Points of Order
Wednesday 23rd May 2018
(5 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Barry Gardiner (Brent North) (Lab)
On a point of order, Mr Speaker. You are a redoubtable champion of Members seeking to hold the Government to account. One of the things we sometimes resort to in doing that is the submission of freedom of information requests. On 20 July last year, I submitted a freedom of information request to the Department for International Trade, to which I have not yet had a response, nor indeed any acknowledgment, despite chasing it up in March and April. I submitted a separate FOI request on 14 March this year, which did receive a response, advising me that the Department would be unable to respond within 20 days but that a response would be forthcoming by 14 April at the latest. I have still had no such response, despite it now being May.
On 26 April this year, the Cabinet Office and the Office for National Statistics released the annual FOI statistics by Department. The Department for International Trade was the worst of all Departments, with 27% of requests either not being answered within the time limits or not answered at all. That failure prevents parliamentarians from properly scrutinising the Government’s trade policy at a time of intense public debate on these matters—something we have a duty to Parliament to do. I make no judgment of whether it is by intention or incompetence on the part of Ministers, but I seek your advice as to how we may redress the situation.
Mr Speaker
I am very grateful to the hon. Gentleman. I hope he will not take it amiss if I begin my response to him by saying that, although it is an attempted point of order, in a very real sense it appeared to me to resemble an intellectual dissertation, which of itself is no surprise to those of us familiar with the cerebral quality of the hon. Gentleman. I think it is important to distinguish between parliamentary proceedings on the one hand, in respect of which I may have some modest powers and capacity to assist Members, and freedom of information requests on the other, in relation to which I am literally powerless, as those are not matters for me. However, the hon. Gentleman has raised a concern, and it may well be shared by others. It is on the record, and I hope, consistent both with the letter of obligation to those who submit such requests and with its spirit, that full account will be taken of the situation the hon. Gentleman has painstakingly highlighted. If I may, I suggest we leave it there for today.
Mr Speaker
I will come to the hon. Gentleman, of course, but I call Andrew Bridgen.
Andrew Bridgen
On a point of order, Mr Speaker. Following last Wednesday’s difficult day, will you clarify a point of Chamber etiquette? Is it now acceptable in the Chamber to call a colleague a liar?
Mr Speaker
I am extremely grateful to the hon. Gentleman for his point of order. I would say to him very respectfully and courteously by way of reply that I made a statement on those matters in the Chamber. I think what I said at the time was very clear to people, and I do not feel the need to add to that statement. My position has been very explicit. I thank the hon. Gentleman for inviting me to dilate on the matter, but I do not intend to do so, and we shall leave it there. I am deeply obliged to him.
Mr Kenneth Clarke (Rushcliffe) (Con)
Further to that point of order, Mr Speaker. Do you agree that, if action were taken every time a Member of this House felt moved to say under his breath something rather abusive about another Member, the Chamber would be deserted for considerable lengths of time? Do you not agree that it is better to leave this to the body that is now investigating it and hope that some common sense will be applied to this rather overheated subject?
Mr Speaker
I thank the right hon. and learned Gentleman for what he has said, and Members will make their own assessment of it. I simply appreciate the fact that the right hon. and learned Gentleman says what he says on the strength, next month, of 48 years’ uninterrupted service in this House.
Mr Speaker
I am saving the hon. Gentleman up, as I often say. I do not want to squander him at too early a stage of our proceedings. I call Mr Martin Docherty-Hughes.
Martin Docherty-Hughes
On a point of order, Mr Speaker. Two hundred days have passed since my constituent Jagtar Singh Johal was held in India without charge, with accusations of torture and with trial by media. I am grateful to Ministers who have engaged with me so far in holding the Indian authorities to account. Nevertheless, I have now written to the Prime Minister twice, without formal response other than a holding response from their office. Will you assure me that all Ministers of State take their responsibilities seriously in responding fully to a constituency Member of the House of Commons on a critical matter involving a constituent—a UK citizen, and a true son of the Rock of Dumbarton—who has made accusations of torture against a close ally?
Mr Speaker
I hope that these matters are always treated with the utmost seriousness and that responses to parliamentary colleagues are both timely and substantive. I say to the hon. Gentleman, without fear of contradiction, that that notion of a timely and substantive response should apply both in relation to parliamentary answers to parliamentary questions and in relation to correspondence. I was not familiar with all the details of this matter, although the hon. Gentleman has apprised me of some of them, but it is of course important that these matters are addressed fully.
A moment ago, we heard from the Father of the House—perhaps I may respond on this point because it is quite an important one for all of us. A former Father of the House, Sir Gerald Kaufman, when he did not receive substantive replies to questions or letters, was given to tabling a written question on the matter, inquiring when he would receive a substantive reply. If I remember correctly, Sir Gerald was inclined to say that that was an extremely effective technique. I volunteer that advice gratis to the hon. Gentleman.
Simon Hoare
On a point of order, Mr Speaker. As you are probably aware, there have been problems with the wi-fi connection in the House for remote devices during the past few days, and the authorities have been reasonably good about keeping Members up to speed. May I invite you to provide the House from the Chair—today is a sitting day, but we are coming up to the recess—with both an update on progress and confirmation that those of us on recess next week will be able to access the intranet, our emails and parliamentary sites in the usual way, notwithstanding the problems?
Mr Speaker
I believe the Parliamentary Digital Service is attempting to keep Members updated on this matter. It would perhaps be rash of me to proffer any—[Interruption.] Well, it would certainly be rash of me to proffer any technical advice, as I have no expertise in that matter, as the hon. Member for Lichfield (Michael Fabricant) can perfectly well testify. It is probably unreasonable to think that I can offer any sort of oral statement on the matter tomorrow, which is the last day that we will sit before the Whitsun recess, but I think the Parliamentary Digital Service will seek to keep Members updated. On the back of what the hon. Member for North Dorset (Simon Hoare) has said, if there is a further way in which the House Service can help him and other right hon. and hon. Members, we shall do so.
Mr Speaker
However, this particular subject will not have been exhausted until we have heard the views on it of the right hon. Lady.
Anna Soubry
Further to that point of order, Mr Speaker. I am sorry not to have given you notice of this, but it flows so naturally from what was said by my right hon. Friend; sorry, by my hon. Friend.
Anna Soubry
No doubt in time.
Mr Speaker, it has come to my attention that some constituents are unable to email me. I believe this is a common problem from which all hon. Members are suffering. Obviously, we will not know because the emails do not even get into the spam filters. For some peculiar reason, which I will not trouble you with, I found out that one constituent—she had a very serious concern about a personal independence payment application being refused—had emailed me and included attachments, quite properly, with her email; I found out through another source that she had emailed me. Therefore, I could deal with her inquiry, but I would never have known about it if that other source had not contacted me.
I have contacted the parliamentary authority, PICT, on more occasions than I would care or want to remember, I have to say, to no avail. In short, the spam filters are set too high, and there are certain popular email addresses that simply do not get through even to the spam filters. It is a serious problem, and I simply do not know how we can resolve it. Can you help, Mr Speaker?
Mr Speaker
I rather fear that I am not able to help. I do not want to make too many declarations on the Floor of the House. Suffice it to say that I am not myself technologically sophisticated. I think I owe it to the right hon. Lady to disclose that candidly to her. I am not saying that I have not the slightest idea what she is talking about, but I am not closely familiar with the detail, and when it comes to this filter or that filter, it all seems very confusing to a simple chap like me.
I would say to the right hon. Lady that these are serious matters. PICT of course ceased to exist about three years ago, but the Parliamentary Digital Service—I think that is what she means—does try to assist. I think there are ways of dealing with this outside the Chamber, but knowing the right hon. Lady as I do, I feel sure that if she is not satisfied on this matter ere long, we will all be hearing more about it and I will doubtless be hearing more about it. [Interruption.] Indeed, the right hon. Lady will probably send me an email. It is always a pleasure to hear from her both in the Chamber and outside it, but in all seriousness, people are aware of this and I will try to ensure, as of now, that there is some progress and that Members are satisfied, because they should not be obstructed in the discharge of their parliamentary duties. I thank her for raising what she has raised.
It is a case of patience rewarded for the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil).
Angus Brendan MacNeil
On a point of order, Mr Speaker. That was excellent pronunciation, as ever. In the north-west of Scotland, fishing boats have been sold, processing jobs lost and exports lost because the Home Office will not provide visas for such work in Scotland or Northern Ireland. All of that is happening to keep the Home Office happy, essentially. We need seasonal workers from non-EEA countries urgently, otherwise we will only have European Union fishing boats around our waters. How can I best get this matter on the record and raise awareness of it? I seek your advice and guidance.
Mr Speaker
As the hon. Gentleman knows, he has achieved his objective with immediate effect. His words will have been heard on the Treasury Bench and will be recorded in the Official Report by the dedicated and expert staff of the House. He can therefore go about his business with an additional glint in his eye and spring in his step, which might otherwise have been lacking. If he feels that he has not exhausted his energies on this matter, he can of course seek a debate in the Chamber or in Westminster Hall. Who knows? The hon. Gentleman might be successful.
Bills Presented
Non-Domestic Rating (Nursery Grounds)
Presentation and First Reading (Standing Order No. 57)
Secretary James Brokenshire, supported by the Prime Minister, Mr David Lidington, Secretary Greg Clark, Secretary Michael Gove, Mel Stride and Rishi Sunak, presented a Bill to make provision for buildings used as nursery grounds to be exempt from non-domestic rates in England and Wales.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 214) with explanatory notes (Bill 214-EN).
Ivory
Presentation and First Reading (Standing Order No. 57)
Secretary Michael Gove, supported by the Prime Minister, Mr Chancellor of the Exchequer, Secretary Boris Johnson, Secretary Penny Mordaunt, Secretary Matt Hancock, Andrew Leadsom and Dr Thérèse Coffey, presented a Bill to prohibit dealing in ivory, and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 215) with explanatory notes (Bill 215-EN).
Non-Domestic Rating (Nursery Grounds) Bill
Tuesday 5th June 2018
(5 years, 8 months ago)
Commons ChamberRead Full debate Non-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I beg to move, That the Bill be now read a Second time.
Agriculture is at the heart of our country’s rural life, and, moreover, at the core of our rural economy. It employs over half a million people and supplies almost half of everything we eat and drink in this country. In England alone, the rural economy is worth over £250 billion. We want our country to offer unparalleled business opportunities for an agricultural community that produces some of the finest food and drink in the world. At every stage of the food chain, the UK is creating exceptional food and drink enjoyed around the world, with lucrative opportunities for British exporters, international buyers, and investors. In just 10 years, global demand has grown by nearly a third, with total food and drink exports now exceeding £20 billion.
I am proud to represent a deeply rural and agricultural constituency, home to businesses like Wensleydale Creamery, HECK sausages, Stamfrey Farm yoghurt, and Thornborough Cider—all fantastic rural businesses producing food and drink that competes with the best around the world.
This Government are absolutely committed to supporting sustainable growth in the rural economy. Through the 2014-2020 rural development programme, we are investing almost half a billion pounds in England’s rural businesses. Our support for rural enterprises includes developing farm and horticultural companies. In February, the Government launched a wide-ranging consultation on the future of farming—one that supports farmers once the United Kingdom is outside the European Union. The Government are now analysing views and responses from all stakeholders who contributed. Our ambition is for a more dynamic and self-reliant agricultural industry. Supporting our rural economy and protecting farmers is an essential part of our exit from the European Union. Leaving the EU provides the Government with a unique opportunity to establish new frameworks that support our farmers to grow more, sell more and export more great British food and drink. As we develop this new approach to food, farming and fisheries outside the EU, we will not compromise on our high standards of animal welfare and environmental protection.
The Government are set to continue to commit the same cash total—£3 billion—in funds for farm support until the end of this Parliament. Then the Government will devise a new agri-environment system to be introduced in the following Parliament.
Mr Jim Cunningham (Coventry South) (Lab)
One of the big problems with regard to protecting farmers, as I am sure the Minister knows, is getting labour in from the EU and other parts of the world. That is where the big problem might lie after we have come out of the EU.
Rishi Sunak
It is not quite my place to comment on future immigration policy, but the hon. Gentleman will know that the new Home Secretary is devising a new immigration system for the UK after Brexit. Of course, ensuring that all businesses, not just in agriculture, have access to the talent and the labour they need will be at the forefront of that new system.
The Government have also said that they will use the structural fund money that comes back to the UK following the EU exit to create a UK shared prosperity fund. The needs and interests of rural businesses have to be addressed as part of any future plans.
We firmly believe that the business rates system plays an important role in supporting agricultural productivity. The agricultural exemption from business rates is a key part of this support. It is a broad-ranging and generous tax measure that ensures that no business rates are paid on agricultural land and properties.
Sir Greg Knight (East Yorkshire) (Con)
The Bill itself does not define what a “nursery ground” is, but the explanatory notes, which are not considered by Parliament and are not part of the legislation, do contain a definition of what a “nursery ground” is. Why is this? Would it not be better to put the definition in the Bill, or does it exist in other legislation?
Rishi Sunak
My right hon. Friend is right. My understanding is that other legislation has outlined the difference between the two, and I will come on to the Court decision that distinguished the treatment of the two.
It might be helpful, for Members who are not aware, if I explain the distinction. A nursery ground is where small plants or trees are propagated or sown with a view to their being sold on to someone else for growing on to their mature state, for sale to or use by the end consumer, whereas a market garden is where fruit, vegetables, flowers or plants are produced to be sold directly or indirectly to members of the public for consumption.
Rebecca Pow (Taunton Deane) (Con)
I have been much involved with the horticultural industry, so I am quite aware of the nursery industry, but I believe that many people are not aware of how significant it is for growing produce for our home market. We could grow it even more after Brexit—indeed, we need to—and the Bill will help a great deal by making these businesses more viable.
Rishi Sunak
My hon. Friend is, as ever, an incredible champion for agriculture and the rural community. She is right to highlight not only the current contribution of the fantastic horticultural sector to the UK economy in providing such fantastic food and drink for us to enjoy but the opportunities that will come after Brexit, as we make good on the promise of a global Britain where our food and drink exporters can look out to the world around, where demand is growing exponentially, and take advantage of all those opportunities. Consumers around the world will have the opportunity to benefit from high-quality produce developed in this country and always to high welfare standards, of which I know she is also a champion.
