Robert
Neill: I apologise if the hon. Gentleman feels that I am
using him as a vehicle to raise a point with the Minister that I failed
to flag up quickly enough earlier. Does he agree that perhaps one of
the reasons for the concern that he and I share, which was expressed by
businesses in their evidence, resulted from a phrase in the impact
assessment, where it mentions the £50,000 threshold, which it
states will be set out in secondary legislation? He just referred to
that. It continues:
“To
provide consistency, this threshold will be standardised across
England.”
That might have led
people to fear that the threshold could not be set at a higher level in
other areas. That appears now to have been conceded by the Minister.
Does he agree that it would be helpful if the Minister could make it
clear that £50,000 is the standardised minimum threshold, but
that it can be set higher? That might affect people’s
attitudes.
Dan
Rogerson: I am happy to be a conduit for the hon.
Gentleman’s point. If the Minister wants to address it, I am
happy to take a further intervention from
him. The
Minister’s argument seems to be that the Government have been
very clear that £50,000 will be the threshold, so it does not
need to be in the Bill. My point of view up until now has been that if
it is going to be £50,000, it might as well say it in the Bill.
We take slightly different views. In my view, if the threshold has been
made clear, there is no reason not to put it in the Bill, rather than
make it the subject of regulations. The intention is clear, at least in
the short term for the one likely major project, so we might as well
put it in the Bill.
I have a
personal dislike of leaving primary legislation as vague as
possible—with all due regard to flexibility—and allowing
things to be settled in another Committee, at another time, when
perhaps less attention is focused upon it. However, as we have had the
chance to debate the issue and I have heard the views of the Committee,
it is clear that although there is a range of views, it would be
inappropriate to include the measure in the Bill. I beg to ask leave to
withdraw the amendment.
Amendment,
by leave, withdrawn.
Question
put forthwith (Standing Orders Nos. 68 and 89), That the clause
stand part of the
Bill. Question
agreed
to. Clause
12 accordingly ordered to stand part of the
Bill.
Mr.
Field: Have I missed my
chance?
The
Chairman: I have put the question and it has been agreed,
and anyway, I would not have allowed a stand part
debate.
Mr.
Field: I wanted to touch on something, but perhaps I can
do so at another point, Mr.
Atkinson.
Clause
13Chargeable
amount Question
proposed, That the clause stand part of the
Bill.
John
Healey: Now we come to the maths. The clause sets out the
method for calculating the BRS chargeable amount for a day. The way in
which the chargeable amount is calculated depends on whether the
property in question benefits from one of the existing mandatory or
discretionary reliefs from the mainstream business rate, in other
words, from the national non-domestic rate.
Subsection
(2), with a neat little formula—A multiplied by B over
C—prescribes the formula for calculating the daily chargeable
amount where no rate relief is granted
in respect of the property. Liability for BRS in those circumstances is
calculated by applying the BRS multiplier, which is defined in clause
14(3), to the rateable value of the property and dividing the result by
the number of days in the financial year. I can tell that the hon.
Member for Northampton, South is still with me at this point. Where the
rateable value of a partially occupied property has been apportioned
under clause 12(2) and (3), the BRS multiplier is applied to the
rateable value for the occupied portion of the
property. Mr.
Field: I might take the opportunity to come back to the
point that I was trying to make earlier, which is to do with the rules
of apportionment to which the Minister referred. To ease
administration, we must try to ensure that the rules of apportionment
are the same for the BRS as they would be for the main business rate.
Will the right hon. Gentleman consider the notion that in clause 12 and
in the mathematical formula in clause 13 and further on in clause 17,
it is suggested that the levying authority may proceed on a different
basis from that adopted by the billing authority as regards
part-occupied buildings and jointly owned premises, for the purposes of
apportionment?
Further on,
clause 18 assumes that a BRS might be levied for less than a full year.
That would provide many billing authorities with considerable practical
difficulties, as they would be required to collect two amounts on two
different bases. I accept that it might be an unusual situation to have
a BRS for a period of less than six months. In relation to
apportionment, will the Minister give us some guidance on the practical
difficulties that will face billing authorities if the BRS is not to be
apportioned on the same basis as the existing business
rate?
