Clause 3 - Rate relief for rural food shops

Rating (Agricultural Premises and Rural Shops) Bill – in a Public Bill Committee at 12:15 pm on 8th May 2001.

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Photo of Damian Green Damian Green Shadow Spokesperson (Environment, Food and Rural Affairs) 12:15 pm, 8th May 2001

I beg to move amendment No. 14, in page 3, line 7, leave out `mainly' and insert `in part'.

Photo of Joe Benton Joe Benton Labour, Bootle

With this it will be convenient to take the following amendments: No. 3, in page 3, line 8, leave out from `consumption' to `is' in line 9.

No. 4, in page 3, line 8, after first `excluding', insert

`a trade or business consisting wholly or mainly of the sale by retail of'.

No. 5, in page 3, line 8, after second `excluding', insert

`a trade or business consisting wholly or mainly of'.

No. 15, in page 3, line 13, leave out from `supplied' to end of line 20.

Photo of Damian Green Damian Green Shadow Spokesperson (Environment, Food and Rural Affairs)

I shall confine my remarks to amendments Nos. 14 and 15, which are tabled in my name and that of my hon. Friend the Member for North Wiltshire. The two amendments are another attempt to make the Bill more generous so that it achieves its purposes better and is much less fiddly.

Amendment No. 14 is designed to help shops that have diversified or, those that have been set up such that food does not provide more than 50 per cent. of turnover—which I assume would be the definition of ``mainly'' food shops—which is the current usage and terminology of the clause as drafted. That would provide welcome flexibility. None of us can anticipate fully which way the retailing sector in villages will go in years to come, so applying a rigid rule about the desirable type of food shop that will be entitled to relief under the Bill, and especially to specify that in the Bill, may prove unnecessarily restrictive.

Amendment No. 15 is intended to cope with what will become the great microwave problem. A shop that is essentially or even wholly a food shop but which contains a microwave oven in which people can heat up a meat pie and take it away will lose relief under the Bill. That restriction is pointless—indeed, it is ingenious in the pursuit of pointlessness, like too much legislation. It does not alter the essential character of a shop to offer such a service, and I fail to understand why the Government insist on that petty and impractical restriction, not least because the effect might conceivably be that an existing service is withdrawn and, at the small margins, the quality of life for some people is reduced, or a service that would have been introduced is not. That seems perverse.

The purpose of the two amendments is to make the Bill more generous and less fiddly. I hope that the Government will accept both amendments.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

I have tabled three amendments in this group. One would widen the Bill's scope and the other would clarify the position that Ministers outlined in their responses on Second Reading to ensure that there is no ambiguity in the wording of the Bill.

Amendment No. 3 would widen the Bill's scope by removing the words in parentheses in subsection (6CA). It would remove the exclusion of shops that supply confectionery and provide food in the course of catering. It is similar to the amendment tabled by the hon. Member for Ashford and is designed to explore the Government's contention that the scope of the clause should be narrower.

Confectionery is not defined in the Bill. Is it defined in existing statute? We have a definition for the supply of food in the course of catering, but we do not know what constitutes confectionery.

Photo of Damian Green Damian Green Shadow Spokesperson (Environment, Food and Rural Affairs)

I am merely attempting to make concrete the problem of the definition of confectionery. I have adduced the microwave problem, and the hon. Gentleman has now introduced into the debate the Jaffa cake problem. It is a serious problem, and I hope that the Minister can clear it up.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

I agree that Jaffa cakes are a significant problem. Are cake shops included? The country must be told, and I hope that the Minister will help us to do so. If he is not clear about the definitions, it might be better to support an amendment that eliminates the exclusion.

Amendment No. 4 deals with an ambiguity in the provision. [Interruption.] Although the Minister will assert that it does not exist, many hon. Members think that it does, including Labour hon. Members. [Interruption.]

Photo of Joe Benton Joe Benton Labour, Bootle

Order. It is difficult to hear the hon. Gentleman, as several conversations are being held in the Committee. If hon. Members must converse, they should do so sotto voce.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

Thank you, Mr. Benton.

On Second Reading, there was some confusion about the provision. My amendment also addresses the great issue of microwaves—and also, possibly, that of Jaffa cakes—by seeking to make it clear that a business that covers the excluded areas in its trading will not be disqualified from the rate relief that would otherwise be granted.

At present, the provision is ambiguously phrased. Although it could be construed as Ministers wish, it could also be construed differently. If the words that I have suggested were added, there would be no doubt that only those companies that deal exclusively with confectionery—whatever that may be—or with catering, which is defined, would be excluded from the provisions of the Bill, and that, with regard to the general food store, including those retail enterprises within the main business would not be a disqualifying factor.

That is a sufficient explanation of the purpose of my amendments. I am also happy to support the amendments of the hon. Member for Ashford, as an unholy coalition has developed this morning, although I suspect that it will be short-lived.

Photo of Bob Ainsworth Bob Ainsworth Parliamentary Under-Secretary (Department for Environment, Transport and the Regions)

The five amendments concern the extension of mandatory rate relief to all village food shops. Amendment No. 14 changes the overall definition of a food shop. Amendments Nos. 3, 4, 5 and 15 concern the exclusion of confectionery and catering from the definition of a food shop.

Amendment No. 14 would extend mandatory relief to any village shop that sold food as only a small part of its business. The clause would allow relief for any small business shop whose business is mainly—meaning more than half—the selling of food.

