House of Commons Hansard Debates for 12 Jan 1994

Mr. Curry : I repeat what I said to the hon. Member for York (Mr. Bayley), who asked for a political assurance. I said that we did not use the word "duty" because it would be daft to incur an obligation to compensate in respect of a scheme that we have not yet devised, but we accept that the product of business rates is hypothecated to finance local government, that local government will expect that any money that is forgone should be made up and that if we use the powers we shall top up the pool. Why do the Opposition seek to remove those powers?

Mr. Straw : All that the Minister of State has to do is to accept one of our amendments and change "may" to "shall". He might want to discuss an amendment which states that if there is a scheme, the difference "shall" be made up.

Mr. Curry : Ridiculous.

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Mr. Straw : It is not ridiculous. The Minister has given half a confession--or coughed only half the job, to use a phrase employed by the Lancashire police. He has coughed the fact that the Government do not know the nature of the scheme to be introduced so he cannot firmly draft the legislation to take account of the undertaking that he has given to the House, which will appear in Hansard but which is not included in the Bill. He has not got a clue about the scheme that will be introduced in the future. It is probably fair to say that, given the way in which things are changing, there is no betting that he will be the Minister this time next year.

Mr. Curry rose --

Mr. Straw : I shall allow the Minister to intervene in a moment. It is almost certain that the Treasury has insisted on the change because it objects to the fact that it is being required to make good the shortfall under current legislation. I do not doubt the Minister's word, but, having spent 15 years listening to Ministers give their word in the House, I have to say that although he has given his word as an honourable Member there is a world of difference between a Minister giving his word and that word being translated into enforceable Acts. The difference is that Acts can be enforced while the word can be ignored, not by him but by his successor. Mr. Curry rose --

Mr. Straw : I shall give way to the Minister and then I shall make my final point.

Mr. Curry : Will the hon. Gentleman agree with me on at least one point of logic? If there is no scheme, there is no shortfall, and if there is no shortfall there is nothing for which to compensate. I do not understand why he is making such a song and dance about whether we introduce the scheme. If we introduce the scheme and there is a shortfall, there will be compensation. If we do not, there is nothing for which to compensate, so I do not understand why the hon. Gentleman is disagreeing.

Mr. Straw : That leads to the second substantive point in our reasoned amendment. We do not want the House to buy a pig in a poke. The House is being invited to provide the Secretary of State with powers to introduce a scheme of indeterminate character subject only to the affirmative resolution, which means an hour and a half of debate late at night during which the Minister need not reply to questions--as was the case last night. The Bill should include the undertaking that the Minister has given to the House to the effect that where there is a scheme, it is not a matter of discretion that the Treasury should pay.

I recall the School Teachers' Pay and Conditions (No. 2) Bill, which represented a modest U-turn by the Government just before the previous election. The Government abandoned a scheme which was the subject of the No. 1 Bill for a negotiated pay arrangement with teachers and substituted a pay review body. The Treasury was given the power to override the review body's recommendations and to give directions to it. Other review bodies were not subject to such a power. We asked the then Secretary of State, now the Chancellor of the Exchequer, why it was there. He said that it was just there because it was there and would never be used. Those were his

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undertakings, but it has been used recently, in the decision by the Government to impose a statutory pay policy on all public sector workers.

The Minister must therefore bear in mind our scepticism. If his words mean what they say, there is no reason on earth why the parliamentary draftsmen, with the skill that they have shown in the algebra that they have put into the Bill, cannot translate his words now into words on the face of the Bill. The Bill gives powers to the Secretary of State which are far too wide, as we say in our reasoned amendment.

The Bill also allows us to discuss the general principle of the non- domestic rating system and to review the operation of the scheme after its first three years. The law was changed in the 1988 Act and came into operation in April 1990 as part of the poll tax fiasco of that year. The decision to establish a uniform business rate is spelt out in the rantings of the former Prime Minister, now Lady Thatcher, which I have read-- although I must tell my hon. Friends, in case they think that I have gone soft, that I have not purchased them, but merely borrowed them from the Library. [Interruption.] I wonder whether Conservative Members have read them. They may need a strong dose of carbolic soap afterwards, but it is none the less an interesting read.

