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Mr. Dunne: I am most grateful to my right hon. Friend for suggesting that the amendment should have been even longer. That thought occurred to us when we were discussing what to include, but it also occurred to us that, given the shortage of time between Second Reading and Third Reading, it would not be possible to ask all Members of Parliament to list all historic buildings of that kind. We therefore deliberately decided not to include a full list of all such buildings.
Some of the buildings that I have mentioned are owned by English Heritage and have been in receipt of lottery grants for large amounts of money to restore them as ruinsnot as buildings for business use. Some of them receive visitors and so there is some income to be generated from them, but often they are visitor attractions run by volunteers and do not generate sufficient income adequately to recompense the cost of keeping them going. Adding to the burden placed on such buildings, through additional rating duties, would be most unwelcome and would help to put some of them at risk. It is important that such buildings are exempted from business rates in their entirety.
I should have declared an interest in the case of Hopton castle, because I have the distinct privilege of having been appointed patron of the Hopton castle restoration fund. We have succeeded in securing a grant from English Heritage of approaching £1 million to restore the property to a state in which it could be opened to the public. To highlight the difficulty, I should point out that Hopton Castle is in a village. In fact, it is barely a village; it is a collection of houses with, I think, 45 inhabitants. It would be quite impossible for that group of people to maintain the property from their own resources. The rates would represent a considerable cost in the event of their applying to the property. It is important that exemptions for such properties are spelled out in the Bill and subsequently in regulations.
Secondly, I want to touch on what happens when properties are empty and the ownership is uncertain or unclaimedan issue that I raised in an intervention earlier. That will be a relatively rare occurrence, because most properties have a value and most people who have a claim on such property are likely to seek to be identified with it. However, there are properties where, because of the nature of their decay and dilapidation, the cost of acknowledging ownership would be too prohibitive for likely claimants. I hope that the Minister will respond to the suggestion that there are certain categories of property where ownership is uncertain and where business rates should not apply.
I can think of an example of a property that, rather like its former occupier, is unloved and unwanted. Nobody is able to pay for its upkeep. I am not seeking in any way to assist the Labour party out of its financial difficulties, but given that the last occupier was the Craven Arms Labour club, which, as far as I am aware, has not existed in my lifetimeand long may that be the casethe property provides the Minister with an interesting example of the problem that I have identified, and I would like him to help us, in the generality, to find a solution. In particular, perhaps he could help the inheritors of the Craven Arms Labour clubLudlow Labour party, I believeto get out of their difficulty by exempting them from business rates on unclaimed property.
Mr. Greg Knight: I do not really need to declare an interest, unlike my hon. Friend the Member for Poole (Mr. Syms), but I believe in erring on the side of caution, so I shall start by saying that I am a non-practising lawyer and the owner of some property, all of which is occupied, mainly with classic and historic motor vehicles, but of course that may not always continue to be the case.
My great concern about the legislation is the time scale. It is at the very least odd that the Government are proceeding with the legislation at such a pace; and at the very worst, it shows a disrespect for the public and Parliament. Now that we are in Committee, which followed so soon after Second Reading, we are forced to ask why the Bill was not subject to pre-legislative scrutiny, and why there was not wide consultation with interested parties and groups before the House was asked to make a decision on the matter. That is a relevant point to raise, because the Minister is seeking to hurry the legislation through at the very time when the Leader of the House, who chairs the Select Committee on Modernisation of the House of Commons, is telling us that he wants the Executive to have greater respect for Parliament, and to allow greater parliamentary scrutiny.
The Chairman of Ways and Means (Sir Alan Haselhurst): Order. It pains me to have to tell the right hon. Gentleman that I do not agree with his assessment of the relevancy of those remarks. I do not think that he should make them in debate on amendment No. 6.
Mr. Knight: I do, of course, accept your assessment, Sir Alan. I was making the point, en passant, that the Government could and should have done a lot more to consult widely before we reached Committee stage.
The Chairman: Well, let us pass quickly on from that point, then.
Mr. Knight: Amendment No. 6 has my support, imperfections and all. I am surprised that the Minister has not yet intervened to say either that he accepts the amendment in its entirety, or that he accepts its spirit. Nor has he said that he will deal with the exemptions by putting them in the Bill. My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) said that the Government might take action later through regulations, but clause 1(2), which we have not yet discussed, contains some exemptions, for which there will be zero rating. They include cases in which
the ratepayer is a charity or trustees for a charity
the ratepayer is a registered club for the purposes of Schedule 18 to the Finance Act 2002.
If the Minister has seen fit to put those two exemptions in the Bill, why has he not seen fit to indicate to the House that he will accept amendment No. 6? It seems only right and proper that the exemptions itemised in the amendment be added to the Bill.
Mr. Gummer:
So that the Minister cannot say it, let me make the point that the exemptions may, of course, be additional to those currently in the legislation. However, if that is the case, surely it underlines the
point that we made earlier, which is that if the time scale changes, all the exemptions must be reconsidered by the House.
