 House of Commons |
Session 2008 - 09 Publications on the internet General Committee Debates Business Rate Supplements |
Business Rate Supplements Bill |
The Committee consisted of the following Members:Alan Sandall, Gosia
McBride, Committee Clerks †
attended the Committee Public Bill CommitteeTuesday 27 January 2009(Morning)[Mr. Peter Atkinson in the Chair]Business Rate Supplements BillWritten evidence to be reported to the HouseBRS
05 City of London
Corporation 10.30
am
Mr.
Mark Field (Cities of London and Westminster) (Con): On a
point of order, Mr. Atkinson. I appreciate that the nature
of the Bill means that there is no formal programme motion debate, and
I seek your guidance on how we might address a particular issue. As you
are aware, the Bill has had some high-profile attention as a result of
news stories in the press. Will I be able to ask the Minister for Local
Government whether he has been approached by Members of the other place
about the matters before
us?
The
Chairman: Order. I must stop the hon. Gentleman. The
Programming Sub-Committee has set a timetable for this Committee. The
matter that he raises has absolutely nothing to do with the contents of
the Bill.
Mr.
Field: Further to that point of order, Mr.
Atkinson. I do not wish to criticise the Chair or answer back, but my
point is relevant. The Government—like any Government—are
well aware that they can get their business through the Commons without
any great difficulty. Therefore, we go through the whole process that
we have seen in the Commons. The concern is that in the Lords, where
there is no majority—at least as the Lords is currently
constituted—amendments can be tabled that have a lot more sway
than is, perhaps, the case here. That is the reason why I wish to put
the issue on the
record.
The
Chairman: Order. It is clear that nothing in the Bill is
relevant to what the hon. Gentleman is saying. As to what happens in
another place, that is up to another place, and is equally irrelevant.
I appreciate what he is trying to do, but it is not in
order.
Clause 1Power
to impose a
BRS Dan
Rogerson (North Cornwall) (LD): I beg to move amendment 1,
in
clause 1, page 1, line 7, leave
out ‘is’ and insert ‘and the
majority of the affected business community
are’.
The
Chairman: With this it will be convenient to discuss the
following: amendment 25, in clause 4, page 3, line 21, leave
out from beginning to second ‘ballot’ and insert
‘a’. Amendment
5, in
clause 4, page 3, line 21, leave
out— ‘where
there is to
be’. Amendment
6, in
clause 4, page 3, line 21, leave
out ‘, the
ballot’. Amendment
7, in
clause 4, page 3, line 24, at
end insert— ‘(2) Subsection
(1)(c) does not apply in relation to
Crossrail.’. Amendment
36, in
schedule 1, page 22, line 36, leave
out sub-paragraphs (a) and (b) and
insert— ‘the
arrangements for the
ballot’. Amendment
37, in
schedule 1, page 22, line 39, leave
out sub-paragraphs (a) and (b) and
insert— ‘the
result of the
ballot’. Amendment
10, in
clause 7, page 4, line 32, leave
out from ‘BRS’ to end of line
42. Amendment
11, in
clause 7, page 5, line 8, at
end insert— ‘(6) This
section does not apply to
Crossrail.’. Amendment
27, in
clause 7, page 5, line 8, at
end add— ‘(6) This section
does not apply to the Crossrail project promoted by the Greater London
Authority.’. Amendment
12, in
clause 8, page 5, line 10, leave
out— ‘If
a ballot on the imposition of a BRS is
held,’. Amendment
28, in
clause 10, page 6, line 12, leave
out from beginning to second ‘a’ in line
13. Amendment
29, in
clause 10, page 6, line 46, leave
out from ‘BRS’ to end of line 13 on page
7.
Dan
Rogerson: 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.
Mr.
Field: Will the hon. Gentleman indicate who would qualify
for such a ballot? I do not wish to do the Government’s arguing
for them, but it seems that this is a rather complicated situation.
Would the qualification be on the basis of being a leaseholder at a
particular time, a freeholder or an owner of property, or of having a
particular interest? As he will know, in relation to the existing
business vote in the City of London, in my constituency, it is only
relatively recently that the qualification has gone beyond simply those
in partnership and sole practitioners of businesses to a corporate vote
with a complicated structure. How does he envisage the ballot and the
qualification for it working?
