My Lords, I beg to move that this Bill be now read a second time.

This is in essence a Bill about the efficient use of property. It is widely recognised that we live in a time of extreme demand on property, be that commercial or residential, where land is scarce and prices are at a premium, and where the balance between development and the protection of our much valued green space is an increasingly delicate one to strike.

A decade of low interest rates and sustained economic growth has created record levels of demand for land and property, creating high prices that place a burden on the competitiveness of the UK. The efficient use of property is therefore a matter of prime importance. Yet, at the same time, the rating system offers tax reliefs of 50 per cent for empty commercial buildings, and 100 per cent for empty industrial buildings, to lie idle at a cost of £1.3 billion per annum. It cannot be right for owners to continue to be subsidised to keep property empty at the expense of taxpayers elsewhere, at a time when UK office rents are among the highest in the world—routinely 30 per cent higher than our competitors in the EU—and where Manchester, for example, is one of the costliest locations in the world.

That is why my right honourable friend the Chancellor of the Exchequer announced in his Budget Report of 21 March the Government's intention to reform empty property relief, as part of a package of measures to encourage more efficient use of land and property.

The Government's decision to reform follows the recommendations of two independent experts, Kate Barker and Sir Michael Lyons, who in their recent reviews advised that the rating of empty commercial property should reflect today’s social and economic realities. In her review of land use planning, Kate Barker recommended that the Government make better use of fiscal incentives—in particular by reforming empty property relief—to encourage more efficient use of urban land. Sir Michael Lyons examined the case for reform as part of his consideration of how local government should be funded. Having consulted widely with industry, local authorities, planners and regeneration bodies, he too recommended the reform of empty property relief, to help to ensure that developed land is put to its most efficient use, given the impact that economic change and rapid housing growth have had on the value of land and property.

The Government agree that the time is right for reform, which is why we have this Bill. It might be helpful to the House if I spent a few moments clarifying its main components. It is a short but none the less important Bill that seeks to amend the Local Government Finance Act 1988 by increasing the empty property rate from 50 per cent to 100 per cent of the basic occupied business rate, to incentivise owners to reuse, re-let or redevelop their properties. This is to encourage owners to bring their vacant shops, offices and factories back into use and thereby enhance the supply of property and help to reduce rents.

The Bill provides a new zero rate for empty properties owned by charities or community amateur sports clubs, as announced by the Chancellor, as an economic boost to the voluntary and community sector. It provides a new power to reduce the empty property rate from the new level of 100 per cent of the basic occupied rate back to a minimum of 50 per cent of the occupied rate, which will ensure that the Government have the flexibility to adapt the unoccupied rate to reflect the prevailing market conditions. It also introduces a new power to make provision to tackle rate avoidance tactics by disregarding changes to the state of property in circumstances that we shall define by regulations. If, for example, an owner removed a roof from a property, for rating purposes it could be valued as if the roof had not been removed.

Properties will continue to enjoy a three-month rate-free period on becoming empty, or six months for industrial properties. Three months is the period already established in legislation and we do not propose to change it. Barker demonstrated in her report that there is no inherently greater risk of different types of property falling empty, so it is right that there should be convergence in the tax treatment of all forms of property. We are therefore bringing the treatment of industrial property towards that for office and retail property, allowing it a six-month period with no rates. Exemptions from empty property rates are set out in secondary legislation and, although our intention is largely to maintain the details of the current regime wherever we can, and it makes sense to do so, we will consult on any proposed changes to that legislation over the summer, including how the new power to tackle rate avoidance will work.

We recognise that the vast majority of property owners do not deliberately vandalise their properties in an attempt to avoid rates. However, stakeholders have informed us that this may be a temptation to a small minority of owners, which may prove even more alluring given the increased liability for rates proposed by this Bill. This is why the Bill provides a new power to make regulations to deal with any benefits that might flow from such deliberate acts of vandalism.

I believe that noble Lords will see that this legislation is good for business. It will invigorate commercial life by creating better access to commercial property at more reasonable rents and increase our business competitiveness. Indeed, the Federation of Small Businesses pressed the Government to reduce the business rate relief on empty commercial property, precisely to ensure the better use of commercial premises. We believe that by enhancing the supply of properties on the market, these reforms are good news for small businesses. It is important, however, that the measures in this Bill are seen as one component of, and in the context of, a wider package of measures which the Government are introducing to support business and property owners. We have, for example, introduced measures to assist owners in our most economically fragile environments to bring empty property back into use.

