HL Deb 18 December 1991 vol 533 cc1425-6

8.7 p.m.

Viscount Astor rose to move, That the draft order laid before the House on 27th November be approved [5th Report from the Joint Committee].

The noble Viscount said: My Lords, this is a technical draft order under the Local Government Finance Act 1988 which sets the maximum amounts by which the non-domestic rates bills will fall next year for those on transition to lower bills under the new system. The order has to be approved by both Houses. It was agreed in another place yesterday.

The transitional relief scheme is a self-financing arrangement designed to ease the change to the new non-domestic rating system for those who would otherwise face large changes in their rates bills. It operates by limiting the amount by which bills can change from one year to the next in real terms until the ratepayer's full bill is reached. Because it is self-financing it limits reductions in bills as well as increases. The limits on gains come from a calculation driven by the number of properties needing protection from increased bills next year and the amounts of protection they will receive. Separate limits are set for England and Wales next year because non-domestic rate income is paid into two separate national pools before redistribution to all local authorities.

In England the proposed limits are 19 per cent. in real terms for properties with rateable values of £15,000 or more in London or £10,000 elsewhere and 24 per cent. where values are below these thresholds. They appear as 81 and 76 in the draft order. In Wales the new limits are 9 per cent. in real terms for properties with rateable values of £10,000 or more and 14 per cent. where values are below there thresholds. They are 91 and 86 in the draft order. Taking account of inflation, English ratepayers on downward transition will see maximum cash reductions in their bills of 15.7 per cent. for large properties and 20.9 per cent. for small ones. Welsh ratepayers will get a 5.3 per cent. cash reduction in a large property in transition and a 10.5 per cent. decrease in a small one. These are all bigger cash benefits than ratepayers received this year.

The order also amends the formulae for determining some of the rateable value assessments of the industries with prescribed assessment. These are the so-called formula rated industries, including most of the utilities. For those industries, formulae are used to achieve a transitional path for those who occupy property where there was a big change of rate liability in 1990. The formulae work by adjusting the rateable values of the property until such time as the full bill is reached. Only certain properties in the electricity, telecommunications, railway and water industries are moving to lower bills. That property gets the same maximum reduction as a large property would: in England a 19 per cent. real terms of 15.7 per cent. cash reduction and in Wales a 9 per cent. or 5.3 per cent. cash reduction. I commend the draft order to the House.

Moved, That the draft order laid before the House on 27th November be approved [5th Report from the Joint Committee]. —(Viscount Astor.)

Lord McIntosh of Haringey

My Lords, it is fortunate that it is the convention of this House that we do not oppose such secondary legislation, otherwise I should have been debarred from speaking by the fact that as a non-domestic ratepayer it is the limit in my reduction, as I understand from the noble Viscount, which is being reduced; in other words, I am worse off as a result of the order.

I only want to put on record the fact that this is the last time that the Government will have the opportunity to introduce such an order. We shall of course restore the national non-domestic rate to local government finance.

Viscount Astor

My Lords, I am grateful for the noble Lord's half couched support for the order, if I may so describe it. However, some ratepayers will be better off under the order.