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Business Rate Supplements Bill

The amendments in this group were Government amendments, tabled in the other place. They relate to property owners in business improvement districts in areas where a business rate supplement is in place. The amendments arose as a result of debates very early on in the life of the Bill, and I hope that hon. Members will find it useful if I take a step back for a moment and recap on how the amendments emerged. That will help to provide some context, so that hon. Members can see the rationale for the approach taken in the amendments. One of the things that struck me as I familiarised myself with the issues raised by the Bill is the genuine cross-party support for business improvement districts, and that has been reinforced this afternoon. There was real concern that the introduction of the BRS might have a negative effect on the future viability of BIDs. I understand that one of the main concerns of BID practitioners and business supporters of BIDs is that if BID levy payers face a BRS on top of any existing levy, rate payers may be inclined to vote against BID proposals when they come up for renewal. That is a particular issue in London, where, I gather, 14 of the 20 existing BIDs will come up for renewal ballots by 2012. As a way of addressing those concerns, my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), whose expertise on such matters is legendary, tabled amendments in Committee and on Report to give property owners more of a say in BIDs and to enable the contributions to a BID to be spread between occupiers and owners. That could act as an effective offset for occupiers against their BRS liability. Although those amendments were withdrawn, they provided the opportunity for the House to have a meaningful debate on the issue, and the previous Minister for Local Government, my right hon. Friend the Member for Wentworth (John Healey), agreed to discuss the matter further with interested parties. Baroness Valentine tabled amendments on the same issue in Grand Committee in the other place on 18 May. 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. The amendments moved by the Government in the House of Lords on Report addressed the same broad issues as the amendments tabled by my right hon. Friend the Member for Greenwich and Woolwich and Baroness Valentine. The amendments that we are considering make arrangements for a new type of BID, to be known as a BRS-BID. It has that acronym to distinguish it from the current BID arrangements. That 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. Where they wish to, they can, but it will not be compulsory to do so. The amendments enable revenues from property owners to be used as additional income for a BID project, or to be used to offset the contributions of those rate payers who are liable for both the BID levy and the BRS. The amendments also offer flexibility; the revenue stream from property owners could be used to fund a different project, quite separate from the BID project. Where BID companies or those proposing BIDs elect to involve property owners, there must be a ballot of those potentially liable for the levy. It will not be possible for a BRS-BID to be established unless there has been a successful ballot on the proposals. That mirrors the current arrangements for BIDs. In crafting the amendments, we have taken on board many of the views expressed both in this House and the other place, and the views expressed by those with an intimate knowledge of the existing BID system. However, property owner involvement in BIDs is new territory, and it raises a number of complex and detailed issues that will need to be resolved before BRS-BIDs can come into being. The new schedule 2 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. We will consult on the detailed arrangements needed to enable BRS-BIDs to be put in place. One concern that was raised yesterday in the other place was about the impact that the amendments could have on billing authorities, which will play a key part in BRS-BIDs. I can reassure the House that the consultation that we will carry out will be accompanied by an impact assessment, which will address the potential impacts on different sectors, including billing authorities. The consultation will give stakeholders the opportunity to make their views known, including on the impact assessment, and we will consider carefully all responses before finalising the regulations that are needed before BRS-BIDs can come into operation. I should clarify one specific point. I have already said that the amendments can apply only in those areas where a BRS is in place. There has been a debate in the other place about whether it would be possible to extend the provisions to BIDs in all areas. I understand the argument that, if these amendments are good enough for BRS areas, they should be good enough for areas where a BRS is not in place. It may be helpful if I clarify the position. We have pursued the matter with the House authorities, who have confirmed that it would not be possible to include amendments to the Bill to deal with the inclusion of property owners in BIDs outside a BRS area. The issue centres on whether an amendment would be relevant. The 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. The principle behind the amendments was warmly welcomed by the other place and was widely supported by the House during the earlier stages of the Bill. The Government listened to the representations that were made, both from within Parliament and from outside, and agreed with them. That is why we introduced the provisions in the other place. Taking that into account, and with the explanation that I have given, I invite the House to agree to the amendments.