The business premises renovation allowance introduced on 11 April this year—a full year ahead of the changes we are proposing through this Bill—is a new 100 per cent capital allowance for the renovation of empty commercial property in our assisted areas. We expect it to better target the needs of these areas to provide quality commercial property that is fit for the 21st century business user, which is one reason why we have already published a forecast yield from reforming empty property rates. Alongside this we have published a consultation on reforms to land remediation relief, proposing that we extend the relief to long-term derelict land to improve economic incentives to bring derelict land back into use. We are also considering the tax treatment of lump-sum payments made by businesses when surrendering onerous leases to see whether current policy results in the retention of premises that would otherwise be released to the market.

I remind the House that local authorities already have discretion to provide hardship relief from empty property rates to respond to the realities of the commercial world by assisting owners facing particular difficulties in re-letting their property. That provision will not change.

The House will see that we are seeking to kick-start and revitalise commercial life across the country, in rural and urban locations, areas of decline and areas of growth. Sir Peter Hall, Professor of Regeneration and Planning at University College, London, has given strong support for these reforms, saying that they will make owners more willing to let units for less than top whack—meaning greater variety in our shopping centres and streets, livening up Clone Town Britain. Sir Peter goes on to say that the effect on empty factories and warehouses could be more dramatic. Owners will be more likely to sell to developers. And, given the weak or non-existent demand for industrial buildings, that will see demolition to make way for residential development, answering the call for a big increase in housing starts—on brownfield, urban sites too. The House will be aware of the progress that we need to make on making land available for housing.

I draw the House’s attention to the support of John Gummer, who is experienced in these matters as a former Secretary of State responsible for business tax, and who last week said in another place that,

“we have been too lax in the past. Given our serious housing problems, we need to ensure that all the buildings we have are properly used, because the alternative is to build yet more in unsuitable places”.—[Official Report, Commons, 14/7/07; col. 908.]

The benefits of this Bill have far-reaching and important consequences for business and our communities. It signals a step change in the use of valuable property. At a time when the scarcity of land and buildings is a well recognised problem, here is a Bill that incentivises us to maximise our existing assets and to harness those assets for the benefit of our economy and wider society. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord Davies of Oldham.)

My Lords, I thank the Minister for setting out the mechanics of the Bill and explaining how the Government have concluded that it has merit. Unfortunately, I cannot agree with him on that. However, before going further I should declare an interest as chairman of a property development company with interests in commercial property. Nevertheless, I trust that noble Lords will accept that what I shall say about this Bill is based not on self-interest but on experience gained over a number of years.

The Lyons report, which has been prayed in aid by the Minister, never argued for the introduction of this measure in isolation. Indeed Sir Michael explicitly said that any change should occur in 2010 and only after extensive consultation. If this Bill is enacted it will come into effect next year, which allows an unreasonably short time for action to be taken by responsible landlords. The main thrust of the argument in the Lyons report for introducing this legislation is to influence commercial rents and capital values. The Lyons report says that,

“the effect across the economy would probably be a fall in future rents that would benefit property occupiers. This might be accompanied by a fall in capital values, which would have no impact on current owner occupiers (assuming that they wanted to continue using the same or more property in the future) and a positive benefit for future purchasers”.

Noble Lords should note the use of the words “probably” and “might”. However, I fear that this is an incorrect summation of what would happen and actually illogical.

In most cases empty buildings are unoccupied not because the rents asked by the landlord are too high—quoting rents are governed by market conditions—but because there is no demand for the type of space in question. Unless market conditions are very strong, such as in London offices at the moment, landlords do not hold out for higher rents, but look to get the building producing income at the market level of rent.

As for Sir Michael Lyons’s dismissive regard for the fall in capital values, I beseech your Lordships to spare a thought for the many millions of people in this country who have at least some exposure to property as an investment class in their pension funds. I am sure that the Government do not wish to strike another blow against pensions, but that is what they will surely do if this Bill is passed.

How many property owners have long-term strategies for leaving buildings empty when they could find tenants or change the use? In my experience, buildings are left empty only due to market conditions or planning policy restricting a change of use.

