Rating and Valuation (S.I., 2009, No. 204)

There will be opportunities to right this wrong, but it seems that the Minister is unwilling to do so. That is deeply depressing, to be frank. As I said, this is a complex issue, but for the people who are affected it is simple: they face a tax bill for previous years for which they did not know they were liable, so they have not been expecting it. The burden was imposed after the terms and conditions with the operator had been agreed and after payment had been made. For many businesses, the impact is so devastating that they may face insolvency. The Minister acknowledged that, which makes me wonder. The Minister's response is that these are well-established principles, we cannot waive backdated liabilities, and as all businesses are aware that the scheme can operate in that way they should plan for it. If so, why are we debating regulations now to try to mitigate some of the problems? Why were such measures not included in the original legislation? If the Government accept that this is part and parcel of the scheme, surely they should have made provision for it at the time. Businesses are being hit with this problem, which is impacting on jobs and on the local economy, at the very time when support is needed more than anything else. The Minister has openly admitted that these problems have predominantly been caused by the failure of the Valuation Office Agency to do its job properly. These proposals today essentially seek to mitigate the impact of those failings. They do not, however, fundamentally right the wrong. Businesses were unwitting victims of the Valuation Office Agency's complete incompetence. It is not only the Opposition parties that are attacking the policy. Suggestions to right the wrong were made by the Treasury Committee, which also clearly identified the causes of the problem. It identified low morale in the VOA, which had an impact on service delivery. It also identified poor communications with the businesses affected. While the operators might have been aware that the changes were in the offing, it was a bolt from the blue for many of the businesses affected. The Treasury Committee stated:"““Port businesses are facing backdated charges because the Valuation Office Agency failed to identify discrepancies in the ratings at the time of the 2005 revaluation. This mistake was compounded by the VOA's failure to communicate changes promptly and effectively with Port businesses.””" If the VOA had done its job when it should have done it, we would not be having this debate, because the retrospective taxes would not have been imposed. Businesses are upset that they are taking the hit for the failure of the Government agency. The Treasury Committee was also constructive in its recommendations. It asked the Government to take steps to ensure that payments already made to the port operators were taken into account—a point already made by hon. Members. However, the Minister refuses to accept that that is an issue, even though the Treasury Committee felt that it could be rectified. The Committee also suggested that the Government should"““take steps to mitigate further the difficult position faced by port businesses. Consideration should be given to the proposal to maintain the rateable values of premises in statutory docks and harbours at the levels published in the April 2005 rating lists until the new ratings list is published in April 2010.””" That is exactly what the Liberal Democrats have said. We have said that we will co-operate if primary legislation is required, but the Minister appears to have ruled that out. What consideration was given to that option? Was it explored or was it ruled out without due consideration? The information that the Department provided to the Treasury Committee was disappointing. On the issue of the contributions that port occupiers had already paid to the port operations, the Minister said again today that as far as the Government are concerned, the information is only ambiguous. However, those people who have spoken to businesses directly affected say that their understanding is that part of the terms and conditions included covering the business rates that operators were paying. I wish that the Minister had provided more information on what the Department had done to seek the information. It is clear that some hon. Members have provided the Department with the information, but I wonder whether there is more out there, if the will existed to try to find it. The Government continually emphasise their inability to waive this tax liability. For example, in the debate secured by the hon. Member for Great Grimsby (Mr. Mitchell), the Minister said:"““We cannot now act as if we do not have the full facts or as if they do not have a liability that is now clearly established in law. Therefore, it is not straightforward or possible simply to undo what has been done, or to hold off until 2010 when the next ratings list comes into effect.””—[Official Report, 28 January 2009; Vol. 487, c. 124WH.]" The Minister spoke today about valuation and the retrospective nature that it has. The point is that these businesses were not paying business rates, so they did not need to factor in retrospective elements. They were not clear what their liability would be in the future. If they did not know that they would be liable for business rates in the future, how were they supposed to plan for any retrospective liability? They did not have the full facts. They may have them now, but they did not have them at the time for which the Government seek to tax them.