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I understand the anxiety of the noble Lord, Lord Jenkin, about the mechanics, problems and burdens of implementation. If he asks me to give some assurance that there will be no burdens, of course I cannot do so.
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What can I say to noble Lords? I am not prepared to withdraw the amendments because we have not broken any issue of timetable. The principle behind these amendments is not only accepted in the House. The Government were persuaded of the principle and not the other way around. In responding as we have—on Report, at the proper stage—we are only fulfilling our duty. I understand that we will sustain a risk and I will enjoy the debate that I probably have to look forward to at Third Reading, when some anxieties may still be expressed on this matter. I am not prepared to withdraw amendments that are in line with what I detect the House to support in principle, and to which the Government are, in principle, giving effect.
A great deal of the noble Lord’s anxieties concern the mechanics of implementation. I agree with him that it is important that local authorities should have a full understanding of how the provision is meant to work. My department will give its fullest support to local authorities in working through these issues. However, we are not talking about implementation next week. The Bill must proceed to Third Reading, be considered further by the Commons and receive Royal Assent. The noble Lords, Lord Tope and Lord Bates, referred to regulations. We hope to deliver these in the autumn. However, that timetable is conditional on the fullest consultation with those who will have to give effect to this matter. Of course, we will consult on these matters and we have several months in which to do so. Given what the noble Lord, Lord Jenkin, his noble friends and the noble Lord, Lord Tope, indicated, I have no doubt that views will be expressed fairly freely by those who will have to implement the legislation. However, our task today is to produce a Bill that gives effect to the will of the House, as the House sees the issues of principle.
I venture to say that although issues relating to the mechanics of implementation are not unimportant—I do not seek to dismiss them—if I thought that the Bill would arbitrarily impose duties for the day after tomorrow which people could not possibly fulfil, of course I would change my perspective on it. But we have time to deal with these issues. I emphasise that we have support in both Houses. I emphasise again that the British Property Federation fully supports these amendments. The noble Lord, Lord Jenkin, has a very proud history of work in this area and recognises that the principle that we are putting forward is one to which he has long been concerned to give effect.
I recognise that it is a function of diligent and effective opposition never to frustrate the will of a duly elected Government. However, sometimes it is proper for them to delay processes to enable further consideration to take place. We still have Third Reading
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Lord Jenkin of Roding: My Lords, before the noble Lord sits down, does he recognise that if this amendment is included in the Bill—despite our arguing that it could be postponed until Third Reading and the Government making it clear that they will not do that—we shall have no alternative but to table amendments to it in order to bring it back at Third Reading? There is no debate to agree a clause or a schedule at Third Reading. Given the procedural rules of the House, we can achieve this only by tabling amendments. There may be quite a number of amendments because we will want to look at the individual clauses in the light of the advice that we will get between now and then on the practicability of the scheme which the Government have embodied in this complex schedule.
If the Minister recognises that that is the process towards which he is now steering us, all well and good, but he has to recognise that if the billing authorities, which will bear the whole burden of the ballots and of sending out the billing notices and so on, are to be satisfied that this is a workable scheme, then his officials and the officials of London Councils will have to work very hard over the next few days in order to reach that position. That is where we have got to. We will have to do it by amendment and not by being able to discuss the clause.
Lord Davies of Oldham: My Lords, I understand the position but the noble Lord, Lord Jenkin, has never avoided hard work and neither have the Government; nor should others in bringing benefits to the communities that we serve.
4 pm
Clause 22 : Administrative expenses
36: Clause 22, page 14, line 26, after “incurs” insert “(including expenses incurred in preparation for collection or recovery)”
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Lord Tope: My Lords, Amendment 36 stands in my name and that of my noble friend Lady Hamwee. I have already declared my interest but I think that I should make it specifically clear here. I am a member of the executive—known elsewhere as the cabinet—in a London borough council which will be directly affected by these proposals.
The purpose of the amendment is to make it absolutely clear and beyond doubt in the Bill that the subsection in Clause 22 that refers to the costs of collection or recovery also includes the set-up costs—the costs of implementing this procedure. As has already been said, London borough councils are the billing authorities and the GLA is the levying authority. We know that if and when the Bill is enacted, as I am sure it will be, London borough councils will be billing within a very short space of time. Indeed, the president of London Councils, the noble Lord, Lord Jenkin of Roding, has already made clear the considerable anxiety—certainly not unwillingness; on the whole we welcome this—in the organisation about the very short timescale for implementing all this and also about the additional costs of doing so. Most London borough councils are what are called “floor authorities”; in other words, although their grant entitlement may increase, the actual money that they receive will not. They will therefore be under particularly great financial pressure in the coming years, given the financial outlook, and that can only increase anxiety concerning the costs that will be incurred.
It is stated in the Bill, and reasonably so, that the costs of collection or recovery will be met from the levy raised, but it is not clear—and we want it to be made clear now—that the initial costs, which will probably be quite considerable, in setting up and initiating this proposal will also be met in that way. That can be made clear beyond doubt by including this amendment in the Bill.
A further issue arises. There may well be, let us say, differences of opinion between the levying authority—in this case, the GLA—and London borough councils collectively or even individually as to what are reasonable costs either of recovery and collection or, perhaps even more likely, of setting up the process. How does the Minister foresee those differences ultimately being resolved? I am sure he will say that with good will they should be resolved between the levying authority and the billing authorities. Of course that is the case, but I think that those of us who are realistic know that that is not always achievable. Does he foresee any role for the Government in quickly resolving any outstanding disputes about those additional costs?
