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

Lord Livermore Excerpts

Tuesday 23rd January 2024 Grand Committee

[Lord Shipley (LD)]

My Lords, I thank the Minister for her introduction. I welcome strongly the decision to ensure, through this instrument, that charities and unoccupied properties will be eligible for the small business multiplier. It is also helpful that the Government have decided to extend the small business multiplier to central list properties below the £51,000 rateable value threshold.

Business rates are simply too high, particularly for small businesses. I recognise that there has been a freezing of the small business multiplier. At Third Reading of the Non-Domestic Rating Bill in October, I said that what is now the Act made some very welcome changes, particularly around more regular revaluations. However, business rates used to be around half the rental value of a property and they are now closer to 100%—they are almost equal. This financial burden is putting huge pressure on many businesses and impacting on our high streets, particularly our retail sector.

I want to ask the Minister this. We had assurances during the passage of the Non-Domestic Rating Bill that the legislation would be kept under review. Will the Government continue to keep under review the amount that small businesses have to pay? Even though there is a discount, at 49.9p in the pound, compared to other businesses, at 51.2p in the pound, small businesses need greater help today. I hope very much that the Minister will be able to say that the Government are well aware of the financial pressures that small businesses have and are alert to the need to ensure that those pressures, in the current economic context, do not get worse. Might the Government find ways to review the business rates system, which we debated at some length during the passing of the Non-Domestic Rating Bill, but also the level that is paid by many businesses which have been struggling?

[Lord Livermore (Lab)]

My Lords, I thank the Minister for introducing this statutory instrument. I would be grateful if she could provide further detail about the Government’s understanding of what constitutes an unoccupied property. The Government consulted on business rates avoidance and evasion in July last year, and in that consultation document they made it clear that they were concerned about the potential abuse of empty property relief by owners who use a brief period of apparent occupation to reset their properties’ eligibility for that relief. The consultation document stated:

“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 set out what definition the Government are using in identifying unoccupied properties for the purpose of this SI. I would also be grateful if she could confirm when the Government are intending to set out their response to the business rates avoidance and evasion consultation, and when they will bring forward any actions they intend to take to combat avoidance and evasion within the business rates system.