Companies cry foul over urban clean-up

Bill for Business Improvement Districts faulted for requiring payments from tenants, but not landlords. Clayton Hirst reports
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The Independent Online

John Prescott's plans to introduce US-style tax laws to pay for improvements in Britain's towns and cities will fail unless they are radically altered, according to leading property companies.

The proposals, to create so-called Business Improvement Districts (BIDs), are contained in the Local Government Bill, which is with the House of Lords. BIDs would introduce a levy on businesses to pay for high-street enhancements such as street cleaning, security and landscaping.

But property companies are giving Mr Prescott's plans the V-sign, saying that the Bill doesn't require landlords to pay towards BIDs, only tenants. "This would significantly reduce the impact that BIDs could have," said Ian Henderson, chief executive of Land Securities, Britain's largest quoted property company. "As the proposals stand, landlords could get a free ride."

Martin Moore, managing director of Prudential Property Investment Managers, said: "The potential impact of BIDs would be greatly reduced without the contribution of landlords."

Landlords are keen on BIDs because they can lead to increases in rents, as a result of street improvements.

Prudential, Land Securities, Hammerson, Slough Estates and Grosvenor are lobbying the Government through the British Property Federation (BPF). Liz Peace, chief executive of the BPF, said: "It is our strong view that the whole BID concept could be undermined unless changes are made." The Confederation of British Industry is also pressing for changes.

Conservative Peer Lord Jenkin of Roding has agreed to table six amendments to the Bill, which is at the Committee Stage of the Lords. The amendments will be heard on Wednesday. He is supported by Liberal Democrat peer Baroness Hamwee. Labour peer Lord Rogers of Riverside, who helped to draft the Government's policies on urban regeneration, is also expected to sign up to the amendments.

The Government is understood to be reluctant to force landlords to contribute money towards BIDs as it is worried that this could be classed as a new tax. However, Lord Jenkin said: "We have carefully worded the amendments so they state that this is a payment for services and not a tax."

While there is currently no legislation for the creation of BIDs in Britain, many voluntary schemes are already in operation.

One of the largest is the New West End Company, focused on London's Oxford Street, Bond Street and Regent Street. Members include property companies Land Securities, Grosvenor and the Crown Estate; and retailers Selfridges, John Lewis and Marks & Spencer.

With a budget of nearly £2m, the company has em- ployed a team of uniformed staff to guide shoppers around the streets; hired a dedicated team of street cleaners; and appointed a design firm to work up proposals for the area. But the voluntary BIDs have no power to collect levies from tenants and landlords.