I hope that the Minister can give us some comfort on this. There is considerable anxiety among London councils about the very short timescale for resolving all these issues, for carrying out the implementation and for recovering in full all the costs involved in so doing.
In moving this amendment, I have spoken specifically and exclusively about London because we know, without doubt, that London authorities will be the pathfinders for this. It will happen in London before it happens anywhere else. They are pathfinders, the only pathfinders. It will apply, in due course, to all other parts of the
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Lord Bates: My Lords, I am not quite sure whether I should support this measure. The noble Lord managed to inspire me as part of his previous contribution. At this stage of the Bill, reaching Clause 22 on administrative expenses, he has probably done something towards the opposite in terms of talking through on this amendment on collection or recovery.
There is an entirely serious point wrapped up in the amendment. It gives us an opportunity to talk about what the administrative costs would be. Clause 22(3) states:
“If the chargeable period of a BRS begins, or a variation of a BRS takes effect, later than the first day of a financial year, the levying authority may not, in respect of that financial year, act in reliance on provision made by virtue of subsection (1)”.
That will therefore probably be coterminous with the collection period for the business rates in general. As boroughs are the collecting authority, one would hope that efficiencies would be introduced so that costs could be minimised. Therefore, the maximum amount is made available to go into the given project by combining business rates into one bill. I am happy to listen to what the noble Lord says in response to that point, and I will lend our support if needed.
Lord Davies of Oldham: My Lords, I am grateful to the noble Lord, Lord Tope, for moving the amendment. It enables me to clarify the issue that he raised, which the noble Lord, Lord Bates, also emphasised. It is an important issue and I recognise it to be so. It enables me to step a little way back from looking like I had no concern about billing authorities with regard to the previous amendment. I wanted to defend the positions set out in the government amendments. However, in representing that argument, I did not want in any way to present the problems facing the billing authorities as not being ones that the Government need to consider.
I want to reassure noble Lords that we recognise that certain costs could initially fall on billing authorities. They do not want to be out of pocket for those costs. Clause 22 of the Bill gives the Secretary of State the power to authorise the billing authorities to use a prescribed proportion of BRS revenues to meet their collection and enforcement expenses where the levying authorities levy the BRS for the beginning of the financial year. That is what we expect to happen in most cases. The noble Lord, Lord Bates, said that he hoped that it would happen in all cases. That might be expecting a little too much. He is right, however, that we would want that to be the norm.
Where BRS is levied part of the way through a financial year, these costs cannot be recovered from BRS revenues. Instead they would have to be met by the levying authority. Clause 22 provides that the Secretary of State may make regulations prescribing the proportion of BRS revenues that may be retained by billing authorities when the supplement is collected as part of the normal billing round. Where costs have to be met by the levying authority, the Secretary of State may cap the amount that the levying authority is
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We have issued a consultation paper with our proposals for secondary legislation, which will clearly be needed to enable BRS to be levied. The consultation paper covers the arrangements for the collection and enforcement of BRS, including the costs of collection, and envisages that those costs will cover set-up costs as well. The consultation paper floats different options for calculating the costs of collection. It invites views on whether those costs should be a fixed percentage of the annual total amount of BRS to be collected by the billing authority or whether they should be a fixed amount. A third option is for it to be agreed locally between the levying authority and the billing authority, subject to an upper limit to provide reassurance for business. The noble Lord, Lord Tope, suggested that there might be agreement between the authorities on that, although he may be sceptical of it being obtained in every case.
Our intention, subject to the outcome of that consultation, is that the billing authority should be able to recover its reasonable costs incurred in preparing, collecting and enforcing BRS. The three-month consultation period will give stakeholders the opportunity to express their views on those options or to come forward with alternative ways to address the issue—or any of the proposed arrangements for administering BRS. That gives scope for the point emphasised in the previous amendment: we will not set out to implement the legislation until we have had that full consultation.
I should draw attention to another provision where costs may initially fall to the billing authority as part of the preparatory work involved in establishing a BRS. Clause 25 enables levying authorities to obtain certain information from billing authorities for the purposes of setting a BRS and drawing up a prospectus. Such information may include the addresses and rateable values of non-domestic properties in the area. The costs of providing that information may vary according to the type of information requested by the levying authority. We have therefore provided in Clause 25(3) for billing authorities to make a charge for providing that information, but it will be for the billing authority to decide whether it would be appropriate to make such a charge.
I therefore hope that the noble Lord will accept that we have considered the issues. In discussing the previous group of amendments, I did not intend to be cavalier about implementation—and I hope that I was not—in seeking to defend the amendments. This amendment has given me the chance to show that the Government have thought about the issues. There will be full consultation. There will be options with regard to collection. I hope that the noble Lord feels that he can safely withdraw his amendment.
Lord Tope: My Lords, before the Minister sits down, I am very grateful to him for that response. We have already made it clear that time is now very tight. Can he say more specifically about when the Government expect to be able to give their response to the consultation? He said in reply to the noble Lord, Lord Jenkin, “the autumn”. We know from experience that autumn, like
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Lord Davies of Oldham: My Lords, the noble Lord appreciates that we are offering a period for the consultation process. He is asking me how quickly the Government will be able to be definitive in their conclusions on that. We all have an interest in getting the legislation effective as early as possible.
Lord Davies of Oldham: My Lords, autumn is later than the summer, and the noble Lord knows why it is not possible for us to deliver that this summer. Given the period of consultation we need and the necessity of evaluating that consultation, autumn is the best that I can do for him.
Lord Tope: My Lords, I am grateful to the Minister for giving me the reply I expected. It was worth a try. With that, I beg leave to withdraw the amendment.
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