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Business Rate Supplements Bill

I will ascertain from my right hon. Friend's office when a response will be forthcoming, but I am sure that today's debate will constitute an element of that response. We do not want to limit the BRS as really only an attractive option for use as the sole funding mechanism for a project. That limits levying authorities in terms of the amount of revenue they can raise, and means that the BRS cannot be used in conjunction with other funding streams to fund larger, more ambitious projects aimed at promoting local economies. The effect will be particularly pronounced outside London. Properties in the London typically have higher rateable values than those outside the capital. Under the current proposals, properties in England with a rateable value of £50,000 will be exempt from paying the BRS. That threshold will exclude a higher proportion of properties from paying the supplement outside London than in the capital, which means that outside London there is an increased likelihood that the BRS will form part of a wider funding package. Therefore, the difficulty created by the ballot in cases in which the supplement will form part of a wider funding package will be more pronounced outside the capital. That makes the BRS less attractive as a funding mechanism to promote economic development outside London. In requiring a ballot in certain circumstances, the White Paper and the Bill go significantly further than either the Lyons review or the Communities and Local Government Committee. Both recommended that the decision to hold a ballot should be left to the levying authority. For the reasons that I have just given, we do not think that a ballot should be required in all cases. We consider that it should be required only in cases in which the supplement will fund more than one third of the total projected costs. However, because Members in both Houses have expressed real concern that there should be genuine engagement of local businesses before a supplement is introduced, we propose that in cases in which a ballot is not required by virtue of the fact that the supplement is expected to fund less than one third of the total cost of the project, the authority should be required to set out the BRS prospectus whether or not it intends to hold a ballot, and—importantly—to explain why it proposes that course of action. I want to make it absolutely clear that the Government do not consider that a ballot should always be held. The amendment requires authorities to state why they think a ballot should, or should not, be held. It does not ask them to justify their decision only if they decide not to hold a ballot; there is not, as such, a presumption of a ballot. For instance, the BRS might be used to fund a small proportion of a project over a short period such as six to 12 months. In such cases, the costs of running a ballot might be considered to be disproportionate, given the contribution that would be made by the supplement. If an authority wanted to hold a ballot in such cases, taxpayers, including local businesses, would justifiably be interested in its reasoning. The amendment provides important transparency in the decision-making process relating to ballots. We think it right for levying authorities to have discretion on whether to hold a ballot when the supplement is expected to fund less than one third of the total cost of the project. However, we acknowledge that the decision-making process must be transparent to those who will ultimately be liable for the supplement. The amendment will give businesses confidence that the decision-making process on ballots will be made clear. It allows levying authorities flexibility to do the right thing by their communities while ensuring that local businesses understand why the authority has taken a particular course of action. For those reasons, I invite this House to disagree with the Lords amendments, and commend the Government's amendment is lieu to the House.