Business Rate Supplements Bill

My Lords, I cannot welcome that statement from the Minister. I appreciate that he is reading the advice he was given from on high, but it is a shameful way to treat the opinion of this House on a matter that is of profound interest to many businesses in this country. We need to put this in some context. Many businesses are today laying off people or making them redundant not as a result of external trading conditions, the banks or the recession, but of this Government’s action in not agreeing to this amendment, which was sent to the other place. My remarks to the Minister will cover three topics: first, the technical issue of privilege and whether it relevant in this case; secondly, the history of this amendment; and, thirdly—however uncomfortable the reminder may be to him—the impact that this is having on the many businesses that have written to the Minister and to me to draw attention to it. In the other place, it was pointed out that the amendment is not to do with financial privilege. The wording of the reason is: ""Because it would affect the levy of local revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient"." The answer to that is that this amendment "could", not "would", affect the levy of local revenue if the Valuation Office Agency, as a result of a cataclysmic series of errors and mistakes, did not place on the list businesses that should have been valued, revalued and placed on it. It could have an impact. However, to say that it would have an impact is disingenuous. Clause 16 already states that where there is an error on the part of the Valuation Office Agency, there should be no retrospective element in non-domestic rates. Our amendment simply continues that principle into the current legislation. That is what is done by an amendment that was passed in this House by a majority of 60. It has nothing to do with financial privilege. We are not costing any money, but rather making sure that a piece of legislation brought forward by Her Majesty’s Government is consistent with other legislation brought forward by them on previous occasions. The other place should have acknowledged that, rather than hiding behind a draconian 17th-century technical measure to block further debate on an issue that is causing suffering and hardship to businesses in this country. The noble Lord, Lord Mandelson, who seems to wield ever-growing influence in the Government, said on 14 January 2009: ""UK companies are the lifeblood of the economy and it is crucial that government acts now to provide real help to support to them through the downturn and see them emerge stronger on the other side"." With this measure, he does not have to go to the £10 or £20 billion guarantee, or the £5 billion support stimulus package. He merely has to not backdate a measure that should not have been backdated in the first place. That is what we are asking for. It is completely within the gift of the noble Lord, Lord Mandelson, to do this. In response to the Minister, and with no reflection on his position, I suggest that he puts this case to the noble Lord, Lord Mandelson, to see whether he would be prepared, independently of this debate, to undertake a review of the circumstances under which this error occurred and retrospective liability was incurred. I would be grateful if the Minister would respond to that suggestion. The noble Lord, Lord Mandelson, is responsible for business. His language on previous occasions has been very supportive of doing everything that he can to support businesses in these tough times. He would—or should—be horrified that this is happening in a Government where he has significant and growing influence. Would the Minister put that proposal to him, given that the possibility of debate in this House is being stymied by a technical provision? As the Minister responsible for government—that was a Freudian slip, because I think that he is responsible for government—or rather, as the person responsible for business, could the noble Lord, Lord Mandelson, be encouraged to hold a cross-departmental inquest into what has happened with the Valuation Office Agency in respect of the retrospective levying of taxes? That is a serious proposal that warrants consideration. We are talking about the potential impact on 1,600 portside operators in 55 ports around the country that are already suffering immensely because of the global economic downturn, changes in rates and the cost of commodities. To impose a further levy would be wholly terrible. It is an act of political spite—I cannot think of a stronger way to put it. It is equivalent to cutting the nose off the economic face of the nation in an act of political spite, and it sends a dreadful message to many hard-pressed businesses in this country. This House had expressed a clear view on this issue on not one but two occasions in the Division Lobbies. The ports and the portside operators then heard that there could be closures because of an arcane rule on financial privilege where no financial privilege is at stake. All we are talking about is a mechanism of legislation, which would bring this Bill into line with the way in which other Bills should be, but which was not applied in the case of the portside operators. I urge the Minister to take cognisance of the great anger which is felt out there. This feeling of anger is exacerbated and not abated by admissions of guilt by the Government. Successive Ministers in the other place, this place and in Committee have come forward with their apologies. They have said, "It has been a dreadful mistake. We have got it completely wrong.". In the non-domestic rating regulations debate, the noble Baroness, Lady Andrews, said: ""I start by saying that the Government are deeply concerned"," about the retrospective element. She continued: ""Those concerns were set out in a letter from the right honourable Stephen Timms and the right honourable John Healey, from my own department, to the Treasury Sub-Committee on 10 February. They said:""‘We have consistently said, in the current economic conditions, the Government is concerned about the impact of backdated rates liability on the trading prospects of businesses and we believe that there is a general case to assist businesses receiving large, unexpected backdated liabilities that have to be paid immediately, as the position for a number of port occupiers has demonstrated’".