Both Bills both provide targeted relief for ratepayers and support the reform of the business rates system, delivering on this Government’s commitments. I am pleased that, with the agreement of noble Lords on the Benches opposite, I am able to bring both Bills to this House today in a joint session. I will first set out the purpose of the lists—or revaluation—Bill, before moving on to the Non-Domestic Rating (Public Lavatories) Bill. I look forward to hearing the views of this House on both.
I know that as we tentatively begin to consider what our local economies will look like on the other side of the pandemic, it is important to recognise the concerns about the current business rates system held by the ratepayers who make up our commercial areas and high streets. It is with this in mind that I move the Non-Domestic Rating (Lists) (No.2) Bill. The Bill delivers on the Government’s commitment to set in law the date of the next business rates revaluation at
The basis of a property’s business rates bill is its rateable value, which broadly represents its annual rental value. This is assessed independently of Ministers by the Valuation Office Agency. The agency has carried out regular revaluations of rateable values since the introduction of business rates in their current form in 1990. These ensure that the responsibility of paying the rates, which fund important local services, is fairly distributed among all ratepayers.
At each revaluation, all rateable values are based on the rental property market at a set date. This is known as the valuation date. A revaluation is an extensive exercise requiring many months of collecting and analysing rents, then the preparation of 2 million valuations. To give the Valuation Office Agency time to prepare these valuations, the valuation date is set two years before the revaluation.
Prior to the pandemic, we had wanted the next revaluation to take effect from
The Bill will also make a change to when the Valuation Office Agency must publish draft rateable values to support the smooth transition of the revaluation. This date will change from no later than
While policy on business rates is a devolved area, the Welsh Government have agreed that the application of the Bill should include Wales. This means that, as in England, the next revaluation in Wales will be implemented on
As I have said, this is an exceptional step, taken in exceptional circumstances, and the Government remain committed to implementing more frequent business rates revaluations. The fundamental review of business rates will look at the frequency of revaluations alongside how they are carried out. It will report on these aspects of the business rates system in the spring. However, this is a step we can now take to provide greater fairness and certainty to ratepayers.
Turning to the Non-Domestic Rating (Public Lavatories) Bill, this Government recognise the importance of public lavatories. That is why at Budget 2020 the Government recommitted to introducing a business rates relief for public lavatories. This small but important Bill delivers on that commitment and responds to calls from local councils. It would ensure that eligible public lavatories receive a 100% reduction on their business rates. It will cut the operating costs of public lavatories, particularly in cases where rates bills are a significant proportion of their running costs, and help to keep these important facilities open. The relief will apply to eligible public lavatories run by the private and public sectors, including those operated by parish councils.
Even now, when we are minimising the use of our public spaces and of public transport, the availability of appropriate toilet facilities to those essential workers who continue to keep our country running, such as taxi and delivery drivers, is of particular importance. Given how vital these facilities are, it is understandable that there has been public concern around the potential reduction in the number of available lavatories. I know that the sentiments of these concerns have previously been reflected in the contributions of many noble Lords in this House. Removing the business rates on public lavatories will make it easier for them to remain open. Furthermore, to ensure this measure is implemented quickly and support provided as soon as it can be, I am pleased to say that, subject to Royal Assent, this Bill will apply retrospectively from April 2020. This means that, for eligible properties, the relief will be backdated to the start of the financial year.
I hope your Lordships will allow me the opportunity to pay tribute to councils, and to the National Association of Local Councils, for their support for this Bill. Let me also thank the private organisations and businesses which, through their launching of innovative local initiatives, have formed the vanguard in the campaign to extend the provision of public lavatories. In particular, I would highlight the community toilets scheme, which has now been adopted by local authorities across the country. This scheme allows the public, in less restricted times, to make use of toilets provided by local businesses and councils without making a purchase. I would also highlight the support that the British Toilet Association has given to this scheme through its “Use Our Loos” campaign and the launch of the Great British Public Toilet Map.
Of course, for people who cannot use standard accessible toilets, it is about not just the number of facilities available but ensuring that the right facilities are available. This is why the Government have delivered in providing more “Changing Places” lavatories to ensure that everyone in this country, including those with special lavatory requirements, can be confident in using our public spaces. At the Budget last year, the Chancellor announced £30 million to fund “Changing Places” toilets in existing buildings and accelerate the provision of these vital facilities. We will announce the details of this funding in due course. The ability of people to enjoy our public spaces, and to support our economy, should not be determined by their disability or personal circumstances. I am proud of the commitments that the Government have already made on this important issue. I hope that the measures included in the public lavatories Bill will help to give people the confidence to get out in our public spaces and support our high streets, once it is safe to do so.
The provisions of both Bills before this House today act only to supplement the extensive support that the Government have already provided to ratepayers since the start of the coronavirus pandemic. In response to it, we have ensured that eligible businesses in the retail, hospitality and leisure sectors will pay no business rates at all in 2020-21. This is a relief worth £10 billion which, when considered alongside small business rate relief, means that more than half of ratepayers in England are paying no rates at all this year. Both Bills before the House form part of the critical package of support for ratepayers and reform to the system that this Government have committed to delivering. I commend both Bills to the House.
My Lords, I want to focus my remarks on the Non-Domestic Rating (Public Lavatories) Bill. I was unable to speak on this Bill when it was first introduced—what seems like a lifetime ago—and I welcome it now with a particular interest.
In 2008, when I was standing where the Minister is now, I was pleased to introduce the then first-ever guidance on public lavatories, designed to prevent further closures, improve access and quality and, in general, to make the point that public lavatories should not be a national joke—let alone a national disgrace—but a local asset, which local people can rely on and take as much pride in as any other local provision. The case made then is the same as made now eloquently by the Minister: that everyone of all ages and conditions should be able to count as of right and dignity on there being a decent public loo accessible. We wanted to expand access and encouraged private partners in retail to consider how they could make their loos more accessible. As the Minister has reflected, a great deal of good practice has been inspired at local level: for example, by encouraging the use of S106 to build more loos and in notable innovations and changes.
However, that was not a national strategy, which was at that time beyond my reach. Sadly, however welcome, neither is this Bill a national strategy. That alone would ensure that there were minimum mandatory standards of access, provision and quality tailored for special needs, particularly those of the elderly and disabled, and the many people who suffer from medical conditions and require frequent access. This is therefore a reactive Bill; it is long overdue and reflects decades of pressure from the British Toilet Association. It has worked with successive Governments to achieve it and we should be very grateful to it, but I think it would agree that a national strategy would be welcome now.
The statistics suggest that in the last decade almost 700 loos have been closed, accelerated, I have no doubt, by the vast cuts in local authority spending. In addition to the loss of public lavatories, we also need to face—as sadly the Bill does not—the degraded and frankly disgusting nature of so many of them. Even in the most beautiful towns such as the one I live in, Lewes in Sussex, our local loos are frankly a disgrace. Other local authorities—Ceredigion in Wales is an exemplar—take huge and award-winning pride in what they offer their local community and tourists. If it can make it an important priority, every local authority can. I should add here how glad I am that Wales is also sharing in this measure.
As with everything else, Covid has exposed the importance of things we took for granted. The awful impacts following closures of public loos revealed that only too graphically. We have also become more aware, as shops and buildings close, that public loos become the only option for people who are still working in the outdoors.
This Bill, which provides business rates relief, is long overdue. It is a modest proposal but it has, in effect, removed what was, frankly, always a historic anomaly. The exam question is: what sort and what scale of difference will it make? In principle, it will certainly incentivise better local provision and free up resources, and it might stop the closure of some local lavatories. However, it is impossible to tell whether it will have a real impact, given that current estimates are that there is a black hole of about £10 billion in local authority finance. It goes without saying that the funding deficit makes it simply impossible for local authorities to provide the services which are so badly needed. As we approach post-Covid better community building, that has to be at the heart of it.
The Bill can be improved in this House. For example, I would like to see more emphasis on how loos in public buildings such as museums, town halls and libraries could be involved. However, I have some real questions for the Minister, primarily regarding how far this small amount of extra funding will go to address the extent of the loss of provisions. My questions are these. What estimates have been made for the public loos that will now be saved? How will this be monitored or reviewed? What guarantees are there that this money will be spent on what it is intended for, rather than lost in the other huge demands of local authorities? What incentives are there that this money will also provide for caring for public loos and providing extra facilities, such as changing places? Finally, does the Minister agree with me that the essential thing now is to build on this Bill, and to recognise that public health—as we know acutely at the moment—needs constant vigilance and constant investment, and local agency and partnership? I ask our Minister to take the lead in pressing for a national strategy.
Public lavatories were a sign of public dignity, of high standards and municipal confidence. They were constructed with care and beauty by our Victorian ancestors. They should also be a fundamental part not only of our public health strategy but of our strategies for equality, ensuring that children can be cared for and comforted when they are out and that parents do not have to search in desperation for a friendly pub, and ensuring that people of all ages, and people with medical conditions, are free to leave their homes without a battle plan for finding a loo and living constantly in fear of embarrassment. This is not a trivial or facetious issue. It is far more profound than we give it credit for because, to take it seriously, if we do not prioritise it, it is discriminatory and dangerous. I really hope that the expectations held for this small but important Bill are fulfilled.
I remind the House that I am a vice-president of the Local Government Association.
First, I want to agree with the concerns expressed by the noble Baroness, Lady Andrews, on the Non-Domestic Rating (Public Lavatories) Bill. I welcome the decision to combine the two Bills for Second Reading, given that there has already been a Second Reading of the Non-Domestic Rating (Public Lavatories) Bill. However, it is also appropriate to consider the two Bills separately as they progress through the House, because they cover different issues.
I shall not say much about the Non-Domestic Rating (Public Lavatories) Bill, as other colleagues on my Benches will cover those issues fully. From my perspective, I welcome the Bill and it is right that the Government have agreed to backdate its implementation to April 2020.
I want to speak on business rates and the need for urgent reform of the system. In his introduction, I think I heard the Minister say on the review of business rates that the Government will be reporting in the spring. I had assumed that the Budget at the beginning of March might be the appropriate time for that to be announced, but it sounds now as though it might actually be early summer. I would be grateful if, when he responds to the Second Reading, the Minister might clarify that.
I accept that a delay in revaluation to 2023 is inevitable, given the coronavirus pandemic. However, revaluation must ensure that local government does not end up being underresourced and that councils are enabled to widen their sources of income. Revaluation, when it comes, will be effective only if there is a root and branch reform of the system, so that it is much fairer to high streets and city and town centres, and raises much more from online retail companies and their warehouses. Valuations in much of retail, hospitality and leisure have become very out of date. We should bear in mind that retailers currently pay over one-quarter of business rates across England and Wales.
I hope the Government will avoid the temptation for further temporary fixes to the system. The system was in great difficulty before the Covid-19 pandemic, but it is now broken. One reason for this is that the current system treats companies in the same way, whether they are making a profit or a loss. This is the consequence of levying taxes on the value of a property as opposed to the value of a business itself. This problem can be made more acute by the need of national and local government to raise broadly the same amount each year from business rates, even if turnover and profits of businesses plummet. Another reason is that the current system does not address the lower business rates paid by companies retailing online and based in out-of-town warehouses. Revaluation must take this into account. I have concluded that we should consider the retail sector as a whole and divide up the tax burden differently, so that online retailers pay their fair share of the total tax bill.
There is a lot pressure to move to an annual system of revaluation. I can understand the arguments for that, but, instinctively, I think that three years would be better. It would reduce administration and allow trends to be more certain.
Finally, there is a very strong case for extending the business rates holiday from April this year. In the current year, the Treasury has written off some £10 billion in business rates, fully exempting around 358,000 properties in retail, leisure and hospitality. The case for continuing the current scheme is strong, probably for another full year, although some selective phasing might be appropriate. That said, the Government should be careful not to give a business rates holiday to companies which do not need it. As an example, large supermarkets—whose profit levels have been rising during the pandemic, as evidenced by their recent results—did not need the help they were given in the current year and so were right to pay it back. The Government should not be borrowing money on behalf of the taxpayer to give it to retailers whose profits are rising. That said, smaller high street retailers, including convenience stores, will certainly justify extra help, well into next year.
My Lords, I welcome the opportunity to debate these two Bills, which I support. I thank the Minister for an online meeting last week. I refer to my professional involvement with non-domestic ratings, my membership of the RICS and other bodies, and my interests as a vice-president of the LGA and the NALC, and as a business property owner.
