House of Commons
Wednesday 11 March 2009
The House met at half-past Eleven o’clock
[Mr. Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
The manufacturing industry is, of course, very important to Wales. According to the latest available figures, the sector employs about 13.5 per cent. of the Welsh work force.
The manufacturing industry in the UK has taken a very hard hit in the recession, and that is perhaps even more true of Wales. Is the Secretary of State aware of the concerns of many in the manufacturing work force in Wales who work for foreign companies that there may be plans to offshore employment? Examples of such companies include Toyota in north Wales and Corus in south Wales; Corus has a plant in the Netherlands. What discussion has he had with other Ministers, and with the Welsh Assembly, to ensure that that does not happen?
The hon. Lady makes a valid point. I have of course had discussions with my right hon. Friend the Business Secretary, and with the First Minister and Deputy First Minister of Wales. I have also discussed the issue of Corus with the chief executive of Corus. The point that the hon. Lady makes about foreign-owned companies in Wales is well taken, but I have no reason to believe that that will be a disadvantage to us in Wales in the months to come. In my constituency, for example, thousands of people work for car component manufacturers that are American-owned, and so far, so good. Obviously, they are feeling the pinch, like all manufacturing companies, and particularly those in the automotive industry, but I very much take her point on board.
My right hon. Friend and his colleagues in Government should be congratulated on the work that they are doing to get information to small and medium-sized businesses about the various schemes that are there to help. However, the Treasury Committee has been taking evidence in Northern Ireland, Scotland and the north of England, and one of the messages that we are getting back from some businesses is that they are not aware of all the schemes. May I urge my right hon. Friend to contact his right hon. Friends in the Cabinet to ensure that all the information and all the schemes are made available direct to small and medium-sized businesses, so that they can approach the banks, and not wait for the banks to approach them?
Yes. My hon. Friend is of course a distinguished member of the Treasury Committee, and he makes a valid point. The issue of information is very important. The “Real help now” information is available on all Government websites, and on the websites of the devolved Administrations, including the Welsh Assembly Government, but more work is necessary, particularly locally. Most local authorities in Wales are now organising economic summits in their areas. There was one in my area on Friday, for example, and I know that there is to be a summit in the constituency of my hon. Friend the Under-Secretary of State for Wales. Information is best disseminated at the most local level, but I very much take the points that my hon. Friend the Member for Carmarthen, West and South Pembrokeshire (Nick Ainger) makes.
Only yesterday, I received notice that the Newtown factory branch of Trelleborg Sealing Solutions is to cut about 56 jobs, following similar examples at Stadco and Floform. What plans does the Secretary of State have to make sure that the manufacturing skills gap does not widen in Montgomeryshire, and is there potential to divert money specifically into the manufacturing base in mid-Wales, so that we can replace the jobs that we are losing with green jobs in the green economy, which provides both manufacturing opportunities and sustainable economic activity for the longer term?
Yes, and that is certainly a priority of the United Kingdom Government, and of the Welsh Assembly Government, too. It is important that the hon. Gentleman and other Members who represent Welsh constituencies are aware of the various schemes available to businesses in Wales, particularly the ProAct scheme. It is unique to Wales and is very effective. Some 75 applications have now been processed, and 66 of them are from the automotive industry. Ten have been accepted. That represents nearly 6,000 workers, so it is a very real scheme, and it means that real money goes to help businesses such as the one that the hon. Gentleman described. I take the point that he makes about the green industry; that is a priority for both Governments.
Will my right hon. Friend take no lessons from Conservative Members on the impact of the global credit crunch on manufacturing in Wales? Their policies in the 1980s and ’90s decimated manufacturing in Wales, and they show every sign of wanting to repeat those policies. I hope that my right hon. Friend will stand up against them.
I certainly agree that, during the recessions back in the time of Mrs. Thatcher’s Government, the situation was very different. It is most important to understand that we cannot simply sit back and do nothing. The Labour Government here, and a Labour-led coalition in Cardiff, are actually being positive about the help that we can give businesses in Wales. That is something that we did not see before, and I fear that we are not seeing that from the Conservative Opposition now.
The Secretary of State will know that Toyota announced today that it is putting its factory on Deeside on short-time working and its staff on reduced pay. He has already mentioned the importance of the automotive industry to the Welsh economy. Given that importance, does he know precisely when the automotive assistance programme, which was announced with so much fanfare in January, will be implemented? Is it another case not of real help now, but of jam tomorrow?
No; the hon. Gentleman is aware that some of the schemes are to operate at different times. For example, in April at least six schemes are due to go live, including help for the automotive industry. There are other schemes that have already started. I cited to the hon. Member for Montgomeryshire (Lembit Öpik) the excellent ProAct scheme that works in Wales. The schemes are staggered in time scale, but they are about real help for people. The hon. Member for Clwyd, West (Mr. Jones) is right that the delivery of such schemes must be a main priority of Government, whether here in London or in Cardiff. Help is available, and it is up to the industry to apply for that help.
Small Business Support
Businesses in Wales are receiving a high level of support from Governments at both ends of the M4. Small and medium-sized businesses in particular are the lifeblood of the Welsh economy and they make up, as the hon. Gentleman knows, some 98 per cent. of Welsh companies.
With reference to one of those schemes, the enterprise finance guarantee scheme, does the Secretary of State share the concerns of many small businesses across Wales that many of the high street banks operating the scheme are demanding crippling personal guarantees of up to 100 per cent. against homes and assets, even though the Government are guaranteeing 75 per cent.? Whose guarantee is it—that of the banks or of the small businesses of Wales?
Obviously, the guarantees are to the banks in order to ensure that they make effective lending possible, but the hon. Gentleman is right that whether the policy is filtering down to the local level—to the bank managers that we used to have in the old days—is another story. It is important for small businesses that lending starts again. It is also important to understand that banks still have to make commercial decisions. One of the reasons for the mess that we are in at the moment is that banks made the wrong decisions about risk or there was a lack of acknowledgement of risk. There are businesses in Wales that are viable and good and that deserve help. It is up to our banks, together with the help that Government in London and Cardiff give, to make sure that that lending occurs.
Small businesses will be greatly helped if they can recruit people with the skills that they need. At Oakdale comprehensive school I saw for myself last week that young people are being prepared well for the workplace and given good IT skills. What initiatives exist to ensure that we have strong school-business links, so that when we come out of the economic downturn Welsh companies are certain that they will have a strong and skilled work force from whom to recruit?
That is the point, of course. We cannot forget about training and education for the future, for when we come out of the downturn. The initiative at Oakdale is a very good one. I will certainly commend it to the First Minister when I next meet him. It is important that we have a properly trained work force, and our colleges and schools in Wales play a hugely important role in that respect.
Does the Secretary of State not realise that there is a huge disconnect between the rhetoric and the words used at his Dispatch Box and at the business summit public relations exercises that are being conducted throughout Wales, and the reality on the ground, particularly in areas such as Pembrokeshire and west Wales, where small businesses are seeing precious little additional new assistance at this time of recession? Is the Secretary of State aware of the enormous disillusion in the small business community with the promises being made by Ministers and with how little is being delivered?
There is time for rhetoric and there is time for people to pull together to help those who are out of work in Wales. I have not the slightest doubt that the economic summits that we have held—there is one to be held in a few weeks in Swansea—have done a remarkably good job in bringing together from business, industry, the trade union movement and elsewhere all the expertise that we can gather in Wales. It is true to say that it will take time for some of those schemes to start working, but some have already started working. The figures that I have just given the House with regard to ProAct are a good example of that. At least we are trying. I fear that the hon. Gentleman’s party has no ideas at all about how to get us out of the recession. It is much better for small businesses, industry and commerce in Wales to know that both Governments are trying to help them, as opposed to his party, which has said absolutely nothing.
We have heard a lot today about the difficulties and economic challenges that face small businesses. However, the Secretary of State was kind enough to come to my constituency recently and he visited a very successful SME—Tomos Watkin’s at the Hurns Brewing Company. It has been bucking the trend. I am sure that the Secretary of State will join me in congratulating the company on its wonderful successes.
I certainly do. Swansea is a great example of a city with thriving small and medium-sized enterprises as the very backbone of its economy. I visited a number of them with my hon. Friend, and I can certainly commend the excellent beers that Tomos Watkin’s provides.
I do not recognise the problems of small businesses in Wales to which the hon. Member for Preseli Pembrokeshire (Mr. Crabb) referred. The Secretary of State has rightly referred to the £48 million ProAct scheme; there is also the £35 million ReAct scheme to retrain and assist people facing redundancy. Furthermore, there is the £20 million apprenticeship scheme for reskilling young people and the extra business rates relief, which now assists approximately 55,000 small businesses in Wales. Is it not heartening to hear of David Rosser of the CBI going out of his way to say well done to the Deputy First Minister and his team in reacting urgently and properly to assist small businesses in Wales?
I am happy to say well done to the Deputy First Minister and the First Minister in Wales for the work that the Assembly Government have done. The reality is that individual people and businesses have been helped by those schemes. For example, there is Her Majesty’s Revenue and Customs Time to Pay scheme, under which taxation is deferred. Some 2,600 firms in Wales benefit from that; £38 million has been deferred so that they can. There are other schemes as well. The point is that unless the Government act to help businesses, families and individuals, nobody else will.
Many small businesses in my constituency and throughout Wales rely on visitors and tourism. Does the Secretary of State agree that the product that is Wales needs extra support and help to promote its image at this difficult time? Furthermore, we should take advantage of the relatively low value of the pound sterling against the dollar and the euro. Will he raise those issues with Ministers? Next time he comes to Ynys Môn, will he meet tourist associations and operators to see first hand the problems that they face?
Of course I will. There is no finer part of the United Kingdom to visit than Wales, and my hon. Friend’s constituency is a great example. I am going there in a couple of weeks’ time, and I assure him that he and I will look at the advantages that Ynys Môn gives the world.
In these dire economic circumstances, the Welsh Assembly Government and the Westminster Government are increasing—I repeat, increasing—business rates by nearly 5 per cent. next year. What message does that send to small businesses that are struggling to survive in Wales, and what is the Secretary of State doing to stop this madness?
There are ways and means by which firms in Wales can go to the local authorities and the Welsh Assembly Government and receive direct help, under the scheme that the Assembly Government have put forward. In addition, there is help on empty properties. I understand, however, that small firms have difficulties with this issue; that is why I referred to the HMRC Time to Pay scheme, of which many firms have taken advantage.
The Secretary of State has revealed today that 10 businesses have been helped under the ProAct scheme and that help for 75 is under consideration. Frankly, that is just scratching the surface. The Secretary of State’s figures are wrong; the Treasury has said today that 3,590 businesses in Wales have agreed terms to defer payments, a further 120 have been turned down and 405 are still in negotiations. That means that more than 4,000 businesses are facing trouble. Given that sort of volume, does the Secretary of State really consider that the schemes put in place by the Welsh Assembly Government and his Government have the capacity to cope with the large number of firms that are in trouble, are closing or are laying off staff?
Yes, I think that the schemes collectively will do that. Does the hon. Lady realise that we are talking about hundreds of billions of pounds, which have been put into the banking system to prevent it from collapsing and to ensure that banks lend again? Those schemes will start at the beginning of the financial year. She should consider the importance of the schemes I have referred to, such as ProAct, ReAct and other schemes in Wales. They are meaningful schemes that are working. I agree that more work needs to be done to ensure that people are aware of them, but they are still better than the policies her party has put forward.
The Secretary of State is right to say that more work needs to be done, because the managing director of the leading business advice organisation in the country, Venture Wales, has said that since the Welsh Assembly Government took over the Welsh Development Agency, help for small firms has deteriorated. He says that decision making is “slow”, that morale is “low” and that millions of pounds are “being wasted”. If that is the view of an expert on the systems of help for businesses in Wales, what is the Secretary of State going to do about it?
That is not the message I am getting. The CBI in Wales, the Federation of Small Businesses and individual businesses in my constituency are giving me the message that real help has come from the Welsh Assembly Government to the business sector. To take one example, the finance Wales initiative—our own Wales bank to help small businesses—has invested £17 million this financial year. That is 25 per cent. more than last year, and it is real help going to real businesses in Wales.
Welsh Language Certificates
My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues on a range of issues affecting Wales, including the Welsh language. Wales Office officials have discussed the provision of Welsh language certificates with colleagues as part of work on recent and current legislation.
I thank the Under-Secretary for that answer. He may be aware of the Bill published by our former colleague, Gareth Thomas, the former Labour MP for Clwyd, West on this subject some years ago. Does the Under-Secretary agree that circumstances have not changed? There is a demand for Welsh language certificates. Will he strive to make parliamentary time available for a Bill on this matter, should one be presented?
I can tell the hon. Gentleman that the Government remain firmly committed to producing Welsh language certificates, and the General Register Office is exploring the best way to do that. I am happy to take forward discussions with the Home Office to find the best solution, but it is not a simple matter. It is not a question of introducing a Bill; we have to explore the best possible way. I reiterate that we are firmly committed to pursuing that path.
Internet Crime Prevention
My right hon. Friend the Secretary of State has regular discussions with the First Minister on a range of issues affecting Wales. The UK and Welsh Assembly Governments are working closely with law enforcement bodies, industry and financial institutions to combat crimes committed over the internet.
I ask for an assurance that my right hon. Friend the Secretary of State and the First Minister will give continued support to e-Crime Wales, which, along with the Yorkshire e-business centre, provides the best example of how to tackle online crime. Does my hon. Friend the Under-Secretary agree that digital inclusion requires Wales specifically and the UK generally to be made the safest place to do business online, whether that business is personal or commercial?
My right hon. Friend makes a good point. The digital inclusion agenda must include the measures he talks about. He referred to e-Crime Wales, and it is holding a series of business breakfasts around Wales in February and March this year, to keep businesses up to date with the latest threats, and to tell them what steps they can take to minimise the risks of the damaging effects of e-crime. Moreover, e-Crime Wales has produced a number of extremely useful fact sheets on its website for business and individuals. All of that clearly shows that we are firmly committed to developing this agenda for the safety of everyone.
Does the Minister agree that there is little prospect of doing anything meaningful about internet crime when Welsh police forces are facing such drastic cuts to their budgets that they have to reduce the numbers of front-line police officers in many parts of the Principality?
The fact of the matter is, of course, that there is no reduction in front-line policing. Of course there are efficiency measures taking shape, and bureaucracy is being reduced, but we are seeing better front-line policing throughout the length and breadth of Wales. That is very significant and far different from what the Opposition would do if they ever had power, for goodness’ sake.
I have regular discussions with the First Minister on a range of issues, including central funding.
I am grateful to the Secretary of State for his response, but in Wales £8,577 per person is spent on public expenditure. In my constituency it is only £6,936. My constituents pay the same taxes as those in Wales. Is it fair that each man, woman and child in Wellingborough is £1,641 a year worse off?
I do not know the rate of deprivation in Wellingborough, but large parts of Wales are seriously deprived because of the run-down of traditional industries. The Barnett formula, which deals with central funding for Wales, Scotland and Northern Ireland, was based on the needs of those different parts of our United Kingdom. That is the reason why that difference is in place.
Will my right hon. Friend assure me that any discussions that he has about central funding and the mechanism used do not undervalue the role of defence expenditure in projects such as the defence technical academy in my constituency at St. Athan? Will he join me in welcoming the news that the joint director for technical training in the military is going to move to St. Athan in April, in anticipation of the construction of the new college?
Of course I will, and I congratulate my hon. Friend on his tenacity in dealing with this issue. Billions of pounds of public spending will come to his constituency and the surrounding constituencies, and I know that he has played a very significant role in ensuring that that is the case.
Central funding for policing in Wales has left south Wales with a shortfall of £10 million since 2005 and with an estimated shortfall of £7.7 million over the next three years. I have already written to the Home Secretary about that and have not yet had a reply. Will the Secretary of State take the matter up with the Home Office, to tackle that unfair and dangerous funding gap?
The Assembly Finance Committee this week, and the Labour party in Scotland through its submission to the Calman commission, have made the case for borrowing powers to be given to the devolved Administrations. Does the Secretary of State see some merit in that proposal?
