Non-Domestic Rating Bill

Debate between Lord Shipley and Lord Thurlow

Committee stage
Monday 3rd July 2023 Grand Committee

[Lord Thurlow (CB)]

I take a slightly different position. I support these amendments, but I want to introduce a brief note of caution. The case for a reduction in the frequency of updating rateable values has been extremely well made, but I think experts should have a voice in the proposal. I think we should wait until the three-year review process has bedded in and all interested parties should then be free to comment, before reducing that interval further from three to two years, or even one year. Clearly, the VOA has a central role—the most important role—but ordinary ratepayers have a role too. It is possible that an annual or biannual revaluation will become unworkable. That is unlikely with digitisation and the wider use of technology, but any period longer than one year between revaluations is, by definition, quickly out of date. We saw that in high relief with volatile rental markets during and following Covid.

My amendment suggests that the Government listen to the view of the VOA, of course, but also to the RICS, the Rating Surveyors’ Association and the Institute of Revenues Rating and Valuation, together with other accredited advisory groups, before making a decision on these further reductions. I ask the Government to write into the Bill that they will listen to the voices of these experts before further reductions are agreed to.

[Lord Shipley (LD)]

My name appears on three of the amendments in this group. I think that the case made by the noble Lord, Lord Thurlow, is very strong. We have to be certain. I believe a reduction from three years to two years—and, in an ideal world, to one year—would be the right thing to do.

I should state for the Committee stage, however long that lasts, that I am a vice-president of the Local Government Association.

I am convinced that currently revaluations are too infrequent. The Government have accepted that case. We are going to three years, and that is indeed better, but to reduce appeals and to ensure a fairer system requires two years or fewer. Like my noble friend Lady Pinnock, I will be very interested to know why we cannot draw on the comparator of the Netherlands since it does a revaluation every year.

There are clearly advantages to more frequent revaluations. We will have fewer appeals because the valuation would be more accurate. It would be fairer to businesses and reduce complaints about the system. I read very carefully the letter the Minister wrote after Second Reading, but it is not clear to me that there are any administrative barriers to moving from three years to two years.

We support Amendments 8 and 10, which suggest that the Government introduce a change to two-year revaluation or to one-year revaluation by order, as long as the affirmative procedure is used. As I said a moment ago, I think the points made by the noble Lord, Lord Thurlow, matter. I hope the Government will pay particular attention to Amendment 12 because it would enable us to be certain that it would not be a mistake to move to two years. We are sufficiently open to say that we want to go to two years and would like to go to one year, but we are very happy to build in a timescale which enables that to happen securely.

Levelling-up and Regeneration Bill

Debate between Lord Shipley and Lord Thurlow

Committee stage
Thursday 20th April 2023 Lords Chamber

[Lord Shipley (LD)]

My Lords, I agree strongly with what the noble Lord, Lord Carrington of Fulham, just said about Amendments 312G and 312H, as well as with what the noble Baroness, Lady Andrews, said about them. This is a particularly serious matter and I hope that the Government will pay due attention. A range of issues has been raised in this group, the comments made by the noble Lord, Lord Carrington, on timelines might be a possible way forward for discussion and prove productive.

I have had concerns for some time about permitted development rights, feeling that in some cases they are simply too loose. My previous concerns have related, for example, to conversions of offices to residential flats for sale, which often reduces the total number of places where people can go to work and increases the distances to where their place of work may then have to be. Very often, permitted development rights are used for short-term development reasons but where those reasons may not be in the long-term interests of a local area, and we need to remember that long term.

I have put my name to Amendments 312G and 312H alongside those of the noble Baroness, Lady Andrews, and the noble Lord, Lord Carrington of Fulham, because there is another aspect of permitted development rights that I believe needs reform in the interests of maintaining our heritage. According to the Royal Institute of British Architects, approximately 50,000 buildings are demolished each year. Many of them may well be unfit or unsuitable for the modern age, and demolition is understandable in those cases where they are going to be replaced with something better.

However, that is not always the case, as we have heard from previous speakers. The Victorian Society has produced evidence that high-quality historic buildings are being demolished when they still have a useful purpose. Many buildings are not listed when they could be. I have concluded that there is a gap in our regulations, which should require that older buildings, at least, that are not listed, should have to undergo a further test. That test is, I suggest, the planning system, which could consider demolition as part of a redevelopment application. If there is no redevelopment application, there is no obvious reason to demolish the building, where it is safe. That could end up with an empty site for a long time, or a later application for a worse development than the building demolished.

These arguments relate to Amendment 312G, but Amendment 312H is also critical. It requires planning permission to demolish locally listed buildings. These lists exist for a reason, and demolition should not be treated lightly. Strangely, not all local councils have local lists anyway, which is another concern.

It should not be possible for buildings on a local list to be demolished without planning permission if they are outside a conservation area—rules currently apply if they are inside a conservation area. I ask the Minister: what is the point of a local list otherwise? Local lists need protection from poor, short-term decisions on demolition which are contrary to our long-term heritage interests. This is about buildings that matter to local people and future-proofing our heritage, and I very much hope the Minister will concur.

