Valuation of other land in drainage district

Rivers Authorities and Land Drainage Bill – in a Public Bill Committee at 4:00 pm on 11th March 2019.

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Question proposed, That the clause stand part of the Bill.

Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West

With this it will be convenient to discuss the following:

Amendment 1, in clause 3, page 14, line 11, leave out “Data Protection Act 1998” and insert

“data protection legislation (within the meaning of section 3 of the Data Protection Act 2018)”.

This amendment updates an outdated reference to the Data Protection Act 1998.

Clauses 3 and 4 stand part.

Photo of David Warburton David Warburton Conservative, Somerton and Frome

We move on to the second part of the Bill. Hon. Members will be pleased to hear that I will endeavour to be briefer in my comments about these clauses.

Another important body involved in water management that helps tackle flood risk management is the internal drainage board. Clauses 2, 3 and 4 cover internal drainage boards and, in particular, how they determine the drainage rates and special levy, which are used to meet most of their expenses. As Members will know, internal drainage boards provide an important service to their local area by maintaining water levels for agricultural and environmental needs, managing water courses and reducing flood risks.

An IDB operates within an area that is known as an internal drainage district. In Somerset we are fortunate—as we are in so much else—because we have three IDBs: the Axe Brue, the North Somerset Levels, and the Parrett. Two of those cover some of my constituency, and I have personally seen the hard work that they undertake. As the Minister mentioned, on the low-lying ground of the Somerset levels, much of which is below sea level and is intended to flood annually, though in a managed way, drainage board work is crucial and exceptionally important to us all.

Photo of Peter Heaton-Jones Peter Heaton-Jones Conservative, North Devon

My hon. Friend is making a good point about the importance of the internal drainage boards, which gives me—and him, I suspect—the perfect opportunity to celebrate the work of the Braunton Marsh internal drainage board in North Devon, which has been in the eye of the storm. Hon. Members might remember coverage of the Braunton floods over the Christmas period of 2012, when, sadly, the village was inundated. Unfortunately, many businesses never recovered from that. The drainage board, working with a number of other organisations, has done fantastic work in bringing together a lot of the flood risk management strategies. They are important, and that is why the second part of my hon. Friend’s Bill, on which he is speaking so fluently, is so welcome.

Photo of David Warburton David Warburton Conservative, Somerton and Frome

I am grateful in many ways to my hon. Friend for his exceptionally important intervention. He is absolutely right that the drainage boards do tremendous work and are vital. We are lucky to have them. One of the important things about the Bill is that it will facilitate other places’ setting them up—something which they are unable to do at the moment.

In total there are 112 internal drainage boards across England, which cover some 1.2 million hectares—around 10% of the land. The work they do protects 600,000 people and nearly 900,000 properties. They operate and maintain over 500 pumping stations and 22,000 km of watercourse, which is slightly further than from this room to New Zealand. Those are incredible numbers, but there is scope to increase that local support and allow more of the country to benefit. However, to enable this support to be available where it is wanted and where it is appropriate, the Land Drainage Act 1991 needs to change.

Internal drainage boards are funded by the areas they serve. Drainage rates are paid by agricultural landowners, and the special levy is paid by local district or unitary councils, which in turn recoup these costs. Under the Land Drainage Act 1991, the proportion of IDBs’ expenses raised by drainage rates is equal to the agricultural proportion of land values in an internal drainage district. In turn, the proportion of expenses raised by the special levy is proportionate to the value of all other land in the internal drainage district.

The calculations that IDBs are required to carry out, in order to apportion the payment of their expenses between the drainage rate and the special levy, depend on an assessment by each IDB of the relative value of agricultural land and buildings, and the value of other land. However, the assessment of the value of other land in internal drainage districts currently depends on data from 1990, which, unfortunately, in many instances is missing or incomplete. This prevents the creation of new IDBs or the expansion of existing ones.

This part of the Bill amends the Land Drainage Act 1991, to enable new data to be used by internal drainage boards when calculating the value of other lands, if they elect to do so, thereby addressing the current barrier to creating or expanding IDBs. Clause 2 amends section 37 of the Land Drainage Act 1991 to enable the Secretary of State to make regulations that provide an alternative methodology for calculating the value of other land. The regulations will be made subject to the affirmative procedure. In the new regulations, the Secretary of State will be able to provide a methodology for calculating the value of other land by making use of data that is not only available and complete, but more up to date.

Among other things, proposed new subsection (5ZB) of the 1991 Act will allow the regulations to make provision about methods to be applied or factors to be taken into account in valuing other land. This proposed subsection allows the regulations to provide for internal drainage boards to elect to have the regulations apply to them and to specify a procedure for making such an election. The IDBs would not have to adopt the new methodology; the Bill provides them with the ability to adopt it if they wish. That benefits those that do not wish to change their procedures; if they do nothing, nothing will change.