It is worth noting that the exemption from business rates for agricultural land has been in place since 1929. Before that, in the early part of the 20th century and before, agriculture benefited from a partial exemption from rates. For almost 100 years, the Government and Parliament have considered that agriculture should not pay rates. This Government and I trust that this Parliament has no intention for any change of direction in this matter.
It has been assumed until now that all plant nurseries where plants or trees are grown in the initial stages of their life, as I outlined, benefited from that exemption. That had always been the understanding of both rating valuers and practitioners, but in 2015, a Court of Appeal decision showed that the exemption did not apply to plant nurseries in buildings where the buildings were not used in connection directly with agricultural land. That does not reflect Government policy, and neither does it reflect our commitment to supporting sustainable growth in the rural economy.
This legislation will ensure that plant nurseries in buildings will once again benefit from the exemption from business rates for agricultural land and buildings. It will restore fairness for hard-working businesses hit by an unexpected tax burden, and it will enable the Valuation Office Agency to return to its former practice of exempting plant nurseries in buildings and removing plant nurseries that have been assessed from the business rates list. Plant nurseries paying business rates since 2015 will be eligible to apply for a backdated refund of their business rates, which will ensure that these businesses do not continue to suffer as a result of a property tax with an impact on the cost of farming and produce.
Bob Blackman (Harrow East) (Con)
My hon. Friend is clearly laying out the Government’s position, but can he clarify one issue that has been raised with me? Garden centres are commercial centres for direct provision to the public, but what will be the position under the new legislation of hybrids—in other words, plant nurseries with a garden centre alongside them that sells their produce directly to the public?
Rishi Sunak
I thank my hon. Friend for bringing up a helpful and important point that is worth clarifying. Under current legislation, garden centres are not exempt from paying business rates because they are not treated as agricultural businesses, which I am sure hon. Members will understand. It would be for the Valuation Office Agency to determine the individual facts of the case that he mentioned, but in general, it is perfectly possible for different parts of an entity to be treated in different ways. In the example he gave of a hybrid, where an agricultural business also had a retail operation, the Valuation Office Agency would be able to treat different parts of the business in different ways, and some may benefit from the agricultural exemption. Another example might be a working farm that also happens to have a retail element—for example, a farm shop—that might not benefit from the agricultural exemption, whereas the rest of the farm would. I hope that that clarifies my hon. Friend’s query.
In developing this legislation, we have worked very closely with the National Farmers Union to make sure that the measure meets our shared aim of ensuring that plant nurseries benefit from the agricultural exemption. I want to put on the record my thanks to the NFU for its invaluable insights and expertise, which has helped us to bring this effective legislation to the House. I very much welcome its support for the Bill.
I also want to put on the record my thanks to my hon. Friend the Member for St Austell and Newquay (Steve Double). He deserves enormous credit for highlighting this issue to both my predecessor and others last year, and he has continued to press the case with Ministers and other parts of the Government. I am glad that he will be able to see the fruits of his labour brought to bear today.
To return to the comment made by my hon. Friend the Member for Harrow East (Bob Blackman), the Bill will not otherwise disturb the existing boundary of the agricultural exemption, so uses beyond agricultural operations, such as garden centres, will continue to be subject to the normal business rates process.
Sir Greg Knight
Is the Minister in effect saying that all the Bill does is return the law to the same state we all thought it was in before the case of Tunnel Tech v. Reeves?
Rishi Sunak
My right hon. Friend is absolutely right: that is what the Bill seeks to do. It is a limited, targeted Bill that restores the practice previously widely accepted and understood by all participants in the rating system and ensures we will return to the state that existed before the Court of Appeal decision.
While I am responding to my right hon. Friend, let me clarify my earlier point. He asked where exactly the definition of nursery grounds can be found. I am reminded that it is precisely defined in case law, rather than in statute. That is where the definitions used over the years have been developed.
To turn to the business rates system in general, the Government are very clearly using the business rates system to create opportunities and to drive growth across the country. The Government have introduced a range of business rates reforms—worth over £10 billion by 2023—that will benefit the wider economy, including many businesses in rural areas. In April 2017, we permanently doubled small business rate relief to 100%, and raised the threshold from £6,000 to £12,000. As a result of these measures, over 600,000 small businesses—occupiers of a third of all properties—now pay no business rates at all. This demonstrates the Government’s clear commitment to supporting small businesses. We understand the impact of business rates in the rural economy in particular, so at the same time the Government also doubled rural rate relief from 50% to 100% for eligible businesses.
Rebecca Pow
I have an urban area in Taunton Deane, but I speak as someone whose constituency is particularly rural. There is a view that there is an increasing divide between urban and rural, particularly in the south-west, where we are largely rural. These business rates exemptions are absolutely crucial. Does the Minister agree that this Government are very much indicating that they understand their importance?
Rishi Sunak
My hon. Friend is absolutely right. She will know that I also represent a deeply rural constituency. I have seen at first hand the incredible difference that the business rates exemptions make to small rural enterprises, whether they are small business rate relief, rural rate relief or, indeed, some of the measures to support pubs that the Chancellor has announced in the last Budget or two. All of these measures add up to tangible savings for thriving enterprises, which are indeed the lifeblood of rural areas.
My hon. Friend will know, as I do, that rural areas typically do not benefit from large multinational employers. The backbone of rural economies are small and medium-sized enterprises, for which business rates are often a significant cost to bear. Any relief that the Government can give is always warmly welcomed, and it makes an enormous difference to their profitability and future success.
I am pleased to tell my hon. Friend that the Government continue to listen to business. At the spring Budget last year, the Chancellor announced a £435 million package to support rate payers facing the steepest rises in bills following the revaluation. Further answering calls from businesses, the Government brought forward to April this year the switch in the annual indexation of business rates from the retail prices index to the consumer prices index. That represents a cut in business rates every year. Although bringing forward that measure two years earlier than previously planned might sound technical, it is worth £2.3 billion over the next five years.
Furthermore, at last year’s autumn Budget the Chancellor also announced an increase in the frequency of property revaluations from every five years to every three years following the next revaluation. That will ensure that bills more accurately reflect properties’ current rental value and relative changes in rents. The 2018 spring statement announced that the next revaluation would be brought forward to 2021 from 2022, so that businesses can benefit from the change as soon as possible. After that, three-year revaluations will take effect in 2024.
To deliver on that commitment, the Government have already introduced secondary legislation to set the valuation date for the next revaluation on 1 April 2019, allowing the Valuation Office Agency to start preparing for a 2021 revaluation. The Government will introduce primary legislation to change the date of the next revaluation to 2021 in due course. The British Retail Consortium recognised that that was a positive move to improve the fairness of the system, and I look forward to meeting its representatives shortly.
In spite of all that, the Government are not resting on our laurels. We are also reviewing the wider taxation of the digital economy, and the Chancellor has been clear that we need to look more broadly at the overall taxation of the digital economy. The Government are working internationally to ensure that corporate tax rules deliver fairer results for certain digital businesses. We will use the output of those discussions to help inform consideration of the wider business tax system, to ensure that all businesses make a fair contribution to the public finances and that business rates continue to support the stability of local government funding.
Sir Greg Knight
I am grateful to the Minister for his generosity in giving way. What would be the position of a business adversely affected by the Court of Appeal decision? Would it be able to claim compensation for any losses suffered?
Rishi Sunak
I am happy to tell my right hon. Friend that businesses will absolutely be able to claim back any business rates they have paid from 1 April 2015. In Wales, businesses will be able to claim back to 1 April 2017. It might help Members if I explain the difference between the two dates.
The business rates system in England has relative lists of valuation dates—there is a 2010 list and a 2017 list. When we reach a certain point, it is then impossible to go back and change the list from the beginning. In this case, for any decisions that the Valuation Office Agency made after the spring of 2016, it was only possible to go back and change people’s bills to April 2015. Our understanding is that only a handful of businesses have been caught, and they will be able to use this legislation and subsequent regulations to appeal to the Valuation Office Agency and receive a refund backdated to when they first started paying bills.
Sir Greg Knight
Will the Minister clarify something—and if he cannot answer today, will he write to me? In addition to claiming back what has already been paid, will the businesses affected be able to claim costs and any other expenses arising out of the money that they erroneously had to pay?
Rishi Sunak
The businesses will not be able to claim costs; the new “check, challenge, appeal” system allows them to make a no-cost filing with the Valuation Office Agency, so there will be no cost to them as they claim back the bills they paid. However, it is important to note that, when they paid, the bills were not paid in error; they reflected the circumstances on the ground at the time.
I said that I would clarify why the date in Wales is different from the date in England. It is purely on the advice of Welsh Government officials. They do not believe that any businesses have been caught up by this in a way that would impact their previous list. In Wales, therefore, any active businesses caught up in this will only have their bills backdated to 2017 at the start of the new and current ratings list. Further retrospective dating is therefore not required.
Bob Blackman
My hon. Friend is clearly setting out to answer many of the questions from across the House. Will he clarify the number of businesses caught up in this and the total amount of money involved? I quite understand if he is unable to answer those questions today, but it would be helpful to many colleagues if this could be clarified subsequently in writing.
Rishi Sunak
I can answer my hon. Friend’s question now. The Government do not actually know, and are not in a position to know, the tax or business rates circumstances of individual businesses across the country. The VOA is under no obligation to share confidential taxpayer information with the Department. What I can say, based on informal conversations with the sector and the VOA, is that we believe just a handful of businesses impacted by the court ruling have subsequently had their bills changed. That is the working number we are aware of and I hope that provides the clarity he requires.
To return to digital taxation, the paper published at the 2017 autumn Budget sets clear expectations on what the Government hope to achieve on digital taxation: international momentum behind long-term corporate tax reforms and, pending that, the development of interim multilateral digital tax measures.
In conclusion, the Bill delivers on our commitment to support the rural economy and promote this country’s rural life. Moreover, it promotes fairness for hardworking businesses in the agricultural sector. I believe that it has widespread support from the agricultural community and valuers around the country. I very much commend it to the House.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
The Opposition welcome the provisions in the Bill. Broadly, we welcome the Government proactively seeking to iron out anomalies across the business rates system, bringing clarity to business, the Valuation Office Agency and local authorities. We agree with the principle that land and buildings associated with the operation of plant nurseries should not be liable for business rate payments, which is why we support both clauses in the Bill.
I should say, however, that the spirit with which the Government have approached this matter is not necessarily reflected in the state of our town and city centres. We recognise that support is being given to small businesses through small business rate relief, but many town centre locations are just above the threshold and do not qualify for any relief. The Minister, like me, will be a regular visitor to town and city centre businesses. He must hear first-hand, as I do, that many businesses on the high street find it a struggle to make ends meet, particularly when their online competitors have a distinct advantage with lower overheads. They can avoid the impact of town and city centre business rates, because they can operate in cheaper locations elsewhere. I think that all of us are pleased that digital taxation is being considered, but without a real and direct strategy to deal with the decline of our town centres and high streets, I am afraid that it will all be for nothing.
Returning to the Bill, since 1929 there has been a history of exempting such premises from paying non-domestic rates. The 2015 court ruling changed matters and it is good that the Government have responded, but let us be honest. It has taken three years for the judgment to work its way to becoming Government policy and to work its way through Parliament to be debated here today. Although it is correct that payments and refunds will be backdated, the point was made earlier on that compensation is not being paid and interest payments are not being made to businesses either.
From the Opposition’s perspective, it would be helpful to understand what the Government have in mind to iron out these types of anomalies across the system. We had the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill a month or two ago and we have this Bill today. If any others are in the forward plan, it would be helpful to see them, because they could well be wrapped up into a single Bill, which would save a lot of time on the Floor of the House and in Committee. These Bills are genuinely not controversial or divisive. They will not be divided on in Committee, provided that they are about dealing with the impact of court decisions that were never Parliament’s original intention.
We welcome the fact that the policy is being applied retrospectively. It will mean that businesses will not be at any direct financial disadvantage and will get back the money that they paid in business rates. However, we need to see what the Bill means for local authorities. The Government have been clear in this and previous Bills that when they are rectifying the decision of the court, their view is that the local authority involved effectively had a windfall for a short period. I just do not believe that is the case at all. Any money that is taken out of a local authority’s base budget, particularly when that local authority is part of a business rates retention pilot, will be a net loss with regard to the money that it has to spend on public services in its area.
While I acknowledge what the Minister said, I am not sure that “a handful” is a number. The Government do not know the number—[Interruption.] Let us say five then—no more than five. However, a very worrying precedent is being set whereby the Government can bring legislation through the House that has a direct impact on the funding of public services by local authorities and choose not to reimburse local authorities for the money that has been taken away. While we accept that only a handful of businesses have been affected in respect of this Bill, a Bill could come tomorrow that affects hundreds of local authorities and thousands of businesses, involving many millions of pounds, but the Government take the same approach and stance. It is not fair, proper or in the interests of good governance for us to make decisions without knowing their full impact. If we are to receive another Bill of this nature, I ask again that the Government come forward with a proper impact assessment by local authority so that we know exactly what impact it will have, including the financial impact, both for those that are not part of a retention pilot scheme and those that are part of the regular scheme.
We look forward to finding reasons to talk at length about the Bill in Committee, as well as to finding other reasons to talk about it at length on Third Reading when it comes back. I implore the Minister, however, to look at his forward plan to see what elements can be brought together to save time on the Floor of the House.
Gillian Keegan (Chichester) (Con)
Chichester is home to a vibrant rural economy that is worth over £1 billion to the area and employs 9,000 people. It is the largest single employer by sector. We have a major growing environment, and this is due to our wonderful environment—our weather, sunshine and, mostly, proximity to the coast means that we have 10% more light than any other area in the UK, and that boosts growing conditions.
As an MP, I have had the opportunity to visit many of these businesses and see what 21st-century farming looks like. In many cases, it is not what I had imagined. Much of the growing occurs indoors in a highly controlled and precisely monitored environment, ensuring that crops are grown efficiently, sustainably and to the best quality. Some growing practices involve moving crops from nursery grounds, whether in glass houses or polytunnels, to open fields or other larger glass houses. However, what is clear is that each of these growing cycles is agricultural and should be classified as such.
The Tunnel Tech Ltd v. Reeves case brought to light a legal anomaly in how the Valuation Office Agency assesses business rates in agriculture. In doing so, the case broke with nearly 100 years of exemption from agricultural business rates for nurseries. Many businesses in my area are therefore pleased that the Government have brought forward this Bill to amend existing legislation and rightly deliver on their commitment to ensure that nurseries are treated as agricultural buildings.