My right hon. Friend the Secretary of State has regular discussions with the First Minister about assistance for those who have lost their jobs in Wales, not least at the all-Wales economic summits that he attends. I would also point out that I have recently visited Llanelli to talk with local businesses, as my hon. Friend well knows.
My hon. Friend makes a very valid point. It is extremely important in these difficult economic times that we all pull together in the UK, not pull apart. I find it strange, as she does, that Plaid Cymru is demanding £3 billion from the UK Government at the same time that it is calling for independence.
I refer the hon. Gentleman to the answer that I gave the hon. Member for Ceredigion (Mark Williams).
I am delighted to have given the Secretary of State more time to think about his answer. He knows that Shimizu, a fine Japanese company, has factories in Welshpool and in Hortonwood in my constituency. The difference is that, on the Welsh side of the border, it receives taxpayer subsidies for wages and training. That is good news; we want people in jobs in Wales, but what about the people of Shropshire and my constituents, who would like a similar subsidy from the regional development agency?
As the hon. Gentleman knows, one great benefit of devolution is that we can have several schemes to help businesses in Wales that might not be available in England. However, there are also effective schemes across the border in England, such as Train to Gain, the help that the Department for Business, Enterprise and Regulatory Reform gives small and medium-sized enterprises, and the Department for Work and Pensions schemes. There are plenty of schemes—it is important that the hon. Gentleman makes his constituents aware of them.
The Barnett formula has been used for almost 30 years, and my hon. Friend has been asking the same question for the past 10 of them. I understand that the Treasury has no plans to review the funding arrangements.
More than 10 million people in the English midlands have a similar socio-economic and demographic profile to that of the people of Wales. They look over Offa’s dyke with some envy at the public expenditure that is possible through the Barnett formula. Will my right hon. Friend see me to ascertain how we in the English midlands can get such support? Is he willing for us to have honorary status in Wales as Powys, East?
The Prime Minister was asked—
With your permission, Mr. Speaker, I know that the House will want to join me in expressing our sincerest condolences to the families and friends of Sappers Mark Quinsey and Patrick Azimkar of 38 Engineer Regiment, who were brutally murdered in Northern Ireland on Saturday evening, and to the family and friends of Constable Stephen Carroll, who was murdered while on police duty on Monday. At times like these, we remember the professional courage and dedication of our armed forces and the police. I believe that, at all times, the whole country will want to—and should—give our full support to the men and women who serve our country. The House will also wish to extend our best wishes for recovery to the soldiers and civilians who were injured in Saturday’s attack.
The peace marches today on the streets of Northern Ireland show what I saw there on Monday, and what we see throughout the country: the unity against violence of the people and their representatives; the defiance and the determination to stand up to the evil of criminal violence, and the unyielding resolution to say with one voice that the peace that the people of Northern Ireland are building no murderers should ever be allowed to destroy.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
I know that I speak for the House when I associate myself with the Prime Minister’s remarks about those who were killed and injured serving our country, and with his remarks about Northern Ireland.
My right hon. Friend knows of my worries about the vehicle industry and its supply chain. I know that a lot is happening, such as discussions with the industry and its trade unions. However, when will the banks get their act together to help stimulate demand, not only for vehicles, but all our manufactured goods?
I thank my hon. Friend for his constant support for the car industry and, of course, Ellesmere Port in his constituency.
At the car summit today, the business Minister is explaining the £2.3 billion of support that is available for the car industry. To ensure that the banks serve companies and the public interest in future in this wholly new world, we are reshaping them. First, they have had to sign lending agreements worth £44 billion of extra investment, which will take place this year. We are also regulating the banks for remuneration and risk, levels of cash flow and cross-border capital flows. We want to achieve an international understanding so that other countries will do exactly what we are doing.
May I thank you, Mr. Speaker, for the kind words that you said a fortnight ago about the loss of my son, Ivan? I particularly want to thank the Prime Minister for what he said. It came straight from the heart and it meant a great deal to Samantha and to me. We have had letters from right across the House of Commons and from thousands of people in the country. It has been a great comfort to know that others are thinking of us. A lot of letters have come from families who themselves have lost children. If there is a common theme in them, it is that although the loss never goes away, there does come a day when you look back at your child’s life and you think happy thoughts about their life rather than feel sorrow at their death. I hope that that day will come for us, too.
Today, I join the Prime Minister in mourning the dreadful losses of the three British families of Sappers Mark Quinsey and Patrick Azimkar and Constable Stephen Carroll. On the day when we remember the service of our soldiers, we should remind those who protest against them that they have the right to do so only because British soldiers put their lives on the line.
On Northern Ireland, let us be clear about the nature of these crimes: they were committed by callous killers, capable of shooting men in cold blood and standing over their wounded bodies and murdering them. Does the Prime Minister agree with me that the most important thing in Northern Ireland today is that everyone works with the police so that these killers can be found, caught, charged and convicted?
Let me welcome back the Leader of the Opposition. I understand the grief that he and his family have been going through.
In Northern Ireland today we are seeing a degree of unity among the political parties that some people thought they would never see in their lifetimes. We are seeing all parties call for the citizens of Northern Ireland to co-operate with the police; we are seeing all parties condemning the violence; and we are seeing all parties asking those people who have information to help the police track down these killers. As the House will know, two men have been arrested as a result of the police killing and the hunt is on for the people who brutally murdered the soldiers on Saturday evening.
I can say to the House that we will do everything we can to enhance security arrangements in Northern Ireland. I have talked directly to Chief Constable Hugh Orde about that and we will leave no stone unturned in ensuring that he has available to him all the arrangements necessary to enhance security there. I believe that out of tragedy we are seeing a unity, which shows the determination that, although a few murderers may try to disrupt the process, the whole of the people of Northern Ireland want not only to see justice done but to send a message that the political process is here to stay and is working.
The Prime Minister is absolutely right about that unity. It is remarkable—and it is remarkably welcome—that every political party in Northern Ireland, including individuals who were once bombers and terrorists, are calling on people to co-operate with the police. Does he agree that that highlights the importance of our reaction, which should be to say that Northern Ireland is not on the brink and is not staring into an abyss, but instead needs effective policing, the co-operation of the public and the measured reaction of politicians? Are not those the things that we need to ensure that these murderers never win?
I agree entirely with the right hon. Gentleman, and I see the assent of all parties sitting in the House to what we are both saying about the importance of people working together to hunt down these criminals. We are dealing with a small minority. The Real IRA and Continuity IRA have claimed credit for the killings in a way that is sickening, and they seem not to be able to distinguish between the needs of the armed services and civilians. Calling civilians “collaborators” was totally despicable. We will do everything in our power to track down these killers, but we will also do everything in our power to support the police and the armed forces.
It is right to raise the support that we give to our armed forces in every part of the country. Homecoming parades should be what people in the communities concerned want them to be, and that is a celebration and a commemoration of the great service and dedication of our armed forces in every part of the country. I believe that the country wishes the homecoming parades that are going on in Watford, Windsor and Bolton to go ahead without interruption. There is a right to freedom of speech, but there is not a right to disruption and to public disorder. It is our duty to ensure that order is kept.
The whole House will have agreed with the Prime Minister about the value of the homecoming parades, but may I turn to another issue?
Serious allegations have been made that Britain may have been complicit in torture. Let us be absolutely clear about Binyam Mohamed. This is someone who claimed he was going to Chechnya to help civilians, but in fact ended up in Afghanistan. Nevertheless his allegations have to be dealt with. It is right for the Attorney-General to see whether a crime has been committed, but is it not also important that the Prime Minister is satisfied that Britain has throughout acted with moral authority—over and above the question of whether a crime has been committed? Will the Prime Minister tell us what he has done to satisfy himself of the true facts in this case?
Let me say right at the outset that this Government unreservedly condemn the use of torture. Under no circumstances will we participate in, encourage or condone the use of torture for any purpose. Where allegations are made about torture, I have instructed that they must be properly examined—including, if necessary, by the courts. The Attorney-General is looking at the very specific allegations in this case. If there is evidence, it will be referred to the police, who will conduct a criminal inquiry. At the moment, the matter is with the Attorney-General, who is looking at all the evidence. As I say, I have instructed that whenever allegations are made, they are properly investigated.
I grateful for the Prime Minister’s assurances and we agree completely with what he says about torture being unacceptable. We all want to eradicate the potential stain on Britain’s reputation, but the question is whether an investigation by the Attorney-General into criminal conduct is enough. Surely we need to look at what procedures and processes are in place to ensure that Britain cannot knowingly, or unknowingly, be implicated in torture. Is that not why we need a brief, judge-led inquiry into what happened and what lessons need to be learned?
I appreciate what the right hon. Gentleman says and it is absolutely right that we be vigilant at all times because the freedoms and liberties of this country are best served by making absolutely sure that we unreservedly condemn and do not allow the use of torture. The Intelligence and Security Committee has investigated some aspects of these matters and reports were done in 2005 and 2007. The Committee will continue to look at these matters because that is the statutory role given to it. At the same time, the Attorney-General will look at all the details, and I have made it clear that there is a next stage. If any evidence is found that should lead to a police investigation, it will be referred to the police, and if they decide to proceed a criminal investigation will be carried out. This is the best way to deal with these specific instances—the Intelligence and Security Committee looks at the general cases.
But it is not clear that the Attorney-General’s inquiry will answer the question that the Prime Minister himself rightly poses, which is whether we have acted properly at all times during these procedures. The Attorney-General will look at the one case, rather than at the procedures in all cases. The Attorney-General is, quite rightly, looking at whether a crime has been committed, but is not really looking at our moral authority and whether it has been maintained. Does not the Prime Minister see that an inquiry is likely to become necessary: either the Attorney-General will find that a crime has been committed, in which case there will be a clamour for an inquiry to answer how on earth it was allowed to happen; or, on the other hand, if the Attorney-General decides not to go ahead with a prosecution, we will still not really have the answers to what happened in this important case? On either ground, would it not be better to order that judge-led inquiry, instead of having it dragged out in the weeks ahead?
The Intelligence and Security Committee has inquired, and continues to inquire, into these matters, and we have had a debate about the full status of the ISC for the future. It looked at the issue of rendition in great detail in its previous inquiry. The Home Secretary, in her role as an adviser to Government, referred the question of possible criminal wrongdoing to the Attorney-General. She is consulting others, as is necessary, about what needs to be done. It is obviously for her to decide how she is likely to proceed. The court that heard Binyam Mohamed’s judicial review case has made it clear that it thinks this is the right way to proceed. I hope the right hon. Gentleman will allow the inquiries taking place to proceed. On the general issues he raised, Britain, because of our defence of freedom and liberty, of course wishes to be seen to be doing everything in our power to deal with questions that arise about the use of torture or rendition. I believe that, at this stage, the best way to proceed is with the Intelligence and Security Committee, but let us hear the report of the Attorney-General.
The Prime Minister made some welcome observations about the terrible tragedies in Northern Ireland. Does he agree that what is especially encouraging is the fact that the leaders of republicanism have spoken out so clearly and unequivocally in condemning those terrible criminal atrocities, and have been united in doing so? Even a few years ago, it would have been unthinkable that the Deputy First Minister, with all his history, would stand alongside the First Minister and the Chief Constable and say that we would not tolerate this criminality, while still retaining his republican objectives. That gives us encouragement, or should, in the current circumstances.
I spoke to the First Minister and the Deputy First Minister on Sunday, and met them both on Monday. Both revealed their determination to make it absolutely clear that violence cannot be tolerated, that terrorists must be rooted out, and that the community should co-operate with the police in doing that. They condemned absolutely the killings of a police officer and the killings of Army officers who were, sadly, on their way to Afghanistan, and who would have left that night but for the terrible incident.
I say to my right hon. Friend that out of this tragedy something is emerging which shows that the people of Northern Ireland, as well as the politicians, want the political process to be both maintained and strengthened. I think that that gives reassurance and encouragement even in this most difficult of times.
Following the brutal murders of Sappers Quinsey and Azimkar and Constable Carroll, and the serious injuries suffered by four others, may I say on behalf of all Liberal Democrat Members that our hearts go out to the families of the victims, though they harden against their murderers? Their violence must not and will not divide the people of Northern Ireland; instead, it will strengthen their resolve to live their lives in peace. That is the unwavering message of the dignified demonstrations taking place in Northern Ireland today.
May I also extend my personal welcome to the leader of the Conservative party on his return to Parliament, and say on behalf of all on these Benches that we sincerely hope that he and his family will be given the time and the space to cope with the terrible loss they have suffered?
I am sure the Prime Minister will agree that today’s announcement from President Sarkozy that he will reverse General de Gaulle’s legacy and rejoin NATO is hugely significant, but does he also agree that it offers an enormous opportunity for Britain, along with France, to lead European defence co-operation, which has been held back by tensions surrounding the Atlantic alliance?
I do welcome France’s announcement that at the NATO summit on 3 and 4 April, with the President of America and other people present, it will announce its return to the inner core of NATO. I believe that that is good for the defence of the world. I also believe that there are opportunities for co-operation not just between France and Britain, but between the countries of the rest of the world, in relation to nuclear disarmament.
We are at a critical point in the nuclear proliferation discussions, and we are at a particularly difficult point in relation to Iran. We have made it clear to Iran that it cannot join the international community unless it renounces nuclear weapons. However, I believe that a wider deal on nuclear arms is possible in the next few years, and I think the right hon. Gentleman will see that France, America and other members of NATO are keen to see that happen.
I welcome the Prime Minister’s response, but my main concern is that he may still miss the full opportunity available to him. If he could commit Britain to working fully with France and others on European defence—which, frankly, we have not done before now—he would be in a stronger position to ask them to commit more money and troops to Afghanistan. Does he recognise that there is a good bargain to be had, which would be of enormous help to our overstretched service men and women for many years to come?
European defence co-operation is important. I think the hon. Gentleman will know that it exists in many areas, and particularly between Britain and France. I have talked directly to President Sarkozy about what more we can do together in Afghanistan and other places. We must also remember that we are talking about the British armed forces: the British Army, the British Navy and the British Air Force. We will defend our right to make our own decisions as well.
The case for the partial sale of Royal Mail is crumbling and opposition is growing across the country and in this House. Is it not about time that the Government dropped that unwanted and unnecessary measure from its postal services reforms?
I know that my hon. Friend has never been a supporter of the course of action that the Government have proposed, but I ask the House to look at this issue. The Royal Mail has a pension fund deficit that is going to approach £8 billion. It has investment needs that it needs to meet for the future. It also wants to continue, as we want it to continue, the universal service obligation. It makes sense to try to find additional investors in the Royal Mail to enable us to meet our commitment to the pensioners, to maintain the universal service obligation, to keep the post office network, with the additional investment that we are making in it, and of course to give maximum support to the postal workers in our country, whom I support as well.
We are happy to debate the economy at any time in this House and to be able to show people that we are taking the right decisions to get us through this downturn. I appreciate the difficulties that savers face at this time. The greatest danger to savers has always been high inflation. We have kept inflation low in this country for the past 11 years, and we are looking at what we can do to help savers at this point. [Interruption.] If Conservative Members want to shout about that, perhaps they should look at their policies for cutting public spending. No country in the world is choosing to cut public spending at a time when people are in need of the help that Government can provide.
Regional airports are incredibly important to the economies of all parts of this country. I recognise the importance of domestic air services to London airports for the regional economy of the north-east and for every other regional economy in the country. I congratulate my hon. Friend and the Northern Echo on their campaign. I understand that the aviation Minister, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), has agreed to meet him to discuss these issues. In the longer term, increasing capacity at Heathrow should help to maintain and grow domestic air services.
May I, first, thank the Prime Minister, the Leader of the Opposition and all other Members who have paid tribute to those who have died in the tragedies that have taken place in Northern Ireland over the past few days? Constable Carroll lived in my constituency in the town of Banbridge. He had served some 20 years, I believe, in the security forces and was due to take early retirement next year. I had the sad task of visiting his home yesterday. While his wife and family are heartbroken, they are resolute that Northern Ireland must move forward.
Will the Prime Minister agree with me that the vermin, for that is what they are, who took out Constable Carroll will be brought to book for what they did; that it is important that, whatever resources the Chief Constable needs, all parties in the Northern Ireland Executive support that; and that these individuals will never be allowed to put Northern Ireland back into the 35 years of hell on earth that we have come through?
