Cambridgeshire and Peterborough Combined Authority (Business Rate Supplements Functions) Order 2018

Lord Kennedy of Southwark Excerpts

Monday 9th July 2018 Lords Chamber

[Lord Shipley (LD)]

My Lords, I again remind the House that I am a vice-president of the Local Government Association. I welcome these orders. I am a firm believer in voluntary taxation, and the system used in this case with the business rate supplement is similar to that used for business improvement districts. In that respect, it is a procedure that can command public support: if the business rate payers involved do not want to pay the money they have the right to reject it in a ballot. There is therefore a democratic process, which is very helpful.

On average, around 90% of business rate payers under any of these four orders will not be paying any additional money. Around 10% in Cambridge and 14% in Peterborough will have to pay a bit more. The Minister kindly read out the total sums of money that could be raised with a 2p in the pound levy. Clearly, rateable values vary. Could the Minister, either now or in writing, tell us the highest amount that might have to be paid by a business rate payer in each of these four areas, given that the threshold is to be a £50,000 valuation but some clearly have a higher valuation than that? Of the £35 million in the West Midlands, say, what is the highest single amount that might have to be paid by a business rate payer?

Overall, I do not think that these orders relate to the overall structure of combined authorities. There have been debates about mayors’ powers and the fact that the scrutiny systems need to be made stronger in combined authorities. Of course, in London an assembly lies behind the mayoral structure, which does not exist for the combined authorities elsewhere in England. All that having been said, the specific process relating to a business rate supplement stands on its own. It seems appropriate and should be supported.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I also draw the attention of the House to the fact that I am a vice-president of the Local Government Association. I am generally happy to support the orders before the House, but there is a point to be made about business rates. I accept that this is a supplement and in that sense it could be subject to a referendum, a plan and stuff, but there is the point about business rates in general and what business has to pay in an area. We have many questions here about the cost to business of further taxation. In the West Midlands, for example, if a further £35 million is raised, what does that do to the economy? Is that the best use of that money?

That then comes back to the whole issue of combined authorities. Where they are established, the funding provided by government is relatively small. I am sure the noble Lord will not agree, but I have made the point before to his noble friend Lord Bourne that we have this rather confusing patchwork of local government emerging in England. We need a clear structure that we will get to. I am all in favour of devolution, but I would like to understand what the plan is. Certain places will potentially have four, five or maybe six authorities, whereas in another place there will be just one. That does not seem to be very good government at all. I am all in favour of devolution, but I am not convinced that the combined authority model is the best way forward.

I am happy to support the orders, as I said. I welcome the fact that the supplementary rates will have to be subject to a ballot. That is good news, but generally there is the whole issue of business rates and the effect on businesses, particularly on the high street.

[Lord Young of Cookham]

My Lords, I am grateful to both noble Lords for their support for the measures before the House. I say to the noble Lord, Lord Shipley, that the average increase, if we go ahead with 2p in the pound, is 4% on the business rate bill, but I would like to write to the noble Lord—a generous suggestion that he made—setting out what the highest amount might be in the highest rateable-value property in a particular area.

I am grateful to the noble Lord, Lord Kennedy, for his broad support. I know that he finds these differing structures untidy and has complained about them before, but the Government are responding to what local people want, which varies in different parts of the country so different patterns emerge. I am not sure that I can take the debate any further today. Doubtless, when we have future debates on combined authorities, I will make the same point. In the meantime, I commend the orders.