House of Commons Hansard Debates for 12 Jan 1994

Mr. Robert N. Wareing (Liverpool, West Derby) : Does the Prime Minister agree that Tuzla airport has become critical precisely because the heaviest, severest and most barbarous fighting is between the Muslims and the Croats in the areas around Mostar and Vitez and is blocking the supply line from the port of Split? Was there no discussion at the NATO conference of the need for pressure to be put on the Croats and the Muslims? How on earth can a one-sided threat of air strikes assist in getting the three parties to sign a peace accord when they meet in Geneva next Wednesday?

The Prime Minister : It is not just a question of signing in Geneva. Quite a lot of agreements have been signed in Geneva. What concerns me is whether the agreements signed in Geneva are honoured in Bosnia. That has been the principal difficulty.

As for putting pressure on all the parties, that point was discussed, and it was agreed that, in terms of diplomatic political pressure, it is desirable to put pressure on all the parties, not only the Serbs. There are particular transgressions by the Serbs, where it may be necessary for

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us to carry out the air strikes we referred to earlier, but pressure undoubtedly needs to be put on all three parties to achieve a negotiated political settlement : the hon. Gentleman is quite right.

Mr. David Atkinson (Bournemouth, East) : In view of the recent sale of North Korean long-range missiles to Libya, Iran and elsewhere, and as it is now known that the American Patriot missile was less successful in bringing down Iraqi Scuds during the Gulf war than was suggested at the time, what discussions took place at the summit on the need for global missile defence, particularly in view of the fact that the Americans have ended research and development on the strategic defence initiative?

The Prime Minister : Predominantly, the summit endorsed comprehensive examination by NATO of responses to the particular problems of proliferation. The intention is that that approach will embrace the traditional non-proliferation policies and will also review the nature and size of any ballistic missile threat there may be to the alliance and, if and where that threat exists, what capabilities the alliance has or may need to counter it. Yes, there was substantive discussion on that point.

Mr. John Hutton (Barrow and Furness) : The final communique at the summit referred to NATO intensifying and expanding its efforts to combat the spread of weapons of mass destruction. Can the Prime Minister tell the House what specific or new proposals he has in mind to achieve this desirable and important objective?

The Prime Minister : It was one of the things that has occurred. It is not simply a matter for the United Kingdom ; that, as the hon. Gentleman knows, spreads much more widely. The agreement that was reached with the Ukraine, Russia and the United States is a further move forward. We need to make sure that START and other agreements are fully honoured. All these are elements of the non-proliferation programme. There is also the test ban treaty, which was mentioned earlier. There are a whole range of policies marching in parallel in the direction the hon. Gentleman wishes us to go.

Several hon. Members rose --

Madam Speaker : Order. We must move on.

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Points of Order

4.19 pm

Mr. Jack Straw (Blackburn) : On a point of order, Madam Speaker. My point of order, of which I have given you and the Secretary of State notice, concerns the availability to Members of the House of the district auditor's report on the designated sales policy of Westminster city council, which was due for publication tomorrow. The inquiry has been going on for more than four years and directly involves two Members of the House- -my hon. Friend the Member for Workington (Mr. Campbell-Savours) as an objector, and the hon. Member for Milton Keynes, South-West (Mr. Legg) as a respondent. Every other right hon. and hon. Member of the House has an interest in the outcome of what, on any basis, has been one of the most major inquiries ever into alleged unlawful spending by councillors. It was always understood by the objectors and by Westminster city council, if not by the respondents themselves, that, at the end of this stage of the inquiry, two things would happen. First, it was understood that all primary evidence--transcripts, documents and so on--would be made available to the parties but, if further proceedings to surcharge were to take place, not to the public.

But, secondly, it was understood that the district auditor would make available in the public domain his report based upon that evidence--the so- called "Note of provisional findings", which runs to more than 500 pages. That was exactly what happened, and rightly, when the district auditor reported into Lambeth and Liverpool in 1985.

