UK rating agency forced to explain backdated rates fiasco

At the Port of Hull, the first to receive its rating demands, 44 port operators have already received backdated demands totalling £18.4m. Occupiers of the UK’s other 55 statutory ports are now preparing themselves for similar backdated demands totalling millions of pounds, and 65 other commercial ports will be open to reassessment.

Michael Fallon, Treasury sub-committee chairman, pointedly questioned the fairness of backdating the rates to 2005, a process which has landed some port occupiers with 500% increases.

Andrew Hudson, chief executive of the VOA, the agency responsible for ongoing rates investigation, responded: “We have looked into that very carefully and businesses do have the right to appeal. We appreciate that some companies are arguing that they have already paid the rates through operators and they need to take that up with the operators.”

David Tretton, director of rating at the VOA, added that the agency had taken legal advice on the validity of backdating rates before issuing demands.

Speaking for the sub-committee, The Right Honourable John McFall was also critical of the lack of consultation, describing it as where “economics and politics collide”.

In response, Mr Hudson said: “We wrote to all the statutory port operators in May 2006 and asked them to contact their occupiers. We weren’t seeking to be secretive on this but we accept that in practice that some of these companies that have contacted us were not aware [of the revaluation].”

Mr Tretton added: “Perhaps with hindsight we should have done some more investigative work [to contact the port occupiers directly].”

Summarising the hearing, Mr McFall said: “We can’t allow a situation like this to go on. It’s completely unacceptable. This will now be taken up at ministerial level.”

Speaking to Port Strategy before the hearing, solicitor Andrew Finfer of Schofield Sweeney in Leeds, acting on behalf of port operators, expressed hope that the select committee would ask some embarrassing questions about why the VOA’s failure to act had put UK port businesses in this position.

After the hearing, he said: “We’re pleased that the VOA has been told to reflect on whether they should postpone the rate revaluation until 2010; we’re pleased that they have been told to brief their ministers to sort this mess out; and we’re pleased that the matter is to be kept on the committee’s agenda until it is properly resolved.”