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Business Rate Supplements Bill

My Lords, I am in some difficulty because no announcement has been made, but let me assure the House that my noble friend Lady Andrews will be fulfilling a role in the public service of great significance and she will, I have no doubt, in due course earn the commendations of the House on that fact. However, the announcement has not been made and that is why I am constrained. It was not clear just when the announcement would be made and therefore to my enormous joy I was drafted in over the course of Friday and the weekend to deal with the Bill. That is why I am delighted to be before the House now. If all the questions are going to be as difficult as the one the noble Lord, Lord Jenkin, has just addressed, I am going to have a very difficult time indeed. I hope I am not going to be so evasive on all the other points. I emphasise that, although I recognise that it is a key issue of the Bill, I do not think that there is a great deal of difference between the position adumbrated by noble Lords who have spoken and that of the Government. The issue is more a question of emphasis than one of principle. None of us thinks that businesses should not be involved in a BRS. We recognise that the policy will not work unless there is effective, constructive partnership between local government and businesses. The whole premise of this concept of any such project is based on that position. We have said that we of course expect levying authorities to engage with businesses early on in the development of any proposals and we would expect that dialogue to continue as the proposals are developed further. We are at one with the sentiment that is behind this amendment, that progress cannot be made unless business is involved in the development of the proposals and has a real say in these matters. How this happens, we believe, should be left to the levying authority to decide. We do not see the case for being overly prescriptive with regard to local authorities but we have strengthened the statutory guidance by encouraging levying authorities to think about how they will engage with businesses over and above the necessary statutory consultation which is already envisaged in the measure. By engaging in this way, the levying authorities will be able to gauge how businesses feel about the emerging proposals before they are complete and to reflect feedback from businesses as the project moves on towards that more formal consultation stage which is involved in the process. We should be able to leave local authorities to work responsibly with businesses to develop projects to benefit the economic development of the local area. It surely cannot be the case that the levying authority needs a ballot in every case. We have indicated that ballots are important where businesses are making a contribution above 33 per cent to the total position, but the approach we have adopted is that ballots must be proportionate and reasonable, bearing in mind that BRS revenues will contribute the lion’s share of project funding in some cases. In other cases, it may well be that the business rate supplement is a very small part of the project envisaged. The fact that we are not requiring a ballot in all cases does not mean that this gives levying authorities carte blanche to bulldoze through their pet projects. Businesses will have a vote if they are involved in more than 33 per cent of the expenditure, levying authorities will be required formally to consult with businesses on top of any preparatory dialogue they have, and with all proposed projects they can be held to account if they fail to carry out this consultation. It is surely recognised that it is in authorities’ best interests to ensure that they consult businesses effectively, but if I have followed the position which has been put forward by noble Lords—it was certainly the burden of the case put forward by the noble Lord, Lord Jenkin, and the noble Earl, Lord Cathcart—that even where the proportion to be funded is fairly small, the danger is that this would put undue emphasis on one aspect of a project. I accept the point that talk of a veto is somewhat excessive, but noble Lords will recognise that a ballot for business, when it may be contributing as little as 10 per cent, certainly puts very considerable emphasis on a contribution which is relatively marginal to it. We have guaranteed that the authorities will have already engaged with businesses that are contributing 10 or 15 per cent and the development of the project will have had the benefit of businesses’ responses to the local authority consultation. I give way to the noble Lord.