|Non-Domestic Rating (Designation of Rural Areas) (England) Order 2001 and Non-Domestic Rating Contributions (England) (Amendment) Regulations 2001
Mr. Clifton-Brown: I wholly agree, and have no doubt that the Minister heard what my hon. Friend had to say.
I should like to dwell on the impact of the problems on Tandridge district council. Perhaps I will be able to get an explanation from the Minister as to what happened in that case and how he would deal with it. How would councils be dealt with in general if errors were to occur in all the maps?
Tandridge district council told us that the Department for Transport, Local Government and the Regions has advised local authorities on the changes to the village shop rate relief scheme. That notification was received on 9 January 2002, but the changes in the order came into effect on 31 December 2001. We all want those changes to be brought in as quickly as possible, but we need to do things in a logical and sound way. The Government were considering important changes to the order at the beginning of January, but it came into effect on 31 December 2001. That strikes me as a not particularly sensible way in which to bring about important changes to the law in this country by secondary legislation. Can think these matters through better?
Tandridge district council tells us that hardship relief should be awarded to rural shops that are now excluded from the village shop rate relief scheme. The Local Government and Rating Act 1997 applied the village shop rate relief to small settlements in rural areas. Local authorities could define rural settlements that would qualify for relief, subject to the guidance issued by what was then the Department for the Environment, Transport and the Regions. Qualifying properties were entitled to 50 per cent. mandatory relief at no cost to the council. Members agreed to grant the balance of the 50 per cent. discretionary relief at a cost of 75 per cent. to the council, and approved a revised rural settlement list on 11 October 2001.
The Department for Transport, Local Government and the Regions issued the consultation, to which I
Column Number: 7referred. It promised that rural settlements would be defined by reference to its map. The council responded to the consultation. On 9 January, the DTLR advised the council that the legislation had been amended and that the designation of rural areas for village shop rate relief would be made with reference to its map. The council did not receive a reply to its letter of 29 November, which it sent in response to the consultation paper. It may be that the letter was lost in the post and there may have been extraordinary circumstances. However, the Minister should investigate whether the letter was received. The council knew a great deal about the subject and had specific problems. If the letter was received, why did the DTLR not acknowledge it and show that it had been taken into account in the consultation?
With effect from 31 December 2001, certain premises are no longer entitled to rate relief. It would not be especially constructive to list them all, but the total cost to the council was £2,079. Tandridge district council goes on to note that under section 49 of the Local Government Finance Act 1988, it must reduce or remit the payment of non-domestic rates liability on the grounds of hardship. The DTLR bears 75 per cent. of the cost of that relief, and the remaining 25 per cent. is borne by the council tax payers of the district. The council must consider whether it is reasonable to grant this relief, while paying regard to the interests of council tax payers in general. Whenever a council grants any relief that is not statutory, it must consider carefully within its standing orders whether it is favouring a particular group of council tax payers.
The total cost to the district council was £1,586. The council went on to state that all costs would be given as full annual costs for the purpose of information. Costs would be proportionate for the current financial year, as legislation requires. Granting hardship relief to the effective property would result in a saving of £709.92 in a full year. The rural settlement list that was approved on 11 October 2001 is now obsolete, and settlements are affected by the imposition of the DTLR map.
This has been a story of shifting sands. Council officials have done a great deal of work to see what settlements in their district are entitled to relief, but the legislation has continually moved on. Certain businesses in certain settlements are losing out. We should debate legislation in less of a hurry and get it right first time, rather than having to take continual bites at the cherry.
The Minister's response to a written parliamentary question from my hon. Friend the Member for East Surrey (Mr. Ainsworth) cleared up the matter as far as Tandridge is concerned, but not in respect of other counties. In the case of Tandridge, the properties that lose out will still get the rate relief but I want to know what will happen in parishes in other district and borough councils that lose out in a similar way.
I have said a great deal about the measure that has the most meat in it. The other order, the Non-Domestic Rating Contributions (England) (Amendment) Regulations 2001, merely alters the
Column Number: 8balancing factor of the non-domestic rate pool for certain councils in order to bring about the necessary changes at the year's end. The regulations appear to be non-controversial, although they encompass many councils. I hope that the Minister will confirm that the proposal should be renewed annually, because there must be a system for re-distributing the non-domestic rate pool to comply with varying circumstances throughout the year.
