Business Rate Supplements Bill
Robert Neill: I have applied my mind to the Ministers 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 Parliaments 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Amendment, by leave, withdrawn.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 authoritiesthe City of London Corporationa list of suggested amendments, and I wish to touch briefly on a matter
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.
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 CLCs 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 Mayors 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.
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 introductionI commend the hon. Member for Cities of London and Westminster for
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.
Regulations about ballots
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 peoples 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 Ministers 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
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 Ministers 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.
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; andthis 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
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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