AMENDMENT OF OTHER ENACTMENTS (Hansard, 7 April 1971)

§ Mr. John Silkin
I beg to move, Amendment No. 10, in page 6, line 18, leave out "a substantial" and insert "the greater".
I will not weary the House with a repetition of the arguments in Committee, because they are perfectly clear and the words are rather obvious.
In Committee, the Under-Secretary undertook to look again at the wording and to see whether there was any justification for the change that we proposed in our probing Amendment. Unfortunately, doubtless because of the speed with which this Report stage has come on, the hon. Gentleman has not been able to inform me whether he has considered the matter. I should be grateful for his views on the subject.

§ Mr. Buchanan-Smith
I am grateful for the spirit in which the right hon. Gentleman has moved the Amendment. I can assure him that, despite the speed with which this Government move in their legislation, I have had plenty of time to consider the point.
I appreciate that hon. Members on both sides are agreed with the purpose that we are trying to achieve in the subsection. The real point which the right hon. Gentleman raised in Committee and again today is whether the definition might not be improved by substituting the word "greater" for the word "substantial".
We have looked at the point carefully. As a result of our study, we prefer the use of the word "substantial". It is slightly more restrictive than the word "greater". I do not believe that the right hon. Gentleman wants to extend the effect of this provision. On that assumption, we believe that we should retain the word "substantial".
If one takes the word "greater", one moves quickly towards the 50 per cent. ratio: anything over 50 per cent. could be argued to be greater, on the basis of pure comparison, whereas the word "substantial" is one which has been used in other legislation, which is understood by the courts in other contexts, and which 498 has been interpreted successfully by them. To substitute the word "greater" would make the Clause very much less restrictive. No one really wants to do that.
One comes back to the question whether the word "substantial" is adequate. In the light of its use in other legislation and in the light of court decisions on its use in other contexts, we believe that it is the best word.

§ Mr. Deakins
The Under-Secretary has spoken about making the definition of the time during which an agricultural building is so used for intensive livestock production less restrictive. I should have thought that it was the desire of everyone to make it more restrictive, in the sense that a burden is placed on the farmer or producer to use the building not only for a substantial part of the time, not only for the greater part of the time, but for the vast majority of the time. Even in Committee we did not have a satisfactory explanation why it was necessary to alter the existing rating law concerning agricultural buildings and their use for agricultural purposes.
As the Minister admitted in Committee, this Amendment was not pressed or supported by the National Farmers' Unions. They were quite happy with the definition of "sole use" which meant that there was a de minimis provision. But the Minister, for some reason best known to himself, chose to widen the definition in a way which will enable a number of people who do not benefit from derating to drive a coach and horses through this part of the Bill. I am thinking particularly of farmers, co-operative groups and other groups of farmers who, apart from being engaged in agricultural operations, are also engaged in agricultural trade.
It is possible, by having "substantial" as the definition of the amount of time during which a building must be used for agricultural purposes to qualify for derating, that a building could be used for only a few months of the year for agricultural purposes, such as grain storage, and for the rest of the year for the purposes of agricultural trade, such as selling the grain which had been stored. This would give not only individual farmers but groups in particular, who would seize on the opportunity given by this provision, an unfair competitive advantage over normal agricultural traders.
499 It is, therefore, wrong that the Government, by this alteration in the law, making it much wider and freer for farmers and groups to take advantage of it, should be seen to be giving an unfair advantage by derating agricultural premises in these circumstances.

§ Mr. John Silkin
By leave of the House, Mr. Deputy Speaker, may I ask whether the Minister will say something on the subject? I should be happy to withdraw the Amendment if he were to give an undertaking to discuss with the local authorities in England, and if his right hon. Friend were to discuss with the local authorities in Scotland, the effect of the word "substantial". We all know what we are trying to ban. If a directive could be issued, I think that would satisfy us.

§ Mr. Buchanan-Smith
Perhaps I might respond to the right hon. Gentleman and to his hon. Friend the Member for Walthamstow, West (Mr. Deakins).
First, the hon. Member for Waitham-stow, West is frightened—I appreciate his point—that those who were farmers in the first instance and extended into trade and commerce could benefit from this Clause. The hon. Gentleman raised this point in Committee where it was discussed fully because concern had been expressed by the National Association of Corn and Agricultural Merchants and by others.
We have tried to cover the situation—I am talking of what has happened in Scotland in recent years—where it has been found that the de minimis rule seems to have been slightly extended and practices have arisen which, in the eyes of many, were of a de minimis nature, yet the courts, in their wisdom, have decided that, because these activities have taken place, a building should have been rated. In other words, the courts have decided that they have not been an insubstantial—I apologise for using that word—part of the activities of those who carried on business in the premises. In equity, we have felt that it was not fair that they should have been completely subjected to rates in the circumstances. I assure the hon. Gentleman that in Scotland—the Clause refers specifically to Scotland—conditions have made it necessary to introduce the Clause.
500 Concerning the extent to which the Clause enables ordinary farmers to compete unfairly with those carrying on trade or commerce in buildings which in other circumstances would be rated, in view of the definitions of the word "substantial" given in other contexts, we believe that the matter is covered satisfactorily. If a farmer was genuinely going to be in competition with these other people the use would be substantial, and the courts—we have to leave a great deal to the common sense of the courts in such matters—would treat it sensibly and deal with it in the light of the intention which lies behind the legislation.

§ Mr. Deakins
Will the hon. Gentleman assure us that there could not be two substantial uses of the same premises at the same time?

§ Mr. Buchanan-Smith
This is almost coming back to the 49 and 51 per cent, argument. It is not for Parliament to say what the courts should decide. If there were two substantial absolutely equal uses, obviously in that case each use would be substantial and one could cancel out the other.

§ Mr. John M. Temple (City of Chester)
Has my hon. Friend had any representations from rating authorities concerning the use of the word "substantial"?

§ Mr. Buchanan-Smith
I am not aware of any particular representations which have been made on this point in Scotland. I understand from all those with whom the Bill has been discussed that it has not given rise to controversy. I can speak only about the Scottish part of the Bill. I understand that this has not given rise to argument or a feeling that there would be awkwardness or difficulty concerning interpretation by the courts.
We believe that this is a sensible provision. It helps those farmers who have an insubstantial use of their premises for activities which in some circumstances could be rated. At the same time, we believe that, in the light of previous court experience, it will not cause difficulties in interpretation.

§ Dr. Dickson Mabon
In response to the question whether anyone was concerned about the use of the word "substantial", I have here submissions from 501 the Scottish branch of the Royal Institution of Chartered Surveyors which specifically raised the point.

§ Mr. Temple
They are not local authorities.

§ Dr. Mahon
These people have made representations to the local authorities since then just as we have to Parliament. If the hon. Gentleman is suggesting that because the local authorities do not make representations we should not make them to Parliament, he is talking through a hole in his head. We are entitled to raise and to discuss these matters in Parliament because the Bill, as it finally goes through Parliament, is what will influence the courts. We have had representations. I hope that the hon. Gentleman will not dismiss them so lightly. Perhaps he will also answer the point raised by my hon. Friend the Member for Walthamstow, West (Mr. Deakins) about what happens if there are two substantial uses.