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Amendment 2 would risk distorting the unique purpose of BRS. Depending on the regulations laid under the amendment, BRS could be used on projects for aims more aligned to cleaner, greener or safer agendas which, while they would bring some indirect economic benefit, would not in the normal sense of the term be “central” to economic development, which is the thrust of the legislation. Of course businesses already contribute to the provision of services such as social services and street cleaning through the national business rate, but BRS is meant to be a new tool for raising revenue to invest in local areas over and above the provision of services and projects already provided. The Bill already provides local authorities, working with local businesses, flexibility in how they use these resources to tailor the project to maximise economic development for their local area.

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I agree with the sentiment behind Amendment 5. It is vital that legislation is reviewed so that if something is not working as well as we had hoped, identified and appropriate action can be taken. As the noble Baroness, Lady Hamwee, was generous enough to indicate, the Government are already committed to post-legislative scrutiny, so that all Acts must be reviewed between three and five years after Royal Assent. This requirement applies to all Acts that received Royal Assent during or after 2005, and this Bill when it becomes an Act will fall within that framework.

The review will involve considerable activity on the part of the department submitting a memorandum to the relevant Commons departmental Select Committee. It will include a preliminary assessment of how the Act has worked in practice, relative to the objectives identified in the Bill. Following consideration of the memorandum, the Select Committee could then decide that a fuller post-legislative review of the Act was required, which would be carried out in the same way as other Select Committee inquiries. So we do not need an amendment to scrutinise Bills subsequent to their enactment.

As I indicated, I did not think that the support of the noble Lord, Lord Bates, for Amendment 29 was whole-hearted and nor is mine. The amendment seems reasonable enough. It would allow the Secretary of State to vary the supplement’s upper limit to reflect the state of the economy. During the good times, businesses might be expected to pay higher BRS than during a recession. However, the Bill needs to balance protecting the interests of business with the ability of levying authorities to raise meaningful sums of cash. The 2p limit strikes a balance between reassurance and meaningful practical application, bringing necessary resources forward. A set limit guarantees businesses the maximum that they can be expected to pay. If the amendment were accepted, businesses would no longer have the assurance of a maximum level, as the upper limit would potentially be subject to change over time. What about projects already under way? They might be subject to the potential for flexibility in resources available to them, increasing uncertainty. I therefore hope that the problems with that amendment are appreciated.

My noble friend Lord Graham asked about consultation, which I dealt with in an earlier amendment. He will know that provision for statutory consultation is written into the Bill and how important that is. He is right: local authorities are the actors in this situation, which is why we need to make sure that they are fully apprised of their opportunities. However, we are going beyond that by producing additional guidance to strengthen consultation to ensure that local authorities know what their obligations and opportunities are and that they consult adequately with the interests whose support they need to attract. Inevitably, very important among those is the business community, because it is being asked to contribute the business rate. I want to give my noble friend reassurance on that score.

These are interesting issues, which I know are being raised as part of a constructive approach to the opportunities that the legislation envisages, but we

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think that we have got the balance right. I hope that the noble Baroness now thinks that the Government have thought about these issues and that she can safely withdraw her amendment.

Baroness Hamwee: My Lords, the amendments are indeed intended to be constructive, and the Minister should read into them our support for the Bill generally. I understand the wariness of the noble Lord, Lord Bates, of Amendment 29. One is accustomed to hearing that rates can go up as well as down; in this case, they can go down as well as up—that is the point of the terminology.

The noble Lord, Lord Best, expressed my intentions extremely well. I thank him and all other speakers for that. I say in response to the Minister that the ballot will be the safeguard.

The Minister referred, as I knew that he would, to the statutory requirement for a review and post-legislative scrutiny. Can he refer us to the legislation which requires that? If he is not able to do it today, perhaps it could follow this debate—he nods at that. It does not, however, wholly answer my point, because, as I understand it, primary legislation will still be needed when there is post-legislative scrutiny, even if the scrutiny recommends the kind of changes that I am proposing.