It is surprising, to say the least, that this Government, who support the twin ideals of sustainability and regeneration, are pressing ahead with this Bill. I regret having to say it, but there is a real risk that it will prompt the decommissioning of very useable buildings.

Apparently, the Federation of Small Businesses supported the measure, which seems to have given the Government the green light to proceed. No mention is made of the fact, however, that the British Property Federation, the British Retail Consortium and the Royal Institution of Chartered Surveyors are all deeply concerned about the effects of this legislation.

I fear that this £1 billion tax grab, for that is what it really is, will slow regeneration, as landlords become less willing to take risks on unestablished locations. I can only hope that the secondary legislation that will follow in the wake of the Bill will address the concerns that I and many others have.

My Lords, the Government give two principal justifications for this measure: first, it will improve, they say, the competitiveness of UK business by leading to a reduction in rates; secondly, it will lead to greater efficiency in the use of land and the existing property stock and, among other things, to speedier redevelopment of already developed land, in line with Kate Barker’s recommendations. A further justification, which is not used by the Government, is that it raises quite a lot of money—almost £1 billion. My comments will deal with these points of substance and then move on to procedure.

The only consequence of the Bill of which the Government can be certain is the increase in revenue—in the short term at least, that will certainly happen—but the extent to which the other professed benefits of the Bill will be realised is much more problematic if it is implemented as proposed.

Let us take the first potential benefit, that businesses will become more competitive because rates will fall. Clearly, the Bill will give property owners an added incentive to let their buildings as quickly as possible, so deals might be done on better terms for the tenant to get them into occupancy more quickly. However, when I worked for a major property developer in the late 1980s and early 1990s, there was always considerable pressure to let property at the earliest possible moment, not just from the developer but also from its agents, who were desperate to see the property let so that they could get their fees. I have seen no evidence, and have no reason to believe, that these motivations have changed, or that owners of non-domestic property in the country are deliberately hoarding it. That flies against any market sense.

If rents fall at all, it will be by only a small amount. In some parts of the country, rents are so low already that there will be no discernible effect. A fall in rents generally, as the noble Earl said, will adversely affect both the income of pension funds and the capital value of their property assets. My noble friend Lord Oakeshott has estimated that the loss of income to pension funds could be £150 million per annum and that the fall in their capital values could be about £3 billion. Any fall in rents, therefore, is by no means an unambiguous benefit.

In terms of efficiency in the use of land and existing property, the benefit will again be small at best. In some areas and types of property, the change could well have a negative impact. It seems prima facie less likely that developers will build speculatively, because the costs of holding an unlet building will be greater. Particularly outside the property hotspots, the likelihood of, for example, business parks or buildings within them being speculatively built seems significantly reduced as a result of this measure. There is clearly a problem also with serviced office and workshop units, where by the very nature of the business and, in particular, the high turnover of tenants, occupancy rates will always be less than 100 per cent, often significantly so. These types of unit are important, particularly for new and small businesses. I fear that the impact of the Bill will be to slow the stream of properties of this kind coming on to the market.

Despite those problems, the legislation is not necessarily fatally flawed, because it could have beneficial effects in the major cities, where rents are high by international standards and where for the foreseeable future demand for space looks set to remain tight. What changes, then, could be made to maximise the benefits, but, just as importantly, minimise the potential costs, of the Bill? The first relates to the proposal to levy the full rates after three months of the property being unoccupied. Three months is too tight. If there are significant levels of dilapidation to deal with, or if the previous tenant has gone bust, it will be simply impossible, even with the best will in the world, to rent the property again within a three-month timetable. We suggest that three months should be extended to six. This is not a concession to the industry, but recognition of the way it works, which is sadly lacking in the Government’s detailed plans to implement the Bill.

Secondly, the Bill, or its implementing legislation, needs to deal with other specific cases where a property owner attempts to use their property, but is unable to do so as a result of official hurdles. A typical example would be where a shop is no longer viable, but the building could be used as an office or fast-food outlet. To qualify for change of use, the owner must demonstrate to the planning authority that, over a substantial period, the shop is not viable. Under the Bill, he could find himself paying full rates on a building that the local authority would not allow him to bring into remunerative use, even though there was another remunerative use into which it could be brought.

