Commons Sitting of 21 April 1988

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS

  LONDON REGIONAL TRANSPORT BILL (By Order)
  Order read for resuming adjourned debate on Question [10 December], That the Bill be now considered.
  Debate further adjourned till Thursday 28 April.
  TEIGNMOUTH QUAY COMPANY BILL (By Order)
  YORK CITY COUNCIL BILL [Lords] (By Order)
  ASSOCIATED BRITISH PORTS (No. 2) BILL (By Order)
  CARDIFF BAY BARRAGE BILL (By Order)
  CITY OF LONDON (SPITALFIELDS MARKET) BILL (By Order)
  FALMOUTH CONTAINER TERMINAL BILL (By Order)
  NORTH KILLINGHOLME CARGO TERMINAL BILL (By Order)

  ST. GEORGE'S HILL, WEYBRIDGE, ESTATE BILL (By Order)
  Orders for Second reading read.
  To be read a Second time upon Thursday 28 April.

  SOUTHERN WATER AUTHORITY BILL (By Order)
  Read a Second time, and committed.

  BRITISH RAILWAYS (No. 2) BILL (By Order)
  Order read for resuming debate on Question [15 March],That the Bill be now read a Second time.
  Debate to be resumed upon Wednesday 27 April at Seven o'clock.

  NEWCASTLE UPON TYNE TOWN MOOR BILL [Lords] (By Order)
  Order for Second reading read.
  To be read a Second time upon Thursday 28 April.

Oral Answers to Questions
  HOME DEPARTMENT

    Litter
    Mr. Michael McNair-Wilson: To ask the Secretary of State for the Home Department how many persons were convicted of dropping litter in the past year.
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): In 1986, the latest year for which figures are available, 1,400 people were found guilty of offences under the Litter Act 1983.
    Mr. McNair-Wilson: Does my hon. Friend not think that that number makes a mockery of the Litter Act, in view of the appalling amount of litter that defaces our towns and cities? Bearing in mind that there are at least 90,000 constables in the police force, many of whom are bobbies on the beat, is it too much to expect each policeman to obtain one prosecution a year against a litter lout?
    Mr. Hogg: I am sympathetic to the point that my hon. Friend has made. Inevitably, the deployment of police officers is an operational matter for chief constables. I do not think that the criminal law can ever be the primary instrument for resolving this problem.
    Mr. Alex Carlile: Does the Minister agree that it would be most unlikely for a prosecution to ensue if the piece of litter found was a copy of the speech by the right hon. Member for Chingford (Mr. Tebbit)? Does he also agree that that speech is certainly part of the political litter of this country—
    Mr. Speaker: Order. That is miles wide of this question.
    Mr. Nicholas Winterton: Does my hon. Friend accept that many people in this country believe that the United Kingdom is now the litter gutter of the world? The situation is disgusting and deplorable. Will he seek methods of reducing the litter problem of this country, if necessary by utilising the services and co-operation of those places that are sometimes partially responsible for it? I refer to food shops, pubs and other places from which food and drink are available. It is a disgrace. Will my hon. Friend attend to it?
    Mr. Hogg: I agree that there is far too much litter around and that it is a disgrace. That is why my right hon. Friend the Prime Minister has given her personal support to the Keep Britain Tidy campaign.
    Essentially, the solution to the problem lies in persuading people of their personal and social obligations not to create litter.
    Mr. Tony Banks: Is the Minister aware that last month litter was deliberately strewn around St. James's park, only to be collected by a lady of pensionable years and stuffed into a black plastic bag carried by a strange old cove covered in fag ash and muttering obscenities under his breath? Can he cast any light on this bizarre incident, and have the two litter louts concerned been prosecuted?
    Mr. Hogg: My recollection is that the litter was picked up with considerable elegance.

    Prisoners (Non-violent Crimes)
    Mr. Yeo: To ask the Secretary of State for the Home Department how many prisoners are currently serving custodial sentences for crimes not involving violence.
    The Secretary of State for the Home Department (Mr. Douglas Hurd): About 22,000.
    Mr. Yeo: Does my right hon. Friend agree that his answer shows that we are cluttering up our prisons with far too many people for whom non-custodial sentences would be appropriate? Does that not make it more difficult to ensure that the public are protected from those dangerous and violent criminals for whom sentences all too often seem to be far too short? Therefore, will he try to make a further attempt to introduce some common sense into sentencing policy?
    Mr. Hurd: Yes, Sir. Of the 50,000 people in prison at the moment, about 10,000 are awaiting trial, 22,000—on whom I have just reported to my hon. Friend—have committed non-violent offences, and about 18,000 have committed violent offences. I think we all agree that those in prison for violent offences not only should be there but in some cases should be there for longer than they are. We should like to reduce the numbers on remand. As regards the 22,000 in prison for non-violent offences, we want to see a wider choice for the courts. It is for the courts to decide, but for such offenders we want a wider choice of punishment outside prison in cases where the courts think that they are suitable.
    Mr. Vaz: Is the Home Secretary aware that on 10 April 1988 the board of visitors of Welford road prison, Leicester, published a report that was highly critical of the Home Office, and that the chairman of the board, Mr. Dennis Rice, said that Welford road prison remains afloat with a combination of miracle and luck? Is he also aware that the prison was built for 200 inmates but that it now houses, on average, 411 inmates per day? What steps does the Home Secretary propose to take to ease the crisis in the prison service in Leicester, rather than the cosmetic steps that he announced to the House on 30 March this year?
    Mr. Hurd: Because of our policy of open government, the reports of boards of visitors at particular prisons, which had not been published before, are now made available to the public. I am perfectly well aware that boards of visitors at many of our overcrowded local prisons are critical of the conditions that they find. They add strength to my elbow in pressing for and achieving the acceleration of the prison building programme which I announced just before Easter, which, undoubtedly, together with the other measures that are in hand, will help to relieve the pressure of which the hon. Gentleman complains.
    Mrs. Virginia Bottomley: Is my right hon. Friend aware that his figures show that almost nine out of 10 14-year-olds serving detention centre orders have not committed crimes of violence? Does that not further underline the absurdity of maintaining penal custody as an option for children of that age?
    Mr. Hurd: My hon. Friend, whose interest in this matter I know, will welcome the fact that the number of juveniles sentenced to detention or youth custody dropped sharply from 7,700 in 1981 to 4,400 in 1986. The use of that power by the courts has been dropping, and that is quite right. Equally, there are occasions when young people,
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    even boys of 14, commit crimes of such brutal violence, or other serious crimes, that the courts, whose decision it is, decide to send them to prison. There is an eloquent letter by my hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten) in The Times on that subject today.
    Mrs. Ann Taylor: If the Minister is serious about wanting to keep more non-violent offenders out of prison, why is there so much emphasis, in all the rhetoric coming from himself and his Government colleagues, on the punishment of offenders? When will the Government realise that the only way to deal with overcrowding in our prisons and the rates of reoffending is to break the cycle of crime by keeping people out of prison unless they are a real danger to society?
    Mr. Hurd: The hon. Lady's question illustrates the basic weakness in the Labour party's approach to the matter. There is a strong human instinct, which Labour Members had better recognise, that when people have offended by doing harm or damage, or by effecting brutality on other people, they should be "punished". That is the word that they use. [Interruption.] That is what the hon. Lady is complaining about, unless there was a slip of the tongue. I am saying that for non-violent offenders I want to create for the courts a range of punishments, not all of which will involve imprisonment.
    Mr. Key: My right hon. Friend will know that those who commence their sentences at Rollestone temporary prison camp on Salisbury plain are mostly category C prisoners. Will he undertake to give special attention to monitoring the scheme, which will involve the use of a Home Office prison governor, but with custody being in the hands of the military—all three forces—to ensure that that management system works effectively?
    Mr. Hurd: I think that it will, and I am grateful for my hon. Friend's interest. As he knows, the Rollestone camp will reopen fairly soon until late autumn. I am confident that the mixture of a prison governor responsible to me, and, this time, with some help from the Army, will be as fruitful as it was in 1981.

    Gaming Machines
    Mr. Matthew Taylor: To ask the Secretary of State for the Home Department if he is now able to announce whether he proposes to seek to amend the law concerning the accessibility of gaming machines to children and young persons; and if he will make a statement.
    The Minister of State, Home Office, (Mr. Tim Renton): Not yet. I refer the hon. Member to the statement which my hon. Friend the Minister of State, Home Office, made during discussion of a proposed amendment to the Criminal Justice Bill in Committee on 24 March. We are examining the various reports and other work that we commissioned into the subject last year and all the other material that we have been sent by those interested. We shall make our views known as soon as we are ready to do so, which we hope will be before the summer recess.
    Mr. Taylor: I am sure that the Minister is as worried as I am about the increasing addiction and the devastation that that causes to parents, particularly in tourist areas such as mine, which have many such units and many applications coming in for more. I understand that the Minister has had the reports for some considerable time. Will he say how long they have been in his possession? At

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    present, operators have a voluntary code banning those under 18. Does the Minister agree that it would be sensible to consider amending that code and imposing a statutory ban, at least up to the age of 18, if not up to the age of 21?
    Mr. Renton: I appreciate the anxiety of hon. Members who, like the hon. Gentleman, represent tourist areas. However, he will know that opinion is divided on whether it is right to introduce further regulations on fruit machines in amusement arcades. We have not had the reports for very long. We are now studying them very closely, and, as I said, we shall inform the House of our conclusions, we hope, before the summer recess.
    Sir Peter Emery: Will my hon. Friend consider the difference between amusement arcades run in holiday camps or other controlled areas, where children often have their families with them, and arcades in towns or on sea fronts, to which children can go without their parents' permission or knowledge? It would be very much appreciated if action could be taken, even before the end of the summer recess, as a number of town councils are worried about the growth in the number of children going into the arcades and then finding themselves in the courts.
    Mr. Renton: My hon. Friend puts his finger on one of the points being studied. We need to make a distinction between seaside towns, for example—where only a few fruit machines are available and to which families should be allowed, or, indeed, encouraged to go with all their children—we do not want to be killjoys—and those areas that are devoted to fruit machines, where the possibility of addiction is even greater.
    In answer to my hon. Friend's last point, local authorities have considerable powers at present. The Home Office proposes to produce model byelaws for them. I do not think that we shall be able to produce our conclusions before the summer recess.
    Miss Lestor: Is the Minister aware that many local authorities, mine included, are sick and tired of objecting to developments such as amusements arcades and having their objections overridden by the Department of the Environment? May I remind him that it is nearly three months since I sent to his Department a report produced by Parents of Young Gamblers? His Department told me that it would see me and a representative of that organisation, before it reached its conclusions, to discuss parents' real fears. When is that meeting likely to take place?
    Mr. Renton: I understand that the hon. Lady is to have a meeting with my hon. Friend the Minister of State. I shall certainly check with him as to when it will be. I know that the report that the hon. Lady sent in has been carefully studied.
    In answer to the hon. Lady's first point, the planning issues are separate, as I am sure she knows. They deal with environmental issues. The Home Office considers licensing issues, and it is about those that we shall report to the House.

    Crime Statistics
    Mr. John Marshall: To ask the Secretary of State for the Home Department if he will make a statement about the latest trends in crime in Greater London.
    Mr. Hurd: I welcome the fall in recorded crime in the Metropolitan police district in 1987, when 4 per cent. fewer notifiable offences were recorded than in 1986.
    Mr. Marshall: Does my right hon. Friend agree that this very welcome decline is due to the fact that we have more bobbies on the beat and that neighbourhood watch is working in London? Does he also agree that we should commend the efforts of the. Metropolitan police and congratulate them, not snipe at them as some hon. Members do?
    Mr. Hurd: I agree with all my hon. Friend's points. It is notable that in the last year the number of hours spent on street duty by uniformed police officers was almost 10 per cent. up on the year before. That is the equivalent of 300 more police officers on the street each day.
    Mr. Bermingham: Does the Home Secretary agree that the position would be even better and further improved if hundreds of Metropolitan police officers did not have to spend their time as temporary gaolers? When will that situation end?
    Mr. Hurd: The hon. Gentleman, who represents a constituency outside London, will welcome the reductions in crime also in Greater Manchester, Merseyside and the west midlands. The hon. Gentleman is right when he talks about using police officers as temporary gaolers. It is a lousy use of police officers to control people who ought to be in prison. That was because of an overflow, which, unfortunately, was necessary for the reasons that I set out in my statement on 30 March. The numbers are now declining from about 1,500 a each night to about 1,100 each night. The numbers are still far too high, but, as the measures that I announced on 30 March come into effect, they will further decline.
    Mr. Budgen: Will my right hon. Friend reconsider the problems of persistent prostitution in Greater London and now recognise that it was a mistake to take away from the courts the right to gaol women convicted of persistent prostitution? Is he aware that in Wolverhampton it is plain that fining these women is no deterrent at all? However reluctantly, he will have to recognise that it may be necessary to imprison some of them.
    Mr. Hurd: I shall be very reluctant to go down the road suggested by my hon. Friend. If he would send me the facts and figures as far as they are available for Wolverhampton, I shall look into them.
    Mr. Hattersley: Is the Home Secretary aware of the great disquiet in London caused by the policy that the Metropolitan police describe as crime screening, which results in many crimes not even being investigated? As the police authority for London, can he say whether he approves of that scheme and how it will affect the clear-up rate in London? Can he also say how many London burglaries and thefts, now running at more than 500,000 a year, will not be investigated in future because of the screening?
    Mr. Hurd: The right hon. Gentleman knows perfectly well that the London and national clear-up rates have improved, and the rate of burglaries in London and elsewhere has declined.
    The answer to his specific question is yes. Crime screening is a method of focusing the detecting resources

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    of the police and enabling them to target those crimes that offer the best prospects for successful detection. I support the Commissioner in his operation of that scheme.
    Mr. Marlow: As a means of reducing the level of crime still further, will my right hon. Friend consider the reactivation of a modern system of stocks as being a particularly appropriate punishment for dealing with vandalism, graffiti artists and some forms of football hooliganism? Will he confirm that this punishment is still on the statute book and that, it is just a question of the courts taking advantage of it.
    Mr. Hurd: In answer to a previous question I expounded the idea of improving ways of punishing people in the community outside prison. I am not quite sure that we in the Home Office have got quite as far as reinventing stocks.

    Official Secrets Act
    Mr. Rooker: To ask the Secretary of State for the Home Department if he will now announce the date of his White Paper on the reform of section 2 of the Official Secrets Act.
    Mr. Hurd: I hope to lay a White Paper before Parliament in June, but I cannot yet give a more precise commitment.
    Mr. Rooker: When the Home Secretary lays the White Paper before the House, will he tell us whether the new official secrets policy will lead to the reopening of the Wormhoudt massacre file, and therefore, it is hoped bringing to account the former Nazi officer, Wilhelm Mohnke of Hamburg, whose address I have supplied to him, having obtained it from the publication World War II Investigator?
    Does the Home Secretary accept that the massacre of over 80 unarmed members of the Royal Warwickshire regiment, which happened in 1940, happened as though it was yesterday for the survivors, like my constituent 81-year-old Reg West? Mr. West and the other survivors are still seeking justice for themselves and for their fallen comrades. We owe it to them.
    Mr. Hurd: The hon. Gentleman was kind enough to give me notice that he was going to raise that point, and I have been in touch with my right hon. Friend the Secretary of State for Defence, whose records these are. My right hon. Friend has asked me to make it clear that the relevant material, which is in the custody of his Department, is being rigorously re-examined to see whether there is any information which could provide a basis for the kind of action for which the hon. Gentleman is pressing.
    Mr. Allason: Will my right hon. Friend say whether, with his Cabinet colleagues, he has concluded that judicial review is a good idea in his intended reform of the Official Secrets Act, or whether he is still committed to the 1979 idea of a ministerial certificate that something is secret?
    Mr. Hurd: My hon. Friend will have to await the White Paper for elucidation of that and other points, but I hope that he will not have long to wait.
    Mr. Dalyell: Does the Ministry of Defence still think that it has all the relevant records?
    Mr. Hurd: The hon. Gentleman must address that matter to my right hon. Friend the Secretary of State for Defence.
    Mr. Bellingham: When my right hon. Friend reviews the Official Secrets Act, he must obviously investigate the case of the SS general in detail, because it involves the murder of British troops. However, does he agree that we must not start a witch hunt against Germans living in this country? In my constituency, a number of former German prisoners of war have already been the subject of abuse. Does he agree that it is important that we do not start that kind of witch hunt?
    Mr. Hurd: As I understand it, in the case about which the hon. Member for Birmingham, Perry Bar (Mr. Rooker) is concerned, there is no jurisdiction in this country. It would be for my right hon. and learned Friend the Foreign Secretary and my right hon. Friend the Secretary of State for Defence, in the light of the examination about which I have already told the hon. Gentleman, to consider whether any representations should be made to the Government of the Federal Republic of Germany. That is where the matter lies.

    AIDS
    Mr. Illsley: To ask the Secretary of State for the Home Department whether any guidance has been given to police forces on the subject of AIDS in relation to the arrest of suspects.
    Mr. Douglas Hogg: Guidance issued by the Association of Chief Police Officers in 1985 included advice on the precautions to be taken against the risks of infection from contaminated blood and sharp objects, such as syringes.
    Mr. Illsley: Does the Minister believe that those guidelines should be reinforced or strengthened, particularly in view of an arrest which took place in my constituency recently, which has resulted in an action for damages by a police officer, somewhat mischievously, against an arrested suspect?
    Mr. Hogg: This is clearly a serious matter and the Home Office, in conjunction with the DHSS, is drafting further guidance. That further guidance is the subject of discussions with the ACPO and other staff associations.
    Mr. Michael McNair-Wilson: What compensation will be available to a police constable who might be attacked by a sufferer from AIDS and might himself therefore contract the disease?
    Mr. Hogg: I am glad to say that, so far as I am aware, no officer has contracted AIDS as a result of his duty, but if an officer did contract AIDS as a result of his duty, I understand that he would be covered by the normal sickness provisions within the force.

    Violent Crime (Sentences)
    Mr. Anthony Coombs: To ask the Secretary of State for the Home Department by what percentage the average sentence for crimes of violence increased between 1980 and 1987.
    Mr. Hurd: Between 1980 and 1986 Crown court sentences increased by 12 per cent. for offences of violence committed by men over 21. Within that, sentences for robbery increased by 21 per cent. and for rape by 27 per cent. The Criminal Justice Bill, as my hon. Friend knows, will give the Attorney-General power to refer over-lenient sentences for serious offences to the Court of Appeal, which will be able, for the first time, to increase the sentence.
    Mr. Coombs: I welcome those figures and the provisions in the Criminal Justice Bill to allow the prosecution the right of appeal over over-lenient, sentences. However, earlier this year in my constituency, totally unprovoked, two young men so badly beat up a cyclist that he suffered a broken rib and lost the use of a kidney. Is there not a strong case, given the fact that these people were fined only £200, for mandatory prison sentences for those who commit acts of violence that mean that people's health is permanently impaired?
    Mr. Hurd: If the House had to start calculating minimum sentences, of imprisonment or otherwise, for particular offences, we would have to take into account the greatest conceivable number of mitigating circumstances, such as where the provocation had been greatest. If we once had to go down that road, we would establish minima that were so low that our constituents would wonder what was going on. It must be sensible to establish a maximum, and to increase the maximum where that seems necessary, and then, within that, to let the court get on with assessing, as best it can, the right sentence for the particular case, but with the proviso, which is important, as my hon. Friend has recognised, in the Criminal Justice Bill that the Attorney-General should be able to refer to the Court of Appeal cases involving violence where he thinks that the decision of the court has been over-lenient.
    Mr. Duffy: Is the Home Secretary aware that south Yorkshire's crime rate continues to hit new peaks, not only in violence, but in sex attacks, burglaries and robberies? The chief constable, in his latest report to his county authority, claimed an improvement in an already creditable detection rate, but the general assessment is of a need for more equipment and manpower, which his 1987 approvals did not even begin to match.
    Mr. Hurd: The hon. Member's question is a symptom of the extraordinary turnround in the attitude of some, although not all, Labour Members to the expansion of the police forces. We have been consistent in favouring and putting into practice a steady expansion of the police forces. For the current year I have an allocation agreed under the expansion programme for 500 extra police officers. Before long we shall announce that allocation for this year, and also before long we shall have to consider the further development of the right kind of manpower levels for the police forces of England and Wales after the present expansion programme is ended.
    Mr. Lawrence: Would there not be many fewer crimes of violence if violent men had to fear the penalty of death?
    Mr. Hurd: That is a matter to which my hon. and learned Friend will be able to return when we deal with the new clause which I expect to be tabled for the Report stage on the Criminal Justice Bill.
    Mr. Alex Carlile: Are not the majority of over-lenient sentences for crimes of violence passed by lay magistrates? Should this not be met by much better training in sentencing policy and practice for lay magistrates?
    Mr. Hurd: I am not sure that I agree with that. We are fortunate not only in the dedication of our lay magistrates but in their increasing skill and professionalism.

    Fraud Investigations
    Mr. Stern: To ask the Secretary of State for the Home Department if he will take steps to assist other parts
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    of the country to follow the joint initiative of the Avon and Somerset constabulary and the West of England Society of Chartered Accountants, under which members of the society provide their expertise free to the police to assist in fraud investigations.
    Mr. Douglas Hogg: We warmly welcome initiatives such as this, where the police and the community act together against crime. I am sure that the help given by accountants in the fight against serious fraud in Avon and Somerset will be invaluable. I understand that a similar scheme also exists in the Metropolitan police and that co-operation in other force areas is under discussion. This is highly commendable.
    Mr. Stern: Does my hon. Friend agree that, however valuable the training given to fraud squad officers in the investigation in particular financial fraud, it will never match the professional experience gained by solicitors, accountants and so on who are dealing with financial records every day? Will he therefore encourage the spread of the scheme and possibly involve the professions in training for this aspect of police officers' work?
    Mr. Hogg: I would be pleased to see a spread of this kind of scheme in appropriate circumstances. It is important not to under-estimate the high skills acquired by police officers specialising in this work.
    Mr. Campbell-Savours: Have not members of the Society of Chartered Accountants, on a number of occasions, pointed to the difficulties that arise when attempts are made to bring prosecutions for fraud against major defence contractors? As the law department of the City of London polytechnic has offered to carry out research into this sector, drawing on the experience of many of our European partners, will the Minister take up that offer, and even help with the funding of that research exercise, because the taxpayer would benefit immeasurably?
    Mr. Hogg: Before replying in detail to a question of that kind I should like to have clearer notice of the offer in question.
    Mr. Hind: Will my hon. Friend also consider whether the kind of expertise that chartered acoountants can provide could usefully be made available to the Crown Prosecution Service? Often, investigations need an overall view to be taken before the case is sent to court. Such involvement could improve the number of prosecutions that result in findings of guilt in the Crown court.
    Mr. Hogg: My hon. Friend makes a very serious and useful suggestion. It was considerations of that kind that caused the Government to bring forward the concept of the serious fraud office, which employ accountants.

    Crime and Young People
    Mr. Flynn: To ask the Secretary of State for the Home Department what assessment has been made of any correlation between the recently published statistics on crime levels and reduction in the percentage of young people in the population.
    Mr. Hurd: Evidence suggests that population changes make a relatively small contribution to changes in recorded crime and known offending. The peak age for offending is 15 and our crime prevention initiatives are in

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    a large part directed at juvenile offending. I shall, for example, expect to see some of the schemes under the safer cities programme specifically for young people.
    Mr. Flynn: I am grateful for that reply. There have been encouraging changes in the crime figures, which will be welcome in all quarters of the House, but in those categories that predominantly involve young people there have been some severe increases. There has been a 9 per cent. increase in robbery, a 12 per cent. increase in sexual offences, and a 13 per cent. increase in crimes of violence against the person.
    As there will be a decrease of one quarter in the number of 16 to 19-year-olds in the population in five years, and by omitting demographic changes, the statistics are as meaningless as unemployment figures that are not seasonally related. The value of future crime figures will be obscured unless they are related to demographic changes. Will the Minister give an assurance that future published crime statistics will relate as closely as possible to demographic changes?
    Mr. Hurd: It is typical of the Opposition to question the figures. When crime increases, it is said to be all the fault of the Government. When there are signs of a better trend, it is said that they are all to do with demography—[Interruption.] That is the point that the hon. Member for Newport, West (Mr. Flynn) was seeking to make and it is a completely bogus one—[Interruption.]
    Mr. Speaker: Order.
    Mr. Hurd: If the hon. Gentleman will study the research, he will notice that what I have said is true. The impact of demography, either when the figures are up or when they are down, is very slight.
    Mr. Ashby: In view of the heavier sentences that my right hon. Friend said had been passed in recent years, and in view of the increase in the number of violent crimes, has he come to any conclusion about the deterrent effect of giving heavier sentences for crimes of violence? Does not the situation also reflect upon his prison programme, in view of the overcrowding that exists? Is there any deterrent effect in heavier sentencing?
    Mr. Hurd: Yes, I believe that there certainly is a deterrent effect in giving heavier sentences for violent crimes. That is part of the answer, just as the increase in the number of police is part of the answer. However, my hon. Friend's question, like the original question asked by the hon. Member for Newport, West (Mr. Flynn), goes further back, to matters that influence the lapse of juveniles into crime. They lead us on to other matters that we ought constantly to discuss, such as the role of teachers, the media and parents.

