My Lords, with the leave of the House, I will speak to both Bills on the Order Paper. I declare my relevant interests in commercial and residential property, as set out in the register.
Both Bills both provide targeted relief for ratepayers and support the reform of the business rates system, delivering on this Government’s commitments. I am pleased that, with the agreement of noble Lords on the Benches opposite, I am able to bring both Bills to this House today in a joint session. I will first set out the purpose of the lists—or revaluation—Bill, before moving on to the Non-Domestic Rating (Public Lavatories) Bill. I look forward to hearing the views of this House on both.
I know that as we tentatively begin to consider what our local economies will look like on the other side of the pandemic, it is important to recognise the concerns about the current business rates system held by the ratepayers who make up our commercial areas and high streets. It is with this in mind that I move the Non-Domestic Rating (Lists) (No.2) Bill. The Bill delivers on the Government’s commitment to set in law the date of the next business rates revaluation at 1 April 2023. This will ensure that future rates bills will better reflect the exceptional impact of the pandemic on the commercial property market.
The basis of a property’s business rates bill is its rateable value, which broadly represents its annual rental value. This is assessed independently of Ministers by the Valuation Office Agency. The agency has carried out regular revaluations of rateable values since the introduction of business rates in their current form in 1990. These ensure that the responsibility of paying the rates, which fund important local services, is fairly distributed among all ratepayers.
At each revaluation, all rateable values are based on the rental property market at a set date. This is known as the valuation date. A revaluation is an extensive exercise requiring many months of collecting and analysing rents, then the preparation of 2 million valuations. To give the Valuation Office Agency time to prepare these valuations, the valuation date is set two years before the revaluation.
Prior to the pandemic, we had wanted the next revaluation to take effect from 1 April 2021 and reflect a valuation date of 1 April 2019, but the impact of the pandemic on the commercial property market since 2019 means it would now not be right to continue with the 2021 revaluation. I hope noble Lords will agree that we could not have a revaluation that resulted in bills which did not reflect the impact of the pandemic. The Non-Domestic Rating (Lists) (No.2) Bill therefore sets the date for the implementation of the next revaluation in England at Wales at 1 April 2023. This revaluation will be based on rents at 1 April 2021, a date which has already been set in secondary legislation.
My Lords, I want to focus my remarks on the Non-Domestic Rating (Public Lavatories) Bill. I was unable to speak on this Bill when it was first introduced—what seems like a lifetime ago—and I welcome it now with a particular interest.
In 2008, when I was standing where the Minister is now, I was pleased to introduce the then first-ever guidance on public lavatories, designed to prevent further closures, improve access and quality and, in general, to make the point that public lavatories should not be a national joke—let alone a national disgrace—but a local asset, which local people can rely on and take as much pride in as any other local provision. The case made then is the same as made now eloquently by the Minister: that everyone of all ages and conditions should be able to count as of right and dignity on there being a decent public loo accessible. We wanted to expand access and encouraged private partners in retail to consider how they could make their loos more accessible. As the Minister has reflected, a great deal of good practice has been inspired at local level: for example, by encouraging the use of S106 to build more loos and in notable innovations and changes.
However, that was not a national strategy, which was at that time beyond my reach. Sadly, however welcome, neither is this Bill a national strategy. That alone would ensure that there were minimum mandatory standards of access, provision and quality tailored for special needs, particularly those of the elderly and disabled, and the many people who suffer from medical conditions and require frequent access. This is therefore a reactive Bill; it is long overdue and reflects decades of pressure from the British Toilet Association. It has worked with successive Governments to achieve it and we should be very grateful to it, but I think it would agree that a national strategy would be welcome now.
The statistics suggest that in the last decade almost 700 loos have been closed, accelerated, I have no doubt, by the vast cuts in local authority spending. In addition to the loss of public lavatories, we also need to face—as sadly the Bill does not—the degraded and frankly disgusting nature of so many of them. Even in the most beautiful towns such as the one I live in, Lewes in Sussex, our local loos are frankly a disgrace. Other local authorities—Ceredigion in Wales is an exemplar—take huge and award-winning pride in what they offer their local community and tourists. If it can make it an important priority, every local authority can. I should add here how glad I am that Wales is also sharing in this measure.