John
Healey: I can understand that the hon. Gentleman would be
concerned if the apportionment bases were different for the BRS and the
business rate, not least because he would worry about what effect that
would have on the formulae, but the apportionments have the same basis.
The valuation for the authority, which is referred to in the previous
clause as undertaking the apportionment, will of course be the
valuation of an agency specialist, so I think that I can reassure
him that we will not have the problem that he is concerned
about.
The formulae
deal with the calculation of the liability according to different
reliefs that may be in place. Subsection (3) deals with occupied
properties to which small business rate relief is granted. Subsection
(4) does the same for charities and community amateur sports clubs
where there is mandatory relief. Subsection (5) deals with occupied
properties where mandatory rural rate relief is applicable and
subsection (6) does the same for empty properties. Just to be clear,
subsection (6) applies only when the Secretary of State or, in Wales,
the Welsh Ministers make an order under section 45(4A) of the Local
Government Finance Act 1988, which reduces the liability for national
non-domestic rates of empty property owners to less than 100 per cent.
of the basic liability. Finally, subsections (7) and (8) deal with
properties where discretionary relief or hardship relief have been
granted in respect of the business rate payer’s main business
rates liability. I hope that that helps the
Committee.
6.30
pm
Mr.
Dunne: A property that was subject to business rates may
become vacant and then subject to the empty property levy, which is a
modest discount to the full rate, but no longer benefits from the
relief that it used to secure. If that property ceases to be habitable
for any reason and is therefore no longer subject to empty property
relief, would it cease to be leviable for BRS if it ceased to be
leviable for normal business property
rates?
John
Healey: I think that the circumstances of the
property—the hon. Gentleman describes them as
“habitable”—mean that it would not be eligible for
empty property relief. I think he means that, as an empty property, it
would not be liable for business rates rather than for the relief. I
shall double check this, but essentially our approach is that if a
property is liable for business rates and falls within the liability
criteria for business rate supplement, the supplement follows the
business rates liability. Therefore, if the empty property is no longer
liable for business rates, it will no longer be liable for business
rate supplement. We have tried throughout the Bill to follow a
consistent principle, as I have explained to the Committee before,
building the supplement on the basis of the business rates system and
the liabilities in it.
Question
put and agreed to.
Clause 13
ordered to stand part of the Bill.
Clause
14Chargeable
amount:
supplementary Question
proposed, That the clause stand part of the
Bill.
John
Healey: The clause may seem inconsequential, particularly
as “supplementary” is in its title, but it is important
for this reason: subsection (6) places an upper limit on the multiplier
for any single BRS imposed by a levying authority of 0.02, or 2p in the
pound of rateable value. That is where the cap will be applied.
Subsection (7) places the same overall upper limit on all business
rates supplements imposed by a levying authority in a financial year if
there is more than one. Finally, in addition, subsection (8) provides
that, where a levying authority levies in a year a supplement or
supplements that are lower than the overall 2p ceiling, individual
supplements cannot increase above the amount specified in the final BRS
prospectus for the year, or in line with a variation under clause 10.
Those are important points to put on the record, and I hope that they
are helpful to the Committee.
Question
put and agreed to.
Clause 14
ordered to stand part of the Bill.
Clause
15BRS
relief Question
proposed, That the clause stand part of the
Bill.
John
Healey: Clause 15 allows levying authorities to grant
relief on the payment of business rate supplements—a matter that
we touched on in earlier discussions. When a levying authority decides
to grant BRS relief, subsection (2) provides that the chargeable amount
must be calculated in accordance with the rules set by that authority.
That gives a levying authority flexibility to decide precisely
how the relief should be applied. It could set a threshold for BRS
liability that was higher than the £50,000 rateable value
prescribed by the regulations under clause 12, or it could
introduce a taper, applying for example a multiplier of 1p for
properties with a rateable value of less than a set amount and 2p for
those with a rateable value of more than that amount. Another approach
enabled by the flexibility in the clause is to phase in a BRS over a
number of years, so that, for example, a 0.5p multiplier is
introduced for the first five years of a project, a 1p multiplier for
the next five years, and a 2p multiplier for the years after
that. Finally,
subsection (3) sets out the conditions that must be met before the
relief may be applied. The relief can be based only on rateable value
and it must be applied uniformly to all types of hereditaments and
owners or occupiers. A levying authority could not apply relief only to
warehouses or certain types of retail outlets. That ensures consistency
and fairness across the BRS area.
