Non-Domestic Rating (Designation of Rural Areas) (England) Order 2001 and Non-Domestic Rating Contributions (England) (Amendment) Regulations 2001

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Mr. Clifton-Brown: I am grateful to the Minister for giving way. His explanation so far has been very helpful. I thank him for responding to those consultations and covering the point about those businesses that might have lost out without a dual system in operation. Can he confirm, equally, whether he will be open to representations from areas that are still not covered by the new map system? If so, what mechanism will be put in place, if their case is justified, for ensuring that they are entitled to the relief?

Dr. Whitehead: The Government have pointed out the possibility that, even with the new map system, some areas that should be within it may not be. That is because, although one might believe that putting a map system in place is a relatively exact science, defining what is a rural community for the purposes of the relief scheme relies on various designations, including whether it is 200 yd from an urban area. The hon. Gentleman will understand that, on the issue of whether something is 200 yd from an urban area, when a number of settlements that do not in themselves contain more than 3,000 people, but which collectively add up to more than that, have spaces among them that approximate to that area, there can be some doubt.

I do not think that the problems are because a bad exercise has been undertaken. There are grey areas, and it will be possible—the Government will be happy to do this—to examine areas that state that they have been left out for some reason, and introduce them into the mapping system if their claims turn out to be justified.

Mr. Clifton-Brown: I am grateful to the Minister for giving way again, as this is an important point. He has now conceded that areas not included under the order that make good representations and prove their case to him may be eligible for inclusion. How would they be eligible? The order brings into operation certain areas designated by the maps. Surely that means that other areas could not just be added in by his Department. Or could they be? Perhaps the Minister could, by ministerial order, bring them back into the system.

Dr. Whitehead: We are essentially talking about three types of designation. The first is of areas that are presently receiving rate relief because they have been regarded as rural but that shall be excluded from future maps because they shall be regarded as urban. Those, for the time being, shall continue to qualify because the previous designations have been maintained. The secondly category is of areas that

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were not previously designated but shall be now because of the map system. That means that from April 2002 they shall be eligible, whereas previously they were not.

The third category, which the hon. Gentleman has mentioned, is of areas that have never been designated and are not designated by the new mapping system, but could make a case that might cause them to be so designated. I can confirm that the Government shall consider any representations, including those that have already been received as well as future ones, and shall consult again on revised designations. As I understand it, revised designation, should it be agreed that those areas come within the scope of the mapping system but have been excluded because of the problem of grey areas, would take place by a revised order.

Mr. Brazier: I should like to clarify something about the first of the Minister's three categories. I think that he has said that if a village currently falls within the rules but, because of the development pressures that we all face, rises above the 3,000 threshold in the near or medium-term future, the village shop that currently qualifies shall continue to qualify after that development takes place. Is that what he said? There is at least one village in my constituency where that might be the case.

Dr. Whitehead: The order designates broad rural areas for the purposes of the scheme. That incorporates a commonly used definition of an urban area as one with a population of 10,000. For the purposes of the scheme, we have designated all non-urban areas as rural, but some may contain settlements with a population larger than 3,000. It is up to the local authority to designate the areas that fit the bill. I believe that the hon. Member for Canterbury (Mr. Brazier) is particularly worried that areas that are adjacent to areas that have been defined as urban might be clawed into the urban designation.

At present, because the previous designations have been retained, areas next to urban areas continue to receive the relief. However, if it is demonstrated in future that they have become urban areas with a population of more than 10,000, they would cease to qualify because they would no longer be defined as rural. They would not even be eligible for the consideration that communities inside their boundaries with a population of less than 3,000 should be eligible for the relief scheme.

I could go on at great length and in great detail about how the scheme previously worked, but I am not sure that it would add to the edification of the Committee.

The Chairman: I am grateful for that.

Dr. Whitehead: I am even more grateful than you are, Mr. Hancock.

I hope that I have reassured hon. Members that no businesses that are presently designated will lose relief because of the dual nature of the scheme, that the mapping system that will, by and large, govern the system from April 2002 is not necessarily the final word—further designations will be considered if a case

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can be made—and that information about the orders will be widely available.

The hon. Member for South-East Cornwall (Mr. Breed) made some points about the designation of areas for foot and mouth relief. That is a separate system of designation that draws on additional funding under Special Grant Report (No. 86) for the 151 most rural English authorities. It is intended to provide rate relief for businesses seriously affected by foot and mouth disease. The Government have announced their intention to extend the scheme to 31 March 2002 subject to the approval of Parliament; a further special grant report will be introduced soon. The designated authorities under the scheme may change slightly, because representations have been made by one authority that was not included but considers that it should have been.

The hon. Gentleman also asked whether it is time to pull all the various designations together. There is a commitment in the local government White Paper to monitor and evaluate the effectiveness of existing and new rate reliefs, including the new reliefs for small businesses, to determine whether a more unified system would be appropriate. The Government have acted honourably and in good faith in introducing reliefs where they believed that they were appropriate; for example, to support the last remaining village shop and to deal with the acknowledged severe crisis that affected rural businesses as a result of the foot and mouth epidemic. If the reliefs appear to be piecemeal, it is because of the circumstances in which they were introduced. The White Paper includes a commitment to examine whether they might be incorporated into a simpler and more general scheme. I believe that that covers the essential points that have been raised.

Mr. Clifton-Brown: I am afraid that the Minister has not answered one of my questions. The new order, by designating areas that have not previously been designated, implies that those areas should have qualified previously. I understand that the order will come into effect for the tax year beginning 5 April. Will it be possible for areas left out of previous

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designations because of simple drafting errors to claim the relief for this financial year, which they would have been entitled to if the order had been drafted correctly?

Dr. Whitehead: My understanding is not that the previous designations were based on incorrect drafting. They were mainly based on descriptions of parishes and rural areas that were not based exactly on maps. The purpose of introducing maps is to ensure a more accurate and universally accepted definition of a rural area, and how a community qualifies for that definition. Therefore, the previous system was not based on a mistake; it was based on a method of description that has been superseded by the introduction of maps.

The hon. Member for Cotswold suggests some sort of retrospective arrangement. That could not easily be attached to the new mapping arrangements. We are not aware of anyone wanting rate relief who had a case considered and rejected under the old system. I hope that the hon. Gentleman accepts that the new mapping system will bring in people and businesses that were previously not eligible, and had not objected to that, who may be pleasantly surprised that they are now eligible because of the accuracy of the new system. The dual system will ensure that the old system will not create any losers, and that the new system will create winners. That should be regarded as good news all round, and I hope that hon. Members will agree to the order.

Resolved,

    That the Committee has considered the draft Non-Domestic Rating (Designation of Rural Areas) (England) Order 2001

Draft Non-Domestic Rating Contributions

(England) (Amendment) Regulations 2001

Resolved,

    That the Committee has considered the draft Non-Domestic Rating Contributions (England) (Amendment) Regulations 2001 (S.I., 2001, No. 3944.—[Mr. Clifton-Brown.]

Committee rose at twenty-eight minutes past Five o'clock.

The following Members attended the Committee:
Hancock, Mr. Mike (Chairman)
Borrow, Mr.
Brazier, Mr.
Breed, Mr.
Clifton-Brown, Mr.
Davies, Denzil
MacDonald, Mr.
Miliband, Mr.
Munn, Ms
Salter, Mr.
Strang, Dr.
Whitehead, Dr.
Woolas, Mr.

 
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Prepared 27 February 2002