Contribution
My Lords, these amendments would require the Government to undertake various forms of impact assessment or review, either ahead of Clauses 1 to 4 coming into effect in April 2026 or shortly following their implementation. Throughout the passage of this Bill, noble Lords have raised valid questions. What properties would be subject to the higher multiplier? What properties will qualify for the lower retail, hospitality and leisure multipliers? What will be the impact on the public sector, anchor stores or manufacturing? Throughout the Bill’s passage, the Government have sought to be as clear as possible. I appreciate that noble Lords may feel otherwise, but this does not detract from the fact that the Government have done what they can to provide as much information as possible.
I will reiterate two key points on the application of the new multipliers. With respect to the higher multiplier, it is the Government’s intention that this will apply to all properties with a rateable value of £500,000 and above. The VOA last month helpfully published an ad hoc data release, providing further detail on the number of properties and their rateable value that would fall above this threshold, broken down by region and by subsector, so noble Lords can see further details on the make-up of the fewer than 1% of properties that fall above the threshold. This is based on the current 2023 rating list, because the 2026 rating list is still being prepared and is not yet available.
The lower multipliers will apply to qualifying RHL properties, with the Government’s intention being to introduce one multiplier for qualifying RHL properties with a rateable value below £51,000 and one for qualifying RHL properties with a rateable value between £51,000 and £499,999. Noble Lords want to know who will qualify. We have been very clear on this, previously and today: the definition of qualifying RHL will broadly follow that currently in use for the existing RHL relief and will be set out later this year. With regards to the proposed amendments for various impact assessments or analysis, as I have explained previously in the House, tax is not subject to the requirement to undertake an impact assessment, and that has been the case for many years. However, the Treasury has committed, and remains committed, to producing analysis of the impact of the new multipliers at the Budget when the tax rates are set and when the outcome of the 2026 revaluation is clearer.
Furthermore, as I set out in Committee, my department already has established and detailed processes in place to collect and publicly report on the business rates collected by local government. My department produces annual forecasts for the coming year, called NNDR 1 returns, and then on the actual amounts collected by local government, called NNDR 3 returns. These are published on the department’s website at both national and local authority level. From the 2026-27 NNDR 1 onwards, these will reflect the new multipliers that the Bill makes provision to introduce. It would not be appropriate or prudent to pre-empt the Budget or the outcomes of the 2026 revaluation, but I hope that, in reiterating the commitments already made and setting out the information that my department already reports on as a matter of course, I will reassure noble Lords.
I note that the amendments tabled by the noble Baroness, Lady Scott of Bybrook, and the noble Lord, Lord Jamieson, also seek to investigate how the £500,000 threshold the Government intend to introduce with the higher multiplier will impact on businesses that have a rateable value around that threshold. I am aware that the interest here is in particular with regard to how that may affect business behaviour around investment. I will make a couple of points on that more specific area.
As acknowledged in the Transforming Business Rates discussion paper published at the Autumn Budget, the Government are aware that some stakeholders have argued that cliff edges in the business rates system may disincentivise investment. In that paper, the Government committed to exploring options for reform in this space. We have recently completed an initial stage of engagement to understand stakeholder views and areas of interest for reform and we are open to receiving written representations in response to the priority areas for reform, until the end of March 2025.
Your Lordships will understand that transforming the business rates system is a multiyear process, and that reforms taken forward will be phased over the course of the Parliament, but I hope noble Lords are reassured that the Government have publicly set out that an announcement on reforms will be made later.
I know that noble Lords have repeatedly raised how any evaluation or analysis should consider the impact of the new multipliers on economic growth and the viability of our high streets. What is being described is what the Government do as a matter of course and as Governments have done for centuries: if a policy is not having the desired effect, it will be changed. Your Lordships should rest assured that the Government will be keeping all this under review, as we do with all tax policy. I respectfully ask the noble Lord to withdraw his amendment.