Business Rate Supplements Bill

Amendment 5, which is in my name and that of my noble friend Lord Cathcart, very much is an argument that has already been made by my noble friend in the context of the debate on Amendment 4. I have to be very careful about how I say that. It surrounds the whole issue of what is considered to be additional funding. We had a discussion about this because there are many ways in which the types of issues, about which the Minister told us and gave examples, could qualify for a business rate supplements scheme or the types of project that might come forward. The list included, for example, a training initiative or a centre of excellence in a particular area, which again would be very worthy. I do not doubt that centres of excellence would improve innovation, which is one of the five key drivers of productivity. That equals growth, with which we have no problem at all. Growth is a wealth-creating investment. There was also the suggestion that people might use marketing to promote a local area and its businesses. These principle examples were offered as schemes which might qualify under the terms of this report and the Lyons report, to which we have referred. The only difficulty is that a lot of that work has already been undertaken. The noble Baroness, Lady Hamwee, has referred to the role of the regional development agencies. In the north-east of England, we have three centres of excellence; that is, one for the process industry, one for new and renewable energies, and another for life sciences. They are all—certainly the first two—doing excellent work and have been funded by the regional development agency. Not wanting to build a conspiracy theory, the regional development agency in the north-east has had its funding cut from £270 million to £207 million. That is a significant cut. The viability and future funding of those centres of excellence is being drawn into question. Clearly, a cut of that magnitude is making the regional development agency look at the funding of all its major projects. We should be grateful for some further statements on the record from the Minister about how the term of additionality is to be applied. If it is suggested that that funding is taken from hard-pressed local business rate taxpayers, simply taking over from the regional development agency because it has had its central government funding cut, that is unacceptable—similarly when it comes to promoting an area. Forgive me for mentioning the north-east of England twice, but there seems to be a rich seam of examples there. We have the major theme of promoting the north-east of England, which is "Passionate People, Passionate Places", as will be demonstrated at St James’s Park this very evening. That is the slogan: "Passionate People, Passionate Places". Regeneration under that slogan is being developed by the regional development agency. Are we to say that it will not be involved in promoting the area any longer? The Newcastle-Gateshead initiative, which has a special board chaired by the noble Lord, Lord Faulkner, is doing some work in that area. My point is that there are myriad different vehicles, whether business improvement districts, local authority business growth initiative schemes, regional development agencies or local authorities’ economic development functions, Business Links, or other quangos, that are doing that work up and down the country. Our suspicion, and the reason for moving the amendment, is that the Department for Communities and Local Government is not the focus, but that this is being driven by the Treasury, which sees this as a way to plug the gap in the cuts in public funding by transferring part of the burden to already hard-pressed businesses. That is the basis of our objection, and that is why we are moving the amendment: to seek absolute clarity about what is meant by additionality and the tests that the Government plan to introduce to ensure that money is truly additional. I beg to move.