Non-Domestic Rating (Nursery Grounds) Bill

Steve Double Excerpts

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

[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us that the property market can sometimes move very quickly and a five-year period can therefore leave rateable values out of date for some time.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 (St Austell and Newquay) (Con)]

rose—

[Nigel Adams]

Before I commend it, I will give way to my hon. Friend.

[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.

Non-Domestic Rating (Nursery Grounds) Bill

Steve Double Excerpts

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

[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.

--- Later in debate ---

[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.