My own experiences started in the Inland Revenue valuation office in 1975. At that time, residential and commercial properties shared a common valuation approach based on an assumed rent between a hypothetical landlord and a hypothetical tenant. I observed both the Layfield report and the Lyons report, which looked at local government finance and central government grant. My maiden speech here was on the Local Government Finance Act 1988, enacting the ill-fated community charge and setting domestic and non-domestic systems on different trajectories. I was in private practice when the poll tax was replaced with council tax, or CT, based on bands of capital value as at 1991. Business rates remained rent based. Subsequently, there was a capping on limited CT increases, but original value bandings for England remained. Business rates, by contrast, were subject to inflation-plus annual increments to uniform business rates, with periodic revaluations. This divergence has changed the tax burdens.
Things sharpened up when the Labour Government curtailed empty property relief, but nothing matched the later financial shock of the 2010 revaluation, based as it was on 2008 peak-of-market rents, by which time of course values had fallen, with insolvencies and rent voids soaring. I saw demands for a fairer approach, reliefs and more frequent revaluations grow, and the effects of the Treasury principle of fiscal neutrality meaning that changes could not of themselves adversely affect tax yield. Welcome exemptions and reliefs for the very smallest premises were thus funded by larger ratepayers. I benefit from that.
Transitional relief for large changes in the rates burden balanced gainers and losers, but the way in which downward transition now operates means that, in the example of a shop in Canterbury, the 2021-22 rates bill will still be 80% more than it would have been without the relief. That seems intrinsically unjust. More frequent revaluations would reduce or eliminate the need for transitional relief but lack delivery. Ideally, we should have annual revaluations but, like the noble Lord, Lord Shipley, I suspect that that may be impractical, although it is proposed for Scotland. Meanwhile, too many rates bills are still coloured by the never-repeated 2008 rental values.
A surge in rating appeals of course followed the 2010 revaluation—many thousands on that list are still outstanding—in response to which the Government introduced a check, challenge, appeal, or CCA, system. It was designed to weed out frivolous cases and reduce administrative burdens, but it also put significant barriers in the way of genuine cases, perceived by appellants as protecting the Valuation Office Agency, the VOA, from the inevitable results of poorly resourced, researched and compiled valuation lists. Avoidance, needless to say, has become more prevalent.
Criticism continues. Largely because of the inflation-proofed and fiscally protected yield, the uniform business rate has risen to over 50p. Some businesses pay more in business rate than rent; reliefs apart, all pay much more on any measure than their services-hungry residential counterparts or businesses under any comparable European tax. The Minister may well wish to reflect on this legacy. The pandemic measures have been very welcome, but even they do not alter the underlying landscape.
I turn to what I call the “lists Bill”. It puts back the next revaluation to 2023 and cuts to three months the deposit of the rating list before it comes into force. The Minister has said how the antecedent valuation date works, but a 2023 revaluation means a 2021 AVD. Although I am assured that the Valuation Office Agency is confident of the evidence base—despite lockdown, furlough, forced closures, pop-up rent deals and rate holidays—other experts think that market rental evidence this April will be thin and unreliable. For bars, clubs and property valued on fair maintainable trade, current evidence will be largely absent. Delaying the AVD to, say, September or December is possible, but apparently not in contemplation due to VOA operational timeframes. I am not entirely convinced on that but am keeping an open mind.
The reduced three-month list deposit period was originally linked to three-yearly valuations—on which the Bill is silent, so it is a little asymmetric. Checking an assessment and pointing up errors in January is one thing; getting the VOA at a busy time of year to make corrections in time for dispatching rate bills in March is another. Bear in mind that rate demands are payable in full until the rateable value is amended. I note that the LGA says it is altogether too short a lead-in period for its members. So this “lists Bill” has consequences.
On public lavatories, I welcome the overdue and long-promised exemption. I thank the Minister for writing to me last October and for confirming backdating. What the Bill sets out is reasonable and appropriate, but it highlights the need to examine public facility exemptions more generally.
Rental values still afford an excellent market-derived business tax base, but problems with the business rates system remain and, as the noble Lord, Lord Shipley, said, major reform is certainly needed. On this, professionals, local government, businesses, the CBI, Revo and trade organisations are united. I commend the Government for commissioning their fundamental review and thank the Minister for his reassurance, but can he confirm that Parliament will have a chance to debate it?
I hope the review will be bold and will look at the overall business rates system and its fairness within local government finance, alongside the appropriateness of exemptions and reliefs and issues of avoidance. I hope that alternative revenue streams, such as those related to online trading and opportunities for locally managed and levied revenues, will be included. It is not before time; critically threatened physical retailing, as well as many investments, pension schemes and jobs may depend on getting this right.
My Lords, I intend to make only a short intervention today.
Covid-19 has had a massive impact on the sport and recreation sectors. While the arts lobby successfully negotiated a £1.57 billion package of support for the art, culture and heritage sectors as long ago as July 2020, the sports sector has not been so fortunate. Some £300 million in emergency funding was agreed to help sports clubs in England survive the ongoing Covid-19 restrictions during the recent winter. Rugby league, rugby union, horseracing and the lower tiers of national league football were all beneficiaries of the support, but in the world of sport the funding gap exists most prominently—and the pain is most acutely felt—among community sports clubs, local authority sports facilities and the smaller local amateur sports clubs, many of which have been the lifeblood of communities the length and breadth of this country throughout our lifetimes.
During this debate on the Non-Domestic Rating (Lists) (No. 2) Bill, I want to draw one item to my noble friend’s attention, in full anticipation that, having heard him respond to my noble friend Lord Botham when he made his impassioned plea on the subject and received such praise from the Front Bench, today in the wider context of post-Covid non-domestic rating policy, his plea and mine will not fall on deaf ears.
Sports clubs in the community provide opportunities for people from all walks of life to have a healthier and more active lifestyle. Non-domestic rate relief pre-Covid had a significant discretionary element. Charities, other not-for-profit bodies and sports clubs could apply for a percentage reduction in the business rates payable on any non-domestic property which was wholly or mainly used for charitable purposes. There were two elements to this reduction and relief: mandatory by law and discretionary—in other words, at the discretion of the council.
If you were a registered charity you were entitled to mandatory charity relief: an 80% discount on the full or transitional amount due. If you ran a community amateur sports club registered with the Inland Revenue, you were also entitled to an 80% mandatory discount on any non-domestic property that was wholly or mainly used for the purposes of the club. However, the rateable values and the cost to the clubs of going through that process—of being at the mercy of some local councils for part of the rates paid—remained a major cost item at a time when many were barely surviving, and those barely surviving have gone through even tougher times now.
I congratulate the Government on the business rates holiday that is in place and on a range of initiatives they have taken, on which my noble friend the Minister has led from the Front Bench in this House. However, the critical issue for the future—I know this is passionately felt by my noble friend in sport, the noble Lord, Lord Addington—is the continued support for sports clubs. My view is that there should be 100% rate relief into the future from the Government for registered community sports clubs. I believe that the time has now come to raise that mandatory element from 80% to 100% and to remove the discretionary element. This should be a mandatory part of the package of measures to help sports and recreational clubs get back on their feet and play a pivotal part in ensuring that the population is healthier and more active as we emerge from Covid-19 and face future challenges.
In summary, I hope that rate relief for community amateur sports clubs will be made compulsory, and I very much hope we will have the opportunity to return to this in future debates. In the meantime, I appreciate the opportunity of raising this important subject in the context of the draft legislation before us.
Although the focus of the non-domestic rating Bill is relatively narrow—to reset the next revaluation of business rates to take account of the pandemic, which of course I welcome—I urge the Minister to get the Secretary of State, the Chancellor and the Prime Minister to think big about the future of town centres. Covid has accelerated their decline; it is now a really big crisis, on top of the online shopping phenomenon, which has also been accelerating.
The Government need to act because town centres can become the hub of local community and business life. They have been in the past, and, to some extent, they still are—but this role is rapidly shrivelling due to commercial and online pressures and changing lifestyles, which have been accelerated by the pandemic. I believe that business rates and rents have a crucial role to play here. Of course, there is a variety of complex exemptions, suspensions and reliefs, but it is now necessary to have a much more radical and comprehensive solution to this problem, or town centres will die just as we consider future policy to save them.
My own town centre in Neath is a cosy, pedestrianised area, which is very attractive to shop in, although the shops have been disappearing on all levels. There is an old market building with small stalls dating back to 1837 and renovated in 1904, and a great variety of small artisan shops—you can get your watch fixed there. Most people go into a jeweller’s and are invited to exchange their watch when the battery runs out rather than replace it because it is almost cheaper to buy a new one. This issue of the throwaway society, which is ecologically damaging, of course, can be dealt with if there are people who repair them, as they do in the Neath town centre market. A number of other small businesses and artisans offer that facility.
To keep that kind of vibrancy in town centres, they have to be supported, otherwise it is not viable. The town centre and markets are being undermined by high costs, high rents and business rates. This is not the local council’s fault: it does not have the funding or the legal basis to subsidise. We lost our Crown post office, which was put into the back of the local WHSmith, but how long will WHSmith survive across town centres such as Neath’s? We have bank branches closing the whole time; if local post offices assumed a post/bank role, banks could put their facilities in the back.
The Government need a completely new agenda on business rates as they apply to town centres. They should be completely scrapped for micro-businesses in town centres. Of course, there will be issues of defining what a town centre is: would this apply to large village centres, for example? At a central level, the Government have to fund local government because it cannot do this on its own. If rents are not scrapped for town centres, that has to be part of this as well. Of course, local government has had a 30% cut in the last 10 years, so it is no good the Government and Ministers passing the buck to local authorities; the Treasury must step in and take responsibility.
To reduce our carbon footprint and end the throwaway culture, where we never get computer printers repaired or watch batteries replaced because it is cheaper to just throw them away and buy a new one, we have to encourage a regeneration of these local skills and facilities, effectively through a subsidy. To do so, we have to end our society’s obsession with low tax. If we want a decent quality of life in town centres, which everyone says they do, we have to be prepared to pay for it. It is not going to happen on its own—market forces and commercial pressures on their own will not resolve this problem. Treasury funding, provided through local councils, is necessary in order to regenerate and revive our town centres, and I hope that the Minister will seriously consider this option in the future review, which has to be comprehensive.
My Lords, I warmly welcome, for the second time, this Bill to scrap business rates on public lavatories. I hope this will mean that closed loos will reopen and that local authorities will now be encouraged to provide more such facilities, including well-maintained disabled loos with hand-washing facilities. It is imperative that more disabled loos are available for our ageing population because so many people with medical conditions cannot risk leaving home without knowing that there is a suitable loo for them to use.
I commend the excellent facilities provided by Changing Places, which the Minister mentioned in his speech: they have space, hoists and a changing table, and are vital for families with disabled children. I am glad that Changing Places is going from strength to strength, with a clear map of where their facilities are installed.
However, there is a problem with the centrally held database of where there are public loos in the United Kingdom. The Government gave up on collecting this information 20 years ago, and the British Toilet Association would like to help them restart this invaluable database. It also says that local authorities would like clear guidance on cleaning and hygiene measures in these Covid times.
Nowhere in the British Isles should be far from accessible public lavatories, and this situation should be monitored. Is that asking too much?
My Lords, it is a pleasure to follow the noble Baroness, Lady Thomas of Winchester. My interest is in the second of the two Bills before us about the exemption from rates for public lavatories. I too am glad to see it back again, following its having been dropped at the end of the last Parliament. I was one of a very small number of speakers at Second Reading on the previous occasion. It is remarkable and very encouraging that, for whatever reason, so much more interest has been shown in the Bill this time round.
I join with others in welcoming the measure; it addresses a very real problem, which is not much talked about in public but is nevertheless very real. This is not just a matter of convenience, as these places are increasingly difficult to find; it is also a serious health issue, particularly for people with special lavatory requirements or other health problems, who need to be able to easily find such places and have them within easy reach. There are some who dare not go to places where they are not assured of such support; there are others who find taking the risk very worrying and uncomfortable. The cost of providing and maintaining such places is not inconsiderable, so something needs to be done. The help that this Bill offers, however small, is overdue and much to be commended.
The other point that interests me about it and has led me to contribute to this debate relates to my past. I spent some time, during an earlier stage in my career as an advocate, in cases about valuation for rating. I was also the joint editor of the leading textbook on this subject in Scotland. To me, it is of interest to find that public lavatories appear as separate entries in the valuation list. I did not encounter them at any time in my practice, and they are not mentioned in the list of unusual subjects to which the book refers, such as advertising hoardings and radio masts. However, there is no doubt that they should be in the list wherever they exist as separate subjects, with the consequence that, according to the ordinary rules, they will be chargeable to non-domestic rates.