But last night we learned that that report will not now be made available to Members of the House, or generally to the public. All that we and the public will get tomorrow is a five-page summary. It is as if a judge of the High Court, after a four-year action, said, "This is what I have decided, but I am not telling the public why nor what weight I have given to the evidence."

My understanding is that that step has been taken by the auditor as a consequence of what can only be described as constant bullying by lawyers acting for one of the respondents, Dame Shirley Porter. But the decision not to publish will place the House in a most extraordinary position.

The report is a matter of great public interest. What if the two hon. Members, who are parties and who will receive the report, wish to quote from it in the House? Will they then be able to quote from it but none of the rest of us be allowed to ask questions upon it? In any event, since copies will be issued to the parties, it is almost certain that further unofficial copies will be made and then passed round, rather as dog-eared copies of "Lady Chatterley's Lover" were in the days before the law was changed.

Semi-secret justice is no justice at all. It is surely wholly wrong for there to be one rule when publication of an auditor's report concerns ordinary councillors in Lambeth and Liverpool and another rule when it concerns the well-connected and the very rich. There is a way in which such a low and terrible farce can be avoided, and that is for the Secretary of State to use his reserve powers under the Local Government Finance Act 1982 in relation to the Audit Commission, and to ask the House to make a return so that the auditor's report becomes

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a parliamentary paper to which parliamentary privilege would then attach. Therefore, I ask you, Madam Speaker, as the guardian of the rights of the House, to ensure that that is done, and I ask, through you, for the Minister now to make a statement about this.

The Minister for Local Government and Planning (Mr. David Curry) : Further to that point of order, Madam Speaker. I am grateful to the hon. Member for Blackburn (Mr. Straw) for his prior notification of his intention to raise the point of order.

My initial reaction is that the hon. Gentleman has misunderstood the Secretary of State's power under the Local Government Finance Act 1982. My understanding is that the Secretary of State can direct the Audit Commission to provide documents and information, but not the auditor. There might well be a real problem if Ministers could be seen to be putting auditors under pressure in that way.

However, I am pursuing detailed legal advice, and as soon as I receive it I shall write to the hon. Gentleman, and I shall place a copy of that letter in the Library of the House.

Several hon. Members rose --

Madam Speaker : Order. The point of order was to me.

There have been some interesting exchanges, and the House is well aware of the situation. I am grateful to the hon. Member for Blackburn (Mr. Straw) for giving me notice of his point of order. Although it is open to right hon. and hon. Members to table motions calling for documents to be laid before the House, in a case such as that which the hon. Gentleman has in mind, the motion would not constitute a motion for an unopposed return--as described on page 281 of "Erskine May".

Such a motion, therefore, would not enjoy any precedence over other motions, and it would have to be placed among early-day motions or the remaining orders of the day. Whether the Secretary of State chooses to table such a motion is a matter for him. As the hon. Gentleman has made clear, the papers in question are not in the Government's possession. We must leave it at that, with the Minister's response to the point of order.

Mr. David Winnick (Walsall, North) : On a different aspect of the same point of order, Madam Speaker.

Mr. Straw : I thank you, Madam Speaker, and the Minister for those replies. I want to make it clear that there has never been any question about the independence of the Audit Commission or of the district auditor. I do not believe that the district auditor's independence would in any sense be called into question by the Secretary of State asking the House to make a return for the papers. In fact, the district auditor's independence would be greatly strengthened if such a return were made.

Mr. Winnick rose --

Mr. Dennis Skinner (Bolsover) : On a point of order, Madam Speaker.

Madam Speaker : Order. The matter has been dealt with ; we cannot go on debating it. The Minister has replied, and we should leave it at that for the time being.

Mr. Skinner rose --

Madam Speaker : Is it a different point of order?

Mr. Skinner : Yes.

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Madam Speaker : Very well.

