Business Rate Supplements Bill

These amendments basically follow an argument I touched on when speaking to Amendment 3, which is our belief that this is important legislation in terms of delivering Crossrail and therefore for the Greater London Authority, but that that is as far as it should go. We should not seek to roll out what was an exceptional case of infrastructure development and turn it into normative practice in terms of raising additional local government finance. One of the arguments I pray in favour of this case is that in a briefing from the Local Government Association for our Committee stage, the point was made that local government works closely with local businesses. It understands and shares concerns about placing excessive burdens on enterprises. The association goes on to make in bold print the assertion that: ""Councils are not sitting eagerly waiting to levy new supplements as soon as the legislation is enacted. A recent survey of the Chief Economic Development Officers’ Society did not find a single local authority that is planning to use the power to apply an additional supplement during the recession"." I believe that the briefing makes my point for me. It explains that this is a piece of enabling legislation that would allow an additional levy to be placed on business, but goes on to make the clear assertion that chief economic development officers are not sitting back and waiting for that to happen and, by implication, do not feel that it is absolutely necessary. No one is planning to take an initiative like this during a recessionary time, so this is quite a damning indictment of the Bill from the Local Government Association. Amendment 4 would remove from Clause 2 the designated geographic areas other than the Greater London Authority. This issue was raised in the Commons when the Opposition wanted to decline to give the Bill a Second Reading because it fails to limit the application of supplementary business rates to the Greater London Authority and the Crossrail project. Crossrail is a unique proposal because of its size and extent. It is a one-off project of exceptional economic importance and should not be used as an excuse to roll out a supplementary rate nationally. The funding of Crossrail has been the subject of much negotiation for some time and should be treated in a different way from the funding of infrastructure projects elsewhere in the country. Further, businesses in London have been deeply involved in Crossrail, and groups such as the CBI support the Bill as it relates to Crossrail, but not as a national scheme. The issue also forms part of the debate surrounding the mayoralty of London; in the case of Crossrail, Londoners have already had an opportunity to express a view. On 27 January during the Bill’s Committee stage in the Commons at col. 127 onwards, a more specific concern was raised that I echoed in the debate on Second Reading in this House: this proposed legislation is somehow being used to cover the Government’s tracks in terms of cutting the amount of funding being made available for local authority business-growth incentive schemes. The money available for those schemes is to be reduced from £1 billion over the past three years to £150 million. That is a significant cut in a proposal aimed at economic development, growth, productivity, wealth creation or whatever we decide to call it. The money was committed and is now being reduced because of the current economic climate. Surprise, surprise; we now have this legislation that is going to be extended elsewhere. It was also discussed on Report in the other place on 11 March, where it was argued that it was incredibly bad timing for businesses which were already suffering with a range of additional taxes. At the point at which Members in the other place were discussing this, the business rates were going to increase by 5 per cent. Now, of course, there has been a magnanimous climbdown to 2 per cent by the Government, but the 3 per cent will have to be repaid next year. A rating revaluationwas also under way; ports, crucially important to economic regeneration and growth, are to be levied by having to fund a revaluation of backdated rates. We are at one with the case for the Greater London Authority having the capabilities laid out in the Bill to raise funds, which I think are in the region of £3.5 billion, as its contribution towards Crossrail, to ensure that that major infrastructure project goes ahead, which we support fully. That has had a democratic test at the ballot box, and the people of London have expressed a view that is supportive of Crossrail. We believe that matters ought to be left there, however; if there are issues that demand this kind of measure, it ought to be brought back at a time when the economic climate and the general mood may be more receptive. I beg to move.