Sports Clubs: Rate Relief (Hansard, 6 March 2001)

§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)
My Lords, in the Green Paper on Modernising Local Government Finance, the Government consulted on proposals to provide mandatory rate relief to all small businesses and nonprofit-making bodies including small sports clubs in England with rateable values below £8,000. We are currently considering the responses we have received and will publish our conclusions in a White Paper later this year.

§ Lord Phillips of Sudbury
My Lords, I am grateful for the Minister's Answer. Does he accept the statistics of the Central Council of Physical Recreation: that this country has over 110,000 amateur sports clubs with over 5 million members? Does he accept that they are irreplaceable and indispensable institutions in our communities, worthy of as much support as this country can give them, particularly with the decline in school sports, the number of sports clubs and the importance of sports to the nation?

§ Lord Whitty
My Lords, I agree that there needs to be support for these clubs. The rate relief will apply only to those clubs which have premises. Therefore, potentially a much smaller number will benefit from these figures. Nevertheless, a significant number of sports premises would so benefit. We have received a positive response to our consultation paper.

§ Baroness Billingham
My Lords, is the Minister aware that a number of clubs and sporting organisations are apprehensive that the local government finance measures will put them at a disadvantage? We should be aware of that.
Secondly, we inherited a chaotic situation. Is it not time to review the whole procedure and to consider the granting of charitable status for sports clubs which will enable them to claim tax relief and rate relief, and to be better off as a result?

§ Lord Whitty
My Lords, I do not think it follows that some clubs and activities will be worse off. Of the 124 16,000 or so clubs which we think would benefit as regards premises, 11,500 would be under the £8,000 rateable value figure. If more provisions were mandatory, some discretionary funds would be available. The local authorities could enhance their use of discretionary funds. However, these issues will be discussed positively in the light of the responses received from slightly larger and smaller clubs. I believe that we can deal with them more positively.
In relation to charitable status, I suspect that noble Lords will understand if I do not tread too far into the mire of charity law. A number of different considerations apply. In certain circumstances clubs can qualify as carrying out a variety of charitable purposes. The charity commissioners are undertaking a review of the extent to which the promotion of sport is charitable under the law as it stands. Certain criteria have to be met. The outcome of that review needs to be considered before we go further.

§ Lord Monro of Langholm
My Lords, is the Minister aware that many volunteers who do so much for sport are driven to despair by the high increase in local taxation, both commercial and domestic, under the Labour Government? His comment that he is considering mandatory rate relief will be most warmly welcomed by those who do so much for sport in Britain.

§ Lord Whitty
My Lords, I welcome the noble Lord's latter remarks slightly more than his first remark. While there has been an increase in local taxation under all governments, we believe that some degree of preferential treatment should be given to small sporting clubs. That is the issue we are addressing now.

§ Lord Addington
My Lords, the Government have placed considerable emphasis on sporting activity being beneficial for the health of the nation. That has been endorsed by the Department of Health and the Department for Culture, Media and Sport. Does it not make sense to remove all burdens on the providers of sporting activities in our society? We should bear in mind the culture within our society of such organisations owning their own grounds.

§ Lord Whitty
My Lords, it is partly because of that culture, in particular at local level, that rate relief is an appropriate form of help.
However, when one looks more broadly at tax relief or other encouragement, one has to consider the requirements of the sporting organisations against other voluntary organisations. One has to have at least a degree of level playing fields (if I may use that term in this context) in order to have a sensible taxation and rating system. Nevertheless, we hope that our proposals will help specifically the smaller sporting organisations.

§ Lord Tomlinson
My Lords, does my noble friend agree with the estimate made by the Central Council of Physical Recreation that to go to 100 per cent mandatory relief would cost only £35 million and that 125 that would bring great benefit not only to sport, but to the health of the nation, and in particular to those pursuing policies for social inclusion? That £35 million would be a small price to pay for achieving all three objectives.

§ Lord Whitty
My Lords, on the eve of the Budget, I do not want to be quoted as saying that any sum, no matter how small, is a price worth paying for something. There are clearly benefits in encouraging sporting activities. The issue is not so much cost as equity. A number of other organisations pursuing a social inclusion agenda might have equal requirements for relief. We have to consider all the needs and not simply adopt a one-dimensional approach to sporting activities on their own.

§ Baroness Carnegy of Lour
My Lords, did I understand the Minister to say that only non-profit-making clubs would be considered? Does that mean that, if a club has a bar, the proceeds of which bring the club's income above its expenditure, it will not be considered for mandatory rate relief?

§ Lord Whitty
My Lords, the reference is to amateur non-profit-making organisations. Many of us have experience of bars being attached to other facilities that do not make a profit. Were the club to make income from a bar that did not make it a profit-making organisation overall, it would definitely qualify.

§ Lord Weatherill
My Lords, as a member of the parliamentary golfing society, I should like to know whether the regulations will cover golf clubs.

§ Lord Whitty
My Lords, I suspect that there are few golf clubs on which the rateable value is sufficiently low. There may be some and were they to be amateur and non-profit-making, the answer would be yes; but I should not like to raise the noble Lord's expectations.