Mr. Curry : We are waiting for the film.

Mr. Straw : The decision to impose a national business rate was a result of a frenetic campaign by some sections of the Conservative party and some sections of business against the setting of a business rate by each authority.

Business rates increased, as did domestic rates, in the early 1980s. They increased faster than inflation, but they increased, not as a result of so- called overspending by local authorities, but as a direct result of cuts in revenue and rate support grant from 61 per cent. in 1978-79 to 46 per cent. in 1985-86. It was a simple matter of arithmetic that if services were to be kept at approximately their previous level, if one cut revenue support grant by that enormous amount--more than 25 per cent.--the effect, especially taking account of gearing, on domestic rates and business rates would be to increase them by an even greater proportion.

Dame Elaine Kellett-Bowman (Lancaster) rose --

Mr. Straw : I am delighted, as ever, that the hon. Member for Lancaster wishes to intervene. No speech that I make would be complete without an intervention by her, and I give way.

Dame Elaine Kellett-Bowman : I wonder whether the hon. Gentleman, who has the misfortune to share our county council, can account for the fact--gearing or not--that spending by the Labour-controlled Lancashire county council increased by 186 per cent. after it became Labour-controlled initially. No amount of gearing could account for that.

Mr. Straw : One reason why I am always delighted to give way to the hon. Lady, courteous though she is, is that it is an invariable truth that any question that she asks contains a major error of fact. If I were allowed to offer a wager across the Floor of the House that spending by Lancashire county council increased by 186 per cent. in, I guess, the first year or so of Labour taking control of the council in 1981, I would not just put a tenner on it. I think

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that the hon. Lady accepts the wager. If she means in a period of 15 years that-- [Interruption.] I think that the hon. Lady is wrong. Lancashire county council has a good record and it was in no different position from any other authority confronted with a dramatic cut in revenue support grant.

The hon. Lady needs to remember that Labour was elected in 1981 because, as my hon. Friend the Member for Burnley (Mr. Pike) said from a sedentary position, we had terrible services in Lancashire. That is why, in every election since--1981, 1985, 1989 and 1993--when every time the hon. Lady has predicted that the Conservatives would sweep back into power in Lancashire, she has been proved wrong. People have faith in the services that Labour authorities provide, and quite correct, too.

Mr. David Winnick (Walsall, North) : Does my hon. Friend agree that, whatever defects Lancashire county council may have--it seems to have very few--those defects cannot be compared with the malpractices which have been carried on by Westminster city council? Lancashire county council has not carried out the type of sleazy political work of that council in London and nor has it had a character like Lady Porter, who should be disqualified for ever from engaging in any form of public life. Should not Lancashire county council--and other local authorities in my hon. Friend's region as well as in mine--be congratulated on not having as members such notorious political characters as those who used to be, and some of whom perhaps remain, members of Westminster city council?

Mr. Straw : My hon. Friend is entirely right.

Dame Elaine Kellett-Bowman : So am I.

Mr. Straw : One of the consequences, which I shall describe, of the profligacy, waste and sleaze in Westminster--as may emerge tomorrow if we ever see the district auditor's report--is that they have been a burden on business because it seems that Westminster city council has wasted millions of pounds of ratepayers' money. As a consequence, the business rate has had to be much greater than it would otherwise have been and there have been fewer services.

The Conservative Government were responsible for that--there is no doubt about it, although I knew that amnesia is the first requirement of any Minister these days. There is no doubt about the fact that there was a major cut in the revenue support grant and that was why business rates increased. Despite that, the Government--

Mr. Clive Betts (Sheffield, Attercliffe) : Does my hon. Friend agree that there is a further nonsense in the Government's approach in 1979? He is right that the Government's policy of cutting the rate support grant between 1979 and 1985 forced the increase in rates, including business rates, and the Government then brought in legislation to try to tackle that increase. Part of that sequence of legislation resulted in a council tax which the Government also found too high and, as a result, they had to legislate to increase central Government support to local authorities to bring the council tax down. The policy went full circle. In the meantime they destroyed many local services along the way.

