Clause 1
Business Rate Supplements Bill
10:30 am
Dan Rogerson (North Cornwall, Liberal Democrat)
I take this opportunity to formally welcome you to the Chair, Mr. Atkinson, and to thank you for the excellent way in which you conducted our evidence sessions. I am sure that you will agree that they were very useful, as well as informative and helpful to us. That leads us nicely to the matters that we will be discussing this morning and in future sittings.
Amendment 1, which is in my name and that of my hon. Friend the Member for Solihull, goes to the heart of the business community’s concerns about the Bill. As we heard in the evidence sessions, there are grave concerns about the ability of businesses to influence the decision on whether a supplement is enacted in their area. The Minister of State has been keen to point out that the consultation is a key part of the Bill, and that is welcome, but as we heard time and again, there are concerns that that does not go far enough. A ballot would be the ultimate reassurance to the business community that the extra contribution that it is asked to make will be put to what it believes is a good use.
The amendment would include the business community in deciding what is of recognised benefit and interest to an area by making sure that the majority of that community is satisfied that the projects funded by the supplement will promote economic development. As it stands, only the levying authorities need to be satisfied of that. It is important to make it clear in the Bill that, since the supplement will be a key contribution by businesses, they have a role in the consensus on moving forward.
Amendments 5 to 7 refer specifically to ballots, and insert the need for a ballot in all cases. As we went through our evidence sessions, one issue emerged time and again: while the business community had concerns about the timing of the Bill, they were prepared to accept that, where important projects were being taken forward in the local area, business should make its contribution. We heard that this form of property tax was perhaps not ideal and that there were issues regarding owners of property—as opposed to tenants—and how they could make a contribution. The fundamental concern was that the business community should have the right, through a ballot, to sign up to, or reject, any proposal.
When the British Retail Consortium was asked about a ballot, Jane Milne said:
“It is, as far as we are concerned, the single most crucial step as to strengthen the safeguards. There are already safeguards within the Bill, but we do not feel that they go far enough.”——[Official Report, Business Rate Supplements Public Bill Committee, 20 January 2009; c. 19, Q82.]
We also heard from the British Chambers of Commerce. Mr. Frost was asked whether it would be more reassuring to include a ballot. He said:
“Yes, to use that terminology, it is far less scary, because it gives the business community the ability to become involved. The worry with the other programmes that I have mentioned is that they would be seen as an imposition.”——[Official Report, Business Rate Supplement Public Bill Committee, 20 January 2009; c. 24, Q99.]
Dr. Grail, representing British BIDs, expressed concern that where a proposal for a business improvement district was being developed, if there were no ballots on a business rate supplement in the same area, businesses might feel that the only chance they had to prevent being overburdened by additional taxation would be to reject the BID. There were concerns that the lack of a ballot on a business rate supplement might influence how people would vote on a BID in the same area.
From our earlier sessions we heard that many Members, of all parties, felt that the BID process has been constructive and useful, and has achieved a great deal in areas where it has been enacted. Conflict between a BID process and a business rate supplement, if there were to be no ballot for a BRS, could be a crucial issue.
My hon. Friend the Member for Solihull and I were also keen to show through our amendments that we feel that Crossrail is a different case, so it was interesting to hear the evidence from the Confederation of British Industry—it feels that Crossrail is separate, as well. Karen Dee said:
“Businesses will vote for something if they see that it is of benefit to them.”——[Official Report, Business Rate Supplements Public Bill Committee, 20 January 2009; c. 39, Q163.]
We discussed the issue then and the feeling was that Crossrail is different: the process has gone on for a very long time and there has been a great deal of debate; and there has been a Bill through Parliament allowing us to look at the issues very closely. For that reason, we concluded that the provision for a ballot in all cases should not apply to Crossrail.
I am sure that the Minister will want to reply to that and say that we should either have a ballot in all cases or in none, but it is clear to Opposition Members that Crossrail is a unique project. Given its scale, scope and national importance, and the clear expressions of will and involvement by all parties throughout, it should be treated separately. That is why our amendments would provide for a ballot in all cases other than Crossrail, including all new projects.
The key issue is to take the business community forward with us. The Local Government Association felt very strongly that it would be able to do so through debate and consultation with the local business community. I hope that that would be the case in many projects and that a ballot would deliver a yes vote, or would not even be approached, as there was already that consensus and the feeling that everybody was moving forward together. However, there still seems to be a concern in the business community that, without the ability to call for a ballot to focus everybody’s mind and ensure that the process is as constructive and inclusive as possible, the consultation might not prove as effective. So I am certainly very happy to commend the amendment to the Committee. From our point of view, the significant amendments in the group are 5 and 6, which would make a ballot compulsory, no matter what the size of the contribution being made by the BRS to the project.