Localism Bill

My Lords, I want to add a word from the perspective of English core cities. The proposals around tax increment financing put by the eight largest English cities to Government three to four years ago have gradually been working their way through a number of committees, particularly in the Treasury. In the past 12 months added impetus has been given to tax increment financing. I hope that what my noble friend Lady Kramer is proposing here does not cause any delay to the move forward with the Government’s proposals because tax increment financing is urgently needed to enable cities, in particular, and all councils to be able to borrow against future business rate income growth. At present local councils have the power to borrow prudentially, but prudential borrowing requires there to be an income stream guaranteed to enable that borrowing to proceed. Tax increment financing enables borrowing to be made against future growth and projections of that business rate income, as my noble friend Lady Kramer rightly pointed out. These are not separate issues and they can sit happily together but we are looking for some clarity from Government that tax increment financing as a principle will go ahead as speedily as the Deputy Prime Minister announced that it would last year. Local authorities are waiting for the powers to be implemented and it could well be a further 18 months to two years before those powers come forward. They are urgently needed. Otherwise infrastructure funding that requires a capital investment based on borrowing on the markets needs to be progressed. Without it that investment will not take place. I look forward to my noble friend the Minister clarifying the speed with which tax increment financing can be introduced and how then that proposal lies with this proposal in the name of my noble friend Lady Kramer.