I remind the House that I am a vice-president of the Local Government Association.
First, I want to agree with the concerns expressed by the noble Baroness, Lady Andrews, on the Non-Domestic Rating (Public Lavatories) Bill. I welcome the decision to combine the two Bills for Second Reading, given that there has already been a Second Reading of the Non-Domestic Rating (Public Lavatories) Bill. However, it is also appropriate to consider the two Bills separately as they progress through the House, because they cover different issues.
I shall not say much about the Non-Domestic Rating (Public Lavatories) Bill, as other colleagues on my Benches will cover those issues fully. From my perspective, I welcome the Bill and it is right that the Government have agreed to backdate its implementation to April 2020.
I want to speak on business rates and the need for urgent reform of the system. In his introduction, I think I heard the Minister say on the review of business rates that the Government will be reporting in the spring. I had assumed that the Budget at the beginning of March might be the appropriate time for that to be announced, but it sounds now as though it might actually be early summer. I would be grateful if, when he responds to the Second Reading, the Minister might clarify that.
I accept that a delay in revaluation to 2023 is inevitable, given the coronavirus pandemic. However, revaluation must ensure that local government does not end up being underresourced and that councils are enabled to widen their sources of income. Revaluation, when it comes, will be effective only if there is a root and branch reform of the system, so that it is much fairer to high streets and city and town centres, and raises much more from online retail companies and their warehouses. Valuations in much of retail, hospitality and leisure have become very out of date. We should bear in mind that retailers currently pay over one-quarter of business rates across England and Wales.
My Lords, I welcome the opportunity to debate these two Bills, which I support. I thank the Minister for an online meeting last week. I refer to my professional involvement with non-domestic ratings, my membership of the RICS and other bodies, and my interests as a vice-president of the LGA and the NALC, and as a business property owner.
My own experiences started in the Inland Revenue valuation office in 1975. At that time, residential and commercial properties shared a common valuation approach based on an assumed rent between a hypothetical landlord and a hypothetical tenant. I observed both the Layfield report and the Lyons report, which looked at local government finance and central government grant. My maiden speech here was on the Local Government Finance Act 1988, enacting the ill-fated community charge and setting domestic and non-domestic systems on different trajectories. I was in private practice when the poll tax was replaced with council tax, or CT, based on bands of capital value as at 1991. Business rates remained rent based. Subsequently, there was a capping on limited CT increases, but original value bandings for England remained. Business rates, by contrast, were subject to inflation-plus annual increments to uniform business rates, with periodic revaluations. This divergence has changed the tax burdens.
Things sharpened up when the Labour Government curtailed empty property relief, but nothing matched the later financial shock of the 2010 revaluation, based as it was on 2008 peak-of-market rents, by which time of course values had fallen, with insolvencies and rent voids soaring. I saw demands for a fairer approach, reliefs and more frequent revaluations grow, and the effects of the Treasury principle of fiscal neutrality meaning that changes could not of themselves adversely affect tax yield. Welcome exemptions and reliefs for the very smallest premises were thus funded by larger ratepayers. I benefit from that.
My Lords, I intend to make only a short intervention today.
Covid-19 has had a massive impact on the sport and recreation sectors. While the arts lobby successfully negotiated a £1.57 billion package of support for the art, culture and heritage sectors as long ago as July 2020, the sports sector has not been so fortunate. Some £300 million in emergency funding was agreed to help sports clubs in England survive the ongoing Covid-19 restrictions during the recent winter. Rugby league, rugby union, horseracing and the lower tiers of national league football were all beneficiaries of the support, but in the world of sport the funding gap exists most prominently—and the pain is most acutely felt—among community sports clubs, local authority sports facilities and the smaller local amateur sports clubs, many of which have been the lifeblood of communities the length and breadth of this country throughout our lifetimes.
During this debate on the Non-Domestic Rating (Lists) (No. 2) Bill, I want to draw one item to my noble friend’s attention, in full anticipation that, having heard him respond to my noble friend Lord Botham when he made his impassioned plea on the subject and received such praise from the Front Bench, today in the wider context of post-Covid non-domestic rating policy, his plea and mine will not fall on deaf ears.
