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Fox Hunting (Abolition)3.31 pm
Mr. Tony Banks (Newham, North-West) : I beg to move,
That leave be given to bring in a Bill to make the hunting of foxes with dogs illegal.
Mr. Alan Duncan (Rutland and Melton) : On a point of order, Madam Speaker. May I seek your guidance on the tabling of the motion in the name of the hon. Member for Newham, North-West (Mr. Banks)? It refers to the hunting of foxes with dogs. Given that anyone who knows anything about fox hunting knows that it takes place with hounds, is the motion in order? [Interruption.]
Madam Speaker : Order. That is a matter for dispute for the House. I want to hear what the hon. Member for Newham, North-West (Mr. Banks) has to say.
Mr. Banks : As a matter of fact, Madam Speaker, the hon. Member for Rutland and Melton (Mr. Duncan) is absolutely correct. As it appears on the Order Paper, the wording is wrong. The hon. Gentleman will soon find out, however, that I am begging to move that leave be given to bring in a Bill to make the hunting of foxes with hounds illegal. I last attempted to make progress with such a measure on 18 July 1990. That, in turn, was the first time that a ban on fox hunting had been tried since the second world war. Since my effort in 1990, a private Member's Bill has been presented by my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara). It sought, among other things, to give wild animals the same protection against cruelty as domestic animals. It would have banned fox hunting, and a number of other disgusting so-called sports.
My hon. Friend's Bill was narrowly defeated on Second Reading, following-- [Interruption.]
Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : Order!
Mr. Banks : I am most grateful to my hon. Friend.
Madam Speaker : Order. I remind the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) that there is no vacancy in this job. He seems to have forgotten that it is just a year today since the House elected me.
Mr. Banks : My hon. Friend clearly has unrequited ambitions in that respect.
The Bill presented by my hon. Friend the Member for Kingston upon Hull, North was narrowly defeated on Second Reading, following what I must concede was a spectacular whipping exercise on the part of that cross between Sir John Falstaff and Bertie Wooster, the hon. Member for Crawley (Mr. Soames), who is sitting on the Government Front Bench.
I have detailed those various attempts to secure legislation as a clear indication that those of us on both sides of the House-- [Interruption.]
Madam Speaker : Order. I am interested in hearing what the hon. Member for Newham, North-West (Mr. Banks) has to say. I hope that the House will come to order.
Mr. Banks : I am giving the background details of the attempts that have previously been made in the House to
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ban fox hunting as a way of showing that those who oppose the so-called sport will never let the matter drop until this anachronistic, barbarous sporting activity has been declared illegal.A few weeks ago, the British Field Sports Society sent out a video to every Member of Parliament in what can only be described as a desperate attempt to vindicate its wretched activities. The video was introduced by Ludovic Kennedy, a man of great reputation who, I am afraid, sullied it by agreeing to front such an obviously fraudulent presentation. I trust that his fee matched the scale of the attempted deception. May I inform those who discarded the tape unseen, or used it to tape a showing of "Blind Date", that the film has been reported to the Metropolitan police on the grounds of possible offences under the Protection of Animals Act 1911, the Wildlife and Countryside Act 1981 and the Cinematograph Films (Animals) Act 1937.
The film shows a fox being seized by the stomach. It is then subsequently ripped to pieces, although the latter sequence has been edited out. Another shot is of a fox deliberately snared in order to demonstrate the cruelty of snaring. I certainly agree that snaring is cruel, but when the House considered a ban on snares, the Bill was blocked by Members of Parliament who support the British Field Sports Society. So to fraud they add hypocrisy.
It is difficult to understand how anyone can claim to derive pleasure from hunting another creature to death in the name of sport. I try to understand the psychology but, for the life of me, I can find no point of contact whatsoever. For me, those who hunt foxes are no better, in the final analysis, than those perverts who bait badgers, course hares, hunt steers, stage dog fights and inflict mindless suffering on domestic pets and wildlife.
