Previous Section Index Home Page

I heard the hon. Member for Bromley and Chislehurst saying, “Well, yes, we understand that Crossrail is quite a good idea.” He is bound to say that, because his own
12 Jan 2009 : Column 61
Mayor of London, Mayor Johnson, is a very strong advocate and rightly so. The hon. Gentleman would be in an impossible position if he were cutting Boris off at the legs by saying, “No, we don’t support this.” He has had to get himself into the curious position of saying, “We don’t really like the Bill”—the tone of the contributions that we have heard today from the Opposition has been hostile—“but okay, we accept it for Crossrail.”

That is intellectually incoherent. Why should London benefit from the Bill and no other part of the country have the benefit? If in any other part of Britain a major infrastructure scheme is developed that has the support of the business community because it believes that the scheme is crucial to economic success, why should it not have the option? We heard no answer to that question. To say that the Bill is acceptable in London on a major project such as Crossrail but nowhere else is incoherent and non-credible.

This new business rate supplement scheme is fundamental to the economic well-being of our country and there could be no better time than the present for it to be introduced. To argue that this is an inappropriate time is extraordinary. In the next week or so we will see the inauguration of a new President of the United States, which many in all parts of the House welcome. He will be clearly committed to major action, including major infrastructure investment to tackle the current economic difficulties that that country, along with the rest of the world, is facing. We know perfectly well from history what an important role major infrastructure investment played in the 1930s in attacking the problems of the great depression.

It seems an extraordinary position at this point in time to try to prevent a scheme from being put in place that will benefit the economy, that can command the support of local business and that is subject to loads of safeguards against measures being imposed on business. That reinforces the view that the Conservative party does not know what to do and so is doing nothing, as against a Government who are determined to take the action necessary to tackle and respond to the challenges of our time. If the Opposition continue in their incoherent, intellectually bankrupt position of saying, “Yes, the Bill is all right for Crossrail, but nowhere else in the country, and we don’t like it,” they will be seen as the party doing nothing at a time when the country deserves better. I sincerely hope that the Bill receives a solid Second Reading tonight.

5.54 pm

Dan Rogerson (North Cornwall) (LD): A theme that has emerged from the debate is that the Bill means different things in different parts of the country. In London it will undoubtedly be seen as enabling Crossrail to be constructed. That has been discussed, most notably in the contribution from the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), but more widely there may be some confusion about whether this is the right time to introduce it, as the spokesman for the Conservatives, the hon. Member for Bromley and Chislehurst (Robert Neill), said, and how the scheme will work and what safeguards there will be for local businesses and communities.

As I said in my intervention during the Minister’s contribution, the Bill falls between two positions. One would be to concentrate on Crossrail and ensure that
12 Jan 2009 : Column 62
the enabling powers were in place for the mechanism to work in London, to see how it works, whether it can be delivered, and whether the money required is raised through that mechanism. The other would entail a more fundamental examination and reform of the way the business rate system works. My party would favour the localisation of that process as part of a genuine process of localism. The Minister was proud of the list that he read out, but if he were to discuss that with local authority members, many would feel that that was not a radical step giving them the tools to change the world for the better.

The Bill is focused on Crossrail and allows some engagement with the local business community and some options for local authorities to make a change. However, it does not allow fundamental reform. Through their reasoned amendment, the Conservatives seem to have decided that they are happy to throw out the Crossrail baby with the legislative bathwater. If we reject the Bill on Second Reading, we are effectively setting back progress towards Crossrail. Although we share many of the concerns that have been expressed about provisions in the Bill and about the safeguards for business at this crucial juncture, we think that it would be wrong to reject the Bill when it has such an important job to do with regard to Crossrail and the funding for that.

Robert Neill: I understand the point that the hon. Gentleman makes, but I am sure he will understand that the rules of parliamentary procedure are such that it is difficult to cast the motion in such a way that the Bill would only give effect to Crossrail. I am sure he will understand the thrust of our argument that we want Crossrail to proceed without being burdened with the other provisions.

Dan Rogerson: I am grateful to the hon. Gentleman for setting out his position once again. Having made those points in a general debate on Second Reading, he could have aired them again and had them resolved in Committee. If he had made it clear that that was his party’s intention, we would not have been forced into an either/or argument on some extremely complex issues. The Minister will no doubt understand that our support at this stage is not equivalent to a blank cheque to support the Bill. We will have many concerns to raise as the discussion moves on.

