Robert
Neill: I have applied my mind to the Minister’s
response. I ascertained his point and understand what he seeks to
achieve. I am reassured to a degree on this serious point. He rightly
stated that the exercise of the powers in the Bill should be proof
against judicial review and meet the standard of the Associated
Provincial Picture Houses v. Wednesbury Corporation case. We
want to ensure wording that achieves that. I am fortified by the
thought of the principle that others can refer to debates in this
Chamber when seeking to ascertain Parliament’s intention. Having
got on the record the standard that the Minister anticipates and
intends that local authorities should attain, I beg to ask leave to
withdraw the
amendment. Amendment,
by leave,
withdrawn. Question
proposed, That the clause stand part of the
Bill.
Mr.
Mark Field (Cities of London and Westminster) (Con): I
will only detain the Committee very briefly. I have just received from
one of my two local authorities—the City of London
Corporation—a list of suggested amendments, and I wish to touch
briefly on a matter
relevant to clause 6: the situation whereby the
results of revaluation become known after the initial consultation on a
BRS proposal, with the result that properties that were previously
below the threshold set in clause 12 move into that chargeable band. I
hope that the Minister can give me some guidance, because, as he is
well aware, the current revaluation will affect those who are liable to
pay BRS. Property values are likely to move in both directions, taking
properties in and out of the charge as they cross the threshold, and it
is possible that one is slightly less concerned about those that move
outside the
charge. The
result of the revaluation in London is not due until September. On a
highly practical matter, of which I know the Minister is aware, all the
London boroughs will have a tight schedule in which to undertake the
necessary work for the consultation on, and introduction of, the BRS,
so that they meet the proposed timetable in London for Crossrail. It
may therefore be necessary to start the consultation before the results
of the revaluation are known. Does the Minister feel that it would be
satisfactory to have a supplementary, late consultation and to adjust
the revised prospectus if it has been issued?
The tight time
frame is in part a belt-and-braces concern from the CLC, but there is a
concern that the consultation process may start under the terms
of clause 6, yet, by the time that the revaluation has taken place,
there may be other properties and property owners who should have been
part and parcel of it.
Mr.
Raynsford: Subsection (5) imposes an obligation on
authorities to
think “whether
it would be appropriate to consult persons who the authority thinks
might become liable to pay a chargeable amount before the end of the
chargeable
period”. I
should have thought that that gave an authority the opportunity to
consider its overall evaluation schedules, to anticipate whether
businesses that are currently below the £50,000 threshold might
fall within it at a future revaluation, and, in the interests of
safety, to draw the net a little wider in its consultation to avoid the
scenario that the hon. Gentleman anticipates. Does he not feel that
that provides us with the necessary
safeguard?
Mr.
Field: I accept what the right hon. Gentleman says. It is
a certain safeguard, but I simply wanted to put the point on the
record, and, for the purposes of the ministerial guidance that is
published, to alert people, particularly given the fact that we will
need a rapid procedure to get Crossrail up and running,. Nothing would
be worse than if elements of the consultation were to be subject to a
legal challenge by a disaffected property owner or occupier who
suddenly found themselves liable for BRS but had not been
consulted.
The right hon.
Gentleman is right to say that subsection (5) goes some way
to meet the CLC’s concerns. I make my point simply to alert
people to the fact that the revaluation may be more comprehensive than
we thought, and I should just like some guidance on the matter from the
Minister.
Mr.
Khan: I commend the hon. Gentleman on raising an issue
that is important to his constituents and to businesses in his patch.
We are alive to the strict timelines, and one reason why we were keen
for the Bill to make progress was to ensure that it could meet the
Mayor’s timelines, notwithstanding the revaluation.
