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I understand why the current Mayor of London opposes extending this power to London boroughs, as he is fearful that, among other things, this funding might be damaged. In any event, this is not the right time for London boroughs to be imposing a further supplementary rate on top of the GLA supplementary rate, which we know will come, and the other measures that have been referred to. However, as several speakers including my noble friend have said, we are talking about the period up to 2035. We all hope that the economic downturn will upturn some time before 2035. Some of us still have a faint hope that, at some time before 2035, some Government will be brave enough to reform local taxation generally. But I have always been an idealist. Maybe it will happen, maybe it will not.
In introducing the Bill, the Minister rightly said that the power will be there when the time is right. The time must become right at some stage before 2035 for London boroughs. The object of this, which I wholly support, is to improve local economic development. London borough councils working in partnerships with their businessesthat is enormously importantare the drivers of local economic improvement. As my noble friend said, all London boroughs, some more than others, are major players in the local area. They are not the local parish council. Surely there is a case for them, too, to have the power, with proper qualification, to levy a supplementary business rate when the time is right, which I readily accept is not in the immediate future. Unless that is in the Act, however, it will never be there if and when the time ever becomes right. If and when local businesses, councils and people are all in agreement on the use of a supplementary businesses rate to help to fund a particularly important project that benefits all, they will be unable to do so unless that power is there. I regret that.
I referred to partnership, which is the key to the Bill. Times have changed beyond recognition from the situation in the 1980s that perhaps led to the nationalisation of the business rate. I remember well that, even in my own council, in those days business did not understand local government and much of local government did not understand business. We did not understand why we behaved and worked as we did, and many had not realised that we very much shared common interests. That situation has changed pretty well everywhere in the country; certainly, it has long since changed in all good areas. Any good local authority will be working in partnership with its business community.
I am therefore a little sorry to see that the briefings for the Bill have become, in a way, a little polarised. We have the Local Government Association on the one
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I accept that we are not yet in that position. Many businesses in all parts, probably including my own borough, do not yet trust local governmentor government generallyenough to proceed on that basis. During the passage of the Bill, we will return to the need to give businesses that reassurance, but I hope that, when we do so, it will be just that: a reassurance that, if it is necessary, it will be at the end of the formative process that I have described.
The issue that had not been raised until the noble Baroness, Lady Valentine, spoke was that of giving BIDs the opportunity to levy from property owners. I know that this was debated in the other place. I do not need now to rehearse the arguments, but I believe that the Local Government Minister said that the Government understand the point, that they are working on a number of issues that, quite properly, need to be resolved and that they hope to take this forward during the Bills progress through this House. In her reply, I hope that the Minister will give us the Governments view and will be able to reassure us that they will bring forward proposals to achieve that. Where they exist, BIDs have been enormously successful. I am a strong supporter of them. This overdue measure is widely supported and this Bill should be used as an opportunity to make it possible.
In opening, my noble friend said that we will support this Bill in the vein of critical friends and that we will seek to improve it. I do not know the superlative to pristine, but whatever it is we will seek to ensure that when this Bill leaves this House it is improved and even moreI have no other wordpristine than when it arrived.
Baroness Andrews: My Lords, I am truly delighted by the response offered to the Bill. I knew that I should not have used the word pristine: it certainly got me into serious trouble almost before I began. Clearly, we will have some interesting debates. It has been an excellent debate so far, as usual demonstrating a wealth of expertise and commitment, and a genuine diversity of approach across the House. Noble Lords have been able to support the principle of the Bill by and large.
I am very pleased by the language that has been used. This Bill has been described as modest and useful, which means that it is in with a good chance.
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Partnership was described not least by my noble friend Lord Smith with all his experience of promoting partnership. The noble Baroness, Lady Valentine, has already had tribute paid to her role in bringing business together, as has the role of the LGA in its ambitions of working with local government. Crossrail has commanded unanimous support, which is a very important part of the success of this Bill as it goes through the House. The noble Lords, Lord Bates and Lord Moynihan, introduced a very interesting perspective, to which I will turn in due course. The noble Baroness, Lady Valentine, and my noble friend Lord Berkeley, raised detailed questions which I will answer.
In this Bill we are trying to achieve a balance of interest and outcomes, and the importance of additionality. I was particularly intrigued by the invitation by the noble Lord, Lord Tope, to answer the noble Lord, Lord Bates. I always look forward to the Opposition answering each others arguments and leaving me out of the picture completely. I am very happy for that to continue. Essentially, I say to the noble Lord, Lord Bates, that, as demonstrated by his response, we have a slightly different take on the Bill. I want to emphasise the principles again; first, the exceptional nature of what we would see BRS as offering. It is normative in the sense that it is in the Bill and will be there as an opportunity. Certainly, it will be an exceptional opportunity for those local authorities which want to take it up. That is partly my response to the fears raised by the noble Lord, Lord Moynihan, in relation to the leisure and sport industries and the interests that they represent. The £50,000 rateable value limit will certainly put many fears to rest because most of those organisations will certainly fall within the 90 per cent that are excluded by the Bill.
