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I am also grateful to hear the Ministers determination to ensure that wherever such a project goes forward, the business community will have a role in its ongoing delivery and in the oversight of it. As the hon. Member for Bromley and Chislehurst (Robert Neill) said, the intention behind amendment 16 is to ensure that that is the case. However, I have noticed a tendency in other Bills for things to be left to be clarified later. Although I sadly do not have the resources at my disposal that the Minister does to test every thought that I have and to ensure that everything is drafted as it should be, I wanted new clause 1 to make the Bill more prescriptive and say that there must be a body that formalises the business involvement in an ongoing relationship.
I was also seeking to look at how the BIDs model works. The hon. Member for Cities of London and Westminster (Mr. Field) is absolutely right that BIDs and the BRS will do different things in different places. However, as models for delivery, they provide us with a starting point. I am seeking to press for such a vehicle with new clause 1. The right hon. Member for Wokingham (Mr. Redwood) was keen to pick holes in new clause 1 and to look for areas of disagreement. However, I welcome the fact that he and all other Conservatives Members who have spoken are keen that there should be a safeguard for businesses, so that they can be confident that they have a role to play.
Mr. Redwood: I was not trying to pick holes in new clause 1; I was trying to say that we need a structure that will work. That is what we are groping towards, but it is a pity that the Minister did not tell us whether the schemes would normally be local authority-run schemes or private finance initiative or public-private partnership-type schemes. However, we have to build on whatever command structure is in place and have accountability and representation.
Dan Rogerson: I am grateful to the right hon. Gentleman for that clarification. However, I am concerned that amendment 16 may not be quite as reassuring to the business community, in that it still puts the onus on the local authority to come up with the means.
The right hon. Gentleman talked about the proportion of business people on the body proposed by new clause 1 being only a third. However, the project delivery board would look at the oversight of the whole project. The BRS is part of the finance package, so it would be unfair for the business community to form all or half of that body if its funding was less than that.
Were new clause 1 to be added to the Bill, it might require some clarification, perhaps through discussions in another place. I am seeking to get something in the Bill that sets out clearly that the business community will have a role in the ongoing discussions on how a project is delivered. We are talking about a long-term commitment, and the right hon. Gentleman said that it was unfair to expect the business community to take on that commitment. I have spoken to business organisationsfor example, when looking at BIDs and other systemsand it is clear that they can usually find a way through their representative bodies to ensure that the business communitys voice is heard.
Although I am pleased to hear that the Minister is looking at the issues closely and saying to local authorities in the guidance, You need to show us how youre going to involve the business community, I am concerned that the nuclear option of the Secretary of State stepping in and saying, You cannot proceed, will not be used in many circumstances. Given that that sanction will be used only in rare circumstances, there is nothing that gives me huge confidence that there will be a systematic way for the business voice to be heard in the ongoing management of a project.
I am grateful to hear what the Minister said about amendment 1. I accept that there may be a need in some circumstances to move beyond that flexibility, but he has put on record his determination that the standard practice should be for everything to be in place at the beginning of the financial year, so that everybody knows what is coming and can plan accordingly.
To sum up my response to this debate, perhaps my new clause 1 is not perfect, but the Bill, too, is imperfect. By seeking to divide the House on my new clause, I hope that we can improve the Bill slightly and leave it to colleagues in another place to tighten up the detail.
(1) In any business improvement district where a business rate supplement under the Business Rate Supplements Act 2009 has been imposed, a property owner BID levy may be imposed on the owners of a non-domestic property, or a class of such owners, in the district.
(2) A non-domestic ratepayer who is liable to pay the BID levy on a hereditament is not liable for a property owner BID levy on that hereditament, and may not take part in a property owner ballot in respect of that hereditament..
(3) A levy on property owners may come into force only where it is approved by a ballot of the property owners in the proposed business improvement district who are liable for the proposed property owner BID levy..
Mr. Raynsford: New clause 2 concerns the interface between business rate supplements and business improvement districts. Although both relate to the promotion of the local economy, BIDs are different from BRSs in a number of respects, as the hon. Member for Cities of London and Westminster (Mr. Field) pointed out. In Committee we examined the differences between the two, highlighting the degree to which the BRS is more likely to support larger-scale, longer-term investmentincluding infrastructurewhereas BIDs have focused primarily on short-term improvements to enhance the attractiveness, commercial success and security of retail and commercial areas. However, there are similarities. Both are based on the principle of partnership between local authorities and business to promote the local economy. Both involve a levy on the ratepayerwho is the occupier rather than the owner of the propertyon top of the normal business rate.
