Business Rate Supplements Bill

New clause 2 concerns the interface between business rate supplements and business improvement districts. Although both relate to the promotion of the local economy, BIDs are different from BRSs in a number of respects, as the hon. Member for Cities of London and Westminster (Mr. Field) pointed out. In Committee we examined the differences between the two, highlighting the degree to which the BRS is more likely to support larger-scale, longer-term investment—including infrastructure—whereas BIDs have focused primarily on short-term improvements to enhance the attractiveness, commercial success and security of retail and commercial areas. However, there are similarities. Both are based on the principle of partnership between local authorities and business to promote the local economy. Both involve a levy on the ratepayer—who is the occupier rather than the owner of the property—on top of the normal business rate. As the Minister responsible for overseeing the introduction of BIDs some six or seven years ago, I am naturally pleased that they have proved to be a success, particularly because—this is another feature common to both BIDs and BRSs—they were not uniformly welcomed when we introduced them. I recall the Opposition's hostility when we debated the local Government Act 2003. I hope that, just as with the passage of time they have come to recognise that their opposition to BIDs was misplaced, they will come to see over the passage of time that their current opposition to the BRS is also misguided. Over those six years, there has been a significant growth in the number of BIDs and in their contribution to improving the economic performance of commercial areas in towns and cities all over the country. Dr. Julie Grail is the chief executive of British BIDs, the umbrella body for BIDs throughout the country. During one of our evidence sessions at the beginning of the Bill's Committee stage—I join the Members who have rightly emphasised the value of those sessions—she told us that 76 BIDs were now operating throughout the country, nearly 20 of them in London. BIDs can be set up only after a yes vote on a dual-key basis by all the businesses that will be liable for the levy. They are also subject to periodic renewal ballots. The key issue that prompted the new clause was the fact that 14 existing London BIDs are due to be subject to such ballots within the next two years. At precisely the same time, business rate payers will begin to face the business rate supplement for Crossrail. Not surprisingly, Dr. Grail and many others who have been involved in the successful development of BIDs fear that when confronted with both the BRS for Crossrail and the ongoing cost of supporting their local BID, some business rate payers, particularly in difficult economic circumstances, will conclude that they cannot afford to continue to support the BID.