    Prison Officers
    Mr. Barry Field: To ask the Secretary of State for the Home Department what representations he has received about the appointment of women prison officers to high security male prisons; and if he will make a statement.
    Mr. Douglas Hogg: No representations have been received other than from my hon. Friend. Since the beginning of this year a total of about 77 women prison officers have been posted into local and dispersal prisons and new male establishments. This innovation has proved highly successful.
    Mr. Field: I welcome the appointment of female warders to high security prisons, so that they can search the female visitors, but does my hon. Friend understand that, although these warders cannot carry out the duties of male warders in high security prisons, they count against the manpower approved strength of those prisons? Does he agree that the Sex Discrimination Act 1975 is about as relevant to the need to keep international terrorists secured under lock and key as my Aunt Fanny?
    Mr. Hogg: I regret that I am not acquainted with my hon. Friend's relatives, so I cannot comment on the last part of his question.
    Female prison officers can perform most roles as effectively as male officers, including that of physical restraint. Moreover, their presence can frequently serve to defuse tension. It is perfectly true, however, that the deployment of female prison officers is a new policy, and because of that and the anxiety expressed by my hon. Friend I intend to review the matter in 12 months' time.
    Sir John Farr: To ask the Secretary of State for the Home Department if he will take steps to bring the number of prison officers up to establishment in maximum security prisons; and if he will make a statement.
    Mr. Hurd: Further staff will continue to be allocated to dispersal prisons as they become available from training courses in the light of operational need.
    Sir John Farr: I thank my right hon. Friend for that reply. Is he aware, however, that there is a school of thought that holds that if Gartree prison had not been 31 prison officers under establishment at the time of the helicopter escape last January those two prisoners would not have escaped? Bearing in mind the intense responsibility of maximum security gaols, will my right hon. Friend pay particular attention to ensuring that their staffing levels are up to scratch?
    Mr. Hurd: My hon. Friend's concern is understandable. I am aware that there is such a school of thought. My hon. Friend will know, however, that it is not borne out by the report that I received on that escape from the deputy director general of the prison service. Nevertheless, by 1 April the difference at Gartree to which my hon. Friend refers had been reduced to 14, and I am glad to be able to tell him that a further nine staff are to be allocated to the prison by the end of May.
    Mr. Corbett: Can the Home Secretary confirm that newly built wings in top security prisons are this day standing empty because of the lack of an adequate number of prison officers? How can prison officers combat the violence, petty crime and drug abuse on which the chief inspector of prisons comments in his latest report when officer levels in too many prisons are still well below the establishment levels agreed in the Fresh Start proposals?
    Mr. Hurd: The hon. Gentleman should know two things. First, the expansion of the prison service has proceeded faster than the expansion of the prison population. Secondly, whereas this year we need about 600 new prison officers to deal with wastage, we are recruiting 1,960–1,360 more than are required for wastage.

    Passports
    Dr. Michael Clark: To ask the Secretary of State for the Home Department what is the current average delay in processing application for British passports; and if he will make a statement.
    Mr. Renton: The time taken to deal with straightforward non-urgent passport applications at the five largest passport offices ranges between 13 working days at Liverpool and 54 working days at London. Urgent applications are given priority at all offices, and strenuous efforts are being made to meet every applicant's travel needs.
    I announced on 31 March a number of special measures to reduce the delays, in advance of computerisation of the passport-issuing system, which should help to avoid similar problems arising in the future.
    Dr. Clark: Does my hon. Friend accept that the majority of my constituents seem to be waiting for two months, which is causing some considerable inconvenience? As the delay seems to be a constant two months, and is not getting better or worse, could he not draft in some temporary staff to reduce the backlog and reduce the delay to about three to four weeks? Finally, will my hon. Friend please thank the staff in his private office for the help and courtesy that they have given me on every occasion when I have contacted them?
    Mr. Renton: I thank my hon. Friend very much for his kind comments, which I shall pass forward. Because of the great increase in the demand for new passports, we took the decision two years ago to computerize—a process which starts with the Glasgow office in July. Since the beginning of this year we have recruited over 200 more staff, permanent and casual, to the passport offices—another 34 alone on a casual basis in the London office last week.
    Mr. Randall: Is the Minister aware that, from his annual report, this increase in demand for passports could have been predicted as far back as 1985? Why has the Minister not taken appropriate action before now to prevent this administrative shambles? He has had plenty of time to deal with the problem. Is he aware that, because of the chaos at Lunar house and now at Petty France, the stench of administrative incompetence is emanating strongly from the departments for which he is administratively responsible?
    Mr. Renton: The hon. Gentleman's comment is a very unfair slander on the work of the trade union staff side at Clive house and Lunar house. Because of the great increase in demand, we took the decision about two years ago to computerise. The computer programme starts in Glasgow in July and, we hope, will be completed by the end of 1989. Many of the delays which we are experiencing, and which I very much regret, will then be overcome. We are looking at the possibility of giving the passport offices executive agency status. That, too, should improve the management structure and make the responsibilities clearer.

  PRIME MINISTER

    Engagements
    Mr. Gwilym Jones: To ask the Prime Minister if she will list her official engagements for Thursday 21 April.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Jones: Is my right hon. Friend aware of the considerable rise in the number of operations to transplant organs, especially kidneys? May I suggest that we need to move to a form of required request legislation as the only way of dramatically increasing the availability of organs for transplant, thus countering increasing waiting lists?
    The Prime Minister: I know of my hon. Friend's interest in this matter. We are committed to trying to increase the numbers of operations with transplant organs. The form of required request by doctors to relatives, for which my hon. Friend asks, was referred to a committee of the royal medical colleges, which recently considered it. The committee did not recommend legislating for it. My hon. Friend can understand the emotional problems caused in asking relatives for permission. We are pursuing a number of the recommendations for alternative approaches.
    Mr. Campbell-Savours: Does the Prime Minister think it morally right for Scottish and Newcastle Breweries to take over a profitable brewery in my constituency, in a development area in west Cumberland, and throve more than 40 people out of work? Does the right hon. Lady think it right that the free market gives companies the right to treat my constituents in that way? Why, when I went to the Secretary of State for Trade and Industry prior to the takeover, did he refuse to intervene when I warned him that these jobs would be lost in my profitable brewery?
    The Prime Minister: The hon. Gentleman is aware that a takeover either qualifies for reference to the Monopolies and Mergers Commission, and he knows the procedure well, or it does not. It seems that in this case it did not qualify. The hon. Gentleman is aware also that there must be rationalisation and redundancies from time to time to keep undertakings profitable and competitive into the future. The hon. Gentleman and I would hope that, whatever happens, people are treated well when that occurs.
    Sir John Biggs-Davison: Does my right hon. Friend recall the reign of Queen Anne—[Interruption.]—when there was a national lottery of which the then Archbishop of Canterbury was a patron? In the event of a hospitals lottery, will an invitation be extended to Dr. Runcie?
    The Prime Minister: To answer the first part of my hon. Friend's question, I do not recall those days. With regard to the National Hospital Trust's proposed National Health Service lottery, it appears to be a private matter and, as far as we can make out, it seems to be legal. If it raises extra money for the Health Service, that will be a very good thing. Of course, DHSS Ministers will not seek to recover any money forthcoming from the trust by adjusting health authority cash limits—it will be extra money. What the trust wishes to do and whom it wishes to join its numbers is a matter for itself.
    Mr. Menzies Campbell: To ask the Prime Minister if she will list her official engagements for Thursday 21 April.
    The Prime Minister: I refer the hon. and learned Gentleman to the reply that I gave some moments ago.
    Mr. Campbell: The Prime Minister will be aware of the tragic occurrence late yesterday afternoon when a Phantom aircraft of 43 Squadron flying from RAF Leuchars in my constituency was lost. I am sure that the Prime Minister will wish to join me in expressing sympathy to the families of the missing crewmen. I understand that the wreckage of the Phantom aircraft was found by a Wessex aircraft of 222 Squadron flying a search and rescue operation.
    Since 1956 more than 2,000 such operations have been flown from RAF Leuchars—57 of them this year—and more than 2,000 lives have been saved. In the light of that, will the Prime Minister confirm that there is no risk, or even likelihood, that search and rescue operations will be withdrawn from RAF Leuchars?
    The Prime Minister: I join the hon. and learned Gentleman in expressing sympathy to the relatives of those two young men who lost their lives when the Phantom crashed into the sea yesterday.
    As the hon. and learned Gentleman is aware, my right hon. Friend the Secretary of State is conducting a review of the air sea rescue services. When he has completed that review, of course he will report his conclusions to the House and to the hon. and learned Gentleman.
    Mr. Sackville: To ask the Prime Minister of she will list her official engagements for Thursday 21 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Sackville: Will my right hon. Friend commend the wisdom and courage of the Government of Kuwait? Does she agree that those Governments who fail to learn the lesson that terrorism must be resisted at any cost expose their own citizens and all of us to the most appalling risks?
    The Prime Minister: Yes, I endorse what my hon. Friend has said. I think it is excellent that the 17 prisoners are still in gaol in Kuwait. It is a policy that we urged upon the Government of Kuwait—not to give in to any blackmail involving hijacking. Various countries have accepted obligations when hijacks occur. That is why my right hon. and learned Friend the Foreign Secretary will be raising the implications of hijacks with his European colleagues in the Foreign Affairs Council next week. We have also been in touch with our Summit Seven partners to propose further discussions in that forum. Thirdly, our delegation to the International Civil Aviation Organisation will be raising the matter of hijacking and the question of what action to take.
    Mr. Boateng: Will the Prime Minister take time this afternoon to dissociate herself from the disgraceful remarks of her right hon. Friend the Member for Chingford (Mr. Tebbit) in his outrageous attack on the front-line states, which she visited recently, and which we understand she will visit again? Will she respond to the profound moral challenge from Archbishop Tutu and at last recognise that the only way forward for non-violent change in South Africa is the immediate implementation of comprehensive sanctions?
    The Prime Minister: I read my right hon. Friend's speech in full. I do not know whether the hon. Gentleman
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    has done the same. My right hon. Friend made it quite clear that economic freedom and political freedom are indivisible and he said to South Africa:
    "So you have a hard choice before you. The very economic success that your political system seeks to preserve will before long be destroyed by the policies you are following to preserve your political system."
    He made it quite clear that each and every person has equal rights to consideration, and he really made it very clear to South Africa that we detest apartheid as a system.
    Mr. Kirkhope: To ask the Prime Minister if she will list her official engagements for Thursday 21 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Kirkhope: As today is the 40th anniversary of the creation of the state of Israel, a country which has had turbulent times throughout its existence and which has often acted as a democratic refuge for people who have been persecuted elsewhere in the world, will my right hon. Friend join me in congratulating all the people of Israel on their achievements, and will she also join me in hoping that it will not be another 40 years before a peace settlement is found for the middle east that recognises the right of Israel to exist?
    The Prime Minister: I readily join my hon. Friend in congratulating Israel on its 40th anniversary. Israel's achievements in that period have been remarkable. I agree with him that that makes it all the more important that those who built the nation should now help to build peace with security for all countries in the region.
    Mr. Kinnock: I support the Prime Minister's last reply.
    May I point out to her that a 73-year-old widow in my constituency has lost all her housing benefit because she owns a house that she has been trying unsuccessfully to sell for 20 months? Out of a total income of £41·67 a week she now has to find a rent for her pensioner flat of £32·74. Can the Prime Minister tell me and my constituent how that old lady can live on less than £10 a week?
    The Prime Minister: I think that the right hon. Gentleman is referring to a number of cases, where there is lapse of time between when a house is put on the market and when it can be sold. There used to be a provision to cover that gap. Unfortunately, it was not properly used. Therefore, the rules were changed. If there is any difficulty in that particular case, I am sure that the right hon. Gentleman will be taking it up with my right hon. Friend the Secretary of State.
    Mr. Kinnock: But there is difficulty in that particular case. That is why I took it up with the DHSS, and that is why it replied that this lady
    "will still be entitled to a Retirement Pension of £41·67 a week. I am sorry that I have been unable to alleviate …"
    —I leave out the lady's name because I do not want publicity for her—
    "anxieties."
    I shall show that reply to any hon. Member on the Conservative Benches who wishes to see it, but I am sure that they have received similar correspondence. As the regulations would be properly used if changes were made, to take the Prime Minister's point, again I ask her to change the regulations so as to lift people such as my constituent and thousands like her out of the anxiety, the fear and the poverty into which the changes have now plunged them.
    The Prime Minister: No. The reason why I said, "If there is any difficulty" is perfectly plain, and I shall explain it to the right hon. Gentleman. If a person has an asset such as a house which is on the market, it should not be difficult to raise money in the form of a loan from the bank on the strength—[Interruption.] If a person has a very considerable asset such as a house, it should not be difficult to raise a modest loan on the valuation of that asset.
    Mr. Kinnock: The Prime Minister does not live in the real world. The house of which I speak cannot be sold, and has not been sold for 20 months. Can the Prime Minister recommend which building society or what source of credit would enable my constituent to raise an additional mortgage at 73 years of age to provide her with the kind of sum that would enable her so to supplement her income in order to live a civilised life?
    The Prime Minister: It would be a loan on the security of an asset, which is a perfectly well understood transaction, and usually provided for by the banks of this country.
    Mr. Stevens: To ask the Prime Minister if she will list her official engagements for Thursday 21 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Stevens: Has my right hon. Friend seen reports recently that the Scottish TUC is to mount a campaign of opposition and boycotting of the Government's new programme for training the long-term unemployed, a
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    matter which I understand will be voted on by committees of the English TUC next week? Will she condemn the wholly negative approach of the Scottish TUC, which, if supported by the English TUC, would be a major threat to the training opportunities for some 60,000 unemployed people?
    The Prime Minister: I saw the report about the Scottish TUC, to the effect that it is objecting to the new training programme. I think that it would be absolutely disgraceful if any union objected to helping a person to get training—the very training that he may need to help him to secure one of the many jobs available for skilled people—especially as the unions are part of the Manpower Services Commission, which approved that programme. I hope that the unions will support the programme in the end.
    Mr. Terry Lewis: Will the Prime Minister inform the House how she regards the old and disabled couple in my constituency who have no assets to sell and whose rent is being increased from £1·66 to £35 a week, because of the housing benefit cut? Will she please explain to them how they will live from now on?
    The Prime Minister: As the hon. Gentleman is aware, I have said that detailed cases should be taken up with my right hon. Friend—[Interruption.] The hon. Gentleman is aware that even after the changes more money is being spent on housing benefit in real terms than in 1979, and still every two households are having to support not only themselves, but keep a third. The amount of money spent on housing benefit is greater by a good deal than in 1979.

Business of the House
3.30 pm
Mr. Neil Kinnock (Islwyn): Will the Leader of the House state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): Yes, Sir. The business for next week will be as follows:
MONDAY 25 APRIL—Completion of remaining stages of the Local Government Finance Bill [5th Allotted Day].
Motion relating to the Local Government (Prescribed Expenditure) (Amendment) Regulations.
TUESDAY 26 APRIL—Second Reading of the Finance (No. 2) Bill.
Motion on the Treaty on the Elimination of Intermediate-range and Shorter-range Missiles (Inspections) (Privileges and Immunities) Order.
WEDNESDAY 27 APRIL—Opposition day (10th Allotted Day). There will be a debate on an Opposition motion entitled "The hardship caused by the house benefit changes".
Consideration of Lords Amendments to the Licensing Bill.
The Chairman of Ways and Means has named opposed private business for consideration at Seven o'clock.
THURSDAY 28 APRIL—Second Reading of the Copyright, Designs and Patents Bill [Lords].
Motion on the Summer Time Order. Details of the EC document relevant to the debate will be given in the Official Report.
FRIDAY 29 APRIL—Private Members' Bills.
[Debate on Thursday 28 April: Relevant European Community Document: 9584/87, Summer Time; Relevant report of European Legislation Committee: HC 43-xv (1987–88), para 4.]
Mr. Kinnock: I am grateful to the Leader of the House for his statement. We shall have a short debate in Opposition time next week on the hardship caused by the loss of housing benefit, which is just one of the sources of great anxiety and poverty arising from this month's social security changes.
Can the right hon. Gentleman tell us whether he will provide shortly a whole day of Government time for a debate on the changes, now that they are in being and already showing tragic effects, which even most of the Government could not have intended?
Following the report this week on teachers' pay, which reveals great problems of recruitment and supply of trained and qualified teachers in vital subjects including maths, sciences and computing, will the Leader of the House make arrangements for an urgent debate on the whole question of teachers' pay, conditions and qualifications?
In view of the annual report that was published yesterday by Her Majesty's chief inspector of prisons, which graphically illustrated the unprecedented crisis in our prisons, described by the chief inspector himself as, "bordering on the intolerable", may we have a full debate in the near future on the situation in the prison service?
When can we expect the promised debate in Government time on the future of the Rover Group? Will the right hon. Gentleman also arrange for an urgent full day's debate on the future of community care, covering the Griffiths and Wagner reports?
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Given the anxiety being expressed over the Government's internal review of child benefit, can we have an urgent statement on the nature of the review, its terms of reference and whether the Government are considering taxing or means-testing that method of help for families, which, as the Leader of the House knows, is regarded as vital by people in all parties.
In view of the implications for the future of workers and skills at Govan Shipbuilders and the rest of British Shipbuilders, which will arise from the sale of Govan Shipbuilders to Kvaerner Industries of Norway and because of the urgent need to clarify arrangements relating to the building of type 23 frigates, can the Leader of the House assure us that there will be a full day's debate on shipbuilding at the earliest possible time?
Mr. Wakeham: The right hon. Gentleman has asked seven questions and I shall do my best to answer him. He asked for a full day's debate on the social security changes. There is an Opposition day next week and they have chosen to debate the aspect that they consider to be most important. I recognise that there are other matters that they wish to discuss, but I cannot promise an early debate on that matter.
We have had a number of debates about teachers' pay. There are implementations of the award that has just been announced, and obviously, it is a matter to which we will have to return. Again, I cannot promise an early debate.
There was an announcement by the Home Secretary recently on the condition of prisons. I said then that I hoped that there would be an opportunity for a debate in the near future. That is something we can discuss through the usual channels. Indeed, that was much the same as I said the day before on the question of the Rover Group and the arrangements that have been made there.
The right hon. Gentleman also asked about community care. There are two reports, the Griffiths report and Lady Wagner's report, both of which are being studied. That is the best way to proceed at the moment. I shall pass on to my right hon. Friend the Secretary of State for Social Services the question about the review of child benefit. I am sure that a statement will be made at the appropriate time when the review has been completed. However, I cannot promise a debate in the near future.
On the matter of Govan shipyard, as my right hon. and learned Friend the Chancellor of the Duchy of Lancaster said earlier this week, the negotiations have only just started. He undertook to keep the House fully informed of any developments. The necessity for a debate may well arise. I shall certainly discuss that through the usual channels.
Mr. Tim Devlin: Could we have an early debate on the procedure of the House in view of the difficulty that many Back Benchers are experiencing in being called during major debates? Certain parliamentary conventions mean that the same people are called time and time again simply because they are Privy Councillors.
Mr. Wakeham: The question of who is called in a debate is not a matter for me. I know, Mr. Speaker, that you go to a great deal of trouble to ensure that you call as many hon. Members as possible in a debate and from as wide a cross-section of opinion as possible. As my hon. Friend will know, I have tabled a motion to make

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arrangements for reducing speeches to 10 minutes on certain occasions. I hope that we can proceed with that in the near future.
Mr. David Steel: A few minutes ago the Prime Minister did not quote those sections of the speech of the right hon. Member for Chingford (Mr. Tebbit) which managed to be offensive to the racial majority in South Africa and the racial minority in this country at the same time. Will the Leader of the House recognise that when the right hon. Gentleman is such a recent member of the Cabinet and chairman of the governing party, there is a responsibility on the Government to distance themselves from those repulsive remarks? Will the right hon. Gentleman arrange for that to be done?
Mr. Wakeham: I hope that the right hon. Gentleman has read the speech in full. I have not read it in full, but my right hon. Friend the Prime Minister has. I thought that she quoted some important parts of it and I do not think that I have anything to add to what she said.
Mr. Julian Brazier: May I allude to another motion standing in my right hon. Friend's name which is welcome to many Members on both sides of the House—namely, the motion dealing with the presentation of petitions? I want to ask whether it would be possible for this motion to be debated before 6 May, as a number of us on both sides of the House are concerned that another attempt may be made to defeat the Abortion (Amendment) Bill procedurally rather than allowing the House to decide properly what its will is. I believe that, after last night, many people feel that the House's standing in the country is not all that great at the moment, and it would he regarded as a tremendous shame if this Bill were not brought to a proper democratic vote because of procedural wrangles.
Mr. Wakeham: As my hon. Friend knows, I have also tabled a motion to deal with that recommendation of the Select Committee on Procedure, and I would like to proceed with that as soon as possible. I believe that there would be a great deal of anger in the House if anybody sought to promote a case by procedural means rather than proper arguments. Whether or not we find time, I certainly hope that that method will not be used on that occasion.
Mr. Dennis Skinner: Would the Leader of the House invite the Secretary of State for Social Services to make a statement on the Social Security Advisory Committee's recommendations regarding the need for emphysema, bronchitis and associated diseases to be prescribed diseases? Is he aware that thousands of miners and others in associated industries are affected by these diseases and that, despite all the Bills that have been brought before Parliament in recent years, they have been rejected? Would he ask the Secretary of State for Social Services to come along, complete with his preacher's voice and all the rest of it, so that we can examine and question him on the need to get this made law?
Mr. Wakeham: Even when the hon. Gentleman has a good or arguable case, he does not always present it in the most persuasive way. Nevertheless, I recognise that there is a serious question there and I will certainly refer it to my right hon. Friend the Secretary of State.
Mr Quentin Davies: M} right hon. Friend will recall that I asked him a few weeks ago whether he would urgently consider the possibility of allowing time for a debate on agriculture since that industry is at present in a state of demoralisation and crisis and the only debate that we have supposedly had on that subject in this Session was taken up entirely with discussion of a single Brussels summit. May I ask my right hon. Friend where he now stands in his deliberations on that matter?
Mr. Wakeham: My spirit is as willing as it ever was, and I intend to have a debate on agriculture as soon as I can, but, as my hon. Friend will recognise, we have had a number of important debates recently and finding time for it is not as easy as I would like.
Rev. Martin Smyth: I support the request by the Leader of the Opposition for a debate on shipbuilding. Will the Leader of the House recognise that the order for the super cruise liner is good news for a British shipyard and for the United Kingdom as a whole, as well as for Harland and Wolff? Might the House therefore be given an opportunity to express its view on the order, in the light of the suggestions that any public finance involved would have to come from the Northern Ireland block grant, when over 50 per cent. of the expenditure will be going to British companies in Great Britain?
Mr. Wakeham: I certainly recognise the hon. Gentleman's concern with shipbuilding and with Harland and Wolff: I know about this interesting project, which is based upon a novel design, but it is too soon to make a Government commitment to support it. No costings have yet been received by the Government. When they are received, they will be fully assessed. The question of a debate is perhaps a bit premature.
Mr. John Stokes: My right hon. Friend will remember that last week I asked him whether he could find time for a debate on terrorism. In view of the fact that the hijackers in Algiers have got away absolutely scot-free, is not the need for a debate even more urgent now than it was before?
Mr. Wakeham: I recognise that this is a very serious subject and that it could well be helpful to have a debate, but, as I am sure my hon. Friend will recognise, there is a great deal of pressure on time at the moment for various debates, particularly on Government legislation, and I am afraid that I cannot offer him time immediately.
Mr. Jeremy Corbyn: Is the Leader of the House aware that yesterday the London boroughs grants scheme launched a report called "London Under Pressure" which emphasised the problems that many people and organisations in London face since the demise of the GLC? Is he also aware that health cuts are continuing very rapidly in London and that as a result many health authorities are seeking amalgamation with neighbouring health authorities, which is leading to further potential job losses and hospital and ward closures?
In the circumstances, does not the Leader of the House think that it is important to have a special debate on the needs of London, the needs of the Health Service in London and the attitude of central Government, which is

