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Business Rate Supplements Bill

My Lords, I shall also speak to Amendments 37 and 42, which are grouped with Amendment 34. These amendments involve property owners in business improvement districts in areas where a business rate supplement is in place. I think that it would be helpful if I were to give a little bit of background first, so that noble Lords can consider the amendments in context. One of the recurring themes during the passage of the Bill in this House and the other place has been the important relationship between BRS and BIDs. The debates in both Houses have underlined the strong support for BIDs. There is a genuine desire across all parties that BIDs should continue to thrive after the introduction of BRS. I understand that one of the main concerns of practitioners of BIDs and business supporters is that, if BID levy payers are faced with a BRS on top of any existing levy, ratepayers may be inclined to vote against proposals when they come up for renewal. Fourteen out of the existing 20 BIDs in London are due for renewal ballots by 2012, so there is real concern that the introduction of BRS could have a negative impact on existing and future BIDs. As a response to these concerns, Nick Raynsford, the right honourable Member for Greenwich and Woolwich, tabled amendments during the Committee and Report stages of the Bill in the other place to strengthen the role of property owners in BIDs and to enable the contributions to the BID to be spread between occupiers and owners, providing an effective offset for occupiers against their BRS liability. Under the current BID arrangements, property owners may make voluntary contributions to BIDs, but they are not entitled to vote in a BID ballot and there is no way of ensuring that, if some property owners in an area make voluntary contributions, others do as well. On 18 May, the noble Baroness, Lady Valentine, tabled amendments in Grand Committee on the same issue. The purpose of those amendments was to enable BID proposers or companies to decide whether property owners should be involved in, and have a chance to vote on, BID proposals for an area. It became obvious from the debates in Grand Committee that this is not a new idea. I am grateful to the noble Lord, Lord Jenkin, who is in his place, for reminding the House that the issue of property owner involvement not only arose during the passage of the Local Government Act 2003—the Act that sets the framework for the current BIDs system—but also featured in a Private Member’s Bill that he introduced in 1997. The amendments that I will move today deal with the same broad issues that featured in the earlier amendments tabled by Nick Raynsford in the other place and by the noble Baroness, Lady Valentine. The amendments make arrangements for a new type of BID, to be known as a BRS BID. This is to distinguish it from the current BID arrangements. This new type of BID could be established in areas where both a BID and BRS exist and would allow for the owners of property to be involved in BID arrangements. It will be for those proposing BIDs or existing BID companies to decide whether they wish to involve property owners in their BID arrangements—I emphasise that it will not be compulsory. A BRS BID could fund the same project as the main BID. Revenues from property owners could be used as additional income for the BID project or they could be used to offset the contributions of those ratepayers who are liable for both the BID levy and the BRS. Alternatively, the revenue stream from property owners could be used to fund a different project, quite separate from the BID project. As is the case for BIDs under the current arrangements, it will not be possible for a BRS BID to be established unless there has been a successful ballot on the proposals. I am sure that the House will appreciate that these amendments are not quite the end of the story. Involving property owners in BIDs raises a number of complex issues. That is why the new schedule contains a number of powers that will allow the Government to include the detail on the BRS BIDs in secondary legislation. The regulations will deal with issues such as who should be considered a property owner, how the rateable value of non-domestic properties should be attributed to property owners for the purposes of the double-lock ballot, and the detailed arrangements for ballots. In addition, I noted from Grand Committee that the noble Lord, Lord Bates, raised concerns regarding possible cost-shunting between owners and tenants, a concern that the Government share. The noble Baroness, Lady Valentine, when moving her amendment in Grand Committee on the involvement of property owners in BIDs, said that she thought that this would not be a significant risk. Her view was based on the experience of property owners making voluntary contributions under the existing BID arrangements, which she did not feel there was a need to address in the Bill. While I am encouraged by her experience on this issue in the context of voluntary property owner contributions, I recognise that there is some disquiet on the matter. As such, it would have been irresponsible of us as a Government to ignore these concerns. We have therefore taken a regulation-making power in the new schedule so that we can address the issue through secondary legislation if the need arises. The amendment to Clause 29 provides that several of the powers in the new schedule will be subject to the affirmative resolution procedure. This covers the important issues—for example, the rules on ballots and how votes may be weighted. We will of course engage closely with stakeholders as we develop our proposals for secondary legislation. There is one specific point that I should raise before I conclude. I have already said that these amendments can apply only in those areas where a BRS is in place. I understand that there was a debate in Grand Committee about whether it would be possible to extend these provisions to BIDs in all areas. It might be helpful to clarify the position on that. We have pursued this matter with the Lords Public Bill Office, which has confirmed that amendments dealing with the inclusion of property owners in BIDs outside a BRS area would not be possible. The term that the Public Bill Office uses is whether an amendment would be "relevant". The BRS Bill has a single purpose, which is to introduce the BRS scheme. The Bill refers to BIDs, but only to the extent that they are affected by the introduction of BRS. However, any stand-alone amendments to the BIDs regime unconnected to the introduction of BRS would not be considered "relevant". I hope that, with that explanation and with the amendments that I have brought forward, the House will feel that it is able to support the changes that we have made. Accordingly, I beg to move.