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Mr. Mudie : Does the hon. Lady agree that those same business men are the first to criticise, vocally and in the press, the standards of the children coming through our education system? Are they not the first to say that those standards should be improved? Yet the same business men who criticise the education system are those who tell the hon. Lady that although they want standards to rise, not only will they not contribute more, but they wish to contribute less.

Mrs. Knight : The hon. Gentleman is correct to say that the business community criticises education standards ; that is why it is so important that tests take place this summer in our schools for seven-year-olds such as my son and for 14-year-olds. I hope that the hon. Gentleman will support his business community and join my hon. Friends and myself in urging all the teaching unions to forget

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about the boycott and to get on with testing those children. However, we had the education debate last week, so I must return to business rates.

It is stability in the rating system that is so important to businesses. That gives them the opportunity to plan for their future. It is important to ensure that there are no big increases, and no big changes year after year in companies' business rates. The UBR and the changes proposed today make an important contribution in that respect.

5.16 pm

Mr. Paul Murphy (Torfaen) : I am pleased to be able to say that the Opposition will support the Government on the Bill, and I am pleased, too, that the Parliamentary Under-Secretary of State for the Environment, the hon. Member for Hornchurch (Mr. Squire), is present, as he was a year ago almost to the day, when we dealt with the Non-Domestic Rating Act. I suppose that this is his annual foray into matters Welsh. I shall not go too deeply into such matters, but I shall make one or two general points about what has occurred in this interesting if short debate.

My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), and the hon. Members for Southampton, Test (Mr. Hill) and for North Cornwall (Mr. Tyler) all, rightly, referred to the recession and to the fact that small businesses--and, indeed, other business--had been seriously affected by it over the past few years. The newspapers this morning all say something along the lines of, "Recession is over--official".

However, in Wales there are still some 50,000 young people unemployed, we have lost 30,000 manufacturing jobs, unemployment costs us £1.2 billion and there are 17 claimants chasing every job, and businesses have gone under at an alarming rate--there were 2,425 business failures recorded during 1992, which represents an increase of 26 per cent. on the 1991 figure, and there were 1,728 bankruptcies, which represents a 38 per cent. increase. I fancy that, if the journalists came to Wales and wrote headlines saying that the recession was over, the idea would be seen to be nonsense. None the less, we welcome the Bill, as we welcomed last year's Non-Domestic Rating Act, because it will ease the burden on small businesses. But we must ponder the amount of money that will be made available. For example, the Government can now find £9 million this year and £5 million next year to make up the shortfall to local authorities. That contrasts significantly with the statements and debates that took place in the Chamber some months ago when we debated the revenue support grant settlement for Welsh local authorities.

The counties and districts in Wales agree that that was the worst settlement ever. There have been cuts in education, in social services, in the police force and in all the services that are vital to the business community--and vital too, of course, for inward investment.

The hon. Member for Erewash (Mrs. Knight)-- [Interruption.] The name of her constituency is as difficult to pronounce as the name of my own. The hon. Lady mentioned stability. Businesses in Wales are yearning for stability in the local government system, yet stability is the very thing that we have not had in local government finance. In 1988, the Under- Secretary of State and I served

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on the Committee that considered the poll tax during its three-month passage through the House. We agreed then on the issues--as, in a sense, we agree today.

There have been enormous changes to local government finance in just a few years. The hon. Member for Bromsgrove (Mr. Thomason) referred to changes that my party might want to introduce in local government financial institutions. When we consider the huge change that occurred as a result of the fiasco of the poll tax, any change that we might bring about would pale into insignificance. Billions of pounds were squandered on having first to prop up the poll tax and then to replace it altogether.

My fear is that the local government financial system in Wales, and in Britain generally, is becoming discredited. In Wales especially, but also in England, one aspect is the so-called "gearing" effect. It means that local councils can do virtually nothing unless they increase their local taxes dramatically. That has distorted local government finance, and has meant that local authorities no longer have a proper revenue-raising function. In Wales, a 1 per cent. increase in expenditure means an increase of about 9 per cent. in the council tax.

