Robert
Neill: I have listened to the Minister and he is
superficially persuasive. Unfortunately, the Government’s
actions belie their reasonable words. He presents the measure as an
enabling opportunity for the rest of the country, but there is great
suspicion of the Government’s real motives elsewhere in the
country. For the reasons rehearsed, there is acceptance that a funding
package for Crossrail is in place that people now want to implement.
However, juxtaposing this new potential tax-raising power given to
local authorities elsewhere and the Government’s slashing the
money available for local authorities to support business development
gives rise to a real fear that the proposal comes from the
Treasury’s desire to transfer burdens from central Government to
local
businesses.
John
Healey: Does the hon. Gentleman know by how much central
Government funding to local authorities is increasing in 2009-10? He is
looking blank, so I shall tell him: 4.2 per cent. Combine that with the
fact that it is the second year of a three-year settlement, which has
secured certainty for local government, and with the removal of
restrictions that were in place on many of the funding streams. The
proposal gives local authorities greater freedom to decide their
priorities and to fund them.
Robert
Neill: It was not a blank look; it was astonishment at the
Minister’s chutzpah in trying that one on. In reality, he knows
that that 4.2 per cent. relates to the overall funding settlement. He
knows perfectly well that that has been roundly criticised by the local
authority associations, in particular because it does not reflect the
many costs shunted on to local authorities and the additional burdens
such as adult social care, or the fact that local authorities are
seriously suffering over the outworking of the formula, which he and I
have discussed in the past.
John
Healey: I am interested in the stance that the hon.
Gentleman is taking, not least because his party’s leader and
shadow Chancellor have already set out national plans for the coming
financial year, which would involve a £3.7 billion cut in
general Government expenditure. If not an increase of 4.2 per cent., as
we propose for next year, what would his settlement be for local
government in the next financial year?
Robert
Neill: The Minister will not get away with that one
either—
The
Chairman: Order. Nor will the hon. Gentleman. That is out
of
order.
Robert
Neill: My specific response is that the Minister
knows full well that that and his earlier comments, which were
in order, do not present the whole picture. The funding for the local
authority business growth incentives scheme, which is specifically
targeted at assisting business and economic development, has been
reduced from £1 billion over the past three years to £150
million over the next two years. That is why people are
suspicious.
The
Chairman: Order. May I say to the hon. Gentleman and the
Minister that we are not having a debate about that issue, so I would
be grateful if we could call it a
day?
Robert
Neill: You will have gathered from all I have said,
Mr. Atkinson, that I am unconvinced by the Minister’s
response. I will give way to the hon. Member for North Cornwall because
I am sure he will be in order—he always
is.
Dan
Rogerson: I am grateful that the hon. Gentleman thinks so.
I want to clarify: is the position of the hon. Gentleman’s party
that the provisions of this Bill—that is, to be an extra tool
for local government with the business community—even if subject
to a ballot, should not be applied anywhere other than on Crossrail in
London? 12.15
pm
Robert
Neill: We do not believe it is timely for rolling out
elsewhere in current circumstances but in due course there are other,
better means to give business incentives to local authorities. We are
not convinced by this mechanism at this time, except for getting
Crossrail up and
running.
The
Chairman: Is the hon. Gentleman proposing to withdraw this
amendment?
Robert
Neill: No. I wish the Committee to vote on
it. Question
put, That the amendment be made.
The
Committee divided: Ayes 4, Noes
8.
Division
No.
2] Question
accordingly negatived.
Clause 2
ordered to stand part of the Bill.
Clause
3Use
of money raised by a
BRS
Robert
Neill: I beg to move amendment 46, in clause 3,
page 2, line 10, at end insert ‘,
and (c) which promotes the economic
well-being of its area, including the provision of transport
infrastructure and the promotion of employment and employment skills,
investment, regeneration, business efficiency and
competitiveness.’.
The
Chairman: With this it will be convenient to discuss
amendment 2, in
clause 3, page 2, line 18, at
beginning insert ‘primary and
secondary’.
Robert
Neill: We now turn to definitions of the use of money
raised by BRS. I tabled the amendment in a spirit of genuine enquiry
and helpfulness.
One concern
raised in the evidence sessions by a number of witnesses from the
business community was the definition of economic development. It links
to the concerns that are rightly set out in the consultation document
that the Minister has provided about how the business community can be
reassured that there is genuine additionality in the funding and, if
business is to contribute, how it can be assured that the money is
genuinely channelled towards economic benefits, rather than substituted
for funding for other activities.
The clause
starts by referring to
“expenditure...on
the project to which the BRS relates”,
but subsection (3)
defines what the money can be used for almost by exclusion. It says
what BRS money cannot be spent on, but you will remember,
Mr. Atkinson, that in the evidence sessions many business
organisations said that they would like the Bill to contain a more
comprehensive definition of what it could be spent on by way of
economic development. The amendment endeavours to achieve
that.