Thirdly, the Bill fails to acknowledge the different circumstances in the overheated cities and those parts of the country where demand for property is weak and where there is often an overhang of existing buildings. All the evidence from the industry is that the Bill will make regeneration in areas of low demand more difficult rather than assist it. A typical example of the problems that the Bill will cause was exemplified in a recent letter to Property Week. The author develops business parks in the north-west. He bought a former Ministry of Defence establishment in Carlisle and he has been letting it at the far from palatial rent of £1.50 per square foot. He says that the Bill is,

“likely to lead to the demolition of the older buildings and us not being able to build new. It would put the investment in the site at risk”.

There are a number of ways in which the Government could shape their plans so that they helped rather than hindered regeneration. They could apply them only in those parts of the country where demand for property is buoyant, such as London, the south-east and the other major cities. They could exempt properties with a very low rental value. They could introduce special provisions for business centres, which otherwise stand to be hard hit. They could use the money that they raise to promote regeneration, rather than just losing it in the overall government coffers. I hope that the Minister might be able to say whether any of those ideas will be considered by the Government.

That brings me to the second area that I wish to mention, which relates to the way in which Parliament is able to deal with the Bill. Leaving aside the fact that as a money Bill we can deal with it only at Second Reading, and therefore our debate today is the only chance that we will have to deal with it, all the implementing measures in the Bill will be dealt with in secondary legislation. That means that there will be very limited parliamentary scrutiny and there will be no chance whatever for any amendments to be made, whatever implementing legislation the Government bring forward.

I know that I have become a scratched record on having amendable secondary legislation, but this is a classic case where amendable secondary legislation is necessary if Parliament is to be able to have any sensible impact on the way in which the legislation is developed. At the Committee stage in another place, there was virtually nothing that Members could bring forward as amendments, and when they tried to do so, Ministers basically said, “That is all very interesting, but we are going to deal with this in secondary legislation”. That was the end of it, and they no more than us will have a chance to make a significant contribution to the detailed implementation of this legislation, which will make a very big difference in its overall impact.

We have no objection to the principle of using the rating system to provide an incentive to use property more efficiently and to discourage property owners from having their property lying idle for long periods. However, the way in which the Government plan to implement this measure suggests that it may well not achieve its purpose.

My Lords, it gives me no pleasure to take part in this Second Reading debate. As the noble Lord, Lord Newby, said, the Speaker in another place has certified it as a money Bill, which it is because it raises nearly £1 billion a year in revenue. The effect is that your Lordships’ House may not alter so much as a comma in the Bill. We are allowed just this one outing to record our distaste for the Bill before it receives its formal Third Reading next week.

This Bill is nothing but an additional tax on business. It was the biggest single hit in the corporate sector in the Budget this year. There were other hits, which we shall come to when we debate the Finance Bill in a couple of weeks’ time, but this was the big one. It comes at a time when the corporate world, large and small, is united in its calls to the Government to reduce the taxes on businesses, which have been hit not only by a tidal wave of regulation in the past 10 years but by a corporate tax system which, in plain terms, is harming the UK’s competitiveness. That is not just the opinion of my party; it is also the view of the World Bank.

The Chancellor announced that from next year the headline rate of corporation tax for larger companies is to come down, but that is offset by other changes to capital allowances. He has delivered a body punch to smaller companies with his hike in the smaller companies rate. I very much doubt whether our ranking in tax competitiveness will have improved as a result of those changes; and indeed this Bill may herald a further decline in the UK’s tax competitiveness.

The Government like to say that they are simply implementing the Barker and Lyons reports in their changes to business tax relief for empty properties, and the Minister has said as much today; but that does not stand up to close examination. The Barker review made no specific recommendations, which was very wise because Miss Barker has clearly done no more than scratch the surface of the practical issues that arise in relation to empty property. The Lyons report recommended that changes to empty property relief take place as part of the package of changes to business rates generally, to take effect from 2010, not to be cherry-picked to fill a fiscal hole in 2008. Perhaps the most important bit of Lyons that the Government have spun out of their version is that the report envisaged extensive consultation. The Chancellor simply ignored this need to consult—a feature of his chancellorship with which we have become all too familiar.

The Lyons report and, to an extent, the Barker report seem to rest on an assumption that property owners are wilfully keeping their properties off the market, thus reducing the supply of available business premises and forcing business rents up. There is no evidence that this is a feature of commercial property ownership in the UK, or, at least, no evidence that would support the imposition of this additional tax burden. There is no evidence whatever that property owners and developers keep property empty in order to force up business rents. My noble friend Lord Liverpool shared his considerable experience of the reality of property lettings earlier.

