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Mr. Alan W. Williams (Carmarthen): Will the Secretary of State look again at the funding of Dyfed-Powys police? Based on a standstill budget for the work that they did last year, they needed an extra £2 million. Instead, they have a cut of £200,000, and they might have to sack or get rid of up to 100 constables. Will the Secretary of State look again at the underfunding of Britain's most successful police force?
Mr. Redwood: My hon. Friend the Under-Secretary of State, the Member for Cardiff, North (Mr. Jones), who is responsible for local government in Wales, will be meeting a delegation tomorrow to discuss the matter, and of course I shall receive a full report on the points that are made at that meeting. There is a common formula for England and Wales, and we shall look very carefully at the points that are made.
Mr. David Hanson (Delyn): Does the Secretary of State accept that my constituents in Clwyd awaited the settlement with great trepidation and nothing that the Secretary said today will allay their fears? Will he meet Clwyd county council to hear at first hand the cuts that will have to be made following the settlement announcement?
Column 939Will the Secretary of State also define what he means by "good schools", as many of my constituents attend perfectly good schools which are not grant-maintained and which face dramatic funding cuts in the forthcoming year? Will he inform the House what he plans to do with the WDA once he has finally sold all the family silver?
Mr. Redwood: The budget proposals make it clear: the grant in aid will increase again in order to maintain the work that we think still needs to be done. We shall make a final judgment nearer the time, in light of the requirements of Wales and the amount of money available.
"Good schools" are schools in the grant-maintained or local education authority sectors which achieve good results and which are liked by parents and pupils. I wish to reinforce all schools that are achieving good results, whether they are under local authority control or whether they run themselves through grant-maintained status.
There will be the usual consultation arrangements during the period of consultation on my proposals.
Mr. Peter Hain (Neath): Taking into account next year's 2.3 per cent. pay increase for local authority workers and the additional cost pressures imposed on local authorities by Government legislative requirements, why does not the Secretary of State come clean and admit that the settlement will mean real expenditure cuts for all local authorities in Wales?
For example, West Glamorgan county estimates funding cuts totalling £9 million. Coming on top of expenditure cuts of £5 million in each of the past two years, that will mean savagely reducing front-line services, such as care for the frail elderly and school budgets, or adopting a scorched earth policy and raiding the reserves and crippling the new unitary authorities. Why does not the Secretary of State admit that cuts have been made instead of surrounding his statement with warm words?
Mr. Redwood: I will not admit anything because I do not agree with the hon. Gentleman's points. Large amounts of money are offered to Wales through the statement--particularly for care in the community, which looks after the frail elderly whom the hon. Gentleman mentioned in his question.
I believe that there is considerable scope for efficiency improvements in local and national government. I am not asking local government to do anything that I will not do myself in the Welsh Office.
Mr. Win Griffiths (Bridgend): What we have heard this afternoon confirms that the Maples memorandum has not been very effective in guiding the Secretary of State for Wales. Plainly, Walter Mitty is alive and well and running around the Welsh Office. This afternoon's statement on expenditure in Wales gives the impression that Welsh local authorities--the police and everyone involved in the provision of public services--will be wondering how on earth they will spend the money, there is so much available.
The truth is that there will be expenditure cuts in education, which come on top of the cuts detailed in last year's settlement. It is calculated that expenditure increases of between 5 per cent. and 6 per cent. will
Column 940be needed next year to maintain the service at the same level as this year. The Secretary of State has not taken into account the increased demands of the introduction of the code of practice for special educational needs. Class sizes in Wales are rising and an increasing number of teachers are taking early retirement because of illness. Yet all the Secretary talks about is a popular schools initiative.
Has the Secretary of State asked any of the heads of oversubscribed schools whether they want money to attract more pupils, or to provide better facilities for their existing pupils? If the Secretary of State wants to spend more money on schools in Wales, he ought to concentrate on the schools that provide education in the most difficult circumstances in our inner cities and deprived valleys. That is where he needs to spend money.
