Local Government Finance (England) Special Grant Report (No. 100) (HC 869), On 2001-02 Special Grant for Rate Relief in Respect of Hardship Caused by Foot and Mouth Disease

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Mr. Pickles: What are the names of those authorities?

Mr. Leslie: Macclesfield, and Bath and North East Somerset.

The special grant will ensure that the assistance available to local authorities in rural areas to provide help to ratepayers who have been seriously affected by the foot and mouth outbreak will extend to the whole 2001–02 financial year.

4.58 pm

Mr. Pickles: It is a particular pleasure to appear before you in Committee once again, Mr. O'Hara. I know that you are a diligent Chairman and I look forward to concluding matters speedily. I also extend a warm welcome to the Minister. Casting political differences aside, it is always good to see a local lad do well, and it is especially nice to see him in a respectable Government job, as opposed to his previous one, which made him a semi-spin doctor. He can now hold his head high in Shipley.

In mid-February 2001, I received a telephone call at home to say that some pigs in a local abattoir were displaying signs of foot and mouth. In a few hours, the press knew and all hell broke loose. Had it not been for the diligence of the veterinary inspection and of the owners of the abattoir, the outbreak would have been considerably worse, particularly in the eastern area, which fared relatively better than many parts of the country. The Cheale brothers had to endure some intrusive press inquiries, but they did a great service for the country.

I have a special interest in the subject, because my patch was the first to be closed down. Several instances occurred in adjoining fields around the abattoir, but the livestock was not moved, which caused an awful lot of upset. What struck me most about the reports—the Minister's introduction seemed to suggest this too—was that several assumptions about the effect of agriculture were simply not true. I saw figures suggesting that each job in agriculture creates four ancillary jobs over 10 years. That figure rose during the foot and mouth outbreak, and one expert suggested that 14 ancillary jobs were being created by each job in agriculture.

I visited and talked on the telephone to farmers on my patch who were affected, and it struck me that rural industries in communities were hit particularly hard. I shall refer in particular to tables 1 and 2 to take up the point made by the hon. Member for Hyndburn (Mr. Pope). Under ''East'' in table 1, there is no mention of Brentwood or of Epping Forest, which were closed down on day one. They will receive nothing from the special grant.

Local authority areas have been used in the tables, as opposed to considering where the problem

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happened, and there was a considerable problem throughout Brentwood and Epping Forest. Companies that were involved in activities such as horse shows had to finish—for example, one in my constituency that successfully produced leatherwork and operated across Europe. People in Europe did not want that business to travel to them, so it reached a state of stagnation. Epping Forest's local authority has been particularly helpful to that business—I might say that all local authorities have the ability to offer some kind of discount—but it will nevertheless receive nothing from the hardship grant. There should be greater cognisance taken of how the grant is put together and how it will be used by authorities.

I hope that you do not think that I am being slightly aggressive, Mr. O'Hara, because that is not my intention, but the Minister will regret suggesting that there is a presumption of generosity. There is no presumption of generosity in Brentwood or in Epping, nor is there a presumption of generosity in Worth Valley ward, within Bradford met, or in Bingley Rural, which the Minister knows well. There is no presumption of generosity in some areas of Lancashire that suffered particularly badly.

I have a number of questions for the Minister. Referring to the calculations that appear, most helpfully, in annexe A on page 5 of the document, how exactly will a calculation be affected by a temporary reduction of rateable value? How will the calculation be applied to a temporary reduction? Will it be made on the true rateable value or on the reduction?

Can the Minister give us an idea of the relief on food shops and small rural settlements? How will the calculation work there? I also have a question of which I gave him notice during the short break for the Division. Can he put a figure on the local authority discretion to defer payments of rates, so that we can assess that properly? Will a deferred payment of rates affect the calculation in any way?

We do not intend to vote against the report, but things that should be in it are missing and the Government should have considered the whole package. I am aware, from casework, that the Inland Revenue and other tax authorities are examining tax liabilities. Generally, such matters can be and are sorted out, but we should have examined a flexible reassessment of such things as income tax liabilities and VAT payments, which affect people's cash flows.

God forbid that we should ever go through such an experience again. I will not forget my conversation with a farmer whose life's work had just disappeared and who had reached such despair that it is difficult to put it properly into words after all this time. We must be more cognisant, and not say simply that a certain area is one that has been affected. We can now undertake proper assessment, so it would be much more sensible to use discretion in addressing where loss has occurred rather than predetermining that through the use of local authority areas in the case of a disease that is no respecter of local authority boundaries and that cannot distinguish between urban and rural areas.