I know that the whole House will want to pass, through the hon. Gentleman, our condolences to the family of Constable Stephen Carroll. He was part of a tactical support group that was supporting a mobile patrol unit responding to reports of a broken window in a house. On arrival at the scene, he was hit by a number of shots that killed him. He was the first Police Service of Northern Ireland officer to be killed by terrorists. I hope that the hon. Gentleman can pass on our condolences to his family. I can assure him that I have talked to the Chief Constable twice and have met him subsequently. I have agreed with him, as has the Secretary of State for Northern Ireland, that he will have the resources that are necessary. We need the co-operation of all communities to bring people to justice. Two arrests have been made, and it is for the police, and then the prosecuting authorities, to make further decisions on that. I must tell the hon. Gentleman that there is a determination to do everything in our power to bring what are criminal murderers to justice and to show that they have no place in the political process of Northern Ireland.
I know that my hon. Friend has not come to these views just in the last few months, but has held them for some time. For the first time, we have insisted that banks give us a quantitative figure for the amount of lending that they will do. This is essentially a lending agreement between Government and the banks that requires the banks to do a particular amount of lending. The Royal Bank of Scotland, in which we have more than 80 per cent. of shares, has agreed to £25 billion of extra lending this year and next year; Halifax Bank of Scotland Lloyds TSB has agreed to £14 billion of extra lending on top of its previous commitment; Northern Rock has agreed to £9 billion. This is an example of how, having learned the lessons of the last few years, we are determined to insist that the banks do their duty by the public.
I hope that the whole House will agree that concessionary travel—the new free bus pass for the over-60s that allows them to travel around the country—is a good invention and a good thing to do. I hope that all hon. Members will agree that we have given support to local authorities. I know that the hon. Gentleman has met the Minister concerned, and with Chesterfield borough council and Derbyshire county council. The issue is how much money they receive for the operation of the scheme. Chesterfield is receiving an extra £416,000 as a borough council, in addition to existing formula grant funding for the pre-existing other elements of the statutory bus concession. We will look at any points that he raises, but the important thing is that the concessionary bus scheme for the over-60s is working and will continue to work.
Is the Prime Minister aware that, in Bolsover, they vote Labour and have not put in a tinpot Liberal council like Chesterfield? Is he also aware that this so-called Liberal council, which has been there for a few years, lost control of its finances generally long before the bus scheme was introduced? So whatever he does—I am sure he will look at the figures—the Prime Minister must make sure that Bolsover retains the money that it properly gets from this Labour Government and make sure that we are able to carry out the bus travel scheme as in the past.
My hon. Friend is absolutely right—and he has also held these views for many years. The free bus pass for pensioners, and what we have done in raising the winter allowance and the basic pension, as well as the pension credit and free eye tests for pensioners, show that we are the party and the Government who are trying to serve the needs of the elderly of this country, and we will continue to do so.
It may not matter to Conservative Members, but people have at least £20 more in their pockets every month; people have more money in their pockets, which they can decide to spend or save. The European Union agreed yesterday that in certain other cases VAT would fall. As the Institute for Fiscal Studies says, the effects of this are giving people more discretionary spending power, and that is the right thing to do. Only the Conservative party could scorn an attempt to give £20 a month to every family in this country.
I thank the Prime Minister for his meaningful and measured presence in Northern Ireland on Monday morning. I previously recorded condolences in this House to the two soldiers who were murdered in Antrim, and I visited Constable Carroll’s family last night. Does the Prime Minister agree that those young people whom the Continuity IRA and the Real IRA are seeking to recruit need to know that the lesson of Monday night is that the real patriots serving the peace of the new Ireland were Constable Carroll and his colleagues, who went to answer the call of a woman in stress, not those who brutally murdered him? While the Prime Minister has affirmed the determination of all parties to make sure these groups are not able to set us back politically, will he also assure us of his determination that they will not succeed in their other immediate aim of setting back the policing environment?
I am very grateful to my hon. Friend. He was at the meeting of all the political party leaders on Monday that was convened in Belfast. All leaders attended: all leaders said they were determined to root out violence; all leaders said that it was important to help the police in their task; and there was a unity of purpose, which is now reflected, I believe, in the peaceful and dignified marches in Northern Ireland today, to show that the whole of the public want to see an end to violence. My hon. Friend is absolutely right that those who gave their lives are true patriots, and we will never forget them; they are in our memories for ever.
Point of Order
On a point of order, Mr. Speaker. As you are aware, the preventing violent extremism pathfinder fund distributes more than £70 million of public money to local authorities. Last year, after a delay of some six months, the Secretary of State for Communities and Local Government was persuaded to place in the Library details of how that fund was being spent for that year. Earlier this year, I wrote to the Secretary of State to ask her to place in the Library the corresponding details for this year. I received no reply. After a written question, I received a reply studiously ignoring the request I had made. This morning, I phoned the Secretary of State’s private office and was told that the Department may—I stress “may”—no longer holds these financial details for this year at all.
My point of order is as follows. Either the Department no longer holds the details of where a substantial tranche of £70 million-worth of public money is going, which is a scandal, or it is refusing to place in the Library details of where that money is going, which, frankly, is no less scandalous in relation to information that Members of this House and members of the public have the right to see. What can you do, Mr. Speaker, to assist Members of this House in obtaining access to information that they have a right to know?
Further to that point of order, Mr. Speaker. I want to point out my concern, which I hope is shared by the House, that it seems easier to get information from the Government through freedom of information requests, which would work for my hon. Friend the Member for Wycombe (Mr. Goodman), than through written questions. That is a very worrying development.
Theft from Shops (Use of Penalty Notices for Disorder)
Motion for leave to introduce a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to restrict the use of penalty notices for disorder in respect of the offence of theft from retail and commercial premises; to revise sentencing guidelines in respect of this offence; to make provision for the recording on a national database of penalty notices for disorder issued; and for connected purposes.
The Bill has cross-party support and I am grateful to my co-sponsors for their support. Organisations representing retailers, including the British Retail Consortium, the Association of Convenience Stores and the Federation of Small Businesses, are supportive of the work that I am doing and welcome the Bill. I am delighted that the Magistrates Association also supports the Bill and that the Justice Secretary has taken the opportunity to meet many of the organisations concerned.
Crimes against business cost the UK economy £19 billion every year according to the British Chambers of Commerce. The cost to small business of shoplifting alone in the past 12 months ran to £1 billion according to the Federation of Small Businesses. In 2007-08, more than 290,000 incidents of shop theft were recorded, and, of course, there might have been many more.
By introducing the Bill, I am seeking to amend police guidelines to ensure that penalty notices for disorder or fines are limited to first-time offences and to ensure that the guidelines state that penalty notices for disorder should be issued only in a police station and that victims of shop theft should be consulted on the appropriate action to be taken by the police.
Secondly, I am seeking to improve the police database to ensure that all recent shop theft offences are entered on the national computer system for ease of reference across the police forces.
Thirdly, I am seeking to amend sentencing guidelines to give greater flexibility in tackling persistent offenders and to check that offenders are able to pay, as well as to ensure that when offences fuel a drug or drinks habit, the offender appears before the court so that they can receive proper treatment and rehabilitation. The Magistrates Association has noted
“from dealing with such offences over many years that most offenders are driven to theft because of poor budgeting and lack of support or abuse of alcohol and/or drugs. The use of a fixed penalty only serves to cause even greater financial hardship and in no way tackles the underlying cause of the offending behaviour. If the matter is put before a court then magistrates have the discretion to impose a penalty that would address the causes of the offending and help in reducing such crimes, which have a significant impact on society.”
Furthermore, the association states:
“We are concerned about the inappropriate use of Fixed Penalty Notices and even more so when we hear that over 50 per cent. are not paid and then registered for court action. As we said earlier, FPNs do not really address the underlying causes of offending and so do not make any contribution to reducing offending behaviour.”
Shop theft is not recognised as a serious offence. Retailers are often not consulted before fines are issued and the police do not always liaise with the victims of the crime. The police are switching from cautions and prosecutions to the increasing use of penalty notices for disorder and fines. The police find penalty notices for disorder attractive as they reduce paperwork and free up police time, but from the retailers’ point of view, as the victims of the crime, PNDs do not match the value of goods stolen. The average value of goods stolen is £149, but the initial fine that is incurred is £80, with a penalty of only a further £40 if that is not paid.
More worryingly, 50 per cent. of all fixed penalty notice fines go unpaid. The Magistrates Association believes that such notices simply do not address the underlying causes of offending, and that they make no contribution to reducing offending behaviour—surely the object of any legislation.
In my view, the Government are not being tough on crime or on the causes of crime. I believe that the punishment should fit the crime, and that is why I want to restrict penalty notices for disorder to first-time offences of shop theft, where the goods stolen are limited in value. Again, a PND would be issued only after consultation with the victim of the crime—that is, the shopkeeper or shop owner.
When a community sentence is issued after persistent or aggravated offences of shop theft have allowed a case to go before the court, that sentence must be seen to be served in full. When shop theft is deemed to fuel a drug or drink habit, the court should be allowed to analyse and treat the underlying causes, and a programme of rehabilitation should be issued, where appropriate. That means that a package of measures should be put in place.
Penalty notices for disorder were introduced by the Criminal Justice and Police Act 2001. Shoplifting was introduced as an offence that attracted a PND in 2004. The notices are regarded as an alternative way to deal with low-level offending because they deliver swift, simple and effective justice and also carry a deterrent effect. A crime report is always required for the offence of retail theft.
A notice may be issued provided that a police officer has reason to believe that a person has committed an offence, and that the officer has sufficient evidence to support a successful prosecution. Sufficient evidence may be based solely on reliable witness testimony. The amount levied by such a notice is specified by the Secretary of State and must not exceed a quarter of the maximum fine on conviction for the offence.
Notices can be issued for the higher sums of £200 or £500 only in exceptional circumstances, and notices for theft would usually be issued only when goods have been recovered. As I said earlier, the penalty notices carry a fine of only £80. If the notice is paid within 21 days, it does not result in a criminal record. Originally, the notices were intended for low-level, usually first-time, offending and were not considered appropriate for those who offend repeatedly.
The British Retail Consortium believes that, in addition to losing £1 billion to retail crime every year, firms must invest £1.4 billion in crime prevention measures, such as installing CCTV cameras and shutters. They also incur higher insurance premiums. Given that there could be job losses to cover those additional costs, the wider community definitely suffers from this crime.
Since 1998-99, the number of recorded offences of shoplifting has averaged an astonishing 295,000 each year. That is equivalent to nearly 6,000 offences a week. Since 2004, the use of penalty notices has become increasingly widespread. In 2004, 1.8 per cent. of shoplifting cases attracted a penalty notice, but that proportion had risen to 27 per cent. by 2006. In fact, from 2002 to 2007, there was a 27 per cent. decrease in the number of people prosecuted for theft from shops. The use of penalty notices is replacing court sentences as a means of combating retail theft, but I believe that the current system is simply not working.
The use of the notices means that shoplifters are treated in the same way as people who leave litter in a public place, or who are prosecuted for a parking offence. The penalty for stealing up to £100 of goods is too modest, and I believe that it should be more severe. Forty five per cent. of businesses state that crime costs them more than £5,000 each year, and that is a heavy price for small firms to pay.
It gives me great pleasure to present this Bill to the House. I hope that the Government will look wisely and supportively on my three modest calls for action—that the police computer be amended so that all multiple and persistent offences are entered into it, that the guidelines for the police be amended so that only first-time offences attract a penalty notice fine, and that the sentencing guidelines be modestly amended to allow such cases to be referred to the court, especially when there are underlying causes.
Question put and agreed to.
That Miss Anne McIntosh, Mr. Roger Gale, Kelvin Hopkins, Peter Bottomley, Mr. Shailesh Vara, Mr. Frank Field, Patrick Mercer, Bob Russell, Mr. Brian Binley and Kate Hoey present the Bill.
Miss Anne McIntosh accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 19 June and to be printed (Bill 74).
Business Rate Supplements Bill (Programme No. 2)
Motion made, and Question proposed,
That the Programme Order of 12 January 2009 (Business Rate Supplements Bill (Programme)) be varied as follows:
1. Paragraphs 4 and 5 shall be omitted.
2. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the motion for this Order.
3. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the motion for this Order. —(John Healey.)
My hon. Friends and I are concerned about the programme motion because, although the Bill is insubstantial in volume, it could have an enormous impact on businesses in the United Kingdom. It could impose a burden of up to £600 million a year on businesses, even though business rates have already increased by 5 per cent. this year and there is a prospect of a further revaluation using a multiplier that is now out of date in the light of the changed economic circumstances.
Although the Bill has been through a careful and constructive Committee stage, it raises a number of technical issues, and I notice that two significant new clauses have been tabled for discussion today—one by the hon. Member for North Cornwall (Dan Rogerson) and the other by the right hon. Member for Greenwich and Woolwich (Mr. Raynsford). They both raise issues that deserve serious consideration. In fairness, during the course of the Bill’s consideration in Committee, the Minister said that he would look at some of those issues, in particular the question of the property owner levy in business improvement districts, which is the subject of the new clause tabled by the right hon. Member for Greenwich and Woolwich, and the issue of business’s involvement in the delivery and oversight of the business rate supplements project, which I and other hon. Members raised.
We have not yet received an inkling of the Government’s thinking on those matters, although I am sure that it will emerge in the debate today. However, given that the House is not overburdened with business at the moment, it might have been better to devise a programme motion that allowed for more reflection on those issues, so that we could consider whether, if my hon. Friends and I are unsuccessful in winning our principal point of opposition to the Bill, we could at least do more to ameliorate any unforeseen and perverse impacts on certain sectors of the business community. For that reason, we shall seek to oppose the programme motion.
I share the concern expressed by my hon. Friend the Member for Bromley and Chislehurst (Robert Neill). There is also a general point to be made here. How much longer will the Government go on with this absurd process of guillotining and timetabling every Bill? Under previous Governments of both parties, most Bills went through this House without any guillotine whatever. They went through in the time that the House felt they needed. Sometimes we needed less time than the Government might have thought, and sometimes we needed more. Governments of both parties accommodated the wish and will of the House on the ground that this is the democratic Chamber, and the place in which we ought to be able to talk sensibly about a Bill for as long as it takes to deal with any problems.
This is a particularly nasty and spiteful little Bill. It will impose up to £600 million of taxation on business at a time when business is running out of money and when the grotesque mismanagement of the money supply and the banking system in this country by the Government and their regulators has left business in a very weak position. Now we see them back for third helpings wanting up to £600 million more out of businesses’ coffers at a time when they are having to worry about how they pay the gas bill or the staff wages, or keep in business at all.
I do not know for how long the House would like to discuss the Bill, but I do not understand why the Government cannot let us discuss it for as long as we think it should take. They may get a pleasant surprise; some of its stages may take less time than they have laid down in their motion. However, surely the least that they could do in the circumstances would be to give us the freedom to express ourselves and to have the debate that we want.
This is a revenue-raising Bill. This great House of Commons built its democratic strength on being able to challenge how much money was raised and how it was spent. It is doing a dreadful job of that at the moment. Huge sums of money go through without our having the opportunity to discuss and challenge them in the normal way, as we saw with this week’s £20 billion supplementary estimate, which was not even down on the Order Paper for debate and went through on the nod. This £600 million should not go through on the Government’s timetable but according to the will of the House.
I urge the Minister, at this late stage, to do the decent thing by withdrawing the guillotine motion and letting us discuss this properly. If it takes longer than until 7 o’clock tonight, what is the problem? We are paid to do our job. I am happy to stay here a bit later if there are lots of colleagues with sensible points to make, so why are the Government not willing? Why will they not do the decent thing?
I entirely agree with the right hon. Member for Wokingham (Mr. Redwood) and the hon. Member for Bromley and Chislehurst (Robert Neill). Those who have been following our debates on the Bill closely are likely to be those who will be affected by it, including the representative organisations that have taken the trouble to contact hon. Members and talk to us. However, many of the businesses that will be affected probably do not yet understand how big an impact this might have on them. As we heard from the right hon. Member for Wokingham, there are huge pressures on business at the moment, and the issues on which business people will rightly be concentrating are staying in business, managing to get the finance that they need from banks, and so on. Liberal Democrat Members are certainly willing to explore the issue, provided that those who are to pay any extra levy have the final say through a ballot, which we will discuss later.
