Business Rate Supplements Bill

I understand my hon. Friend’s point, but, with respect, may I say that I suspect it would be more appropriate to address the question to the Minister than to me? Currently, the provisions simply give power to upper-tier authorities and do not specify which. I should point out to my hon. Friend that the Bill contains a clause that would enable upper-tier authorities to levy a business rate supplement jointly, but he would have to ask the Minister about that. Perhaps we will be able to return to that point when we examine the details of the relevant clause, where safeguards are not properly addressed. Another point advanced in favour of the Bill is that it provides additional money, and my intervention hinted at the issue that I take with the Minister about that. If the Government are serious about making additional money available for economic development by local authorities, it is extraordinary that they almost strangled the local authority business growth incentives—LABGI—scheme at birth by cutting its funding so drastically. The LABGI scheme was not perfect, but it edged in the direction of giving a greater incentive to local authorities to attract business to their areas. The funding was cut from £1 billion over the first three years to £150 million in the following three. In effect, the Treasury—yet again the villain of the piece—is taking moneys from local economic development and by sleight of hand, in the form of this Bill, shifting the burden for economic development on to businesses and their customers and employees. The Treasury has used that trick repeatedly under this Administration. May I give one other London-based example in that regard? Interestingly, when the opportunity for the Mayor of London to levy a congestion charge was first introduced under the Greater London Authority Act 1999 an assessment was made of the likely take of the congestion charge—it did not turn out to be terribly accurate, but that was consistent with most of the other things in the assessments at that time. Lo and behold, the following year the central Government grant to Transport for London was reduced by an amount that was almost exactly the same as the projected take of the congestion charge revenue. The truth is that the Government have form for this, and they are robbing shopkeeper, businessman Peter to pay the Treasury’s Paul. I hope hon. Members forgive my saying so, but there is no credibility to the suggestion that this measure will attract additional money. The points outlined by a number of my hon. Friends in interventions were well made. I can understand why local authorities have been interested in the ability to use such a power—I do not blame them—but one of the reasons they are interested is precisely because they are being put under enormous pressure by central Government. Local authorities have had a range of unfunded obligations placed on them in recent years, they have been given a range of ungenerous, rather tight financial settlements and they have seen the LABGI scheme funding slashed—no wonder they are under pressure to seize any opportunity that they can. In a sense, the Minister is setting up local authorities to be his human shield against criticism—he is pushing them into the front line and saying they want this, when it is almost being done with a financial gun to their heads. That is the reality, and the suggestion being made does not have much credibility. A third point is that the suggestion has been made that the Bill will give local businesses a stake and a real say. Here is a separate point that the Bill simply fails to address in terms of its own original prospectus. I was having a look at some of the phrases used in the White Paper. Benefits were suggested as including devolved decision making, because resources would be raised and controlled locally and those who have a stake in the success of a scheme and the best understanding of what is needed would be running it. That will not be the case, because the people who have the best understanding and the most at stake are the local businesses and they are not going to have a ballot on this in all cases. Neither is there any provision in the Bill to give those local businesses that contribute an ongoing overview of the implementation and working through of the scheme. In fact, their say is limited, because the compulsory consultation can be ignored. That issue could be addressed—every business group that made representations suggested this—by requiring a ballot in all cases. I hope that the Minister will reflect on that, because if there is to be genuine partnership, there must be good will on the part of local authorities, and that can be achieved. The Minister rightly said, as did my hon. Friend the Member for Cities of London and Westminster (Mr. Field) and others in interventions, that business improvement districts are a good model for that. I have had the opportunity to talk to several people who run successful business improvement schemes. I recently met Dame Judith Mayhew Jonas, who is leading a successful scheme in a new west end company in my hon. Friend’s constituency. The point that was made by everyone involved in the BID schemes is that they work because there is genuine buy-in from businesses and a real incentive for everyone to succeed. Why not adopt that model with the compulsory ballots?