Business Rate Supplements Bill

From our perspective, we find much in the later amendments in this group with which we would agree and find very helpful. However, as we are discovering as we go through this afternoon, we are perhaps on the wrong foot—or the right foot, depending on one’s perspective. Under Amendment 6, the business rate supplements can be used for capital and/or revenue expenditure. We would have a problem with that because we do not want the scope of the business rate supplements to be wide and to include revenue spending. It opens up the possibility of local authorities being called to use the business rate supplements for things that should really be paid for from the centre. That is all tied up with the fear that the Government will try to use the business rate supplements to shift the burden of debt on to local authorities. If the rate is to be used, it should pay for specific and clearly identified projects, which are one-off in nature or have a clear plan as to how they will generate the revenue from their activity to fund their ongoing existence. Taking the conference centre example used by the Minister, in the prospectus there should be a clear statement as to how that will be commercially viable on an ongoing basis. However, other elements of this group are very helpful. Amendment 24 sets out the requirement in the prospectus to make clear how the projects will be funded on an ongoing basis. It also means that there is something for businesses and interested parties to hold an authority to account for if more expenses are incurred and more funding is needed. It also increases the business involvement in a project by increasing the amount of information open to assessment in the prospectus, which is available before a decision is made. This is very important, because we would like businesses to be involved throughout the whole process and not just when a decision is imposed and the business rate supplement has been levied. Amendments 26 to 31 relate to borrowing money. The noble Baroness has done us a great service in raising the issue of borrowed funds, which is outlined in Schedule 1 in the prospectus. If money is going to be borrowed for cash flow, one presumes that there is going to be a lag, albeit a fairly short one, between the funds coming in and their being expended. Some funding is going to be needed in that gap. That is important, because this clause in the schedule raises whole new questions. In this age of difficult dealings with banks, for example, which the noble Baroness, Lady Hamwee, referred to, what rate of interest is going to be levied? Who undertakes the liability for the loan on its ongoing basis? If a project does not work out, who stands liable? Could it be that the businesses that signed up to the business rate supplement are therefore somehow inculcated as part-funders, and therefore partly responsible for the loan that is taken out on a project that they have supported? There are a number of questions here, and we will listen with care to the Minister’s response.