Local Government Finance Bill [Ways and Means] (Hansard, 19 April 1988)

§ Mr. Richard Shepherd (Aldridge-Brownhills)
I want to speak by way of inquisition and inquiry because I have great difficulty in understanding the mechanism by which we arrive at the allocation of funds. We do not know the amount to be raised, how it is to be disposed across the country or what effect it will have on local businesses; nor do we know what its impact on the country will be.
This may be an intellectual difficulty, but it is also practical in terms of the business and interests that we serve and of the economy of our country. We have no idea what the sum of money to be raised will be, or where it will fall—on London or on my constituency in the midlands. In the absence of revaluation we cannot identify what the sum of money is, yet the Government are asking us to march to the sound of trumpets to allocate large sums of money, without knowing what they are. It is a monstrous proposal that the House of Commons should give taxation to a Government without knowing the quantum. I wait to hear from the Government what the quantum to be raised is, and I want to know its impact on the north-west, the north-east and the rest of our nation.
The Government cannot give me any of these figures. What an absurd tax! If the House of Commons stands for anything, it stands for the control of the supply of money. We are giving the Government the right to raise money without the amount being known by the House. I want the Government to explain to me the effects of raising this money on the economic life of my country and on employment and the generation of business. In many ways this issue is fundamental to the economic purpose of my country.
Why do we arrive almost at Third Reading of a Bill in these circumstances? The House exists to grant money, yet the Government cannot tell me how much money they will raise and what that will do for business. Casually, we are saying that this should go through on the nod and that we shall ascribe these funds to the Consolidated Fund Bill, whose purposes and allocation we do not know—and I am asked to support that. That is why, with the greatest respect, this should be challenged and we should hear facts and figures in advance of the debate. We should hear of the amelioration of some of the effects—not the detail or the quantum, but merely some hypothetical amelioration for the next five years.
I ask these questions by way of a preface to considering whether we should support this money going into the Consolidated Fund tonight, in advance of Thursday's debate and of the revaluation next year that will give us many of the answers to these questions.

§ The Secretary of State for the Environment (Mr. Nicholas Ridley)
I well understand why my hon. Friend 783 wants to inquire about the meaning of this resolution and why it is on the Order Paper. The answer to his main question about how much this will raise is that, currently, the non-domestic rate yields about £8.5 billion and it is the Government's intention that a similar sum should be raised by the new form of non-domestic rate contained in the Bill.
We made it clear that we would not increase the non-domestic rate and that the total would be redistributed according to the revaluation that is currently taking place and, of course, according to the uniform rate poundage that will be imposed by the Bill. I cannot forecast the individual rate bills of each and every commercial hereditament that will result from these changes because the revaluation is not yet complete. I shall have much more to say about that on Thursday when we will be able to discuss the whole matter.

§ Mr. Richard Shepherd
Is my right hon. Friend saying that he cannot tell me, even in the most general terms, whether the west midlands will be paying a significantly higher tax, the same tax or a lower tax, because of the one critical factor that enables the House to judge the merits of the proposal—revaluation? If it is, how can he come to the House and propose that we raise unknown taxes that will have an unknown effect on vital constituency interests of every hon. Member? Hon. Members have not been aroused about this because of the absence of this knowledge and the diffidence of the Secretary of State about a fundamental point.

§ Mr. Ridley
Revaluation has taken place for decades in respect of rates on domestic and business premises. It is never possible to predict the results of revaluation before the revaluation takes place. There is nothing new about having a non-domestic rate revaluation.
I should like to make one other point to my hon. Friend. It is necessary to have this resolution because the Government had a choice whether to set up a separate fund for the payment of the non-domestic rate by local authorities which would then be redistributed per capita and pro rata to every local authority, or to pay the money into the Consolidated Fund and redistribute it in the way that I have described.
We decided that it would be cheaper and therefore provide a little more revenue for local authorities if the money was paid into the Consolidated Fund rather than into a separate fund set up for the sole purpose of redistributing this £8.5 billion. As a result of that decision, this money resolution is needed to make sure that the Consolidated Fund can receive and pay out the money in question. There is no change of policy here, nor is there anything new, except for the point that I have made, that instead of a separate fund we shall use the Consolidated Fund. That is a sensible decision.
I shall be happy to respond to any of my hon. Friend's points about the impact or the effect of the non-domestic rate in the debate on the Bill on Thursday. That is the proper time at which to raise these matters.