Yesterday, for the first time ever in the Principality, the Secretary of State for Wales announced his ideas about which local authorities should be capped. Only one authority out of 45 in Wales has been capped and it is the authority of the Minister of State, Welsh Office. It is an authority that is not controlled by any one political party. The decision has meant that the whole subject of capping has been discredited in Wales, as has the fact that the Secretary of State is having to take Gwent county council to court over its budget. The whole thing is a sorry mess, and the sooner we get some stability in local government finance, the better for businesses and the better for our communities.

In many parts of the country, business rate arrears are high. Local authorities find it increasingly difficult to collect business rates. There is an increasing gap between business rate payers and council tax payers. In Gwent, for example, business rates over the past three years have increased by 1.6 per cent., whereas local council tax payers have had to face a 53 per cent. increase.

The chief question, which has exercised the minds of hon. Members who have contributed to this short debate, concerns the nature of the business rate and what we want it to be. It is not a local business rate ; it is a national business tax. It bears no relation to the way in which rates used to operate, or to the way in which the council tax operates.

I believe that there is a vital link between local businesses and the local community, and that the link has been broken by the new business rate. All local authorities provide for businesses an educated work force, roads and infrastructure. In Wales, local authorities play an especially important role in economic development and inward investment. All my experience in 15 years as a member of a local authority was that local authorities and the business community saw great advantages in that direct link.

Large multinational companies in my own constituency agreed tremendously with what the local authorities were doing. They were very much involved in local authority matters, including the sponsorship of council activities. The sooner the link between business people and local authorities disappears, the worse it will be for democracy.

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The business rate is no longer related to commercial activity or to a particular district. There may be a great steelworks or a massive factory in an area. It may provide employment, but it may also disturb the area. The fact that the business rate is now collected centrally in Cardiff or in London means not only that there is no link between business and the community, but that there is no link between commercial activity and the business rate.

The business rate should relate to the ability of business people to pay it. There should be a system of rebates related to the profitability of businesses with an annual turnover below a specific level. We are firmly of the view

Mr. Simon Burns (Chelmsford) : I have listened carefully to the hon. Gentleman speaking up for businesses. The Labour party speaking up for the interests of business is about as convincing as Herod being in charge of a nursery.

Mr. Murphy : All I can do is describe my experience over many years, since local government organisation, of the relationship between my local authority, whether the county council or the district council, and the businesses in the area. I believe that the relationship has been healthy. That experience may not be repeated throughout the length and breadth of the country, but local government and local democracy are all about diversity. The great harm that has come from having a uniform business rate is that individual local authorities cannot determine their rate locally ; they cannot set it, and they cannot collect it.

I am not the only person who makes that point. Sir John Banham, for example, said recently that the present system

"reflects neither the ability to pay nor the level and quality of the local services businesses receive."

He has a role to play in local government reorganisation in the months ahead.

Mr. Thomason : Does the hon. Gentleman agree that it was this Government who introduced a consultative procedure on local authority budgets with businesses, and that that procedure was opposed by many in the Labour party?

Mr. Murphy : Opposition comes to different things in different ways. The Under-Secretary of State was a firm opponent of the poll tax when it was introduced in 1988. The Government saw the error of their ways and rightly appointed the hon. Gentleman to be a very good Minister. There are differences in view on all these matters across the country.

As I said, it is healthy for a diversity of views to be held on these matters by local authorities in England and in Wales. That is what local accountability and local democracy are all about. Businesses play a vital role in our communities, and that is why we support the Bill.

The Secretary of State for Wales acknowledges that belief, because he appoints many business people to quangos in the Principality. The White Paper on Welsh local government reform is the only indicator of how the Government intend to develop their ideas on the future shape of local government. They propose a system of unitary local authorities which will be responsible for raising their own revenue. When the Secretary of State for Wales reforms local government, he has a golden opportunity to set an example to the rest of the country, and to have another

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look at the system of local government finance. I am not saying that the Government must change the council tax-- they will not--but there are changes to be made. The simplification of the grant system would be something that hon. Members on both sides and members of local authorities throughout Britain would welcome.

There is a case for the business rate to be examined, as my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) said, and to be brought back into the local community. That opportunity should not be wasted. I urge the Secretary of State for Wales and the Government generally to rethink the whole question of local government finance when the reforms are introduced.

We support the Bill, but we recognise that it is a short-term expedient. It does not answer all the problems that face the country and local government in terms of how to finance local government, and it does not explain what the relationship between businesses and local authorities should be. I hope that the Government will address those matters in the months ahead.