Mr. Skinner : Between 1972 and 1974, when Clay Cross councillors were surcharged under district auditor reports made before 1982, the matter was placed in the public domain, and everybody knew everything about it. In fact, Members of Parliament representing towns and cities other than Clay Cross throughout the country, including Scotland, were involved. The Minister said, however, that since 1982 a clear distinction has been made as a result of the Local Government Finance Act 1982. It is hard to believe that the Government do not have the power to do in respect of Westminster as they did in the cases of Lambeth and Liverpool, which both arose after 1982. Is that because Westminster is Tory controlled and is close to the Tory Government?

Madam Speaker : The hon. Gentleman knows that legal advice is not given by the occupant of the Chair.

Mr. Winnick rose --

Madam Speaker : Is it the same point of order?

Mr. Winnick : It is on a different aspect.

Madam Speaker : I do not think that we need a point of order on another aspect. We are dealing with points of order--this is not a debate.

Mr. Winnick : My point of order concerns the rights of Members of Parliament. If there is legal pressure on the district auditor--as I understand is the position--not to publish a 700-page report on what happened in Westminster city council, right hon. and hon. Members will not be able to read it. Why should not right hon. and hon. Members be able to study the report when that is essential for their understanding of events?

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Madam Speaker : I cannot listen to allegations about legal pressure. The Speaker is not in a position to give legal advice. The House heard the Minister's comments, and right hon. and hon. Members must leave it there.

BILL PRESENTED

Social Security (Incapacity for Work)

Mr. Secretary Lilley, supported by Mr. Chancellor of the Exchequer, Mr. Secretary Gummer, Mr. Secretary Hunt, Mr. Secretary Lang, Secretary Sir Patrick Mayhew, Mrs. Secretary Bottomley, Mr. Secretary Redwood and Mr. Nicholas Scott, presented a Bill to provide for incapacity benefit in place of sickness benefit and invalidity benefit ; to make provision as to the test of incapacity for work for the purposes of that benefit and other social security purposes ; to make provision as to the rate of statutory sick pay ; to make other amendments as to certain allowances payable to a person who is or has been incapable of work ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time tomorrow, and to be printed. [Bill 32.]

NORTHERN IRELAND COMMITTEE

Motion made, and Question put forthwith, pursuant to Standing Order No. 99(2) (Matter relating exclusively to Northern Ireland).

Health Service

That the Matter of the health service in Northern Ireland, being a Matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Committee for its consideration.-- [Mr. Chapman.] Question agreed to.

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Orders of the Day

Non-Domestic Rating Bill

Order for Second Reading read.

Madam Speaker : I have selected the amendment in the name of the Leader of the Opposition.

4.28 pm

The Minister for Local Government and Planning (Mr. David Curry) : I beg to move, That the Bill be now read a Second time. It does two things. It honours a pledge given by my right hon. and learned Friend the Chancellor of the Exchequer in his Budget speech on 30 November 1993 to provide yet further help for businesses next year under the transitional arrangements we introduced to phase in changes in rates bills following the 1990 revaluation. Similar help will be provided in Scotland by reducing rate bills, on average, broadly in proportion to the reduction in England.

Secondly, the Bill gives the Government greater flexibility to introduce, if necessary, further transitional arrangements following the 1995 revaluation. The House will be aware that this is the third time in the past two years that we have brought forward measures to help businesses that are facing rates increases as a result of the 1990 rating reforms. The previous measures were warmly welcomed by the House. I hope that this Bill, too, will be given a swift passage so that local authorities will be able to incorporate the changes when they send out their rate demands before the start of the financial year. Failure to do so could result in uncertainty for businesses and delays in bills or the need to re-bill, with the administrative costs which that would involve.

Many businesses are already benefiting from the introductioin of the uniform business rate. The occupiers of 1.25 million business properties that have no need of the transitional arrangements can plan ahead in the knowledge that the business rate poundage cannot rise above inflation. By announcing a poundage of 42.3p in the pound, the Government have guaranteed that their bills will rise by no more than 1.7 per cent. next year, enabling them to benefit from the current low rate of inflation.