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5.8 pm

Mr. Pope: I shall be brief. I have a great deal of sympathy with what the hon. Member for Brentwood and Ongar (Mr. Pickles) has just said—foot and mouth disease did not respect local authority boundaries—and there is a problem with the definition that the Minister has given us. I shall discuss that in a moment.

I rise to speak because of several constituency cases, in particular that of Mr. Ken Holden of the Rossendale and Hyndburn Equestrian Centre. His business was extremely adversely affected by foot and mouth disease. He applied to Rossendale borough council for rate relief, but was turned down on the ground that Rossendale borough council was not included in the Government scheme approved last year. Following that, I had what was, to be honest, some fairly unsatisfactory correspondence with the Minister's predecessor on the nature of the case. I have to say that I am still extraordinarily unhappy about the situation.

I have constituents who have been very badly affected. They are being denied the help that they, and I, think they have a right to expect from their local authority and the Government. They are being excluded because of the Government's chosen definition of an affected area. The definition that the Government have used, which the Minister's predecessor set out to me in a letter dated 7 August last year, defines such authorities as those that are ''wholly or mainly rural.'' That is not helpful if one represents, as I do, a partly rural constituency in which some people have been adversely affected.

It is no good telling those in my constituency who have been affected that they would get help if they lived five miles north in Ribble Valley, because that area was more adversely affected, or that they would get help if they lived five miles east in Pendle, but that they will not get help if they live in Hyndburn borough or Rossendale borough. I hope that the Minister will have another look at that.

It seems to me that the Government have relied on the definition of rurality set out by the Countryside Agency, but I have not been able to discover in any adequate sense what that definition is. I would be grateful if the Minister wrote to me about the definition of rurality that has been used. I also ask him to consider the specific cases of Rossendale and Hyndburn borough councils.

I am not suggesting for a moment that the Minister will ignore my pleas. However, although it may be easy to shrug off Back Benchers or the Opposition, the issue affects other constituencies that cannot find a voice in Committee this afternoon. I suggest to him that the constituency of Oldham, East and Saddleworth has been adversely affected. He may care to reflect on that and consider Oldham's case as well as those of Hyndburn and Rossendale.

5.11 pm

Mr. Colin Breed (South-East Cornwall): I broadly agree with both previous speakers. We have all experienced foot and mouth's creation of a two-tier

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situation in many instances. Some farmers who suffered at the hands of foot and mouth got compensation for the herds and flocks that were culled, receiving substantial cheques in some cases, which enabled them to take decisions. They could choose to go back to farming or to carry out a totally different land utilisation. There is a stark difference between those farmers and those who did not have foot and mouth in their farms, but were severely affected by it. Many such farmers have less choice than before, they often have to borrow much more and they are suffering even now from the weight of additional borrowed money.

The same happened to many businesses. Some were obviously affected by foot and mouth because of footpath closures and so on, but others were not so obviously affected and they have received less support. There has been a problem with the boundaries, which certainly persists in the far south-west, but I am delighted that north Cornwall and west Somerset have been added to table 2, and the businesses affected in those areas would wish to say that they are grateful for that additional consideration. I think that the Minister said that such consideration will be retrospective, so those businesses can make retrospective claims. I am pleased about that.

It is difficult to draw lines quickly. Now that the situation has calmed down to a certain extent and we can reflect on it, will the Government consider businesses that have been severely affected, even though they are not located directly in the rural areas? I suspect that they are relatively few in number, but they nevertheless feel a certain injustice. Purely because of their geographical location, they have been denied the opportunity of rate relief, even if their business comes from the neighbouring rural area that they serve.

Having said that, I am pleased that the measure has been extended until March, as that recognises the fact that the effects of foot and mouth, although out of the headlines, remain a real difficulty for many people. Many businesses are teetering along after their cash flow and profitability were significantly affected. They are hoping for a good season this year that will enable them to see through next winter.

I broadly welcome the grant and hope that, although the Government do not want to include at this stage the areas where businesses have been affected but which are not designated rural, they at least review the situation during the coming months to see whether such areas can be provided with similar rate relief. That would reduce to an absolute minimum the injustice felt by some businesses due to their location.

5.15 pm

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