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nothing but contemptuous towards the needs of the many poor people in London who are suffering under the Government's policies?
Mr. Wakeham: I do not accept much of what the hon. Gentleman has said, except that he touched upon a number of important issues. As he rightly said, a report was published yesterday. We should read and study it before we consider whether it is right and proper to have a debate on the subject. Certainly his request for a debate on London is reasonable and I shall bear it in mind.
Mr. Tony Marlow: Since, during the last five suspensions of Labour Members of Parliament from the House, excluding last night, some 260 Labour Members, including the Parliamentary Private Secretary to the Leader of the Opposition, three Labour Whips and at least 10 Labour Front Benchers voted against the recommendation of the Chair and only 68 voted in favour, many of us were not totally convinced by the stance of the Opposition Front Bench yesterday. This has been reinforced by the fact that two Labour Whips deliberately abstained in the vote last night. Will my right hon. Friend say what discussions he has had about that through the normal channels?
Mr. Wakeham: I thought that the debate last night, with the substantial support which the motion which I tabled received from the House, recognised how important the authority of the Chair is to the good running of Parliament. I was very pleased indeed that it was demonstrated in the way it was. The activities of members of the Opposition and the way they vote are a problem which I can refer to the Opposition Chief Whip. I do not want to add to his burdens, but that is his problem, not mine.
Several Hon. Members rose—
Mr. Speaker: Order. May I draw attention to what I said last week? Business questions should be related to the business for the following week.
Mr. Bob Cryer: When we have a debate on the Rover Group, will the Leader of the House make it clear who will respond on behalf of the Government—whether it will be the Chancellor of the Duchy of Lancaster or the right hon. Member for Chingford (Mr. Tebbit), because the position is not clear?
Can we have an early statement at long last about the Settle-Carlisle line? The Leader of the House will know that the local authorities have agreed to advance several hundred thousand pounds to support the line. They have asked for certain criteria from the Government, such as a guarantee for a number of years of operation of the line. All the criteria are reasonable. The Government have still not come to the House with a statement about keeping the line. Now that the local authorities have yielded to a great deal of pressure and blackmail by the Government to support the line, is it not time that the Government came up with their own support to make sure that we save this magnificent 80-mile railway?
Mr. Wakeham: When the Rover Group debate is arranged, it is not a matter for me who will be called to speak. I do not want to disturb the hon. Gentleman, but under the nresent arraneements it seems he might have to
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deal with speeches from my right hon. and learned Friend the Chancellor of the Duchy of Lancaster and from my right hon. Friend the Member for Chingford (Mr. Tebbit). I hope that that does not disturb him too much.
I recognise the hon. Gentleman's long concern and interest in the Settle railway. He knows that it is being considered by my right hon. Friend the Secretary of State for Transport. An announcement will be made when my right hon. Friend has made up his mind how best to proceed.
Mr. James Kilfedder: The Government have stated time after time that the community charge legislation is essential for the well-being of the people of Scotland, Wales and England. When will the Government introduce similar legislation for Northern Ireland?
Mr. Wakeham: I have to say to my hon. Friend, not next week. I will refer the matter to my right hon. Friend the Secretary of State for Northern Ireland, but I know of no plans to do so immediately.
Mr. Andrew Welsh: Is it not a disgrace that the Scottish Office, with 12,000 civil servants and a £9 billion annual budget, alone among the major Departments of State does not have a Select Committee to scrutinise its affairs? Will the Leader of the House advise the Committee of Selection that if the problem is that it cannot get Scottish hon. Members to serve on it, there is no problem? I can volunteer three for him. Will he promise the House a debate on this whole sorry affair?
Mr. Wakeham: I know of the interest in the Select Committee on Scottish Affairs. I understand that the Chairman of the Committee of Selection, whose responsibility it is, will be writing to me later today, and I think the position might best be reviewed when I have received that letter.
Mr. John Carlisle: Does my right hon. Friend recall that some months ago he promised the House a debate on sport? In the light of the blackmailing tactics and, in the words of Daley Thompson, the cheating tactics now being employed by the International Amateur Athletics Federation against Miss Zola Budd and the British Amateur Athletics Board, would it not be a good idea to have a debate on sport to get rid of the hypocrisy and bigotry of those who are far more interested in politics than sport? May I recommend to my right hon. Friend early-day motion 973, standing in my name, which has more than 150 signatures in favour of its spirit?
[That this House urges the British Amateur Athletics Board to reject the International Amateur Athletics Federation's recommendation that Miss Zola Budd be suspended from international competition; and believes that each governing body of sport should be able to select any competitor free from political or outside pressure, particularly when that athlete is proved innocent of any offence under international rules.]
Mr. Wakeham: I recognise that a debate on sport is desired in a number of quarters in the House, and I would arrange one if I could see time for it, but I do not see that in the immediate future. However, I shall certainly bear it in mind. The Government remain committed to the Gleneagles agreement. The position of Miss Budd is, of course, a matter for the British Amateur Athletics Board and the International Amateur Athletics Federation.
Mr. Doug Henderson: The Leader of the House will recall that, at Question time on Tuesday, the Prime Minister referred to those who are putting pressure on the British Amateur Athletics Board to consider the eligibility of Miss Budd as "rather repugnant"? Was the Prime Minister aware that 23 countries had unanimously agreed that decision of the IAAF, including the United States and West Germany? May we have a debate specifically on the Gleneagles agreement so that the House can once again reaffirm its commitment and reassure the rest of the world?
Mr. Wakeham: I cannot be more forthcoming to the hon. Gentleman than I was to my hon. Friend the Member for Luton, North (Mr. Carlisle). As to what my right hon. Friend the Prime Minister said on Tuesday, when she makes a statement from the Dispatch Box she says what she believes to be right and not always necessarily what other nations think is comfortable to hear.
Mr. Terence L. Higgins: In the case of Miss Budd, will my right hon. Friend accept that I may be a little prejudiced, as the only South African to get to the tape ahead of me in a Commonwealth games was disqualified for cheating? Be that as it may, will he accept that it is inconceivable, after all the controversy over the years about Miss Budd, that she returned to South Africa and attended an athletics meeting—where she was bound to be greeted as a celebrity by those in favour of apartheid—without realising that that was bound to create real problems for herself and for British athletes generally? Is my right hon. Friend aware that many British athletes regard that as a deliberate and extremely selfish act?
Mr. Wakeham: My right hon. Friend has followed these matters over many years since the days, not so long ago, when he was a distinguished athlete himself. What he says is what he believes to be true. All I can say is that, listening to the arguments, there seems to be a considerable amount of controversy about this case; but I must repeat that this is a matter for the British Amateur Athletics Board and the International Amateur Athletics Federation, and not a matter for the Government to resolve.
Mr. Harry Ewing: To return to the Select Committee on Scottish Affairs, may I advise the Leader of the House not to take the offer from the Scottish National party too seriously? During the last Parliament, when the Select Committee on Scottish Affairs was sitting, it was difficult to get SNP hon. Members to sit on that Committee or, indeed, on any other.
Is the right hon. Gentleman aware that there is deep discontent that the only Department of Government that is not subject to the scrutiny of a Select Committee is the Scottish Office? The Leader of the House is under an obligation by resolution of the House to set up that Committee. Will he accept that he has a duty to come to the House and make a statement as soon as he receives the letter from the Chairman of the Committee of Selection so that we can question him closely and ensure that the Committee is set up?
Mr. Wakeham: The hon. Gentleman will have heard me say that I do not propose to say any more on that subject until I have received a letter from my hon. Friend the Member for Shipley (Sir M. Fox) who is the Chairman of the Committee of Selection. When I have received that
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letter, I shall consider what it says and decide how best to proceed. If there is a question about the need for a debate, it can be discussed through the usual channels.
Mr. Allan Stewart: Further to the questions from the hon. Members for Angus, East (Mr. Welsh) and for Falkirk, East (Mr. Ewing), does my right hon. Friend agree that a debate on the Select Committee on Scottish Affairs would be welcome on the Conservative Benches so that, for example, I could explain that I do not propose to waste my time in that Select Committee, but prefer to defend my constituents against the absolute arrogance of the leader of the Strathclyde regional council in writing abusive letters to local ministers and making it clear that he will not reply to letters from my constituents about school reorganisation?
Mr. Wakeham: My hon. Friend adds weight to the demands of which the usual channels will have to take note when deciding whether there is a need for a debate on that matter. One thing is certain: that we do not need to have a debate on the merits in business questions.
Mrs. Ray Michie: Will the Leader of the House please find time for a debate as soon as possible on a matter that is important to my constituency and, indeed, to other parts of Scotland—the proposed increase in the weekly closing time for salmon net fishermen? We should really like to debate that because it is due to come into effect at the beginning of May and will be enormously damaging to that industry.
Mr. Wakeham: I cannot promise an early debate on that subject, although I recognise its importance. However, I remind the hon. Lady that there are Scottish questions on Wednesday and she could question my right hon. and learned Friend the Secretary of State for Scotland on that subject, if that would be of any help.
Mr. Richard Holt: My right hon. Friend will know that yesterday my right hon. Friend the Secretary of State for Transport announced an inquiry into the workings of the M25—or, to be precise, its inadequacies. In view of the representations that have been made by north-east Members of Parliament of all persuasions on the need for a motorway on the east of England from the south to the north, will my right hon. Friend make it his business to see that we have an urgent debate on the subject, and that the Minister is not advised by the same stupid civil servants who gave him advice on the M25 but listens to some of the business men and representatives from the north-east of England who know how much that would mean to regional policy and how much better it would be than some of the projects on which money has been wasted over many years?
Mr. Wakeham: I am sure that my hon. Friend would want to be fair. The advice on how to build the M25, its size and so on, was taken long before the present Secretary of State for Transport was in the House, when others had responsibility for the matter. However, I recognise my hon. Friend's concern. I shall refer the matter to my right hon. Friend the Secretary of State for Transport but I regret that I connot promise an early debate on the subject.
Mr. Geoffrey Lofthouse: May I refer the Minister to his answer to my hon. Friend the Member for Bolsover (Mr. Skinner) on emphysema among mineworkers? Is he aware that I have

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letter from the Secretary of State for Social Services informing me that the Industrial Injuries Advisory Council has reported to him that it is not recommending that the disease should be prescribed? Will he request the Secretary of State to publish that report and provide time in the House for a debate on it so that we can ascertain why?
Mr. Wakeham: I recognise the hon. Gentleman's concern and I shall certainly refer the matter and the question of publishing the report—if that is normal practice—to my right hon. Friend the Secretary of State for Social Services. I shall certainly see what can be done so that the hon. Gentleman will know more about the advice that my right hon. Friend has received.
Mr. Michael Latham: With regard to—
Mr. Skinner: What a scandal. Miners are coughing their lungs up.
Mr. Holt: Shut up, Skinner.
Mr. Speaker: Order. Both hon. Members.
Mr. Latham: With regard to next Thursday's debate on summer time, will the Minister in charge of that order make it clear that he has no intention of asking the House to go back to all-year-round summer time, which was abandoned in 1971, since that would be disastrous for the building industry, for farmers and for many people in industry in the north and in Scotland? Will he tell those yuppies who want to ring Europe that they can get up an hour earlier and use their car telephones at Virginia Water station?
Mr. Wakeham: My hon. Friend makes his point well, but I fear that the order that we shall be discussing is of somewhat more limited scope; it refers to British summer time beginning on 26 March 1989 and ending on 29 October 1989, although the wider issues may well arise in the debate, subject to your ruling, Mr. Speaker.
Mr. Dick Douglas: Will the Leader of the House consider getting either the Secretary of State for Scotland or the Secretary of State for Energy to comment on the reductions in employment in the headquarters of the coal industry in Scotland? Could he perusade them to give us some further information regarding the state of negotiations between the South of Scotland electricity board and British Coal about the coal uptake for power station consumption in Scotland? Does he accept that right now, because of the perhaps understandable cuts in manpower, morale in the Scottish coalfield is extremely low and we need an urgent statement and a clear indication that the SSEB intends to burn coal produced in Scotland in Scottish power stations?
Mr. Wakeham: I shall certainly refer the matter to my right hon. Friend the Secretary of State for Energy and my right hon. and learned Friend the Secretary of State for Scotland. We have long regarded it as a priority that the nation's coal consumers should have access to reliable and economically produced supplies of coal, from whatever source. Provided that British Coal can get costs down, it has every chance of remaining the supplier of choice.
Mr. Ivor Stanbrook: A clause in the Copyright, Designs and Patents Bill [Lords] would have the effect of depriving this House of one of its most important, ancient and hallowed privileges, namely, the control of its domestic affairs—in this case the control of its recorded, filmed, televised and photographed events. Will my right hon. Friend ensure that on Second Reading on Thursday a Minister justifies this proposal that we should give up our ancient rights?
Mr. Wakeham: My hon. Friend and I have had some correspondence about this matter. I shall certainly refer it to my right hon. Friend before the debate next Thursday so that he can make the position clear in that debate, and it may well be debated during the passage of the Bill.
Mr. Nigel Griffiths: Will the Leader of the House make time next week for a statement from the Secretary of State for Education and Science about the severe threat felt by medical research charities such as the Friedrich's Ataxia Group, which feel that the imposition of overhead costs on them by the universities, which are themselves threatened with financial crisis, would do much to destroy the valuable research work that they do?
Mr. Wakeham: I can only say that I shall refer this matter to my right hon. Friend and if he thinks it appropriate to make a statement, I am sure that he will.
Mr. Harry Greenway: Will my right hon. Friend arrange an early debate on the dignity of man, having regard to the continuing and unpleasant practice of paupers' graves? Is he aware that at this moment there are two open graves in the Hanwell cemetery on the edge of my constituency, which will take five or six people with 6 in of soil between them? That causes great distress and has done for many years. Is it not time that the practice was ended? In view of the local authority's remit in this, would my right hon. Friend help me to secure money from Ealing council by stopping its proposed spending of ?980 on an evening for lesbians on 7 May and put that money into a dignified burial for our citizens?
Mr. Wakeham: I will give my hon. Friend any help that I properly can to pursue the matter but I cannot promise him a debate on it next week.
Mr. Greville Janner: May we have a debate on the Government's unworthy policy of keeping secret many documents more than 40 years old concerning the deaths of British service men and prisoners of war? Why is it that the three Government investigations taking place at the moment are all secret? One of them concerns war criminals who live in this country, one concerns the involvement of President Waldheim in the deaths of prisoners of war and the third, announced today, concerns the alleged mass murderer General Mohnke? Why should they be secret? Why are the documents not available? What are the Government covering up, and should we not have a debate on the matter?
Mr. Wakeham: I am sorry that I cannot promise the hon. and learned Gentleman a debate. Decisions about what should be secret and what should be made public are based on long-standing conventions and rules in this place and I am not in a position to change them. I shall certainly refer the hon. and learned Gentleman's remarks to the

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appropriate quarter but I can see an important case for conducting such inquiries in private to avoid the possibility of injustice.
Mr. Bill Walker: When my right hon. Friend receives the report from the Chairman of the Committee of Selection, will he bear in mind the fact that I have been accused by the Scottish National party of having cheated the electorate at the general election? In fact, I made it quite clear that I would not serve on the Committee and I gave my reasons. I would welcome the opportunity of a debate to draw attention to the inconsistency of the SNP on these matters and to make it quite clear why I and others need time to defend our interests against the lies put out about us in our constituencies.
Mr. Wakeham: I have no doubt that if my hon. Friend should catch your eye, Mr. Speaker, he will make his point clearly. I would certainly acquit him of any charge of cheating or of not making his own position abundantly clear to anybody who would listen to him.
Mr. David Winnick: My question arises from the question asked by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) earlier today. Do the Government accept that there is an obligation on any British Administration to ensure that those held responsible for atrocities against British troops in the last war are brought to justice? Will there be a statement about the person named by my hon. Friend? Why should a notorious Nazi mass killer and Hitler pimp be allowed to go scot-free and live in comfort in Germany instead of being brought to justice?
Mr. Wakeham: I do not think that I can add to what was said earlier. I understand that the House was told by my right hon. Friend the Home Secretary that the material in the possession of the Ministry of Defence is being urgently re-examined following the representations made by the hon. Member for Perry Barr. That would seem to me to be the right way to proceed, and I do not think that I can add anything further.
Mr. Kenneth Hind: My right hon. Friend will have noted the substantial falls in unemployment in the north of England. Has he also noted that councils such as Lancashire are increasing their rates by 18 per cent.? That is causing a great deal of concern as it is feared that employment prospects will be much reduced. Will he give time in the near future for a debate on industrial development in the north of England as we have not had such a debate for some time?
Mr. Wakeham: I recognise that this is an important subject. I note my hon. Friend's concern about the policies of certain county councils, and he makes the point very well.
Mr. Tam Dalyell: In view of early-day motions 228, 253, 272, 273, 279, 286, 622 and 627, and as, for some strange unfathomable reason, the Prime Minister will not be answering the Adjournment debate tomorrow on the conduct of her private office, could we have an assurance that the Minister answering for the Civil Service will have been fully and frankly briefed by Mr. Ingham and Mr. Powell about their total role in the Westland affair?
[That this House notes in the book, Campaign, by
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Rodney Tyler, the Selling of the Prime Minister: from behind the doors of Downing Street and Conservative Central Office—A unique inside account of the Battle for Power that the author on page 1, chapter 1, paragraph 1, sentence 1, states 'It was an extraordinary turnaround in fortunes from the moment on 27th January 1986 when Mrs. Thatcher secretly confided to a close associate that she might have to resign …' and on page 3 that 'On the eve of the crucial Westland debate she herself felt shaky enough to doubt her future' though some around her later sought to dismiss this as late evening anxieties of the sort that had disappeared the following morning. It is certainly true that if Leon Brittan had chosen to, he could have brought her to the brink of downfall, by naming the real culprits inside Number 10. Instead, he chose to remain silent', and calls on the Prime Minister to give a full account of what transpired between 3rd January and 27th January 1986, at Number 10 Downing Street, in relation to the selectively leaked Law Officer's letter concerning the Westland Affair.]
[That this House notes that the Member for Aldershot on page 136 of his book Heseltine: the unauthorised Biography, states in relation to the Westland Affair that 'John Wakeham issued an order of the day which contained the trite, if effective message, that it was time for all good men to come to the aid of the party'. We did and calls on the Leader of the House, The Right Honourable Member for South Colchester and Maldon, to explain when he first knew the role of the then Trade and Industry Secretary, The Right Honourable Member for Richmond, Yorks, in the matter of the disclosure of a selectively leaked Law Officer's letter.]
[That this House notes that in his book Mrs. Thatcher's Revolution, published this week by Jonathan Cape and Co., Mr. Peter Jenkins writes, on page 200 'Brittan himself refused to enlighten the Select Committee on any point of substance. However, he is reputed to have told close friends subsequently that not only has she known perfectly well what had happened but that, on the day following the leak, had expressed her satisfaction to him at the way things had been handled. However at that time, the downfall of Heseltine had not been achieved.… He ( Mr. Brittan) might point the finger at her ( Mrs. Thatcher). Potentially he now had the power to destroy her'; and calls on the Prime Minister to give the House a full account of her conversations with the then Secretary of State for Trade and Industry, the Right Honourable Member for Richmond, Yorks, over the period from 3rd January and 27th January 1986, in relation to the selectively leaked Law Officer's letter concerning the Westland Affair.]
[That this House notes that in The Thatcher Years—A decade of Revolution in British Politics, published by BBC Books, Mr. John Cole, on page 170, considering the selectively leaked Law Officer's letter in the Westland Affair, writes 'why did he ( Sir Robert Armstrong) not give her a quick interim report when he discovered that the leak was an inside job, authorised by her office? Why did Leon Brittan not tell her? Or the private secretary concerned? Or his chief, who sits in the same room? Or her press secretary? And why did she never ask?'; and calls on the Prime Minister to inform the House of the answers to these questions.]
[That this House notes that, in the book 'Not with Honour—The Inside Story of the Westland Scandal', on page 142, Magnus Linklater and David Leigh write that 'Instead, following Havers's complaint, she spoke privately to Brittan about the leak. Although this is something the Prime Minister has failed to disclose, to widespread disbelief, the evidence comes from an authoritative source,

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who told us: "The Prime Minister knew about the leak. She was pleased it had been done. There was a meeting between Brittan and her after the complaint from Mayhew. Only the two of them were present … Brittan assumed she knew of [the leak's] origins. You must draw your own conclusions." ' One of Brittan's friends adds, "Nobody thought it was a problem. The complaints were out of the public domain and any inquiry was expected to be a formality. Leon wasn't worried at all about it."; and calls on the Prime Minister to give a full account to the House of the meeting between herself and Right Honourable Member for Richmond, Yorks, referred to therein.]
[That this House notes that in an article by Mr. Paul Foot in the Daily Mirror, dated 28th January, a Ministry of Defence official, Mr. Paul Newbigin, is quoted as having admitted witnessing the shredding and incinerating of the log book of HMS Vonqueror'; is concerned that if this statement is true, the Ministry of Defence is guilty of having established an entirely bogus investigation into the disappearance of the log book when the facts of its deliberate destruction were already known; further notes the parallel between this case and that of the leaked Solicitor General's letter in the Westland Affair, when a similar investigation was launched despite the availability in advance of all the salient facts; and calls upon the Secretary of State for Defence to set up an immediate inquiry with the genuine purpose of furnishing Parliament with a full explanation of this bizarre series of events.]
[That this House calls for a debate on the conduct of honourable and right honourable Members of the House, considering the position of back bench members who resort to unparliamentary language and Heads of Government who misuse Law Officer's letters and then display lack of conduct about what they have done.]
Could we have an up-to-date report on a matter about which I have written to the Prime Minister—the progress of the leak inquiries in relation to the contact between her own office and the Secretary of State for Education on school testing, the Scottish Office on opting out and the latest difficulty over the poll tax with the Department of the Environment?
Mr. Wakeham: I doubt whether the hon. Gentleman will get all that in answer to tomorrow's debate—whoever answers it. The Minister who replies to the debate tomorrow will be well briefed and will give a very good answer, but it may not satisfy the hon. Gentleman.
Mr. Harry Cohen: The Leader of the House will be aware that over two days next week the NATO Nuclear Planning Group meeting will be held in Kolding in Denmark. On the agenda will be a proposal from the Government for lots of new nuclear weapons. After Nuclear Planning Group meetings in the past, the Government have not been particularly honest with the House or with the electorate. Will the Leader of the House arrange for a statement at an early and convenient time about the result of this meeting?
Mr. Wakeham: To make allegations of that sort, which I totally repudiate, is not the way to try to get me to arrange a debate on the subject. Nevertheless, I shall forgive the hon. Gentleman for that lapse from his usual
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standards and refer to my right hon. Friend the Secretary of State for Defence the hon. Gentleman's concern that there should be a statement, but I cannot promise one.
Mr. Tony Banks: Is the Leader of the House aware of the great disappointment felt in all parts of the House when the arts debate that we were to have on 25 May was cancelled? When are we to have a debate on the arts? Among the things that we could discuss is the giving of advice to Lady Soames. Indeed, we could possibly discuss the possibility of an Arts Council grant for the colourful socks of the hon. Member for Crawley (Mr. Soames). Will the right hon. Gentleman say that if we have such a debate it will not be held on the day of the local government elections? That has happened in the past and it is not satisfactory and would disappoint many hon. Members.
Mr. Wakeham: I am delighted to see the hon. Gentleman here. He was here at the beginning of last night's debate but then he disappeared and I thought that he might have been taken ill. I recognise his interest in the arts and his possessive attitude to some art trinkets. I hope to arrange a debate at the earliest opportunity and I recognise the hon. Gentleman's desire that it should not take place on the day of the local government elections.
Mr. Chris Mullin: May I join those hon. Members who have pressed the Leader of the House for a debate on the shipbuilding industry—or on what remains of it? It is not just a question of the recent developments at Govan, but also of the knock-on effect on many of my constituents. In Sunderland, nearly 3,000 people are employed in the shipbuilding industry. There have been recent reports, apparently well-sourced, that the Government intend to end the public subsidy to shipbuilding. May we have an opportunity to debate that before the decision is made? Such a debate could have some influence on the decision and would be better than just hearing about the decision afterwards.
Mr. Wakeham: I cannot be any more forthcoming than I was earlier in answer to the hon. Gentleman's right hon. Friend the Leader of the Opposition. I recognise that there may well be need for a debate on shipbuilding. We will see how we get on. I appreciate that the concern is not restricted to Govan, and that Sunderland is also concerned about these matters. I hope that the hon. Gentleman takes into account the concern of his hon. Friend the Member for Sunderland, North (Mr. Clay) that hon. Members do not spread rumours that cause undue anxiety in what is obviously a difficult situation.
Mr. John McAllion: Will the Leader of the House try to understand that his complacency about the Select Committee on Scottish Affairs is wholly unacceptable to the vast majority of Scottish Members? For example, it is no secret that the letter that he awaits from the Chairman of the Committee of Selection will simply confirm the failure to find, from more than 370 Conservative Members of this unitary Parliament, five who are sufficiently interested in Scotland to man the Government side of this important Select Committee. Will the right hon. Gentleman stop dodging the question and give the House a guarantee that there will be an opportunity for a full debate on his abysmal failure in this important matter?
Mr. Wakeham: I have to tell the hon. Gentleman that it is not a sign of complacency not to comment on a letter until one has received it. Perhaps if the hon. Gentleman has received a letter meant for me he would send it round to me so that I may read it.
Mr. Bob Clay: Returning to the question of merchant shipbuilding, may I say to the Leader of the House that he does not seem to understand the urgency of the situation? He talks about people spreading rumours. The most serious rumour being spread at the moment is the one that the Government persistently spread when they claim that if things are in crisis it has nothing to do with them and there is nothing that they can do about it.
We need a debate in order to point to policies that could be undertaken. For instance, at the moment there is a real prospect of a substantial order from Cuba and it is about time that the Department of Trade and Industry decided what it could do to assist. That would be better than the continual knocking campaign against North East Shipbuilders Ltd.
While the negotiations take place at Govan it is not just 3,000 jobs in Sunderland that are at stake: it is 10,000, because for every one of the 3,000 people employed directly by British Shipbuilders, there are another three dependent jobs. The situation is urgent and the Government have a responsibility and should allow a debate no later than next week.
Mr. Wakeham: Remarks like that do not help to deal with a difficult situation. The situation on the ground is about people and jobs, and words such as those used by the hon. Gentleman totally ignore the substantial sums of money, verging on £2 billion, put into the shipbuilding industry over the years by various Governments. It is incorrect to pretend that nothing has been done. This is a serious problem that merits serious interventions and will not be helped by remarks such as those of the hon. Gentleman.

