Rates fight dealt another blow

It all hinges on whether an amendment to the bill, passed by the House of Lords with a substantial majority, is agreed to by the lower House.

Solicitor Andrew Finfer, who has been acting on behalf of a ports group, explained to Port Strategy that the amendment means, simply, that “the cost of rectifying a business rates mistake should be borne by the person or organisation making the mistake”. In this case it would be the government’s Valuation Office Agency who suddenly started issuing three years worth of backdated bills at the end of last year, throwing ports into turmoil.

“This should be a simple, clear principle”, said Mr Finfer, but it is one that has been objected to by the House of Commons who narrowly rejected it last week after pressure from government whips. “We do not understand why, when all political parties voted for the amendment, some Labour MPs whose constituents will suffer from the VOA’s mistakes voted against the amendment,” he added.

But more importantly, the bill does not just apply to the maritime sector, and it seems that the Lords are aware that if the above principle is compromised, “any UK business may suffer the same problems as the port companies at any point in the future”, said Mr Finfer.

However, all is not lost – yet. If the Lords remain firm in their resolve, the Government face losing the entire Business Rate Supplements Bill if they don’t get an agreement in this parliamentary session. The reason the House of Commons might have been reluctant to push it so far is because the bill also stands to raise £3.5bn in revenue from London businesses in the form of a rates supplement, which is earmarked to pay for the new Crossrail development. An important project that is estimated to add at least £36bn to the UK economy.

But while there may be the opportunity for a bit of brinkmanship, any deals will have to be cut just before parliament goes into recess for the summer or just after its return in October – before the end of this session in November.

However, North East Lincolnshire Council has confirmed that it has reluctantly begun to start collecting payments from port businesses – while admitting that those who have lodged an appeal with the VOA will not have immediate action taken against them.

It seems that the council workers, many of whom privately support the ports struggle against the Bill, originally hoped it would be overturned. But now even those with appeals lodged have received invoices with instalment plans covering the eight years that the government has given to businesses to enable them to pay the arrears – since the legislation, as a council spokesman explained to PS, will only apply going forward, and is not retrospective.