Should business help pay for Merseytram?

Oct 23 2007 by Larry Neild, Liverpool Daily Post

If Liverpool wants trams, how should they be paid for? City Editor Larry Neild investigates

DOES Liverpool need a tram network, especially if local businesses have to help pay for it? Major European cities have tram systems and say they are a symbol of a go-ahead, forward-looking integrated transport philosophy.

Manchester has been transformed by its trams that transport tens of thousands of people into the city daily.

Ironically, around half a century ago, Liverpool dispatched its famous Green Goddesses into the sidings, saying that buses were the future.

It was argued that trams, confined to dedicated tracks, did not have the same flexibility as buses.

Now, in an era of global warming and carbon footprints, there is an urgent need to introduce methods of moving vast numbers of people without harming the environment.

Trams are the answer, insists Merseytravel, who have been in the forefront of the drive to bring back a network geared for the 21st century.

The collapse of the project in 2005, when the Government declined to hand over the £170m it had originally pledged due to fears over cost over- runs, seemed to dispatch the project into another set of sidings.

But a change at 10 Downing Street, with the ministerial shake-up that accompanied it, has remarkably revived the hopes of getting the project back onto the starting blocks.

Merseytram, it seems, could ride again, providing there is Whitehall backing and a formula to pay for it.

Liverpool is changing fast and a tram is seen as one way of ensuring people can move around easily.

The big question will be how is the network to be paid for, and will it become a burden for council tax payers or the business community?

So, today, we ask: Should businesses help pay for Merseytram?

larryneild@dailypost.co.uk

YES: The Case For - Trams system will generate extra economic activity

by Louise Ellman, Labour MP for Liverpool Riverside

WE NEED a tram system in Liverpool as soon as possible. It will be an important part of our regeneration to make us into a major European city.

It is about helping visitors to get around to main attractions in the city, the museums, the cultural quarter, the waterfront and the arena. But the trams will have an important part to play in helping local people to enjoy the city, and to help them to get to work. It will also give easy access to amenities and facilities such as hospitals and schools.

Very detailed research work on the trams has already taken place, so much of the very important studies has already been carried out over a number of years. That means we do not have to start from scratch. It was a very great disappointment to me when the Merseytram network plan collapsed.

Last week, I went with George Howarth to see Ruth Kelly, the Secretary of State for Local Government. She told us that the Government would be prepared to look at new proposals from Merseytravel that would revive the tram network. What it needs though is real commitment from Liverpool City Council, and the determination to make it happen. Line One will cover the city to Kirkby and we also want to see a line linking up with Liverpool John Lennon Airport. This will be part of a fully integrated transport system that will be good for the environment, good for passengers and free much congestion from our roads.

If we are to be a successful modern city, we need a progressive transport system and light rail is part of that.

With all of the regeneration work in the city with the £1bn Grosvenor project, the new arena and convention centre, the new Museum of Liverpool, vast numbers of people will be coming into Liverpool City Centre.

The trams will be an efficient and environmentally way of moving around.

In addition, the new developments will create thousands of jobs, added to the 80,000 already working into the city. If we are to avoid congestion experienced by so many success- ful cities, the trams are an essen- tial part of a transport system.

So how will it be paid for? The Government, as before, would have to make the major contribution towards the cost. The local transport authority would have to pay the rest. There have been suggestions that locally set business rates could be used to help pay. That will ultimately be a matter for the city council. If the council decided that a local busi- ness tax was appropriate, I would support that. The extra economic activity generated by the trams would make such a funding method viable, but that would, as I say, be a matter for the local authorities. One thing is certain: Liverpool needs a trams system.

NO: The Case Against - It is an initiative that businesses will live to regret

by Frank McKenna, chairman of Downtown Liverpool in Business

ANOTHER Chancellor, another stealth tax hitting businesses where it hurts.

Alistair Darling’s so-called “Magpie Budget”, taking ideas from the Tories and claiming them as his own, is purely politics. What government, when faced with a raft of good ideas from the Opposition, wouldn’t “borrow” a few of them to win over undecided voters?

But, yet again, the budget has hit the backbone of the economy, the business sector.

In March, when Darling’s predecessor, Gordon Brown, delivered his final Budget, he annoyed many by increasing the rate of Corporation Tax for small businesses.

Now his successor is at it, too.

Darling revealed the Government is to press ahead with plans to let councils levy a new Supplementary Business Rate (SBR) of up to 2%. This would then be used locally to pay for particular regeneration ideas.

This is good in theory, of course, especially in an area like Greater Liverpool where, despite a host of major projects being completed, a number of schemes, not least the introduction of a tram from Kirkby to Liverpool, are still on the public sector’s “wish list”. And it will be up to the local councils to decide where, when and how to take the money.

But in Liverpool, businesses have contributed significant pots of cash already. As well as the existing business rates that go straight to the Treasury, Mersey- side companies have paid to assist in the renaissance that has been witnessed across the region, matching pound-for-pound millions of the European Objec- tive 1 money invested, sponsoring the Culture Company, and paying additional taxes in Business Improvement District (BID) areas. This is not to mention the hikes in car parking charges, and, of course, the impact of the “Big Dig” that city centre-based firms have had to suffer.

But my biggest criticism of the new SBR is the lack of accountability of those who will have powers to demand the cash to those who will have to pay the cash – and the potential impact such a charge will have on the business community locally.

City centre businesses already pay a premium for commercial space. If they now think they are going to get hit for additional taxes, , why would a good number of them not feel motivated to move to out-of-town business parks, where rent and rates are cheaper, and where they are less likely to get caught up in the politics of the day?

The tram scheme may still be worthy of support – but will business really benefit disproportionately to other sections of the populace? Of course not.

Providing local politicians with the opportunity to get their hands on extra cash, without any real accountability to those who are paying, is an initiative that Darling – and businesses – will live to regret.