Business Rate Appeals

Debate between Earl of Lytton and Lord Bourne of Aberystwyth

Monday 25th February 2019 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I anticipate that questions will arise regularly, as they rightly should. We have always been clear that the review will happen in 2019, and I have reiterated that today. There is no doubt on the position: we want to let the new system operate fairly. As I said, it only started in the spring of 2017, it is making progress and we are having regular meetings to update. I think that is a fair position.

[The Earl of Lytton (CB)]

My Lords, while drawing the House’s attention to my professional interest in business rates matters, I put it to the Minister that the Government’s response indicated a review by, not during, 2019. Problems with “check, challenge, appeal” have been ongoing since the beta test stage two years ago and, despite the intervention of HMRC’s digital team in the summer of 2017, far too many glitches, impediments, shortcomings and so on persist. Given the continuing criticism of CCA’s functionality, will the Minister undertake as part of any review to have the system independently audited and the findings published?

[Lord Bourne of Aberystwyth]

My Lords, I pay tribute to the noble Earl, who has been very active in this area. Two hours ago, he sent me a list of issues he is concerned about, which I will ensure that officials address. In the process of reading it, I noted his acknowledgement that the system has improved. More work needs to be done, as I said, but we hold regular meetings to review progress and speak to chief executives and officials to ensure that it continues.

Tenant Fees Bill

Debate between Earl of Lytton and Lord Bourne of Aberystwyth

Report stage (Hansard): House of Lords
Tuesday 11th December 2018 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I declare my interests as a vice-president of the LGA and also as a practising chartered surveyor and private rented sector landlord. Mercifully, I have managed to steer clear in a personal capacity of managing agents—at least for the last many years.

I have one query on the way in which the holding deposit arrangements are intended to function. I quite understand the geometry that sits behind this and the reason for it, so I will not go over it again. But let us suppose that a prospective tenant, having been provided with all the relevant information, pays a holding deposit and then, through some reason of default which would allow the agent to retain part or all of that deposit, there develops an argument as to what proportion—perhaps the whole—should be retained or not. That could take some while to resolve. Meanwhile, the agent is debarred from taking a holding deposit from anybody else, even though it may be clear beyond peradventure that the original deal with, and intention of, the tenant, whose holding deposit is still being hung on to, will not go ahead.

I can see that this could put an undesirable element of drag into the situation. I can also see that it might be the godmother of unforeseen consequences, in that the agent may feel that it is becoming a problem—a rather metropolitan problem, if I may say so; I think of zones 2, 3 and 4 of central London as the areas where a lot of this goes on, although I know it is not unique to there. The corollary to that is that the agent may say, “I’m not going to take a holding deposit at all. It is on a first-come, first-served basis. I have various people interested and the first who comes through my door with the relevant boxes ticked gets it”. That does not seem at all helpful either. That does not happen in my part of leafy Sussex, because we do not deal with things in that way and do not have that sort of high-pressure tenant demand. But I can certainly see it happening in zones 2 and 3 and I wonder what the Minister has to say about how he sees that working in practice, without having some perverse effects on the market.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness, Lady Thornhill, and the noble Earl, Lord Lytton, for their contributions to the debate on this part of the Bill. I thank the noble Baroness very much for her comments and support.

I thank the noble Earl very much for his support and for raising the issue relating to holding deposits. First, as he will be aware, there is no obligation upon an agent or a landlord to operate a holding deposit system if they do not want to do so. It is optional. But where it applies and there is a dispute, if the two parties agree that there is no chance of pursuing the tenancy, it would obviously be open at that stage for the landlord or agent to take another holding deposit in relation to the land in question, as it were, where that matter is truly settled. If it is not settled, a lot will turn on the particular circumstances of the case. If the noble Earl feels that he would like to discuss this further, I will ensure that officials are available to discuss possible scenarios with him. It may be that he wishes to discuss a particular scenario, but in the meantime I commend these amendments to the House.

Tenant Fees Bill

Debate between Earl of Lytton and Lord Bourne of Aberystwyth

Monday 5th November 2018 Grand Committee

[Lord Bourne of Aberystwyth]

I thank noble Lords for those points. The consideration was around the notion of an upper limit, not a norm. As I say, there are difficult cases where a four-week limit may not be appropriate. I have outlined some of those and we have to think about the consequences for tenants. It was that which motivated the reconsideration.

