§ Mr. Laurence RobertsonTo ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on what constitutes agricultural usage when considering the setting of business rates; and if she will make a statement. [66521]
§ Mr. RaynsfordI have been asked to reply.
316WMost agricultural usage is exempt from non-domestic rates under paragraph 1 of schedule 5 to the Local Government Finance Act 1988. The types of agricultural land and buildings covered by this exemption are set out in paragraphs two to eight of that schedule.
In the White Paper "Strong Local Leadership—Quality Public Services" we confirmed our intention to amend the agricultural exemption. First, we intend to ensure that the exemption applies to a range of flexible farming arrangements such as share farming, contract farming and machinery rings, which do not currently qualify for the exemption.
Second, we intend to ensure that the exemption is properly targeted on agricultural activities. Case law has determined that a body corporate can qualify for the agricultural exemption in respect of ancillary activities such as food processing and packaging operations, provided that the corporate body includes a member who occupies agricultural land. The Government are proposing to amend the legislation so that ancillary premises occupied in connection with agricultural land and buildings can become exempt only where the occupiers of the agricultural land have a controlling share in the body corporate that occupies the ancillary premises. A consultation paper on these proposals was published on 31 May 2002.
Provisions for both of these proposed amendments to the agricultural exemption are included in the draft Local Government Bill that was published for consultation purposes on 12 June.