I hope that,
on the basis of those remarks, members of the Committee will now allow
the clause to stand part of the
Bill.
Robert
Neill: I just want to give the Minister the opportunity to
come back to the point that I sought to raise earlier. I am grateful
for what he says about the flexibility measures—the taper and
the threshold setting—that are intended to be given in the form
of reliefs. Perhaps the Minister in his reply will pick up the point
that I sought to raise via the hon. Member for North Cornwall. When the
right hon. Gentleman says that under this provision the local authority
will be able to set a threshold that is higher than £50,000, is
that without prejudice to the statement on page 14 of the impact
assessment: “To
provide consistency this threshold will be standardised across
England”? Is
it the case that the minimum guaranteed protection—I see nods
from those who advise the Minister—is £50,000 but that a
local authority will have the flexibility to increase that protection
if circumstances in its area so warrant? Such recognition of the
situation would be useful and would come as some reassurance on that
point.
John
Healey: I apologise to the hon. Gentleman. To be honest I
did not pick up that point because I thought that it was evident in
what I was saying. We want to ensure a base consistency and will
legislate for that threshold. The Bill provisions allow a levying
authority to set thresholds that are higher than that £50,000
rateable value, should it decide that that is appropriate. The hon.
Gentleman quoted accurately from the impact assessment: it does refer
to England. The Bill would require Welsh Ministers to set an
appropriate threshold for Wales, similar to the way in which under
regulations we set a threshold of £50,000 for any BRS in
England.
Robert
Neill: I am sorry if I was being a hard-headed lawyer in
pinning the Minister down on that
point. Question
put and agreed
to. Clause
15 ordered to stand part of the
Bill.
Clause
16Interaction
with BID
levy Robert
Neill (Bromley and Chislehurst) (Con): I beg to move
amendment 30, in
clause 16, page 11, line 37, leave
out subsection (1) and
insert— ‘(1) Where a person
is, by reference to a hereditament, liable for BID levy in respect of
all or part of a financial year in respect of which the person is, in
relation to that hereditament, subject to a BRS imposed by the
authority, the chargeable amount payable in relation to the BRS shall
be offset in accordance with subsection
(2).’.
The
Chairman: With this it will be convenient to discuss the
following: amendment 31, in clause 16, page 11, line 43,
leave
out— ‘to
the extent specified in the
rules’. Amendment
32, in
clause 16, page 12, line 4, leave
out ‘subsection
(4). Amendment
17, in
clause 16, page 12, line 8, leave
out paragraphs (b) and
(c). Amendment
33, in
clause 16, page 12, line 9, at
end add— ‘(5) This section
does not apply to the Crossrail
project.’. New
clause 1—BIDs: supplementary
provisions ‘(1) The 2003 Act is
amended as follows. (2) After
section 41
insert— “41A
Additional arrangements where business rate supplement
imposed (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 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) In
section 46(1) (description of non-domestic ratepayers liable for BID
levy to be specified) insert at end “, and, where applicable,
the description of property owners who are to be
liable. (4) In section 49 (BID
proposals) after subsection (2)
insert— “(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.” (5) In section 50
(approval in ballot) after subsection (6)
insert— “(7) A
property owner BID levy is not to be regarded as approved by a ballot
held for the purposes of section 49(3) unless the two conditions set
out in subsections (2) to (6) are
satisfied.” (6) In
section 55(2) (regulations about
ballots)— (a) in
paragraph (b) after “ ratepayers” insert “and
property owners”,
and (b) after paragraph (h)
insert— “(i)
enabling the billing authority to construct a list of all property
owners in the BID area for the purposes of holding a property owner
ballot and
billing.”’. Amendment
45, in title, line 3, after
‘development;’, insert
‘to make provision about business
improvement districts in consequence of the imposition of a business
rate supplement;’.
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