Rating (Agricultural Premises and Rural Shops) Bill

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The Chairman: With this it will be convenient to discuss amendment No. 9, in page 3, line 33, leave out from `appoint' to end of line 34.

Mr. Green: The purpose of the amendments is to inject a degree of certainty and predictability into the process by which relief is given.

Amendment No. 8 would insert a commencement date of 30 October, and amendment No. 9 is largely consequential. There is no particular magic about the dates, but it seems desirable to introduce a degree of certainty. The Royal Institution of Chartered Surveyors has said that, under the Bill, rural food shops, farm businesses considering diversification and those that have recently established a diversified business are uncertain about their potential liability for business rates. To provide a degree of predictability, one should set a specific commencement date; and a powerful argument for that is that it would enable people to plan their business with slightly more certainty. We have constantly said that if the Bill is to be effective, it should encourage as much diversification as it can.

The NFU has a further argument in favour of such certainty. That is that businesses have to go through sometimes lengthy planning procedures before they can demonstrate the practical effects of diversification. The union is concerned that if the commencement date is earlier than expected, individuals who are going through the planning process might lose many months or even years of potential rate relief due to the Government's insistence on the five-year limit.

Either way, we can argue for a specific date. We are not wedded to a particular date, but it would be good to know that Ministers accept the argument for that degree of certainty, and I hope that they will say what they regard as an appropriate commencement date.

Mr. David Heath: I should like to hear a firm date from the Minister. I should like it to be at the earliest possible opportunity, and I should like there not to be different dates for the different purposes proposed in the Bill. I hope that the Minister can reassure me on all those points.

Mr. Robert Ainsworth: Amendment No. 8 would remove the power of the Secretary of State to determine when the Bill will commence, either wholly or in part, in relation to England. It does not alter the powers of the National Assembly for Wales to commence the provisions of the Bill in Wales on any day or days that it chooses. Amendment No. 9 would remove the power of the Secretary of State and the National Assembly for Wales to have separate commencement dates for different clauses of the Bill, although both would retain the discretion on when to commence the entire Bill.

The amendments are unnecessary. To those who fear that the Bill will be delayed, I can say that we intend to implement it as soon as practicable. In England, that may be before 30 October. Not only do the amendments curtail the discretion of the Secretary of State and of the National Assembly as to the best time for the commencement of the provisions but they might delay commencement in England.

The hon. Member for Ashford suggested that the Bill should not come into effect before a particular date. We shall reflect on that. However, I believe that the amendments are unnecessary, as we should still have discretion. I am not sure whether he was right about introducing the measures too soon. We shall consider the matter and let him know. On the understanding that we shall introduce the measures as soon as practicable, I ask the hon. Gentleman to withdraw the amendment.

12.45 pm

Mr. Green: I am grateful to the Minister for his commitment on the possibility of premature commencement and merely echo the point made earlier that the sooner those who will benefit from the legislation know the target date, the better. That applies both to people who want the legislation to be introduced as soon as possible and to people who do not want it to be introduced prematurely. The amendments are intended to achieve certainty on that. I hope that the Government can provide that, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 ordered to stand part of the Bill.

New Clause 2

Exemption of equestrian enterprises from non-domestic rating

    `.—In paragraph 5(1) of Schedule 5 to the Local Government Finance Act 1988, after sub-paragraph (a) there is inserted—

    ``(aa) it is used for the keeping or breeding of horses as part or all of a business.''.'.—[Mr. Gray.]

    Brought up, and read the First time.

Mr. Gray: I beg to move, That the clause be read a Second time.

I shall speak more briefly than I normally would in such circumstances in the hope of currying favour with the other members of the Committee. I shall explain new clause 2 less thoroughly than I might otherwise do, despite the insult of being described as the duller end of the rainbow. My name may be duller, but I am sure that my hon. Friend the Member for Ashford would not wish to make any intellectual comparison. Certainly, if there were to be an intellectual comparison across the Floor—I will not go down that track.

