Non-Domestic Rating (Lists) (No. 2) Bill

Lord Bourne of Aberystwyth Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Monday 18th January 2021 Lords Chamber

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Randerson. I should tell her that it is not that she has failed, just that she has not succeeded yet in some of the important aims that she has close to her heart.

I shall say a little bit about the first of the two Bills. I welcome the Non-Domestic Rating (Lists) (No. 2) Bill. I agree that the idea of postponing the date for the next revaluation to 2023, when it was originally to have been brought forward to 2021, makes sense in the context of the pandemic. I think that is the right move. The only points that I would make in relation to that are, first, to stress the importance of continuing the business rates holiday for retail during the pandemic. I welcome the fact that we have had it in this financial year but, clearly, in the next financial year it will be equally important, at least for part of that financial year, as I see it.

As my noble friend the Minister made clear, there remain long-term issues about the fair treatment of town centre retail and the proper taxation of online sales and out-of-town businesses, which we need to deal with. Clearly, that has been heightened in the pandemic. We have all welcomed online sales during the pandemic; they have performed very well. But it highlights the need to have a different tax treatment from the one that we have at present. But I certainly welcome that piece of legislation.

I turn to the second Bill. I should say that I see no problem in dealing with both Bills together at Second Reading. As I understand it, they will be separate for Committee and Report, and I welcome that, too. The second Bill is also welcome; it is virtually identical to one that your Lordships may recall I took through Second Reading in July 2019—the only difference being the retrospective nature of the tax relief that is going to be part of the scenario in this current legislation for the present financial year. That Bill fell with the prorogation and, essentially, this is the same legislation being brought forward again.

I recall from that time—and I highlight an issue that has been mentioned by the noble and learned Lord, Lord Hope of Craighead, as well as the noble Baroness, Lady Randerson, just now—the issue of the separate assessment requirement. The problem with the legislation—and I recall looking to see whether there was a possibility of doing some apportionment—is that, unless the public lavatory is separately assessed as a single unit, the possibility of the business rate relief is not there. If it is part of a shopping centre, a museum or a library or, indeed, if it is with a council car park, the likelihood is that business rate relief will not be forthcoming, as the Bill is structured, because it has to be separate standing. That does not mean that it is not a welcome piece of legislation, but it is a defect, if what we are seeking to do is to improve the scenario demonstrably by ensuring that it is far more likely that we get a good spread of public lavatories throughout the country.

I agree with the noble Baroness, Lady Andrews, that we need to look at this as a more serious issue than is covered by this piecemeal reform, welcome as it is. There is an issue, which we can all identify with as we go around the country and go into our own towns and communities, of the need for proper provision that can be welcomed and held up as an exemplar of what we do as a country. If my noble friend the Minister could say something about the possibility of apportionment or a more widespread reform, so we can have wider relief, that would be welcome.

I agree about the welcome measures that are there—the community toilet scheme referenced by my noble friend, and the Use Our Loos campaign funded I think by Domestos, which is also worthwhile. I also very much welcome the Changing Places toilet scheme. Could my noble friend say something about the MHCLG consultation, which I think ended in 2019, on how we are going to carry that forward and do more? As the noble Baroness, Lady Thomas of Winchester, said, that again is much needed, and something that any civilised society would want to do.

Like others, I welcome the fact that Wales is signing up to both pieces of legislation. That is absolutely right and welcome. The only other issue that I will mention briefly is in relation to Network Rail. As I Minister, I talked with Network Rail about extending free entry for its managed stations, which I think the noble Lord, Lord Kennedy, was also keen on. I think that we discovered that all mainline stations in London had free entry except for Marylebone, for some reason. Does the Minister have any update on that, or could he look at it and let me know by letter and copy it to the Library, about the position there? I very much welcome these two measures and will certainly support the Bills.

Non-Domestic Rating (Lists) (No. 2) Bill

Lord Bourne of Aberystwyth Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Thursday 4th February 2021 Grand Committee

[Baroness Thornhill (LD) [V]]

My Lords, I, too, am a vice-president of the Local Government Association.

I wish to speak in favour of Amendment 6, which stands in my name and that of my noble friend Lady Pinnock, and to support Amendment 1 in the name of the noble Lord, Lord Kennedy of Southwark.