Mr. Straw : My hon. Friend is right. Under rates, despite what the Government say, average domestic rate

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bills in Labour-controlled areas were always lower than in Tory-controlled areas. It is still the case today, thanks to the excellent work of our Labour councils, that average council tax bills per household in Labour-controlled areas are £14 lower than they are in Conservative-controlled areas.

Despite the truths that I have spelt out, the Conservatives claimed--that was the so-called intellectual basis, the tissue of their policy proposal for going to a national business rate--that high business rates lost jobs. No Opposition Member--it is rather different on the Government Benches these days--wants taxation of any type to be a pound more than it should be. The Conservative party is, as we know, the party of high taxation, which breaks its tax promises, and Labour is the party of probity on tax, as on other matters. [Hon. Members :-- "Hear, hear!"] The Government's claim then, however, that there was a link between rates and jobs, not only stank of hypocrisy but had no basis in fact.

In 1980, I asked the excellent statisticians in the House of Commons Library if they would do a regression analysis which sought to correlate increases or decreases in unemployment with business rate increases in each travel-to-work area. They found no such correlation. I presented that evidence, in the early 1980s, to the then Minister of State, the right hon. Member for Bristol, West (Mr. Waldegrave), now the Chancellor of the Duchy of Lancaster. After much humming and hawing, the Government decided to spend £50,000 of taxpayers' money to carry out a major study into the effect of business rates on the location of employment. Rather a similar story was attached to the publication of that report as to the publication of the Westminster district auditor's report. The Government believe in open government and it is something of an irony that the right hon. Member for Bristol, West should now be in charge of open government.

My hon. Friend the Member for Rossendale and Darwen (Ms Anderson) will remember all too well that, at the time, the then Minister of State did everything that he could to suppress the report. Why did he do that? Was an issue of national security at stake? Would the report expose an intelligence agent in Iraq, who might be exterminated, as we were led to believe was the reason for suppressing the Iraqgate affair? Were people's personal peccadilloes being revealed in that study on the effects of business rates on the location of businesses? I agree that those should not be revealed. The answer is none of those, but that the £50,000 study, paid for with taxpayers' money, had reached the wrong conclusion.

The statisticians had been asked to use their expertise and intellect and set up all kinds of mathematical models to establish whether there was a connection between rates and jobs. They did that and came up with exactly the wrong answer for the Government. Their answer confirmed the validity of the work carried out by Mr. Robert Clements, who is now head of the statistical section in the House of Commons Library. For ease of reference for the Minister, the report has been deposited in the Library and he has only to pop downstairs to get it. I have the introduction of the final report, which we had published only by getting hold of an illicit copy, publishing it ourselves and then embarrassing Ministers into making it public. The report went into detail about methodology. It said :

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"Simple graphs and cross-tabulations reveal no relationship. Multiple regression, which enables a more sophisticated analysis of the data, confirms the importance of the structural and other factors, but provides no evidence that the location of manufacturing employment change is related to the level of or change in rates Preliminary analyses also fail to reveal a relationship between rates and changing number of manufacturing businesses in each area." The report went on to say :

"The report therefore concludes that with the exception of office employment in and around London"--

the report found a saving in that regard--

"it is not possible to detect an influence of rates on the location of employment."

The report then said that many more detailed studies were needed. Interestingly, it is suggested in the body of the report that there might be a relation between higher rates and more jobs because higher rates supported higher public spending which, in turn, supported high local private employment.

Mr. Jim Cunningham (Coventry, South-East) : My hon. Friend will recall that, back in the early 1980s, any surveys carried out could prove beyond a shadow of a doubt that 2 per cent. of business costs were rate costs. So the other 98 per cent. were other costs. I am sure that my hon. Friend will agree with that.

Mr. Straw : I agree with my hon. Friend and I congratulate him on his clairvoyance. He has not seen my speech in advance, but that was exactly the point that I was about to make. I was going to point out that, despite all the blather and bluster that we get from the hon. Member for Lancaster about the burden of business rates--we do not want business rates to be higher than they should be--we never heard a peep out of the Government about what they were doing about the much bigger burden on businesses, then and now, caused by employers' national insurance contributions.

