Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016

Lord Kennedy of Southwark Excerpts

Wednesday 21st December 2016 Lords Chamber

I also agree with the noble Lord, Lord Beecham, about the overall context. In our discussion last week of the local government settlement, I said that I was concerned about council tax being used to supplement a shortfall in adult social care. It is actually a substantially out-of-date property tax, particularly in relation to its bandings, and we should have some higher bandings at the top end. Questions will increasingly be asked about how local government is funded. Once the consultation on fair funding is complete, there has to be a discussion—possibly on an all-party basis—about the relationship between the raising of taxes locally, along with what might be done about that, and the level of local expenditure to ensure that given the devolution of business rates, levels of equalisation will be maintained. There is a danger here that better-off councils will continue to get better off and poorer councils will continue to get poorer.

[Lord Kennedy of Southwark (Lab)]

My Lords, as we have heard, these regulations bring into effect a transitional scheme to phase increases and reductions on non-domestic rates following a revaluation. The scheme has been in place before and it applies only to England, as these matters are devolved in the other parts of the United Kingdom. I have no problem with the regulations as they stand but I have one or two questions for the noble Lord, Lord Bourne of Aberystwyth.

On the consultation process, I noted that there was only one month down for consultation. Does the Minister think that was sufficient? Given that the Government received only 173 responses, is that a good rate of return and how was the consultation conducted? Was it just an item put on the department’s website or was more than that done, so that people were spoken to?

I agree very much with my noble friend Lord Beecham’s points in respect of council tax revaluations. I think that it is now 20 or 25 years since revaluation, which is long overdue. I recall the noble Lord, Lord Marlesford, who is not in his place today, bringing forward a Private Member’s Bill last year on this very matter of increasing the number of bands. He clearly outlined to the House the problem that we have, which the Government will at some point need to look at. I also agree with the comments of the noble Lord, Lord Shipley, about the impact assessment.

I also note on the consultation that the department will not issue any formal guidance on the transitional arrangements, which the Government say will be implemented by very experienced staff. I hope it will be confirmed that informal guidance would be available to any authorities that need it from the department. With that, however, I am happy with the regulations as they stand.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in this debate on the non-domestic rating regulations very much. I will endeavour to deal with the points that they have raised.

First, on the point raised by the noble Lord, Lord Beecham—and indeed by the noble Lords, Lord Shipley and Lord Kennedy—in relation to council tax revaluations, this point was raised in Questions. I indicated then to the noble Baroness, Lady Tonge, that I would write to her on that issue. I make the same undertaking to noble Lords who have participated in this debate. I know that there is no proposal for any revaluation at this stage and I do not think there is any significant pressure for one, whereas businesses have certainly embraced the need for a business rate revaluation. That is part of the Government’s plans but I will write on that particular point.

The noble Lord, Lord Shipley, raised the absence of an impact assessment. It is normal not to prepare an impact assessment for tax measures but we and the Valuation Office Agency have published detailed information on the revaluation and the way that it has been handled.

The noble Lord, Lord Kennedy, raised points in relation to the consultation. I do not think that there has been any significant pressure for a longer period of consultation; essentially, it was carried out via the website. The consultation was of course on the basis of the different methods of conducting the revaluation, which is mandatory. We were not consulting on the need for revaluation; it was more the way that it was carried out. He is right that there were 173 responses from ratepayers and local government. Although only 24% supported our preferred option, that figure was higher than for the alternative option for carrying forward the revaluation. I hope that that is of interest to the noble Lord.