5.29 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Robin Squire) : It is a great pleasure to follow the hon. Member forTorfaen (Mr. Murphy). As he said, we have followed each other for several years both in our previous role as Back Benchers and as "Box and Cox", or whatever the phrase is. It is nice to do so. He raised points to which I shall refer in my speech, as have other hon. Members.

I shall start by reminding the House that the Bill will provide a further £350 million boost to businesses this year on top of the £1.25 billion package that was introduced last year. We calculate that it will ease rate bills for some 400,000 small business premises and 100,000 larger ones.

As with the changes we made last year, local authorities will not suffer from the reduction in non-domestic rate income brought about by the Bill. The Government are committed to refunding the national pool to the extent of the estimated loss. We will also allow local authorities to net off their reasonable costs of re-billing from their national non-domestic rate payments.

We will need a short period--about a month--after enactment to introduce regulations governing the adjustment of rate bills that have already been issued and to enable local authorities to recalculate their contributions to the non-domestic rating pool. We will bring the Act into force in parallel with those regulations. Once in force, the Act will have retrospective effect to 1 April and authorities will be required to give refunds to ratepayers who have overpaid instalments in the meantime.

The debate was interesting, and I shall refer to some of the earlier speeches. The first Opposition speaker, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), highlighted some of the sad realities of the recent recession. There is no division between Conservative Members and Labour Members on that. The recession has had a terrible impact on a number of businesses and on many individuals.

In the context of the Bill, let us not forget--as some of my hon. Friends rightly reminded the House--that before the uniform business rate, many businesses were being hammered year after year by Labour councils up and

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down the country. The figures are clear. Between 1979-80 and 1989-90--the last year of the old system--locally set non-domestic poundages rose by 37.4 per cent. more than inflation on a compound basis nationally. Some of my hon. Friends who spoke today were councillors in opposition and saw that at first hand. My hon. Friend the Member for Erewash (Mrs. Knight) immediately comes to mind. By replacing locally set non-domestic rate poundages with uniform national poundages which cannot increase faster than inflation and by pooling and redistributing the proceeds of the business rate on a per capita basis, it is no longer possible for authorities to increase expenditure, knowing that businesses will meet much of the extra cost.

Mr. Dennis Turner (Wolverhampton, South-East) : Will the hon. Gentleman give way?

Mr. Squire : I shall willingly give way to the hon. Gentleman when I have finished this point. Although he has just come in, we would not like to disappoint him. If the uniform business rate had not been introduced, businesses would have paid £842 million more in 1992-93 and £797 million more in 1993-94.

Mr. Turner : I shall simply make this point. It is the height of cheek and hypocrisy for Conservative Members and the Minister to blame Labour local authorities for increasing rates during the period to which he referred, when in fact it is a direct result of the Government's failure properly to fund local government. The Minister should tell us how much was lost to local government in rate support grant settlement over that period. Every year, your Government cut support for local government. When Labour and Conservative local authorities had to increase rates, it was a direct result of your Government's policy.

Mr. Deputy Speaker (Mr. Michael Morris) : Order. It is the hon. Member's Government, not "your" Government or my Government.

Mr. Turner : Indeed, I am referring to the Minister's Government. How can the Minister use such cheek to imply that it was Labour local authorities' fault that rates increased during the period he quoted, when he knows that it was a direct result of his Government's failure properly to fund local government?

Mr. Squire : The hon. Gentleman was entertaining but not factually correct. I recommend that he go to the Library. He will find that the amount of support for local government during much of the period to which I referred increased rather than decreased. To help him a little more, I suggest that, if he looks under S for Sheffield, he will find a prime suspect in the area to which I was referring.

Mr. Henderson : I refer the Minister to his figures about the savings to business as a result of the introduction of the business rate. Does he accept that those figures must be put in the context of a subsidy from central Government and taxpayers generally? During the debate on the Non-Domestic Rating Bill on 2 June 1992, the Minister for Local Government and Inner Cities made it clear that the cost to the central Exchequer of protecting the business community from the introduction of the national business rate was £1,250 million, which is almost greater than the figure that the Under-Secretary of State claimed was saved by the business community. What has happened is that,

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generally, the taxpayer has subsidised the business community. I do not necessarily disagree with that, but the figures must be put in that context.

