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We are very alive to these concerns. We are committed to ensuring that the process is fair to defendants, works effectively in practice and provides value for money for the taxpayer. To ensure fairness, the court ultimately maintains control of whether to proceed with the virtual court.

Lord Carlile of Berriew: My Lords, does the Minister agree that in many areas outside the big cities, such as shire counties, where very few real security issues arise in magistrates' courts hearings, summary justice could at last be brought much closer to local communities by holding hearings in community facilities, such as school

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halls and village centres? Does he agree that kind of approach would save the cost of building centralised and inconvenient palais de justices, which are often no more than an exhibition of an edifice complex?

Lord Bach: My Lords, as always the noble Lord comes up with a fascinating idea. We have no proposals in the manner that he describes. He will know that the community justice schemes that began in north Liverpool and Salford have now been extended to 11 more venues. Apart from the north Liverpool one, which was in a special building, the others are all in the ordinary magistrates' courts. Can I take his ideas back to the department and write to him in due course?

Baroness Hanham: My Lords, I am a serving magistrate. Has the Magistrates' Association been consulted, or will it be, about these pilots? If so, when and what was its response?

Lord Bach: My Lords, the magistrates' courts have been consulted already and will be consulted again when the pilots are completed in about a year's time. The courts, whether with a magistrate or a district judge sitting, have the power to decide whether it is suitable for a particular case to be heard in this way. If they decide that it is, but change their minds, then they can say so and the case stops there and then.

Lord Elystan-Morgan: My Lords, without in any way detracting from the relevance of the point made by the noble Lord, Lord Carlile, is it not the case that part of the answer with regard to unnecessary delay in the administration of justice in magistrates' courts lies with the need for a greater number of district judges sitting as stipendiaries? Will he give an undertaking that appointments will be made in such numbers, and for such places, as are necessary in the circumstances?

Lord Bach: My Lords, we always do our best to ensure that there are sufficient district judges, other judges and of course magistrates to deal with the level of work that there is.

Baroness Butler-Sloss: My Lords, are there proposals to have any more domestic violence courts where both the criminal and the family side of domestic violence are held under the same roof? These courts benefit both the litigant who has been subject to violence and also the defendant.

Lord Bach: My Lords, I am grateful to the noble and learned Baroness for her question. As I understand it, those courts have been a success where they have been tried out. I do not know what the proposals are for the future. I shall write to her with that information.

Lord Avebury: My Lords, if the defence solicitor is in court and the defendant is 100 miles away in a police station, how does the solicitor take instructions on developments during the proceedings?

Lord Bach: My Lords, in London, that is unlikely to be the position. The solicitor is with the accused in the police station. The court remains open to the public; it is a public hearing. The solicitor sits with and takes instructions from the accused in the normal

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way. It is very early days, but up until 25 June, some 19 cases were dealt with in this way, of which 75 per cent were guilty pleas with immediate sentence. This brings justice, but quick justice, and seems to be an experiment worth carrying on with.

Arrangement of Business


3.16 pm

Lord Bassam of Brighton: My Lords, with the leave of the House, my noble friend Lady Royall of Blaisdon will repeat the Statement on Building Britain's Future immediately after the consideration of Commons amendments to the Business Rate Supplements Bill.

Holocaust (Return of Cultural Objects) Bill

First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Driving Instruction (Suspension and Exemption Powers) Bill

First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Online Purchasing of Goods and Services (Age Verification) Bill [HL]

Main Bill Page
Copy of the Bill

Third Reading

3.17 pm

Bill passed and sent to the Commons.

Business Rate Supplements Bill

Main Bill Page
Copy of the Bill
Explanatory Notes

Commons Amendments

Motion A

Moved by Lord McKenzie of Luton

14A: Page 22, line 35, leave out paragraphs 19 and 20 and insert-

"19 In an initial prospectus-

(a) a statement as to whether there is to be a ballot on the imposition of the BRS;

(b) if there is to be a ballot, a statement as to whether there is to be one by virtue of paragraph (a) or (b) of section 7(1);

(c) if there is to be a ballot by virtue of paragraph (b) of section 7(1), an explanation of why the authority thinks that there should be one;

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(d) if there is not to be a ballot, an explanation of why the authority thinks that there should not be one.

20 In a final prospectus-

(a) a statement as to whether there was a ballot on the imposition of the BRS;

(b) if there was a ballot, a statement as to whether there was one by virtue of paragraph (a) or (b) of section 7(1);

(c) if there was a ballot by virtue of paragraph (b) of section 7(1), an explanation of why the authority thought that there should be one;

(d) if there was not a ballot, an explanation of why the authority thought that there should not be one."

The Parliamentary Under-Secretary of State, Department for Communities and Local Government & Department for Work and Pensions (Lord McKenzie of Luton): My Lords, I am of course aware that the amendment of the noble Lord, Lord Tope, would reintroduce the requirement on levying authorities to hold a ballot before introducing any BRS or varying any existing BRS. However, as your Lordships will be aware, the other place has disagreed with the Lords amendments requiring authorities to hold a ballot before levying a BRS or making a variation to an existing BRS, except in the case of Crossrail, and has offered this House an amendment in lieu.

