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The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): Like the noble Baroness, Lady Maddock, I am sympathetic to the spirit of most of the amendments, even though I have to resist them.
The noble Earl, Lord Peel, is quite right about the regulations that affect people these days, particularly in respect of meat hygiene. I have to say that when I am in my own car, I sometimes give a cheerand not a silent cheerwhen I drive past a butcher's shop in the country and see all the game and everything else hanging outside, and not stuck inside in the fridge. I think, "Ah, the environmental health officers haven't caught up with them yet". The point is that if the meat matures nicelyas it has done for 100 yearsand is looked after properly, it will be perfectly safe. I am well aware that that is how the game works. On the other hand, we should not have a problem in respect of competition with French farmers.
I realised how ignorant I was when I looked at the rest of the definitions in the schedule to which Members of the Committee have referred. I thought that guinea fowl, pigeons and quails might be game, but they are classified as poultry. We are talking only about pheasant, partridge, grouse and black gameand about something that I am not sure how to pronounce, although I have no doubt that all the country people opposite will tell me how to do so. My noble friend and I have never eaten, let alone seen, one. It is spelt p-t-a-r-m-i-g-a-n. I presume that the "t" is silent. Well, someone knows what it is.
No one involved in game production for food will pay rates, so they should win hands down over French farmers. They do not have a problemthey will be rate-free. If they are supplying local shops and local people with game and that is the purpose of their production, they will not pay rates. However, we are discussing a slightly different issue.
The amendments would extend the rating exemption for agricultural land and buildings. However, the intention in Clause 68 is to amend the rating system to reflect modern farming practices and ensure that the exemption from rates is targeted in relation to the ancillary activities, such as food processing and packaging operations, where occupiers of related agricultural land control the company.
Under the provisions of the Local Government Finance Act 1988, agricultural land and building used for the production of food and the rearing of livestock for food are exempt from non-domestic rates. Agricultural land or buildings used for other purposesfor example, the rearing of animals intended to be used for leisure or sporting activities, farm shops or food storageare not exempt and are liable for rates. I fully accept that the by-products of sport may be game for sale, but it is still a by-product. If the farm is a game farm and its production is for food purposes, farmers will not pay rates.
The decision as to whether a game farm should be rated rests with the local valuation officer, who has statutory responsibility for maintaining the rating list. I suspect that that varies throughout the country, however. I talked to someone yesterday who is well into retirement but who used to be a farm secretaryI will not say where, but at three large farms. The farms were basically arable, but one of them was involved in game production. The ex-secretary said that, because of the nature of the job, no rates were paid. I said, "So, there was no sport", and he said, "Well, there was quite a good income from shooting as well".
The situation depends on the local rating officer. If the overwhelming purpose of the production was the production of food, and sport was ancillary to it, as opposed to the other way round, any reasonable person would argue that they should be exempt from rates. However, that is a matter for the local valuation officer. There are appeal mechanisms, but I am not aware of any examplesat least, none has been drawn to my attention in which there has been a perverse decision.
Amendment No. 141 seeks to extend the rating exemption for agricultural land, and Amendment No. 142 seeks to extend the exemption for agricultural land to include the rearing of game birds. Amendment No. 143 broadens the provisions. For the reasons stated before, we cannot accept any extension to the agricultural exemption. Amendments Nos. 141 and 143 would potentially open up the rating exemption to activities not solely connected with farming. That would give those property occupiers an unfair competitive advantage over other businesses that could not seek exemption.
I think that that was the thrust behind what was said by the noble Baroness, Lady Maddock, although the idea of the farmer taking over the butcher's shop in the local town is in reverse. Getting more control down towards the end of the chain is the way in which producers on the continent have done things for years with co-operatives. I know that what I am going to say is very broad-brush, but basically our farmers have been very reluctant to get involved in genuine co-operatives so that they can control more of the supply chain. That is the only way in which they will ever take on the nasty reaction that some people see as the cause of supermarkets controlling too much of the chain from the other direction and, of course, taking too much of the profit. There is no question about that, whatever Select Committees might say. Supermarkets clean out the profits.
I am going back to my MAFF days now, and I should not do. I feel strongly about the subject because in some ways the farmers can help themselves in this country, but they have been naturally reluctant to talk to their neighbours and co-operate financially and economically in a way that French, Italian and German farmers do. Those farmers control more of the supply chain, and therefore more of the income and profit. In some ways, the farmers in this country are their own worst enemies. I know that they do not like being told that by a Brummie, but my view has not changed since I left MAFF. The problem is worrying.
I found out the difference between proper turkeys and mass-produced turkeys when I was in MAFF. I shall not go into that either, but there is a big difference. I have not eaten turkey since, by the way. When I saw how proper turkeys were produced, I would go only for proper turkeys. They are 10 times the price of supermarket turkeys and the scale of production is very small. That is a very seasonal problem, and people come up against regulations and rates for buildings that might be used for something else at another time of year, so I realise that there are difficulties.
I shall get on to my notes; I have nearly finished. The general thrust is that farmers can take action themselves and that, if they are involved in production for food, they do not have a problem. That may require a slight tweaking to the establishment and to business plans, so that it can be clear that food production is put first. The rearing of game birds can have a part to play for farmers wishing to diversify. We introduced a rate relief scheme on 15th August 2001, designed to help farmers to diversify into non-agricultural activities by partly offsetting their rate bills for an initial period of up to five years. The assistance given to farmers means that they are now able to diversify into a whole range of activities, some of which are in competition with existing business while others are in totally new markets.
Farmers wishing to diversify into small-scale game farms and hatcheries, for example, may be able to qualify for mandatory relief under the farm diversification scheme. The relief is available to new enterprises on farms and is aimed at small-scale enterprises. As such, it gives properties 50 per cent rate relief provided that the rateable value is £6,000 or less and that the premises were in agricultural use for at least 183 days in the year prior to 15th August 2001. Local authorities have the power to top that up to 100 per cent if they think that it is in theinterests of their council tax payers to do so. The relief is time limited and available until 14th August 2006, although there are provisions to extend that if necessary.
In the light of what I have said, I hope that the amendment will be withdrawn. I am certainly not saying that there is no problem but on the other hand we are talking about farmers involved with game birds and fish farms for the purpose of producing food. I did not do fishing when I was at MAFF, thank heavensElliot did it, bless him. However, no one would argue that fish farms are essentially a sport. They are genuinely food-production activities, as opposed to anything else.
Earl Peel: I am no great expert on fish either, but fish farms produce for two purposes: directly to the market and to reservoirs and so on for sport fishing. With the greatest respect to the noble Lord, I think that he is wrong.
Although the amendments are seductive in that respect, I regret that they must be resisted. I would resist them even if I wanted to accept them, as they would greatly confuse the legislation. This is not the appropriate Bill to deal with the matter; other legislation would be required.
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