Railways: East Coast Main Line

Debate between Baroness Kramer and Lord Shutt of Greetland

Thursday 27th November 2014 Lords Chamber

[Lord Shutt of Greetland (LD)]

My Lords, I thank the noble Baroness for repeating the Statement. I have to say that it is no surprise—I would have thought to anyone—that the winner of the franchise is one of the three applicants. That seems quite a sensible way for things to go. If there are three applicants, the winner will be one of them.

I have a concern about monopoly. The winner of the franchise is the firm that operates on the west coast. There can be opportunity with monopoly. If we are to have a monopoly, can we have some benefits from it? I am delighted that the tentacles of the east coast will go to Dewsbury and Huddersfield, and that there will be more trains to Bradford and more in the West Riding. Those of us in the Pennines are in a position from which we can look east and west. Will there be opportunity under this franchise, particularly on fares and opportunities to choose routes? Bearing in mind that the operator is to be the same, will there also be fair play on fares for people in the middle of the country?

[Baroness Kramer]

My Lords, this is certainly not a monopoly situation. Quite a number of companies bid on these franchises across the UK. They all start from a level playing field and we consider them completely impartially. With regard to fares, I note that the new franchise operator proposes a 10% reduction of standard anytime fares on longer distances in May 2015.

Railways: High Speed 3

Debate between Baroness Kramer and Lord Shutt of Greetland

Monday 21st July 2014 Lords Chamber

[Baroness Kramer]

I can certainly confirm the comments from the noble Lord, Lord Faulkner, that high speed rail is a very effective form of transport. It is one of the reasons we have chosen it. However, we have never thought of High Speed 2 as being the limit of our ambition. We have studies under way to look at taking the benefits of high speed rail to Scotland, including what we now call HS Scotland, and we are obviously looking at HS3 and at many more programmes to provide connectivity beyond that.

[Lord Shutt of Greetland (LD)]

My Lords, the word “connectivity” is very appealing. It will be even more appealing if we get more connections that work. Does the noble Baroness agree that if we are to have an east-west HS3 it is even more important that HS2’s arrival in Leeds is not at a hammerhead terminal but at a terminal that really connects with everywhere else in Yorkshire?

[Baroness Kramer]

I fully understand the interest of the noble Lord, Lord Shutt, in connectivity. We consider it to be vital. All the options for the route for phase 2 of HS2 are now being studied, including exactly how stations will work. Connectivity has been built into that discussion with intensive engagement with local authorities and various other stakeholders in the area.

Railways: High Speed 2

Debate between Baroness Kramer and Lord Shutt of Greetland

Monday 24th March 2014 Lords Chamber

[Baroness Kramer]

I am delighted to say that the department is somewhat ahead of the game. I have already commissioned a report and consultants have been retained; we expect a preliminary response on how to take the benefits of high-speed rail to Scotland. We will get our interim response in July, and that will be a very important document in being able to identify the future. Of course, HS2—even the “Y” that is currently planned—will help to bring journey times to Glasgow and Edinburgh down to less than three hours.

[Lord Shutt of Greetland (LD)]

My Lords, I welcome this report; I am in favour of HS2. However, I am rather more in favour of the “plus”. In this report, one word which bellows out is “connectivity”. In the foreword it says that there is,

“poor connectivity in the North”.

It wants us to be,

“more ambitious … about producing a coherent transport plan for the North”.

On page 9, the report states:

“In contrast, connectivity in the North is poor”.

I agree.

I do not want to detract from what has been said about getting to Crewe earlier, and the connectivity in the north-west. However, I want to speak about the other leg, from Birmingham up into Yorkshire, and the possibilities beyond that. The original proposals in January 2013 propose a terminal station in Leeds—what I describe as a “hammerhead terminus”—where the only connectivity is a long walk. That might suit Leeds but it is useless for connectivity for anywhere else, such as Huddersfield, Halifax, Bradford, Keighley, Skipton, Ilkley, going back round to Wakefield, or further connectivity to York, the north-east and Scotland.

Does the Minister agree that connectivity will be achieved if, in Leeds, we get a new station parallel to the Leeds City station of today, not a station that is a hammerhead terminus, which would mean that people would have to leg it such a long way, and the detraction that that would bring?

Localism Bill

Debate between Baroness Kramer and Lord Shutt of Greetland

Tuesday 28th June 2011 Lords Chamber

[Lord Shutt of Greetland]

My Lords, I hope I can be helpful on this but, while thanking all noble Lords who have spoken, I revert to the point that my noble friend Lady Kramer made in her initial remarks about this being a probing amendment.

The Government have committed to introduce tax increment financing but we should not pre-empt the outcome of the local government resource review that will conclude in July. The review is looking at both local retention of rates and tax increment financing as we need to make sure that tax increment financing proposals are consistent with our wider proposals on business rates retention. The amendment appears to increase the rates liability of businesses, whereas tax increment financing, as generally understood, does not increase the business rates that would otherwise be levied but uses those rates to repay the borrowing that helped to deliver a piece of infrastructure. The business rate supplement and proposals for tax increment financing are two separate models that are structured differently. Rather than integrate them, there is no reason why they could not be used alongside each other to facilitate the funding of infrastructure to support economic growth.