There seems to be a close correlation between those who take pleasure in hunting and hurting animals and those who inflict violence on other human beings. Those who ride to hounds would no doubt be outraged at such a linkage, but respect for life is indivisible. Anyone who derives pleasure from the pain and suffering experienced by a fox being hunted by a pack of hounds is on a continuum which, like it or not, ends up, in its most extreme form, with the hideous cruelties of a Bosnian massacre or a Nazi death camp.
There might be reasons for culling wild animals or controlling foxes, but to use such reasons to derive pleasure from killing them is pandering to a blood lust. To take any form of life dehumanises all of us. It lowers the threshold of our resistance to further and more objectionable forms of violence. In recent months, we have heard of appalling violence being inflicted by hired thugs on those seeking to protest against fox hunting, including the tragic deaths of two young men. Regrettably, fox hunting is still a legal activity, but protest against fox hunting is also legal, and the police have a duty to enable protest to take place without hunt-hired thugs assaulting protesters.
According to all public opinion polls, the great majority of people in this country--and, I dare say, all foxes--oppose fox hunting. It is not a town versus country argument, either. A clear majority of country dwellers also support abolition. Despite this weight of public opinion, the vile practice has survived and there is substantial, albeit declining, support for it in this House--and, no doubt, in the House of Peers.
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The fact is that, although fox hunters are guilty of babarous behaviour, they are neither fools nor without political influence. Indeed, champions of the so-called sport are to be found at the very highest levels of influence and status in our society. I only hope that whoever encouraged the young princes to slaughter a few harmless rabbits recently does not go on to introduce them to the organised barbarity of fox hunting.The fox hunters know that their days are numbered, and their arguments are becoming increasingly desperate. They say that people like me loathe the type of person who hunts. I readily confess that, in the main, they are not my favourite people, but who could loathe the hon. Member for Crawley (Mr. Soames), however much one might detest the colour of his socks on Friday or discreetly laugh at his Mr. Toad wardrobe? It is not a campaign against middle-class people-- [Interruption.] Obviously, no one could deny the middle-class antecedents of the hon. Member for Crawley, but one often hears the argument that there are hunts up in the north-east that are based on the old mining collieries. I do not know whether hunts continue in those areas--if they do, perhaps they would prefer to hunt the President of the Board of Trade--but I condemn those hunts as much as I condemn those in the south and elsewhere.
The use of environmental and conservation arguments by the fox hunters makes me reach for my sick bag. It is no argument for fox hunting to say that foxes sometimes kill livestock and are pests. The fox is a carnivorous predator and scavanger, but far more lambs die of hypothermia, for example, than are ever taken by foxes, and those the fox takes are usually either dead or unlikely to survive. However, the great majority of foxes live largely on beetles, frogs, rabbits, wild birds and carrion, and they are
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the most significant destroyers of rats and mice. They do not constitute a pest, but, if they did, there are more humane and efficient methods of controlling them other than having a bunch of yahoos on horseback, a pack of hounds and assembled motley villains charging over the rural landscape.Of the estimated 300,000 foxes killed each year, fox hunting accounts for some 7,500 dog foxes, and cub hunting, which is especially despicable, for another 8,500. The final lie given to fox hunting as a method of pest control is that, in some parts of the country, foxes have been deliberately encouraged to provide a quarry for the hunt.
The hunting mob is running out of valid arguments and time. Only the Labour party is officially committed to banning fox hunting at the next general election. However, given the number of Tories in the House and the country and the number of Liberal Democrats, I hope that, one day soon, those two parties will also embrace the same policy of banning fox hunting. I ken we shall shortly welcome the day when we hear the last "tally-ho" and when John Peel will have to find something else to do with his horn in the morning.
Question put and agreed to.
Bill ordered to be brought in by Mr. Tony Banks, Mr. Jeremy Corbyn, Ms Dawn Primarolo, Mr. Andrew Bowden, Mr. Elliot Morley, Ms Diane Abbott, Mr. Kevin McNamara, Mrs. Alice Mahon, Mr. Alan Meale, Mrs. Anne Campbell, Mr. Simon Hughes and Mrs. Maria Fyfe.