The clause sets
out those whom levying authorities must consult before introducing a
business rate supplement, as my right hon. Friend the Member for
Greenwich and Woolwich said. The consultation will provide an important
opportunity for local businesses to scrutinise the proposal and to have
their say, including making the point about a possible revaluation. We
expect local authorities in practice to develop their prospectus with
key business stakeholders, but the clause places a statutory duty on
them to consult formally all those liable for the proposed BRS. That is
reinforced by the draft statutory guidance that we talked about
earlier, which again makes the point that local authorities should
consider how they will involve businesses in developing proposals prior
to the formal consultation. As such, the prospectus and the business
case will benefit from their expertise.
Subsection (1)
states that before a levying authority can introduce a BRS, it must
consult those who will be liable to pay the supplement. That includes
anyone whom the authority thinks, based on its proposal, will be liable
to pay the BRS from the day on which the supplement is introduced. That
is the important point. The authority will also have a duty to consult
anyone whom it considers would have been liable to pay the BRS on the
day that it was introduced had they not been receiving 100 per cent.
relief from the BRS as a consequence of receiving 100 per cent. relief
from paying business rates. Authorities are also required to consult
any ratepayer who is likely to become liable for the supplement on the
basis that their current exemption from the BRS is likely to cease. For
example, if BID levies are to be offset against BRS liability, a
ratepayer who is not liable for the supplement when the BRS is first
introduced might become liable when the BID is
complete. 4.45
pm As
well as providing for consultation with those who will be liable for
the supplement, subsection (1) provides that levying authorities must
consult those individuals or groups whom they consider appropriate who
might reasonably be expected to be interested in their proposals. In
two-tier areas, they must also consult the lower-tier authorities.
Subsection (5) provides that levying authorities must also consider
whether it is appropriate to consult anyone who is not liable for the
BRS at the outset but might become so: for example, ratepayers whose
properties have a rateable value approaching
£50,000. Subsection
(6) places a duty on levying authorities to revise the prospectus in
the light of the consultation if they think it appropriate to do so. In
particular, they must consider doing so if the consultation results in
significant changes or amendments to the proposal. The duty will be
particularly relevant if any changes to the proposed BRS mean that it
will support more than a third of the cost of the project, which will
require a
ballot. Whether
or not a revised prospectus needs to be published will depend on
specific local circumstances, so the decision to publish a revised
prospectus will rest with the levying authority. The clause ensures
that no BRS will be solely the work of the local authority. Local
businesses will always be consulted and be part of the BRS
process. As
I said in my introduction—I commend the hon. Member for Cities
of London and Westminster for
making this point—the draft evaluation list
for a 2010 start after revaluation will be published by 1 October 2009.
I commend the clause to the
Committee. Question
put and agreed to.
Clause 6
ordered to stand part of the
Bill. Clauses
7 and 8 ordered to stand part of the
Bill.
Clause
9Regulations
about
ballots
Dan
Rogerson: I beg to move amendment 13, in
clause 9, page 5, line 25, leave
out ‘may’ and insert
‘must within 90 days of the coming
into force of this
section’.
The
Chairman: With this it will be convenient to discuss
amendment 14, in
clause 9, page 5, line 27, leave
out ‘may’ and insert
‘must’.
Dan
Rogerson: At the risk of boring Members who were not
present for deliberations on the Planning Bill, I shall again refer
back to it briefly. One issue that we debated was that that Bill made
provision for regulations, as is customary, but that some of those
regulations had a significant effect on how the Bill would affect
people in the real world. There was disquiet that the detail of those
regulations might influence people’s view of the Bill as a
whole, because they were crucial elements of it.
Given that we
have had such a lengthy discussion about ballots and when they should
be used, it would be useful to tighten up one or two of the
regulations. Amendments 13 and 14 would do so, stating that regulations
on how a ballot will work should be provided as early as possible.
Obviously, the length of time that we have chosen could be made shorter
or longer, but it is a means of sending a signal so that people out
there in the real world who will need to deal with the provisions will
have an early indication, if possible, of how that ballot should take
place and what form it should
take. The
amendment is probing, but I would welcome the Minister’s point
of view. I have proposed one or two other amendments to other clauses
in a similar vein. Let us put as much information as we can on the face
of the Bill now, so that when other Members get a chance to consider it
later, they will know exactly what they are dealing with and be clear
about how the provisions will affect business communities and the local
authorities forced to carry out such
consultations.