For around 360,000 businesses, however, increases in bills will be greater than 1.7 per cent. next year. Those are the businesses which are still moving upwards towards their full new rate bills after the 1990 revaluation. It is inevitable that revaluations shift the burden of rating between businesses. That has to happen if rates are to continue fairly to reflect the relative prosperity of different types of businesses in different areas. Equally inevitably, adjustment to those changes can be painful. It was to cushion such changes and to ease the pain that the Government introduced transitional arrangements in 1990 and additional measures since then further to soften the impact.

The Non-Domestic Rating Act 1992 froze rate increases beyond the rate of inflation for 1992-93 and allowed businesses whose bills were being phased downwards following the 1990 reforms to see their remaining gains come through this year. That was an extremely generous package which benefited around 900,000 premises throughout the United Kingdom at a cost of around £1.25

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billion over three years. The Non-Domestic Rating Act 1993 again held rate increases to the rate of inflation for 1993 -94 at an additional cost of some £550 million.

Without any change to the arrangements for 1994-95, businesses that benefited from the two earlier measures would face increases of up to 20 per cent. on top of inflation next year. We do not think that businesses should be asked to face such large increases. However, it is necessary to make some progress towards full rate bills based on the 1990 revaluation. We simply cannot afford a further freeze for all properties. The Bill will, therefore, reduce the increases that businesses would otherwise be facing to 10 per cent. on top of inflation for larger properties and 7.5 per cent. for smaller properties. For smaller properties that are in part domestic and in part non-domestic--the composite hereditament--the Bill will continue the freeze on increases beyond the rate of inflation for a further year.

The measures will provide relief of some £90 million in forgone revenue for around 360,000 properties in England. A free-standing shop in, for example, Newcastle or York with a rates bill of £4,000 for 1993-94 would save about £305. An office with a rates bill of £10,000 in that year would save about £1,017.

Mr. Hugh Bayley (York) : The Minister has mentioned my constituency, where many properties will face such enormous increases in their business tax when the uniform business rate is introduced that they will not reach anywhere near the revaluation level at the end of the five-year transitional period. What guarantee can the Minister give that those businesses will not face an enormous £2,000, £5,000, £10, 000, or £20,000 increase, as some of them could if transitional relief is not run forward beyond the end of the current revaluation period and into the next?

Mr. Curry : In 1995, there will be a revaluation based on the values of April 1993--the values of nearly a year ago. Because of the change in business fortunes, many properties may not reach even the rateable values anticipated in the 1990 revaluation ; they will not have to complete a transition, because the new values will be lower than those fixed in 1990.

Mr. Bayley : That is certainly true of some businesses and properties, but for other properties the new revaluation level will be considerably higher than the existing uniform business rate, involving transitional relief rebates. Unless the transitional relief regime continues for some years, to ensure that the rate bills of businesses do not rise from, say, £20,000 to £40,000--unless the system continues in a form similar to that proposed by the Minister for the current year--some businesses will incur massive increases, not this year but next year.

Mr. Curry : I look forward to receiving the hon. Gentleman's support in the Lobby tonight. The Bill will enable us to mitigate increases that might result from the 1995 revaluation, without necessarily requiring a self-financing system, so that those whose rates are going down need not meet the costs of those whose rates are rising. The purpose of the legislation is to give the Government the necessary power, without necessitating recourse to primary legislation, to enable them, by means of an affirmative resolution in both Houses, to introduce

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transitional measures financed by a contribution to the pool to compensate for any deficit in the amount that it would otherwise have received.

Mr. Bayley : The Bill would certainly give the Government the power to roll forward transitional relief. I am asking for a political commitment that they will use that power to protect businesses in my constituency-- and, indeed, in the constituencies of other hon. Members.

Mr. Curry : It is perfectly clear that the total business rate is hypothecated to local government finance. If we introduced measures that resulted in less money being available for the pool than would be available otherwise, local government would expect us to make good the shortfall. I, therefore, give the hon. Gentleman the commitment that we would do so.