This is the result of two basic rules. The first is that every hereditament or structure that is capable of separate occupation should be the subject of its own entry on the list. The other is that the annual value that must be attached to it for rating purposes is, in theory, the rent at which the hereditament might reasonably be expected to be let from year to year, assuming that the tenant undertakes to pay all the rates and to bear the cost of repairs and other expenses necessary to maintain the structure in a state to command that rent. That may seem rather fanciful in the case of public lavatories, but it is what the rule requires. Nowadays, in practice, that figure is obtained, in cases such as this, by applying a prescribed formula which probably does not bear much relationship to actual rents but is intended to maintain some kind of balance across the entire valuation list.
In this case, we are concerned only with self-standing public lavatories that are in separate occupation, such as one might hope to find in a town centre or a public park or in or near a children’s playground. The Bill is designed to deal with that situation only, as is the method that it applies to ensure that rates do not have to be paid by those who occupy them, by which I mean those who are in rateable occupation as their owners or tenants, not the people who find it convenient to use them. However well disposed their owners or tenants may be to the public need for such facilities in these places, it is unlikely that they would be able to claim relief on the ground that they are charities. The subjects cannot be taken out of the list altogether, as that would be contrary to one of the basic principles. So, the solution is to provide by statute that they are to be entered in the list at zero value, which is what this Bill seeks to do.
Like other noble Lords, I would like to see something done to encourage the more frequent provision of public lavatories in public places such shopping malls, public libraries and bus stations. However, the problem is that facilities of that kind have to be included in the value of the larger hereditament of which they form part. They cannot be extracted from it to form a separate entry, as in the case of the subjects dealt with in the Bill. That is not to say that this is not a very important issue, but the fact is that it is not easy to provide a simple solution for them such as we have in this case. Nevertheless, I hope that the Minister can assure the House that minds are not closed on that issue and that something may be done, perhaps by adjusting the relevant formula, to address it.
I support the Bill and would like it to pass into law as soon as possible.
My Lords, I wish to concentrate solely on the Non-Domestic Rating (Public Lavatories) Bill and, in doing so, express my regret that these two Bills have been harnessed together. They may sound similar, but their impact is very different. I declare an interest as a member of an, as yet, informal campaign group trying to improve the quality of public toilets through the introduction of a toilet hygiene rating scheme.
I will start with a quote:
“The main results from the enquiry are 1) the quite inadequate free provision for women. This is perhaps the most outstanding defect at present existing in London in relation to this important matter.”
The inquiry referred to was undertaken in 1928 by the London County Council. This inequality was made worse by the Public Health Act 1936, which allowed providers of public toilets to charge women but not men for using facilities. That particular injustice stopped in 2008, but the inequalities in provision for women continue. Indeed, official advice from the Health and Safety Executive on workplace toilets still embodies this discrimination, setting in print a recommendation for a ratio of male to female facilities which greatly favours men.
It is a biological fact that it takes a woman approximately twice as long to use a toilet as a man. In addition, an average woman has approximately 480 periods in her lifetime, each lasting three to seven days. Some 14 million people in the UK are estimated to have some kind of bladder dysfunction. Women are more prone to this than men, because of the impact of childbirth. I share with very many women a lifelong sense of injustice that we are continually disadvantaged in this way. When did you ever see a queue outside the gents’ toilets? Modern changes of attitude recognise the argument for gender-neutral facilities, but sadly these are sometimes being provided only with the loss of facilities for women. Women from some faith and cultural backgrounds find it simply impossible to share facilities with men.
Of course, this is not the only shortcoming in our public toilets. There are still far too few changing places toilets, as my noble friend Lady Thomas referred to, with both the space and the high standard of hygiene required for severely disabled people and their carers. There are too few well-appointed toilets for disabled people generally. I also want to make a complaint on behalf of fathers. Far too many sets of public conveniences assume that all childcare is done by women, so baby-changing facilities are in the women’s toilets. Men on their own with children often face an impossible dilemma on where to change their child’s nappy.
I have campaigned on these issues since the 1980s and clearly I have failed, because the number of public toilets has dwindled. When the public complain that their cleanliness and condition are poor, local authorities facing financial problems find that the easy solution—the only solution—is to shut them down.
The Covid crisis has heightened awareness of these issues. First, we all became aware of the need for the highest standards of cleanliness. Combined with pressures on staffing, this posed a dilemma for local authorities, which too often simply shut them up completely. Over the years, as the number of council-run facilities has dwindled, we have increasingly relied on toilets in shops, pubs and cafés, but these have been shut for large parts of the last year. This led to some pretty horrifying situations, which hit the headlines when the Prime Minister suddenly decreed that we could all drive as far as we wanted for our exercise. It was midsummer and the weather was lovely. Hundreds of thousands of people set off for the coast without considering whether there were toilets for them to use during their day out. That incident revealed that good, clean public toilets are an important part of our tourist industry.
This legislation is obviously a good, sensible provision, and I support it, but it is not going to solve any of the problems I have outlined. I note that the estimated cost will be £6 million in England and £450,000 in Wales, which will hardly make up the financial deficit which has reduced the availability of good public toilets over the years. The Minister outlined other initiatives that the Government are taking to improve public toilet provision. We clearly need many more of them. The community toilet scheme that he mentioned started in Wales well over a decade ago, so it is good to see England catching up with this excellent initiative. It is now time for stricter requirements and standards. I note that the provisions of the Bill will not apply to toilets which are part of a larger unit; for example, in a public library. Why not, if they are open for public use? My local public library has the only public toilets for at least a mile and a half in all directions. That restriction seems unnecessary.
It is definitely not in the spirit of the Minister’s speech, which emphasised how imaginative the Government have been in approaching this issue.
My Lords, it is a great pleasure to follow the noble Baroness, Lady Randerson. I should tell her that it is not that she has failed, just that she has not succeeded yet in some of the important aims that she has close to her heart.
I shall say a little bit about the first of the two Bills. I welcome the Non-Domestic Rating (Lists) (No. 2) Bill. I agree that the idea of postponing the date for the next revaluation to 2023, when it was originally to have been brought forward to 2021, makes sense in the context of the pandemic. I think that is the right move. The only points that I would make in relation to that are, first, to stress the importance of continuing the business rates holiday for retail during the pandemic. I welcome the fact that we have had it in this financial year but, clearly, in the next financial year it will be equally important, at least for part of that financial year, as I see it.
As my noble friend the Minister made clear, there remain long-term issues about the fair treatment of town centre retail and the proper taxation of online sales and out-of-town businesses, which we need to deal with. Clearly, that has been heightened in the pandemic. We have all welcomed online sales during the pandemic; they have performed very well. But it highlights the need to have a different tax treatment from the one that we have at present. But I certainly welcome that piece of legislation.
I turn to the second Bill. I should say that I see no problem in dealing with both Bills together at Second Reading. As I understand it, they will be separate for Committee and Report, and I welcome that, too. The second Bill is also welcome; it is virtually identical to one that your Lordships may recall I took through Second Reading in July 2019—the only difference being the retrospective nature of the tax relief that is going to be part of the scenario in this current legislation for the present financial year. That Bill fell with the prorogation and, essentially, this is the same legislation being brought forward again.
I recall from that time—and I highlight an issue that has been mentioned by the noble and learned Lord, Lord Hope of Craighead, as well as the noble Baroness, Lady Randerson, just now—the issue of the separate assessment requirement. The problem with the legislation—and I recall looking to see whether there was a possibility of doing some apportionment—is that, unless the public lavatory is separately assessed as a single unit, the possibility of the business rate relief is not there. If it is part of a shopping centre, a museum or a library or, indeed, if it is with a council car park, the likelihood is that business rate relief will not be forthcoming, as the Bill is structured, because it has to be separate standing. That does not mean that it is not a welcome piece of legislation, but it is a defect, if what we are seeking to do is to improve the scenario demonstrably by ensuring that it is far more likely that we get a good spread of public lavatories throughout the country.
I agree with the noble Baroness, Lady Andrews, that we need to look at this as a more serious issue than is covered by this piecemeal reform, welcome as it is. There is an issue, which we can all identify with as we go around the country and go into our own towns and communities, of the need for proper provision that can be welcomed and held up as an exemplar of what we do as a country. If my noble friend the Minister could say something about the possibility of apportionment or a more widespread reform, so we can have wider relief, that would be welcome.
I agree about the welcome measures that are there—the community toilet scheme referenced by my noble friend, and the Use Our Loos campaign funded I think by Domestos, which is also worthwhile. I also very much welcome the Changing Places toilet scheme. Could my noble friend say something about the MHCLG consultation, which I think ended in 2019, on how we are going to carry that forward and do more? As the noble Baroness, Lady Thomas of Winchester, said, that again is much needed, and something that any civilised society would want to do.
Like others, I welcome the fact that Wales is signing up to both pieces of legislation. That is absolutely right and welcome. The only other issue that I will mention briefly is in relation to Network Rail. As I Minister, I talked with Network Rail about extending free entry for its managed stations, which I think the noble Lord, Lord Kennedy, was also keen on. I think that we discovered that all mainline stations in London had free entry except for Marylebone, for some reason. Does the Minister have any update on that, or could he look at it and let me know by letter and copy it to the Library, about the position there? I very much welcome these two measures and will certainly support the Bills.
My Lords, I welcome the return of the Non-Domestic Rating (Public Lavatories) Bill and hope that it will now rapidly complete its passage into law after the delays that it has suffered since its introduction. I declare a strong local interest, in that Saltaire is a village that is also a world heritage site, attracting hundreds of visitors—most often schoolchildren or retired people, both of which groups naturally ask where the toilets are as they get off the bus.
Bradford Council, faced with continuing cuts in its transfers from central government, closed most of its public toilets three years ago, including those in its three tourist destinations—Haworth, with the Brontë parsonage, Ilkley and Saltaire. I do not blame the council, which has found itself up against extremely painful choices in trying to sustain essential services. It has attempted to transfer the costs of providing these basic facilities on to the local communities, which in turn raises the question of how local councils can raise sufficient funds for services such as this when principal councils have found themselves unable to do so.
The history of local government in England is intimately connected with public health, public and private toilets and the prevention of disease. The history of Bradford and the building of Saltaire were shaped by public health concerns. Typhoid and typhus were rife in Bradford in the early 19th century, as a result of overcrowding and the contamination of water supplies. Titus Salt therefore decided to move his entire works and workers out to the countryside, specifically building clean water and the regular emptying of privies into the design of the village. But Titus Salt did not regard such provision as purely a private affair; he was also a local councillor and twice mayor of Bradford, and he raised local rates to pay for public improvements in water supply and sewage disposal.
It is a sad indication of the peculiar mix of anarchic libertarianism and authoritarianism with which the Conservative Party has now become infected that some have questioned whether the provision of toilets is a public duty. We have heard suggestions that visitors can use local shops instead for toilet breaks—not an easy option in a Victorian village such as Saltaire, where toilets were originally in back yards and are now either in basements or upstairs, meaning no access for the elderly or disabled. At a time when our country is gripped by a pandemic, with the Prime Minister regularly reminding us all to wash our hands as often as we can, the suggestion that people away from home should not have easy access to toilets and washing facilities takes the idea of the privatisation of public services to a dangerous extreme.
There are wider issues here about the future of local government finance—and the future of local government and local democracy as a whole. We have all witnessed the bias against local government that the Conservative Government display, painfully evident in the way that they turned to multinational outsourcing companies to set up the test and trace scheme for Covid-19 last spring, rather than turning to local authorities and their public health officers, who would have known how to do it. Government plans to parcel up bits of Whitehall to dispatch outside London, rather than devolving decision-making power to regional and local government, demonstrate a similar engrained authoritarian centralism.
The Prime Minister’s pledge to level up the neglected communities and regions of this country will not begin to make a difference unless the funding, and the powers, of local authorities in these regions are transformed. The Treasury is now undertaking a fundamental review of business rates, as the Minister noted in his opening speech. But questions of the relationship between local and central government in England, including the fiscal and redistributive aspects of that relationship, go much wider than those of business rates alone, of which the provision and financing of public toilets is itself only a small part. The Government have promised us a devolution White Paper. I look forward to the publication of that, and I hope that Ministers will be open to a wide debate on the future of England’s local and regional government when at last it appears.
My Lords, I thank the Minister for his introductory remarks, and, like many others, I support these Bills. I will confine my remarks to the Non-Domestic Rating (Lists) (No. 2) Bill, not least because the other Bill—and the important subject it raises—has been dealt with comprehensively and succinctly by my noble friend Lady Andrews and a number of others, embellished by the hygiene history of Saltaire given by the noble Lord, Lord Wallace. It is always a pleasure to follow him.