The undue haste with which the measure is being pushed through is not the proper way to proceed. If hon. Members feel that they need more time to tease out the issues and explore them in more detail, they should have that time. This legislation is potentially very serious in terms of the extra burden that it could place on businesses without their having the opportunity to comment on it in their local area. That is why I share the concerns that have been raised about the nature of motion before us.
Having served on the Public Bill Committee, I pay tribute to the Minister for the work that was done during the evidence-gathering sessions. We had the opportunity to carry out a pretty full analysis of what the Bill was about. However, I endorse the words of my right hon. Friend the Member for Wokingham (Mr. Redwood). He did not serve on the Committee, but he recognises the Bill’s huge importance to the financing of large-scale infrastructure projects; I suspect that it will even go beyond that. That will affect our constituents throughout the UK, not least because much of this money will be raised through a supplementary charge on local businesses during difficult times.
It is regrettable that these constraints have been imposed by business managers; I accept that the Minister may not necessarily be directly to blame. Given that other elements of our business have fallen away quite easily, and that may well apply to much of the work in the next week or two, given what is likely to be dealt with, it is surprising that this did not warrant a full day’s debate instead of being truncated to four hours.
Given that the motion is likely to go to a vote, the danger is that the longer I and colleagues speak in this debate, the more we reduce the amount of time available for proper scrutiny, and there are important matters to be debated later on. This is regrettable. I hope that even if the Minister decides not to take on board our concerns at this juncture, he will at least consider them and ensure that when we discuss such crucial Bills in the future involving tax-raising we can deal with them properly.
Is this not an unreasonable pressure to place on us? There is nothing wrong with debating whether the House should receive this summary treatment or be given a proper length of time for consideration, but why should that be taken out of the time spent on the Bill? It is absolutely outrageous. This is all part of the thuggery of this Government’s approach towards the House of Commons. They will not let us have time to discuss anything: they say, “If you discuss A, you can’t discuss B.” They need to get used to democracy.
I entirely agree with my right hon. Friend’s every word. I only hope that there are not too many hostages to fortune for a future Conservative Government and that we will ensure we do not go down this path when these matters arise.
I will not detain the House any further. I hope that the Minister will take on board our concerns even if he will not allow a longer debate today. These are very important issues that affect all of us as constituency Members, and they deserve full and proper consideration by this House.
This programme motion surprises me. We hear many fine words from the Government about the importance of small and medium-sized businesses, but see little action. We have talked a lot about giving money to that sector through the banks, but it is not getting through, and we still do not get a reaction from the Government that suggests they really understand that.
However, that is not what we are discussing. We are talking about loading more financial burdens on to small and medium-sized businesses from April 2010. I bet you, Mr. Deputy Speaker, that many local authorities will jump on this bandwagon, not least because they consider that they have been starved of cash over recent years and see this as an opportunity to do a little more than they have been able to hitherto. I suppose that that could be considered a good thing.
The Minister will know how many business organisations have objected to this measure. He will know how much they fear the role of local government in extracting more money from them.
I will be delighted to answer that if I can get into the mindset of the Government, which is difficult. I would have thought that they would not want this motion because they wanted to make it clear to the business communities affected that they wanted it to be fully debated. The eyes of the business community are on us at this moment. That community is very aware of the Bill and deeply concerned about it. It has made representations in sizeable numbers and of sizeable length. I would have thought that the Government were concerned about that particular constituency, as they are opinion formers who talk to the electorate and come into contact with them all the time. I would have thought that, with an election looming, the Government may feel that that was a good reason to want to prove that they were being fair to small business. The fact is, however, that they are not being fair to small business, because they are not providing the opportunity to have this measure fully and properly debated without the constraints of a programme motion. That is why I am surprised by the motion. I hope that the Government will reconsider at this last moment and withdraw it.
I quite understand why the hon. Member for Bromley and Chislehurst (Robert Neill) and his friends are using the programme motion to make arguments that go well beyond the scope of the Bill, and well beyond the issue of the scrutiny that the House will, quite properly, give the subjects before it this afternoon, once we are able to get on to them. He was right to say that the Bill has been well debated so far, so let me remind him of something as he tries to argue for more time this afternoon than the Government have proposed. I say this to the hon. Member for North Cornwall (Dan Rogerson), too, who accuses the Government of undue haste. We had three very good evidence sessions, as the hon. Member for Cities of London and Westminster (Mr. Field) said. We then agreed to hold six scrutiny sessions. We finished early on the fifth, and we did not need the sixth. The Bill was, as the hon. Member for Bromley and Chislehurst said, well debated and properly scrutinised in the Public Bill Committee.
The programme motion gives the House ample time to do its job properly. I urge my hon. Friends to support the programme motion if the hon. Member for Bromley and Chislehurst insists on opposing it.
Business Rate Supplements Bill
Consideration of Bill, not amended in the Public Bill Committee
New Clause 1
Project Delivery Board
‘(1) Where a levying authority imposes a BRS it shall set up a body corporate called the Project Delivery Board (in this Act referred to to as “the Board”) to oversee delivery of the project to be funded by the BRS.
(2) Schedule [Project Delivery Board] is about the Board.’.—(Dan Rogerson.)
Brought up, and read the First time.
With this it will be convenient to discuss the following: Amendment 1, page 13, line 6, leave out clause 19.
New schedule 1—‘Project Delivery Board—
1 A Board shall be established at the first instance of an initial prospectus being published for the imposition of an approved BRS.
2 A Board shall exisit for the period in which the BRS is in existence.
3 The members of the Board are to be appointed by the relevant levying authority in the following way—
(a) a third are to be representatives from the affected local authority;
(b) a third are to be representatives from the affected local business community;
(c) the remainder is to be made up of members appointed as thought appropriate by the relevant levying authority.
4 In appointing members to the Board the levying authority must have regard to the desirability of securing that the Board is able to perform its functions effectively and efficiently.
5 Where two or more levying authorities are acting jointly by virtue of a BRS the Board shall be established by arrangement between those levying authorities.
6 The Board’s functions are to be specified by regulations.
7 Regulations under paragraph 6 must be made by the Secretary of State within 90 days of the commencement of this Act.
8 Regulations under paragraph 6 may authorise a levying authority to use a prescribed proportion of such sums as it collects or recovers in respect of a BRS to meet expenses incurred by the Board.
9 Expenses incurred under paragraph 8 may not extend to a salary for any Board member.’.
Amendment 16, in schedule 1, page 22, line 16, at end insert—
‘11A A description of the arrangements by which persons paying the BRS shall—
(a) be kept informed of what monies have been raised in pursuance of the BRS and how they have been expended, and
(b) be represented upon the governing body of any organisation set up for the purposes of delivering the objectives of the BRS, or, if such organisation is not to be set up, how such persons are to be involved in the oversight of the delivery of such objectives.’.
As we heard in the previous debate, the Bill is attracting increasing attention from business people throughout the country whose business may be affected, should the local authority or a group of local authorities in their area choose to opt for the mechanism set out in the Bill in order to fund a local infrastructure project. Although I said on Second Reading that my party is not opposed to the principle of a business contribution to important infrastructure projects, we believe that safeguards are needed so that the businesses affected feel that they have an input, first, into the proposal being drawn up, and secondly, into whether the proposal meets with approval, as we shall discuss later.
Businesses and organisations that I have spoken to felt that the business improvement districts process was valuable because it enabled the continuing engagement of the business community in the delivery of a project, so that businesses can be reassured that the project is proceeding to schedule and in the way originally envisaged, and so that they can make a contribution to delivery through their experience in delivering similar projects in the private sector.
The new clause would set up a project delivery board as a mechanism for businesses that were making a contribution through business rate supplement, local authority representatives and others appointed to the board to enable them to come together to ensure that there was adequate oversight of the project as progressed. The positive relations that, hopefully, would have been fostered during the putting together of the prospectus would continue, increasing opportunities for joint working.
As we heard in Committee, many hon. Members consider it important to put on the record that relationships between local authorities and the business community are much better now than they have been in the past. I know that the Minister and his colleagues have used that point to argue that the ballot is not necessary in all circumstances.
The hon. Gentleman and the Minister have both said that the relationship between businesses and local authorities is profound, particularly in the case of high- profile business regeneration in our inner cities, but does the hon. Gentleman not have some concerns that the third element, the residential population, especially in our bigger cities, has often been left out? How would he try to ensure that there was input from residential communities whose vibrancy is an important part of ensuring that such initiatives are maintained, particularly in our inner-city areas, where they are most likely to take place?
The hon. Gentleman raises a good point. In his constituency there is an organisation that represents a small residential community which does not participate as strongly in elections to that body as does the business community represented in the Corporation of London, although I note from the press that that may change and that there are moves afoot for residents to mount more of a challenge at the next elections.
From my party’s perspective, the important thing is that local authorities represent the residential community. They are elected by the residential community, so it is crucial that the local authority is well represented on the board. It is the levying authority or part of the group of levying authorities and will have consulted its electorate and been elected on a platform to deliver projects such as those that may be proposed. That is a safeguard, but schedule 1 also sets out that a third of the board could be appointed by the levying authority so, for example, if the project was specifically relevant to an area where there was an active residents association, I can see no reason why someone from that association could not be co-opted to the board to represent the voice of the residents, as the hon. Gentleman suggests.
As I was saying, it is necessary to reassure the business community that its voice matters not just in putting together the proposal and signing up to it, but in the ongoing delivery of it. The board would be an additional means of fostering positive relations between local authorities and the local business community. Those relationships are undoubtedly much stronger, but the fact that all hon. Members have been lobbied by business organisations about the Bill proves that there are still issues to be overcome.
One of the matters raised time and again by businesses is, sadly, concerns about the delivery of certain local projects. The new clause would help to reassure businesses that its voice would be heard and would be central to the delivery of the BID. If the business community had any concerns about business rate supplements being levied for purposes not entirely set out in the prospectus—I am sure the Minister will tell me that that is not possible and that there are safeguards in place to protect against that—it would be reassured by having its representatives at the heart of the process.
In the debate on the programme motion, we heard from the Minister that we had excellent evidence sessions. He is right. Hon. Members in all parts of the Committee agreed that one of the most important contributions was that of Dr. Julie Grail from British BIDs. In her evidence to us at our second sitting on Tuesday 20 January she said:
“With regard to the business rate supplement, we have heard a lot today about concern with the ballot…it is not just about the ballot… it is about managing the relationship going forward. One huge value that we have seen coming out of BIDs is that it has truly brought together local government and the business community. A danger about the business rates supplement is that it could rip it apart again.”––[Official Report, Business Rate Supplements Public Bill Committee, 20 January 2009; c. 46, Q199.]
Of course, that is not the intention, but there clearly are concerns in the business community about that. We have a model in BIDs showing how positive relationships can be fostered and can deliver projects that respond to local need and ensure that everybody has a say in their ongoing management. If there was that model and it was successful for the local sorts of projects that bids deliver, we could adapt it to cover some of the bigger schemes that affect a wider area and which, it is hoped, the BRS could play a part in delivering.
According to the evidence from the head of the CBI’s property group, if the business community were not consulted about a scheme, there would be considerable business unrest. The CBI stressed that it was imperative that businesses got the opportunity to work with local authorities to deliver real economic benefit to an area. A project delivery board would be exactly such an opportunity.
As I said, the new schedule sets out in a little more detail our initial thoughts about how the project delivery board might be formed and how it might operate. One concern that I am sure we all share is that we could create a body that does the same as other bodies, and duplicates—with all the waste of officers’ and business people’s valuable time and the costs that that would involve. We have therefore, for example, said that board members should not get any form of salary. That is the tone that we are trying to set: the board would be focused on delivery and would not necessarily have to meet regularly. It would, however, be a mechanism to ensure that everybody was involved in delivering what I hope would be exciting projects that would greatly improve areas, with benefits for residents and the business community.
Amendment 1 seeks to remove clause 19, which deals with when a levying authority has not given notice to a billing authority before the start of the financial year. The issue came up briefly in Committee. There is concern that billing authorities might have to respond very quickly. That could be an extra burden on them and cause problems for businesses and local authorities as they react. The amendment is to test the Minister’s view on the issue. Surely things should be done in good time for the billing authority—in other words, by the start of the financial year so that the bills can go out together and there is no need for supplementary billing or recall of any bills. The business community would certainly welcome that. I am sure that the billing authorities, as distinct from the levying authorities, would also welcome it.
I am sure that the hon. Member for Bromley and Chislehurst (Robert Neill) will correct me if I am wrong about his amendment 16, which seeks to define and contain how money raised by the BRS is spent and to make sure that that happens according to the prospectus and that there is no prospect of its being used for other purposes. Furthermore, if a governing body were set up along the lines that I set out in new clause 1, the amendment says that the business community should be involved and sets out how that should happen. Amendment 16 is on lines similar to those of new clause 1, although I think that our new clause, which sets up a project delivery board, is a clearer and, I hope, more defined way of doing things.
New clause 1 would improve the Bill in respect of the crucial element of business involvement. There is support in the country for the concept of a business rate supplement delivering an important local project, as long as everybody is clear about what the money is being spent on and everybody is signed up and willing to participate and has a continuing voice in the delivery of the project. I look forward to what the Minister has to say on the new clause, but I should say that I am minded to press it to a vote, should the Minister not agree to it.
I have much sympathy with many of the remarks of the hon. Member for North Cornwall (Dan Rogerson). We debated the issue in detail in Committee and it goes to the heart of how we make the Bill work. My hon. Friends and I make no bones about our position on the Bill in principle: we think it a mistake to use the Bill to impose burdens on businesses, with the exception of Crossrail, in the current climate. That said, if the numbers are against us, let us see what can be done to make the arrangement work better. That is why we are interested in the hon. Gentleman’s proposal.
In Committee, I thought that the Government were not uninterested either; the Under-Secretary of State, the hon. Member for Tooting (Mr. Khan), replied in a constructive way, saying that he and his officials would consider the issue. The hon. Member for North Cornwall referred to the powerful evidence of Dr. Grail, whom Committee members from all parties regarded as one of the most impressive of a strong team of witnesses. I hope that the Department will find a way of taking the issue on board.
Furthermore, there is logic to the proposals, which go right the way back to the Lyons review, which was one of the drivers of the original proposal. It made a point about the importance of securing legitimacy and support from the business community. That works in two ways. The first, to which we shall come later, is the opportunity for businesses to have a genuine say by means of a ballot. The second, every bit as important, is the thought that even if there is a ballot—and I hope that there will be—things should not just stop there. Business has to have an ongoing involvement. There is a compelling logic to that; businesses have perhaps the largest stake in the success of a BRS scheme. They are ultimately the potential beneficiaries, but they are footing the bill at the same time. Furthermore, they are likely to have local and sectoral knowledge to bring to the discussion.
I absolutely agree with my hon. Friend, who makes a powerful point. I was a member of a local authority for 16 years and I worked well with excellent local authority officers. However, the fact is that the business man can bring an additional dimension that neither I as an elected member nor the officers were always in a position to bring. If the BRS or business improvement districts are to work on the basis of genuine collaboration between the local authority as a governing body and the business community, having that ongoing and structurally assured involvement is important.
Often the business person will spot something because of the nature of the culture that they are in; it might not be spotted by the elected officers who work in the administrative culture. That hugely powerful point should be taken on board. That is why we tabled amendment 16, which covers much the same ground as new clause 1, although there is an additional factor that I shall come to. Like the approach adopted by the hon. Member for North Cornwall, my approach will be influenced by what Ministers say they have been able to do to take the issue forward.
The point of difference between me and the hon. Gentleman is that his new clause might be a little too prescriptive in specifying the form of delivery vehicle that there must be. In some cases, the project delivery board might be the right vehicle; I can, however, think of some BRS schemes for which it might not be appropriate. That is why, both here and in Committee, I have deliberately cast my amendment in broader terms so that before a decision is made—and before the businesses vote, as I hope they would—the prospectus will set out how that ongoing involvement will take place. That will vary and should have the opportunity to do so, according to the nature of the scheme and the scale, place and sector involved. The point is that the information should be set out before the die is cast and the commitment to the BRS scheme is made. Sometimes, it may be done along the lines of the delivery board model, but not always, which is why I would like greater flexibility.