On the point made by the noble Lord, Lord Shipley, about Bob Blackman in the Housing, Communities and Local Government Committee, it is true that different periods were talked about—of four, five, six and eight weeks, as we have already rehearsed—but it is important to note that this was not pressed to a vote in the other place. We have considered the element of flexibility. We are not mandating that it has to be eight weeks; that is far from the case. The evidence from Scotland is that it has not gone to eight weeks; rather it has not really budged. However, it gives flexibility, and that has influenced us. We cover in the guidance the point that we do not expect it to reflect anything other than the loss on the deposit.

[The Earl of Lytton]

My Lords, in connection with what was mentioned earlier about tenants who do not have a particularly good track record or who come from abroad, perhaps I may pick up on one point. One of the bones of contention is that the tenant pays a not insubstantial deposit and it is held by and on behalf of the landlord. Is there not an opportunity to have a third-party deposit holder who, in effect, would hold the money and provide a guarantee of the tenant’s performance so that it does not become a bone of contention for students, those from abroad and people with no track record? Could we break that particular logjam so that it is not seen as the landlord accruing a sum of money and hanging on to it as a sort of financial bludgeon? Could this be defused in some way? Perhaps the working group could look into the possibility of something along these lines.

[Lord Bourne of Aberystwyth]

My Lords, I am happy to pass that on to the working group, but one has to be careful what one wishes for. As we know, there are all sorts of issues around deposit protection and to disturb the existing relationship may well be dangerous. However, I will ensure that the message is passed back to the group so that it can consider it if appropriate.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Debate between Earl of Lytton and Lord Bourne of Aberystwyth

Committee: 1st sitting (Hansard): House of Lords
Tuesday 19th June 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, from what I can gather—admittedly, it is anecdotal, from speaking to local government and getting a feel for this—this position is relatively evenly spread across the country, although focused more in the urban areas, as your Lordships would expect. Again, I cannot give a precise number but I do not think it is a massive one. If I can give a more precise indication, perhaps I will do that in a letter to noble Lords ahead of Report. I do not think it is a massive number, from what I can gather.

[The Earl of Lytton]

My Lords, I thank all noble Lords who have spoken, and the Minister for his response. In defence of any appearance of lack of numeracy on my part, I say in connection with whether or not billing authorities have gained some windfall that the point outlined by the noble Lord, Lord Kennedy, is correct; namely, the budgetary process does not arise evenly or as an even offset or indeed even in a comparable year. But I do not proclaim to be an expert on local government budgeting and finance—thank goodness. I am only a humble valuer and therefore doomed to perdition for having only managed to get an O-level in ordinary maths. With that in mind, I beg leave to withdraw Amendment 2.

--- Later in debate ---

[Lord Kennedy of Southwark]

I fully support the noble Earl in his Amendment 3. I think we all deal online very much more now in our work and in terms of official and unofficial things, so this is a very sensible amendment.

[Lord Bourne of Aberystwyth]

My Lords, with the indulgence of the House, I would like to pick up a point from the last group. I failed to address a point made by the noble Lord, Lord Shipley, on the pilot business rate retention issue. We are speaking to the Local Government Association and others about that. It is not straightforward but we are not convinced that there is any loss. Still, I shall seek to address that in more detail in the letter. I apologise to him for not picking that up earlier.

I thank the noble Earl for moving this amendment, which would require the Valuation Office Agency to publish on its website guidance and advice on the effect of Clause 1. I understand and appreciate the motivation behind the amendment, backed by the noble Lord, Lord Kennedy. Business rates can be a complex area and confusing to ratepayers, and of course we support ideas that would give ratepayers more information to help them to plan for their business rates liability.

On Clause 1, I agree that it is especially important that the VOA provide clear guidance to ratepayers on when they may be affected. Clause 1 concerns contiguous properties that are assessed for rating in more than one part, but there are many reasons why a ratepayer may have seen their property split into two or more rating assessments. That will include properties whose rating assessments have split because of the Supreme Court decision in Mazars, but will not be limited to that. Clause 1 will change the law to mirror the practice of the VOA prior to the Supreme Court decision. Those ratepayers may therefore fall within Clause 1. However, there will be many other reasons why a rating assessment may have been split into several parts. A property may have seen physical change requiring it to have more than one rating assessment, for example, or part of the property may have been sublet. These splits are unlikely to be related to the Supreme Court decision, and those ratepayers will not be affected by Clause 1.

