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Clause 1

Part of Business Rate Supplements Bill – in a Public Bill Committee at 10:45 am on 27th January 2009.

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Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party 10:45 am, 27th January 2009

I am grateful to the Minister for raising that point, but if he follows my argument, he will see that that is not the case. I shall discuss later why Crossrail is a different case. Under the present regime, if a local authority has the political will to impose a scheme, it is not obliged to take the majority of businesses with it. The evidence and the example that I cited demonstrate that that was the case under the previous Mayor of London.

The proposal in the Bill and the existing arrangements give local authorities the opportunity to decide, by a narrow political majority, to implement a scheme, even though it might have been rejected by businesses or there is clear evidence of their opposition. It would be better to test the proposal and get businesses on board. I hope that the hon. Member for Halton is correct in his aspiration that local authorities will not go down a route that will bring them into conflict with local businesses, but localism always carries that risk. Businesses in the present climate need to have some protection against that.

Another point that worries many businesses and is flagged up in the consultation document is that, without the ability to have a ballot, there is a risk of an accumulation of burdens being placed on them. We will come to automatic set-offs for BID levies later, but the BRS and BID schemes, as well as the possibility of community infrastructure and workplace parking levies, could impose a cumulative burden. A real concern in the business community was demonstrated throughout the evidence sessions about that cumulative burden being, for many businesses, the straw that breaks the camel’s back.

For all those reasons, if the Government are genuine about giving local authorities a power to raise revenue that is truly and demonstrably additional, it is important that the local businesses who pay—who may pay substantial sums—are able to have a say on whether they are  convinced that there is genuine additionality. If the case is made out and the local authority engages with its business community from the start, it is much more likely to get a result that everyone buys into, which would be to everyone’s advantage.

I hope that the Government will think again about the amendments. I cannot for the life of me see why they would not. The Minister will probably say that he has come to a pragmatic and rational decision that a third of the cost is a reasonable ballpark figure for the threshold. It might be, but he could equally say the same about a quarter or a fifth, because an element of arbitrariness is inevitable in any threshold. Some sort of de minimis exception might be better, and the Minister conceded that we could discuss that. If there is not to be such an exception, there should be a ballot.

On why we do not take that stance on Crossrail, I am perfectly happy to say that Crossrail is and should be an exception, for the perfectly good reason that Crossrail is a project that has been discussed and consulted on within London among business rate payers and voters. London has had an election—a democratic process—in which all the major party candidates standing for Mayor were committed to Crossrail and the funding package for the project. Londoners had a chance to have a say on Crossrail.