Business Rate Supplements Bill

I think that my hon. Friend and I can agree that the current situation is bad and will get worse, and that this therefore is not the time to introduce an extra levy. We are not at present debating the extra levy that is the subject of the Bill. Rather, we are debating a proposal from the right hon. Member for Greenwich and Woolwich that is designed to try and abate the consequences of that levy. He has rightly seen that introducing the levy in the same area as a BID would amount to a double whammy, or something from Clobber and Clobber, as I have just described it. He has rightly asked himself, "How do I ameliorate that?" He has produced a positive suggestion, but within a framework in which the Government wish to take the risk of upping the tax burden in these difficult areas at a time when the business community is flat on its back. The right hon. Member for Greenwich and Woolwich is asking whether it is possible to take some of the burden off tenants and put it on to the property owners. His suggestion has the agreement of most property owners, although quite a lot of important ones do not necessarily support it. In his ideal world, the tenants would have an abated total cost. They would still have a much bigger total cost, because they would have to pay the supplement imposed by the Bill as well as the BID, but there would be an abatement. Not only did I think that the right hon. Gentleman spoke well to his new clause, but I gave him a fair hearing because he was trying to move in the right direction. Before I could possibly support the proposal, however, I would need to be satisfied that there would not be leakage in the way that my hon. Friend the Member for Bromley and Chislehurst suggested. My understanding is that a lot of local authorities, as soon as they see another group of people liable to pay a levy, will not decide that that allows them to cut the levy paid by someone else. Instead, they will think, "Whoopee! We can have a bigger levy! We have broadened the tax base and so we can have a bigger scheme." Alternatively, authorities re-entering BID projects that are already up and running might understandably say, "We started this BID in the extremely favourable property circumstances of 2006 and 2007, when we though that the private sector would contribute a particular amount. However, we now discover that the private sector banks have been largely nationalised and cannot make the money available, and that the private sector players no longer have the profits to do so. As a result, we have to make good the shortfall—the amount that the private sector can no longer provide—out of public moneys. What a good idea the right hon. Member for Greenwich and Woolwich has given us. He has provided us with the answer, and we have another bunch of people to put a levy on."