Business Rate Supplements Bill

You are absolutely right and I thank you again for your guidance, Madam Deputy Speaker. But the very fact that local government estimates are no better than Government estimates is why local business needs to be involved at every point. Local business knows that often estimates cannot be trusted. That is why we cannot set the level at a third of a given project, as is proposed, because there are too many ways of perverting any projection for local business to accept it at face value. What guarantee does business have that local government will not understate a project cost? What is to say that local government will not say afterwards, ““Oh yes, well, we should’ve had a ballot, because this has turned out to be more than a third of the total rate, but we didn’t expect that when we made our projections””? It is just not good enough. Business is also concerned that there would be a reduction in spending on projects financed from Government sources. We have already experienced a reduction in the revenue support grant for local government because other items are reckoned to have more impact. Let me give an example. Grants for infrastructure have been used as a reason for not increasing the revenue support grant in my county. The truth of the matter is that grant is given and taken away, but we are still left with a lower base than we should have, had we received the proper amount of revenue support grant. We need a guarantee from the Minister when he replies to this debate that other Government spending can in no way be lessened because of the ability to levy an extra business rate on businesses. Let me talk about the concern about the level of rateable value. You will know, Madam Deputy Speaker, that it is suggested, although not stated in the Bill, that the level for payment of a supplementary business rate will be a rateable value of £50,000. I do not know whether the Government will confirm that that will be the level before the end of this debate, but the Bill does not come into effect until 2010. We shall have a rate revaluation in 2010 and many more businesses will be caught in the net of that tax as a result. What is to say that, if the proposal does not work quite how the Government wish it to, we will not lower the level of the rateable value relevant to the calling for a particular tax under the Bill to be paid? There is massive concern about rateable value and, in particular, about the fact that we will have a reassessment that could affect the whole thing. We will vote on the proposal now, have a reassessment and then find that many more businesses are caught in the trap of extra taxation. There is concern about consultation. I have had the experience—I was about to say ““good fortune””, but it was not good fortune—of being in a business caught up in local government consultation. I was a marketing and public relations professional for a long time, and the consultations that I saw emanating from local government were some of the most amateur and shoddy that I could expect to see. The lack of professional ability in that respect has been lamentable. It is therefore no wonder that business is concerned about the lack of good consultation. Business is concerned that BIDs payments will not be offset against business rate supplements. The BIDs project is excellent—I pay tribute to the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), who introduced it—because it has meant that business and local authorities work in partnership. That was the essence of the project, which had the effect of bringing business and local government together more and creating greater understanding. The Bill will do the opposite, because business will not be involved in the project. The businesses might simply have the chance to vote, but that would pretty much be all, until the project ended. If there is a good BID project going, the very least that we ought to be doing is to offset the business rate supplement against that project. That provision is not in the Bill, at least not in a form of words that the right hon. Gentleman and I know to be meaningful. Let me introduce another point. I live in a sustainable communities project area. Northamptonshire is due to build 167,000 houses by 2031. It is expected that our population will grow by 50 per cent., and that most of the money for the infrastructure will come from—would you believe it?—the local construction industry. So the industry will have to make sustainable communities project payments on land, and perhaps pay a roof tax, and pay a business rate supplement on top of that. Asking it to take part in a BID project will simply not work. I want to make a final point on the loopholes in the Bill. I hope that the Minister is noting these points, and that he will respond to each one in as much detail as I have used in trying to make them to him. Businesses are worried about how the cost of administration will be constrained, and about how well the funds will be ring-fenced. They have seen in local government what is loosely called unofficial virement across budgetary silos, along with work not being properly classified in one area of activity and being moved into another. They are very concerned about this proposal. Businesses are also concerned because this is a long-term project. I have already mentioned that we are now in one of the worst business environments that we have ever faced, but we all hope that that will come to an end. In fact, we believe that it will do so. We might run a book in this place on when it will happen. Will it be in two years, or three? We do not know, but green shoots will appear, and that is the time at which we must take all the burdens off businesses that we possibly can. We want to release them from regulation and extra taxation, not add to their burdens when they are recovering from a recession that will do more damage than has been seen in living memory. After three years of recession, we shall have about 10 years of recovery—at least, that is what most business people tell me—before we get back to where we were in 2007. We shall also face a global challenge that will run for 30, 40 or 50 years. The only sector of our community that can fight that challenge is the business sector. It will be fighting massive growth from what is called BRIC— Brazil, Russia, India and China—and the underdeveloped nations. The world will be dramatically changed in business terms over the next 40 years, and this recession might have heightened that change. Yet the Government fail to recognise that every burden that they place on business is another millstone around its neck to be dealt with in the fight to stake our business claim in a global world. I have heard very little from the Government that shows that they understand the need to nurture and help the wealth-producing sector rather than adding to the regulation and burdens placed on it. That is what business is most angry about. That is what I meant when I talked about the fine words that emanate from this Government but are not carried through into real actions when it comes to nurturing, nourishing, growing and helping to sustain the business sector in this country. The business sector wants help and understanding, not fine words and promises that are not very meaningful. It wants help and real understanding, but the Bill shows that it is not going to get it from this Government.