Robert
Neill: I understand the logic about the heavy lifting, but
will the Minister address the point, raised by my hon. Friend the
Member for Northampton, South and other Members, that the assessment of
heavy lifting should perhaps not be in terms of the proportion of the
expenditure as borne, but also of the quantum? One can envisage some
schemes where a quarter will amount to a financial contribution that
could fairly be described as heavy lifting.
John
Healey: We deal with quantum concerns with the
Bill’s proposal that there will be a 2p cap on the scale of a
business rate supplement. That is an area where we were again urged
strongly by all parties in the LGA to go a lot further, and we will
come on to debate that.
Mr.
Raynsford: Does my right hon. Friend not think it slightly
odd that the hon. Member for Bromley and Chislehurst, who argued that
Crossrail should not be subject to a ballot but that every other scheme
should be, is now suggesting that the quantum of the contribution
should be a factor? There can be no scheme that I can imagine in which
there is a greater quantum of contribution from business than
Crossrail. Is that not an indication of how hopelessly confused and
intellectually bankrupt the Opposition’s case
is?
John
Healey: Quite so. I also think that it exposes the
weakness of an approach that says that one specifies quantum figures in
legislation because it is difficult to do so in a way that is
appropriate for all parts of the country. My right hon. Friend is
right. The Bill is framed so that, in the case of Crossrail, the
quantum across Greater London would raise about £178 million a
year. The quantum of a similar supplement raised across
Northamptonshire would be just over £9
million. Frankly,
we in this House cannot legislate on that sort of thing without
creating an inflexibility that would be totally dysfunctional. I
understand the quantum question being a concern of business, but we are
dealing with that by a cap on the size of the levy and by a threshold
of a £50,000 rateable value above which businesses would be
liable for any business rate supplement—at a stroke taking out
the vast majority of businesses in any
area.
Mr.
Binley: What analytical statistical base did the
Government use to set its figure of a third as the cut-off point for a
ballot? I assume there is an analytical base, and I would love to have
it
explained.
John
Healey: It is a matter of studying the impact assessment
of any business rate supplement and, in the end, a judgment. We believe
that the judgment strikes the right balance, as I described earlier. I
shall come to that in a moment, but now I would like to turn to the two
principal questions that underpin the different amendments of the
Conservatives and the
Liberals. First,
both parties’ amendments propose that there should be a ballot
in all cases in which the levying authority wishes to introduce a
business rate supplement. Second, they propose that the requirement to
have a ballot should not apply to London.
Dan
Rogerson: The Minister is accurately setting out the
position of my party and, I believe, of the Conservatives, except in
one respect. He just said that the ballot requirement should not apply
to London, but that is not what our proposal says; it says that it
should not apply to Crossrail. At some point in the future, when
Crossrail has been funded and we are all happily taking trains through
the heart of London, if other projects emerge, they should be subject
to a ballot in the same way. We were specific about saying Crossrail,
not
London.
John
Healey: I shall deal with in a moment. To all intents and
purposes, for the discussions and the proposition before the Committee
and before London—the business rate supplement—the
proposal is to levy to the 2p limit. That proposal comes from the Mayor
and will fund Crossrail for 24 years. The hon. Gentleman may be taking
a very long view and seeking framework legislation for 25 years plus,
but the core of the argument is not changed by the technicalities of
his slightly deficient
amendment. Our
third requirement for a ballot applies across the board—to be
clear, it is not limited to any type of project or to any geographical
area. The two principal questions raised by the debate are whether the
Committee accepts that any contribution—however large or small a
proportion of a project—from a business rate supplement should
be subject to a vote and, secondly, whether we accept that Crossrail is
unique and therefore warrants unique treatment in the legislation. I am
disappointed that the hon. Member for Bromley and Chislehurst is still
arguing from the Front Bench that London is an exception to the rest of
the country—particularly when Crossrail is of national
significance, not least with the national taxpayer putting in the
largest single contribution to the funding package.