Points of Order
4.7 pm
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. Yesterday I raised with you the question of the rights of a Member to use our internal House systems for communicating information on the closure of a brewery while acting for that company. Your reply, Mr. Speaker, is contained in yesterday's Hansard and it reads:
"Provided that that hon. Member has declared his interest in the Register of Members' Interests, it would be in order for him to put a letter on the board."—[Official Report, 20 April 1988; Vol. 131, c. 832.]
You then went on to refer me to the Select Committee on Members' Interests. Yesterday I did not prolong the matter, but I say now that I am a member of that Committee and can say that it is not within the responsibility of that Committee to deal with this matter.
In so far as you have said that it would be in order for that hon. Member to put a letter on the board, thereby using one of our internal House systems, may I suggest to you, Mr. Speaker, that this has implications in many other areas? For a start, does it now mean that an hon. Member acting for a company can use our telephones, our non-imprint stationery, our photocopying facilities, our internal message board and, indeed, our office accommodation?
In the light of your ruling yesterday, Mr. Speaker, many facilities may well be used by persons acting for organisations and companies outside the House. While I do not think that it is possible for you to rule today on this matter, I would be grateful if you would reconsider your ruling so as to reassure hon. Members that none of the facilities that I have described in my point of order can be used by people who receive money from outside the House for carrying out what they believe to he their duties.
Mr. Speaker: I do not think that there is any reason at all for me to reflect on the ruling. I am sorry if I left the hon. Gentleman in any doubt about the matter yesterday. It would be quite out of order for any hon. Member to use the facilities or the stationery of the House for commercial purposes. The hon. Gentleman asked about putting letters on the board. The rule is that up to six letters may be put on the board by hon. Members.
Mr. Campbell-Savours rose—
Mr. Speaker: I do not think that I can add anything to what I have said.
Mr. Campbell-Savours: Further to that point of order, Mr. Speaker. I understand the ruling that up to six letters may be placed on the board, but they must relate to the activities of an hon. Member carrying out his public duties. I am talking about correspondence which in this case is in the name of the Scottish and Newcastle Brewery, and which was put on the board by a Conservative Member for a Kent constituency. I believe that that was in breach of the spirit or, indeed, a direct breach of the rules with which we are all required to comply.
Mr. Speaker: I think that the hon. Gentleman could certainly draw that to the attention of the Select Committee. I have no responsibility. Any hon. Member many put up to six letters on the board. I have no knowledge of the letter about which the hon. Member for

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Workington (Mr. Campbell-Savours) speaks, but the hon. Gentleman who put it there may well have had a covering note with it.
Mr. Dennis Skinner: Further to—
Mr. Speaker: Order. We have a very heavy day ahead of us.
Mr. Skinner: I know, yes.
You, Mr. Speaker, will recall that many years ago—in 1974, I believe, between the two elections—there was a public outcry, certainly by the Tory press, when it was discovered that a relative of Harold Wilson, the then Prime Minister, had from time to time been using an office in the House of Commons for purposes that, I suppose, were not all that dissimilar from those described by my hon. Friend the Member for Workington (Mr. Campbell-Savours). Because he was a Labour Prime Minister and the Tory press, particularly the Daily Mail and one or two other newspapers, went to town, Tory Members raised the issue and the result was that my right hon. Friend at that time had to deal with the matter and presumably that was the end of it.
If it was right for a Labour Member to have to take appropriate action, it appears to me that what is good for one should be good for the other. A few years have elapsed, but I reckon that you would do well, Mr. Speaker, to look back at that period and to check what occurred. If my hon. Friend's suggestion is in any way in line with what occurred then, you might find it necessary to take appropriate action.
Mr. Speaker: I again suggest that, if that were to happen, the hon. Gentleman should draw it to the attention of the Select Committee concerned.
Mr. Campbell-Savours: But we have rules.
Mr. Richard Holt: On a point of order. Yesterday we had an important debate on an important subject which all of us believe is something that will reflect for a long time.
I hesitate to raise this point of order, but, at the same time, I would be neglectful of my responsibilities to myself and others if I did not.
It is only a short time ago that you, Mr. Speaker, made a ruling that, unless hon. Members presented themselves in the Chamber properly attired, you would be blind to their presence when it came to selecting speakers. Those little things all amount to the type of trouble that we had in the House and the debate that has ensued.
Today, an Opposition Member once again came scruffily into the Chamber without wearing a collar and tie, yet he was called. If, Sir, you do not abide by your own rulings, how can we ultimately expect the respect and dignity afforded to the Chamber to be maintained? Would you kindly repeat your ruling of just a few months ago, that unless Members behave and dress properly, you will not call them?
Mr. Speaker: I do not recollect having said that at all. I said that the standards in the House are important. I entirely agree with what the hon. Gentleman said about the debate last night which I hope will be a watershed in terms of the future. It was perhaps one of the best debates that we have had in the House for many a year and anyone who was present, as most hon. Members were, will share that view.
In view of my background, I am perhaps the last person to pronounce upon the dress of Members, but the House will not be surprised to hear me say that standards of dress are very important.

Orders of the Day

  Local Government Finance Bill
  [4TH ALLOTTED DAY]
  As amended (in the Standing Committee), further considered.

Clause 39

  OCCUPIED HEREDITAMENTS: LIABILITY
  4.22 pm
  Mr. Robert Hicks: I beg to move, amendment No. 7, in page 23, line 23, at end insert—
  'and
  (c) abating the first £1,000 (or any lesser amount) payable per year by 50%.'.
  Mr. Speaker: With this, it will be convenient to take the following: Amendment No. 9, in page 23, line 33 leave out '2' and insert '10'.
  Amendment No. 154, in page 23, line 37 at end insert—
  '(6A) Where subsection 6 above applies, the charging authority may at its discretion remit the liability calculated by reference to the formula in subsection (5) above, and the income it forgoes in so doing shall not be deemed to have been collected for the purposes of calculating its contribution to the National Non-Domestic Rating Pool under section 51 and Schedule 7 below.'
  Amendment No. 155, in page 23, line 37 at end insert—
  '(6A) Where subsection (6B) below applies the chargeable amount for the chargeable day shall be calculated in accordance with the formula—
  A x B/C x M
  (6B) This subsection applies where on the day concerned the ratepayer is a small business.
  (6C) The Secretary of State may make Regulations prescribed—

  (a) the definition of small business

  (b) the value for M in subsection (6A) above, and that value is to be between 1 and infinity.'

  Amendment No. 10, in page 23, line 38, at end insert—
  '( ) Where subsection (6) above applies, a charging authority shall have the power to make no charge on the hereditament.'.
  Amendment No. 172, in schedule 6, page 97, line 5, leave out paragraphs 7 and 8.
  Amendment No. 171, in clause 49, page 28, line 15, leave out 'and 1994' and insert
  '1994, 1995, 1996, 1997, 1998 and 1999'.
  Amendment No. 228, in page 28, line 15, at end insert—
  '(5) Any non-PLC business that can prove it is solvent and that its taxable profit is less than £20,000 per annum can claim non-domestic rate abatement by completing a form for the purpose which is counter signed by the business's accountant. The amount of the abatement to be set by the Secretary of State annually.'.
  Amendment No. 270, in page 28, line 15, at end insert—
  '(5) Any business not paying Corporation Tax at the higher rate can claim non-domestic rate abatement at a level set by the Secretary of State annually.'.
  New clause 6—Small businesses—
  '(1) Where subsection (2) below applies, the chargeable amount for a chargeable day as calculated in accordance with section 39(4) and (5) shall be reduced by an amount up to 100% of the sum due, on a basis to be determined by regulations made by the Secretary of State.
  1008
  (2) This section applies where a hereditament is occupied by a ratepayer wholly or mainly for small business.
  (3) "Small business" is to be defined in regulations, and in defining the term regard shall be had to:

  (a) Whether or not the business is in the form of a PLC:

  (b) The taxable profit of the business:

  (c) The business's asset base: and

  (d) The number of employees on the business's payroll.'.

  Mr. Hicks: My hon. Friend the Member for Kensington (Sir B. Rhys Williams), whose name heads this amendment, is unfortunately in hospital; hence my undertaking this task on his behalf.
  The Government propose the introduction of a uniform business rate as part of their overall reform of our local government finance system. We are all aware of the inadequacies of the present arrangements, both in terms of the domestic and non-domestic ratepayers. Indeed, it has featured strongly in our deliberations in recent days.
  The proposal to introduce a uniform business rate has had a mixed reception. If one considers its immediate effects, few of us can fail to be worried about the impact that it could have on the level of economic activity, with specific reference to the smaller business units in our respective constituencies.
  As the House knows, I have the honour to represent a constituency in Cornwall, which is not in itself a major industrial county, but is nevertheless dependent upon a wide diversity of economic activity. In Cornwall's case, to bring it into line with a uniform national figure, an immediate increase of about 10 per cent. to 12 per cent. will be needed, but, as we know, that will be accompanied by a revaluation, the first since 1973. That combination could lead to serious disruption and damage to individual business enterprises.
  That overall effect worries me. It is significant. All hon. Members have received in their post in the past few days a joint statement issued by the Association of British Chambers of Commerce, the Association of Independent Businesses, the Confederation of British Industry, the Forum of Private Business, the National Chamber of Trade, the National Federation of Self-Employed and Small Businesses and the Union of Independent
  Companies, about the transitional provisions for the introduction of the uniform business rate.
  The business organisations supporting that statement have differing views about the desirability of a national non-domestic rate, but they are all concerned about a specific aspect—that it will lead to serious disruption or permanent damage to the business world as a whole. They have called upon the Government to take note of four particular considerations.
  First, during the transitional period, the maximum annual increase in the rate bill of any individual business premises should be restricted to 10 per cent. in real terms. Secondly, the cost of the transition should be met from the Exchequer. Thirdly, the transitional period should be extended beyond the five years from 1990, although revaluations should be quinquennial. Finally, there should be an announcement of the Government's intentions on transition, prior to the implementation of the legislation.
  There may be a statement this afternoon that meets some of those requirements. Since Monday night's debate, I have been with the Select Committee on European Legislation in The Hague and in Bonn. This morning I read in several British newspapers that my right hon. Friend the Secretary of State for the Environment has,

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  either formally or informally, made statements to the effect that, first, he is either prepared to extend or is considering extending, the period for which the transitional arrangements will apply and, secondly, that we can expect some concession in respect of the small business sector. I am not sure whether the reports that appeared in the English newspapers obtainable in The Hague this morning are correct. Nevertheless, I hope that, whatever the intentions of my right hon. Friend the Secretary of State, he will clarify them today.
  4.30 pm
  As I said, it is my wish in moving this amendment to concentrate on the impact that these proposals will have on smaller business enterprises. We are all aware that the Government, in conducting their national economic strategy in recent years, have placed great emphasis on the role of the smaller business unit in assisting the revival of our economy. Various schemes have been introduced, the great majority of them aimed at encouraging smaller business men. Ministers have consistently emphasised the seedcorn principle. Numerous success stories have been held up by my right hon. Friend the Prime Minister and other Ministers as examples for business men to follow.
  Many would say that this strategy has been successful. It is often suggested that 1 million new businesses have been created since 1979. These have provided new employment opportunities and they have all contributed to local and regional economies as well as the national economy. We have been successful in creating new business. Of course, this has had some multiplier effects. It has, for one, dramatically increased the demand for office, factory and retail space in many parts of the United Kingdom. This unprecedented demand in certain parts of the country has led to faster than average increases in rent, which will result in higher than average increases in rateable value following revaluation. In addition, where the proposed uniform business rate results in an increased poundage for business enterprises in those areas, existing businesses could suffer still further this particularly applies to the smaller ones, which may be unable to relocate because of the essentially local nature of their business activities.
  It is worth reminding the House of the system that governs the non-domestic sector, and works positively to the disadvantage of smaller business enterprise. We all know that in assessing rateable values of business premises, the square footage at the front of that business property is rated at a higher value than the area to the rear of the premises. Since smaller businesses, by definition, tend to occupy smaller premises, it follows that their properties are rated at those higher levels. The figures produced by the Inland Revenue's valuation office property market report 1987 suggest that the smaller industrial units will pay 74 per cent. more in rates per square foot than larger business units. This reflects the fact that rents will be 74 per cent. higher.
  The new business rate consists essentially of two elements—the adjustment to a national figure and the revaluation. With regard to the latter, a close estimate of the projected level of the uiform business rate and thus its
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  impact on revalued businesses can be made from the Government's statements. I refer particularly to those made by my hon. Friend the Under-Secretary, who said:
  "Revaluation is likely to mean that rateable values increase on average by a factor of 5, or 6 … The Uniform Business Rate poundage will, however, be reduced by an equal and opposite amount."
  The Government have repeatedly quoted, both in statements and in responses to hon. Members, a figure of 224p in the pound for the uniform business rate, based on current rateable values and the level of expenditure of local authorities in 1987–88. Reducing this figure by an equal and opposite amount of 5·5 per cent. produces a new figure for the uniform business rate based on revalued rateable values of 41p, which, when increased by the level of inflation—say, 4 per cent. per annum—will result in a level of 46p for the uniform business rate when it is introduced in 1990.
  It does not quite end there. If, as expected, local authorities increase their expenditure by more than the rate of inflation over the next three years, the uniform business rate will be that much higher. Various professional organisations and individual companies have produced figures which suggest that there will be an increase of between 45p and 52p. In other words, the statement that businesses will pay about half as much in rates as they do in rents is confirmed.
  I do not wish on this occasion to quote examples from various parts of the country, but many hon. Members on both sides of the House are deeply conscious of the effect that the projected figures will have on the level of business activity in their own constituencies and local regions. That is why a suggestion has been put forward that a solution would be an abatement of 50 per cent. in the first £1,000 of rates payable, and that this would most certainly help to redress the incidence of rates on the smaller business unit.
  The other advantages of this scheme are that it has no additional administrative costs, no thresholds are involved, and it would be self-financing. I accept that that would mean that the overall level of the uniform business rate would need to be increased a little. However, in view of the great emphasis placed by my right hon. and hon. Friends on the value of the contribution that the smaller business unit has made to the revival of our economy in recent years, we should acknowledge in a tangible way the real fears that small business men have expressed to us and the problems that they think will result from the changes in the arrangements.
  There is another side to the coin, as is frequently the case. Many of us will know of business enterprises and business units that find it difficult to survive economically and yet, in our respective areas, perform an important social function. I refer to what one might describe as the village shop scenario. They perform an important social and economic function. We all know that they are under tremendous pressure from supermarkets and cash-and-carry stores and that the Post Office has introduced policy changes in respect of payments made to their proprietors, and so on.
  Such businesses make a very important contribution to the structure of our local communities, be they urban or rural. Many are finding it economically difficult to survive and it could be that any significant increase in the level of their rates burden will place their economic viability in question.
  Mr. Dick Douglas: I come to this Bill pretty late, and perhaps the hon. Gentleman can explain his intentions. Am I correct in assuming that any redistribution in terms of abatement would place an additional imposition on other commercial ratepayers within that particular orbit of the local government revenue-gathering system?
  Mr. Hicks: The hon. Gentleman has summarised the situation correctly. All businesses would be eligible for the 50 per cent. abatement of the first £1,000 for which they were eligible. However, if that fixed amount has to be raised by the commercial sector, it means that subsequently there will he an additional charge placed on the larger business unit.
  Mr. Matthew Taylor: As the hon. Member for Cornwall, South-East (Mr. Hicks) will know, I have put my name to this amendment. Much will depend on the amount of support the Government choose to give. That will be a decision for the Government to make at a later stage; it need not be a problem in respect of the amendment. I am sure that the hon. Member for Cornwall, South-East agrees that the provision is aimed at businesses such as the village post office under threat from others moving into a village and a resulting increase in property values. The same applies in town centres into which multinational or national companies have moved, increasing costs for local and family-owned businesses. There is already pressure on them to leave.
  Mr. Hicks: That is the second set of conditions by which smaller business enterprises, which I am anxious to help, will benefit.
  This amendment merits consideration by my right hon. Friend the Secretary of State, not only in the context of the very real contribution that the smaller business enterprise has played in the survival of our national economy in rural areas but in terms of the significant contribution it can make socially, as well as economically, to the stability of local communities.
  Dr. John Cunningham: This large group of amendments embodies many important ideas. I wish to make it clear that we do not accept the principle of a national business tax. I cannot for the life of me understand why many Conservative Members are willing to accept that concept, especially as one of the principal arguments behind the Bill is improving local accountability. How can a national business tax, which is under the control not of the Secretary of State for the Environment but of the Chancellor of the Exchequer, improve local accountability? It will totally divorce local authorities and break the relationship that this Government have rightly sought to build between local authority decision-taking and budgets and local business communities. That was an important and welcome development, but this Bill will destroy it.
  Mr. John Butterfill: I fail to follow the logic of the hon. Gentleman's argument. It would be logical if businesses had a vote, but they do not. Therefore, the accountability argument does not apply. There will be continuing consultation, as my right hon. Friend has made clear in Committee. That is a different matter from accountability resulting out of taxation.
  4.45 pm
  Dr. Cunningham: I regret giving way just to hear the vacuous statement that business does not have a vote. Every adult in our plural democratic society, under universal franchise, has a single vote. What is the alternative to what the hon. Gentleman refers, when he says that businesses do not have a vote? Everyone has a vote. I am not aware of any proposal, even from the hon. Gentleman, to change that.
  When the Government say there will somehow be an improvement in accountability in local authority decision-taking, that cannot possibly be the case when Ministers are taking powers centrally to determine the level of the tax.
  Mr. John Hannam (Exeter): Rubbish!
  Dr. Cunningham: The hon. Gentleman says, "Rubbish," but that is what is being proposed. It is also proposed that there should be no change in the amount of money collected. We have heard from Conservative Members time after time that businesses have been under crippling financial burdens. The level of those burdens will not be altered in any way by the Bill. The Minister for Local Government made it plain that the totality of the tax being collected will remain exactly the same. He is suggesting that the burdens will be shifted about and that the alleged onerous burdens in the north will be transferred to the south—[HON. MEMBERS: "Hear, hear."] Conservative Members say, "Hear, hear," but I am not so sure that their right hon. and hon. Friends in the constituencies so affected will be saying it with quite the same gusto.
  The Secretary of State for the Environment has said—I understand why—that he wants to speak later rather than earlier, no doubt to try to head off a fourth day of revolts by his right hon. and hon. Friends in the Lobbies. We have seen some papers being passed around the Chamber, and no doubt we shall learn more in due course. However, he is now saying that any scheme to mitigate the implications of the proposals on business in the south will have to be paid for by business in the north. In other words, the alleged claim that the burden will be reduced will disappear.
  Dame Elaine Kellett-Bowman: There is a substantial burden on business in my part of the world, caused by the huge increase of 36·5 per cent., or 18·5 per cent., in the rate this year. That was something for which those businesses could not plan. Once the business rate is made uniform and rises only in line with inflation, it will reduce the incentive for county councils such as Lancashire to raise the rate, because they will no longer be able to milk business.
  Dr. Cunningham: Yesterday we discussed rating increases and local control, and I do not want to reopen that debate. If the hon. Lady is saying that those "huge" burdens are so damaging, she had better address her remarks to her colleagues in Conservative councils around the country. In the constituency of the Minister for Local Government, Tory-controlled Shepway—
  Mr. Edward Leigh: We have heard it all before.
  Dr. Cunningham: The hon. Gentleman says, "We have heard it all before." We have heard it all before from the

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  other side of the House—again and again. Apparently, when Labour or alliance councils increase rates by large amounts, that is thought to be disgraceful, incompetent, profligate or extravagant. But when Tory councils do the same, that is somehow different. I do not understand it.
  Mr. Leigh: I am grateful to the hon. Gentleman—courteous as usual—for giving way. Can he confirm that a Labour Government would revalue business premises and keep the present business rate?
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Can we stick to the amendment? We have enough work as it is without going into other matters.
  Dr. Cunningham: At the risk of incurring your wrath, Mr. Deputy Speaker, I shall reply to the hon. Member for Gainsborough and Horncastle (Mr. Leigh). We are committed to keeping a property tax, but that is what the Bill will provide. This is a property tax. I am not sure what point the hon. Gentleman is making.
  As I said in Committee, the introduction of a property tax will mean modernising the base on which it operates, and that means revaluation. It would not make sense otherwise. We agree with the Government about that, and I am more than happy to put our agreement on record.
  Mr. Leigh rose—
  Dr. Cunningham: No, I shall not give way again. You, Mr. Deputy Speaker, have rightly asked me to move on and deal in more detail with the amendment, and that is what I now intend to do.
  As I have said, we believe that the Government are creating a nationally controlled tax in the hands of the Chancellor of the Exchequer. That is made clear in Government amendment No. 179, which gives the Chancellor control over the tax. Government amendment No. 104 makes it clear that the tax will be paid into the Consolidated Fund.
  Schedule 5(2)(7)(e), states that
  "matters affecting the amenity of the locality of the hereditament (including transport services and other facilities)"
  will be taken into account in the fixing of the tax. That means that if a well-managed local authority—whatever its political control—provides good, effective, efficient services, the result will be an increase in the tax. As the level of provision goes up, the tax is likely to do the same, and there will be nothing that the local authority can do about it other than to reduce the quality of services, or eliminate them altogether. I assume that that is not what Conservative Members, or even sensible business people, want.
  As I have also made clear, the Bill as it stands does not provide for a statutory requirement for business consultations between local authorities. I cannot understand why Conservative Members find all this so attractive. Of course, the answer is that many of them do not, and that also goes for many people in business communities.
  Our amendment No. 155 and new clause 6 aim to provide for regulations to allow a discount of up to 100 per cent. to be available to small businesses. I recommend new clause 6 to the House for it enshrines an important new principle. I am persuaded, as is the Labour party, that
  1014
  existing burdens on small businesses can be very damaging, and they will continue to be so under the Government's proposals. [Interruption.] I shall happily give way to the Minister for Local Government if he wishes to intervene rather than mutter at me across the Chamber. Apparently he does not wish me to give way.
  I cannot understand why the Government, instead of quibbling, do not accept the new clause or produce a similar new clause of their own. Regrettably, they are not persuaded of the case for a 100 per cent. rebate for individuals. As there seems to be far more concern on the Conservative Benches about businesses than about individuals and families, perhaps before we vote they will reflect on that.
  New clause 6 spells out the proposal to introduce a 100 per cent. rebate, or at least to make it available for small businesses.
  The Secretary of State for the Environment (Mr. Nicholas Ridley): It is not clear from the new clause who should bear the cost. Does the hon. Gentleman wish it to be borne by the rest of the businesses, or does he seek external assistance from the community charge payer or the Exchequer?
  Dr. Cunningham: My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) and I are at one on that. As we have made clear, we think that larger businesses and the Government should contribute to such a scheme. As we said yesterday, we believe that the better off in society should fund a 100 per cent. discount scheme for those on low incomes.
  Mr. Richard Shepherd (Aldridge-Brownhills): I have some difficulty in understanding the distinction that the hon. Gentleman makes between large and small businesses. Surely the criterion is whether a business is profitable and provides employment. That one firm employs six people and makes a profit of £2 million is surely as relevant as a firm that employs 100,000 and makes a profit of £50,000. The distinction bothers me. I cannot find any credibility in it.
  Dr. Cunningham: We have responded in the new clause to discussions which are still proceeding with organisations representing small business people around the country. If the hon. Gentleman, who was not a member of the Standing Committee, had found time to read the report of its proceedings, he would have been able to see in some detail why we reached those conclusions.
  Amendment No. 171 would extend the period of phasing in the proposals up to 10 years. The purpose of amendment No. 172 is to point out that Government phasing slows down the rate of benefit in the north to the advantage of business in the south. As I said earlier, the Secretary of State, his Ministers and their supporters have welcomed the proposals, saying that they will bring significant benefits to business in the north. However, the Government's second thoughts now mean the erosion of those benefits.
  Amendment No. 154—I said that this was a large group of amendments—deals with charitable relief, which is also affected by the Bill. We tabled the amendment to re—establish the possibility of 100 per cent. relief for voluntary organisations and charities. As the Bill stands, local authorities will not be able to give such relief. The Government say that if they wish to do so, they should do

