Business Rate Supplements Bill

No, I will not, for precisely the reason that the hon. Gentleman mentions: we are talking about a proposal that is far more wide-ranging than the BIDs, which have a narrow, local focus. As he will have heard in my exchange with the hon. Member for Bromley and Chislehurst (Robert Neill), the Front-Bench spokesman, not every business has a vote on BIDs. The landowners do not have a vote. Many people saw that as a potential weakness in the BID mechanism, but we regarded it as necessary, because it would have been a huge complication to create an electoral register for freeholders and landowners that is separate from that for tenants, who are liable to pay the business rate. To avoid unnecessary bureaucracy and complication, we did not extend a voting right to freeholders. So in the case of BIDs, not every business has a vote. We should think about the purpose of the initiative. If it is meant to secure the support of business for major infrastructure schemes, it is vital, first, that there is a framework to ensure that support and, secondly, that it cannot be prevented from operating by the activities of businesses that do not see the benefits. We have heard the view of the hon. Member for Croydon, South (Richard Ottaway), who is no longer in the Chamber; he did not see what benefits small businesses in Croydon would gain from Crossrail. He is wrong, because businesses in Croydon will benefit substantially from Crossrail, which has conducted a detailed survey of the economic benefits resulting from improved journey times and greater access to commercial premises and of all sorts of other benefits from improved transport. It demonstrated significant economic benefits in all parts of London—including areas such as Croydon, which would be some distance from the nearest Crossrail station—as London’s transport network is an integrated whole. When part of that network does not function, the consequences spread across the whole city. There are benefits, even in Croydon, and as my right hon. Friend the Minister made clear, small businesses will be exempt. The supplements will apply only to businesses above the threshold, which we think will be set at the rateable value of £50,000, although that has not yet been confirmed in the Bill. The risk of a universal ballot by businesses outside the area immediately affected by the infrastructure investment, which could destroy the huge benefits for those businesses that are more familiar with the scheme in the area where it will be constructed, could prevent necessary improvements. However, I stress that there are safeguards. First, schemes where less than a third of its cost is met by business will not be subject to a ballot. In any case in which business is expected to meet the majority or a significant proportion of the cost, if the cost is less than 50 per cent. but more than a third, businesses will have a ballot, which is a fair safeguard. Secondly, as we know from the Crossrail experience, the measure would not command the support of business if business in London did not believe that it was a good thing. Even without holding a vote, business representatives in London—the CBI, London First and the chamber of commerce—all know how crucial Crossrail is to the future of our city. That is why there is extensive business support for the concept of a business supplement. This is important because, as Opposition Members know only too well, Crossrail has been a long time a-coming. The scheme—the hon. Member for Bromley and Chislehurst made this point—has been in gestation for 20 years or more. I remind the hon. Gentleman that when his party was in government, the scheme fell. His party introduced a Bill in the early 1990s to create a Crossrail scheme, but it did not get through the House, not because of the activities of Labour Members but primarily as a result of the stance of the Conservative Chairman of the Select Committee that looked at the scheme. Perhaps that is a comment on part of the Opposition’s past to which they do not want to return or of which they do not want to be reminded, but that was the shambles of the hon. Gentleman’s Government in the 1990s, and that was the reason why the Crossrail scheme did not proceed. Without a sound, broad funding base, which is now in place, I do not think that Crossrail would proceed even now. It is difficult to see where the funding would come from to enable it to happen if it were a wholly publicly funded scheme without an element of business contribution. It is fundamental if we are to enable a scheme such as Crossrail to proceed that we have the option for that type of joint partnership funding for major infrastructure schemes. Under the Crossrail formula, funding will come partly from central Government, and it is right that they should contribute; partly from the Greater London authority, and it is right that there should be a GLA contribution; partly from the users of the service through the fare box, which has been taken into account in the financial formula; and, crucially, from business. The business contributions are not uniform. There are two separate types of business contribution. There is the direct contribution of those businesses that have premises or development sites in the immediate locality of a new Crossrail station, which stand to benefit enormously from the creation of the new transport links. I think of Berkeley Homes in my constituency which is carrying out an important new development on the Royal Arsenal in Woolwich—a major regeneration project that is rightly attracting a great deal of support, plaudits and awards, because it has transformed a formerly derelict site into an area with real prospects in the next two decades of becoming one of the great locations not just for residential premises but for businesses. Businesses recognise the huge benefits that will come to them from having a Crossrail station in Woolwich and they are contributing towards the cost of that station. That is a direct contribution. There are similar contributions at Canary Wharf from the City of London and elsewhere. That direct contribution is an element, but other businesses not so closely connected to the areas where there will be stations will benefit for the reasons that I referred to in the study that Crossrail carried out into the wider economic benefits. It is right that above the threshold—a £50,000 rateable value threshold seems a reasonable one—there should be a contribution from business towards something that will unquestionably improve the economy of London and the prospects for London businesses. That is the nub of the argument in favour of the type of mechanism that the Bill represents. I heard the hon. Member for Bromley and Chislehurst saying, ““Well, yes, we understand that Crossrail is quite a good idea.”” He is bound to say that, because his own Mayor of London, Mayor Johnson, is a very strong advocate and rightly so. The hon. Gentleman would be in an impossible position if he were cutting Boris off at the legs by saying, ““No, we don’t support this.”” He has had to get himself into the curious position of saying, ““We don’t really like the Bill””—the tone of the contributions that we have heard today from the Opposition has been hostile—““but okay, we accept it for Crossrail.”” That is intellectually incoherent. Why should London benefit from the Bill and no other part of the country have the benefit? If in any other part of Britain a major infrastructure scheme is developed that has the support of the business community because it believes that the scheme is crucial to economic success, why should it not have the option? We heard no answer to that question. To say that the Bill is acceptable in London on a major project such as Crossrail but nowhere else is incoherent and non-credible. This new business rate supplement scheme is fundamental to the economic well-being of our country and there could be no better time than the present for it to be introduced. To argue that this is an inappropriate time is extraordinary. In the next week or so we will see the inauguration of a new President of the United States, which many in all parts of the House welcome. He will be clearly committed to major action, including major infrastructure investment to tackle the current economic difficulties that that country, along with the rest of the world, is facing. We know perfectly well from history what an important role major infrastructure investment played in the 1930s in attacking the problems of the great depression. It seems an extraordinary position at this point in time to try to prevent a scheme from being put in place that will benefit the economy, that can command the support of local business and that is subject to loads of safeguards against measures being imposed on business. That reinforces the view that the Conservative party does not know what to do and so is doing nothing, as against a Government who are determined to take the action necessary to tackle and respond to the challenges of our time. If the Opposition continue in their incoherent, intellectually bankrupt position of saying, ““Yes, the Bill is all right for Crossrail, but nowhere else in the country, and we don’t like it,”” they will be seen as the party doing nothing at a time when the country deserves better. I sincerely hope that the Bill receives a solid Second Reading tonight.