Sports clubs in the community provide opportunities for people from all walks of life to have a healthier and more active lifestyle. Non-domestic rate relief pre-Covid had a significant discretionary element. Charities, other not-for-profit bodies and sports clubs could apply for a percentage reduction in the business rates payable on any non-domestic property which was wholly or mainly used for charitable purposes. There were two elements to this reduction and relief: mandatory by law and discretionary—in other words, at the discretion of the council.
If you were a registered charity you were entitled to mandatory charity relief: an 80% discount on the full or transitional amount due. If you ran a community amateur sports club registered with the Inland Revenue, you were also entitled to an 80% mandatory discount on any non-domestic property that was wholly or mainly used for the purposes of the club. However, the rateable values and the cost to the clubs of going through that process—of being at the mercy of some local councils for part of the rates paid—remained a major cost item at a time when many were barely surviving, and those barely surviving have gone through even tougher times now.
My Lords, I very much agree with the noble Lord, Lord Moynihan, about the vital importance of sports clubs, and I ask the Minister to look favourably on his proposal.
Although the focus of the non-domestic rating Bill is relatively narrow—to reset the next revaluation of business rates to take account of the pandemic, which of course I welcome—I urge the Minister to get the Secretary of State, the Chancellor and the Prime Minister to think big about the future of town centres. Covid has accelerated their decline; it is now a really big crisis, on top of the online shopping phenomenon, which has also been accelerating.
The Government need to act because town centres can become the hub of local community and business life. They have been in the past, and, to some extent, they still are—but this role is rapidly shrivelling due to commercial and online pressures and changing lifestyles, which have been accelerated by the pandemic. I believe that business rates and rents have a crucial role to play here. Of course, there is a variety of complex exemptions, suspensions and reliefs, but it is now necessary to have a much more radical and comprehensive solution to this problem, or town centres will die just as we consider future policy to save them.
My own town centre in Neath is a cosy, pedestrianised area, which is very attractive to shop in, although the shops have been disappearing on all levels. There is an old market building with small stalls dating back to 1837 and renovated in 1904, and a great variety of small artisan shops—you can get your watch fixed there. Most people go into a jeweller’s and are invited to exchange their watch when the battery runs out rather than replace it because it is almost cheaper to buy a new one. This issue of the throwaway society, which is ecologically damaging, of course, can be dealt with if there are people who repair them, as they do in the Neath town centre market. A number of other small businesses and artisans offer that facility.
My Lords, I warmly welcome, for the second time, this Bill to scrap business rates on public lavatories. I hope this will mean that closed loos will reopen and that local authorities will now be encouraged to provide more such facilities, including well-maintained disabled loos with hand-washing facilities. It is imperative that more disabled loos are available for our ageing population because so many people with medical conditions cannot risk leaving home without knowing that there is a suitable loo for them to use.
I commend the excellent facilities provided by Changing Places, which the Minister mentioned in his speech: they have space, hoists and a changing table, and are vital for families with disabled children. I am glad that Changing Places is going from strength to strength, with a clear map of where their facilities are installed.
However, there is a problem with the centrally held database of where there are public loos in the United Kingdom. The Government gave up on collecting this information 20 years ago, and the British Toilet Association would like to help them restart this invaluable database. It also says that local authorities would like clear guidance on cleaning and hygiene measures in these Covid times.
Nowhere in the British Isles should be far from accessible public lavatories, and this situation should be monitored. Is that asking too much?
My Lords, it is a pleasure to follow the noble Baroness, Lady Thomas of Winchester. My interest is in the second of the two Bills before us about the exemption from rates for public lavatories. I too am glad to see it back again, following its having been dropped at the end of the last Parliament. I was one of a very small number of speakers at Second Reading on the previous occasion. It is remarkable and very encouraging that, for whatever reason, so much more interest has been shown in the Bill this time round.
I join with others in welcoming the measure; it addresses a very real problem, which is not much talked about in public but is nevertheless very real. This is not just a matter of convenience, as these places are increasingly difficult to find; it is also a serious health issue, particularly for people with special lavatory requirements or other health problems, who need to be able to easily find such places and have them within easy reach. There are some who dare not go to places where they are not assured of such support; there are others who find taking the risk very worrying and uncomfortable. The cost of providing and maintaining such places is not inconsiderable, so something needs to be done. The help that this Bill offers, however small, is overdue and much to be commended.