However, I am realistic enough to know what the government response to these amendments would be were we to win them when the Bill goes back to the Commons. I shall therefore pause while we are ahead on Amendment 5. I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Clause 2 : Levying authorities

Amendment 3

Moved by Lord Bates

3: Clause 2, page 1, line 17, leave out paragraphs (b) to (d)

Lord Bates: My Lords, I shall speak also to Amendments 4, 10, 14 and 38, standing in my name and that of my noble friend Lord Cathcart. The amendments highlight concern on this side of the House about the legislation full-stop. Our argument is that the legislation should have been restricted to London. It was designed and conceived as a mechanism for bridging the funding gap for Crossrail. Crossrail’s £15.9 billion of funding was calculated, in negotiation no doubt with the Treasury, to include a business rate supplement in the region of £3.5 billion. We on this side of the House and the Mayor of London, whom we are happy to support in his ambitions for the capital city, see Crossrail as a major infrastructure project which should have been commissioned far earlier and desperately needs to go ahead. It requires some additional support from businesses. It was subject to debate during the mayoral election, where it was a principal part of a manifesto commitment. This legislation should therefore have been wrapped in, isolated and linked totally to the Crossrail project, because to move out beyond it looks suspiciously like an additional tax.

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A number of areas of government funding used to deal with economic regeneration and, to an extent, still do. The local authority business growth initiative, for example, provided about £1 billion per year to improve and stimulate economic regeneration in many of the areas in which it is claimed the business rate supplement is now needed. That £1 billion over the past three years has been reduced to just £150 million over the next two years. We are already seeing the invisible hand of the Treasury at work, because, on the one hand, the local authority business growth incentive scheme is being wound down by an amount close to £850 million while, on the other, we see, miraculously, the business rate supplement being ratcheted up and rolled out more widely to provide potential funding of up to £750 million.

This is a great concern that we have: when this particular measure was considered and conceived, it was in a wholly different economic environment and climate to the one that we are now in. Now, businesses up and down the country are struggling for breath to keep afloat in very testing economic times indeed. The business rates that are already there—whether it is non-domestic rate revaluations, the increase of 5 per cent, albeit spread over two years, congestion charging, parking charges; all of these taxes—stealth taxes—which were levied by the Chancellor to raise revenue from businesses during the good times are now very much the ones which are sinking many businesses, including other iniquitous taxes, such as empty property rates.

This is in the same genre as empty property rates. It is one of these initiatives which were conceived in times of economic boom—so the Chancellor and the Prime Minister would have us believe—and are now being levied in times of bust in this country. Therefore, a very strong case is represented in these amendments, which we wish to pursue. This is a piece of legislation which should always have been linked to a specific, major, vitally important infrastructure project in the capital city and should not be levied outside it. I beg to move.

7.30 pm

Baroness Hamwee: My Lords, I do not think that the noble Lord will be surprised that I am not with him on this one—as we were not in the Commons. Actually, I wrote against the first of his amendments, “So you don’t support the Lyons review”. I am not sure whether that is an entirely fair response—or perhaps it is a fair but incomplete response. We have made it clear throughout the debates on this Bill that we support the concept; were that not so, I would not have been seeking to extend the provisions of the Bill in the way that I just have.

This is not just about London. One gets rather weary of people outside London thinking that those of us who live in this particular bubble are really only concerned about London. I do not want to be London-centric on this one. This Bill provides a mechanism which may not be used next week or next year by local authorities outside the capital—sadly it is not available to be used by the London boroughs because of the way this is constructed, but there we are—but a mechanism which I hope local authorities will find ways that

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perhaps none of us has thought of to use the BRS for the benefit both of their business community and their wider community. I think that the amendment goes against the whole concept of the Bill to confine it in the way that the noble Lord suggests.

Lord Brooke of Sutton Mandeville: My Lords, I shall be very brief. I hesitate to say this in the absence of the noble Baroness, Lady Andrews, whom I wish extremely well in whatever unknown circumstances she now is, but I recall, as the noble Baroness, Lady Hamwee, will recall, having attended the Committee and remaining stages of Bills over which the noble Baroness, Lady Andrews, presided, that at the time of the housing Bill, I allowed myself the comment on the very day that the Governor of the Bank of England was suggesting for the first time that there was a possibility that we might be in a recession, that those remarks sat somewhat forbiddingly over the optimism which the noble Baroness, Baroness Andrews, was expressing about the economy at the present time, and we returned to it later in one of the Bills this year. I do recall on that occasion that her defence of her position was that there was not a recession occurring at that moment.

I entirely endorse, therefore, the remarks of my noble friend Lord Bates that in so many of these areas we are looking at legislation which was being carved out and conceived in much more favourable economic times than we are now enjoying, and it is a mistake if we carry on thinking that in fact all is going to be well, when at the moment there is still no dramatic evidence that that is so.

Lord Davies of Oldham: My Lords, if we constructed legislation on the basis of any immediate stage of the economy, we would have some very interesting legislation indeed. The noble Lord, Lord Brooke, will readily recognise that the process of legislation, from the initial concept to gestation and actual completion is a prolonged one. The idea that under normal circumstances one could cope with the vicissitudes in the economy is a little unrealistic.

