Business Rate Supplements Bill

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Mr. Binley: Would the Minister be so kind as to give way?
John Healey: I am drawing to a close, but I will give way to the hon. Gentleman.
Mr. Binley: I am still concerned about local authorities’ ability to consult and the quality of the consultation. Will the Minister give us some reassurance that, as part of the process of ensuring that the Bill works fairly and properly, he will ensure that that quality is improved?
John Healey: I am grateful to the hon. Gentleman for his intervention. Indeed, part of my purpose in producing the draft guidance covering consultation is precisely to collect views, particularly from people such as himself who may be concerned about the nature of the consultation process over the next 12 weeks, on whether that could be strengthened, and if so, how. If the hon. Gentleman wants to submit a view to me, I would be pleased to receive it.
In summary, we are trying to strike a balance between giving business a degree of reassurance to which we believe it is entitled, and the interests of others, including local residents, who may benefit from or share an interest with business in a project supported by a BRS going ahead, and who may contribute a share of such a project’s funding. On the question of balloting, those others may therefore say that it is appropriate to give business a vote or a veto if a BRS is to contribute a third or more towards a project’s costs, but not if it makes a smaller contribution and the financial heavy lifting comes from other sources. Business should not be able to block a project’s going ahead on that basis.
I hope that, in the light of the explanations that I have given during our debate, amendment 1 will be withdrawn and the hon. Members for North Cornwall and for Bromley and Chislehurst will not press their other amendments, but will accept that we have striven to strike an appropriate balance in the Bill.
Dan Rogerson: I wonder whether I might seek your guidance, Mr. Atkinson, before I remark on the Minister’s point about pressing amendments to a vote. Would it be possible to vote on amendments 1, 5 to 7, 10 and 12 all together? I do not intend to press them to a vote now, but would it be possible to vote on them en bloc, or would there have to be a separate vote on each?
The Chairman: No, we cannot do that. We would only vote on amendment 1 at this stage. If hon. Members want to vote on the subsequent amendments, which have been grouped with amendment 1 for the convenience of debate, they will have to be voted on in their proper place in the Bill later.
Dan Rogerson: Thank you, Mr. Atkinson. I will signify my intention to press for a vote when we reach the appropriate point. The reason I mention that is that, as the Minister has quite rightly pointed out, amendment 1 relates to the theme under discussion, namely consultation with business and being able to demonstrate that business supports the scheme, but the crucial issue is the ballot, which, as I understand it, is dealt with later in the Bill. We will have the opportunity to vote on, for example, amendments 5 to 7, which are on the issue of a ballot, when we reach them. That is the crucial question for hon. Members, certainly on this side of the Committee.
The Chairman: That is correct.
Robert Neill: Along similar lines to the hon. Gentleman, I point out that amendment 25, which is the principal amendment in my name—the others are essentially consequential—is grouped here for the purpose of debate, but it is actually an amendment to clause 4, and I therefore wish to put the Committee on notice that when we reach it, in due course, I anticipate dividing the Committee.
The Chairman: I am getting some helpful guidance. If hon. Members indicate that they wish to vote on amendment 25 when that comes, they will not be able to vote on amendment 5, as the one cancels out the other. So voting will be restricted to amendment 25 or amendment 5, but not both.
Robert Neill: But we can have a vote on amendment 1 now, Mr. Atkinson?
The Chairman: Yes. I am sorry to have interrupted, Mr. Rogerson.
Dan Rogerson: I do appreciate that I threw the debate slightly off course with my question, Mr. Atkinson.
This has been a useful debate on what is the most important issue for many of the witnesses we heard from in our previous sessions. I will focus, first of all, on the points made by the Minister in response to the individual amendments.
Amendment 1 would set out a clear indication that the business community’s views matter, and that for a project to proceed it must be clear that the business community is convinced that the economic development case has been made. Although I accept the Minister’s claim that the only way to do that would be to have a ballot, I would have thought that it might be possible to set out clearly in that ballot that the business community supports the measures in light of the intention to promote the economic development of the area.
12 noon