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  so simply by putting the burden of the concession on poll tax payers—individuals in the community. We do not think that that is fair or reasonable. The relief should come from national taxation, not from individuals' poll tax.
  This is an important point. Increasingly, because of the prevailing circumstances, individuals and families are relying on schemes organised by groups such as MIND. I am president of that organisation in my constituency. The funding of MIND, and that of many other groups, benefits significantly from local authority help. The ability to give rebates of up to 100 per cent. should be written into the Bill.
  Mr. Butterfill: In Committee I tabled an amendment on this point. Does the hon. Gentleman agree that it would be somewhat unreasonable if his suggestion, that this should come from the Exchequer, were accepted so that there was no charge back to the community? Surely the amount that might be given by discretion of individual local authorities could vary enormously, and it would fall on the general taxpayer. Should not local communities decide whether they wish to assist charitable organisations, in the knowledge that they will have to pay for that help?
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  Dr. Cunningham: As the hon. Gentleman knows, the totality of these proposals means that 75 per cent. of local government finance will be in the control of central Government. That is unprecedented in this country and is unparalleled in any democratic society. The proposals mean that for every 1 per cent. increase in expenditure, local authorities will have to increase the poll tax by 4 per cent., so a disproportionate burden will fall on individuals. That is the gearing implication of the totality of the proposals.
  Of course, I do not suggest that local authorities should be absolved of all responsibility to contribute to such a scheme. We are arguing about the principle of establishing such a scheme in the Bill. We can argue and perhaps disagree about the details.
  Mr. Quentin Davies: The hon. Gentleman has mentioned the gearing effect. Will he acknowledge that it works equally in the opposite direction and, therefore, establishes a great incentive to keep local government spending down?
  Dr. Cunningham: That is exactly its intention. The Government have made no secret of the fact that they want to use this way of imposing additional heavy personal burdens to achieve their manic goal of more control over everything that local government does. There is a fundamental difference between the Labour party and the Government on this point. That is why we oppose the proposals. I readily acknowledge that this is the Government's intention. In fact, I do my best to make it as clear as I can that that is exactly what the Government seek to do.
  Mr. Leigh: Twister.
  Hon. Members: Withdraw.
  Mr. Douglas: On a point of order, Mr. Deputy Speaker. We had an interesting debate last night, to which hon. Members have alluded. I distinctly heard the hon. Member for Gainsborough and Horncastle (Mr. Leigh)—I am sure that lie would not want his comment to be on the record
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  —refer just now to my hon. Friend the Member for Copeland (Dr. Cunningham) as a twister. I am sure that the hon. Gentleman would want to withdraw that remark.
  Mr. Leigh: I happily withdraw that remark. The hon. Member for Copeland (Dr. Cunningham) is a very experienced and shrewd politician who is always capable of putting the best light on Labour party policies, whatever they may be.
  Mr. Deputy Speaker: I do not know what the word means but, whatever it is, it did not sound very nice.
  Dr. Cunningham: I guess that everyone is very sensitive about these matters at the moment, but I cannot say that I was made too uncomfortable by what the hon. Member for Gainsborough and Horncastle said. Of course, I accept without reservation his withdrawal, whatever he said. In turn, I accept the hon. Gentleman's compliment that he thinks that I am reasonably able to portray the Labour party's policies and position. That was a generous comment.
  In Committee, on 3 March 1988, the Secretary of State made this commitment:
  "1 turn now to amendment No. 360, tabled by my hon. Friend the Member for Kensington."
  I understand that the hon. Member for Kensington (Sir B. Rhys Williams) is ill and therefore cannot be present. We send him our best wishes for a speedy recovery. The Secretary of State continued:
  "I am happy to tell him that I am prepared to meet that amendment on Report. He will forgive me if I seek to redraft it. I am certain that under any of the schemes that we have been discussing the transition will not be over for all businesses by 1995."—[Official Report, Standing Committee E, 3 March 1988; c.1215–16.]
  There does not appear to be any such amendment on the Amendment Paper. I wonder why the Secretary of State has not delivered that commitment. No doubt he will say why, having promised the hon. Member for Kensington that he would table an amendment—perhaps trying to head off yet another revolt—he has not tabled such an amendment.
  Mr. Ridley: Perhaps it will save time if 1 say that we certainly intend to put forward that amendment in another place. It has proved rather more complicated than we thought and redrafting was not completed in time for Report, but I undertake to put it forward.
  Dr. Cunningham: The problem is that the amendment will be tabled in another place and we will not have the chance properly to discuss and consider it before decisions are taken and hon. Members vote in this debate. That is less than satisfactory, and I should have thought that a number of Conservative Members would think so, too.
  Mr. Robin Maxwell-Hyslop: Will the hon. Gentleman give way?
  Dr. Cunningham: I am trying to finish, but I give way.
  Mr. Maxwell-Hyslop: The hon. Gentleman will have noted, of course, that my right hon. Friend the Secretary of State agrees that it is wholly proper for another place to amend the Bill.
  Dr. Cunningham: That just shows the virtue of giving way. Of course I agree with the hon. Member for Tiverton (Mr. Maxwell-Hyslop). I wonder whether he heard the speech last night by the hon. Member for Leominster (Mr.

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  Temple-Morris) about the infamous broadcast on "Today" by the Secretary of State on the ability of the other place to amend the Bill. The right hon. Gentleman spent his time talking about these proposals as a "tax" and said that was why the House of Lords should not interfere. But the right hon. Gentleman has spent the past four months telling us and the country that it is not a tax—it is a community charge. Before the other place gets the Bill, the right hon. Gentleman had better make up his mind what advice he is giving. Is it or is it not a tax? Is it a charge? We are confident that, whatever the right hon. Gentleman says it is, the other place will have the opportunity to amend this and other parts of the Bill.
  It is not only the Opposition, or even some Conservative Members, who are worried about the implications of the proposals. As recently as yesterday, the Confederation of British Industry issued this statement:
  "The CBI believes that for some businesses the combined effect of the Uniform Business Rate and revaluation will be catastrophic…Towns—like Croydon, Bromley and Bexley, and there are many others—will not be encouraged to attract firms by careful stewardship of resources".
  That is true. The Bill in this form wipes out any incentive on the part of local authorities to attract businesses in the way that many of them want, whatever their political persuasion.
  Groups and individual organisations representing small business people and small businesses generally remain deeply opposed to these proposals. For those reasons, we have tabled our amendments. I hope that it is possible—it will depend on what happens to the various amendments—to have a vote on new clause 6, which introduces the principle of rebates up to 100 per cent. for small businesses.
  Sir Hugh Rossi: I was not a member of the Committee so perhaps those hon. Members who spent many hours discussing this Bill will forgive a newcomer, as it were, interposing one or two remarks that I hope will be of some value to the House.
  I must say to the hon. Member for Copeland (Dr. Cunningham) that I take a more sanguine view of the uniform business rate that he appears to take. My quarrel, if it is a quarrel, with my right hon. and hon. Friends is that they are adhering too slavishly to the concept of rateable values, with all the consequential distortions that will be caused to business and to the property market.
  Amendment No. 270, tabled in my name, has the same intent and objective as amendment No. 7 in the name of my hon. Friend the Member for Kensington (Sir B. Rhys Williams). I am sorry not to see him in his place and I extend to him my good wishes and the good wishes of all my right hon. and hon. Friends and the hope that he has a speedy recovery and return to the House from hospital. I congratulate my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) on the points that he made in support of that amendment, with which nobody could quarrel.
  My amendment is possibly closest to amendment No. 228 in the name of my hon. Friend the Member for Billericay (Mrs. Gorman) who, before coming to the House, established a reputation as a champion of small businesses. I recall receiving delegations from small market gardeners in Northern Ireland led by my hon.
  1018
  Friend and others in London about statutory sick pay. I hope only that my right hon. and hon. Friends will prove as flexible and helpful to my hon. Friend as I tried to be.
  I am glad to note from the report of the Committee stage of the Bill that my right hon. Friend has recognised the difficulties of small businesses and is attracted to the idea of giving them help, at least during the transitional period, but I understand that he intends to do so by the use of a rateable value threshold. I do not believe that such an approach will target relief where it is properly needed. The objective of my amendment and those of my hon. Friends is to depart from the concept of rateable value to target relief where it is needed.
  The amendment of my hon. Friend the Member for Kensington is directed to targeting relief at particular levels. The amendments in the names of my hon. Friend the Member for Billericay and myself seek to give a definition of small businesses and leave it to the Secretary of State annually to fix the rate of relief. My amendment differs from amendment No. 228 in that it seeks to use a machinery that is already in existence. The Inland Revenue already distinguishes between businesses which are subject to higher and lower rates of corporation tax and it would be relatively simple for it to be confirmed and certified into which category a particular business falls and the collector of rates notified accordingly.
  Mr. Butterfill: Does my hon. Friend agree that there is a difficulty in that businesses' profits can vary from year to year and that, particularly for small businesses, profits can vary quite considerably? There might be a problem with fluctuation, particularly for businesses that are on the borderline. One year they might be above the threshold and the next year they might be below it and it would not be possible to verify that until a time subsequent to the year in question.
  Sir Hugh Rossi: I think that they will be in difficulty in any case. If they are originally fixed to a rateable value, such businesses may never get out of that trap. In any case, whatever approach we take, there are bound to be difficulties for some people.
  I am concerned to try to target the help where it is really needed. One way of doing that is by reference to the level of corporation tax. Another way would be by reference to turnover which might be easier to establish. We already have such a system with regard to VAT and that does not necessarily cause difficulties. Firms know whether they will need to register for VAT usually in advance of the year in question. A certificate of registration for VAT may itself be sufficient to trigger the relief that we are seeking to give small businesses. I am trying to argue that there are better ways of doing it than adherence to a threshold of, say, £15,000 rateable value, which I think was one of the figures discussed in Committee.
  I understand on good authority that, if £15,000 rateable value were taken as the threshold, a particular retailer in this country with more than 2,000 stores would obtain relief on 85 per cent. of its outlets. Another retailer with 1,200 outlets would benefit from the lower rate for 84 per cent. of its outlets. Even if the threshold were reduced to £10,000 rateable value, 79 per cent. of one of those chains would still qualify for relief. I am not sure that that is the kind of targeting that my right hon. Friend has in mind when he is trying to devise ways of giving assistance to small businesses.

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  I suggest to my right hon. Friend that perhaps the distinction that needs to be borne in mind is not between small and large units but between small and large businesses. if he did that, perhaps he would not need to spend so much of his resources on the wrong target.
  Having said that, I believe that my right hon. Friend has received a great deal of evidence on the possible effects of revaluation on large and small businesses and on businesses which occupy primary, secondary or tertiary trading positions. I shall not detain the House by going into all the details and technicalities.
  Dr. Keith Hampson: My hon. Friend leaves out one important category affecting hon. Members with northern constituencies. I know that we are not very well represented tonight but we must consider the fact that the more concessions that are given to other categories the more difficult it becomes for northern constituencies to benefit from the commitment given by the Minister for Local Government that we would be offered a package sufficiently dramatic to enable us to attract many more new businesses.
  Sir Hugh Rossi: No doubt my right hon. Friend will answer that point. Nevertheless, if my right hon. Friend is seeking to give relief, it might be suggested to him how that relief might be more accurately targeted. It should not be crudely and arbitrarily targeted so that the money goes in the wrong direction.
  I was seeking to make a point about primary, secondary and tertiary positions of trading, which is also extremely relevant. I said that I did not want to bore the House with a lot of technical detail on valuation, but I understand that, for properties in primary sites, revaluation will affect them by a factor of between 6 and 7, whereas for tertiary and secondary sites the factor is between 2 and 4.
  Mr. Richard Shepherd: As my hon. Friend makes quite clear, these are all national averages. Within areas, there will be vast and extraordinary differences that can reach multiples above 20. That will have such a capricious effect that it will be totally destructive of economic purpose in regional terms.
  Sir Hugh Rossi: I take my hon. Friend's point. That is why I am urging, possibly a little late in the day, that the rateable value of business premises is not the best approach. The Committee was unable to persuade the Secretary of State that the balance sheet and the profitability of a business might be a more equitable way of raising tax or a levy of this kind on businesses. We have departed a long way from that concept.
  When he considers relief, my hon. Friend should bear in mind the enormous distortions that will result from the provisions. It is absolutely essential that the period during which the transitional provisions will operate and the percentage that a particular business will be required to pay over and above its existing rates should be right.
  I would argue that, for businesses both large and small, we should consider a 10 per cent. increase, in real terms, over an extended period of time. Then they would be better able to organise their affairs and plan ahead. I think that my right hon. Friend knows that a group of about 10 of the largest retailers in this country have an investment programme of about £3 billion for the next three years.
  By coincidence, that is roughly equivalent to the Government's inner cities development programme. These
  1020
  are extremely large sums of money, which, if injected into the economy, would generate an enormous amount of economic activity. As the money came in and was used by the construction industry, new stores would be opened arid new jobs would be created in areas where they were required.
  The uncertainty that my right hon. and hon. Friends have created in the retail industry has led to doubt about whether it should go forward with its expansion plans. Therefore, my last plea to my right hon. Friend is that he should come forward as quickly as possible with his proposals for the transitional period and that he should announce as soon as possible the increased amount that businesses will be required to pay over and above their current rates bill. If he does not do so, he will be doing. a disservice to a great many people who depend upon a viable retail system to provide them both with goods at a price that they can afford and employment. I hope that my right hon. Friend will think very carefully about the way in which he gives the relief that I know he is contemplating should be given.
  Mr. Richard Livsey: I, too, was not a Member of the Committee that considered the Bill but my constituents will be greatly affected by the legislation. I intend to speak about amendment No. 7, which would provide a 50 per cent. abatement for small businesses, new clause 6, which provides for 100 per cent. relief, and amendments Nos. 9 and 10, relating to charities that stand in my name and those of my hon. Friends.
  We are strongly of the opinion that the uniform business rate will mean that local government will no longer be able to set a business rate. The fact that that rate will be set by central Government causes us considerable alarm. The relationship between local government and the rating system ought to be much stronger than it is today. The uniform business rate will undoubtedly penalise small businesses, especially in rural areas. The ability of small businesses in particular to pay the uniform business rate should be considered, just as the ability of individuals to pay the poll tax should be considered. It ought to be recognised that some small businesses do not have great ability to pay.
  Typical businesses in rural areas, such as post offices, shops, filling stations and pubs, are under severe stress. The viability of such businesses is very fragile. There will be a 10 per cent. increase in the uniform business rate in Radnor, in my constituency compared with the present rating system, but in other areas the increase will he very much larger. The National Federation of Self Employed and Small Businesses believes that many areas will suffer a 100 per cent. increase, that others will suffer a 200 per cent. increase and that some will suffer even larger increases.
  The unknown factor is revaluation. The Secretary of State has ridden into the field on his community charger in a swashbuckling way. The five-year transitional period is supposed to be an amelioration, but I draw the attention of the House to the exchange on Tuesday between the Secretary of State and the hon. Member for Aldridge-Brownhills (Mr. Shepherd). The Secretary of State said:
  "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."—[Official Report, 19 April 1988; Vol. 131, c. 779]

  1021
  The last revaluation was in 1973, more than a decade ago. If there is to be only a five-year transitional period, considerable concessions will be needed. I trust that the Secretary of State will make those concessions tonight.
  Another worrying aspect relates to shops and post offices, with the people who run those businesses living in the same premises. They will be subject to the uniform business rate as well as to the poll tax. That will hit the traditional family business. The combination of the revaluation and the uniform business rate will cause very great problems for small businesses. The Secretary of State for Wales wrote to me on 14 April about the problems in my constituency and he was honest enough to say:
  "The effect on individual businesses is difficult to predict."
  I do not believe that anybody can predict precisely what will happen. Within defined areas there may be grave differences between individual businesses and there will be many anomalies that cannot be corrected.
  We object to the removal of local accountability. These provisions mean that local authorities will have no power over a large proportion of their revenue, the tax will not be highly visible, and the link between those who pay and those who spend the money will be very weak.
  I shall deal now with amendments Nos. 9 and 10 in relation to charities. Many charities could face large increases in their rate bills from the introduction of the national non-domestic rate, largely due to the effects of revaluation on high street shops. Amendment No. 9 seeks to mitigate these effects by increasing the present 50 per cent. rate reduction to a 90 per cent. reduction. In addition, the existing system of non-domestic rating gives local authorities the power to waive the 50 per cent. liability that charities face. The Bill as presently drafted does not make this provision. Amendment No. 10 restores the situation.
  5.30 pm
  This is a very worrying state of affairs for charities. There are a tremendous number of charities in this country. Representations that we have received from the National Council for Voluntary Organisations stresses these points. At present, with rate relief of 50 per cent. under section 40(1) of the General Rate Act 1967, this totalled £81·7 million in 1985–86. Discretionary rate relief from the rating authority of the remaining 50 per cent., under the same Act, is also available to charitable organisations and various other non-profit making organisations. This totalled £20·4 million in 1985–86.
  These large sums of money affect many worthwhile charities. In the places where they operate, the properties they occupy, those include the offices of national and local charities and voluntary organisations, as well as charity shops. I am sure that such shops can be found in the constituences of many hon. Members. Properties include village and parish halls, community centres, day centres, sports clubs and leisure centres, as well as training workshops.
  It is very difficult to estimate the total number of properties involved, but there are 158,000 registered charities in Great Britain and at least a further 100,000 non-registered charities. The implications of the measure are very great for charitable organisations. I hope that the Secretary of State and the Minister will pay due attention to these matters. For these reasons we wish to support the
  1022
  amendments tabled by my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) and myself as well as amendment No. 7 and new clause 6.
  Mrs. Teresa Gorman: I wish to follow the points raised by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi). I thank him for his kind remarks about my previous career as a champion of small businesses.
  The whole point about rates, as I understand it, is to protect businesses from the depredations of spendthrift councils. We must be very careful with our new proposals and ensure that the increases do not turn out to be depredations. Surely it must be the intention of the Secretary of State to protect small businesses.
  I was very pleased to see the Secretary of State's latest press release dated 20 April. He tells us that he has taken on board many of the concerns voiced about this rate, and that he will be phasing it in. He has not yet told us, however, how long that phasing-in process will be. I hope that he will not find it necessary to increase the rates of any business by more than 10 per cent. a year. If he does so, it may present special difficulties to small firms.
  I shall give an example of one small business in my constituency. The potential increase in the rateable value can be worked out by reference to rent increases since 1973, when the last valuation took place. It is likely to be somewhere between £2,000 and £6,500, which is an enormous amount of extra money to have to find. Even if that increase were phased in at 10 per cent. a year, such a business would need to find something like £400 every year to meet that increase. I do not think that that is an exceptional example. The point is that in relation to that business, and that family, living from the proceeds from the business, it can be a very large sum indeed.
  Mr. Matthew Taylor: The hon. Member for Billericay (Mrs. Gorman) is absolutely right, as this assumes, even with a phasing-in period, that that business is able to generate more income to meet the increase. For example, rural village post offices, as in my constituency, tend to be flat on income or even squeezed out. No matter how long one spins out an enormous increase, such increases will still have to be found in the end.
  Mrs. Gorman: The hon. Gentleman's point is very valid.
  Mr. Irvine Patnick: Will my hon. Friend give way?
  Mrs. Gorman: I shall give way in a moment.
  This increase, as the hon. Member for Truro (Mr. Taylor) has pointed out, will not be just 10 per cent. in a year, but 10 per cent. every year, plus inflation, in the foreseeable future, and certainly for 10 years. To make the extra profit to meet that increase, that business will at best need to turn over perhaps £4,000 to £5,000 a year more, to give it a net profit of 10 per cent. or £400. In many trades, particularly groceries, there may be a much lower profit margin, so that business may have to generate £8,000 to £10,000 a year more trade. That is very difficult to do year on year.
  A small shoe shop or book shop in the town cannot necessarily expect to get that amount of extra custom. Perhaps a greengrocer is in competition with three or four more grocers in the high street. These little businesses, such as a small cafe or a little wool shop, cannot automatically

  1023
  generate that amount of extra trade. Small retailers in particular, perhaps trading in competition with a little bit of black economy, or with the multiples, which can spread costs over a much larger turnover, may well be in special difficulty.
  I know that it is not the intention of the Secretary of State to be callous or insensitive to the needs of small businesses. Some people might say, "Well, these businesses have had it good for a long time because the rateable revaluation should have taken place long ago." But that is no help if one has suddenly to dig into one's pocket and find this extra amount of money in a short time.
  Mr. Patnick: We are working on several assumptions. One is that the rating and valuation court will disappear and that people will be unable to appeal if they believe the rating is incorrect. The second is that there have been no rating increases or revaluations since 1973, which is not the case. Rating revaluation continues to take place. It is possible to appeal and, indeed, to obtain a revaluation.
  Mrs. Gorman: My hon. Friend must know something that I do not and I need to have it checked, but I do not think that he has his facts quite right.
  Mr. James Couchman: Will my hon. Friend give way?
  Mrs. Gorman: In a moment; let me finish my point.
  My point is that the increase must be met out of an income that cannot necessarily be increased very much. Some people might say, "Tough luck, you have had it good, so that is your hard luck," and others might say, "This is the market operating, and therefore market forces should rule."
  I give way to nobody in the House in my support of market forces, but of course, paying one's rates is not a question of dealing with ordinary competitive market forces. A business man cannot choose whom he pays to cart away his dustbin or mend the holes in the road. He has to do that through a monopolised system known as the local council. He is not really in a position to influence his expenditure on many things for which he must pay the council.
  I hope to live to see the day when everybody pays directly for everything, including education, but that has to come in future Conservative Governments.
  What are we going to do to help those small firms? My amendment proposes a safety net. It makes proposals for small firms with a taxable profit of less than £20,000. I appreciate that that will vary, but that amount of money represents the pre-tax profit of the company and is the income of the family concerned. Out of that money they will have to pay the rate increase. Therefore, we are talking about a lowering of their income levels by increasing the rates on their small business. I am proposing that people in that position, producing their accounts to the rating officer, may apply for an abatement. The actual amount would have to be decided, probably by the Secretary of State.
  There is a precedent for that sort of system. I have a form that is produced by Macclesfield borough council. It allows people to apply for rate and rent rebates in that area. One of the questions on the form relates to small businesses and self-employed people, who can produce their audited accounts and apply for a rate rebate.
  1024
  The alternative to us taking on board the plight that small businesses will experience is seeing another exodus of small shops and retailers from our high streets and not so high streets and the banks, buildings societies and estate agents will move in. As I have said, I support market forces. If and when a business goes, new people will know what the rates are and will take on the premises knowing what they are in for. In the meantime, I am sure that we do not want to see yet more empty shops where the rates exceed the rent, which is why they are standing empty. I am sure that we want to avoid that and the way to do it is to phase in the increase which, as I have said, no business could possibly have anticipated. We do not know exactly what the increase will be but we know that in some cases it will be a devastating amount.
  Mr. Dafydd Wigley: I come from a rural area with a scattered population and most of the businesses in my area are small. The question of the impact of the new regime on such businesses is causing considerable concern. The reports that we had earlier this week and the figures that have been quoted on the possible effect on small businesses have led to many of those small concerns starting to express misgivings about the direction in which we are moving.
  The hon. Member for Hornsey and Wood Green (Sir H. Rossi) asked whether we should be gearing the revenue from business rates on the basis of property values. I agree wholeheartedly that it should be on the basis of profitability. Indeed, there is an analogy between the impact on businesses and the impact on individuals. We have had arguments and debates at earlier stages of the Bill on the need for a progressive system for individuals, with those with the greatest ability to pay paying a little more while those with less ability to pay would pay less. I believe that that argument is equally applicable to the business sector.
  That causes difficulty with some of the amendments in this group. The system that the Government have suggested can be unfair and burdensome for some large companies as well as smaller companies. Indeed, new clause 6, which I shall support as a step in the right direction, gears itself to smaller companies alone.
  5.45 pm
  In the evidence we gave to the Layfield committee 10 years ago, we suggested that there should be something that we called an incorporation tax. I suspect that that was probably the wrong title. The details of what we were suggesting were that there should be a system of taxation for the corporate sector, for small and large businesses, that was geared to ability to pay and profitability. There could be a threshold level analogous to the threshold that exists for individuals in that there is a threshold that one has to reach before taxation is paid. It should recognise the difficulties of small companies or companies close to the breadline and the contribution to the local exchequer should be in line with profitability.
  I accept that there are difficulties in concept to some extent when one is dealing with multi-plant concerns. There is the question how one allocates profitability that may be computed only on a central basis. In passing, there is a strong argument for having profitability computed on a plant basis so that employees identify themselves with the success of their company, measured by the profitability on a plant level. Even if that was not part of company law,

