 House of Commons |
Session 2008 - 09 Publications on the internet General Committee Debates Business Rate Supplements Bill |
The Committee consisted of the following Members:Alan Sandall, Gosia
McBride, Committee Clerks †
attended the Committee Public Bill CommitteeTuesday 3 February 2009[Mr. Peter Atkinson in the Chair]Business Rate Supplements BillClause 24Power
to cancel a
BRS Amendment
proposed (29 January): 20, in clause 24, page 15,
line 20, at end insert ‘, and where it does
so it— (i) must direct the levying
authority to refund the sums received by it in respect of the BRS or,
where the levying authority is not a billing authority, direct it to
return to a billing authority that is a lower-tier authority in
relation to sums transferred to it by the billing
authority, (ii) must direct a
billing authority that is a lower-tier authority in relation to the
levying authority to refund the sums collected by it in respect of the
BRS but not transferred to the levying authority,
and (iii) must direct a
functional body to transfer to the levying authority sums received by
the body in respect of the BRS but not used by it,
and’.—(Dan
Rogerson.) 10.30
am Question
again proposed, That the amendment be
made.
The
Chairman: I remind the Committee that with this
we are discussing amendment 21, in clause 24, page 15,
line 21, leave out paragraphs (b) to
(d).
The
Minister for Local Government (John Healey): Welcome back
to the Chair, Mr. Atkinson. I also welcome members of the
Committee back to the Bill scrutiny
proceedings. I
was not certain whether the hon. Member for Northampton, South had
finished his intervention when we adjourned last Thursday, but I have
checked the record and it appears that he had. I get the hon.
Gentleman’s point—I get it every time he makes
it—and he will find that there is provision, particularly in the
guidance, for encouraging local authorities to deal with businesses
that have a particular interest in a project’s success
throughout its delivery life, not just during the period leading up to
the potential introduction of a business rate supplement that helps to
pay for
it. The
hon. Member for North Cornwall explained that amendment 20 would
require the Secretary of State to give directions that provide refunds
to ratepayers in areas where she exercises her power to cancel a BRS,
but I think he understands that the Bill already gives the Secretary of
State the power to do that. The Bill therefore clearly contains the
principle that that may well be the appropriate and right thing for the
Secretary of State to do.
My concern
about the amendments is that there could be wide-ranging consequences ,
probably unintended by the hon. Gentleman. The principal risk is that
the Secretary of State would find it more difficult to exercise her
power to cancel if refunds were required and automatically followed,
whatever the financial consequences for the local authority and
whatever stage a project and payments under a BRS had reached. The
provision is therefore designed to ensure that there are safeguards
that acknowledge the concerns that the hon. Gentleman and other right
hon. and hon. Members have voiced on behalf of business interests, as
well as the practicalities for local authorities and
ratepayers. The
Secretary of State has to balance those issues as part of her job and
she owes public law duties not only to ratepayers, but to local
authorities. If the amendment were made and there were an automatic
right to full refunds of all amounts paid, it could prove in practice
more difficult to cancel a BRS in a reasonable
way. Dan
Rogerson (North Cornwall) (LD): I am grateful to the
Minister for the way he has considered the intention behind my
amendment. The principle that I wish to stress is that available
surplus moneys—moneys that have not been spent up to the point
at which a scheme fails or draws to a halt, or the Secretary of State
needs to intervene to force that to happen—could be paid back,
rather than moneys that have already been spent up to that point being
refunded. It is clearly not my intention to penalise a local
authority’s taxpayers for liabilities that have already been
incurred, but I would prefer that any surplus moneys available be sent
back, rather than sit in an account and used for some other
purpose.
John
Healey: I am grateful to the hon. Gentleman for that
clarification of his intent, but it is not entirely captured in his
amendment, which is what I am addressing. The power and principle that
any surplus funds could be directed towards refunds are clearly
established in the Bill. By taking away the Secretary of State’s
power to act in a way appropriate to particular circumstances that are
impossible to anticipate in detail from our vantage point, the
amendment could have the unintended consequence of reducing some of the
protection that the hon. Gentleman would like for the interests of
businesses that he wants to promote. It might create further
difficulties and make those consequences wider ranging if the refund
was automatic in the event of any BRS cancellation.
The clause
also provides the Secretary of State with a power to take a number of
steps before a full-blown cancellation of a BRS—including
refunds of surpluses or refunds without a cancellation—so that
the potential for a refund does not depend on the cancellation of a
BRS. My right hon. Friend the Member for Greenwich and Woolwich was
understandably concerned about that, as it has the potential be an
almost nuclear power. He was concerned that it might be used not in a
measured way, but to remove a BRS at some point in the
future.
I accept the
point that the phrase in the clause, “materially
inconsistent” with the prospectus, is not defined, but it means
that a levying authority has made more than a minor deviation from the
terms of its prospectus. If, when the project was undertaken, the
levying authority did something extra that had a relatively
small effect on the cost, but no effect on the level of the BRS, it is
very unlikely that that would be considered materially inconsistent and
that it would be sufficiently strong grounds for the Secretary of State
to consider a full-blown cancellation of the BRS. However, if a levying
authority diverted revenue from the BRS from one project to another,
clearly that might be materially inconsistent. From the
Committee’s point of view, at this stage, any sort of judgment
on intervention, including cancellation, would be based on a test of
fact and a test of
degree. Mr.
