All over Scotland, businesses large and small are actively engaged with local communities and councils in improving localities within our cities, towns and villages to make them more attractive places in which to shop, work, rest and play. Such projects focus on, for instance, improving the streetscape by creating pedestrian areas with seats and benches, floral displays and information points and on preventing crime and promoting public safety through devices such as closed-circuit television. Those initiatives and partnerships are all welcome and to be commended.
The fact that such partnerships are to be found all around Scotland as we speak demonstrates that the Parliament need not pass new laws to enable such projects to be undertaken where there is support for them from the local business community. The projects are voluntary initiatives to which businesses contribute financially and to which many business owners, large and small, have made a strong personal commitment. The only reason for the existence of part 9 is that the Executive wants to create business improvement districts that are financed through a compulsory levy, which will be an additional tax on Scotland's businesses, which already contribute more than £2 billion in business rates towards the provision of local services and amenities.
If those businesses are happy to contribute on the basis of compulsion, they must be happy to contribute voluntarily. Why does the member not go round their doors, ask them to get their cheque books out, put their contributions in the fund and get on with the job? Businesses can do that today. We do not need to pass any laws requiring businesses to contribute to such funds.
The purpose of amendment 149 is to remove the element of compulsion. Payment of a BID levy should be voluntary rather than compulsory. That is what amendment 149 is designed to achieve.
Amendment 150, which is also in my name, is designed to underpin the principle of freedom of contract in the negotiation of commercial leases in Scotland. The Scottish Executive wants property owners to pay a share of any BID levy that is raised. That is not the case in England. The Executive is guilty of a fundamental failure to understand how the commercial property market works in the United Kingdom as a whole. The foundation of that market is the full repairing and insuring lease whereby, in order to generate a pure investment return for investors, obligations such as a BID levy normally fall on tenants under the terms of the contract into which they voluntarily enter.
The Executive needs to tell us whether it intends to introduce subordinate legislation to prevent landlords from passing on to tenants their share of a BID levy, either specifically or in the form of an increased service charge, and whether such regulations will apply to existing leases whose terms would have the effect of transferring that responsibility. If that is the Executive's intention, it is wrong and I urge members to support amendment 150. However, if that is not the Executive's intention, it can have no objection to the amendment, which merely asserts the principle of freedom of contract—it would be up to the landlord and tenant to determine where the liability for a BID levy would fall and not for the Executive or anyone else to dictate that to them.
Amendment 151 focuses on the principle of additionality. The Executive has told us constantly that those who pay a BID levy will receive enhanced services and amenities within the BID. Accordingly, it would therefore be wrong for businesses in an adjoining area that is not a BID to receive the same enhanced services and amenities without paying an additional levy on top of their general business rates. One business should not compulsorily have to pay extra for a service that another business two streets away receives for nothing. If businesses pay extra, they should get extra; that is what additionality means. That is what BIDs are supposed to be about, in which case the Executive should assert that principle by supporting amendment 151, which is most reasonable.
I move amendment 149.
Amendment 149 is unnecessary and would undermine BIDs fundamentally. In effect, it would allow businesses to vote yes to a BID but then never make a contribution through the levy. As was explained to the Communities Committee at stage 2, the
I am aware of reports in some quarters that the BID levy could be as much as 10 per cent of rateable value, but we have made it clear that the levy should usually be no more than 1 per cent of rateable value. Amendment 149 would be bureaucratic, as it would require a written undertaking from every business that was to pay the levy; it would undermine the financial viability of BID proposals, because the number of businesses that would pay would be unknown; and it would be unfair, as some businesses in a BID would subsidise others, after the BID had been properly approved and agreed by businesses in the area. We believe that businesses will benefit from being part of a BID. I repeat that, at the end of the day, businesses will decide on the matter. The majority of business organisations in Scotland, based on experience elsewhere, agree with our view. I therefore ask members to reject amendment 149.
Amendment 150 would place formally in the bill an ability for owners of property to pass on their liability to non-domestic ratepayers, thus ensuring the owner's non-payment of the levy. The bill already allows for owners to be excluded, provided that the BID proposer—and not the Executive, as David McLetchie suggested—considers that to be the best approach for the area. I am satisfied by that approach but not by the restrictive one that David McLetchie proposes.