It is therefore important that we explain this to ratepayers. The VOA already has clear guidance on its website explaining in simple terms how the law currently applies under the Supreme Court decision, including some clear examples. I assure the Committee that once the Bill receives Royal Assent, the guidance will be quickly changed so that it explains the operation of the new law under Clause 1. I further assure the noble Earl that the VOA will share that guidance in draft with the professional bodies, including the Rating Surveyors’ Association. The noble Earl will therefore have the opportunity to consider this guidance from his expert perspective before it is published. I appreciate that we are very fortunate in having him look at this legislation in some detail because of his professional understanding of it. This, together with the information that ratepayers can already access about their own property on the VOA website, will provide ratepayers with the information that they need to decide whether they fall within Clause 1.

I hope that with these assurances the noble Earl will agree to withdraw his amendment.

[The Earl of Lytton]

My Lords, I thank the Minister for that reply and the noble Lord, Lord Kennedy, for his support. The Minister probably credits me with a great deal more expertise than I feel I actually possess, but that is probably because, the more one knows about something, the more one realises one does not know. That seems to be one of the facts of life that one has to face. But I am reassured by what he said in terms of making sure that the information is readily available on the Valuation Office Agency’s website. Obviously, I am aware of some of the advice generally on that website, which for the most part seems to me to be clear. I thank the Minister for the assurances that he has given and I beg leave to withdraw the amendment.

--- Later in debate ---

[The Earl of Lytton]

My Lords, I have some mixed feelings about the amendment moved by the noble Baroness, Lady Pinnock. In my own mind, I cannot quite get my head round whether this is to be a charge to discourage long-term empty properties as defined in the Bill or, in effect, an escalating fine. It seems to me that the two are slightly different.

At Second Reading, I highlighted the fact that there is a general lack of information about the reasons for long-term vacancy, and the high probability is that it varies quite a lot from one area to another. For instance, in some former industrial cities, whole streets of Victorian housing may have lain empty for some time because no one wants to occupy them.

On the definition of “empty dwelling”, it is a moot point, as far as I can see, as to the ease or difficulty of chasing the sums of money involved, as is the likelihood or otherwise of the “empty dwelling” label simply evaporating. I think that I may have used the example of an itinerant with a van load of cheap second-hand furniture going around populating odd properties that might otherwise be subject to this. The point is made not entirely in jest, because there is no plumbing the ingenuity of people who wish to avoid some impost or other.

Another point is that there is a reputational risk if one is not careful here. I seem to remember that, not very long ago, one local authority was said to be investigating the contents of people’s refuse bins, and I would hate to think of local government being again painted into that sort of scenario. One needs to be careful to ensure that there is a justifiable reason for an escalator.

If we are talking about what is in effect a fine, there would need to be a clear and justified framework as to how that would apply, possibly with provision for making an appeal against the charge. Now, I am not clear what happens about appeals against things like this. I am clear what happens with an appeal against one’s business rate assessment, and I am clear what happens with an appeal against a council tax banding. What I am not clear about is, where something like this comes in by dint of this type of legislation, if someone thinks that it has been unfairly applied, where do they go? I hope that a noble Lord, or a noble Baroness, with better knowledge than I have will tell me what the situation is.

I rather took to Amendment 7 in the name of the noble Lord, Lord Stunell. As we heard at Second Reading, there can be a number of different reasons why vacancy and long-term empty property status can apply. I think of the minimum energy standards regulations which came into force only a couple of months ago, making it impossible to let a property with an EPC of less than E. I think of the many hard-to-insulate properties—those Victorian properties with nine inch solid walls or suspended floors, where it is difficult to get insulation to the required standard.

In essence, the noble Baroness, Lady Pinnock, is right: there is often a local need to take a differential approach. I would appreciate the Minister saying how differential he thinks that that needs to be, or can be: whether it is endless or will be circumscribed in some way. I think of areas I know well in national parks, where you occasionally come across properties that are long-term empty, but also in former industrial cities, to which I referred. One needs to be careful about that. I do not have a solution, but I simply flag up those issues for further consideration.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in the debate. I am most grateful to those noble Lords and the noble Baroness, Lady Pinnock, who tabled the amendments on the level of the empty homes premium, as they allow us to discuss the factors we have to consider in deciding the maximum charge on empty homes in setting the framework for local authorities. I reiterate that, once we have set the framework, this is a discretionary measure for local authorities: something we are giving local authorities discretion to administer, according to their local needs and personalised or very localised factors affecting particular properties.