In any case, where is the money? The Secretary of State did not tell us this afternoon where it will come from. What does he intend to do about his grant-maintained school initiative? Will he now dump that initiative, given the second ballot at West Mon school and given today's announcement that Bishopston school has voted 2:1 against becoming grant-maintained? Is it true that the 18.8 per cent. that has been given as extra money to the Curriculum Council for Wales for external marking will come out of the budget that schools would normally have had?
On further education, can the Secretary of State confirm that while current spending will go up by less than 4 per cent., he expects student numbers to go up by over 11 per cent.? Why does not he fund the further education sector so that it can take full account of the increased number of students?
On housing, the right hon. Gentleman mentioned that he wanted to encourage home ownership, but no money was attached to that. Finally, on local government reorganisation, he said that he did not expect there to be any staff cuts, but that he expected savings to be made. Where does he expect savings to be made in the immediate future?
Mr. Redwood: The hon. Gentleman with the elephant tie went on a stampede of a question, and ran out of control as a result. He cannot stand the good news. South Wales police is very pleased with my announcement today, and the health service will be pleased with the substantial sums of extra money.
The popular schools initiative will of course apply in the valleys and in communities such as the hon. Gentleman's own, as well as elsewhere in Wales. I am now consulting schools before I finalise the details of the scheme. I thought it best to tell the House first, although I see that the hon. Gentleman wishes that I had not. I wonder whether he cleared his remarks on grant-maintained schools with the Leader of the Opposition, who takes a rather different view from him on the subject.
The money for the further and higher education sectors will take account of the growth in student numbers, and the hon. Gentleman should remember that there are some economies of scale as one increases the number of pupils or students going to an organisation. The hon. Gentleman is simply wrong to say that there is no money for home ownership, as I announced money for that subject in my statement.
Mr. Alex Carlile (Montgomery): On a point of order, Madam Speaker. Will you confirm to the House that statements by Ministers are made by your indulgence and that there are at present no Standing Orders that regulate the making of statements? Would you consider the production of a Standing Order that ensured that Ministers knew the scope within which statements may be made? Would you say that if a Minister wishes in effect to make a speech on a matter that is more effectively dealt with by debate, he should do so under Standing Order No. 22 on a motion for the Adjournment of the House, or--he would be better placed in this instance--by bringing the matter to the Welsh Grand Committee, where we could have a proper debate on what has been described, for the first time as I can recall, as a Welsh budget?
Madam Speaker: Statements made by Ministers are not made by my indulgence. I have no authority whatsoever in relation to statements. I am simply told by the Department concerned when a Minister wishes to make a statement.
The other two matters raised by the hon. and learned Gentleman are matters of procedure. There may be a great deal in them, and perhaps the hon. and learned Gentleman might like to put the points to the Chairman of the Procedure Committee, as they relate very much to Standing Orders.
Mr. Ted Rowlands (Merthyr Tydfil and Rhymney): Further to that point of order, Madam Speaker. You heard the Secretary of State say that he wanted this Welsh budget to be compared with the Budget. At the time of the Budget, the Vote Office normally has all the press releases associated with it. We have heard that there are about a dozen press releases emanating from the statement, but not one press release is available in the Vote Office. Through you, Madam Speaker, may I ask the Secretary of State whether he intends to issue press releases, as the Chancellor does?
Madam Speaker: That is not a point of order for me. The hon. Gentleman is trying to use me as Speaker to put questions to the Secretary of State. The Secretary of State heard what the hon. Gentleman said, and I am sure that the right hon. Gentleman will let the House or individual Members know his response.
I ask hon. Members not to use me as Speaker to put questions to Ministers, as that should be done during questions.
Mr. George Galloway (Glasgow, Hillhead): On a point of order, Madam Speaker. My point of order relates to Foreign Office questions. As a result of his legendary arrogance and unpleasantness, the Minister of State--the right hon. and learned Member for Grantham (Mr. Hogg)--had an uncomfortable time during Foreign Office questions, and I must ask you on a point of order to make the right hon. and learned Gentleman's time more uncomfortable still.
