Kingston companies vote for higher taxes to fund investment

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Businesses in a London suburb became the first in the country yesterday to agree to pay higher rates in exchange for a council pledge to pump the cash into local improvements.

Businesses in a London suburb became the first in the country yesterday to agree to pay higher rates in exchange for a council pledge to pump the cash into local improvements.

In what is being seen as the first of many similar schemes, 66 per cent of companies in Kingston upon Thames voted for a 1 per cent rise in their rates.

The move will raise £4m over five years from 1 January to be spent on the environment, marketing, transport and safety, doubling the local council's current budget.

A total of 218 businesses backed the Business Improvement District (BID) out of a total of 331 that voted, which represented a 37 per cent turnout of eligible companies.

Nick Raynsford, the local government minister, welcomed the decision, saying the investment would have "knock-on benefits" for the local economy. "This is an exciting day for Kingston and for businesses around England which could soon benefit from similar schemes," he said.

The London Development Agency (LDA), which backed the move, said there would be votes in the coming months for similar schemes in Leicester Square, Holborn, Paddington, and Waterloo, as well as Borough and Bankside in south London. The Royal Borough of Kingston supported the plan, saying it received just 29 per cent of its income from the business community and could not ask residents to pay higher council tax.

The British Chambers of Commerce said that BIDs were a better alternative to proposals for a supplementary business rate, which it feared would have marked a return to days when councils set their own business rates.

"We believe that BIDs can be a success," David Frost, its director general, said. "If the pilot projects can kick-start the process, and demonstrate success, then other localities will follow suit."

The idea was based on similar schemes in the US, where they are seen as a success. Kingston councillors visited Washington and Baltimore as the plan was put together.

The plan would have added some £1,000 on average to the annual rates bill, although this would hit larger businesses more.

Opponents included the Conservative-controlled Surrey County Council, which has its historic quarters in the town. Another private sector opponent, who asked not to be named, said: "We don't get a lot of help from [Kingston] council largely as it is."

The plan was promoted by Kingston First, an amalgam of Kingston Council, the LDA and the town centre management company, to stem a fall in the number of shoppers.

It said that annual daytime visitors had fallen by a million to 18 million since 1998, while the town has slid from 12th to 17th in a league table of shopping destinations.

There are 20 BID pilot schemes outside central London: Bedford, Birmingham, Blackpool, Brandon, Bristol, Bromley, Coventry, Greenwich, Hammersmith & Fulham, Hull, Lincoln, Liverpool, Maidstone, Manchester, Newquay, Peterborough, Plymouth, Reading, Rugby and Swansea.

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