Speaking to the West Sussex Growers Association ahead of this debate, I was told of growing concern, in the light of the Tech Tunnel Ltd v. Reeves case, for future assessments by the Valuation Office Agency of other agriculture buildings. There is now concern that historical exemptions applying to ancillary buildings for packing, offices or energy production, for example, may come under threat. I ask the Minister to clarify this. One company in my constituency, which grows 10% of the peppers sold in the UK, packs all its produce onsite in a building adjacent to the glasshouses where the peppers are grown. Similarly, businesses across the horticultural and agricultural industry have developed sustainable energy production by using their waste to produce energy in biomass boilers, for example.
The 2015 Court of Appeal decision created significant concern for the wider industry, so I am pleased the Government have taken swift action to rectify the issue and ensure that the measure’s implementation is retrospective. This has sent a clear message of support to the industry, which has been well received. The deputy president of the National Farmers’ Union, which welcomed the Bill, said
“this is a significant victory for nursery growers, and brings them in line with other farm businesses and providing essential certainty for the future.”
The Bill will ensure that agricultural land and buildings are not liable for a property tax that could otherwise have a significant impact on the cost of farming and produce, and we must make sure this remains the case. I fully support the Bill as it works towards the Government’s commitment to a productive and sustainable agricultural sector, which is so important to rural economies such as Chichester, and will become increasingly important as we leave the European Union.
Matt Warman (Boston and Skegness) (Con)
We are always being told that debates in Parliament should be about real people, not statistics, and in that spirit, for me, this debate is about cabbages and flooding, not business rates per se.
This matter first came to my attention when the Black Sluice drainage board came to me deeply concerned about the prospect of losing £23,000 as a result of the levy. Worrying though that was, it turned out that a business in my constituency—it is incredibly rural, and in many areas business rates payments are very little, which is why I have some concerns about business rates retention, although we will gloss over that—was, although set to see its drainage levy fall by £23,000, faced with a business rates rise of well into six figures. So my drainage board—one of several in my constituency—was in a state of some confusion over the prospect of not having enough money to keep people’s feet dry, and my local businesses were in a state of perturbation at the prospect of going bankrupt.
This anomaly was a real issue for my constituents, as it was for those of my hon. Friend the Member for Chichester (Gillian Keegan). When I went to see R. Fountain & Son, the business in my constituency, I was delighted to discover not just its confidence in expanding its business, this potential problem aside, but how much it led not just Lincolnshire—a pretty difficult place to lead when it comes to growing brassicas—but the country in terms of its technology. In collaboration with the National Farmers Union, whose work on this I pay particular tribute to, it alerted me to the anomaly arising from the Tunnel Tech case and the ramifications of that case for it and others running glasshouses across my constituency.
Sir Greg Knight
I believe that my hon. Friend’s constituency contains two villages called Bicker and Wrangle, which I have always thought would make an excellent name for a law firm.
It was suggested earlier that there should be a compensation fund for those who had had to pay rates in the past, and also for local authorities that had suffered loss. What is my hon. Friend’s view on that, and who does he think should pay for such a fund?
Matt Warman
My constituency also contains a village called Old Leake, which is in the same ward as Wrangle. “Wrangle and Old Leake” surely has some comic potential as well. I agree with my right hon. Friend that businesses that have paid out—I should say that I do not believe that Fountain is in that position—should be entitled to the refund that the Minister suggested, and the Government should consider establishing such a fund if compensation is due.
Having been exempted from rates since 1929, the businesses to which I have referred were faced with a number of factors that they had previously never even had to consider incorporating in their business models. I understand that glasshouses, which are obviously of huge concern to a constituency such as mine, have been exempted since the 1990s. An issue on which businesses throughout this section of the economy have been entirely predicated was upended by the courts almost overnight.
I agree with the hon. Member for Oldham West and Royton (Jim McMahon) that the Government deserve some credit for seeking to clarify what might have been an important issue had the system been allowed to persist. There was real concern—not just among businesses in my constituency—when it became obvious that the Valuation Office Agency was going down this path. I began by saying that the issue was about brassicas and flooding, but in fact it is about the jobs that would have been at stake. If the Government had not intervened to clarify the position, people would undoubtedly would have found themselves out of work.
I pay tribute to my hon. Friend the Member for Nuneaton (Mr Jones), who at the relevant time had ministerial responsibility for these matters. Having visited those at R. Fountain & Son and reassured them that I was confident that such an extreme situation could only be the result of a mistake rather than Government policy, I had the extraordinary and delightful experience of mentioning that to my hon. Friend in a Lobby—he may not even remember it—and being told that the Government were already looking into the matter. It was a pleasure to be able to go back to businesses in my constituency and say that the Government would not be daft enough to increase their business rates so suddenly and massively.
To be honest, however, it was an even greater pleasure to go back to the drainage board. While I obviously care greatly about businesses throughout my constituency, the work of drainage boards in Lincolnshire is particularly and enormously valuable. They do huge service to the broader economy, and provide a great deal of reassurance through their work with the Environment Agency across the broader flooding landscape. Given that, according to the Association of British Insurers, my constituency is at greater risk of flooding than any other, I am particularly alive to that.
As I have said, my constituency is largely agricultural, and we are grateful for the business rates retention pilot. The Department is obviously aware of what must be done to ensure that business rates retention works for the areas to which it is applied, and that we do not end up losing out overall and accidentally giving more money back to the Treasury. I know that it does not intend that to happen in any circumstances.
I hope that Members will bear in mind that the Bill represents a useful endeavour to fix a problem that would have had a real impact not only on the local economy and jobs in my constituency, but on the availability of cabbages throughout the country, about which I know the House cares deeply. I also hope that, while accepting my praise for his swift action, the Minister will bear in mind that it highlights what business rates retention may well look like as we proceed with what I consider to be a worthwhile and popular policy.
Rebecca Pow
Does my hon. Friend agree that it is heartening that although people often think that we in Parliament are powerless and are not listened to, when my hon. Friend went to the Minister about his cabbages, the Minister listened and we have done something that will help? That is a positive message. It might be a small thing to many people, but this is a positive message that, with cross-party work, we can make something happen.
Matt Warman
I agree with my hon. Friend, and this shows the power of my hon. Friend the Member for Nuneaton, and now the power of the two current Front Benchers. I agree with the Opposition spokesman that it is of course a good thing to work cross party on such an issue, which relates to not an intentional decision taken by the Government, but a decision by the courts that risked upending a long-standing principle.
I pay tribute to the work of my hon. Friend the Member for Nuneaton and those who have continued his work. I hope that the one wrinkle in the potential of the excellent notion of business rate retention will be considered in the context of these sorts of decisions. Such decisions could of course come up again, because people do go to courts, and courts do produce judgments that perhaps surprise all of us. In this case, the decision certainly surprised my drainage board and farmers such as Fountains. I praise the Government and hope we can get on with this as soon as possible.
Rebecca Pow (Taunton Deane) (Con)
I am delighted to follow my hon. Friend the Member for Boston and Skegness (Matt Warman), and I want to add my comments on what is a very precise Bill. Although it relates to plants, it is not in any way flowery; it is a tight, neat little Bill that very much that does what it says on the tin—or, we might say, on the plant pot.
The Bill exempts from non-domestic rates buildings that are, or form part of, a nursery ground. That is highly significant for our highly professional and essential horticultural industry, which does not often get as much attention as it deserves. The horticultural industry supplies many fantastic plants for the whole nation, and as the Minister mentioned—I am glad he referred to this—there is scope for the industry to increase.
Julian Knight (Solihull) (Con)
I pay tribute to my hon. Friend for her knowledge in this area; in fact, I think she was a TV star in the horticultural sphere for a short time. Is it not true that the changes in the Bill will make it much easier for plant nurseries to grow and be productive?
Rebecca Pow
Yes, and I thank my hon. Friend for his intervention. One of the programmes my name was attached to was called “Loads More Muck and Magic.” It was a Channel 4 series and it was all about growing plants organically, which is terribly trendy now, so it was a bit ahead of its time—it was all ponytails and carpets then, though. It was filmed not far from my hon. Friend’s constituency at the Ryton organic gardens at Ryton-on-Dunsmore, which is still a terrific centre for organic gardening. The organisation there was called the Henry Doubleday Research Association, and it did a lot of great work on how to grow plants and what we should all do as growers at home.
My hon. Friend makes the good point that this Bill looks very much at the beginning of the plant chain when people take seeds and grow them—that exciting germination and propagation process that grows up plants, which can then be handed through the chain. I will go into that in more detail shortly, but it is an area that people forget about, even though it is such a valuable part of this important industry.
Although this is a great industry and it is highly valued, it is quite difficult to put an exact value on the horticultural trade. For example, estimates show that the whole gardening industry—that category is very wide, and would include garden tourism and events such as the Chelsea and Hampton Court flower shows—is worth approximately £16 billion to the economy and employs 300,000 people.
Normally, however, the best measure of an industry’s contribution to the economy is gross value added. I am not an economist—I am sure that most of my colleagues are much more knowledgeable about this than I am, particularly the Minister, who I know is very good with his figures—but I believe that GVA measures the value of an industry’s goods or services to the economy, excluding any goods or services used in production. However, that breakdown of statistics is not carried out for the horticultural industry. If it were, we would have a much better figure to show just how important the industry is. Should the Minister ever move to the Treasury—he may well do, given his mathematical brain—he might like to look into that GVA anomaly. That would be incredibly helpful to the nation as a whole, particularly in the light of Brexit. It is hard to grow an industry and attract the investment that it needs if we do not have the exact figures relating to that industry. You might think that I am digressing, Mr Deputy Speaker, but I think this is an important point.
Julian Knight
I do not think that my hon. Friend is digressing at all. In fact, she has made a germane point in mentioning the 300,000 people who work in the industry. Does she agree that if we can get people to plant more and get them really interested in horticulture in ways such as this, we could get a great deal closer to self-sufficiency, not only in food but in plants?
Rebecca Pow
My hon. Friend is a man after my own heart. I do not know whether you are a gardener, Mr Deputy Speaker, but I am—
Rebecca Pow
A reluctant gardener? That’s okay. You can garden from your chair, or in a window box, but you can get your fingers into the soil. My hon. Friend the Member for Solihull (Julian Knight) is absolutely right to say that we could increase our home growing, but we could also increase the health and wellbeing that people get from being engaged in the soil and growing things. Horticulture is such an exciting area to be in, and it is also very good for mental health. My hon. Friend makes an excellent point.
The industry itself believes that if we had the statistics that I was talking about, it would be possible to grow the industry by £18 billion. I am pleased to say that the ornamental horticultural roundtable group, in which I have been much involved, has commissioned Oxford Economics—at the vast expense of £50,000—to look into the value and economics of the ornamental horticultural sector. That is just one section of the horticultural industry, but it is pertinent to what we are talking about today. I urge all my colleagues to join the all-party parliamentary group on gardening and horticulture if they are not already members of it, because we have interesting trips to places such as Chelsea and glean a lot of excellent information. The group is also looking into the issue of growing the horticultural industry in the context of Brexit.
The ornamental plant industry supplies our landscaping industry and our popular gardening sector with wonderful bedding plants and perennials, and it is thought that that sector was worth £1.4 billion in 2017, which represents an increase of 4.8% compared with 2016. So the sector is on the up, and it could increase more. It could be a much more viable industry with this essential business rates exemption, and the more we can grow the industry, the more it will benefit the economy, particularly in the south-west.
Mr Marcus Jones (Nuneaton) (Con)
It has been great to hear about the all-party parliamentary group—perhaps I should dig out the details. Coming back to the exemption that the Bill is likely to provide, my hon. Friend has talked at some length about the fact that the industry is now able to grow. Is it not also the case, however, that the tax that was imposed by the Court of Appeal could well have had a significantly detrimental effect on many growers, particularly the smaller businesses that would have been most affected?
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. I could put the hon. Gentleman on to the speaking list if he would like. I will put him on it with pleasure, but we must have short interventions.
Rebecca Pow
I thank my hon. Friend and apologise to you on his behalf, Mr Deputy Speaker. However, he made a useful intervention, because I am going to come on to that point. That issue was causing concern among many businesses, because it would have cost some of them hundreds of thousands of pounds, and some smaller businesses could have been wiped out, so this is a serious point.
Sir Greg Knight
First, does my hon. Friend share my disgust that not one Liberal Democrat MP is in the Chamber to discuss an important matter affecting rural communities? Secondly, although retrospection in law is generally to be frowned upon, does she agree that it is most welcome in this case because we are righting a perceived wrong?
Rebecca Pow
We began this debate on a cross-party basis, and I am loth to say anything more controversial, but he makes an exceedingly good point about the Liberal Democrats. They were large in the south-west, but we wiped them out—as one does with a weed wiper, to use another horticultural term. The south-west is a rural region, and gardening and horticulture are important parts of our economy. One would have thought that the Liberal Democrats might have realised that and turned up, but yet again it is the Conservative party that speaks up for the rural community, and I am proud to be part of that community. [Interruption.] The hon. Member for Stroud (Dr Drew) is also here, of course.
The south-west has a good climate for horticulture, as does Chichester, and horticulture and gardening are important in Taunton Deane. We have some wonderful open gardens and visitor attractions, such as at Hestercombe and Cothay, hundreds of private gardens, and many allotment holders, many of whom have plants that started their lives in the nurseries that we are talking about today. I had a marvellous Sunday planting out my fuchsias, geraniums and alyssums into my tubs and containers, and they would have started life at one of those nurseries. I had a lovely time, and the weather was beautiful.
To get back to the Bill, which is going to come to fruition today—to use another horticultural term—nursery grounds were exempt from non-domestic rates from 1928 until recently, when the Court decision that we have heard about found exemptions to be an incorrect application of the law. As I said, that change caused a huge amount of worry in the nursery industry, where margins are tight. The Horticultural Trades Association reported that the change would be detrimental to the industry, inevitably driving up costs if nurseries had to pay business rates that they had not been paying previously, and that those costs would be passed on to the consumer. As Conservatives, that is not something that we are in favour of.
Several hon. Members rose—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. I do not mind if you want to pad out the debate, but I am bothered by the fact that we have another Back-Bench speaker to come and I still have to bring in the Front-Bench speakers, so I do not know whether you still want to give way.