The new clause was tabled for a sound reason. I should declare a non-pecuniary interest, which is that I am chairman of the Horse and Pony Taxation Committee and an unpaid consultant to the British Horse Industry Confederation. I therefore speak on behalf of horse businesses.

We support the Bill. It is important that farmers should be allowed to diversify in the way that is proposed, so we do not oppose the Bill. However, given that many farmers will diversify into horse businesses, the Bill will have an unfortunate effect on existing horse businesses. That particularly applies in the case of riding schools, which are already in severe decline. Since the Government came to power, riding schools have closed at the rate of 200 per annum. It looks as if that rate of decline is increasing rather than decreasing, and it has certainly been made worse by the foot and mouth disease crisis.

The purpose of the new clause is to correct an anomaly that was last addressed by the House in 1987, when the other place decided not to proceed with the matter. It is a peculiar anomaly that premises used for housing horses used for agricultural purposes—heavy horses in particular—and stud farms, are given business rate relief. However, if one uses precisely the same barn as was used last week for housing a heavy horse to house a horse that one intends to rent out for pony trekking, or which will be used in a riding school business, one does not receive rate relief. That is a curiosity that ought to be corrected. This may not be the right Bill in which to do that, but it could become the right Bill when one considers that, if it is enacted, a farm that diversifies into a riding school business will receive 50 per cent. rate relief, whereas an existing riding school will receive no rate relief at all. That introduces a peculiar form of competition between new and existing businesses.

The new clause corrects both of those anomalies at a stroke by simply describing all horse businesses as agricultural, and from that point of view it is more effective than another amendments that was not selected for discussion today. That would mean that a horse business, whether a pony trekking business, a DIY livery yard or a riding school, would be described as agricultural and would benefit from the zero rate that other farming industries enjoy. That would be the cleanest possible way both of avoiding the unfortunate competition issue and of clearing up the existing anomalies in the agricultural exemptions.

Ms Armstrong: I understand the issues that the hon. Gentleman has raised. However, as he has in a sense acknowledged, the new clause is not directly relevant to any of the other clauses of the Bill, in that it does not relate to the new rate relief for farm diversification enterprises or to the extension of mandatory rate relief to all small village food shops. It amends the definition of agricultural buildings, which are exempt from rates, so that those used for the keeping or rearing of horses as part of a business would be included. It would exempt all such buildings from rates, so it would cover not only buildings on farms but any commercial stable, riding school or stud farm, wherever its location and whatever its size. However, it would not cover private stables that were not part of a business, which would remain liable to non-domestic rates.

Mr. Gray: I think that I am right to say that private stables attached to a building are not subject to rates. However, private stables a short distance from buildings are.

Ms Armstrong: I am sure that the hon. Gentleman is right. He seeks not to help farmers diversify or maintain essential services in isolated rural communities, although he does want to deal with another serious problem that he and other hon. Members have sought to tackle. I appreciate his ingenuity and his commitment.

The issue of whether horse enterprises should be regarded as agricultural is being considered. I have discussed the issue with colleagues in the Ministry of Agriculture, Fisheries and Food, and their and our officials are reviewing the definition. The law is complex and straddles a range of legislation, and there must be a careful assessment of the implications. The hon. Gentleman will know that the subject requires detailed work.

I do not feel able to accept the new clause. However, I assure the hon. Gentleman that I understand the issues that he raises, and do not want to dismiss them out of hand. He talked about competition between an existing horse enterprise and a new one set up under the diversification proposals in the Bill. That is why I was cautious earlier about the purpose of the Bill, and was clear that we did not seek to provide a level of support that meant that already established businesses felt undermined by similar new businesses.

My Department and MAFF are discussing the issues that the hon. Gentleman raised to work out the most effective way forward. I assure him that those discussions will continue, although other events may take precedence. We want to see what we can do, as we know that several horse enterprises are in serious trouble, and we want to establish a regime that enables them to prosper. That is at the forefront of the minds of MAFF Ministers, and I have had extensive discussions with them recently. However, I cannot give the hon. Gentleman what he wants. I can assure him that the matter is under consideration in terms of general principles, but we do not think that we can fit it into the Bill.

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