Confederation of British Industry (CBI) director-general Richard Lambert yesterday said that if businesses were to pay a supplementary rate to fund new infrastructure, as recommended by government advisor Sir Michael Lyons last week, they must be able to vote on how the money is spent.
Speaking at a conference to discuss the implications of the Lyons Inquiry into Local Government, Lambert said: 'There's a big risk that business will be seen as a cash cow for local government spending. Lyons is right that trust needs to be built up in the relationship between local government and business. There's no surer way of undermining that trust than by bringing additional business taxes in without the full support of local companies.'Lyons recommended that councils be allowed to levy an additional rate on business premises in order to fund infrastructure and projects within the local community.This would be done only in consultation with local businesses to agree both the rate and the projects it would fund.However, Lambert said consultation failed to go far enough in providing his members a voice.'Too many existing consultations result in an authority pressing ahead with what it wanted to do anyway,' he said.'Individual council tax payers get to vote, having weighed up the type of services they want money spent on. Businesses should get the same right to vote on whether they want to pay more in return for a new infrastructure project. It's a model that already works with Business Improvement Districts (BIDs), and this levy would be bigger in scope and geography than BIDs, adding several hundreds of millions to business rates.'