§ Report received.
§ Schedule 1 [Relief from non-domestic rates for general stores etc. in rural settlements: England and Wales]:
§ Baroness Hamwee moved Amendment No. 1:
§
Page 19, line 17, at end insert ("or—
(ii) to have had a population of not more than 3,100 on the last 31st December before the beginning of the chargeable financial year in question and to have had a population of not more than 3,000 on the last 31st December before the beginning of the year immediately preceding the chargeable financial year in question,").
§ The noble Baroness said: My Lords, Amendment No. 1 is an attempt to meet comments made by the Minister in Grand Committee. At that stage my noble friend Lord Beaumont of Whitley and I raised the need for stability. Perhaps I may explain. Small shopkeepers who will benefit from the provisions of this Bill may be in danger of benefiting only for a very limited period. There is a population cut-off point of 3,000 which applies to the settlements in which the shops are situated.
§ I am concerned to ensure that having gained the rating benefit, the ratepayer knows that that benefit will apply for at least two years, provided that there is no substantial change in the settlement in which the shop is situated. In Committee the Minister made the perfectly valid point that a line has to be drawn. He said that once the line is moved, it has to be moved for every area. I have attempted to meet that point by providing the two limits which appear in the Bill—not more than 3,000 the year before last, if I can put it in that way, and not more than 3,100 in the current year. In other words, one must always meet the 3,000 limit but if the settlement increases in size just a little bit, then the benefit would still apply.
§ Raising the point at this stage, although there are obviously practical difficulties, will give the Minister an opportunity to confirm further on the record how the 834 counts of population and settlements might be applied. In Committee he said that the local authority is not meant to be obliged to go on a head count and said also that the Government would consult local authorities on how to conduct a count of population sizes. I must say that I should be unhappy if I thought it was simply a question of turning a blind eye because that seemed to be the kind thing to do. If the Minister can give any more detailed information on that score or can comment on the objective—to provide continuity for the ratepayer in question—I should be most grateful. I beg to move.
The Minister of State, Department of the Environment (Earl Ferrers)My Lords, the noble Baroness is nothing if not tenacious. We had this discussion in Grand Committee and she has again raised the subject matter and is concerned about head counts and people turning a blind eye.
I shall do my best to explain the position to her and I hope to put her at ease. Her amendment seeks to provide a measure of protection for ratepayers in communities which may possibly grow above the 3,000 limit. It would ensure that once entered on a list, a settlement could not be removed until its population had grown to more than 3,100 in order to give a certain amount of leeway.
The noble Baroness is concerned to soften the impact of what she sees to be a purely arbitrary limit on the size of a settlement. She argues that the limits may create hard cases but the amendment itself also imposes arbitrary limits and may create hard cases. Perhaps I may give an example. The ratepayers in one village which had a population of 3,050 might find themselves eligible for relief under the terms of the amendment because the population has grown from 3,000. When it reached 3,000, the village was entered on the list. But ratepayers in a neighbouring village, which had always had a population of 3,050, would not be eligible for relief because it had never appeared at all on the settlement list. That is not fair.
The noble Baroness finds it difficult to accept that, if the scheme is to be targeted at small communities, we must draw a line somewhere and wherever that line is drawn, inevitably, some villages will fall on the wrong side of it. The noble Baroness is anxious that without her amendment, ratepayers will have insufficient warning of the removal of a village from the list. That is not so. Local authorities will have to give early warning of changes to the rural settlement list. If any changes are required, local authorities will have to draw up a new list for the following financial year and they would have to make available that list for inspection from 1st January. Therefore, ratepayers will have at least three months' notice of any withdrawal of relief.
But of course, in reality, they are likely to be aware of the possibility long before the local authority formally deposits the new list. For example, villagers will know whether their village is close to the 3,000 limit and will know of any new housing developments under construction. Therefore, the removal of the settlement 835 from the list is unlikely to come as a surprise to them and, as I explained before to the noble Baroness, there is no question of the local authority having to go on a head count every year to make quite sure of the position. As currently drafted, the Bill is phrased deliberately to ensure that the settlements are those which appear to the local authority to be of the figure of 3,000.
The Bill does not mean that communities will appear on a list on one year, disappear from it the year after and reappear the year after that, as the population fluctuates, and populations often do fluctuate. We do not intend—and the Bill does not require—authorities to chop and change the settlement list every time a villager is born or dies. But it requires local authorities to take account of significant changes in population such as, for example, the building of a housing estate.
The Bill has been drafted deliberately in order that local authorities can take ordinary common-sense decisions. We have talked to the local authority associations about how we can best apply the 3,000 threshold and we have asked them whether they would welcome any further guidance. They are considering that offer and if they come back to us to say that they would like further guidance, we shall be only too happy to provide it.
I hope that the noble Baroness is satisfied with that response. As the Bill is drafted, the whole purpose has been to try to make a common-sense arrangement. But wherever a line is drawn, there are bound to be some who fall on one side and some who fall on the other. We believe that, as it stands, the Bill is workable.
