Business Rate Supplements Bill

My Lords, I start by declaring an interest as chairman of the British Olympic Association. Unsurprisingly, I will address the subject of the sports and fitness industries during my remarks. However, the Minister will be pleased to learn that I, too, support the Bill in principle. Indeed, I never thought that I would hear the case for a new tax made so eloquently. For 10 years I was the Member of Parliament for Lewisham East and I believe that allowing the Greater London Authority to introduce a levy on business rate payers to ensure that Crossrail is finally brought into life is commendable. It is difficult to see alternative funding mechanisms being implemented on the timeline required and necessary to ensure that Crossrail’s financing package is signed off. I have long believed that the economic benefits from Crossrail, as outlined by the Minister, will be substantial both for Londoners and for the rest of the UK. Estimates have been made ranging from £20 billion to £36 billion as a contribution to GDP over six years through faster journey times, job growth and increased productivity. However, this support does not come without some concerns about the Bill. No one welcomes additional burdens on business, particularly if we do not emerge from this recession as fast as the Chancellor, speaking in another place today, would hope. Nevertheless, it is incumbent on us to balance the cost-benefit analysis involved. In this context, I echo the key findings of the Greater London Authority, which supports the Bill, for the following reasons. The authority recognises the long-term benefits of Crossrail to business, which will far outweigh the costs to it of the BRS. As has been pointed out, all of London’s boroughs will benefit from Crossrail and there are important medium-term benefits which should create demand for up to 14,000 jobs during its construction. This will make it an important source of employment at a time when London’s job market is likely to remain difficult. The authority makes a further compelling point, which is that getting on with Crossrail’s construction sends an important signal to the world about the intention to continue to invest for the long term. Delay would reveal a lack of self-confidence in maintaining London’s status as a leading global city. That said, I share the views expressed by the noble Baroness, Lady Hamwee, who has deep-seated reservations about the fact that the detail of the Bill lies in secondary legislation in the form of regulations that have yet to be published and that a significant amount of that detail will focus on how the boroughs are to administer the new business rate. Perhaps the Minister will be able to provide greater clarity on when these documents will be made public, because, in the tempered words of London Councils, "This is not ideal". However, it will not surprise your Lordships to learn that my principal concern relates to sport and recreation, whose role I am pleased to see is recognised in Clause 13(4). In Canary Wharf today, the International Olympic Committee’s Co-ordination Commission met for the fourth time with the London Organising Committee of the Olympic Games; indeed, I have just returned from there. The Olympic Games and Paralympic Games bring more to a host city than a summer of glorious sport. They are a catalyst for the youth of this country, a catalyst for the elite sportsmen and sportswomen of future generations and a catalyst for a sports legacy that should reach every community in the land. I am therefore concerned about the effect that this could have on a unique entity—the Olympic Park following completion of the 2012 Games. The facilities there are a central part of the legacy that we are all working so hard to foster and it is important that we do not undermine the work that is being done to inspire a generation of young people to take up sport by increasing costs to the businesses and facilities covered by the authority of the proposed special purpose vehicle. More generally, and in principle, although it would appear that sport has no problem with the Bill, a number of additional issues may have an effect on sport which I hope we will be able to consider in Committee. As noble Lords will be aware, under Clause 13(4) community amateur sports clubs—CASCs for short—would receive an exemption under the provisions of the Bill. While I welcome any measure that benefits CASCs and boosts the CASC scheme, I am concerned about those sports clubs that are not registered as CASCs and are not exempt by the de minimis threshold in the Bill, but which nevertheless provide a valuable service to local communities. It is important that their contribution is recognised in the tax system, particularly because last year the Government recognised the promotion of amateur sport as a charitable purpose. Let us not forget that the excellent work done by the Central Council of Physical Recreation in its 2007 sports club survey found that more than half of the UK’s amateur sports clubs were either operating at a deficit or only just breaking even. We must remain committed to easing the regulatory burden on them, not increasing it, and, if necessary, counteract the effects of this Bill by launching a parallel CASC registration initiative. The negative impact that this measure could have on sports clubs would undermine the valuable role that they play in achieving government targets, not only in encouraging more people to be actively involved in sport and recreation but also more widely in improving public health and education, fostering community cohesion and tackling anti-social behaviour and social exclusion. To us in the British Olympic Association, who are working closely with the Central Council of Physical Recreation, which represents sport and recreational governing bodies the length and breadth of the country, the sports legacy for this country from the Olympic Games is as important as the regeneration legacy. The challenges that we face have been clearly set out by the Fitness Industry Association, which, in its briefing to us today on these health issues, stated: ""A BRS, coupled with the expected rise in the Uniform Business Rate … has the potential to inflict a significant and negative impact on public and private health and fitness facilities and to impede Government and community efforts to bring about a healthier, more active population. The Foresight Report"," to which it refers, ""estimates that, based on current trends, the UK will experience a virtual ‘obesity time-bomb’ in which 60% of adult men, 50% of adult women and 25% of all children will be, not simply overweight, but obese by 2050"." As a result, there is understandable concern that some of the key businesses that offer the facilities needed to address these issues will face disproportionately high rate increases. It cannot be right to increase the tax burden on those organisations and businesses offering the facilities that are needed to address the challenge of delivering a sports legacy for the Games and for the country at large. It is my view that nothing should be done to jeopardise public health campaigns and overall health and sports objectives. That may lead me to introduce a "cardiovascular amendment" to the Bill to provide special BRS relief for public and private organisations that facilitate opportunities to be physically active. In conclusion, I give my thanks to Ministers who have already provided some relief on the subject that I have been discussing through the community amateur sports clubs initiatives. I hope that we can, in considering the Bill, go significantly further. At this point in our journey, we have a long road to travel.