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Baroness Farrington of Ribbleton: My Lords, I am grateful for the further work that the noble Lord, Lord Jenkin of Roding, has undertaken to refine the Bill. I have no comments on this particular amendment although it appears to envisage separate orders for the different areas it mentions. However, in considering the amendments which have been laid today, the House may wish to have confirmed that discussions were held with the noble Lord following Committee stage. The Government's view that the charges imposed by a BID company would be treated as a tax and the income

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raised would count as public expenditure, as the noble Lord, Lord Jenkin, said, together with the fact that we are still awaiting the Government's paper on the review of local government finance, which I believe will be issued imminently, mean that we cannot give the Bill our support.

On Question, amendment agreed to.

Clause 2 [Application for election order]:

Lord Jenkin of Roding moved Amendment No. 2:

Page 2, line 12, at end insert (", subject to subsection (4A) below,").

The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendments Nos. 3 and 21. Amendment No. 2 is a paving amendment and the substantive amendment is Amendment No. 3, which inserts a new subsection into the clause.

The purpose of the new subsection (4A) is to deal with the situation where the maximum business improvement district charge proposed exceeds 5 per cent. It will be recalled that in Committee there was some debate about the desirability of allowing for that without requiring all the businesses paying BID charges to agree to the increase as the Bill provides at present.

However, there is a difficulty in allowing a proposal for a further increase beyond 5 per cent., on the basis of agreement by a majority of businesses, even with a majority of three-quarters of participating businesses, as the noble Baroness, Lady Hamwee, suggested in her amendment at Committee stage. Those businesses which had not been in favour of setting up the BID, but which were outvoted, would find themselves subject to additional charges without further scrutiny if the Bill was simply to provide that the percentage could be increased further once a bid was established.

Such an arrangement might also open the door to some indiscipline over the assessment of costs incurred when a scheme is put forward. So subsection (4A) allows for such an increase, but only where the application to set up a business improvement district is in fact for the continuation of an existing scheme. Adopting that mechanism ensures that the proposal is subjected to further scrutiny by the local authority and further representations from interested parties, as well as giving all the businesses concerned a vote as to whether a scheme should be confirmed on such a basis. It may be that where a scheme is seen to be successful and there is an impetus to continue it, a large majority of businesses will be receptive to the possibility of an increased charge. That is a prospect that ought to be assessed with the same level of protection which applies to initial applications.

The amendment to omit Clause 14 is tabled because the issue raised there is now being dealt with under the new subsection. I beg to move.

Baroness Farrington of Ribbleton: My Lords, while recognising the efforts made by the noble Lord to give BID companies, in proposing the continuation of a BID

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scheme, a greater degree of latitude in raising funds, noble Lords may wish to consider whether unlimited charges would be desirable.

Baroness Hamwee: My Lords, I recognise that the noble Lord, Lord Jenkin of Roding, has responded to a concern that I voiced in Committee. To a large extent, my amendment was probing and I was not persuaded by it, but I was concerned about how increases might be dealt with and whether appropriate and perhaps small increases could be prevented by a small number of chargepayers. I remain somewhat concerned because there seems to be no top limit to the amount of the increase.

We have heard from the Government that the Bill is fated to run up against the buffers, but that it will no doubt form part of the discussions when your Lordships are considering business rates in the context of the forthcoming Green Paper. I think that there is still some mileage to go in how one deals with possible increases, but I recognise the efforts which the noble Lord has made to deal with this point.

Lord Jenkin of Roding: My Lords, with the leave of the House, perhaps I may respond. I am well aware that there are certain obstacles in the way of the Bill making a great deal of progress in another place. Nevertheless, as I said at Second Reading, the idea of a business improvement district (with some mechanism for requiring all business ratepayers within the area to pay if a two-thirds majority support the Bill) has attracted much interest and there is now a good deal more steam behind the idea.

Earlier this week, a number of us in an all-party group concerned with London listened to a fascinating talk on the subject of London theatres and some of their problems. We were interested to learn that London theatres very much support a BID on the lines of what happens in New York as a means of increasing the attractiveness of the theatre area to patrons. I was up in Walsall last week where strenuous efforts are being made by the East Mercia Chamber of Commerce, with the support of the local authority, to upgrade some of the rather run-down industrial areas near the railway and canal, with some exciting projects. They, too, would very much welcome the Bill.

That is why I make no excuse for pressing ahead, while recognising that the scheme may have to wait for another piece of legislation. In the mean time, the amendment offers a way ahead if the Bill makes progress. There will no doubt be other opportunities to look at the detailed points which have been raised by the two noble Baronesses. I commend the amendment to the House.

Lord Bowness: My Lords, my noble friend's amendment addresses a problem to which we referred in Committee. If a business improvement district has been established and if unanimity were required for its continuation, some very good work might come to an end in short time. If I understand the amendment correctly, it seems that an application for an extension is subject to the same vote as an original application

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and, therefore, requires the same majority of business ratepayers to be in favour. In that respect, I am content to support the amendment.

Baroness Hamwee: My Lords, with the leave of the House, I am sorry if the noble Lord, Lord Jenkin, misunderstood me. My comments were directed to this amendment, not to the principle. My concern was about the apparent lack of a cap--although perhaps I am the last person in this Chamber who should be calling for a cap--to the total of the business charge as incorporated in this amendment.

On Question, amendment agreed to.

Lord Jenkin of Roding moved Amendment No. 3:

Page 2, line 29, at end insert--
("(4A) Where an application under this section is for the continuation of a business improvement district scheme, or for the continuation of a scheme subject to such modifications as may be proposed in the draft scheme accompanying the application, the maximum annual business improvement district charge proposed under the draft scheme may exceed 5 per centum and shall be the figure proposed by the applicant.").

On Question, amendment agreed to.

12.15 p.m.

Lord Jenkin of Roding moved Amendment No. 4:

Page 2, line 37, leave out ("3(1) and (2)") and insert ("3").

The noble Lord said: My Lords, in moving Amendment No. 4, I should like to discuss also Amendments Nos. 5, 6, 7 and 10. Amendment No. 5, which seeks to insert new Clause 3, makes it clear that in considering an application for a BID a local authority should have regard to interested persons generally, quite apart from the specific attention to be paid to the representations of the interested parties which are mentioned specifically in paragraphs (a) to (e). The interests which are to be given specific consideration by the local authority have also been broadened to include--at paragraph (b)--businesses located outside the area of the proposed BID but which would be affected by it, and any interested public authority, which we call a "relevant authority", which we seek to define in Clause 30 by means of Amendment No. 27, which we are also considering with this group, as I should have made clear earlier.

The reason for employing that term may need some explanation. As defined, "local authority" means a billing authority, and will generally be a district authority, a London borough or the City of London Corporation. That is natural enough because the applicants for BID schemes ought naturally to be the authorities which keep non-domestic rating lists--and they are the billing authorities. They do not include such authorities as county councils and police authorities, all of which may provide services or undertake initiatives in the area of a proposed BID. They therefore could be said to have a particular interest in an application, and it seems right that those areas should be given particular consideration along with the other categories referred to in the clause. Therefore, the definition of "relevant authority" used in the Bill is the same as that in Part V of the Local Government and Housing Act 1989.

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That is the definition deployed for the purposes of revenue accounts and capital financing of local authorities. It seems to me to be the most appropriate definition to catch the appropriate authorities consistent with keeping the notification process within reasonable bounds.

The amendment has been tabled in response to specific criticisms made in Committee and I hope that the House will feel that it meets the case. I beg to move.

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