New Clause 2

Clause 1 – in the House of Commons at 8:30 pm on 5th June 1985.

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LIMITATION OF RELIEF

'The total rebate payable will be restricted to a maximum of 10 premises and a total maximum of £50,000 for any one corporate body.'—[Mr. Bruce.]
Brought up, and read the First time.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Energy and Climate Change)

I beg to move, That the clause be read a Second time.

The new clause is an attempt to provide a further targeting element in the Bill. I was taken aback by a phone call two or three weeks ago from a shopkeeper who thinks that the Bill does not prevent large companies with chain stores from receiving substantial benefit. I believe that the measure should concentrate on small businesses and small shop units. I do not want to repeat my argument about the threshold being too low, but the Bill should not enable large amounts to be refunded to relatively large companies.

It is difficult to be specific, but some companies have many branches consisting of small shops such as newsagents and supermarkets which might be able to claim rebate on each of their premises. That could mean that tens of thousands of pounds could go to one enterprise. That would be regrettable if the money was then not available to assist small businesses with only one or two outlets. The measure is designed to try to save businesses which might cease to trade as a direct result of rate increases.

The shopkeeper told me that she operated two shops —one in Aberdeen and the other in York. The shop in York, which is six times larger than the shop in Aberdeen, pays rates of £850 and the much smaller Aberdeen shop, under the new revaluation, will pay rates totalling £1,400. The Bill will give that shopkeeper rate relief, but she will still have to pay substantially more for her shop in Aberdeen than for her larger shop in York.

I appreciate that the Bill is confined to Scotland and that therefore the comparison is not valid, but the point will not be lost on the Minister. Many of the larger groups which trade throughout the United Kingdom might be able to claim substantial rebates.

As the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) said, a major store moving into a town centre is an asset and we must consider that. However, that is a wider problem and might be resolved by the abolition of the rating system. Businesses should not have to pay more rates in Scotland than they pay in England and Wales. That possibility is causing concern and might affect future investment and development in Scotland.

The new clause ensures that no chain store operator receives a substantial rebate. The money saved could be redirected to ensure that the benefit goes to those who need it most. If nothing else, it could be used by the Government to assist small businesses in other ways by reducing the costs of their overheads.

Most hon. Members will have received representations from the National Federation of Small Businesses and Self-Employed which is looking for a £10,000 limit. That is probably too narrow a boundary. It restricts assistance to a maximum of 10 premises and a maximum figure of £50,000. That would ensure that all medium-sized businesses would receive full benefit but that the large businesses which are best able to carry the burden would be restricted to a £50,000 rebate. The Minister says that he does not want to neutralise the effect of revaluation, but that is a different argument.

Photo of Mr Albert McQuarrie Mr Albert McQuarrie , Banff and Buchan

I oppose the new clause because the hon. Member for Gordon (Mr. Bruce) is wrong again. He spoke about chains, but he has forgotten that the chains operate individual shops in different towns. An example is C and J Clark, the retail shoe operator, which has over 100 retail shoe outlets throughout Scotland in the names of Peter Lord, Ravel and K shoes. They are individual businesses employing managers and staff. If they cannot enjoy the benefits that can arise from revaluation they will be penalised. The firm estimates that the increased rate burden for all its Scottish shops will amount to an additional £300,000 this year. It estimates that £75,000 will be returned as a result of my right hon. Friend's scheme announced on 14 May. Without that the firm will have to pay an additional rate poundage throughout Scotland of £225,000 this year. That would be unfair because we are talking about small businesses.

I totally support small businesses. There are two such shoe shops in Aberdeen and three in my consituency and I am sure that there are more in the hon. Gentleman's constituency. If they are forced out of business it will be because they have not enjoyed the advantages of the Government's scheme. I urge hon. Members to reject the new clause. We are talking about small businesses in 100 places in Scotland.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

I shall be brief because for once I agree with the hon. Member for Banff and Buchan (Mr. McQuarrie). I doubt whether the hon. Member for Gordon (Mr. Bruce) has thought about co-operative societies. I am sure that if the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) were here he would not support his hon. Friend because he is a good and active co-operative supporter, and always has been. The new clause could be devastating for some co-operative societies. It is certainly not welcomed by the co-operative movement. The hon. Gentleman should withdraw the motion.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I shall be brief because I recognise that other issues are battering at the door. I have sympathy with the motives behind the new clause. We want help to go to the right people in the right degree, but the hon. Gentleman's case in based upon a fallacy. The hon. Member for Gordon (Mr. Bruce) argued that, if money were saved, it could be given to others.

The Minister has made it painfully clear that that is not an option open to us and that there will be a substantial underspend, and I think that we can now be confident on the scheme.

Considering the real situation in Scotland and some of the figures with which the Retail Consortium has been supplying us, the case is perhaps not as clear-cut as the hon. Member for Gordon may have thought when tabling the amendment. I could think of a large number of complications about firms which have premises in different regions and different districts and the problems that would arise therefrom.

Therefore, although I have sympathy with this, my advice to my hon. Friends is not to support the amendment.

9 pm

Photo of Michael Ancram Michael Ancram Parliamentary Under-Secretary (Scottish Office)

The hon. Member for Glasgow, Garscadden (Mr. Dewar) has made one of the basic points which I intended to make about the amendment—that it would clearly severely complicate the Bill as well as be unfair. In particular, where there are, for instance, different stores belonging to the same company or chain but within different valuation areas, it would create difficulties to ascertain where they were and what their relationship was. I am sure that the hon. Member for Gordon would not wish unnecessarily to complicate the scheme.

The spirit of the amendment has been met, in that we have already announced that we are putting a £10,000 limit on the amount of rebate that can be obtained by any one rateable subject. I believe that that is a necessary safeguard. It was in response to a number of representations that one would find certain subjects qualifying for a lot more than that. We believed that it was necessary to put a safeguard on this. That will be included in the order. On that basis, I hope that the hon. Gentleman will withdraw the amendment.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Energy and Climate Change)

I have listened with interest to the points made. The hon. Member for Banff and Buchan (Mr. McQuarrie) highlighted my concern — that, given our present lack of information, some chain store operators could still take up a substantial amount of the money available. If that were the case and there were an overspend, I think that most hon. Members would appreciate the need to provide some limit.

As to the co-operatives, I accept the point made by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), although I could also argue that many of the co-operatives are organised in groups which would probably leave them outside the limit.

Allowing for that point and reaffirming my concern that £10,000 per premises could add up to a substantial amount for any one company, but because there is a desire to terminate the Committee and because the point has been made and registered, I can only hope that I am not proved wrong and that there are no circumstances in which it will be found that a substantial amount of money has been taken up by rebates to individual companies. Given all our assumptions on the basis of our lack of information that we are discussing amounts of £30 million or £40 million but under £50 million, and in view of the comments that have been made. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Bill reported, without amendment; considered.

Motion made, and Question, That the Bill be now read the Third time, put and agreed to.

Bill accordingly read the Third time, and passed.