In 1978, £3.3 billion was raised from the business rate and £6.1 billion from employers' national insurance contributions. In 1992, £13 billion was raised from rates and £22 billion--the figure is still rising--from employers' national insurance contributions. So if the few Conservative Members present to pay an interest in the level of business rates are seriously worried about the burden on business, they should campaign to reduce employers' national insurance contributions, rather than increase them.

Mr. Michael Bates (Langbaurgh) : I am trying to follow carefully the point which the hon. Gentleman is making, but it is difficult to understand his assertion that there is no link between where businesses locate and the business rate charged in that area. If that were so, the programme of enterprise zones which allowed free rates for a period of five years and which has been so successful in rejuvenating many parts of the north-east would not have been so successful.

Mr. Straw : I understand the hon. Gentleman's perplexity because it was widely shared among Conservative Members. In the end, the penny dropped with most of them. I shall send the hon. Gentleman a copy of the study.

First, as the study shows, businesses move and relocate as a result of factors that are not related to the level of business rate. That is because, as my hon. Friend the Member for Coventry, South-East said, the business rate in

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relation to overall business costs is so low that it is unlikely to be a factor in location. The study made it absolutely clear that it was not a factor.

The hon. Gentleman also asked about enterprise zones. The reason why we hear so little about enterprise zones these days is that, as the study showed, they led to a transfer of jobs within a travel-to-work area, from areas where businesses were paying rates to areas where they were not paying rates. There was no increase in jobs, which is why the scheme has disappeared into oblivion.

Mr. Bill Michie (Sheffield, Heeley) : In the so-called free enterprise zones, where rates may be free, the lease and ground rent charges went up to compensate for the saving that businesses made on their rates. So although the local authority did not receive the rates, some businesses were exploited through their leasing arrangements because they were paying no rates.

The studies carried out many years ago in Sheffield, which was a major manufacturing base, showed that when employers were asked why they could not be competitive and why there would be job losses--it was not just because of Europe, although that was a significant factor--showed that the energy costs far outstripped any rate rise during the period when the city council controlled the rates. It seems odd that we are still beefing on about that and that the Government are considering VAT on energy costs. They do not know what they are talking about.

Mr. Straw : My hon. Friend is right and underlines the point that the enterprise scheme was one of the most expensive forms not of job creation but of job transfer ever invented. My hon. Friends the Members for Newcastle upon Tyne, North and for Burnley have just reminded me that, in many cases, the benefit from the rates holiday was taken not by the business located in that area but by the landlord, who increased the rent.

Mr. Bates : The north-east has attracted some £3.5 billion worth of inward investment, creating or safeguarding some 35,000 jobs as a result of development corporations. Many of those businesses have been created in enterprise zones.

Mr. Straw : The north-east has done well and it is a testament to the brilliance of Labour-controlled authorities throughout the north-east. The areas of inward investment in the north-east are all in Labour- controlled areas. Inward investment has taken place in Derbyshire, which is another Labour-controlled area.

Mr. Bates : Will the hon. Gentleman give way?

Mr. Straw : No. I have already given way twice to the hon. Gentleman.

I remember it being said that Newcastle's rates and other rates in the north-east were too high. Of course, they are too high as a consequence of the Government's policies, but they did not affect business location or the attractiveness of the area to inward investment.

Mr. Jim Cunningham : Will my hon. Friend take it from me that, although rates may be a factor, a more important factor for a company coming to a city is what is available in terms of Government grant, skills in the area, the location of the business, transport costs, and good public services to transport people to and from work? If the

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hon. Member for Langbaurgh (Mr. Bates) wants to check those facts, I am sure that he will find that most local authorities will confirm what I am saying.

Mr. Bates rose--

Mr. Straw : I have already given way twice to the hon. Gentleman. As Labour authorities score high on good public services, they create jobs while Tory authorities destroy them.

The Bill provides an opportunity to review the underlying principle of the business rate. I have already dealt with why the Conservatives went ahead with a national business rate. In doing so, they assaulted local democracy and, at the same time, halved the local tax base at a stroke. We objected to that, as did the local councils, but it was easy for the Conservatives to reject those complaints. Many in business and many Conservative Members, however, opposed the change. In a letter written to the Local Government Chronicle in December 1991, Mr. Graham Mason, the director of company affairs of the Confederation of British Industry, said that its policy on business rates was set out in a document issued in 1987, but he noted "our approach to reforming local government finance was not adopted"

by the Government. I am not arguing that the CBI was then fully in favour of the local business rate, but it was never in favour of the national non- domestic rating scheme.