You will recall that a few months ago, I had cause to write to you about a question that I asked the Minister of State, to which he replied that he found my views odious, and sat down. [Interruption.] Conservative Members evidently find that proper parliamentary procedure. That says much about them--indeed, we know the record of the hon. Member for Sutton and Cheam (Lady Olga Maitland) in the matter.
Column 942This afternoon, my hon. Friend the Member for Linlithgow (Mr. Dalyell), a widely respected Member of Parliament, asked a very long and detailed question of the Minister of State, who stood up and said words to the effect that my hon. Friend was a loony and sat down. I ask you, Madam Speaker, on a point of order, as I did on the occasion when the same thing happened to me, to assert again that Ministers of the Crown have a responsibility to answer parliamentary questions raised by all Members of Parliament at Question Time. I hope that you will take a dim view and the gravest exception to that pattern of behaviour from the Minister of State.
Madam Speaker: I do take considerable exception to the manner in which that question was answered. For my part, I should not have used the word that the Minister did to describe the manner in which the hon. Member for Linlithgow (Mr. Dalyell) pursues issues in the House.
The hon. Member for Linlithgow pursues any issue he takes up truly at great length, truly in great detail and with great determination, but certainly with the greatest courtesy. I believe that not only does he have the right to a proper response, but he has the right to have that response given to him in a most courteous manner.
Mr. Tam Dalyell (Linlithgow): Further to that point of order, Madam Speaker. May I add that this is not, of course, a blanket criticism of all Ministers? I must say that, on Monday night, the Foreign Secretary thought it proper to give me 25 minutes of his time on the very issue in his room. The courtesy of the Foreign Secretary is in contrast to the discourtesy of the Minister of State.
Mr. Frank Cook (Stockton, North): On a point of order, Madam Speaker. There is one pleasing aspect to my point of order, because it gives me the opportunity to repeat, yet again, my thanks to you for the admonishment that you directed at those on the Treasury Bench on Monday and for the efficacy of the advice that you offered me yesterday.
Following your advice, Madam Speaker, I contacted the private office of the Secretary of State and I reminded that office of the commitments made by two Ministers on three occasions in March and April this year. Those promises were two-pronged. First, Ministers promised to place summaries of the representations on the Cleveland order in the Library. Of course you saw the paucity of their response--just a paltry five paragraphs on a scrap of paper, supplied two days ago and four days late.
The second half of the commitment was that individual representations would be made available, if requested. I must be honest and say that the Minister for Local Government and Planning followed that up by saying:
"unless the writers intended their views to be treated in confidence."-- [ Official Report , 20 April 1994; Vol. 241, c. 532 .] This afternoon, I received a reply from the Secretary of State, who said:
"I am bound to regard representations as not intended for publication unless there is a clear indication to the contrary." The Government have already said that they have received more than 300 representations and I do not believe that those 300 writers would not want us to know about them. The Secretary of State has agreed to contact the local authorities to ask their permission to allow me to see their submissions--copies of which I have in
Column 943profusion. Surely it is not unreasonable to ask the Secretary of State to contact those who made the other 300 representations, which the Government claim they have received, so that I am allowed to see them.
As a pupil of the Jesuits, and with all due respect to my teachers, I think that that twisting of words adopted by the Government is unacceptably Jesuitical in the House.
Since you, Madam Speaker, supported my appeal on the first half of the commitment and pointed out that those on the Treasury Bench were being unacceptably lethargic, I ask you to support my request that those Ministers honour the second half of that commitment to make individual representations available to the House.
Madam Speaker: This is the third successive day on which the hon. Gentleman has raised this matter with me on a point of order. I recognise his frustration over the issue, but it is not a matter on which I can help him any further. I know that he was promised a summary of the representations received. He has had that, although he does not consider the response adequate. He was also told that individual representations would be made available, unless the writers intended their views to be treated in confidence. I understand that the Minister's view is that that proviso applies to the representations to which the hon. Gentleman wishes to have access. That cannot be a matter for me.