I recognise the point that he makes—that this Bill is about economic development and therefore that requires a degree of optimism. We are not going to deliver this Bill, nor are local authorities going to respond to this Bill, in the next three months; it will take time. It is right, as the noble Lord, Lord Bates, indicated, that the concept behind the Bill, the original concept, related to Crossrail—a very important project and a very important concept—which is at the heart of this Bill, but the Government would be failing in their duty if they did not, even in difficult circumstances, enact legislation that constructs opportunities for local authorities and for communities. After all, I hope noble Lords are not saying that, because there is a recession on at the present time, they have given up on every conceivable initiative in business, and that they cannot think of a single area in which any development or progress is being made. If they do suggest that, they have got a rather more blighted view of this recession than any economists I can think of. So I am not going to accept that; I am going to state that of course it is entirely right that the Government should be constructive about this legislation.

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Of course I respect the noble Lord, Lord Brooke, with his enormous commitment to the City of London, and I recognise therefore that he latches onto London-centric legislation in its genesis. I just remind the noble Lord, Lord Bates, if he did not notice, that I have endured over the past 24 hours the Conservatives extolling the fact that they have scored the largest number of votes in Wales. Here is a piece of legislation which relates to Wales in a constructive sense—and what is the stance of the Conservative Opposition? It is to say, “We do not think you should have any opportunities; the only opportunities are those which are reserved for London”. That is a splendid way of rewarding the people of Wales for their, I hope, short-term perspective in which they have given some support to the Conservative Party. It will not take them long to learn the wisdom of their ways.

I say this as far as this legislation is concerned. The legislation is enabling legislation: no local authority is compelled to take action. It is enabling. It gives local authorities the opportunity where a local development can take place—economic development in which business can play its part and wishes to play its part. That is the whole point about the necessary consultation and support. I maintain that even in the darkest days, it is still the case that enterprise shows its desire for opportunities. Local authorities should spend a great deal of their time concerned with enterprise, business development and economic development in their localities. They all ought to direct their attentions there, particularly in these difficult times, when we need to recover. This legislation will assist. That is why, on this occasion, I am asking the noble Lord, who has tried to persuade the Government of the virtues of the legislation, to withdraw the amendment.

Lord Bates: My Lords, I thank the Minister for his invitation. On the subject of Wales, the point which seems to be at odds here as we bask in our position of having secured the greatest popular vote for the Conservative Party in the Principality of Wales since 1918 is that—

Lord Brooke of Sutton Mandeville: My Lords, my noble friend should not ignore the fact that the last occasion on which the Conservative Party gained a majority of parliamentary seats in Wales was in 1859, exactly 150 years ago. It is therefore a very good omen for coming events.

Lord Bates: My Lords, my noble friend's grasp of history and his wit and insight are the things that we look forward to. I would add only this. The thing that will secure our position not only among the Welsh people but in the other parts of the country and also in the north of England is that we are protecting them from a tax increase. We reject the notion that the best way of advancing our newfound prominence in those regions outside London—in the south-west and in the north; in fact, it is difficult to think of a region where we did not make advances—is to levy a tax on those people, when there are many other vehicles by which that economic regeneration could be happening. For example, there is the money going from the central

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Exchequer into the regional development agencies. There is the business rates levy. There are business improvement districts. There is a local authority business growth initiative. Business taxes many and plenty are being levied to promote economic regeneration, which is desperately needed at this time.

I found the Minister's response less than convincing. As such, I should like to test the opinion of the House on this issue.

7.42 pm

Division on Amendment 3

Contents 59; Not-Contents 122.

Amendment 3 disagreed.

Division No. 2


Anelay of St Johns, B. [Teller]
Attlee, E.
Bates, L.
Bottomley of Nettlestone, B.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Byford, B.
Caithness, E.
Cathcart, E.
Colville of Culross, V.
Colwyn, L.
De Mauley, L.
Dixon-Smith, L.
Eccles, V.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Garel-Jones, L.
Geddes, L.
Hanham, B.
Howard of Rising, L.
Jenkin of Roding, L.
Knight of Collingtree, B.
Lawson of Blaby, L.
Lindsay, E.
Luke, L.
Lyell, L.
Mancroft, L.
Mar, C.
Marland, L.
Marlesford, L.
Montrose, D.
Morris of Bolton, B.
Northbrook, L.
Norton of Louth, L.
O'Cathain, B.
Onslow, E.
Patten, L.
Rogan, L.
Rotherwick, L.
St. John of Bletso, L.
Sanderson of Bowden, L.
Seccombe, B. [Teller]
Sheikh, L.
Shephard of Northwold, B.
Shrewsbury, E.
Skelmersdale, L.
Skidelsky, L.
Stewartby, L.
Taylor of Holbeach, L.
Trenchard, V.
Trimble, L.
Ullswater, V.
Verma, B.
Waddington, L.
Walpole, L.
Wilcox, B.
Williamson of Horton, L.