Fox Hunting (Abolition)
Mr. Tony Banks accordingly presented a Bill to make the hunting of foxes with dogs illegal : And the same was read the First time ; and ordered to be read a Second time upon Friday 7 May, and to be printed. [Bill 186.]
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Orders of the Day
Non-domestic Rating (No. 2) Bill
Order for Second Reading read.
3.42 pm
The Minister for Local Government and Inner Cities (Mr. John Redwood) : I beg to move, That the Bill be now read a Second time The Bill will freeze business rates in real terms for a further year. It honours the pledge given by my right hon. Friend the Chancellor of the Exchequer in his Budget speech on 16 March to protect businesses from the most serious consequences of the 1990 revaluation. A similar measure, which we introduced last year, was welcomed by the House, and I hope that the Bill will be equally well received.
Under the current law, business rates cannot rise each year by more than the rate of inflation if the property's valuation stays the same. The Government's success in tackling inflation means that the rises this year will be no more than 3.6 per cent. following increases of only 4.1 per cent. last year--and, of course, inflation is now lower again.
For 30 per cent. of the businesses, however, the 1990 revaluation implied larger annual increases last year and this year. Although the increases were being phased in gradually, some businesses would still have faced real -terms increases of up to 20 per cent.
Bearing in mind the effects of the recession, the Government decided last year not to add to the burden on businesses. The 1992 Act therefore froze all rates increases in real terms for 1992-93. Last year's measure was intended as a one-year respite. However, although the economy is now recovering, a full resumption of the transitional arrangements would be premature, so the Bill extends the freeze on transitional real increases for a further year. About 250,000 shops and offices, mainly in the south of England, will benefit from the measure to the tune of more than £190 million. About 85,000 factories and warehouses, mainly in the north of England, will benefit from reductions worth more than £30 million. A further 165,000 properties will gain relief worth £120 million. Businesses in Wales will save about £9 million. The total savings for business will be £350 million this year and £225 million next year.
Mr. John Maxton (Glasgow, Cathcart) : I am aware that the Bill does not cover Scotland, but can the Minister tell a good Scottish Member such as myself what the Scottish Office is doing by way of an equivalent to the Bill?
Mr. Redwood : I am happy to oblige the hon. Gentleman. As he says, there are different arrangements in Scotland. Through regulations, a comparable reduction of 2.6 per cent. in rates bills overall--the English level--will be achieved in the 1993-94 rates poundages, at a cost of £32 million. Derating has not been adjusted in line with reduced poundages, so the ratepayers will get the full benefit. I hope that that satisfies the hon. Gentleman.
The benefits in England come on top of the benefits of last year's freeze, which was worth £1,250 million over the years of its impact on its rates bills.
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Many of the businesses that fared worst as a result of the recession were those facing the largest increases following the 1990 revaluation. In the six months following that revaluation, 633,000 ratepayers appealed against their valuations. I want the backlog of appeals to be cleared, as I am sure the whole House does. Of the initial 633,000 appeals, more than 525,000 have now been settled, and I am told that valuation tribunals are well on target for clearing the remainder by the end of the current year. I am sure that the House will welcome that.In 1995, a new revaluation, based on the property market at 1 April this year, will come into effect. Rental values in depressed sectors are likely to be significantly lower than they were at the time of the previous revaluation. If that is so, the rateable values concerned will fall. That means that, as I promised last year, some businesses still in transition may never have to face the full rates liabilities implied by their 1990 valuations. I am sure that that will be most welcome to many businesses, especially the small businesses that faced the largest increases.
Mr. Michael Ancram (Devizes) : I am grateful to my hon. Friend, and I am sure that many businesses in my constituency will welcome what he has said. However, does not what he has said reveal one of the difficulties of the present non-domestic rating system, in that what a business pays effectively depends on the general economic situation, and therefore on the value of the property in which it operates, rather than on anything to do with the nature of the business itself?
Not immediately, but at some time in the future, will my hon. Friend examine the basis of local taxation of businesses to find out whether there is a fairer way of assessing what they should pay for local services?