Mrs. Ann Taylor (Dewsbury): Further to that point of order, Madam Speaker. May I suggest that that matter raises an important issue which is relevant to all hon. Members? If we are to believe answers that we receive from Ministers and answers printed in Hansard , we need to pursue the matter slightly further. If it is not possible for the Minister to fulfil the commitment that he made not just to my hon. Friend the Member for Stockton, North (Mr. Cook), but to a Conservative Member, the Minister should not have made those promises in the first place. Either Ministers were wrong when they gave their answers in March and April this year or they have gone back on promises, which are clearly recorded in Hansard , to Members on both sides of the House.
Madam Speaker: Ministers are responsible for the remarks that they make in the House, but I am glad that the hon. Lady has placed her comments on record, where all members of the Government can see them.
Mrs. Diana Maddock, supported by Mr. Tim Yeo, Mr. John McAllion, Mr. David Rendel, Mr. Cynog Dafis, Mr. A. Cecil Walker, Sir Richard Body, Mr. Peter Bottomley, Mr. Alan Simpson, Mr. Peter Temple-Morris, Mr. Malcolm Wicks and Mr. Gary Waller, presented a Bill to make provision for the drawing up of energy conservation plans and priorities for residential properties in their areas by local authorities in the United Kingdom in order to secure more efficient and effective use of natural resources; to give the Secretary of State powers to set timetables for such plans and for works arising from them; and for related purposes: And the same was read the First time; and ordered to be read a Second time upon 20 January, and to be printed. [Bill 8.]
Mr. David Jamieson, supported by Mr. Win Griffiths, Mr. Nigel Griffiths, Ms Glenda Jackson, Ms Harriet Harman, Sir Malcolm Thornton, Mr. Andrew Miller, Ms Tessa Jowell, Mr. Nick Harvey, Mr. David Porter, Mr. Robert Hicks and Mr. Peter Kilfoyle, presented a Bill to provide for the regulation of centres and providers of facilities where children and young persons under the age of 18 engage in adventure activities and for the establishment of prescribed minimum standards of safety in the provision of such activities and the maintenance and use of equipment and premises for the purpose of such activities: And the same was read the First time; and ordered to be read a Second time upon 27 January, and to be printed. [Bill 9.]
Sir John Hannam, supported by Sir Ivan Lawrence, Ms Ann Coffey, Mr. Oliver Heald, Mr. Menzies Campbell, Mrs. Anne Campbell, Mr. Michael Shersby, Mr. James Clappison, Mr. Sebastian Coe, Mr. Anthony Steen and Mr. Michael Stern, presented a Bill to make further provision for and in relation to the recovery of the proceeds of criminal conduct; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 3 February, and to be printed. [Bill 10.]
Mr. Terry Lewis, supported by Mr. Kevin Barron, Sir Peter Emery, Mr. Hugh Bayley, Rev. Martin Smyth, Ms Liz Lynne, Mr. Roger Gale, Mr. Gerald Kaufman, Mrs. Alice Mahon, Mr. Eric Illsley, Mrs. Edwina Currie and Ms Tessa Jowell, presented a Bill to require warnings and information carried on packets containing tobacco products to be displayed more prominently: And the same was read the First time; and ordered to be read a Second time upon 17 February, and to be printed. [Bill 11.]
Mr. Harry Barnes, supported by Mr. Alfred Morris, Mr. Roger Berry, Mr. David Alton, Mr. Dafydd Wigley, Mrs. Margaret Ewing, Rev. Martin Smyth, Mr. Seamus Mallon, Rev. Ian Paisley, Sir James Kilfedder, Sir Richard Body and Mr. Gordon McMaster, presented a Bill to make it unlawful to discriminate against disabled persons in respect of employment and in other circumstances, and to establish a Disability Rights Commission; to make provision for access to polling stations and voting by disabled persons; to place certain duties on local authorities, education authorities and other bodies in relation to disabled persons; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 10 February, and to be printed. [Bill 12.]
Mrs. Teresa Gorman, supported by Sir Richard Body, Mr. Nicholas Budgen, Mr. Christopher Gill, Mr. Tony Marlow, Mr. Richard Shepherd, Sir Teddy Taylor and Mr. John Wilkinson, presented a Bill to provide for the holding of a referendum on the United Kingdom's membership of the European Union: And the same was read the First time; and ordered to be read a Second time upon 24 February, and to be printed. [Bill 13.]