The other matter that I have added to the original amendment that I tabled in Committee relates to strengthening the requirements on the provision of financial information—an issue that became apparent during the evidence given to the Committee by several people. That provision would introduce an obligation to spell out clearly the moneys that are to be raised in pursuance of the BRS, and what they will be expended on.
There was some debate in Committee about the definition of the purposes that BRS could be used for. We debated whether it was appropriate to go down the route of defining by exception, which is more or less the scheme adopted in the Bill. It says that the BRS cannot be used for X, Y or Z—broadly, other types of local service—but is otherwise silent about its application. The view of the bulk of the business community is that we should specify the categories of project that the moneys can be used for. The amendment would attempt to offer a middle way, and if we believe in localism and a ballot on such matters, the prospectus should set out exactly how people will be told, before they decide, what money is being raised and what it will be expended upon.
An ongoing, iterative process would be involved so that, unlike the current arrangement, it would not just be a question of giving a broad-brush outline of what the project would be, and how much the overall budget would be, including certain other budget heads. I am talking about a more iterative process—almost a report back—to keep in touch with the community on what the money had been spent on so far, and what had been raised. It is like the requirement on the board of a company to produce annual accounts. There would be an obligation to provide regular updating, which is in everybody’s interest, not least the proponents of the BRS scheme because it is desirable to have the confidence of the business community, and of council tax payers and residents.
I do not have a firm view on whether we will press these matters to a vote, but we hope for a positive response from the Minister, and our judgment will be largely coloured by that. I hope that he accepts that these are serious issues—I am sure that he and his colleagues do so—which have not been introduced in a partisan manner, but rather as a result of the evidence that we heard in Committee.
I shall make a few brief comments, particularly on new clause 1, because I want to save most of my remarks for the later group dealing with ballots. I pursued an argument in Committee about the changes in local government during the past 15 or 20 years, and the lack of trust. I am not sure whether the hon. Member for North Cornwall (Dan Rogerson) trusts his Liberal Democrat-run councils, but I trust my Labour council to make the right decisions. It is a Labour council that has this year again had a four-star rating, and it has done remarkable work on regeneration and economic delivery in the borough of Halton and working more widely with Merseyside and Cheshire.
The new clause is over-prescriptive in telling local government what it should do. If I were to criticise what this Government have done over the past 12 years, I would say that we have sometimes been a bit over-prescriptive about local government. My right hon. Friend the Minister, dare I say it, took a different view in a number of areas about trusting local government and giving it some say in decisions. It is fine to legislate, and there must be safeguards; one of the safeguards in the Bill is that the Secretary of State can intervene if the procedures laid down in it are not being followed.
I feel that there is an in-built distrust of local government in this House, however, and a lack of willingness to give it more freedom to get on and deliver what many local authorities are already delivering through their tremendous economic development and regeneration policies. I believe that the new clause is over-prescriptive, and we should trust local government more. In these difficult economic times, I do not believe for one moment that local government will do something stupid such as putting businesses and jobs at risk in its own area. I do not think that that will happen.
I was at great pains to say earlier that the relationship between business and local government has improved hugely over the past couple of decades, and that is absolutely right—I remember the hon. Gentleman making that point in Committee. However, we heard evidence in Committee from organisations such as British BIDs to say that the business improvement districts process, through continuing such engagement in a more formalised and recognised way, has been a positive step. The new clause seeks a similar mechanism for the BRS. Although there is a positive relationship in general, when we are talking specifically about an extra levy of cash on business for a specific project, business organisations, and BIDs, which represent everyone involved in those processes, feel that that is a positive model to use.
I do not disagree with the hon. Gentleman’s comments on what was said during the hearings; powerful representations were made. Lessons have been learned from that process, and the way in which local government has responded, working through partnership and co-operation for the benefit of a particular area, has borne that out. That shows that local government is in such a mindset, and we come down to a particular principle.
I shall finish on that point. In many areas, local government is responsible for leading regeneration and economic development. It has come a long way during the past 15 or 20 years and we should trust it more. The new clause and some of the comments made by the hon. Member for Bromley and Chislehurst (Robert Neill) go against that grain, and I fundamentally believe that we should give local government more freedom. We shall no doubt come later to differences as far as Crossrail is concerned—what we want to allow for it, and what we do in the rest of the country. I believe, however, that we must give local authorities more freedom to get on and work locally. Lots of organisations are working together already, and there are already forums for such decisions to be taken by working in partnership. To be prescriptive about the type of forum concerned is the wrong way to go about things.
Given the hon. Gentleman’s point about the forums and procedures that exist to allow bodies to work together, what is his objection, as far as amendment 16 is concerned, to saying that the prospectus should set out how such working together should take place? Amendment 16 is not trying to prescribe a particular model; it is just saying that the information should be set out.
The hon. Gentleman makes my point for me. Why should we do that? In most areas—not every area—these forums already exist, or such co-operation is taking place, so I do not accept what he says. I genuinely believe that we would be telling local government how best to run its local area. I strongly feel that local government should be given the freedom to get on and deliver what is important, working with all the partners in the local area to deliver the sort of improvements that we all want.
The Minister will be aware from previous debates on this matter that I have perhaps a little more sympathy than one or two of my colleagues for the whole principle of business rate supplements. This is not the ideal year for the Bill. Had it been introduced a few years ago, those in my party might not have had the many understandable concerns that we have expressed, representing business interests, given the real financial and economic problems that are facing our businesses.
I fully support my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) in speaking to amendment 16, so I must express some opposition to the comments made by the hon. Member for Halton (Derek Twigg). I worry that the credibility of BRS schemes is crucial. There is a risk of such schemes, particularly the longer ones, seeming to be at quite a distance from the local authority. During what might be a 10 or 12-year scheme—a bigger type of regeneration project perhaps—a range of different councillors may be involved. A certain political party will be in office when a BRS scheme is put into place, and by the time it comes to fruition a different one might be in office. It is therefore all the more important that we have an ongoing input from business in the way that we have set out.
I agree with a number of the comments that have been made, although I have some sympathy with what the hon. Member for North Cornwall (Dan Rogerson) proposed. The notion of having a project delivery board, in the way he sets out, would be over-prescriptive and highly unwieldy. It would detract from what we are trying to achieve. The hon. Gentleman will forgive me if I consider the proposal in the context of Crossrail. How on earth could we have a project delivery board that would avoid being anything more than an extra layer of bureaucracy that left us open to a lot of confusion, if it were given a project of such size that it took into account the views of people from 33 different boroughs?
I am pleased that the hon. Gentleman is exploring the matter and supports us on the general concept, although I appreciate that he is unhappy with some of the details of the new clause. We have been at pains throughout the process to point out that there is a distinction between Crossrail and projects in the rest of the country. Indeed, his own party has sought to do that as well. Although I believe that a mechanism could be found to ensure that local government and the business community in London are represented, we need to consider closely how the system will operate in other areas. We are considering a specific case in London, but the Bill may well be applied across the whole country.
I appreciate that the Bill will not necessarily create fully fledged Crossrails across the board.
The hon. Gentleman made a comparison between the proposed business rate supplements and business improvement districts. I believe that we will return to that matter in other debates this afternoon. It is crucial that we draw a firm distinction between the two. My biggest fear is that by putting the Bill on the statute book, we will allow it to be used for small infrastructure projects that should be covered not by a BRS but by BID-type schemes. A BID works by being highly localised and highly focused, and by working for businesses that, as in my constituency, are often within a couple of roads or a small number of blocks of each other. Those schemes work extremely well, and having some sort of delivery board mechanism makes sense in the context of a highly localised scheme.
My concern, which is implicit in all the amendments in this group, is that no local authority should be able to say, “Right, we’ve now got our BRS scheme through and we do not need to bother with worrying about the concerns of business or anybody else for the next 10 or 12 years”, or however long the project takes. That would be wrong, which is why I support amendment 16. Equally, we should avoid highly prescriptive man-management that would only provide a further level of bureaucracy and confusion. I hope that the Government will give some thought here and in another place to finding a way to ensure that the credibility of BRS schemes is maintained. I know that we will come on to ballots later this afternoon, but my biggest concern is that without some safeguard for business, there is a real risk that credibility will be undermined and the system will simply be seen as another opportunity for a cash-grab from the Government, rather than used for a specific purpose that benefits a business community in infrastructure terms.
I see the need for something that will satisfy the business community that a project is worthy and well managed, but I share the concerns of those who believe that imposing a board in every case might be difficult, inappropriate or unnecessarily bureaucratic. Under the terms of new clause 1, it is difficult to know who from the private sector side would want to volunteer to sit on such a board. We learn from new schedule 1 that there would be no remuneration, and we can imagine that in some cases the meetings would be long and frequent.
Anyone considering sitting on such a board would want to know what their legal duties and responsibilities were and what the consequences might be if something went wrong. Would it be a board in the legal sense, on which a director sits only if he is aware that serious legal duties and requirements are placed on him, and aware of what provision is to be made for officer insurance, professional indemnity and all the other things that anyone placed in that position of trust deals with? If so, that would represent a labour due imposed on top of the cash charge that the business community will be invited to expend. It is bad enough that a company will have to pay the tax, but worse for it to be told that it must put up some people to sit on the supervising board so as not to make an even bigger mess of the scheme. That would mean that they were invited to give of their time free, on top of having to give their money to the project in question. I see certain difficulties in that.
I assume that in line 3 of proposed subsection (1) of new clause 1, we do not need the word “to” twice, and that that is a typing error or misdrafting that could be dealt with.
New schedule 1 provides what support there is for the idea of the board, but it is quite slim. We are told in paragraph 6 that the board’s functions would be specified by regulations. If that idea were to go any further, those regulations would be of great interest to the House, as they are where the meat of the system would be. Currently, we know nothing about the intended responsibilities, duties or legal requirements, the degree of surveillance required or the necessary reporting, accountability and so on.
We learn from the new schedule that the members of the board are to be appointed in the following way. One third are to be representatives from the affected local authority; one can understand that. However, only one third are to be representatives of those paying—the affected local business community. The remainder—one’s mental arithmetic might run so far as to say the other one third—are to be
“members appointed as thought appropriate by the relevant levying authority.”
In other words, the authority seeking the money and imposing the tax on the local community could have two thirds of the board members. It could therefore win any simple majority vote and a lot of weighted majority votes up to the two-thirds threshold. That would give it effective control.
I am sure that the framers of the new schedule have it in mind that the local authority will be well disposed towards the local community and want people of independence and stature on the board. However, that is not what the new schedule actually says.
The objective of allowing scrutiny is to allay suspicion and fear. The appointment of the whole board would be in the hands of local authorities, some of which are very unpopular. In my area we currently have a Liberal local authority that is immensely unpopular. Does my right hon. Friend agree that suspicion would not be allayed if such power were invested in the hands of such an authority?
Yes. I do not want to make this party political, although I have had experience of what my hon. Friend mentions, but a council of any kind could become unpopular. It might make itself unpopular by proposing one of the supplementary levies provided for in the Bill, no doubt on top of a large council tax increase at the capping threshold. Yet under the new schedule, local authorities would not just be given the power to have a third of the representatives and to choose the third who are perhaps intended to be more independent, although that is not stated. They would be given the power to choose the whole lot.
The business community might choose for the board two or three good people who, despite all the obvious aggravation and the lack of wisdom involved in sitting on one of these things, decided that they wanted to do so because there was a big project. The local authority would have every right to say, “No, we’re not having them. We would rather have some friendly, helpful people who are of our political disposition or agree with us about this project”, so that there would be no grit in the oyster and no challenge to how the project was going ahead. The new schedule reveals a weak system, which in certain circumstances would prevent the board from acting as an accountable body with control over costs and responsibility for better project management. If a local authority were determined to drive something through, against the interests of its electorate, it could do so. That is a great weakness in the system that is suggested.
We are told that a board would be established
“at the first instance of an initial prospectus being published for the imposition of an approved BRS”,
and that it would continue for the whole period for which the BRS existed. That means that it would be a long task in many cases, and that, too, would make it more difficult to get people of good quality on the board. We are told:
“In appointing members to the Board the levying authority must have regard to the desirability of securing that the Board is able to perform its functions effectively and efficiently.”
That is a very wide suggestion, and I do not believe that it requires a local authority to have much discipline in choosing people of substance who are likely to provide the critical analysis and accountability that we would like. We are told that everything else will be sorted out in regulations—doubtless, they are still to be drafted.
I therefore have more sympathy with the more wide-ranging amendment 16, in which my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) leaves open the question whether we need such a body, and correctly directs attention to the lack of accountability in the projects if we do not provide for some sort of mechanism. We are here, even at such a late stage in the Bill’s progress, to tell the Government that there is a genuine problem of accountability. The system is unsatisfactory anyway, in that it enables the imposition of big levies on local communities in times of stress. If there is no proper system for engaging them and getting them to believe that a project is well run and that the expenditure is properly controlled, that makes matters far worse. Amendment 16 gives scope for the Government to make regulations under the Bill that might get nearer the mark.
I therefore hope that the Government will use new clause 1 as a prod and a stimulus to improve their Bill. I do not believe that it is quite right, for the reasons that I identified and for others with which I shall not delay House. Perhaps amendment 16 provides a way forward if the Government are willing, and if they are prepared to produce regulations to give some accountability under the law.
We have now moved beyond the programme motion debate and back to the serious scrutiny that has been characteristic of the way in which all hon. Members who have been involved with the Bill have dealt with it. I shall try to respond in kind. I want to encourage the hon. Members for North Cornwall (Dan Rogerson) and for Bromley and Chislehurst (Robert Neill) to feel that they do not need to press either the new clause or the amendment that they respectively tabled.
Let me start by looking for common ground. I agree that it is important for businesses to feel confident about the running of any project to which the business rate supplement contributes a funding stream. It is also important that they are kept informed of a project’s progress and of the costs that are incurred in running it. However, new clause 1 would over-centralise and is too prescriptive, as other hon. Members have pointed out. I intend to achieve the same end through much more flexible means.
I urge the hon. Member for North Cornwall to consider that, if the duty on levying authorities to set up a body to oversee the delivery of any project that was funded or part funded by a business rate supplement existed—even if that supplement were a small element of a much larger funding package, which would inevitably have its own governance arrangements—the authority would still need to establish a project delivery board such as he has described. Although I am with the hon. Gentleman in principle, a moment’s pause suggests that, in practice, the new clause would be too prescriptive. It may not work in all circumstances, and the hon. Member for Cities of London and Westminster (Mr. Field) rightly asked whether we could imagine it working for the arrangements that are properly in place for Crossrail. The new clause is likely to blur the lines of accountability and could lead to less rather than more effective management of the delivery of any project linked to the business rate supplement.
The right hon. Member for Wokingham (Mr. Redwood) made an important point about the new clause. It specifies that the board should be a “body corporate”, which has implications for those who would sit on a board. They may face the possibility of being legally liable and responsible for a project over which they have relatively little direct control. Ultimately, responsibility for such a project must rest with those who are put there to take it.
My preference is in keeping with the arguments that my hon. Friend the Member for Halton (Derek Twigg) presented. The levying authorities, clearly with wide local consultation, are best placed to determine the appropriate governance for a project. It is neither easy nor appropriate to specify that centrally. It should certainly not be done in of the Bill.
Amendment 16 attempts to introduce a similar provision more flexibly. As the hon. Member for Bromley and Chislehurst said, the delivery board model may not always be appropriate. He wants to ensure that the business rate supplement prospectus makes it clear how those paying it can expect to be informed, especially about the amount of revenue that has been raised and how it is being spent. The Bill already provides for that. Paragraph 11 of schedule 1 requires levying authorities to make clear in their prospectus the way in which those liable for the supplement will be informed about the expenditure incurred on a BRS project. It also requires the authorities to set out how they will provide updates on the work until its completion. In other words, levying authorities will not be able to keep in the dark businesses that pay the business rate supplement.
Let me be clear and, by doing so, attempt to be helpful. We also expect levying authorities to consider how they will involve businesses in running any project that is funded or part funded by a business rate supplement. Indeed, in the draft statutory guidance that is out for consultation, we have made it clear that authorities should consider how they can involve businesses over and above the specific statutory consultation. Consultation on the draft statutory guidance closes on 17 April.