I think we all agree that there is a clear case for increasing the cap on the premium that applies to long-term empty properties. The noble Lord, Lord Stunell, gave distinguished service in the coalition Government—I think in my current role—and rightly referred to the importance of the issue. We have borne down on it. My noble friend Lord Patten, who is not in his place, referred at Second Reading to how the number has reduced—we have squeezed it very effectively—but there is still more to do.

The debate is about the level to which we should take this charge and the circumstances in which it should apply. These are the difficult judgments we face. We propose through the Bill that owners of long-term empty homes should see their council tax bills double. This is a major step in allowing local authorities to incentivise such owners to bring their homes back into productive use.

One amendment tabled by the noble Lord, Lord Kennedy, would mean that owners of empty homes would be paying triple the level of council tax payable on occupied homes within two years, or within one year if his other amendment were to be enacted. In fairness, that is from the Labour Party manifesto. Perhaps it is all the more surprising that nothing happened in the other place on the Bill: no amendment was proposed, still less debated. That said, it is something we should discuss.

Under the amendments supported by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell, properties empty for between five and 10 years could face premiums of up to 200%, and those empty for more than 10 years could be subject to 300% premiums. I of course understand the rationale behind the amendments, and as homes are remaining empty for longer and longer, the logic of that is obvious: the figure goes up after five years and after 10 years. In addition, empty properties can be a nuisance to local residents, and potentially sites of crime or squatting. I share the concern about the need for robust measures to tackle what may become, and often are, blots on the landscape, to the benefit of those seeking a place to live as well as of local communities as a whole. I think we all understand that.

Building Safety Update

Debate between Earl of Lytton and Lord Bourne of Aberystwyth

Thursday 15th March 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I thank my noble friend. I am not sure about whether Dame Judith Hackitt has commissioned any work to look at what is happening overseas or indeed in the USA. She has massive experience in this area and I would be very surprised if she is not looking at what happens in other countries—the USA and elsewhere. I will make sure that she has the benefit of my noble friend’s comments, but I would be surprised if she were not doing so.

[The Earl of Lytton (CB)]

My Lords, I welcome this announcement from the Minister and, in doing so, I declare my interests as a vice-president of the LGA and, more particularly, my practice as a chartered surveyor in the building and construction sector. I join other noble Lords in expressing concern that there are components—whether they be doors or something else—in buildings that are not meeting the standards that are claimed for them. That is a very serious matter that needs to be followed up with great rigour.

On the doors in particular, there are of course questions about the fireproofing of the door panel itself and its frame, but there are also more discrete fireproofing systems, such as smoke seals, intumescent paint and, of course, self-closers. I remember teasing a fire officer years ago, perhaps rather unfairly, by saying that the chief use in a particular building of the two-gallon water extinguishers seemed to be propping open the one-hour self-closing fire doors. There is this issue about the “desire line”—if I can use that term. How people use buildings is a very important factor in all this; we do not want to have fire doors propped open with bicycles, suitcases or anything else that might itself cause an obstruction but, more particularly—as the noble Baroness, Lady Brinton, said—might imperil the very basis of the compartmentalisation. If we allow that to happen, because self-closers are inconvenient or because there are too many doors, we need to look into that. I hope that the Minister can reassure us that that is being looked into at the same time.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Earl and recognise his vast and detailed experience as a chartered surveyor. In drawing this debate to a close, I say first that I share the concern that he has expressed, but I think that we need to keep a sense of balance regarding what we know at the moment, which is that it could well be just this batch. But the Government are of course concerned and we are moving this forward at pace.

To echo the point made by the noble Baroness, Lady Brinton, I also think that we have to look at all aspects of this in the round—that is absolutely appropriate. The Dame Judith Hackitt review gives us the context for doing that; she really does know what she is talking about and understands this country. Those points are very valid, and so is restating some common-sense advice, as the noble Earl has just done, on ensuring that fire doors are closed. Too often, one enters residential buildings where the fire doors are propped open, particularly in the summer months. We need to bear down on that and ensure that it does not happen. I take on board all the points that have been made and the concern expressed. I will write to noble Lords on all the points that have arisen and ensure that, in addition, we have a statement before the end of April so that all those points are dealt with.

