Bill Gleeson: Business should not pay for the daft tram plan

Oct 17 2007 by Bill Gleeson, Liverpool Daily Post

LABOUR’S fortunes have moved in exactly the opposite direction to those of England’s rugby team during the past few weeks.

A month ago, nobody rated England’s chances in the World Cup. I sat around meeting tables at the Daily Post while Welsh and Irish colleagues poured scorn on Jonny Wilkinson’s latest injury woes. Then, of course, we were given a 36-0 thrashing by the scintillating South Africans.

Then, almost miraculously, the team’s fortunes were transformed. First the Aussies and then the French succumbed to England’s reinvigorated team of old men, and now they are in the tournament’s final at the weekend.

In contrast, Labour were riding high in the opinion polls at the start of September. Then things went sour and the party started to lose public support.

First, there were the failings of the conference season when Labour was trumped by the Conservatives on key policy areas. Then there was the Pre-Budget Statement, riddled with half-baked, patently populist ideas and stealth taxes that could turn out to be bad own goals.

Labour’s proposed changes to inheritance tax will see a redistribution of wealth, from the poor to the rich. To top that, when business advisers rooted through the details of the Chancellor’s statement, they found a plan to give local authorities the power to raise supplementary business rates, something that had been abandoned more than a decade earlier because it was ruinous to the interests of some places. The party’s spin doctors didn’t trumpet that one, did they? Instead, they hid it away in the small print.

My guess is that Alistair Darling, the Chancellor of the Exchequer, knows exactly what he is doing, but you wouldn’t credit it from his performance in the last week or so. What his Pre-Budget Statement has succeeded in doing is galvanising business against the Government in a way that I haven’t seen for a long while, particularly in respect of the changes to Capital Gains Tax.

In the run-up to the 1997 General Election, Labour mounted a charm offensive in the City of London. The party wanted to persuade British business that it would keep the economy stable and be supportive of private enterprise. Business leaders were won over at the time, but now they are perilously close to withdrawing that tacit support.

Mr Darling’s business rates proposal puts the ball in the local authorities’ court. Councillors can choose to use the funds, or not. However, giving a tax- raising opportunity to a local authority is a bit like asking a child whether he would like ice cream. They’re not going to refuse.

Locally, there is already talk of using the new revenue-raising powers to resurrect Merseytravel’s daft tram plan. To use these powers in such a way would be downright disgraceful. Why should business foot a disproportionate share of the cost of a public transport system?

In contrast, refraining from using the powers would give Liverpool a competitive advantage when it comes to attracting inward investment over those cities that choose to raise the cost of doing business in their localities. If we play our cards right, then in a couple of years’ time we may well be able to point out to big businesses that Manchester has both a congestion charge and higher business rates.

It would be a pity, if after last week’s good news that Liverpool has attracted BNFL chief executive Michael Parker to be chairman of Liverpool plc, it then effectively abandons its long-held aspiration to be the most business- friendly city in Britain.

Don’t do it.