'In Schedule 5 to the 1988 Act there is inserted—
"Sport and Recreation Clubs
15A. A hereditament is exempt to the extent that it consists of property used wholly or mainly by a club, society or other organisation not established or conducted for profit for purposes of sport or recreation.".'.—[Mr. Macdonald.]
§ Brought up, and read the First time.
§ Mr. Calum Macdonald (Western Isles)
I beg to move, That the clause be read a Second time.
The intention of the new clause is to remove the liability for non-domestic rates from voluntary sports and recreation clubs and associations. The effect of this would be to bring the treatment of clubs in England and Wales into line with the treatment of clubs in Scotland. I hope that the Government will recognise that this is an important issue, and that it is a fair and reasonable proposition to which they should respond positively.
The Government should make a positive response for two reasons; the first being the importance of sport to our national life. The Government have explicitly acknowledged that, and the Prime Minister made his contribution last year in a document called "Raising the Game". The document was all about the need to improve the access of British people—particularly young people—to sporting facilities. We all acknowledge that an important part of that is the role of voluntary clubs and associations, and particularly the role of the thousands of volunteers who devote much of their time trying to involve young people in sport and recreational activities.
The second reason why the Government should accept the fairness and common sense of the new clause is that clause 2 of the Bill aims to correct the anomaly that currently exists between the treatment of sporting rights in England and Wales and the treatment of sporting rights in Scotland. However, I wish to point out to the Minister that a second anomaly—between the treatment of sporting clubs in England and Wales and the treatment of such clubs in Scotland—still exists. That anomaly is no different in principle from that which the Government are trying to tackle in clause 2 affecting sporting rights. If it is right to do away with one of those anomalies, I suggest that—by the same logic—the Government should do away with the other. That is what I am trying to do in new clause 5.
One of the reasons why the Government could not include the measure at the outset was that they were apparently unaware of the existence of the anomaly. Certainly the Minister seemed to be unaware of the matter when I raised it in Committee, although he has since checked and found that it does exist. He wrote to me on the matter and sent copies of the letter to all other members of the Committee. I hope that he is now prepared to take a fresh look.
The question of costs must be addressed, and the Central Council of Physical Recreation—the umbrella body that covers all voluntary clubs and associations—has looked at this. Its most recent study of the effect of the new clause suggested that the cost to the Exchequer would be £14 million a year. That sum, I suggest—although it is not negligible—is relatively modest when 1136 compared with the total take of taxation, whether local or national. More relevant, perhaps, is that it is a reasonable sum when compared with the cost of removing the anomaly affecting sporting rights.
The Government estimate that the cost of removing the sporting rights anomaly will be £4 million to £5 million. That anomaly affects only 6,000 holders of sporting rights in England and Wales. By comparison, the sporting clubs anomaly affects over 150,000 clubs and associations—25 times as many clubs—and will affect the 6.5 million people who enjoy and use these clubs. Given that the additional costs of removing the anomaly dealt with by the new clause are only £14 million—compared with the £5 million costs of clause 2—the Government will be getting good value for money.
I represent a Scottish constituency, and I am aware that I am speaking on an issue affecting England and Wales, but that is entirely within the rules of the House. I have tried to be brief, and I shall conclude by quoting briefly some of the clubs and associations that have been in touch with me to allow them to have their say directly—as it were—on the importance of the issue. The National Cricket Association has been in touch with me through the firm of chartered surveyors that acts as rating adviser to the association, and it pointed out that most of the individual members of the association are small voluntary cricket clubswho survive purely on the income that can be generated from their individual members. Over the last few years … many of the clubs have fallen into severe financial difficulty".This has occurred as a result of the generally difficult economic background of the past few years. Inevitably, the association said, a number of clubs will not survive.
At the same time, the association said that asubstantial increase in rate liability … has fallen on the clubs as a result of the rating revaluations in 1990 and 1995, and the generally unsympathetic attitude of Local Authorities to the applications which have been made for … rate relief".The association's letter continued:The first effect of this is usually that the club will halt any expenditure on maintenance or equipment. Club premises fall into disrepair, reducing the attraction of the club to new members. The falling standard of facilities such as nets and practice equipment also deters parents from encouraging their children to participate in the youth activities at clubs which in turn will have a knock-on effect in the next few years on the number of talented youngsters rising to the top level of our—meaning the English—national summer game.Given the state of English cricket today, that seems to be a cry from the heart to which the House should respond. The association then stated:A straightforward and very tangible benefit which could be provided for clubs would be mandatory rate relief … clubs would undoubtedly view this as a significant encouragement to their activities which would help strengthen the long term future of the game throughout the United Kingdom.I should like to mention a letter that I received from the secretary of the English Indoor Bowling Association to illustrate the different types of sport that are affected by the rating liability. He pointed out that a lot of capital investment is needed to provide the basic facilities for indoor bowling. The association believes that it has a strong case for arguing that those facilities should benefit from rate relief. He made an important relevant point when he stated: 1137Indoor bowls is played by people of all ages, there is no advantage in gender, size, age, and within reason, physical fitness. It is played by many people with disabilities with the majority of clubs providing sessions each week for the blind and partially sighted, wheelchair bound bowlers and other mentally and physically handicapped people … the operation of the bowls hall is often left to the clubs themselves and in common with the majority of the members clubs, they are run mainly with voluntary labour since without this they would not be viable.