Rebecca Pow
Thank you, Mr Deputy Speaker. If it will be short, I shall take an intervention from my hon. Friend the Member for Chichester (Gillian Keegan), who has not yet intervened.
Gillian Keegan
My hon. Friend was talking about the prosperity of our economy. Does she agree that the growers and the farming industry of the future are important to that prosperity? There are many technological changes coming along in germination, for example, and our growers and farmers do not want to be sat there thinking about rates on particular buildings or polytunnels. The Bill is important to allow flexibility and ensure sustainability so that we have a thriving food economy.
Rebecca Pow
That is a good point. Industries such as horticulture are not quick—it takes time to grow plants and for them to go through the cycles, so it is important that businesses have the security and confidence that this Bill will put back into their lives. I am grateful for that.
The HTA has reported that some members are facing bills to the tune of hundreds of thousands of pounds, which we do not want. I am pleased the Bill clarifies the situation and is aligned with the previous practice of exemptions. I am particularly pleased to hear that the funds will be backdated, as the Minister clearly said.
I thank the Minister, because many colleagues on both sides of the House have been to see him, and he has listened. That is what people want from the Government, and we are making the change. This is the right way to go. The turnaround supports the Government’s commitment to a vision of a productive, competitive and sustainable UK agricultural sector, of which horticulture and the plant nursery sector are an important part.
Plant nurseries are under the microscope in the Bill, and they are important to our landscaping industry and to our towns that have been landscaped. Taunton has just received garden town status and will be seeing more landscaping. We want more trees and, as the MP, I have laid claim to that and have said that we must have more trees in our urban environment. Local authorities are not necessarily keen on having more trees, because they claim trees have a high maintenance cost, but we will change their mind.
Plant nurseries are hard-working businesses with soil under their fingernails. They grow plants from seed to germination to propagation, and many nurseries then sell them on to the next stage for businesses to grow them before they ultimately get into the market. That is what the Bill is about—plant nurseries are important stepping stones.
Nurseries will become increasingly important, because we need to increase our home-grown production, if nothing else, to prevent the threat of pests and plant diseases coming in from abroad. There is a terrible disease called xylella that is wiping out olive trees and many other herbaceous and woody commercial plants in Europe. We do not want that in the UK. If we grow more plants at home, and if we help our businesses with business rates exemptions such as this, we can expand and grow our own industry. That is essential, because there is a great line of diseases waiting to march in here on imported plants. We have a very good biosecurity system, but there is always a danger of disease. The more we can help our businesses to grow with Bills such as this, the fewer diseases we will have in this country.
The Bill will help an industry with very tight margins. It is a crucial step, and I know the Minister is taking it all to heart because he is committed to enabling the viability of the agricultural industry, rather than saddling it with a property tax. The Bill is about supporting the economy, and it is vital for the south-west, where horticulture is so important. Horticulture needs to grow, and I hope the Bill and the plant nurseries it supports will blossom.
Mr Deputy Speaker (Sir Lindsay Hoyle)
Bob Blackman, you have one minute before the Front-Bench speeches.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow my hon. Friend the Member for Taunton Deane (Rebecca Pow). We have discovered that she is clearly a star of stage, screen and media.
I pay tribute to my hon. Friend the Member for St Austell and Newquay (Steve Double) for raising this issue in the first place. Equally, I pay tribute to my hon. Friend the Member for Nuneaton (Mr Jones) who made the commitment on behalf of the Government, and I thank the Government for delivering on that commitment.
The devil is in the detail. In my constituency, on the edge of the green belt in London, we have plant nurseries that are growing plants, as well as garden centres that are selling them. One of the institutions in my constituency that has had a problem has been held back: young people with learning disabilities are planting plants and growing them for commercial sale, but the investment in that has been held back because of the very decision we are discussing. So I trust that when we clarify this, it will be clear.
The final thing I want to say is that the devil is in the detail and we need to clarify the provision in respect of plant nurseries and garden centres. We should not run the risk that certain people may choose to ride roughshod over the intentions of the House by turning garden centres into plant nurseries and trying to avoid paying business rates as a result. With that, I strongly support the Bill.
Yvonne Fovargue (Makerfield) (Lab)
I am pleased to say that this Bill has been addressed in a climate of co-operation, as has been said. The Bill irons out an anomaly in the business rate system highlighted by the Tunnel Tech case, as we heard from the hon. Member for Chichester (Gillian Keegan), and it is the right thing to do. It removes unnecessary doubt, although, as the hon. Member for Harrow East (Bob Blackman) has highlighted, there are still little grey areas and perhaps those need looking at in the future. The Bill will make claims clearer for small businesses and, we hope, avoid lengthy and costly court cases in future.
We have all heard how important the horticultural industry is to many areas, and the hon. Member for Taunton Deane (Rebecca Pow) highlighted that. We also heard about the many variations in the horticultural and plant industry, and she has tempted us to go to look at her garden after all she said about planting this weekend. There is an increased use of new technology, with the polythene tunnels and grass and crop growing, and of businesses that specialise in one discrete stage of the growth and do not rear the crops to their mature state ready for the market. Fewer distinctions seem to be made between “nursery ground” and “market garden”, and the Bill does recognise that, even if it retains the terminology. A lot of businesses contain elements of both and simply prefer to see themselves as “food growers”, rather than separating the businesses out. Nobody here wants to stand in the way of home food production, or of more crop-growing operations taking place under the cover of polythene or involving some of the many other novel, innovative techniques that our growers are looking at now. That can lead to cost savings for consumers and more efficient use of limited land, and, as we have heard, it can also protect us from bringing in imported seeds, which may also bring in imported diseases. The hon. Member for Boston and Skegness (Matt Warman) highlighted the fact that removing some of the anomalies and giving people confidence that the business rates will not be charged allows his local businesses to grow.
Dr David Drew (Stroud) (Lab/Co-op)
Does my hon. Friend accept that this is one piece of evidence of a Government agency, the Valuation Office Agency, seemingly overstepping the mark, causing confusion and not a little additional cost? Does she agree that this Government need to get a grip on this sooner rather than later?
Yvonne Fovargue
I do agree with my hon. Friend on that. Indeed, this is not the first time the VOA has caused confusion. To see that, we have only to look at the combined premises Bill that had to be brought before the House to separate out the issue of whether premises were conjoined because of how close they were. That was discovered to be wrong from the VOA, too.
I am pleased that the Government have confirmed that the revenue they have received from plant nurseries being assessed for business rates will be returned, but I am not sure we can call it an unexpected windfall. This is money that the local authorities will have factored into providing local services. The hon. Member for Taunton Deane said this could be hundreds of thousands of pounds in some cases, and that is a big loss to a local authority already struggling with the Government cuts at the moment. I agree with my hon. Friend the Member for Oldham West and Royton (Jim McMahon) that this and all policies should be costed. Without that, the effective scrutiny of financial implications is impossible. It is just not good enough to talk about a “handful” if that handful involves hundreds of thousands of pounds to a local authority. I would like to see this and all future policies costed. If the VOA will not give the figures to the Government, surely the Government should be telling that other arm of government, as it is a Government agency, that they need these figures.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Nigel Adams)
I have 15 minutes in which I have the pleasure of winding up this incredibly interesting and broad-ranging debate on an important subject. I am grateful for all the valuable contributions that have been made; it has been helpful for me to hear Members’ views ahead of further scrutiny of the Bill. There have been contributions from all parts of the House—well, almost all parts—and they have all been very well informed.
I wish to respond to some of the points that were raised, but first I wish to refer to the opening remarks by the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), and to flesh out his comments on what we have done to improve the revaluation process. As my hon. Friend noted—[Interruption.] Mr Deputy Speaker, I never knew how much interest there was in plant nursery grounds.
Mr Deputy Speaker (Sir Lindsay Hoyle)
The Whips are being sent like London buses!
Nigel Adams
There are Whips at the Bar of the House who when they noticed a nursery grounds Bill thought it referred to Lords nursery ground, rather than to plant nurseries.
Let me build on some of what my hon. Friend the Minister said earlier. We heard from stakeholders that the normal five-year revaluation cycle was too long. They told us that the property market can sometimes move very quickly and a five-year period can therefore leave rateable values out of date for some time. We recognised that that was unfair. [Interruption.] They are still coming, Mr Deputy Speaker. We listened to stakeholders’ concerns, which is why we announced in the autumn Budget 2017 that we will move to a three-year revaluation period.
To help businesses further, we have moved the next revaluation forward from 2022 to 2021. [Interruption.] My right hon. Friend the Minister for the Armed Forces is here; there is clearly a Ministry of Defence interest in the Bill. The steps we have taken have been welcomed and supported by ratepayers across all sectors. The VOA has started to prepare for the 2021 revaluation and we have ensured that the agency is sufficiently funded to carry out high-quality valuations.
Let me turn to the points raised by the Opposition. The hon. Member for Oldham West and Royton (Jim McMahon) asked whether ratepayers would be paid interest on any repayments made as a result of the Bill. In principle, ratepayers are entitled to receive interest for overpayments, including as a result of the Bill, but it is only fair that the interest is tied into the actual cost of money and that ratepayers do not gain overall from receiving repayments if they are found to have been paying too much. To ensure that that is the case, the rate of interest is set at 1% below the average base rate of the largest banks. The reality is that not much interest will be paid back—in fact, there will be nil.
The hon. Gentleman also rightly asked why the Government are acting only now and what other cases are in the pipeline. The court decision was indeed taken in July 2015, but it was right that the Government and the VOA looked into the impact of the decision and how it would be applied in practice before deciding whether to change the law. A written ministerial statement was made in March 2017, and a further written ministerial statement in 2018 restated the Government’s intention to legislate and make the changes in the Bill.
My hon. Friend the Member for Chichester (Gillian Keegan) is the most fantastic champion of rural issues in Chichester. She asked whether ancillary buildings are exempt. They may very well be—it will of course depend on the facts on the ground—but it is for the VOA to decide whether rates are payable.
My right hon. Friend the Member for East Yorkshire (Sir Greg Knight) displayed his disgust at the fact that there were no Liberal Democrats present in the Chamber for this debate. It may very well be the case that one can get an entire parliamentary Liberal Democrat party into two London cabs. I am very pleased to see that the hon. Member for Stroud (Dr Drew) did make his way in for this debate.
In conclusion, this Bill will deliver on the Government’s commitment to ensure that plant nurseries can continue to benefit from this important agricultural exemption. Members have raised a number of interesting points in today’s debate, and we will return to them at a later date. I hope that we can all agree that the overall aims of the Bill and the positive impact that it will have on the rural economy mean that it should be welcomed, and I commend it—
Steve Double
I am very, very grateful to the Minister for giving way. I congratulate him and say that it is great to see him in his place. May I place on the record my deep gratitude to the ministerial team, and indeed to the former Minister, my hon. Friend the Member for Nuneaton (Mr Jones), for bringing forward this measure? Will the Minister join me in acknowledging the very important role that the National Farmers Union played? It first brought the matter to my attention, which led to me raising it in the House. It has played a very important role in speaking up for its members, and it is only right that we acknowledge the role that it has played in this.
Nigel Adams
I absolutely agree with my hon. Friend. In fact, without his amendment on the Local Government Finance Bill, I am not entirely sure that we would have got to this measure so quickly, so he should be congratulated, along with the NFU and everybody else who has contributed to the Bill.
Mr Deputy Speaker, I am wearing a new set of glasses. I thought that the clock said 6.59, but it actually said 6.49, so, if you do not mind, as there are so many Members in the Chamber, they may very well want to hear some more about what this Government are doing for the rural economy.
Sir Greg Knight
I am most grateful to the Minister for giving way. Perhaps he should have gone to Specsavers. Will he say a little bit more about compensation? Some of the people who have to pay rates, which they will now get back, may have deferred business investment decisions, based on a business expense that they were not expecting. There is an arguable case in future for our looking at the issue of compensation again.
Nigel Adams
What I can tell my right hon. Friend—it is not the answer that he will want to hear—is that there will be no compensation paid to these businesses. We are talking about a very small number of organisations and businesses that are affected and a relatively small sum of money.
In the absence of any more interest in this debate, I hope that we can all agree across this House that this Bill will have a positive impact on the rural economy and that it should be welcomed. I am sure that we all look forward to being able to flesh it out further during its later stages, and I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Non-Domestic Rating (Nursery Grounds) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Non-Domestic Rating (Nursery Grounds) Bill:
Committal
(1) The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on Consideration and up to and including Third Reading
(2) Proceedings in Committee, any proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings in Committee of the whole House.
(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to other proceedings up to and including Third Reading.
Other proceedings
(5) Any other proceedings on the Bill may be programmed.—(Rebecca Harris.)
Question agreed to.
Non-Domestic Rating (Nursery Grounds) Bill
Tuesday 10th July 2018
(5 years, 7 months ago)
Commons ChamberRead Full debate Non-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
It is a pleasure to serve under your chairmanship today, Dame Rosie. I should like to start by reiterating this Government’s commitment to supporting the sustainable growth of farming and horticultural businesses. We firmly believe that the agricultural exemption from business rates plays an important role in supporting this aim and boosting agricultural productivity. This measure will therefore help to drive our ambitions for a more dynamic and self-reliant agricultural industry. Until a Court of Appeal ruling in 2015, the long-standing practice of the Valuation Office Agency had been to apply the agricultural exemption to all plant nurseries. However, the ruling clarified that the exemption did not apply to plant nurseries in buildings that were not occupied together with agricultural land, and used solely in connection with agricultural operations on that or other agricultural land. This does not reflect Government policy, and neither does it reflect our commitment to growth in the rural economy. The Bill will therefore amend the Local Government Finance Act 1988 and enable the Valuation Office Agency to return to its former practice of exempting all plant nurseries solely consisting of buildings. It will also enable the VOA to exempt those plant nurseries that have been assessed since the ruling.
The Government have been consistently clear that they would take action on this matter. In March 2017, we set out our intention to legislate in a written ministerial statement. A further written ministerial statement was made in 2018, restating our intention to legislate and for the first time confirming that the measure would have retrospective effect in England from 1 April 2015. In Wales, the measure will have effect from 1 April 2017. The Bill delivers on that commitment and, once enacted, it will restore the previous practice and enable refunds to be provided to the handful of plant nurseries that have already been assessed for business rates as a consequence of the Court of Appeal ruling. While the Bill will restore the practice of exempting plant nurseries and buildings, it will not otherwise disturb the existing boundary of the agricultural exemption. The Bill amends schedule 5 to the Local Government Finance Act 1988, which determines the extent to which certain hereditaments are exempt from business rates.
