Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Debate between Baroness Pinnock and Baroness Blake of Leeds

Report stage
Wednesday 1st December 2021 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I draw the attention of the House to my relevant interests as set out in the register, as a vice-president of the Local Government Association and as a member of Kirklees Council. I am speaking on Amendment 1 in my name and that of my noble friend Lord Fox, and on Amendment 2 in the name of the noble Baroness, Lady Blake.

I and my colleagues support the principle of the proposals—as I have said at every occasion—in relation to the non-domestic rates element of the Bill. Businesses have faced challenging circumstances due to Covid, and these challenges remain. Understandably, businesses have reviewed their position, and some have decided to use the VOA check, challenge, appeal process to seek a reduction in their business rates. The VOA publishes quarterly statistics of the numbers of businesses using the process to appeal their rates. The statistics do indeed show a spike in both the check and challenge elements of the process. For example, there were around 80,000 checks requested in the March to June quarter of 2020 —this spike compares with an average of around 10,000. However, 70,000 of these checks were quickly resolved. There were around 22,000 challenges in the next quarter, but fewer than half seem to have been resolved. There is clearly a significant increase in the volume of claims being received by the VOA. However, the value of these claims, including the value of successful claims, is not revealed.

Throughout the course of the Bill, I have been concerned to establish the evidence base for its proposals, including, importantly, the total value of successful and potentially successful claims which would result in a loss of business rates income. A loss in business rates income has a direct and adverse impact on local government finances, which have already been squeezed dry. Responding in Committee to similar concerns that I raised, the Minister was unable to give a categoric assurance that there would be no loss of income for local government. The Minister stated then that

“central government will meet 75% of the costs of irrecoverable losses in business rates income for 2020-21.”—[Official Report, 10/11/21; col. GC 522.]

Can the Minister confirm that local government will not be paying for any losses in business rates due to Covid?

Further, it is widely accepted that the existing system of business rates is ineffective and woefully inadequate in ensuring that retail businesses that use online ordering are paying at the same rate as those on traditional high streets that the Government often profess to want to support but lamentably fail to.

Amendment 2, in the name of the noble Baroness, Lady Blake, seeks a review of the impact of the changes and of whether business rates are fit for purpose. Any government review with recommendations to try to fix this broken system is welcome, and we support the sentiments in this amendment. I beg to move.

[Baroness Blake of Leeds (Lab)]

My Lords, I declare my interests, particularly as a vice-president of the LGA. I will speak to Amendment 2, in my name, and to Amendment 1, as introduced by the noble Baroness, Lady Pinnock.

As we begin Report, I remind the House that we are broadly supportive of the Bill and recognise that action needs to be taken swiftly. The measure in the Bill to rule out Covid-19-related material change of circumstances business rates appeals—that is quite a mouthful—coupled with the announcement of £1.5 billion in funding to provide additional targeted support to those businesses that have not already received rates relief, provides some certainty for local government.

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[Baroness Blake of Leeds (Lab)]

In this group we also have Amendments 7 and 8, in the name of the noble Baroness, Lady Pinnock.

I move this amendment to seek confirmation

“that the Secretary of State publishes advice to local authorities on the implementation of this Act.”

Clearly, there has been some movement on this issue; there was widespread concern about this Act in Committee. From my experience, this message has been repeated not only in this area but throughout the whole pandemic. Given that local authorities were tasked with many responsibilities in helping businesses with the financial packages from government, which were welcome, it is important that whoever is in government has the full respect for local government that it needs and deserves. Timely, appropriate and full information is of paramount importance.

I am sure that I do not need to remind the House that local authorities face a dire situation, particularly regarding their finances. Many of them are about to publish their budget, which they will have to deliver in the early months of next year. The timing of this Bill brings into focus why local authorities are asking for clarity, and the sense of urgency that is being expressed.

We know that, since 2010, under the policy of austerity, Conservative Governments have variously come together to cut £15 billion from central government funding to local authorities. According to the Local Government Association, councils in England will face a funding gap of more than £5 billion by 2024 just to maintain services at their current levels. That is why we must ensure that they get the best advice from government on the implementation of this Bill. If we could have real clarification from the Minister on what advice they will receive and when, we would be grateful.