Will the minister give the Parliament an unequivocal assurance that there will be no circumstances in which one business would pay two levies, first as a tenant and secondly, because, under the commercial lease under which they occupy the premises, they are responsible for the owner's BID levy?
As I am not responsible for the policy area, it would be fair if I got a note to give me the answer to that. The proposals are in the bill, but they are the responsibility of the Scottish Executive Finance and Central Services Department and the Minister for Finance and Public Service Reform. I will not give a hasty answer to that without having received advice.
Further to that point of order, Presiding Officer. We are considering stage 3 of a bill, which will no doubt go into law today, so it is important that, when members have questions about it, we have a minister present who can put the answer on record. The Executive's practice is simply not acceptable, so I hope that you will make a ruling on that.
The reason why I said that I would not give a hasty answer is that an answer will be given before the end of this speech. Members must understand that part 9 comes from another department. Obviously, I understand the generality of the policy but, if there is a detailed question to which I do not know the answer, I will seek advice on it. There is nothing unusual about that.
Through the BIDs working group, representatives from the public and private sectors urged us to legislate for owners to be part of BIDs, as did the majority of responses to the public consultation. The bill reduces the risk that owners will benefit from a successful BID project at the expense of occupiers who pay the levy. At stage 2, the committee rejected an amendment with the same outcome as amendment 150, which I ask members to reject as well.
Indeed. We have asked for an order on that under section 104 of the Scotland Act 1998 and it has been granted.
Amendment 34, together with amendments 35 and 36, provides for the allocation of a vote to each property that is liable for non-domestic rates. Those amendments will also allow the allocation of a single vote to each property owner or tenant who is eligible to vote. That voting arrangement best provides for the involvement of property owners
Amendment 36 acknowledges that voting arrangements for BIDs are not straightforward. We will include in secondary legislation the details of the allocation of votes between non-domestic ratepayers and other owners and tenants who are entitled to vote. Putting those requirements in regulations will allow scope to reflect the variety of permutations of owners, tenants, non-domestic ratepayers and so on in a BID, especially where those persons may be interchangeable or overlap. The level of detail that is required to cover those permutations is not appropriate for primary legislation, and amendment 36 provides for it to be covered in secondary legislation.
I recommend that members accept amendments 34 to 36.
Although I agree that councils should work together with businesses throughout their areas and should not do anything to undermine or cut across existing BID projects, I cannot understand the rationale for amendment 151. I can illustrate the issue by referring to the BID pilot that is taking place in Inverness city centre. If amendment 151 were agreed to, it would prevent Highland Council from undertaking work in another part of its area—for example, in Wick or Thurso, which are more than 100 miles from Inverness—simply because a BID is already doing similar work. Where is the logic in that? As we explained at stage 2, when a virtually identical amendment was rejected, I am open to any amendment to make the bill stronger; amendment 151 does not do that, so I ask that it be rejected.
The Executive will monitor the effectiveness of BID arrangements on behalf of the Scottish ministers. To improve BID arrangements, the Executive may propose to alter the groups that are eligible to vote in the BID ballot; the veto criteria that local authorities will apply to BID proposals; and the allocation of votes between non-domestic ratepayers and owners and tenants. Amendment 90 and amendment 159, which takes account of the Subordinate Legislation Committee's views, make such important changes possible only by regulations under affirmative procedure. Parliament, therefore, will have the opportunity to approve such recommendations and improve the workings of BID arrangements. Related amendments 89 and 89A are consequential on those amendments.
I therefore recommend that amendments 89, 89A, 90 and 159 be accepted.
In response to Fergus Ewing's question, the weighting of the levy depends on the weighting of the vote. It is possible that a person will vote and pay as both a ratepayer and an owner. However, the vote and the burden are weighted accordingly.
Obviously, voluntary schemes whereby businesses contribute towards city centres have played a part in Scottish civic life and will continue to do so, as in Inverness and Bathgate. However, the so-called pilot BID schemes that the Executive has discussed throughout the passage of the bill are not BIDs at all, because businesses pay nothing. They are bungs of public money, designed to win the support of business. That is straightforward.
Let me come directly to the point. The SNP campaigned against the higher business tax that was imposed by the First Minister when he was Minister for Finance, which was called—eponymously and, I thought, rather generously—Jack's tax. Since then, we have had seven years of higher tax in Scotland than in England. Eventually, the Executive recognised that it had got it wrong, and it is scrapping it. It is too late, though—that will not apply until the year after the current Executive has demitted office.