IDBs will need access to information from the Valuation Office Agency—the executive agency of Her Majesty’s Revenue and Customs—to calculate the value of other land using a new methodology set out in regulations. Clause 3 provides a power enabling the VOA to share revenue and customs information with IDBs—

Photo of Therese Coffey Therese Coffey The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I encourage my hon. Friend to leave the IDBs for the next part of his speech.

Photo of David Warburton David Warburton Conservative, Somerton and Frome

Before speaking to clause 3, I need to address amendment 1—which I was just about to do, obviously. Since I introduced the Bill, new data protection legislation—the Data Protection Act 2018—has come into force, and the amendment updates the Bill to reflect that. Rather than simply changing the year of the Act mentioned, the amendment refers to data protection legislation as defined in section 3 of the 2018 Act, which means that it incorporates other related and relevant data protection legislation, including the general data protection regulation and related secondary legislation.

Returning to clause 3, proposed new section 37A(5) of the 1991 Act enables the appropriate national authority—the Secretary of State or Welsh Ministers—to update and/or amend references to qualifying persons and/or qualifying purposes by regulations to be made under the affirmative procedure. Proposed new subsection (8) ensures that such regulations may be made only with the consent of the commissioners for HMRC.

New section 37B provides restrictions on onward disclosure of Revenue and Customs information. In essence, all onward disclosure is prohibited unless it meets certain criteria, as set out in subsection (1). Subsection (2) sets out the circumstances under which information may not be disclosed by the VOA without the consent of the commissioners for HMRC. It is an offence if a person contravenes the first two subsections by disclosing information relating to a person whose identity is specified in or can be deduced from such a disclosure, as is set out in subsection (4). The associated penalty of imprisonment, a fine or both is set out in subsection (6). Finally, new section 37C sets out further provisions about disclosure of information under the previous new sections, such as the conditions under which the data issued by the VOA would be exempt from the Freedom of Information Act 2000.

While clause 2 amends the Land Drainage Act 1991 in respect of calculating the value of other land, clause 4 makes amendments in respect of calculating the value of chargeable land—namely, agricultural land and buildings. Clause 4 inserts new section 41A into the 1991 Act, enabling the Secretary of State to make regulations, again by the affirmative procedure, to establish an alternative methodology for calculating the value of chargeable land. Although the issue of missing or incomplete data does not affect the 1991 Act’s method for calculating the value of chargeable land, the change is necessary to reduce the risk of imbalance on either side of the apportionment calculation. The Secretary of State will be able, within the new regulations, to provide a new methodology for calculating the value of chargeable land that makes use of more recent data than that dating back some 30 years.

New section 41A(3) allows the regulations to make provision about the methods to be applied or the factors to be taken into account in valuing chargeable property, including land. As before, subsection (9) allows the regulations to provide for IDBs to elect that the regulations apply to them and to specify the procedure for making such election. As I mentioned in respect of clause 2, that means that they can determine whether to adopt the new methodology and, if they do not wish to do so, nothing will change. Together, the changes will enable new, complete, available data to be used to provide alternative, fair methodologies for the calculations, which fairly apportion payment of IDB expenses between the drainage rate and the special levy.

In Wales, the situation is slightly different from England. There are 12 internal drainage districts, but each is administered by Natural Resources Wales. However, those districts are funded in a similar way, and these provisions of the Bill extend to Wales to enable the Welsh Government to make similar updates there.

Like other hon. Members, I am keen for the benefits of IDBs to be more widely available, where appropriate and where communities and local authorities support them. I am aware of hon. Members who support the creation of new IDBs, or the expansion of existing ones. The hon. Member for Westmorland and Lonsdale, who is not in his place, supports the Cumbria flood action plan, which proposes the establishment of an IDB for the Lyth valley.

I do not want to delay things any further, so I hope that hon. Members agree with all that I have said and I commend these clauses to the Committee.

Photo of Luke Pollard Luke Pollard Labour/Co-operative, Plymouth, Sutton and Devonport 4:15 pm, 11th March 2019

The Opposition have no problem with the clauses that the hon. Gentleman has talked us through. However, we have one question about charges for non-rate payers: do businesses have similar protection against increases? Beyond a certain percentage, council tax payers have the protection of the referendum; is there a similar protection for businesses, and small businesses in particular? Small businesses affected by flooding frequently use up available capital to restore their businesses and sometimes struggle with insurance. We would not want a situation whereby businesses in an area affected by flooding face increases that are greater in proportion than the increases rate payers face. We should make sure that there is an element of fairness, and I would be grateful if the hon. Gentleman set that out for the record.

