Non-Domestic Rating (Lists) (No. 2) Bill

3rd reading
Tuesday 9th March 2021 Lords Chamber

Third Reading

13:55

Motion

Moved by

[Lord Greenhalgh]

That the Bill do now pass.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, in moving this Motion, I express my thanks to noble Lords for their helpful insights and support throughout the proceedings. I especially thank the noble Baronesses, Lady Pinnock, Lady Bakewell and Lady Thornhill, and the noble Lords, Lord Kennedy, Lord Addington, Lord Shipley, Lord Stunell, Lord Moynihan, Lord Bourne and Lord Thurlow. I also thank the Local Government Association and the Valuation Office Agency for engaging with my officials during the passage of the Bill and, indeed, even before it was introduced in the other place.

Every revaluation requires the co-operation of all stakeholders involved in business rates. I thank the Rating Surveyors’ Association, the Royal Institution of Chartered Surveyors and the Institute of Revenues, Rating and Valuation. Their expertise and support have been, and will continue to be, a central part of the revaluation process. Finally, I thank my department’s Bill team—Nick Cooper, Rhys Tomlinson, Nick Pellegrini, Tom Adams and Lee Davies, as well as Sam Loxton in my own private office—for their support throughout this process. I beg to move.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

The Question is that this Bill do now pass. As many as are of that opinion shall say “content”.

I am sorry—I am being too quick this time. I call the noble Lord, Lord Kennedy.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I thank the noble Lord, Lord Greenhalgh, for his engagement on the Bill. As always, he was very generous with his time and I have enjoyed working with him. Also, through him, I thank all the officials in his department. Again, they were generous with their time and open in engaging with me.

This is a very small, one-clause Bill, but it raises very important issues and the debates we had were much wider than the one clause itself. We all love our high streets. We love the pubs, cafés and shops we go to and I hope the Minister will take away all the issues we raised in the discussion of the Bill and look at them because, yes, it is great that we can have online deliveries, but getting a box to your front door is not quite the same as going out on a Saturday morning to your favourite café and reading the paper, meeting your friends at the shops and so forth. We have to protect our high streets and all the shops that we all love.

I know that the noble Lord agrees with me on those matters, but we need to make sure that, in the period ahead, we are looking at ways to support our high streets. Yes, they have to evolve, but, equally, we have to make sure that they are still there, delivering for our communities. Our communities thrive only when we can meet each other, and being on a high street and visiting your favourite café or pub to meet your friends is the way it works. However, on that basis, I thank the noble Lord and his officials again for their engagement on the Bill.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

I call the noble Baroness, Lady Pinnock. I am back on form now.

[Baroness Pinnock (LD) [V]]

My Lords, I give my thanks also to the Minister and his officials for the time that was offered for helpful briefings at each stage of the Bill. As the noble Lord, Lord Kennedy, said, it is a very simple Bill just to change the date of revaluations, which start in April this year but come into effect in 2023.

One issue raised during the Bill which we need to keep a watchful brief on is that, because the revaluation is starting this April, with the huge upheaval in market rents due to the pandemic it will be difficult to make assessments of rental value, which could affect the outcome of when businesses start paying in 2023. I hope the Minister can confirm that he will inform the House of any difficulties that arise from the timings of the revaluation.

The other issue discussed during the passage of the Bill, on which there was broad agreement on all sides of the House, was the strategic one about the future of the business rates system. Evidence was provided during all stages of the Bill demonstrating that retailers on the high street were at a huge disadvantage in business rates charged compared to those retailers which were online only. The differential is very large; a small shop in a small town may have a rental value at least five times that of a large online retailer in an out-of-town warehouse.

There is wide concern about the future of our high streets. The vast majority of people want to see the high street retained as a community focus, as the noble Lord, Lord Kennedy, has just described. One policy lever available to the Government to provide stimulus to the high street is a fundamental reform of the business rates system. It cannot for ever be put on the “too difficult” pile that the Government must have. Can the Minister provide the House with any timetable for the long-awaited reform of business rates? That would provide some hope to retailers on our high streets that change will come.

With those questions and comments, I look forward very much to hearing what the Minister has to say.

[Lord Thurlow (CB) [V]]

My Lords, it is a privilege to be asked to make the concluding remarks from the Cross Benches as we complete the passage of this Bill. I congratulate the Minister on steering it through, notwithstanding unsuccessful attempts—certainly from me—to divert the debate down other routes and related avenues. However, it is fair to say that we have been debating this in something of a straitjacket; those of us interested in non-domestic rates had nowhere to turn, try as we might—indeed, try as we did—to draw the failings of the NDR system to the Minister’s attention. He was perfectly within his rights to wear his benign smile throughout—and a tremendous smile it is. Why a straitjacket? Because it is a two-clause Bill, strictly focused on timing alone, to which there were only two amendments; I am aware of the frustrations of at least one other Peer who wished to table one and was unable to do so within the scope of the straitjacket. I congratulate the noble Lords, Lord Kennedy and Lord Moynihan, on successfully navigating these restrictions and tabling their well-founded amendments, both of which I was happy to support.

There are important implications in changing the dates for compiling the lists to two years’ time; I do not disagree with the principle, but I am concerned that the valuation date for determining rateable value, as we have just heard from the noble Baroness, Lady Pinnock, is within weeks. Without rehearsing the valuable and revealing contributions at earlier stages, it would be unwise to ignore the fact that retail and office markets are in crisis. Retail values are in freefall and office values are in pandemic-related confusion as businesses reassess their space occupancy needs. How on earth can the Valuation Office Agency determine rental value in these conditions? I wish it well.

There will inevitably be dramatic reductions in rateable values and a corresponding fall in local authority revenues. Unless the rate poundage is increased, when rates paid could exceed rent, that would be a lightning rod to disaster and a knife to the heart of the small business retail sector in that retail economy. Will the Chancellor continue to support the sector, or could we expect those who do not pay enough to compensate for those who pay too much? I am afraid that, regrettably, the Amazons of this world that do not pay enough will not make up the shortfall.

To conclude, I say to the Minister that I see some light in this dark place I describe. At every stage of the debate in this House, we have had reference to the fundamental review already mentioned. This is the real opportunity to introduce fairness across the landscape of NDR—sadly delayed but vital and urgent. I very much look forward to its publication and the chance for us all to consider it in the shape of a new Bill, no doubt steered by the Minister and his generous smile. I hope, for the sake of the smaller business sector, that it does not arrive too late.

[Lord Greenhalgh (Con)]

My Lords, this has indeed been a very narrow Bill but a very broad discussion. I thank noble Lords for the many points that have been raised during its passage, particularly in considering how we can support our town centres, especially our high streets, that give such a high quality of life to the residents of our towns and cities.

I point out to the noble Baroness, Lady Pinnock, that we are very clear that we will ensure that we keep a close eye on the impact of timings as this exercise is carried out and that we intend to look at the future of business rates. However, that is predicated on the fundamental review of business rates taking place later this year. I also assure the noble Lord, Lord Thurlow, that, as far as is practical, local authorities’ finance will be protected via the business rates retention scheme and other measures to ensure that there should be no material impact on local authority finances.

A number of issues have been raised, and it has been an important Bill.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

A bit of a longer debate than I anticipated, but a worthy one none the less.

Bill passed.

14:08

Sitting suspended.