Mr. John McFall, supported by Sir Andrew Bowden, Mr. Ron Davies, Mr. Elliot Morley, Mr. Simon Hughes, Sir Teddy Taylor, Mr. Edward O'Hara, Mr. Tony Banks, Mr. Kevin McNamara, Mr. Roger Gale, Mrs. Margaret Ewing and Mrs. Helen Liddell, presented a Bill to make provision for the protection of wild mammals from being taken, killed or injured by the use of dogs and snares and from certain other cruel acts; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 3 March, and to be printed. [Bill 14.]
Mr. Nicholas Budgen presented a Bill to provide for the holding of a referendum on whether the United Kingdom Government should continue to work towards a single currency within the European Union: And the same was read the First time; and ordered to be read a Second time upon 24 February, and to be printed. [Bill 15.]
Mr. Oliver Heald, supported by Mr. A. J. Beith, Mr. John Butterfill, Mr. John Greenway, Mr. James Clappison, Mr. Peter Ainsworth, Mr. Peter Butler, Mr. Nigel Evans and Mr. Edward Garnier, presented a Bill to provide for the maintenance by insurance companies of reserves in respect of certain classes of business; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 27 January, and to be printed. [Bill 16.]
Mr. Malcolm Wicks, supported by Mr. Hugh Bayley, Mr. Roger Berry, Mr. Tom Clarke, Mrs. Margaret Ewing, Mr. Frank Field, Mr. Alan Howarth, Ms Tessa Jowell, Mr. Archy Kirkwood, Rev. Martin Smyth, Ms Rachel Squire and Mr. Dafydd Wigley, presented a Bill to provide for the assessment of the needs of carers and for the provision of services to them by social services authorities; and to amend the law relating to the definition of the term "private carer": And the same was read the First time; and ordered to be read a Second time upon 3 March, and to be printed. [Bill 17.]
Dr. Michael Clark, supported by Mrs. Elizabeth Peacock, Mr. Richard Page, Mr. Andrew Mackinlay, Mr. Michael Lord, Mr. Robert Key, Mr. Doug Henderson, Mr. Nick Hawkins, Sir Anthony Grant, Mr. Winston Churchill, Mr. Malcolm Bruce and Mr. Stuart Bell, presented a Bill to make provision about newly qualified drivers who commit certain offences, including provision with respect to tests of competence to drive: And the same was read the First time; and ordered to be read a Second time upon 3 February, and to be printed. [Bill 18.]
Mr. Gordon McMaster, supported by Mrs. Irene Adams, Mr. Thomas Graham, Mr. Jimmy Dunnachie, Mr. Brian Donohoe, Mr. Thomas McAvoy, Mr. Sam Galbraith, Mr. Tom Clarke, Mr. Norman Hogg, Mr. Charles Kennedy, Mrs. Margaret Ewing and Mr. Bill Walker, presented a Bill to make further provision in
Column 946respect of emergencies or disasters occurring in Scotland as a result of accidents or natural causes and involving destruction of or danger to life and property: And the same was read the First time; and ordered to be read a Second time upon 10 February, and to be printed. [Bill 19.]
Mr. Nicholas Winterton, supported by Sir Terence Higgins, Mr. Gerald Kaufman, Mr. Sebastian Coe, Mr. Tom Pendry, Mr. Menzies Campbell, Mr. Joe Ashton, Mr. Anthony Coombs, Mr. John Maxton, Mr. Toby Jessel, Ms Kate Hoey and Rev. Martin Smyth, presented a Bill to make provision about the use for commercial purposes of the Olympic symbol and certain words associated with the Olympic Games; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 3 February, and to be printed. [Bill 20.]
Ms Tessa Jowell, supported by Rev. Martin Smyth, Mr. Geoffrey Hoon, Mrs. Alice Mahon, Mr. George Foulkes, Mr. Kevin Barron, Dr. Tony Wright, Mr. Peter Luff, Ms Janet Anderson, Mr. Roger Sims, Mr. Terry Lewis and Mr. Simon Hughes, presented a Bill to control smoking in public places and to make provision with regard to smoking and employment; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon 17 February, and to be printed. [Bill 21.]
