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The noble Lord has raised the other important matter. It is complex and I will have to write to him. I will surely do so as swiftly and as comprehensively as I can. In the mean time, however, I hope that the noble Lord having put that on the record as he has will enable business partners, particularly those in Crossrail, to see that we are seriously debating the issue.
Lord Jenkin of Roding: Before I withdraw the amendment, those who asked me to table it have had some discussions with Her Majesty’s Revenue and Customs which they did not find particularly positive. It is difficult to see why that should be so. I hope that the noble Baroness, to whom I am most grateful for undertaking to write, can put the case as firmly as she can. It is clearly in the interests of all of us who want to see this great scheme come to fruition. This project has been in my consciousness for well over 20 years, and one now sees the prospect of it starting; indeed, the Prime Minister dug the first hole, or whatever it was, for one of the stations the other day. However, there is no question but that tax deductibility of voluntary contributions could make a considerable impact upon the willingness of business to put them up.
Baroness Hamwee: Before the noble Lord withdraws his amendment, as I assume he is about to, can the Minister confirm that she can write to us before Report?
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Baroness Andrews: I completely understand what the noble Baroness is saying. I shall do my very best.
Lord Jenkin of Roding: With that, I beg leave to withdraw the amendment.
Amendments 26 to 32 not moved.
33: Schedule 1, page 22, line 16, at end insert—
“11A A description of the arrangements by which persons paying BRS shall—
(a) be kept informed of what monies have been raised in pursuance of the BRS and how they have been expended, and
(b) be represented upon the governing body of any organisation set up for the purposes of delivering the objectives of the BRS, or, if such an organisation is not to be set up, how such persons are to be involved in the oversight of the delivery of such objectives.”
Lord Bates: The amendment is fairly straightforward and I will not take a great deal of time in introducing it. I shall be grateful, however, to hear the Minister’s response.
The amendment seeks to follow the theme of ensuring that businesses are kept involved in and apprised of how a scheme is going. Once they have committed and contributed to a scheme, they deserve to be kept informed to ensure that the project proceeds according to plan. This fits in with the point made during Second Reading about the contribution that businesses can make to major projects which extends way beyond their financial contribution. The knowledge and expertise involved in delivering projects on time and to budget is higher in the private sector than in the public sector, particularly under this Government. I do not want to impose any further disappointment or sadness—as has already been said, the Prime Minister is digging holes—but that has been observed.
The key point is what happens once the money has been committed and approval has been given; how are businesses kept involved? The proposal in the amendment follows the recommendation made in the Lyons inquiry that businesses should have a strong voice in the final decision on the supplement and that that voice should be continuous throughout. By what mechanism can this be achieved? In a business improvement district, for example, there are boards of directors, governance bodies, governing bodies and special purpose vehicles can be established, and representatives of the business community can be on them. I have alluded in previous debates to the City Challenge schemes which were introduced by the Conservative Government in the 1980s and 1990s. They were based very much on
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The amendment simply makes that point and seeks to put it in the Bill so that it cannot be avoided. It gives a structured role for business to oversee the use of funds and the delivery of projects; it draws on its expertise; and, as business will have made a contribution to a project, the amendment acknowledges its right to sit at the table to ensure that the promised benefits are delivered. I beg to move.
Baroness Hamwee: I support the noble Lord in his thinking behind the amendment. I am not quite sure about being involved in the oversight but the principle is quite right; businesses need not only to be kept informed but there should be a mechanism allowing their views to be made known. In my mind I equate business rate payers with shareholders in a company; they are not necessarily on the board although they may have a representative on the board. The second subsection of his amendment could lead to quite complex arrangements, but his points are quite right.
Lord Moynihan: Picking up briefly on my noble friend’s comments perhaps I may ask the Minister whether in giving her reply—which I am sure will be as comprehensive as ever—she will focus on the two critical issues of the amendment: first, what she considers to be the appropriate apparatus for the strength of that voice; and, secondly, the continuity, so that it is not a one off but the continuity principle is respected.