The Institute of Directors is not affiliated to the Labour party, although these days anything could happen and usually does, but it has always been in favour of a local business rate. Interesting statements have also been made by individual business people. Mr. Stephen Boyd, the operations director of Courtaulds, has written : "At least with the former system you could talk to those who made the decisions locally on the county or district council and have a good moan. Now the decision is based upon the Retail Price Index. Local businesses, whether part of multi national companies or local enterprises, are an essential part of the life of a community. They consume local services. They require local supplies."

They also employ local people.

"there is precious little link between the quality of services received and the amount paid out It seems to me that the gearing imposed by the current financial regime"--

the gearing consequences of having a national business rate have been extremely severe--

"gives local authorities very little room for manoeuvre. Returning UBR to local decisions would bring the gearing factor back to two to one, a far more comfortable position."

He argued that the system should be changed and that a business charter should set out local business rights. We would support and develop such an initiative.

Mr. Tony Saint, then director and general manager of British Aerospace at Hatfield, put forward a similar argument in the Local Government Chronicle in December 1991. He wrote that meetings between business and local government representatives had always been constructive and noted :

"Meetings were a strong influence on county council members when they were considering the level of local taxation to levy each year. The sharp break with the past as a result of the introduction of the uniform business rate has removed this long and steady relationship. No matter how many meetings we now have, nothing the county council does can influence the level of local' tax that businesses are required to pay."

Mr. Bill Michie : The Government keep telling the nation that we must keep state hands off the running of

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businesses. That is nonsense. Next year, the Government may take into consideration the recession and may appreciate that the business rate should be set accordingly, but as the business world has said, it is much easier to talk to the people who run the city or the county about problems. Flexibility was far greater under the old system. I hope that I will have the opportunity to speak later about the problems encountered in Sheffield because of the current system's inflexibility. Unfortunately, we will not have the time to discuss that problem in detail.

Mr. Straw : My hon. Friend is right.

It is important to note that Mr. Tony Saint also said : "In the past there was a proper consultative process in which my company felt a genuine involvement and through which we had an ability to influence the outcome of the level of the tax in a particular year."

As a result of the imposition of the central tax, that involvement and influence have gone.

My hon. Friends will be interested to know that our policy is also supported by the Conservative flagship borough of Westminster city council. Councillor David Weeks, the leader of the council before he was fired, wrote this to the Local Government Chronicle in January 1992 :

"At Westminster we fully support the call of the Institute of Directors for the return of business rates to council control. Since national non- domestic rates were introduced we have vigorously campaigned for the right of local authorities to be held accountable for the taxes paid by and the services provided to their local businesses. The argument we have made carries even more weight for the smaller businesses, which operate only within the boundaries of one local authority."

If Westminster council was able to collect business rates from every premises used for business purposes, the rate base would be greater and those who pay business rates and council tax legitimately would face a smaller bill because they would not be subsidising those who avoided the business rate.

Many hon. Members have studies or offices in their private houses. Plenty of people run small businesses from their homes. Neither is separately rated. When anybody lets an office to someone else or runs a separate business from it, questions arise about whether it should be subject to the national non-domestic rate. That brings me to the hon. Member for Rutland and Melton (Mr. Duncan).

I wrote to the hon. Gentleman as one is required to do--and I always do so- -to state clearly that I intended to raise this matter on the Floor of the House. Madam Speaker will be aware of that fact because I sent her a copy of the letter. I also left the hon. Gentleman a telephone message to that effect. I know for certain that he contacted one of my Front Bench colleagues and acknowledged that he had received my letter. I fully anticipated that he would be present today, because he would then be able to answer the questions raised relating to entirely legitimate matters of public interest. I am astonished that he is not here, because in all my years in the House I have never known an occasion when an hon. Gentleman about whom legitimate questions about his conduct of public business have been raised, and who has been given proper notice by an hon. Member that those questions would be put, has not come to the House to deal with them.