Mr. Redwood : I am afraid that I cannot promise any immediate action along those lines. We are happy with the basis of property taxation for some element of businesses' tax bills. Of course, businesses also contribute to the national exchequer through VAT and through the income tax and national insurance that their employees contribute, which businesses originally pay in employee remuneration. We feel that there is a balance in the taxation affecting businesses, their employees and their turnover. That is Parliament's and the Government's chosen method of taxation to support local authority expenditure.
However, my hon. Friend has a good point when he says that problems were caused by the 1988 valuation. The main problem arose because that valuation took place at the peak of an extremely active property market, especially in the south, and especially for shop and office properties. We trust that the valuations based on 1993 values, which do not allot such extreme relative values as between different types of properties, will remedy that.
I hope that the results will be more acceptable across the country than the results were when they were based on the high values of certain properties in 1988. A further pause in increases this year should help to smooth any changes to bills resulting from the 1995 revaluation.
We believe that the Bill will provide another valuable fillip for many businesses, and will give a further boost to
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our economic recovery. My hon. Friend the Under-Secretary of State will be happy to deal with any issues that arise in the debate when he winds up. I have great pleasure in commending the Bill to the House.4.9 pm
Mr. Doug Henderson (Newcastle upon Tyne, North) : The Opposition support the general thrust of the Bill, and we shall not oppose Second Reading. However, we are concerned that businesses are becoming dependent on artificially held-back increases in rates. Since the revaluation in 1988, which was implemented in 1990, businesses have, in addition to the original transitional limitations in 1990-91 and 1991-92, been protected by a further limitation in 1992-93. The Bill proposes another limitation in 1993-94. Businesses potentially face a large hike in business rates when the transitional arrangements expire and the next revaluation takes place in 1995. The late Lord Ridley, who was Secretary of State for the Environment at the time, announced in 1989 the terms of the original transitional arrangements which were intended to be self-financing.
Mr. Roy Thomason (Bromsgrove) : Does the hon. Gentleman agree that, in referring to the 1995 revaluation as potentially increasing the liability of the business rate payer, he is assuming a continuing increase in rental values, because the rates are based on rental values? In fact, most business rents have been stagnant over the past few years ; consequently, the increase in valuation which is likely to take place in 1995 should be quite limited. The hon. Gentleman's point therefore has a limited validity.
Mr. Henderson : I do not accept that. If I replied at this stage, I should have to do so at some length. I shall give the hon. Member a flavour of what I propose to say later. Whether businesses face a hike after the implementation of the 1993 revaluation in 1995 depends very much on what happens elsewhere.
It depends on whether the real level of local authority expenditure is maintained. It depends on whether the rate poundage, as originally outlined in the Local Government Finance Act 1988, is maintained in relation to inflation. It also depends on what happens to businesses that have already had their rates bills artificially held back--I support this--because of the recession over the past two or three years.
The answer to the hon. Gentleman's question is that it very much depends on what the Government do between now and 1995, and on whether the revaluations in 1995 are based on what people actually pay in rates or on what they would have paid if there had been no transitional arrangements. I shall develop that point at a little more length later. If more hon. Members had wished to catch your eye, Madam Speaker, I might have restrained myself a little on the matter. In the circumstances, it may help the hon. Gentleman and his colleagues to be a wee bit more appreciative of some of the difficulties that they may face in the near future.
I return to what the late Lord Ridley said. He believed that the original transitional scheme would be an incentive to many businesses to flourish in the late 1980s. I realise that he had no more access to the future than any of the rest of us had. He said :
"The Local Government Finance Act provides for a uniform business rate in England and in Wales and for a
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revaluation of non-domestic property This will provide a welcome incentive for businesses to expand in the currently less economically buoyant areas."--[ Official Report, 15 February 1989 ; Vol. 147, c. 315.]It is clear that he did not anticipate the economic events of the post-1989 period. Indeed, he predicted the opposite of what has transpired : he argued that northern business would be helped by rate reductions that could stimulate the more depressed parts of the country. The late Lord Ridley did not foresee the depth and length of the recession that would sweep through the country at the time that the business rate was introduced.
