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Rates (Capital Values, etc.) (Northern Ireland) Order 2006

Yes, it will be the value for rates. Although someone might buy a house for £100,000, the rateable value might be £90,000 because that is what it was 18 months ago. The buyer would know what the rates would be, and the two values would be quite separate. Over a period, with future revaluations, the idea is to base the value on the capital value of what the property would be sold for. How is the capital value arrived at? The mass appraisal system is currently used. I was surprised to learn how much information the Valuation Agency in Northern Ireland already has about the dwellings there. Apparently, it knows virtually the floor area of every dwelling, which I am fairly certain is not the case in England. An enormous amount of information is held about property values. The real trick is that the valuation will not be based on postcodes; it must be done for individual properties. One could argue that, on some roads, all the dwellings have the same rateable value. But, in some cases, there could be different neighbourhoods on the same road, where you could turn a corner or go further down and all of a sudden there is a change. The computerised system can take account of those changes of neighbourhood. I have seen it work; we will find out. It is a successful system. As I said, it works in North America. People have come over and checked out what we are doing with the system’s technology, so I am fairly confident that we can get it right. There will always be cases on the margin, where people will be able to complain to the Valuation Agency because they do not agree with the value. The first port of call will be an informal chat. It will be a welcoming, really, because we will have time to do that; but there will be an appeals system, as there is now. There must be an appeals system if someone wants to challenge the rateable value of their property. On my visits to Northern Ireland I have seen bigger bungalows than I have ever seen in my life and the biggest single dwellings on a mass scale. There are also low-density buildings in Northern Ireland. I tell you, the Deputy Prime Minister would go spare if he saw the use of land that I have seen. Occupants of all those new dwellings that have been built in the past few years pay rates based on a 1960s rateable value. How do you work it out? It is a mystery how you would calculate a rateable value to fix today’s rates, still working within that system. I assure noble Lords that it would be a lot easier dealing with capital values of new dwellings than it would be to deal with rental values, because so few properties are rented these days. Most are owned, so people will know what the value is. I think that noble Lord, Lord Kilclooney, was asking about another issue related to the value of the properties. The value of the property is not related to the income of the person living in it, although you do get people who are asset rich but income poor. The further order will take account of that. It will not be for everyone, but it will be for the vast majority. We will look at it to make sure that those people who are just above the limit and would miss out on housing benefit and are not in the social security system do not feel penalised by this system. We will make arrangements for that. Evidence will be required to provide that halls are available to the community, but we do not want a load of red tape on this to make the system onerous. But the best thing is that I should come back with a separate note. I was also asked about the total cost of the valuation exercise, which is between £10 million and £12 million. I think that I originally gave a figure on the cost of domestic revaluation. There has been other work going on with the two other orders covering empty and industrial properties. It works out at about £15 per property. If you go for a mortgage assessment you will pay about £150 to get a valuation from a mortgage lender. For those purposes, it looks like a good use of money. I have made the point about people living in expensive homes. I have answered the question related to properties owned by halls if it is a business property. I have given the average rate bill and I have tried to make it fair, following the supplementary. Without entering a party-political battle on an important day for her party—I congratulate her new leader—I have to say to the noble Baroness, Lady Harris, that I hope that her new leader is a lot cleverer than the previous one at explaining local income tax to the electorate of this country. They had a lot of trouble with it last year in the general election. I will save any more embarrassment and will pass on the fact of why we are not doing local income tax. I think that I have dealt with, not so much entries, but visits to properties. As I said, our estimate is that something like 1 per cent of properties will need visiting. A lot of work has gone on. We are on the verge of being able to publish the figures in April, although we have put it back to June for technical reasons. It probably makes sense to publish them at some distance from the rate bills. I understand that in Northern Ireland rate bills are not sent out until the financial year starts in April, whereas in England they are sent out almost immediately a local authority fixes the rate. I would not want everyone to receive their rate bill from the Rate Collection Agency at the same time as receiving a letter about the new system. That would be a recipe for confusion. I apologise if there are any points that I have not answered. I thought that this would be a lot more straightforward. However, there will be another order to deal with ability to pay and exemptions. There will not be a single person discount as in England. I can knock that one on the head in case anyone thinks about asking that. It will be based on ability to pay, so it is a fully discrete system. In England, a single person living in a dwelling, however rich or poor, gets 25 per cent off before the rates are even calculated for the discount for housing benefit purposes. On Question, Motion agreed to.