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The Earl of Courtown: My Lords, first, I should like to thank the noble Baroness the Minister for placing the draft practice note, together with her speech in Grand Committee, in the Library. I understand that these will be used by the rating professionals in determining and discussing valuation practice. This is also a good opportunity to congratulate the noble Earl, Lord Lytton, on all his hard work on this subject. Noble Lords are aware that the noble Earl is one of the great experts on the matter in this House.

To paraphrase the noble Earl, he said that there was still confusion about this judgment and therefore it was imperative that any contradictions should be ironed out before the Bill became law. A number of noble Lords at other stages of the Bill have raised issues about definitions, particularly the meaning of "reasonable repairs". At other stages of the Bill the noble Baroness said that to include a definition could create more problems than it solved. I am still not certain why this is so and I hope that the Minister can clarify the point when she replies to the noble Earl.

The Minister also said in Grand Committee that the meaning of "repair" in the context of property and property valuations was well understood by professionals in that field. I believe that that is too great an assumption and that further clarity is required. I look forward to the reply of the noble Baroness and hope that this Bill can go through, perhaps with additions to the practice note.

Baroness Hamwee: My Lords, I too congratulate those professionals who have been advising the noble Earl. I know that he will be the first to acknowledge their help. I too appreciate their input and the willingness of officials to listen and to be involved in a string of meetings and discussions. The noble Earl is concerned about the Bill being enacted while the practice note is still either incomplete or, putting it at its lowest, a matter of concern.

When the Minister replies, perhaps she will explain when the Bill will come into force. I understand the point the noble Earl makes. Although the practice note can be subject to amendment during the life of the statute, it would be desirable for there to be a document which is widely agreed at the start of its life.

Lord Elton: My Lords, when the Minister replies, perhaps she will help the amateurs among us by stating the relative weight given by the courts to the text of the Bill, the text of the practice note (in whatever form it may be at the time a case is brought) and the words that the noble Baroness is about to utter, under the terms of Pepper v. Hart.

3.45 p.m.

Baroness Farrington of Ribbleton: My Lords, perhaps I may comment to the noble Lord, Lord Elton, that had I been unaware that I was a lay person when I began this process, experience by this stage of the Bill

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would inevitably have convinced me that I was--and it may not have ended yet. The noble Earl, Lord Lytton, his advisers and noble Lords opposite who have taken part in the Bill have taught me how little I knew to begin with. I am grateful to the noble Earl. We had a careful and most useful discussion in Grand Committee of the aspects of the Bill to which this amendment is addressed. During the passage of the Bill, or in discussions outside this House, it was clarified that the paramount concern is the text of the Bill. But if there is difficulty following that, the assurances given in your Lordships' House take precedence over a practice note which, inevitably, due to circumstances over a period of time, may need to be amended.

In Committee--I think that the noble Earl, Lord Lytton, will agree--I said that the word "repair" was and is well understood among professionals. The noble Earl still suggests that it needs further definition. The amendment seeks first to insert in the Bill a definition of "repair". Parliament has sought to define "repair" in statute where there might be cause to doubt, at the margins, what it means in particular situations. As I said in Committee, we have not sought to do so in this Bill because, in practice, rating professionals have well understood what in principle has counted as a "repair" for the purposes of estimating rateable value, and what has counted (to take examples raised at earlier stages) as "improvement" and "alteration". If we were to attempt to define the term exhaustively, we would on one view be addressing a problem that has not been shown to exist. On another view, we would run the risk of introducing some nuance, some inference, which would unintentionally disturb the settled position. I believe that we have no need and no wish to do either of those things.

I believe that those are still the overriding aims on the issue. I therefore do not believe that the Bill would benefit from definition in the proper sense of the term. For those considerations, the amendment is not acceptable.

