Business Rate Supplements Bill

My Lords, this amendment deals with a wider issue than that which we have just dealt with on the amendment tabled by the noble Baroness, Lady Hamwee. Here, we are concerned with the administration by the billing authorities of the combination of the business rate supplement and the business improvement districts levy, which can be accepted by a local authority as an addition to the BRS that it will raise. This has a long history, and I do not want to detain the House, except to say that the issue raised is the addition of owners of property to occupiers who would be liable for a business improvement district levy. This goes right back to the time when I introduced a Private Member’s Bill in this House to introduce BIDs. We took it right through this House back in the previous century, but it was killed in the end when the Bill reached another place, notwithstanding that it had the support of all sides of this House. That was a matter of great disappointment to me. The Local Government Bill 2003 was introduced by the Government, and the noble Lord, Lord Rooker, who I am delighted to see in his place this afternoon, introduced Part 4 of that Bill. Lo and behold, what did it include?—my Bill on BIDs, in effect. It was all there. So BIDs are incorporated in that 2003 Act. We are now concerned with those areas when the BRS is or may be levied where there are BID levies. This is a complex matter but it must be dealt with. At a late stage—between Committee and Report—the Government tabled a substantial new schedule, which is now Schedule 2 in the Bill before us. That was tabled towards the end of the week before Report and the weekend came in between when notably it is quite difficult to get hold of people to brief one. It had to be dealt with on Report on the immediate following Monday. Accordingly, the noble Lord, Lord Tope, then speaking on behalf of the Liberal Democrats, supported by my noble friend Lord Bates and myself, asked the then Minister, the noble Lord, Lord Davies of Oldham, if he might withdraw it so that we could have a proper briefing and then a discussion. The noble Lord said that he was not prepared to withdraw the amendment. As I warned the House at the time, we had no alternative but to table amendments to bring it back at Third Reading. I had a little difficulty in persuading the Public Bill Office that my amendment fell within the rules of amendments that could be tabled at Third Reading. However, when the Clerk in the Public Bill Office heard the full story of how we had reached that stage, he had no hesitation in allowing my amendment. All I can say is that the noble Baroness, Lady Hamwee, seems to have had to appeal to the usual channels before she managed to table her amendment. I did not have to do that. The Public Bill Office recognised the case that I was making. The previous amendment raised the question of the costs of billing authorities in collecting the levy where there was just the BRS. This amendment concerns both BRS and BIDs. The central purpose of the Bill is to provide an industrial and commercial addition to other funds to help to fund the Crossrail project in London. Of course, the powers go beyond London although we have been assured and reassured that there are no immediate intentions of any local authorities outside London to introduce BRS. In effect, we are discussing BRS and its relationship with the BIDs in London, of which there are quite a number. The question of adding the owners, for which there has been pressure since right back into the previous century, and to which the Government to their credit have now agreed, has been supported by a large number of influential interest groups, including the British Property Federation, the British Retail Consortium, British BIDs—the association of BID authorities—the Greater London Authority, London First and the New West End Company, which is a prominent BID in London. They have had legal advice on that. None of those bodies is a billing authority. In London, the billing authorities will be London Councils. Like the noble Baroness, Lady Hamwee, I am a joint president of London Councils, and I declare that interest. These bodies are anxious to know—I shall look for reassurance about this from the Government—whether they are going to have the time and have their costs met for dealing with this complex matter of levying bids from owners, as well as occupiers, in parallel to what they will be doing to levy the business rate supplement. They need to know now if there are any burdens, and, if so, whether the boroughs will be repaid for any additional work that they will have to undertake. In a sense, it is the same question that the noble Baroness, Lady Hamwee, asked on the previous amendment in relation to BRS—but this, of course, is in the more complex area of the BRS and BIDs. The local authorities have some evidence that it is in fact quite difficult for them to levy BID levies from owners. There are two or three authorities where that has been sought; one in Scotland, in Clackmannanshire, and one in London, the Better Bankside BID. It is quite difficult to administer the levy on owners, partly because it is actually quite difficult to trace who are the owners of properties at any particular time. It is difficult to get up-to-date information on landowners, which will of course be important. I apologise for taking a little time on this but I should like to look at the implementation issues in