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Business Rate Supplements Bill

My Lords, I welcome the noble Lord, Lord Davies of Oldham, who is a veritable and valiant Pooh-Bah, taking up this Bill at what I assume was very short notice. I should say almost in the same breath that I am very sorry that the noble Baroness, Lady Andrews, is not here to see it through this stage. She described the Bill as "pristine" when she first introduced it. We are hoping that it will become a little grubbier as we go through today. I should declare an interest as one of three joint presidents of London Councils. I was also a member of the London Assembly, part of the Greater London Authority, and the London Borough of Richmond upon Thames. As well as moving Amendment 1, I shall speak also to Amendments 6 to 9, 20, 21 and 25 to 28. Amendment 1 is a paving amendment and, I accept, not a very subtle one at that. This is the way we do things here. The noble Lord, Lord Bates, on behalf of the Conservative Benches, has put his name to all the amendments in this tranche. I am grateful for that. The Bill provides for a ballot if more than one third of the total cost of the project is to be raised from the business rate supplement or if the levying authority decides to hold a ballot. For us on these Benches—and, I believe, for all the Opposition—it is a point of principle that all those who are being asked to contribute should have their say, whatever the proportion of the BRS to the total cost of the project. Their view may, of course, not prevail—that is in the nature of voting—but they should be given the opportunity to exercise a vote. We are well aware that the Local Government Association is not enthusiastic about having a ballot in all cases. I suspect that this has something to do with a mixture of amour-propre and pride, confidence in how local authorities operate, and, no doubt, the cost of holding ballots. I explained in Committee that, although I would normally be heard to be supporting local authorities, that support is not without a critical approach. I believe in this case that the claim of the business organisations for a ballot and, more importantly, our own values and the strength of our own feeling about the necessity of allowing for a ballot should prevail. At the previous stage the Minister quoted the LGA’s claim that no authority will make a decision that has a detrimental effect on its local business community. Of course not, but that is not quite an accurate description. No authority will make a decision which it thinks will have a detrimental effect on its local business community. But that is not the point. What is proper is that business should be able to express its view via a ballot and affect the outcome. Views will have been expressed before a ballot through consultation. The two stages of consultation and ballot are complementary, not alternative. The Minister defended the provision that there should be a compulsory ballot if one third of the costs are to be met by the BRS and said: ""I would ask noble Lords to think about whether it would be right, democratic or fair that an entire project of some significance that was being marshalled by a balance of partners should be put in jeopardy due to uncertainty over a relatively small but critical element of a funding package. I would argue that it unbalances the partnership and introduces an avoidable degree of uncertainty. It is not worth taking that risk if the BRS is contributing only to a relatively small proportion of the overall funding package, which is one that would genuinely help business because it will be the test to be applied"." A relatively small proportion which would genuinely help business? This is a top-down approach. I am sure that the noble Baroness, Lady Andrews, did not mean this. It quite honestly just dismisses businesses as not knowing what is good for them. It fails the test of what is right. She said that one third was "a fair point" because the business rates supplement is, ""a smaller player in terms of the overall funding of a project".—[Official Report, 11/5/09; col. GC 329.]" Whatever the proportion of the total cost, the effect on the individual ratepayer of that BRS will not vary. In the case of the other contributors to a project when there are a number of funders of a package, each contributor or investor will take a decision as to its own contribution—its loan or whatever it might be. In the case of BRS, it will be the local authority, not the ratepayers, which will take the decision about the "smaller contributions". The CBI and others have put forward arguments in support of a mandatory ballot on the basis of its practical benefits because business has better experience and understanding of investment than local authorities. They may have a point, but for us this is a matter of principle. Describing a mandatory ballot, as the Minister did in the Commons, as giving business a veto, is, as I have said before, offensive. I should make clear that the amendments would not bring Crossrail within the ballot provisions because of the amendment to Clause 27 agreed in Grand Committee. Crossrail is very different. It has been the subject of discussion, publicly available information and legislation over a long period, as has the contribution of businesses with a high rateable value. My amendments are not an attack on local government. If a local authority has the confidence to propose a project and put together a funding package, it should have the confidence that local business will support it. It will have to put it to local business if business is to contribute more than a third. After all, what is appropriate for BIDs is appropriate for the bigger schemes which are likely to be the subject of the business rate supplement. I beg to move.