Mr. Keith Vaz (Leicester, East) : Will the Minister give way?

Mr. Curry : I was going to give the Opposition time to recover from a state of stunned shock, but I am happy to give way to the hon. Gentleman.

Mr. Vaz : Will the Minister answer a question that he failed to answer when I asked it during last night's debate on the money resolution for this Bill? Why has he thought it necessary to depart from the principle set out in previous Bills--and, in particular, from a statement made in the House on 13 May last year by his predecessor, now Secretary of State for Wales? During the Report stage of last year's Bill, the then Minister said that full compensation would be paid and that the Secretary of State would make up the entire amount missing from the pool.

Mr. Curry : The House risks falling into a dangerous consensus. Under the current legislation, if we decide to mitigate, compensation must be provided within the system--unless we introduce measures to enable the Exchequer to finance the deficit. That is the commitment made last year by my right hon. Friend the Secretary of State for Wales, as he now is ; and I am fulfilling it in this Bill. We are looking ahead to the 1995 revaluation. After that, we may need to mitigate further. We want to have the power to do so in a way that enables the House to scrutinise our proposals fully. The measures will be introduced by means of an affirmative resolution. There is a change. We are departing from existing powers that impose a system of self-financing. We can compensate the pool only by means of primary legislation, such as this Bill. We are moving to a system in which we seek powers to make regulation, to give us more flexibility. We do not yet know the nature of the scheme that we might introduce and it would be entirely wrong for us to bind ourselves, by means of a duty, to a scheme that we have not yet devised. The affirmative resolution procedure, however, will give the House a proper opportunity to debate the matter. I cannot understand why the hon. Member for Leicester, East (Mr. Vaz) has such a constitutional hang-up about the problem.

After that brief consensual interlude, I shall continue. The measures will provide relief for about 360,000 properties in England, to the tune of about £90 million. I quoted examples of offices in Newcastle and York. Some

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180,000 shops and offices will benefit by over £50 million and 60, 000 warehouses and factories will benefit by £7 million. About 120, 000 other properties will also gain. Much of the relief--about £73 million--will benefit 236,000 businesses in London and the south of England, because that is where the impact of the 1990 revaluation was felt the heaviest, based as it was on 1988 values. The same principles will be adopted next time.

Businesses in Wales will save £5 million and in Scotland the rate bills of all 220,000 businesses will be reduced by £10 million overall under separate powers. The reduction will, on average, be broadly in proportion to the reduction in rate bills for businesses in England.

We believe that this additional relief will be welcomed by businesses in the run-up to the 1995 revaluation. However, that revaluation is likely to result in further shifts in rate bills to reflect the changing economic fortunes of businesses since the peak of the boom in 1988. We may need to introduce further transitional arrangements for 1995-96 onwards and our powers to make further transitional schemes are contained in the Local Government Finance Act 1988, which has just been the subject of my exchanges with the hon. Member for Leicester, East.

It is still too early to say how the revaluation is likely to pan out. Although the Valuation Office Agency has been collecting the necessary data, this will need careful analysis before final assessment of the rateable value can be determined. We do not expect to have firm indications of the effect of the revaluation before the spring. We shall then be able to look carefully at the overall pattern to see what form any further transitional arrangements might take. Once the proposals have been formulated, we would expect to consult on them by the early summer. We would certainly wish to give businesses a chance to comment on the proposals, and local authorities will need as much time as possible to prepare for the introduction of any new scheme once it has been finalised. We would expect to announce our conclusions in the autumn. Parliament will also have an opportunity to consider any new arrangements. The regulations giving effect to them require the approval of both Houses and must come into force by 1 January next year.

