My Lords, it is a great privilege to follow the Minister and, as it were, to open the batting order of discussion on this important Bill. Before going any further, I declare a number of interests as a landowner but not a grower, a property valuer, a one-time employee of the then Inland Revenue Valuation Office and a vice-president of the Local Government Association. That said, I welcome this Bill, which quite properly remedies the outcome of the decision in Tunnel Tech Ltd v Reeves (Valuation Officer) and I applaud the Government on finding a slot to bring this forward in times of considerable legislative congestion.
The pivotal point here is that the decision meant that the operation of Tunnel Tech would have been regarded as some sort of industrial enterprise rather than in the nature of agriculture or a horticultural nursery ground. However, the effect of rating buildings being used as nursery grounds but without other land would have put the company in very considerable contrast and at a disadvantage to an identical building occupied by, say, a market garden or a conventional farm. I am glad that the effects of this decision were not much more widespread than has in fact been the case.
I have to admit to being slightly astounded by the process whereby a court today has been asked to overturn the practice and understandings which have prevailed since 1928. I understand of course that changes in the methods of husbandry have to be taken into account, but I see this as an example of an overly literal interpretation of the present being applied to the legislation of yesteryear. This, coupled with the adversarial arts of legal practice, highlights the dangers of taking a position-based approach as against the broader consideration of intentions and public policy.
I believe that it was not Tunnel Tech which sought to have the additional burden of a business rates assessment placed on it, but the interpretation of the Valuation Office Agency, no doubt backed by the advice of the Treasury Solicitor. Much time and treasure have been expended on taking this case to the Court of Appeal and then further resource expended on the parliamentary processes necessary to reverse what I
believe would have been a highly damaging outcome for an important sector of an ostensibly agricultural type of activity. At any moment the department or the Valuation Office Agency could have desisted. Can the Minister inform us as to why that did not happen?
While I welcome the Bill, I further ask the Minister to ensure, along with his departmental colleagues, that before his or any other department or agency embarks on a process of forensically dissecting bits of legislation, all concerned with agriculture and business more widely, they should make a special effort to avoid upsetting generations of established practice unless there is a very good public interest reason to do so.
In recent times, the Valuation Office Agency has been criticised about many things, not least by me in this House. In this instance, the criticism might be that it allowed the administrative role of being the government valuer to merge with and become some sort of proxy for HMRC’s role as the taxman. This of course skews the fair and consistent administration of the property valuation system. This is not the stuff of some intellectual plaything. There should be a far clearer differential between the activities of HMRC and the role of the VOA. Sadly, and here I speak from some direct experience, the ill-effects of the present arrangement continue to spread. The risk is therefore of opportunistic excursions into novel interpretations of established practice that may then have to be reversed by Parliament on public policy grounds. To my mind, that is an extremely unwelcome process causing interim uncertainty and damage to cash flow in both the private and local government sectors, and being potentially hazardous to investment and employment. This should be the subject of better oversight. I encourage the Minister to comment. I mention this because there is a potentially very rich seam of trouble to be mined in this area by anyone with disruptive feelings or tendencies. The unplanned and often unforeseen effects on business can be considerable—it would not require any of your Lordships to devote much imagination to it.
Looking forward, if I have any advice for a Government contemplating a post-Brexit Britain—this might be the only pronouncement on Brexit that your Lordships will hear from me, for which you are doubtless very grateful—it is to ensure greater simplicity, transparency, fairness and balance to all our laws and regulations governing business and commerce, in taxation especially. If we want to be internationally slick and competitive, this is where I would start. So far, the Bill represents a welcome if small attempt to roll back the tide, but one can usually be sure that any claim to provide a better, fairer and more transparent regime will, on past performance, produce precisely the opposite.
I wish the Bill well and certainly have no intention to seek to amend it in any form. It has limited application and I hope it has a speedy journey on to the statute book, but let it also be a warning to better manage affairs in our great departments of state.
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