---

Business Rate Supplements Bill

My Lords, these two amendments, which have been tabled in my name and that of my noble friend Lord Cathcart, are designed to provide an important guarantee to avoid retrospection in business rate supplements taxation and to highlight a staggering injustice that continues to be waged against portside industries in this country by virtue of the change in valuation procedures. The effect of these two amendments is simply to restrict the liability affecting business rate supplement if an alteration has been made due to an error that was not the fault of the business rate supplement payer. If it was not the fault of the BRS payer, there should be no retrospective collection of tax or levy under this Bill. I hope that that statement seems obvious to all sides of the House. If there is no fault, how on earth can retrospection be imposed on businesses? These amendments point out an injustice that has resulted in just such a situation. There was a change in the way in which valuations were operated following a review carried out in 2006 by government tax inspectors at the Valuation Office Agency. Each port used to pay a single levy for all the businesses operating within the port area. Following the 2006 review, the Valuation Office Agency decided that each firm in a port area was in separate occupation. Therefore, from 55 ports in England and Wales, the levy would now be made on 1,600 portside operators. Rather than giving advance warning to those businesses of the change, the Valuation Office Agency retrospectively backdated the next tax bills not to 2006 but to 2005. As a result, portside operators, which are already on the brink and in many cases clinging on for dear life as viable businesses, were landed with an additional tax of £124 million. In introducing this retrospective tax, the Government disregarded their own rules. The rules that they contravened were that there should be an impact assessment, but none was made; that there should be a consultation exercise with those affected, but no such exercise was carried out; and that there should be an assessment of the impact on the wider economy, but no such assessment was undertaken. The policy also contravenes the Treasury’s own guidance on retrospective taxation. The Government have admitted that this was a mistake. In fact, John Healey acknowledged that during a debate in another place, when he said that it was a regrettable mistake. As evidence of regret over the nature of the mistake, the Government introduced a small concession, whereby payment of the backdated bill could be spread over eight years. They felt that that would be sufficient to deal with the problem. However, that is certainly not the case. Many businesses face huge increases in their bills. I wish to mention a couple of the businesses that have come to my attention and made representations to me. Andrew Dixon of Freshney Cargo in Grimsby talked about his additional rates bill taking his annual business rates bill from £48,000 to nearly £900,000, which is an additional £850,000. Even spread over eight years, that is still an additional £100,000 per year, which needs to be found at a time when all other sorts of business rates have been increased and when trade is sinking dramatically. The impact of this has led to many people losing their jobs. Victoria Ayling has done an outstanding job in drawing attention to this injustice, highlighting a number of cases in the Grimsby area. She recalled an instance where a father had just been made redundant as a result of this tax and his son had to take a forced reduction in his number of hours. She pointed to the impact on companies such as Conoco and DFDS. It has a huge impact on the car industry. I know from my own experience of visiting the CAT depot at Teesport that it has a huge impact, as CAT occupies a large space of land for allowing landing vehicles into this country. This was debated in this House when my noble friend Lord Attlee ably proposed a Motion on it. In that debate we heard from a number of highly experienced and knowledgeable people about the impact on businesses. I will give some of the examples that were mentioned. In the port of Hull, the effect of this backdating amounts to £25 million. In Liverpool, it amounts to £22 million. In Immingham it is £19 million; in Goole it is £6.5 million; and in Grimsby it is £4.8 million. The Minister lamented yesterday as to why his party was failing so poorly compared to the Conservative Party in Wales. Here might be one of the answers. In Cardiff, the bill for this additional tax has increased by £1.6 million. This is a spectacular own goal when the Government are trying to introduce measures to save jobs. Here is a very simple measure. It does not cost the £50 billion to bail out the banks; it only costs £124 million to correct something that had nothing to do with the businesses themselves. It was not their fault; it was the fault of the Valuation Office Agency, which has contravened at least five of the commitments that the Government gave about retrospection. This amendment, by guaranteeing that such a series of events could not recur in the context of the Business Rate Supplements Bill, further raises the pressure on the Government to step forward and address this serious injustice. I beg to move.