The Government have not explained what drives differences in vacancy rates across the UK. Why has the level of vacancy been gently rising since 1998, to about 9 per cent in 2004-05? Surely it is not because there are more property owners waiting for more prosperous times ahead when they can extract higher rents? It is much more likely that there is simply not enough demand at present. Have the Government any explanation for the vacancy rate in the City of London virtually doubling in that period? Does the Minister think that, with property prices the way they are in the city, some scheming on the part of big landowners is taking place? If so, will he name the companies that are carrying out their business in this way, because I do not believe that they are recognised in the commercial sector?

Let us take the borough of Hackney, which had a vacancy rate starting at 30 per cent in 1998 and six years later was only 2 per cent lower. Do the Government have any evidence that the owners of the remaining 28 per cent are deliberately withholding property from the market, or that it would be let and occupied at lower levels of rent?

Economic theory is very nice: let us use the tax system to force companies to reduce the price at which they are prepared to let their properties, thereby increasing supply. Perhaps there are other factors involved which the Government have not taken account of. Is it the case that there will be tenants willing to occupy the properties at lower rent levels? In rural areas, there can be a complete lack of demand. It is simply not the case that there are long queues of tenants, waiting for rents to drop by a pound per metre or more. If there is some pent-up demand, have the Government considered whether the covenant of such tenants would be good enough to induce property owners to lease their property out? Surely the Government do not expect landlords to take unacceptable tenant risk.

We are not convinced that the Government have even thought about the impact of the Bill on regeneration, especially the regeneration of the most disadvantaged areas. Getting private sector developers involved can be hard enough, but if they then have to face not only the economic risk of letting their developments, but a fiscal penalty for not doing so, it is quite likely that some will think again. That will mean a delay in economic regeneration, as well as an increased dependency on public-sector providers of regeneration capital, which we do not believe to be a healthy way to pursue the regeneration of our disadvantaged areas.

Similarly, farmers have been encouraged to diversify and to make their buildings available for alternative use. Have the Government thought about the impact that this Bill will have on their willingness to run the risk of a rates penalty if they cannot fully let their properties? This is not a fanciful proposition; such farmers often have problems in achieving full letting of properties that have been taken out of agricultural use and renovated for alternative industrial or commercial purposes.

The Government have not taken the trouble to work out how property development takes place. It can involve the assembly of several sites, which generally have to be left vacant during the assembly period. The planning process can then add extra delays. These are not properties that can find a ready use pending redevelopment. The extra costs that this Bill will impose may well alter the economics of the development adversely. Does that help the renewal of business premises in the UK?

We have received representations from the Royal Institution of Chartered Surveyors that the business-centre sector, referred to by the noble Lord, Lord Newby, which provides flexible accommodation, especially for small and medium-sized businesses, will be hard hit. This sector expects a relatively high churn rate and does not expect to operate at 100 per cent occupancy. This new tax is expected to penalise existing centres and to deter new development. How will that help the business sector in the UK?

There will be other effects, which I will generously call unintended consequences on the ground that the Government may simply not have worked out what will happen. In particular, the Government have been promoting more flexible lease terms, which will help all businesses to rent property. If the risk of a property vacancy will now carry a tax hit on top of a potential void income period, why on Earth would landlords want to make it any easier for tenants to move on? Indeed, why would landlords ever be prepared to negotiate surrenders in difficult market conditions?

We do not welcome the Bill and we regret the fact that the Chancellor has chosen to resort to this measure to fill the black hole in the nation’s finances.

My Lords, I am grateful to noble Lords who participated in this debate and accept the ritual complaint that the House has limited opportunities to debate the Bill because it has been defined as a money Bill. That settlement goes back over many decades. I imagine, although I have not had the benefit of being in opposition in this House—nor am I likely to, I might add—that that cry has been emitted by members of all parties on the Opposition Benches from time to time. I recognise the frustration of articulate and well informed Peers in this House in this regard. Nevertheless, the noble Baroness would not expect me to advocate a constitutional revolution of that nature at this stage, even if she thought that she had the persuasive powers to tell me that it would be advantageous for the upper House to have greater powers with regard to finance and Treasury matters. I could not be persuaded on that.