The other point that interests me about it and has led me to contribute to this debate relates to my past. I spent some time, during an earlier stage in my career as an advocate, in cases about valuation for rating. I was also the joint editor of the leading textbook on this subject in Scotland. To me, it is of interest to find that public lavatories appear as separate entries in the valuation list. I did not encounter them at any time in my practice, and they are not mentioned in the list of unusual subjects to which the book refers, such as advertising hoardings and radio masts. However, there is no doubt that they should be in the list wherever they exist as separate subjects, with the consequence that, according to the ordinary rules, they will be chargeable to non-domestic rates.
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The Bill will also make a change to when the Valuation Office Agency must publish draft rateable values to support the smooth transition of the revaluation. This date will change from no later than 30 September to no later than 31 December in the preceding year. Doing this will allow us to align the publication of these draft rateable values with the timing of decisions relating to the multipliers and transitional arrangements—decisions which are normally made at the autumn fiscal event. Ratepayers will still be given several months’ notice of their bills for the following April onwards.
While policy on business rates is a devolved area, the Welsh Government have agreed that the application of the Bill should include Wales. This means that, as in England, the next revaluation in Wales will be implemented on 1 April 2023 and the latest date for publication of Welsh draft rateable values will also be changed to 31 December. Entirely different legislation applied in Scotland, where the Scottish Government have also committed to implementing their next revaluation on 1 April 2023, and Northern Ireland, which has only recently implemented a revaluation on 1 April 2020. There is therefore recognition across this country that moving the date of the next business rates revaluation to better reflect the impact of the pandemic is the right thing to do. I hope that this agreement is also shared in this House.
As I have said, this is an exceptional step, taken in exceptional circumstances, and the Government remain committed to implementing more frequent business rates revaluations. The fundamental review of business rates will look at the frequency of revaluations alongside how they are carried out. It will report on these aspects of the business rates system in the spring. However, this is a step we can now take to provide greater fairness and certainty to ratepayers.
Turning to the Non-Domestic Rating (Public Lavatories) Bill, this Government recognise the importance of public lavatories. That is why at Budget 2020 the Government recommitted to introducing a business rates relief for public lavatories. This small but important Bill delivers on that commitment and responds to calls from local councils. It would ensure that eligible public lavatories receive a 100% reduction on their business rates. It will cut the operating costs of public lavatories, particularly in cases where rates bills are a significant proportion of their running costs, and help to keep these important facilities open. The relief will apply to eligible public lavatories run by the private and public sectors, including those operated by parish councils.
Even now, when we are minimising the use of our public spaces and of public transport, the availability of appropriate toilet facilities to those essential workers who continue to keep our country running, such as taxi and delivery drivers, is of particular importance. Given how vital these facilities are, it is understandable that there has been public concern around the potential reduction in the number of available lavatories. I know that the sentiments of these concerns have previously been reflected in the contributions of many noble Lords in this House. Removing the business rates on public lavatories will make it easier for them to remain open. Furthermore, to ensure this measure is implemented quickly and support provided as soon as it can be, I am pleased to say that, subject to Royal Assent, this Bill will apply retrospectively from April 2020. This means that, for eligible properties, the relief will be backdated to the start of the financial year.
I hope your Lordships will allow me the opportunity to pay tribute to councils, and to the National Association of Local Councils, for their support for this Bill. Let me also thank the private organisations and businesses which, through their launching of innovative local initiatives, have formed the vanguard in the campaign to extend the provision of public lavatories. In particular, I would highlight the community toilets scheme, which has now been adopted by local authorities across the country. This scheme allows the public, in less restricted times, to make use of toilets provided by local businesses and councils without making a purchase. I would also highlight the support that the British Toilet Association has given to this scheme through its “Use Our Loos” campaign and the launch of the Great British Public Toilet Map.