Like other noble Lords, I fully understand the need for the measures contained in the Bill. In effect, in summary they will help ensure that future business rates will better reflect the potential effect of the Covid-19 pandemic on the commercial property market by postponing the date of the next business rates revaluation until April 2023. It seems to make sense—not least to the business community affected—to take into account the effects of changing market conditions, and that is why I will support the Bill. But perhaps the Minister could respond to one or two questions and queries that I have regarding the Bill.
First of all, it seems to me that the delay cuts both ways. Does it not mean, for instance, that some businesses badly affected by the pandemic will have to tolerate their existing burden of rates—assessed and set in perhaps much more benign circumstances some years ago—for potentially an additional two years, while their present commercial reality may be much changed for the worse precisely because of the pandemic? To address this, could not the new valuation and assessment, taking into account the effects of the pandemic, be carried out in a much shorter time than the additional two years outlined in the Bill? Perhaps the Minister could tell us.
Secondly, as we have heard on several occasions, the Government are presently undertaking a fundamental review of business rates and, as part of that exercise, they are considering the frequency of future revaluations. Can the Minister tell us what specific implications, if any, today’s Bill might have on that review? Can he assure us, for instance, that the review will not be unduly delayed because of the measures we are considering today, or are we to assume, as I did from his opening remarks, that there has already been a delay on this, partly—presumably—because of the attention being given to the pandemic, including those aspects which relate to the present Bill?
Thirdly, will the additional time being allowed by this Bill permit a consideration of wider changes in market conditions outside of those directly springing from the pandemic? Is it to be exclusively centred in its consideration on the pandemic itself, or, for instance, are the short-term effects of Brexit, which may well prove as deleterious as the pandemic itself for some businesses, to be taken into account?
Finally, in supporting these measures, I should say that, as others have stressed, while they are a common-sense response to a temporary and, I hope, unique challenge—the Covid-19 pandemic—they do not provide a long-term solution to the recurrent problems and criticisms associated with the present valuation process, with which all of us are very familiar. That will be provided only by the review and reform of the whole process mentioned by the Minister. I hope that the Minister can assure myself and all the other noble Lords who have raised this that it will be a thoroughgoing review, followed by the expeditious implementation of the necessary and appropriate reforms, and that that is the Government’s prime longer-term objective.
My Lords, I thank the Government for introducing the Non-Domestic Rating (Public Lavatories) Bill, which applies business rates relief to all public lavatories in England and Wales. We know that many public toilets have closed during the Covid-19 pandemic, and this Bill helps local authorities and others who provide these facilities to keep them open, cleaned and generally maintained.
As co-chair of the All-Party Parliamentary Group for Bladder and Bowel Continence Care, I cannot overstate the importance of government support to keep public lavatories open at this time. It is important to understand, however, that the decline in access to public toilets predates the current pandemic, and I will briefly highlight what I believe are the most urgent issues which need to be addressed.
First, there is no verifiable data on the total number of public lavatories in England and Wales. The British Toilet Association estimates that there has been a 60% reduction in the number of public toilets in the last decade—60%, my Lords. According to the National Association of Local Councils, business rates on public lavatories cost local councils around £8 million each year. Increasingly, local councils are picking up the management of public lavatories due to financial pressure facing principal councils. One of the reasons this is so urgent is that there are 14 million people in the UK living with bladder control issues, and 6.5 million with bowel issues. A Royal Society for Public Health survey in 2018 found that one in five people do not feel able to go out as often as they would like due to the lack of public toilets provided throughout England and Wales.
One group who have been negatively impacted by the closure of public toilets throughout the coronavirus pandemic are bus drivers, delivery drivers and others who work in the transport sector, who are increasingly helping all of us during this time. One way to support these essential workers is to ensure greater access to toilets.
Not only do we need more public lavatories but we need to ensure that these provide the support that people need; for example, there are often no bins provided for the disposal of stoma and other continence and personal care products, especially in men’s toilets. Also, people with severe disabilities require toilets with hoist systems and height-adjustable changing benches, and there are still too few public lavatories with these facilities across the country.
It is recognised that there are economic benefits of providing clean and accessible public toilets: doing so boosts tourism and supports businesses on the high street. The Bill is an important first step towards achieving this.
When the Bill was debated in the other place, it was suggested that the Government publish an assessment of the impact of this legislation and that as part of this assessment they should start collecting verifiable data on the number of public lavatories in England and Wales.
The Public Health (Wales) Act 2017 requires all local authorities in Wales to publish a local toilets strategy by 2021. The aim of this is to encourage Welsh local authorities to invest in public toilets. Local authorities in England should also be required to publish a local public toilets strategy. By collecting and publishing verifiable data on the provision of public lavatories, the Government would be supporting local authorities in delivering such essential strategies, which is surely the minimum we can demand.
I end by commenting that until public lavatories were introduced in railway stations, only women with personal maids could travel—which we sometimes forget. Public lavatories are essential, and they become more and more so as we hope we can become more and more civilised.
My Lords, it is a pleasure to follow the noble Baroness, Lady Greengross. I declare my interest as a vice-president of the Local Government Association. I fully support the comments of my noble friends Lady Thomas of Winchester and Lady Randerson on the NDR (Public Lavatories) Bill. It is essential, in terms of equality, that the number of disabled lavatories and access to them should be increased, not only in town centres but in visitor attractions and beauty spots around the country. Other Peers have spoken eloquently on that issue.
Turning to the NDR (Lists) (No. 2) Bill, I have a few points to make. While I support moving the date for compiling the lists to
It is important that we fully understand what is happening to our high streets. During lockdowns, most of the retail and market outlets are not able to trade. Some retail outlets have been able to move their business to online trading and delivery, but most have not. We have reached a stage where enormous warehouses have been constructed to service online business, but they do not contribute in the same proportion as high-street businesses. Now is surely the time to readjust the rating system so that the rateable value and rates paid by high-street retail outlets is radically reduced permanently. At the same time, online warehouse operations should be taxed in proportion to their size, turnover and profitability.
While it has been enormously beneficial to people to be able to buy goods online during lockdown, especially in the run-up to Christmas, the effect on the high street has been catastrophic. Many retail outlets rely on the December trade to see them through the rest of the year. I am sure the Minister does not wish to see a return to the moribund state of our high streets during past recessions. I welcome the rate relief which the Minister has set out to alleviate hardship during Covid, but that is only short-term.
I will speak briefly on mixed hereditaments. Many, many years ago I sat on rating appeal tribunals. While a large proportion were about dates, there were a proportion of mixed hereditaments, with those living in premises above retail outlets which they ran having concerns about their rateable value. The Government have been keen to increase the housing supply by allowing developers to give notice to quit to business tenants in blocks of flats in town centres over retail outlets. These premises were then allowed to be converted into domestic dwellings. These conversions have not been subject to building controls, and in many cases have resulted in substandard accommodation with very limited space.
Can the Minister say whether these newly converted domestic dwellings were subject to reassessment of their rateable value? Were they changed from business rates to domestic rates? Did the local authorities in which the dwellings were situated receive less in rates payments than previously or more? As the Minister knows, local authorities are very dependent on the receipt of rates to help balance their budgets and to fund their vital services to the community.
While providing homes for those desperate to escape sofa-surfing with their long-suffering friends and relatives, it is important that the accommodation provided through office conversions is adequate, meets minimum standards and provides a dignified living space for their residents. I look forward to the Minister’s response on this and other matters in this debate.
My Lords, the non-domestic rating Bill is a simple Bill but it has some important ramifications that I want the Minister to clarify in this debate.
The first point I want to explore is how the Government intend to compensate local authorities for the income lost through the current Covid-19 emergency rates rebates, particularly for retail premises. As the Minister himself said, that has cost around £10 billion in this financial year, and it is at least a possibility that there will be some extension of that rebate system into the next year. My first question to the Minister is therefore: who is carrying the burden of that shortfall? Are the Chancellor and the Treasury making up the missing income so that local authorities do not lose out on the redistribution, or is the payout to the fund being cut and the damage borne by local authorities? The Minister may feel that that is outside the scope of the Bill, but that matter is very relevant to the point I shall explore in just a minute or two.
The Bill is the end product of a yo-yo policy-making process by the Government. Plan A was to reduce the review periods to every three years with a review date in 2022. That was changed to an intention to bring the review forward to 2021, to tackle the increasing evidence that outdated valuations were producing more and more unfair burdens for some—especially high-street retailers—and unearned tax holidays for others, especially distribution centres and out-of-town warehouses.
However, we now have a Bill that is to be effective from 2023, which is one year later than the original plan A and two years later than plan B. The Bill, plan C, avoids carrying out revaluation surveys until the Covid-19 pandemic is over—we sincerely hope. That makes sense in the current circumstances; it is not an issue for me at least. But the crucial point that remains is for how long hard-pressed retailers will be left paying exorbitant rates for rapidly depreciating high-street locations. How soon will they get the relief they so desperately need? One unintended result of the switch from plan B to plan C could be that that relief will be delayed by up to two years—a point the noble Lord, Lord Reid of Cardowan, made eloquently.
One key to this may be the antecedent valuation date, or AVD. That is the baseline date from which assessing the rental values will be made. I am indebted to the Association of Convenience Stores for its briefing on that topic. The first part of the briefing welcomes a proposed AVD of
The Bill is running two years later than the Government originally intended. There must not be a two-year delay in bringing the benefits of an updated valuation to the retail sector, which has been left on its knees, not just by Covid-19 but by underlying trends in retail purchasing that were already in train but have been hugely accelerated as a result of it.
If the revaluation is done this year and comes into force only in 2023—and, even worse, if there is any kind of a transition period that delays any benefits to it—the retail industry, already struggling desperately, will be left high and dry between the end of the Chancellor’s scheme and their incoming reduced rates bills. That brings me back to the working of the current retail rate relief system. If the Chancellor has acknowledged the acute pressures facing retail businesses by granting them business rates relief, and if he pays heed to what the Association of Convenience Stores and many others have had to say about extending that scheme, surely there has to be some joined-up thinking across government departments. It cannot make any sense for there to be a critical gap of two years, possibly more, between the end of the Chancellor’s scheme and the delayed implementation of the rates revaluation, given that that review is to be based on an AVD of
Can the Minister confirm that the AVD will indeed be on
Finally, if an early start is not an option, will he work with the Chancellor to provide appropriate transitional support to that sector between the end of the Chancellor’s scheme—that is, the current support package—and the new valuations taking effect? It would be folly for what is now a two-year delay in the original timetable proposed by the Government, which would lead to a near-fatal blow to our high streets—
I wish to address the Bill concerning non-domestic rates on commercial premises. The other Bill has been well discussed; I certainly support it. I declare my interests as in the register.
I cannot make these comments without some focus on reform of the system. By way of background, I spent some 40 years working in non-domestic property. I also spent a limited time—but some time, nevertheless—in the rates department of my firm, where I learned that this is a highly specialised sector lying within a specialist division of the RICS. It is a complex business.
This Bill is about moving the revaluation date forward, thus adopting values from March this year. I believe that it is flawed. In the retail sector, it will be very difficult, if not impossible, to establish estimated rental value—ERV—based on supply and demand and comparable evidence. There are probably thousands of empty shop units across England and Wales. Some will have had no offers for many months, let alone competition—an unheard-of blight in my 40 years of market practice. Many landlords have given up the premises for temporary charity use precisely to avoid the NDR obligation. There is virtually no retail letting activity from which the ERV must be assessed in only a couple of months’ time.
This blight was predicted. For 10 years at least, the industry has been debating the implications of internet shopping for the traditional retail format of high streets, out-of-town shopping and shopping centres. The threat was clear, and it has arrived. Traditional retail must change dramatically if it is to survive the low-rent, low-rates model of internet shopping.
Of course, the body blow to traditional retail is Covid. For many retailers, it is the death knell of their businesses. Every day, the newspapers remind us of high street retailers folding. A few will be bought out of administration but many will disappear, with jobs lost, debts, personal guarantees and tragedy. However, if you are Amazon or any internet retailer, Covid has played into your hands, with low rent, low rates and collapsing competition.
With the Government turning something of a blind eye to the soft rates regime for these internet businesses, the high street carnage comes as no surprise. Yet this could swiftly be corrected if the rating value rules recognised internet warehouses as the engine room of internet shopping. The burden of rates should follow the money and the profits. We should treat these warehouses as the retail properties they have become. The Government have provided Covid rates relief—huge relief—but to the high street, this is a stay of execution, not a cure. Retail patterns are not changing; they have changed.