This is a short but important Bill. I hear the argument that it represents a tax grab. Of course it brings revenue to the Treasury. As the noble Baroness and the noble Lord, Lord Newby, recognised, it will bring revenue of £1 billion to the Treasury. Its purpose is to free up land. The noble Baroness gave me a small insight into economics and suggested that I should accept that there is no indication that a fall in the cost of renting buildings would be of any benefit to the potential person paying the rent. That is an interesting economic proposition. I should have thought that we would be safer following the general perspective established as long ago as Adam Smith on these issues. She should recognise that in this attempt to get costs down, we will seek improvement in the use of property that is already available.

My Lords, the Minister may have misunderstood my argument. I said that there was no evidence that if rents came down, there would be pent-up demand. I also indicated that if rents came down, only tenants who were waiting for property at that rate might have a poor tenant covenant, which would raise its own problems.

My Lords, those issues are of course a danger; the markets are far from perfect, as we on this side are more prone to argue than are the noble Baroness and her supporters. However, the Government’s case is that, in general, economic advantages derive from our attempts to ensure that our land and property are more effectively used. I have some pretty weighty evidence behind my argument.

The noble Earl, Lord Liverpool, was very critical of Sir Michael Lyons’s report and the noble Baroness and the noble Lord, Lord Newby, said that the Kate Barker report left something to be desired. Such reports are always open to criticism. We recognise that when reports of that weight and significance are put forward, there are points at which challenges can be adumbrated. Nevertheless, these two reports are very important. Both come to the conclusion that we could use our existing resources more effectively than at present. The purpose of the Bill is to achieve that.

I heard what the noble Earl, Lord Liverpool, said about damage to pension funds. Of course, I recognise the limited point that he makes, but he will recognise the far more significant point that the health of pension funds, the development of equity and the whole question of returns to investors depend a great deal more on the success of the broader economy. If this measure plays its part in improving the position of the broader economy, such pension funds will benefit from it.

I emphasise that the Bill was introduced in a Budget that reduced corporation tax by 2 per cent. I noticed that the noble Baroness was extremely dismissive about that—about as dismissive as anyone would be who had a carefully selected fox to run and became upset when someone else shot it. I believe that that was the position of the opposition Benches on corporation tax.

My Lords, I am grateful to the Minister for giving way. I want to pick up on his point about pension funds. Although I mentioned it, it was mentioned in far greater detail by the noble Lord, Lord Newby, who cited a figure that absolutely staggered me; namely, that property values within pension funds are likely to reduce by £64 billion. I would like to refer to Hansard tomorrow on that but—

My Lords, £3 billion.

My Lords, not quite as much as £64 billion, but a significant amount.

My Lords, I recognise that the noble Lord, Lord Newby, never speaks without consideration and careful analysis. However, it does not detract from my point that in this Bill we are seeking a broader span of measures to guarantee the expansion of the economy in such a way that these potential costs on pension funds become limited against the obvious advantage that the funds would develop from a rapidly expanding and growing economy.

The noble Earl introduced the issue of secondary legislation, and the noble Lord, Lord Newby, dwelt on it, too. I, of course, accept the limitations on secondary legislation. The Liberal Democrats can sustain their arguments until they are blue in the face about the desirability of being able to amend secondary legislation. However, I cannot imagine that anyone who is serious about government will concede that point; we will not. I have not seen the slightest indication that, if the faint hopes of the Opposition of occupying these Benches were ever realised, they would think that secondary legislation should follow the pattern that the Liberal Democrats put forward. Nevertheless, I respect the point that secondary legislation should be considered legislation. That is why we have clearly indicated our intention to consult on the way in which we deal with these issues. There is no question of rushing our fences on those points.

The noble Lord is right that secondary legislation cannot be amended. However, it certainly could be subject to scrutiny and criticism, as indeed it is in the other place; from time to time, it has not been unknown for it to be subject to fairly intensive scrutiny here. If the noble Lord wants me to do so, I will enumerate the list of occasions on which his party has rather departed from past conventions and voted against secondary legislation. We will have that argument in due course. I do not think he can pray it in aid now and say that somehow because this legislation adumbrates general propositions—which of course it does under the secondary legislation to deal with the detail—the way in which the Government are tackling matters is unfair and improper.