Photo of Matt Warman Matt Warman Conservative, Boston and Skegness

I will be brief and will begin, as others have, by congratulating my hon. Friend the Member for Somerton and Frome on bringing the Bill forward. When a number of constituents wrote to me urging that I support it, I wrote back confident that it would face either the chop or the Chope. However, it has got through, which we should all be grateful for. According to the Association of British Insurers, my constituency is the most likely in the country to flood, and in 2013 it did so, which is why the Minister is spending £100 million on a flood barrier for it. I am as grateful for that as I am for the five IDBs that work in my constituency.

I want to ask two brief questions. First, the Bill is clearly aimed at the south-west, and I will not pretend for a moment that I begrudge that. However, I would like some reassurance that the IDBs in my constituency that work so well together could, if they wanted, avail themselves of the opportunity to form a rivers authority. Would the Government look favourably on that sort of thing? I say that without wishing to indicate that those IDBs necessarily want to do so, but that option is working well for Somerset in its shadow form and will hopefully work well in the future. I would like to think that we, too, could have that potential benefit.

Secondly, as the expansion of areas that are rated for IDBs is permitted elsewhere in the country, and since we all know that drainage boards work and that their benefits often extend well beyond the areas that pay for them, I hope that the expansion of IDBs will reach not just Somerset but other areas. Unfortunately, councils such as mine in Boston are often affected financially by necessary and sensible rises in drainage rates filtering through to their bottom line. That effectively means that borough councils cannot responsibly raise taxes as much as they wish to, because the 2% cap on council tax might be disproportionately taken up by that rise in drainage rates. A rivers authority is one way of solving that problem, but it strikes me that it is not the only way.

I commend this excellent Bill, and the excellent Member who has brought it forward. I hope that he and the Minister will be able to tell me that it is not only the south-west that will benefit from it.

Photo of Therese Coffey Therese Coffey The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

To answer the hon. Member for Plymouth, Sutton and Devonport, internal drainage boards operate in a quite different way. Effectively, cash comes from local councils, which appoint people to them, and there are people who have to pay the drainage rates—that relates to agricultural land. They carry out their own elections and make decisions together. The local businesses will be ones that are concerned with agricultural land, and they run their own election process. I hope that that provides the hon. Gentleman with some reassurance.

I am conscious of the issue raised by my hon. Friend the Member for Boston and Skegness that there is not a separate way of accounting for the item in question on the council tax bill. I am sure he recognises that it is not possible under the Bill to change the existing arrangements by which councils might want to show clearly how money is raised, or, indeed, other aspects of the referendum. However, I assure him that if people in his area, working with the councils, want to come forward on the matter of a rivers authority, it would be open to them to do so if they believed that the benefits would outweigh those of their current arrangement.

I reiterate that the Government support the changes. In my area the East Suffolk internal drainage board operates exceptionally well and, with the de-maining pilot, will take on further responsibilities for certain rivers in the area, with no extra cost to councils or indeed agricultural landowners. I believe that IDBs are generally a force for good. They are a key part of the Cumbria flood action plan.

Photo of Rebecca Pow Rebecca Pow Conservative, Taunton Deane

I thank the Minister for injecting her expertise and local knowledge into the debate. Does she agree that the Somerset IDBs do a complicated job representing landowners, as well as a great job on the conservation front? What is amazing about the Somerset levels is that they are an internationally famous wetland site and the largest area of lowland wetland grassland in the UK. Huge populations of wading birds come there. We have three IDBs in Somerset and they have just jointly produced a biodiversity action plan. It is all part and parcel of why we need to control the water and why the Bill is so important. It is not just about people and businesses, but about wildlife.

Photo of Therese Coffey Therese Coffey The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

My hon. Friend makes an important point, which just goes to show how committed farmers and landowners are to improving and enhancing the natural environment in whatever way they can. The flow of water can have a significant impact on nature, and not only in landlocked areas. Members with coastal constituencies will be aware of saltmarsh and intertidal habitats that are critical for the conservation of many special species. I agree with my hon. Friend and support the work going on in Somerset.

Photo of David Warburton David Warburton Conservative, Somerton and Frome

I am grateful to the Minister for fielding all the questions so well. My hon. Friend the Member for Taunton Deane is well known as a passionate advocate of environmental matters. She is right that the Somerset biodiversity action plan is exciting and that the IDBs will play an integral part in ensuring that our splendid Somerset heritage is maintained.

Photo of Sandy Martin Sandy Martin Labour, Ipswich

Is it not the case that making more provision for wildlife and helping to keep any possible river flooding upstream also creates savings for people downstream? Will there be any mechanism for those savings to be used to compensate upstream agricultural operations that might lose out financially?

Photo of David Warburton David Warburton Conservative, Somerton and Frome

The hon. Gentleman makes a good point. Drainage boards operate area by area, and those within the area will benefit. However, of course they work together and they understand the needs of surrounding areas. That brings us back to rivers authorities and the reason, perhaps, why my hon. Friend the Member for Boston and Skegness wants to bring them together and create a rivers authority. It is about working together in the best interests of us all.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.