Business Rates and the Recession

I wish to speak exclusively about port rates, so far as they affect my constituency and the Humberside port. A serious situation is developing that will create a mess in the ports, thanks to the inefficiency, the failures and the understaffing of the Valuation Office Agency. It is an institution that combines quite horrendous powers, such as the imposition of retrospective rates, with crippling inefficiency, rather like Her Majesty's Revenue and Customs. It was decided in 2000 to end prescriptive rating of the statutory ports and to replace it with individual rating of port businesses, which was to be introduced in 2005. The Minister said that people should have known that that would happen, but so should the Valuation Office Agency. It should have had the valuations prepared for 2005, when individual rating began, but it did not. The result was that port businesses continued to pay rates under the old system, which was the cumulo system, whereby the rent on the property paid by the operator included the rates, which were then paid by the port owner—Associated British Ports in Humberside—to the local authority. The Government's little homily—that not having individual rating of the port businesses would disadvantage other competing businesses—is therefore so much nonsense. They are asking businesses to pay rates twice, because the cumulo system continued up to last year. That means that if port businesses are to be charged retrospective rates as well, they will be charged twice, which is not exactly a system to advantage businesses in the ports. Meanwhile, like Rip Van Rating, the sleeping Dutchman, the Valuation Office Agency woke up in 2006 to the fact that it needed to reassess all those businesses. However, it did not do so until 2008 in many cases. In 2008, businesses in Humberside were getting big new assessments and, both this year and last year, a demand for retrospective payments of three and a half years of rates on those big new assessments. That is crippling. Those businesses cannot make the money back by making charges on the transactions that they completed over the past three and a half years, so how are they to pay those big retrospective rate bills? What has happened is unjust, unfair, incomprehensible and any other adjective that one might care to use—I have not had time to go through the thesaurus, but there must be lots more adjectives that describe that monstrous procedure whereby businesses are being asked to pay two sets of rates, one of them retrospectively, on a big scale. What is so farcical about the situation is that Ministers have gone to ABP, the port owner, which has received rebates on the rates that it paid on behalf of other port businesses, and asked, "Please would you give this money to the port businesses that paid it in the first place?" and ABP has said no. That is ludicrous and double impotence on the part of the Government. They tell us that they cannot stop retrospective rating, but they also tell us that they cannot get the money back from ABP that was paid in rates in the first place. It is like a chorus of castrati—double impotence all over the place! It is just not good enough for Ministers to be telling us that there is nothing we can do in this ludicrous situation to get the money back to the people. The Government tell us that they cannot get the money back retrospectively without changing the law. Well, I have not noticed that we are overwhelmingly busy in this place, passing legislation every day, with a frantic legislative programme. There is plenty of time and space: the Opposition have said that they will support it; the Liberals have said they will support it, so what is holding us back from doing what is obviously necessary? I cannot accept the Nuremberg defence that we are only obeying orders and must do this. Next week, we will be debating orders to provide for the eight-year payment scheme, which is itself an aid to industry that the Government claim they cannot give by abolishing the retrospective rating. We will have to make a decision. If we reject it, it will put port businesses in a mess, as they will have to pay immediately, but it will also put the Government in a mess, as they will have to decide what to do about the situation. I am intellectually puzzled and mystified as to why we are doing this and persevering with it, although I am delighted to see that the Opposition have taken up my solution, which is to scrap what has gone before, begin over again in 2010 with new assessments that year, and forget the whole business—putting it down to the inefficiency of the Valuation Office Agency, which caused the problem in the first place. Why do we not do that? It could be that we want to give a good campaigning issue to the Opposition; they are not doing particularly well in the polls at the moment. It might be that they will benefit from this exciting issue. At this stage of the electoral war, we might need a futile gesture—but I do not know; I am not master of the political science behind this issue. I ask my right hon. and hon. Friends, and particularly Treasury Ministers, whether they want to hit small and medium-sized businesses at the docks when we are trying to help small and medium-sized enterprises. Do we want to bankrupt port businesses when we are trying to develop an export drive based on the competitiveness given to our industries by devaluation? Do we want to put port employees out of work at a time of rising unemployment? Do we want to cripple ports that are big business—certainly in Humberside, and we rely on them—and drive business elsewhere, perhaps to Europe, perhaps to other British ports, or perhaps put them out of existence? If my right hon. Friends want to do all that, I say that they should persevere and carry on: let us go ahead and watch the payments coming in, if they do come in, month by month, and watch the businesses go bankrupt month by month. If they do not want to do that—and I hope no Labour Ministers are that daft that they do not want to change this incomprehensible system—then for heaven's sake change it, and act quickly.