Amendment 16 is also too prescriptive. The message in the guidance is clear to authorities: it is important to ensure that those who pay the business rate supplement are informed and involved in running a BRS project. It also gives authorities the scope to determine what is appropriate given the nature of the project and the needs of the local community as well as the desire of local businesses to get involved.
As I said in Committee, consultation on the statutory guidance is under way and we have put down markers in it. I also made it clear to the Committee that we will consider the points that were made in the debate as part of the consultation.
I am grateful for the spirit in which the Minister has approached the matter. I do not seek to be needlessly prescriptive and I am grateful for his comments on paragraph 11. I understand the intention behind his point about the statutory guidance, which is out for consultation, but what is the sanction if a levying authority does not come up with the goods under that guidance? We must give the business community some assurance that there is a fall-back and a sanction.
The hon. Gentleman has a good memory and I am surprised that he has overlooked our detailed discussion in Committee about the provisions that set out the range of sanctions. Ultimately, the Secretary of State has the power to suspend a business rate supplement. Before that point, there is range of other potential interventions and sanctions, which we discussed.
The Minister is generous, as always, in giving way. His response may help us crystallise our thinking about what we do. Does he envisage a position whereby the draft statutory guidance, once it is issued—I do not know what his time frame is or how it will fit in with considerations in another place—will set out how the business community is to be involved before a decision is made? I do not want to be unduly prescriptive, but does he understand that moving in and using sanctions is to shut the stable door after the horse has bolted? We want an assurance that people will be informed before they make a decision about a BRS.
The guidance is statutory and authorities are therefore clearly expected to follow any terms set out in it, especially when it applies to the way in which they are expected to consider a case for a business rate supplement: consulting on the ideas and involving others, including potential BRS payers, in their preparation. We have published the proposed guidance in draft and we will update it after the consultation closes.
I have said that we will take into account the points made in this debate and in Committee in coming to our conclusions about the content of that guidance. I hope that the hon. Members for Bromley and Chislehurst and for North Cornwall will both regard that as a sensible and flexible but nevertheless clear and firm way of ensuring the aims that they seek.
The hon. Member for North Cornwall said that he was testing my view with amendment 1, which would mean that levying authorities in two-tier areas would be able to levy a business rate supplement or vary one only from the beginning of any billing round in April each year. It will certainly be more efficient for billing authorities to collect the supplement at the same time as they collect business rates. That is why we want to encourage, as we are doing, any authorities to collect the supplement in order to do just that.
As the impact assessment that accompanies the Bill says, and as I explained in Committee, when the business rate supplement is collected as part of the annual billing round, the Bill provides for the costs of that collection to be met from the revenues of the business rate supplement. When the business rate supplement is collected as a separate exercise, the costs of collection would have to be met by the levying authority. There is therefore a clear financial disincentive to do anything other than make the collection part of the annual billing round.
The hon. Gentleman’s proposal is unnecessarily restrictive—he is nodding, which I hope means that he would accept the general argument and not press amendment 1 to a vote. The risk is that if there were a minor delay—say, a month—in a project for any reason, including any reason not connected with the BRS, amendment 1 would require a whole year’s delay before that project with the BRS element could get up and running. That is unduly inflexible and gives undue weight to administrative processes rather than to the proper delivery of the projects concerned.
In summary, hon. Members have ably made their arguments this afternoon. I hope that they will allow us to consider those arguments as part of the current consultation on the statutory guidance. We are concerned about the credibility of any BRS-supported project, as the hon. Member for Cities of London and Westminster urged that we should be, as well as about the delivery of those projects. The guidance is clear and so is our aim through that guidance. Our approach is more flexible than that proposed either by new clause 1 or amendment 16. It allows for arrangements that will properly inform and involve the business community, and BRS payers in particular. Our approach will also mean that any proper arrangements can suit the area, the project and the BRS scheme concerned. I hope that the hon. Members for North Cornwall and for Bromley and Chislehurst will not need to press their amendments to a Division.
I am pleased to have prompted a debate about the issue, if nothing else, although I sense that there may be a range of views not entirely sympathetic to new clause 1.
I am also grateful to hear the Minister’s determination to ensure that wherever such a project goes forward, the business community will have a role in its ongoing delivery and in the oversight of it. As the hon. Member for Bromley and Chislehurst (Robert Neill) said, the intention behind amendment 16 is to ensure that that is the case. However, I have noticed a tendency in other Bills for things to be left to be clarified later. Although I sadly do not have the resources at my disposal that the Minister does to test every thought that I have and to ensure that everything is drafted as it should be, I wanted new clause 1 to make the Bill more prescriptive and say that there must be a body that formalises the business involvement in an ongoing relationship.
I was also seeking to look at how the BIDs model works. The hon. Member for Cities of London and Westminster (Mr. Field) is absolutely right that BIDs and the BRS will do different things in different places. However, as models for delivery, they provide us with a starting point. I am seeking to press for such a vehicle with new clause 1. The right hon. Member for Wokingham (Mr. Redwood) was keen to pick holes in new clause 1 and to look for areas of disagreement. However, I welcome the fact that he and all other Conservatives Members who have spoken are keen that there should be a safeguard for businesses, so that they can be confident that they have a role to play.
I was not trying to pick holes in new clause 1; I was trying to say that we need a structure that will work. That is what we are groping towards, but it is a pity that the Minister did not tell us whether the schemes would normally be local authority-run schemes or private finance initiative or public-private partnership-type schemes. However, we have to build on whatever command structure is in place and have accountability and representation.
I am grateful to the right hon. Gentleman for that clarification. However, I am concerned that amendment 16 may not be quite as reassuring to the business community, in that it still puts the onus on the local authority to come up with the means.
The right hon. Gentleman talked about the proportion of business people on the body proposed by new clause 1 being only a third. However, the project delivery board would look at the oversight of the whole project. The BRS is part of the finance package, so it would be unfair for the business community to form all or half of that body if its funding was less than that.
Were new clause 1 to be added to the Bill, it might require some clarification, perhaps through discussions in another place. I am seeking to get something in the Bill that sets out clearly that the business community will have a role in the ongoing discussions on how a project is delivered. We are talking about a long-term commitment, and the right hon. Gentleman said that it was unfair to expect the business community to take on that commitment. I have spoken to business organisations—for example, when looking at BIDs and other systems—and it is clear that they can usually find a way through their representative bodies to ensure that the business community’s voice is heard.
Although I am pleased to hear that the Minister is looking at the issues closely and saying to local authorities in the guidance, “You need to show us how you’re going to involve the business community,” I am concerned that the nuclear option of the Secretary of State stepping in and saying, “You cannot proceed,” will not be used in many circumstances. Given that that sanction will be used only in rare circumstances, there is nothing that gives me huge confidence that there will be a systematic way for the business voice to be heard in the ongoing management of a project.
I am grateful to hear what the Minister said about amendment 1. I accept that there may be a need in some circumstances to move beyond that flexibility, but he has put on record his determination that the standard practice should be for everything to be in place at the beginning of the financial year, so that everybody knows what is coming and can plan accordingly.
To sum up my response to this debate, perhaps my new clause 1 is not perfect, but the Bill, too, is imperfect. By seeking to divide the House on my new clause, I hope that we can improve the Bill slightly and leave it to colleagues in another place to tighten up the detail.
Question put, That the clause be read a Second time.
New Clause 2
BIDs: supplementary provisions
‘(1) The 2003 Act is amended as follows.
(2) After section 41 insert—
“41A Additional arrangements where business rate supplement imposed
(1) In any business improvement district where a business rate supplement under the Business Rate Supplements Act 2009 has been imposed, a property owner BID levy may be imposed on the owners of a non-domestic property, or a class of such owners, in the district.
(2) A non-domestic ratepayer who is liable to pay the BID levy on a hereditament is not liable for a property owner BID levy on that hereditament, and may not take part in a property owner ballot in respect of that hereditament.”.
(3) In section 46(1) (description of non-domestic ratepayers liable for BID levy to be specified) insert at end “, and, where applicable, the description of property owners who are to be liable.”.
(4) In section 49 (BID proposals) after subsection (2) insert—
“(3) A levy on property owners may come into force only where it is approved by a ballot of the property owners in the proposed business improvement district who are liable for the proposed property owner BID levy.”.
(5) In section 50 (approval in ballot) after subsection (6) insert—
“(7) A property owner BID levy is not be to regarded as approved by a ballot held for the purposes of section 49(3) unless the two conditions set out in subsections (2) to (6) are satisfied.”.
(6) In section 55(2) (regulations about ballots)—
(a) in paragraph (b) after “ratepayers”, insert “and property owners”, and
(b) after paragraph (h) insert—
“(i) enabling the billing authority to construct a list of all property owners in the BID area for the purposes of holding a property owner ballot and billing.”.’.—(Mr. Raynsford.)
Brought up, and read the First time.
New clause 2 concerns the interface between business rate supplements and business improvement districts. Although both relate to the promotion of the local economy, BIDs are different from BRSs in a number of respects, as the hon. Member for Cities of London and Westminster (Mr. Field) pointed out. In Committee we examined the differences between the two, highlighting the degree to which the BRS is more likely to support larger-scale, longer-term investment—including infrastructure—whereas BIDs have focused primarily on short-term improvements to enhance the attractiveness, commercial success and security of retail and commercial areas. However, there are similarities. Both are based on the principle of partnership between local authorities and business to promote the local economy. Both involve a levy on the ratepayer—who is the occupier rather than the owner of the property—on top of the normal business rate.
As the Minister responsible for overseeing the introduction of BIDs some six or seven years ago, I am naturally pleased that they have proved to be a success, particularly because—this is another feature common to both BIDs and BRSs—they were not uniformly welcomed when we introduced them. I recall the Opposition’s hostility when we debated the local Government Act 2003. I hope that, just as with the passage of time they have come to recognise that their opposition to BIDs was misplaced, they will come to see over the passage of time that their current opposition to the BRS is also misguided.
Over those six years, there has been a significant growth in the number of BIDs and in their contribution to improving the economic performance of commercial areas in towns and cities all over the country. Dr. Julie Grail is the chief executive of British BIDs, the umbrella body for BIDs throughout the country. During one of our evidence sessions at the beginning of the Bill’s Committee stage—I join the Members who have rightly emphasised the value of those sessions—she told us that 76 BIDs were now operating throughout the country, nearly 20 of them in London.
BIDs can be set up only after a yes vote on a dual-key basis by all the businesses that will be liable for the levy. They are also subject to periodic renewal ballots. The key issue that prompted the new clause was the fact that 14 existing London BIDs are due to be subject to such ballots within the next two years. At precisely the same time, business rate payers will begin to face the business rate supplement for Crossrail. Not surprisingly, Dr. Grail and many others who have been involved in the successful development of BIDs fear that when confronted with both the BRS for Crossrail and the ongoing cost of supporting their local BID, some business rate payers, particularly in difficult economic circumstances, will conclude that they cannot afford to continue to support the BID.
One of the arrangements that has applied throughout the evolution of BIDs is a proper procedure for defining the objectives of a BID and the level of contribution that will be expected before the proposition is put to a vote, so that when business rate payers come to vote, they will know whether they are receiving value for money. That is a well-established arrangement, and all who are experienced in the way BIDs have operated know that it has proved successful. When businesses feel that a BID will enhance the value of their area, they are likely to vote yes—and, as Dr. Grail pointed out, they have done so in 76 areas.
I am sorry if the hon. Lady did not entirely follow what I said earlier. As I explained, the BID legislation provides for renewal ballots every five years, which means that a BID must submit its proposal to the business rate payers who contribute to it every time it seeks a renewal of its status.
Unlike the BRS for Crossrail, which relates to a single, albeit very large, project, BID schemes usually involve a variety of different arrangements. A scheme may be intended to improve security, perhaps by providing additional policing to enhance shoppers’ safety in a retail area. It may involve environmental improvements to make an area more attractive to visitors, or transport improvements to make it more accessible. It may involve promotional work to attract people who would otherwise not be aware of what was available in a shopping centre. It is entirely up to the BID body itself to decide on its programme. However, that programme must be set out in advance of the first ballot, and when it is due for renewal the BID will be required to set out its programme for the following year. There is a well-established procedure enabling the parties invited to contribute to BIDs to know what they would be getting, and to say either yes or no to it in a ballot.
Although BIDs have generally been successful and are widely seen as such throughout the country, and although the improvements to the local economy which they support are rather different from those supported by the BRS—which, in the case of London, will support the hugely important Crossrail scheme—there is a real risk that, following the introduction of BRSs, several BIDs that are due to be subjected to renewal ballots in the next two years will not survive. That, in my view, would be a very unfortunate consequence. The purpose of my new clause is to find a solution that does not pit BIDs against BRSs, or put either at risk.
The new clause addresses the problem by returning to an issue that has been debated long and hard since BIDs were first introduced: the contribution that might be made by property owners in bid areas to support activity from which they stand to benefit considerably. The BID model was originally developed in north America, where the contributions from the business side come from property owners rather than occupiers. In adapting the model to United Kingdom circumstances, in which business rates are levied on occupiers, we concluded that the BID levy should also apply to occupiers. However strong the argument was for imposing the levy on landowners—and we received forceful representations from many quarters, including property owners who felt that that was right and equitable—it would have required the establishment of a wholly new register of commercial property ownership throughout the country so that property owners could be balloted in the first place and the local authority could subsequently impose the levy, assuming that there was a positive vote. Not only would that have imposed significant cost burdens on local authorities, but it would have been a major bureaucratic exercise and, crucially, delayed the implementation of the BID scheme. At the time, there was a real appetite among the business community, town centre managers and many others to get a move on with BIDs to ensure that the benefits that many saw would come from the establishment of BIDs could be achieved.
I understand the thrust of the new clause and I have some sympathy with it. However, my concern is twofold. First, if the property owner is liable for the BID, at the next lease review is not the cost likely to be placed on the lease? The business user is therefore likely to face the cost anyway. Secondly, how does this relate to accounting? If there is a BID in one town but not in another, the cost may increase in one town but not in another. However, competition between the two may be keen.
If the hon. Gentleman bears with me, he will hear precisely how I believe that the introduction of an owners levy in parallel with the occupiers levy—not as an alternative—will help to avoid the problem of costs being passed from one to the other. In addition, the concept of a BID is entirely compatible with the concept of local democracy. Local communities should be free to decide to do things that they think will enhance their area. Obviously, they will take account of the competition issue. If the businesses in one area do not think it will be to their benefit, they will not vote for it. It is entirely a matter for local decision, and in this case the vote comes from the local business community.
I am sure the right hon. Gentleman agrees that one of the most important tenets of any tax, to make it as efficient as possible, is certainty. Presumably that was one of the issues when six years ago it was determined that BIDs would not go down the route of a levy on property owners. How much evidence is there on the certainty of property ownership? Often it will be difficult to get the money from offshore companies. In introducing the new clause, has he given any thought to how that problem can be overcome?
The hon. Gentleman raises a pertinent point. I am going to address that in detail later in my speech, so if he will bear with me, I will come back to the point, which is relevant and has exercised people. I should stress at this stage that it was not so much a problem of certainty that deterred us from introducing a property owners levy as a basis for BIDs when BIDs were introduced. The obstacle was the cost and time involved in creating a register throughout the country, which would have been necessary, when there was no certainty that BIDs would receive positive votes anywhere. There could have been a lot of abortive cost. Now we are in a different situation, as I will explain.
The Government took the decision, and I do not in any way resile from it, in 2002-03 to proceed with the BIDs on the basis of an occupier levy that could be easily and quickly implemented on the basis of the existing business rates register. At the same time we encouraged the concept of voluntary contributions from property owners to supplement the levy on occupiers, so as to spread the burden and ensure that owners had an involvement and were not excluded from the BID. That has worked reasonably well in a number of BID areas, but not everywhere. It has worked to a considerable degree in key retail locations such as London’s West End, in the area including Regent street, Oxford street and Bond street, which has a BID: the New West End Company, which has been very successful. It has an annual BID levy income of £2.5 million from property occupiers, but it receives an additional £900,000 a year in voluntary contributions from property owners, so the contributions from owners represent about 36 per cent. of the levy income.
