Business Rate Supplements Bill

My Lords, the structure of the arrangements is that the BID would apply to occupiers and, under the terms of the Bill, a BRS-BID would apply to those who have a relevant property interest, which will be prescribed. However, regulations may prescribe only freehold, leasehold or commonhold interests. In terms of collections, when one is dealing with owners of property rather than people who occupy property and are routinely subject to the non-domestic rate, there are challenges associated with that. We need to be mindful of costs on local authorities, although we also need to be mindful of the benefits that these arrangements could bring to a local authority. With regard to the timing of this, it has been pressed on the Government; it is not a Government-conceived policy that has been visited on the Bill at a late stage. I will endeavour to deal with some of the specific questions that have, quite reasonably, been raised, although the generality of my answers on process may not fully satisfy noble Lords. This amendment would require that before commencing the provisions for BRS-BIDs the Secretary of State consults those bodies representing billing authorities. It also requires the Secretary of State to carry out an assessment of the likely costs to the billing authorities of any BRS-BID. I agree with the noble Lord that there must be a full consultation prior to the implementation of BRS-BIDs and a review of the possible impact on interested parties. Indeed, the Government intend to go further than the noble Lord’s amendment. I can assure the House that the Government will consult a wide range of stakeholders on the detailed arrangements for BRS-BIDs. That will include businesses, the BID lobby and property owners, and, importantly, billing authorities, giving them the opportunity to influence how BRS-BIDs will work. An impact assessment on BRS-BIDs will be published alongside the consultation document. The assessment will look at the impact of all affected groups, including billing authorities. Respondees will have an opportunity to comment on the impact assessment, alongside the proposed arrangements for BRS-BIDs. As noble Lords will recall, before any BRS-BID can be levied, secondary legislation will need to be put in place and Schedule 2 enables the Secretary of State to make the necessary provision before BRS-BIDs can come into being. It may be more appropriate to consult prior to making that secondary legislation than prior to bringing Schedule 2 into force, but I can reassure noble Lords that consultation will take place before any BRS-BIDs are established. I believe that that is the fundamental thrust of the noble Lord’s amendment. The noble Lord, Lord Jenkin, asked whether the billing authority’s costs of establishing the BRS-BIDs will be met. As I indicated, there will be an impact assessment when the Government implement the schedule, which will include an assessment of billing authority costs. As to whether the billing authorities will be given time to establish systems for BRS-BIDs, the consultation will be 12 weeks, following which the Government will consider responses and will announce the outcome well before regulations come into force. Without regulations, no BRS-BIDs can be established. There will be a lead time for BRS-BIDs and billing authorities will in practice be given plenty of time to establish systems. I acknowledge the importance of that, particularly with everything else that is going on with revaluation, transitional relief and other matters. The noble Lord, Lord Jenkin, asked whether billing authorities will be covered for transitional costs. That issue will be covered in the consultation paper. The noble Baroness, Lady Hamwee, and the two other noble Lords who spoke made reference to the potential burden on billing authorities. Any potential problem will be considered through the impact assessment which will accompany the consultation document on the draft regulations. Specifically, I can say to the noble Baroness, Lady Hamwee, in relation to new burdens generally that it is CLG policy that all new burdens on local authorities from duties or powers are assessed and, depending on the outcome of the assessment, are funded by the relevant department. The noble Lord, Lord Bates, touched on the rating revaluation. Revaluation happens every five years based on market rents at an earlier date—typically, two years earlier. Therefore, the 1 April 2010 revaluation will be based on market rates at 1 April 2008. That system has been in place since 1990. He pressed me on whether the revaluation should be scrapped. We certainly have no plans that I am aware of to do so. The noble Lord also asked whether there should be a raising of the threshold. I think that that was a threshold in relation to BRS, rather than to BRS-BIDs in particular. The threshold is not mandatory and there is scope within the proposals that will come forward for a higher threshold that is introduced in particular arrangements. The threshold does not have to stick at £50,000. As I understand it, there is scope within the provisions of the Bill to have higher thresholds. I hope that that has dealt with the questions raised. I am conscious that much of the answer is about how we are going to consult and much of the detail that noble Lords seek will be dependent on that consultation. We will have an impact assessment, which is very important. But until that has been constructed and the consultation has been undertaken, it will not be possible to flesh out some of the more detailed questions that have been raised. I hope that that will at least satisfy the noble Lord of our intent in how we will move forward and that he will feel able to withdraw his amendment.