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As to why we have not done an impact assessment, the five-yearly revaluations are required by statute and have been a regular part of the rating system since 1990. They maintain fairness by ensuring that rateable values are based on up-to-date information and, as no decisions were required to proceed with revaluation in 2010, no formal impact assessment has been prepared. However, an impact assessment on the transitional arrangements was available from July of this year and contained a great deal of information on revaluation in 2010. From 1 October, ratepayers have been able to put their new rateable values into the excellent business rates calculator on the Business Link website to see the impact of the revaluation on their property. A great
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The noble Earl raised the issue of empty property rates. The Government stand by their decision to reform empty property rate relief. A £1.3 billion subsidy to owners of empty commercial properties is no longer justified. The reforms to empty property rate relief introduced from 1 April 2008 are principled and right for the long term. Charging rates beyond the initial rate-free period when properties stand empty increases the incentive to re-let and to reuse empty property.
However, the Government have listened to concerns expressed by property owners. PBR 2008 therefore announced that for 2009-10, the year that we are just about to exit, all empty properties with rateable values up to £15,000 will be eligible for full relief. That has been extended for a further year for properties up to £18,000 rateable value in PBR 2009. It is estimated that up to 70 per cent of properties are rated under that threshold and, if empty, will pay no rates in 2009-10. Introducing relief for all empty property would be costly and not well targeted.
The noble Earl referred to certain types of properties-petrol stations, in particular. I say again that revaluation does not raise any extra revenue, it simply ensures that each business pays its fair contribution and no more. Ratings for all properties, including petrol stations, are based on rental value. In the past five years, alongside rising petrol prices, the profitability and turnover of many petrol filling stations has grown significantly. It is only fair to all ratepayers that that is reflected in rates bills. Rental values for petrol filling stations are determined by the market according to the trading potential of the individual site. That is regardless of whether they are independent or part of one of the multinational chains. As I said, the majority of businesses-60 per cent-will see their overall rates liability decrease because of the revaluation.
The noble Earl asked why we are doing this now. Regular revaluations are important, as they maintain fairness in the rating system and keep bills up to date, which is necessary as relative property values change over time. Postponing revaluation would hit hard those businesses which most need our help, such as businesses in the Midlands and in industry, whose relative property value has fallen since the last revaluation and which therefore should pay less in rates. The noble Earl concentrated on those businesses facing increases, but if we were to do as he urged, many businesses would miss out on a reduction. Businesses facing increases are in sectors and locations which have performed better than average since the last revaluation, such as inner London and such as supermarkets. It is only fair that they should pay a proportionately higher share of the total rates bill.
In particular, I instance the fact that the revaluation was based at the height of the property market. It would have been wrong to delay or postpone revaluation, as to do so would, as I said, deprive the majority of business properties-1 million in total-of a deserved reduction in their rate bills. The high property market of April 2008 does not mean higher bills or more
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The noble Lord, Lord Tope, who gave the regulations a qualified welcome, instanced issues concerning software. We are not aware of any software problems connected with the revaluation. As I said in my opening presentation, we do not expect any delays. If the noble Lord has more information that he would like to share with us, I am happy to have a discussion outside the Committee, or we could correspond on the matter.
The noble Lord and the noble Baroness, Lady Valentine, talked in particular about London. Of course, London is a key player in our economy, with the highest concentration of business properties, particularly in inner London and the City of Westminster. It has seen the highest economic growth of any region in the UK, and it is only right that it makes a proportionate contribution through business rates. Nevertheless, nearly 45 per cent of businesses in London-124,600-will see their rate liability fall as a result of revaluation. Small shops are expected to be winners, and could see rate bills fall by 3 per cent on average in 2010-11, an overall reduction of £6.5 million. Furthermore, more than 55 per cent of business properties in outer boroughs in the capital will see their rate bills fall next year by an average of £950 as a result of revaluation. We estimate that 16 London boroughs in total will see their total rates liability fall due to the revaluation and transitional relief.