Once we get rid of Jack's tax, we will find it replaced by Lamont's levy, Malcolm's money or Chisholm's cash. The point about BIDs is simple. Whether they want to or not, businesses that have voted against the proposal will have to pay a higher tax. This morning, the First Minister, in full rattled mode, was talking about the perceived impact on business of things that might happen. Is he really saying that those higher taxes on small businesses in Scotland are welcomed by small businesses? They are not welcomed by the Federation of Small Businesses.
Let me move to the revelation from today's debate. The Executive that brought us higher taxation now brings us double taxation. The Minister for Communities has just indicated that nothing in the bill will prevent a business from paying twice. It is very simple—if the First Minister
The minister was plainly hit by surprise by my rather simple, modest intervention. He did not appear to notice that it was not my idea—it was in the Local Government and Transport Committee's report, at paragraph 57.
I hope it is always thus.
I will quote from paragraph 57 of the Local Government and Transport Committee's report on the bill at stage 1, which has been out for months. One would expect the minister to have read that parliamentary report—ministers are always going on about how they listen to Parliament. It says:
"There is a question as to whether landlords or property owners who pay a levy will recoup it from their tenants".
However, the minister did not know about that today—sleeping on the job, not noticing it. Malcolm's money is coming to businesses, not once, but twice. That is double taxation. Who says the Executive is fit to run the country if its specialist subjects appear to be poor legislation and shambolic management of the public finances?
I will speak against the amendments in the name of David McLetchie. Similar amendments were lodged and rejected by the committee at stage 2. David McLetchie was right to say that a BID levy would be implemented, but he failed to acknowledge that a levy could be implemented only if local businesses voted for it. I see nothing wrong with local businesses working in partnership with local authorities to improve the districts in which they trade. If businesses did that and wanted to reinvest in their areas, it would be completely wrong if some businesses in those areas enjoyed all the advantages of that but paid nothing for it.
David McLetchie wants us to accept the strange concept that someone can opt out of the result of
Nobody will vote for a business improvement district unless they believe that they will get something out of it. It is ludicrous to suggest that people would blithely say that they would pay another 1 per cent of rateable value without taking great interest in what they got for that. If BIDs are to succeed, it will be important that all businesses are signed up to them. The way to achieve that is to have a ballot and take it from there.
BIDs offer a tremendous opportunity.
Employment in Dunfermline has just taken two major hits. If a small business there that was starting in its life to try to grow from a small acorn into a large oak tree voted no, would it be right that it still had to pay the BID levy, which might push it over the edge so that it could no longer survive?
Dunfermline is a good example and I am interested in what local businesses there think of the idea. Several local businesses have told me that they are interested in the concept of BIDs, in whether they could contribute to that and in whether they would get something out of it. As I said, no business would vote for a BID levy if it did not think that that would be in its interest.
My answer to Mr Crawford's direct point is that if a business thinks that it will get something out of a BID, it is not unfair to ask it to put something in. The levy will not be a flat rate for all businesses—it will be a percentage of rates, so a small business will pay considerably less than a larger business will. That principle is fair.
The BID proposal is good and is worthy of consideration. An interesting point about the debate is to ask why, if members disagreed with BIDs and thought that introducing them was the wrong thing to do, they did not lodge amendments to remove BIDs from the bill. Such amendments were not lodged; members just want to play at it.
I will add to what David McLetchie said. How much more will we land our businesses with? They pay massive water charges and massive business rates and now we are to ask them to pay for BIDs. The system should be voluntary; as Fergus Ewing said, such a system works perfectly well up north. Also, there is no question but that either the tenant or the owner, but not both, should pay. Finally, as David McLetchie said, businesses that pay extra should get extra.
I will respond to a comment by Scott Barrie. The Scottish National Party has had to lodge an amendment to the motion to pass the bill because it is not competent to amend a purpose of a bill, and one of the bill's purposes is
"to make provision for business improvement districts".
Otherwise, we would have lodged an amendment to delete the provisions on BIDs.
I will make a brief speech and I will not require the full two minutes.
The position for which the Scottish National Party and the Conservative party have argued would not improve businesses in Scotland but would create a freeloaders charter. It would create a situation in which businesses that were prepared to invest funded improvements in town centres while businesses that declined to put resources into that would benefit without contributing.