§ 8 pm
§ It is useful to compare the services that such associations provide for young people, the handicapped and the old with those provided by the holders of shooting rights, who will enjoy a 100 per cent. exemption under clause 2. That comparison makes clear the case for extending the exemption to voluntary clubs and associations.
The Football Association has told me that many of its members are voluntary clubs, local clubs and associations. It has stated in a letter to me:
We understand that it is the intention of the Government to introduce measures which will assist financially those business `sporting rights' owners throughout the UK. In our view, it is equally important that our affiliated voluntary clubs that have to pay the Uniform Business Rate should be afforded equal status".
The FA goes on to point out that it
is committed to investing in establishing links between clubs and local schools.
It argued that if such clubs were granted relief from rates they could reinvest the finances in youth coaching programmes.
The letters and representations that I have received from different clubs and associations make my case. I hope that the Minister will offer a positive response. I cannot see any reason why the anomaly between England and Scotland in respect of sporting clubs should be allowed to continue if it is the Government's intention to remove the anomaly between England and Scotland in respect of the holders of sporting rights.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison)
I agree with the hon. Member for Western Isles (Mr. Macdonald) that sports clubs play an important role in communities across England, Wales and Scotland. I, too, would like to play tribute to the individuals whose voluntary efforts help to sustain those clubs which play such an important part in the community, especially for young people. It is because of the potential value of sports clubs to the community that they are eligible for 100 per cent. rate relief at the discretion of the local authority.
I believe that it is right that discretion should continue to rest with the local authorities since they are in the best position to decide which club is of genuine benefit to the community. Local authorities will know the needs of the local community and will be able to judge the importance of particular sports clubs in the light of the range of services already on offer. Not all such clubs will be equally deserving. Even those that are not conducted for profit may have constitutions or membership rules that effectively exclude sections of the community. In all the circumstances it is appropriate that relief should be discretionary.
As the hon. Gentleman said, the funding of discretionary relief was discussed in Committee. Local authorities in Scotland can grant discretionary relief to non-profit-making sports clubs in the same way as they 1138 can in England and Wales. In England and Wales, however, 25 per cent. of the cost must be met by the local authority, whereas in Scotland the Exchequer meets the full cost. I appreciate that, because of those arrangements, sports clubs in England and Wales may consider that they are at a disadvantage compared with their colleagues north of the border. That is certainly an anomaly and we are as keen as anyone to avoid such anomalies.
Changes to the funding arrangements are a matter for secondary legislation. I and my colleagues at the Welsh Office and Scottish Office propose therefore to undertake a review of how discretionary relief is funded in England, Wales and Scotland with a view to providing consistent treatment for all sports clubs. We will aim to complete that review by the time that the Bill receives Royal Assent. In the meantime, I invite the hon. Gentleman to accept my arguments about why discretionary relief should be awarded. I invite him to accept what I said about the review that we will carry out into the funding of that relief and to withdraw the new clause.
§ Mr. Nick Ainger (Pembroke)
On the anomaly between England and Wales and Scotland, can the Minister assure the House that the review will not have any detrimental effect on Scotland?
§ Mr. Clappison
I would not like to pre-empt or prejudge how that review will be conducted. We have all accepted that there is a case for such a review and I hope that the hon. Gentleman will accept that our approach to it is constructive.
I should like to share the timely sentiments that the hon. Member for Western Isles expressed about English cricket, although we may diverge on other sports.
§ Mr. Macdonald
I am grateful to the Minister for his constructive reply.
I am happy to withdraw the new clause on the assumption that the result of the review will not mean that clubs in Scotland end up being liable for rates or that their local authorities will end up losing some of the support that they currently receive. The Minister would not be a popular person if he chose to go down that road. I look forward to seeing the results of the review. On that basis, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.