HL Deb 06 December 2001 vol 629 cc947-9

3.31 p.m.

The Earl of Onslow

My Lords, as a hereditary Peer, may I make hay while the sun shines and ask the Question standing in my name on the Order Paper?

The Question was as follows:

To ask Her Majesty's Government whether their commitment to treat rural businesses affected by foot and mouth disease sympathetically in tax terms is being acted upon adequately.

Lord McIntosh of Haringey

Yes, my Lords, but do not just take my word for it. The Rural Task Force and the noble Lord, Lord Haskins, have both acknowledged the positive and sympathetic approach taken by the revenue departments and reported widespread praise for the way in which they have responded. They have now helped more than 22,500 rural businesses, deferring tax, national insurance contributions and VAT liabilities of more than £190 million. No interest will be payable by the businesses concerned for the period of deferral. The revenue departments are well aware that for some the financial difficulties are not over and they are continuing with the programme.

The Earl of Onslow

My Lords, I thank the Minister for that quite helpful reply. Is he aware that that is not necessarily the view in the countryside, as expressed by the director of the North West Tourist Board? Does not that add to the general confusion of the whole ghastly saga of foot and mouth and make it even more necessary to have a proper full public inquiry rather than bits and pieces, odds and ends and bits and bobs?

Lord McIntosh of Haringey

My Lords, I have read the article in the Sunday Telegraph to which the noble Earl alludes and I have read about the case of a director of the North West Tourist Board. We do not comment on individual cases, but we are making inquiries about those allegations. Our understanding is that the views are those of only a small minority of those who are being satisfactorily helped by the programme. That is the remit of this Question.

Lord Harrison

My Lords, I declare an interest as a former deputy chairman of the North West Tourist Board. Does my noble friend recognise that many rural businesses are small firms, often in the hospitality and tourism industries? What more can be done to help them? Does he believe that they are being treated equally in all respects to those in the agricultural sector?

Lord McIntosh of Haringey

My Lords, I responded to the Question, which was about tax. There is also the Business Recovery Fund, which has provided £74 million in grants through the regional development agencies. There is also the provision of mandatory rate relief, which we are greatly encouraging in rural areas. All those are contributing to the deserving small businesses in rural areas to which the Question refers.

Baroness Miller of Chilthorne Domer

My Lords, does the Minister understand the comments from the UK Competitiveness Index that the rural development agencies are spending too much time on institutional change rather than on the issues in the countryside? Does he agree that they should be pulling together the sort of comprehensive package for small rural businesses that has been developed region by region for farmers whose stock has been culled? Copies are in the Select Committee minutes of the other place. There has been no such package for small businesses.

Lord McIntosh of Haringey

My Lords, I assume that the noble Baroness is talking about regional development agencies rather than rural development agencies. That is the context in which I was referring to the Business Recovery Fund. Clearly there are many tens of thousands or hundreds of thousands of rural businesses, not all of which are in the same plight. We must remember that at one time 140,000 premises had restrictions, whereas now there are only 1,472. The situation is substantially better than it was.

Baroness Sharples

My Lords, the Minister referred to 20,000 rural businesses being helped by the taxation provisions. Can he tell us the total number of rural businesses that have been affected by foot and mouth?

Lord McIntosh of Haringey

No, my Lords. The definition of "rural" is not entirely precise. The 22,500 businesses to which I referred are those that came to the revenue departments and asked for help. There is no way of telling from what pool they came.

The Lord Bishop of Hereford

My Lords, can the Minister give us assurances about clear and consistent criteria that apply to grants from regional development agencies across the country? In particular, are there significant differences from one region to another? Do some RDAs give grants 10 individual businesses while others do so only for businesses that are committed to working in some new and co-operative way? There are signs of some unease that the criteria are not clear and the grants are not being given consistently across the country.

Lord McIntosh of Haringey

My Lords, this is always a difficult issue. The rules are published and are available from local offices and on websites. The scope for poor treatment in certain areas is limited. At the same time, regional development agencies have to have some flexibility when allocating funds. It is not my understanding that flexibility is being applied in an unjust way.