It is probably worth making the case that there is one very large landowner in that area: the Crown Estate. Under the scheme that the right hon. Gentleman is envisaging for BIDs and the BRS, property ownership would be much more disparate, at least at freehold level, which would make it far more difficult. He clearly recognises that the New West End Company may have certain benefits and advantages over many of the other 76 BIDs.
That is absolutely right and I am not making my case solely on the basis of the New West End Company, but I am using it to illustrate how a levy has been supplemented by a voluntary contribution from the property owners. However, even there, as I will explain, there are problems.
Dame Judith Mayhew Jonas, who heads the New West End Company, was part of a group of interested parties I was pleased to have the opportunity to take on a delegation to meet the Minister just last week. During the debate that we had on the subject in Committee, he offered to have a meeting with representatives of British BIDs, individual BIDs and the British Property Federation. We had that meeting and I am grateful to him for making that opportunity available. It was a constructive discussion. Dame Judith highlighted a number of weaknesses with the voluntary contribution system. First, it is unstable and unpredictable. Whereas the BID levy is fixed for the full five-year duration of the BID before it comes up for renewal, voluntary contributions can be cut off at any time. Given the significance of the sums—£900,000 a year in the case of the New West End Company—that makes forward planning and budgeting much more difficult.
Secondly, although current owners may commit to a voluntary contribution, there is no guarantee that their commitment will be taken up by their successors if property changes hands, and BIDs are concerned that income is reducing from voluntary contributions as a result of insolvencies and change of ownership.
Is that not the point? All these schemes were dreamed up in a totally different world of rising property prices, rising rentals and strong tenant demand. In a world of crashing property rentals, many voids and falling asset values, it seems that it is no longer appropriate to try to extract the added value when value is being subtracted.
On the contrary. The right hon. Gentleman will know the importance of major infrastructure investment such as Crossrail to the long-term health of the economy of London. He must be aware that, were we to lose confidence and cancel Crossrail, which would be the implication of not proceeding with the Bill, that would have a devastating long-term impact on London's reputation and its economic viability. It is precisely because it is necessary, even in difficult times, to help to support appropriate investment that will help our economy and business, that such arrangements are necessary.
British BIDs has told us that income from voluntary contributions in the Heart of London, another central London BID, have reduced by 34 per cent. in its first three years, so there is a risk of declining income through change of ownership. Thirdly, there is growing resentment among the owners who are making voluntary contributions at what they rightly see as freeloading by other property owners in the BID area who get the benefit of the work of the BID without having to make any contribution. For all those reasons, there is a strong case for revisiting the option of introducing a property owner levy in BID areas. That is given added urgency by the introduction of BRS, which, as I have emphasised, could threaten the survival of several BIDs.
To overcome the objections, notably the cost and time necessary to compile a national property owners register, which prevented this being undertaken when BIDs were introduced, the new clause would apply only in very limited circumstances: first, in areas where BIDs have already been established; and secondly, in areas where a business rate supplement has been introduced. In effect, therefore, the new clause, if it is accepted, will apply only in the early years of business rate supplement within the London area, where there is the only BRS scheme that is likely to be ready to start from 1 April 2010. Even when BRS is picked up in other parts of the country, the provision will apply only in those areas where there is both a BID already in existence and where the BRS scheme is to be applied.
The provisions in the new clause are permissive; they do not require the imposition of a property owner levy. They allow it in circumstances where the existing BID company, board or governing body—I wholly take the point about the need for flexibility in such arrangements, which we debated under the previous group of amendments—decides that it is in favour of pursuing this, subject to exactly similar balloting arrangements as apply in the case of a property occupier levy. In other words, there must be a double-key ballot: a majority vote among the property occupiers and, for the owners levy, the majority of owners voting yes along with the majority of rateable value. Essentially, there has to be support from both large and small-scale occupiers or owners to ensure success. One cannot simply load a cost on to others. That safeguard has worked well in the case of BIDs, and the new clause provides that that should be applied equally in the case of the owner levy.
I am listening to the right hon. Gentleman most carefully and I think I understood him to say that owners will not be able to offload the additional charge on to occupiers. Is he not concerned that occupiers will pay their additional charge as occupiers and then may be required to pay again when the owner transfers the equivalent sum, or recoups the cost, in additional leasing or renting charges?
That is very much the point raised by the hon. Member for Northampton, South (Mr. Binley) and perhaps I will come to it now. I wanted to get to a relevant stage in what is necessarily a rather complex presentation of the new clause.
The proposal would allow the BID company or board to decide what it required in the way of a budget over a period and then to decide whether it wished to seek an apportionment of the cost between property owners on the one side and property occupiers on the other. It should not be required to do that. In my view, it should be equally permissive, with separate ballots to be held of owners and occupiers. Dr. Julie Grail has given evidence, to which I shall refer, from Scotland to demonstrate why flexibility is probably a good thing, but if there is a decision to apportion the cost between the two, the proposition will be put to both the owners and the occupiers that they should meet a set percentage of the agreed budget, which will be set in advance. Both parties would know at the outset what share of the total budget they would meet and what the financial implications would be.
The right hon. Gentleman is most kind and I am very grateful to him for giving way. Can I get it clear in my mind? We have a BID in operation. If we introduce a supplementary rate, is the right hon. Gentleman suggesting that the levying authority would be able to divide the element of supplementary rate between the owners and the occupiers, not exceeding the total of 2 per cent., or is he saying that we could levy even more money by including the owners of the property, while the occupiers would still have to pay both the BID levy and the supplementary rate levy?
I must apologise to the hon. Gentleman. This is complex territory and I am probably not explaining it as well as I should. The apportionment is purely in relation to the contributions to the BID. The business rate supplement—the main purpose of the Bill—would apply only to occupiers. There is no provision for the business rate supplement to apply to owners. My new clause would not change that. It applies only, as I thought I had stressed, to those areas where there are existing BIDs, in which it would be open to the BID board to work with the levying authority. I would hope that the two would work closely together; one of the lessons of BIDs is that close co-operation is crucial to their success. If the board were to propose an apportionment between the element of the BID that would be paid by the occupier and the element that would be paid by the owner, it would be free to do so.
I said that I was in favour of flexibility; let me explain why. There will be some BID areas where the renewal ballot is perhaps not due for three, four or more years. The New West End Company only just had a successful renewal ballot at the end of last year. Therefore, there will be a period of almost five years before it is time for another ballot. If the new clause were accepted, there would be an option to set an owners levy within an area where there is an existing BID—the New West End Company is one—and where the business rate supplement is coming in. It might be decided that it was sensible to introduce an owners levy as well as the existing BID. It is right that there should be the flexibility to do that rather than saying that the board has to wait until the end of the current BID period, when there would then be the relevant apportionment and a proposal. It is purely a practical measure to allow a degree of flexibility.
The other point was whether the occupiers would end up paying more because the owners tried to offload the extra costs that they were bearing through a rent review. In the experience of most BID areas, probably only a very small element of the total costs would be part of a rent review, particularly because—as I hope I have now explained—the costs of the BID are being apportioned between owners and occupiers. It would be difficult for the owners to make a case to seek to offload their contribution on to the occupiers.
I would not be tabling the new clause if it had not received substantial support from property owners and occupiers, who believe that it will strengthen the BID’s offer and make it more likely that BIDs will succeed. I am not proposing to impose something. I am making a proposal that commands the remarkable support of a large proportion of those involved, either as owners or as occupiers of retail premises in some of the country’s most significant shopping areas.
I tabled the new clause to provide an offset for property occupiers who currently have a liability to pay a BID levy and will also be affected by business rate supplement. The right hon. Gentleman will have heard me say clearly that I would leave it to the BID board to determine what the basis of the levy on owners should be and the amount it would seek to collect. I would expect it to be used to offset the contribution of occupiers; in other words, the extra contribution from owners would offset the liability of the occupiers, which would reduce their contribution and make it less burdensome to meet the additional demand of the business rate supplement. I cannot give an absolute guarantee on that because it would depend on individual circumstances. I hope that the right hon. Gentleman will recognise that that is necessary if we are to leave the control of these operations at a local level, with the board covering the businesses and the levying authority.
On this aspect of the new clause, am I right in understanding that where there is an existing BID, there would be the possibility of this new provision being brought into effect, but that that would also automatically be discussed in any area where a BID proposal is currently still being worked on? That would provide a reassurance to businesses prior to a ballot in any new BID areas, as well as to businesses in an existing BID.
I have already made it clear that this provision will apply only in areas where there is an existing BID, and where business rate supplement is proposed. Those are the two areas that are covered. A new BID would not be covered, and the new clause may need to be improved to address that requirement, because there would be a logic in doing so. However, it also remains the case that the provision would not apply even in areas where there are BIDs unless there is a business rate supplement.
I wonder whether the right hon. Gentleman can provide clarification on the following point. In my neighbouring constituency, with which I have a connection through the main town centre of Ilford, a BID is being voted on at present. Would that also be included, or would it be counted as a new BID?
Even assuming that this new clause is accepted, the Bill still has to pass through Parliament. I do not know the precise timetable for the Ilford BID ballot, but if it is taking place soon, there will be an existing BID within Ilford when the Bill is passed. Therefore, it will be open to the BID, if it is successful, to decide to use this power, if it is available. That would be entirely permissive, however; the BID would not be required to use it.
Other benefits arise from focusing on areas where there are existing BIDs, which is why the new clause is framed in this way. On the whole, there is a good understanding of property ownership in such areas, because the BID itself has, as a matter of course, had to bring together the various business interests—the occupiers, because they are contributing, and the owners, because, in many cases, a voluntary contribution is being sought from the BID and it is necessary to know and understand who those owners are. I am assured by British BIDs as well as the New West End Company that they do not think that in these circumstances it will be difficult, expensive or time consuming to compile a register of ownership in such areas. That was the primary obstacle to the introduction of an owners levy at the outset.
The second safeguard, which is absolutely crucial, is a minimum threshold contribution. If this were to apply across the board to all businesses, I could foresee certain difficulties, such as having to deal with very small pockets of land that might be held in ownership that it would be difficult to identify. However, it is a characteristic of most BIDs that contributions come from significant businesses within an area, and most small businesses in most BID areas are exempt. Therefore, the range of business ownerships that have to be identified will be less, and the risk of serious problems arising will also be less. I therefore believe that this is a practical measure that addresses the problem, and that does so without creating the kind of difficulties that deterred us from adopting an owner register and owner levy when BIDs were first introduced.
I thank the right hon. Gentleman for taking great steps to ensure we understand what is a rather complicated area. Let us consider a situation in which a business rate supplement is in being and a new BID is then mooted; does the right hon. Gentleman fear that the supplementary rate could make it much more difficult for a new BID to be introduced? Let me say to him at this point that I am a fan of BIDs, as I have said both on previous occasions and in a commission I had the privilege to head-up for my party. Does he fear the concept of BIDs becoming less attractive because of this double whammy of costs, albeit split between property owners and property occupiers?
By definition, yes, because, as I have said, I think that there is the possibility of existing BIDs failing to get support in renewal ballots because of the imposition of BRS. It is precisely because of that that I believe it is right to address the long-standing problem of property owners not having had any liability to contribute towards BIDs. I believe that this proposal addresses that problem in a practical way, and that it will make it possible for people to see the case for continuing to support BIDs, albeit the occupiers will be contributing less because the owners will be contributing more as well as meeting the business rate supplement. I believe that, for all these reasons, there are very strong arguments in favour of the approach I advocate.
I have also been struck by the amount of support I have had from a very wide range of organisations. There is strong business backing for the introduction of a property owners levy. The British Property Federation has been closely involved in the preparation of the new clause, and it made clear the degree of both its support and business support for this approach at the meeting that my right hon. Friend the Minister for Local Government arranged a week ago. It is not every day that business welcomes the introduction of a financial levy, and the fact that business and owners’ representatives were saying they welcomed this and thought it was the right way forward for BIDs is doubly telling.
We have also had a letter of strong support from the Mayor of London. It was sent to my right hon. Friend, and I would like to quote from it:
“Further to the Committee Stage debate on property owner involvement in Business Improvement Districts (BIDs) I am writing to express my full support for this measure.
Specifically I support proposals by the British Property Federation ‘to amend the Local Government Act 2003 to allow a BID, where it wanted to, to make the BID levy mandatory for both owners and occupiers, and giving property-owners full rights of BID membership. Similar to occupiers, property owners would only be faced with a levy if a majority by number and rateable value had voted in favour of it.’
The British Property Federation, British BIDs, London BIDs, London First and other organisations have long argued that BIDs should have the power to decide whether or not to include property owners in BIDs. Currently, they are exempt from paying any BID levy. Many property owners have contributed voluntarily to BIDs. Other property owners benefit from the activities of BIDs but do not contribute to them. The Bill represents an opportunity to rectify this imbalance. Also this measure would be a helpful way of ameliorating the impact of the BRS on BIDs by spreading the levy across a wider pool of payers.”
That is what the Mayor of London wrote, and I wholeheartedly agree with his views and hope his letter will lead a number of Members of the same party as him to believe that this is a splendid measure.
While reading the letter, I was very impressed by the Mayor’s grasp of the complexities of the issue, because—as hon. Members will understand from my presentation, which has gone on for too long already—this is complex territory. On reflection, I came to the conclusion that the Mayor’s letter probably owed quite a lot to the input of his chief of staff, the former leader of Westminster city council, who is not only an expert on local government, but was the leader of the council which has, I think, the largest number of BIDs of any authority in the country. Therefore, he is fairly expert in this matter.
I have been following the right hon. Gentleman’s remarks to the best of my ability. When business owners are consulted about a new BID proposal, do they have to give a unanimously positive response, or does there need to be a positive response from a certain proportion of those approached? What does “majority” mean, if there is to be a majority vote? If the proportions are 49 per cent. to 51 per cent. will the scheme go ahead?
The procedure is the same as the one that applies to the property occupiers ballot. There has to be a numerical majority among the occupiers in the areas who will be liable to the levy and there has to be a majority according to the rateable value, too. It is a double key ballot that requires a majority on both counts before the levy can be imposed. That has worked extremely well with BIDs and it is strongly recommended by the business interests that are supporting the new clause as a similar safeguard for property owners to that which exists for property occupiers.
I hope that the cross-party endorsement of new clause 2, which is clear from the Mayor of London’s support for it, will be reaffirmed this afternoon. It is a practical measure that addresses the short-term challenge of the potential adverse impact of the BRS on BIDs and the longer-term challenge of ensuring an equitable and sustainable funding base for BIDs. I have been greatly heartened by the degree of support that new clause 2 has attracted from all quarters, and I hope that my right hon. Friend the Minister, if he is unable to accept it here and now, will be able to give us assurances that the Government will be prepared to amend the Bill in the other place to give effect to the intentions of the clause.
I accept entirely that details are needed about how the ballot and the dual-key safeguards will apply in practice. Complex issues will need to be clarified before the property owner levy can be introduced. We touched on several of those issues in the meeting that my right hon. Friend the Minister set up last week with the interested parties from BIDs and the British Property Federation. Dr. Julie Grail of British BIDs has prepared a very helpful paper on the subject. I accept her judgment that none of the details is a show-stopper and I feel confident that they can be dealt with in regulations to avoid any delay in incorporating the principle of a permissive property owner levy in the Bill.
We also have the experience of Scotland, where a property owner levy has been implemented as an option as part of the BIDs scheme. As British BIDs has pointed out, only two of the Scottish BIDs have chosen to apportion the levy between owners and occupiers, which reinforces the case for allowing the greatest flexibility in how the scheme is implemented area by area.
In conclusion, I commend new clause 2 to the House as a pragmatic response to a real challenge and as a measure that has secured widespread support from those concerned with improving the effective operation of BIDs and the longer-term objective of enhancing the economic competitiveness of our towns and cities.
I am grateful to the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) both for having reintroduced his clause in a slightly different form from the one that we saw in Committee and for having returned to the issue, which is very serious and warrants significant consideration. Like hon. Members from all parties, I am grateful for the care that he has taken to outline the issue. It is necessarily complex and somewhat technical and, ironically, it is a good demonstration of how regrettable it is that we are constrained by the programme motion that was passed earlier. This one element of the Bill will take up a considerable part of Report, but that is necessary so we can get our heads around the detail.