The year 1990 was a bad one for the economy, with 28,935 businesses collapsing. In 1991, the position was even worse, with 47,777 business failures during the year--an increase of 65 per cent. on the previous year. The pace of collapse quickened in the last quarter of 1991 : from 900 collapses a week to 995, or 199 business collapses each working day.
All parts of the country suffered. The south-east recorded 9,722 business failures that year--an increase of 68 per cent. The east midlands recorded 2,189 failures--an increase of 79 per cent.--and the south-west had 5,415 failures--an increase of 76 per cent. The position grew even worse in 1992 as the recession deepened, with business failures reaching an all-time high. A total of 62,767 businesses failed--a 31 per cent. increase on the previous year. London and the south-east were the areas worst hit by the hurricane of collapsing business. The south-east recorded 14,000 business failures during 1992--a 46 per cent. increase. In 1992, 9,132 bankruptcies took place and liquidations increased by 20 per cent. to 5,000 plus.
The eastern region also recorded a dramatic increase in business failures-- a 22 per cent. increase on the previous year. In London, there were 9,121 business failures in 1992--15 per cent. of the total for the country.
Despite all the self-congratulation from the Government Front Bench, 1993 has continued to be a disastrous year for business. In the first quarter, 15,444 businesses collapsed--a rate of almost 1,300 a week. A total of 5,297 limited company liquidations were recorded, and there were 10,000 individual insolvencies, compared to 9,200 in the same quarter last year.
Dun and Bradstreet pointed out that the latest overall figures represented a 4 per cent. increase in business failures on the same period last year. London and the south-east are still suffering the worst. But beyond this region, the record of failures has also worsened, despite the soothing words of Ministers on this matter. For example, in the west midlands, there was an increase of 5.5 per cent. in the number of business failures compared to last year. In the south-west, there was an increase of 9 per cent. compared with the same period last year. In my own region, the north- east, 1,176 business failures were recorded--an increase of 3 per cent.-- but bankruptcies increased by 8 per cent.
Not only did the late Lord Ridley get wrong the level of aggregate demand in the economy : he and the Government completely failed to predict that the 1990-93 recession would hit the southern parts of the country worse than the north. Yet many areas in the south face the largest increases in business rate bills arising from the introduction of the national business rate in 1990.
The original transitional release scheme was therefore wholly inappropriate in the economic circumstances of the
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country. The limitations and reductions of rate bills in the north acted against northern-based companies holding on in the recession because they needed the full stimulus of any reductions. Even with the original limitations contained in the original transitional arrangement scheme, the increases in the south served to put great pressure on many companies which faced extremely serious problems and could ill afford even the limited increase.I want to be fair to the Minister by saying that, during the Second Reading of the Bill on non-domestic rates which was before the House last year, he recognised that the Government had allowed the country to sink into a deep recession and that, as a consequence, the original transitional scheme was wholly inappropriate and therefore had to be modified. He told the House on 19 May :
"I know that the recession has created difficulties for many businesses and some of those that would have faced the largest increases this year have been particularly hard hit in the recession. The Government have therefore decided that their costs this year should not be worsened by any real increases in the business rates."--[ Official Report, 19 May 1992 ; Vol. 208, c. 204.] The Minister's proposals to limit increases in rates to inflation will be welcomed by businesses throughout the country. Businesses look to that assistance to help them recover from the battering that they received from the recession. They also recognise that the net cost to the taxpayer will not be as has been suggested in the accompanying papers, for every business that is saved by the measure will continue to contribute rates and other taxes on which the Exchequer depends. The multiplier effect in local economies will help other companies.
The Minister's proposals might excite the ashes of John Maynard Keynes. However, to save the hon. Gentleman's blushes among his erstwhile friends and colleagues, I shall not press the point too far. I would hate to be responsible for any provocation that might compel the hon. Gentleman to renege on his conversion or to make his task of getting the Bill through another place more difficult, even if it receives the support of the House of Commons.
