My Lords, I have two amendments in this group, to which the noble and learned Lord, Lord Etherton, who cannot be with us because he is arguing his case across the way in the Chamber, has added his name. I declare that I am a member of the Rating Surveyors’ Association, which, together with Luke Wilcox, barrister of Landmark Chambers, has been helping me formulate my views on these amendments.
The purpose of the two amendments in my name in this group, Amendments 2 and 6, is to extend the application of improvement relief, so, to some extent, they follow the lead of the noble Lord, Lord Ravensdale. Without discussing it with him, I opted for extending the application to works carried out within a five-year period. The amendments follow up on the comments made at Second Reading.
The expected lifespan of the many types of improvement may extend to decades. If, as one supposes, the relief is intended to incentivise improvements—not just mandatory compliance works but those which add materially to utility, convenience and annual value—it needs to be an altogether bigger quantum; otherwise, as matters stand at the moment, we will be in a situation where, maybe 13 months after the work is carried out, the rateable value will increase by some 50% of the additional annual value of the works. This may not be so much for the purposes of adding value as of preserving value in the face of decline, so this dynamic needs to be whittled down.
We have issues with the definition of “relief” and whether it will count for anything at all in practice, and of “improvement”, of which other noble Lords may seek to define certain aspects more clearly—I agree with that. Unfortunately, the Government’s protestations about the sums they claim to have earmarked for this relief do not disguise the fact that the design of these things is often such that none of it is ever called on in practice. I will leave that bit of cynicism to one side, but if this relief is to mean anything beyond a fig leaf, it has to be large enough in quantum and long enough in duration to be commercially noticeable and relevant. Some types of improvement may take a considerable time to translate into a business benefit.
Although I understand, for instance, not including developers in the benefits of this measure, I maintain that the net effect of excluding any otherwise qualifying works carried out by landlords for the tenant, for which there may be a higher rent payable, is based mainly on groupthink rather than objective balance. That is the reason behind Amendments 2 and 6.