Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2018

Debate between Baroness Donaghy and Lord Kennedy of Southwark

Thursday 1st February 2018 Lords Chamber

[Baroness Donaghy (Lab)]

I have two very small questions. The first concerns the Explanatory Memorandum. Point 3.2 states:

“This entire instrument applies only to England”.


However, point 5.1 states:

“The extent of this instrument is England and Wales”.


Have I misunderstood the headings or is that a typo?

My question on guidance follows from the questions of the noble Earl, Lord Lytton, and concerns Paragraph 9.1. I would be grateful for some clarification. It states:

“The Department does not intend to issue formal guidance”.


That is fair enough, if it does not want to, but how will the department satisfy itself that the system is working? Will there be consultation with the VOA or will there be other mechanisms in the absence of formal guidance? It goes on:

“The VOA may issue internal guidance to their staff, in relation to the reforms to the business rates appeals system. As above”—


I am not quite sure what the phrase “as above” applies to—

“the VOA intends to provide specific guidance on the provision of information by ratepayers, and internal guidance on the application of penalties”.

I find that all a bit confusing, to be honest. Which is going to be transparent and available to the public, which is going to be an internal office one? I would be grateful for some clarification.

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

My Lords, as we have heard, the regulations before your Lordships’ House this afternoon provide for the imposition of financial penalties for giving false information in respect of a proposal and also provide for an appeal against the imposition or the amount of a financial penalty. I am happy to support these proposals, and in doing so draw the attention of the House to my relevant interests in the register, namely being a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.

Many years ago, in the 1980s, I was a member of a rating appeals tribunal and I agree with the Explanatory Notes, which state in paragraph 7.3 that little supporting evidence was supplied, what came in came in late, and most appeals,

“did not result in either an appeal hearing or a change to the rating list”.

That was what used to go on in the appeals I used to attend—it was certainly my experience serving on a tribunal in London. Looking at the papers there seem to be only two levels of fine. I thought that the purpose of any fine is to provide an element of deterrent. I am not convinced that these levels actually do that: perhaps a sliding scale would have been better, or some link to a rateable value, as I think the noble Lord, Lord Bourne, made reference to. I do not think that any large corporation will be the least bit worried about a £500 fine.

Paragraphs 8.1 and 8.5 of the Explanatory Notes refer to the number of responses to various consultations. Will the noble Lord give the House some more information about the range of responses received, as the notes have only such phrases as “the majority of respondents recognised”, and “many businesses accepted”. A bit more clarity would be useful for us to understand the range of responses that the department actually received. I accept the point, as set out in paragraph 8.6, that,

“in line with other parts of the tax system, ratepayers have a responsibility to take reasonable care when providing information in relation to their tax affairs”,

but coming back to my earlier point, I am not sure a £500 fine helps in any way to focus the mind of a large company or corporation in that respect. I am sure that all companies do these things properly, but if one were to decide that it could gain some advantage by not doing so, it might risk taking a punt. The worst it could get would be a £500 fine but if it got away with it, it might gain many thousands of pounds in a reduced business rate bill. Will the noble Lord address that?

I assume, since there is nothing about it in the papers, that there is no link to inflation, so these figures will wither on the vine, as it were, until the regulations are brought back here in a few years to be uprated. So I am not convinced that the sanctions are strong enough. Having said that, I support them in principle and I look forward to the noble Lord’s response.