John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

Now we come to the maths. The clause sets out the method for calculating the BRS chargeable amount for a day. The way in which the chargeable amount is calculated depends on whether the property in question benefits from one of the existing mandatory or discretionary reliefs from the mainstream business rate, in other words, from the national non-domestic rate.

Subsection (2), with a neat little formula—A multiplied by B over C—prescribes the formula for calculating the daily chargeable amount where no rate relief is granted  in respect of the property. Liability for BRS in those circumstances is calculated by applying the BRS multiplier, which is defined in clause 14(3), to the rateable value of the property and dividing the result by the number of days in the financial year. I can tell that the hon. Member for Northampton, South is still with me at this point. Where the rateable value of a partially occupied property has been apportioned under clause 12(2) and (3), the BRS multiplier is applied to the rateable value for the occupied portion of the property.

Mark Field (Cities of London & Westminster, Conservative)

I might take the opportunity to come back to the point that I was trying to make earlier, which is to do with the rules of apportionment to which the Minister referred. To ease administration, we must try to ensure that the rules of apportionment are the same for the BRS as they would be for the main business rate. Will the right hon. Gentleman consider the notion that in clause 12 and in the mathematical formula in clause 13 and further on in clause 17, it is suggested that the levying authority may proceed on a different basis from that adopted by the billing authority as regards part-occupied buildings and jointly owned premises, for the purposes of apportionment?

Further on, clause 18 assumes that a BRS might be levied for less than a full year. That would provide many billing authorities with considerable practical difficulties, as they would be required to collect two amounts on two different bases. I accept that it might be an unusual situation to have a BRS for a period of less than six months. In relation to apportionment, will the Minister give us some guidance on the practical difficulties that will face billing authorities if the BRS is not to be apportioned on the same basis as the existing business rate?

John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

I can understand that the hon. Gentleman would be concerned if the apportionment bases were different for the BRS and the business rate, not least because he would worry about what effect that would have on the formulae, but the apportionments have the same basis. The valuation for the authority, which is referred to in the previous clause as undertaking the apportionment, will of course be the valuation of an agency specialist, so I think that I can reassure him that we will not have the problem that he is concerned about.

The formulae deal with the calculation of the liability according to different reliefs that may be in place. Subsection (3) deals with occupied properties to which small business rate relief is granted. Subsection (4) does the same for charities and community amateur sports clubs where there is mandatory relief. Subsection (5) deals with occupied properties where mandatory rural rate relief is applicable and subsection (6) does the same for empty properties. Just to be clear, subsection (6) applies only when the Secretary of State or, in Wales, the Welsh Ministers make an order under section 45(4A) of the Local Government Finance Act 1988, which reduces the liability for national non-domestic rates of empty property owners to less than 100 per cent. of the basic liability. Finally, subsections (7) and (8) deal with properties where discretionary relief or hardship relief have been granted in respect of the business rate payer’s main business rates liability. I hope that that helps the Committee.

Philip Dunne (Whip, Whips; Ludlow, Conservative)

A property that was subject to business rates may become vacant and then subject to the empty property levy, which is a modest discount to the full rate, but no longer benefits from the relief that it used to secure. If that property ceases to be habitable for any reason and is therefore no longer subject to empty property relief, would it cease to be leviable for BRS if it ceased to be leviable for normal business property rates?

John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

I think that the circumstances of the property—the hon. Gentleman describes them as “habitable”—mean that it would not be eligible for empty property relief. I think he means that, as an empty property, it would not be liable for business rates rather than for the relief. I shall double check this, but essentially our approach is that if a property is liable for business rates and falls within the liability criteria for business rate supplement, the supplement follows the business rates liability. Therefore, if the empty property is no longer liable for business rates, it will no longer be liable for business rate supplement. We have tried throughout the Bill to follow a consistent principle, as I have explained to the Committee before, building the supplement on the basis of the business rates system and the liabilities in it.