Moving the valuation date will require valuers to assess ERV at the trough of a dead market. There will be little evidence. The problem will arrive with an appeals process of huge proportions. There will be a tsunami of claims. Without internet shopping, this would not be a problem.
The fundamental review that we expect in the spring, as mentioned by the Minister, is welcome but I fear that these events are occurring in the wrong order. The definitions of “internet shopping” and “distribution centres” must be rewritten to acknowledge their role. Following that event, the valuation process could unfold. High street retail could settle down. Rates would be at an economically justified level. Post-Covid markets would be able to return to a balance between supply and demand.
I fear for those in the VOA who, I believe, will be overwhelmed by the appeals process. I am afraid that the NDR, as applied to retail, is a broken system. There has been a simple transfer of retail trade away from shops to the internet without the corresponding and necessary transfer of rateable obligation. Can the Minister tell the House how long we must wait, following the review, for legislation to reform fundamentally the non-domestic rating system?
My Lords, I welcome both these pieces of legislation. They seem an odd coupling, though, so I hope that the Minister will manage to separate out all the comments on the two. I declare my interest as a vice-president of the Local Government Association.
First, I want to talk about taxing online businesses. They were already outdoing physical businesses before the pandemic, but now, our rapid transition to a digital life over the past 12 months has concentrated commerce into a very small number of online businesses while small high street businesses are really struggling—much more than they did before. It is obvious that we need some sort of online sales tax so that online businesses do not have unfair tax advantages relative to physical businesses. The revenue should go to the local authority of the delivery address. It is a real pity that the Bill does not include such a measure, because this is an opportunity not to moan but to encourage local businesses, which is what we should be doing.
It is good that the Government are finally delivering on their promise to scrap business rates for public toilets. Public toilets are important for everyone but they are especially important for people who might need to use the bathroom more due to age, illness, disability and a whole host of other reasons. Should we be doing more to support their provision? Rather than just scrapping business rates, we could employ a negative rate so that public toilets could earn a rebate based on their rateable value. Businesses and premises that allow the public to use their toilet for free—that is, without needing to buy anything—would therefore benefit. The Explanatory Notes give the example of a toilet in a library premises not being eligible for the zero rate. This is a missed opportunity to encourage more premises to make their toilets readily available to the public. Of course, if, like the Victorians, we were prepared to build new public toilets—or even open the Victorian ones—we would not need to do this.
Finally, I shall talk more broadly about the old system of land taxation. It is a long-standing and fundamental policy for the Green Party that all land should be subject to a land value tax, which would share the unearned value of land use among the community. A policy of taxing land value would act as an incentive to encourage good stewardship and to reduce corporate land ownership—and, of course, the practice of land banking. It would encourage the best use of all land, compatible with the agreed permitted use, encouraging urban land to be used to its full extent and discouraging land ownership for investment purposes only.
A policy of taxing land value would bring many benefits to a large majority of the population, whether urban or rural, including owner-occupiers in small or medium plots and those who do not own land. Taxing land value thus contributes to the creation of a decentralised and sustainable society. Eliminating speculation in land and stabilising prices should make land more available at cheaper prices, enabling more workers’ co-operatives, small-scale enterprises and other community ventures to flourish.
The key difference of a land value tax compared to business rates and council tax is that the tax is levied on the unimproved value of the land itself, not the rentable value of the buildings placed on that land. The level at which the tax would be levied would be based on the full value of the current permitted use of the land, so permitted use would mean, for example, that the taxable value of land deemed by the community to have special amenity or habitat value would inhibit use for a possible greater financial return. When it is considered desirable to change the use through the land use planning framework, this new permitted use would then form the basis of the assessment, so communities would be able to keep what they see as valuable land, which might be open space or habitat for animals, without incurring huge costs.
I would love to hear the Minister’s views on land value tax and for him to take the issue away to explore further with officials. We should be taking a much deeper, longer-term look at reforming the whole of land taxes in this country. This is perhaps not the moment—but if not now, when?
My Lords, I wish to address the Non-Domestic Rating (Lists) (No. 2) Bill, and much of my comments will reflect the speeches of the noble Lords, Lord Stunell and Lord Thurlow. Although this is a short and, I suppose, on the surface relatively uncontroversial Bill, amending the date of the next revaluation for business rates to
The Minister will know that retail is a sector that generates about £20 billion in taxes and contributes about £7.5 billion in business rates each year, largely from the high streets and town centres, with further tax contributions made throughout the supply chain. The burden of business rates has risen extremely high in the past 30 years, up from an average of 35p in the pound of rateable value in 1990 to more than 51p, causing business failures, store closures and job losses. The problem for physical retail is accentuated by the rise of online retail and is most acute in the north and the Midlands, adding to the business pressures on those communities.
Frankly, in my judgment, the system is broken. From my past activities in the Commons—that is why I took 1990 as a reference point—and before that as leader of the London Borough of Islington, I believe that business rates have always been a challenge. Now we have a pressing need for a fair system of taxation for business. We need an urgent plan to keep rates at manageable levels to save jobs and retain the character of our shopping places, town centres and high streets. I have done some consultation with the industry, and there are three points it would have me make, which I now make—and agree with. First, we should reduce and fix the uniform business rate from the current 51p-plus rate back to somewhere near 30p, so that it more closely reflects physical retail’s share of sales in the 2020s. Secondly, we should introduce annual business rates revaluation from 2023, to ensure that business rates are fair and accurately reflect market conditions. Thirdly, we should abolish downwards transitional phasing to further support the recovery of the retail sector.
In the immediate term, the Government need urgently to commit to continuing the Covid-19 business rate holiday for retail. The industry itself has accepted that at the end of the current system, a 50% rate would seem appropriate. However, we now have a somewhat different situation because of a significant rise in Covid-19 cases, which has led to the current lockdown. We now see it as vital for the Government to sustain the current relief at 100% until the end of the pandemic to enable retailers and businesses to make the decisions needed now to ensure their survival and recovery next year.
I understand that the industry supports April 2023 as the next revaluation date, but has real concerns about the antecedent valuation date—the AVD—set for
Reliable market retail data, which is the basis of AVD, will not be available until at least April 2021 and maybe not until the following January. I therefore urge my Government to defer the AVD, which is specified in secondary legislation, so that it will not affect the primary legislation. I conclude by saying once again that this debate on this Bill provides a unique opportunity to highlight the need for fundamental business review.
My Lords, I refer to the Non-Domestic Rating (Lists) (No. 2) Bill, and agree with much of what the noble Lord, Lord Naseby, just said. Although I welcome that the Bill postpones the revaluation of business rates until April 2023 to help firms affected by the pandemic, I cannot but think, as a number of noble Lords have expressed, that this is a missed opportunity for root-and-branch overhaul of the rating system, despite the Minister having pledged that there will be a review of the current system.
The economy is facing a double-dip recession and many businesses are under extreme financial pressure, as several noble Lords have said. Spending patterns are changing as more goods are bought online. High business rates are killing off our high street and, in these circumstances, a further hike in rates, even two years down the road, will sound the final death knell for many struggling businesses. The noble Lord, Lord Hain, described his experience with his local high street and the independent traders there that are under threat.
As the CBI pointed out in a recent report, the uniform business rate has risen by 44% over the last 30 years. The UBR would be lower if it had risen only in line with inflation. If the switch in indexation from RPI to CPI had happened earlier, it would have saved businesses £13 billion over a nine-year period. The UBR makes up a significant proportion of fixed costs for businesses—another reason any further increase should be delayed beyond 2023. The Government should look at rebasing the UBR, which would boost business investment and fuel economic growth at a crucial time for the UK’s economic recovery from Covid-19.
The CBI has made a number of recommendations and I hope the Minister will take them on board, particularly when the review gets fully under way. For example, for the remainder of the 2017 revaluation period, the Government should freeze the UBR. As a number of noble Lords have said, relief should continue to be targeted to support the most vulnerable businesses, so badly hit by the pandemic.
The Minister should ask himself, “Do we want to save our high streets and many smaller businesses, or not?” Currently, any business that can operate remotely will continue to do so, with implications for the economic health of our city and town centres. The incentives to cut staff and operate from smaller or with no office space will continue. Remote working can bring many benefits, especially if linked to more flexible working, but it should not lead to the shrinkage of our vibrant business sector and have the effect of turning our urban centres into ghost towns.
My Lords, my taking part in this Bill is totally down to the presence of two other names on the list. The first is that of my noble friend Lady Thomas, because of the points she made when one of these Bills was first presented to the House. When I heard her speech, I said, “I should have been there to back her up.” The second is the noble Lord, Lord Moynihan, because when he puts his name down you can reckon there will probably be something about sport. There was not a big jump from rating to small sports clubs—it was not down, but it was something that was going through.
To deal with them in that order, the provision of public toilets, particularly for giving some support to those who are disabled and need access to them, is something a civilised society should do. If you think about it, what you are trying to avoid is a disabled person being fundamentally humiliated—or risking that—when they go out in public. To be perfectly honest, if someone fouls themself, it is not only unpleasant and unsightly, but that person has been marked down as “other”—as being beneath you in public. That is what it effectively amounts to. You have to bear that in mind. You have to actually put that down and say, “That will restrict that person; that fear will restrict them more than just about anything else.” Anybody with them does not want to go through that either.
In coffee shop culture, if we ever get back to it, where cafés have a loo, there is also that little sign that we used to see only in pubs: “Customers’ use only”. It is not a public facility; you are not sure if it is there. You have to go into the place and find it. Is it upstairs or down? We do not know. Many of the suggestions we have heard today, about making available the knowledge of where toilets are and so on, are things that, as a civilised society, we should take on board fundamentally.
To turn my attention to the points about the rating value and the amateur sports groups or smaller sports clubs, we have agreed the principle; let us get the practice down so that it is easy to administer. Let us help these groups. In our society we have a huge bonus in our small sports clubs because, due to historical accident, they are usually self-funded. Local government is not required to provide the stade municipale, as it would be in France. Small clubs have financed themselves. They have given us an infrastructure that will implement government policy—and has been seen as something to implement public policy—for many years. Give them this little bit of help. The principle has been accepted; just say, “Go and get on with it.”
I do not know how many times I have said this, but we have institutions funded either by people taking part and paying a match fee—or whatever you call it—or by the bar. Neither of those income streams is coming in. The Government will have to look at this and are probably keeping an eye on making sure that these institutions stay there, but the higher echelons of most of these sports are not generating the money that used to trickle down. We have a major problem there to keep something that we need and use—to implement the rest of government policy—functioning, or at least functioning at the rate it should. You will not get more people being more active without the use of these things. Even in later-life activity, if you have never moved till the age of 50, and then someone says, “Why don’t you go for a walk with everybody else?” it will be like climbing the Eiger to go up a small hill, to be perfectly honest. We have to make sure that the facilities are there.
I will leave my remarks there, but unless we address these fundamental problems, by making sure that somebody feels safe and has their personal dignity intact when they go out, they will not go out. Let us make sure that we have public toilets you can get to. When it comes to sports clubs, if you have something for free, provided by the general public, that implements government policy, it is insane not to make sure that they can continue to function in the future, especially after the experience of Covid.
My Lords, I am glad to follow the noble Lord and I very much endorse what he said on those subjects. I begin by declaring my relevant interests as set out in the register.
I wholly endorse the powerful and often moving points made by the noble Baronesses, Lady Andrews, Lady Thomas of Winchester and Lady Randerson, the noble and learned Lord, Lord Hope of Craighead, and the noble Lord, Lord Wallace of Saltaire: we cannot, in a civilised society, allow squalor to prevail when we should have dignified surroundings. If anything underlined the need for decent public facilities in the form of public lavatories, it was the series of repulsive scenes in the summer when people flocked to tourist areas and defiled them—in some cases wantonly, but in others because there was no adequate facility.
I want to concentrate my remarks on the Non-Domestic Rating (Lists) (No. 2) Bill because it is absolutely essential that we concentrate, as many noble Lords have this afternoon, on the dire future facing the retail trade—in particular the entertainment sector, including hotels, restaurants, cafés et cetera. I congratulate the Government and thank them warmly for the rescue action they took last year in giving the business rate holiday. They were right to defer the revaluation.
