HL Deb 24 July 2001 vol 626 cc216-8WA
Earl Peel

asked Her Majesty's Government:

When they will bring forward the necessary commencement orders in order to bring the provisions of the Rating (Former Agricultural Premises and Rural Shops) Act 2001 into force. [HL535]

Lord Falconer of Thoroton

The Rating (Former Agricultural Premises and Rural Shops) Act 2001 (Commencement No. 1) Order 2001 was signed on 16 July. All the provisions of the 2001 Act will come into effect on 15 August 2001. Commencement of the Act in Wales is a matter for the National Assembly for Wales.

Earl Peel

asked Her Majesty's Government:

What they are doing to promote awareness of the provisions of the Rating (Former Agricultural Premises and Rural Shops) Act 2001 among those whom it is intended to benefit; and whether they will monitor the take-up rate in rural areas. [HL536]

Lord Falconer of Thoroton

Local authorities will initially be responsible for bringing the new farm diversification relief and the extension of village shop rate relief to food shops to the attention of potential recipients. Department officials have already written to local authorities informing them that the Act will be commenced in England on 15 August. They have also written to the National Farmers Union and the Country Land and Business Association which will no doubt bring the Act to the attention of their members. In addition we intend to issue a more detailed press statement about the new reliefs on the day the Act is commenced.

Earl Peel

asked Her Majesty's Government:

What percentage of agricultural businesses and rural shops they estimate will benefit from the new provision of rate relief under the Rating (Former Agricultural Premises and Rural Shops) Act 2001; and what percentage will be unable to benefit, as a result of the limitation of a rateable value of £6,000. [HL537]

Lord Falconer of Thoroton

The number of businesses receiving the new farm diversification relief will depend on how many such businesses are established. There are no precise figures available on the number of businesses that will or will not benefit from the new farm diversification relief, because it is not known how many new enterprises will in future be established and how many of those will be below the qualifying rateable threshold of £6,000. We have estimated that between 5 per cent and 30 per cent of farms in England may establish businesses that are eligible for the new relief, but the eventual figure will depend on demand.

It is also difficult to give precise figures on the number of businesses benefiting from the extension of village shop rate relief to food shops, as they are not currently separately identified in the rating system. However, it is estimated that there are about 3,000 food shops in small rural parishes. We would expect most of these to have rateable values of less than £6,000.

Earl Peel

asked Her Majesty's Government:

In view of the recent Green Paper on local government finance, which uses a rateable value of £8,000 to determine a small business, whether they consider the rateable value limitation of £6,000, under the Rating (Former Agricultural Premises and Rural Shops) Act 2001, to be adequate, especially in the light of the differences that exist between regions. [HL538]

Lord Falconer of Thoroton

the Green PaperModernising Local Government Finance last year proposed a tapered scheme of rate relief, which was targeted on small businesses with rateable values up to £6,000. It proposed that relief would be 50 per cent for properties with rateable values up to £3,000, reducing at higher rateable values to 20 per cent at £6,000 rateable value. This covers a very large number of properties. To avoid any unfairness to businesses just above the £6,000 threshold, it is proposed to provide a small amount of relief to slightly larger properties, continuing to taper from 20 per cent relief at £6,000 rateable value to 0 per cent relief at £8,000 rateable value. The £8,000 threshold is therefore the point at which businesses cease to receive any relief and above which they instead contribute to the costs of the scheme.

The two new rate reliefs under the 2001 Act are completely different. All qualifying businesses will receive 50 per cent rate relief, up to £6,000 rateable value, with the possibility of the local authority increasing this to 100 per cent if they feel there is a need. It is therefore more generous than the one outlined in the Green Paper for all small businesses.

Farm diversification relief is specifically designed for small non-agricultural business on farms. Information obtained from the Valuation Office Agency indicates that the vast majority of small enterprises that are typically established on farms have rateable values of less than £6,000 in all parts of England. Information also suggests that most village food shops fall below this threshold.

Earl Peel

asked Her Majesty's Government:

What additional resources will be made available to poorer local authorities to offset the additional costs of the Rating (Former Agricultural Premises and Rural Shops) Act 2001 so as to ensure that the discretionary relief can be applied equally across the country by all local authorities. [HL539]

Lord Falconer of Thoroton

The Exchequer will meet 75 per cent of the cost of any discretionary relief granted under the provisions of the 2001 Act. This is the same as any other discretionary rate relief available to ratepayers. The requirement on local authorities to meet 25 per cent of the cost of granting discretionary relief does not appear to affect their granting if they feel there is a need to. Indeed experience with the existing village shop rate relief scheme would suggest that a substantial number of businesses receiving 50 per cent mandatory relief have had this topped up with discretionary relief by local authorities.