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Mr. Deputy Speaker (Sir Alan Haselhurst): Order. That is quite sufficient. We must make speed.

Mr. Raynsford: Thank you, Mr. Deputy Speaker. I very much agree with my hon. Friend that the maintenance of a property tax as the basis for local government finance is the sensible way forward, which is the conclusion that the review has reached and that the Government have accepted. On the question of a review
 
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of banding, which he raised, we believe that that needs to be considered carefully, because there are considerable implications, both in relation to fairness and equity, and in terms of the impact of revaluation, which is due to come in from 2007. We are confident that the Lyons inquiry will be able to examine carefully those issues, building on the evidence that has been presented to the balance of funding review, and coming forward with firm suggestions to deal with those complex issues in the most equitable and fair way.

Mr. Henry Bellingham (North-West Norfolk) (Con): On the subject of relocalisation of business rates, further to the point raised by my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), does the Minister agree that it is vital that he and his fellow Ministers consult widely with all the small business organisations, many of whom have bad memories of what happened in the 1980s, when many of their members were put out of business by excessive increases in business rates? Will he undertake today to enter into full consultation?

Mr. Raynsford: I have announced today that the Lyons inquiry will involve consultation with stakeholders, and I have absolutely no doubt that Sir Michael will want to engage with representatives of the business community. I mentioned specifically small business, and I am sure that that is a grouping whose views will also be taken on board. The balance of funding review acknowledges exactly the fears and anxieties that the hon. Gentleman has voiced. It sets out three options, and it sets out the safeguards that it would view as appropriate were there a move towards relocalisation. His real concern, however, is further consultation, and I assure him that that will happen.

Jim Knight (South Dorset) (Lab): I welcome the review and the further work that the Minister has announced. Can he confirm that the review so far has found no magic way of freezing funding of local government and local government finance, and yet maintaining services? Would not the implications of such a policy—the policy of the Conservative party—be either massive cuts or massive increases in council tax?

Mr. Raynsford: My hon. Friend makes an extraordinarily good point. There is no magic way of maintaining and improving services, which the public want, while at the same time making massive cuts in local authority spending, which is the policy of the Conservative party. Its policies, if pursued over the spending review period, would result in a reduction of £4.8 billion in local government spending. That would have a drastic consequence for services run by local authorities. It is precisely because we do not have any illusions about magic solutions that we have approached this whole issue in an extremely hard-headed and rigorous way, and we intend to continue that approach.

Sir Patrick Cormack (South Staffordshire) (Con): Having spent 15 months chairing this review, and sifting all the evidence, to what provisional view has the Minister come as to the correct balance of funding?

Mr. Raynsford: When the hon. Gentleman has a chance to read through the review in detail, he will see
 
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that there is no single appropriate figure. The review makes the point that areas of considerable deprivation receive substantially more Government grant because of that deprivation. In evidence to the Select Committee, I quoted the London borough of Newham, which currently receives 90 per cent. of its funding from central Government. Even were the balance of funding changed from the current national average of 25:75 to 50:50, in the case of Newham, all other things being equal, its balance of funding would probably still be 20:80. There is not a magic national figure. The report acknowledges, however, the importance of trying to ensure that local government has greater accountability for its spending, and that a shift in the balance of funding would undoubtedly help to achieve that.

Mr. Patrick Hall (Bedford) (Lab): I thank my right hon. Friend for his statement. As he will know, many of my constituents are keen to engage in any consultation undertaken by the independent inquiry. I know that he does not want to pre-empt the outcome, but must not three elements be addressed if we are to reform council tax properly? First, there is the regressive nature of banding. Secondly, there is the unfairness to council tax payers of the nationalisation and capping of the business rate by the Conservatives. Thirdly—

Mr. Deputy Speaker: Order. I think that two are sufficient.

Mr. Raynsford: I well recall the lively and interesting public meeting on this subject that my hon. Friend organised in his constituency. I was delighted to have an opportunity to meet his constituents and talk about a number of the issues involved. I assure him that we are committed to continuing consultation as we proceed with our work on the balance of funding. As for banding and the future of the business rate, they will be central issues for the Lyons inquiry to consider.

Mr. Harry Barnes (North-East Derbyshire) (Lab): Along with my hon. Friend the Member for Normanton (Mr. O'Brien), I served on the Standing Committee that dealt with the poll tax—and if there was ever fiddled funding, that was it. Why has it taken us so long to make fairer arrangements for the council tax? It is an easy enough process, involving extra bands at each end and larger steps between the bands. My hon. Friend and I will not be here in autumn 2005, and we should like the process to be completed by then.

Mr. Raynsford: First, as my hon. Friend will know, we have made a number of changes to the grant distribution formula to increase fairness. The Government have not been inactive in pursuing changes that have enhanced the fairness of the existing local government finance arrangements. Secondly, as my hon. Friend will also know, the revaluation is due to come into effect in 2007. Any changes of the order that he has described—the process is, in fact, more complex than his question implied—should be introduced according to the same timetable to avoid unnecessary turbulence and repeated alterations, which cause difficulty to both individuals and local authorities.
 
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Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I welcome my right hon. Friend's statement about council tax bands and benefits, but does he accept from the review and the Select Committee that if we are to have a radical change in the balance of funding there are only two ways in which to proceed? Either there must be a shift in the amount of income that local government controls through localisation of the business rate, or there must be a reduction in the amount of spending that it controls through centralisation of control over school budgets. Does my right hon. Friend accept that the vast majority of his hon. Friends would like him to take the route of increased local democracy rather than that of increased central control?

Mr. Raynsford: My hon. Friend made an important contribution to the Select Committee's report. He will know that the issues are complex, and must be approached in a measured way. I think that the report has done just that, and I am confident that the Lyons inquiry will follow in the same tradition.

 
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Members Sworn

The following Members took and subscribed the Oath:

Parmjit Singh Gill Esq., for Leicester, South

Liam Byrne Esq., for Birmingham, Hodge Hill

 
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Points of Order

2.17 pm

Mr. Patrick McLoughlin (West Derbyshire) (Con): On a point of order, Mr. Speaker. You will know that yesterday was the last day for questions to be tabled to the Secretary of State for Environment, Food and Rural Affairs. I tabled a question to the Secretary of State, which was drawn as Question 3. Today the Department informed me that the question had been transferred to the Department of Trade and Industry. That obviously denies me the chance to put a supplementary question to the Secretary of State during oral questions.

This is important, Mr. Speaker, because of a serious issue relating to a company in my constituency that recycles the vast majority of car batteries in this country—some 99 per cent. There is a great danger that the company could be under threat as a result of a decision made by DEFRA. When I challenged the Department, it told me that the matter was not its responsibility, but that of the DTI. Not one Minister in the DTI is registered in the book of ministerial responsibilities as having responsibility for recycling, but earlier this year the Secretary of State for Environment, Food and Rural Affairs answered two questions on the issue from my hon. Friend the Member for Meriden (Mrs. Spelman). The questions, which related directly to the recycling of batteries, were answered on 10 and 12 March.

What protection can you give Members of Parliament, Mr. Speaker, when Departments are deliberately trying not to answer legitimate questions tabled in the House?

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