My Lords, I shall speak to Amendments 1 and 2, which are tabled in my name and that of my noble friend Lord Fox, and to Amendment 6, which is tabled in the name of the noble Baroness, Lady Blake. They refer to Clause 1, which is the only clause relating to changes proposed in non-domestic rates as a consequence of the pandemic.
My colleagues and I support the purpose of the proposals in relation to non-domestic rates—I hope that gives some cheer to the Minister. The Valuation Office Agency is being inundated with requests by businesses for material change of circumstances checks which cite the impact of the pandemic. There is such a large volume of such checks that if many of them are successful the balance of the business rates system would be fundamentally altered, to the detriment of the total income available for local authority funding.
The proposals to address this are reasonable, except for the issue I and other noble Lords raised at Second Reading, which forms the basis of Amendments 1 and 2. The Bill proposes not to allow a material changes of circumstances check if the pandemic is the sole cause. As we have already heard, in its place there will be a grant system worth £1.5 billion. That figure was confirmed in the spending review but it was announced much earlier this year. As we have heard, there is no clarity about the calculation of that sum.
During the debate on whether Clause 1 should stand part of the Bill, the noble Lord, Lord Cormack, said that the calculation is of a mere £9,000 per potential business, which would probably cover a small shop in small town centre, if it is lucky. That raises serious questions about whether the funding available will cover the very large number of requests that have already been made to the Valuation Office Agency. Does the Minister have any statistics on the number of such checks? Are there any figures relating to the monetary value of the checks that have been made? That would help us to understand whether £1.5 billion is anywhere near sufficient. Many of us think that it is not.
Then there is the question of the criteria that will be used to disburse the funding to local authorities, and then by local authorities to businesses. As the noble Lord, Lord Hunt, said, local authorities will need time to consult. How they intend to distribute the funding will depend on the balance of businesses in their local authority area. As we have heard—perhaps it was in something I read from the English schools people—Bournemouth has a great number of English language schools in its area; its system for disbursing funding will therefore be very different from somewhere where there are no English language schools or other similarly affected businesses.
Those are two big questions that need to be answered. The Minister has said that this Bill will provide “swift certainty”—I think I quote him correctly—for local
authorities. I must say, I am missing both the swiftness and the certainty. Perhaps he can tell us how swift “swift” is and how certain “certainty” is.
Can the Minister shed some light on the distribution of the grant funding, including which businesses will be eligible? Clearly, not all businesses will be; otherwise, there is definitely not sufficient funding. Amendment 1 is an attempt to get answers by asking for a review of the impact of the new system on businesses after six months, and for that review to state whether sufficient funding has been made available. I look forward to the Minister giving us some answers on that, I hope, because at the moment, as was said in the debate on the previous group, it is very unsatisfactory for businesses to find that their route to addressing losses as a result of events well outside their control has been cut off, unless the substitute system is as good in terms of compensation.
Amendment 2 takes the opportunity to raise once more the completely unfair business rates system, whereby—I have used this example before—a small town centre shop will, in relative terms, pay many times more than an out-of-town distribution warehouse, which thus gains a considerable competitive advantage while also making greater use of local roads and other local services. This has to be put right. Dare I cite Amazon? I am going to do so. Amazon, because it does retail out of town and in a warehouse, has a relative value in my area of roughly £45 per square metre, whereas a small shop in my little town centre pays perhaps £250 per square metre. That just is not right. They are both doing retail. For one, folk go to the shop to buy; for the other, the warehouse delivers to them. It is just turning the system around. The Amazons of this world do not pay their fair share. Until we get that right, we will not get healthy town centres back again.
It was, I think—again, the Minister will put me right if I am wrong—way back in 2017 that the first reform of business rates was proposed. Four years on, we are still talking about business rates reform, inequality in the business rates system and the need to regenerate our high streets, yet that is the one thing that could help enormously. So Amendment 2 asks for an assessment of the impact of the changes in the Bill in the non-domestic rating system and, crucially, an assessment of whether the changes support our town centres and high streets.
Finally, the amendment seeks a recommendation on whether the business rating system is fair as far as town centre businesses are concerned. There is concern, expressed in both my Amendment 2 and Amendment 6 in the name of the noble Baroness, Lady Blake, about the impact on local government finances. I trust that the Minister will be able to give a categoric assurance that no hard-pressed local authority will lose out financially by the Bill. I look forward to the Minister’s response to the questions I have asked. I beg to move.
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