§ Mr. Bowen Wells (Hertford and Stortford)
On a point of order, Mr. Speaker. If my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) is right in saying that the House is being asked to debate the money resolution 784 before the substantive debate takes place on Thursday, can you tell us how you have been advised in this procedural matter? Surely it must be the wrong procedure.

§ Mr. Speaker
Nothing out of order has taken place. The Government have put down a Ways and Means motion and it can be debated.

§ Mr. Jeff Rooker (Birmingham, Perry Barr)
To avoid any misunderstanding on either side of the House, let me say that the measure could have gone through on the nod. I hope that we can now dispose of it in a few minutes. Without that agreement, there would not have been five days for the Report stage of the Local Government Finance Bill. If there had not been five days, there would have been no opportunity whatsoever even to discuss the part of the Bill relating to the business rate. That was part of the arrangement agreed between the Front Benches to protect the opportunity for the House to debate the business rate, because that would not have been possible in only four days.
As the Secretary of State has said, the sum of money is the same. The Bill does not invent business rates. They are already there. We do not know the consequences of revaluation and of the unified business rate. We did not discover that in Committee and hon. Members will not even find out about it on Thursday, but, in the limited time available on Thursday, questions can at least be put.
The only point that is questionable, which I raised with the Government earlier, is the use of the words "Consolidated Fund" in the Ways and Means resolution. The fact that the Consolidated Fund will be used has a simple consequence: it then becomes national, not local, taxation. That means that the other place will not be able to discuss the business rate, as opposed to the poll tax, part of the Bill. Hon. Members might consider that point on Thursday.

§ Mr. Richard Shepherd
If I have understood the matter correctly, we have seen the transfer of the business rate away from the local authorities and, therefore, the transfer of the direct relationship to the national Exchequer. We are to pass the motion on the nod, just to do a cosy deal between the Labour party and the Conservative Government to ensure that we can now get this measure through.

§ Mr. Rooker
I resent the term "a cosy deal." Opposition Members, in demanding five days, were trying to protect the right to debate the business rate. No Conservative Members were asking for a debate on the business rate. We said, "Right, the Ways and Means resolution, on the nod." It is as simple and clear-cut as that. The decision whether the scheme is carried through is not in the hands of my hon. Friends. It is for hon. Members on Thursday to decide whether to support the Bill. The Bill is not about the rights of the Secretary of State for the Environment. The Bill states that the Chancellor of the Exchequer will henceforth fix the business rate. Hon. Members must either accept or reject that on Thursday.

§ Mr. A. J. Beith (Berwick-upon-Tweed)
The hon. Member for Birmingham, Perry Barr (Mr. Rooker) has done the House a service in drawing attention to some of the features of this Ways and Means resolution, but it also 785 seems a little distasteful that he should lecture the hon. Member for Aldridge-Brownhills (Mr. Shepherd) as if he were a recalcitrant schoolboy, misbehaving and daring to interfere in the arrangements into which the hon. Gentleman entered in good faith for perfectly respectable reasons. We can accept his argument that, in reaching an agreement to take the business on the nod, he believed that he was advancing the interests of hon. Members, but that does not preclude the hon. Member for Aldridge-Brownhills from speaking. He is in no way party to that agreement and is drawing the attention of the House to some important matters.
The important dimension that the hon. Gentleman has added to the discussion is the possible impact of this on the consideration of the Bill in another place, which has assumed a greater relevance since the Secretary of State today purported to be in a position to issue Mr. Speaker's 786 certificate and identify which Bill was a money Bill and which Bill could be considered by another place. The Secretary of State, in the remarks that roused me from my slumber this morning, purported to say what Bill the other place could consider and appeared to try to say that the other place had no right to consider the essential features of the Bill. That is not so, but it would be true in respect of the business rate if the resolution goes through. For that reason, the hon. Member for Aldridge-Brownhills is right to draw attention to the matter and the House should take the matter more seriously.