  1025
  on a conceptual basis it would be possible to apportion profitability on the basis of turnover, employees or whatever. Certainly, that would be a better basis than working purely on property value.
  The basis of property value is even less fair for businesses than it is for individuals. There are all sorts of anomalies and I recognise the need to move away from a purely property-based revenue system for local government. I have said that before and hon. Members know that my party would like to see a local income tax. However, at least with individuals there is some indication of wealth in terms of the property they hold. That can be totally different for businesses. The land and buildings they take up may be totally out of proportion to the turnover that exists within the framework.
  In this legislation, we have landed ourselves with proposals that are not radical enough. We shall wait many years before there are changes to this and it is a shame that we have not taken the opportunity to find a system for local government that is more acceptable.
  I am not sure whether the amendment moved by the hon. Member for Cornwall, South-East (Mr. Hicks) goes far enough. The formula it suggests is restrictive. I find the formula suggested by the hon. Member for Billericay (Mrs. Gorman) more attractive as a way of trying to alleviate some of the pressures. However, again one is drawing an arbitrary line and it has the problems associated with drawing arbitrary lines anywhere.
  We have a formula within the Bill as it stands that is unsatisfactory and which will cause considerable difficulty. It will cause difficulties for many of the friends of Conservative Members who, for reasons that I would not think of as being valid, have looked to the Conservative party from time to time for protection. I suspect that Conservative Members will face quite a reaction when the truth comes home.
  There is also the question of the effect that it will have on regional regeneration. That has been referred to by hon. Members on both sides of the Chamber. For my sins, I am one of the vice-presidents of the Federation of Industrial Development Associations. I know that this is causing concern to those industrial development associations. They are worried about the additional factor that may be a disincentive. One has to handle that with considerable sensitivity and I am not convinced that that has been thought through in the legislation.
  I apologise to the House for the fact that there is not an amendment in my name that would bring about a solution to the problems I have mentioned. The amendments that I would like to have tabled, along with others that I tried to table in Committee, were outside the purview of the Bill. An incorporation tax, like value added tax and so on, is outside the definition of what we are allowed to do. However, we should be looking at amendments in those radical terms.
  If we do not receive a concession from the Government when the Secretary of State replies, or if the amendments are not carried, we must look to another place to bring forward its amendments to make sure that the imposition we are placing on all businesses, particularly small businesses, is something that they can carry. We must ensure that we do not do ourselves economic damage in
  1026
  bringing about a change that is needed but which, at the moment, does not appear to be on the even basis that hon. Members on both sides of the House would wish to see.
  Mr. Ridley: It might be for the convenience of the House if I intervened now that the amendments have all been moved and spoken to, so that I can make clear the Government's position on these matters, and, if the House gives me leave, reply to any detailed points as briefly as possible at the end. This is a very important matter and I would like to give the House the benefit of my thinking as fully as possible in order to give such reassurance as I can about the Government's intentions.
  Only two of the amendments and new clauses explicitly concern the transitional arrangements; the rest are really concerned with a permanent cushion of the effect of rates as a tax on small businesses, however defined.
  I share the view that both large and small businesses will need time to adjust to the change in values that will emerge from the revaluation, and we accept that that need is greater for small businesses than for bigger ones. I will come to the details of our proposals later. I discussed them yesterday, as hon. Members have said, with the leaders of the main business organisations. We agreed that there should be gentle transitional arrangements and that businesses would be consulted on the precise details of how those arrangements would be worked out before we came to a conclusion. We further agreed on the need to retain a duty on local authorities to consult business representatives about their spending plans.
  The hon. Member for Copeland (Dr. Cunningham) quoted the Confederation of British Industry and reinforced the point as his own view that the link between businesses and local authorities was very important. I agree, but it is almost non-existent in terms of any statutory connection at the moment. First, there are no votes for businesses representing the rates that they pay to local authorities. Secondly, there is no benefit to a local authority that is successful in enticing industry into its area.
  It may not be generally realised, but when, say, the rateable value of an authority increases by £1 million owing to industrial settlement in its area, the rate support grant is currently cut by an equivalent amount, removing all benefit from the successful. And I am afraid that the converse is true—that a spendthrift authority that loses £1 million of industrial rating through driving businesses out gets compensated by having its grant increased by a similar amount. So the link does not exist.
  Dr. Cunningham: The Secretary of State has just said again that the link does not exist. There is at the moment a statutory requirement upon local authorities to consult, and it is placed on them by the Government. Is he saying that even Conservative-controlled councils are not taking any notice of that requirement?
  Mr. Ridley: That is an unnecessary intervention, because I have already said that we agreed to retain the statutory link to consult. That is quite different from a responsibility under some financial arrangement.
  Mr. Matthew Taylor: Will the right hon. Gentleman give way?
  Mr. Ridley: No, I must get on; I have a lot to say. I may cover the hon. Gentleman's points; I nearly always do.

  1027
  I want to say something quite important about this, because we have an improvement. The point that was raised was whether the new system would contain any incentive for local authorities to provide businesses with the services that they need. We realised that most of those services to businesses are not revenue services but capital services, such as infrastructure, roads, improvement of the environment and many other such things.
  So we agreed that we would use the new capital control system, of which I expect to announce details soon, to make it possible to take account of the need to provide new infrastructure to encourage business expansion. That, of course, could be a very major part of the new statutory consultative arrangements that we propose. I believe that that package of statutory consultation arrangements, together with the use of capital allocations directed to the true needs of industry, could form a much better package than we have at present. I hope that the House feels that that would be an improvement.
  All the amendments are concerned with special treatment for small businesses. My hon. Friend the Member for Cornwall, South-East (Mr. Hicks) moved amendment No. 7, in the name of my hon. Friend the Member for Kensington (Sir B. Rhys Williams). We all miss my hon. Friend the Member for Kensington very much. He made a great contribution to the debates in Committee and, although he did not always entirely support the Government's arguments and propositions, I pay a tribute to the thoughtfulness and wisdom that he brought to our debates. I think that the whole House would have wished him to be with us during the past week and hopes that he will be back with us soon.
  Mr. Harry Barnes: Will the right hon. Gentleman give way?
  Mr. Ridley: Could I complete the argument? I will stop after a hit and have a question time, but I may be going to cover the hon. Gentleman's point. I do not want not to give way; it is just that I want to put a list of serious arguments before the House.
  Amendment No. 7 would abate the first £1,000 of rates due on a hereditament by 50 per cent. Amendment No. 155 and new clause 6 in the Opposition's name would do the same—only, unusually for the Opposition, they would leave to my sole discretion the rates of abatement. I am always glad of the competence which hon. Gentlemen sometimes try to thrust upon me and sometimes criticise me for trying to take to myself, but that is another matter.
  In other words, amendment No. 7 would mean that everyone would pay £500 less, except that someone would have to pay more to make up for this. The amendment would cost between £0·8 billion and £0·9 billion. That is an estimate; it is not easy to be clear about this. It is clear from the speech of my hon. Friend the Member for Cornwall, South-East that he intends that the rest of business should pay for that.
  When I asked the hon. Member for Copeland about this, he said that in his view the cost should be shared between the national taxpayer and other businesses but as he might go up to 100 per cent. relief it seems to me that the general sense of these two amendments is that 50 per cent. relief would be the responsibility of the rest of industry. That would put another 10 per cent. on to the hills of the rest of business and industry, or roughly that.
  1028
  The main fault in that is that it does not discriminate fairly between the small businesses that will face large increases, those that will end up all square and those that will be the major gainers from the national non-domestic rate. Even those who gained from the introduction and the revaluation would share that exemption. What it amounts to is the permanent subsidising of smaller businesses by larger businesses, and it has nothing to do with transition. That, I believe, would undermine the whole point of a property tax, in that payment would cease to be based on the true value of the property. The amendments introduce a new and permanent distortion—precisely when we are getting rid of so much that is already distorting in the system.
  The hon. Member for Copeland insisted that, if we have a capital taxation system, the valuation should be accurate. He quite rightly admitted—I am glad that he did—that he would want to have a business revaluation himself. But if one is having a business revaluation and basing a tax on values, one has to take the values which the valuer reaches, and not change them, as a permanent feature of the tax. It would not make a sensible cushion for the position that small businesses will face in 1990. It is unnecessary to do it that way because the Government are proposing what is already a transitional scheme, which I will come to shortly. So it is not a transitional measure but a permanent weighting of the system.
  6 pm
  Amendments Nos. 228 and 270 in the names of my hon. Friends the Members for Billericay (Mrs. Gorman) and Hornsey and Wood Green (Sir H. Rossi) share the same defect. They would provide for a reduced rate bill for any business which is not a public limited company and which makes a taxable profit of less than £20,000 a year or has a turnover of less than £100,000 a year. Again, the amendments would give me a remarkably wide power—not that I complain about that. The amount of abatement would be as much or as little as I liked; at least, that is how I read the amendments. Again they come up against the objection that they design a permanent solution for a temporary problem.
  I shall return to the best way to define small firms. We now have three values—the rateable value, the turnover and the profit. The hon. Member for Caernarfon (Mr. Wigley) added VAT and one or two others, so there are masses of values. I will return to that point, but I think that I should pursue the argument logically in a different way.
  There is some evidence that small businesses pay more in rates per square foot than large ones. I agree about that, but I say to my hon. Friend the Member for Cornwall, South-East that I do not think that is because of the zoning system of valuation. The zoning system of valuation is merely a method of comparing one property with another. The actual value is determined ultimately on an appeal to the valuation court. The truth probably is that small premises are more valuable per square foot than larger premises or premises which go further back from the main street. This is simply a technique for measuring that.
  I am not entirely clear how values vary, but it seems that rents per square foot are higher for small units in a free market than for large units. That in turn no doubt reflects the judgment of the market that small units are worth more than are large units, presumably because they are in shorter supply relative to demand. Demand in turn reflects business men's judgment of the profit which they

  1029
  are likely to make from one type of premises rather than another. So rates have a clear, if indirect, relationship with profits.
  Moreover, if we give a permanent subsidy to small businesses or the buildings they occupy, that might serve only to increase demand for small units, thus benefiting no one but the landlords of those units, and not the businesses occupying them. It is possible that a general reduction in the rateable value of small shops would be a boon to the landlords but not to the business men.
  This argument can be carried forward into the whole question of the transitional relief and is of great importance. The effect of low rates on property values in many parts of the south of England is that rents have been more buoyant. In fact, landlords have been the beneficiaries as tenants have been willing to pay more rent because they were paying lower rates. After revaluation, landlords will find that the combined rent and rates bills which their tenants have to pay may be above the market value and that in due course they will have no alternative but to reduce the rents. That in turn will cause the rates to follow rents down at the next revaluation.
  Mr. Richard Shepherd rose—
  Mr. Ridley: If my hon. Friend lets me complete the point, I shall give way in a moment. I am making an important point which I want all Members to grasp.
  I will repeat it. Rents are high in prime sites. They will attract high rates on revaluation, but the combined effect will mean that the high rent cannot be sustained. It will come down and at the next revaluation the rates will fall alongside the rent. That is why the transitional arrangements are needed to cushion the effect. That position may not persist, as is perceived now, because of the very effect about which I have told the House.
  Mr. Shepherd: Sometimes my right hon. Friend does not acknowledge that some of us are intelligent enough to grasp the proposals which he is making. Most of us who rent property are locked into leases with fixed periods for rent reviews. Modern leases invariably state that there will be no reduction in the rent under any circumstances. We shall come to the transitional arrangements into which my right hon. Friend is leading us but I want him in this terrible, disastrous, dangerous, nasty, miserable, economic measure to have regard to that.
  Mr. Ridley: My hon. Friend is right. But if the two parties to an agreement wish to change it, they are at liberty to do so. It cannot be changed unilaterally, but it can be changed if both sides to the agreement wish to do so. I think we will find that some of them will.
  Mr. John Heddle (Mid-Staffordshire): What my right hon. Friend has said is right. There is a direct correlation between rent and rates total outgoings. Does my right hon. Friend agree that the transitional arrangements should be for a longer rather than a shorter period to enable the normal five, seven, 14 or 21-year lease, to which my hon. Friend for Aldridge-Brownhills (Mr. Shepherd) rightly referred, to balance out on the gross and net outgoings of industrial and commercial enterprises?
  Mr. Ridley: My hon. Friend has made the point which I was about to make. The consequences of what I have
  1030
  said, with which he agrees, are that although one form of transition may be appropriate for the first quinquennium, a different form of transitional scheme might be appropriate after that. Of course, by the time we get to the second revaluation in 1995, perhaps none, perhaps some or perhaps a lot of what I am predicting will have happened. Therefore, we may find that those who thought they would be big losers have turned out at the second revaluation not to be in that position. That is the only point I seek to make.
  Mr. Tam Dalyell: This is not necessarily an unfriendly question. We have done our best to follow this. Does it not involve the most enormous potential use of valuers and assessors? Has the Department of the Environment made any estimate of the skilled actuarial and other manpower that will be necessary?
  Mr. Ridley: The hon. Gentleman said that he had done his best to follow the argument; clearly it was not good enough. A revaluation is to be carried out by the Inland Revenue, not by my Department, in 1990, with a further one in 1995. Nothing that I have said adds to or subtracts from the effort involved in that.
  Mr. Matthew Taylor: As I understand it, the Secretary of State is saying that if rates rise considerably over time, that will force rents down, and that will sort out the problem. Yet he is introducing a uniform business rate on the grounds that execessive rates increases in certain local authority areas are hitting business badly. I cannot understand how he can argue one point about what happens now and a completely different and opposite point about what will happen in future under his proposals.
  Mr. Ridley: Even if I predict wrongly, there is no harm in making allowance for the possibility that I may be right. The effect that I have described has to be taken into account.
  Mr. Tony Speller: Is my right hon. Friend aware of how important certainty in prediction is for small business? I would welcome the opportunity to support him in every way except that, as a small shopkeeper, I am aware of the importance of what my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) said, that once one is locked into an agreement, perhaps with a London property company, the rent will not be reduced however rates may change.
  I fear that unless something is done to allow small shopkeepers to predict with reasonable certainty—as they can at present—approximate increases in rates, the Government may well succeed in their aim of assisting business back into the inner cities, but it will only be attracted to the bigger parts. Businesses will be driven away from smaller places and, as the hon. Member for Truro (Mr. Taylor) said, the smaller areas will lose out to the larger. The multinationals will not be hurt, but the smaller areas will be crucified.
  Mr. Ridley: I am fully aware of that: I have not yet come to the proposals that I shall put forward. I ask hon. Members to bear in mind that if there is something in my argument—my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) thinks there is—we should at least allow for it to take place.

  1031
  Amendment No. 171 would extend the duration of the transitional arrangements from five years to 10, but I believe it would be better to take power to provide for a further and possibly different transitional scheme to cover the five years after 1995. That will take account of any changes that are apparent in 1995 and any increases that may still be to come through by 1990. It will enable us to set a lower transitional ceiling in the first five years than would otherwise have been possible. So we are at one with the principle of the amendment but we shall put it in a different form later on.
  Amendment No. 171, which would simply extend the 1990 transitional arrangements, is too inflexible and would mean that we would be forced to continue setting a ceiling for businesses still facing increases from 1990, even if they had gained from the 1995 revaluation. If there are still significant changes to come through, if is far more sensible to have a fresh transitional scheme, such as we propose, to benefit those that might most need it at the time.
  Mr. Douglas: I understand that the uniform business rate is intended to apply to the whole of Britain. What are the implications for Scotland of what the right hon. Gentleman has said? We have already had a revaluation. What sort of amendment is likely to be made in another place to the Scottish legislation?
  Mr. Ridley: I am not to answer for any special provisions that relate to Scotland. The idea is that the rateable value bases of the two countries should be brought entirely in line as soon as possible so that there is no distortion between arrangements in England and Scotland.
  We do not yet have reliable figures or detailed estimates of the effects of the revaluation, and it is possible that once we have them we might need to think again about whether it is practical to finance the whole cost of the ceiling by a cap on gains, or by having also a small premium on poundage. We want to keep both powers in the Bill, but we shall take powers by means of amendments in another place to phase gains as well as losses.
  Dr. Hampson: My right hon. Friend says that he would take account of the fact that any phasing in in one part of the country of a redistributive system may have effects elsewhere—for example, in the north. We have been promised that this will draw in much new business, and many of us do not want the system to be phased in to the point at which that extra incentive is eroded.
  6.15 pm
  Mr. Ridley: I accept my hon. Friend's point. It is important that we should weigh the advantages of the gainers—especially in the north—against whatever transitional relief we give to possible losers in the south.
  Mr. John Redwood: Does my right hon. Friend agree that it is a more hazardous enterprise to combine a revaluation with a change in poundage to a national average poundage? Does he not concede that it might be better to take the necessary powers to cancel the 1990 revaluation and to move to a system in which rates are revalued when rents are revised, or when leases are changed or freeholds change hands? There could, of course, be a long-stop power to say that if a freehold or lease did not change for seven or 10 years, there would be a revaluation. The argument that my right hon. Friend
  1032
  tried to put to the House earlier—it did not meet with universal approval—about how rates and rents might adjust to each other would then have some force, because a revaluation would take place only when rents changed.
  Mr. Ridley: I think that my hon. Friend is inviting us not to proceed with the revaluation; that would be a disaster. All the problems that we are discussing today have resulted from postponing the revaluation for 17 years. It is better to bring valuations uniformly and universally up to their true value so that we start to get back to a property tax that is based on property values.
  One of the worries that underlies and obscures much of the discussion on this subject is the premise that a great majority of small businesses, or businesses as a whole, will face large increases in rates as a result of all this. The burden on business will remain exactly the same as it is now. Indeed, in future it will not rise in real terms, which is much better than if the present rating system had been allowed to continue. Naturally, there will be losers and gainers, but relatively few businesses will face large rate increases.
  Revaluation arouses more fear than the NNDR, because it is a fear of the unknown. The businesses that face increases will tend to be concentrated in retailing, in prime high street sites, and in the south of the country. In other words, they will be those that have been most successful since the last revaluation 15 years ago, but the figures that are being bandied about apply to only a tiny fraction even of them. The National Federation of Self-Employed and Small Businesses likes to talk as if every small shop will face increases of hundreds of per cent., but that is not true. If they did, there would not be much left for the rest of business to pay.
  There was some interesting news on this only yesterday. The NFSESB has been encouraging its members to forecast changes in rate bills by looking at their present rental values and assuming that the new poundage in 1990 will be 50p in the pound. Yet a firm of chartered surveyors—Messrs Herring, Son and Daw—came out with the forecast that the total of all rateable values will increase by a factor more like 7 than 5, and that as a result the new poundage is likely to be of the order of 35p—one seventh of what it is now. If that is true—I stress that it is too soon to say anything about this precisely—the small businesses that have been forecasting their rate bills by the NFSESB method and have come up with some pretty horrid results will find themselves paying 30 per cent. less than they had been led to expect.
  Nevertheless, for the few that will face big increases in 1990, we are providing unprecedented transitional arrangements. There will be arrangements in Scotland similar to those in England and Wales, although the details may differ to suit the circumstances. We have already announced that these arrangements take the form of a ceiling on year-on-year rate increases for five years after 1990. As I have already said, we propose to take powers to allow further transitional arrangements for the period after 1995. That will enable us to leave the effect of the largest increases to be dealt with after a substantial revaluation when the rent-rate equation may be better balanced. The largest increases may never happen at all.
  Mr. Tony Worthington: Why are there to be transitional arrangements in Scotland after 1990 when there is not to be a uniform business rate in Scotland after 1990?
  Mr. Ridley: Scotland will move to unified business rate at the English rate poundage after rateable values have been harmonised. No changes to the Bill are proposed, because it is unclear how fast harmonisation can proceed. That is the answer to the hon. Gentleman's question.
  We have already announced that, recognising, as I have said, the specific difficulties of those small businesses that will face large rates increases, we agreed in Committee to look closely at the possibility of a special transitional arrangement scheme for small businesses. I am now able to tell the House that we shall take power to have such a scheme and that it will take the form of a lower ceiling on year-on-year increases for small businesses than for larger businesses.
  Amendments to provide such a power will be introduced in another place. We shall take a final decision whether to activate the power at the same time that we take a decision on the overall ceiling later this year, when we have more information on the outcome of revaluation. That clearly makes sense. The need for a specially reduced ceiling for small businesses will be less if we find that we can afford a relatively generous ceiling for all businesses.
  Mr. John Watts: I understand that it is not possible to predict the effects of revaluation until the exercise has been completed, but I do not understand why my right hon. Friend argues that he cannot announce what the maximum ceiling on rate increases should be until the outcome of revaluation is known. As I understand it, we wish to allow such a ceiling in order to ensure that the proposals do not impose intolerable increases in rate burdens on business, such as we are trying to stop by linking increases in the uniform poundage to the rate of inflation in future years. Why cannot my right hon. Friend give some reassurance to the many businesses which are concerned about the impact of the proposals by at least saying that the ceiling will be no lower than whatever percentage he might consider appropriate?
  Mr. Ridley: The lower the ceiling that is imposed, the higher the cap that will be imposed on the gainers and the other half of business and industry, as exemplified by my hon. Friend the Member for Leeds, North-West (Dr. Hampson), who is keen to make sure that whatever the transitional arrangements, they are fair as between the losers and the gainers.
  Secondly, I could make an awful mess of this—[HON. MEMBERS: "You have."]—by announcing a ceiling of 20 per cent., 15 per cent. or 10 per cent. now, which could turn out to be unnecessarily high or unnecessarily low depending on whether one is a gainer or a loser.
  When we discussed this yesterday with the CBI, the Institute of Directors and the Association of British Chambers of Commerce, they were keen on the conclusion to which we all came that there should be no determination of the ceiling at this stage because they did not know the figures that would emerge from the revaluation and they would very much prefer to know those figures before they calculate what attitude to take to the level of the annual ceiling. I am sure that my hon. Friend would not like me to go against the advice given by those major business
  1034
  organisations yesterday. It would be better to wait until we have the revaluation. [Interruption.] Yes, and the view of small businesses too.
  Mr. Michael Grylls: I am sure that my right hon. Friend remembers that he was kind enough to receive a delegation of the main business groups representing small firms on 8 February which asked for a spreading of the transitional period and a special ceiling for the smaller firms. My right hon. Friend may be attacked fairly widely because any new tax is bound to be imposed, but the House should recognise that he has given the main small business groups the two pledges that they asked for on 8 February. At least we should be grateful for that. The ceiling should give them the security of knowing that they should not be put out of business. We at least know that there will be a ceiling, even if we do not know the details of it at the moment.
  Mr. Ridley: I am grateful to my hon. Friend. I have already said that we shall have two ceilings—one for the larger businesses and one for the smaller businesses. Of course, it is important that the small and large business organisations should be consulted about what those ceilings should be, but all of them are of the opinion that they would prefer to know the rate rises they face before they decide on their attitude to any particular provision.
  Mr. Richard Shepherd: Does not my right hon. Friend's exposition really underline that this is a most speculative redistributive tax? We do not have a clue how it will hurt or help people. My right hon. Friend cannot give that information for his constituency, for my right hon. Friend the Prime Minister's constituency or for my constituency. We do not have a clue. Would it not be better to withdraw this part of the Bill so that we can look at revaluation and see how a major business tax affects the community?
  Mr. Ridley: If my hon. Friend had his way and we withdrew this part of the Bill, we would have a revaluation of non-domestic assets with no hope of a transitional scheme of any sort whatever. His problem would be infinitely more difficult, because that is the only alternative. Without this part of the Bill, there would be no powers for a transitional scheme.
  Mr. Butterfill: I do not wish to prevent my right hon. Friend from getting on and telling us how he will define small businesses, but when the matter was raised in Committee—my right hon. Friend will remember that I moved an amendment on this—he did say that he thought that the differential between small and large businesses should be in the region of 5 per cent. Can he confirm that that is still the sort of differential that is in his mind?
  Mr. Ridley: It is indeed. That might be the right figure. [Laughter.] Labour Members should not be too stupid. I am asked to consult and listen to the views of business. Is it not better to say that I am not sure whether that is the figure that I shall choose if the object of the exercise is to consult and listen to people? I have never heard such stupidity from Labour Members who ask me to listen to what people are saying and at the same time castigate me for having a closed mind.
  Dr. Cunningham rose—
  Mr. Ridley: No, I shall not give way.
  Dr. Cunningham rose—
  Mr. Ridley: All right, but the hon. Gentleman does not deserve it.
  Dr. Cunningham: No matter how ungraciously the Secretary of State has given way, I am grateful to him. The laughter, which was at least as loud from Conservative Members as from Labour Members, was because the right hon. Gentleman is asking the House to vote on this matter tonight, yet he cannot even tell us what we are voting about.
  Mr. Ridley: The Government have no amendments.
  Mrs. Elizabeth Peacock: My right hon. Friend will recall that towards the end of last year and earlier this year he and his hon. and learned Friend the Minister for Local Government assured us that business in the north of England in my part of the world would benefit greatly from the unified business rate. We welcomed that fact. There is now some concern that the £700 million gain that we in the north hoped to get will not now materialise. Can he assure us before he finishes speaking this evening that that is what will happen and that the gains in the north, that are so desperately needed in manufacturing industry, will be there?
  Mr. Ridley: I can give my hon. Friend that assurance. We are talking about the rate at which the resource transfer will take place. Many of my hon. Friends are suggesting that the rate at which that resource transfer should take place should be slowed down. I am making the point that I do not want to slow it down more than can be helped because I must take account of the points made by my hon. Friend and by other of my hon. Friends whose constituents may be among the losers.
  Let me return to the distinction between a large and small firm, with which my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) asked me to deal. The problem with the definition couched in the terms of new clause 6, which is by reference to the structure, taxable profits, asset base and number of employees in the company, is that it would impose a considerable amount of extra work on local authorities because it would require the collection of large amounts of information that they do not at present have or have any need for.
  They would also need to be able to verify it. It seems much more practical to make the qualifying test the rateable value of the property. That would give greater certainty and allow the concession to be applied automatically by local authorities and so ensure that all those entitled to benefit would do so.
  We should like to set a threshold for relief by reference to the new valuation lists rather than the existing ones, but we shall have to wait a little longer to decide what is appropriate in the light of that revaluation. It would be almost impossible to base the arrangements on profits or turnover, which are sometimes not determined until two or three years after the event. It would be a most complex business to have to go back to past years to give businesses refunds or impose surcharges depending on eventual profits and it would also greatly affect the cash flow of local authorities.
  Mr. Stuart Holland: Why should it be so difficult to have a local turnover tax? For years after the war most European economies had precisely that—before they moved to value added tax. Such a tax can be estimated on an annual basis.
  6.30 pm
  Mr. Ridley: The hon. Gentleman will be in trouble with his Front Bench colleagues, who think that they would like to retain a capital tax for businesses as well as individuals to provide local revenue. I do not think we should be diverted into inventing a new tax at this point in my speech.
  I understand businesses' concern to know what their rate bills will be in 1990, but we simply cannot set a ceiling until we have the preliminary results of the revaluation, nor can we make a final decision on the need for special protection for small businesses or on how to administer it. However, we shall do that as soon as we can in the autumn.
  Mr. Roger Gale: Given the number of imponderables that seem to have been introduced and the decisions that cannot be taken until the autumn, will my right hon. Friend assure the House—for the benefit of those of us who still have mild doubts—that the proposals will be laid before the House in the autumn in the form of regulations and that we shall have the opportunity to vote upon them then?
  Mr. Ridley: Absolutely. I do not know precisely when regulations will be laid, but the Bill would give the powers to make regulations that would then be consulted upon and laid before the House, arid that would be the time at which to decide these matters. Notwithstanding our eagerness to make the decisions, I am sure that the House will agree that we would be wiser to make them on the basis of facts rather than speculation.
  Mr. Maxwell-Hyslop: Is not the problem that whereas amendments and new clauses can be amended by the House, regulations cannot? Moreover, does my right hon. Friend intend that the affirmative or the negative resolution procedure should apply? If the negative resolution procedure applies, we may not even get a debate on the regulations. If the affirmative resolution procedure applies and we disagreed with and defeated the regulations, there would be no relief, so we should have to accept them faute de mieux.
  Mr. Ridley: The resolution should be an affirmative one. I am certain about that, but we have not even tabled the amendments necessary to bring this about.
  My hon. Friend's observations must apply to all regulations, but if there were no regulation-making power, there would be no chance to change what might have been on the face of the Bill. Had I put the scheme in the Bill, it would have been just as unamendable when enacted as an order-making power, but an order-making power can be used to amend an order.
  The hon. Members for Copeland and for Brecon and Radnor (Mr. Livsey) asked about relief for charitable bodies. The history of this matter is well known. We accept that it is entirely right that charities should not have to pay the full rates and that in the case of other bodies performing activities which it is in the public interest to encourage to flourish—education, sport, recreation and culture—the possibility of giving relief from rates should be available. The provisions are contained in section 40 of the General Rate Act 1967 and have been developed over many years; they command widespread public support