During consideration of the Lords amendments in the other place, the Government clearly set out their thinking on ballots. However, for the sake of completeness, I should like to reiterate the key points. In developing BRS, the Government have balanced the need to protect business interests with ensuring that the requirements on levying authorities are practical and proportionate. It is right that where businesses will contribute a relatively large proportion towards the cost of a project they should have the power to vote on whether they should make that contribution. That is why we believe that levying authorities should be required to hold a ballot in those cases where the supplement will fund more than one-third of the estimated total cost of a project.

As an aside, I mention that this goes further than the recommendations made by Sir Michael Lyons in his review into local government and the Communities and Local Government Select Committee. Both considered that the decision to hold a ballot should be left to the discretion of levying authorities. However, the Government decided to require a ballot in certain circumstances to protect businesses and ensure a fair deal. Where a ballot is required, there is a risk that financial institutions and funding partners will be unwilling to commit themselves as one element of the funding package is uncertain. Even where an authority is confident of businesses' support, the outcome of a ballot can never be guaranteed. While the Government consider that it is right that there must be a ballot where the BRS is funding a relatively large proportion of the project, it would be disproportionate for an entire funding package for a project to be put in jeopardy by a ballot on one small element of it.

Holding a ballot will not be a quick or inexpensive process. Making a ballot mandatory in all cases potentially creates unnecessary obstacles to using BRS as a small part of a funding package and prevents levying authorities

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determining the most appropriate course of action in their area. This could discourage levying authorities from using BRS as part of a funding package in circumstances where a small supplement might make a real and positive difference to an area.

This could have particular repercussions for levying authorities outside London. As your Lordships may be aware, rateable values are typically lower outside the capital. As such, the potential revenue raising power of BRS is lower outside the capital. This increases the likelihood that BRS will form part of a wider funding package. Therefore the potential problems caused by requiring a ballot in all cases could be more significant outside London and deter the use of BRS other than in the capital.

As we made clear during the passage of the Bill, both in this House and in the other place, even if there is no ballot, levying authorities will not have the freedom to levy a supplement irrespective of the views of local businesses. Levying authorities will be required formally to consult businesses and we commit that the statutory guidance will make clear that levying authorities must consider how they will engage with businesses over and above the statutory consultation requirements.

Business interests are also protected though other safeguards, such as the national upper limit of 2p, the £50,000 threshold for liability to a BRS in England and the fact that the supplement can be used only for economic development and to fund additional projects.

We must trust levying authorities to do the right thing. What is appropriate in terms of engagement will depend on the nature of the project that BRS will be funding and the needs of the local area. For this reason, the Bill sets a minimum standard for engaging with businesses, but leaves the rest to levying authorities. This localised approach reflects the diversity of local areas. However, noble Lords and Members of the other place have expressed real concern that there must be genuine engagement with local businesses before a supplement is introduced. In recognition of that, we propose that in those cases where a ballot is not required, by virtue of the fact that the supplement is expected to fund less than one third of the total cost of the project, the authority should be required to set out in its BRS prospectus whether or not it intends to hold a ballot. Importantly, the amendment will also require the levying authority to provide an explanation as to why it proposes that course of action.

While the Government believe that it is right that levying authorities should have discretion as to whether or not to hold a ballot in certain circumstances, we acknowledge that the decision-making process must be transparent to those who would ultimately be liable for the supplement. This amendment will provide local businesses with an explanation of the levying authority's decision, ensuring that authorities are accountable to local businesses for their decision on whether to hold a ballot.

The amendment requires the levying authority to set out its proposed course of action and the reasons for its approach on ballots in the initial prospectus. This gives businesses an opportunity to challenge the levying authority's thinking, should they wish to do so, at the consultation stage. The decision on balloting

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is not something which should be explained only after a BRS has been imposed. As such, the decision of ballots is as much part of the consultation as the other aspects of the project and the levying authority will have to justify its approach. That will be just as important in cases where, for example, a BRS will fund only 5 per cent of a popular project over a few years-when it will have to justify using its resources for a ballot if it decides to hold one-as in cases where it decides not to hold a ballot. This amendment gives businesses the confidence that the decision-making process on ballots will be transparent and, at the same time, gives levying authorities the scope to respond to the specific circumstances of individual projects. I beg to move.

Amendment to the Motion

Moved by Lord Tope

Lord Tope: My Lords, in moving Motion A1, I thank the Minister for his full and careful explanation, to which we all listened very carefully. I again declare my personal interest; I am still a serving councillor in the London borough of Sutton, as I have been for the past 35 years, and a member of the executive on that council. I declare that interest not just because I need to be open and transparent and declare my interests but because I am not only a friend but very much an active part of local government. It is from that standpoint that I come to move this Motion.