§ Baroness HamweeMy Lords, I am grateful for that response. I suspected that we might not entirely see eye to eye but perhaps my sense is more common or less common of that of the noble Earl. My intention was not to challenge the settlement figure. I have not sought to alter the 3,000. My sole intention was to ensure that a shopkeeper who received the benefit knew where he or she was for a period of two years simply to further the aim of supporting small shopkeepers in communities where the continued existence of a shop was threatened. However, it is not practicable to pursue the point, and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Baroness Hamwee moved Amendment No. 2:
§ Page 20, line 42, after ("not") insert ("substantially").
§
The noble Baroness said: I beg to move Amendment No. 2. This deals with a different point. During Committee stage there was some discussion of the position of a general store in a settlement where the local post office sold a few household goods. The noble Earl said that if there was a genuine store in the village that sold everything it should qualify but he asked whether, if the post office happened to sell a couple of tubes of toothpaste, that would ditch the store. He went on to answer his own question:
The answer is that it would not ditch the store, but it would depend on the amount and quantity of what it was selling. If its job is primarily that of being a post office, then it would not prevent the other store from getting rate relief". [Official Report, 4/3/97; col. CWH 17.]
836
I thought it might be helpful to return to this point briefly to address an issue of drafting so that the matter was on the record. Paragraph 2 of Schedule 1 to the Bill provides in the new subsection (6C)(a) that the qualifying general store must be a,
business consisting wholly or mainly of the sale by retail of food…and general household goods…and (b) [that] such a trade or business is not carried on in any other hereditament".
I have tabled an amendment to test what is meant by "such a trade". My amendment proposes the insertion of the words "that such a business is not substantially carried on in any other hereditament". I believe that that reflects the Minister's words in Committee. But it may be that the Minister can confirm that in (b) the term "such a trade or business" imports the notion of "wholly or mainly" in (a); in other words, that such a trade is not simply a retail trade but a trade consisting wholly or mainly of that retail trade. That is intended to meet the question of what happens if the post office happens to sell a couple of tubes of toothpaste. If it would assist to expand on it I would be prepared to do so. I understand that it would not assist. I beg to move.
Earl FerrersMy Lords, the noble Baroness quite rightly returns to a matter about which we had some discussion at Committee stage. There was doubt as to exactly where the limits lay in a post office which sold other things apart from those items which post offices normally sell. At present the Bill provides that mandatory relief is limited to the sole general store and/or the sole post office in a village. If a second general store opens in the village the special circumstances that merit mandatory relief to the first store no longer apply, and the relief is withdrawn at the end of the financial year.
The amendment moved by the noble Baroness seeks to ensure that a genuine store that sells a range of goods and services should not be denied relief simply because another business in the village begins to stock a few items of food or household goods such as a post office which (as I suggested) sold a few razor blades and some toothpaste or a garage that sold fizzy drinks or potato crisps as well. The noble Baroness is concerned that in this situation the second business would also be considered to be a general store and then no one would get mandatory relief. Instead, her amendment would provide that the business would have to be substantially a general store before the relief ended.
I am bound to tell the noble Baroness that when I first saw her amendment I was attracted by it. Like Little Red Riding Hood I was nearly taken in by it. But then I realised that the wolf was there. I should probably end the simile at that point. If my memory serves me correctly, Little Red Riding Hood proceeded to describe the wolf's big eyes, big teeth and so on. I believe that it would be inappropriate for me to reflect on the noble Baroness in that way. But the fact is that her amendment is unnecessary because the Bill meets her concerns. The Bill defines a general store as,
a trade or business consisting wholly or mainly of the sale by retail of both food for human consumption (excluding confectionary) and general household goods".837 To have simply a few odd items on sale would not in our view be sufficient to constitute a separate trade or business—one that would be separate from the other activities carried on on the premises. To prevent the first general store from qualifying for mandatory relief, the second premises would have to include a distinct business which consisted wholly or mainly of the retailing of food and general household goods. In those circumstances if there were another general store there would be no justification for the mandatory relief scheme to apply because the village would be well provided with the services which both these stores offered.We discussed the practical aspects of implementing these provisions with the local authority associations. They have concluded that guidance may be helpful. We will be talking further to local authorities about the precise points that they would like to see covered in that guidance. I believe that the noble Baroness asked whether "such" equalled "wholly or mainly". The answer is yes.
I hope that I have been able to persuade the noble Baroness that the selling of additional items over and above what, for instance, a post office would normally sell would have to be done on such a scale as would amount to competition with the other store before that other store lost its relief.
§ Baroness HamweeMy Lords, what the noble Earl has said is helpful. I had not intended to be a wolf in sheep's clothing or a wolf in wolf's clothing in moving this amendment. I simply wish to clarify the point. The noble Earl's answer is useful. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Earl FerrersMy Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Local Government and Rating Bill, have consented to place their prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
7.58 p.m.
Then, Standing Order 44 having been suspended (pursuant to Resolution of today's date), Bill read a third time, and passed.
§ Baroness Miller of HendonMy Lords, I beg to move that the House do adjourn during pleasure. I suggest that the House reconvenes at 8.35 p.m.
§ Moved accordingly, and, on Question, Motion agreed to.
§ [The sitting was suspended from 7.59 to 8.35 p.m.]