Outside London, eyes will be focused on the Bill’s slight reform of the business rate, which is important for the businesses that will be directly affected. As we heard from other hon. Members, the organisations that represent those businesses have been keen to point out that big risks are involved. Their fundamental argument is that there should be no taxation without representation. It was good to have an insight into the Christmas viewing of the hon. Member for Bromley and Chislehurst. We share that principle. I am a little concerned that in the Government’s responses so far, they seem to be saying that although the process works effectively for bids, with the double-lock vote and so on, and the opportunity for businesses to be consulted, to have the final say and to be involved in what goes on from there, there is not the same safeguard in much larger and more important schemes. That is a problem.

The Liberal Democrats believe that the Bill is a missed opportunity to reform local taxation altogether and radically shift the balance of funds raised and spent
12 Jan 2009 : Column 63
locally; it could have been the first step away from the Britain that is the most centralised country in Europe outside Malta. The Lyons inquiry has already been debated in the House many times. It has said that a significant increase in the proportion of expenditure raised locally would assist in the revitalisation of local democracy and its strategic role. That may hint that the principle might be acceptable in certain circumstances, but it does not concede the wider point that local authorities could be trusted to be more involved in raising money locally and justifying the expenditure to the local community, businesses and electorate. The Government should have had that fundamental aim in drafting the Bill. That would have allowed them to look at the Crossrail issues and the reform would have been wider, which many would have welcomed.

There is a real danger that the Bill will set back the positive relationships between businesses and local authorities, which, as we have heard, have been moving forward and delivering through bids and other mechanisms in their areas. That is a real concern. Why concede the principle of locally collected business rates without allowing local authorities to engage fully in that practice?

A useful change adopted by the House has been the hearing of evidence first hand from a wide range of organisations at Public Bill Committees. No doubt our Public Bill Committee will hear from those who think that the Bill is a positive step and those who are far more concerned about it. Clearly, businesses are ready to engage with some proposals of this kind, but they rightly want firm safeguards so that concerns about an ever-increasing taxation burden, at a time when even slightly increased overheads could mean the difference between bankruptcy and insolvency, can be addressed and the voices can be heard. The Prime Minister himself has instructed Her Majesty’s Revenue and Customs, for example, to do all it can to support businesses going through short-term difficulty. It would be against that trend if proposals such as these could be imposed on businesses in the local community without their having had the chance for a final say and for thoroughly opting into the process.

We have heard a great deal about business improvement districts as an idea of how such a principle could work. It was instructive to me, as a relatively new Member, to hear that the Minister was instrumental in bringing them in; I am sure that he will want to explore that if he joins us in Committee. What the BID mechanism tries to provide is very different; there are some key local renewal projects to encourage investment. However, the fundamental point is how businesses can be consulted and reassured that they are not simply a cash cow, but very much part of the process of coming up with a vision—and not only funding it, but delivering it and ensuring that it is realised.

BID approval requires a majority of the liable ratepayers and that the aggregate of rateable values voting in favour exceeds those voting against; that is the double-lock system to which the Minister referred. Such a provision is in the Bill for certain circumstances—when more than a third of the eventual project is to be funded through the mechanism. That provision is there, but my
12 Jan 2009 : Column 64
concern and that of businesses is that it is not there in all cases. Clearly, if the Bill is enacted, that will be a problem for many people.

BIDs can choose to exclude certain businesses from paying the levy; the Minister has said that he may envisage parts of an area being targeted for funds. Those are the sorts of questions that people will have. There is a fear that the measure could be an overall levy, on top of the existing business rates structure, to fund projects that a local authority might have wanted to fund for some time, but lacked the money to do so.

I appreciate that in some cases it is difficult to demonstrate additionality. However, it is crucial that businesses have confidence that in any system such as this the principle of additionality will apply. A similar point came up in the debates between the Minister, the hon. Member for Bromley and Chislehurst (Robert Neill) and I, during the Planning Bill, about the infrastructure levy and how it would work. Such measures must be designed to provide something and enable development and genuine economic benefit.

Will the Minister reconsider the question of a ballot and return to it later to meet the concerns shared by many hon. Members—that circumstances are likely to occur in which a local authority imposes the measure without there having been a ballot? That is the business community’s fundamental and major concern, and a change on that issue could go a long way towards allaying people’s concerns about the Bill.