Mr. Squire : That is an interesting interpretation. I think other hon. Members will agree that there is a significant difference between the amount of Exchequer support which we are debating now, and which we debated on an almost identical Bill last year--the hon. Gentleman quoted the correct figure--and the tendency, until recently, for a number of local authorities to let rip as far as the private sector was concerned. That is the context in which I am speaking. Before I leave that aspect of the debate I shall refer to the democratic argument. I note that Labour Members want to revert to such a system and suggested that in some way it would bring greater accountability. Frankly, I do not accept that. My hon. Friend the Member for Southampton, Test (Mr. Hill) has said that there is no such thing as a business vote--nor is there any intention of introducing one. In the absence of such a vote, the concept of accountability as I understand it would be sadly lacking if such a proposal were entertained.

Mr. Murphy : It is important to understand the point that we made earlier about the gearing effect. Having taken control of the business rate away from local authorities, the amount of money that is left for local authorities to control is limited. That distorts the local government finance system.

Mr. Squire : It is an arithmetical fact that there is a gearing effect in England, Wales and Scotland--I cannot deny that. That does not, in itself, deny the advantages which the concept of the uniform business rate has brought to businesses in general.

I was referring to the speech of the hon. Member for Newcastle upon Tyne, North. I welcome his welcome for the measure, which was echoed by hon. Members on both sides of the House. He rightly said that the measure would be welcomed by businesses across the country. He then tried to get me to estimate the national non-domestic rate for 1994-95. His tongue might have been slightly in his cheek at the time. He knows that it is unrealistic to estimate that rate at present. Obviously, we must continue to be guided by the state of the economy and the impact of residual increases on big and small businesses. The hon. Gentleman will know that, under legislation previously passed, the maximum will be limited to the inflation rate, rather than the impact of past revaluation.

It is a little early to say what transitional arrangements may be needed to phase in the results of the 1995 revaluation. We have always said that we will examine the outcome of the revaluation before deciding whether transitional relief will be needed. By April 1995, many businesses will not have reached their full bills under the 1990 rating list, as the hon. Gentleman said. That is one factor that we will need to take into account, although many businesses may well find that their post-1995 bills are much reduced, reflecting relative changes in business rates between the valuations. I can reassure the hon. Gentleman on his specific point. If any business which faces an increase under the 1990 revaluation does not reach its full payment, any increases under the 1995 revaluation will be by comparison with the amount paid in 1994-95 rather than the amount that would have been paid if protection had not been available.

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The hon. Member for North Cornwall (Mr. Tyler) referred to the fall in business rate revenue. The distributable amount of business rates has fallen since 1991-92. That is, indeed, partly the result of the recession, which has led to an increase in empty property relief. A second factor which is equally important is the effect of rating appeals. Increasing numbers of appeals are now being decided, as my hon. Friend the Minister for Local Government and Inner Cities said. Repayment of rates following appeals may relate to the whole period from 1 April 1990, but the entire cost falls in the year in which the repayment is made. Therefore, the yield of business rates is likely to rise again once the peak of appeals has passed. Any changes in business rate yield will, of course, be compensated for by revenue support grant pound for pound within the published plans for external finance.

My hon. Friend the Member for Bromsgrove (Mr. Thomason) spoke with all the experience of a former senior local authority councillor. I assure my hon. Friend that, notwithstanding his nervousness at the appearance of support from the Opposition Front Bench, he is right to support the Bill. He pointed out how much impact the measure would have and how welcome it would be to business ratepayers in general. My hon. Friend was the first hon. Member in the debate to highlight the failings of site value rating, which subsequently became almost a separate debate in itself. I wish to put on record just some of the reasons why site value rating would be a poor system and a poor substitute for the current system which is the subject of the Bill. Site value rating would be a tax on a small number of owners rather than on many occupiers. It would be a hidden tax on the latter through rents. We would need a register of beneficial owners. Site value rating would involve indentifying the development potential of each and every parcel of land. It would require detailed evidence of land sales and prices in each area. It would be unfair to owners if existing convenants and contractual arrangements meant that land could not realise its development potential.

