|Rating (Agricultural Premises and Rural Shops) Bill
Mr. Green: We have now reached the debate on hereditaments, to which I am sure Committee members have been looking forward all morning. I shall be brief, as the Minister knows what the issue is. She and her officials have defined the term in a way that I think we would all welcome. Outside organisations that have read the Bill think that the term applies in a more narrow sense. In particular, they think that third parties who rent or lease buildings from farmers would not be entitled to the relief. That would significantly narrow the effect of the reliefs available under the legislation. I hope that during the clause stand part debate the Minister will be able fully to assure the Committee and those observing its deliberations.
Mr. Gray: I rise very briefly indeed because it was an intervention from me on Second Reading that prompted the Minister to say:
Wiltshire Tracklements, a company in my constituency, rents a building from Pinkney Park farm to make mustards, but there is no suggestion that the excellent Mr. William Tullberg, the owner of Wiltshire Tracklements, can pass on the tenancy of that building to his son on his death. On his death, the tenancy lapses unless some other agreement has been made in the normal commercial way between Mr. Tullberg and the farm owners. Wiltshire Tracklements' tenancy at Pinkney Park farm is not a hereditament and therefore would not benefit from rate relief under the Bill. The Minister's answer on Second Reading was extremely plain, and I look forward to her explanation of that distinction.
Ms Armstrong: Clause 1 provides for the new mandatory rate relief for former agricultural premises. It achieves that by amending section 43 of the Local Government Finance Act 1988, which sets out ratepayers' liabilities, including provision for other mandatory rate reliefs. The 1988 Act uses the same definition of a hereditament as was used in the General Rate Act 1967. Section 64(1) of the 1988 Act states:
Other definitions relating to hereditaments may well survive, but a leading legal dictionary states that the word is now used only to mean a unit for rating purposes. Statutes from 1836, and probably earlier, may well have used the term differently, but now it is used as I have explained. That is its use in the provisions that we are considering, derived from the definition in the General Rate Act 1967.
Mr. Gray: I am delighted to hear the Minister's definition, but it might be helpful if she would ask her officials to let the House of Commons Library know about it, so that the excellent document in question can be updated. It is clearly incorrect.
Ms Armstrong: I am sure that the Library keeps a close note of our proceedings and will see how we are working.
Proposed new subsection (6F) defines properties eligible for relief. Paragraph (a) specifies that they must meet the conditions in proposed new subsection (6G). Any property that does so will be eligible for the relief, and there will be no restrictions on who occupies it. Rates are levied on the occupiers of property, not the owners, but they are assessed on the nature of the property. Whoever is the ratepayerwhether a farmer owner-occupier, tenant farmer or third partywill receive the relief if the property qualifies for it.
I am able to be so clear about this matter because in our consultation last November we suggested that relief be restricted to farmers, as it is farmers whom we want the rate relief to help. That consultation may have affected what people outside the House believe about our intentions. However, we dropped the restriction because the response to the consultation was clearly against it. Opposition Members have clearly judged matters by their experience. The Government listen and respond to consultations and we recognised that farmers and the wider rural economy would benefit if under-utilised agricultural premises were brought into other uses, where the potential for that exists.
Farmers may establish such enterprises as part of the farm. However, the enterprises may be set up by family members or by a company legally separate from the farm, even if it is in the same ownership or occupation. Farmers will also benefit if they let or sell part of their farm to a third party to operate a separate business. That indirect form of diversification brings the same benefits, and properties used in that way will also qualify for the relief.
I hope that the matter is now clear to Opposition Members. The new rate relief will be available with respect to small-scale properties used for non-agricultural activities, which were previously in agricultural use. The purpose of the relief is to help farmers who want to diversify but who are discouraged from doing so by the additional rate burden. The clause will halve the rate burden, making it easier for farmers to move some of their property into small-scale, non-agricultural activities.
The new rate relief is not intended to subsidise other rural businesses, including those that are already well established, or those that are not on farms. We are taking a range of other measures to support rural businesses, as set out in last year's rural White Paper. The new rate relief is one measure aimed at a problem that concerns farmers at present.
Question put and agreed to.
Clause 1 ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
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