I want to concentrate my remarks on our town, city and, indeed, village centres, and on our high streets. The noble Lord, Lord Hain, in particular, made some extremely important points: if you want to sustain the throwaway society, all you need to do is depopulate our town and city centres. What has to be addressed in the review—it is vital that it is thorough and that we have it soon—is the disparity of treatment between town centre and high-street shops and the vast warehouses, which we have all drawn on during periods of lockdown. They perform a valuable service but they are getting away, if not scot free, then with very little to pay for it. We have to readjust the balance; we have to means test business rates in a way that means the Amazons of this world pay what they properly should, and the small, specialist shops in a glorious town such as Ludlow in Shropshire, or Louth here in Lincolnshire, are not penalised to the point of extinction.
Let us concentrate on this specific issue, and let us also remember that while we have to nurture the smaller shops so that they survive, we have to recognise that the supermarkets have prospered wonderfully over this last year. After all, they are virtually the only large shops allowed to be open at the moment. I thank them for their service. We all depend upon them. They were right to pay back some of what they had been given, but they must be treated differently from the smaller shops.
We have to remember in this context that one of our greatest industries, on which we will depend considerably in the future, is tourism. If we rip the heart out of towns such as Ludlow and Louth by, in effect, closing their restaurants, pubs, et cetera, and their smaller specialist shops, we will certainly decrease the attractiveness of our towns and cities to tourists.
I implore my noble friend to do all he can to bring on the review, but he must make sure that it is thorough and realistic. We all remember the poll tax; I do, as one who never cast a single vote in its favour, even when it was introduced in Scotland. We do not want to have a review that leads to anything like that. We must reform our non-domestic rating system to allow prosperity to return to our towns and cities. If we do not, we will have missed an opportunity. The business rates holiday must continue throughout this next year; otherwise, we will destroy that which we proclaim we wish to preserve.
My Lords, this government Bill will introduce 100% mandatory business rates relief for public lavatories in England and Wales. In recent years, organisations such as the Royal Society for Public Health have expressed concerns about the rate at which public lavatories have closed. According to data obtained by the BBC in 2018, local councils have stopped maintaining at least 673 public lavatories across the UK since 2010. Local councils have also reduced the number of lavatories they maintain over the past few years.
In the March 2020 Budget, the Chancellor recommitted to reintroduce business rates relief measures for public lavatories. He said that it would apply retrospectively from
“keep these vital facilities open.”—[
The coronavirus pandemic has also led to local authorities temporarily closing some public lavatories to help reduce the spread of the virus. The closure of such facilities has had a massive impact on those who require access to them, including those with medical needs and pregnant women. The closure of such facilities could push people further into the shadows and heighten their isolation.
While the rates reduction is a good measure by the Government, coronavirus has once again created further difficulties. Only the scientists can find a solution, with the full co-operation of local authorities.
I remind the House that I am a vice-president of the Local Government Association. As my noble friend Lord Shipley and others have so ably stated, we have few issues around the specifics of the Bill and the most pertinent points have already had a good airing during this excellent debate. Like many others speaking today, I believe that the time for tinkering with and tweaking the business rates system has long passed. I eagerly await the outcome of the review and urge the Government to be both bold and radical.
During my years as the elected Mayor of Watford, in any discussion with businesses in the town, business rates would crop up. I had a set patter about how we, the local authority, did not set business rates, nor did we get all the money into our coffers; we were merely the collector. Interestingly, that fact was always greeted with incredulity. The first complaint was that the rates were too high, of course, and the next that the system of exemptions and reliefs was too complicated; it is. Then, a matter of which I knew nothing at first was the long gap between valuations and the real problems that led to. They clearly felt that such valuations were out of kilter with local economic realities and should be more frequent. In previous iterations of the Bill, as was mentioned by the noble Lord, Lord Bourne, a period of three years was proposed, but it has now gone back to five years, while many groups press for annual valuations. Perhaps the Minister could explain the thinking behind that.
There is no doubt that the Bill, in kicking back the revaluation by a further year, will give businesses some stability, which has been broadly welcomed. But I fully agree with the noble Lord, Lord Naseby, on the AVD, and I too would like the Minister to explain the rationale for the next valuation to be based on April 2021 costs and rentals. That is surely too early for the full impact of the pandemic to hit, and yet it will not be implemented until April 2023. As my noble friend Lord Stunell said, businesses that get a valuation downwards have to pay more rates for a further two years, at an already difficult time.
If I really wanted to see sparks fly in the conversations I mentioned earlier, I only had to mention transitional relief schemes. This is but one of a number of examples in which the current web of reliefs hinders the system and, more importantly, contributes to further unfairness. It needs serious reform. There was also always “Don’t get me started on appeals,” usually with a look towards the heavens. Appeals have already been mentioned by several noble Lords, as well as the backlog of 50,000 cases for the 2010 and 2017 lists. Minister, is there a closing date for the appeals from the 2017 list yet? Within the forthcoming reforms, is there consideration for a much shorter window of time following a revaluation—say, six months—in which to appeal?
It has long been recognised that the Valuation Office Agency is not agile enough to keep up with and adapt to changes in demand within sectors, such as the shift towards online, which has been much mentioned this afternoon. The case could be made that delayed devaluations have, in fact, acted as a subsidy for online retail. While logistics space has massively increased as a result of this trend, it is not taxed anywhere near as heavily as retail shop space. Are the Government looking to address this particular unfairness in their upcoming reforms? The VOA has been criticised for being difficult to deal with and cumbersome, and its valuations as often opaque and inconsistent. Minister, will any consideration be given to local government being the responsible authority for valuations, working in genuine partnership with local experts who know their patch and can respond to change more quickly? This happens successfully in some other countries, often alongside annual revaluations. It can be done.
The principle behind the local retention of business rates is good but, unfortunately, in reality it has meant that local authorities are now competing with each other, not only to attract inward investment, but even to outbid each other in the now controversial commercial entrepreneurial investments. I feel that, particularly in a two-tier system, economic areas are just too small to be really effective and local enterprise partnerships lack the powers and finance to make a difference.
Combined authorities, however, are showing what can be done to drive improvement across larger economic areas. Minister, to encourage and incentivise councils to work together on economic development, which is surely needed, would the Government consider allowing areas that agree to work in this pooling system to keep 100% of their business rates? Finally, can the Minister at least hint at whether it is the Government’s intention, eventually, to transfer the powers and freedoms around businesses rates that are currently available to elected mayors in combined authorities to all local authorities?
My Lords, it is a pleasure to follow the noble Baroness, Lady Thornhill. I will address the Non-Domestic Rating (Lists) (No. 2) Bill. I happen to agree with the noble Lords, Lord Hain and Lord Cormack, that there is a fundamental direct correlation between business rates and the prosperity of our towns and cities, and there is a clear need for business rate reform. In his opening address, the Minister referred to a report on this being forthcoming in early spring. I have to say that that will be challenging, because this fundamental review will have to reflect what has happened as a result of the pandemic, that existing evaluations or revaluations have taken a considerable time and that there are about 50,000 appeals with the VOA. So what will be the constituent parts of that review, when will it be published and when will it be implemented? Will it mean further legislation?
Initially, I referred to the fact that there is a direct correlation between the prosperity of our towns and cities—as already referred to by the noble Lord, Lord Cormack—and business rates and revaluations. There is a need to protect, boost and regenerate high streets. An opportunity must be given during this pandemic to rebuild businesses and their revenue-creating potential. Many of them have been forced to close because they are considered non-essential. Some were never able to open following the first lockdown, including many in the hospitality and retail sector, and they have lost a lot of important revenue. That must be reflected in the Government’s root-and-branch review of business rates. They have also had to compete with large out-of-town supermarkets and the online trade from companies such as Amazon. Therefore, those retail businesses and general businesses have found themselves undermined in every sector. This must be addressed.
Will the Minister have a conversation with ministerial colleagues in BEIS and in the Treasury about a revamp of our towns and cities, putting the heart back into our towns and cities with a freeze on commercial rents for at least one year, a business rate and business taxation reform—which has already been referred to by myself and other noble Lords—a possible rethink or lifting of Sunday trading restrictions, a rethink on the extension of permitted development rights, extension of the towns fund beyond the 101 locations, the expansion of business improvement districts and the expansion of city deals, working with local government, and for all those to happen and be constituent parts of any plan?
This requires a total regeneration plan for our high streets, coupled with that root-and-branch review of the business rates system that reflects what has happened to our businesses as a result of the pandemic. Measures need to be put in place to protect the independent retailers that are having to compete with the large supermarkets which are busy trading when many of them are closed. So can the Minister indicate what action will be taken to address those areas and ensure that a fairer, more equitable business rating system is implemented that reflects the challenges, difficulties and problems faced by all businesses as a result of the pandemic? I have talked to the Booksellers Association, which has no particular issue with 2021 as a base year for 2023 but would like to see some form of transitional relief.
My Lords, I declare my interest as set out in the register as an owner of a small commercial office building from which I ran my business for many years.
There is an inherent unfairness in a tax based on the nature of the property that it is necessary to occupy to conduct a particular type of business rather than based on profitability. Maybe they once marched in step, when retail margins were high and out-of-town and internet selling were not prevalent. Now retail pays 25% of the tax for 10% of gross added value to the economy, and it constitutes 42% of their taxes. These distinctions are broadening further with the expansion of office work from home and more online shopping. If commercial space dwindles, the remainder will inevitably be on the treadmill of ever higher rates to satisfy the tax need. The truth is that the tax base has to be broadened and based on commercial activity and profit. It should be based on known fact, not supposition. I hope the consultation will have that scope.
Why are we sticking with the general design of the present system? It is broken. It does not properly track rents, which are far from the stable or routinely upward rent reviews that were once the story. Added to that background is the ongoing effect of forced closures and staying at home, whether from legislation or from caution. Is that going to be taken into account? Like others, I welcome the rate holiday that has already been given. Will the Government consider further reliefs for the most affected businesses, both in terms of compensation for what they could not do and as a mechanism to aid recovery?
The Non-Domestic Rating (Lists) (No. 2) Bill postpones a review that had been brought forward, which will disappoint many who had been hoping for an earlier lowering of rateable values. Given that the Government are fixed on a delay, I still wonder about the base date for revaluation being April this year, which is likely still to be a time of uncertainty and flux, with relocations out of cities and working from home escalating, shop closures and growing numbers of empty properties of all kinds. How do those empty properties feed into the analysis? Surely their emptiness shows a lack of takers, so how is the market price found?
Unfortunately, delaying a review further would also cause disappointment, but why is it not possible to sample rents for the purpose of adjustment in the same way that a basket of products is monitored for the cost of living? That is a genuine question, as well as perhaps another consultation point. Will the next review be brought forward in sectors or areas where there have been significant changes since April 2021?
Turning to the Bill concerning the removal of rates for stand-alone public lavatories, again I confess to wondering how market rents for public lavatories are assessed, but the measure is welcome. “Stand-alone” means a building that is “wholly or mainly” a public lavatory, so does the Minister have any more guidance about what constitutes “mainly”? What about a combined public lavatory and bus stop? I have seen such an arrangement in car park and rides. Does “mainly” have to mean more than 50% of the footprint of the building, or is it related to purpose? An example given in the Explanatory Memorandum is that lavatories in a public library would not qualify, presumably because the facilities would be provided anyway, even though they also serve those nipping in in passing. What would be the situation if the lavatories were accessed through an independent entrance from the street?
More generally, should not more buildings serve the public need and the owners be recompensed? I can think of other buildings, such as old town halls, that rent out rooms that stay open for the public to access lavatories, even when there are no events. Should those types of facilities be given encouragement to stay open rather than being locked up, which is the usual trend?
I am glad that this Bill is before us, but I hope for more generosity in how it is applied.
My Lords, I welcome both Bills. I completely support the noble Lord, Lord Thurlow, in what he said. When we are reforming the rating system, we absolutely need to follow the money and move in the wake of Amazon, and make sure that, at least where we can bite it, which is its distribution centres, it is paying a proper rate of tax. It is important that we look at the effect our tax system has on our businesses and that we do not disadvantage native UK businesses and advantage overseas ones, as we have been doing for years in our VAT system.
It is also important that, when it comes to rate relief measures, we look at exactly who needs the relief. As the noble Lord may know, I am saddened that the Government have excluded a category of businesses from the Covid rate relief, specifically those such as suppliers to exhibitions, which have to maintain large premises so that they can have a business when exhibitions resume again—maybe this year, but maybe not—but which are still subject to the full business rates arrangements.
I want to spend my time today on the lavatories Bill and support what the noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady Randerson, said. Indeed, I was cheering through the noble Baroness’s speech. We need public lavatories in town centres. Think of what life would be like if there were none. It ought to be one of the Government’s underlying objectives to encourage their provision.
