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We have had many debates in the Chamber about the importance of keeping communities together and of village halls and community centres, particularly in rural areas but also in many urban ones. They are of
real value to our constituents. The purpose of the amendment is therefore to make it explicitly clear that such halls should not be caught by the Bill.
For a number of years, I was a rural county councillor. I was always amazed by the sometimes bizarre and unusual methods by which people get village halls. Sometimes, farmers give a piece of land and build a village hall for the community. While, effectively, it is the village hall, its ownership might still be vested in a local landowner or prominent member of the community. That is why we moved the amendment.
Such facilities are greatly valued. People often put a great deal of time into painting, upkeep and ensuring that the facilities are available to the local community. It would therefore be a pity if the Bill, a major revenue-raiser of more than £1 billionthe fourth largest raiser of money in the 2007 Budgetwere to catch the small proportion of community and village halls that are not registered as charities.
The Minister has a useful opportunity, before the end of play, to set out why the amendment should not be accepted. The amendment would reinforce the good aspects of the Bill, and, as we have heard, charities and sports clubs are covered by it. By slightly broadening the provision, it would ensure the survival of valuable community facilities. The Government should not intend those facilities to be affected by this revenue-raising change. I look forward to hearing his comments.
Mr. Woolas: I appreciate the motive behind the hon. Gentlemans amendment. I readily confess that my argument is a difficult one, but I shall explain my logic for not supporting his amendment.
The motive of the amendment is to extend to community-owned village halls and community centres the zero-rating liability that the Bill provides for empty properties owned by charities and community amateur sports clubs, where those properties appear likely to be next used for charitable purposes or for the purposes of the club. In essence, the problem is one of definition, as well as of trying to determine where the boundaries of exemptions from rates should lie.
The amendment seeks to protect facilities owned by the community. The hon. Gentleman referred to his experiences as a rural county councillor, and I represent an urban and rural area that has many community and village halls. Once one scratches the surface, however, it is apparent that ownership, and the definition of community ownership, is not always that clear. I remind the Committee that community amateur sports clubs are well defined.
My next argument is that a great many of our village halls and community centres are held by charitable organisations and will benefit from the zero rating of empty properties held by charities. Therefore, that provision does not need amending, and I would have had some difficulty had that not been the case. In addition, the opportunities for charitable registration have recently been improved by the Government.
I remind the Committee of the wide support that the Government are extending to community organisations as part of our strategy of reconnecting with the public, which the Local Government and Public Involvement in Health Bill and other measures address. For example, the £30 million community asset fund has
been announced. In addition, on 7 June, we published the departmental third sector strategy, of which a key proposal, subject to the comprehensive spending review, is to support community-owned village halls, community centres and other such facilities. We want to stimulate and develop enterprise by transferring assets to community ownership and management through the expansion of earned revenue. The Quirk report is about exactly that. We are creating more community-owned assets, which makes the issues covered in the amendment more pertinent, and the hon. Gentleman is right to raise them.
Perhaps hon. Members are concerned to ensure that parish councils and other bodies that own community facilities, as well as the community itself, enjoy zero rates liability when the facilities are empty, as charitable bodies will by virtue of the Bill. However, the practical effect of any exemption would always be to remove any incentive for owners of an empty property previously used for a community purpose to bring it back into use. We have concluded that in the particular case of charities, whether they own community facilities or any other type of property, the case for exemption does, exceptionally, outweigh our general presumption that all owners should be subject to empty property rates other than in cases where an exemption is already available. I remind the Committeeagain, this is an important point in meeting the hon. Gentlemans concernsthat properties with a low rateable value of less than £2,200 are exempt.
Michael Gove: I might have misheard but, in trying to follow the Ministers logic, I fear that I might have misunderstood him. Is he genuinely asserting that owners of community facilities, such as those who are responsible for village halls, would wilfully keep those premises empty and would need the goad of the Bill to ensure the efficient disposition of their assets? It seems bizarre that we would have the situation that he appears to have described.
Mr. Woolas: I do not think that there would be examples of people wilfully keeping premises empty, but I can envisage how a bill landing on a doormat might prompt change if a community asset has not been used for a number of years, perhaps because the committee members or the activists who kept things going have moved on. The general presumption of the policy is to give incentives to owners of empty properties to put them back into use. There is a balance to be struck in the case of charitable organisations that outweighs the exemption, with the £2,200 threshold and charitable status covering many village and community halls.
It is much more difficult to extend new zero rates to different types of owner, such as public bodies. Here the problem of definition comes into play. We could all invent exemptions for types of owner and types of building: we could come up with a list of worthy causes as long as our arm. The purpose of the regime proposed in the Bill is to give owners an incentive to return their empty properties to active use, whether
they are vacant city offices or rural halls. We do not wish to subsidise properties to lie empty. The application to public buildings, including parish halls and community halls, creates a very difficult situation in which the definition of a community or village hall would make the legislation unworkable.