I am very aware that this is a narrowly focused Bill and that it has had broad support and been welcomed. However, it is significant that, despite that, several Members of your Lordships’ House have taken the opportunity to table amendments. I believe that that shows the depth of concern around the whole issue of business rates. The amount of interest shown in both this tightly drawn Bill and the Government’s consultation for their ongoing business rates review shows how important it is for the review to be both bold and radical.

It is also significant that all the amendments seek to hold the Government’s feet to the fire with regard to the various ongoing impacts of the Bill, be they on sports clubs, the high street or local government finance—hence, Amendment 6 stipulates a timeframe of six months. This is due to the fact that the instability and uncertainty provoked by the impact of Covid-19 are exacerbating issues that were already of significant concern—and we are not out of the woods yet.

Indeed, the amendment seeks to continue to draw your Lordships’ attention to the challenging situation regarding local council finances. The latest figures from the Local Government Association show that the financial impact of Covid-19 on local authorities is an estimated £9.7 billion for 2020-21, with a further £2.8 billion of lost income from council tax and business rates. However, it must be noted that these figures were reported before the lockdown and the spread of the new strain was known. This is a significantly different set of circumstances from when the 2020-21 funding package was last evaluated, and is part of the reason for continuing concern around council finances. I am sure it is appreciated by all noble Lords just how important business rates are to the individual finances of a local authority.

One reason for the amendment is to highlight the volatility of the tax base, which is so unpredictable at present. For example, the loss of office space to residential—a topic much discussed with the Minister in this House—is a trend that is likely to continue with inevitable loss of revenue. The Valuation Office Agency is currently negotiating appeals and challenges for offices, airports and factories under a material change of circumstances appeal, due to Covid-19. A rebate of up to 25% was mooted. The reduction in income could be substantial. If a rebate were forthcoming, would subsequent losses be repaid to local government in line with the recently announced tax income guarantee? Some 75% of losses will be guaranteed for 2020-21, but nothing has been said yet about 2021-22. Of course, local government must make up the other 25%.

The amount of money that councils have had to put aside for appeals is also significant, hence local government concerns around cutting down the window of time to appeal and getting the number of appeals reduced. The more certainty that we can add to the processes the better. To date, councils have had to divert £3 billion from services to appeals. A significant amount of money is also tied up in irrecoverable losses for both business rates and council tax. With debt recovery and enforcement activities understandably limited due to the pandemic, and with limits on activities and pressures on court time, councils’ ability to recover debts and secure income as they usually would, will be restricted. These are not usual times, and more businesses are likely to fail.

I use these points to illustrate one purpose of the amendment and the volatility of this important tax base. There is much instability in the system at present, which is being masked by the current, much-needed and much-valued reliefs offered to businesses from the Government. This could change significantly when the reliefs end; it could impact on local authority incomes, but we do not know when this will be. If the amendment is not accepted, could the Government at least agree to look closely at the impact once all reliefs have been suspended? This could provide vital evidence on which sectors are most impacted as well as on local councils’ finances.

Regarding Amendment 1, it was noted by several noble Lords at Second Reading that the VOA has been formally criticised as being cumbersome and difficult to deal with, and its valuations opaque and inconsistent. This is why I endorse what has been said by the noble Lord, Lord Kennedy of Southwark, and support his amendment and additional amendments tabled by my noble friends. In short, the amendment asks the Government how the pandemic that happening now will affect the revaluation in 2023, based on values at April 2021, which will not be looked at again until 2028.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Thornhill, who certainly speaks with authority in this area, not least from her time as Mayor of Watford. I speak to the first group of amendments and, as I indicated at Second Reading, I strongly support this Bill. It is welcome, it is needed, it is positive, and I hope that it passes unadorned. I thank the Association of Convenience Stores for its briefing on this subject. It too strongly welcomes this legislation.

The effect of moving the business rate revaluation to 1 April 2023 will mean, as has been noted, that valuations will be fixed as at 1 April 2021. This will prevent the base being on a very high value, or on a relatively high value, as at 2019. This Bill will, in short, ensure that the base that is used reflects the impact of the pandemic. That is welcome. It will also provide certainty to non-domestic rate payers. This is very welcome to a hard-pressed sector. However, I have some questions for my noble friend the Minister. While I am very much in favour of passing this Bill, I would welcome some further reassurance from my noble friend regarding what discussions there have been with the Valuation Office Agency and local authorities about timescales and resources.