In some respects, we do not believe that our existing regulation powers are wide enough to do all that we might wish to ease the transition in 1995. The Bill will provide additional flexibility. In particular, our existing powers require the Secretary of State to devise transitional arrangements that are self financing. The Bill will remove that requirement and enable the Government to devise rules that would reduce the burden on businesses. It will enable us, should we wish, to ease the burden for those facing increases as a result of the 1995 revaluation without requiring the full cost to be borne by other ratepayers. We should be able to make up the difference by making an Exchequer contribution to the business rate pool.

The existing powers also require regulations governing each five-year transitional period to be made before the period starts. That would require the Government to take a view in advance on the extent to which they might be prepared to support the arrangements centrally each year. The Government would wish to have the flexibility to decide that afresh each year in the light of changing economic circumstances. The Bill will allow regulations to be made governing one year at a time.

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The Bill will give us the powers to ensure that protection against rate increases under any transitional arrangements after 1995 is not lost if a property is subsequently altered to create a new property. In such cases, it will be necessary to derive notional rateable values for the new properties as if they were in existence at the time of the revaluation. The Bill will allow regulations to include provision for the valuation officer to certify such notional rateable values and for ratepayers to be given the opportunity to appeal if they disagree with the certified value.

We believe that, overall, the measure will provide further relief for many businesses and enable a smoother transition towards the new rate bills that businesses will face following the 1995 revaluation. I commend the Bill to the House.

4.44 pm

Mr. Jack Straw (Blackburn) : I beg to move, to leave out from "That" to the end of the Question and to add instead thereof "this House declines to give a Second Reading to the Non-Domestic Rating Bill because it fails, in future years, to guarantee that any shortfall in the rating pool will be made up by the Secretary of State, fails to guarantee that the cost of transitional arrangements for non-domestic ratepayers will not be borne by council tax payers and fails to make the Secretary of State sufficiently accountable to Parliament."

When the Government fall, as they surely will, it will be because of their continued abuse of power, their failure to respect the spirit of the rules and conventions of the House, their failure to distinguish between private partisan interest and their public role as trustees of the constitution and because of the contempt and arrogance which Government Members now display for all who disagree with them.

The House is being asked today to agree to every stage of the Bill without any justification. The fact that the Minister did not devote a single word to attempting to justify the abuse of power spoke volumes for the lack of justification for the procedure that has been adopted. I am sorry that the Minister should be a party to this abuse. Since he became a Minister he has built up a deserved reputation for being reasonable. On two occasions I have heard him say that he comes from the consensual wing of the Conservative party, if that is not an oxymoron. At a conference organised by the city council in the city represented by my hon. Friends the Members for Coventry, South-East (Mr. Cunningham) and for Coventry, North-East (Mr. Ainsworth) I heard the Minister open his remarks by saying that he believed in consensus and that he wanted to develop it. The use of that word used to be a hanging offence in the Conservative party, but he used it. Yet last night he showed contempt for the House. Our anger and astonishment at what he did was palpable when he refused to answer straightforward questions put during the short debate on the money resolution. Today he has offered no explanation for why the Bill should be forced through every stage in one day.

As the House knows from the excellent speech last night of my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), we are not opposed to the principle that businesses should receive a subsidy as a consequence of the continuation of the recession. We made that clear when similar but different Bills were debated last year and the year before. The Bills that were debated last year and the year before followed the normal and accepted procedure for non-emergency Bills. This is not the

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nationalisation of Rolls-Royce which, although it was introduced by the Conservative party, we accepted had to take place in a day. This Bill is not to deal with an emergency but to provide relief for businesses in respect of their business rates for the next financial year which starts on 1 April.

