2 The Government's proposals
3. The Government's proposals were published in a
White Paper in October 2007.[5]
The White Paper accepts the case for introducing a power for local
authorities and the Greater London Authority (GLA) to raise and
retain local supplements on the national business rate.
4. The Government's proposed model for business rate
supplements involves four levels of protection for business:
- Revenue from supplements will
only be available for spending on economic development, such as
infrastructure. Plans will need to be clearly specified and committed
in advance; and spending will be subject to a transparent accounting
framework to ensure this.
- A national upper limit of 2p in the pound will
be set on the level of supplements that can be levied.
- To protect smaller businesses from disproportionate
burdens, properties liable for business rates with a rateable
value of £50,000 or less will be exempted from paying supplements.
- Where the supplement will support more than a
third of the total cost of the project there will additionally
be a full 'double-lock' ballot of businesses affected.[6]
5. The White Paper continues:
Revenues from supplements will be locally raised
and retained, with local decision-making on the duration of any
supplement and the specific projects it should be spent on. The
Government intends that that only the highest tier local authority
in any area should be entitled to levy supplements. These authorities
will be able to cooperate to raise supplements to fund joint projects,
within the existing statutory framework. In London, the power
will rest with the Greater London Authority. Shire counties will
be required to consult their districts on any new supplement proposals.[7]
6. The Government supplemented the White Paper with
a brief memorandum to us with "an explanation of why the
Government decided to deviate from some of [the Committee's] recommendations."
That memorandum is published as an Appendix to this Report.
5 HM Treasury and Communities and Local Government,
Business rate supplements: a White Paper, Cm 7230, October
2007 (hereafter 'White Paper'). Back
6
White Paper, Executive Summary. Back
7
ibid. Back
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