Nick Raynsford (Greenwich and Woolwich) (Lab): I am
grateful for my right hon. Friend’s explanation of the way in
which the phrase “materially inconsistent” is likely to
be interpreted in practice. The worry that I expressed in our last
sitting was that subsection (2)(c) may relate to information provided
in the course of consultation. I gave the example of what might be said
by a council officer during a consultation, which could then be used by
those unsympathetic to a BID to seek perhaps even judicial review, on
the ground that something was said that was materially inconsistent
with the objectives, even if that had not been confirmed in writing. I
do not want to push that point too hard, but I am nervous. I hope that
my right hon. Friend will reflect on whether the phrasing is
appropriate to ensure his objective, to which I entirely subscribe, or
whether there might be
loopholes.
John
Healey: I am grateful to my right hon. Friend for not
wishing to press the point too hard. He does not need to because I will
move on to that. Having dealt with the bigger context and what are
likely to be the core tests in the individual circumstances which any
Secretary of State might need to bring to bear, I take the point that
he has raised regarding subsection (2)(c) and will consider it further.
If I conclude that any clarification is necessary, either in the
legislation or in the guidance, I will provide it, but I am grateful to
him for raising the matter.
In
summary, there are a number of other steps short of the cancellation of
a BRS that the Secretary of State could take if she believes that there
is a material inconsistency in relation to a BRS and its use. The
clause allows the appropriate flexibility for action in specific
circumstances and, of course, there will be a range of levels of
intervention, as hon. Members will be aware, short of the Secretary of
State having to step in if there is concern or evidence that a local
authority is going off track in its use of the BRS. Those are generally
the established support and intervention powers that are available to
local and central Government in a wide range of
circumstances. I
hope that my remarks have been helpful to the Committee and that the
hon. Member for North Cornwall will not need to press amendment 20. I
commend the clause to the Committee and I hope that hon. Members will
allow it to stand part of the
Bill.
Dan
Rogerson: I welcome you to another morning’s
entertainment watching our deliberations from the Chair, Mr.
Atkinson.
I do not
intend to press the amendments to the vote. I am somewhat reassured by
the Minister’s saying that flexibility is not an indication that
money would not be
returned to bill payers as a matter of course and that the aim would be
to return it wherever possible, although there might be occasions when
that would not be appropriate. I am sure that the matter will receive
further consideration—perhaps the other place will want to
consider it, unencumbered by any
interests. I
hope that the Minister has taken on board the Opposition’s
concerns about possible problems were money to be held back following
the cancellation of a scheme. There is an indication on the record that
the aim would be to return money as a matter of course, although some
flexibility may be necessary. I therefore beg to ask leave to withdraw
the
amendment. Amendment,
by leave, withdrawn.
Clause 24
ordered to stand part of the Bill.
Clause 25Provision
of
Information Question
proposed, That the clause stand part of the
Bill.
Mr.
Philip Dunne (Ludlow) (Con): It is a pleasure to welcome
you back to the Committee, Mr. Atkinson, in what might be
our final
sitting. If
I may, I will reiterate the point that I made on the audit of
information under the clause. I have not tabled an amendment, but I ask
the Minister to consider on Report expanding the remit of the clause to
place on a levying authority that chooses to introduce the BRS an
obligation to make information on the progress of the project available
to the public. That could be done not only through the
authority’s accounts, but through a statement that could be made
available to the BRS payers—say, annually—so that there
was accountability to those payers for the levy that they have been
charged.
John
Healey: The hon. Gentleman made that case clearly and
strongly in previous discussions. Clause 25 is perhaps not the most
appropriate point to consider that issue or such amendments, not least
because it provides for billing authorities in two-tier areas to make
information available to the levying authority where that is necessary
for the administration of the BRS. However, in general terms, as I
think my hon. Friend the Under-Secretary has indicated to him, our
basic approach in framing the legislation is to look to any potential
levying authority to prepare projects and the actual use of a BRS in an
open and consultative manner. The general question of what should be
required of levying authorities in carrying out that responsibility if
they choose to exercise the powers is dealt with in the draft guidance,
which is now out for
consultation. 10.45
am My
hon. Friend and I have listened carefully to the points that the hon.
Gentleman and other members of the Committee have made about the open,
consultative provision of information. We will reflect further on the
specific point that he has made, which essentially is to ensure that
that approach is continued once a BRS is introduced, and not just in
the period up to its potential introduction.
The clause, as
I explained briefly, allows the levying authority to gather the
information that it needs to fulfil its duties under the Bill, while
ensuring that the information that it gains from the billing
authorities cannot be exploited or misused, but is used only for the
particular purposes. The safeguards are in place, setting out clearly
that the levying authority can use the information only for the
purposes of the BRS and not for any other use, and that the information
cannot be disclosed to another authority for other, non-BRS-related
business. On that basis, I hope that members of the Committee will see
the importance of the
clause. Robert
Neill (Bromley and Chislehurst) (Con): I do not disagree
with the Minister’s comments, and I take his point about the
safeguards. However, subsection (3) makes provision for charging a fee
on a discretionary basis. Does the Minister envisage a covering of
costs by the billing authority? Since it is all council tax
payers’ money at the end of the day, I should imagine anyone
will welcome any degree of cost shunting between the two tiers of
authority. I hope that that will be made clear in the guidance, and
dealt with on a sensible
basis.
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