Baroness Andrews: I shall try to do that because these are important points. They go to the heart of the commitment that the partnership makes to ensure that all the partners are fully informed in their ownership of what is being done. The amendment is in two parts and would require levying authorities to expressly set out in their prospectus how they will involve stakeholders in the delivery of BRS objectives.
If a levying authority intends to set up an organisation to deliver the BRS-funded project, the amendment proposes that the prospectus should explain how BRS ratepayers are to be represented on the governing body. Where no such organisation is proposed, the prospectus should describe how those who would be liable for the BRS would be involved in overseeing the delivery of the project.
We have talked quite a lot in the Committee about the notion of the Bill being a flexible framework with safeguards within which local authorities can tailor what they do to suit their community and partnership and how they should operate in order to levy a BRS for their specific economic development project. The Bill already requires levying authorities to set out in their prospectus how they will provide business with information about progress on the BRS-funded project.
That is a very important point because this will be a dynamic project that may take many years, and it is vital that business is kept continuously up to date with what is being delivered under the commitments. I am sure that that is partly what Lyons meant by a “strong voice”. That would have to be clear in the
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The second part of the amendment relates to governance. As the noble Baroness, Lady Hamwee, said, issues are raised here concerning the nature of the governance choice, and it involves complexity. Every area is different, with different needs and levels of partnership working, and different resources at their disposal. Therefore, flexibility and local autonomy are very important in order to tailor governance procedures for projects.
Given that the projects may be using BRS to a greater or lesser extent, I would be afraid that, if we were to lay down anything more than a broad set of principles here, we might end up with a governance body that was not fit for purpose, or it might be fit for one type of purpose but not for another. We need to respect potential diversity and ensure that the governance arrangements are as good as they need to be and right for each area. For example, we might find that a project is managed by a few key local businesses or by an outside contractor, and both will require a different set of governance methods. They may choose to draw on the expertise and experience of businesses that may not have to pay the supplement because, for example, they fall below the £50,000 rateable value threshold. We must not emphasise one aspect of governance more than another, although of course there must be clear governance procedures for every project. Although I respect the intention behind the amendment, we should not bind the hands of local authorities and business regarding how they wish to manage their project. I hope that having that on the record will help the noble Lord.
Lord Bates: Not exactly. Normally the Minister is extremely helpful, but not on that point. I shall respond more generally on the amendment but, specifically, could circumstances be conceived where a business rate supplement levied in a given area was the subject of a ballot and therefore the subject of an affirmative resolution in that ballot? As a result, voluntary contributions and business rate supplements would be levied in that area in order for the project to go ahead and there might be no business involvement. Is that a conceivable possibility?
Baroness Andrews: No, I should not have thought that it was a conceivable possibility because the whole point is that the partnership with business makes this different from the partnerships that exist at the moment. Therefore, there must be a business element.
4.15 pm
Lord Bates: Therefore, if a circumstance where that might be the case is not conceivable, would it not be appropriate to have it stated somewhere in the Bill or its schedules?
Baroness Andrews: I am not certain that I am following the noble Lord’s argument. I am not quite sure what he would want to see in the Bill which is not expressed already in terms of that partnership.
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One of the problems that we may be wrestling with is that, because the partnerships will be different in each area—for example, there may be third-sector partners in some areas, or levying authorities or different sorts of private and public partnerships—we may not want to identify just one partner in the way that the noble Lord suggested, bearing in mind that we shall have to try to represent and encourage a range of partnerships.
Lord Bates: We are getting a little bit closer—I thank the Minister for that—but we are not quite there, because all the partners are not necessarily equal. The amendment stipulates that representatives—obviously, not all—of those people who are contributing to the project be present. The noble Baroness, Lady Hamwee, rightly said that it may be analogous with shareholder/stakeholder involvement, where there may be representatives on the board to look after the shareholders’ interests, and that it might be entirely appropriate that, on projects of this nature, where we are borrowing a lot of that language in talking about ballots and prospectuses, we see that through and say, “Yes, there ought certainly to be some business representation on the board, not simply for tokenism but to monitor that the promised benefits are delivered”.