That the Government are relieving the rates on separate buildings that are just lavatories is good, but the most effective way of providing a public lavatory is in conjunction with a business. The loos in Victoria Station are there because the railway wants to look after its customers, and it is the same for the loos in John Lewis, restaurants, hotels and anywhere else that one might make use of them. These are the provisions that we ought to be encouraging. That the intricacies of the current rating system do not seem to offer any obvious way of saying that the value added to a building by including a public lavatory should not affect the rateable value of the building is no reason why we should not do our best, conversationally in Committee on the Bill, to get real legislation when we get rating reform to make sure that the provision of this public service is not something that we then tax.
Also, if we are giving rate relief to public lavatories, we should do so with some conditions, and there should be something in the Bill that allows the Government to impose those conditions.
Coming back specifically to what the noble Baroness, Lady Randerson, said, a proper quantity of provision of separate women’s toilet facilities is absolutely crucial. She demonstrated in great detail why that is true, and I support everything she said. I shall be introducing an amendment in Committee to enable the Government, should they so wish, to impose conditions to say that a toilet would be zero-rated for rates only if it matched the conditions required by the Government.
My Lords, coming last after so many people speaking, astonishingly, about public lavatories, which has delighted me, there is nothing substantially new that I can say. I will just talk about one or two things that have happened in my part of the world and about how things need remedying. Before doing so, I declare an interest as a member of Pendle Borough Council. I am not a vice-president of the Local Government Association; I used to be but I resigned in order not to have to declare an interest all the time—I am still sent the briefings. Like other speakers, I commend the National Association of Local Councils, which has provided so much good evidence and, in many ways, run this campaign. In a sense, I am not surprised that there have been so many speakers in this debate in the House of Lords. When you think about it, the demographic of the House suggests that more people here might be concerned about public lavatories than perhaps a younger generation might be.
As the noble Baroness, Lady Andrews, said, almost at the beginning, the important thing is that there is a need everywhere. There has to be a sufficient number of lavatories in the right places, and many, unfortunately, are not of a sufficient quality; they are what she described as “a disgrace”. The noble Baroness said that there is a need for a national strategy. What worries me is that, if is too much of a national strategy, when national finances get into trouble and there are big cuts, it will be too easy to cut something such as public lavatories. I remind everybody that it was the nationalised railways that closed down a third of the network. I believe that local care and resilience are vital in very local services such as this.
I want briefly to tell a tale of two towns: one is Colne, my own town, and the other is Barnoldswick, next door. Both are on the Yorkshire border. Back in Mrs Thatcher’s time, there was government pressure for what we thought then were massive cuts—little did we know. The council officers thought that public lavatories were an easy thing to cut. They did not have to provide them and thought they were an anachronism in the modern age: people had cars, it was an old-fashioned service and the lavatories were expensive to maintain. They put a lot of pressure on councillors to close them down. In Colne, where I was chairman of the Colne and District area committee, we resisted this as far as we possibly could. Then I took a council holiday and another party took over in Colne and closed down almost all the public lavatories.
Then came austerity, and the cuts to our budgets that we never dreamed would happen did happen. The council as a whole decided that it could not continue to provide a public lavatory service; it simply had to stop doing some things because its budget over 10 years had been cut by half in real terms—I am not exaggerating. So we offered the remaining public lavatories to town and parish councils. Some were taken over, in particular by the very local parish councils, which have looked after their public lavatories—sometimes with volunteers and sometimes using the local odd-job person—and they have been very successful. They have looked after them much better than Pendle council ever did.
Barnoldswick Town Council, on the other hand—I give the plug that it was under the control of my party, the Liberal Democrats—took over the three public toilets in Barnoldswick and significantly increased the council tax precept, because that was the only way we could get extra money. Since then, the public toilets have been looked after by a local contractor from the town, with local care and maintenance. The service has been well received and successful, despite the fact that people are paying more money locally for it.
In Colne, where we have been denuded of almost all our public lavatories, the town council set up a community toilet scheme, which people have been talking about. It got going quite well and had some success, but unfortunately another party then took over the town council and lost interest in the scheme. As I said, it was quite successful but we learned the problems: if you rely on private premises to provide public facilities, they are not open on half-day closing, and quite a few people, for various reasons, are not happy about going into town-centre pubs to go to the toilet or for any other reason. It is not a perfect solution at all. The perfect solution has to be new provision where there is not any. In order to provide that—I think Colne Town Council would be willing to do that and to run it—money is needed to invest in new facilities.
This comes back to one of my beefs: that there is no conventional, easy way for town and parish councils to get capital funding from the Government. Capital grants for town and parish councils are needed if we are really serious about them taking over and providing new facilities. Indeed, when they take over facilities from the principal councils, improving and upgrading them, they have to have sources of money over and above the council tax, because there is a limit to how far people will pay extra council tax for their town and parish councils.
My Lords, I draw Members’ attention to my relevant interests as set out in the register: as a councillor in Kirklees and as a vice-president of the Local Government Association. I thank the Minister for providing time last week for a discussion about these Bills.
We have had a wide-ranging and well-informed debate on both the Bills being considered. Both have in-principle support from Members on my Benches. As many noble Lords have said, the provision of publicly accessible public toilets is essential for many people, but my noble friend Lady Thomas has made a powerful case for the need for more accessible toilets to serve the specific needs of those with disabilities. I hope that the Minister will be able to provide an answer to her question about a government database of public needs. That would be of immense value, especially to those with particular needs.
That is amplified by a report from the Royal Society for Public Health published in 2019. It made a very strong case for a review of the number of accessible public toilets. The royal society investigated public toilets and discovered the number that have been closed by local authorities as a consequence of the severe cuts to public funding, the potential health impact of a lack of public toilets, as others have referenced, and the fact that many people plan their days out according to the accessibility, or not, of public loos.
My noble friend Lady Randerson spoke strongly and firmly in favour of equality of provision for women and talked about the long queues that we women have all experienced on a regular basis. Perhaps the Minister will be able to provide a positive response to her plea.
The same Royal Society for Public Health report also said that in 2018 there were no public toilets at all funded and maintained by local authorities in 37 council areas. That is of course a consequence of the years of significant cuts to local government funding, and this Bill is a bit like shutting the stable door after the horse has bolted.
My noble friend Lord Wallace has raised the difficulties faced by tour groups visiting the world heritage site of Saltaire in the Bradford City Council area, where there are currently no public toilets for the coachloads that arrive. If only the Government could address the lack of public toilets and enable councils, through specific grants, to build them once more.
If the Government believe that public toilets are so important that they deserve special treatment in the form of this rate relief to help ensure their future, they should consider how the provision of publicly maintained toilets can be incentivised. For example, public toilets in town halls and libraries should be offered the same business rates relief, as the noble Lord, Lord Bourne, argued. I hope the Minister will be able to show how a system of apportionment can be devised that will achieve this end.
All speakers today have accepted the need for the provision of publicly funded, publicly owned toilets. I hope the Minister will be willing to consider extending the Bill to encompass more public toilets and, in particular, more fully accessible public toilets.
The headline of the Non-Domestic Rating (Lists) (No. 2) Bill, which concerns the timing of the revaluation of rates to be paid by businesses, is the introduction of new rates from April 2023. However, that means that the revaluation will be based on rental values as of April 2021. The noble Earl, Lord Lytton, who is an expert in this field, has helpfully exposed considerable failings in the current system. Can the Minister confirm that the assessment date for rateable values is subject to decision by a statutory instrument? If so, can he give the House any idea of the timing of such a statutory instrument?
A delay in assessing and then introducing new rateable values is understandable. However, this is tinkering at the edges, while our town centres are in deep trouble. As my noble friends, Lord Shipley, Lady Thornhill and Lady Bowles have pointed out, there is a desperate and urgent need for wholesale reform of the business rates system. There are two fundamental reasons for radical reform, as many noble Lords have referenced during this debate. First, the current system is based on an out-of-date concept of business being dependent on well-located property. In the retail sector, Amazon and hundreds of other such businesses have blown that idea out of the water. The growth of digital-only businesses adds to that argument. Secondly, income from business rates forms a large part of the spending of local government. Loss of business rates income, due to the move away from the high street, has a consequence for the funding available for local council services. Fewer shops means less income from business rates, and this is at a time when there is a growing demand for services due to the pandemic.
Businesses are naturally deeply concerned about the outcome of the next revaluation. My noble friend Lord Stunell made a strong case for the extension of the Covid rate relief, as there is a huge danger for retailers that there will be a gap between the ending of the Covid rate relief and the introduction of the new rateable values. I hope that the Minister can respond to this threat. I urge him to have particular concern for those towns across the country that were struggling even prior to the pandemic.
We on these Benches support these Bills in principle, but we know that there is scope for improvements, which we will bring as amendments in Committee on both Bills.
My Lords, first, I declare an interest as a vice-president of the Local Government Association. Secondly, I am very happy to support both Bills before us today, but I will want to explore options for improving both Bills in Committee.
On the public lavatories Bill, the noble Lord, Lord Greenhalgh, set out what the Bill will achieve: 100% mandatory business rate relief for public lavatories in England and Wales, whether publicly or privately owned. The closure of public toilets over many years is a matter of concern for the general population, particularly those with specific needs—they could be medical needs but not exclusively so. I agree with my noble friend Lady Andrews that this is a long-overdue Bill—of course, it was lost previously due to the general election of 2019. As my noble friend said, Covid-19 has exposed deficiencies in matters that previously we probably all took for granted. I am sure that we will want to deal with them in this Bill.
An increasing number of people are affected by the state of Britain’s public toilets. These include those with disabilities, carers, the infirm, the elderly or people with babies and young children. As I said earlier, people of all ages who are coping with a range of issues and/or medical conditions are not finding adequate provision when they are out and about.
With the closure of bars, cafés and public buildings during the Covid-19 pandemic, we have also seen a reduction in the number of places where people can ask to use the toilet. Although these closures may be only temporary, they have highlighted a real issue for delivery drivers and others who work long shifts on the road getting food to the shops and delivering other essential supplies. Multi-drop goods delivery has always been very hard work. Let us pay tribute to those drivers, who have been outstanding in delivering in these difficult times and ensuring that food is on the shelves. They are struggling to find places where they can go to the toilet when working long hours.
When we are through the worst of this pandemic, we should keep washing our hands with the same increased frequency as we have all been doing in recent months. It would keep us all safer and help prevent the spread of all sorts of infections in the future. We need to be conscious of the age profile of our population and the needs of its older members.
In the past, Britain has—and will do so again in the future—welcomed many millions of tourists to this wonderful country. It is something that we all want to increase and build on. However, it will place further pressure on our existing facilities. Sometimes, these facilities do not give the best impression; for example, when you visit a tourist area and find that facilities are non-existent or, if you find them, they are not in a particularly good condition and do not have a proper cleaning rota.
I am, however, pleased with the progress that has been made in making toilets free at all the mainline railway stations. London Bridge is a station that I use frequently. I have been impressed with the work that has been going on there to make the toilets safe to use during the pandemic. I have not been through Marylebone station recently—the noble Lord, Lord Bourne of Aberystwyth, mentioned it, as he did in our debate in 2019—but I hope that they have now taken away the charge there.
We should all be concerned about public health, hygiene and environmental standards in toilet facilities. I very much agree with the British Toilet Association, which has been mentioned many times in this debate, in its campaign to improve these essential facilities. Good access to toilets that the public can use is all about health and well-being, quality, social inclusion, privacy and public decency.
I agree with the noble Lord, Lord Wallace of Saltaire, in his comments on Bradford and Saltaire; I know the area fairly well, although not as well as him, and I thought the points he made were very valid.
Public toilets must comply with parts 1 and 4 of British Standard 6465, BS 8300, parts M and R of the building regulations and other requirements. It is all about keeping us safe and well.
The British Toilet Association has done some excellent work with the Changing Places consortium, mentioned by the noble Lord, Lord Greenhalgh, and others. The campaign is about the ability of the quarter of a million people in need of Changing Places toilets to get out and about and enjoy the day, which many of us have taken for granted in the past. It is important that, when we go out—when we move on from the pandemic—we can use toilets safely and in comfort. For many that will require a Changing Places toilet, with the adjustable bench, hoist and so on; we need to ensure people with profound disabilities can go out and use them with dignity.
I congratulate Tesco, which has just opened its 100th Changing Places toilet. The Tower of London also has its first Changing Places toilet, put in by Historic Royal Palaces. Again, many congratulations—it is probably the oldest public building in Britain with a Changing Places toilet.
We are in a lockdown, but that will come to an end. When life returns to something like we knew before, we need to ensure that we have legislation in place—possibly with amendments—to ensure that people can enjoy their time outside without any concerns or worries about adequate toilet facilities.