Mr.
Khan: I thank the hon. Gentleman for his probing
amendments. I know that he has experience with the planning board, and
I can see why he has tabled them. They are interesting amendments that
seek to strengthen the provisions in clause 9 in relation to
regulations about ballots. None the less, I will explain why they are
unnecessary and why I hope that the hon. Gentleman will withdraw
them. Clause
9 enables the Secretary of State to make regulations in relation to the
procedure of a ballot on the imposition of a business rate supplement.
Among the topics that the regulators may cover are
“the timing of
the ballot; the form that a ballot may take; who is to hold the
ballot” and “the
conduct of a ballot.”
Regulators may also
provide for the delegation of functions in relation to the
ballot.
My right hon.
Friend the Minister for Local Government sent a statement of intent to
you, Mr. Atkinson, on Friday 23 January, which set out the
approach that we intend to take on the secondary legislation that will
be needed to give full effect to our proposals for the business rate
supplement and to enable levying authorities to exercise the power to
levy a BRS. Our intention is that the regulations should come into
force as soon as possible after Royal Assent to the Bill. The
ballots’ regulations will contain all the procedural detail, and
they must be in force before the first business rate supplement can be
levied on 1 April 2010. We believe that the regulations should cover
the same issues that the hon. Gentleman proposes. With that
reassurance, I hope that the hon. Gentleman will withdraw his
amendments.
Dan
Rogerson: I thank the Under-Secretary for his comments.
The parallel that I was drawing was with the Planning Bill and the
community infrastructure levy. The debate on how that should be
implemented has been contentious. I am sure that the parties involved
will have their minds focused even more by the economic difficulties
that we now face. It was my intention to encourage the Government to be
as clear as possible about how the provisions will be enacted, so that
the regulators will be given all the information they need as soon as
possible. However, I take the Minister’s point that further
information has been released. I beg leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Clause
9 ordered to stand part of the
Bill.
Clause
10Variations Question
proposed, That the clause stand part of the
Bill.
The
Minister for Local Government (John Healey): We have come
to an important part of the Bill, which is the provision that we are
creating in the legislation framework for levying authorities to make
variations to the business rate supplement when circumstances or
conditions require them to do so. In framing this part of the Bill, we
aim to strike the balance between allowing the local authority, or
levying authority, to respond to the particular demands of the economic
development project and the funding that it may require while at the
same time giving the businesses that may be affected and may be
contributing through a BRS a degree of certainty and a safeguard to
allay their potential concerns. In framing the provisions in clause 12,
Committee Members will see that we have taken the same approach as we
have taken in the rest of the Bill.
It is clearly
important for local authorities to have some flexibility to deal with
changing circumstances. Subsection (1) allows a limited variation,
provided that the possibility of the variation and the circumstances in
which it is made are set out in the BRS prospectus; and—this is
referred to in subsection (12)—that the variation will not
increase the number of people liable to pay the supplement. This is
designed to provide some
flexibility to ensure that projects that are funded
by a BRS can maintain momentum in the event of a change in their
economic circumstances or other
circumstances. Let
me move on to the safeguards or reassurances to business. Subsection
(2) is designed to protect businesses from any unexpected changes in
the supplement arrangements. It provides that the levying authority
cannot without due consultation make significant changes that were not
foreseen at the outset of the process and therefore not consulted on
or, in some cases, voted on at the outset. If the authority wants to
vary a BRS in a way that was not foreseen and set out in the original
prospectus, it will need to consult on its revised plans. Subsection
(2) requires the authority to undertake a number of steps: to publish a
document setting out the proposed variation; to consult on those
proposals; to hold a ballot in the cases in which the variation will
mean that the supplement supports more than one third of the project
cost or in which there was a ballot on the original proposal; and to
publish a revised prospectus setting out the new arrangements, once the
variation has been
agreed.
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