Perhaps as importantly, if site value rating was limited to where planning or zoning permission had been obtained, any competitor, other developer or business could apply for planning permission on someone else's site. The consequence could be to drive the business out. That seems a strange way to encourage business. I urge the Liberal party to rethink.

Mr. Tyler : I am grateful to the Minister and his colleagues for paying so much attention to my party's policies. That is a new experience for me. I wish to pursue the Minister's last point because I know something about planning. Is he aware that it is now widely regarded as unacceptable for someone who has no interest in land to be in a position to make a planning application for it? If that is the Minister's main objection, as it seems to be, does he accept that there is in any case considerable anxiety about that feature of the planning system?

Mr. Squire : I listed several reasons why site value rating was inadequate. On the hon. Gentleman's specific point, he will be aware that it is likely that more than one person will have an interest in any site, land or property. It could be a tenant, the landlord or a putative purchaser. A range of people could have an interest. The hon. Gentleman

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described the existing law. I was simply interpreting his remarks. It was not clear whether in the event of a Liberal Democrat Government being elected--the House should not hold its breath--site value rating would be introduced.

I am grateful to the hon. Member for North Cornwall for welcoming the measure, in company with the other hon. Members who spoke. However, it was a bit rich, virtually in his first minute and the day after quarterly GDP figures were announced showing an increase for the first time in three years, for the hon. Gentleman to suggest that my hon. Friend the Minister had denied a recovery. It is simply untrue. My hon. Friend not only highlighted it, but put it in context, as a re-reading of Hansard will show.

It is possible that the recovery is badly timed for the Liberal Democrats whether in the context of the county council elections or that of the Newbury by-election. However, the hon. Gentleman will understand if I say that the vast majority of people welcome the recovery notwithstanding any difficulties that it may give the hon. Gentleman.

The hon. Gentleman said that it was interesting that, out of all the figures for Newbury, we mentioned the figures for only one month. But the figures have fallen for two months and Newbury's rate of unemployment at 7.1 per cent. is well below both the Great Britain and EC averages. I shall be delighted if the hon. Gentleman's speech is widely circulated in Newbury in the next two weeks. It will not add one vote to the Liberal Democrats' likely haul.

Mr. Tyler : Of course we all welcome any reductions in unemployment, even if they are only in one or two months. I wish that we had a dramatic reduction in unemployment in my constituency, but sadly that is not the case. In my speech--I am sure that the Minister was paying careful attention--I compared the position of small businesses before the introduction of the uniform business rate in 1990 with now. That is why I picked 1990 and 1993. I made a comparison over a three-year period. I know that the Minister is an honourable, honest and fair-minded man. He will accept that over a three-year period there has been a substantial increase in business rates, whether one takes February, March or any other month.

Mr. Squire : I am not sure whether I should continue with my modest, up-beat comments based on fact or look backwards to what has happened in the past three years. I judge that on balance most people prefer to look forward rather than back, so I shall keep going with my speech.

The hon. Member for North Cornwall made some comments about tourism. Seasonality of use is taken into account in rates assessments. If a holiday resort is open for only a limited period in the year, that will be reflected in rents and hence in rateable values. Any change in economic circumstances such as a shorter summer season is taken into account at revaluation. Any change made within the life of an existing list would cause a loss of revenue from rates which would have to be made up elsewhere in the tax system. That would be unfair.

The hon. Member for North Cornwall correctly pointed out that several local authorities under all forms of political control had been rather slow in applying section 49 and providing hardship relief. I underline from

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the Dispatch Box that hardship relief is available where there is genuine hardship. I was not sure whether the hon. Gentleman suggested that because the take-up had been low, the Government should centralise hardship relief. I hope that he was not suggesting that. If he was, it runs counter to the actions of the Government in devolving decision making to local authorities. It also runs against what his party normally stands for.

Mr. Tyler : I am grateful to the Minister for giving way yet again. As he seems to be so interested in my speech, I hope that he will forgive me for interrupting. The point that I made was clear. If the Government were prepared, within the criteria, to fund hardship relief 100 per cent., clearly local authorities would feel a great deal less inhibited in providing the hardship relief which he and I agree should be available.

Mr. Squire : The whole point of the system--I know that the hon. Gentleman knows this--is that it gives local authorities discretion to determine hardship. If we provided 100 per cent. support, we would do precisely what I thought that the hon. Gentleman would not support and take the decision into central Government. Hardship is better determined by a local authority. I join the hon. Gentleman in urging its wider use by local authorities.

