Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

John Redwood Excerpts

2nd reading: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 23rd April 2018 Commons Chamber

[The Minister for Housing (Dominic Raab)]

I beg to move, That the Bill be now read a Second Time.

The Bill takes forward two important measures to promote fairness derived from the autumn Budget: fairness for hard-pressed businesses that face an unjustified tax hike because of the so-called staircase tax; and fairness for the families, young people and many others who see properties lying empty while they struggle to find somewhere to live. On the first issue, we are determined to support the occupiers of business premises in multiple occupation and to ensure that they do not face unfair penalties. For more than 50 years, businesses that operated in adjoining units or rooms accessed from a common corridor staircase received one rates bill. That applied, for example, if a business occupied three consecutive floors in an office block or if a business occupied two rooms separated, let us say, only by a wall.

The rule was widely understood and accepted among all ratepayers, rating professionals and the Valuation Office Agency. No one was looking to change that approach. However, as a consequence of a Supreme Court decision in 2015 concerning an office block occupied by the accountancy firm Mazars, the situation was put in some doubt. After considering the Supreme Court judgment, the Valuation Office Agency concluded that it had to change its long-standing practice. As a result, each unit of property accessed from common parts has to have its own rating assessment, regardless of whether the properties are adjoining or associated with the same business. So, for an office block housing more than one business, each floor will now typically need to have its own rating assessment, even if successive floors are occupied by the same business.

We are not criticising the Supreme Court for reaching that judgment or the Valuation Office Agency for changing its practice as a result, but we have monitored the impact of the changes and it is clear that they have had troubling and damaging implications for ratepayers. First, moving from rating assessments that cover several floors to individual floors has increased some rateable values and rates bills, even when there has been no change to the property or locality. That is because the rateable value per metre squared is sometimes lower for larger properties, reflecting the normal practice in the market whereby landlords will offer discounts on rents for occupiers willing to take more space. This left some ratepayers suddenly facing a backdated increase in their overall rates bill.

Secondly, some businesses have lost small business rate relief as a consequence of the changes. That is not what we wanted to see, given its role in supporting the small independent businesses that are vital contributors to local economies and communities. As hon. Members will be aware, small business rate relief is a generous measure providing relief for ratepayers of property up to £15,000 in rateable value, and as a result more than 600,000 small businesses, occupiers of a third of all properties, pay no business rates at all. It is targeted at ratepayers with only one property and one rates bill to ensure that it benefits small independent businesses, which are very much the lifeblood of our local economy.

As a result of the change in practice that has seen some single rating assessments split in two, some ratepayers who were previously eligible for small business rate relief have lost some or, in some instances, all, of that relief. We understand that the number of small businesses affected by the loss of relief is relatively low, at fewer than 1,000, but that is still about 1,000 too many.

These businesses already pay their fair share. They deserve our support and this Bill will make sure that they get it. That is why we have decided to restore the previous practice of the Valuation Office Agency under clause 1. This will again see adjoining properties that are part of the same business receiving one rating assessment and paying one rates bill. We have decided to do this retrospectively. It is important that we get the process right, so we carried out a technical consultation on draft provisions over eight weeks after Christmas, supported by workshops held by my officials with the ratings sector. Indeed, there were meetings with expert valuation surveyors, too.

The Minister for Local Government, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), answered detailed questions from the Chair of the Select Committee. I am pleased to say that a good response to the consultation has helped us to improve some of the draft provisions. We published a summary of those responses and an explanation of the improvements on the Ministry’s website. I want to take this opportunity to express my appreciation on behalf of my Department and the Valuation Office Agency for the help we received from the Rating Surveyors’ Association, the Royal Institution of Chartered Surveyors and the Institute of Revenues Rating and Valuation in this work. It is probably worth saying that the Federation of Small Businesses supports the measure, too. As a result of this work, I am confident that the provisions we are introducing in clause 1 are technically sound and meet the Government’s aims, and that they will be welcomed not just by ratepayers but by everyone who wants to see British businesses thriving, especially small businesses and those on our precious high streets.

We are also determined to deliver a fairer deal for the many people who want and need decent, secure and affordable homes. We are straining every sinew to build more homes. Last year, we saw 217,000 new homes delivered, the highest number in all but one of the past 30 years.

[John Redwood (Wokingham) (Con)]

I am a strong supporter of what the Minister is trying to do but, on the question of a more penal tax on empty properties, will he assure me that, if a property is empty pending permissions for subdivision or improvement to get it into a better state so that it can be enjoyed as a home, there will be some flexibility so that people are not being taxed while they are trying to do that work?