Baroness Andrews: Yes, I take the noble Lord’s point. Perhaps he will let me think about what he said. We have some scope in guidance, again, to ensure that. It is probably the judgment that we would come to. Will he leave that with me? Perhaps we can talk about it between now and Report. My main point was that we should not tie the various projects in the various local areas into a formula for governance which will be neither adequate nor appropriate in some cases. However, I take the noble Lord’s point about business, because, after all, this is a Business Rate Supplements Bill and business is a key partner in all of this.
Lord Bates: I am reassured by the Minister saying that she will take the matter away and look at it, in particular the points of my noble friend Lord Moynihan, which were succinct and went to the heart of the issue. He said that appropriate opportunity should be given to the business community.
Lord Moynihan: It is extremely helpful that the Minister will go away and think about my noble friend’s important suggestion; namely, to see whether it is possible to place in the Bill not the details—which as the Minister stated, will differ from area to area—but the principle that business will have a strong voice and that there will be continuity of representation. That would be enshrined in the Bill and taken into account in the context of each case, the detail of which neither we need nor would it be appropriate to delve into because that flexibility is needed. I hope, however, that the principle will be accepted.
Lord Bates: I am grateful to my noble friend for making that point. We understand that there needs to be flexibility in these matters to fit local circumstances, which will take many different forms. However, establishing
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Baroness Andrews: All that I would add is that I could not conceive of a governance arrangement for one of these projects that did not have the business partners on it as they are so critical to it. If it helps to have that on the record, I have just put it there.
Lord Bates: The Minister has been clear in that regard. It is a commitment for which we are very grateful, but it would give a great deal more comfort, notwithstanding the high standing of the Minster, if that could be expressed somewhere in the Bill or in its attached schedules. With those assurances I am happy to seek leave to withdraw the amendment.
Amendments 34 to 37 not moved.
Lord Tope: I shall also speak to Amendments 39, 40, 46A, 63 and 66.
At Second Reading, I expressed my concern that there seemed to be, perhaps understandably, some polarisation between the business community on the one hand fearing that the evil local authorities would rush to impose unwanted and unnecessary taxes on them, and on the other, local authorities fearing that businesses would automatically be against any tax simply because it was a tax, however worthwhile the project might seem. I believe strongly that it will not be like that. Indeed, any successful project for BRS could not be like that. The process will work, I expect, in much the same way as a successful BID works in its preparation—in partnership. The representatives of the business community will work with the levying authority in partnership to conceive the project and work out the prospectus, and by the time that is done I would expect them to campaign together for a “yes” vote if there is a ballot, or for a successful outcome to any consultation. Idealist as I am, I do not necessarily see this as one side against the other. I see it very much
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We have to recognise that to achieve this is an issue of trust. However good the representatives of the business community may be, there will always be some businesses for financial or other reasons that are less happy. Amendments 38, 39 and 40 address Clause 6, which is about consultation. Amendment 38 would delete the requirement for the levying authority simply to think whether it was appropriate to consult, but would actually require it to do so. That is a necessary reassurance to a business community. It will be consulted not just because the levying authority wants to but because the authority must consult. Should levying authorities be reluctant to consult, for whatever reason, the knowledge that they are required to do so would encourage them in proper thinking from the start. If there is to be consultation the results clearly should be published, which is the purpose of Amendment 39. Similarly, Amendment 40 requires a levying authority to publish a revised version of its initial prospectus regardless, not simply whether it thinks it might want to in the light of the consultation.
Amendment 46A moves on to Clause 10 and again would require a levying authority to specify charges—previous, current and future—as suggested in the amendment. Amendment 63 relates to Clause 29 and requires consultation before regulations are made. Amendment 66 similarly inserts regulations about ballots.