Last year and the year before, the Committee stages of those Bills were separated from the Second Reading by well over a week, which is the normal procedure. [Interruption.] That is correct and I will give the Minister the dates if he wants them. The House has developed that procedure regardless of whether a Bill is contentious. The Second Reading debate allows Members to think about and discuss the general principles involved. Detailed questions are asked of Ministers and there is time to reflect on the answers. There is also time to table amendments in the light of the debate on general principles and for them to be debated. If the Minister is wondering why the Opposition, who are a constructive Opposition, dealt with matters expeditiously last year and the year before, it is because Ministers sought to respect the conventions of the House and provided time for reflection. There is another reason. Both those Bills were introduced after the financial year had started. Ministers could have said, "We should not be in this position, but we are. It is an emergency. The financial year has already begun and rate bills are about to be sent out. We want to get this through immediately." They never said that. They took their time, as did the House and, as it happened, neither Bill received Royal Assent until midsummer. This Bill was published in December, three and a half months before the end of the financial year. It is having its Second Reading two and a half months before the end of the financial year. We do not want any jiggery-pokery from the Government later, so I must make the point that even allowing for the suspension of the usual channels, given the narrow range of amendments tabled, their grouping and the normal time for discussion, there is no doubt that if there is a majority in favour of the Bill, it could become law by the end of February. That is the earliest that it will be needed by any treasurer. I hope that the Minister will take account of that fact. If he wants to offer an explanation that none of us had spotted as to why councils need such powers now when they know that they are likely to get them in any event before the end of February, I invite him to intervene. It is interesting that he fails to do so, just as he failed to offer the House an explanation during his speech--no wonder he is looking so uncomfortable.

The Bill differs in two important respects from the two previous Bills, as our reasoned amendment makes clear. Our amendment states that

"this House declines to give a Second Reading to the Bill because it fails in future years, to guarantee that any shortfall in the rating pool will be made up by the Secretary of State, fails to guarantee that the cost of transitional arrangements for non-domestic ratepayers will not be borne by council tax payers and fails to make the Secretary of State sufficiently accountable to Parliament." The Bill is a masterpiece of obfuscation. I think that the Government have signed up to the "Clear English" campaign, but it is perfectly obvious that the parliamentary draftsmen have not paid their subscription. There has rarely been a less comprehensive Bill. Any member of the public picking it up would think that it was an examination paper for maths A-level rather than a Bill apparently designed to give relief on rates.

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I shall read out clause 1(2) so that it becomes clear just how confused it is. It refers to

"sub-paragraph (2A) of that paragraph"

which, according to clause 1(1), is

"paragraph 5 of Schedule 7A to the 1988 Act."

I know that my hon. Friends who are experts in these matters think of little else. Clause 1(2) continues :

"for the words from except that' to the end there shall be substituted the words except that for the financial years beginning in 1992 and 1993 X is 100 and for the financial year beginning in 1994 X is--

(a) 110 if the hereditament falls within sub-paragraph (3) below, and

(b) 107.5 if the hereditament falls within sub-paragraph (4) below."

It then gets worse. I am making a serious point. If the House passes legislation, it is important that it should be comprehensible. We know and the Minister knows what the legislation means, but a busy business man who is supposed to be relieved of the burden of government and who wants to know what it means will need A-level maths and will probably have to be a retired parliamentary draftsman as well.

Buried in clause 3(3)(a) is one of our principal objections to the Bill and the difference between this and previous Bills. It states that

"in paragraph 9(3A) of Schedule 8 to the 1988 Act (as set out in section 4(1) of the 1992 Act), for the words, shall also' there were substituted the words may also'".

One of our principal objections is that under the 1988 Act--now the 1990 Act--the Secretary of State is required to make up any shortfall in the business rate pool as a consequence of the introduction of a transitional scheme. Under the Bill, that requirement is turned into a discretion, as my hon. Friend the Member for York (Mr. Bayley) and others have said. That means, first, that there is no requirement on the Secretary of State to enter into a transitional scheme even if one is needed, which will place a burden on businesses facing very large increases--well above the rate of inflation--as a result of revaluation.

Secondly, where a transitional relief scheme is put in place, the cost of that scheme may not be borne by the Exchequer, as it should be, but will fall as cuts in the overall spending of local councils or will fall to be paid by the domestic ratepayers, or council tax payers, of the area. The domestic residents will be robbed by the Treasury and the Secretary of State in order for the costs of the transitional scheme to be made good.

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