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Business Rate Supplements Bill

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 building 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 required to reimburse the billing authority. Amendment 36 would enable billing authorities to recover the costs they incur in preparing for the collection and recovery of BRS. 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.