Part of Non-Domestic Rating Bill - Report – in the House of Lords am 3:45 pm ar 19 Medi 2023.
My Lords, I support these amendments. As we are at this stage of the Bill, I declare that I am a chartered surveyor, a registered valuer and a member of the Rating Surveyors’ Association. It is some time since my bread and butter was generated from dealing with non-domestic ratings; the concepts are well trod, but I will not claim to have any up-to-date knowledge on some of the finer points.
The noble Baroness, Lady Hayman of Ullock, mentioned some of the concerns that the Minister has put forward. My ears pricked up a bit, as they always do when I hear about ministerial concerns. The first was a reduction in revenue. Let us be clear: we are talking about not making an increase—not actually losing something that was there before. It is the increase created in value that is discounted under the Government’s proposals, for no more than one year. The purpose of these amendments is that the increase should not bite for a longer period. That is important, because the work to improve energy efficiency of buildings is sometimes only really justifiable over quite a long period of time. There is no instant fix. In the meantime, it has to be funded, by a loan or an imputed opportunity cost of money for that period. As I said at an earlier stage of the Bill, one year is simply too short and would be no incentive. The other question about the reduction in revenue is: what is better, not to be able to charge the increase in rates, or someone not to do the work at all because they consider that they should defer the evil day for doing it? There has to be some incentive all round.
The second point that the noble Baroness referred to about what the Minister had said was on the classification of energy-efficiency works in valuation terms. I really do not see that there is any particular difficulty with that. Valuers are dealing with these sorts of things all the time, whether they be tenants’ improvements that are disregarded for rental value purposes, which is actually the nearest open-market analogy to what one is dealing with in business rates valuation, or whether it be for some other purpose—the cost-benefit of some scheme or other. One obviously has to look at these things in the round. If somebody is just replacing the windows and nothing else, clearly they are doing a bit to the U-value to make it more efficient, but it is not a holistic approach. Alternately, if they are part of any type of scheme that one would put forward—that may come out of the further guidance that was referred to by the noble Lord, Lord Stunell—they will have to look at these things on a holistic basis, because you cannot just put a draught-proof strip on a door and expect your bills to go down. It does not happen like that.
These amendments are very important. I do not see the difficulties that the Minister raised in discussions with the noble Lord, Lord Ravensdale, so I wholeheartedly support this. The Government could afford to be a little more generous-minded over the whole thing. I encourage the Minister, when she is replying, to perhaps apply that metric.