Non-Domestic Rating (Nursery Grounds) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 5th June 2018
(6 years, 5 months ago)
Commons ChamberNon-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text
This text is a record of ministerial contributions to a debate held as part of the Non-Domestic Rating (Nursery Grounds) Act 2018 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
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
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 10th July 2018
(6 years, 4 months ago)
Commons ChamberNon-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text
This text is a record of ministerial contributions to a debate held as part of the Non-Domestic Rating (Nursery Grounds) Act 2018 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
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.
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
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 24th July 2018
(6 years, 4 months ago)
Lords ChamberNon-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text
This text is a record of ministerial contributions to a debate held as part of the Non-Domestic Rating (Nursery Grounds) Act 2018 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
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
(Limited Text - Ministerial Extracts only)
Read Full debateWednesday 10th October 2018
(6 years, 1 month ago)
Lords ChamberNon-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text
This text is a record of ministerial contributions to a debate held as part of the Non-Domestic Rating (Nursery Grounds) Act 2018 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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
(Limited Text - Ministerial Extracts only)
Read Full debateWednesday 24th October 2018
(6 years ago)
Lords ChamberNon-Domestic Rating (Nursery Grounds) Act 2018 Read Hansard Text
This text is a record of ministerial contributions to a debate held as part of the Non-Domestic Rating (Nursery Grounds) Act 2018 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.