There is much to be said for how local government structures work in other parts of the world in raising money, engaging with electorates and ensuring that there is collective support for measures. In the United States, for example, there are ballots when major infrastructures are to be funded through whatever mechanism is appropriate in the state and a local authority is allowed to pursue. We should move towards such a process, in which the business community and local residents have far more of a say in opting to support major infrastructure projects that could put a significant financial burden on the local authority and the business community.

Under the United States system, the powers available to local authorities are very different and they vary in different states. However, we should aspire to provide that sort of example; that would go far further than the measures outlined by the Minister to engage people and ensure that everybody has a say in the financial commitments for a community and in delivering the community’s wishes for its future.

As I said, the Bill raises questions about how the rateable value system works. Last week, I met representatives of St. Austell Brewery in my constituency to talk about the problems that the company’s pubs are experiencing. They were keen to get across to me the fact that the smoking ban and changes in people’s spending behaviour because of changes in the economy mean that the rateable value of some of their pubs will be affected. The system is very slow to catch up with that. The problem is that businesses are dealt with at a certain rateable value, and it takes a long time for them to get across the message that their business has changed fundamentally and that the premises have a different value. Businesses would have welcomed more exploration of such questions in any Bill on business rates.

12 Jan 2009 : Column 65

As we have heard, next year the rateable value formula will be reviewed. There are concerns that although the threshold is set at £50,000 at the moment—although that is not in the Bill—that may well change in future and many other businesses may be drawn in. That does nothing to allay the fears of those outside who see the Bill as potentially dangerous or negative. The Government’s ability to see the economic future has been drastically called into question in recent months. We could see Government Ministers in the role of Michael Fish, who said in 1987 that everything was going to be fine—and then the hurricane struck. All of a sudden we find ourselves in the worst economic circumstances for decades, if not centuries.

There is a need for greater clarity in the Bill. Clause 6, which deals with the consultation process, has little detail about how consultation with business will be conducted. Having said that we favour a ballot system were the Bill to be enacted, I should say that consultation will need to be undertaken extensively prior to that to ensure that there is real debate. We want to hear more about how such consultation should take place and how businesses can have confidence that their voices will be heard. Given that local authorities will also be contributing to these schemes, that also applies to how the debate will be conducted locally for local residents and other organisations in the voluntary sector and so on.

The impact assessment that accompanies the Bill states that assurance will be provided by internal safeguards as well as via external audits undertaken by the Audit Commission. However, inevitably, there will be concerns about consultation. We heard about a specific London-based example regarding the congestion charge. On a national scale, the recent programme of post office closures is another example of consultation. Many communities were given the opportunity to be consulted, but all the evidence that they presented in those consultations came to nothing, and in the end valuable local institutions were lost. That devalued concept of consultation needs to be addressed—the problem is not insurmountable. If there is to be consultation, it must be genuine and there must be a much clearer vision of how it is to be conducted.

We will explore many of those issues in Committee, so it is a shame that the Conservatives have chosen to take an all-or-nothing view at this stage. However, the House seems to be more or less unanimously in agreement that we should not put Crossrail in jeopardy. That is why the Bill, although it needs to be improved drastically, as I hope will happen during its passage, deserves a Second Reading. We have been waiting 18 years for Crossrail. I saw somewhere on a website that we have been waiting for it since Brunel’s time, so we can go even further back. That is a name that resonates with me as I come up here on the Great Western line.

Robert Neill: He was a Conservative.

Dan Rogerson: I am sure that the ghost of Brunel would have something to say about that.

An efficient transport system across London is vital to remove congestion, to increase productivity and to deliver economic growth in the constituencies of hon. Members across London. Pulling back from building Crossrail is not an option. Congestion in London’s already overcrowded system would worsen and conditions
12 Jan 2009 : Column 66
for passengers would deteriorate. International business could relocate to Europe, away from the UK altogether. It is vital to business and to London that the scheme goes ahead. We have had that consultation process, as well as the tortuous progress of an Act through Parliament. Hon. Members who sat on the Committee on that Bill certainly felt that they had done their duty to the House. We have had a consultation process and there is support for the scheme, and it would be hugely damaging to send any signal that it should be brought to a halt or rejected or that the finances enabling it to come to fruition might be curtailed or prevented from being secured. Whatever disagreements we have about the nature of the Bill and the clumsy way in which a broader business rate supplement has been piggy-backed on to what could have been a Crossrail funding Bill, there can be no doubt that the Crossrail project is urgent and must not be further delayed.

