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Mr. Woolas:
I will come back to that. The hon. Gentleman mentioned another important point earlier about rateable values and rent in different sectors. He and the hon. Member for Fareham referred to the impact of the internet on the retail sector. To take the argument to its logical conclusion, if every shop in this
country found that its business was being done through the internet so that all the shops were empty, the rental value of those shops would be naught, zero or nothing! Nobody would want to rent them, so the empty property rent charge would be naught as well. The argument does not hold up.
Mr. Dunne: As I tried to point out to the Minister, that may be the case, but only after some 15 to 25 years of paying business rates on empty properties until the tenancy has passed out or everybody has gone bust.
Mr. Woolas: Except, of course, that we have a regular revaluation of non-domestic rates every five years. Because of our successful policy of regular revaluation and capping the ratio at inflation, those revaluations take place without a murmur from Conservative Members, despite the fact that they bang the drum about the alleged evils of domestic rate revaluation as though it were the end of the world. The hon. Gentleman is not rising to the bait, so I shall move on, but there is no evidence that it would take 15 to 25 years. In any event, to be fair to him—I recognise the “real world” point that he is trying to make—I said that that would be the logical conclusion of the argument, but because of our hugely successful economy, all this country’s shops are not going to shut down. As the hon. Gentleman knows, the retail sector is one of the flagships of our economy, as my town centre manager is reporting, but I need to move on.
I was replying to the hon. Member for Blaenau Gwent, who had raised the issue of domestic properties. As he knows, the provisions do not cover that, but there are circumstances in which council tax is relieved on the renovation of empty homes. Indeed, as I explained earlier, it is the capital value, not the rental value, that applies. I recognise the significant experience of the hon. Member for Ludlow in retail centres in towns and cities, although not the big cities, throughout the country. It is fair to say that the Government need to consider the differential impact. My hon. Friend the Financial Secretary referred to the consultation.
The hon. Member for Ludlow and the hon. Member for Fareham both made the allegation that the Government were hiding behind the fig leaf of Barker and Lyons. When we agree with a consultation, we are accused of hiding behind a fig leaf, and when we disagree with a consultation, we are accused of arrogantly riding roughshod over it. Both points cannot be true. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander)—it is easier just to say, “the hon. Member for the Liberal Democrats”, which is a little tip that my hon. Friend the. Member for Bolsover (Mr. Skinner) gave me—accused us of not consulting. Of course we have consulted. The Barker and Lyons reports were substantial pieces of work, which we studied and took seriously. I note that his party said that we had kicked the document into the long grass without even reading it. Again, he cannot have his cake and eat it.
I have answered the point made by the hon. Member for Ludlow about commercial activities and the ratios between non-domestic rates and corporation tax. He also asked about consultation. We did, of course, consult on Lyons and Barker, and another consultation
will take place later this year. A Committee of the whole House will take place, as this is a finance measure but not part of the Finance Bill. We have given the issue a generous amount of time.
The hon. Member for Ludlow brought his experience to bear on the issue of leases and made an important point. My hon. Friend the Financial Secretary made a specific point about leases, the need to consider the impact on them, and the consultation that will take place, particularly with regard to onerous leases. The hon. Gentleman also asked about business improvement districts. There have been 40, and there are more in the pipeline. I am not making great claim for them, although I think that they are very useful in the areas where they exist. We have one in the centre of Oldham, for which I voted; I am obliged to pay into it, and jolly good it is too.
The hon. Gentleman asked about Manchester and Birmingham. I will not tease him, but I think that he was just making the point that the richer commercial areas have to be treated differently from the rural areas. The hon. Member for the Liberal Democrats asked about rural-proofing, which we believe the regulatory impact assessment does. I should also point out that rural rate relief schemes are in place.
The hon. Member for South Norfolk (Mr. Bacon), who is no longer in his place, made an important point about empty farm buildings in relation to an empty pig farm. Agricultural buildings do not pay business rates; they are treated differently. The impact in such areas is therefore taken into account by that. The hon. Member for Salisbury (Robert Key) made some similar and important points about the interaction between planning policies and procedures and rates for empty properties. We are addressing those points in relation to planning policy. Two of the three examples that he raised, which I have researched, are matters for planning policy. When we debate planning policy, however, I hope that the Opposition will resist the temptation to accuse us of riding roughshod over local opinion, building over the countryside, demolishing our heritage buildings and so on, and that their arguments will be consistent—as they no doubt will be in the debate on the Sustainable Communities Bill—with what they have called for in this debate.
It is advantageous for Opposition parties to be consistent in their arguments. I was going to say “to have consistent policies”. It would be nice if they had any policies, but let me be non-partisan and say that the points about planning are important.