Secondly, the amendment seeks to expand on what is meant by "reasonable repair". I assure the noble Earl, Lord Lytton, that he has no cause for concern regarding the use of the terms within this Bill. The first limb seems to be intended to require that what is "reasonable repair" is to be determined by what might reasonably be expected having regard to all material considerations. So far that seems unexceptionable, but it is not necessary to state it. It should go without saying that statutes are scattered with references to the concept of reasonableness but it is not normally found necessary to spell out that that means "reasonable in the light of all the surrounding circumstances so far as they are relevant". That would be a statement of the obvious. The material considerations will vary with the context, the purpose of the statute and the facts of the individual case.

However, the second limb asks us to disregard who is responsible for repairing the hereditament. Taken at face value, the amendment is wholly unnecessary as the identity of the parties is not an issue for most purposes when applying the valuation hypothesis to a case. However, I take it from what the noble Earl said about

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the amendment that he intends it to refer to the assumed responsibility for repairs. What matters for the purpose of the hypothesis is who is to be assumed to be responsible. Reading the amendment in the light of what the noble Earl appears to intend, it would directly contradict the 1988 Act. At present, the tenant is assumed to be responsible for ongoing repairs during the life of the hypothetical tenancy. That is the express intention of the valuation hypothesis as enacted in 1988 and is rooted in the real world of commercial leases; and I cannot accept an amendment which could overturn this.

On another view, the Bill is undermined also if the identity of the person assumed to be liable for repairs is disregarded for the purpose of establishing what is reasonable.

It may assist the noble Earl--I do not think that there is anything between us--if I say again that the Bill is intended to effect as little change as possible to the position as it stood under valuation to gross value under the 1967 Act. Under gross value, valuations were undertaken on the basis of the hypothetical landlord carrying out any necessary repairs. To separate the landlord from that responsibility would risk the conclusion that no one was to be regarded as responsible for repairs. On that assumption, the Bill might not achieve its objective, given that if no one is to be deemed to be responsible for the repairs, they cannot be assumed to have been carried out. On that analysis also, the amendment could undermine--I am sure that it is not the noble Earl's intention--the basic purpose of the Bill.

I am sure that the noble Earl's only intention in proposing the amendment is to clarify the effect of the Bill. I hope that he feels able to accept my assurance that it is the Government's intention also that practice in this area should be clear and transparent. I am aware that the noble Earl has concerns about the way in which issues addressed by his amendment are dealt with in the current draft of the practice note. However, that is another matter. The note is still under discussion and the agency will be happy to discuss further with him the formulation of the note. I can assure the noble Earl that the Valuation Office Agency will give careful consideration to how the note might best be readjusted to reflect his concerns.

However, it may help if I reiterate points that were made earlier. I gave a detailed statement to the Committee on 5th May about the Government's intentions in introducing the Bill. I also gave a number of examples of valuation practice to illustrate why we believe that the Bill would not have practical implications for ratepayers. My intention is that the statement should be an aid to interpretation of the Rating (Valuation) Bill; and I am entirely happy that it should be read in that context. I am happy to make clear to noble Lords today and to the wider profession in their consideration of the practice note that that is so.

I can also assure the noble Earl, Lord Lytton, that the final practice note will reflect all the assurances I gave the House. I am sure that he will confirm that they were very detailed assurances. I understand that a meeting

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with those in the wider profession to consider outstanding issues on the note has been arranged. As the noble Earl indicated, he will participate in that discussion, which I welcome. I remain available to meet him at any stage should that prove helpful.

I wish to place on record not only my thanks to the noble Earl, but to the noble Baroness, Lady Hamwee, and the noble Earl, Lord Courtown. In regard to the timing and protection of current cases, the Bill will come into force on Royal Assent. Ratepayers who challenged their rating assessments before 12th March 1998, the date of the Anston judgment, will be entitled to have their cases decided on the basis of that judgment as set out in Clause 2.

I hope that I have been able to give noble Lords the assurances they have sought. I repeat that if it should be necessary or helpful to meet at any stage I should be only too happy to do so. I hope that in the light of those assurances the noble Earl will feel able to withdraw his amendment.

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