Meanwhile, importantly—this will have particular resonance on Grenfell—officials have been out very early to speak people in Grenfell. The Minister for Grenfell survivors, Nick Hurd, has also been in touch and a letter is going out. This is very much at the forefront of our minds. This was happening ahead of the Statement being given in the Commons to make sure that the process was being carried forward, because it will raise particularly horrid memories and connotations for the people at Grenfell.

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

Debate between Earl of Lytton and Lord Bourne of Aberystwyth

Thursday 1st February 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the Government are committed to delivering a fair and effective appeals system for business rates that provides an efficient means for ratepayers to challenge the valuation of non-domestic properties. That is why in April 2017 the Government introduced significant reforms to the appeals system, through the new “check, challenge, appeal” framework that is being delivered by the Valuation Office Agency and Valuation Tribunal for England. I hope that noble Lords agree that the system in place before April 2017 was clearly in need of reform.

Penalties for the provision of false information, which are the subject of the regulations we consider today, are an important part of these overall reforms. They will act as an important deterrent to providing false information that will help to maintain the integrity of the appeals process and the wider business rates system. Under the “check, challenge, appeal” framework, ratepayers are required to provide information to the valuation officer. This is both at the check stage when the underlying facts are confirmed and agreed, and throughout the challenge stage with the exchange of more detailed evidence. In line with other parts of the tax system, penalties will be an important mechanism to support the submission of accurate information. Specifically, the regulations will, if approved and made, provide the Valuation Office Agency with the power to impose a penalty on a person who provides false information knowingly, recklessly or carelessly.

The regulations specify the level of the penalty, which will be set at £200 for small businesses and £500 for all others. It may be helpful to remind noble Lords that the £500 maximum penalty reflects the level that was specified in the Enterprise Act 2016, which provided the enabling powers for penalties in the business rate appeals system.

The Government recognise that there may be cases where a person wishes to challenge the imposition of a penalty. The regulations therefore also provide a right of appeal. Any person who is subject to a penalty may, within 28 days of receiving a penalty notice, appeal to the independent Valuation Tribunal for England. Where the tribunal finds in favour of the appellant they will then be able to order the valuation officer to remit the penalty in full. Clearly, it is important that there is no financial incentive for the valuation officer to impose a penalty. The regulations therefore also require that any sum received by the Valuation Office Agency by way of a penalty must be paid into the Government’s Consolidated Fund. This will ensure that the Valuation Office Agency does not benefit financially from the imposition of penalties.

As part of the wider consultation on draft regulations for the new appeals system, the Government sought views on the proposed approach on penalties. The consultation received over 280 submissions, and the Government’s response was published in March 2017. As set out in the government response, there was clear support for the introduction of penalties from local government. Many businesses also accepted the need for a penalties framework, but expressed concern that penalties could be imposed where ratepayers have made a genuine mistake. Some respondents suggested that the level of penalties should be linked to rateable value, to ensure that they are an effective deterrent for large businesses.

In light of the concerns raised, the government response confirmed that the Valuation Office Agency would provide clear guidance to support ratepayers with the provision of information and on the application of penalties. Where ratepayers feel that a penalty has been unfairly imposed, as I have already outlined, they will have a right to appeal to the independent valuation tribunal. While these are important provisions to support a fair system, the consultation also confirmed the Government’s clear view that ratepayers have a duty to take reasonable care in providing information on their tax affairs.

Noble Lords will no doubt be aware that the wider reform to the appeals system is not without its critics and that the concerns of some noble Lords were discussed at length on a Motion to Regret late last year. Given that discussion, I do not propose to revisit those concerns in detail today. Suffice it to say the Government remain clearly of the view that the reforms were an important and necessary step to fixing what was clearly a flawed and inefficient system for all involved. I reiterate that we expect the Valuation Office Agency to continue to work closely with ratepayers to ensure that the system is meeting our objective of a more efficient and effective system.

For the purposes of today’s debate and the specific regulations at hand, I hope that noble Lords agree that it is entirely right that the system is supported by appropriate powers to penalise the provision of false information, and that these are accompanied by appropriate safeguards, such as the right of appeal, to ensure the system operates fairly and effectively. I commend these regulations to the House.