Turning specifically to clause 1, it amends paragraph 3 of schedule 5 to the 1988 Act, providing that a building that
“is or forms part of a nursery ground and is used solely in connection with agricultural operations at the nursery ground”
will, subject to the passage of this Bill, be exempt from business rates. Clause 1 also contains a provision that the measure will have effect from 1 April 2015 in England and from 1 April 2017 in Wales, as requested by the Welsh Government. That will ensure that the measure has the intended retrospective effect and that refunds can be provided as necessary.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Dame Rosie, you will be pleased to hear that the Bill is non-contentious. It simply fixes the position as it was before the 2015 Court of Appeal ruling and, on that basis, the Opposition are happy to allow the Government to go ahead without objection.
It was said both in the press and when the Local Government Finance Bill was in Committee before the election that the Government were pledging to right the wrong of the Court of Appeal’s hearing after listening to businesses’ concerns, but several other similar representations have been made. For example, in towns where the banks have closed and there is no post office, a convenience store might step in to install a cash machine, but it would straight away be taxed on the turnover of the cash machine, which could take the store over the threshold for small business rate relief. There have been calls for that issue to be examined, but we are yet to see any progress.
Another big issue affecting many high streets and town and city centres is the impact of business rates on the viability of retail. We see companies go under on an almost weekly basis because they cannot afford to meet the high running costs of operating in primary locations. Communities resent seeing their local high streets and town centres go downhill, and businesses and representatives of other organisations have made the same point, but the Government have offered nothing comprehensive in response, because there would be a big bill.
However, the truth is that if we want to save our town centres and high streets, we must be bold and fully examine how such premises are taxed if they are to have any future. This goes beyond business; this is about communities. When people talk about how well or badly their communities are doing, they will often point to their town centres and high streets as a barometer. When people see the roller shutters pulled down or boards over windows, that has a material effect on how they feel about their community, and the Government ought to take note of that.
When the Local Government Finance Bill was in Committee, the Opposition made the offer that where there were non-contentious issues on which local government was seeking progress, we were happy to sit down and go through a plan for the legislation that ought to be brought forward. That would be done away from partisan interests because it is the right thing to do for our communities, and I look forward to the Minister arranging such a meeting.
Steve Double (St Austell and Newquay) (Con)
I am delighted to speak in support of a Bill that rights a wrong that was clearly never intended in the first place, and I have the honour of being the Member who first raised this issue when the Local Government Finance Bill was in Committee last year. Unfortunately, however, the Conservative party’s majority was not the only victim of last year’s general election, because that Bill fell at that point and the amendment that was likely to be made to it could not be passed, hence the need for this new Bill.
Plant nurseries play a vital role in this country’s food production supply chain. At a time when we want to increase domestic food supply and become less reliant on imported food, it is right to do all we can to support an important industry and ensure that we do not impose a further tax on producers that would see them struggle with the additional costs. Many of them would face the possibility of going out of business, with the loss of jobs that that would entail. The Bill sets out to put in place what the Local Government Finance Act 1988 always intended and to ensure that the exemption for nurseries continues. It will support our rural economy, ensuring that we support food production and that jobs are retained in the industry. I am therefore pleased to support the Bill to ensure that it becomes an Act as soon as possible.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
Does my hon. Friend agree that this is a crucial Bill, because it gives hope to so many businesses that underpin life in rural constituencies such as his and mine?
Steve Double
I agree that it is vital to support those important businesses in our rural communities. If the jobs that they provide were lost, it would be difficult to replace them.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
Does my hon. Friend agree that the Bill is important for farmers wanting to intensify their businesses, because it will put it beyond doubt that any nursery operation will come under the scope of the exemption?
Steve Double
I am grateful to my hon. Friend for that good point. We should do all that we can to support our farmers who want to diversify and expand their operations to include growing plants in greenhouses and so on, and they should be able to do so with confidence and in the knowledge that they will not suddenly incur a business rates bill. It is therefore correct that we introduce clarity and put right the wrong that the court case created. As I said, I do not believe that that wrong was ever the intention of Parliament or the Government, and we should provide the sector with confidence that horticultural buildings and nurseries will continue to attract the agricultural exemption that they should rightly have.
I acknowledge the role played by the National Farmers Union in bringing the matter to my attention and lobbying on this issue. It has spoken up for its members, ensuring that their voices have been heard. I thank the Minister and the former Local Government Minister, my hon. Friend the Member for Nuneaton (Mr Jones), for listening carefully to the arguments, agreeing to take this measure and ensuring that the matter is corrected. I welcome the Bill and trust that it will pass unopposed with wholehearted support from across the House so that it can reach the statute book as quickly as possible to support this sector.
Mr Marcus Jones (Nuneaton) (Con)
I rise to support clause 1. As ever, it is a pleasure to follow my hon. Friend the Member for St Austell and Newquay (Steve Double), although he has just reminded me of the Local Government Finance Bill and the many interesting and fun hours that we spent on it, particularly in Committee. Unfortunately, however, those hours were subsequently lost when the Bill fell, so it is good to see this measure coming to the House, as have several other provisions that were in the previous Bill.
The agricultural exemption for nursery grounds has been in place for a significant period, dating back to 1929. Indeed, this issue was raised during the passage of the Local Government Finance Act 1988, when Ministers gave a steer that there was a clear intention that nursery grounds should be subject to the same sort of exemption as other agricultural uses. The Court of Appeal case—the Tunnel Tech case—seems to have driven a coach and horses through the custom and practice since 1929 and the intimation given by the then Government during the passage of the 1988 Act that the status quo would prevail. To put it mildly, suddenly receiving a significant rates bill as the result of a Valuation Office Agency investigation and the subsequent Court of Appeal case has challenged a number of growers in the running of their businesses.
I am pleased in many ways to have played a small part in the Bill. My hon. Friend the Member for St Austell and Newquay apprehended me in the Division Lobby one evening to explain the challenge he was seeing in his area as a result of this Court of Appeal ruling and the problems it was likely to cause growers. We subsequently had meetings with the National Farmers Union, which put a coherent and collegiate case for restoring the status quo.
I am glad that, when I approached the then Secretary of State for Communities and Local Government and the matter was put before Ministers—we do not always receive this type of response—the unanimous verdict was that the Court of Appeal decision was not the right thing for growers and other such businesses and was not consistent with the Government’s intention. I was delighted to publish a written ministerial statement confirming the Government’s intention to restore the position as it was before the Court of Appeal ruling and to allow the agricultural exemption in this regard, as was clearly intended.
Ben Bradley (Mansfield) (Con)
My hon. Friend mentions the NFU’s contribution. Will he join me in showing appreciation for its work in representing our farming and agricultural industries, particularly when we are deciding on the future of those industries? Does he agree it is important that the Department for Environment, Food and Rural Affairs, in particular, continues working with the NFU to make sure we get the policy right?
Mr Jones
My hon. Friend makes an extremely important and pertinent point. The agricultural industry is very different from many other industries in this country. This country needs to be as self-sufficient as possible in food production, and we also need to consider that it is often difficult for producers in the industry to recover their costs. For example, there has been a perennial challenge for milk producers, which have not been able to realise even the cost of production. That is why organisations such as the NFU are extremely important in bringing such issues to the fore so that we maintain our food security.
Sir Geoffrey Clifton-Brown
Does my hon. Friend agree that, with Brexit, it will be ever more important that this type of horticultural industry is as competitive as possible? Countries such as Holland and Italy are increasingly competing with our industry, and it is much better to grow food here for phytosanitary, employment and all sorts of other reasons.
Mr Jones
I completely agree with my hon. Friend. Again he is absolutely right that, wherever we can, we should be producing food in this country for those reasons.
Importantly, clause 1 is a retrospective measure. Such measures are often not retrospective, but it is important that the Bill is being implemented retrospectively, because a number of growers have already been caught by the provisions of the Court of Appeal decision and, as a consequence, have seen their business costs rise significantly. I have mentioned the challenges that agricultural producers often face, and those challenges are compounded when growers are retrospectively asked for an amount of money that they did not anticipate they would need to build into their business costs.
In this case, a number of growers will have already sold their produce and therefore will not have factored this into their price, if they were able to do so. The decision will put a significant strain on the businesses in question, so I am pleased the Bill is being applied retrospectively and that businesses that have already been caught by the Court of Appeal decision will be refunded any business rates they have paid.
Steve Double
Does my hon. Friend share my view that another reason why we need to keep costs down is to allow the industry to invest as much as possible in emerging new techniques and technologies for developing and growing food and increasing yield? An additional tax burden would reduce the amount of money the industry can invest for the future.
Mr Jones
My hon. Friend is right. There is huge potential for such industries to grow—pardon the pun—but investment in technology is needed for them to do that. If the Government or, in this case, the Court of Appeal decide to levy an additional cost on such businesses, bearing in mind many of them are small and medium-sized businesses, the chances of their being able to continue investment will be diminished. The Bill will therefore help us to facilitate businesses in taking advantage of new technological advances. By being more likely to invest than they otherwise would have been, they will be able to further themselves, and hopefully not only will their prospects improve but they will add to UK GDP and add jobs in their local area.
I am grateful to my hon. Friend the Minister, who is now taking the Bill forward. The Bill is a positive step to put right a Court of Appeal decision that most rational people consider to be wrong. I am extremely glad that the Bill is being applied retrospectively. As colleagues have said today, not only will it enable growers to continue growing produce to sell on to other growers, who can then provide the produce we all buy in the shops and subsequently eat, but it will enable growers to invest for the future. The Bill will make sure this country continues to be a leading player in advancing how we grow our food and sustain our population.
Matt Warman (Boston and Skegness) (Con)
It is extraordinary that this House has spent so long talking about doing such a simple thing as undoing the errant court judgment, and I suspect we may even continue talking about it for a few minutes yet. However, that is only fitting, because, as has been said by a number of my hon. Friends, including the Minister, and by the Opposition, we are all here concerned about this issue as we understand the profound impact that a single court judgment could have had, not only on businesses up and down the country, but on the food chain and even on the communities and local economies that those businesses support.
I have talked in the previous debate on this matter about the individual constituency business that came to me to discuss the impact this court judgment would have had, not only on its business and bottom line, but, crucially, on the income to the local internal drainage board. This would have meant that in my constituency, which is the most at risk of flooding in the country, according to the Association of British Insurers, not only would businesses and livelihoods have been affected, as others have said, but, even worse, that huge swathes of the area would have been at greater risk of flooding. That would have posed a real threat to the broader economy, the food chain and huge numbers of people who live in areas at or sometimes below sea level and who rely on those internal drainage boards being able to function.
The Bill is therefore a hugely important tweak to the legislation that was inadvertently altered by the court judgment, and it is a fitting tribute to the change that the previous Minister and this Minister are initiating and seeing through respectively that we have devoted a reasonable amount of parliamentary time to it. However, it is worth pointing out that we would hope in future, in legislation generally, not just in this area, to avoid a single court judgment having the kind of ramifications that this one has had here. We would all like not to put our constituents through the genuine trauma of knowing that the business they work for might face real financial difficulties simply because of a single court judgment. Somewhat unusually, these people in my area may also face the risk of their homes and businesses being flooded, which is an additional factor.
Although it is good that the Government are fixing this and the Opposition parties have co-operated so readily in fixing it, we should also bear in mind that it would have been better not to have found ourselves in this situation in the first place. So my plea to the Minister is to see what he can do, working across the Government—I do not pretend that all the problems are in his Department, by any means—to avoid legislation where we have not thought through all the potential consequences of the precise wording. We spend a lot of time in Bill Committees and in Committee of the whole House going through pieces of legislation line by line, paying close and deep attention to every moment in those Committees, but sometimes such things lay themselves open to unintended consequences, so we would all welcome anything that can be done to try to avoid them.
Clearly, the Government have acted as quickly as they can, given the unfortunate situation with the previous Bill, to bring this piece of legislation back individually, notwithstanding the election interrupting the previous passage of the Local Government Finance Bill. Obviously, that Bill was going to do a number of things far wider than this one and it is clearly the right thing to have adjusted how the legislation has been formatted so that we can do this quickly. It is likely we would have ended up seeing businesses paying large sums and going through significant difficulty only then to be given that money back. Of course it is a good thing that this legislation has been moved on faster than it otherwise might, but I hope that we would all like to avoid this sort of situation in the first place.
I will close simply by saying that I hope the Minister will do all he can to avoid this sort of situation arising again, should he have the opportunity. I re-emphasise how good it is that we have been able to bring this matter to a relatively speedy conclusion and how heartening it is to see so many colleagues discussing a matter that otherwise would have passed with relatively little attention. This is a good example of the Government giving real attention to an important matter and acting quickly to correct a court judgment that was never intended by any previous Government. I welcome the actions that the Minister has taken and, as I said previously, that his predecessor has taken. Perhaps weirdly, I welcome, above all, the co-operation of the Opposition in getting on with this ever so quickly. I hope that the constituents who raised this issue with me see that this is an example of action being taken and are genuinely reassured.
Mr Simon Clarke
It was particularly moving to be in here as we heard the sound of the RAF fly-past a few moments ago to mark 100 years of the RAF. It was 100 years ago this month that my great, great uncle John Headlam was killed while serving in the RAF, so it is nice to be able to pay tribute to his service and sacrifice.
We are a nation of gardeners, and it is important to us all that our nursery sector thrives. It is a particular pleasure to see my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) on the Front Bench as the Minister today, because my constituency abuts his and it is home to some of the nurseries that I know very well—Cherry Hill and Strikes in Stokesley, which was subject to a recent devastating fire. I know that I speak on behalf of lots of people in my constituency when I say that I hope Strikes is back up and running in its normal place as quickly as possible.
The nursery industry is extremely significant for growing produce for our home market and for ensuring the sustainability of our rural economy. At a time when there is fierce competition from the supermarket and similar sectors, there is no doubt traditional nurseries need all the support they can get that Agricultural land has been exempt from business rates for almost 100 years.