Dan
Rogerson: We are not seeking to change the conditions in
the Bill about who would qualify for a ballot, and when we come on to
talk about thresholds, we will discuss those on whom the rate will be
imposed. The issue is that the Bill defines a set of circumstances that
would trigger a ballot, which is when a certain percentage—30
per cent. or so—or more of the total scheme budget is to be
funded by the BRS. Below that proportion, it will not be necessary to
hold a ballot. Given the evidence that we heard and the written
submissions that we had from the business community, there is a great
deal of concern that the provision does not go far enough and there
should be a ballot in all circumstances, and that is what my amendment
seeks to
introduce. I
will therefore be interested to hear the Minister’s response. I
suspect that I can anticipate some of the arguments because we
rehearsed them a little during the exchanges—I hesitate to call
them debates—in our evidence sessions. I will obviously wait to
hear what the Minister has to say, but I hope he will feel that the
evidence that we heard in our earlier sittings is convincing enough to
move to having a ballot in all circumstances. If I am not entirely
satisfied, I may well seek to press some of the amendments to a
vote.
Robert
Neill (Bromley and Chislehurst) (Con): Welcome back to the
Chair, Mr. Atkinson. I am delighted to see that it is as
sunny in London as it was in the north-east of England when I was there
yesterday.
I have much
sympathy with the amendment moved by the hon. Member for North
Cornwall. In broad terms, my colleagues and I are minded to support it
but we have tabled our own amendments. They are grouped here in a
different formulation but they would achieve essentially the same
objective. I shall speak to those as well as to the hon.
Gentleman’s amendment.
The hon.
Gentleman is right to say that the amendment concerns two of the
Bill’s key issues. Principally, there is the question of whether
there should be a compulsory ballot in all cases. My hon. Friends and I
adopt the stance that to meet the Government’s objectives of
ensuring that the BRS system has credibility in the business community,
a ballot is essential in all cases. The threshold that the Government
propose—that a ballot should be required only when the BRS will
raise more than one third of the total cost of the scheme—seems
to us, with respect, a somewhat arbitrary figure. One can think of
schemes, particularly some of the joint schemes, that are proposed for
transport infrastructure where a quarter or a fifth of the total cost
would be a very large sum. In the evidence sessions, Government Members
talked about transport schemes for bridges and tramways—that is
substantial capital investment—and a quarter or a fifth of the
cost would be a very substantial burden to place on
businesses. 10.45
am It
may be, if the case is convincingly made, that businesses will consider
it a worthwhile investment, and I do not have an objection to that.
That is why my hon. Friends and I have always supported the concept of
the business improvement district and would be happy to see it
implemented further. The key test, however, is that businesses can buy
in.
We are
particularly concerned in the present economic climate about the
potential imposition of large levies without a ballot. We are worried
that, without a ballot, there will not be the necessary discipline on
local authorities that choose to take up a BRS scheme, although in the
current climate how many schemes are likely to be proposed is
questionable. Witnesses from the Local Government Association could not
think of any bodies apart from the Greater London authority proposing a
project. However, as and when the schemes arise, it would be a useful
discipline and serve to concentrate minds if local authorities knew
from the outset that they would have to take the business community
with them and produce something that is acceptable to a majority of
them through the double-lock mechanism, which is a sensible
safeguard. I
am grateful to the Minister for publishing the consultation guidance,
as he promised he would, last Friday afternoon. I do not disagree with
the aspirations that it sets out for the early involvement of the
business community, but the fact is—I speak as one who has been
involved in local government for much of my career—that some
local authorities are more proactive and assiduous than others about
involving their business communities. A mechanism that requires local
authorities to engage with their local businesses, because they need
businesses’ votes at a very early stage, would surely be more
effective.
Derek
Twigg (Halton) (Lab): Can the hon. Gentleman give an
example of a local authority that does not consult or involve its
business community in any of its decisions? The local authority in
Nottingham consulted the local business community, although it ended up
disagreeing with
it.
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