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Lord Moynihan: My Lords, I also wish to congratulate all those involved in the long-running campaign, especially my predecessor, John Greenway, whose tireless work on the issue in another place has paid dividends today. I, too, congratulate the Central Council of Physical Recreation and add to the tributes paid to Nigel Hook, who is retiring. This is a red letter day for him. His encyclopaedic knowledge of sport and his enthusiasm are second to none. I pay tribute to noble Lords on all sides of the House, not least to the important work done over the years, characteristically diligently, by the noble Lord, Lord Pendry. I also pay tribute especially to the work done by the noble Lord, Lord Phillips of Sudbury. I thank the Ministers and the officials who accepted our case. It is a classic example of the maxim that if at first you don't succeed, try, try and try again.

This is, I hope, the first in a series of campaigns to raise the profile of sport. From these Benches we want to ensure that the importance of sport and recreation is re-established at the centre of the political agenda and is recognised as relevant to the objectives of every government department. That is why I am deeply grateful to my noble friend Lady Hanham and her

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team in local government for working so constructively to support 80 per cent mandatory rate relief for CASCs.

Today's victory goes to the heart of our vision for sport at the local level. It is about volunteer retention; engagement with local communities; youth involvement; the participation of the disabled in sport. It is about social inclusion and the goal of a healthier nation. It is not about today's Olympians; it is about where tomorrow's Olympians are to be found. It is an important step towards wider participation at a time when, despite, 1.6 billion going into sport from the lottery over the years, participation over that time has risen by only 0.3 per cent. That is why the litmus test of this amendment and this initiative is to increase the active membership of community amateur sports clubs. I hope that we shall be able to rectify the now unusual position that Northern Ireland faces of being worse off than the rest of the United Kingdom in respect of rate relief for amateur clubs.

In the spirit of welcoming the Government's U-turn, perhaps in conclusion the Minister can continue the spirit of co-operation and of cross-party support which should always be in the nature of the links between sport and politics, and announce today that the Government do not intend to pocket the tax from the proposed London Olympic lottery game but reinvest that tax directly into the success of the Games in London.

Lord Pendry: My Lords, I support this important amendment and I add my voice to those who have congratulated the Government on listening to those of us who have argued for years for mandatory rate relief for voluntary sports clubs.

I was particularly pleased that the noble Lord, Lord Bassam, confessed at Report stage that he was,

    "not aware of the 65 per cent mandatory relief in Northern Ireland"—[Official Report, 16/7/03; col. 932.]

with regard to voluntary clubs. He said that he would review the situation, which he did. I pay tribute to the excellent work of the noble Lord, Lord Phillips of Sudbury, who has been a great campaigner on the issue for many years, as has the noble Lord, Lord Moynihan. Our congratulations must go to them. The CCPR and Nigel Hook have also been mentioned. His voice has been loud and clear on the matter. I do not wish to say much more except that common sense has prevailed. I refer to the benefits that accrue to the people of Northern Ireland as a result of this mandatory rate relief and to the local and wider communities. As the noble Lord, Lord Moynihan, said, Northern Ireland now has some catching up to do as a result of the amendment. I welcome it wholeheartedly.

The Earl of Caithness: My Lords, while supporting the amendment, I should like to ask the Minister one technical question. Who will pay for the rate relief? Will it be the general taxpayer or business?

Baroness Billingham: My Lords, before the Minister replies to that I add my congratulations to everyone who has been involved in what is, as has been said, a

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red letter day for sport. When I joined the House relatively recently, I found that a huge campaign had been mounted by people who are present in the Chamber today. I pay tribute to them and recognise the work that has been done by noble Lords. I pay tribute also to the Ministers. The measure is an important example of co-operation throughout the House. The House has shown me what a good friend it is to sport. Every debate we have ever had has shown a complete consensus on all sides. Not only do we realise that sport is fun—many of us have enjoyed it and continue to enjoy it, surprisingly, far past our teenage and our early years. We also know the other benefits that accrue from it, such as health and social inclusion. For all those reasons, this is a marvellous piece of work.

I do not want people outside this Chamber to read Hansard and think that this issue is of interest only to men. I want to say thank you on behalf of all the women and girls. They, too, love their sport, and I want it to be seen both in this Chamber and outside that they welcome the amendment. It is a marvellous achievement and I congratulate everyone concerned.

But the next thing I want to say to the Minister is: now we must make it work. We have had some bad press on community amateur sports clubs and we have to put that to rights. People have been disheartened, discouraged and frightened by what they have seen as the red tape involved in setting up community amateur sports clubs. Let us join together and make sure that we send this message out now: that is in the past. The future is much simpler, much more proactive and much more likely to benefit all our communities. I thank everyone who has been involved.

Lord Bassam of Brighton: My Lords, it is nice, as a Minister, to be the recipient of congratulations, and the congratulations that have been generally disbursed are well merited. I, too, wanted specifically to mention Nigel Hook. He is to retire shortly and, in a sense, this is almost a parting gift. I know from contact with him that he is extremely grateful for what has occurred.