Ben Bradley
I want to pick my hon. Friend up on the point about supporting nurseries and this kind of industry. Does he agree that it would be right for this place to make a plea to our constituents, not just in this area, but across our high streets and in all sorts of other areas, to support independent local businesses such as these nurseries to ensure that they can continue to exist in the future?
Mr Clarke
I thank my hon. Friend for that intervention and he is right in what he says. That is something people really care about, and people often regard these nurseries as a hub in the local community. They are not just another shop; they are often dearly loved, and this fits with the spirit of the time, when people increasingly want to buy local.
Until recently, the exemption that applied in this case had been assumed to be uncontroversial and would fit with the understanding of both rating valuers and practitioners. That was the situation until the 2015 court judgment in the Tunnel Tech case, which was a great mistake. I am delighted that the Government have taken steps to reverse it, as such judicial activism simply is not appropriate. The Bill will ensure that plant nurseries in buildings will once again benefit from the business rate exemption, which restores the law to the same state in which it existed before the Court of Appeal decision. I am pleased that the Bill will apply retrospectively, so that those nursery grounds in England that have been charged business rates will now be refunded.
The Government should be congratulated on acting so swiftly to rectify this wrong and on demonstrating common sense. This is so clearly the right course of action that there is no controversy anywhere in this House, and the Bill has received full support from the NFU. I pay tribute to the NFU, because I know full well the value of the work it does in supporting farmers in rural East Cleveland. Indeed, I had the pleasure of going on a farm visit with the NFU recently to see Capon Hall farm and Peter Humphrey. That is exactly the kind of work the NFU does day in, day out, and it should be saluted.
The legislation needs to be viewed in the broader context of the Government’s commitment and keenness to support our agricultural sector and small businesses, especially those in rural areas. Last week, I spoke out about my deep concerns regarding the future of business rates, but it is worth noting that as a result of measures taken by the Government, more than 600,000 small businesses—occupiers of a third of all properties—now pay no business rates at all. The Government doubled small business rate relief to 100% and raised the threshold from £6,000 to £12,000. At the same time, the Government doubled rural rate relief from 50% to 100% for eligible businesses. Such reliefs are hugely welcome for many small businesses in my constituency.
Rebecca Pow (Taunton Deane) (Con)
I am delighted to speak in support of the Bill. This is a most pertinent time to talk about measures that will aid our worthy horticultural industry—not least because it is the tennis season. In particular, it is the time of that most prestigious of world-class events, Wimbledon. What is even more important about Wimbledon than the tennis, Sir Lindsay? The strawberries. People were wondering how I could get tennis into the debate—
Rebecca Pow
I have written down in brackets “and cream”. During the tournament last year, more than 166,000 portions of strawberries were served, with cream. That is 33 tonnes of strawberries. Were I not speaking in this debate, I would be at Wimbledon. That is how important I think it is that we get our business through.
Many strawberry plants, like other plants in the horticultural chain, start life being propagated in nursery grounds, which are often the lifeblood of the horticultural industry. They are the hotbed of germination, propagation and cultivation, and we are discussing them because the Bill exempts from non-domestic rates buildings that are, or form part of, a nursery ground, as several hon. Friends have already said. It gives nursery grounds parity with their agricultural counterparts.
The south-west region, where I come from, is a rural region with a good climate for gardening, growing and horticulture, and it supports so many businesses in the sector, not least in Taunton Deane, which is one reason why I particularly wanted to speak in this debate. I also wanted to speak because in a previous life I worked for the National Farmers Union and got quite involved with the horticultural industry, and I was for many years a horticultural and gardening journalist and broadcaster, so this subject is close to my heart.
I certainly appreciate the hard graft—to use a horticultural term—involved in the industry and the very tight margins, especially for those at the start of the chain. It is difficult for them to pass on their costs: they cannot have huge add-ons because they do not deal with the general public. For this small sector of the industry to discover recently that it was to be penalised by having to pay business rates, when previously it had been exempted, like its agricultural counterparts, was a bitter blow.
Let me give some background. Nursery grounds were exempt from non-domestic rates from 1928 until recently when, through one particular court decision, about which we have heard from colleagues, it was found that the exemption was an incorrect application of the law. This was a bolt from the blue and, as can be imagined, caused a huge amount of angst in the nursery industry, which was already up against the tight margins that I mentioned. The Horticultural Trades Association reported that the change would be detrimental to the industry: if nurseries had to pay business rates that they had not paid previously, that would inevitably drive up costs that would be passed on to the consumers at the end of the chain. As Conservatives—we are the party of business—that did not sit easily with us. The HTA reported that some of its members could face bills to the tune of hundreds of thousands of pounds if the situation was not rectified.
I am delighted to say, though, that through the ripening of this small but perfectly formed Bill, the wrong has been righted. The fruitful outcome that we are witnessing today clarifies once and for all that the situation will again be aligned with the previous practice of exemptions. I am particularly pleased to hear that the funds will be backdated, as specified in the Bill. The Bill demonstrates that, in such an instance, where unfairness has so obviously been demonstrated, the Government, particularly the meticulous and attentive Minister, have listened—and they have not just listened but acted.
The Bill is fully in step with the Government’s commitment to a vision of a productive, competitive and sustainable UK agricultural sector, of which horticulture and the plant nursery sector are an important part. In fact, I believe there is great scope for the industry to grow and blossom, particularly as we exit the EU. With the right back-up, such as that demonstrated through this Bill, there is an opportunity to grow more of our plant material at home, to fuel our landscaping and ornamental plant industry, thereby avoiding the inherent plant disease and pest threats that are associated with importing plants for this trade. For example, we hear a great deal about the disease xylella, which is wiping out olive trees and many other herbaceous and woody commercial plants in Europe. We do not want that in the UK.
After the granting of Taunton’s new and most welcome garden town status, designated through the Ministry of Housing, Communities and Local Government, I am working to see more trees included in our townscape. Would it not be wonderful if, at the same time as improving the environment and people’s health and wellbeing, along with all the other benefits that we get from trees, those trees were home-grown, so that the economy benefits at the same time?
Let me touch on the idea of growing the whole horticultural industry and why it is important to put in place measures such as the Bill to stimulate the industry. It is thought that there is great scope to grow the industry, perhaps by as much as an incredible £18 billion. In fact, tomorrow the all-party group on gardening and horticulture is holding an inquiry into how we can skill up the industry and what we need to do to make that happen. There is consensus from the Horticultural Trades Association that if the gross value added—that is, the goods and services that emanate from the diverse horticultural and gardening industry—was measured, which it currently is not, it would demonstrate exactly how valuable the sector is to the economy. It would then be easier to make a case for putting in the right measures, including research and development and so on, to grow the sector.
This small but perfectly formed Bill rights an injustice relating to the imposition of business rates on a special sector of the important horticultural industry, one of the very veins of the supply chain. In so doing, it benefits the industry by not saddling it with an unwelcome property tax and thus helps all those who work in the trade and the whole economy, by giving back to the industry one of the benefits that it needs to thrive. It will have particular resonance throughout the south-west, so I fully support the Bill.
Rishi Sunak
It is a pleasure to respond briefly to the various points raised. I thank my opposite number, the hon. Member for Oldham West and Royton (Jim McMahon), for the typically constructive way he has approached this type of legislation; of course, we do not agree on everything, but it is fantastic to be able to move these relatively technical matters through the House speedily.
The hon. Gentleman expressed, as he has before, a specific concern about whether the presence of an automated teller machine in a convenience store could take the rateable value of that small shop above the threshold for small business rate relief. Having looked into the matter, I am delighted to tell him that we do not believe that that should be the case. If an ATM is rateable, it would appear as a separate assessment on the ratings list and the ratepayer would typically be the financial institution that operates the ATM, not the shop itself. I assure the hon. Gentleman that we are discussing the specific issues with the Association of Convenience Stores to ensure that its concerns are investigated and addressed.
The hon. Gentleman turned to the important topic of high streets. I know that all of us in this House celebrate our local high streets; they are vital parts not just of our communities, but of our economies. I am very pleased to tell him that my hon. Friend the Member for Rossendale and Darwen (Jake Berry) is the Minister for high streets and is fully focused on the issue at hand through the Future High Streets Forum. More excitingly, he has just launched the Great British High Street Awards 2018. I will do a plug and call on all Members to nominate their local high streets. Nominations are open until the end of August. The last iteration of the competition saw almost 1,000 entries from across the country and hundreds of thousands of votes from the public to choose the eventual winner. There is a considerable cash prize on offer for the winner and, indeed, a new rising star category. The winner will also receive expert advice from industry professionals. I hope that the hon. Gentleman knows that we take the issue of high streets very seriously indeed.
Let me touch briefly on some of the other contributions. My hon. Friend the Member for St Austell and Newquay (Steve Double) should take enormous pride in the role that he has played in ensuring that we are discussing this important issue today. Hopefully, this legislation will eventually receive Royal Assent and that will be in no small part owing to his efforts to put this issue on the agenda of Ministers, and he deserves enormous credit for that.
My hon. Friend the Member for Nuneaton (Mr Jones), who had this job before me, put in motion the Bill that we are discussing today and engaged with my hon. Friend the Member for St Austell and Newquay on this important topic, ensuring that when I arrived in the Department this agenda was ready to take forward, and he also deserves credit for that. It is always intimidating to have to respond to him in this Chamber, as I am always reminded that so well did he do this job before I inherited it that the job had to be split between two different people. The Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for South Derbyshire (Mrs Wheeler), sits beside me on the Bench. The two of us together do our best to replicate what he did before us and we are grateful that he left everything in such good shape for us to pick up.
My hon. Friend the Member for Boston and Skegness (Matt Warman) has been a stalwart in speaking about business rate tweaks. I join him in hoping that there are far fewer of these to come in the immediate future, but thank him for his support of the Bill. He spoke eloquently about defending the rural interests in his constituency, which will benefit from this Bill, as he did when we enabled business rates relief for new fibre installations, a topic that is dear to his heart and which he pushed hard for. He should shortly be seeing the benefits of that policy in action across the country.
My constituency neighbour, my good hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), has, as I know at first hand, a very mixed constituency. As ever, he did an excellent and eloquent job in talking about the importance of small businesses across Teesside and the efforts that this Government have put in place to ensure that the tax burden on those small businesses is as low as possible. I welcome his support for the £10 billion-worth of measures to alleviate the burden of business rates on small enterprises across Teesside. I am glad that they are benefiting from that. In the rural part of his constituency in East Cleveland, the agricultural community will, I am sure, welcome his support and lobbying for this measure as it can ensure that its productivity remains high in the months and years to come.
What better place to end than with my hon. Friend the Member for Taunton Deane (Rebecca Pow)? As ever, she gave us a brilliant defence and a brilliant celebration of our rural economy and everything that it contributes to our national life. We are, of course, grateful to her for gracing us with her presence today, when she could have been at Wimbledon enjoying the strawberries, the Pimms, the cream and everything else on offer. I must say that, when it comes to slipping requests, she clearly has a much better relationship with the Whips than I do, as my previous requests for various exemptions for cricket matches and tennis matches were firmly denied, so I have something to take up with the Whips in due course.
I am glad that we have had a very constructive discussion today and that there is widespread support for this particular clause.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment (Standing Order No. 83D(6)).
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. As indicated on the Order Paper, the Speaker has certified that the Bill relates exclusively to England and Wales on matters within devolved legislative competence. As the Bill has not been amended, there is no change to that certification. Copies of the certificate and the consent motion are available in the Vote Office. Under Standing Order No. 83M, a consent motion is required for the Bill to proceed. Does the Minister intend to move the consent motion?
Rishi Sunak
indicated assent.
The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).
[Sir Lindsay Hoyle in the Chair]
David Linden (Glasgow East) (SNP)
On a point of order, Mr Deputy Speaker. I beg to move that the Legislative Grand Committee do sit in private.
The Chairman of Ways and Means (Sir Lindsay Hoyle)
As we both know, you cannot move that motion at this stage.
David Linden
Further to that point of order, Mr Deputy Speaker. Can you clarify that the reason that I cannot move that motion is because I am a Scottish MP and have been rendered a second-class Member of the House as a result of English votes for English laws?
The Chairman
Mr Linden, you may wish to judge yourself as a second-class Member, but let me reassure you that I will always treat you as a first-class Member. On that basis, you will still not get your way.
I remind the House that only Members representing constituencies in England and Wales may vote on the consent motion. I call the Minister to move the consent motion.
Motion made, and Question proposed,
That the Committee consents to the Non-Domestic Rating (Nursery Grounds) Bill.—(Rishi Sunak.)
David Linden
It is a great honour to serve under your chairmanship, Sir Lindsay, and, indeed, it is a pleasure to serve on this esteemed Legislative Grand Committee of England and Wales. I look forward to making a few observations on the Bill, which has been certified by Mr Speaker as competent for EVEL. It is of course a real pity that, should the Bill divide the Legislative Grand Committee, I and my hon. Friends from Scotland will be excluded from having our vote counted. Indeed, Scottish colleagues have to endure the immense indignity of being ordered by Government Whips to traipse through the Lobby to have their vote discounted in person. It is all incredibly sad. My immense sadness in this regard is founded upon the view that, during the Scottish independence referendum of 2014 and indeed after it, we the people of Scotland were told that Scotland is an equal partner of the United Kingdom. The Secretary of State for Scotland might have strayed off that line a couple of weeks ago, but I am sure that that was a mere oversight on his part.
Today, we have been relegated from legislators to narrators, and so can only speak in the Legislative Grand Committee—and speak I certainly will. Before I continue with my remarks, let me say that I am conscious that I must stick to the strict parameters of this fine Bill. I wish to offer, though, a few thoughts on the English votes for English laws mechanism and, in particular, Standing Order No. 83.
In essence, Scottish Members of this House have become second-class MPs in the House of Commons. EVEL basically excludes MPs from Scotland, and in some cases MPs from nations other than England, from voting on legislation that could have consequentials and affect other parts of the UK. There are also financial implications, as decisions taken for England only can lead to changes to Scotland’s budget from the UK Government.
I rather suspect that the days of the English votes for English laws are numbered, but, for so long as this legislative apartheid continues, I shall continue to be a diligent participant in the Legislative Grand Committee.
Patrick Grady (Glasgow North) (SNP)
I just want to note the fact that my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) is unable to be here, as he is in the Scottish Affairs Committee. Unfortunately, that brings my hon. Friend the Member for Glasgow East (David Linden) closer to beating his record of being the Member who has spoken the most often in the Legislative Grand Committee. The ironic thing is that Members from England and Wales never actually speak in the English Legislative Grand Committee.