As the Minister knows all too well, some noble Lords and at least one right hon. and noble Lady in the other House currently delight in opposition to Maastricht but might re-focus to delight in opposition to the Non-Domestic Rating (No. 2) Bill. I am sure that the business community, the Government and the Opposition would not want to incite such opposition to the Bill.
Another worrying impact of the recession is the general and projected decline in business rate revenue. That partly addresses the point raised by the hon. Member for Bromsgrove (Mr. Thomason). The aggregate business rate revenue fell from £12.4 billion in 1991-92 to £12.3 billion in 1992-93. In 1993-94, according to the Government's figures, it will fall to £11.6 billion. Does the Minister agree that that has serious consequences for Government revenues in general? Does the Minister acknowledge that, if local authority resources are to be maintained, one of several things must happen? The shortfall must be made up by central Government grant, by raising more revenue from council tax or by increasing the poundage beyond the rate of inflation to compensate for the impact of the narrower
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business tax base--that avenue might create additional problems--or the books will have to be squared by forcing a cut in local authority resources.Does the Minister agree that there are, indeed, severe potential major problems ahead? Does he agree that, if there is to be stability in the business community, it is important that the Government state their future policy well in advance, so that business can plan accordingly?
In his statement on local authority finance to the House in November last year, the Secretary of State said that there would be no cuts in services if councils were run efficiently. The Minister and I discussed the matter at some length only a week last Friday in a debate in the House. There were arguments about whether services were cut by councils which were efficient or only by councils which were inefficient.
Setting aside that argument, I said in that debate, and I repeat today, that cuts were made by councils in many parts of the country, and severe cuts were made by some Conservative authorities. Even if the Minister has been unable to meet his stated policy this year, can he give us some assurances for the future?
Mr. Redwood : Clause 2 makes similar arrangements to those last year, to ensure that the rates pool does not suffer from the decision to forgo the extra increases on properties suffering from the revaluations. So we have made our position clear. The rates pool will be compensated through that mechanism. But is the hon. Gentleman saying that it is Labour party policy not only to support that compensation but to urge higher real rates increases for businesses in order to allow higher local authority expenditure? That would be interesting, and the House should know.
Mr. Henderson : It is always interesting to be questioned about Labour party policy. I do not intend to detain the House all afternoon, but I shall mention Labour party policy later, and I shall consider the local determination of rates--a method which, as I shall demonstrate, is supported by some Conservative Members.
The basic issue is what the Government's policy will be if cuts are made. Can the Minister assure the House that the Government will maintain the real level of local authority expenditure as a proportion of our gross domestic product? If so, will he assure the House that, if business rate revenue continues to fall, as the Government's own figures predict, the Government will increase their subventions to local authorities in one way or another to compensate for that shortfall?
If the Minister cannot give that assurance, is he prepared to commit himself to making that argument to the Chancellor, with a view to a relevant announcement in the joint Budget and expenditure statement in the autumn? Will he stress to the Chancellor the need to maintain the real level of local authority resources?
If there is a shortfall as a result of the existing way in which revenue is gained and as a result of a fall in business rate revenue because of the recession, will the Minister make proposals to allow the Government to compensate for any subsequent losses?
On the question of the transitional arrangements covering business rate increases, will the Minister give a commitment that there will be no sudden elimination of T
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the limitation on increases? Does he accept that, if that were to happen, many companies, especially in the south, would face a sharp hike in their rates?If the Minister accepts the case for a stable and predictable business rate, which is especially important to the small business community, is he prepared to say how the 1995 revaluation in the business rate will be approached? The small business community considers such stability to be crucial to its economy, and I hope that the Minister will accept the strength of its argument, which is frequently presented to politicians and others, and rightly so. I hope that the Minister will recognise--if he does not, his officials certainly will--that, even if the transitional arrangements had been allowed to work through, about 160,000 businesses would still have had the increase in their rates deferred until the end of 1994-95. The Association of Metropolitan Authorities estimates that, following the two-year freeze in real increases, which the Labour party supports, about 350,000 businesses will not even pay full rates under the 1990 revaluation when the new 1995 revaluation comes into force. The London Chamber of Commerce and Industry has stressed that point, and noted :
"The Uniform Business Rate still presents enormous problems for London businesses, particularly when the new valuations are brought in."