Mr. Knight: That is absolutely right; I agree with my right hon. Friend, and it is right and proper that we consider each and every one of the exemptions today.
I have some doubts about the cut-off period of three months mentioned in proposed new subsection (1A)(a). I can understand why the provision is thereit is because we want to achieve a balance between being fair to the owner and seeking to bring a property back into use. In some instances, however, there may be good reasons why the property is vacant for more than three months, and I should have preferred paragraph (a) to allow the owner to plead cause beyond that period. I regret the fact that my hon. Friend the Member for Poole chose not to include such a provision. That is a minor criticism of the drafting, however, and I none the less support the amendment.
Paragraph (b) of proposed new subsection (1A), however, is rather curious, and I am not entirely happy with the drafting. I gave my right hon. Friend the Member for Suffolk, Coastal an example of a situation that may arise when a violent husband attacks his spouse and is subject to a court order that prevents him from re-entering his property. In those circumstances, paragraph (b) would exempt him from paying any rateable charge, which I am sure is not what we intend to achieve. Perhaps the Minister will give us his thoughts on the matter when he responds to the debate.
Paragraph (c) of proposed new subsection (1A) is an essential exemption. A property may be kept vacant by the Health and Safety Executive, acting on behalf of the Crown, because a staircase is unsafe. If the property is a listed building, specialists may have to be brought in to carry out alterations to the staircase before it can be safely used. In the interim, the owner, who is using all his endeavours to improve the property, should not face a rates bill, so paragraph (c) is vital. I hope that the Minister accepts it, but if he does not, I hope that a similar exemption will apply.
Turning to paragraph (h), I had some experience when practising as a solicitor of dealing with the winding up of estates. Sometimes that is easy and quick to complete, but that is not so if there is no will or, if there is one, if the family do not know where the beneficiaries live. Documentation may be missing, so probate sometimes takes far more than a year to complete. In the interim it is wholly unfair to charge the personal representative, who may be a family member and not a well-paid solicitor who can reimburse himself for any charges by charging the estate. Why should the widow or widower who has to deal with the estate in a time of emotional stress and difficulty suddenly find that they have to pay, in addition to any duties payable by the estate, a rateable charge on an empty property? I therefore hope that the Minister will accept the fairness and common sense of the exemption in paragraph (h).
Some of us wonder why there is a need for the Bill at all. If the Chancellor and the Prime Minister had not given away part of our EU rebate to Europe, we would not need to collect £1 billion from this piece of
legislation. The Bill should not have been introduced, but we are, however, considering it. We are trying to make it better, so I hope that the Minister accepts amendment No. 6.
Dr. Vincent Cable (Twickenham) (LD): I had not intended to speak in this debate, and I certainly do not intend to do so for as long as some of the preceding speakers. Having listened to their contributions, however, I believe that amendment No. 6 is a useful provision, at least in spiritthe phrase used by the right hon. Member for East Yorkshire (Mr. Knight)because it answers one of the main concerns expressed by groups who have lobbied us on the Bill, even those who are well disposed towards it. I recall the evidence from the Federation of Small Businesses, which supported the Bill but said that what was needed to improve it was a better definition of how to exempt groups of property owners who were genuinely trying to occupy their property. That is what the various proposed exemptions try, in their different ways, to do.
I shall group the exemptions, rather than discuss them individually. The conditions in paragraphs (h) to (l) are designed to help people who are trapped in legal processes entirely beyond their control. That might arise as a result of death or of bankruptcy or insolvency. The legal mills will not grind any faster because the Government have changed the tax procedures. However hard people try, they will none the less be penalised unless some exemptions are provided.
The second group of cases is covered by the exemptions in paragraphs (b) to (e), which deal with cases in which official authorities have created obstacles to use. That might arise because of historic buildings and, in some casesthis applies to the exemption referred to in paragraph (c)where there are difficulties with the planning process.
In a typical case that I have encountered several times in my constituency, shopkeepers find that their shops are no longer viable. They start using the shop as an office or a burger bar and planning officers come down on them quite heavily for improper use. Enforcement orders are issued, followed by appeals against enforcement orders and applications for permission. The planning staff say that it must be demonstrated over a substantial period that the shop is not viable as a shop. A long process is involved, and the owners are barred from using the premises in the meantime. Such practical situations arise on many occasions.
I have listened to the speeches and I believe that amendment No. 6 is helpful in setting out many of the practical circumstances in which a property owner is entirely genuine in trying to use property but is unable to do so. If the amendment is not acceptable to the Government, I hope the Minister will explain how he would address the problem that the Federation of Small Businesses outlined very well.
Mr. Woolas:
I congratulate the hon. Member for Poole (Mr. Syms) on tabling an amendment that prompted such a comprehensive and thorough debate. The Committee owes him its gratitude. I have been enlightened by what I have learned this afternoon, such as what was said about the castles and ruins in Shropshireruins that do not pay rates anyway, but we have heard about them. Genuine congratulations are due to the hon. Member for Ludlow (Mr. Dunne).
What he has achieved with the restoration of a castle is welcome and will be noted.
