Business Rate Supplements Bill

I feel as though I have sat through a master class in parliamentary draftsmanship, consequential detail and research of the history of the Bill. I am immensely grateful for the way in which the noble Baroness, Lady Valentine, moved this hideously complicated amendment. What is trying to be achieved now makes perfect sense. I cannot ask anything. Perhaps my only function in this debate is to give the Minister’s team time to concoct great answers to the challenges that have been presented. This is simply a case of perfect logic and sense. Why should any business engage any tenant of a retail premises in improving its local area? The answer is that it would increase the footfall into that area and potentially enable it to sell more produce and therefore make greater profits. That is the logic. Hitherto, however, an important group of people was exempted from that: the property owners themselves. If you are renting out a property at £15 per square foot, and if it is valued at £10 million, to use an illustrative sum, then when the business improvement district is established and improvements in the local area take place, you clearly have a more secure tenant. You may find that when you come to re-let or renegotiate, you can increase your rent per square foot. In addition, you have a capital value increase because, as the rental values increase, so the asset’s capital value increases. So it is obvious that, whereas the tenant may only benefit in one way—the bottom line in terms of sales—and potentially then fall foul of their rent being increased by the landlord in subsequent years, it follows that the property owner is benefiting most from this on two counts. Therefore, the fact that they should contribute seems to be an omission from earlier drafts of the Bill and should certainly be corrected now, even if it needs to be done in such a complicated way. When the amendment was debated in Committee in the other place on 27 January, at cols. 184-186 of the Official Report, and on Report on 11 March, at cols. 337-338, concern was expressed that there should be no perverse consequences. I took that to mean that the purpose of the amendment ought to be to ameliorate the cost of the project; it should be a mechanism not for increasing the overall take from the business community but for spreading the burden more widely so that some of our concerns about the impact on business, which we have mentioned on a number of occasions, may be softened by including property owners in the measure. It would be helpful if we could hear assurance from Ministers that, should the amendment be acceptable, those guarantees in terms of the overall take and spreading the impact on businesses would be upheld. Perhaps that should be mentioned in the Bill if it is not directly referred to in the amendment which has been so ably moved. I am pleased to add my support to the amendment, which stands also in my name.