For those ratepayers facing increases, London will benefit more than anywhere else in the country from the transitional relief scheme to help with future business rate liability. While London is expected to see a 10 per cent increase, the transitional relief scheme would see this reduced to 3 per cent in 2010-11. In total, 466,000 ratepayers will benefit from transitional relief, of whom 112,000 are in London-some 24 per cent. Over five years the transitional relief will be worth £2 billion. Of that, £934 million would go to London.
The noble Lord, Lord Tope, asked about London's so-called "double whammy". The business rate supplements provide a new tool for local authorities to invest for the longer-term economic development of their area. The GLA and the Mayor of London have just finished consulting on proposals to levy a BRS as part of the funding arrangements for Crossrail, as I am sure the noble Lord is aware. Under these proposals, properties with a rateable value of £50,000 or less would be exempt from the supplement, which would mean that more than 80 per cent of properties in London would not have to pay the supplement. The Mayor of London also has discretion to set a higher threshold exempting additional properties. Furthermore, London will benefit more than anywhere else in the country from the transitional relief scheme, as I said a moment ago.
The noble Lord asked for confirmation that the transitional relief scheme does not apply to the business rate supplement. He is right: the transitional relief is designed to limit and phase in significant increases in
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Transitional relief is a national scheme that is funded by other business ratepayers. Extending it to the BRS would mean that ratepayers in parts of the country where rateable values have gone down as a result of the revaluation could be asked to contribute to relief on an increase that did not result from revaluation but was instead the result of a local BRS that had not been levied in their area and therefore would not bring any benefit to them.
I hope that that has covered each of the points raised. The noble Baroness asked what the levels of potential increase were. The 12.5 per cent is before inflation; it becomes 11 per cent after inflation. The 5 per cent is before inflation and becomes 3.5 per cent after inflation because of the 1.4 per cent reduction.
Earl Cathcart: I did not want to interrupt the Minister when he touched on this point, as he was on a roll at the time and fired up by the subject. In my remarks I mentioned the figure of £20.8 billion, which I believe is the amount expected to be received from all these business rates. In response to a Written Question, the Government said that they expect to distribute £21.5 billion back to local authorities by way of the formula grant. I raised the point that there is a £700 million deficit between the two. I think the Minister tried to touch on that, but I did not get it. How is this going to be funded? How will not doing an assessment on the effects of these rate revaluations affect businesses? Will they be able to pay? How many businesses are going to go bust between October last year and next April? That will reduce the £20.8 billion expected, thus increasing the £700 million black hole. Will the Minister respond to that?
Lord McKenzie of Luton: I will try. On the general point about businesses going bust, the recession-from which we are not immune because of what has happened across the globe-has given rise to policy changes and initiatives. For example, we have introduced the fiscal stimulus and rescued the banks; we are ensuring that the banking system is working properly; and £5 billion has gone into the DWP to increase its capacity and to help people move back into the labour market. These are all parts of a package of measures to help dampen the impact of the recession, particularly its impact on employment. Given the environment we are in perhaps I should not press the point, but the noble Earl's party opposed the fiscal stimulus on the general principle of its effect on business and that recovery from the recession would be made more difficult. On the precise point that he raised, I do not have in front of me that figure of £20.8 billion but I shall write to him on the matter.
In principle, two things will happen: first, the business rate will be paid into the fund and, over time, it will be redistributed back to local authorities. There may well be a mismatch in the early years and I shall write to
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That the Grand Committee do report to the House that it has considered the European Communities (Definition of Treaties) (1996 Hague Convention on Protection of Children etc.) Order 2009
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): In debating this draft order on 8 December, my colleague in the other place explained its purpose and outlined some of the provisions of the 1996 Hague convention. I hope it will be helpful if I do the same today.
The 1996 Hague convention on the protection of children applies between contracting states across the world. It established uniform rules on jurisdiction, choice of law and the recognition and enforcement of judgments in relation to measures for the protection of children. We believe that the convention will improve outcomes when orders are made for the better protection of children. That is why the Government decided in favour of ratification.