As I have said many times, we will examine the issue of exemptions in the summer, and I therefore ask the hon. Member for Poole to withdraw his amendment. I congratulate him on tabling it, because it reflects a real argument that will take place in communities, but I think that, on balance, it is likely to foster circumstances whereby community halls would be allowed to lie empty rather than be put to good active use. Nothing is more visible and more likely to damage a community, whether it is a village or an urban neighbourhood, than an empty hall at the end of the road that is usually covered in weeds and graffiti. We want to return such buildings to use for the benefit of the community, and I fear the amendment would not achieve that.
Mr. Syms: I thank the Minister for the way in which he responded to the debate. The problem is that when certain exemptions are included in a Bill, the question arises of where the boundaries should be drawn, and the arguments are always difficult to deploy.
I have often seen housing developments on the edge of villages or in towns that have included community facilities as some of the planning gain. That leaves the problem of older halls that might need redevelopment and remain empty. A new hall might not be 100 per cent. provided by a developer: it might need new chairs, or redecoration. This tax proposal could well affect the ability to provide first-class facilities for communities that badly need them and that would use them.
I am sorry to tell the Minister that we will press the amendment to a Division; it is one of those afternoons. I hope that, in due course, he will take account of the arguments, particularly in his consultation.
Question put, That the amendment be made:
It being after Five oclock, The Second Deputy Chairman of Ways and Means, proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour. pursuant to Order [this day]
Clauses 1, 2 and 3 ordered to stand part of the Bill.
Bill reported, without amendment.
Order for Third Reading read.[Queens Consent, on behalf of the Crown, signified.]
Mr. Woolas: I beg to move, That the Bill be now read the Third time.
In earlier debates on this Bill, my hon. Friends the Economic and Financial Secretaries to the Treasury and I explained why the Government consider this Bill to be such an important piece of legislation. The current policy on the rating of empty properties is based on a set of economic circumstances that simply does not exist in the UK today, and which does not fulfil the requirement for the efficient use of property and the regeneration of brownfield sites to meet our housing needs.
The Governments commitment to regeneration and to meeting those needs cannot be faulted, and I assure the House that that will remain the case, but I have also made it clear that devoting more than £70 million in tax relief every year to the owners of empty properties in Westminster is simply unjustifiable. Consequently, it is time to reform the blanket relief extended to empty commercial property. In place of that relief, the Government are moving their support for regeneration and renewal towards a brand new, and much better targeted, 100 per cent. capital allowance for the renovation of property in our assisted areas. I strongly believe that that meets the points made by hon.
Members such as my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley), Opposition Members and Liberal Democrat Members in interventions and in speeches.
We have introduced this new allowance now, so that owners of unlet property in these areas can take advantage of the new incentive before the changes to empty property rates. Furthermore, we have consulted on a wider application of land remediation relief to a much broader range of contaminated and derelict brownfield sites specifically in order to promote efficient use of our developed land and to help protect greenfield sites. I believe that those two measures allow policy to meet the reasonable and correct objection made by a number of hon. Members on both sides of the House that there are different types of market in different parts of the country. That point was made by constituency Members of Parliament as well as by hon. Members speaking on a wider policy agenda. I ask the House to consider the other measures that I have mentioned in the round with this measure. I hope that my hon. Friends, and Opposition Members, will see that the Bill is part of a much wider package of measures, supporting regeneration but also meeting the needs of business and our communities for active property markets and efficient use of land.
We have decided that for charities and community amateur sports clubs there will be 100 per cent. relief from empty property rates. These organisations play such a key role in our society, often leading regeneration efforts, and the Bill offers substantial additional help to them. For the rest of the business community, this Bill will reduce rents and provide opportunities for new companies, expanding companies and companies wanting to join the most successful economy in the G7.
I repeat what I said in the Ways and Means debate and on Second Reading. We have the successful policy of linking business ratesor non-domestic rates as they are properly calledto the retail prices index cap. As that business rate is based on rental value, not capital value, the successful implementation of the policy in bringing rents down over the years will indeed, as the Red Book acknowledges, see a diminution in the revenue that it generates, the more successful it becomes. That is the serious answer that my hon. Friend the Financial Secretary gave to the serious objection that the hon. Member for Surrey Heath (Michael Gove) has raised.
This is, of course, a revenue-raising policy. It was a policy announced as part of a Budget package and its process through the House has been unusual. I am grateful to the House authorities for their guidance and advice in this regard. However, it is far from the case that the Bill is simply a matter of raising revenue. It also embodies a policy on land use and properties, and our own Red Book acknowledges that there will be a diminution in the revenue raised. As the cap on business rates exists, the total yield from business rates cannot rise higher than inflation.
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