[Dominic Raab]

My right hon. Friend is absolutely right, and that is precisely why we have a minimum period of two years, to ensure that we strike the right balance and encourage the use of existing resources in our housing stock without penalising those who want to get their housing stock on to the market but are taking a bit of time to do so, for whatever reason—perhaps because of renovations or the challenges of the local market.

--- Later in debate ---

[Eddie Hughes]

My hon. Friend brings me to a point that I had neglected to cover so far: the flexibility that is allowed because we absolutely do not want to penalise people who have genuine reasons for a having a property empty for an extended period. Those people should fear nothing from this Bill. My understanding—I may be incorrect; if so, I am sure that hon. Members will correct me—is that the Bill would not apply, Madam Deputy Speaker, if you were serving in our armed forces overseas and your property was therefore left empty for an extended period. Similarly, should you unfortunately need to go into hospital or respite care, leaving your property vacant for a two-year period, there would be the flexibility to ensure that this measure was not applied.

[John Redwood]

Does my hon. Friend agree, though, that quite a few of these empty homes are owned by the public sector, which may not respond to this incentive? If only my council had lots of empty homes, it would be much easier, but it does not, and we are under enormous pressure. Does he agree that where that is the case, we need something else as well in order to end the scandal of empty public-owned housing?

[Eddie Hughes]

This is dangerously close to becoming a debate with great interaction. I look forward to more comments from my right hon. Friend, because my understanding is that there was previously a tool that allowed compulsory purchase of properties that had been left empty for an extended period. Some might think that this Government would not apply such rules, which perhaps seem draconian.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

John Redwood Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 15th May 2018 Commons Chamber

[Pete Wishart]

Let me say to you, Madam Deputy Speaker, that the papers I have here are just a few of my brief speaking notes.

I am being very serious in all this. I know there can be a little bit of banter about English votes for English laws—how embarrassing, unworkable, stupid and ridiculous it all is—but this is a serious Bill that requires attention. The thing that surprises me more than anything else is the lack of interest from my English colleagues. We will do this job on their behalf. If they are not prepared to get to their feet to speak to this fine Bill, it will be left to Scottish National party Members—

[John Redwood (Wokingham) (Con)]

rose—

[Pete Wishart]

But here is the genuine voice of England. I think the House awaits the right hon. Gentleman’s pronouncements with great interest.

[John Redwood]

I am grateful for the introduction from the hon. Gentleman. His misguided mockery serves his cause ill and serves this House ill. He well knows that we have had a proper constitutional debate about how some symmetry can be put into the asymmetric arrangements that we inherited so that each part of the United Kingdom can make its own decisions on its own measures, and this is the result. England now has the right to veto a measure that the Union Parliament wishes to impose on England if it does not meet with the approval of England. It is the weakest form of devolution of any of the four countries in our Union. The reason there are not English Members queuing up to speak on this measure is that we agree with it. We like this measure and we wish it to go through. If the hon. Gentleman is a true friend of England, he will now sit down and let this Bill pass.

[Pete Wishart]

I think I am grateful to the right hon. Gentleman. I would describe his intervention as half-hearted at best. His heart was not really in it, I do not think. He is one of the great defenders of the tradition of an English Parliament and English rights. Is he really satisfied with these woeful arrangements for this House? I am all for English democracy and making sure that English Members get the opportunity to design and progress their own legislation, as is required by their constituents, but to describe what we are doing today—this embarrassing mess—as a solution is below the right hon. Gentleman.

--- Later in debate ---

[John Redwood]

indicated dissent.

[Angus Brendan MacNeil]

The right hon. Gentleman shakes his head—one principle for England, and another for Scotland.

[Pete Wishart]

My hon. Friend hits the nail right on the head. In this wonderful institution—the quasi-English Parliament—it seems to be all right for English Members to demand that they get their way and that they determine their legislation. But I remember the Scotland Bill 2015, as the right hon. Member for Wokingham (John Redwood) will too. I remember something like 97% of all Scottish Members of Parliament tabling amendments to that Bill, only for them to be overwhelmingly and comprehensively rejected because of the Government majority. It seems to be all right for English Members to get their own Parliament when it comes to these things, but when we have our say on important reserved issues in this House, it is completely and utterly ignored.

[John Redwood]

The hon. Gentleman must know that his colleague, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), has completely misconstrued the arrangements. No member country of the Union has a veto over Union matters such as withdrawal from the EU. Scotland not only has a complete veto over Scottish legislation but is in sole possession of Scottish legislation in a way that we English Members are not for English legislation.

[Pete Wishart]

I will leave the right hon. Gentleman to take that up with my good friend from Na h-Eileanan an Iar, who I have to say I find much more convincing when it comes to some of the great constitutional issues of the day. I am more than persuaded by my hon. Friend’s eloquence.