Let us step back to the objective behind the new clause, on which I think I am in agreement with the right hon. Gentleman. This issue was flagged up to the Government at an early stage and they need to address it: how will we deal with the potential interaction of BIDs and the BRS in a way that does not place an undue burden on businesses? Some of us would perhaps not start from this point, but if we have that interaction we need at the very least to try to ameliorate the situation to the greatest possible degree. That is the issue that I want to see addressed.
If the right hon. Gentleman’s formulation can be taken forward following work and tweaking, I hope that the Government will consider it sympathetically. I take on board the comments made by the Mayor of London. There is a lot more detail that we probably need to explore, and that might need to be done elsewhere, but I hope that the Government will respond seriously to the proposal. The assurance that my right hon. and hon. Friends and I want is that there should ultimately be no perverse consequence of such a provision, either through the total revenue take being increased through the back door or through some failure to pass on in practice, regardless of any good intentions, the offset of the owner levy to ameliorate and reduce the bid that comes down to the occupiers. If those concerns can be met, the proposal warrants consideration.
Is that not the danger? In this climate, when there will be very little private finance for such schemes, will it not be very tempting for the BID organisations to say, “We can find another bunch of people and companies that have to pay too” and to simply ask for more money from the levy because they will get less money from elsewhere?
That is precisely the risk. It concerns me with regard not only to the new clause but to the Bill in general. Local authorities as well the promoting bodies of BIDs will be tempted always to go down that route. It might be possible, with good will and work from all parties, for a solution to be found. I get the impression that the right hon. Member for Greenwich and Woolwich will not press his proposal to a vote today, but I hope that what I have said is of some help in concentrating minds on finding a way forward.
Does my hon. Friend share my concern that where BID schemes are being voted on an element of fear might be put into businesses—even though it might not be accurate—and that that might force them to vote the opposite way to how we might want them to vote? Like my hon. Friend, I am a great supporter of BIDs.
My hon. Friend highlights one of the conundrums that the Government have created in their handling of this matter. I am prepared to learn from experience and see the advantage of BIDs. Given that we have a ballot for BIDs but do not have a guaranteed ballot for the BRS, the accumulation of the BRS plus BIDs plus other costs will ratchet up a fear factor and will also cause businesses to wonder where they can take some steps to cut costs, and because they cannot vote against the BRS they will vote against the BID. That will be a shame, because the BID will often be a desirable and worthwhile project. I think that the right hon. Member for Greenwich and Woolwich takes that point on board and we are all looking for a means to prevent that from happening. Perhaps it is work in progress at the moment, but that is why I have made sympathetic noises without committing to the detail. Avoiding the perverse incentive mentioned by my right hon. Friend the Member for Wokingham (Mr. Redwood) and others will be crucial in seeing that the provision delivers the results that are wanted in practice.
I have shown where I am coming from and I shall be interested to see how the Minister responds, because the issue needs to be dealt with. We had considered other alternatives at other points in the Bill, such as automatic offsets. I am not seeking to return to those alternatives at this stage, but the conundrum of the interaction has to be resolved and the Bill as drafted does not achieve that.
I echo the comments made by the hon. Member for Bromley and Chislehurst (Robert Neill) in saying that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), in tabling his new clause, has sought within the constraints of the Bill to revisit the BID system that he played a great role in introducing. As other hon. Members have said, it has proved to be a beneficial process and I am sure that it will continue to be so.
As was said at the beginning of the debate, there has been a conflict in the minds of business people who have been asked to consider whether they should support an ongoing BID in their area or whether they should be part of putting together a new BID when there is the prospect—as there is in London—of a supplementary business rate being levied, too. It has been clear to me from discussions that I have had with representative business organisations that the sort of approach that the right hon. Gentleman wants to take and that he is encouraging the Government to adopt represents a way forward. The British Property Federation, the representative organisation of the people whom right hon. and hon. Members are seeking to protect—that is, property owners—has been keen to point out that it supports this way forward. That reassures me, as I am sure it does other Members.
Inevitably, because we are not talking about legislation to revisit BIDs and widen their scope, the new clause is limited in scope. Therefore, I return to what I said in my earlier intervention on the right hon. Member for Greenwich and Woolwich: the proposal does not allow us to address the formation of new bids. As a result, there is a disincentive for a BID to be successful in the ballot and that would be unfortunate for the areas involved if they are also facing the prospect of a BRS.
When the Minister responds, I hope that he will explore these matters in more detail. Although my party supports the concept of a supplementary business rate where a ballot has been held to determine local approval—an issue to which I hope to return in respect of a later set of amendments—we would regret anything that called into question the benefits of a positive BID process, which will help a local area’s residents generally, as well as its visitors, business community and property owners.
For those reasons, my party supports what the right hon. Member for Greenwich and Woolwich is trying to do. We very much appreciate the lengths to which he has gone to explore the matter fully, and to consult widely before our debate this afternoon. I congratulate him on his contribution and hope that, regardless of whether this new clause is accepted, we will hear about a way forward that will satisfy the concerns that have been raised.
I, too, praise the right hon. Member for Greenwich and Woolwich for the way in which he spoke to his proposal. He has drawn the House’s attention to a very important matter, and if some Ministers spoke to their amendments in similar detail and with similar concern for the House, we would have much better informed debates generally, and perhaps better legislation. [Interruption.] I am not referring to the Minister dealing with the debate today, but if he feels that my remark applies to him, I hope that he will demonstrate shortly that it need not do so. He certainly made no sensible contribution to the earlier debate on the allocate of time, but we live in hope that he might make a sensible response to the points that we are making about the Bill, as I believe he did in Committee.
I think that the right hon. Member for Greenwich and Woolwich is trying to paper over some cracks with this proposal. As a Minister, he was the architect and sponsor of the BIDs scheme, which has met with quite a lot of approval in the places that it has affected. It has been used in areas with councils of different political persuasions, often to good effect. However, he sees the danger that the supplementary levy will hit exactly the same people who are financing the BIDs scheme, at a time when the world has changed dramatically.
I am afraid that the Minister has to deal with the very important point that all these schemes—the BIDs idea, the supplementary levy and some of the other ideas that the Government have floated and not proceeded with—rested on the heroic assumptions that rents and property values would go up and that most properties would find tenants very easily. The idea was to try to capture, for the public sector and the common weal, some of the enhanced value that the private sector seems to create so easily. The aim, through the variation of levies and betterment charges and so on, was that some of the gain could be shared, as well as to provide public infrastructure and support to the glamorous private sector developments that were going ahead.
This is not the place to debate all that again. Indeed, I do not think that we can have that sort of debate any more anyway, because that is no longer what the real world is like. In today’s real world, there will be fewer tenants and more void properties. Rentals are falling and could fall a lot further, while commercial property values have fallen some 30 per cent. from their peak and many experts feel that they will fall further. That is not a good background for doubling charges, and the proposed scheme looks like one that might have been designed by a firm called Clobber and Clobber. That is, an area is clobbered first of all with a BID, and then again with the supplementary levy.
My right hon. Friend is making his case very powerfully, and he is right to say that there was a sense that things would go from good to even better over the years ahead. However, does he agree that there is at least some mileage in the notion of value capture? Although I think that it is right for Opposition Members to stand up for our much-beleaguered business sector just now, does he accept that there is a risk that we are failing to put in place something that could be of use in the upturn? Provided that there are the safeguards that we have discussed, especially in relation to balloting, might not an idea such as the business rate supplement be the right way to find elements of the funding that will be needed as the economy moves out of recession, not least because of the value capture to which he and I have referred? I must add that I probably share his fears that the recession and downturn are likely to be part of the economic tableau before us for quite some time to come.
We are not at present debating the extra levy that is the subject of the Bill. Rather, we are debating a proposal from the right hon. Member for Greenwich and Woolwich that is designed to try to abate the consequences of that levy. He has rightly seen that introducing the levy in the same area as a BID would amount to a double whammy, or something from Clobber and Clobber, as I have just described it. He has rightly asked himself, “How do I ameliorate that?” He has produced a positive suggestion, but within a framework in which the Government wish to take the risk of upping the tax burden in these difficult areas at a time when the business community is flat on its back.
The right hon. Member for Greenwich and Woolwich is asking whether it is possible to take some of the burden off tenants and put it on to the property owners. His suggestion has the agreement of most property owners, although quite a lot of important ones do not necessarily support it. In his ideal world, the tenants would have an abated total cost. They would still have a much bigger total cost, because they would have to pay the supplement imposed by the Bill as well as the BID, but there would be an abatement.
Not only did I think that the right hon. Gentleman spoke well to his new clause, but I gave him a fair hearing because he was trying to move in the right direction. Before I could possibly support the proposal, however, I would need to be satisfied that there would not be leakage in the way that my hon. Friend the Member for Bromley and Chislehurst suggested. My understanding is that a lot of local authorities, as soon as they see another group of people liable to pay a levy, will not decide that that allows them to cut the levy paid by someone else. Instead, they will think, “Whoopee! We can have a bigger levy! We have broadened the tax base and so we can have a bigger scheme.”
Alternatively, authorities re-entering BID projects that are already up and running might understandably say, “We started this BID in the extremely favourable property circumstances of 2006 and 2007, when we though that the private sector would contribute a particular amount. However, we now discover that the private sector banks have been largely nationalised and cannot make the money available, and that the private sector players no longer have the profits to do so. As a result, we have to make good the shortfall—the amount that the private sector can no longer provide—out of public moneys. What a good idea the right hon. Member for Greenwich and Woolwich has given us. He has provided us with the answer, and we have another bunch of people to put a levy on.”
The right hon. Gentleman is setting out what is clearly a cautionary principle, and it is right and proper that we acknowledge it. However, at the risk of starting another debate about his view of how local government operates—as opposed to the one expressed by other hon. Members, especially the hon. Member for Halton (Derek Twigg)—I venture to suggest that the BID process is slightly different. The organisations operating the BID, which would therefore decide how an offset would work, include bodies apart from just the local authority. As the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) said, the BID would be operated by a wider group. That is certainly some reassurance to me, and I hope that the right hon. Member for Wokingham (Mr. Redwood) agrees.
I accept that, and there will be some examples of good BID organisations that would not go down the route that I am setting out. However, the hon. Gentleman will accept that the local authority often starts with an important role in a BID organisation, or comes to play such a role, because it has the necessary public funding and staff. Local authorities in that situation are in some ways the continuity people. When the private sector is in a state of financial haemorrhage and collapse, it loses time, confidence, money and power in the BID organisations. Proportionally, the power and confidence of the public sector rises, and that is what is happening very visibly at the moment.
When the BIDs were introduced, some people in the business community expressed the fear that local authorities would simply substitute business contributions for their expenditure. I am pleased to say that actual practice on the ground has shown the business community to be pretty canny, on the whole. Its members vote in favour of BIDs only when they have been reassured by the local authority that it will continue and in some cases enhance its contributions to those areas. I would expect there to be a similar positive and constructive dialogue between the two parties in the context of the owners levy that I am proposing.
I am sure that the right hon. Gentleman is right; he has more experience of BIDs than I do. There are many examples of such good practice, but I think that he would concede that what I am saying is possible. I am not saying that it would be a typical experience; I am sure that there will still be many good BIDs and that the business communities will stay fully engaged in many places, but he should not underestimate how much stuffing is being knocked out of the business community by the day-to-day pressures on cash flow, the collapse of turnover and the difficulty in getting access to banking facilities. That is sometimes going to make even the best of intentions among the business community difficult to carry through. Businesses simply will not have the time to do these things, let alone the cash, or the intellectual self-confidence, given the recent very destructive few months, which have hit them badly.
Like my hon. Friend the Member for Bromley and Chislehurst, who is leading for us on this issue, I am not ill-disposed to what the right hon. Gentleman is trying to do. If I felt that the words could mirror exactly what he wished to achieve, and if there were a cap on the ability to take extra money out of the community, I would be much more in favour of the proposal. I would like to hear the Minister’s response, to see whether it might be possible to find a way forward. I hope that he will equally understand my concern—alongside those of the right hon. Gentleman—that at this juncture, above all, the main aim of the House should be not to take more money off the business community.
I want to elaborate a little on what I said in an earlier intervention, and I hope that the Minister will be able to respond to this point. Let us take Ilford as a prime example in relation to these measures. A BID scheme has been proposed, and Crossrail will also be coming to, and bringing great benefit to, Ilford. I fully support both projects, but some members of the community might not understand these proposals. They were eloquently explained by the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), but they would have to be explained to people to ensure that no one voted against the BID scheme purely because they were worried about the business rate supplement for Crossrail, when both projects are so badly needed, especially at times such as these, to encourage people into the area, bringing more money with them and creating more jobs. Both schemes are therefore vital, and I hope that the Minister will be able to put my fears to rest.
I am grateful to my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) for tabling this new clause. I pay tribute to him for the way in which he has prepared his case and pursued it, and not least for the way in which he has marshalled an impressively wide range of support for his proposal. It was a reminder to us all of why he is held in such high regard as one of my predecessors.
The House has already acknowledged, today and in Committee, my right hon. Friend’s essential role in introducing the legislation that enabled business improvement districts to be established. Despite the reservations of some Opposition Members at that time, we have now had several years’ experience of BIDs. There are more than 70 up and running in different parts of the country and I am happy to say that there is now all-party support for them, both here and in local government. The last thing we want to do is to undermine BIDs through the introduction of the BRS. The Bill enables authorities introducing a BRS to offset a BID liability against the BRS. This approach was based on our overall approach to the BRS. BRS is a new discretionary power for authorities to use, and it is consistent to allow the authorities to decide whether to use an automatic offset for BID payments, according to the needs of their area.
We have had a debate about automatic offsets in the earlier stages of the Bill, and I hope that we have now settled that matter. Even the chief executive of British BIDs, Dr. Julie Grail, made it clear that she was not necessarily advocating them. In our debates about offsetting, and in our general debates about the value of BIDs, it has become clear that offsetting might not be the only solution. It is also clear that there is some merit in involving property owners in business improvement districts on more than a voluntary basis. That case has been made again, in great detail, by my right hon. Friend this afternoon, and it is backed not only by BIDs but by leading organisations representing property owners, including the British Property Federation. It is also supported by the operation of exactly this arrangement in two areas of Scotland, where property owners are involved in BIDs in this way.
If we are to change the present arrangements—I want to make it clear that I am willing to do so—it is essential that we get these measures right. I am grateful for the encouragement by the hon. Member for Bromley and Chislehurst (Robert Neill) to look sympathetically at this approach, and I am grateful to the hon. Member for North Cornwall (Dan Rogerson) for his support for the approach that my right hon. Friend is taking and for what he is trying to achieve.
We have more work to do in ensuring that that measure would be optional for business improvement districts. We also need to do more work on determining how the arrangements for property owners would work alongside those for occupiers, and on putting in place a satisfactory mechanism for collecting BID levies from the owners of occupied properties. I would like to get this detailed work done, in close consultation with my right hon. Friend and with the organisations that are supporting him. If we can do this, as I aim to do, I will then look forward to having the support of both the Opposition parties for this approach, and for any amendments that we might table in another place.
I hope that, on that basis, my right hon. Friend will feel that I have accepted his case and captured the spirit of it. I am determined to do the necessary work on the detail, and I hope that he will feel able to withdraw his new clause this afternoon.
I am extremely grateful to my right hon. Friend for that most encouraging response. I fully understand the need for further work to be done, and I hope that, as a result of that work, some of the searches for reassurance that we have heard from Opposition Members will be satisfied. I genuinely believe that this proposal holds out the prospect of not only safeguarding the survival of BIDs when BRS comes in, but of providing a more sustainable basis for the future of BIDs in the long term. Across the whole House, we recognise that the BIDs initiative has been successful in helping to enhance our towns and cities.
I am extremely grateful to my right hon. Friend the Minister, and I look forward to working with him. I shall make myself available to do so whenever necessary. I know that the many bodies outside the House that have supported the approach set out in new clause 2 will also want to play their role in helping him to define a practical way of moving forward. I very much hope that he will be able to table an amendment in another place; I would see that as an important step forward. Given the assurance that I have received from him, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.