[The Earl of Lytton (CB)]

My Lords, I first declare a professional interest as a property consultant and a member of bodies concerned with business rates, as a vice-president of the LGA and, from time to time, as a non-domestic ratepayer. It will be no surprise, and I am sure that the Minister will understand, that I am coming at this somewhat from the ratepayer standpoint.

My concerns are with the penalty for inaccurate information under new Regulations 9A to 9D. I entirely accept what the Minister has said: the system needed a thorough going over. But I have a question surrounding the terminology of “knowingly, recklessly or carelessly” providing false information in new Regulation 9A(2)(b).

Penalising deliberately providing misleading information is absolutely fine in principle. I make no observation about the quantum of the fine either or, for the most part, the mechanisms for imposing it and appealing it. But if the process of “check, challenge, appeal”, as I perceive it, involves systemic complexity and a requirement for information from a ratepayer that they are unlikely to possess and probably cannot verify, the risks of infraction become unreasonably high. It is the working environment rather than purely the penalties that I will concentrate on.

We know that the intention is to discourage false information and that there was a problem about that in the past. All too often, it was perpetrated by so-called business rates consultants, who were, sadly, on a number of occasions, proven to be neither professional nor honest. But rather than tackle them—they were known firms and bodies—it seems to have been decided to scapegoat by design every appellant ratepayer. I do not accept that approach.

Noble Lords will also be aware that new arrangements for “check, challenge, appeal” mean that most of the proposals to alter entries in the rating list must be made via a government portal. That requires an individually named person to register by giving a lot of personal information. For example, for an SPV that has no employees and no land with buildings for development, that is clearly unworkable. I am also told that a number of local authorities are finding this difficult as well. If you do not have a UK passport or UK national insurance number it has to be done manually. If you register but then forget your password, I understand that there is no reset provision. If you have multiple properties, each must be individually linked to the person registering and the details re-entered for each one. If you appoint an agent, he or she has to go through this again once they have received a formal notification through the system that they have been appointed. Annoyingly, if as sometimes happens the agent does not get the notification, I am told that the only advice the Valuation Office Agency was able to give was that the ratepayer should deregister. In other words, they must reverse the entire process and re-enter the whole lot de novo. That cannot be right.

Once the registration has been done, the check stage comes in. As the Minister has said, that is the point at which a lot of information needs to be put in about the property. Some of the requirements are a little opaque, shall I say, such as how many floors the property has. Apparently one can select from minus nine to plus 55, which is mathematically slightly Quixotic but also happens to rule out the Shard. One may also be asked about the eaves height, for which the Shard would also be a non-qualifier. At other times people have been required to provide a net internal floor area for a property customarily measured and valued on the basis of gross externals. This is beginning to look a little problematic for the ratepayer. One may then be asked when the last refurbishment took place; as if the tenant would necessarily know that. The choices go back in tranches as far as 1900 on the online system. There is also a rather risible suggestion that the lease details or the local planning office might have information on refurbishment. In any case, a refurbishment undertaken 30 years ago is likely to be totally worthless in modern valuation terms.

I do not wish to poke too much fun because actually this is a very serious business. Let us remember that in the middle of all this there is a ratepayer trying to fill in an online form for which there is a potential liability for inaccuracies. The point I want to make is that the architecture is deficient and the system makes unnecessary and time-wasting demands on ratepayers as well as putting in place tripwires that really should not be there.

I note the answer given by the Financial Secretary to the Treasury to the Delegated Legislation Committee in the House of Commons on 29 January in answer to the honourable Member for Oxford East concerning rating appeals:

“The technical problems we have had with the system some months ago have largely been resolved”.—[Official Report, Commons, First Delegated Legislation Committee, 29/1/18; col. 6.]


That is not quite the message I am getting through the trade, if I may term it thus. In reality, although the digital platform may have improved, the environment in which it operates has not.

My concerns are the lack of clarity or definition over what will constitute a culpable error. I noted the noble Lord’s comment that guidance was to be provided. I am not aware that guidance has been provided, but I am aware that rating professionals have been asking the VOA whether it will produce anything to clarify the circumstances that constitute a culpable error, but I have been told that it does not propose to do so. This seems a rather one-sided situation, and the decision to impose penalties seems to be in the hands of a party to the matter even though they do not benefit financially. The process is a touch inequitable and asymmetric as a way of dealing with public administration.