I cannot
accept what underpins the hon. Gentleman’s basic argument: that
there should be one rule for London and one rule for the rest of the
country. In the gentlest terms, that is such a narrow view—one,
unfortunately, that we suffered throughout the 1980s and 1990s, when
Government economic policy could barely see beyond the limits of
Greater London and the south-east, and through which so many of the
economic problems and economic potential of the rest of the country
were largely ignored. I do not want us to legislate for the BRS in a
way that says, “We are interested in London, we will legislate
for London and the rest of the country can go hang”. I cannot
accept that as a basic proposition for the hon. Gentleman’s
amendments.
Mr.
Field: I do not wish to go down the narrow alleyway of a
history lesson, but the Minister will be aware that many people in his
own party are expressing concerns today at the rescue of the banking
system—at the perception that it is a London rescue, with a lot
of other industries obviously having great difficulties with the credit
crunch.
I go back to
the point I made earlier to my hon. Friend the Member for Bromley and
Chislehurst. If we were discussing this Bill ten years ago, no doubt
Crossrail would be part and parcel of these amendments. In other words,
we would not be making any exception for Crossrail. It is simply a fact
that Crossrail is so far down the line that it should be given the
go-ahead and not necessarily be subject to the ballot safeguards that
we
regard as important. Looking forward—I go back to what the hon.
Member for North Cornwall had to say—we are not trying to make
London an exception; we are making the specific Crossrail project an
exception. John
Healey: For the purposes of this debate and Bill, London
and the Crossrail project are the same thing. To divide them is a false
basis for argument. I am disappointed that the Liberal Democrats are
taking such a London-only view, essentially overlooking the interests
of vast swathes of the country, some of which is led by Liberal
Democrat local councils.
Let me come
to the two principal questions—first, the one of
balance.
Robert
Neill: With respect to the Minister—because I am
sure he does not want to misrepresent what has been said—if he
is saying that there is genuine concern for the rest of the country, I
accept it. Can he answer why, if we are to pursue an evidence-based
approach, there is no evidence from the LGA of anywhere else in the
country with a desire to take up the powers proposed for
them?
John
Healey: Surely the hon. Gentleman accepts that any
Government ought to be looking to the long term and ought to be capable
of legislating and coming up with policy that is not simply in response
to the demands placed on them. I hope that in this passage of the Bill
we will see a different approach from his party from five years ago,
when it raised exactly the same opposition to business improvement
districts, through which we set a new framework, allowing local
authorities to discuss and develop with local businesses propositions
to benefit their areas. It was a visionary move and forward-looking
legislation from the Government—and, in particular, from the
then Minister who led it through the House, my right hon. Friend the
Member for Greenwich and Woolwich—which has proved a great
success over recent years. There are 67 business improvement districts
in place, many in areas led by Conservative local councils. I encourage
the hon. Gentleman to take that longer-term view of the legislation
that the Committee is considering this
morning.
Mr.
Binley: Is the Minister not raising the same concern that
we are—that the BIDs project was specifically designed to
involve business at every stage of the
process?
Mr.
Khan: So why did you oppose
it?
Mr.
Binley: I did not. I was not here. I will speak for myself
on this matter, so I do not want any of that nonsense.
Business is
involved at every stage of the BIDs process, which has the effect of
bringing business into the humble issue of community and its impact on
the people whom we serve. That is the opposite of this exercise, which
will drive business away because it will not be involved. It will just
see the price at the end of the day and know whether it was right or
wrong, whether it has been balloted or not, quite frankly. So the Bill
is not doing what BIDs did, and that is one of its
failures.
11.45
am
John
Healey: I am grateful to the hon. Gentleman, who gives me
the cue to go on to BIDs. He encourages me to use BIDs as a model, and
others have cited them as the proper model for a BRS. However, the BRS
is unlike BIDs in a number of ways. BIDs have a time limit of five
years and their footprint is essentially localised. They are often
there to support revenue funding for things such as improvements in
local streets and police community support officers—things where
the benefit to the businesses involved are direct and immediate. Unlike
BIDs, schemes funded by the BRS—Crossrail is the clearest case
in point—are likely to be considered appropriate for much wider
areas and to offer much wider benefits, beyond the immediate interests
of the businesses in that area and, because of the likely time scales,
beyond the interests of those businesses that may, if the BRS is
introduced, be paying it. So the BRS is different from BIDs, which
leads us to our view that the balloting question needs to be dealt with
differently.
