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Clause 2

Business Rate Supplements Bill – in a Public Bill Committee at 12:00 pm on 27th January 2009.

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Levying authorities

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

With this it will be convenient to discuss the following: amendment 23, in clause 2, page 2, leave out lines 1 to 5.

Amendment 24, in clause 3, page 2, leave out lines 44 and 45.

Amendment 38, in clause 5, page 3, line 29, leave out subsection (2).

Amendment 39, in clause 5, page 3, line 36, leave out subsection (4).

Amendment 44, in schedule 2, page 23, line 26, leave out sub-paragraph (3).

Amendment 40, in clause 28, page 17, line 42, leave out subsection (3).

Amendment 41, in clause 29, page 18, line 21, leave out paragraph (b).

Amendment 42, in clause 29, page 18, line 44, leave out paragraph (b).

Amendment 43, in clause 30, page 19, line 6, leave out paragraph (b).

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

As hon. Members will appreciate, the effect of the amendments is to restrict the scope of the definition of “levying authority” to the Greater London authority. I can be brief because this harks back to our earlier debate, but I was not convinced by the Minister’s reply, for the reasons already stated. We believe that it is possible to decouple Crossrail from the roll-out of BRS elsewhere nationally. Amendments 22 and 23 amend the definition of levying authority in clause 2 and the other amendments are consequential, changing the references to levying authorities elsewhere in the Bill. The arguments have been made; I need not say more.

Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Essentially, the amendments would make a business rate supplement an option for London only, removing the possibility for other local authorities in England and Wales to choose to fund a project through a business rate supplement. It is precisely the sort of special treatment that we cannot accept as a Labour Government, and especially as a party that is concerned about the whole country. We are concerned about jobs, investment and the long-term business success of all parts of the country, not only London.

As I have tried to explain to the Committee, we do not accept the arguments made this morning that London is different and should be treated differently in the Bill, or that Crossrail is different. It is the most developed example of a project for which a business rate supplement is appropriate. It is an exemplar, rather than an exception, and from it we can draw good lessons for the way in which a BRS could and should work in other areas.

During our evidence sessions, I was struck by the fact that both business and local government representatives accepted the principle that a BRS should be available across the country, not only in London, despite their concerns about details such as balloting. There is a lot to gain from giving local authorities greater ability to raise investment for local economies, particularly in the way that we require them to do so: in consultation and in partnership with business. The potential would be lost if the amendments were accepted. I hope that the hon. Member for Bromley and Chislehurst will not insist on pressing them, but if he does, I will ask my hon. Friends to resist.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

I have listened to the Minister and he is superficially persuasive. Unfortunately, the Government’s actions belie their reasonable words. He presents the measure as an enabling opportunity for the rest of the country, but there is great suspicion of the Government’s real motives elsewhere in the country. For the reasons rehearsed, there is acceptance that a funding package for Crossrail is in place that people now want to implement. However, juxtaposing this new potential tax-raising power given to local authorities elsewhere and the Government’s slashing the money available for local authorities to support business development gives rise to a real fear that the proposal comes from the Treasury’s desire to transfer burdens from central Government to local businesses.

Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

Does the hon. Gentleman know by how much central Government funding to local authorities is increasing in 2009-10? He is looking blank, so I shall tell him: 4.2 per cent. Combine that with the fact that it is the second year of a three-year settlement, which has secured certainty for local government, and with the removal of restrictions that were in place on many of the funding streams. The proposal gives local authorities greater freedom to decide their priorities and to fund them.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

It was not a blank look; it was astonishment at the Minister’s chutzpah in trying that one on. In reality, he knows that that 4.2 per cent. relates to the overall funding settlement. He knows perfectly well that that has been roundly criticised by the local authority associations, in particular because it does not reflect the  many costs shunted on to local authorities and the additional burdens such as adult social care, or the fact that local authorities are seriously suffering over the outworking of the formula, which he and I have discussed in the past.

Photo of John Healey John Healey Minister of State (Department of Communities and Local Government) (Local Government)

I am interested in the stance that the hon. Gentleman is taking, not least because his party’s leader and shadow Chancellor have already set out national plans for the coming financial year, which would involve a £3.7 billion cut in general Government expenditure. If not an increase of 4.2 per cent., as we propose for next year, what would his settlement be for local government in the next financial year?

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

Order. Nor will the hon. Gentleman. That is out of order.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

My specific response is that the Minister knows full well that that and his earlier comments, which were in order, do not present the whole picture. The funding for the local authority business growth incentives scheme, which is specifically targeted at assisting business and economic development, has been reduced from £1 billion over the past three years to £150 million over the next two years. That is why people are suspicious.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

Order. May I say to the hon. Gentleman and the Minister that we are not having a debate about that issue, so I would be grateful if we could call it a day?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

You will have gathered from all I have said, Mr. Atkinson, that I am unconvinced by the Minister’s response. I will give way to the hon. Member for North Cornwall because I am sure he will be in order—he always is.

Photo of Dan Rogerson Dan Rogerson Opposition Whip (Commons), Shadow Minister (Communities and Local Government)

I am grateful that the hon. Gentleman thinks so. I want to clarify: is the position of the hon. Gentleman’s party that the provisions of this Bill—that is, to be an extra tool for local government with the business community—even if subject to a ballot, should not be applied anywhere other than on Crossrail in London?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party 12:15 pm, 27th January 2009

We do not believe it is timely for rolling out elsewhere in current circumstances but in due course there are other, better means to give business incentives to local authorities. We are not convinced by this mechanism at this time, except for getting Crossrail up and running.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

Is the hon. Gentleman proposing to withdraw this amendment?

Question put, That the amendment be made.

The Committee divided: Ayes 4, Noes 8.

Division number 2 Nimrod Review — Statement — Clause 2

Aye: 4 MPs

No: 8 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Clause 2 ordered to stand part of the Bill.