Can the Minister tell us whether there will be transitional arrangements after 1995? Are the Government prepared to contribute additional funds to the national business rate pool to assist businesses that face sharp increases? If transitional arrangements are intended after 1995--this relates to what I said in answer to the hon. Member for Bromsgrove--will they be based on the actual rate payments made under the various schemes in 1994-95 or will they be made on the basis of what the bills would have been had the full effects of the 1990 revaluation worked through the system? That also relates to the point that the Minister tempted me to discuss when he intervened, and what was said by his hon. Friend the Member for Devizes (Mr. Ancram), who is sitting to the rear and left of the Minister--perhaps that hon. Gentleman is to the left of the Minister in all senses : he certainly used to be when he was on the other side of the border.
Is the Minister prepared to review the system? Is he prepared to consider giving local councils full respon-sibility for setting the business rate? Over the past two or three years, it has sometimes been suggested that anyone making such a proposition must be off his head and would not receive the support of the business community. But that is not really what the business community believes. It recognises that there is considerable advantage in the business rate being determined by local councils.
I do not want to detain the House for too long, but I have quotes from two representative business organisations. I do not necessarily concur with their views on other matters, but I think that they speak much sense on this issue. In its recent submission on local government affairs, the Institute of Directors said :
"We consider that on balance there is more to be gained than lost by reverting to non-domestic rates being determined by the individual local authorities".
In its submission on local authority policy, the London Chamber of Commerce and Industry states :
"The Chamber would like to see a return to local revenue raising and accountability for at least 50 per cent. of all local
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government expenditure. This could be done if both the council tax and business rate were controlled locally. The voice of business could then be heard, and in a real sense accountability could be reintroduced Changes along those lines would ensure that locally raised rates were spent in the areas of need, and reflect the local economy the Chamber strongly recommends that the Government includes a fundamental reassessment of the present arrangements as part of its overall view of local government finance."It is not only Opposition Members who subscribe to the cause of determining rates at local level. Conservative Members who are closely associated with such organisations make the same submissions, and many in the business community have made it clear that they do not want to be determined by central Government, but want to allow reasonable local discretion.
Does the Minister agree that it is advantageous to allow local councils to make decisions, as they know more about their business community, and they know how much the business community can afford to pay in rates? It would be extremely stupid of them not to take that into account when setting the rates. It would be
counter-productive in economic terms, as, if they made the rates too high, companies would run into difficulties, which would produce a lower net revenue. That would be a pointless exercise, and local government would be stupid to make such a mistake--indeed, it is not doing so.
Not long ago, the Minister was praising the way in which local government approached many issues. He has done so at political conferences, in press releases and elsewhere. Some of us have sometimes been tempted to question the authenticity of his apparent conversion to local government. Setting that aside, the Minister--and, indeed, the Prime Minister--have made the case for local government. The Opposition support the measure, but would it not be wise to consider the longer term to discover whether there are better and more flexible ways of determining business rates, so that local communities and local business needs can be taken into account? The London Chamber of Commerce and Industry also referred to democracy. If local democracy is to mean anything, local people must have the ability and right to determine the level of services they want, and how much the business community should contribute to them. It is clear that the Government are intent on pressing on with seemingly endless changes in the rules governing local authorities. It is no surprise to me that the business community is still subject to the unstable business rate levels caused by the Local Government Finance Act 1988. It is also clear that the House will face further requests to support further legislation to change the rules relating to the business rate.
I am clear that a return to the local determination of business rate is a more democratic policy and will, in the long term, reduce the involvement of the House in such matters. But until then, business will need assistance in shielding itself from severe hikes in business rates. If the Bill gives a measure of support, it has our general approval.
4.15 pm
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