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Standing Committee Debates
Local Government Bill

Local Government Bill

Column Number: 345

Standing Committee A

Thursday 6 February 2003

(Morning)

[Mr. Win Griffiths in the Chair]

Local Government Bill

Clause 45

Additional contributions and action

Question proposed, That the clause stand part of the Bill.

8.55 am

Mr. Geoffrey Clifton-Brown (Cotswold): Good morning, Mr. Griffiths. I must report to the Committee that I conflicted with the cleaners because I was unable to use the lift, which was stuck in the basement. However, the stairs are becoming easier, not because the steps are becoming fewer but because I am becoming a little fitter. If the Committee does nothing else, it might help my health.

The Committee will recall that we had started on part 4 of the Bill covering arrangements for business improvement districts and had had a long debate on whether property owners should contribute. We then moved on to clause 44 and how local communities will be consulted. At that stage the Under-Secretary must have been getting tired because he dismissively waved the matter aside, but I suggested that he and the Minister would probably have to return to the matter because if BIDs are to get off the ground and to be satisfactory, local communities will have to be on board.

Clause 45 covers additional contributions and actions and subsection (2) describes the people who may have to make contributions. One of the major groups is the billing authority and other superior and lower authorities—the county councils' own parish councils if part of their area falls within the BID. It also refers to other people who are

    ''authorised or required to do so in accordance with the arrangements.''

I want to quiz the Minister on that. What are those categories of other people? It was made fairly clear in previous debates that residents would not be required to pay, but if residents were involved in a scheme that was clearly to their benefit, one wonders in what circumstances they might choose to pay or be required to pay. It is worth trying to tease that out from the Minister.

Mr. Desmond Swayne (New Forest, West): Subsection (2)(a) refers to

    ''the billing authority which has made the arrangements''.

Does that mean that the billing authority is merely required to hand over the finance that it has raised through the process of billing, or is it empowered to make additional contributions? As I understand it, the billing authority is likely to be as described in subsection (2)(b)—a county council or some other local government body. With that in mind, why are we expecting local authorities to make a contribution to

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the BID, given that they are supposed to be self-financing as a consequence of the whole scheme? Why are we expecting local authorities to make a contribution that is additional to what would otherwise have been spent by local government?

I am concerned about the possibility of a democratic deficit arising because the bids are supposed to have been arrangements set up, in effect, by a local referendum, but under the clause local residents may be expected to stump up through the local authority. I hope that the Minister will assure me that only the money that has been raised through the BID billing scheme is expected to be paid under the clause and not additional resources from the local authority.

Mr. David Lepper (Brighton, Pavilion): May I put on the record a matter of interest in that I chair the steering committee for the 22 pilot BID projects for the areas about which an announcement was made some two weeks ago? I do not want to contribute to the debate at this stage, but I thought that I should put that on the record as a matter of interest.

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): I am glad to say that we have managed to complete most of the speeches on clause 45 in a short time and I hope that that is a precedent for this morning's sitting.

Clause 45 allows voluntary financial and other contributions to the BIDs to be made. That will allow those who are not ratepayers subject to the BID levy to contribute to the success of the BID. As a result, local authorities, whether parish, district, county, borough or unitary, covering the area of the BID will be able to make contributions. The clause also allows any other person to make a voluntary financial contribution to a BID. That will allow, for example, property owners in a BID area to make financial contributions to it and those contributions may be written into the BID arrangements from inception.

The hon. Member for Cotswold (Mr. Clifton-Brown) asked who is required to pay. The only requirement on payment would be on ratepayers, as set out in the schemes. All others would be voluntary financial contributions, as clause 45 makes clear.

The hon. Member for New Forest, West (Mr. Swayne) asked whether, under subsection (2)(a), the billing authority will just hand over the levy or whether it has a power to make additional contributions. Subsection (1) is clear that persons specified may make financial contributions, which means that billing authorities—usually district councils—can have their own additional financial input into a BID scheme if they so choose.