David Linden
I am grateful to my hon. Friend for that powerful intervention. Perhaps today we might find that Members from English constituencies will rise to speak, but I would not necessarily hold my breath for that.
When I first looked at the Order Paper last week and saw that we were debating the Non-Domestic Rating (Nursery Grounds) Bill, I excitedly and somewhat naively thought that this was about nurseries in the sense of toddlers and early years. There was I planning to come to the Legislative Grand Committee to talk about the SNP Scottish Government’s childcare revolution.
I should declare an interest: my three-year-old son, Isaac, starts nursery next month and is thoroughly looking forward to starting Sgoil Araich Lyoncross. The incredibly good news about that childcare revolution is something that will be welcome from Shettleston to Shetland.
Of course, had the Bill been about nurseries in the early years sense, I could have regaled the House with some wonderful nursery rhymes, such as my favourite, “The Grand Old Duke of York.” It rather reminds me of the right hon. and learned Member for Beaconsfield (Mr Grieve), with regard to Brexit, particularly the lines,
“He marched them up to the top of the hill,
And he marched them down again.”
Alas, the House will have to wait for another day to hear me pontificate about nurseries and nursery rhymes. Instead today, we have the delight of discussing non-domestic rates for nurseries of a plant variety, and what a treat that is.
The Bill’s purpose is to reverse the effect on valuation practice for non-domestic rating of the 2015 case, Tunnel Tech v. Reeves. In brief—I shall try to be brief, because I know other Members want to get on to other business soon—the case established that, where a business operates a plant nursery or nursery ground where agricultural operations take place entirely indoors, it cannot benefit from the general business rates exemption for agricultural land and buildings. The Government made a policy commitment to legislate to establish that nursery grounds should be entitled to an agricultural exemption and to apply that exemption retrospectively, back to the 2015-16 financial year.
The Legislative Grand Committee will doubtless be aware that, on 9 July 2015, the Court of Appeal gave judgment in the case of Tunnel Tech v. Reeves. I am sure that all members of this esteemed Legislative Grand Committee will have read in full that judgment from the Court of Appeal. The case concerned the rateability of a property occupied by the company Tunnel Tech in Stockbridge, Hampshire. The property was used for growing mushrooms from spores. I myself absolutely abhor mushrooms and feel that they can really ruin a rather good lasagne, but I do not want to digress too much from the subject at hand.
A mixed material was fermented and then used to fertilise
“mushroom mycelium grown through sterilised wheat or rye grain produced in laboratory conditions”.
After 20 days, mushroom tendrils have grown within the material. It is very interesting that, at that point, Tunnel Tech removed the material and transferred it to specialist mushroom farms. I have never had the pleasure of visiting a mushroom farm myself, but I am only young. [Interruption.] I am glad to hear that the hon. Member for Ogmore (Chris Elmore) has visited a mushroom farm. Perhaps he might extend an invite to me to visit one in his constituency. I am still relatively young; there is plenty of time left to visit mushroom farms in my life.
The court found that the property in that case was liable for business rates because the mushrooms were produced in order to be sold on to complete the cultivation process elsewhere, not direct to consumers, and because of that, the property did not attract an agricultural exemption. In rating terms, it was a “nursery ground” and not a “market garden”. It is very important that the Legislative Grand Committee takes that seriously.
The Valuation Office Agency rating manual defines a nursery ground as
“land in, or on which, young or immature trees and/or young plants are reared (not necessarily being grown in the actual soil of the nursery) until fit for transplanting or sale: the emphasis on young plants should be noted. Even though plants are raised in containers on the land rather than by rootstock in the soil, such ‘grounds’ should be treated as exempt.”
The rating manual defines a market garden as
“a holding cultivated wholly or mainly for the production of vegetables, fruit and flowers for sale in the course of a trade or business.”
The definitions are used for internal guidance purposes by the VOA and do not have the force of law, but they are based in part on case law discussions of the definitions of those terms.
On Second Reading, the Minister—who I know is playing very close attention to my remarks today—said:
“A nursery ground is where small plants or trees are propagated or sown with a view to their being sold on to someone else for growing on to their mature state, for sale to or use by the end consumer, whereas a market garden”—
this is where there is a differentiation—
“is where fruit, vegetables, flowers or plants are produced to be sold directly or indirectly to members of the public for consumption.”—[Official Report, 5 June 2018; Vol. 642, c. 259.]
Agricultural land has been exempt from business rates since 1929. I do not want to test the patience of the Committee too much by going back to 1929. The Committee will be relieved to know that I do not plan to do that. However, areas within an agricultural property that are used for farm diversification such as a farm shop or holiday accommodation on what was previously a farm are liable for business rates. The current legislative authority for that can be found in schedule 5 of the Local Government Finance Act 1988. I am sure that all members of the Legislative Grand Committee have paid close attention to that. Before that, agricultural land had been subject to a 75% discount on rates from 1923, a 50% discount for poor law rates and a 75% discount for sanitary-related rates from 1896, known as partial derating.
I am really only clearing my throat at the moment, but I am conscious that scores of other right hon. and hon. Members, especially for English constituencies, will wish to contribute to the Legislative Grand Committee of England and Wales.
Patrick Grady
Before my hon. Friend comes to a conclusion, I want to reflect on his earlier point about “nurseries” and “nurseries”. It is a good opportunity to pay tribute to the Children’s Wood in my constituency, an outdoor play facility that hosts a nursery for young children but also has an allotment that in itself is a nursery for vegetables. It shows that the two things can be brought together and serve important educational purposes, and we should pay tribute to that kind of thing.
David Linden
I do not want my hon. Friend to think that I am coming to the end of my remarks too early. I am only a third of the way through. He is right to pay tribute to the organisations in his constituency, and while I have the floor, I pay tribute to Eddie Andrews of Connect Community Trust in the Wellhouse area of my constituency, who does a sterling job of looking after that allotment. There is a long-standing problem that allotments have not been given the focus that they require, especially in Glasgow. We now have an SNP Administration—
The Chairman of Ways and Means (Sir Lindsay Hoyle)
Order. Perhaps I can help. If the hon. Gentleman is suggesting that he needs an Adjournment debate, he should apply for one on allotments, because obviously we will not be discussing that as part of today’s debate.
David Linden
I am grateful for your guidance, Sir Lindsay. That is much appreciated. I am conscious that scores of MPs from English constituencies will wish to take part in this important Legislative Grand Committee. Members fought for it for a long time; it was the English Parliament. I expect to see hundreds of MPs rush into the Chamber to get to their feet and make their voice heard. There is still time for that, but I shall return to my own remarks.
Tunnel Tech sought to argue that its use of the property constituted that of a market garden. The term “market garden” has no statutory definition, but using several examples of case law, it argued that a hereditament is a market garden if any part of a process of horticulture is carried on there with a view to ultimate consumption by the public, even though the produce of the hereditament is not itself, when it leaves the hereditament, an article capable of consumption by the public or indeed intended for consumption by the public. For the purposes of time, I will not read out the full 2015 judgment; the Chairman is indicating that he would prefer me not to read it out. The judgment found that Tunnel Tech’s use of the property meant that it constituted a plant nursery and not a market garden. The produce of a market garden is suitable for direct or indirect sale to consumers, whereas the produce of a plant nursery is not. I found that fascinating when I read the briefing note for this.
This distinction was important because Tunnel Tech’s operations took place entirely within the buildings. The provision for the exemption of agricultural buildings is found in paragraph 3 of schedule 5 to the 1988 Act. It says, and it is important that the Committee understands this:
“A building is an agricultural building if it is not a
dwelling and—
(a) it is occupied together with agricultural land and is used solely in connection with agricultural operations on the land”
or
(b) it is or forms part of a market garden and is used solely in connection with agricultural operations at the market garden.”
The 2015 judgment noted that paragraph (b) does not include plant nurseries in the definition of agricultural buildings. It is important that we make that distinction. Therefore, a plant nursery that is located entirely indoors does not constitute an agricultural building and is not exempt from business rates. I am a frequent visitor to garden centres and there is one in the constituency of my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows). We in the SNP Whips Office have been there before to enjoy some tea and cake and I commend the garden centre to anyone visiting central Scotland.
It is worth noting that garden centres, including those calling themselves nurseries—I ran an election campaign from a nursery in 2016 in Barrhead in the constituency of the hon. Member for East Renfrewshire (Paul Masterton), but I will not go into that in great depth—are not considered to be agricultural land or agricultural buildings. They are subject to normal business rate liability and will continue to be so if and when the Bill receives Royal Assent.
I can see that some colleagues are getting a bit impatient at the length of my remarks—[Interruption.] The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) says, “Carry on!” I am tempted but I had better not. I know that countless hon. Members from English constituencies will be wishing to take part in this Legislative Grand Committee of England and Wales, so I shall conclude by thanking you for your forbearance, Sir Lindsay, and wishing this Bill a very speedy passage when it goes to their noble lordships.
Question put and agreed to.
The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).
The Deputy Speaker resumed the Chair; decision reported.
Third Reading
Rishi Sunak
I beg to move, That the Bill be now read the Third time.
I thank all hon. and right hon. Members who have contributed at the various stages of the Bill in supporting the measures involved and highlighting the contribution that it makes towards furthering the Government’s ambitions to support agricultural and horticultural productivity. I am grateful to the Clerks of the House and for the work done by the officials both in DEFRA and in my own Department.
I thank the National Farmers Union for its strong support for the Bill. We have worked closely with the NFU to make sure that nurseries benefit from the exemption in the Bill. I am grateful for its invaluable insight and expertise, which has helped to bring these effective measures to the House.
This Bill is just a small part of how the Government are using the business rates system to create opportunity and drive growth across the country. It has wide support, restores a long-standing policy position, and will support a vibrant and sustainable rural economy. I commend it to the House.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Non-Domestic Rating (Nursery Grounds) Bill
Wednesday 11th July 2018
(5 years, 7 months ago)
Lords ChamberRead Full debate Non-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text
Non-Domestic Rating (Nursery Grounds) Bill
Tuesday 24th July 2018
(5 years, 6 months ago)
Lords ChamberRead Full debate Non-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I am grateful to noble Lords who have given up their time to discuss this Bill. I am looking forward to hearing the considered and expert views of the House. These views are always welcome as we work together to ensure that our laws are both fair and robust.
This Government are committed to supporting sustainable growth in the rural economy. Through the 2014-20 rural development programme, we are investing almost half a billion pounds in England’s rural businesses. Our support for rural enterprises includes developing farm and horticultural companies and the Government are also set to continue to commit £3 billion in funds for farm support until the end of this Parliament.
Earlier this year, the Government also launched a wide-ranging consultation on the future of farming. This Bill is an important part of our continued support for the horticultural sector in England and Wales. The agricultural exemption from business rates plays an important role in supporting agricultural productivity. This measure will support our ambitions for a more dynamic and self-reliant agricultural industry.
This Bill received cross-party support in the Commons, where it passed quickly without amendment. We want swiftly to amend the law to ensure that those ratepayers affected will not have to pay business rates. The Bill will deliver on our commitment to support the rural economy and promote this country’s rural life.
Noble Lords may be aware that, for almost 100 years, plant nursery grounds have been treated as exempt from business rates as part of the general exemption for agriculture. This practice was widely understood and accepted by the Valuation Office Agency and rating surveyors. However, in 2015 the Court of Appeal decided in Tunnel Tech v Reeves that the exemption did not apply to plant nurseries in buildings which were not occupied together with agricultural land and used solely in connection with agricultural operations on that or other agricultural land. Only at the end of 2015 was it clear that there was to be no appeal on that decision to the Supreme Court.
This did not reflect the Government’s policy nor the widespread belief among the sector. The consequence of the 2015 judgment has brought unwelcome change and uncertainty for business rate payers in the horticultural industry. It was therefore understandable that following the judgment the industry expressed concerns about the consequences that the potential imposition of business rates might have on nursery growers, and the Government have listened. We understand that to date only a small handful of nurseries have been affected by the court ruling, but there is the potential that many more would be affected if the Government did not act.
The Government made clear that they would take action. In March 2017, we set out in a Written Ministerial Statement our intention to legislate and, subject to the passage of this Bill, enable the Valuation Office Agency to return to its former practice of exempting all plant nurseries from business rates. A further Written Ministerial Statement was made in 2018 restating the Government’s commitment to legislate and for the first time confirming that the measure would have retrospective effect from 1 April 2015 in England and from 1 April 2017 in Wales.
This Bill will preserve a long-standing policy and ensure that plant nurseries solely consisting of buildings will once again benefit from the exemption of business rates for agricultural land and buildings. It will enable the Valuation Office Agency to return to its former practice of exempting plant nurseries and removing those few plant nurseries which have been assessed from the business rates list. Those plant nurseries that have been paying business rates since the 2015 decision on the basis of the Tunnel Tech decision will be eligible for a backdated refund of their business rates.
While the Bill will restore the former practice of exempting plant nurseries in buildings, I make it clear that it will not otherwise disturb the existing boundary of the agricultural exemption. Uses beyond agricultural operations, such as garden centres, will rightly continue to be subject to business rates. The Bill will also provide support and certainty to plant growers in England and Wales who would have otherwise been brought into the rating system on the basis of the Tunnel Tech decision. It ensures that these viable businesses do not become subject to a tax which could have an impact on the cost of farming and produce.
We have been able to bring forward this measure quickly and without amendment because of the support and advice—which I acknowledge—we received from the National Farmers’ Union in England and the Farmers’ Union of Wales. Their expertise has been invaluable and we are grateful for their assistance.
This Bill is about fairness for business rate payers in the agricultural sector and I commend it to the House. I beg to move.
The Earl of Lytton (CB)
My Lords, it is a great privilege to follow the Minister and, as it were, to open the batting order of discussion on this important Bill. Before going any further, I declare a number of interests as a landowner but not a grower, a property valuer, a one-time employee of the then Inland Revenue Valuation Office and a vice-president of the Local Government Association. That said, I welcome this Bill, which quite properly remedies the outcome of the decision in Tunnel Tech Ltd v Reeves (Valuation Officer) and I applaud the Government on finding a slot to bring this forward in times of considerable legislative congestion.
