Non-Domestic Rating (Nursery Grounds) Bill

Bob Blackman Excerpts

2nd reading: House of Commons
Tuesday 5th June 2018 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

[Bob Blackman]

rose—

[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.