Companies should be allowed to vote on Crossrail
No taxation without representation” was the cry of colonial entrepreneurs in 18th century America before the revolution. But in 21st century Britain, business still sees its coffers raided without being given chance to vote.
The Business Rate Supplements bill going through parliament will allow councils to impose an extra 2p in the pound levy on rate bills to make companies pay for local authority projects. London firms face not only a general rate to finance the Crossrail transport link but a levy on new developments.
Business will be told to contribute £3.5bn towards the Crossrail link but, however large that sum is to firms struggling with recession, it is not large enough to give them a vote. Business must be paying a third of the cost before it has a chance to say no and its contribution will be just under a quarter of the £16bn cost.
And to answer those who claim the £3.5bn is more than a third of the capital cost, the government is slipping in a special belt-and-braces clause to make clear business gets no vote whichever way the numbers are calculated.
Work has now started on Crossrail, which will link Heathrow and Maidenhead to the west of the capital with suburbs to the east, tunnelling under the City and Canary Wharf. The benefit, apart from construction jobs, should be quicker connections and commuting for those travelling east-west. But while some economists say the gains will be smaller than expected, the costs can only rise.
There is likely to be a £20 a sq ft levy on central London office developments – despite the current dearth of such proposals. But a general levy across the capital would affect businesses in northern and southern boroughs that could benefit only peripherally. And London mayor Boris Johnson now wants businesses outside the capital to pay too.
The 80-mile service is scheduled to start in 2017 – thus missing the Olympics, which are subject to a further rates levy.
If a vote was held it is likely businesses would reject financing Crossrail because of the unfairness in how the levy falls and because of their own financial constraints. Companies that favour the train link oppose its financing. There will be no vote however, just as there will not be at other councils that demand an extra 2p to finance local follies.
Yet it is just possible Crossrail could be curtailed by an election. The enthusiasm of London’s Conservative mayor is not shared by his colleagues in national politics. The Tories see the project as a possible spending cut to balance their budget. Indeed, they cancelled Crossrail in 1994, four years after it was first approved. Perhaps for the wrong reasons, economics will yet save democracy but a simple vote by business would be fairer.
