Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Clause 1

Part of Business Rate Supplements Bill – in a Public Bill Committee at 11:45 am on 27th January 2009.

Alert me about debates like this

Photo of Dan Rogerson Dan Rogerson Opposition Whip (Commons), Shadow Minister (Communities and Local Government) 11:45 am, 27th January 2009

I do appreciate that I threw the debate slightly off course with my question, Mr. Atkinson.

This has been a useful debate on what is the most important issue for many of the witnesses we heard from in our previous sessions. I will focus, first of all, on the points made by the Minister in response to the individual amendments.

Amendment 1 would set out a clear indication that the business community’s views matter, and that for a project to proceed it must be clear that the business community is convinced that the economic development case has been made. Although I accept the Minister’s claim that the only way to do that would be to have a ballot, I would have thought that it might be possible to set out clearly in that ballot that the business community supports the measures in light of the intention to promote the economic development of the area.

The Minister made a number of further points about balloting, and therefore amendments 5 to 7 and 10 to 12, as well as amendment 25, to which the hon. Member for Bromley and Chislehurst has just referred. Why should we not have a ballot for Crossrail? The hon. Member for Cities of London and Westminster made a very good point when he said that if Crossrail were a new project being proposed subsequent to the Bill being considered, of course we would be calling for a ballot. However, Crossrail is different; in the view of many, it is unique. In the Minister’s view, it is not unique; it is very much the same as any other project which might emerge, but I think the time scale makes it very different. Most of the witnesses that we heard from were clear in pointing out that they felt it to be unique as well. I think that most politicians in London would say that Crossrail is a project of unique significance, having had vast amounts of consultation and scrutiny. I therefore believe that it is of a different magnitude, or at least that we have arrived at a formulation different from that for any subsequent scheme elsewhere in the country.

The Minister said that he was sympathetic. I am very grateful for his sympathy and he did look as though he was wrestling with himself and was quite anguished as he tried to reconcile all these important arguments. It might help to point out that, unlike the Conservative party—we will no doubt develop this argument when we debate later clauses—my party does not believe that this measure should be restricted to London. We believe  that it is a useful tool, and we heard from the Local Government Association that many projects may now emerge that require a BRS. We do not have a problem with that as a concept. The problem is that there needs to be a ballot. That is our opinion and that of many organisations representing the business community.

The distinction between not having a ballot on Crossrail specifically and not having a ballot in London at all is crucial. The Minister said that 25 years may be the lifetime of this legislation and by then it may well have effectively run its course. A few years ago, it was my privilege to serve on the Committee considering the Bill that became the Commons Act 2006, where we were looking at legislation that dated from the 12th and 13th centuries. It is important that we consider the possibility that future projects in London will be funded under any regulations that we play our part in approving. Most people accept that there is a difference between Crossrail and other projects that may emerge elsewhere in the country.

The Minister returned to a point that he made in his evidence to the Committee— that a ballot will effectively give business a veto over those projects. I think that he is saying that if a third or more of the cost of a project is funded by the BRS, he is quite happy for the business community to have a veto, but if it is slightly less—1 per cent. less for example—he is not happy for it to have a veto. I do not believe that it is a veto, but he has presented it to the Committee in those terms. Government Members who say that there is an intellectual inconsistency ought to consider their own arguments about this concept—or spectre—of a veto quite closely, because surely they apply equally whether the contribution is more than a third or less.

The lower the proportion of the overall financial package provided by a BRS, the less important it is to that project’s advancement. Far from being a veto, the ballot is merely a way for the business community to say to all the other funding partners that it is not convinced that it will reap equal benefit from the economic development in question, so they should go back and look at it again. That important point needs to be borne in mind. Through the consultation, local elections and the mechanisms for contributions that may be made by central Government to a project that is proposed by an elected government body, there is in many cases accountability to these other sections—a veto, if one likes, on behalf of the other funding partners. To pick out the business community and say that it will be handled differently is inconsistent and unfortunate. Regardless of whether the BRS will form more or less than a third of the funding package, the point is that it is still 2p on the rate to a business in an area where a BRS is imposed. It will be of no comfort to the business that the overall contribution is less than a third, because it is still paying its 2p, without the benefit of a vote. The fundamental problem with the Government’s argument is that businesses in an area where a greater contribution is to be made are to be allowed to have their say, even though their own contribution will be no different from that of businesses in an area where the contribution makes up less than a third of the funding package.

There are problems and intellectual inconsistencies in the Government’s argument. I therefore very much wish to press the amendment to a vote, so that we can have the Committee’s decision on that important question. I  would also like the opportunity later of a vote on whether a ballot is crucial to the proposal. I believe that it is, and I therefore signal my intention to press to a vote my amendments on the ballot proposal.