Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill — House of Lords, 2018-06-04
Topic: Housing
John Warren Shipley (Liberal Democrats, Centre to centre-left): My Lords, I remind the House that I am a vice-president of the Local Government Association. Like colleagues on these Benches, I welcome the Bill and the steps it takes, both the business rates element and the increased powers proposed for local authorities on the amount of council tax that they can levy on an empty dwelling. I agree with the noble Lord, Lord Patten, who reminded us that the House of Commons did not propose any amendments to the Bill and that there was all-party agreement. Indeed, the Bill has benefited from the pre-legislative scrutiny that took place at that stage. It raised a number of issues, for example the potential financial loss for local billing authorities and whether rarely occupied second homes should be treated in the same way as empty homes. Given the role of this House as the scrutiny Chamber, I hope that it may be possible in Committee to look at a number of these issues. My noble friend Lady Thornhill talked about whether two years should be the limit or whether another figure might be appropriate, and whether the figure of 200%—that is, 100% plus 100%—is the maximum that a local authority could apply. There is a case for looking at whether the total might well be 300%. I look forward to that discussion in Committee. The noble Lord, Lord Campbell-Savours, made a very interesting point about the legal definition of a second home, should someone seek to transfer their primary home to become a second home. That is something that I would like to think about further As the Minister has explained, the basic aim of the Bill is to discourage home owners leaving properties empty for long periods without penalising those who are unable to sell as a result of market conditions or who face genuine delays in probate. For that reason, it is welcome. As several noble Lords, including my noble friend Lady Pinnock and the noble Earls, Lord Lytton and Lord Listowel, have pointed out, the context is the state of local government finance, the future organisation of business rates, and funding local services. There are now clear difficulties in the retail sector over business rates. There is a fair funding review, and inevitably the Government are now reviewing the future of business rates. However, the noble Earl, Lord Lytton, pointed out that the system is not fleet of foot, and indeed it is not Clause 1 relates to the rating of property in common occupation. It rightly corrects the problems caused by the 2015 judgment, which has cost some businesses not only a backdated increase in their bills but also, in some cases, the loss of their small business rate relief. The Bill is the correct response to that judgment. Put simply, contiguous hereditaments should be counted as a single hereditament I join the noble Earl, Lord Lytton, in saying that it is a trifle unreasonable—I think those were his words—for the Government to assume that building authorities have put away shedloads of money, given the 2015 judgment. He is right; I am sure they have not been putting away shedloads of money. However, there is a discussion to have about this issue, and it was raised several times during passage of the Bill in the other place, not least at Third Reading. I hope very much that the Government will be able to come forward, perhaps in Committee, with a greater clarification that local building authorities are not going to suffer from the Bill becoming law I have four very brief points towards the conclusion on the council tax issue. First, I think it is right to raise the maximum premium on council tax that can be levied by a local authority to 100%, making 200% in total, where a property has been empty for two years or more. I want to associate myself at least with the definition of "long-term" as two years or more. If we get agreed definitions like that, it makes our discussions much easier My noble friends Lady Pinnock and Lady Thornhill both said the Bill would probably not make a great deal of difference in terms of council tax. I want to agree with them but I also want to agree with the noble Lord, Lord Patten, who was right when he said that this is a big incremental step. The sense of direction is the right one and a clear message is being sent. In future, therefore, there may need to be further fine-tuning of the law. However, the principle that the Government are trying to get across is important. It is not just that empty properties need services—they do; they need policing and they may need fire services if they are empty—but they can also cause a nuisance to neighbouring properties, so the steps taken since 2013, in the days of the coalition Government and after, to introduce both the 100% charge and the principle of a premium on properties that are unoccupied and substantially unfurnished, have been the correct ones The Minister reminded us about the total number of homes empty for over six months, which is not long-term. Six months is a comparatively short period in reality. I associate myself again with the comments of the noble Earl, Lord Lytton, when he said that we need to be a bit clearer about what the problem is that we are trying to solve with regard to empty properties. The figure of 205,000 is a comparatively low percentage, at around 1% of the 20 million-odd properties in the country. It is the case that since 2010 the total number of homes—