Acton, L.
Adams of Craigielea, B.
Addington, L.
Ahmed, L.
Amos, B.
Anderson of Swansea, L.
Archer of Sandwell, L.
Ashdown of Norton-sub-Hamdon, L.
Bach, L.
Barker, B.
Barnett, L.
Bassam of Brighton, L. [Teller]
Berkeley, L.
Bernstein of Craigweil, L.
Billingham, B.
Bilston, L.
Blood, B.
Borrie, L.
Brett, L.
Brookman, L.
Campbell-Savours, L.
Carter of Coles, L.
Clinton-Davis, L.
Cotter, L.
Crawley, B.
Davies of Abersoch, L.
Davies of Oldham, L.
Donoughue, L.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Faulkner of Worcester, L.
Ford, B.

8 Jun 2009 : Column 490

Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Gale, B.
Garden of Frognal, B.
Giddens, L.
Gilbert, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Greaves, L.
Grocott, L.
Hamwee, B.
Harris of Richmond, B.
Hart of Chilton, L.
Haskel, L.
Haskins, L.
Hattersley, L.
Haworth, L.
Henig, B.
Hollis of Heigham, B.
Hooson, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Janner of Braunstone, L.
Jones, L.
Jones of Whitchurch, B.
Jordan, L.
Kinnock, L.
Kirkhill, L.
Lea of Crondall, L.
Leitch, L.
Livsey of Talgarth, L.
Lofthouse of Pontefract, L.
Macdonald of Tradeston, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Maclennan of Rogart, L.
McNally, L.
Massey of Darwen, B.
Maxton, L.
Miller of Chilthorne Domer, B.
Morgan, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Handsworth, L.
Morris of Yardley, B.
Myners, L.
Newby, L.
O'Neill of Clackmannan, L.
Prosser, B.
Quin, B.
Radice, L.
Redesdale, L.
Rendell of Babergh, B.
Rennard, L.
Richard, L.
Roberts of Llandudno, L.
Robertson of Port Ellen, L.
Rosser, L.
Rowlands, L.
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Sharp of Guildford, B.
Sheldon, L.
Shutt of Greetland, L.
Simon, V.
Soley, L.
Steel of Aikwood, L.
Stone of Blackheath, L.
Taylor of Bolton, B.
Thomas of Walliswood, B.
Thomas of Winchester, B.
Thornton, B.
Tomlinson, L.
Tordoff, L.
Tunnicliffe, L. [Teller]
Tyler, L.
Uddin, B.
Vadera, B.
Wall of New Barnet, B.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
Whitty, L.
Wilkins, B.
Young of Norwood Green, L.
7.53 pm

Clause 3 : Use of money raised by a BRS

Amendment 4 not moved.

Amendment 5 not moved.

Clause 4 : Conditions for imposing a BRS

Amendments 6 to 9

Moved by Baroness Hamwee

6: Clause 4, page 3, line 25, leave out “where there is to be”

7: Clause 4, page 3, line 25, after first “ballot” insert “has been held of the relevant persons”

8: Clause 4, page 3, line 25, leave out “the ballot has been held”

9: Clause 4, page 3, line 26, after “approved” insert “by a majority as set out in section 8”

Amendments 6 to 9 agreed.

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Clause 5 : Prospectus

Amendment 10 not moved.

Amendment 11

Moved by Baroness Hamwee

11: Clause 5, page 3, line 37, after “prospectus” insert “and a summary of it together with an easily understood explanation”

Baroness Hamwee: My Lords, I will speak also to Amendments 12 and 13. The amendments are retabled from Committee with an addition inspired by the noble Lord, Lord Bates, which I will come to in a moment.

They are mild little amendments, and I have been very surprised at the resistance that the Government have shown to them. They simply provide that, under Clause 5, when prospectuses are published, either in hard copy or electronically, they should be accompanied by a summary and what I have described as an “easily understood explanation”. This was inspired by the noble Lord, Lord Bates, who said that it would be sensible if local authorities produced FAQs—frequently asked questions—and their answers. I thought that the PPO might have a seizure if I used the term “FAQs” in an amendment, so this longer group of words is the synonym.

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