Draft Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2023

James Murray Excerpts

Wednesday 24th January 2024 General Committees

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to serve on this Committee with you in the Chair, Mrs Murray. I welcome the opportunity to address the draft regulations on behalf of the Opposition.

As we know, business rates are determined according to the formulas defined in the Local Government Finance Act 1988. The rates are calculated as the product of the property’s rateable value, as determined by the independent Valuation Office Agency, and the relevant multiplier. As we heard from the Minister, this statutory instrument continues the existing policy under which the majority of occupied properties with a rateable value below £51,000 pay rates calculated by reference to the small business multiplier, and extends it by making charities and unoccupied properties eligible for the small business multiplier too.

Specifically, as the Minister set out, the statutory instrument seeks to do three things: first, to maintain the threshold for the small business multiplier to be applied at below £51,000 of rateable value, which, as the Minister notes, has been Government policy since 2017; secondly, to give effect to the announcement that charities and unoccupied properties will be eligible for the small business multiplier; and thirdly, to implement the Government’s decision to extend the small business multiplier to central list properties below the £51,000 rateable value threshold, of which we understand there are seven.

We will not oppose this statutory instrument. However, I would be grateful if, when the Minister responds, he could provide further detail about his and the Government’s understanding of what constitutes an unoccupied property. As he will know, the Government consulted on business rates avoidance and evasion in July last year. In the consultation document, the Government made it clear that Ministers were concerned about potential abuse of empty property relief by owners who use a brief period of apparent occupation to reset their property’s eligibility for that relief. The consultation document that I am referring to made clear that,

“There is no statutory definition of what constitutes ‘occupation’ of a property, and minimal occupation possibly of no material benefit to the occupier, except as a method to avoid paying rates, may be sufficient to allow ratepayers access to a further rate-free period.”

As there is no statutory definition of what constitutes occupation of a property, I would be grateful if the Minister could explain to the Committee what definition the Government are using to identify unoccupied properties for the purposes of this SI.

I would also be grateful if the Minister would confirm when the Government intend to set out their response to the business rates avoidance and evasion consultation, and when they plan to bring forward any actions they intend to take to combat avoidance and evasion in the business rates system.