Mr. Paul Flynn, on behalf of Mr. Tony Banks, supported by Mr. Elliot Morley, Mr. David Amess, Mr. Alan Meale, Sir Teddy Taylor, Mrs. Diana Maddock, Mr. Harry Cohen, Ms Diane Abbott, Mr. Peter Bottomley, Mr. John McFall, Mr. Paul Flynn and Sir Andrew Bowden, presented a Bill to make further provision for the protection of animals; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 3 March, and to be printed. [Bill 22.]
Mr. Bill Olner, supported by Mr. Elliot Morley, Mr. David Jamieson, Mr. Roger Gale, Mr. Harry Greenway, Sir Andrew Bowden, Mr. Michael Stephen, Mr. Simon Hughes, Mr. Nigel Jones and Ms Ann Coffey, presented a Bill to prohibit the export of live animals for slaughter and in certain other circumstances; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 10 February, and to be printed. [Bill 23.]
Lady Olga Maitland, supported by Sir Ivan Lawrence, Sir David Mitchell, Mr. Michael Shersby, Mr. Michael Stephen, Mr. David Amess, Mr. Hartley Booth, Mr. Oliver Heald, Mr. Edward Garnier, Mr. Nick Hawkins, Mr. Nirj Joseph Deva and Dr. Robert Spink, presented a Bill to make provision, by the creation of an offence and the conferring of powers of entry, for the punishment and return to lawful custody of persons unlawfully at large: And the same was read the First time; and ordered to be read a Second time upon 17 February, and to be printed. [Bill 24.]
Mr. Ray Whitney, supported by Sir Peter Hordern, Mr. Frank Field, Mr. Jerry Hayes, Sir David Knox, Mr. Peter Luff, Mrs. Marion Roe, Mr. Andrew Rowe, Mr. Roger Sims and Dame Jill Knight, presented a Bill to make provision for the treatment of two or more charities as a single charity for all or any of the purposes of the Charities Act 1993: And the same was read the First time; and ordered to be read a Second time upon 27 January, and to be printed. [Bill 25.]
Mr. Harold Elletson, supported by Mr. Michael Fabricant, Mr. John Sykes, Mr. Andrew Robathan, Mr. Keith Mans, Mr. Nigel Evans, Mr. David Porter and Mr. Gyles Brandreth, presented a Bill to make provision with respect to the fouling of land by dogs: And the same was read the First time; and ordered to be read a Second time upon 10 February, and to be printed. [Bill 26.]
Mr. Eric Martlew, supported by Mr. D. N. Campbell-Savours, Mr. Elliot Morley, Mr. Gerry Steinberg and Mr. Keith Bradley, presented a Bill to prohibit the export of calves where, after such export, they are to be housed or fed in a manner which would be unlawful in Great Britain: And the same was read the First time; and ordered to be read a Second time upon 3 February, and to be printed. [Bill 27.]
That the draft Non-Domestic Rating (Chargeable Amounts) Regulations 1994, which were laid before this House on 12th December, be approved.
Mr. Jones: These seven orders and regulations make important provisions for the implementation of the 1995 revaluation of non-domestic property, which takes effect next April. Five of the orders prescribe the rateable values of the large network industries--the railways, electricity and water industries, British Gas and certain docks and harbours. Without those, the industries concerned would not have up-to-date values next year. A sixth order revokes the 1989 rateable values orders for the telecommunications industry and British Waterways. Those industries will have their rateable values for next year determined in the same way as most other businesses.
Probably the most important instrument for the majority of businesses, however, is the Non-Domestic Rating (Chargeable Amounts) Regulations. Those regulations contain measures to phase in the effects of the revaluation for those ratepayers who would otherwise be confronted by significant changes in their rate bills next year. As announced by my right hon. Friends the Secretaries of State for the Environment and for Wales on 29 November, the effect of those regulations will be to limit rate increases for small businesses next year to no more than 17.5 per cent. after allowing for inflation. For property with a new rateable value of £10,000 or more-- or £15,000 or more in London--increases will be limited to a maximum of 10 per cent. after allowing for inflation. For small properties consisting of both business and living accommodation, the corresponding limit will be 5 per cent. Those limits will continue to apply throughout the period until the next revaluation in the year 2000.