We also learned in the debate, which is on a tightly drawn amendment and not on Second Reading or Report, about the collection of classic cars in East Yorkshire. I was hoping that the right hon. Member for East Yorkshire (Mr. Knight) would tell us what they were, but I suspect, Sir Alan, that you would have stopped him, just as you are about to stop me now, so I will move quickly to the amendment.
The problem with the amendment is not the justification or otherwise for the exemptions that it proposes, but a misunderstanding of what the amendment would do if it were written into the Bill. Let me explain why that is the case. I think that that will satisfy right hon. and hon. Members who have raised in depth concerns that were expressed on Second Reading. It is important that we respond to those concerns.
When I read the amendment, it looked very familiar. As I looked into it, I realised that the amendment, subject to minor tweaking, is taken from the wording of the Non-Domestic Rating (Unoccupied Property) Regulations 1989, as amended. The regulations flowed from the Local Government Finance Act 1988, and it is the 1988 Act that the Bill seeks to amend. Putting the 1988 Act regulations into the Bill would insert into it exemptions that are already in place in such a way that we would not be able to change them, should we want to, without primary legislation. In other words, the exemptions are already there.
The right hon. Member for Suffolk, Coastal (Mr. Gummer) made an intelligent and quick-witted point. I increasingly realise why he served in government for such a long time. In fact, I think that he was the longest-serving Local Government Minister, so I take what he says very seriously. Over the summer, we will consult on the regulations to take on board the points that interested parties, including hon. Members, may make. Putting the existing regulations into the Bill would not achieve what right hon. and hon. Members want to achieve.
Hon. Members have referred to several problems. I could use the Aunt Agatha analogy, which is a good one. The hon. Member for Twickenham (Dr. Cable) mentioned planning issues, which were also raised on Second Reading. Those and other problems already exist under the current time scale and rate of collection, and they would continue to exist whatever the algebraic formula in clause 1. I am sorry that the hon. Member for Bromley and Chislehurst (Robert Neill) is not here to hear that, but those points are not relevant to the Bill, although the amendment has given us the opportunity to explain the position.
It might be of interest to Opposition Members, and indeed to my hon. Friends, to learn that the authors of the 1988 Act and the 1989 regulations were the late Sir Nicholas Ridley and his then Under-Secretary, the hon. Member for Christchurch (Mr. Chope). I will contact the hon. Gentleman, who is a distinguished member of the Chairmens Panel, to explain how his right hon. and hon. Friends have been trying to undermine his beautifully crafted laws and regulations. Indeed, I am doing no more than repeating the process that was undertaken by Sir Nick, whom I remember
lobbying as a student. I always found that he gave us a very fair hearing although he was ideologically opposed to us. I do not know what he would have made of the smoking banI imagine that he would have been outraged.
Section 45 of the 1988 Act sets out the liability of unoccupied hereditaments for business rates, and subsection (1) determines to which of those the liability applies. The liability includes, among other things, all hereditaments that fall within a description prescribed by the Secretary of State by regulations. In other words, the 1988 Act gave the Secretary of State the powersubject of course to the passing of the necessary regulationsto determine the exact classes of unoccupied hereditament that should be subject to empty property rates. By means of some rather convoluted double negatives, the effect of the regulations is to include within the empty property rates regime all unoccupied hereditaments except those falling within certain specified classes of exemption.
Mr. Goodwill: Will the Minister clarify the position of cemeteries? As someone in that line of business, I know that valuations have been carried out throughout the country that are aimed at rating cemeteries as businesses. At what point does a cemetery become unoccupied? Is it a hereditament? Cemeteries are obviously occupied for a long time after burials. People who run private sector and local authority cemeteries would like to be reassured that they will not pay rates in perpetuity, despite the fact that those buried are there in perpetuity.
Mr. Woolas: I congratulate the hon. Gentleman on the ingenuity of that point. I do not know whether he has just thought of it or whether the matter featured in his postbag. It worries me greatly when a Conservative Whip starts to talk about cemeteriesI do not know what lies behind that. However, the point is not relevant because the Bill does not deal with exceptions and exemptions from rates, which the 1989 regulations already tackle. Let me repeat that, although the points have been interesting and some of the questions have been ingenious, they are not relevant to the Bill.
Michael Gove: The Minister is making an interesting case. He argues that it would be wrong to include exemptions in primary legislation and that they are suitable for regulation. However, as my right hon. and hon. Friends have pointed out, sporting clubs and charitable organisations are specifically exempt from the Bill. That exemption is in both secondary legislation and on the face of the Bill, and the Government have invited support for it. We are happy to support it and we applaud its inclusion, but we must also mark the Minister down on logic because if he can include one exclusion in the measure, why cannot he include others?
Mr. Woolas: The hon. Gentleman makes a good point and I congratulate him on spotting it. He is right. The answer to his question is that the exemption to which he refers is already in primary legislation. I therefore have to deal with it in primary legislation rather than in regulations. Indeed, I asked the very same question of my officials when I read the first draft of the measure.
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