HL Deb 17 March 2000 vol 610 cc1906-8

5.34 p.m.

Lord McIntosh of Haringey rose to move, That the draft regulations and orders laid before the House on 29th February and 2nd March be approved [12th Report from the Joint Committee].

The noble Lord said: These orders will set the rateable values for companies whose rateable values are prescribed by the Secretary of State. Those companies are the electricity industry, including large energy from waste plants; the water supply industry; BG Transco, which runs the gas pipeline network; Railtrack and London Underground; and large docks and harbours. The chargeable amounts amendment regulations make some technical amendments to the transitional relief scheme for ratepayers generally.

Most properties have their rateable values assessed independently by the Valuation Office Agency. However, since the 1950s, valuation of the former public utilities has proved very difficult, so their rateable values have been prescribed by the Secretary of State. In recent years, following privatisation, conventional rating valuations of these industries have again become possible and our intention is that they should be moved to conventional assessment at the revaluation after this one. For the current revaluation, we are proposing to prescribe values so far as possible assessed by conventional means.

The orders either prescribe actual rateable values or set formulae for reaching rateable values. Railtrack, London Underground, the water supply companies, BG Transco, National Grid and the regional electricity companies all appear on the central rating list held by the Secretary of State. For those companies, the orders set the actual rateable value for 2000–01 and, in most cases, an adjustment factor for future years. Power stations, large energy from waste plants and docks and harbours all appear on local rating lists held by local authorities. For those properties, the orders contain formulae which will calculate the rateable value in each case.

Both actual rateable values and formulae are the result of detailed discussions with the companies or their representatives. Those discussions have been running since last spring and have resulted in the agreement of some of the rateable values before us today. All the companies have been given several opportunities to comment on the valuations. In many cases their points have been accepted and the rateable values have been reduced accordingly. We have based the values on full rating valuations from the Valuation Office Agency so they will also be comparable to rateable values in the normal rating world. We believe the orders are fair in their preparation and fair in their result.

The orders contain over £2 billion of rateable value. Some companies will see increases and others will see reductions, but because the rating multiplier will fall to 41.6 pence in the pound for 2000–01, only ratepayers with an increase in rateable value over 17.5 per cent will see an increase in their bill. Furthermore, the transitional relief scheme will limit increases and reductions in bills. Next year the maximum increases for these companies is 12½ per cent and the maximum reduction is 2½ per cent before allowing for inflation.

The transitional relief scheme has been widely welcomed by business, as my noble friend Lady Farrington of Ribbleton noted in the debate on 9th December on the regulations giving effect to the scheme. Amendments are now required to those regulations to bring them into line with subsequent developments. Those amendments are contained in the Non-Domestic Rating (Chargeable Amounts) (Amendment) (England) Regulations 2000 which are before us today, and which I have moved.

The most important provision is to be found in Regulation 8. It brings the transitional relief scheme into line with changes to the rules on the backdating of successful appeals by ratepayers against their rateable values. We announced these changes on 2nd February following extensive consultation with interested bodies.

Under the new rules, a successful appeal against a new rateable value will have effect from 1st April 2000 only if the appeal is made by 30th September. Where an appeal is made after 30th September 2000 and before 31st March 2001, the alteration to the value in the rating list will not be backdated before 1st October 2000. Appeals made in subsequent financial years will not be backdated beyond the start of that year. The new limits on the backdating of successful appeals form part of a wider package of administrative measures to improve the appeals system. This includes publication of a programme for considering appeals. The changes on effective dates are intended to encourage appeals to be made early, which in turn will make it easier to devise a comprehensive programme for considering appeals. Details of these changes to the appeals system are covered in a leaflet that we have asked local authorities to send to all ratepayers with their new rates bills.

Regulation 8 provides that where a change in rateable value is backdated to 1st October 2000 or later any adjustment to the transitional relief applying to the rate bill will have effect from the same date. This will ensure that a ratepayer affected by the transitional scheme is in the same position as one who is not. Both will secure any benefits of a reduction in their rateable value from the date of the alteration of the rating list, whether it is 1st April 2000 or later. I beg to move.

Moved, That the draft regulations and orders laid before the House on 29th February and 2nd March be approved [12th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

Lord Northbrook

My Lords, perhaps I may ask the Minister a question relating to the Electricity Supply Industry (Rateable Values)(England) Order 2000. On page 3, why is it that the rateable value for nuclear energy not produced by a Magnox reactor is more than twice that for nuclear energy which is?

Lord McIntosh of Haringey

My Lords, the figure per megawatt is a reduction in the present assessment. Rating hypothesis makes different assumptions as to what is provided by a landlord and hence the rent that a tenant will be prepared to pay. AGRs and PWRs are some of the most efficient generators. The amount of electricity generated is therefore greater than some of their competitors and the income that they can generate is greater. This is reflected in a higher rental value that the tenant would be prepared to pay. As to Magnox power plants, the running costs are higher than for the modern nuclear reactors. The life of Magnox power plants is limited and any prospective tenant will be responsible for considerable decommissioning costs. With the modern plants, decommissioning is quite a long way off and the operators can make contingencies for this.

On Question, Motion agreed to.