Secondly, once again I place on record that I and my noble friends have, with qualifications, been supporters of this Bill throughout, and certainly support its application throughout the whole of the country and not simply to London and Crossrail. I say that on record to make it clear that this is not in any way intended to inhibit let alone to wreck the Bill. We think that it is a very important principle and a very important and necessary part of the process for approaching this.

We have debated these issues in this House and in the other place a great deal, and there has been very welcome progress during the course of the debate. I recall commenting at Second Reading that I regretted how polarised the two positions seemed to be. On the one hand, we had the business interest appearing to take the view that arrogant, out-of-touch local authorities would impose unwelcome and unneeded taxes on helpless businesses. On the other hand, we seemed to have the local authorities and the LGA equating a business vote to a business veto and saying that under almost no circumstances should there be a business vote. I think that we have moved a long way since that time and all of us recognise that, for any project to which a BRS may apply, whether or not there is a vote, it has to be developed in partnership with the local businesses. They will work together on the concept of the project, on developing a prospectus for the project and developing the budget-and, by the time it comes

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to a vote, one would hope that the leaders of the business community would be campaigning for a yes vote, such was the support. That may be an idealistic position but, if the partnership is working as good partnerships should, that is what should be the case.

So why do we need a vote? We need a vote, first, to give reassurance to the business community. Whether we like it or not-and personally I do not like it at all-consultation these days tends to have a rather unhappy reputation. There is too much an attitude that consultation means that you tell people what is going to happen and, regardless of what they say, it still happens. That may not be fair-in many cases it is not fair-but it is a very real perception at all levels, local, regional and national. The knowledge that there is reassurance there and that a ballot will come and businesses will have their say is important. Secondly, it is important for the process as well. To know that there is going to be a vote and that you will have to win it and persuade people to vote as you would wish them to is a very important part of engagement. There is nothing that concentrates minds better than to know that at the end of the process you are going to win or lose and that you have a vote to win. Therefore, the engagement is bound to be more meaningful if there is knowledge on the one hand that they have to persuade, not just to consult and, on the other hand, that if they really do not like it, they can stop it.

We need to remember that a vote does not have to be unanimous. There seems to have been some suggestion, particularly in the other place, that a vote is won or lost depending on what 100 per cent do one way or the other. Some of us in politics might wish that was the case, but it is not. It is a majority vote. We are not talking about necessarily having to win over every single business voter-much though one might aim to do that.

I understand very well why the Government have set the limit at one-third of the total cost of the proposed project. Inevitably, that, as any limit would be, is an arbitrary limit. One-third is quite a high threshold. Most likely to be of greater importance to the business, if not to the envisaged project, will be the amount of extra tax that business has to pay, rather than the proportion to which that tax contributes. I suggest that if there is to be a threshold then maybe one-third is too high. Those businesses will be paying an extra tax regardless of what proportion it contributes to the actual project and it may very well be a significantly higher extra tax. If it is, as is likely, to be a significant and substantial project-that is what we are primarily talking about with the Bill-they are likely to be paying it for many years ahead. For those reasons, it is right and proper that they should have an effective say in the decision on whether to levy the rate.

I understand why the Government would not want to see-neither would local authorities want to see-disproportionate cost for a relatively small contribution to a project. It may be that we need to look again at the threshold, but I do think that one-third is too high.

The Commons amendment is a helpful move in the right direction. In as far as it goes I am prepared to welcome that, although, for the reasons I have stated, it does not yet go far enough. However, it recognises

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that there is an issue of quite proper concern to the business community. I believe that, working together in partnership with local government, which is why I stressed at the beginning where I personally come from, we can still find a better solution and a better compromise that will meet the quite proper and understandable concerns of local business, and the equally proper concerns of local government, that they should not have imposed on them disproportionate cost and effort for relatively minor benefit.

We are on the way with the Commons amendment. I do not think that we are there yet. I have brought this Motion to your Lordships today in the hope that we will give the Commons an opportunity to continue with their thinking and perhaps to make still further progress. I beg to move.

3.30 pm

Lord Bates: My Lords, I, too, thank the Minister for his helpful introduction of Motion A standing in his name. I support the noble Lord, Lord Tope, in his Motion. Like the noble Lord, Lord Tope, I place on record my interests in these matters as a director of three companies in the north-east of England that pay business rates.

I have read the interesting debate that was held in the other place on this issue. A number of new points were raised and this revised amendment has been brought forward. That is all very welcome. However, a couple of key points of concern remain. I put these forward in support of the amendment and for the Minister to respond to when he replies.

First, this measure creates an anomaly. The business rate supplements are analogous to the business improvement districts, which have been championed and advocated by my noble friend Lord Jenkin of Roding. In the business improvement districts, there are ballots on each investment. In fact, an integral part of the case being made is that there is going to be a partnership, which would be undermined if a scheme were to be imposed on a business community that was not welcoming of it. Therefore, we are breaking that sprit of partnership in this business rate supplement. We are introducing an anomaly, which may have ramifications when we come to consider the sections that relate to business rate supplement and business improvement districts.

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