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Business Rate Supplements Bill

My Lords, I do not, but a line has to be drawn somewhere. If the noble Lord concedes a contribution of 10 per cent ought not to occasion a ballot, then having listened to my careful arguments, he will not support the amendment before the House. If I say 33 per cent and he responds by saying that 32 per cent is only 1 per cent below and the ballot will be denied, logic dictates that one is faced with the same problem wherever the line is drawn. I merely indicate that there is a strong case for such a line to be drawn because where the contribution is relatively small, it cannot be logical or proper that local authorities which have carried out a consultation then have to go to ballot. The business rate supplement provides a new mechanism for local authorities to work with businesses on projects that will enhance the development of local areas. We want authorities to be innovative in their use of this new power provided that a link to economic development can be demonstrated. It is for the authority to decide the extent to which BRS revenues should be used to fund a project, but it is probable that BRS will feature as just one part of an overall funding package. Surely, therefore, a local project backed by a range of funding partners should not be put at risk because of the uncertainty surrounding what might be a relatively small contribution to the overall funding package. By the same token, we do not want unnecessarily to constrain levying authorities in their use of BRS; we want them to use this power flexibly. However, there is a real danger that financial institutions and funding partners will not be willing to commit themselves where business has a vote on an element, even a small element, of the overall project. In effect, the BRS would then be used where it forms the lion’s share of the funding so that the whole project would stand or fall on the outcome of a ballot to which the funding partners do not have to be signed up. That is not what we are looking for. We want authorities to have a broader range and a degree of flexibility, and that is why we are against the constraints that would be imposed by ballots. We have provided many safeguards in the Bill for the interests of business, lest it be suggested that just because I am arguing about the universal ballot in this case, we do not have the interests of business at heart. A ballot on a scheme is necessary where the BRS provides more than one third of the funding, and an overall limit of 2p per pound of rateable value is established in the Bill. The BRS cannot be used to fund statutory services. It must be used for additional developments for the benefit of the economic development of an area. Mandatory consultation is required in all cases and we have provided that the details should be set out in a prospectus, including a cost-benefit analysis. So business has safeguards built into the legislation when it enters into consultation with a local authority about these possibilities. It is right that such safeguards have been included, but requiring a ballot in all cases runs the risk that projects will be put in jeopardy or that local communities will miss out on opportunities of enhancing areas because of the difficulty of securing broader financial backing for much-needed developments. I appreciate that the noble Baroness, Lady Hamwee, was somewhat guarded in her criticism of local authorities; indeed, all noble Lords who have spoken have shown some degree of respect for the position of local government. Local authorities are democratically elected bodies, so surely we should trust them to work responsibly with businesses on local projects and not shackle them with unnecessary requirements that are not needed given the other safeguards in the Bill. Accordingly, having listened to my case that this process will not work and opportunities will not be exploited unless local authorities work in close partnership with business, I hope that she will feel able to withdraw her amendment.