Non-Domestic Rating (Preparation for Digital Services) Bill

Baroness Pinnock Excerpts

Tuesday 11th June 2019 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I draw the House’s attention to my interests as listed in the register: as a councillor in Kirklees and as a vice-president of the Local Government Association.

The Bill brings forward a sensible proposal: to examine the potential for business rates, currently managed by local authority systems, to move to HMRC digital tax accounts so that businesses can manage their tax liabilities in one place. This is likely to particularly benefit larger businesses with premises in different local authorities. The Bill states, as the absolute minimum, that the purpose is simply to enable such an investigation to occur. However, the lack of detail leads to concerns and questions about changes that might result from any implementation. I have some questions for the Minister, which he might or might not be able to answer, but I assure him that they are not of the expert variety just demonstrated by the noble Earl, Lord Lytton. Mine are far more prosaic.

First, is it the Government’s intention that businesses, local government and HMRC will work as a partnership of equals in the project? I emphasise the idea of a partnership of equals, partly because of the obvious background to this: HMRC has experience in tax collecting, while local authorities have knowledge and experience as the long-standing billing authorities for business rates. Businesses of all sorts—one-person businesses as well as big corporations—should be able to take part in this and contribute to the project; otherwise, it will be doomed to failure.

Secondly, is it the intention that local authorities retain responsibility as billing authorities? This is something that the noble Earl, Lord Lytton, has already asked, but I emphasise that it is one of my concerns as well. I believe it is crucial that they do retain this responsibility as local government is increasingly reliant on business rate income to fund local services. The consequence of this project may well be that the link between businesses and the local authority to which they pay their business rates is broken. That would be unfortunate, as the existing direct link means that businesses are able to have a considerable influence in local government spending in their area, and vice versa: local government can aid businesses that have temporary problems of cash flow or whatever. If that direct link is broken, it would be detrimental both to business and to the local authority.

Having made these brief remarks, I reiterate our general support for the Bill.