I move: "That the Bill be now read a Second Time."
The major purpose of this Bill is to fix in permanent statutory form the most generous scheme of rates relief for average farmers which has obtained since rating began. The impact of its measures, first announced in the budget of last January, will be both timely and direct. First and foremost, the Bill will extend total relief of rates to 94 per cent of all land holdings and partially derate a further 3 per cent. It will complement the other considerable initiatives developed by the Government in support of agriculture by transferring a potential £62 million in tax revenue from the public sector to the free use of farmers. Finally, the Bill will achieve these objectives by way of full subvention from the State and without loss of rates income to local authorities.
Besides the unprecedented scale of the new reliefs, the Bill embodies three other welcome improvements. For the first time in 35 years, the legislation to give effect to the agricultural grant will be expressed in a permanent rather than a temporary set of measures. This departure from the principle of periodic reviews will be welcomed by farmers and will create a more stable framework for forward financial planning by them.
Another innovation of the Bill is its extension of the agricultural grant reliefs to all land in urban areas. This will benefit an additional 9,500 landholders. Lastly, the Bill sees to it that farmers eligible for relief of rates on land will no longer suffer the irritant of having to meet the levy of certain separate charges, such as those for malicious injuries, on their rateable valuations.
The Bill replaces the Rates on Agricultural Land (Relief) Act, 1980, which was due to run until the end of 1982, with two major relief provisions. One, contained in section 8, validates the additional relief granted by the Government in 1980 when the second moiety of rates was waived for farmers in the £40 to £60 valuation category.
The primary, and permanent, form of rates relief given under the Bill is however set out in sections 2 to 4. As in the past, the reliefs will take the form of an allowance to the rated occupier against the amount of the rates which would otherwise be leviable on the valuation of his holding. For the purpose of the reliefs, land holdings may be divided into two categories — those with land valuations under £50 and those with land valuations of £50 or more but under £70.
For holdings under £50 valuation, the allowances provided under the Bill amount to 100 per cent of the gross rates. This means that the holdings concerned will be fully derated from this year on. Previously, full derating applied only to holdings with valuations of up to £20. The extension of the 100 per cent allowances to holdings with valuations between £20 and £50 means that the present Bill is derating an extra 71,250 holdings in county council areas for the first time.
The Bill also provides for allowances against their gross rates for the occupiers of holdings with land valuations between £50 and £70. For these holdings, the relief being given amounts to 50 per cent of the gross rates. This means that the rated occupiers are being relieved of one-half of the total rates which would otherwise be payable on their land valuations. An estimated 13,200 holdings in this category will benefit from this relief.
Under existing legislation, the agricultural grant reliefs applied by and large only to land situated in county council areas. The exclusion of urban areas from the scope of the reliefs, save for certain land newly embraced by boundry extensions, has been the subject of representations for many years now from urban councils, from the Association of Municipal Authorities, and from many farmers involved.
Section 5 of the Bill will bring a long needed remedy to this anomalous situation. From this year on, the agricultural grant reliefs will extend in full to land situated within the boundaries of county boroughs, boroughs and urban districts. This fundamental change means that a further 9,500 landholders will be relieved of all rates. When account is taken of the 71,250 holdings to which I have already referred, the total number being fully derated for the first time under the terms of this Bill comes to 80,750.
Another worth-while improvement, provided by section 6 of the Bill, relates to the basis on which reliefs will be calculated. Up to now, reliefs under the Rates on Agricultural Land (Relief) Acts related to the general rate in the pound only. The rated occupier remained liable for the full amount of any separate charges which might be leviable, such as those arising from malicious injury decrees. Local authorities had a limited power to waive separate charges in certain circumstances but without the benefit of recoupment from the Exchequer. Section 6 of the Bill extends the agricultural grant reliefs to the total rate in the pound, including any separate charges, and the full cost is recoupable from the Exchequer.
The Bill is a relatively simple one, but the benefits which it brings to the farming community are far-reaching and lasting. Seen in a more general context, the Bill is part of a wider Government commitment to implementing fair and progressive reliefs in the burden of rates. This movement towards greater equity in local taxation began when our long-standing commitment to abolish domestic rates was honoured from 1 January 1978. Between the reliefs still obtaining under that initiative and the new reliefs for farmers now being given, nearly one million properties which bore either a full or a substantial rates liability before 1978 now enjoy complete exemption from rates. The total value to ratepayers of the reliefs involved amounts to £183 million in the present year.
The present Bill provides the legislative framework necessary to advance and consolidate this important work. I know that it will be welcomed by Members on all sides and I now commend it to the House.