Draft Non-Domestic Rating (Rates Retention: Miscellaneous Amendments) Regulations 2023

Barry Sheerman Excerpts

Monday 27th February 2023 General Committees

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

I beg to move,

That the Committee has considered the draft Non-Domestic Rating (Rates Retention: Miscellaneous Amendments) Regulations 2023.

It is a pleasure to serve under your chairmanship, Mr Hosie. I realise that this is the big issue before Parliament today, so I shall focus on it.

Business rates are governed by a raft of secondary legislation that needs to be updated more or less annually to ensure that it reflects changes made to the rates retention scheme and to the structure of local government. The miscellaneous amendments in the draft regulations will ensure that for the forthcoming financial year, the retention scheme operates as intended and everyone receives the funding they expect.

The draft regulations make changes to four of the seven principal sets of regulations that govern the operation of the rates retention scheme. First, the Non-Domestic Rating (Transitional Protection Payments) Regulations 2013 provide for authorities to receive compensation where their business rates income is lower than it otherwise would be as a result of transitional measures put in place by Government. The draft regulations make a small change for 2023 and future years to ensure that the calculation ignores the newly introduced public lavatories relief, so that compensation is calculated and paid on the true cost of the transitional arrangements put in place following the revaluation.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I have a tiny point to make. Do the draft regulations cover the whole of the UK, just England, or England with Wales?

[Lee Rowley]

I had to check, but it is England.

Secondly, the Non-Domestic Rating (Rates Retention) Regulations 2013 provide for the day-to-day administration of the rates retention scheme. As part of those arrangements, the City of London is allowed to retain a small amount of business rates income outside the scheme in recognition of its low resident population and its limited ability to raise council tax income. The amount that the City is allowed to retain normally changes each year in line with the change to the business rates multiplier. In 2023, that multiplier is not changing, so the change before the Committee isolates the inflationary uplift and ensures that it is applied to the City offset. Without the change, the City would see no increase in the coming financial year.

Thirdly, the draft regulations make changes to the Non-Domestic Rating (Levy and Safety Net) Regulations 2013. Under the rates retention scheme, authorities may receive financial help if their business rates income declines. The cost of making the safety net payments is met in part by a levy on those authorities whose income is growing. The levy and safety net regulations set out in detail how such payments are to be calculated and make adjustments accordingly.

[Mr Sheerman]

The Minister is being very good at giving way, and being fast and getting through the business as we all want to, but as a newly appointed freeman of the City of London, may I press him? I hope the measure does not mean that the City of London gets special privileges, does it?

[Lee Rowley]

It is an accommodation within the existing regulations, as I understand it, given that the City of London is incredibly atypical in having large service requirements but a very low residential population. There has to be an accommodation somewhere in the processes for the realities in the City of London to ensure that it can still support the services it needs to provide for those visiting, living and working within the City.