I draw attention to the fact that business improvement districts are up and running in the UK—they operate in England. In many town and city centres in England, businesses have willingly voted by substantial majorities to implement business improvement districts. The SNP and the Conservatives are saying that Scottish businesses cannot take a conscious decision about what is in their best interests in the way that English businesses can. They do not trust Scottish businesses to make informed judgments. We should reject the amendments in the name of David McLetchie and the SNP's amendment to the motion on the bill, which we will debate later.
I take strong exception to the minister's comment that amendment 149 is misconceived, because it is far from misconceived; indeed, it was carefully conceived in order to establish the principle of voluntary payment as opposed to the principle of compulsorily extracting funds from people who see no worth or merit in proposals that will affect their locality. I also take strong exception—as I am sure Scotland's businesses will—to what Bristow Muldoon said about freeloaders. Those freeloaders already pay £2 billion a year in Scottish taxes. It is absurd to characterise them in such a way.
Mr Barrie said that things will be all right because people will get to vote. The Scott Barrie concept of democracy is two wolves and a sheep sitting down to decide what is for lunch—it is ridiculous. We cannot create a subset of taxpayers in this country and decide that they should get to vote on whether they should all pay extra money.
Taxes are levied by councils and Parliaments that all of us elect. We should not chop up the country, allow one group of people to impose their ideas on others and then allow money to be compulsorily extracted from those people. That is a negation of democracy—it is not democracy at all.
I echo a point that the SNP ably made. It is not true to say, as the minister asserted, that businesses in Scotland support the BID proposals. The Federation of Small Businesses, which is one of the largest business organisations, is wholly opposed to them. Members will know that because it was reasserted only this week in the briefing that they received in advance of the debate.
The Scottish Executive's performance in dealing with amendment 150 was lamentable. It does not have a clue about what the impact will be of imposing a landlord levy and the implications of that for new and existing leases in Scotland. Mr Ewing made that point very well and I am sure that he will do so again now.
It is prudent to resolve the whole issue and not to undermine the UK's property investment market. I am sure that Mr Ewing knows that undermining that market would have disastrous effects on property investment in this country.
The point that I made about amendment 151, which focuses on the principle of additionality, is that it is fair. We have heard about Highland Council and businesses in Inverness and Wick. The simple question is why a business in Nairn should pay extra for a service that a business in Wick gets for nothing. The amendment would ensure that that does not happen, that there is a level playing field, that if somebody pays extra, they will get extra and that people will not pay more for nothing.
Division number 21
For: Adam, Brian, Aitken, Bill, Brocklebank, Mr Ted, Brownlee, Derek, Crawford, Bruce, Cunningham, Roseanna, Davidson, Mr David, Ewing, Fergus, Fabiani, Linda, Fraser, Murdo, Gibson, Rob, Grahame, Christine, Hyslop, Fiona, Ingram, Mr Adam, Johnstone, Alex, Lochhead, Richard, MacAskill, Mr Kenny, Marwick, Tricia, Mather, Jim, Maxwell, Mr Stewart, McFee, Mr Bruce, McGrigor, Mr Jamie, McLetchie, David, Milne, Mrs Nanette, Mitchell, Margaret, Morgan, Alasdair, Neil, Alex, Petrie, Dave, Robison, Shona, Scott, John, Stevenson, Stewart, Sturgeon, Nicola, Swinburne, John, Swinney, Mr John, Turner, Dr Jean, Watt, Ms Maureen, Welsh, Mr Andrew
