The main element of the reforms to empty property rates was to raise the business rates liability of owners of empty properties to 100 per cent. of the full occupied
rent. The reforms provided a new zero rate for charities and community amateur sports clubs in respect of any property that they own. They also exempt companies in administration from rates on their empty properties in line with our policy to assist such companies. The reforms were part of a package of measures. However, I understand and sympathise with the fact that they have not helped the engineering firms or the printer company that my hon. Friend talked about. The Government considered that it was right for landlords to receive rate relief for limited periods while they manage their vacancies. The reforms kept the three-month exemption period for non-industrial properties, but replaced the previous total exemption in perpetuity for industrial properties with a six-month exemption period.
Let me explain the rationale for the reforms. Our cities and towns occupy very high-ranking positions in the table of the worlds most expensive markets for rents. The 2007 King Sturge survey of global rents found that English towns and citiesnamely London, Birmingham, Bristol, Manchester and Leedsoccupy five out of the top 10 positions for the worlds most expensive total occupancy costs for prime industrial space. Those same towns occupy five out of the top 20 positions for the worlds most expensive total occupancy costs for prime office space.
Those points were considered during the course of the reviews that my hon. Friend mentioned. High rents might be a sign of companies recognising the attractiveness of locating in the UK and, to some extent, be a marker of how successful we have been. However, while our cities and towns occupy high-ranking positions in the table of the worlds most expensive markets for occupation costs, owners of empty properties received a subsidy of £1.3 billion, paid for by other taxpayers. The reforms to empty property rates should reduce the costs of relief to the public purse by £950 million in 2008-09 and £900 million in 2009-10.
Mr. Mullin: Obviously, the reforms will benefit the public purse only if the companies concerned are capable of paying the large increases. In the case of Pallion Engineering, there has been a fivefold increase in rates. If the effect is to put the company out of business, that will reduce the revenue available to the public purse.
Mr. Dhanda: I am grateful to my hon. Friend for raising his concerns about his constituents and his local companies. As I explained earlier, we have had to strike a difficult balance. We have a big problem with empty properties, but we must do something to stimulate the market, partly to bring down rents and to ensure that the spaces are utilised by would-be entrants to the local marketplace and other companies. I hear what my hon. Friend is saying about his own local businesses. I am keen for him to have the opportunity to sit down with Ministers in the Department to discuss how his local companies have been affected.
The overall purpose of the reforms is to increase the costs of holding empty property, thereby providing a stronger supply-side incentive for owners to re-let, redevelop or sell empty properties. That incentive should increase access to existing premises for business, reducing the need for new development on greenfield sites, increasing the supply of commercial properties available to new and existing businesses, and helping to reduce business rents across the board.
Mr. Mullin: The Minister has outlined a theory. Further south, that theory may be justified. Perhaps there is a market for the surplus property that will be forced on to the market. In large parts of the country, however, especially in the area that I represent, there is no market for that property. Some of it has been on the market for years. Earlier, I mentioned the site owned by the printing works. The company has been trying to sell it for three years, but has had no takers. At that point, the theory breaks down, does it not?
Mr. Dhanda: I am always keen to ensure that theory and practice come together and are resolved effectively. The reforms are relatively new, so we will need to look at the patterns and see whether the changes have made a difference. I am confident that they have. My hon. Friend asks whether there will be regional variationsan interesting point that must be considered. It is important to sit down and assess whether the changes are making the difference that Barker suggested they would make.
The Government have estimated that the reforms could result in an overall reduction in business rent across the commercial property sector of between £80 million and £165 million. Such a reduction should directly benefit many local companies up and down the land, which is important when the world economy is facing an increasingly challenging environment. The UK is well placed to meet these challenges, thanks to the resilience and stability engendered by the Governments macro-economic framework and a decade of reform that has promoted open and flexible markets for labour, products and capital.
To help business further, from 1 April we have seen the implementation of the major package of business tax reforms announced in the 2007 Budget, including the reduction in the main rate of corporation tax to 28 per cent., which will deliver the lowest ever rate in the UK and the lowest in the G7, improving competitiveness and encouraging investment. All these measures need to be seen as a package.
To assist deprived areas, the business premises renovation allowance, which was introduced on 11 April 2007, almost a year before the reforms to empty property relief took effect, gives 100 per cent. capital allowance for the renovation of empty commercial property in deprived areas, as defined by the UK assisted areas map. Hopefully, that measure will also make a difference to many local companies.
The package of measures should help to tackle low demand for property, as it is designed to increase competition in the economy more generally and to maintain the UKs attractiveness as an investment location, thereby helping to attract foreign direct investment and to stimulate innovation and growth.
It is fully understood that the circumstances of property owners and the reasons why properties lie empty vary from case to case, and that many owners are genuinely trying to let their property, as my hon. Friend has made clear during this debate. However, too many commercial properties lie empty indefinitely, in many cases blighting communities and wasting the potential of brownfield assets. As a consequence, other areas are then developed.
