Business Rate Supplements Bill

As Amendment 55B is consequential, I shall focus on Amendment 60A, which is grouped with it, and apologise for its length and complexity. This amendment provides the ability to broaden the way that business improvement districts are funded by giving BIDs the power to decide whether or not to include property owners as well as occupiers as contributors to their funding. I, too, join the Minister in paying tribute to the noble Lord, Lord Jenkin, for his work on BIDs legislation. At a time in which businesses will be hit by both BRS and BID levies, these measures will go some way to mitigate the impact by spreading the overall burden of both levies from occupiers to both occupiers and owners. As the noble Lord, Lord Bates, and I mentioned at Second Reading, an occupier will potentially be hit by an uplift in rates, an absence of empty property rate relief and the sharp effects of revaluation due to the valuation having been taken in April 2008 at the peak of the market. BRS is but one more levy, and for occupiers who are already funding a BID it seems a reasonable request of government to reduce the burden by allowing the cost to be spread to owners, a move which most property owners support. After discussion with existing business improvement districts, the amendment allows for flexibility in both the financing of BIDs to include owners and/or occupiers, and for flexibility in the way that the levy is calculated. I should like to touch on four areas of detail in the amendment. First, proposed new paragraph 3(5) gives two options for the means of calculating a BID levy to be paid by a property owner: the first is the allocated proportion and the second is the allocated multiple. The allocated proportion is where the amount paid is divided up as 30 per cent by owners and 70 per cent by occupiers, or whatever proportion is agreed between the two. The allocated multiple is where the calculation is based on a multiple of rateable value. These are complicated proposals and I shall speak later to a local authority veto as a last resort to ensure fair and equitable use of the funding mechanism. The second area of detail relates to proposed new paragraph 6, which seeks to retain the principle of 50 per cent by value and 50 per cent by number that is applied to occupiers at the moment. By aggregating and ensuring that the two together, 50 per cent by value and 50 per cent by number, vote in favour, the BID takes place. The third point of detail relates to the local authority veto in proposed new paragraph 7. As a last resort, the local authority can verify that the arrangements to deal with the allocation are fair and equitable, particularly in relation to the allocation by multiple under proposed new paragraph 3, which is fairly complex. Proposed new paragraph 10 deals with where a leasehold interest may or may not be counted as ownership. It suggests that if a lease is longer than seven years, a person should be treated as being a property owner. Those are the points of detail that I wished to raise in relation to the amendments. I now wish to make two specific comments on issues that the amendments do not capture. First, the amendment deals only with BIDs where there is a BRS; it does not deal with BIDs outside BRS areas. This clearly creates a two-tier arrangement for business improvement districts. I believe there is a legal problem with sweeping up BIDs outside the BRS areas in the Bill and I am in discussion with the Bill Office about that. The other issue relates to the passing on of costs to tenants. It has been a worry that owners, if billed, will pass on the costs to tenants. In my view, this is not a significant risk. Indeed, where property owners are voluntary contributors to BIDs already operating, that has not been the experience. I do not believe this issue needs to be dealt with in the Bill. Finally, I appreciate that my amendment is complex but, as I understand it, the principle has cross-party support. Given the pressures on business at the moment, I urge the Government to support these proposals and to accommodate the most unusual desire from the property community to be taxed. I beg to move.