Against: Alexander, Ms Wendy, Arbuckle, Mr Andrew, Baillie, Jackie, Baird, Shiona, Baker, Richard, Ballance, Chris, Ballard, Mark, Barrie, Scott, Boyack, Sarah, Brankin, Rhona, Brown, Robert, Butler, Bill, Byrne, Ms Rosemary, Canavan, Dennis, Chisholm, Malcolm, Craigie, Cathie, Curran, Frances, Curran, Ms Margaret, Deacon, Susan, Eadie, Helen, Ferguson, Patricia, Finnie, Ross, Fox, Colin, Gillon, Karen, Glen, Marlyn, Godman, Trish, Gordon, Mr Charlie, Gorrie, Donald, Harper, Robin, Harvie, Patrick, Henry, Hugh, Home Robertson, John, Hughes, Janis, Jackson, Dr Sylvia, Jackson, Gordon, Jamieson, Cathy, Jamieson, Margaret, Kane, Rosie, Kerr, Mr Andy, Lamont, Johann, Leckie, Carolyn, Livingstone, Marilyn, Macdonald, Lewis, Macintosh, Mr Kenneth, Maclean, Kate, Macmillan, Maureen, Martin, Campbell, Martin, Paul, May, Christine, McAveety, Mr Frank, McCabe, Mr Tom, McConnell, Mr Jack, McMahon, Michael, McNeil, Mr Duncan, McNeill, Pauline, McNulty, Des, Morrison, Mr Alasdair, Muldoon, Bristow, Mulligan, Mrs Mary, Murray, Dr Elaine, Oldfather, Irene, Peattie, Cathy, Purvis, Jeremy, Radcliffe, Nora, Robson, Euan, Rumbles, Mike, Ruskell, Mr Mark, Scott, Eleanor, Scott, Tavish, Sheridan, Tommy, Smith, Elaine, Smith, Iain, Smith, Margaret, Stephen, Nicol, Stone, Mr Jamie, Wallace, Mr Jim, Whitefield, Karen, Wilson, Allan
Abstentions: Douglas-Hamilton, Lord James
Division number 22
For: Aitken, Bill, Baird, Shiona, Ballance, Chris, Ballard, Mark, Brocklebank, Mr Ted, Brownlee, Derek, Davidson, Mr David, Fraser, Murdo, Goldie, Miss Annabel, Harper, Robin, Harvie, Patrick, Johnstone, Alex, McGrigor, Mr Jamie, McLetchie, David, Milne, Mrs Nanette, Mitchell, Margaret, Petrie, Dave, Ruskell, Mr Mark, Scott, Eleanor, Scott, John
Against: Alexander, Ms Wendy, Arbuckle, Mr Andrew, Baillie, Jackie, Baker, Richard, Barrie, Scott, Boyack, Sarah, Brankin, Rhona, Brown, Robert, Butler, Bill, Byrne, Ms Rosemary, Canavan, Dennis, Chisholm, Malcolm, Craigie, Cathie, Curran, Frances, Curran, Ms Margaret, Deacon, Susan, Eadie, Helen, Ferguson, Patricia, Finnie, Ross, Fox, Colin, Gillon, Karen, Glen, Marlyn, Godman, Trish, Gordon, Mr Charlie, Gorrie, Donald, Henry, Hugh, Home Robertson, John, Hughes, Janis, Jackson, Dr Sylvia, Jackson, Gordon, Jamieson, Cathy, Jamieson, Margaret, Kane, Rosie, Kerr, Mr Andy, Lamont, Johann, Leckie, Carolyn, Livingstone, Marilyn, Macdonald, Lewis, Macintosh, Mr Kenneth, Maclean, Kate, Macmillan, Maureen, Martin, Campbell, Martin, Paul, May, Christine, McAveety, Mr Frank, McCabe, Mr Tom, McConnell, Mr Jack, McMahon, Michael, McNeil, Mr Duncan, McNeill, Pauline, McNulty, Des, Morrison, Mr Alasdair, Muldoon, Bristow, Mulligan, Mrs Mary, Murray, Dr Elaine, Oldfather, Irene, Peattie, Cathy, Pringle, Mike, Purvis, Jeremy, Radcliffe, Nora, Rumbles, Mike, Scott, Tavish, Sheridan, Tommy, Smith, Elaine, Smith, Iain, Smith, Margaret, Stephen, Nicol, Stone, Mr Jamie, Wallace, Mr Jim, Whitefield, Karen, Wilson, Allan
Abstentions: Adam, Brian, Crawford, Bruce, Cunningham, Roseanna, Douglas-Hamilton, Lord James, Ewing, Fergus, Fabiani, Linda, Gibson, Rob, Grahame, Christine, Hyslop, Fiona, Ingram, Mr Adam, Lochhead, Richard, MacAskill, Mr Kenny, Marwick, Tricia, Mather, Jim, Maxwell, Mr Stewart, McFee, Mr Bruce, Morgan, Alasdair, Neil, Alex, Robison, Shona, Robson, Euan, Stevenson, Stewart, Sturgeon, Nicola, Swinburne, John, Swinney, Mr John, Turner, Dr Jean, Watt, Ms Maureen, Welsh, Mr Andrew