Rating (Empty Properties) Bill

I am grateful, Mr. Deputy Speaker. The proposal is a stealth tax because the people who vote through the ballot box are not directly paying it. It is being borne by businesses, and often by businesses in difficult circumstances; otherwise, they would not have an empty property. It is therefore not surprising to me that local authorities are likely to vote yes to a measure that will not have a direct impact on them. Secondly, any local authority asked whether it would like more funds to be raised locally other than through council tax is likely to support that. In the context of the Lyons review, which considered the balance of funding, anything that encourages funding by any means other than the council tax will be attractive to local authorities, especially if there is some prospect of the Government passing it back to them in increased grant. Therefore, I do not take much comfort from the responses by local authorities. I hope that the Minister will tell us how many applications for local business tax he has had from local authorities who would voluntarily increase tax on business. If local authorities had to make the decisions themselves, I suspect that they would react differently. Thirdly, the Financial Secretary touched on the vacancy rate analysis and highlighted the high rates in cities. He described it as applying equally in areas of high and low demand, citing Manchester and Birmingham as areas of relatively low demand compared with London. The answer is to offer a differential response, not the same response, to both kinds of problem. I touched on the importance of the rate to speculative developers—the relative lack of impact that it will have on those undertaking speculative development of properties that are sitting idle—because it is in the developer’s interest to wait for the market to improve to match their rental expectation. Generally speaking, the developer can afford to do that. It is different for vacant industrial property in our industrial heartlands, where the owner is in a position to accept an occupier at any rental better than zero, because that is in their commercial interest. I would argue that the impact will fall elsewhere and the law of unintended consequences will apply. Those in more marginal areas, especially tenants, will find higher vacancy rates as a result of the Bill. The consultation that the Government will undertake is welcome, but why will it take place after the Bill is enacted? Surely the exemptions to the proposal are just as important to many of the sectors that I have touched on as the Bill itself. I suspect that the answer is that the Chancellor is desperate for the money and needs to have this in place as soon as possible. Rural diversification was mentioned by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) and my hon. Friend the Member for Bromley and Chislehurst. I was pleased to learn that there are agricultural endeavours in Bromley. The implicit assumption in the Bill is that vacant premises are deliberately left vacant. I assure the Minister that in rural areas it is not the case that properties are deliberately left vacant; it is generally the case that there is either a difficulty in finding new occupants or it takes time—as we heard in a strong contribution by the hon. Member for Inverness, Nairn, Badenoch and Strathspey—to secure a change of use for planning purposes, if that is what is required to turn a redundant building into something else. That is a particular problem in rural areas, where planning policies tend to be more restrictive. Fewer businesses tend to seek premises, with the result that premises can stay idle for longer. Therefore, I urge the Minister for Local Government to consult his colleagues in DEFRA when he considers the impact of the Bill on farmers seeking to diversify into activities that are not purely agricultural. The problem posed by different types of property in different areas could be solved by the use of local solutions. I know from previous encounters that the Minister regards himself as a localiser who wants local solutions to problems. I believe that local authorities should be given discretion to implement the proposals as they choose. They are best placed to decide whether businesses in their areas should be allowed to take advantage of exemptions that apply in some places but not in others. In that connection, I cannot resist reminding the Minister about another matter under discussion at the moment. If Shropshire were to go down the unfortunate unitary authority route, people in the most rural parts of the county that I represent—that is, in south Shropshire and Bridgnorth—would be very upset to be told that they must adopt a proposal coming from the unitary authority based in Shrewsbury. That is because the effect of any such proposal in rural areas would be very different from the effect that it would have in Shrewsbury. I turn now to the detail of the Bill, and in particular to two provisions in clause 2. I welcome the proposed exemption for charities, but want to echo one note of caution expressed by the hon. Member for Inverness, Nairn, Badenoch and Strathspey. That is that the presence of too many charity shops in a high street tends to deter a proper and balanced retail mix. Charity shops are an indicator of a decline in footfall and customer traffic; they are often established in premises that are otherwise vacant and other activity can be deterred when there are too many of them. I welcome what the Minister wants to do, but point out that it is not all good news, all of the time. My absolutely final point has to do with the welcome exemption proposed for community amateur sports clubs. Many sports clubs in my constituency, and I am sure elsewhere, benefit from the Finance Act 2002 provisions giving them a zero value added tax rating, but I hope that the proposed exemption will be applied only rarely. I am pleased to say that the Olympian movement has its origins in Much Wenlock in my constituency, and that the approach of the 2012 games in London means that interest in sport is rising across the country. I hope that no amateur sports groups find that they have empty premises, and so I hope that the proposed exemption is merely a goodwill gesture that is not likely to be used. Has the Minister considered extending the proposed relief to other, similar organisations? The hon. Member for Inverness, Nairn, Badenoch and Strathspey referred to community-owned properties. In my constituency, there are many village halls and other community properties. If, for some appalling reason, they had to become vacant, they would find it very difficult to fund the business rates—not least because, often, they are owned not by the parish council but by a village hall committee. Such committees are a community enterprise of one form or another and have no funding. As a result, their inability to pay the rating bill would be likely to lead to the demolition of premises.