Non-Domestic Rating (Nursery Grounds) Bill

David Linden Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Legislative Grand Committee: House of Commons
Tuesday 10th July 2018 Commons Chamber

[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.

--- Later in debate ---

[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