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Lord Goldsmith: If I understand correctly—I have listened carefully to what the noble Baroness said—her concern centres around what will happen to the Valuation Office Agency which operates at present. It is currently an executive agency within the Inland Revenue. The functions are currently carried out on the basis of the Royal Prerogative, as expressed in the Treasury Minute of 1920. The Bill provides an opportunity to embody the agency's non-statutory remit within primary legislation. I think that is the explanation for why it appears in the Bill. That explicit legislative backing to its work will regularise its position.

Apart from that, there will be no change in the Valuation Office Agency's status or functions. So far as governance is concerned, because members of the agency are by virtue of Clause 10 officers of HMRC, it is already the case that they are required by Clause 2(3) to comply with the directions of the commissioners. Under Clause 5, the commissioners are responsible for all the functions that previously were vested in the commissioners of Inland Revenue and of Customs and Excise. The clause does not, as she said, specify that those offices carrying out property valuations will be known as the valuation office.

Let me explain that. The Valuation Office Agency will be an agency of HMRC, as it is an agency of the Inland Revenue now—it is not a separate legal entity. The commissioners are entitled to organise officers providing valuation services into an executive agency, but the legal form is it is still officers of Revenue and Customs who are providing those services. That is in line with what some other agencies do; for example the Highways Agency is an agency of the Department for Transport that administers the trunk road network and motorways. The powers that the agency uses are the Secretary of State's powers, and although its staff are organised in an agency for good administrative reasons, they remain without any legislative underpinning for the existence of the agency itself.
 
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I have little doubt that there will continue to be good reasons to organise this function in the form of an agency, but it will be for the commissioners to organise the collective responsibilities of HMRC, and there is no need to require that in the Bill. I hope that the explanation is sufficient for the noble Baroness to feel able to withdraw her amendment.

Baroness Noakes: I thank the Minister for that explanation. I hope that he noted that my amendment did not try to create a separate legal entity in the valuation office. I merely tried to draft that the persons engaged in that activity were to be referred to as the valuation office. This is a significant organisation in its own right. We talked a lot about culture when we dealt with the first group of amendments. The Valuation Office Agency has a distinct culture; it is a distinct organisation within the Inland Revenue.

My amendment did two things: first to try to get the valuation office recognised; secondly to ensure that there was a commissioner who was positively responsible for the valuation office. The Minister did not answer that point—

Lord Goldsmith: The noble Baroness is quite right. The current position is that the chief executive reports to the chairman. That position might well change—not in the sense that I know that there is a change in mind, but it is something that is capable of changing. It would not be sensible to set it out in statute. There may be another way of doing it. The commissioners will be responsible for the proper administration of all the functions and responsibilities of staff under their responsibility. There is no more sense in requiring there to be a specific nominated commissioner responsible for the Valuation Office Agency than there is to say that a specific commissioner should be responsible for some other activity of Revenue or Customs. The basic responsibility will be there. It is not necessary to say that a particular person should be nominated to look after it. We should rely on his proper judgment, subject to parliamentary scrutiny and accountability, to run the whole department properly.

Baroness Noakes: I thank the Minister for that reply. He may or may not be aware that the immediately preceding arrangement was that there was a commissioner who was specifically responsible for the Valuation Office Agency, which meant that it was represented at a higher level.

Lord Goldsmith: I am simply saying—not on the face of any statute. It may well be a sensible thing to do, but we should not require it in statute.

Baroness Noakes: I take what the Minister says. I will not labour the point. I wanted to air the issue that the Valuation Office Agency, ignored by statute entirely until today, now has only a half-life created by Clause 10. I thought that was a bit of a pity. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.
 
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Baroness Noakes moved Amendment No. 25:


"( ) Any fee charged for the provision of a valuation under subsection (2) shall not exceed the costs incurred in connection with providing that valuation."

The noble Baroness said: We are staying with the valuation office and now descending into more prosaic matters and I am slightly more on home territory. Clause 10(2) allows the valuation office to charge fees where valuations are done for those outside the Revenue and Customs.

The valuations carried out by the valuation office are wide reaching. The valuation office carries out valuations for council tax and business rate purposes as well as many other purposes, for example the valuation of NHS property. I believe that the valuation office started life as an adjunct to the core Inland Revenue functions—providing valuations of property to assist with the assessment or collection of tax—but its current scope goes way beyond that. The issue of the charging of fees, which is provided for in Clause 10 (2) is not necessarily a small matter.

The amendment is simple. It provides that where a fee is charged outside Revenue and Customs, that fee should not exceed cost. That is, Revenue and Customs should not make a profit from its valuation activities. The valuation office will be a monopoly supplier of valuations in nearly all instances; it is important that it does not have any opportunity to abuse its ability to price.

Again, the Institute of Chartered Accountants of Scotland drew this matter to our attention. It proposed a slightly different amendment to create a right of appeal against a fee. We may need to revisit that issue at a later stage, but my own amendment is more modest for the purposes of today's debate. I hope that it is uncontroversial in its approach by seeking to put beyond doubt that the valuation office should not seek to profiteer from its monopoly functions. I beg to move.

Lord Goldsmith: I do not at all disagree with the noble Baroness that the valuation office should not be able to "profiteer" from its position. The way to achieve that it does not charge excessive fees is this: the Valuation Office Agency operates in accordance with the published Treasury fees and charges guide. It is subject to internal and external audit to ensure that it operates fully in line with Treasury guidance. There is no intention that the agency should change its practices and start to charge excessively in any sense for its services. In that way, the assurance that the noble Baroness seeks about the operation of the Valuation Office Agency can be provided. Therefore, it is not necessary to put this on the face of the Bill. There are adequate other safeguards that will keep the position as the noble Baroness has described it and as I agree it ought to be—namely, not charging excessive fees for the work that it does.

Baroness Noakes: I thank the noble and learned Lord for placing on the record that the valuation office will be subject to the normal fees and charges
 
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memorandum prepared by the Treasury, which is what I expected him to say. I will ensure that the Institute of Chartered Accountants of Scotland sees what he has said in Hansard and I hope that it will be satisfactory. For today, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
 
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Clause 10 agreed to.

Lord Goldsmith: This may be a convenient moment for the Committee to adjourn until Thursday at 3.15 p.m.

The Deputy Chairman of Committees (Baroness Ramsay of Cartvale): The Committee stands adjourned until Thursday at 3.15 p.m.


 
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