My Lords, I have Amendment 5 in this group. Its purpose is to probe the expiration date for heat network relief. For example, why have the Government come up with 2030 in this respect? As I said at Second Reading, we very much welcome the introduction of heat network relief but, as I asked then, as the exemption of renewable energy plant machinery is permanent, why has a similar approach not been taken to heat networks?
Also, the heat network relief applies only to what are described as “occupied” heat networks, so it would be helpful to have some clarification of the definition of “occupied”. For example, if the networks apply as a mix of properties, some of which are traditionally occupied and others are unoccupied, is that still considered to be an occupied property, or does the whole property have to be occupied?
More broadly, the aims of this amendment are also to do with the fact that we believe that the reform of business rates as a whole should have the underlying principle and aim to encourage green improvements to business properties, if, as the noble Lord, Lord Ravensdale, talked about, the targets are around net zero and emissions. We feel that all the proposals should have as their aim—at their centre—ways of meeting those targets.
I thank the noble Lord, Lord Ravensdale, for his introduction of this group of amendments. His amendments are very sensible, and I hope that the Minister will look at them carefully. I also take this opportunity to thank the Minister for her letter to all Peers following Second Reading, in which she gave quite detailed clarification of a number of issues, which I am sure we will discuss further today. I put on record that that was extremely helpful.
As for the other amendments in the group, clearly, improvement relief has been designed so that no business will face higher business rate bills for 12 months following qualifying improvements. We also heard from the Minister in her letter and at Second Reading that the Government consider 12 months sufficient for
the benefits to flow through but, clearly, noble Lords who have spoken previously have reservations about this—in particular the noble Earl, Lord Lytton.
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I was pleased to see in the Minister’s letter that the scheme will be reviewed in 2028 but, having heard the concerns raised, perhaps that date could be revisited. Are the Government completely confident in their rationale that within 12 months that will be the case?
The noble Lord, Lord Ravensdale, said that energy-efficiency measures should be considered differently from other measures, which comes back to what I said about meeting our national target by, for example, treating energy-efficiency improvements in the same way as renewable energy installations and exempting them from rateable value entirely. Excluding them from business rates calculations would incentivise business to make those improvements.
I also noted in the helpful briefing provided by the Chartered Institute of Taxation that it is asking why the new relief for improvements will not be introduced until 2024. Its concern is that leaving it until then will incentivise a delay in undertaking improvements. I will be interested in the Minister’s response on that.