This money goes to local authorities in partnership with business to develop local significant projects which have been jointly agreed, designed, devised and expressed in the prospectus, so this is very much local funding done on a joint basis. Therefore, it is about responding to the needs of the local community. In developing BRS, therefore, the Government have been mindful of the need to balance these greater freedoms to raise revenue locally with the need to protect business interests. I particularly welcome noble Lords applauding this celebration of local autonomy, and the power which it gives local authorities.
I agree with the noble Lord, Lord Tope, that it is regrettable that the debate has become polarised between the 2p rate and the extent of the ballots. I hope that we
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My second major point in relation to balance is that the Bill does not give local authorities unfettered access to businesses profits. It includes numerous protections for business rate payers. As I said, it gives them a real say in whether the supplement should be levied, not least because we are requiring a double lock which will guarantee support as 50 per cent of all qualifying businesses will have to agree to give their support in a ballot, and they will have to represent more than 50 per cent of rateable value among businesses. That is genuine fairness in terms of proven support.
The noble Lord, Lord Best, on behalf of the LGA, referred to the 2p rate. We are aware that the LGA has taken a particular stance on that. The 2p limit allows local authorities to raise what we think is a significant and meaningful sum towards projects while safeguarding business. The national upper limit provides an important safeguard for business in terms of the maximum that they may be required to pay. We shall return to that issue in Committee when we discuss the noble Lords amendment. Alongside that we have had the beginnings of a debate about the ballot. The noble Lord, Lord Bates, and other noble Lords asked why there should not be a ballot in all cases. There have indeed been strong calls from the business sector for a vote in all cases. However, again, this contrasts sharply with the position of the Local Government Association, which takes the opposite view entirely and would like the local ballot to be left to local discretion. Once again, the Government find themselves in the middle, trying to balance the interests of both parties.
Requiring a ballot where the supplement will support more than one-third of the total cost of the project strikes the right balance. It will ensure that where the BRS is contributing a relatively large proportion, or all, of the funding needed for a project, that business will get a vote. However, in the circumstances where it is contributing a smaller package, we do not believe that it would be desirable. There will be a robust consultation process, but we think that it would create additional uncertainty, greater delay and confusion about whether complex and large projects can be agreed and can go ahead. I say to noble Lords, in particular the noble Lord, Lord Bates, that although
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Noble Lords have addressed additionality and how money is spent, which are important. As the noble Baroness, Lady Hamwee, said, this could be about revenue-raising projects as well as capital-raising projects. The noble Lord, Lord Bates, put forward some very interesting examples. I reiterate that in Clause 3 we have provided that the projects must be specific to what the prospectus says, and they can take place only if they are funded additionally and for the purpose specified. The examples that the noble Lord gave of the RDAs and the centres of excellence are interesting, but we do not see this as a substitute for projects that can be funded in other ways. My sense is that those options would have been exhausted, or a decision would have been arrived at that the RDA might be a contributing partner, for example. Certainly, every case would be taken on its merits in terms of the local conditions. I am sure that there will be many opportunities for us to discuss that in Committee.
The noble Lord, Lord Moynihan, raised some interesting issues in relation to community amateur sports clubs. The noble Lord will know that registered sports clubs are eligible for 80 per cent relief from national non-domestic rates, and they will get exactly the same relief in the Bill. Billing authorities can top up the mandatory 80 per cent relief, and if they do so they will have to make sure that it is systematic across both ordinary relief and this levy. Obviously, I agree with everything that he said about the contribution of sport and about the legacy that we want to see and, we would not wish to inhibit that in any way. I foresee the possibility of a project under BRS that would bring the boroughs, the sports community and sports industries together to conceive of something specific and part of that legacy. I would have thought that there is a lot of comfort to be got from the £50,000 rateable value limit in relation to those businesses and charities. I will read the noble Lords speech in more detail, as he may have raised other issues.
My noble friend Lord Berkeley and the noble Lord, Lord Tope, talked about Crossrail, and asserted that there will be differential benefits for different parts of London. The whole of Londons economy and the areas surrounding London will benefit from Crossrail in the long run. It is a London project but, my goodness, its benefits are not confined to London. We know how much London drives not just the economy of the south-east but the country as a whole. Its impact will be felt in reducing congestion and enabling faster journeys. That will free up many routes, not just across London. It will contribute to the build-up of jobs in London as well.
The Mayor of Londons briefing suggests that every London borough is projected to benefit by at least £14 million by 2026 in terms of wider economic employment and transport benefits for local residents. There are some variations within that, but I look to the expertise on London across the House to see whether a test will be applied to that.
On the question of my noble friend Lord Berkeley, we estimate that the BRS will raise about £177.9 million a year. That would bring in less than a third of the
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One fundamental and important question raised was: why not limit the Bill to London? We heard a conclusive argument as to why not from my noble friend Lord Smith, who asked why other areas should be denied the potential benefits of the Bill. I cannot think of a better counterargument, because that is the point of creating an opportunity in the Bill for areas outside London. If and when the time is ripe and the partnerships agree and want to work on something exceptional that crosses different local authorities, why should they not have this opportunity? Is it not more undemocratic to deny them that chance and construct something for London alone? I suspect that if we had constrained the Bill to London, I would be here making an altogether much weaker case. We are very mindful of the potential use of BRS more widely as local authorities move towards subnational organisation. Indeed, there were splendid examples of progress on that in todays Budget.
