determination that part of a conurbation was in its own right a settlement of fewer than 3,000 people, he would fail in his duty properly to represent the Government's view.

Mr. Ainsworth: The amendment effectively removes the Secretary of State's ability to do that, so the hon. Gentleman is protesting against his own amendment in making that comment. The amendment would turn the scheme into rate relief for small food shops and certain small general shops, post offices, pubs and petrol stations throughout England and Wales. It would no longer be a scheme of rate relief targeted at isolated rural communities. A general scheme of rate relief would be much more effectively achieved through our proposals in last year's local government finance Green Paper. Those proposals would cover all small businesses; that approach would be preferable to amending the scheme that we are now considering, which was designed for other purposes.

The comments of the hon. Member for Somerton and Frome give the impression that some small villages in rural areas will not qualify for relief under clause 3. That is not so. Rural villages with populations below 3,000 will qualify. The designation of the 151 local authorities as rural does not apply to clause 3; it applies to the temporary relief being given to local authorities for foot and mouth. It does not stop local authorities giving relief to small businesses in their area, but it affects the amount of assistance that they subsequently receive from the Government for doing so. Without the amendment, clause 3 will provide for rate relief for small shops in rural settlements with populations under 3,000, irrespective of whether they are in the areas of the 151 rural local authorities.

Mr. Cotter: While the matter may be slightly outside the scope of the Bill, it has highlighted the great concern about the present crisis and about how Government support will be brought to where it is needed.

Mr. Ainsworth: There are issues to be dealt with. I respond to correspondence on this issue from Members of Parliament, so I am fully aware of the concern. However, the question of what can be done needs to be discussed elsewhere, not in Committee today. The amendment is unnecessary and I ask the hon. Gentleman to withdraw it.

Mr. Heath: I am wholly unconvinced by the Minister's response. I was careful not to make any claims about qualifying the Bill's provisions. I said that this was an opportunity to deal with an anomaly that was all too clear to those people who are struggling to make ends meet as a result of the foot and mouth crisis. They are anomalously discriminated against by the present legislation. It would be quite proper to take this opportunity to do that.

I do not believe that it was ever anyone's intention that there should be discrimination against villages that happen to lie on one or other side of a local authority boundary, depending on the general nature of the local authorities and their hinterland. We do not have homogeneous local authorities in this country. Some are clearly urban, but the great majority of district council areas contain urban and rural settlements. The problem is that the rate relief to which the provision applies is aimed only at places in the areas designated by the Secretary of State. That is an anomaly and the Minister should consider it more carefully.

Mr. Ainsworth: The hon. Gentleman protests that I point out the effect that his amendment would have. He appears not to accept my statement that the relief under clause 3—his amendment would change this—would apply to all small rural villages with populations below 3,000, whether or not those were part of the 151 local authorities designated by the Secretary of State.

Mr. Heath: This is a dialogue of the deaf; I have accepted what the Minister says about that relief. However, the matter concerns other non-domestic rate reliefs, whether through the hardship relief or other measures. The Minister has clearly not been listening, but I hope that he will study the record of the Committee carefully and at some future time, if he has the opportunity, do something to correct matters. We have probably now aired the subject sufficiently, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Green: I beg to move amendment No. 10, in page 1, line 15, leave out from `than' to end of line 16 and insert

    `£8,000, or any amount prescribed by the Secretary of State by order, whichever is the higher.'.

The Chairman: With this it will be convenient to take the following amendments: No. 11, in page 1, line 15, leave out from `than' to end of line 16 and insert

    `£12,000, or any amount prescribed by the Secretary of State by order, whichever is the higher.'.

No. 1, in page 1, line 15, leave out from `amount' to end of line 16 and insert `which the Secretary of State may by order prescribe, and which he will review within three years beginning with the day on which this subsection comes into effect.'.

No. 12, in page 1, line 16, at end insert—

    `(6FF) The Secretary of State shall make at least one order in each year under subsection (6F) to prescribe an amount in relation to the subsequent financial year.'.

Mr. Green: The purpose of amendments Nos. 10 and 11 is to put the relief on a more generous scale and to make it more consistent with other Government actions. There are several reasons for that, the most important of which is to match the scale of the crisis now affecting so many businesses in the countryside. This Committee may not be the place to rehearse the full extent of the devastation caused by foot and mouth disease, but the Minister knows that the reliefs that we are discussing under the clause originated before foot and mouth struck. They were intended to deal with the crisis that was already going on, and not the one that has been added to it.

The amendments would, among other things, have the beneficial effect of approaching more closely an effective way of coping with the scale of the crisis affecting businesses in the countryside. In that context, I am grateful for the support of the National Farmers Union for the amendments. The NFU noted that, when the existing village shop rate relief scheme was extended to pubs and petrol filling stations, relief was limited to properties with a rateable value of up to £9,000, rather than the £6,000 in the Bill. That recognised the fact that premises that provide key services in rural areas can have higher rateable values than £6,000, as mentioned on Second Reading. Clearly, farmers should be encouraged to introduce the most appropriate diversification projects. However, it is conceivable that we shall frustrate the policy objective behind the Bill if we continue to set the level too low. I hope that the Minister who replies to the debate will take those comments on board, because they go to the heart of the Bill.

11 am

If the Bill is to be effective, it should not exclude businesses with a rateable value of more than £6,000. The figures that we have chosen—£8,000 and £12,000—invite the Government to introduce more coherence into their policy. A Department of Trade and Industry Green Paper on small businesses makes the cut-off point for such businesses a rateable value of £8,000. If that is the general definition of a small business, it is not obvious why it should not apply to the rural small businesses that the Bill is meant to help. The crisis relief level for businesses affected by foot and mouth disease is £12,000. We therefore have a cornucopia of choices for the rateable value, and the Government should settle on one. They should at least explain why the level in the Bill differs from that in other legislation and in some of the Green Papers that they have introduced.

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