The Government no longer believe that we should continue to offer tax reliefs for buildings to lie empty, so the reforms were applied to all non-exempted properties
in England, on the basis that it is in the interest of all communities that land and property are utilised efficiently. Indeed, we find empty properties in all communities in England. For example, in 2004-05 empty properties were found not only in areas of low demand, such as Wolverhampton or Sandwell, but within fast-growing and strong regional economies, such as Ealing, Manchester and Birmingham.
Furthermore, in removing the total exemption for industrial properties, the reforms improve the fairness of the system between different sectors of the property market, by ensuring that the incentive to re-let or redevelop a property is applied to all empty properties, whether they are in the industrial, office or retail sectors.
Mr. Mullin: I can see that my hon. Friend is approaching the end of his remarks, but there is one point that I would like him to address. The problem with all this reform is not that there is not some theoretical reason why it is worthy, but that it does not allow for any flexibility or for the application of common sense. The one thing that might help, as I have mentioned before, is that there is apparently a reserve power to allow 50 per cent. relief in the event of an economic downturn. Is there such a power and, if there is, will the Government contemplate using it? I must say that the situation is very urgent. We are really running out of time; some of the businesses that I have mentioned will be bankrupt by the end of the autumn if this situation continues.
Mr. Dhanda: There is no such reserve power that I am aware of, although my hon. Friend did mention local authorities and relief, so I will try to explain a little more about what local authorities can and cannot do. Having said that, the detail of what they can and cannot do is a complex area to get into during an Adjournment debate. I am sure that he will take up the opportunity to meet Ministers to discuss the matter further.
Local authorities have no discretion to exempt or vary the rates liability of empty property ratepayers. Although there are reliefs for small businesses and other occupants, such as charities, they apply only where there is a business in actual occupation of a property. Local authorities have discretion to award hardship relief, but there are provisos within that, too. Those provisos are where it gets a little more technical and complicated, so my hon. Friend would probably benefit from having a more detailed conversation with Ministers about them after this debate.
We believe that overall the reforms represent a good balance between providing incentives to owners to re-let or to redevelop propertyI think that my hon. Friend is in favour of that himself, although how we do it is perhaps where the disagreement arisesand for providing rate relief for limited periods while they manage vacancies.
In summing up this debate, I say to my hon. Friend that Kate Barker and Sir Michael Lyons saw that empty property rates should be reformed, and the Government agreed. It cannot be common sense to continue to pay owners to leave their properties empty, to be subsidised by taxes paid by others, when UK rents are among the highest in the world and a hindrance to UK competitiveness. It also cannot be beneficial to seek more land on which to build commercial property when existing land could be put to that use or to alternative uses.
At the same time, however, my hon. Friend makes a very good point, which he describes as theory and practice needing to come together to work. I am very keen, and I know that my Department will also be very keen, to learn from his experience, to help to ensure that theory and practice come together and work effectively.
Mr. Charles Walker (Broxbourne) (Con): I feel like I am over Heathrow airport, stacking up and waiting to land on the runway, not having done a Westminster Hall debate before. However, I am delighted to be called in such good time and that I arrived here three minutes before I was due to start, otherwise I could have been slightly embarrassed.
I will use my brief Adjournment debate today to discuss the fabulous contribution that the great sport of recreational fishing makes to the economy of this country. I have been a passionate angler for 37 of my 40 years. I was introduced to the sport by my grandmother, who gave me a cotton reel, a bamboo stick, a bit of string and a bent pin. I fished for five years without any reward. Then my dear grandfather took me to a pond and I caught three goldfish. The less said about that the better probably at this stage, but my grandfather was at my shoulder when I caught my first brown trout and for the first salmon that we caught together on the River Feshie in Scotland. A love of angling has been his great gift to me and it is one that I treasure. I am also pleased to say that, in his early 90s, my grandfather is still going strong and can still wipe my eye on the riverbank.
As hon. Members may know, angling captivates somewhere in the region of 3 million people; 1.5 million of us are extremely hardcore and the other 1.5 million, who make up the total number of anglers, dabble from time to time, but we are still very lucky to have them. Angling also brings people, including the families of anglers, to our great countryside and it gets people experiencing some of the wonderful sights and scenery that this great land of ours has to offer.
The wonderful thing about fishing is that it is blind to class, religion and ethnicity. On the riverbank, everyone is equal and completely consumed by their passion, discussing tactics and methods for landing the fish of their dreams. If more politicians from across the House spent time on the riverbank together, we might be a little nicer to one another and, on occasion, a little less savage.
At this juncture, I should like to pay tribute to my good friend, the hon. Member for Reading, West (Martin Salter), who is chairman of the all-party angling group. Since his election to Parliament 11 years ago, he has done a huge amount for the sport of angling and, as an angler, I am very grateful to him for all his hard work on behalf of all 3 million anglers in Britain.
I should also like to say quickly that some of my happiest times as a Member of Parliament are spent on the riverbank in my constituency, armed to the teeth with tackle bought from Simpsons of Turnford and Johnson Ross Tackle in Hoddesdon. I am a member of the Amwell Magna trout fishing club and recently joined one of the oldest coarse fishing clubs in the country, the Red Spinners. In between my engagements on the riverbank, I find time to be attentive to my constituents.
