§ Lord Stallardasked Her Majesty's Government:
What was the outcome of the consultation on the revaluation of non-domestic rates in April 2000. [HL102]
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Witty)Businesses have overwhelmingly supported the need for a transitional relief scheme to phase in changes in business rate bills, as proposed in our recent consultation paper. Following that consultation, we are pleased that we can announce today limits on the size of annual increases over all five years of the new rating list.
Rate bills will fall for many properties, while others will see only modest increases. The transitional relief scheme will place maximum limits on any larger increases, with additional protection given to small properties.
The largest possible increase in bills for small non-domestic properties will be 5 per cent in real terms in 2000–01, rising to 7½ per cent in each of the following four years. The threshold for these small properties will be increased to a rateable value of less than £12,000 (or £18,000 in London). The equivalent limits on bill increases for all larger properties will be 12½ per cent in real terms in 2000–01, 15 per cent in 2001–02 and 17½ per cent in each of the following three years.
Small properties will also be given preferential treatment on tie limits on the amount by which rate bills can fall in any year. Their bills will be allowed to decrease by up to 5 per cent in real terms in the first two years, up to 10 per cent in the third., 12½ per cent in the fourth and 25 per cent in the last year. Decreases for all larger properties will be limited to 2½; per cent in real terms in the first two years, and 5 per cent in the third 7½ per cent in the fourth and 15 per cent in the last year.
Revaluation does not mean that more money will be raised from the rates, since the rates multiplier (or poundage) will be reduced next year to take account of the increase in rateable value across the country. What it does mean is that the rate burden will be distributed more fairly, reflecting changes in the property market since 1995.
30WAA number of responses to the consultation paper called on the Government to review the current system of business rate revaluation. We agree that such a review is needed. This will not be a fundamental review of the business rate, but it will look for ways of improving the approach to valuation in order to increase stability, certainty and simplicity in the system, including changes to the frequency of valuations. The details of the review will be announced in due course.