The amendments, particularly the first three, would go a considerable way towards the reassurance that we have been talking about for quite a part of this afternoon in making clear to levying authorities what is expected of them and, similarly, giving some reassurance to the business community of what it may expect—that the consultation will take place not because a levying authority thinks it may be appropriate, but because it is appropriate in all circumstances. I beg to move.
Lord Bates: We are quite comfortable with the amendments. The only concern that we have about them is the extent to which they add to the bureaucratic and time delays that may be involved. Again, this links back to a debate that we had on an earlier amendment; that the greater use of technology might enable this process to be conducted in a speedier way. Certainly, we support the general thrust of the amendment.
Earl Cathcart: I was not going to speak this afternoon; in fact I was slightly apprehensive about having to speak this afternoon. The last time we were in Grand Committee, the helicopters were going overhead the whole time, and it was extremely difficult to hear. It must have been very difficult for Hansard to have got down all our words accurately. If the Committee remembers, last time in Grand Committee, I was talking about the dualling of the A11, and I said that that would be of benefit to those businesses around the A11. I went on to say that it would probably be of little benefit to King’s Lynn and then I said—I will have to say this clearly—“and market towns around King’s Lynn like Downham
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“I mentioned King’s Lynn. There are lots of down-market King’s Lynns, such as Swaffham, Dereham, Fakenham”.—[Official Report, 11/5/09; col. GC328.]
It listed a whole raft of towns. It was not my intention to say that at all. They say when you are in a hole, stop digging; but it is worth my while getting up this afternoon to dig a little bit further to try to put the record straight, because everyone will know that I am a strong supporter of all things Norfolk.
I will say a few things about the amendment. It imposes a duty on the levying authority to consult on the proposal in an initial prospectus and to publish the results of that consultation. However, the consultation can be ignored; we have been there before in earlier debates. Providing the business rate supplement is below 33 per cent of the total cost of the production of the project, the levying authority can press on regardless. This ties in with the up-market King’s Lynn point that I made earlier. Of course, it can benefit all those businesses around and along the A11, but it will have no benefit to those other areas in the north-west of Norfolk. They can be consulted on, but the levying authority can completely ignore that consultation.
This ties in with something else that I tried to bring up during our previous day in Grand Committee. I suggested that it would be better if a local authority asked the business community what infrastructure projects it would like most, and then one might be able to get a consensus. The consultation process would probably be much more favourable if it were done by asking the business community what projects it wanted, rather than the infrastructure levy saying, “This is the project that we are going to do. What do you think about it?”.
4.30 pm
Baroness Andrews: I am very glad that the noble Earl had the opportunity to correct Hansard. I cannot imagine what his postbag from Swaffham and other parts of rural Norfolk has been like.
Earl Cathcart: I had to go back last weekend under the cover of darkness. I crept in and kept a very low profile. I am hoping that, if Hansard gets it right today, I shall be able to go back to Norfolk in daylight hours.
Baroness Andrews: We have all had experiences of Hansard and of problems that we have created. I remember when I was a health Whip confidently promising to spend most of the NHS budget on aromatherapy. I read the report of it in Hansard the following day and had to make some urgent corrections.
The noble Earl’s point about the validity and integrity of the consultation process and the extent to which it is a serious exercise is important. Many is the time that we have debated the nature of consultation in the field of housing and local government, and this is another opportunity to do so.
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I was slightly puzzled by the argument that the noble Lord, Lord Tope, put forward simply because he rightly talked about the nature of the trust implicit in a project such as a BRS. It will involve a significant amount of commitment and there will have to be a complete understanding of what everyone is signing up for. Therefore, the quality of the consultation between business and the levying authority and the frankness that is involved will be important. However, the amendments are about requiring authorities to do that, which seems to go a little beyond the notion of trust.
Amendments 38 to 40 and 46A all relate to the consultation that authorities will be required to undertake before levying or varying a BRS. I could not be more supportive of the general principle that the consultation has not only to be serious in purpose but to lead to a reflection in the prospectus of what has been consulted on and agreed. That is at the heart of what will make a project a success.
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