Of course, for people who cannot use standard accessible toilets, it is about not just the number of facilities available but ensuring that the right facilities are available. This is why the Government have delivered in providing more “Changing Places” lavatories to ensure that everyone in this country, including those with special lavatory requirements, can be confident in using our public spaces. At the Budget last year, the Chancellor announced £30 million to fund “Changing Places” toilets in existing buildings and accelerate the provision of these vital facilities. We will announce the details of this funding in due course. The ability of people to enjoy our public spaces, and to support our economy, should not be determined by their disability or personal circumstances. I am proud of the commitments that the Government have already made on this important issue. I hope that the measures included in the public lavatories Bill will help to give people the confidence to get out in our public spaces and support our high streets, once it is safe to do so.
The provisions of both Bills before this House today act only to supplement the extensive support that the Government have already provided to ratepayers since the start of the coronavirus pandemic. In response to it, we have ensured that eligible businesses in the retail, hospitality and leisure sectors will pay no business rates at all in 2020-21. This is a relief worth £10 billion which, when considered alongside small business rate relief, means that more than half of ratepayers in England are paying no rates at all this year. Both Bills before the House form part of the critical package of support for ratepayers and reform to the system that this Government have committed to delivering. I commend both Bills to the House.
As with everything else, Covid has exposed the importance of things we took for granted. The awful impacts following closures of public loos revealed that only too graphically. We have also become more aware, as shops and buildings close, that public loos become the only option for people who are still working in the outdoors.
This Bill, which provides business rates relief, is long overdue. It is a modest proposal but it has, in effect, removed what was, frankly, always a historic anomaly. The exam question is: what sort and what scale of difference will it make? In principle, it will certainly incentivise better local provision and free up resources, and it might stop the closure of some local lavatories. However, it is impossible to tell whether it will have a real impact, given that current estimates are that there is a black hole of about £10 billion in local authority finance. It goes without saying that the funding deficit makes it simply impossible for local authorities to provide the services which are so badly needed. As we approach post-Covid better community building, that has to be at the heart of it.
The Bill can be improved in this House. For example, I would like to see more emphasis on how loos in public buildings such as museums, town halls and libraries could be involved. However, I have some real questions for the Minister, primarily regarding how far this small amount of extra funding will go to address the extent of the loss of provisions. My questions are these. What estimates have been made for the public loos that will now be saved? How will this be monitored or reviewed? What guarantees are there that this money will be spent on what it is intended for, rather than lost in the other huge demands of local authorities? What incentives are there that this money will also provide for caring for public loos and providing extra facilities, such as changing places? Finally, does the Minister agree with me that the essential thing now is to build on this Bill, and to recognise that public health—as we know acutely at the moment—needs constant vigilance and constant investment, and local agency and partnership? I ask our Minister to take the lead in pressing for a national strategy.
Public lavatories were a sign of public dignity, of high standards and municipal confidence. They were constructed with care and beauty by our Victorian ancestors. They should also be a fundamental part not only of our public health strategy but of our strategies for equality, ensuring that children can be cared for and comforted when they are out and that parents do not have to search in desperation for a friendly pub, and ensuring that people of all ages, and people with medical conditions, are free to leave their homes without a battle plan for finding a loo and living constantly in fear of embarrassment. This is not a trivial or facetious issue. It is far more profound than we give it credit for because, to take it seriously, if we do not prioritise it, it is discriminatory and dangerous. I really hope that the expectations held for this small but important Bill are fulfilled.
I hope the Government will avoid the temptation for further temporary fixes to the system. The system was in great difficulty before the Covid-19 pandemic, but it is now broken. One reason for this is that the current system treats companies in the same way, whether they are making a profit or a loss. This is the consequence of levying taxes on the value of a property as opposed to the value of a business itself. This problem can be made more acute by the need of national and local government to raise broadly the same amount each year from business rates, even if turnover and profits of businesses plummet. Another reason is that the current system does not address the lower business rates paid by companies retailing online and based in out-of-town warehouses. Revaluation must take this into account. I have concluded that we should consider the retail sector as a whole and divide up the tax burden differently, so that online retailers pay their fair share of the total tax bill.
There is a lot pressure to move to an annual system of revaluation. I can understand the arguments for that, but, instinctively, I think that three years would be better. It would reduce administration and allow trends to be more certain.