rather more detail. The Minister is the third we have dealt with on this Bill. The noble Baroness, Lady Andrews, introduced the Second Reading debate and dealt with the Committee stage; the noble Lord, Lord Davies, handled Report and, as he pointed out to me rather forcefully this morning, he is not handling Third Reading, so the noble Lord, Lord McKenzie of Luton, now finds himself in this slightly difficult position. The local authorities are faced with a number of issues as billing authorities. The point is that they are the billing and not the levying authorities; in London, the levying authority is the Mayor and the Greater London Authority. The first issue is the time that will be required for borough treasurers to deal with these matters. They need to know that they will have enough time in order to deal with this effectively by April 2010. This is already going to be a busy time for London authorities in relation to the national non-domestic rate; they will have to deal with revaluation, the new transitional relief scheme and the NNDR deferral. They are now being asked to add to this the problem of collecting both BRS and BID levies from an additional group of ratepayers—the people who are in the BID. The second issue is that will have to adapt their systems. The swift implementation for BRS in London means that London authorities as billing authorities will need to adapt their current systems in order to collect, administer and enforce the BRS in London. Software adaptations will be necessary; and as one who was cut off from e-mail for 24 hours yesterday and today, I know just how difficult that can be. It is very upsetting when you cannot receive or send any e-mails for 24 hours. These software adaptations will need to be implemented and paid for, and there will need to be additional resources when they introduce the new systems for testing and assessing how the authorities are going to run their collection and administration systems. The authorities’ third problem is up-front costs, which were dealt with in the amendment that we have just considered. I listened very carefully to the assurances which the noble Lord, Lord McKenzie of Luton, gave the noble Baroness, Lady Hamwee, but those costs could be significant. There is also a timing problem. The authorities will have to incur these costs in 2009-10 and will not be able to reimburse themselves until they have begun to collect the BRS in 2010-11: so there is a transitional cost. Will the Minister say whether that cost will be covered in some way? Will the Government be prepared to help to finance it? London Councils sees this as a key and worrying omission. It is not right to expect the billing authorities—the London councils—simply to bear this out of their ordinary revenues. Then there is the question of offset costs. It is very unclear how such set-up costs would be recovered. Would costs be offset against BRS revenues, or would the billing authorities withhold costs from BRS revenues before paying them over to the Greater London Authority? As I say, these are likely to cause cash-flow difficulties, and the billing authorities need to be reassured about this. This may all sound very complex, but Schedule 2 is a very complex amendment to the Bill. Of course, stakeholders will be able to come back to this in another place because, as an amendment introduced by the Government in this place, it will have to go to the other place, but the questions that I particularly want the Minister to answer are what I might describe as the salient questions of what we are looking for. Will new Schedule 2 add any additional time and cost burdens to London boroughs that are acting as billing authorities? My second question is different. Will the Secretary of State order that a new impact assessment be made of the burden that Schedule 2 will place on boroughs? The impact assessment of the Bill was, of course, provided long before Schedule 2 was envisaged. The Government’s commitment, the new burdens doctrine, is on the DCLG’s website and says: ""A new burden is defined as any new policy or initiative which increases the cost of providing local authority services … Government as a whole are committed to ensuring new burdens falling on local authorities are fully funded"." Will the Secretary of State now publish what I might call a supplemental impact assessment so that it can be properly assessed and valued and the necessary reimbursements made? My third question is the general question which the noble Baroness, Lady Hamwee, asked. Will the London boroughs be assured that all this time and all these costs that will be incurred not just by the BRS but by the collection of BID levies from owners as well as occupiers will be repaid to them? We have had very little time since Schedule 2 was first amended. It is supported by a large number of bodies. Indeed, I support it myself because it provides the finance that will be needed to enable the Crossrail project to be brought forward. I listened only last night to the Mayor of London describing how vital that was to the whole of London. All the London boroughs and the Greater London Authority agree, but most of those who support the schedule are not billing authorities on which the burdens of administration will fall. I hope that I have said enough to indicate that they have some serious worries and are looking to the Government for reassurance. I hope that the Minister will be able to give that this afternoon. I beg to move.