My Lords, this is clearly not the time to go into great detail on a rather technical matter so I will be as brief as I can. I put down this amendment because I was dissatisfied with the explanations given by the department and dismayed somewhat at the claims made by Ministers.
Now, the noble Lords will realise that this amendment follows one moved in another place by the Member for Greenwich and Woolwich, Mr Nick Raynsford. I should probably declare some particular interest here in the sense that I am professionally involved with matters of rating. Of course, in a private capacity, I am both a landlord of commercial premises where rates are paid and, indeed, a commercial ratepayer myself in another capacity. I want to pay special tribute to the work done in connection with this and the whole question of the deferral of the rating revaluation by rating surveyors Gerald Eve. They have certainly been enormously helpful to me.
The fundamental point here is that businesses need to feel that they are being treated fairly in all this. I have mentioned before that, in my opinion, the rating system badly needs some attention. It has great unfairnesses and anomalies. The treatment of exemptions and relief needs looking at. The mounting number of appeals shows that there is a problem. Along with planning and compulsory purchase, this is another administrative system covered by the Bill that is under critical stress.
Frequent revaluations have long been known as necessary. For more than 20 years, we have had five-yearly revaluations. The Lyons report made it clear that where there are major shifts in values, more frequent revaluations might be necessary. If ever there was a
seismic shift in property values, the time between 2008—the antecedent year for the 2010 year—and now was surely it.
It is hard to identify the precise reason for the decision to defer the revaluation. There does not appear to have been any consultation or compelling independent assessment, certainly not one that stood the test of hard scrutiny from the likes of surveyors Gerald Eve when they presented their evidence to the Public Bill Committee in another place. There does not appear to be any particular fiscal advantage because revaluations are tax neutral; the basket of values goes up and the non-domestic multiplier goes down, and vice versa. There does not appear to be any particular financial benefit to deferral.
Where was the quoted advantage? It was in the claim that 800,000 businesses would be better off. This simply was not correct. Even on a reworking of the Valuation Office Agency’s figures, one could not arrive at that figure; it just does not make sense. As I said, it was comprehensively demolished by the evidence submitted to the Public Bill Committee by Gerald Eve. The greater certainty claimed for the benefit of these businesses seemed to be the greater certainty of being saddled with, in many cases, an over-high base for the rating assessment.
Whatever the reasons, this has caused a considerable amount of dismay among many bodies associated with businesses, in particular the British Property Federation, the British Council of Shopping Centres and many others. Many of them have taken advice, and have in turn made representations, through rating surveyors. Today, two press releases were put out by a number of these bodies, many of them household names. They all know that the effect, based on the public statistics, will be that retailing in much of London and food superstores generally will gain by the process of deferral. However, almost everybody else will be a loser in all this. Of course, extending the revaluation from five years to seven, even on a one-off basis, will make the process of subsequent adjustment that much more difficult. It is in recognition of that that I tabled the amendment. One has to consider whether it is fair that this situation should be allowed to continue.
I noted in passing a comment that some of the Portas pilot towns in particular, about which we hear so much, are likely to suffer through this. The fact that they need the undivided attention of the likes of Mary Portas means that they have problems. Possibly there is something of a self-fulfilling prophecy here. However, one needs to recognise the message that is being sent to businesses. Perhaps because they do not have votes, they do not matter, and perhaps that is why the information fed back to me suggests that when the industry met Ministers and officials, the tone was entirely dismissive of the industry’s views.
The facts cannot be denied. Accounts abound of commercial ratepayers that are paying more in rates than in rent. Small business rate relief apart—which, of course, is financed by other ratepayers—the incidence of inflexibly high levels of rates stands in interesting comparison to the maligned upward-only
commercial rent review. It is one of those areas where one simply cannot make progress, and something must be done about it.
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A message that the voice of business ratepayers is being listened to and is important has to go out. It is not good enough for these toxic effects on retailing and investment and ultimately land-use decisions to be based on trying to avoid elements of excessive tax. They need fair treatment as much as consistency.
My amendment would not reverse the matter altogether but it would require proper review of the data and an impact assessment. It would require consultation with businesses in exactly the same way as consultations already take place, such as the consultation on transitional arrangements before the 2010 revaluation. It is interesting that this amendment is grouped with the amendment tabled by the noble Lord, Lord Smith of Leigh. My amendment would not delete Clause 25, but I could be persuaded that wholesale removal is ultimately the only practical option. I beg to move.