I beg to move, That this House
agrees with Lords amendment 7.

With this it will be convenient to discuss Lords amendments 10 and 15.

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 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 Although those amendments were withdrawn, they provided the opportunity for the House to have a meaningful debate on the issue, and the previous Minister for Local Government, my right hon.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 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.

I am glad to say that on this occasion, there is a degree of consensus. As those who served on the Bill Committee know, the Opposition parties were very interested in the proposal from Mr. Raynsford, and I am delighted to see that it has broadly appeared in the amendments. That is progress.

The Minister is right to say that some detail may yet need to be bottomed out, but the concept seems to deal with a potential anomaly. I wish the Government had been persuaded of the fact that the benefits of BIDs, which I endorse, include a ballot in all cases. It is ironic that this set of amendments includes a compulsory ballot. I wish that were a general application. It is a step in the right direction.

I hope that when the Minister replies, she may be able to tell us the time frame for the consultation and how we can ensure the maximum ability to make changes in the regulations that will set out the guidelines, and so on. I am conscious that although their lordships welcomed the proposals, they expressed some concern about the size and complexity of very late amendments to the Bill. That is no fault of the right hon. Gentleman, who has been a proponent of BIDs, but it made for some interesting overnight reading of the Official Report of the other place.

I hope the Minister will take on board the comment that if we are to get it right, we must have the ability to revisit matters of detail that may not yet have been completed. I welcome the overall attempt to plug what might otherwise have been a weakness in the legislation. We support the amendments.

I now have to announce the result of a Division deferred from a previous day. On the motion relating to external service, the Ayes were 305 and the Noes were 160, so the Question was agreed to.

[The Division list is published at the end of today's debates.]

I congratulate the Government on agreeing in another place this series of amendments, which provide a satisfactory and elegant solution to a real problem, which was the potential adverse impact of BRS on BIDs in areas where BIDs are in existence or due to be brought into existence in the foreseeable future, and where a ballot could well have been lost because those paying the BRS levy might have decided that it would not be fair for them also to have to pay an additional levy to support the BID.

I shall not go over the history. My hon. Friend the Minister explained that it was a subject of considerable debate in the House earlier this year when we first considered the Bill. The amendment introduced in the Lords goes further than the one that I moved, and I welcome the way in which that has been improved. Specifically, it tackles the issue of areas where BIDs are proposed but not yet in existence, whereas my amendment was limited to areas where BIDs were in existence. I recognise that that was a defect, which Dan Rogerson highlighted in the debate in the House.

I acknowledged that at the time so I am delighted that the Government have found a formulation that allows the new provision to cover areas where BIDs are proposed but not yet in existence. It also includes provision to reassure tenants that the owner levy will not be passed on to them through rent. Again, that was a cause of some concern among BID levy payers—that the landowner would try to pass on the full cost of the landowner levy.

The Government have addressed the issue in a manner that has improved the amendment, which we debated a while ago in this House, and I very much welcome what is now in the Bill. I add one caveat only, on an issue to which my hon. Friend the Minister referred: the need at some stage to consider extending the provision to cover those areas where there is not a BRS, but where BIDs exist. The principle of landowners contributing to BIDs has been an issue since BIDs were introduced in the early years of this century. We had a debate at the time, and some parties strongly advocated the adoption of the American system, whereby the property owner rather than the tenant pays the levy. I, as the then Minister, believed that creating the register of landowners would have caused substantial upheaval and set back the process, and could have resulted in many abortive costs arising in areas where the register had to be compiled despite there being no proposal for a BID.

Given those circumstances, it seems sensible to proceed on the basis of the existing rating system in this country, where the tenant pays the business rate but owners are encouraged to make voluntary contributions. Some have but others have not, and there is a natural worry about freeloading, whereby substantial property owners in a particular area get the benefit of improvements that a BID brings but do not contribute towards it. The issue still exists, and, although I fully understand my hon. Friend's reasons why, within the remit of the Bill, it was not possible to extend the provision before us to other BID areas, the problem will need to be considered again. I hope that the Government will, in due course, find a suitable legislative vehicle to allow the same formulation to be applied more generally to all BIDs. With that one caveat, I greatly welcome the amendment. It has made an important improvement to the legislation, and it will enable BIDs to continue successfully in many areas where they have made a big impact and whose existence might otherwise be threatened by the introduction of BRS.

It is a pleasure to follow Mr. Raynsford. He has pursued the issue keenly throughout the Bill's passage through both Houses, and there is an element of unfinished business in it for him, given that he presided over the introduction of BIDs and, along with many others, has been an advocate of them during our deliberations. He was keen to ensure that the proposed changes—the involvement of a BRS system, too—would have a positive rather than negative impact on BID areas, because there was a danger of conflict between the two systems.

The previous two contributors discussed anomalies and particular situations, and, as the right hon. Gentleman said, we are not quite there yet. It would have been good to tidy up the situation in which a BRS is not imposed, but, despite his attempts in Committee to do all sorts of things, such as amend the title of the Bill, which was necessary at the time, it has not quite been possible to resolve that particular situation.

I also note that the right hon. Gentleman was slightly more supportive of the work that their lordships put into this element of the Bill than he was of their work on the previous one, but I leave that to the House to decide. The House has obviously had the opportunity to vote again on the issue, but I merely note in passing how I think that they were right on the previous issue and right on this one.

I am pleased to see that Robert Neill, in his usual friendly and positive way, seeks to contribute to resolving the issue before us, although it presents him with a slight challenge, given that he is technically approving the imposition of BRS in other parts of the country but his party has said that it does not do so. With that comment set aside, however, we can all support the fact that the provision presents a solution—albeit slightly inelegant—to a problem and takes us further forward. We will all be watching keenly to see how BID areas make progress and, I hope, do even more to benefit their local communities and the business communities within them.

I just want to respond quickly to Robert Neill, who asked when we would consult on regulations. As I explained, these are complex issues but we hope to begin consultation in the autumn. I thank the hon. Gentleman and Dan Rogerson for their support.

Lords amendment 7 agreed to , with Commons privileges waived.