—[Official Report, 18/3/09; col. 299.]" The Government have admitted culpability of the need for action. The amendment which we tabled and sent down to the other place was entirely consistent with that view declared by the Government. The Valuation Office Agency initiated this mistake. Again, I call on the noble Baroness, Lady Andrews, the predecessor of the Minister who will respond today. I mention those remarks just in case he wishes to repeat them. The Valuation Office Agency is not under the control of the department. The noble Baroness made the point that it is in the control of Her Majesty’s Revenue and Customs. She said: ""The VOA has acknowledged, in response to the Treasury Select Committee, that there were serious failures of communication, particularly with the occupiers, and by implication that too much reliance was placed on information being provided by the port operators. Andrew Hudson, head of the VOA, indicated to the Select Committee:""‘With the benefit of hindsight we have learned a lesson and please God this does not come up again’".—[Official Report, 18/3/09; col. 300.]" It is too late for hundreds of jobs that have already gone in our ports and for the many businesses facing hundreds of thousands of pounds of backdated claims. But Andrew Hudson is saying that, ""with the benefit of hindsight"," it will not happen again. Why should it have happened at all? In 2005, a business believed that it was not liable, but found out that it has liability only by accident in 2008 as a result of a court case. Then the sums, which were incorrectly calculated leading to an incorrect assessment, are backdated and the business is required to pay a significant sum—estimated at £200 million. In our mailbags, we have received responses from the portside operators. It is not me who is making these protests. These statements come from businesses which are at the sharp end and are in very difficult situations. I received a letter from Barry Holt, director of TTS Shipping, who noted that the House voted against the amendment placed before it. He also noted his great affection for his business and the livelihood of his staff. He said that he uses 42 stevedores in Hull who rely on his business and that he employs hundreds of hauliers and contractors on a subcontract basis. He believes that as many as 250 members of staff may now be faced with a backdated claim, which may run into hundreds of thousands of pounds. I turn now to TransAtlantic, which wrote to the noble Lord, Lord Mandelson, about this. It wrote to say that, ""TransAtlantic is now facing rates bills in excess of £1.1m on the properties that we occupy in statutory docks and harbours in the United Kingdom"." This is something which has had a very significant effect, as was picked up by the Daily Telegraph. It has reported that many people, including the Liverpool Chamber of Commerce, have written en bloc to express their concern about the real impact on Mersey Docks. They have an action group—Mersey Docks Rating Group—which is campaigning about the effect that this is having. Most worrying of all are the many representations from overseas operators who are now making representations to the Government to say, "Listen—we are just going to take our business elsewhere". The Government may or may not realise—I am sure that they do—that actually shipping is the most mobile of all businesses. They can take their business across to Rotterdam very easily, and they are doing that: there is evidence that that is happening. There were threats that it might happen by DFDS, P&O and other organisations. This is a very serious situation. Sitos has made the following representations: ""The unloading of the ships in Hull is undertaken by Global Shipping Services Ltd at an extremely competitive price to us. As Global have received backdated demands of £1.9m, we fully expect to see a sharp increase in costs to us as they struggle to meet these payments. This in turn we would attempt to pass back to"," clients and customers, thereby making it uncompetitive. The scale of this problem is very significant, and very real, as is the anger which is going to be felt because this amendment—which was passed by a majority of 60 in this House, and which is trying to save real jobs—is being stopped from being debated further in this House because of a technical measure. There are other people who wish to make similar points on this, but I do think it is a shameful way for the Government to treat this House, when the House has considered this issue extremely carefully and arrived at a considered view in respect of these hard-pressed businesses. The Government should have some guts: if they actually feel that they have the case on their side, they should allow the amendment to go ahead, and for the opinion of the House to be tested again. The fact that they have not got the stomach for that, despite admitting that they were in the wrong, and hearing and acknowledging the siren cries coming from ports around this country about the impact on real jobs, shows a cowardly streak in this Government—one which is deeply offensive and will not be forgotten. Our only hope now is to place this whole case at the mercy of the noble Lord, Lord Mandelson, in the hope that he can exercise some judgment, and intervene on behalf of port-side businesses in this case.