As the Minister responsible for overseeing the introduction of BIDs some six or seven years ago, I am naturally pleased that they have proved to be a success, particularly becausethis is another feature common to both BIDs and BRSsthey were not uniformly welcomed when we introduced them. I recall the Oppositions hostility when we debated the local Government Act 2003. I hope that, just as with the passage of time they have come to recognise that their opposition to BIDs was misplaced, they will come to see over the passage of time that their current opposition to the BRS is also misguided.
Over those six years, there has been a significant growth in the number of BIDs and in their contribution to improving the economic performance of commercial areas in towns and cities all over the country. Dr. Julie Grail is the chief executive of British BIDs, the umbrella body for BIDs throughout the country. During one of our evidence sessions at the beginning of the Bills Committee stageI join the Members who have rightly emphasised the value of those sessionsshe told us that 76 BIDs were now operating throughout the country, nearly 20 of them in London.
BIDs can be set up only after a yes vote on a dual-key basis by all the businesses that will be liable for the levy. They are also subject to periodic renewal ballots. The key issue that prompted the new clause was the fact that 14 existing London BIDs are due to be subject to such ballots within the next two years. At precisely the same time, business rate payers will begin to face the business rate supplement for Crossrail. Not surprisingly, Dr. Grail and many others who have been involved in the successful development of BIDs fear that when confronted with both the BRS for Crossrail and the ongoing cost of supporting their local BID, some business rate payers, particularly in difficult economic circumstances, will conclude that they cannot afford to continue to support the BID.
Mr. Raynsford: One of the arrangements that has applied throughout the evolution of BIDs is a proper procedure for defining the objectives of a BID and the level of contribution that will be expected before the proposition is put to a vote, so that when business rate payers come to vote, they will know whether they are receiving value for money. That is a well-established arrangement, and all who are experienced in the way BIDs have operated know that it has proved successful. When businesses feel that a BID will enhance the value of their area, they are likely to vote yesand, as Dr. Grail pointed out, they have done so in 76 areas.
Mr. Raynsford: I am sorry if the hon. Lady did not entirely follow what I said earlier. As I explained, the BID legislation provides for renewal ballots every five years, which means that a BID must submit its proposal to the business rate payers who contribute to it every time it seeks a renewal of its status.
Unlike the BRS for Crossrail, which relates to a single, albeit very large, project, BID schemes usually involve a variety of different arrangements. A scheme may be intended to improve security, perhaps by providing additional policing to enhance shoppers safety in a retail area. It may involve environmental improvements to make an area more attractive to visitors, or transport improvements to make it more accessible. It may involve promotional work to attract people who would otherwise not be aware of what was available in a shopping centre.
It is entirely up to the BID body itself to decide on its programme. However, that programme must be set out in advance of the first ballot, and when it is due for renewal the BID will be required to set out its programme for the following year. There is a well-established procedure enabling the parties invited to contribute to BIDs to know what they would be getting, and to say either yes or no to it in a ballot.
Although BIDs have generally been successful and are widely seen as such throughout the country, and although the improvements to the local economy which they support are rather different from those supported by the BRSwhich, in the case of London, will support the hugely important Crossrail schemethere is a real risk that, following the introduction of BRSs, several BIDs that are due to be subjected to renewal ballots in the next two years will not survive. That, in my view, would be a very unfortunate consequence. The purpose of my new clause is to find a solution that does not pit BIDs against BRSs, or put either at risk.
The new clause addresses the problem by returning to an issue that has been debated long and hard since BIDs were first introduced: the contribution that might be made by property owners in bid areas to support activity from which they stand to benefit considerably. The BID model was originally developed in north America, where the contributions from the business side come from property owners rather than occupiers. In adapting the model to United Kingdom circumstances, in which business rates are levied on occupiers, we concluded that the BID levy should also apply to occupiers. However strong the argument was for imposing the levy on landownersand we received forceful representations from many quarters, including property owners who felt that that was right and equitableit would have required the establishment of a wholly new register of commercial property ownership throughout the country so that property owners could be balloted in the first place and the local authority could subsequently impose the levy, assuming that there was a positive vote. Not only would that have imposed significant cost burdens on local authorities, but it would have been a major bureaucratic exercise and, crucially, delayed the implementation of the BID scheme. At the time, there was a real appetite among the business community, town centre managers and many others to get a move on with BIDs to ensure that the benefits that many saw would come from the establishment of BIDs could be achieved.
Mr. Brian Binley (Northampton, South) (Con): I understand the thrust of the new clause and I have some sympathy with it. However, my concern is twofold. First, if the property owner is liable for the BID, at the next lease review is not the cost likely to be placed on the lease? The business user is therefore likely to face the cost anyway. Secondly, how does this relate to accounting? If there is a BID in one town but not in another, the cost may increase in one town but not in another. However, competition between the two may be keen.
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