My colleagues and I will reluctantly support the Government tonight—reluctantly because there are many ways in which they could have gone further to work with businesses to deliver a Bill that allayed their concerns and assured them that the aim is a partnership that can deliver for local communities. We have been advocates of Crossrail for many decades, and I am afraid that we cannot join the Conservatives in opposing it at this late stage.

There is an enormous amount of work to do in Committee. Britain needs a Bill of this nature, but it needs to go much further in its consideration of business rates. It is a great shame that the Bill falls between two objectives, but I hope that the House will give it a Second Reading. However, I am sure that at later stages and in another place much can be done to improve it and to ensure that it is more fit for the purposes that the Government claim for it.

6.14 pm

Paul Farrelly (Newcastle-under-Lyme) (Lab): I want to give general support to the Bill, which advances modest reforms to the uniform business rates regime that has been run nationally since its introduction with the ill-fated poll tax 1990. The poll tax—I am sorry to mention it twice in two sentences—was swiftly replaced, but this small amount of discretion locally to tinker with business rates has been a long time coming. Importantly, it is not mandatory—no council will be forced to implement a business rate supplements scheme. It also gives local businesses a strong voice in the introduction of any such scheme and over the projects for which any funds raised are earmarked.

That said, I have concerns about the operation of the business rate regime that I hope to highlight with specific examples after these short opening remarks. I promise that I am not going to mention Boris, London or Crossrail. I want to deal with some of the potential benefits outside the capital, but also some of the flaws in the current system that assist abuse. In short, I want to talk about some of the good intentions in the Bill, but also some of the bad apples out there abusing the system. That issue should be addressed with further reforms, possibly as the Bill goes through the House.

In my area of Newcastle-under-Lyme and north Staffordshire, one of the biggest challenges that we face is economic regeneration in a traditional manufacturing
12 Jan 2009 : Column 67
and former coalmining area. It will not have escaped the notice of any hon. Member—not least the hon. Member for Lichfield (Michael Fabricant) and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Flello), who are both here—that last week, on practically the first working day of the year, Waterford Wedgwood, one of north Staffordshire’s biggest and most renowned employers, went into receivership. Indeed, Wedgwood’s employees are today expecting to learn their fate. Like my colleagues locally, I am in touch with Government Departments, agencies and our local Potteries trade union, Unity—its general secretary, Geoff Bagnall, its deputy general secretary, Garry Oakes, and officers in particular—to see what help and advice can be offered.

In Newcastle-under-Lyme, large swathes of land, particularly around the central ring road, are awaiting development. As in other towns across the country, how they are developed will determine not only the economic future of the town but how it looks and feels for the foreseeable future. The issue of land acquisition by the public sector has been one of the key stumbling blocks to joined-up regeneration in our area for many years. A business rate supplements scheme might provide useful extra funding—an additional tool in the armoury, as it were—to make the town more the master of its own future. Public land acquisition would help to safeguard against speculative developers playing the planning system, cajoling local councillors and getting away with poor design, especially as the siren calls of “Any development is welcome development” will only grow stronger during a downturn. In my area, it may well prove popular with local traders and property owners in a traditional market town that is under threat of further huge supermarket developments right round the town centre, not only on the edges of the town.

Together with a coherent local plan, having more wherewithal for public ownership of key sites would act as a bulwark against—or perhaps provide a backbone for—weak, old-fashioned, unimaginative, unambitious or simply perverse planning officers who cave in too easily. That happened yet again in Newcastle before Christmas. Our head of development control, who goes largely unsupervised in a dysfunctional planning department, almost single-handedly pulled the rug from under the feet of councillors, his planning colleagues and experts from Urban Vision North Staffordshire, our local architecture and design centre, by recommending the approval of a Lidl discount store and budget Travelodge hotel, right in the town centre, against all expert opinion and emerging site guidance. Had the site been in public ownership, that could have been resisted. That failure is ultimately political and managerial at the highest level of the council. However, there is no doubt that if these sites were in public hands, in Newcastle-under-Lyme, as in many towns and cities up and down the land, we would be more masters of our own fate.

Next Section Index Home Page