Derating of Reed Cultivation (Scotland) (Hansard, 4 May 1983)

§ Mr. Bill Walker (Perth and East Perthshire)

I beg to move, That leave be given to bring in a Bill to remove reed cultivation from the payment of rates in Scotland. I want to make it clear at the outset that there is no question of a massive loss of revenue for Scottish local authorities. At present, there is only one place in Scotland where reed cultivation is rated. It is at Errol on the north bank of the river Tay in my constituency.

The two local authorities that are involved, Tayside region and Perth and Kinross district council, support me in my efforts to have reed cultivation at Errol de-rated. They do so because they recognise that the small company that is engaged in reed cultivation will go out of business if it is forced to pay rates for this year and previous years.

The sums involved are minute, compared with the vast amounts that are collected by the authorities. Nevertheless, they are massive in terms of the margins, prices and turnover of the company, Reedways of Errol. The rate demands cover the periods 1980–81, 1981–82 and 1982–83. Payment of the outstanding rates will force the company out of business, and nine craft jobs will vanish. It is in no way the fault of Reedways that this matter has taken so long to be resolved.

I first wrote to my hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), who at that time was Minister of State, Scottish Office. In my letter of 18 November 1981, I pointed out that the rates being levied on the reed beds which the company cultivated would completely wipe out the company's profits, and would mean that in future the company that supplied the reed for thatching and other old craft industries which had been restored to Tayside would face unfair competition from Hungary, and that consequently the company Reedways would be unable to pass on the rates cost in a price increase to its customers. I also drew attention to the fact that reed cultivation in England was not subject to rates. Sadly, the regional assessor for Tayside was not impressed, and continued to press for rates to be levied on Reedways.

Eventually, the case for the regional assessor, who claimed that reed bed cultivation was not an agricultural activity and consequently should not be derated, was heard before a tribunal, and later at an appeal before the lands 234 courts. The case for the regional assessor was upheld, and reed bed cultivation in Scotland on the banks of the river Tay became the only activity of this kind in the United Kingdom to be subject to rates.

During the whole sad saga, I pressed Ministers, until, on 21 October 1982, the Minister of State, Scottish Office, the noble Lord Mansfield, accepted that reed bed management, cultivation and production fell within the terms of the farm capital grants system. It is my view that if that decision had been available to the lands court when the appeal was heard, it is very likely that that court would have decided that reed bed cultivation was an agricultural activity and therefore should be derated. Sadly, my noble Friend's decision was not made until after the appeal was heard, and the information was not available to the court at the time it was sitting.

The problem facing myself and the company was how to alter the situation before the rates payment requirement forced it out of business. I pressed Ministers to introduce an amendment to the Valuation and Rating Act (Scotland) 1965 to include reed bed management in the definition of agriculture, and asked that the effect should be retrospective. My hon. Friend the Member for Renfrewshire, East (Mr. Stewart), the Under-Secretary of State for Scotland, has been very helpful and sympathetic, and I believe that he accepts the justice of the case for an amendment. Sadly, he cannot give an assurance to do so before 1985.

Th company cannot survive if it is forced to pay the outstanding rates bill. That is why I ask leave of the House to introduce my Bill. Action is called for now, not in 1985, and I look to the House to help me to change this ghastly and unrealistic situation before another ancient craft is lost to Scotland.