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Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Volume 816: debated on Wednesday 8 December 2021

Third Reading


Moved by

My Lords, it is a pleasure to see this Bill through to its conclusion.

The pandemic has had far-reaching and unexpected impacts and the business rates part of this Bill seeks to address its potentially distortive effects on the rating system and local government income. By clarifying that coronavirus and the Government’s response to it will not be considered a “material change of circumstances” for the purpose of property valuation, the Bill ensures that the rating system will continue to operate as it was intended to. It also removes a significant source of uncertainty for local councils.

I thank noble Lords for the engagement we have had during the passage of the Bill. We have sought to strike the right balance between getting this important measure passed quickly and leaving space for legitimate discussion on the wider issues at play, for instance the future of business rates. Considerable expertise has been in evidence, which will be of great value when we come to debate the more substantial changes that the Government have announced. In particular, I thank the noble Baronesses, Lady Blake and Lady Pinnock, for their careful scrutiny and, ultimately, the very welcome support they have offered.

The new power to investigate the conduct of former directors of dissolved companies and seek to disqualify them where appropriate will have far-reaching benefits to the economy, in terms of improved confidence in lending, and to business and the wider public, in protecting them from the actions of rogue directors.

Of course, there is the very pressing matter of ensuring that the Government have the tools they need to tackle those reprehensible individuals who have taken advantage of a public health crisis to line their own pockets, and this new measure will play its part in bringing them to task. I am sure noble Lords will agree with me that it is only right that the retrospective provision in this measure will mean that the investigation of those individuals may start immediately upon Royal Assent.

As well as the noble Baronesses, I extend my thanks to the noble Lord, Lord Fox, and my noble friend Lord Leigh, who have provided thoughtful and constructive contributions to the debate on the director disqualification part of this Bill. Finally, I thank the Bill teams in the Department for Levelling Up, Housing and Communities, and the Insolvency Service for bringing me up to speed on some of the more detailed provisions and helping me get a proper understanding of the Bill. I beg to move that this Bill do now pass.

My Lords, it is fair to say that there has been some significant consternation from noble Lords at the way this Bill was initially put together. However, in the main, we support its passage to get help to those in serious need.

We expressed our ongoing concerns at different stages of this Bill. It is obvious that the whole area of business rates needs urgent review and root-and-branch reform. Likewise, enormous concerns remain as to whether the Insolvency Service is sufficiently resourced to meet its obligations under the Bill with regard to the significant increase in business, as outlined.

I put on record my appreciation of the informed contributions from the noble Lords, Lord Fox and Lord Leigh, the noble Earl, Lord Lytton, and the noble Baroness, Lady Pinnock. I thank my noble friends Lord Hunt and Lord Sikka for their invaluable insights and knowledge on these matters.

From these Benches, we express our gratitude to the Bill team, the clerks and the staff of the House, and the Insolvency Service for the in-depth briefings it provided. I also thank both Ministers involved in this Bill: first, the noble Lord, Lord Greenhalgh—I particularly acknowledge the further detailed investigation he went into when the cause of our concerns over the business rates issue came to light—and the noble Lord, Lord Callanan, for his continued courtesy in offering regular briefings from his team and the insolvency support service on the various matters under consideration.

Finally, I thank both Ben Wood and Dan Harris, our excellent advisers, for their unfailingly high standard of support throughout the proceedings.

Clearly, both matters leave further work to be undertaken in both Houses, as has been outlined. I will watch the implementation of provisions with great interest.

My Lords, on behalf of my noble friend Lord Fox, I thank the noble Lord, Lord Callanan, for the constructive meetings that helpfully resolved the issues in the part of the Bill dealing with directors’ disqualifications and insolvency. I thank the Minister for the time he devoted to discussions on the Bill and the private meetings we held to try to resolve various issues, some of which remain; nevertheless, we are happy that the Bill has to pass to deal with the issues in front of us. I am still concerned about its retrospective nature, an issue that we did not fully resolve, inevitably. As the noble Baroness, Lady Blake, has said, the reforming of business rates is still a major concern. But with that in mind I wish to thank everybody who was involved, particularly Sarah Pughe, from the Lib Dems’ legislative team, for her help and advice. I am grateful for the way the Bill was discussed and debated so that we were, in the end, able to support it. With that, I thank the Minister for his help.

My Lords, I will make a contribution from, as it were, the technical Benches on the matter of non-domestic rating. I thank the Minister—this will probably be the only time I can thank him publicly—for writing to me about matters he raised when we were at a previous stage of the Bill, in connection with the package of measures the Government have put in place to try to alleviate the problems facing businesses. I do not know whether the right term is “sidestep”, but I suspect he did not quite get the point I was making. Where a major manufacturer carries out works to meet an environmental target—for decarbonisation, for example—and in doing so wrecks something tantamount to a building or structure, or an item covered by the plant and machinery order, a proportion of its value automatically gets built in as an addition to the rateable value. That has been described to me as the double whammy of having to pay for the improvement to meet a government-imposed target, and additional rates. I was trying to focus on specific instances involving a building or structure, or the plant and machinery order, but I leave that to one side because that was to some extent an overture to what the Bill is about. I mention it only because the Minister was making the point about the assistance the Government have provided.

As for the Bill itself, I obviously regret a business rating measure of such a binary nature preventing the effects of coronavirus being properly reflected in rental values as a material change of circumstances for the purposes of making appeals against the assessments. Although the government package of reliefs and other support for the business sector is extremely welcome, it none the less pales into insignificance compared with what businesses could have expected, had a material change of circumstances applied. I will leave that there.

The Government say that the material change of circumstances was never intended to apply to things like pandemics. Well, probably not, but there has never been a time like this when HM Treasury and HMRC have been quite so keen to protect their income streams come what may, regardless of the precise effects on businesses. I hope this Bill does not have the consequences I fear it might, but I remain concerned that the whole process of business rates is beginning to drive responses, which should always be a warning sign with any taxation measure going forward. That said, I thank the Minister and the Bill team, and other noble Lords who have spoken up for the business rate payer. I wish this Bill a safe passage, and I hope it will not fulfil my worst prognostications.

Bill passed.