Chancellor steamrollers over London’s councils and businesses to rush through Crossrail

London's businesses and local authorities have been cut out of a national initiative to involve the councils in 'place-shaping' their local area through a Supplementary Business Rate by a snap announcement made in the Chancellor's Comprehensive Spending Review yesterday.

Government had previously said that a consultation paper would be published on SBR at the end of this year to consult on whether London's boroughs could levy a proportion of the SBR to pay for improvement projects in their own area or whether all levying power should go to the Greater London Authority.

However, in total contradiction with these earlier promises of a consultation on SBR Chancellor Alistair Darling ignored this process and announced a White Paper dictating that "The power [of SBR] will be given to the highest tier authority only in each area, including the Greater London Authority".

This means that London businesses and boroughs will be cut out of a national initiative to give all local authorities and businesses across England a chance to levy a local business rate to make specific improvements in their area. All the SBR raised from London businesses can now only be used to fund the £5 billion needed to pay for the funding shortfall for the Crossrail project.

Crossrail will not benefit all of London's boroughs but as a result of Darling's announcement all large businesses will now have to pay for them without the opportunity to pay some of the new tax to more local projects or even be consulted on this issue.

Yesterday's announcement not only comes as a disappointment to London Councils, it also completely dismisses the findings of a House of Commons' Communities and Local Government Select Committee. In August this committee produced a report which endorsed London Councils' calls for all London's boroughs to be able to set a local SBR.

Responding to today's announcement Councillor Merrick Cockell chairman of London Councils said:

 

"Crossrail appears to have come at the cost of local people and local businesses' right to a fair consultation.

For a government that prides itself on devolving power to local communities London's businesses have been prevented from having a real involvement in their local areas. From the Chancellor's announcement it would appear that the aspirations of Britain's businesses count only so long as they're not in London, where only Mayor Livingstone will decide where this new business tax will be spent. Our view, endorsed by the Select Committee, that any extra business tax should be directly invested in the area in which they operate has been ignored, as has the promised consultation."

For press enquiries please contact: Holly Sutton on 020 7934 9842
Holly.Sutton@londoncouncils.gov.uk  Fax 020 7934 9769

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