My hon. Friends the Members for Test and for Erewash made strong speeches, drawing on their experience of small business and local government. They correctly spelt out the gain that businesses will make under the measure.

The hon. Member for Torfaen spoke, as I expected him to do, about the gearing effect and the relationship especially in Wales between central and local government support for local government expenditure. He will know that prior to setting the levels of total standard spending and aggregate external finance for 1993-94, the Secretary of State for Wales took account of the view expressed by Welsh local authority associations that the proportion of revenue raised locally in Wales should be increased. The lower level of increase in the additional aggregate external finance of 1.7 per cent., relevant to that of the total standard spending, means that Welsh local authorities are able, on average, to raise about 10 per cent. of their income from the council tax, which represents an increase of more than 1 per cent. on the figure for 1992-93. The hon. Gentleman also raised the spectre of further reform of local government finance. I beg the hon. Gentleman as a Minister and as an individual, although I am not allowed to hold a separate view, to ignore that siren call. The hon. Gentleman and I have sat on many Committees and we know perhaps better than other hon. Members just how difficult it is to reform that system. I believe that the system now in place for the collection of local business and personal taxation will last and will be welcomed by the overwhelming majority of people.

The overall effect of the Bill is that no business will end up paying more rates in real terms this year than it did last. The Bill is important and worth while. It is well targeted on those businesses that have borne much of the brunt of the recession and I urge the House to support it.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

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Non-Domestic Rating (No. 2) Bill [Money]

Queen's recommendation having been signified--

5.51 pm

The Minister for Local Government and Inner Cities (Mr. John Redwood) : I beg to move

That, for the purposes of any Act resulting from the Non-Domestic Rating (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums so payable out of money so provided under any other Act. It gives me great pleasure to move the resolution so that the money is available to provide the relief that business is seeking--the relief that the House seems to favour.

The Bill has two main financial consequences. The big one is the reduction in the amount of money to the rates pool, which the Bill will make good. The second is that there will be some additional expenditure to local authorities in implementing the Bill, and we are proposing to allow authorities to set that expenditure against the pool to adjust the rates bills. I hope that the House will welcome those two features, which are reflected in clauses 2 and 3. The cost of making good the shortfall for the pool in England is estimated to be £340 million in 1993-94 and £220 million in 1994-95. That is on top of the substantial relief that was made available last year as a result of a similar Bill to which my hon. Friend the Parliamentary Under-Secretary of State for the Environment has already referred. In Wales, which has separate pooling arrangements, the cost will be £9 million in 1993-94 and £5 million in 1994-95. The money issues were given prominence on Second Reading. It is interesting that the Liberal party in particular favours a different approach to the financing of local government--one which would be deeply damaging to many businesses. The hon. Member for North Cornwall (Mr. Tyler) seemed to be particularly interested in Newbury and in Berkshire. He failed to tell the House, or the people of Newbury, however, about the impact of his proposals upon the butchers, the greengrocers and the grocers of that town.

Dame Elaine Kellett-Bowman (Lancashire) : It would be disastrous.

Mr. Redwood : Yes, my hon. Friend is correct. It would put such businesses under intense pressure. We are glad that Liberal policies are not threats but spectres, or their effects would be considerably more serious.

We can always tell when there is a by-election, county council election or even a general election in the offing, because it is then, in spring time, that we begin to see the first "Focuses". They come out of the woodwork after a year of absence and a year of neglect and appear in Newbury or wherever else containing all sorts of claims about how the Liberals have done everything that has, in fact, been done by the Conservative party for the good of local people. The Liberals claim the credit, but they do not do the work, as is evident from the "Focus" publications. I am sure that another "Focus" will be issued to say that the Liberals were behind the money resolution, which is so instrumental in helping local business. Site value rating should be condemned by all men and women of good will and by all sensible parties in the

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House, because it would be extremely damaging. It is symptomatic of the Liberal party that it usually supports the Labour party in local government. Recently, I believe that the Liberals have encouraged the Labour party to withdraw candidates from the county elections in Berkshire. Obviously, they have struck some kind of deal. When we hear about Liberal party policies, they seem to be Labour policies in fiscal drag. They are dressed up in a new kind of style, with local income tax and site value rating on top of the other imposts that the Labour party would like to impose. As always, it is the Liberals who want other people's money. They may well vote for the money resolution today, but, secretly, they would like to impose far more taxes and to waste far more money.