The hon. Gentleman's purchase of No. 17 Gayfere street involved a public subsidy from Westminster city council. That subsidy was paid for by council tax and business ratepayers in Westminster. The question is

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whether it was right for that subsidy to be passed on to the hon. Gentleman. In my view, that depends, critically, on the circumstances in which the hon. Gentleman made his deal with Mr. Ball- Wilson, the ostensible purchaser of No. 17. When the hon. Gentleman loaned that gentleman most of the purchase price, did he agree with him that, in return, as soon as the three years had elapsed--the restriction governing a sale--Mr. Ball-Wilson would sell the hon. Gentleman the property ? That is an important question.

My second question concerns the business rating of No. 17 Gayfere street. That house is not the residence of the hon. Gentleman, but--

Mr. Bates : On a point of order, Mr. Deputy Speaker. I seek your guidance because I do not detect that this matter relates to the business before the House.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : I am listening closely to the hon. Member for Blackburn (Mr. Straw) and I assure the hon. Gentleman that if any of his comments are out of order, I will rule them so.

Mr. Straw : I am grateful, Mr. Deputy Speaker.

I am raising serious questions about the business rate in Westminster. I quoted from the former leader of Westminster city council--his comments were made well in advance of any knowledge of Mr. Ball-Wilson or the purchase made by the hon. Member for Rutland and Melton--who expressed his support for our policy in favour of local councils having the right to determine the business rate. Anyone who avoided paying that business rate would increase the burden on legitimate business ratepayers in Westminster. That important issue is germane to the purpose of the Bill.

My second question to the hon. Member for Rutland and Melton concerns the business rating of No. 17 Gayfere street for national non-domestic rating purposes. I understand that that property was used as the headquarters for the leadership campaign of the Prime Minister. I understand from an article in the Evening Standard that it was also used by the author of a biography of the Prime Minister. I do not believe that that book has enjoyed enormous sales--perhaps there is some curse on the property. I am sorry that the hon. Gentleman has decided to duck and run and not to answer my questions, because I know that he is around.

The Daily Mirror claims that the hon. Member for Rutland and Melton worked for Mr. Marc Rich for six years, during which time Mr. Rich was a fugitive from justice in Switzerland. Did the hon. Gentleman do that work from No. 17 Gayfere street? This raises serious questions about whether the place is rated, whether it should be rated and whether, if it is not rated--it appears not to be, judging by the views of Westminster city council-- Westminster ratepayers and the Exchequer have lost revenue as a result. The hon. Gentleman does not seem willing to answer these questions or even to come and listen to them and I am sure that Conservative Members are as astonished as I am that he has ducked out without explanation. But these questions will not go away until he provides a proper answer to them.

I now set out the Opposition's view on the national non-domestic rating system. We support the subsidy in the Bill because it is needed by business, but we do not believe in the principle of a national non-domestic rate. All our experience of the past three years confirms our view that the position that we took in 1988 was correct. Our view is

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the same as that of the Institute of Directors, of Conservatives in Westminster and of many in business. We believe that the Government should conduct a thorough review of the NNDR system with a view to establishing an improved system of business rates.

We do not say that the old system was perfect ; indeed, it had its defects. Recently the Institute for Fiscal Studies conducted a major study of various alternatives to the system that should be looked at carefully.

When we come to government we will establish a local business rate. We will have safeguards to ensure that it cannot be increased any faster than increases in the domestic local tax. We will establish a charter, as proposed by the director of Courtaulds, and we shall consult widely on our proposals.

At the election the Prime Minister said that if electors voted Conservative on the Thursday, recovery would begin on the Friday. This Bill is proof that, despite that claim, the effect of the recession on businesses continues to be so great that the Exchequer subsidy of business rates is still needed. But the Bill provides no guarantee that all such subsidy will be paid in future years by the Treasury and it gives too much power to the Secretary of State. Above all, the manner in which the Bill is being forced through the House is wholly unacceptable. It represents an abuse of power by a petulant, incompetent and contemptible Government, drawn from a party that has lost all moral authority to govern.