Finally, there is a very strong case for extending the business rates holiday from April this year. In the current year, the Treasury has written off some £10 billion in business rates, fully exempting around 358,000 properties in retail, leisure and hospitality. The case for continuing the current scheme is strong, probably for another full year, although some selective phasing might be appropriate. That said, the Government should be careful not to give a business rates holiday to companies which do not need it. As an example, large supermarkets—whose profit levels have been rising during the pandemic, as evidenced by their recent results—did not need the help they were given in the current year and so were right to pay it back. The Government should not be borrowing money on behalf of the taxpayer to give it to retailers whose profits are rising. That said, smaller high street retailers, including convenience stores, will certainly justify extra help, well into next year.
Transitional relief for large changes in the rates burden balanced gainers and losers, but the way in which downward transition now operates means that, in the example of a shop in Canterbury, the 2021-22 rates bill will still be 80% more than it would have been without the relief. That seems intrinsically unjust. More frequent revaluations would reduce or eliminate the need for transitional relief but lack delivery. Ideally, we should have annual revaluations but, like the noble Lord, Lord Shipley, I suspect that that may be impractical, although it is proposed for Scotland. Meanwhile, too many rates bills are still coloured by the never-repeated 2008 rental values.
A surge in rating appeals of course followed the 2010 revaluation—many thousands on that list are still outstanding—in response to which the Government introduced a check, challenge, appeal, or CCA, system. It was designed to weed out frivolous cases and reduce administrative burdens, but it also put significant barriers in the way of genuine cases, perceived by appellants as protecting the Valuation Office Agency, the VOA, from the inevitable results of poorly resourced, researched and compiled valuation lists. Avoidance, needless to say, has become more prevalent.
Criticism continues. Largely because of the inflation-proofed and fiscally protected yield, the uniform business rate has risen to over 50p. Some businesses pay more in business rate than rent; reliefs apart, all pay much more on any measure than their services-hungry residential counterparts or businesses under any comparable European tax. The Minister may well wish to reflect on this legacy. The pandemic measures have been very welcome, but even they do not alter the underlying landscape.
I turn to what I call the “lists Bill”. It puts back the next revaluation to 2023 and cuts to three months the deposit of the rating list before it comes into force. The Minister has said how the antecedent valuation date works, but a 2023 revaluation means a 2021 AVD. Although I am assured that the Valuation Office Agency is confident of the evidence base—despite lockdown, furlough, forced closures, pop-up rent deals and rate holidays—other experts think that market rental evidence this April will be thin and unreliable. For bars, clubs and property valued on fair maintainable trade, current evidence will be largely absent. Delaying the AVD to, say, September or December is possible, but apparently not in contemplation due to VOA operational timeframes. I am not entirely convinced on that but am keeping an open mind.
The reduced three-month list deposit period was originally linked to three-yearly valuations—on which the Bill is silent, so it is a little asymmetric. Checking an assessment and pointing up errors in January is one thing; getting the VOA at a busy time of year to make corrections in time for dispatching rate bills in March is another. Bear in mind that rate demands are payable in full until the rateable value is amended. I note that the LGA says it is altogether too short a lead-in period for its members. So this “lists Bill” has consequences.
On public lavatories, I welcome the overdue and long-promised exemption. I thank the Minister for writing to me last October and for confirming backdating. What the Bill sets out is reasonable and appropriate, but it highlights the need to examine public facility exemptions more generally.
Rental values still afford an excellent market-derived business tax base, but problems with the business rates system remain and, as the noble Lord, Lord Shipley, said, major reform is certainly needed. On this, professionals, local government, businesses, the CBI, Revo and trade organisations are united. I commend the Government for commissioning their fundamental review and thank the Minister for his reassurance, but can he confirm that Parliament will have a chance to debate it?
I hope the review will be bold and will look at the overall business rates system and its fairness within local government finance, alongside the appropriateness of exemptions and reliefs and issues of avoidance. I hope that alternative revenue streams, such as those related to online trading and opportunities for locally managed and levied revenues, will be included. It is not before time; critically threatened physical retailing, as well as many investments, pension schemes and jobs may depend on getting this right.