The hon. Member for Ludlow also asked about the localisation of relief, as part of the recent pendulum swing towards localism in the Conservative party. I wonder where it will end: in kibbutzes in Shropshire, perhaps.
I remind the House that it was the Conservative party that nationalised the rate of tax on empty properties in 1981, removed discretion for empty rates on industrial policy from local councils in 1984, and nationalised the whole lot in the Local Government Finance Act 1988. However, if they are moving in the other direction now, I welcome that.
The hon. Member for Bromley and Chislehurst (Robert Neill) spoke on the basis of experience rather
than a Conservative research department briefing. I congratulate him on that, and on the fact that he distanced himself from his Front Bench on two occasions. He raised some important issues. He said that ours was a risky strategy. The purpose of the strategy is to bring more properties on to the market by reducing rents, and to that extent—I hope I shall not be quoted out of context—there is a risk involved. But although there is some fairness in that criticism of the policy, it rather militates against the criticism that the Bill is motivated solely by a desire to raise revenue. Again, both cannot be true.
The hon. Gentleman said that London was not uniform, for a whole raft of reasons. How true that is. There are different property markets in different parts of London, just as there are in different parts of the country. That returns us to the point about the rates of rent. I think the hon. Gentleman was talking about Bromley high street—I shall not make the mistake of getting the geography of his constituency wrong again—but whether on a micro-level or on a sub-regional level, in the round rents reflect supply and demand in the market place. I should have thought that the hon. Gentleman supported that. Indeed, I know he does support it, for I have heard him quote Adam Smith on many occasions.
I think it was the hon. Gentleman who was worried about roofs blowing off in the night, and asked us to take account of the fact that an empty property might not be fit for use as a result of either a deliberate act of self-vandalism or a windy night. Paragraph 4 of schedule 1 is very specific, having learnt the lessons of the past. It states that the regulations may
“provide that an act is to be treated as done on behalf of a prescribed person if it is done by any person connected with that person”.
“the hereditament shall be deemed not to have changed—
(a) since before any event of a prescribed description, or
(b) by reason of any act done by or on behalf of a prescribed person.”
That covers the hon. Gentleman’s “windy night” fear.
Robert Neill: The credit for the “windy night” argument should be shared between me and the hon. Member for Inverness and all points to the north-east. It was a discussion between us. But does the Minister accept that until we have a little more clarity about what “prescribed” means in this context, the lawyers are still likely to have a pretty windy field day?
Mr. Woolas: I completely apologise for getting wrong the author of the windy night argument; I cannot think why I did that. We are trying to be fair and to stop tax avoidance. We also want to recognise that there may well be good reasons why a property could not be occupied. I repeat that the Valuation Office will have this matter within its remit, not least of course through its very successful computer database, which is the source of much excitement on the Conservative Benches.
Newham and Hackney were mentioned. I would not claim to be an expert on the property market in those two parts of London, but Newham is one of the authorities involved in our new targeted 100 per cent.
allowance for renovation of long term empty properties. That is a good example of how we are trying to ensure that policies are more locally sensitive. Sometimes we may not get it wholly right, but we do listen to these arguments.
The admin burdens were referred to and I have tried to cover that point. I have looked at this because although Revenue and Customs is the lead department for the Valuation Office, policy and operational matters are an issue for my Department. We have consulted on that point and we are working closely with the Local Government Association and the Institute of Revenues Rating and Valuation to ensure that we get this right. We are confident on that point.
My hon. Friend the Member for Stoke-on-Trent, North talked about regeneration and I am familiar with that issue in regard to her constituency. I hope to be able to announce the details of the commission on democracy in Stoke-on-Trent—both its membership and remit—very shortly. I thank my hon. Friend for her assistance in this regard.
Regeneration is central to our goals in that area. Stoke-on-Trent is an assisted area, with 100 per cent capital allowances. I am grateful for my hon. Friend’s comments on the neighbourhood renewal fund and its future. My hon. Friend the Financial Secretary is attending urgent business; I should have put on the record earlier that he had to leave to attend the Finance Bill Committee. I know that he heard what my hon. Friend said; I know that because I kicked him when she said it to ensure that he did. The neighbourhood renewal fund in her area has proved to be very important.
I come back to my point about low demand and low value; rents are low in areas where properties are empty simply because there is no demand. My hon. Friend raised an important point about listed buildings and we will be looking at that. It is important; we all know of examples of listed buildings that are empty and, perhaps because of their listed status, cannot be rented out. The hon. Member for St. Albans (Anne Main) is not here, but she has informed us of the Rex cinema in St. Albans. I looked into that because I have a love for cinemas. I am looking at why Brixton was able to regenerate its cinema, but St. Albans has not been able to do so thus far. I can see you frowning, Madam Deputy Speaker, so I will move on.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey talked about the process of the Bill. I hope I have convinced him that we did take seriously the consultation on the Barker and Lyons reviews and the pre-consultation in the period since. We have had the usual consultation that my hon. Friend the Financial Secretary has talked about, but this is a finance measure coming out of a Budget. There are good reasons for that, but I hope that I can reassure him about the purpose of the Bill and its impact on revenue. The policy will bring about a reduction in rental values, so the revenue we raise from it will diminish over time if we are successful.