  1037
  and generally seem to work well. Our policy is to replicate the existing provisions as closely as the change to the new system permits.
  Clause 39(5) and (6) already contain provisions whereby charities will have their rate bills automatically rebated by 50 per cent. That is what the factor 2 does in the bottom line of the formula. The provisions that we intend to reintroduce will permit charging authorities to increase that rebate up to 100 per cent. and additionally to give relief of up to 100 per cent. at their discretion to other bodies—in the words of the 1967 Act, relief may be granted to bodies that are
  "philanthropic, religious, concerned with education, social welfare, science, literature or the fine arts"
  and to premises used for the purposes thereof, subject in all cases to the requirement that the body concerned must not be conducted for profit.
  We intend to ensure that the full cost of giving relief for charities and for other non-profit-making bodies does not fall on the community charge payers. For mandatory relief, the position is simple: local authorities will be obliged to give this relief, so it will be deducted in calculating their contributions to the national non-domestic rate pool.
  For discretionary relief, it is a little more complicated. At present, the whole cost of any discretionary relief that a local authority gives is borne locally, but that cost is spread across local business as well as domestic ratepayers. If we did nothing more, the entire cost would fall on local community charge payers under the new system. That might make authorities less keen to give relief than at present and it would not be as fair as the present system. That is certainly not what we want. We therefore propose that authorities should be allowed to offset half the cost of any relief that they give against their payments into the national non-domestic rate pool. Regulations under schedule 7(4) will deal with that.
  The new arrangements will roughly mirror the present arrangements, as just under half the total rate bill, and thus half the cost of relief given now comes from domestic ratepayers. I hope that that is adequate to satisfy the two hon. Gentlemen.
  Dr. Cunningham: The Secretary of State has made an important and, on the whole, welcome statement, although we shall have to look very carefully, as always, at the fine print. I welcome at least the commitment in principle to make the change and I am sure that it will also be widely welcomed outside the House. From what I can recollect of the details that he has given, he seems to have met the points in full, and I am grateful to him.
  Mr. Ridley: I am not aware that there are any differences between us, but I do not want to claim that until the hon. Gentleman and I are both sure that it is true.
  Mr. Livsey: I thank the Secretary of State for his concession. If I heard what he said correctly, he is giving 100 per cent. relief to charities. The difference remains between this 100 per cent. and a residual 25 per cent., and the Secretary of State mentioned that there was a differential. As I understand it, there is 25 per cent. left. Where will that burden fall? Will it fall on the local authority and will it be 25 per cent. more than it is liable for at present?
  Mr. Ridley: Setting aside mandatory relief, local authorities at present shoulder about a quarter of the cost of discretionary relief. We suggest that they should continue to do so, although the cost will of course be transferred from ratepayers to community charge payers. Effectively, that leaves the discretion with local authorities, while the financial consequences will remain almost identical.
  Mr. Douglas: The Secretary of State has said something very profound about the amelioration of the rate burden. The Scottish arrangements, particularly in relation to sports grounds, are very different from those in England. We are supposed to be seeking harmonisation. What consultation has the Secretary of State had with his right hon. and learned Friend the Secretary of State for Scotland to ensure that we get the same advantages for sports grounds and other recreational facilities in Scotland as he seems to be giving in England and Wales?
  Mr. Ridley: My right hon. and learned Friend the Secretary of State for Scotland and I talk about little else, and we talk about it frequently. I am most concerned that the arrangements for Scotland, and the basis of valuation, should be identical to those in England, so that there is no distortion of competition and so that there is fairness.
  Mr. Butterfill: On this question of parity between Scotland and England, my right hon. Friend will recall that certain groups of people, especially those in the mining and extraction industries or others who need to use the contractor test, are very concerned about the decapitalisation rate and the current difference in practice between Scotland and England. Has he made any decisions about what the overall decapitalisation rate will be?
  Mr. Ridley: I am disappointed at the progress that has been made in harmonising the basis of valuation, both on the formula basis and on the valuation of properties generally, between England and Scotland. I shall see if we can accelerate the process in order to bring equity between the two countries closer as soon as possible. At the moment I have nothing to report to my hon. Friend.
  I have spoken for far too long, but that is not entirely my fault because I think that about half of my speech was taken up by hon. Members who intervened. I hope that I have shown that our approach to the transitional relief must be based on having the facts. I think that that is agreed by business. We shall come to a conclusion as soon as we have the facts. There will be consultation about them and the House will be able to express a view and to vote.
  It is right to have a special scheme for small businesses to help them through this difficult period. We shall have powers to make another transitional scheme for 1995 after the first quinquennium. I hope that my hon. Friends will feel that that is the wisest way to respond to the very justifiable concerns of business. This will amply meet those concerns, but we must have the facts in order to plan the schemes in detail.
  Mr. Jim Cousins: I am a new Member but undoubtedly other hon. Members will have experienced bigger shambles than the one with which we are now faced. Certainly this is a considerable shamble. At the last moment the Secretary of State offers us two thresholds for the definition of large and small businesses, and the definitions will be defined on a basis that will not

  1039
  be known until after 1990. He offers us two different ceilings for transitional arrangements and two different kinds of transitional arrangement—one that will operate from 1990 and the other, if it can be defined, may exist after 1995.
  Ms. Marjorie Mowlam: The Secretary of State is not listening.
  Mr. Cousins: Perhaps the Secretary of State is in difficulty again. No doubt he has a hard time of it because every Thursday lie offers more Maundy money to the people of Britain and every Thursday the stunned people of Britain throw it back in his face. That must be a difficult experience.
  This strange structure that the right hon. Gentleman is offering us, of two different kinds of business defined by two different thresholds, operating on two different ceilings and two kinds of transitional arrangements, none of which he has specified, are being offered to us in the great and good cause of giving business men more stability and certainty in their arrangements. At one point in his speech the Secretary of State tantalised us with the possibility that he might be right. Since in his speech he attacked two cornerstones of the legislation, it would be churlish not to agree that for once he might be right.
  Far from the allegations on which the legislation is based, the Secretary of State said that high rate poundages are not a free-standing phenomenon. That is a cornerstone of the case for the introduction of this legislation, but now the Secretary of State tells us that high rate poundages may be compensated by wonderful self-regulating mechanisms that link high rate poundages to low rateable values an to adjustments in rent. I do not believe in those wonderful self-regulating mechanisms. If I did, I would wonder why the enterprise zone experiment is a feature of the Government's legislative programme.
  Mr. Butterfill: Does the hon. Gentleman not agree that the reason for making these difficult transitional arrangements and for the uncertainty arises not from what is proposed in the legislation—that national non-domestic rates will make a difference between north and south or between east and west of about 10 per cent. at most—but from the failure of successive Governments since 1973 to revalue the base? That is the problem that we are addressing, and it is that and not the legislation that is causing the difficulties.
  6.45 pm
  Mr. Cousins: That intervention brings me to the wonderful revelation made by the Secretary of State when he invited us to consider that he might be right. We spent many weeks in Committee and were continually told that rates have no connection with income. However, in this debate we were told by the Secretary of State that rates have a connection with profits. That answers the question by the hon. Member for Bournemouth, West (Mr. Butterfill) and therein, unfortunately, lies the root of the damage that the Secretary of State has so casually done to the whole structure of his legislation.
  Mr. Alistair Burt: I take the hon. Gentleman's point, but surely it is a question of degree. The way in which rates may go up or down in any one year or the amount that they may rise as a result of revaluation, can cause considerable distress, depending on the actual
  1040
  amount. It is a question of degree. We know that rates as a proportion of a company's costs are low, but if they go up by a great deal, especially in a period of stability in other respects, they have a great marginal effect. We are talking about the problem of the degree of rise. That is why there can be a considerable effect and why the Secretary of State is right to talk about concessions.
  Mr. Cousins: That is why the hon. Members for Batley and Spen (Mrs. Peacock) and for Leeds, North-West (Dr. Hampson) have departed the field. They have already spotted that we are not talking about matters of degree. They now see that the great promise of huge rate reductions in the north of England on which they were building all their hopes, have been at least severely compromised by what the Secretary of State has said.
  Amendment No. 7 is in the name of the hon. Member for Kensington (Sir B. Rhys Williams) and I join in wishing him a speedy recovery. When speaking to that amendment the Secretary of State told us that its cost was equivalent to a 10 per cent. general rise in the uniform business rate. If the calculations with which we are dealing are so sensitive to the effect of amendment No. 7, the hon. Members for Batley and Spen and for Leeds, North-West are correct in supposing that the great promise of huge rate reductions in the north have been severely compromised by the Secretary of State.
  Before we come to the architecture of these concessions, I should like to tell the House what the Secretary of State said in Standing Committee. When talking about how they should be financed, he said:
  "the limits on any rate bill increases will have to be matched by the deferral of gains which would otherwise be due."—[Official Report, Standing Committee E, 3 March 1988, c. 1214.]
  It is not absolutely clear from what the Secretary of State said today whether he is standing by that statement. It looks and sounds as if he is standing by that statement, and the hon. Members for Batley and Spen and for Leeds, North-West certainly felt that. I give the Secretary of State credit for that. Those two Members have now departed because the Secretary of State's great concessions have been postponed to the indefinite future. They are lost in indefinite obscurities that he cannot even define for the Third Reading on Monday. These great concessions, the great reductions for northern business, are now severely compromised.
  Mr. Leigh: What would be the effect on business rates in the hon. Gentleman's constituency if the present business rating system was kept, there was a revaluation and shopkeepers were required to pay a local income tax and rates based on capital value? That is Labour party policy.
  Mr. Cousins: The hon. Gentleman invites me to consider the matter of capital value rates. I remind him that all the exemplifications that we have heard from the Government about the effect of capital value rates incorporate the continuation of resource grant equalisation. If one removed the effect of resource grant equalisation from assessments of what might be rates based upon capital values, the picture would be very different. It might even benefit the people of Canterbury quite as much as it would benefit the people of Newcastle. Perhaps we can return to that point later.
  It is a pity that the Chancellor of the Duchy of Lancaster, at his first Action for Cities breakfast in

  1041
  Newcastle, offered the business men of Newcastle a prediction of a 32 per cent. rates cut. I hope that he has been made aware of the Secretary of State's statements tonight. I hope that, at all the future breakfasts, he will incorporate in his predictions of rate reductions in our great northern cities the effect of the concession that has been offered this afternoon to business in the south, as a consequence of a rate revaluation which is part of the Government's policy.
  Mr. Butterfill: Does the hon. Gentleman agree—this was a point of common ground between us in Committee—that the shopkeepers in his constituency of Newcastle, Central are likely to suffer dramatically because their rental values have risen above the average, and that they will be as much beneficiaries of my right hon. Friend's announcement this afternoon as anybody in the south? It is by no means clear that this is exclusively a north-south, east-west or any other geographical divide, although, in general terms, the north will benefit.
  Mr. Cousins: I shall deal with that point in a moment.
  My other point relates to the Secretary of State's remark that special capital allocations would be targeted at the need to create in cities important infrastructure, which would have to be introduced by the local council. At 8 o'clock, we are due to discuss rate support grant and I look forward to the Minister telling us that the revenue consequences of the expenditure on those capital allocations will form a proper part of the new revenue support grant system.
  Unfortunately, the infrastructure on which we are invited to spend to assist industry carries with it revenue expenditure. For years, in the great northern cities, we have struggled to obtain a recognition of those central city services into which huge expenditure has been sunk by progressive councils in Leeds, Manchester and Newcastle. We have struggled to obtain proper and adequate recognition inside the rate support grant system of the consequences of the investments that we were making to improve and secure the commercial future of our cities.
  If we are to have special capital allocations targeted at that kind of investment, with such consequences, I very much hope that we shall not be tricked again by the non-recognition inside the revenue support grant system of the revenue consequences of that expenditure.
  Of course, it is true that in cities such as mine—where investment in the infrastructure has been great and sustained and where, even this year, a rate-capped council is investing in two new car parks, one in the shopping area and another in the commercial area of the city, to attract new opportunities for investment, and is prepared to meet the revenue deficits that accompany such investment—rental values for shops and offices have risen, despite the high rate poundages, faster and higher than in any other area of Britain. Shopping rental values in Newcastle have risen higher and faster over the past 10 or 12 years than in any other area of Britain, including Oxford street. That shows the benefits that can come from linking a concern for business, commerce and opportunity with progressive infrastructure spending in a sustained way through successive local government administrations.
  It is precisely those connections that the Secretary of State, through these proposals, is now seeking to break
  1042
  and for which the offer of special capital allocations cannot possibly substitute. The moral of what the Government are doing to that sustained relationship between commerce and local councils is spelt out by the fact that the leader of the city council was not invited to attend the first Action for Cities breakfast. That shows the true value that some Members of the Government—I do not say all—place upon a positive, sustained relationship with local people and local industry.
  We are now to face a period of enormous uncertainty as to what the Government's proposals mean. On the basis of what has been said this afternoon, no business man can work out for himself or herself, or for his or her business, the precise consequences of the proposals.
  Mr. Heddle: Does the hon. Gentleman agree that my right hon. Friend's proposals, and the whole thrust of the reform, is to introduce certainty and stability into the commercial rate? Will the hon. Gentleman inform the House what certainty there was for an industrialist or a retailer in the London borough of Waltham Forest whose rates went up by 68 per cent. this year? What certainty was there last year for a business man in the area in which the right hon. Member for Islwyn (Mr. Kinnock) lives, whose rates in the London borough of Ealing went up by over 60 per cent?
  Mr. Cousins: If, over the past 10 years, the Government had been willing to offer local councils the same kind of certainty in the working of the rate support grant system that they have now offered business men through the uniform business rate, that confrontation might not have been necessary.
  Mr. Ridley: During the years of high rate increases to which my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) referred, the rate support grant percentage has not been changed at all. It has remained at 46·2 per cent.
  Mr. Cousins: I simply do not understand and I am happy to give way to the Secretary of State yet again. Each year there has been a reduction of rate support grant.
  Mr. Ridley: The hon. Gentleman was complaining that the reduction in the Government's rate support grant had led to those high rate increases, but, during the two years in which those rate increases have taken place, the Government's grant has not been cut. It has been kept at the same percentage.
  7 pm
  Mr. Cousins: No doubt the Secretary of State, with his great vision, could see all the way from Rochdale to Manchester were it not for the houses in between. Does the Secretary of State believe that local government finance is a year-on-year calculation, in which one year can be said to have ended and completely finished when the next year starts? Of course not. I am referring to the lack of stability in the rate support grant system. Even in the last couple of years, when there has been stability in the level of grant there has been continuing instability both in the distribution of rate support grant and in the amazing contraption of penalties and other features which have accompanied it.
  I remind the Secretary of State that Newcastle is being rate-capped this year on the basis of a GRE assessment last year which he now admits was wrong. Therefore, if

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  Newcastle had been assessed last year on the GRE it had this year, it should not have been rate-capped at all. That is an example of the instability and uncertainty to which I referred.
  I do not want to go on for too long, but, as the Secretary of State has now returned, perhaps he could reassure us about the special capital allocations to which he referred earlier. He did not state the size, but a continuing feature of the Secretary of State's remarks is a lack of precision. Perhaps he will tell us at 8 o'clock that the revenue consequences of those capital allocations will be restricted in the future revenue support grant distribution system. I should be happy to give way to him now so that he can give that guarantee.
  The Secretary of State will not say anything. We realise that the uncertainties in the future pattern of uniform business rate are no doubt to become a structural feature of our debates after 8 o'clock, in which the Secretary of State will be unable to be precise about the future pattern of revenue support grant. Businesses in this country, both north and south, face a revaluation which will have unpredictable effects. On the basis of that revaluation, we are to have a new uniform business rate which cannot be specified or defined, the consequences of which for any part of the country or type of business cannot be quantified. This is the sorry state to which we and business have been brought by the proposals for this ludicrous community charge.
  Mr. Richard Alexander: I have not rebelled against the Bill at any stage, and I support the principle of the community charge. I believe that it is right for the country and the community generally. However, I do not believe that there should be any sacrifices on the altar of getting it right and getting rid of the domestic rate. Many small businesses, particularly in my constituency, believe that they are about to be sacrificed. That is why I put my name to amendment No. 7.
  I listened carefully to what my right hon. Friend the Secretary of State said, and I shall be studying his comments later. I do not criticise my right hon. Friend for this, because he is in enormous difficulty, but the situation is very "iffy". I am not sure what I can tell my constituents by way of reassurance on the matters that they have mentioned to me. For example, will the figures that my right hon. Friend is to produce, when the matter is discussed in the other place, be debateable here, or will we be presented with a fait accompli? I do not criticise my right hon. Friend, but I make the point that we should be able to discuss the details in this Chamber.
  My right hon. Friend was interrupted frequently, and he gave way on a number of occasions, but there was one point that I would have wished to raise with him when he was telling us about his discussions with the CBI. The CBI has given us all a briefing—I am sure hon. Members on both sides of the House have received it; indeed, the hon. Member for Copeland (Dr. Cunningham) referred to it—in which it says that for some businesses the combined effects of the uniform business rate and the revaluation will he catastrophic. I would have liked to hear from my right hon. Friend whether, after his meeting with the CBI, it was still of that view.
  My information is that there will still be harm to smaller businesses. In reply to a letter from me, written on behalf of the Southwell branch of the National Federation of Self-Employed and Small Businesses Ltd., my hon.
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  Friend the Under-Secretary of State said that my constituents' fears were exaggerated. My right hon. Friend the Secretary of State spoke of generous phasing arrangements. I want to put it on record, as many of my hon. Friends have done, that he ought to be thinking of increases of no more than 10 per cent., plus inflation.
  I do not believe that the community charge is a tax and should therefore be geared to one's ability to pay. It is a charge, and as a charge it cannot be regarded by the Government or my right hon. Friend as a tax which has to be borne by the small business community until the whole
  thing is sorted out.
  In his letter to me, my hon. Friend said:
  "We have no reason to expect small businesses to fare worse than large, except to the extent that they are concentrated in the more buoyant retail and service sectors. Our forecasts suggest that most small shops will face modest increases in rateable value, with those over 50 per cent. being relatively uncommon."
  That must be totally unacceptable for those who are in that position. It will not satisfy me, if I am to pay this charge, to be told that it is relatively uncommon and I will just have to get on with it. A business man will say, "My business is my business and my tax is my tax and you, as my Member of Parliament, must sort it out. If anything that your Government do puts me out of business, I object to it and I object to you, too."
  A briefing from the Forum of Private Business tells us that under the present proposals some businesses could be subject to annual increases in community charge well above the rate of inflation, and in extreme cases for 20 years. During the transitional period, the maximum increase should be 10 per cent., after allowing for inflation. Surely that is not too much to concede if we are to have fundamental changes to business men's liabilities as a result of the Bill.
  Five years is too short a transitional period. I would like my right hon. Friend to consider a much longer period. It is worth considering the impact of rates as they affect small businesses. I agree with my right hon. Friend that businesses in the front of a building pay more than those at the back. The National Feferation of Self-Employed and Small Businesses Ltd., in its briefing to right hon. and hon. Members, says that shops need to be at the front of
  buildings and, therefore that they are smaller units. Nevertheless, it means that a business in that location is on a higher basis for rating then any other type of commercial premises. That is why, when these matters are considered
  in another place we should be looking after smaller businesses.
  Mr. Butterfill: That might be the case if one presumes that all small businesses and shops are in prime high street locations, but that is by no means true. A few of them are, but the vast majority are located in secondary or tertiary locations where the values are considerably lower. The organisation to which my hon. Friend referred has rather overstated its case.
  Mr. Alexander: My hon. Friend may be right. In constituencies such as my own, which have smaller communities, most smaller businesses have what one might call high street sites: they are highly rented and highly rated. However, if I am right in what I have said, it follows that the ratio of rates to income is much larger for he smaller business than for the larger.
  The community charge was introduced to bring a measure of justice and fairness to those hard pressed by the

