|Non-Domestic Rating (Designation of Rural Areas) (England) Order 2001 and Non-Domestic Rating Contributions (England) (Amendment) Regulations 2001
Mr. David Borrow (South Ribble): I was interested in the hon. Gentleman's point about the need to revisit non-domestic rating and provide an alternative basis for calculation. Thus far, however, the hon. Gentleman has not suggested what other system should be put in place of the current one, which is based on the rental value of properties. What does the hon. Gentleman believe would be more appropriate?
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The Chairman: Order. If the hon. Gentleman attempts to answer that question, he will be straying into territory that the provisions do not cover, which I will not allow.
Mr. Breed: Thank you, Mr. Hancock.
As I said, I question the whole system. We are moving only round the edges. Perhaps there is time for a re-examination of the whole issue, and I hope that the Minister will agree to that. In the meantime, I welcome these reliefs, and I am sure that they will be a great help to some businesses. However, if businesses were represented here, they would say that we needed a new system altogether.
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Dr. Alan Whitehead): I should like first to deal with what I hope can be a brief element of our debate, which is the Non-Domestic Rating Contributions (England) (Amendment) Regulations 2001. The hon. Member for Cotswold referred to those regulations briefly and sought confirmation that they will be updated annually to allow the pool system to proceed. I am happy to confirm that that is the case. If, for any reason, the regulations are not agreed each year, there would be no change in the total amount of money collected, but no permission would be granted to a local authority to hold back a sum proportionate to the cost of collecting the business rate. The whole business rate would go into a central pool and be redistributed pro rata to local authorities. That default central collecting system could produce injustice for some local authorities because they would not be able to take from the pool system money relevant to the local cost of collecting the business rate. With those assurances, and given that the effect of not passing the regulations would be unfortunate for some local authorities—not necessarily by a large amount of money, but there could be some unfairness—I hope that the hon. Gentleman will accept that we should agree to the regulations.
The more substantial debate concerns the Non-Domestic Rating (Designation of Rural Areas) (England) Order 2001. I confess at the outset to some puzzlement. As you kindly made clear, Mr. Hancock, the maps that have been produced have been available in both parliamentary Libraries. I accept that the hon. Member for Cotswold spoke in good faith and on the basis of checking when he suggested that the maps were not available. If, for any reason, there has been a glitch between the maps being available in the Library and the information being conveyed to hon. Members, I am sorry about it. It appears as if everyone has acted in good faith, as the maps were there but the information may not have been fully conveyed to Opposition Members.
In talking briefly about the existence of the maps, the hon. Member for Cotswold suggested that it might be a good idea for them to be available on the Department's website. I assure him that there is no issue of copyright, and if anyone wishes to receive a map relating to his or her area by e-mail, that can be done. The problem is more the capacity of a website to
Column Number: 11carry a complete series of designated maps electronically for perusal. Certain specialised website-mapping companies have the necessary systems, but they occupy the whole database, and I understand that it would be a difficult exercise to provide that as part of a wider DTLR database. I hope, however, that the fact that the maps can be made available electronically reassures the hon. Gentleman that the Department does not wish to withhold or not distribute the information, electronically or otherwise.
The centrepiece of our discussion is the village shop rate relief scheme and the way in which it was previously designated.
Mr. Clifton-Brown: On the issue of copyright, a representative of Tandridge district council said in a letter to the Department:
That issue is different from the one that I raised in my speech. The letter continues:
I do not know whether there is a problem with copyright. If the Minister cannot respond now, I should be grateful for clarification later, perhaps in writing.
Dr. Whitehead: I would be happy to write to the hon. Gentleman, but I surmise in the first instance, from the fact that the DTLR makes maps available electronically, that it has made the proper arrangements on copyright with the Ordnance Survey. The question is then what would happen about publication of those maps on separate websites on separate occasions. I imagine that the local authority would need to make arrangements concerning publication. I said that copyright was not an issue. The point is that copyright would not stand in the way of the electronic transmission or dissemination of the information on request. That may be a more exact way of describing the DTLR's position.
As I said, the nub of the order is the village shop rate relief scheme. It might be helpful if I sketch out the nature of that scheme, which was introduced on 1 April 1998. It provides mandatory rate relief of 50 per cent. of the rates bill to the sole village general store, the sole post office and all food shops in qualifying rural settlements, provided that their rateable value is no more than £6,000.
The 50 per cent. mandatory rate relief is also available to the sole public house and sole petrol station with rateable values of no more than £9,000, provided that they are located in qualifying settlements. The reason for the two different rateable values is straightforward. Petrol stations and public houses tend to have a higher rateable value than village shops, hence the difference in the limits of qualifying rateable value.
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Local authorities can top up mandatory relief to 100 per cent. if that would benefit the local community. Authorities also have a discretionary power to grant up to 100 per cent. rate relief to any other business in a qualifying rural settlement, provided that it has a rateable value of no more than £12,000 and they think that it is in the interests of the local community to do so.
As I have explained, eligibility for rate relief depends on the business being located in a qualifying rural settlement. Those settlements are identified by local authorities and must have a population of no more than 3,000 and be wholly or partly in an area designated by the Secretary of State for Transport, Local Government and the Regions as a rural area for the purposes of the rate relief scheme.
In the past, those rural areas have been designated in orders, which together comprise a list of several thousand rural areas. In October, we consulted on changes to the system whereby the list of rural areas would be replaced by one based on maps. Previously the system was essentially based on description, and it was felt that a system based on maps would show much more clearly which rural areas are designated and which are not.
The purpose of the change to a map-based system is to provide a more uniform and coherent system of designation of rural areas across England than has applied previously. The new method of designation will ensure that all areas eligible for rate relief are properly included in the scheme. It will make the scheme easier to administer and easier for rural businesses to know whether they qualify for rate relief. The majority of responses from local authorities to our consultation welcomed the proposals. I was pleased to hear this afternoon that Opposition Members also welcome that way of doing things. We are talking not about the principle of how one does this, but about what happens when it is done.
A number of respondents to the consultation identified rural settlements that would lose out under the new map designations. That was certainly not our intention. To answer the concern expressed by the hon. Member for Cotswold, if we postponed implementation of the new scheme until those problems were fully considered, areas that were not designated under previous orders would remain outside the scheme and ratepayers in rural settlements be precluded from receiving rate relief. To prevent that, and to safeguard those who may have lost relief under the new system had it been introduced in isolation, we proceeded with the map-based designation system but preserved the previous designation orders. As a result, no business currently receiving rate relief under the scheme will lose out as a result of those changes, even if it does not subsequently appear in the new map designation.
We intend to keep the scheme under review and we will consider the detailed points raised in consultation with a view to producing an integrated system in due course. The result of maintaining the previous designation orders and bringing in the new map-based system means that more businesses in rural areas than ever before will be able to benefit from rate relief
Column Number: 13from 1 April 2002. It will be of great help to vital rural businesses and safeguard those services on which many small isolated rural communities depend.
As I said, the order designates rural areas for the purposes of the village shop rate relief scheme in England by reference to maps. That will increase the area in England designated as rural for the purposes of the rate relief scheme and will bring more village settlements into the scheme. The order starts from the point of view, given that previous designation orders are maintained, that nobody who currently receives rate relief will lose it from 1 April 2002 as a result of the new map designation system.
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