Why cannot any organisation that installs a Changing Places or other disabled toilet facility in its premises, which is available to the public, make use of some sort of business rate relief? Maybe it could be a double relief or revert to 100% relief? I very much agree with the noble Baroness, Lady Jones of Moulsecoomb, who asked why organisations that let people come in and use their toilets cannot have the benefit of some sort of relief. We will want to explore those issues in Committee and expand this Bill to make things better.
As I have said, this is a public health issue, which we might not have taken as much notice of before the pandemic. We need to take notice of it today. Will the Minister set out how this measure will increase the provision of facilities for women and user groups such as wheelchair users, the elderly and people with young children and families with medical conditions? The way in which this Bill is designed does not do that at this stage, but perhaps we can ensure in Committee that it does.
The noble Baroness, Lady Thomas of Winchester, made a powerful case for highlighting the needs of disabled people. What problem would there be in saying that, by investing in facilities for disabled people, young children and families could not actually attract extra relief?
The noble Baroness, Lady Randerson, made the very valid point about the issues facing women and men with children and the general problem we have seen, particularly during the pandemic, about the availability of toilets. I mentioned additional reliefs; that would be one way of encouraging provision for disabled people, for example. I intend to bring these issues back in Committee.
A number of noble Lords made points about lavatories in town halls, libraries and other public sites. Again, we should look at those in Committee.
The “Can’t Wait” card is a very good initiative. It always annoys me to see places that have signs up telling you that “You’re not welcome—you can’t use the toilet”. We need the situation to be much friendlier and to recognise that some people cannot wait; they do need to use the toilets. I remember trying to find the public toilet in Stratford-upon-Avon in the summer of 2019. There were signs up pointing to it but I could not find the thing—it was literally impossible—so I went into the theatre and they let me use the toilet there. A place such as Stratford-upon-Avon relies on tourism. There were coaches of people and tourists everywhere, but it seemed that the council had got to the point where it relied on people going to use toilets in bars, restaurants and cafés. Many let them in, but I did not think that is right. If people are letting them in, why can they not have a benefit from providing that public service?
I also very much support the calls from the noble Lords, Lord Moynihan and Lord Addington, about support for local sports clubs. Thinking about where I live, a place such as the Francis Drake Bowls Club is that sort of organisation, as is Lewisham Borough Football Club, which plays on Ladywell Arena—I think the noble Lord, Lord Moynihan, will know it from his time as a Member of Parliament for that area. There is also Fisher Athletic football club. I must also mention Millwall Community Trust, which I am delighted to be a trustee of, and the work we are doing down at Surrey Docks stadium and the facilities next to the Den.
I support the Bill but, as I have outlined, I will table some amendments in Committee where we can improve it. The Bill is narrow in scope but very welcome. We will see if we can improve it, particularly to reflect on how life going forward after the lockdown may have things in it that we did not all focus on before.
Moving on to the Non-Domestic Rating (Lists) (No. 2) Bill, I am very supportive of the points made by the Local Government Association. As we have heard, this will move the revaluation date to
Closer working with the valuation office and local authorities is very much needed, as is reducing the backlog of appeals. As we have heard, according to the latest Valuation Tribunal for England statistics, there are 40,000 unresolved appeals from 2010—I repeat, 40,000. Councils are having to hold money to one side as these have not yet been determined, and this cannot carry on. I support the calls from the noble Baroness, Lady Thornhill, and others: this matter really must be dealt with sooner rather than later.
I support the call from the LGA to see reforms to ensure that appeals can be received no later than six months after a new rating list has come into force. The noble Lord, Lord Shipley, was right to say that we need root-and-branch reform of the business rate system. Our high streets are in crisis and we need a sustainable, long-term solution to the problem. We should make sure that companies all pay their fair share. I endorse my noble friend Lord Hain’s comments urging the Government to think big. My noble friend Lord Reid of Cardowan also drew the attention of the House to the wider issues that this welcome measure will address but which the Government do need to deal with.
Many noble Lords mentioned the contribution of the noble Lord, Lord Thurlow. He made that very valid point about high streets and ensuring that online businesses pay their fair share, as did the noble Baroness, Lady Jones of Moulsecoomb. The noble Lord, Lord Cormack, made some excellent points about support for the high street, small shops and towns such as Louth in Lincolnshire, which I know well. As I said earlier, tourism will once again be an important part of our economy. We have to have the shops for tourists, as well as local people, to visit. As I said, the big online businesses—the Amazons—have to pay their fair share, and the Government need to ensure that they do so.
Finally, my noble friend Lady Ritchie of Downpatrick made a point about the correlation between business rates and the prosperity of our towns—their revenue-creating potential. As my noble friend said, we need root and branch reform.
This has been an excellent debate. I am delighted that there were many more speakers than when the House looked at the public lavatories Bill in 2019. Noble Lords have made fantastic contributions—we are clearly going to have a very interesting Committee stage for both Bills. I look forward to the Minister’s response.
My Lords, I thank noble Lords for their contributions to today’s debate. I shall do my best to respond to the nearly 30 speeches that preceded this final one, in relation to both Bills, starting with the Non-Domestic Rating (Lists) (No. 2) Bill.
What we have heard today reflects what the Government have already been hearing from ratepayers: that frequent revaluations are of great importance to the fairness of the business rate system. It is therefore only in the face of exceptional circumstances that this Government have taken steps to postpone the implementation of the next revaluation. As I have said, we remain fully committed to frequent revaluations, and considerations of the timings of these form part of the Treasury’s ongoing fundamental review of business rates.
As I set out earlier, the Non-Domestic Rating (Lists) (No. 2) Bill will also change the date by which draft rateable values must be published, ahead of the revaluation, from
Of course, moving the date of the draft rating list also has implications for local government, which has a share in business rates income through the business rates retention scheme. On this point, I assure the House that we intend to make any necessary adjustments within the business rates retention system to ensure that locally retained income is, as far as is practicable, unaffected by the revaluation. My department has held discussions with local government representatives and will continue to do so to ensure that the sector has what it needs in order to issue new bills in a timely manner.
I will now address some specific comments. I credit the noble Earl, Lord Lytton, who gave a tour d’horizon of local government finance reform, starting with the Layfield review, which took place over 40 years ago—I was still at primary school at the time—and moving on to the Lyons review. This helped explain the long history of local government finance and how the reform of business rates has been approached since their inception in 1990.
I assure my noble friend Lord Moynihan and the noble Lord, Lord Addington, that the fundamental review of business rates will look specifically at reliefs. They made strong points about community and grass-roots sports. The provision has not cost the Exchequer anything. We are not talking about a stade municipal, but they need support at this difficult time. The noble Lords made their points very eloquently. I will make sure that I take their case to the Treasury and do my best for them.
I also point out that the fundamental review of business rates has not shifted; it was always due to end in spring of this year. It will also look at alternative ways of taxation. A number of noble Lords raised the move to online sales and mentioned specific retailers that seem to be making a whole lot of money. I am sure that the fundamental review will look at alternative taxes to capture the shift in our shopping habits.
I will do my very best on some of the other points raised. My noble friend Lord Bourne and the noble Lords, Lord Shipley and Lord Reid of Cardowan, mentioned frequency. We need frequent valuations to ensure that business rates bills are up to date, but we recognise that doing a revaluation is quite an undertaking. Balance is important. We remain committed to frequent revaluations, but this is a hiccup in the road because of quite extraordinary events.
The noble Baroness, Lady Thornhill, and the noble Lord, Lord Stunell, mentioned transitional relief and, under the current business rates system, we are required by law to provide transitional arrangements after each revaluation. The next scheme to apply following the 2023 revaluation will be designed once revaluation data is available, so it has not yet been designed.
The noble Lord, Lord Stunell, and my noble friend Lord Naseby raised the specific issue of the antecedent valuation date, or the AVD. I think the noble Lord, Lord Stunell, mentioned it on behalf of the Association of Convenience Stores. We recognise that business groups such as the ACS have asked us to consider reducing the gap between the valuation date for the revaluation, the so-called AVD and the date that revaluation takes effect. This would ensure that rateable values follow the rental property market more closely. The revaluation is an extensive exercise, requiring assessment by the VOA of 2 million valuations and this takes time. We have to balance the need for up-to-date valuations against the need to prepare accurate valuations. This is all about ensuring that balance.
To respond to the noble Baroness, Lady Pinnock,
I will make one point of clarification on the £10 billion of business rates relief mentioned. That is over half of business rate payers not paying any business rates at all. Will that fall on local government? Absolutely not. These costs fall on the Treasury and are not borne by local government at all. In fact, the new burdens doctrine means that the administration of reliefs is also captured and borne by the Treasury, so it will not affect local council finances in that regard.
The noble Baroness, Lady Thornhill, and the noble Lord, Lord Kennedy, asked about when the Valuation Office Agency can clear the appeals it has received because of Covid. We are aware that the Valuation Office Agency has received a large number of checks and challenges from rate payers who believe that their rateable value in the current rating list should be reduced to reflect the impact of the pandemic. I understand that the VOA is currently considering these cases, but no decisions have been taken yet.
A number of noble Lords raised fundamental reform. It is fair to say that that is not part of this narrow Bill, but there is no doubt that the fundamental review in spring could be a springboard to the reform mentioned by a number of noble Lords. Only time will tell, however, and I do not want to give a sense of direction until we have had the benefit of that review in the spring.
The second Bill before the House today may be small but it is also crucial to the local authorities and private organisations providing public lavatories up and down the country. I am aware of concerns that the Bill applies only to those public toilets that are separately assessed for business rates.
The Government’s policy aims have been clear: this Bill is focused on providing targeted support specifically in circumstances where there are unlikely to be other publicly available facilities and where removing the cost of business rates could help keep facilities open. That narrowness of scope is entirely designed to ensure that we stop seeing more closures of public facilities. Widening the relief to cover all public toilets would significantly increase the cost of the relief and be less likely to target resources efficiently.
Subject to Royal Assent, the Bill will provide a mandatory 100% relief on all separately assessed toilets, including accessible lavatories, whether publicly or privately run, effectively removing business rates altogether for these properties. In meeting the commitment made in the 2020 Budget, the relief will be applied retrospectively from
I will now comment on the specific points raised by noble Lords. I thank the noble Baroness, Lady Randerson, for her extraordinarily detailed history of public toilet provision; the noble Lord, Lord Kennedy, for the virtual tour of public toilets in our stations; and the noble Lord, Lord Wallace, for his hygiene history of Saltaire. Much could be gleaned from those contributions.
I point out to the noble Baroness, Lady Andrews, that I am not sure that the answer to this question is a national strategy authored in Whitehall, and I share some of the scepticism of the noble Lord, Lord Greaves, partly because there is such a difference in public toilet provision throughout the country. The answer lies closer to the town hall than to Whitehall—respectfully, that is my view on the matter, notwithstanding the importance of this as a public policy point.
Turning to the issues raised by the noble Baroness, Lady Thomas of Winchester, nobly backed up by the noble Lord, Lord Addington, it is incredibly important that we have fully accessible public toilets. It is something you expect in an advanced western democracy such as ours; it ensures the full participation of all members of our community, which is particularly important in our town centres, which thrive on footfall. We need to make sure that they are accessible to all. That is the basis on which the Changing Places funding was committed in the Budget. I will be able to provide noble Lords with more detail on how the £30 million has been committed—the details of this funding will be made available in due course. This is incredibly important.
The vibrancy of our town centres and high streets is a personal concern of mine. Anyone who spends any time travelling from Fulham, say—we could have said Southwark, but I will take the example of Fulham—to the central activities zone knows the huge impact that this pandemic has had not just on our town centres throughout the country, but particularly on this great global city. I note the points made by the noble Lords, Lord Hain and Lord Reid of Cardowan, the noble Baroness, Lady Bakewell, and others—and the point about high streets made by my noble friend Lord Naseby and others. It is incredibly important that we think about how our high streets and town centres throughout the country can bounce back once this wretched pandemic allows us to be a little freer to move and enjoy life as we once did.
The answer lies not just in business rates but in supporting our high streets. We have a high streets fund and we need to think about flexibility in planning permissions. There are a number of policy tweaks that, I am sure, will make a difference; it is not just about this Bill. However, the point made by noble Lords is incredibly important.
Finally, I have noted the many helpful points raised by my fellow Peers, and I anticipate a plethora of amendments to keep us busy at the next stage. As always, I appreciate the knowledge and expertise in this House, and I am sure that we can all agree that we welcome and support the aims of these Bills. I commend both Bills to the House.
Bill read a second time and committed to a Grand Committee.