If the
amendment were made, as well as saying that the BRS money may be spent
only on the project to which the BRS relates and that the authority
would otherwise not have incurred that expenditure—it is
genuinely additional—the clause would state that the BRS money
may be spent only in a way that promotes the economic well-being of the
local authority’s area. We set out specific examples of such
expenditure, which I suspect have been well rehearsed, both in the
documentary
evidence—the White Paper—and our
evidence sessions. I do not think that anyone would argue against such
areas of expenditure attracting the interest of authorities for a BRS
scheme, but the amendment is intended to reassure businesses that there
is a requirement to stick to a definition that is in the Bill, and that
should for any reason there be a straying beyond that, they would have
recourse through the usual provisions—judicial review and so
on. I am sure
that local authorities would not stray, but the amendment is intended
to help and to make the spirit of co-operation more effective, which I
am sure is something that, after the controversy of the earlier
debates, we all genuinely wish to see, having got thus far. That is the
spirit in which I move the amendment, and I am interested to hear what
the Minister says about how we can achieve that better definition,
which seemed to be a genuine—not an obstructive—desire on
the part of
business.
Mr.
Raynsford: I shall not detain the Committee long, but I
cannot fail to observe the extraordinary contortions and intellectual
confusion displayed by the Opposition. We have just heard them arguing
that the Bill should be limited to London and the Crossrail scheme;
however, the amendment, which was obviously tabled at the same time as
the others, is based on a widening of the remit to include provision
for training, employment and other desirable objectives, which the hon.
Member for Bromley and Chislehurst knows perfectly well could not be
contemplated for at least 25 years because the proceeds of the business
rate supplement have been predicated in London for the support of
Crossrail throughout that
period.
Robert
Neill: The right hon. Gentleman is always courteous, but I
am sure that he will appreciate—he has been here long
enough—that it is not beyond the wit of anyone to have worked
out that had we by some chance and some fluke of arithmetic in the
Committee succeeded in limiting the Bill to Crossrail, I might not have
moved the amendment. I would have thought that that was
obvious.
Mr.
Raynsford: So here we have the Opposition, who have said
emphatically that they do not want anywhere else in the country to get
the benefit of the provision, saying that although they would like to
see the remit expanded to include certain activities such as training
and skills development, those things would not be available anywhere
else in the country. They would only be available in London where they
could not work because the proceeds of the business rate supplement
have been predicated for at least 25 years on Crossrail. That is a
product of a party the whole approach of which on this subject of
relations between business and industry and the promotion of economic
development shows no sign whatsoever of an ability to learn any
lessons. The
Conservative party wrong-footed itself five years ago when it opposed
BIDs. It did not understand the importance of the scheme, to which it
is now, at a late date, a convert. It recognises that it made a
mistake, but it cannot learn a lesson and it is about to commit the
same mistake again. I forecast that in a few years’ time we will
hear the Conservatives talking about how excellent
it is to have a framework in which business and the local authority can
work together for economy development—business rate supplements.
I look forward to that day when wisdom prevails, but in the meantime I
am appalled at the Opposition’s
incoherence. Dan
Rogerson: Although I share the concerns of the hon. Member
for Bromley and Chislehurst and his hon. Friends about some aspects of
the Bill, I agree with the right hon. Member for Greenwich and Woolwich
on this issue. As we saw in the last vote, there is a clear difference
between the parties’ views on whether the provisions should be
available—subject to a ballot, which we have already
discussed—outside London. My party believes that the provisions
should be available in other parts of the country, as long as there is
a clear coming together of the business community, local government and
all the other funders to
deliver. I
shall speak to the amendments that stand in my name and that of my hon.
Friend the Member for Solihull to highlight the thinking behind them.
They are probing amendments, to which I hope the Minister will have the
opportunity to respond briefly. Amendment 2 deals with education. We
question whether there might be provision for training and skills to be
involved in a scheme is funded by a BRS, as opposed to specific primary
and secondary education, which is funded as a core function of the
relevant authority. The purpose of the amendment is to probe the
Government and see whether their intention is to allow local
authorities, as part of their economic development schemes, to fund in
that way the provision of training and
skills.
Mr.
Binley: I was rather taken aback by the remarks of the
right hon. Member for Greenwich and Woolwich. It seems to me that there
was a sizeable degree of illogical thinking in those remarks. He is the
man who presented the BIDs concept to this House and who said that it
was vital for business to be as involved as it possibly could be in all
the activities relating to the project. He is clearly aware of the need
to encourage businesses to be involved, and, I have no doubt, the great
scepticism that businesses, particularly small and medium-sized
businesses, feel about expenditure that is said to be to their great
benefit. They hear those words and become frightened, because all too
often in the past they have been told that a particular project or
fundraising exercise will be to their benefit, but have found that they
are the payers, to very little benefit indeed.
I would have
thought that the right hon. Gentleman, who produced the BIDs scheme so
well, would have supported the argument that to create confidence
within the business community, we need to define the role that a
business rate supplement can play and the projects it can be involved
with as precisely as we are able. The more open the definition, the
more room there is for suspicion in the business community,
particularly in small and medium-sized businesses. It is that sector
that will be particularly hurt if the burden of a large project lasting
10 or 15 years is placed on it to extract the BRS. I would have thought
that he would be pleading with the Minister to expand the definition,
on the basis that that would give greater confidence to the business
sector.
The business
sector made it clear to us that it is immensely concerned about the
loopholes in the Bill, which it thinks is loosely written. It is
concerned about
giving local authorities the right to extract what it sees as greater
dues from them. To define that in more sensible terms would be helpful.
I urge the Minister to take that plea seriously. If he is unable to
tell us today what he might do, he should come back with a better
definition, even though he might reject the
amendment. | 