This debate is about the economic contribution of angling, but I should like to mention that anglers contribute a huge amount to conservation as well. The Anglers Conservation Association works tirelessly to improve habitats along rivers and streams, thereby not only improving the well-being of many species of fish but
having a huge impact on invertebrate life, bringing otters back to our waterways and having a beneficial impact on flora and fauna across the piece.
Let us get down to the meat of thisthe bold, hard facts. There are about 3 million of us out there fishing at any one time, or on some occasions. As the Minister discovered from the good report that his civil servants prepared on angling, we spend about £3.5 billion to £4 billion a year in pursuit of our passion, and angling is responsible, directly or indirectly, for 16,000 to 20,000 jobs.
The point about tourism and jobs is important. Does the hon. Gentleman agree that places such as Ireland sell tourism by specifically targeting fishermen and describing the facilities that exist for them, but that the United Kingdom does not do a good enough job to publicise the sport?
Mr. Walker: The hon. Gentleman makes a good point. For the past 15 or 20 years, Ireland has heavily promoted fishing tourism. Many people come to this country to fishto Scotland in particular but also to Englandbut a great deal more could be done. I am proud to say that we have some of the best fisheries in Europe, and long may they last, but we could do more to promote them. The hon. Gentleman is working in his constituency to bring such matters to the fore.
There are 1,000 commercial fisheriesperhaps moreand hundreds of fishing clubs. The economics of fishing are simple. There is bait and tackle, of course, and my garage is like the garage of the hon. Member for Reading, West, which is full of mountains of tackle and hundreds of fishing rods.
Martin Salter (Reading, West) (Lab): May I ask the hon. Gentleman to desist from notifying every burglar in the Thames valley area of the contents of my garage, which I should like to say for the record have all been moved to a secure lock-up? I thank him for his kind comments earlier.
On a more serious point, does the hon. Gentleman acknowledge that some of the figures that he quotes were published in Labours charter for angling, which was a serious contribution to Britains most popular participant sport? Is he pledged to do what he can within his own party to ensure that there is consensual support for the sport of angling among all political parties in the House in the run-up to the election?
Mr. Walker: I am happy to say that that will be the case, if I have anything to do with it. Angling should be non-politicalsupport should cross all political parties. If I get the chance at some stage in the future, I should like to be at the fore in forming my partys position on fishing.
Let us return to the economics. There are fishery fees, and we all spend money on motoring. At a time when we are worried about our environmental footprint, perhaps I should not dwell on the money that we spend travelling around the country to far-flung fisheries. We spend fortunes on provisions from local shops. We bring tourism
in the form of trade to pubs and restaurants. We often stay overnight at hotels or campsites, or in bed-and-breakfast accommodation.
To put this into perspective, I give the example of my annual pilgrimage to the sunlit uplands of Scotland to try to catch a salmon. Each beautiful silver fish that I land probably costs me in the region of £1,500 to £2,000. It is money well spent. I have wonderful holidays with my family, but it is my love of fishing that takes me to Scotland. My family also engages with the local community and brings tourist pounds to villages and towns in the area of Islay where I go fishing.
Direct employment is also important in the world of fishing. Many water keepers are employed to look after our fisheries, and professional booking and guiding services are increasingly growing in this country and sending fishermen overseas. The Minister will be aware of our thriving fish farming industry. Fishery managers look after the many thousands of fisheries that people enjoy in this country. Fishing makes an important contribution of some £3 billion to £4 billion a year, as I have said.
In my last two minutes, I shall conclude with these few points. Fishermen are the eyes and ears of our rivers and lakes. If there is a problem, we are the first to raise the alarm. We play a huge role in ensuring sustainability. The catch-and-release mentality pioneered among the coarse fishing fraternity has now moved into the game fishing and sea fishing fraternities.
There are still issues that we need to address. For example, abstraction remains a concern. I was at a presentation a few months ago at which some fishery officers were applauding the increase in barbel and chub stocks on the Wye. I love catching barbel and chubI am a passionate barbel and chub fishermanbut the Wye is changing from a cold-water fishery that supports salmonids to a warm-water fishery that supports chub and barbel. We need to address the issues that are causing that. Global warming is certainly playing a part, but there is no doubt that abstraction is affecting the water quality of that river.
We need to educate the people who come to this country about our traditions. I always welcome fellow anglers to our shores. We have a lot to offer them, but some people are used to taking fish for the table in their own countries. In this country, we do not do that. We need to educate them, so that they can enjoy our fishing and not come into conflict with people who are concerned about fish being removed from our waters.
I do not share much common ground with the Royal Society for the Protection of Birds in respect of cormorant predation, which still causes concern to fishery owners. I am worried that the RSPB does not recognise that cormorant predation has put, and will continue to put, commercial fisheries out of business until it is properly addressed. However, I do agree with its concerns about the damming of the Severn estuary with a barrage. The hon. Member for Reading, West will say a few words about that.