I was also very pleased that so much attention was paid to the nature of consultation. The noble Lord, Lord Bates, talked about the importance of transparency. That was absolutely right. The issue, as the noble Baroness, Lady Hamwee, said, is about the need to take the whole funding package, whereby everyone is clear about their roles and responsibilities, particularly funding responsibilities within the package, and the need for the prospectus to be absolutely clear about the expectation, the additionality, the cost benefits and the responsibilities. That will be an extremely serious part of our debate on the detail of the Bill. My noble friend Lord Smith also referred to that. Underpinning that is the idea that this is not something that will be done to local businesses; they will be involved in this and will benefit from it. The consultation process before each BRS is levied is an extremely important part of the whole argument.
I am winding up, but I should address the issue raised by the noble Baroness, Lady Valentine, about BIDs. There was much discussion in another place about the possible impact of BRS on BIDs, but she raised a wider issue. This was also raised by Nick Raynsford in another place. Perhaps I may deal first with the notion of offsets; the decision to offset BIDs against BRS is accomplished in the Bill. That will depend very much on the specific circumstances of the project. Clause 16 leaves the decision to local discretion. As for the wider issue about whether property owners should be included in BIDs to strengthen the role and to spread the weight, since the Commons considerations we have received further representations on the issue. It is now clear that there is widespread support for BIDs and we are keen to ensure that they continue to flourish. We are giving further consideration to the representations on the interaction between BIDs and BRS, and I hope that in Committee I can come forward with more detail on that and keep the noble Baroness fully informed.
I believe that I have taken care of most of the substance of the arguments that have been made, but I shall read Hansard tomorrow to make sure. The issue of implementation and the timing of regulations was
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I am extremely grateful to everyone who has spoken in this debate. I am very grateful for the welcome that noble Lords across the House have given to the Bill and for the intelligence and thoughtfulness with which they have responded. I very much look forward to our later debates on the detail.
The Lord President of the Council (Baroness Royall of Blaisdon): My Lords, before the House begins the Third Reading of the Bill, it may be helpful for me to say a few words about Third Reading amendments. In line with the guidance recommended by the Procedure Committee and agreed by the House, the Public Bill Office has advised the usual channels that two amendments on the Marshalled List for Third Reading today fall outside the guidance given in the Companion and set out by the Procedure Committee. These are Amendments 3 and 4 in the name of the noble Lord, Lord Ramsbotham. On the basis of the Public Bill Offices advice, the usual channels have agreed to recommend to the House that the amendments should not be moved. As ever, this is ultimately a matter for the House as a whole to decide.
When I spoke on Report, I made it clear that those whom we wished to help were those who were coming to the end of their journey towards citizenship and who were already on limited leave to remain and were poised to apply for indefinite leave to remain. As line 6 is currently worded, as a result of my previous amendment, applications submitted before the commencement of Part 2 would be assessed under current arrangements.
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Amendment 2 deals with the other problem caused by the defective amendment, which referred to an application made by any person for limited leave to remain. This should have been an application for indefinite leave to remain, a much later part of the process. A close reading of Hansard would underline the fact that I spoke to this effect on Report. I only regret that the amendments did not reflect what I was saying or what the House voted on. I hope that this clarifies the situation and that these amendments will be accepted and incorporated into the Bill, as the House voted for. I beg to move.
Lord Avebury: My Lords, the amendment clearly provides that a person who is currently en route to citizenship and is within 12 months of making an application for indefinite leave to remain should continue on that path. I rise only to support the amendment and to say that I hope that, since we discussed the matter on Report, the noble Lord, who also replied then, has satisfied himself that what we are doing now fully complies with the judgment in the case of HSMP Forum Ltda matter that I raised both in Committee and on Report but which I am pretty certain has not been dealt with in the voluminous correspondence that we have had from Ministers. It would be useful to have on the record that the Minister has taken advice and that the Government are completely satisfied that the amendment and Clause 39 fully comply with the terms of the judgment in HSMP.
I gave the noble Lord, Lord Brett, a few minutes notice on my next point, which is that the amendment obviously implies that the route to indefinite leave to remain is still there following the coming into effect of Part 2, as it allows the person to make the application within 12 months. There will be changes in the rules consequent to the passing of the Bill and we want an assurance from the Minister on the record that by having the amendment in the Bill the route to ILR will be maintained.
The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): My Lords, I heard what the noble Baroness, Lady Hanham, said and I accept that the amendment is technical and consequential on the first vote. On the question of the HSMP judgment referred to by the noble Lord, Lord Avebury, UKBA officials are currently analysing the details to determine the wider impact, if any, on the UKBA. It would be wrong to prejudge the outcome of that analysis.
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