The Minister made a number of further points about balloting, and therefore amendments 5 to 7 and 10 to 12, as well as amendment 25, to which the hon. Member for Bromley and Chislehurst has just referred. Why should we not have a ballot for Crossrail? The hon. Member for Cities of London and Westminster made a very good point when he said that if Crossrail were a new project being proposed subsequent to the Bill being considered, of course we would be calling for a ballot. However, Crossrail is different; in the view of many, it is unique. In the Minister’s view, it is not unique; it is very much the same as any other project which might emerge, but I think the time scale makes it very different. Most of the witnesses that we heard from were clear in pointing out that they felt it to be unique as well. I think that most politicians in London would say that Crossrail is a project of unique significance, having had vast amounts of consultation and scrutiny. I therefore believe that it is of a different magnitude, or at least that we have arrived at a formulation different from that for any subsequent scheme elsewhere in the country.
The Minister said that he was sympathetic. I am very grateful for his sympathy and he did look as though he was wrestling with himself and was quite anguished as he tried to reconcile all these important arguments. It might help to point out that, unlike the Conservative party—we will no doubt develop this argument when we debate later clauses—my party does not believe that this measure should be restricted to London. We believe that it is a useful tool, and we heard from the Local Government Association that many projects may now emerge that require a BRS. We do not have a problem with that as a concept. The problem is that there needs to be a ballot. That is our opinion and that of many organisations representing the business community.
The distinction between not having a ballot on Crossrail specifically and not having a ballot in London at all is crucial. The Minister said that 25 years may be the lifetime of this legislation and by then it may well have effectively run its course. A few years ago, it was my privilege to serve on the Committee considering the Bill that became the Commons Act 2006, where we were looking at legislation that dated from the 12th and 13th centuries. It is important that we consider the possibility that future projects in London will be funded under any regulations that we play our part in approving. Most people accept that there is a difference between Crossrail and other projects that may emerge elsewhere in the country.
The Minister returned to a point that he made in his evidence to the Committee— that a ballot will effectively give business a veto over those projects. I think that he is saying that if a third or more of the cost of a project is funded by the BRS, he is quite happy for the business community to have a veto, but if it is slightly less—1 per cent. less for example—he is not happy for it to have a veto. I do not believe that it is a veto, but he has presented it to the Committee in those terms. Government Members who say that there is an intellectual inconsistency ought to consider their own arguments about this concept—or spectre—of a veto quite closely, because surely they apply equally whether the contribution is more than a third or less.
The lower the proportion of the overall financial package provided by a BRS, the less important it is to that project’s advancement. Far from being a veto, the ballot is merely a way for the business community to say to all the other funding partners that it is not convinced that it will reap equal benefit from the economic development in question, so they should go back and look at it again. That important point needs to be borne in mind. Through the consultation, local elections and the mechanisms for contributions that may be made by central Government to a project that is proposed by an elected government body, there is in many cases accountability to these other sections—a veto, if one likes, on behalf of the other funding partners. To pick out the business community and say that it will be handled differently is inconsistent and unfortunate. Regardless of whether the BRS will form more or less than a third of the funding package, the point is that it is still 2p on the rate to a business in an area where a BRS is imposed. It will be of no comfort to the business that the overall contribution is less than a third, because it is still paying its 2p, without the benefit of a vote. The fundamental problem with the Government’s argument is that businesses in an area where a greater contribution is to be made are to be allowed to have their say, even though their own contribution will be no different from that of businesses in an area where the contribution makes up less than a third of the funding package.
There are problems and intellectual inconsistencies in the Government’s argument. I therefore very much wish to press the amendment to a vote, so that we can have the Committee’s decision on that important question. I would also like the opportunity later of a vote on whether a ballot is crucial to the proposal. I believe that it is, and I therefore signal my intention to press to a vote my amendments on the ballot proposal.
Question put, That the amendment be made.
The Committee divided: Ayes 6, Noes 8.
Division No. 1]
Binley, Mr. Brian
Burt, Lorely
Dunne, Mr. Philip
Field, Mr. Mark
Neill, Robert
Rogerson, Dan
Healey, rh John
Khan, Mr. Sadiq
Love, Mr. Andrew
Raynsford, rh Mr. Nick
Sharma, Mr. Virendra
Turner, Mr. Neil
Twigg, Derek
Watts, Mr. Dave
Question accordingly negatived.
Clause 1 ordered to stand part of the Bill.

Clause 2

Levying authorities
Robert Neill: I beg to move amendment 22, in clause 2, page 1, leave out lines 17 to 20.
The Chairman: 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).
Robert Neill: 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.
John Healey: 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.
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Prepared 28 January 2009