My Lords, I thank all noble Lords who have taken part in this debate. I state specifically that Amendment 49B would require the Secretary of State to publish updated estimates of the 2015 revaluation and to consult formally with those affected before this clause was brought into force. I say from the outset—and it has been raised—that the Government are totally committed to supporting business and delivering growth by providing a strong economic environment in which commerce and businesses can thrive. Businesses tell us that uncertainty is a major barrier to growth. Any business—small, medium-sized or large—will tell you that.
Clause 25 provides certainty over business rate bills for all businesses in England for the period up to 2017. The noble Lord, Lord Smith, talked about courage, and this policy is not being taken forward out of fear. It is being taken forward to address the issue of uncertainty. As business rates are linked to inflation, that means that there will be no real-terms increase in rates over this period. That is why we have decided to postpone the 2015 revaluation to 2017.
The importance of this certainty has been recognised by the Government in Scotland, who also announced their postponement before Christmas. Last week we heard that the Welsh Government will also postpone their revaluation to 2017. I welcome those decisions as they mean businesses operating across Great Britain can plan with confidence for the next four years. However, during the passage of this Bill we have heard too little from the opposition Benches about the benefits that this clause will give to business. Instead we have heard many criticisms of the Valuation Office Agency’s report on the high level impacts of a 2015 revaluation. In many cases, we have heard of criticisms from the private sector rating agents who advise ratepayers on appealing against the new assessments at a revaluation.
Following the Committee stage of the Bill, my noble friend Lady Hanham committed to, and we indeed arranged, a meeting with the noble Lord and the Valuation Office Agency to hear its concerns and to allow it to address and respond directly. That took place yesterday. I attended the meeting. I suppose I
should be d’Artagnan of the Three Musketeers, but I am breaking ranks here because I am certainly from the other side. Never mind, one for all and all for one and we are certainly for business—and at the meeting certainly the VOA’s explanation of its work was one that I found helpful.
As we have said before, we understand that ratepayers would like to know what the postponement of the revaluation means for individual rates bills. But that is just not possible without spending, as has been indicated by my noble friend, in excess of £43 million on the revaluation itself. What we do know is that the VOA’s report is the only analysis we have seen that has been published in full and looks across all sectors and regions. We have seen studies from some firms which look only at specific prime retail locations and we have seen others which have merely sought to redraft the VOA’s analysis. None of those studies from private sector agents attempts to capture the full picture of the revaluation as has been done by the VOA. As such, the VOA’s report remains the only credible analysis of the impacts of a 2015 revaluation.
I will address a couple of the points that have been raised by noble Lords. The noble Lord, Lord McKenzie, referred to the 800,000 premises that would have seen a real term increase in their rates compared to the 300,000 seeing a reduction. Some sectors, as has been acknowledged, would have paid big hikes including petrol stations at an increase of 28%; the self-catering industry such as caravan parks at 29%; hotels at 6%; theatres at 25%; and pubs at 11%.
The question was raised about the challenge of including the 530,000 in the 800,000. These 530,000 properties were in the “other” category. The VOA acknowledges, as it does throughout its report, that at this stage in the revaluation cycle it has very limited evidence on those properties. But the VOA, as it said in the meeting yesterday, has looked at some of the larger groups of property within this extra “other” category. Within that category we find petrol stations with an increase of 28% tax paid; hotels with an increase of 6% tax paid, and pubs with an increase of 11% tax paid. So the VOA remains comfortable with its professional judgment to support the figure of 800,000 losers.
The amendment also seeks to ensure that we consult with those affected before we postpone the revaluation. On this issue of consultation, of course we recognise the importance of speaking to ratepayers about the rating system. Both the Government and the Valuation Office have regular fora to discuss business rates and indeed in recent weeks the Department for Communities and Local Government has held several meetings with those affected by the postponement of the 2015 revaluation. But, as I have said before, our priority is to give businesses extra certainty now, before the revaluation process starts to raise doubts about future rates bills. As the revaluation is a statutory exercise we need to take primary legislation to stop it. That is why we have moved forward to include these measures in the Growth and Infrastructure Bill. By placing the date of the next evaluation on the face of the Bill, as well as the requirement for five-yearly revaluations thereafter, we have also shown our commitment to keeping rateable values up to date. As the noble Lord,
Lord Smith, said, we have shown courage to ensure that businesses are clear and Governments are clear in setting these revaluations. We will of course continue to speak to representatives of ratepayers about the postponement of the rating system in general.
The hour is late and the noble Lord, Lord Smith, reminded us that we seem to reach this point on this issue at this time. In the light of the reassurances I have given I hope that noble Lords will understand why the Government cannot accept this amendment.
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