Birmingham Commonwealth Games Bill [HL]

Debate between Lord Foster of Bath and Lord Hunt of Kings Heath

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 25th February 2020 Lords Chamber

[Lord Foster of Bath]

I am enormously grateful to the noble Lord. The entire House is looking forward to a later debate on future signage arrangements around Birmingham New Street station, which he is the world’s expert on. I hope that, before our Committee deliberations are finished, he will offer to lead a team of Games volunteers at the station to guide people, since he knows his way around there better than most.

However, the noble Lord’s suggestion is wrong: at no point have I been a clear enthusiast for a hotel tax. He will note that in many debates in the other place, I expressed on the record grave reservations about such an approach until the issue of VAT had been addressed. There is commonality of agreement with my noble friend on the Front Bench on this issue, but there are a range of views, which we will have an opportunity to hear when his noble friend introduces his amendment.

My final two amendments, 19 and 20, look at the wider reporting mechanism. Amendment 20 calls for an earlier report than the Bill currently provides for. I hope the Minister agrees that on financial and other vital issues, we need early reporting. Amendment 19, from the noble Lord, Lord Moynihan, calls for not only earlier reports but far more frequent reports than is currently proposed. That way, your Lordships and the other House can keep abreast of what is happening and hold people to account. The more reports that we have as the Games develop, the better, and it is important that we use them to keep a tight grip on expenditure.

Let me give an example of why there are continuing concerns, and why there is a need to keep a grip and to understand what is meant by the Government’s plans for underwriting the Games. We know from newspaper reports that removing the National Express bus depot in order to create the Games village and subsequently providing 1,400 much-needed homes in the area was initially estimated to cost £2 million. Reports now suggest that the cost will be a staggering eight times higher, at £15.5 million. Will the money that has to be found be additional to the £185 million that Birmingham City Council must find, or will it be covered by the Government’s underwriting agreement with the council? It is important that we find out such details now. We need early and regular financial reports on what is taking place, and that is why I have tabled my amendment. I support nearly all the other amendments, albeit that one needs a slight tweak. I beg to move.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I shall speak to my Amendment 3 and respond to the noble Lord, Lord Foster. He is right about the need for transparency in the underwriting agreement between the Government and Birmingham City Council. It is not at all clear to noble Lords. The key issue is: who is the provider of funds of last resort if the Games run into financial difficulty? We are entitled to be told at some point during the passage of the legislation. Whether we get that is another matter entirely.

It needs to be repeated that these Games are a fantastic opportunity for the country, Birmingham and the West Midlands. Many characteristics of the Games are very exciting. Now that we have resolved imaginatively the issue of the two sports originally to be excluded, all is set fair for a brilliant competition. However, the problem of finances for a city that is already under some financial challenge is formidable. As we have heard, there is a 75:25% budget split between central government and Birmingham City Council. Birmingham has to find £184 million and it will of course look for commercial opportunities to help with that; but it also has other plans such as the post-Games housing development in Perry Barr. All that means that sources of private funding will have to be found. We must recognise that the city council’s finances are under pressure, which is why this is such an important issue.

I have been interested in a tourism levy because the city council has been. The Core Cities group believes that a levy would be a sensible and fair way in which to raise funding revenue. Scotland is close to implementing such a levy for Edinburgh, and the consultation of the city council there showed high levels of support for it—85% of respondents to the consultation backed a levy of either 2% or £2 per room per night. The noble Lord, Lord Foster, rather unkindly took me to task for the wording of my amendment. We should not take the wording of amendments in Committee too literally. The point that I am trying to make and is clear in my amendment is that we want the Government to look at this matter sympathetically and produce a report. The issue that the noble Lord is right to raise is the length of time for which a levy would operate. I fully accept that important point and it surely would be discussed after review by the Government and the city council.

[Lord Foster of Bath]

I entirely accept the noble Lord’s point and that a drafting change can be made, but does he not think it more sensible to adopt the approach proposed in the amendment tabled by my noble friend Lord Addington, which talks about the Government looking at ways they can help Birmingham City Council raise funds through, for example, a local tax more generally or even a local lottery? There are quite imaginative solutions and to tie it down to one specific mechanism is probably an error.

[Lord Hunt of Kings Heath]

We already know from what the Minister said at Second Reading that she will say that the decision on a new tax rests with Her Majesty’s Treasury and it thinks that local authorities already have ample means to raise funding. I am sure she will say that again. The noble Lord raises some fundamental points about local government finance, and I am very sympathetic to them. I have been trying to put forward a very simple suggestion: as a tourism levy has been floated by a number of local authorities and we are seeing one implemented soon in Edinburgh, why not use the Commonwealth Games as a way to pilot it—without commitment to any other city or area of the country or that it will be a long-term tax—to see whether it could work?

I understood that, post-election, Her Majesty’s Treasury was looking at changing all the rules of engagement as part of the Government’s new strategy towards local government and to help in some of the more deprived parts of the country. This is a very straightforward way to try something out to see whether it would work, whether it would impact on the hotel economy—a downturn is clearly one risk—and whether it would be a very straightforward way to enable local authorities to raise more resources for sports, leisure and culture in the future. I do not see the problem with having a pilot scheme to allow that to happen.