Business Rate Supplements Bill

I hesitate to disagree with my distinguished colleague and noble friend Lord Jenkin, and with the considerable expertise that the noble Lord, Lord Best, brings to these matters. However, I must. It follows through our general theme of concern about the burdens that are being placed upon the business community. The sum of 2p may seem inconsequential, but it is the equivalent of £750 million nationally—around 5 per cent of the total to be raised. It is in the nature of these things that whatever the top level, people tend to claim up to the maximum in any walk of life. Therefore, to remove that barrier from 2p and to give the Secretary of State the power to vary the upper limit up to 4p is giving too much at this stage. We are certainly supportive of the review of the scheme’s progress. A radical new tool is being proposed. We have our misgivings about it outside London, but it is none the less appropriate to seek its review. As well as the Local Government Association having argued for it, business organisations such as the CBI have made representations that we should seek to retain the current 2p level—indeed, not even 2p. The point is that there ought to be gradations and a scaling before somebody moves all the way up to 2p, depending on the size of the business. Timing is also critically important. Certainly, economic forecasts point to our being in a period of sustained economic difficulty for some three to four years. Therefore, the idea that this power of flexibility could be introduced by the Secretary of State just as businesses are emerging from that would be regarded by us as unhelpful. Finally, one of the things that we have always been suspicious of, with the reduction of local authority business growth initiative funding from about £1 billion to £250 million or something of that order, is that this is not additionality, but we are seeing the already hard-pressed business community being asked to supplement a gap in funding.