The pivotal point here is that the decision meant that the operation of Tunnel Tech would have been regarded as some sort of industrial enterprise rather than in the nature of agriculture or a horticultural nursery ground. However, the effect of rating buildings being used as nursery grounds but without other land would have put the company in very considerable contrast and at a disadvantage to an identical building occupied by, say, a market garden or a conventional farm. I am glad that the effects of this decision were not much more widespread than has in fact been the case.
I have to admit to being slightly astounded by the process whereby a court today has been asked to overturn the practice and understandings which have prevailed since 1928. I understand of course that changes in the methods of husbandry have to be taken into account, but I see this as an example of an overly literal interpretation of the present being applied to the legislation of yesteryear. This, coupled with the adversarial arts of legal practice, highlights the dangers of taking a position-based approach as against the broader consideration of intentions and public policy.
I believe that it was not Tunnel Tech which sought to have the additional burden of a business rates assessment placed on it, but the interpretation of the Valuation Office Agency, no doubt backed by the advice of the Treasury Solicitor. Much time and treasure have been expended on taking this case to the Court of Appeal and then further resource expended on the parliamentary processes necessary to reverse what I believe would have been a highly damaging outcome for an important sector of an ostensibly agricultural type of activity. At any moment the department or the Valuation Office Agency could have desisted. Can the Minister inform us as to why that did not happen?
While I welcome the Bill, I further ask the Minister to ensure, along with his departmental colleagues, that before his or any other department or agency embarks on a process of forensically dissecting bits of legislation, all concerned with agriculture and business more widely, they should make a special effort to avoid upsetting generations of established practice unless there is a very good public interest reason to do so.
In recent times, the Valuation Office Agency has been criticised about many things, not least by me in this House. In this instance, the criticism might be that it allowed the administrative role of being the government valuer to merge with and become some sort of proxy for HMRC’s role as the taxman. This of course skews the fair and consistent administration of the property valuation system. This is not the stuff of some intellectual plaything. There should be a far clearer differential between the activities of HMRC and the role of the VOA. Sadly, and here I speak from some direct experience, the ill-effects of the present arrangement continue to spread. The risk is therefore of opportunistic excursions into novel interpretations of established practice that may then have to be reversed by Parliament on public policy grounds. To my mind, that is an extremely unwelcome process causing interim uncertainty and damage to cash flow in both the private and local government sectors, and being potentially hazardous to investment and employment. This should be the subject of better oversight. I encourage the Minister to comment. I mention this because there is a potentially very rich seam of trouble to be mined in this area by anyone with disruptive feelings or tendencies. The unplanned and often unforeseen effects on business can be considerable—it would not require any of your Lordships to devote much imagination to it.
Looking forward, if I have any advice for a Government contemplating a post-Brexit Britain—this might be the only pronouncement on Brexit that your Lordships will hear from me, for which you are doubtless very grateful—it is to ensure greater simplicity, transparency, fairness and balance to all our laws and regulations governing business and commerce, in taxation especially. If we want to be internationally slick and competitive, this is where I would start. So far, the Bill represents a welcome if small attempt to roll back the tide, but one can usually be sure that any claim to provide a better, fairer and more transparent regime will, on past performance, produce precisely the opposite.
I wish the Bill well and certainly have no intention to seek to amend it in any form. It has limited application and I hope it has a speedy journey on to the statute book, but let it also be a warning to better manage affairs in our great departments of state.
Baroness Byford (Con)
My Lords, it is a great pleasure to follow the noble Earl, Lord Lytton. I will not go into the detail of his speech because he speaks with great knowledge on the valuation agency and how this instance came about.
I very much welcome the Bill. It is the smallest Bill I have ever taken part in—only one side of A4—but I am grateful to the Government for bringing it forward and getting it through Parliament so quickly with support from all sides. The case certainly raised great uncertainty in the industry. In fact, the Government’s response brings great fairness to all those in the business. When he introduced it, the Minister spoke about the need for sustainable growth. I highlight that because I believe that in the next 50 years we will see very different agricultural produce and methods of agriculture than in the past. Much may well come from having an indoor start.
In Leicestershire we have a nursery grower, James Coles. It is a very well-known company that has been going for a long while. When I spoke to it, it had not been affected by the change. It will be interesting if the Minister could tell us why some people have been affected in some places while others have not. The Minister also recorded the Government’s current commitment to £3 billion of grants for farming. That could well go towards looking at new buildings and a new way of producing food.
I record my thanks to the NFU for its briefing. If we thought that the Bill was small, its briefing of seven pages was slightly different. It went into very great detail. I think that all of us taking part in the debate will be fully aware of the various aspects of the issues that it raised. I declare a family farming interest, but, in this case, we do not have an interest in the Bill.
It is of great urgency that we propagate and raise more young plants in this country for sale to other horticultural businesses and to the wider supply trade. Anyone following the vagaries of pest or disease control will know that if we can produce more here and import less we will reduce that risk, which is real. As has been said, the general exemption for agricultural premises stood solidly from 1928 until this case in 2015. Plant nurseries have been treated as agricultural and so are exempt from non-domestic rates, but the court appeal highlighted the gap in the legislation. That is why this legislation is being brought forward today.
As I said earlier, I welcome the legislation, which will enable businesses to flourish. The UK grows excellent products. We are increasing and will continue to increase the amount of homegrown foods, trees and plants, which is important. That will give us greater export opportunities as well.
I shall end by identifying four things that I think are hugely important. The first is to recognise that the agri-food industry is worth some £108 billion. Horticulture, excluding potatoes, is worth some £3.1 billion based on the 2015 figures. The second is the importance of food security and, linked with that, the climate change that we are experiencing now. I am sure that we will need to grow many more trees. The Government have a big push in encouraging the various public bodies and individuals to plant more trees. The third is the importance of new techniques in growing and producing food. Lastly, it is extremely important that we have fairness within the industry. For all those years the industry knew where it stood but then, all of a sudden, the 2015 case gave rise to the need for this Bill.
I hope that the Bill goes through without any need for alteration. It is needed. It affects only a few people, but it could affect more people in future if they diversify in a different way.
Baroness Pinnock (LD)
My Lords, I draw your Lordships’ attention to my relevant interests as a councillor on Kirklees Council, a vice-president of the Local Government Association and a member of the Royal Horticultural Society.
We on these Benches fully support the purpose of this Bill, which, as other noble Lords have said, is to address an anomaly arising from a court case in 2015. I thank the noble Earl, Lord Lytton, for raising some significant questions on the process that led to the court case which I hope the Minister will be able to answer, either today or in a letter.
I have some comments and questions for the Minister in relation to this short Bill. The first is on the definition of “nursery grounds”. The Government have published a factsheet which is helpful in distinguishing between market gardens, garden centres and nursery grounds. However, it would be helpful if the Minister could clarify further, as many of these businesses straddle the various definitions.
Where a business grows plants from seed in greenhouses or polytunnels, my understanding is that they will be exempted by the Bill, but the retail element, where the plants are sold, will not be. Is that correct? What if the nursery has an online order business? Will the packing and posting buildings be exempt?
What about a garden centre where the main centre of the business is retail? Will the small section where plants have been brought in and are cared for before sale be included—if they are shrubs or trees, they might be there for a year or for several years? Will the totality of that business be classed as a garden centre and be liable to business rates, or will some element of that, too, be exempted as a consequence of the Bill?
Once the definition is clarified, it would be helpful to understand the impact of the changes this Bill will make. I noticed that when the Bill was debated in the other place there was no answer to the question about how many businesses would fall into the exemption. It would be helpful to understand the scale of the changes that the Bill will make. Will businesses that fall into this category be expected to self-identify to the valuation office, or will there be a notification as to their change in definition so that they would be exempt? I think it would be very helpful if the onus were on the valuation office to notify the businesses.
Then, there is the impact on the income of local government. No doubt this may be small in totality, but there may be a significant financial impact on some rural district councils, which may have several businesses falling into this definition of nursery grounds. As local authorities now depend for a large portion of their spending on business rates, this may have an unexpectedly significant effect on some councils. Can the Minister provide assurance on these issues?
With those questions and comments, I am totally positive. This is a constructive Bill to change the anomaly that was the result of the court case. It is right that these businesses are exempt from business rates and I support the purpose of the Bill.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, first I draw the attention of the House to my relevant interest as a vice-president of the Local Government Association. I support the Bill and its intention of providing that buildings that are, or form part of, a plant nursery ground should be exempt from non-domestic rates if they are used solely for agricultural operations at a nursery ground. We have heard from other speakers in this short debate that this issue arose as a consequence of the judgment in the Tunnel Tech Ltd v Reeves case in 2015, which highlighted how structural changes in the industry have resulted in purely horticultural operations being rated, as opposed to being exempt. It is welcome that the Government have sought the opportunity to correct this and I congratulate them on it.
We know that since 1928 Parliament has had no intention of rating the agricultural industry. That is absolutely right: I support the industry and support sustainable growth in agriculture and horticulture. We have heard from other noble Lords that there is no longer a distinction between nursery grounds and market gardens: all operators consider themselves to be growers and I agree with that. That is an important point to make here, as is the point made by the noble Baroness, Lady Byford, that the industry is worth £108 billion a year and, excluding potatoes, horticulture is worth £3.1 billion a year to our economy. I agree with the noble Baroness that we produce some wonderful food in this country: we have some wonderful farmers and growers and we need to always be supporting them, so that they can sell their produce to us and also export it. For the United Kingdom it is very much about selling high-quality produce, so we must support them in growing that high-quality produce.
I too received the briefing from the National Farmers Union. It is an excellent briefing, as the noble Baroness said: seven pages long, which is six pages longer than the Bill. It highlights how important this is—at the moment for a small number of growers, but with the potential for many more—so I think it is important to support it. I am also aware that when the Bill went through the other place, no amendments were tabled or agreed. I think that was right and, unusually for me on a government Bill, I am going to suggest that we make no amendments either. I have no intention of tabling an amendment and I hope that other noble Lords will not table amendments, so that very quickly, when we come back in September, the minister can stand up and move to discharge the commitment Motion. That would be the best thing to do, so as to quickly get the Bill on to the statute book. I have looked at it very carefully and I think it is the right thing to do: it is a good Bill and I fully support it.
Lord Bourne of Aberystwyth
My Lords, first let me say that I have lost a bet: I said that there was nothing more certain than that the noble Lord, Lord Kennedy, would put down an amendment. I owe my team and I probably owe the noble Lord a beer as well. I thank him very much for his support.
I shall deal with the points raised by noble Lords, whom I thank very much for their participation in this debate. I turn first to the noble Earl, Lord Lytton, and his point about the provenance of the decision that led to the Court of Appeal judgment in Tunnel Tech Ltd v Reeves.
We have the separation of powers in this country, and HMRC is not a government department, so the decision in this case cannot be laid at the feet of the Government. It would have been entirely wrong for us to interfere—and it would have been interference—in a wholly unconstitutional way with the valuation office procedures, the valuation tribunal decision and the Court of Appeal decision.
That said, once the decision was made, we faced having to decide whether we should seek to overturn the judgment or let it stand. I think it took everybody by surprise—everybody in the agricultural sector, surveyors. The great mass of people were caught on the hop by this decision, and that certainly included the Government; we were not expecting the decision. However, faced with letting it go through or doing something, I think we have taken the right decision, as borne out by noble Lords’ contributions, in deciding to reverse it. The alternative would have been unthinkable for our agricultural industry, and I share what other noble Lords have said about the importance of the agricultural industry and returning some certainty to it. In a way, as other noble Lords will have realised, there is a parallel with the recent legislation on the staircase tax that we have been looking at. In that case, once again, we were confronted with a decision that we did not expect. That is important.
Let me correct a particular point that I made when I said that HMRC is not a government department. It is a government department, but it is a non-ministerial department. I should have stressed that, and it is important that I correct myself on that point.
My noble friend Lady Byford speaks with great knowledge and authority in this area, particularly in relation to her home county of Leicestershire and her experience there. She asked a very valid question: how is it that some have been affected by this judgment and not others? All are affected by this judgment, but so far the valuation has been done only for some. We are therefore moving fairly quickly, because valuations here apply to just a handful of cases involving the reimbursement of backdated money—the retrospective effect. If we did not act, more and more agricultural businesses would gradually be involved.
I join my noble friend and the noble Lord, Lord Kennedy, in thanking the NFU and the FUW very much for their help, their briefing and their great interest and assistance in this case.
I thank the noble Baroness, Lady Pinnock, very much for her support, and indeed for her questions. She asked about the definition of a plant nursery, which it is quite true is not in the legislation. A plant nursery ground, as I understand it, is where small plants or trees are grown in the initial stages of their life with a view to selling them later to somebody else to complete the growing process. A market garden, which would not be subject to rating, is where fruit, vegetables and flowers are produced to final crop and then sold directly or indirectly to members of the public for consumption. Sometimes businesses are both, in which case there is a split assessment. I hope that is helpful.
I very much agree with the noble Lord about the importance of support for the agricultural exemption and the sector generally, which I think, given the contributions made, is shared across the House.
I come back to the noble Earl’s point and understand how the confusion could arise, but HMRC is a non-ministerial department and it is clearly not open to us to interfere in valuation tribunal decisions, and still less, on the same basis, in the Court of Appeal.
I thank noble Lords very much for their support on this.
Non-Domestic Rating (Nursery Grounds) Bill
Wednesday 10th October 2018
(5 years, 4 months ago)
Lords ChamberRead Full debate Non-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
Non-Domestic Rating (Nursery Grounds) Bill
Wednesday 24th October 2018
(5 years, 3 months ago)
Lords ChamberRead Full debate Non-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I express my thanks to noble Lords for their helpful insight at Second Reading and support throughout proceedings. Additional thanks are due to Duncan McLaren at the Valuation Office Agency, Eleanor Griggs and Michael Parker at the National Farmers’ Union, the Farmers’ Union of Wales and the select nurseries that provided assistance.
I also thank officials and the Bill team who have contributed to the Bill: Phil Shere and Kirsty Roberts at Defra, and my own officials—Nick Pellegrini, Lisa Gouveia, Joshua Hardie, Matthew Scales and Ed Clark—for their work and support in preparing the Bill.
The Bill has wide support across the House, restores a long-standing policy position and will support a vibrant and sustainable rural economy. I beg to move.
Royal Assent
Thursday 1st November 2018
(5 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 15 June 2018 - (15 Jun 2018)