Let me tie in
the question of Crossrail at this point. Like Crossrail, any other
potential project that might attract a BRS will almost certainly
involve other sources of funding. Local council tax payers, through
local authorities, make a contribution; national taxpayers, through
central Government, make a contribution; and they are likely to do so
precisely because of those wider benefits that such a project could
bring across a wider area.
Let me say
what for me is the principal question. Where other sources of funding
are part of the package for a big project bringing wider benefits, and
where there is a will to see investment from other sources so that such
projects bring those wider benefits—just like
Crossrail—those who argue for a ballot in all cases have to
explain whether it is right that businesses should, in all those cases,
have a vote and a veto on whether the project goes ahead? In other
words, should business be able to block projects even if the will, the
desire and the approval is there from people who are not in business
but who have an interest in the benefits that a project could bring to
an area? Is it right that businesses should have that vote and veto
when they may be paying a quarter or a tenth of the project funding, or
when a BRS may contribute a negligible proportion of it? That is the
question at the heart of whether a ballot is right in all
circumstances, and that is why we have taken the view that it is not
right to give businesses a vote and a veto in all circumstances,
whatever the proportion of funding for a project they would contribute,
but that it is right to put a ballot in place where business is
required to pay more—more than a third—of the project
costs. I
now turn to the question of Crossrail. Is it unique and should it
therefore warrant unique treatment in the Bill? In my view,
Crossrail is a very special project but it is not unique. It is special
in its scale. For the purposes of the BRS, it is also well developed:
its business plan, project plan and funding package are clear. To that
extent, it is well ahead of the field in relation to the potential use
of the BRS. However, I think it is easy for Members of all parties here
to consider that other major transport projects similar to Crossrail
may be highly desirable, play a big part in economic development and
bring benefits to other areas of the country—projects for which
the BRS could play
a part in the funding package. They may bring a
similar relative investment and have similar relative economic
importance as
Crossrail. The
hon. Member for North Cornwall has argued that Crossrail is special
because it has been subject to legislation. Some transport projects in
the future, for which the BRS may be appropriate, may also require
legislation. If they do, why rule them out of benefiting from a BRS,
using that argument to justify a carve-out for Crossrail? The point is
that, when Parliament has considered a project and given it the
go-ahead—Crossrail in this instance, but potentially other
transport projects in other areas—is it right that a business
vote could stop the project later? Essentially, that is the argument
advanced by the hon. Member for North Cornwall. He is trying to
justifying a rather odd position, which, when I gave evidence, I
described—perhaps a bit harshly, but I still maintain that this
is the case—as illogical and intellectually
inconsistent.
Crossrail is
special—it is more advanced than any other potential
project—but it is not unique in terms of what we, or other areas
of the country, may want to use BRS to contribute towards. For that
reason, it is not correct to say that it needs a special carve-out, and
that we should invent a set of principles to cushion Crossrail and give
it special treatment in the Bill.
I hope that
the Committee will forgive me for dwelling a rather long time on that
point. I shall deal with the points that have been raised and the
amendments, but I dwelt on those questions because they go to the core
of the Bill, and many other points that we will come on to are in a
sense derived from the decisions that the Committee and Parliament will
take on
them. We
will discuss the provisions for detailed consultation and explore
concerns about business consultation and influence on any potential use
of the BRS under clauses 5 and 6, but I can say now that levying
authorities that want to use the BRS will be required to draw up a
prospectus, which will be the basis for formal consultation. The
prospectus will need to set out the detailed plans for expenditure,
including the time scales and funding sources, in addition to how the
supplement will work, the assessment of economic benefits that could be
brought to the area and the costs of the project; I have published the
draft guidance that will help to frame that requirement to consult. The
prospectus will allow businesses to see clearly and cross-examine the
costs and benefits that may be proposed. I published the draft guidance
at this stage partly for formal consultation over the next
12 weeks and partly to inform the Committee’s
deliberations of the relevant clauses when we get to them. In summary,
we are trying to strike an appropriate
balance.
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