Regular revaluations are essential to ensure that businesses pay their fair share of the cost of local government. Revaluations do not affect the overall yield from business rates. Even if the national total of rateable value increases, we are required under the statutes to set the poundage-- that is the amount per pound of rateable value that ratepayers must pay--so as to keep total rate bills broadly constant after allowing for inflation and the possible effects of successful appeals.
As it happens, the 1995 revaluation will hardly change total rateable values in England, and we have announced a poundage of 43.2p for this country for next year--the same as for this year after allowing for inflation. In Wales, total rateable value is set to increase, so we have proposed a reduction in the poundage from 44.8p to 39p next year to compensate.
However, it is inevitable that the revaluation will change the rateable values of individual properties in line with changes in the property market during the five years since the previous revaluation. The rates bill of many individual businesses will therefore alter, with some businesses confronted by rate increases, some benefiting from reductions and others experiencing little or no change.
Column 949For the 1995 revaluation, the swings in bills are likely to be more marked than might have been expected, for two reasons. First, the 1990 revaluation was based on market rental values for property as at April 1988. In most parts of the country, rentals were still on the rise then, and they continued to increase for a while. In some regions, especially the north and the midlands, values then levelled off; in others, they fell back as recession started to bite. By April 1993--the base date for the 1995 revaluation--property values had hit rock bottom in central London but were barely past their peak in other areas. As a result, and as a broad generalisation, there has been a reversal of fortunes between ratepayers in the north and south: ratepayers who benefited from the 1990 revaluation are likely to do less well next year, and those who found themselves worse off in 1990 are likely to do much better.
The second reason for large potential changes in bills is that some ratepayers continue to benefit from the transitional arrangements introduced to cushion the effects of the 1990 revaluation, so their bills this year continue to be somewhat less than what they would have been, had the 1990 changes come through in full. Without a further transitional scheme, some of those ratepayers would be confronted by a stiff increase next year, irrespective of the revaluation. Although the revaluation will mitigate the increase for some ratepayers, for others it may add to it.
The Government do not think it right that businesses should have to absorb large increases in their costs overnight--they need time to adjust. That is why we have put before the House the regulations to phase in the changes. We estimate that nearly 1 million smaller properties and nearly 350,000 larger properties in England and Wales will benefit from relief. More than one third of the beneficiaries will be shops, and 156,000 offices and 320,000 warehouses and factories will also benefit.
Mr. Tim Smith (Beaconsfield): How many of the businesses that will benefit from transitional arrangements will be ones that were already enjoying some transitional relief following the 1990 revaluation?
The cost of protecting businesses against large rate increases must fall somewhere. About 170,000 properties will have reduced bills as a result of revaluation, and many of those will have benefited from relief under the 1990 transitional arrangements. We feel it right, therefore, that they should meet much of the cost of funding the new arrangements. The regulations therefore include provision to limit rate reductions so that, as under the 1990 transitional scheme, a contribution towards the cost of the relief will be required only from those who will make savings from the revaluation.
For next year, rate reduction will be limited to a maximum of 10 per cent. for small businesses and 5 per cent. for larger ones, after allowing for inflation. We envisage that similar limits will be required in the following year. Reductions should then start to come through much faster, as many ratepayers who have been phased upwards will have then reached their full new bills and will no longer require relief. The regulations make provision for
Column 950reductions of 20 per cent. for small businesses and 15 per cent. for large businesses for 1997-98, and 35 per cent. for small businesses and 30 per cent. for large businesses for 1998- 99 and 1999-2000. As the revaluation is not yet complete and the effect of appeals cannot be known with accuracy, those estimates are inevitably provisional, which is another reason why I cannot answer my hon. Friend's question at the moment. We therefore propose to review the estimates before the start of each year.