As my hon. Friend the Under-Secretary has already said, it is a curious paradox, some might say that it was a two-faced approach, that the Liberal party reveal. It claims that it wants much more devolution and local autonomy, but as soon as any measure offers such autonomy to Liberal councils, the Liberal party will not use its local discretion and gets its spokesman to come to the House to say that the Government must order councils to exercise such autonomy.

Mr. Paul Tyler (North Cornwall) : The Minister's claims are erroneous, as is his interpretation of his colleague's remarks. The Under- Secretary said that parties of all colours in government in local councils throughout the country have used the hardship relief. In my speech on Second Reading, I was able to quote the impeccable record of Newbury district council and North Cornwall district council on their use of the hardship relief. The Under-Secretary was right to acknowledge that.

Why is the Minister trying to stir things up? He said that election time was when "Focus" appeared, but that is not the case in my part of the country. It appears throughout the year. We always know when the Government are expecting a defeat at the hands of the electorate, however, because they attack us.

Mr. Deputy Speaker (Mr. Michael Morris) : Order. We are actually debating the money resolution.

Mr. Redwood : I thought that a little circumlocution about the money might be appropriate at this stage. As I understand it, there is no great pressure on our parliamentary business, and I thought that it was important to elucidate these crucial--

Mr. Deputy Speaker : Order. The Chair allows no circumlocution dependent on time. I am afraid that the Minister must stay in order regardless of the time factor.

Mr. Redwood : I shall, of course, endeavour to do that--and with your guidance, Mr. Deputy Speaker, how can I fail?

The money issues at stake are clear. The hon. Member for North Cornwall has said that more use should be made of hardship relief. He said that that should be incorporated in Government proposals in a Government mandate to local government. I am sure that he would like that proposal to be added to the money resolution, if that were possible.

The answer to that request is that the powers are there, and councils can use them if they see fit. That is local judgment and local autonomy in action, and I cannot understand why the hon. Gentleman wanted us to insist that that power be used. Now he is, as always,

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backtracking on this very point. He now accepts that there is local discretion, and he is trying to claim that Liberal councils use it well.

The money resolution is important for business and the continuing economic recovery. It is an important means of building on the improved figures and prospects that we have seen in recent weeks. It is important that the House now gives more stability to local authority taxation and expenditure measures. The resolution is part of that process, and it will mean that local government has the money for the job so that the burden on business is not unacceptably high. I have pleasure in commending the resolution to the House. 5.58 pm

Mr. Doug Henderson (Newcastle upon Tyne, North) : We have witnessed a somewhat unorthodox approach to a money resolution. I did not intend to speak, but I feel bound to make some response to some of the Minister's remarks. I shall endeavour, Mr. Deputy Speaker, not to circumlocute ; I am sure that, if I do, you will bring me back into line.

A number of cuckoos have been flying around Westminster and Fleet street, and Wapping, I suppose, over the past two days, and it seems that one of them has got into the House. Claims are being made about the recovery from which the country is now beginning to benefit. The Opposition want to see the economy recovering, business pulling itself out of recession and output picking up. We want jobs to be created in our economy.

The statistics announced by the Government yesterday--a 0.2 per cent. increase in output in the first quarter of

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1993--have been mentioned. There has been a 0.2 per cent. increase in output in the first quarter of 1993, but does that constitute the beginning of a recovery? That is the question that businesses will be asking as they face business rates.

It is interesting to note the way in which the Government claim that a 0.2 per cent. increase in output--if my arithmetic is correct, that means a 0.8 per cent. annual increase in output--constitutes a recovery in Britain. When Germany and France enjoyed increases in output of 1 per cent. and 1.5 per cent., the Government said that those statistics represented part of the world recession and constituted a recession in those countries. There seems to be some contradiction in the Government's position. I hope that the House will reflect on that when it considers the money resolution. The Opposition supported the Non-Domestic Rating (No. 2) Bill as a means of assisting the business community, and they also wish to extend their support to the money resolution. However, we wish that the Government--and, perhaps, the Liberal Members--

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