Strong concerns were raised over the timing of the bill at the start of a recession of indeterminate length and the effect the levy would have on established Business Improvement Districts (BIDs) such as the one in Brighton city centre. With their strong emphasis on local delivery, local accountability and democratic genesis BIDs have been widely viewed as a success by both the public and private sector.

Reassurances of protective measures for businesses within the bill has done little to quell fears. In a statement, the British Retail Consortium (BRC) said: “The BRC is opposed to Government’s proposal for BRS. We believe that it is an unsatisfactory way to secure business contributions to large infrastructure projects. In essence, these proposals amount to a form of re-localisation of business rates and will inevitably result in unpredictability, instability and inequity for business rate payers affected.”

Brian Binley, MP for the opposing Conservative party voiced concerns during a reading of the bill. He said: “We speak against a background of a serious recession, so what do the Government do? They propose that we think about levying extra cost, through an extra tax, on businesses, which are suffering from massive past burdens.”

Despite opposition from both of the UK’s main opposition parties, the bill is still likely to gain royal assent because it comes packaged with funding for the London Crossrail project. The bill is facing its 3rd reading in the House of Commons before it can be passed to the House of Lords for ratification.

The views of the various business organisations giving evidence are summarised below: -

• British BIDs
  BIDs are liked by business as they are run by business for business. They are accountable to businesses and provide certainty on level and length of contribution.
• There is a danger the BRS could destroy the valuable relationships BIDs have built-up between local government and the business community. A phasing in of BRS in London would safeguard the life of BIDs in the capital.
• If a BID is the only occupancy cost a business has a vote on, in a tight market they will chose not to support a BID.
• Consultations will not achieve the same kind of focus and scrutiny from businesses and local authorities that a ballot does.
• Crossrail is a unique project and should not be used as a precedent for the rest of the Bill.
• There should be a partial offset of the BID levy against the BRS.
• There is a risk that the BRS will cause BIDs to rely on property owners and smaller businesses for contributions. BIDs should be able to formally involve property owners and this could alleviate pressures on occupiers who could be charged BRS and BID levy.
• A £50,000 threshold for BRS is not high enough to protect BIDs.

British Retail Consortium

• The BID model represents a proper model of engagement with businesses and BRS would not.
• The BID ballot is a key element of BIDs.
• Business Consortium involvement in drawing up BID proposals ensures the investment made in BIDs brings be nefits to businesses. BRS would not involve this close engagement, which means the additional cost for businesses might not result in the economic development desired by retailers.
• There should be an automatic offset for those paying BID levy and BRS. The ratio of cost to benefit of Crossrail for retailers is a concern.
• British Chambers of Commerce David Frost, Director-General There appears to be a lack of overall strategy and coherence in local determination and funding given the plethora of levies and planned schemes to charge business to improve areas (BIDs, BRS, community infrastructure levies; possible accelerated development zones; workplace parking levies; congestion charging).
• BRS is suitable for Crossrail/London only – it is a different matter outside the capital. It is important to involve the business community in decisions.
• Chambers are more welcoming of the BID model than BRS.
• BRS should include a ballot for businesses.
• BRS/BID levy should be offset to protect businesses.

Confederation of British Industry

• There should definitely be a business ballot for BRS.
• The BID model is liked.
• BRS/BID levy should be offset – especially where there is no BRS ballot.

Royal Institute of Chartered Surveyors
There should be property owner contributions to BRS but there are recognised issues represented in the lack of an owner register.

• Voluntary owner contributions would come in if there was a BRS ballot as owner contributions would encourage yes votes from occupiers.
• BIDs are aimed at local, immediate benefits and BRS is for larger scale and longer term projects.

Local Government Association

• Local government is best placed to engage with businesses and ultimately to make the decisions about what is in the best interests of local economies. Local Government wants the flexibility to be able to work with businesses to put together schemes that would have to have broad business support to go forward.
• There should not be BRS ballots: individuals should have one vote as a resident and not an additional vote as a business. BRS should be implemented via district councils not county councils. District councils could work together - even across counties - to ensure benefit for businesses.
• It would be acceptable for BRS to be up to 4p in pound (all ‘business’ witnesses who expressed a view on this wanted it limited to 2p).
• Business rates should be localised – the BRS bill is a step towards this.
• Local authorities are accountable to businesses and do engage with them.
• Benefits of BRS funded schemes will be wider spread and longer term without an immediate tangible return to business.