The noble Lord also suggested that the increase in revenue was certain but that the impact on the supply of property was a good deal less certain. We contend that this measure will have beneficial effects on the property market, on competitiveness and on the environment. It will be a stimulus towards ensuring that property does not stand empty and idle. I would have thought he would recognise the advantages derived from that framework.

The noble Earl, Lord Liverpool, challenged the Government on sustainability. If we are able to make more extensive use of existing property, the demand on the other land necessary for social purposes ought to be eased. I do not under-estimate the pressures of that demand. We recognise the pressures upon our land. An expanding economy and the amount of business premises it requires, and the housing crisis, lay heavy burdens potentially on the land which is available and present real challenges not only to brownfield sites but to protected greenbelt land as well. The thrust behind the Bill is to reduce elements of that pressure by using more effectively the assets that are available but not fully in use at present. I hope the Government will not be criticised for the lack of a sustainable position but commended for the fact that this measure fits well within the general perspective.

My Lords, I am sorry to interrupt again and I am grateful to the noble Lord for giving way. He mentioned the question of—I am sorry; he was rather a long time in giving way and when I came to interrupt him I had forgotten what it was that he was saying. I withdraw and apologise.

My Lords, if I continue the argument I might provoke the noble Earl into recalling what he wanted to challenge me on. I would be very loath to miss a challenge because I had not seen that he had risen to his feet. I apologise to him for that.

The noble Lord, Lord Newby, should also recognise that we are concerned to change the planning position. We have publicised a planning paper which streamlines and simplifies the planning system. Again, I recognise that there are criticisms of the planning paper which have been well articulated. However, when the noble Lord says that part of this issue ought to be addressed by a fresh look at planning, that is exactly what the Government think and why we have put the planning paper into the public domain. He will surely again recognise the Government’s virtues in this area.

The noble Lord also said that he thought the Bill would make regeneration in areas of low demand more difficult. Sir Peter Hall, the professor of planning and regeneration, said that he thought the Bill would help to revitalise town centres—I mentioned that in my opening contribution—and that it would bring forward opportunities for development of urban brownfield land, and the non-business premises renovation allowance is providing extra support to owners of empty properties in deprived areas. We are concerned. The noble Lord is right to raise the issue, but I had sought to assuage his anxieties on that account in my opening contribution, when I indicated that I had support for the fact that the Bill will also bring benefit to areas that he rightly identified deserve proper and special consideration.

The noble Baroness, Lady Noakes, also emphasised that certain aspects in regard to property are difficult for the farming community. I understand the point she makes. Of course, we are concerned to make special provisions in regard to difficulties experienced by farmers. She will recognise that in a Bill of this kind, the broad, general terms and the principles need to be established. Rural land, agricultural land and property provide no great difference from the urban scene. If we suggested for one moment that farmers have particular difficulties in reletting property, the noble Lord, Lord Newby, would be the first to say that that is as nothing compared with areas of inner-city decline where properties can be quite difficult to let. The Government need principles that obtain across the board. Within the framework of secondary legislation, we shall address ourselves to certain aspects of these matters.

My Lords, the Minister said that he has accepted that there are difficulties for farmers in letting their land because of a lack of demand. The same is true of some inner-city areas. Can he explain how the Bill will help with properties that are not let at the moment because of insufficient demand?

My Lords, in the short term, it cannot help where there is insufficient demand. The noble Baroness will recognise that the market will operate in those terms. If we are successful—we will be successful—with the Bill in terms of the development of the economy, she will recognise that that very expansion in the economy will be the surest guarantee that we will have of an expansion of demand. Of course, she will be all too well aware of the fact that areas of decline suffer the greatest difficulties whenever the broader economy is in decline. Their greatest succour and support is likely to come from an economy that burgeons into success. On property, we have a constraint, which we all recognise now, which the Bill sets out to address.

The noble Baroness can identify the limitations of the Bill in this respect. It is a modest little Bill. I am not putting forward the full budgetary provision of 2007 in this Bill, although it is an important part of the 2007 budget. The budget, taken in the round, and the issues of the management of the economy are much broader than this Bill, but it tackles one area on which it is important to make progress for the development of the economy. On that basis, I commend the Bill to the House.

On Question, Bill read a second time; Committee negatived.

House adjourned at 8.49 pm.