On the £1.5 billion in the funding announcement, I remember my noble friend Lord Hunt saying in Committee that there is a problem in that the guidance to local authorities on the distribution of money is still awaited. Many businesses do not know whether they will qualify for funding given that, as I understand it, the criteria have not yet been published. My noble friend was particularly concerned that whole areas have been missed out in the proceedings.

In Committee, the Minister stated:

“The funding will be available as soon as local authorities have established their own local release schemes; the Government will support them to do this as quickly as possible, including through new burdens funding.”—[Official Report, 10/11/21; col. GC 522.]


I would be grateful if the Minister could provide an update on how that work is going, and give a clear explanation of how the rationale running throughout this is being used to inform how decisions are made and how fairness and transparency will be assured. I beg to move.

[Baroness Pinnock (LD)]

My Lords, Amendments 7 and 8 in my name pursue an issue I raised both at Second Reading and in Committee regarding the complete mystery surrounding the £1.5 billion of taxpayers’ money that the Government propose to use as recompense for businesses in removing their rights to appeal their business rates.

This is all very unsatisfactory. The Bill is in its final stages and we do not know, first, the value of the real and estimated claims being made by businesses via material changes of circumstances based on the impact of Covid. The Minister may well claim that there is no information regarding the value of estimated claims, yet that is precisely what the Bill seeks to do. Secondly, we do not know at all whether £1.5 billion will in any way be sufficient to adequately and fairly compensate business for the removal of lawful claims made to the VOA.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Debate between Baroness Pinnock and Baroness Blake of Leeds

Wednesday 10th November 2021 Grand Committee

[Baroness Pinnock (LD)]

My Lords, I draw attention to my relevant interests as set out in the register, as a vice-president of the Local Government Association and a member of Kirklees Council.

My noble friend Lady Garden is not able to be here today, due to another commitment over the way, but she asked me to speak briefly on her behalf. My noble friend is especially concerned about the impact on English language schools. It is a significant issue that these and other businesses may not even qualify for the relief or the grants set out by the Government during the pandemic. The criteria for the qualification of grant funding are desperately needed—the noble Lord, Lord Cormack, has just expanded to that effect. This is a concern that I intend to raise when I speak on the second group in more detail, with its amendments in my name and that of my noble friend Lord Fox.

The noble Lord, Lord Hunt, and the noble Earl, Lord Lytton, have made a compelling case for the Government to move—to quote their favourite phrase—“with pace” to respond to the significant concerns raised. The failure of the Government to act swiftly since the announcement of this potential grant funding in May, and then its confirmation a couple of weeks ago, is putting businesses in jeopardy through no fault of their own. I do not think any Member across the House would do other than condemn that situation. These businesses need to be able to apply for the grants, and for rate relief, to enable their businesses to stay afloat. That is the bottom line for all.

I support what has been said regarding Clause 1 standing part, although I also agree with the noble Lord, Lord Hunt, that we want the Bill to succeed and are using this opportunity to raise these serious points. Those are the words that my noble friend Lady Garden would have said.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank noble Lords for drawing attention to the inadequacies of the situation that we are in. Until February this year, I was leader of Leeds City Council and we had the difficult job of working with businesses, when the complexity of the welcome resource that was available was challenging, to decide who was worthy of getting the relief and who was not. The comments made today just highlight the difficulties that local authorities are still having to face. I speak now as a vice-president of the LGA and am mindful of its input to this debate.

I thank my noble friend Lord Hunt for focusing on one specific sector and area, because that helps us to understand just what particular sectors are going through. We know that language schools are not the only area having problems but the noble Earl, Lord Lytton, referred to the loss of expertise, knowledge and experience. All those things add up to what we hope will be viable businesses as we emerge from this. In line with the comments they made, and continued by the noble Lord, Lord Cormack, we are faced with a situation across business and local authorities where there is now a lack of confidence, and concern at the lack of consistency and certainty. I hope that the Minister will be able to put our minds at rest on this.

We have had a good discussion regarding our concerns about how the figure of £1.5 billion was achieved. My concern here is that while we talk in terms of billions, we actually need to drill it down to the cost for businesses. I think what we are looking for collectively in the answers is a recognition of the urgency and the detail, and to hear when and how this is to be brought forward.