For the next year, the 5 per cent. and 10 per cent. limits on reductions will not meet the full cost of the relief for business facing increases. That is why, as my right hon. and learned Friend the Chancellor of the Exchequer announced in his Budget statement on 29 November, the Government have also pledged a generous Exchequer contribution towards the cost. In England and Wales, the contribution will total £525 million for next year. As we promised in debates on the Non-Domestic Rating Act 1994 earlier this year, that contribution will be added to the non-domestic rating pool so that no billing authority is any worse off as a result of the shortfall in rates yield.
Right hon. and hon. Members may have seen some recent press reports, as I have, notably in the London Evening Standard , suggesting that, notwithstanding the Exchequer support that we have announced, London will be robbed of hundreds of millions of pounds as a result of those measures.
It is perfectly true that inner-London ratepayers, taken together, will make a substantial net contribution to the cost of the scheme, but I fear that memories are short. In 1990, the boot was on the other foot; many businesses in central London received transitional protection, which was paid for by ratepayers elsewhere. Besides, this is not a simple issue of London versus the rest, because every region will have a mixture of losers and gainers. About half the ratepayers in inner London, most of which will be small businesses, will actually receive help from the scheme. A good many fewer inner-London ratepayers will be required to pay an additional contribution, and two thirds of the contributors will not be in inner London at all. I must also emphasise that local authorities in London will not receive a penny less out of rates as a result of our scheme, because rate revenue is pooled nationally, and every authority area receives the same amount per head of population.
The regulations governing the transition are complex. That is the result of the need to deal fairly with a number of different types of case that can arise. In essence, however, the arrangements will work similarly in all cases.
The new rates bill, known in the regulations as the notional chargeable amount, will be compared with a notional bill--the base liability--for the current year, taking account of the existing transitional arrangements where necessary. If the change from one year to the next is more than the limit--known as the "appropriate fraction"--allows, ratepayers will pay the limited amount, subject to any other reliefs that may be available.
Properties newly constructed after 1 April 1995 will not attract the phasing arrangements, but properties created by division or merger of existing properties will do so. In addition, we have made special provision to apply the downward phasing provisions to properties wholly or mainly reconstructed from existing properties. We do not think it right that ratepayers who are helping to meet the
Column 951cost of the phasing arrangements should be able to escape their obligations simply by undertaking refurbishment or other reconstruction works.
The phasing provisions will apply to the large network industries in broadly the same way as for most other businesses. That brings me to the six rateable value orders before the House. Prescription of rateable values for those industries is necessary because assessment by local valuation officers in England and Wales is impractical. In some cases, it is because the property is of a highly specialised kind which presents complex valuation problems. In others, it is because the property is so extensive that the time and other resources needed to value it conventionally have simply not been available.
Rateable values in Great Britain for conventionally assessed property have changed little as a result of the revaluation. We have, therefore, based the new values for most of the centrally assessed industries on their 1994- 95 values, adjusted for any changes in the property they occupy. There are exceptions, such as the railway networks, where the industry has undergone profound changes since the last revaluation and we have undertaken a fresh valuation. The orders also contain provisions to recalculate rateable values for those industries annually, to take account of changes in the amount of property they occupy. They appear as formulae in each of the orders and provide a proxy for the changes which ratepayers who occupy conventionally assessed property would expect to see reflected in changes to their rating assessment. In addition, the water undertakers order contains a method for determining rateable values when water companies merge.
It is less than satisfactory that we still have to set rateable values for certain industries in this way and I am therefore pleased to announce that, from next April, some industries whose rateable values were previously prescribed by order will have their values assessed by the Valuation office agency in the normal way. They include British Waterways, British Telecommunications and Mercury Communications, for which there is a separate order repealing the earlier provision. The Tyne and Wear metro and the docklands light railway will also be conventionally assessed and will no longer appear in the railways order and the amendments to the 1989 docks and harbours order ensure that ports with relevant incomes of between £50,000 and £1 million will also be conventionally assessed next year. It is our intention that the prescription of values for most of the remaining industries will end in the year 2000. We have already drawn up timetables for gathering the information we need to determine the values for some industries and discussions on others are to start early in the new year.
I commend these somewhat technical orders to the House.