I am glad that my hon. Friend the Member for Brighton, Pavilion (Mr. Lepper) drew attention to his crucial role in helping to guide the pilot BID projects to fruition. I know that he has taken a close interest in discussion of the clauses. I hope that his role will lead to a successful series of initial BID pilots that will in turn give other areas good cause to see that the scheme could benefit them.

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Mr. Swayne: The Under-Secretary said that the clauses enable voluntary contributions to be made by other persons. Why does subsection (2)(c) refer to

    ''any other person authorised or required to do so''?

What is the significance of

    ''or required to do so''?

Mr. Leslie: I imagine that there may be circumstances when a local authority may be a tenant of a property in a town centre and, by virtue of its tenancy, may be a ratepayer and bound to make a contribution within an area. I suspect that that reference is also included to give power to public bodies to pay if, after consultation with proposers and billing authorities, the public bodies wish to make a contribution.

Mr. Swayne: The first explanation is somewhat implausible, given that the clause refers specifically to additional contributions. If a local authority were a tenant or ratepayer as a consequence of its property in a town centre, it would fall outwith the arrangements and come under the other arrangements.

The Minister's second explanation was rather more plausible. It is rather worrying that a public authority could be required to make payments to the BID. It has been sold on the idea, as characterised in the description of the hon. Member for Kingston and Surbiton (Mr. Davey), of it being a voluntary tax. It was supposed to be taken on spontaneously by the community that will set up and run the proposals. It sounds fantastic, but if public bodies are to be required to contribute, that puts a rather different gloss on it.

Mr. Leslie: I understand the hon. Gentleman's point. The clause ensures that a public body is empowered to make a payment if—once it has consulted those involved in drawing up the BID arrangements and the billing authority—that public body itself wishes to make a contribution. If it has given a commitment to make a contribution at the outset of the BID proposals, thereafter it is required by the BID arrangements to make that contribution. We have draft guidance that gives fuller information about such matters and I shall revisit the text of the draft guidance to make sure that that point is entirely clear.

Question put and agreed to.

Clause 45 ordered to stand part of the Bill.

Clause 46 ordered to stand part of the Bill.

Clause 47

BID levy

Question proposed, That the clause stand part of the Bill.

Mr. Clifton-Brown: We must have a brief discourse on clause 47 to try and tease out from the Government whether the scope of the BIDs is unlimited. In the Bill there is no limitation at all. Could the whole of a local authority's area become a BID in itself? It would be interesting if the Government would explain that. Is there any scope for limiting the amount of money that can be demanded from an individual non-domestic ratepayer under the BID levy, other than the fact that

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if it became too outrageous people would not vote for it?

I would also like to ask about one or two other problems that may arising from the BIDs. What will happen to empty properties? I know that empty properties get a rate relief after three months, but in such cases who is entitled to vote? Presumably, it will be the superior landlord to whom the liability is passing.

Mr. David Curry (Skipton and Ripon): They will have been commandeered in order to house people.

Mr. Clifton-Brown: As my right hon. Friend says, under this Government, if houses remain empty for more than a week, they will be confiscated. Then owners will not be non-domestic ratepayers at all. The Government will completely forfeit any money that they may have raised, which would be entirely self-defeating.

Nevertheless, it is worth establishing who will vote, and the arrangements that will be made for empty properties. What arrangements will be made for exceptional circumstances, such as flooding, riots, civil commotion or terrorist attacks? There appears to be no power in the Bill to suspend or cease a BID. Perhaps the Minister will explain what the Government would have in mind in such circumstances.

Mr. Swayne: Will the Minister give the Committee some idea of what the chargeable periods are likely to be? What do the Government envisage as being the likely lifetime of a BID and the process by which it would be renewed? Can he take the Committee through the Government's logic or is it all to be set out subsequently in regulations, to which little thought has yet been given?

 
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Prepared 6 February 2003