The draft European Communities (Definition of Treaties) (1996 Hague Convention on Protection of Children etc.) Order 2009 will declare that the 1996 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children is to be regarded as a Community treaty as defined in Section 1(2) of the European Communities Act 1972. Section 2(2) of the Act provides that an international agreement specified as a community treaty may be implemented by regulations.
The 1996 Hague protection of children convention can be specified because it is a treaty entered into by the UK as ancillary to the Community treaties. There is European Union legislation which partly covers the same subject matter, known as Brussels 2a, concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and matters of parental responsibility. This overlap gives the European Union competence over certain provisions of the convention, and this power is shared with member states. However, the convention can be ratified or acceded to only by states parties. The European Community cannot ratify the convention in its own right and, therefore, by
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The draft order does not implement the detailed provisions of the convention. It is an enabling measure. The order will specify the 1996 Hague convention as a Community treaty, enabling detailed secondary legislation to be introduced, implementing all aspects of the convention. The draft order was approved in the other place last week. Subject to approval of the draft order by both Houses of Parliament, the order will be made by Her Majesty in the Privy Council. We shall then bring forward next year a statutory instrument to implement the convention for England and Wales, and Northern Ireland. The Scottish Government have indicated that they are preparing their own statutory instrument to implement the convention under Section 2(2) of the 1972 Act.
The Government decided in 2001, following public consultation, that the UK should ratify the 1996 Hague convention whenever it was brought forward for implementation by the European Community. The EU Council decision in 2003 was the subject of scrutiny in both Houses at that time. The UK signed the convention in April 2003. If all the EU member states which have not already done so are ready to ratify by June 2010, the convention could be in force in the UK as early as October 2010. All member states need to be ready at the same time for ratification to proceed. We intend that the UK should be ready to ratify the convention in June next year.
What does the convention do? Measures for the protection of children which may be dealt with under the 1996 Hague convention include residence, contact, and care orders. The main basis for jurisdiction is the child's habitual residence. As noble Lords will understand well, the court in the state of the child's habitual residence will generally know more about the child's situation and is, therefore, best able to take decisions about the child.
Uniform rules of jurisdiction should achieve this and ensure that decisions on children properly made in one country are respected in others, so that there is no need to go to court again about the same issues in cases with an international element. Jurisdiction can be transferred by agreement if this is in the child's best interests. The convention will also lead to an enhancement of existing mechanisms for administrative co-operation between courts and public authorities in different countries concerned with the protection of a child.
The 1996 Hague protection of children convention will complement and strengthen the operation of the 1980 Hague child abduction convention between states which have ratified both conventions. The 1996 convention is in force between the countries which have ratified it. We hope that ratification en bloc, by the 17 EU member states which are yet to do so, will send a powerful signal to other countries that the convention merits signature and ratification. This is certainly the expectation of the secretary-general of the Hague Conference on Private International Law.
Community rules for recognition and enforcement of judgments are at least as favourable as the rules laid down in the 1996 Hague convention. A declaration made by the UK and other EU member states in 2003 has the effect that relevant internal rules of Community law will apply for the recognition and enforcement of judgments between EU member states. Where a child is habitually resident in an EU member state, Community rules will also apply to determine jurisdiction.
As some noble Lords will know, the decision of the European Council in June last year to authorise certain member states, which have yet to do so, to ratify the 1996 Hague convention was not issued sooner because of disagreement relating to communications between Gibraltar and other contracting parties. Following resolution of this issue in December 2007, the European Union was able to proceed with its approval of this and other conventions. In coming before the Committee today, I am glad to be able to highlight the fact that the decision of the European Council in June 2008 has enabled us to make progress towards UK implementation of this important instrument. I commend the order to the Committee. I beg to move.