5.32 pm

Mr. Gordon Oakes (Halton) : My hon. Friend the Member for Blackburn (Mr. Straw) pointed out that this is a short Bill. It is also, probably inevitably, a technical Bill. I make no criticism of the Government for that, because it is a very important Bill for a large sector in this country.

First, the Bill affects councils. I speak as a vice-president, serving in a purely honorary capacity, of the Association of County Councils, which is clearly affected by the idea of a uniform business rate. The Bill probably affects district councils even more, because they are the unpaid tax gatherers, for the Government, of the UBR. That is not to say that they have any say in the matter--the proceeds do not come to them but go into a national pool. Nevertheless, they have to collect the money and incur the odium for doing so. The Bill affects every domestic council tax payer because there are no guarantees in the Bill that any shortfall in the rating pool will be made good by the Government ; nor are there any guarantees that the costs of the transitional arrangements will not have to be borne by the domestic council tax payer. The House heard with astonishment and delight the Minister of State giving a firm assurance about this to my hon. Friend the Member for York (Mr. Bayley), who extracted the assurance from him with the persistence of a true Yorkshire terrier. The Minister said that the Government would bear such costs. If so, why not include that in the Bill? It would be simple to do so. We have an amendment tailor made for the purpose : it changed the word "may" to the word "shall". If the Government accept the amendment, proceedings on the Bill--or at any rate on this point--can be kept short, no doubt to the delight of hon. Members.

To parody the words of the Chancellor of the Exchequer about an election in the midlands, I fear that some future Minister will come along and say that the Government are

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not bound by what a Minister of State said in response to an intervention on a wet and windy Wednesday. That is what we shall hear in 1995 or 1996. I plead with the Government to incorporate the amendment, if they mean what they say. The Minister is an honourable and respected figure, and I am sure that he means what he says, but I am not sure that the Government do. They have often backtracked on their words in this House. There was a time when such words were sacred and if Ministers said something in the House the Government would carry it out because they had given their word to the House of Commons, so I hope that council tax payers will be protected in the Bill.

The Bill will affect business and industry because they face another revaluation in 1995, albeit based on 1993 prices. All the expert advice suggests that that revaluation will mark a shift of the burden from London and the south-east to the rest of the country, especially to the north and the north-west--a reversal of what should happen. The burden will shift from retailing and office development to manufacturing industry, a ridiculous state of affairs in a country which depends so much on that industry. Despite that, the Bill says little about the revaluation and its effects.

Finally, the Bill affects this House. As my hon. Friend the Member for Blackburn said, it gives more and more powers, by regulation, to the Secretary of State, who can thereby avoid bringing primary legislation, on which all of us can have a say, to the House. I know that the Minister has said that the regulations will be debated here, some of them even under the affirmative procedure, but we all know what that means : the regulations are discussed late at night, when most hon. Members want to go home or have gone home, and the regulations are not amendable. We have to accept them all or throw them out.

This is not the sort of government that we expect. I deeply regret the fact that the Government, as they have done so often before, are taking more powers against local government--and by the back door, not by debate in the House but by regulation.

As my hon. Friend asked, why are the Government behaving in this way? They have offered us no explanation as to why they are forcing the measure through all its stages in a single day. We started the Session a fortnight late, on 18 November. Sessions usually start at the beginning of November. We had an extended Christmas holiday. Not much legislation is in the pipeline, as far as I can tell, to keep us going for the rest of the Session--so why adopt this arrogant approach, just as the Government did before Christmas when they shoved two other Bills through in one day? I do not know whether arrogance, incompetence or the Government's fear of Conservative Back Benchers is the reason, but the House will not put up with this : we have the right properly to debate legislation which will affect our constituents.

The Minister said that the House has accepted other such Bills. Possibly, but the national business rate has never been accepted by the main local government organisations--the Association of Metropolitan Authorities and the Association of County Councils. Both are opposed in principle to the whole idea of a national non-domestic business rate. It drastically reduces the independence of local authorities, which is what the Government want. In 1989-90, locally raised money formed 57 per cent. of local government finance. This year, it was 17 per cent. That is a mark of local government's dependence on central Government, and the concept is

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