The hon. Member for Ashford represents the bright end of the Tory rainbow in the Committee, but the issue of the microwave on the side does not apply. That ensures that relief is given to shops that provide food to their local rural community. The amendment would allow any small shop in a village to exploit a loophole by selling a small amount of food: for example, an antique shop could become eligible for rate relief by selling the occasional can of beans.

Amendment No. 3 would delete from the definition of food shops the exclusion of confectionary and catering, allowing sweet shops, tea rooms, restaurants and takeaways to get mandatory rate money. The purpose of the relief is to ensure that isolated rural villages maintain the presence of services essential to the local community. Although businesses such as those referred to may bring economic benefits to a village, they do not provide essential community services such as the provision of basic food stuffs.

Hon. Members have asked me whether a legal definition of confectionary exists. There is no such definition in law, but in 1968 there was a court case on purchase tax in which it was held not to include baked food. In that case, confectionary was described as any form of food normally eaten with the fingers and made by a cooking process other than baking, and which contains a substantial sweetening matter. I do not know whether that helps the Committee. The exclusion of confectionary was not included in the original legislation and has so far not presented a problem of interpretation for local authority officers.

I am a great supporter of businesses such as we are discussing. As hon. Members can probably see, I am a great supporter of the local chip shop, and it is not unknown for me to enter a confectionary premises or even, on the odd occasion, a restaurant. However, the legislation is not intended to provide a tax break for such businesses; it is supposed to assist shops providing essential services in small rural communities.

Amendment No. 15 would, similarly, extend mandatory rate relief to takeaway food shops, although sweet shops, tea rooms and restaurants whose main business was serving food on the premises would remain excluded from that relief.

The hon. Member for Somerton and Frome will be disappointed to hear that amendments Nos. 4 and 5 would make no practical difference to the effect of the Bill. Shops that are mainly food shops but have a subsidiary activity in the provision of confectionary or catering would qualify for mandatory relief under the Bill. There is no need to specify that the exclusion applies only to premises whose businesses are wholly or mainly involved in confectionary or catering, because that is already implicit in the requirement that the business is wholly or mainly for the sale of food, which allows any other activity in the smaller part of the business. Therefore, the clause allows for relief to the Jaffa cake syndrome or the microwave option. If the main business is the provision of food to a rural community, the business will be eligible for relief.

To accept the amendments tabled by the hon. Member for Ashford would change the legislation, allowing for non-food premises selling the odd item of food to apply for relief. That is not the purpose of our proposals, so I ask the hon. Gentleman to withdraw the amendment.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs) 12:30 pm, 8th May 2001

Before the hon. Member for Ashford gets to his feet, I should say that I expected the Minister to dismiss amendments Nos. 4 and 5. The difficulty lies simply in the wording—the issue is a semantic one of whether ``excluding'' qualifies the

``business consisting wholly or mainly'' of ``food for human consumption''. An exclusion normally refers to the immediately preceding item in the sentence, but not in this case. That is where the ambiguity lies, but I do not intend to press my amendments to a Division at this stage. I ask the Minister to reconsider the wording, to ensure that no ambiguities are present that could be misused.

Photo of Damian Green Damian Green Shadow Spokesperson (Environment, Food and Rural Affairs)

I merely observe that the Government seem to have it in for antique shops. Every time Ministers search for a definition of an evil business of the sort that they do not want to help—as the Minister did on Second Reading, and as the Under-Secretary has just done—they think of antique shops. I shall be drawing that fact to the attention of such shops during the next few weeks. I hope that the Government get what they deserve from that section of the community as well as from the many others who are looking forward to the election.

The serious point is that the Government seem to have a slightly old-fashioned view of the village store. As the Minister explained, they are seeking to close loopholes that allow shops to do other things, such as selling food on the side, as a way of gaining rate relief. Welcome though such relief may be, it is a relatively minor improvement to the viability of such businesses. The number of village retail outlets of all kinds has contracted over the years. It is therefore important that the various kinds of village shop should not be defined in legislation. The shops that survive will be much more wide ranging, but the Bill is marching in the wrong direction. The Government seem to want to segment village shops—some being virtuous and others, such as antique shops, not being virtuous—by saying that only certain shops will be acceptable.

Photo of Bob Ainsworth Bob Ainsworth Parliamentary Under-Secretary (Department for Environment, Transport and the Regions)

The hon. Gentleman accuses us unfairly of being down on antique shops. He will know that local authorities are free to give discretionary relief to small businesses which they believe are beneficial to the local community. The Bill simply attempts to underpin the viability of basic food stores in small villages.

Photo of Damian Green Damian Green Shadow Spokesperson (Environment, Food and Rural Affairs)

Increasingly, the Bill will not do that. It is a wider issue. The village retail outlets that will survive will have to be more varied, and the more pressure they are under the more varied they will have to become. The problem with the restrictions imposed under the Bill is that they face backwards, not forwards.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

The hon. Gentleman is absolutely right. It is the Government's declared intention greatly to increase the amount of business done in village stores on the internet. That is one way in which they can maintain their profitability and viability, but at what point does business in hyperspace become ``wholly or mainly'' part of that business?

Photo of Damian Green Damian Green Shadow Spokesperson (Environment, Food and Rural Affairs)

From a sedentary position, the Minister says that it is when it becomes an essential service. Under the Bill, however, if it is an essential service other than a food retailer, it will lose the relief. The Minister has shot herself in the foot. The Government are being unnecessarily petty in seeking to close loopholes; in deciding what village shops will have to do to survive, they are opposing the march of progress.

We have aired an important matter. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

Clauses 4 and 5 ordered to stand part of the Bill.