The hon. Gentleman asked whether the policy has been rural-proofed and what information will be placed in the Library. I have answered that by mentioning the regulatory impact assessment. Rural business rate reliefs provide substantial support for rural businesses in respect of empty properties. Every
area and sector could, of course, argue for special treatment, but that one is a special case.
The hon. Gentleman and many other Members asked about the three-month period question. The period is laid down in existing regulations for offices and retail premises, and the Conservative party made those regulations. We wish to give all property the same tax treatment.
The hon. Gentleman asked about reviews of other business rate reliefs and exemptions. We will take forward Sir Michael Lyons’s recommendations on that. The hon. Gentleman also asked about social enterprises and companies. To tease him, his party is always asking for certain categories of business to be exempt, but it never points out the consequences of that for other categories of business. To be more serious, however, we will look into that matter, as he made an important point about the growth of the third sector—of social enterprise organisations.
The hon. Gentleman asked about local councils. I repeat what I said about the support of Hampshire county, Hull, West Sussex, Birmingham, Essex and Kent, because that is a strong point.
The hon. Member for Surrey Heath accused us of rushing to plunder and argued that the measure would breach the retail prices index cap. That argument misunderstands how the multiplier works. I can give him a lesson on the algebraic formula in clause 1 if he wishes. I should also point out that there are two multipliers, as there is a different one for small businesses—it is not always understood that we provide help to such businesses. The hon. Gentleman then contradicted his argument by saying that we would damage pension funds because rents would decrease. As I have said, both arguments cannot be true. However, the hon. Gentleman was gracious enough to praise the Financial Secretary’s thoroughness and eloquence, although he did not say that about my contribution, for which I cannot blame him. [Interruption.] The hon. Gentleman says from a sedentary position that that goes without saying. He made an eloquent argument that was well researched and based on a false premise—which I suppose is what the journalistic trade teaches its practitioners.
Some areas of our country have the highest rents in the developed world and also high empty property rates. That is a silly situation, and this policy is intended to change it. We have the RPI cap on the multiplier to protect businesses, and that has proved to be sustainable.
We have provided ample time for this debate, and we have another debate next week to look forward to, in which we can address matters of detail, rather than of policy and principle, which is the proper subject of a Second Reading debate.
I believe that I have answered all the questions asked in our debate, and that the Comptroller of Her Majesty's Household, my right hon. Friend the Member for Rutherglen and Hamilton, West (Mr. McAvoy) is happy. My hon. Friend the Minister for Housing and Planning is in the Chamber, so I shall conclude.
Bill accordingly read a Second time.
RATING (EMPTY PROPERTIES) BILL (PROGRAMME)
Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(7) (Programme motions),
That the following provisions shall apply to the Rating (Empty Properties) Bill:
Committal
1. The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on consideration and on Third Reading
2. Notwithstanding the practice of the House as to the intervals between stages of Bills brought in on Ways and Means Resolutions, proceedings in Committee, any proceedings on consideration and proceedings on Third Reading shall be completed at one day’s sitting.
3. Proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion one hour after the commencement of those proceedings or at the moment of interruption on that day, whichever is the earlier.
5. Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee and on consideration and Third Reading.— [Jonathan Shaw. ]
RATING (EMPTY PROPERTIES) BILL [MONEY]
Queen’s recommendation having been signified—
Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with bills),
That, for the purposes of any Act resulting from the Rating (Empty Properties) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase in the amounts so payable under Part 3 of the Local Government Finance Act 1988.— [Jonathan Shaw.]
Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): On a point of order, Madam Deputy Speaker. Have you received a request from the Foreign Secretary or the Prime Minister to make a statement about plans to transfer the individual convicted of the Lockerbie bombing, who is currently serving his sentence in Scotland, to Libya? Surely such a sensitive matter concerning our relations with a foreign Government and matters relating to terrorism requires a statement. What advice would you give, Madam Deputy Speaker, about ensuring that it is forthcoming as quickly as possible?
Madam Deputy Speaker (Sylvia Heal): I have not been advised that any Minister has asked to make a statement, but the hon. Gentleman’s remarks are now on the record, so I hope that he will able to pursue the matter and find the answers to the questions that he has raised.
German Road, Bramley
Motion made, and Question proposed, That this House do now adjourn. —[Jonathan Shaw.]
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