Business Rate Supplements Bill

My Lords, I would hope—not with great prospect, I am bound to say—that I could persuade noble Lords who have spoken to Amendment A1 not to press it. I start with the contribution of the noble Lord, Lord Tope, and acknowledge in what he said that he is supportive of the thrust of the Bill. Indeed, I acknowledge his position in local government—with more than 30 years’ service, I think, and still going. He made an important point in recognising that the provisions as they stand require engagement with the local business community. There is no prospect of a BRS just being introduced effectively over the heads of local businesses whatever their views. All the consultation guidance makes that clear. I refer noble Lords to the Business Rate Supplements: A Consultation on Draft Guidance to Local Authorities, which we published in January 2009. It sets out the fact that any projects that come forward should relate to and be embedded in the regional strategies that are in place and the local strategies that an area would have. In particular, the paragraph about the engagement of business in some of the assumptions states: ""Ultimately, business will have the scope to challenge prospectus assumptions at the consultation stage and for that reason it is in the levying authority’s best interests to ensure the robustness of its business case and to ensure work on the preparation of the prospectus involves detailed discussions with local business and other interested parties"." That must inevitably follow and I believe that that should allay the fears of noble Lords. I understand that the noble Lord, Lord Tope, was saying that the Government’s proposed amendment in lieu was a helpful step and that, of itself, it is something that he would support. However, although he is moving an amendment to say that there should be ballots held in every case, I thought that the tenor of his comments was also that the one-third threshold was too high. I do not know from that whether his position is that, if the threshold were lower, he would have a different view on mandatory ballots. As it stands, the proposition before us is about mandatory ballots. To a large extent, the arguments have been ranged over in the other place and in your Lordships’ House. There are probably no great new points of substance to bring forward, but we have moved in a material way to address noble Lords’ concerns by the amendment in lieu that I moved earlier. We hold fast to our objections to mandatory ballots in every case. The noble Lord, Lord Bates, supported the Motion moved by the noble Lord, Lord Tope. I think that beneath that was support for the thrust of the Bill, notwithstanding our residual disagreement. He says that we have created an anomaly with BIDs. We need to see the substance of that. BIDs are much more likely to be localised projects and, as the history of BIDs suggests, business-led rather than more strategic, local authority-led projects. I have not been through each of the BIDs in operation, but the thrust of them has very much been business-led in more localised areas. As has been discussed before, they are more likely to provide a significant element of the funding than might be the case in some of the BRS situations. On the argument that we must have a ballot in every case because, if there is a threshold above which ballots have to take place, the authorities will be manoeuvring around it, given the robust approach that must take place—the development of a business case, the consultation on it and the initial prospectus—it would become pretty apparent if anyone was trying to pitch a scheme in a way that circumvented the threshold, wherever it were put. Notwithstanding that, the number of businesses that might be involved in a ballot depends on the scale of the BRS and the particular area; I do not know. However, ballots, even if the numbers are relatively small, do not come cost-free. The noble Baroness, Lady Valentine, expressed her support for the amendment moved by the noble Lord, Lord Tope, although I understand that she is still happy for Crossrail to be outwith the basic position that we took. However, I take issue with the concept that businesses will be threatened with extra rates. The ethos of the Bill is not about threatening local businesses to extract money from them; it is about trying to identify projects for which additional spend will have beneficial impacts on business development in an area. Together, all the locks that are there to protect local business—the threshold, the 2p cap and it needing to be extra spend—are a genuine series of protections. It is not right to say that the Bill is just about seeking to extract resources from local businesses. I remember from my days on a local authority, when the domestic rate was set locally, there was a brief engagement with the business community when it was set—normally over a cup of coffee with the borough treasurer. There was not a focus on strategic issues; it was a million miles from that. Local authorities have come a long way with all the engagement through LSPs. I do not have the number in front of me, but a not inconsiderable number of LSPs are chaired by the business community. We are in a different situation. We are not about threatening businesses. For all those reasons, I hope that the noble Lord will feel able not to press his amendment. However, I am not sure that I have moved him sufficiently on this matter.