I take the point that this provision must be made to work. I suspect that those in the local authority sector, the CCPR, Sport England and everyone else will want to see it work, and work well. It deserves to. It will bring immense benefits to those clubs that operate at the lowest possible level. In my local authority area, some 20 sports clubs will benefit from this. This is a city with a population of a quarter of a million. We can see, if we extrapolate that, the enormous benefits that will accrue across the country.

The question was asked: who will pay for this? In the end, does it much matter? I can tell the noble Earl that there will not be a cost to business. The money will come from general taxation. But, in general, business has a role to play in sponsoring and supporting sport, and it does that very well indeed. That will be reflected financially, I suspect, in the way in which the formula works. That is how these matters usually operate, and certainly that is how we intend to see it work.

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This is a great day for sport. It speaks volumes for what can be achieved when intelligent and rational debate takes place and when people put their point at exactly the right stage of a Bill. I am grateful for all the congratulations that have been expressed. They are certainly well merited.

On Question, amendment agreed to.

[Amendment No. 8 not moved.]

Clause 64 [Transitional relief]:

5.15 p.m.

The Earl of Caithness moved Amendment No. 9:

    Page 32, line 26, leave out "be the same as or different from" and insert "subject to subsection (10A) below, be less than, but not greater than"

The noble Earl said: My Lords, in moving this amendment, I shall speak also to Amendment No. 10.

Governments of all persuasions have accepted that rating revaluations may produce significant increases in rate bills for individual ratepayers and that, therefore, a cushion should be introduced to avoid sudden and significant increases in such bills. That concept is not opposed by the amendments that I have tabled.

The Government are tightening the current rating system by introducing self-financing for transition within each financial year. The Bill also calls for any shortfalls in any year to be recovered by changes to the unified business rate in later years, thus removing any chance of predictability ratepayers may have for their forthcoming rate liabilities. That makes the system a whole lot more complicated.

The Government intend to achieve this precise balance for transitional arrangements through two mechanisms, or through a combination of the two. The first mechanism is to balance the cost of cushioning rate bill increases by delaying reductions in rate bills when a ratepayer has not experienced an increase in rateable value. That is otherwise known as downwards transition.

The second mechanism is to make a simple, overall surcharge on the uniform business rate in order to pay for the cost of transition for ratepayers. I believe that this second approach is fairer to ratepayers if the cost of the surcharge is spread over the lifetime of a rating list rather than set every year.

The amendments do not—and never have done—fundamentally challenge the notion of self-financing. They merely seek to redress the unfairness of the means of making transitions self-financing—which the Government have admitted will include the system of downwards transition. Downwards transition means that, following a revaluation, ratepayers whose rateable values change by less than the national increase in rateable value will find themselves subsidising more successful ratepayers whose rateable value has increased, often as a result of their location in a growing business area. Independent research suggested that this policy cost ratepayers 1.3 billion in denied rate reductions between 1995 and 2000. I am sure that your Lordships will agree that that is

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fundamentally unfair and that it affects most harshly the very ratepayers, estimated by independent research to be in the hundreds of thousands, who are for the most part in small or medium-sized enterprises which find rates a disproportionate burden.

The amendments instead seek to facilitate alternative arrangements for transitional arrangements in England, identified by the independent report, The future of business rating transition in England, produced in time for this Bill, in February of this year. The report concluded:

    "Compared with the current system, implementing any one of these schemes"—

the schemes that I have put forward—

    "would have the advantages of speed of implementation, robustness, fairness, transparency and affordability",

in comparison to the Government's proposals.

The amendments would enable a government to avoid "downwards transition" through allowing a surcharge in the uniform business rate to be phased in over more than one year. That gives the flexibility that the Government need to avoid making transitional self-financing in each and every financial year and allows the Government a practical opportunity to avoid downwards phasing.

I wish to stress that my amendment would address the lack of flexibility that the Bill imposes on the Government. I was party to a mistake in 1988, when we did the same thing and left no flexibility at all. That had to be corrected in 1992; the Government had to redress the situation. I fear that the present Government are making the same mistake as we made in 1988.

My final point relates to the question that I asked on the previous amendment. For months, in the negotiations that we have had with the Government, they have turned round to us and said that there can be no money from the general taxpayer. The system that I have proposed is self-financing over a five-year period together with interest. It requires some investment from the general taxpayer in the first one or two years, which is then recouped; so at the end of the fifth year there has been no cost to the general taxpayer.

In his response to the previous amendment, the noble Lord, Lord Bassam, confirmed that the general taxpayer would be the person who bore the cost of the relief for sports clubs. That is a new and important step forward. It means that the Government will use general taxation for the benefit of some sectors. I also refer the noble Lord to the local retention of business rates. That, again, is being supported by the general taxpayer. Here, I propose a system that is not going to cost the general taxpayer any money over a five-year period. It will initially, but all that money will come back. It is better for business; it is more equitable for business. The amendment is strongly supported by the Royal Institution of Chartered Surveyors, the Rating Surveyors' Association and the Institute of Revenues, Rating and Valuation. I beg to move.

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