The amendment seems to create two types of business rate supplement. The first type is a traditional business rate supplement of up to a 2p levy on business rates payers within an authority area that occupy property rated above £50,000 for an economic development project. The second type is a business rate supplement for where tax increment financing has delivered some infrastructure project of up to a 2p levy within an authority area but is restricted to the increases in rateable value of properties rated above £50,000 as a result of some infrastructure that has been implemented by tax increment financing.

The amendment appears to be defective in a number of ways. There is no definition of tax increment financing. The amendment would also create some practical concerns. The tuppence maximum will apply to the area, so in London the proposal could not apply as the tuppence limit reached by the Crossrail business rate supplement has been dealt with. Applying the increase to the rateable value to adjust the impact of the tax increment financing project would require a second ratings list to be set up for all properties with rateable values both prior to and after the tax increment financing project delivery. A consequent increase in administrative costs is highly subject to challenges over the extent of any rateable value increase as a result of the tax increment financing project or other factors—refurbishment of a property, for example.

The tax increment financing scheme does not increase the business rates that would otherwise be levied but uses those rates generated by the infrastructure to repay borrowing. Under existing arrangements, 100 per cent of business rate revenues collected by local authorities are pooled for redistribution to local authorities in England. By considering options to enable councils to retain their locally raised business rates, the current local government resource review provides an opportunity for significant changes in the way in which councils are funded. Such an approach could help to set free many local councils from dependency on central government funding and provide incentives for them to promote economic growth. The review is considering how we could manage the distributional impacts of any new arrangements. More deprived councils will continue to receive support.

Last September, the Deputy Prime Minister announced that the Government were committed to take legislation to allow for tax increment financing. Then, the local growth White Paper, issued in November, set out the Government’s intention to carry out a resource review. The terms of reference for the resource review were published in a Written Ministerial Statement by the Secretary of State on 17 March 2011. The resource review will look at local retention and tax increment financing in the round and will conclude in July. The aim is then to move as quickly as possible towards implementation, taking into account the need for primary legislation.

I appreciate the spirit of Amendment 118ZA, which aims to ensure that any business rate supplement where the levy raises less than one-third of the overall project cannot be imposed between Royal Assent and the commencement order without a ballot. However, we do not think that bringing forward commencement of that part is necessary as we are not aware of any proposals for any new business rate supplement planned to be imposed—that would fund less than one-third of the overall project—as we have not seen an initial prospectus or consultation. The business rate supplement for Crossrail has already been imposed and would not be affected by the amendment. I should like to offer reassurance that the Government will bring into force the proposed change that will ensure a ballot for all future business rate supplements regardless of whether it funds more or less than one-third of overall costs.

Clause 38 will come into force following a commencement order to be made by the Secretary of State. We will look to make that commencement order for a date no earlier than two months after Royal Assent in line with convention that legislation is brought into force earlier only where necessary and in exceptional circumstances. I trust that that is a fair response to the noble Baroness and that she will feel able to withdraw her amendment.

[Baroness Kramer]

I thank the Minister. I am not sure that we are a whole lot clearer on the commencement date but perhaps the Government at the earliest possible opportunity will make that date clear to allow local authorities to handle their affairs in the most effective manner. I accept that I am not likely to get a clearer answer than that.

There are no absolute rules on tax increment financing. There is no absolute requirement that TIF applies only to the standard business rate. There is no rationale that says that it should not apply to a special business rate, which is what we might call the business rate supplement. If this begins to be a widely used measure, many communities and many business communities might rather see a special rate for a project that they consider to be particularly beneficial rather than forgo the project. I would be sad if the Government were ruling out flexibility around TIF from the beginning and going only with the very plain vanilla simplest form of TIF as they look at the various options in front of them.

The noble Lord, Lord Beecham, raised the point that very often the person or the business paying the business rate is not necessarily the one that benefits from the increase in value. I take his point. However, as the Minister pointed out, with the standard vanilla TIF, this would not be an issue because one is looking just at the standard business rate and it would be only where there was a special levy in order to create the project. It will depend on whether that increase in value results in increased benefits to the occupier. For example, a shop that suddenly finds there is much more traffic coming through the door may be very pleased to support the higher rate payment because, in effect, their business has benefited. I would say that that is not an absolute.

I would hope that local authorities are given the maximum amount of flexibility to be able to design projects around the needs of their community—and the benefits that will come to their community—to negotiate much of this with local business. I hope very much that as the Government deal with this issue, they will not try to be prescriptive but will allow that kind of financial flexibility which local authorities, I suspect, are best positioned to understand in detail.

I very much confirm that this was a probing amendment. I was rather flattered by the Minister’s attempt to deal with some of it on a line-by-line basis. It was not written with that in mind. I very gladly beg leave to withdraw the amendment.