I want to ask the Minister what proposals there might be to address some of these continuing problems, in particular the absence of a proper definition and guidance. By “guidance” I do not mean some general comment into which one can read anything, but how this will be dealt with and how individual business ratepayers will be protected from an honest error, because it is not clear how that will be done. In particular, I want to know what further steps the Minister feels could be taken to establish greater confidence among business ratepayers about the CCA system, because it seems to be still distinctly lacking.

Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2017

Debate between Earl of Lytton and Lord Bourne of Aberystwyth

Monday 11th September 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I apologise for missing that point. I am not sure whether it was made when I slipped out—it conceivably was—but it is a fair point anyway. If I may, I will write to the noble Lord about it and copy that to other noble Lords who participated in the debate.

[The Earl of Lytton]

My Lords, I am extremely grateful to the Minister for the comprehensive answer he has given to the Motion. I am also most grateful to all other noble Lords who have spoken in this short debate. I would never go so far as to try to question matters of reasonableness and accuracy, or to cross swords with the noble and learned Lord, Lord Hope, especially as he is the Convenor of our Cross-Bench group—and a much cherished and honoured Convener as well.

However, two things come out of this. First, there is an urgent need to sort out CCA online. I am particularly grateful to the Minister for inviting me to discuss the process issues, because they are numerous. If I could arrange to come and see him with a team of people who could explain what the issues are and why they are so grindingly irritating to ratepayers, and give such a bad impression of the whole thing, then trying to clear the air on that would be very good.

Secondly, yes, the overall system needs fixing and there is to some degree a focus on these SIs in that context. But various things follow from that: there has to be proper finance for it overall—a point mentioned by the noble Lord, Lord Beecham; there has to be a justification of the impost in absolute and relative terms, compared with other things, and we have lost sight of that a little; and there has to be in the change in the style of management. We are to some extent in this together and if the Government are serious in saying, “We are pro-business”, we cannot have a situation where businesses are set on edge by such a system. It is entirely negative and unnecessary, so there has to be a change in the style of management.

Part of the key to this is the transparency of information. As soon as people start thinking that information is being concealed from them, they become suspicious that there is some malevolence hiding behind it. The proof of the pudding will obviously be in the eating here. The whole point about a non-domestic tax, particularly since it affects so many businesses, is that it must rest on the taxpayer’s confidence that it is being dealt with efficiently, expeditiously and, above all, fairly. We should bear in mind that business rates have a long and cherished heritage. When I started dealing with rating matters back in 1975, it was one of the lowest cost and most efficient means of collecting money for local government purposes. If we do not get that right, the alternative is mounting further appeals. If this provision eliminates individual appeals and starts giving rise to a whole series of class actions, the impediment—the drag—that it will cause in the system will be the same.

This has been a very welcome opportunity to air these views. There are certain things that I dare say the Minister and I are probably destined never quite to agree on. It would be almost inconceivable if that were the case. I appreciate that an effort is being made here, but we need the financial resource and manpower to go into that to try to sort this out. If it is not sorted out, it will continue to cause us problems. Having said that, and with thanks to all noble Lords who have spoken and to the Minister, I beg leave to withdraw the Motion.

Business Rates Hardship Fund

Debate between Earl of Lytton and Lord Bourne of Aberystwyth

Wednesday 19th July 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is absolutely right about the importance of the high street. The Chancellor announced £435 million-worth of relief in the Budget and, as I have indicated, allocations have been made to local councils. We are certainly looking to them to implement this; some have set a good example—such as Leeds and Haringey—and we are looking to others to do the same. We will certainly consider what further action we need to take if they do not comply with our instructions.

[The Earl of Lytton (CB)]

My Lords, will the Minister explain why the means of claiming small business rates relief is often hidden away in obscure parts of billing authority websites? Furthermore, given the need for an accessible redress system, when will the check, challenge and appeal process for online rating appeals move beyond the beta test stage?

[Lord Bourne of Aberystwyth]

My Lords, the noble Earl is right about the importance of small business and rural rate relief, and we are very clear about that. As part of the £435 million package we have set out how that is to operate, and we are looking to local councils to implement it—and they are doing do. He is absolutely right also about the importance of the check, challenge and appeal system operated by the Valuation Office Agency, and we are in close contact with it to make sure that that is working effectively.