Baroness Seccombe: My Lords, I thank the Minister for explaining this important measure in great detail. I wish to ask a couple of questions. As I understand it, the Hague convention improves the international protection of children by providing uniform rules on jurisdiction, applicable law, recognition and enforcement for decisions on parental responsibility and measures for the protection of children, which is so important in a violent world. I am sure we all agree that that can only be to the good.
I also take note of the 2008 decision of the European Council, which authorises member states that have not yet ratified or acceded to the convention to do so. That, of course, includes the United Kingdom. In view of depositing their instruments of ratification or accession simultaneously, these member states are to exchange information on the status of the related procedures with the Commission and the Council. This exchange should have taken place before 5 December 2009, after which the date of the simultaneous deposit-that will preferably be before 5 June next year-will be established.
I have two questions for the Minister. What steps have other member states taken to deposit their instruments of ratification and what progress can the Minister report on the implementation of the Hague convention? According to the Explanatory Memorandum, a full impact assessment has not been produced for this instrument as it has no impact on the costs of business, charities or voluntary bodies. Can the Minister give an assessment of the impact on UK law, for the sake of all parties-children, families and legal practitioners-to family law proceedings, that the incorporation of the Hague convention as a Community treaty will have?
Lord Dykes: My Lords, I, too, thank the Minister for clearly explaining this important order, the background to the Hague convention and how the European Union will fit into it. As he said, we hope that will be by the end of next year. I also thank the chief Opposition
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Gradually, and at long last, I think we are getting there with the beginnings of the universal protection of children-that will, of course, take much longer-and at least the protection of children in Europe, as we know it, and other advanced territories of the so-called first world. I say that with no condescension in regard to other parts of the planet. This measure has been a long time coming and much pain and agony has been endured by families as it has been developed.
This is a very welcome step; it is progress that is to be welcomed. As the Minister explained, it is an interesting hybrid whereby, although the individual jurisdictional implications are dealt with by the member states only and are not part of EU jurisdictional law, the EU itself comes into the other crucial parts of it that imply the beginnings of the European unified system of child protection. This will enormously help the courts in different member states that have been grappling with these problems for many decades already. It got worse after the Second World War, when there was a lot of movement of families and children for all sorts of reasons.
I welcome the Government's endorsement of the order. I hope that it will be carried today and that the two Houses will then proceed to ratification, so that the other 17 member states that the Minister referred to will proceed as rapidly as they can to this point. Some of the newer member states may need somewhat longer. Perhaps the Minister has some indication and enlightenment on that point, because we need to reach the conclusion of this in the European context and make sure that justice is done, certainly to families but particularly to children, in these often painful human matters and matters of jurisdiction, control, family welfare and child welfare that are so important in modern society.
Lord Bach: I am grateful to the noble Baroness and the noble Lord who have spoken for their support for this measure. On the question of what steps other member states have taken, seven already ratified in 2001. Interestingly, some of them were not members of the European Union, so they ratified before they became members. I am advised that a number are ready to proceed and approximately 11, including us, have proceedings taking place in national parliaments. What steps is the UK taking to implement this? The enabling measure will allow us to use the powers in Section 2(2) of the 1972 Act to ensure that the treaty has the force of law and implements the necessary arrangements.
The noble Baroness asked what the impact would be on UK law. Brussels 2a, which I referred to in my opening, will primarily control jurisdiction and enforcement within the European Union, but the 1996 Hague convention that we are debating today will do a similar job for the UK between other contracting states, which may not necessarily be members of the EU. It will not have an internal effect except in a few circumstances where Brussels 2 does not apply. I have
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That the Grand Committee do report to the House that it has considered the Legislative Reform (Revocation of Prescribed Form of Penalty Notice for Disorderly Behaviour) Order 2009
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): My Lords, this order was laid before Parliament on 21 October and seeks to remove the requirement for the penalty notice for disorder-or PND, as it is widely known-form to be prescribed by law.
Penalty notice disposal provides the police with a quick and effective way of punishing minor nuisance offending by minimising the paperwork and processing required from the police. It has been in existence for some time. Cases do not have to be taken to court, which also relieves the burden on the courts.
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