The official Opposition broadly welcomes both orders, although I have raised several queries and perhaps been a little too carping about the mechanism involved. Businesses in rural areas have been hit hard by the foot and mouth crisis, the BSE crisis and the events of 11 September and many are closing. If the order keeps open even a few of them, people in rural villages will be grateful to the Minister and to the Government.
Mr. Colin Breed (South-East Cornwall): First, I want to refer to the point of order made by the hon. Member for Cotswold at the beginning of the debate. Maps are pretty important to the process and as there is now much more secondary legislation, it is important to ensure that Committees are provided with relevant information so that they can reach the right conclusion.
The Chairman: Order. After the hon. Member for Cotswold made that point of order, the Minister was kind enough to pass me a note suggesting that the maps were in the Library. I asked whether that could be checked, and the response was that the maps required for this debate were available. There is no point in pursuing the matter at this stage.
Mr. Clifton-Brown: Further to that information, Mr. Hancock, I assure you, and the Minister, that I was acting in good faith. I checked with the Library and was told that the maps were not available. It is possible that they were found subsequent to my inquiry.
The Chairman: I accept that entirely.
Mr. Breed: Thank you, Mr. Hancock.
Many businesses which would be considered by most people as being in rural areas are shown on the maps to be in more urban local authority areas and many businesses that have been affected by foot and mouth disease have not been able to obtain rate relief. Although the designated areas are important, a significant number of businesses have been unable to secure rate relief because they are not within a local authority's designated area.
I have some difficulties with the geographical areas and the way in which local authorities operate their discretionary powers. I do not know whether other hon. Members have had similar experiences, but several small businesses contacted me when they were unable to secure rate relief due a rather strict interpretation of the conditions laid down by the Government.
Mr. Clifton-Brown: I am grateful to the hon. Gentleman for allowing me to intervene. Representing a rural constituency, he will know that
Column Number: 9when two hardship measures were introduced last year during the foot and mouth crisis, all businesses had to re-verify the information provided to secure the first benefit in order to claim the second. Is that not a huge amount of unnecessary bureaucracy to impose on businesses that are already struggling?
Mr. Breed: I entirely agree. Many small owner-manager businesses are struggling and it is hard to get through the day. Hours have had to be increased in order to stay open with other shops, garages and so forth. Additional work has been necessary to secure often not very substantial relief. The difficulty with terminology is another problem. Some small businesses may be eligible for relief, but do not receive it; others have to go through enormous bureaucracy and almost have to fight their local authorities in order to get it. Larger businesses are left out of the process altogether.
I referred to out-of-town retail units, but would not suggest that they should receive rate relief—quite the reverse. In some respects, they have been part of the problem and they have a significant advantage in the way in which they are currently rated. The time must come when we start to examine more critically how large out-of-town supermarkets have exerted such a tremendous effect on the centres of market towns and even villages. Foot and mouth is not the only problem: some good businesses have been undermined on account of the competition from such supermarkets.
We have a great variety of rate reliefs and a huge disparity between out-of-town supermarkets and small village shops. Is it not now time to start out again on the entire problem? Statutory instruments are all well and good, but surely the whole paraphernalia of non-domestic rating should be placed under real scrutiny and we should attempt to produce a fairer and more just system. That is particularly important now, as we consider putting public money into assisting market towns. I am all in favour of that: they have certainly declined, largely on account of the operation of out-of-town supermarkets. We are providing reliefs here and putting public money in there: rating is not the only factor, but it is part of the process. As I said, we need to start reflecting on the whole system rather than tinkering around the edges.
I join the hon. Member for Cotswold in saying that we should assist small village businesses in the interim. We are debating interim measures. Whether for small businesses in villages and market towns or for larger businesses on the edge of towns, the whole rating system should be readjusted to take account of the realities of economics today. If we ensured that rates fell fairly and justly, it would prevent the need to deal with different recipients of various reliefs and would allow others to gain significant advantage from the system for themselves.
|©Parliamentary copyright 2002||Prepared 27 February 2002|