I congratulate the Government on the business rates holiday that is in place and on a range of initiatives they have taken, on which my noble friend the Minister has led from the Front Bench in this House. However, the critical issue for the future—I know this is passionately felt by my noble friend in sport, the noble Lord, Lord Addington—is the continued support for sports clubs. My view is that there should be 100% rate relief into the future from the Government for registered community sports clubs. I believe that the time has now come to raise that mandatory element from 80% to 100% and to remove the discretionary element. This should be a mandatory part of the package of measures to help sports and recreational clubs get back on their feet and play a pivotal part in ensuring that the population is healthier and more active as we emerge from Covid-19 and face future challenges.
In summary, I hope that rate relief for community amateur sports clubs will be made compulsory, and I very much hope we will have the opportunity to return to this in future debates. In the meantime, I appreciate the opportunity of raising this important subject in the context of the draft legislation before us.
To keep that kind of vibrancy in town centres, they have to be supported, otherwise it is not viable. The town centre and markets are being undermined by high costs, high rents and business rates. This is not the local council’s fault: it does not have the funding or the legal basis to subsidise. We lost our Crown post office, which was put into the back of the local WHSmith, but how long will WHSmith survive across town centres such as Neath’s? We have bank branches closing the whole time; if local post offices assumed a post/bank role, banks could put their facilities in the back.
The Government need a completely new agenda on business rates as they apply to town centres. They should be completely scrapped for micro-businesses in town centres. Of course, there will be issues of defining what a town centre is: would this apply to large village centres, for example? At a central level, the Government have to fund local government because it cannot do this on its own. If rents are not scrapped for town centres, that has to be part of this as well. Of course, local government has had a 30% cut in the last 10 years, so it is no good the Government and Ministers passing the buck to local authorities; the Treasury must step in and take responsibility.
To reduce our carbon footprint and end the throwaway culture, where we never get computer printers repaired or watch batteries replaced because it is cheaper to just throw them away and buy a new one, we have to encourage a regeneration of these local skills and facilities, effectively through a subsidy. To do so, we have to end our society’s obsession with low tax. If we want a decent quality of life in town centres, which everyone says they do, we have to be prepared to pay for it. It is not going to happen on its own—market forces and commercial pressures on their own will not resolve this problem. Treasury funding, provided through local councils, is necessary in order to regenerate and revive our town centres, and I hope that the Minister will seriously consider this option in the future review, which has to be comprehensive.
This is the result of two basic rules. The first is that every hereditament or structure that is capable of separate occupation should be the subject of its own entry on the list. The other is that the annual value that must be attached to it for rating purposes is, in theory, the rent at which the hereditament might reasonably be expected to be let from year to year, assuming that the tenant undertakes to pay all the rates and to bear the cost of repairs and other expenses necessary to maintain the structure in a state to command that rent. That may seem rather fanciful in the case of public lavatories, but it is what the rule requires. Nowadays, in practice, that figure is obtained, in cases such as this, by applying a prescribed formula which probably does not bear much relationship to actual rents but is intended to maintain some kind of balance across the entire valuation list.
In this case, we are concerned only with self-standing public lavatories that are in separate occupation, such as one might hope to find in a town centre or a public park or in or near a children’s playground. The Bill is designed to deal with that situation only, as is the method that it applies to ensure that rates do not have to be paid by those who occupy them, by which I mean those who are in rateable occupation as their owners or tenants, not the people who find it convenient to use them. However well disposed their owners or tenants may be to the public need for such facilities in these places, it is unlikely that they would be able to claim relief on the ground that they are charities. The subjects cannot be taken out of the list altogether, as that would be contrary to one of the basic principles. So, the solution is to provide by statute that they are to be entered in the list at zero value, which is what this Bill seeks to do.
Like other noble Lords, I would like to see something done to encourage the more frequent provision of public lavatories in public places such shopping malls, public libraries and bus stations. However, the problem is that facilities of that kind have to be included in the value of the larger hereditament of which they form part. They cannot be extracted from it to form a separate entry, as in the case of the subjects dealt with in the Bill. That is not to say that this is not a very important issue, but the fact is that it is not easy to provide a simple solution for them such as we have in this case. Nevertheless, I hope that the Minister can assure the House that minds are not closed on that issue and that something may be done, perhaps by adjusting the relevant formula, to address it.
I support the Bill and would like it to pass into law as soon as possible.