Amendment 1

Part of Non-Domestic Rating (Lists) (No. 2) Bill - Report – in the House of Lords at 3:15 pm on 1st March 2021.

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Photo of Baroness Bakewell of Hardington Mandeville Baroness Bakewell of Hardington Mandeville Liberal Democrat Lords Spokesperson (Environment, Food and Rural Affairs) 3:15 pm, 1st March 2021

My Lords, it is a pleasure to follow the noble Lord, Lord Thurlow, and I declare my interest as a vice-president of the LGA. I congratulate the noble Lord, Lord Kennedy of Southwark, on his composite amendment which neatly brings all the issues that have been debated previously into one. During those debates, all the relevant arguments were made, and I speak today in favour of Amendment 1.

It is important that there be annual rate revaluation reporting. Business rates reviews cannot be left to drift from year to year, especially as so many businesses are struggling. Keeping a careful watch on how revaluations are affecting businesses is vital to ensuring a healthy economic recovery. Towns and high streets are being decimated by the lockdown, as the noble Lord, Lord Kennedy, said. Some three-quarters of retail outlets are closed and many have been boarded up. Only essential outlets are open: supermarkets, pharmacies, opticians and some DIY stores. As lockdown is gradually released, many shops will, hopefully, reopen, but the effect of business rates may be the last straw. This must be monitored to prevent the total decimation of the high street shopping experience.

The Association of Convenience Stores has welcomed the Bill and the revaluation date being moved to 1 April 2023. It sees this as a positive step forward but it has several recommendations that would further assist its operation, including a reduction in the burden of business rates by resetting the business rate multipliers to more sustainable levels.

The whole issue of NDR is a balancing act between the need of funding local authorities and the economic viability of businesses. Local authority finances are stretched to the limit. Government grants have been radically reduced over the years and many councils now only deliver statutory services and these to the minimum standards permitted. It is not that councils do not wish to provide those vital services which communities rely on, such as grants, improved play areas, adequate and dignified social care, after-school clubs et cetera; it is the sad, realistic fact that they no longer have the finance to do this.

The understandable increased cost of social care for the elderly, children looked after, and those with learning and physically disabilities has taken every spare pound councils might have had to provide extra provision for speciality services. Without access to business rates, many local authorities will not even be able to provide the statutory minimum level of service in many areas.

Potholes—a constant running problem on the many rural C roads—are becoming deeper and wider. How are local authorities meant to balance the needs for decent roads against the needs of children looked after and adults with learning disabilities? I do not expect the Minister to provide the answer today, but the question will need to be addressed by central and local government working together.

In Committee, I spoke about business rate appeal waiting lists and times and will not repeat my arguments today, but the length of waiting lists should be kept under constant review. The noble Lord, Lord Thurlow, referred to the impact of delayed appeals. An appeal left waiting for years, is a properly elected council waiting years for its legitimate funding. This makes budgeting all but impossible. The ACS suggests reforming the appeals system by shortening the statutory timeframes for the VOA to respond to checks and challenges and improving the transparency of data used to inform valuations. Has the Minister considered this?

Lastly, I want to speak about the ability of the high street to compete with online businesses. Currently, that is an inability. The online business fraternity, previously in most cases, offered free delivery, but the purchaser had to pay the cost of returning unsuitable goods. Nowadays, if you purchase online you are more likely to be offered free returns but be charged for the initial delivery. This encourages purchasers to buy, as they can clearly see the delivery charge, whereas returning a bulky item could be expensive, if free returns were not offered. This has altered the playing field.

With high street retail outlets closed in lockdown and many businesses going under altogether, online is the only way in which to access the goods and services we have been used to. It is extremely frustrating, to put it mildly, for those paying business rates, to see vast profits accumulated online without the need to pay business rates. This has led to a total distortion of the marketplace.

The Minister will have heard these arguments many times, so he and his colleagues in Government have had plenty of time to come up with an answer. What are the Government going to do to ensure that online businesses are treated in the same way as those on the high street, in shopping centres and in business parks around the country? The ACS recommends introducing an online sales levy or an alternative rating methodology for online distribution warehouses and using the revenue raised to reduce bills for retail stores to support the viability of high streets and local services. Have the Government considered this? It is essential this element is addressed for the sake of all businesses concerned and for the funding of local authorities. I fully support the amendment in the name of the noble Lord, Lord Kennedy, and look forward to what I hope will be a positive response from the Minister.