[Lord Thurlow (CB)]

My Lords, first, I simply put right a matter of record. I failed to declare my interests in our debate before lunch. I have two buy-to-let properties, as marked on the register.

I now briefly reference Amendment 247B from the noble Lord, Lord Cormack, ably introduced by the noble Lord, Lord Carrington of Fulham. I refer to our heritage assets in the context of properties, as well as statues and artwork. In the UK, a disproportionately small minority can cause heritage assets to be removed from public view, whether they are in public or private ownership or locations.

Furthermore, the world we live in of modern development seldom includes a requirement on developers to contribute to what I think is referred to as the public realm. Most larger developments, as we have heard from the noble Lord, Lord Carrington, are built to minimum cost. We must not forget that good architecture and good design—itself expensive—is a great contribution to the public realm. The presence of statues and monuments, and good building design is a really important contribution to society. Planning applications should have a public realm box, simply to ask whether they are making any contribution to the public realm and heritage assets. The amendment of the noble Lord, Lord Cormack, should also refer to heritage assets which are stored out of sight and yet are in public ownership.

Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2022

Debate between Lord Shipley and Lord Thurlow

Tuesday 20th December 2022 Lords Chamber

[Lord Shipley (LD)]

My Lords, I declare my vice-presidency of the Local Government Association. I too welcome the regulations, with some caveats. I agree with the noble Earl, Lord Lytton, that they are welcome and long overdue, and I agree with many of the points that he made, not least on the need for the reform of the business rates system. I am looking forward to hearing the Minister’s reply to his specific points.

The Government have made the right decision to press ahead now with implementing the revaluation because it reflects changes in market value since 2015, a period now of eight years. The decisions on the transitional relief scheme seem appropriate since they will give targeted support for the next five years to those businesses facing increases in their bills, in very difficult economic circumstances; they will freeze the multipliers in 2023-24; they will give extra, specific help to the retail, leisure and hospitality sectors; they will provide extra protection for small businesses that have lost rates relief because their property has been revalued upwards; and, as the Minister said, they will give some 300,000 businesses entitled to reductions an immediate and full implementation of the fall in their bill by ending the policy of downward caps. Welcome though all that is, it represents a temporary fix to a system that has not been working well and needs reform, as the noble Earl said.

The Government have brought forward the next revaluation to 1 April 2026, just over three years away. In my view that is the right timing because rental values, and thus rateable values, over the next three years may face pressures, given the overall state of the economy. It will also present an opportunity to take further account of online retailing. As part of this revaluation, total business rates paid by the retail sector will fall by 20% but the bills of large distribution warehouses will go up by 27%. That is welcome. As the letter dated 16 December from the Financial Secretary to the Treasury says:

“It is right that those sectors that have seen significant growth since 2015 pay their fair share of the tax burden.”


I agree, but the question remains: are they paying their fair share?

I have concluded that we still need a review of the business rates system. I hope that during our debates on the Levelling-up and Regeneration Bill we can examine how that might be approached, because we need more control of business taxation at a local level. I hope we will discuss how that might be done.

[Lord Thurlow (CB)]

My Lords, I declare my interest as a former chartered surveyor, and one who worked in the dark ages in the world of rating. As a former chartered surveyor, I opened the statutory instrument with interest and excitement, and, as we heard from the noble Earl, Lord Lytton, found it was full of what I thought was trigonometry: pages 4 to 26 were theorems, fractions and things that I certainly did not understand. But the objective of the regulations is clear, and I support them.

The position of non-domestic rates has become, I am afraid, a shambles over a number of years. A failure of the authorities to remain abreast of trends in rental value—rateable value should be based on the revaluations in the commercial property markets—has led to a gross imbalance between sectors and, in some cases, competing users within single sectors. That is gross unfairness. This certainly applies to hospitality and leisure sectors, and, in some cases, competing uses, with traditional retail perhaps being most affected.

For several years now, the Government have failed in their promise to address the unfairness in commercial rates to deal with the likes of Amazon, as we heard from the noble Lord, Lord Shipley, and to allow our high street retailers to compete with these big-box retailers. They have a much lower cost of delivery model, and that cost is further increased by the rateable value system. Although we have heard that a 40% increase in industrial and warehouse rates, and a 20% reduction for retail, are proposed, this is de minimis in real terms—it is tiny, and it is not a percentage on like-for-like terms. A 40% increase in industrial rents of £10 a foot and a 20% reduction in the rent of zone A shops of £150 a foot are absolutely not comparable. That needs to be spelled out and made clear, and the Government need to do a great deal more very soon. This injustice continues to be kicked into the long grass at the expense of our high streets, and the important social benefits that they provide continue to decline.

This statutory instrument accelerates the reduction across the piece in non-domestic rates and feathers the increases for those suffering an increase over several years—both of these are to be welcomed. Similarly, freezing the rate poundage is also to be welcomed. The current levels of approximately 50p in the pound are the absolute maximum that businesses can stand. I support this statutory instrument and request that the Minister confirms that there is to be comprehensive rating reform very soon, as earlier speakers have requested.