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  present rating system. I return to my preliminary point. I support the idea of the community charge and do not resile from it. Business men feel that their lack of representation, together with their obligation to be taxed, is unfair. They will still have no representation, but they are not looking for any. However, they look to this House for a new system that will be no more unfair than the one that we are trying to replace.
  Without the back-up position provided by amendments such as those in the names of myself and my hon. Friends, I believe that there could be unfairness and an effect on small businesses' viability. This Government, above all, have always supported the smaller business men and business women and wished them increased success. I strongly urge my right hon. Friend to ensure that, when the Bill goes to another place, we do not desert them.
  Mr. Holland: Rarely in the history of local government can any Secretary of State have asked so many of his right hon. and hon. Friends to follow him virtually blindfold into the Division Lobby over so major a provision as in this Bill. It has been the most remarkable performance.
  My hon. Friends have already stressed that there are two threshold levels and a ceiling—a false ceiling, it seems—on differential policies for different types of firms. Nearly all of that is based on a false premise in the first place. The Government have failed to show that there is any correlation between rates and the closure of small or large firms. The Department of the Environment commissioned a study from the university of Cambridge department of land economy which found no evidence that changes in rate levels were linked to job losses. Evidence from enterprise zones has demonstrated that where rates were abolished, business rents were increased to compensate, with very little net gain, if any, to business. It is worth bearing in mind that the overall level of rates as a proportion of the total costs incurred by United Kingdom industrial and commercial firms, is less than 2 per cent.
  That argument—so favoured by Conservative Members in the way in which they inveigh against local authorities, nearly all of which, in their lexicon of demonology, are Labour-controlled—is itself misplaced. The main problem for smaller businesses in the inner cities in Britain today, as in the post-war economy, is not local government but bigger business.
  7.15 pm
  The argument in relation to retailing shows that to be the case. In a series of parliamentary questions that I have tabled since entering this place I have asked what is the number of firms commanding the upper half of the United Kingdom retail trade—the more concentrated, larger firms. I am informed that in 1950 the figure was 4,750. But by 1986 it was only 94. It is the concentration of a larger share of the market in the hands of the multiples in retail distribution that has caused such problems for small firms.
  That trend is not an abuse of the market—it is the working of the market. The market rewards the more efficient. The more efficient thereby grow larger and enjoy a bigger market share. They enjoy, as a result, lower unit costs and squeeze the corner shop and the small firm. The
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  small corner shops and firms that continue to survive do so mainly because many of their customers do not have access to transport to visit large supermarkets.
  This is the dynamics of the problem that the Government should be addressing, instead of imagining that the problem concerns rates. It is the dynamics of unequal competition, which is quite rightly addressed by my right hon. and hon. Friends on the Front Bench in new clause 6 in their concern to tackle the problem.
  Mr. Butterfill: Does the hon. Gentleman agree that the other consequence of the situation that he describes is that profit margins and prices to the consumer in the grocery trade, for example, have been dramatically reduced over the same period? The consumers have been the beneficiaries. It is because they have done so well that the effects that have been described in relation to small businesses have occurred. There is also the phenomenon of the corner shop, run by Mr. Patel or Mr. Singh, where standards of service are so much better and where the loyalty of customers is retained, despite the fact that their prices may be higher. Surely the future of small businesses lies in providing higher standards of service.
  Mr. Holland: The first part of the hon. Gentleman's comments confirms my argument. Economies of scale and throughput in the large multiples are such that there is no way that small corner shops or even the routine high street retailer can compete.
  The family shop—whether it is owned by Mr. Singh or Mr. Smith—is surviving by using unpaid family labour, often working very unsocial hours. The problems for such shops is not local rates or local government, but bigger business. That is a consequence of the Government failing to restrain the growth of bigger business. If they are not to do that, in terms of the efficiency argument made by the hon. Gentleman, they should compensate smaller shops on social grounds so that they may remain open.
  There are strong social arguments for such shops remaining open. A single parent without a car, or pensioners, find it difficult either to get to supermarkets, even on public transport, or to carry back the volume of purchases that would make such a visit worth while.
  Mr. Roger Knapman: The hon. Gentleman has said that rate demands are not all that important, because they represent only 2 per cent. of a firm's turnover on average. Should he not look more carefully at the proportion of profit that that represents?
  Mr. Holland: If we are considering the proportion of profit of bigger firms, there is some force in the argument that there should be more effective local taxation of that big business which is making supernormal profits. We need more transparency in the differential between the profits of different kinds of firms.
  Mr. Knapman: What about small businesses?
  Mr. Holland: That is the point that I am making. If we want the corner shops to stay open, faced with unequal competition, there is an argument on social grounds. Often, certainly in inner-city constituencies such as mine, the only lights that are on in the evening are those of the corner shop. If we want access to shopping in local communities, there is a case for a differential in the taxation of small and large businesses.

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  Another aspect of the underlying fallacy of the Government's approach—their attack on the basis of rates—relates very much to the London area. The reason for the decline in small manufacturing firms in inner London since the war is nothing to do with the rating system. In the 1950s and 1960s, expanding firms needed more size to achieve minimal economies of scale. But it was part of the consensus of the Town and Country Planning Act 1947, and of its industrial development certificate legislation, to forbid the expansion of firms over 15,000 sq ft without permission from the Board of Trade—more recently, the Department of Trade and Industry. For those reasons, many manufacturing firms left inner London and went to the new towns, and many remaining supplier firms were forced to close down.
  Another reason is the same theme of unequal competition. A study by the community development project in Canning Town showed that over half the job losses in the area over a 10-year period, up the mid-1970s, were caused not by small firms moving out because of high rates, but by large multinational companies deciding to close down and move either to the new towns or abroad. The Government are failing to address problems of this kind.
  The same applies to the transitional problems of the small firms that flourish and succeed. There is evidence, in a recent study by Professor Storey of Newcastle university and others of the death rate of small firms, that of any 100 firms that have started within the last 10 years, 80 are now dead. Of the remaining firms, four on average are responsible for creating half the remaining employment.
  The reasons for the failure of those firms often relate to their difficulties in coping not with local rates, but with the transition from being a small family-managed company to being a more modern multi-product, multi-division or multi-regional enterprise. Most do not make the transition, and the Government's industrial policies do not help, because they do not identify or even recognise the problems of that transition.
  Such factors are far more important than rates in relation to the difficulties faced by small and medium-sized firms today. We are virtually the only European country without a real policy for small and medium firms. France has an SME policy; Germany has its Mittelstandspolitik. Other Governments admit the problems, but ours do not. They have wrongly identified rates as the crucial factor.
  There is a further problem. Where is the incentive for local authorities to provide better services when the responsibility for the revenue is taken from them? [Interruption.] The hon. Member for Aldridge-Brownhills (Mr. Shepherd) made some forceful interventions earlier. If he wishes to intervene I shall be happy to respond, but other hon. Members wish to speak.
  Where are the incentives for local authorities to provide decent roads, transport, signalling systems, police, fire and other protection services, environmental health, consumer protection and training if they are not responsible for raising the necessary revenue? That point has been raised by other hon. Members, and it is a forceful one. It is another reason why, in my view, the new clause supported by my hon. Friends is correct, and the Government's rationale is entirely wrong.
  Mr. Graham Bright: The one dread that most business people feel is that of the rates bill. It cannot be offset, and, however clever his accountant, the
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  ratepayer must pay the money up front. Whenever the future of the rates is discussed, terror is projected into the hearts of most business men, but of small business men in particular.
  It has been said this afternoon that there are many views on this issue. That is clear from the various reports by the organisations representing businesses, large and small, and by the valuers. The one factor common 10 them all is that, without doubt, there will be anomalies, and it is those anomalies about which I am concerned.
  I am not talking only about retailers. There are many other small firms in our city centres, in areas that are premium sites, sometimes for historical reasons. They may be involved in crafts or in the service industries. Some historically own their premises, so they will not be too worried about rents, but will be very concerned about rates.
  I pay tribute to my right hon. Friend the Secretary of State for listening to what some of us have said during recent months, and for his announcement this afternoon. I had prepared a very different speech, because I did not know what he was going to say, but what he has said answers most of the fears that are felt. There is to be a cushioning, and a ceiling is to be imposed. That is important. If we know that a change is to be made, but do not know whether it will be an increase or a decrease—if we just pay five times as much, or what—we obviously feel worried. I should be even happier if I knew what the ceiling was to be, but at least we know that there is to be one. We also know that there is to be a transitional period extending beyond what was originally put in the Bill, and that, too, will allay the fears of many businesses.
  More important, my right hon. Friend has recognised that the new rating system could hit small businesses harder than large businesses. I am glad, therefore, that he has introduced a different ceiling for small businesses. Above all, this is the time when the Government should take powers to deal with the problems—although we can argue that we do not know precisely what they will be. We should support what my right hon. Friend has said, because he is taking powers that will be essential when the unified business rate is introduced.
  Mr. Ridley: It may help my hon. Friend on the timing point if I say that I hope to receive the full analysis of the results of the revaluation in August or September this year. It will then be possible to suggest the type of scheme that can go out to consultation. That leaves 18 months before the new system comes into effect. There is therefore plenty of time for people to become aware of what they face. The details of the new valuation lists for individual businesses will not, of course, be available until many months later, but the scheme can be based on analysis of the results.
  Mr. Bright: That was a most reassuring and helpful intervention.
  Although to some extent we are going into the unknown, I am much more confident following this afternoon's statement by my right hon. Friend the Secretary of State. I believe that small businesses and businesses in general can put aside some of their fears. I hope that the organisations which have been campaigning will help small businesses to take account of what is happening and will not constantly pump up fears. I thank my right hon. Friend the Secretary of State for his comments.
  7.30 pm
  Mr. Rhodri Morgan: I am grateful for the opportunity to raise some points that have not yet been covered. A carrot has been offered to hon. Members who represent the large cities in the north of England: industries there will be better off following the introduction of the national non-domestic rate. Although initially it will possibly have a deleterious effect in the south of England, especially in the service and more buoyant sectors, a big carrot for the north has been presented at some of the working breakfasts which were attended by colleagues of the Secretary of State. It has been said that substantial reductions will be available in the north, especially in manufacturing industries.
  Problems will arise in Cardiff, which has some similarities with the large cities of the north in that it is an intermediate area and, therefore, is recognised as requiring incentives to attract more business, jobs and manufacturing. However, in terms of the treatment of the national non-domestic rate, Cardiff seems to fit in more with large areas in the south of England and no concessions appear to have been given. The Cardiff area, its businesses and manufacturing will be substantially worse off, even though the Government categorise it as an intermediate area requiring assistance.
  If the non-domestic rate had been in force this year, rates for Cardiff businesses would have increased by 12·3 per cent., which would have meant an additional tax on business of £5 million. An additional tax of £5 million makes little sense in an area designated by the Government as assisted and therefore needing all the assistance that it can get to create new jobs.
  The Government will have to spend more money from their regional assistance budget to make good that £5 million tax imposed on Cardiff businesses. To paraphrase the words of the Secretary of State this afternoon, he intends the new system of non-domestic rates to create more small businesses. Some of those businesses were large before he started, but they will be small by the time he has finished.
  Have the Secretary of State for the Environment and his Welsh Office colleagues given special thought to the implications of the national non-domestic rate, not just in the north where it has been presented as a carrot, but in parts of Wales which will do worse out of the new system than under the present system? Does Cardiff need an extra £5 million tax from the imposition of the national non-domestic rate?
  Mr. Butterfill: Does the hon. Gentleman appreciate the interrelationship between the national non-domestic rate and the revaluation which gives a true guide to what will happen? Since Cardiff in general has had lower rate valuation increases since 1973 than most of the rest of the country in respect of its commercial and industrial activities, it should end up as a net beneficiary of the overall system.
  Mr. Morgan: I think that the hon. Gentleman makes unwarranted assumptions which are not based on any local knowledge of Cardiff. I listened carefully to the Secretary of State, who appears to be under the misapprehension that rentals will be a kind of residual at the end of the revaluation exercise and the imposition of
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  the national non-domestic rate. The national non-domestic rate may be imposed first and then, roughly at the same time, the rating revaluation, followed by reassessment of rent.
  The Secretary of State said that the rent would probably be determined by what people could afford to pay not to have empty shops or factories. If rent levels are reassessed just before the introduction of the NNDR and the revaluation, the NNDR cannot be adjusted—it is a fixed sum—that could lead to massive brankruptcies. Free market forces combined with the imposition of a national non-domestic rate will, occasionally, benefit firms if the calculations are correct about rent being a residual, but in a capricious way.
  Cardiff, as a business centre, has low rates and has been economical in spending public money. It will do badly out of the new system. There will be no incentive to retain the present system whereby, as part of its armoury in attracting new businesses, it has the sixth lowest business rates in England and Wales. With only intermediate area status to offer in Cardiff, there will be no incentive for proper accounting of public money by the county council, which is in charge of economic development.
  Mr. Burt: I am sorry that the hon. Member for Vauxhall (Mr. Holland) is no longer in the Chamber. Recently I picked up at the remainders desk in Stamford public library a copy of his great tome "The Socialist Challenge". I congratulate the hon. Gentleman on it and am sorry that he is not here. I shall content myself with congratulating the hon. Member for Cardiff, West (Mr. Morgan) on his great work in last week's marathon. I hope that the cause for which he ran was well supported.
  I echo the sympathy behind the amendments on small businesses and welcome the comments of my right hon. Friend the Secretary of State. As a representative of the north-west, may I say how keen we in the north are that concessions to small businesses are not made too much at the expense of the north. The north stands to gain from the unified business rate, and we are grateful for that. That advantage is much needed.
  The north is on the brink of change. It has been through some of the dark days and is looking to a bright future. The vast majority of us know that the north is no longer simply the birthplace of Crompton, Kay and Arkwright and of the industries at the heart of the industrial revolution and Britain's energy in the 19th century. It is the place also where the newer technologies are finding a home and it is at the heart of the change which is affecting Britain in terms of world markets.
  This is exactly the time when industry should look to locate in the north and especially the north-west. That is why the announcement of the uniform business rate found such favour with our businesses in the north. It is about time that we said loudly and clearly that there are plenty of reasons, for locating in the north. Location advantages provided artificially by Governments are not always the best reasons, but while they exist full use should be made of them.
  Mr. Couchman: Although I can understand precisely why businesses in the north-west should welcome the proposed changes, does my hon. Friend accept that in many places in the south-east there is just as great a depression as in parts of the north? My hon. Friend the Member for Thanet, North (Mr. Gale) is sitting next to my

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  hon. Friend. My constituency is in much the same position as his. There are places other than the City and Thames corridor in the south-east. Many businesses there view these changes with great alarm and apprehension.
  Mr. Burt: I shall come to that point later, as I do not wish to get involved in a colleague-to-colleague battle.
  As a matter of general principle, it is recognised by the House that the greatest difficulties that this country has faced since the war have been concentrated in areas which depended on traditional manufacturing industries which have suffered greatly because of industrial change. As we consider the problems of one nation, it is fair that we should examine the advantages for those areas and say, "Thank you very much, this is about time."
  I shall say something about small businesses in a moment. Although we gain financial advantage in the north, there are other reasons for supporting the uniform business rate. First, revaluation had to come about. My constituents will face the greatest problems through the change in the domestic local government system precisely because revaluations were fudged for years. If there had been revaluations, we would not be facing such problems with the community charge.
  I do not think that those problems should be laid at the door of the Government, in considering the changes in local government finance. The problems of revaluation in the south-east can be attributed to the same cause. We should have had revaluation earlier. We did not, and we will have to pay the price, but we would have had to pay the price sooner or later. It is about time for revaluation.
  Secondly, we accept that the present system is so outrageously complex that a change had to come. We appreciate that the change in the system through the uniform business rate will simplify and help, and we welcome that.
  Thirdly, little has been said about the prospect of index-linked changes following the creation of the uniform business rate. It has been mentioned only in passing. During the 1970s, when the rapid rise in inflation was causing very large changes in rates for businesses throughout the country, those who lived in the areas which suffered excessive changes in rates year after year will realise—or their businesses will realise—how welcome is index-linking. It is about time that that was introduced, and it will he important and welcome.
  Dame Elaine Kellett-Bowman: Hear, hear.
  Mr. Burt: My hon. Friend is extremely perceptive. She recognises the importance of this matter. She is usually right, and she is right about this.
  I now turn to the matter mentioned by my hon. Friend the Member for Gillingham (Mr. Couchman)—the problem of small businesses. If we talk seriously about one nation, and if those of us in the north recognise that the change to the uniform business rate will help the industrial areas of the north, it is also true that those in the north should be concerned about sudden changes elsewhere. It is not fair that we should take advantage of this measure if there is to be major disadvantage elsewhere.
  As my hon. Friend rightly said, not everyone in the south and the south-east is a yuppie stockbroker. Many people in the south-east have problems and many small businesses have difficulties. If we are concerned about our position and if we welcome the changes that benefit us, surely it is right that we spare some thought for those who
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  may be caught in a once-only position because of the revaluation arrangements and the changes in rate poundages. We recognise their difficulties and that is why we welcome the transitional arrangements to assist them. Far be it from us to say no. We shall all benefit sooner or later because problems for small businesses can lead to unemployment and bankruptcy, and we do not want that.
  My right hon. Friend announced some sensible concessions. He has made very clear his intention to help small businesses and he knows the concerns of those of us in the north. We do not want to see those concessions made at our expense. My right hon. Friend is well aware of that. He nods in assent to show that he has taken that on board. However, we recognise that he can help small businesses in the south that might be affected badly. Because of the working of the uniform business rate, and because of its sectoral impact, parts of the north where there are many new businesses may face a rise rather than a fall in their rates and may benefit from the transitional arrangements. We recognise that in general we shall benefit, and we welcome what is being done for others.
  7.45 pm
  Mr. Cousins: Some of us from the north are concerned about the effect of the uniform business rate on the depressed Medway towns where there is a projected increase of 28 per cent. How does the Secretary of State propose to index-link rateable values as well as rate poundages?
  Mr. Burt: That is a question for my right hon. Friend the Secretary of State.
  Mr. Ridley: The simple answer is that I do not intend to index-link rateable values.
  Mr. Burt: My right hon. Friend the Secretary of State has already announced that there will be a continuing system of revaluation. We have needed that for a long time. The fact that there has been no revaluation for so long has led to a big jump now. The hon. Gentleman missed precisely that point.
  I conclude by saying that the changes in the uniform business rate will help many areas in the north and are to be welcomed. Because we are truly one nation, we recognise that we do not wish to cause problems for small businesses in the south who may face difficulties. The changes will benefit us, but we do not wish it to be at the expense of anywhere else. We very much welcome the concessions that my right hon. Friend announced today. We know that he has taken on board the concerns of the north and listened to the problems of small businesses in the south. We look forward to supporting him warmly in the Lobby this evening.
  Mr. Worthington: I shall make only a brief contribution. I was hesitant about contributing to this debate, which is mainly about England and Wales, until I heard with amazement the words of the Secretary of State. I was going to complain that there was not to be a uniform business rate for Scotland in 1990 as there was for the rest of the United Kingdom, but to my amazement the Secretary of State announced that there were to be transitional arrangements in Scotland for a non-existent reform. He did not mention that to the Secretary of State for Scotland and spoke only about the harmonisation of

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  rates, so I very much look forward to hearing from the Secretary of State next week the details of the transitional arrangements for that non-existent reform.
  In Scotland, there would be great benefits from a uniform business rate, especially in the poorest areas, but it is not to be. In my constituency, a most deprived region, there would be a transfer of £59 million to Strathclyde. That is not to occur because the major loser would be Dumfries and Galloway, which happens to be in the constituency of the Minister of State, Scottish Office.
  I am pleased to see signs of the north-south divide among Conservative Members. They now know what we have been suffering for many years. One of the major problems that will exist because there will not be a uniform business rate in Scotland, in terms of the slow progress of harmonisation between England, Wales and Scotland, is that the present disadvantage of high rateable values in Scotland will be made even worse. For example, the Scottish Exhibition Centre pays the same rates as the National Exhibition Centre, but is five times smaller. The rates for the pipeline which runs from Grangemouth to Wilton halve as the pipeline crosses the border.
  In Scotland, the rates are about double what they are in the north of England. It is estimated that when the uniform business rate is introduced in England and Wales, there will be a further subsidy of about one third to the north of England. The implications of that for business in Scotland are truly horrendous. The Secretary of State seems to care not at all about that, which is odd, because he says that the major disadvantage of devolution is high taxation rates. However, he is applying a high taxation rate to Scotland by failing to harmonise the rates in England, Wales and Scotland.
  I doubt whether the Secretary of State talks as often as he says he does to his right hon. and learned Friend the Secretary of State for Scotland, but I ask him to have further conversations with his right hon. and learned Friend about the possibility of harmonising the rating values of England, Wales and Scotland much more rapidly than the earliest possible estimate, which is 1995.
  Mr. William O'Brien: I have sat through the debate, and it is clear to me that the Secretary of State has lost the argument. It was suggested earlier that the Bill should be withdrawn, and that would be the best course to adopt.
  My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) has just referred to Scotland. The Opposition believe that further explanations should be offered about what is to happen in Scotland. If what the Secretary of State has told the House is to come about, changes will have to be made in Scotland.
  The Secretary of State referred to the survey by the National Federation of Self-Employed and Small Businesses. He derided the federation's survey. On 19 February, the members of the Standing Committee on the Local Government Finance Bill received a letter from the secretary of the federation, saying that the federation was worried about the problems that the uniform business rate would create for small firms and that it had attempted to analyse the position throughout the country. According to the letter, information was supplied to the federation by
  1054
  valuation experts. That information was not supplied, as the Secretary of State suggested, by members of the federation.
  It referred also to advice from the Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope), that the revaluation of small businesses would result in rateable value increases, on average, of between 5 and 6 per cent. The Under-Secretary of State also said that the uniform business rate poundage would be reduced—by an equal and opposite amount.
  There will be substantial increases throughout the country if the uniform business rate, as outlined today by the Secretary of State, is imposed. We are told that a shop in Doncaster that now pays £1,184 in rates will have its rates increased by 34 per cent. to £1,587. In Barnsley, the rates of an industrial unit will be increased by 23 per cent. In Northumberland, the rates of a restaurant, now £3,500, will be increased to £6,075—an increase of 74 per cent. Many properties will face substantial increases. In Salop, Hereford and Worcester, for example, a furniture shop, whose rates are now £450, will, under the new system, be increased to £1,013—an increase of 125 per cent. Those are the kinds of increases that small businesses will have to bear.
  The Secretary of State said that small businesses will need time to adjust to the revaluation. Much more attention needs to be paid to that timing, because small businesses are reeling under the Secretary of State's proposals. I hope that he will be more specific about the transitional period. We welcomed his reference to charities, but we await what the small print will reveal. Throughout his 51-minute speech the Secretary of State's only constructive proposal related to charities.
  I have received representations from community and town councils about how they will fare under the distribution of the non-domestic rate. The Welsh community and town councils say that they will fare the worst, as they will receive no part of the non-domestic rate. I hope that the Secretary of State will consider the request that has been made by the town and community councils of Wales.
  The hon. Member for Batley and Spen (Mrs. Peacock) referred to the Kirklees and Wakefield chamber of commerce and industry in west Yorkshire, which has written to all Members with west Yorkshire constituencies. It says:
  "This Chamber has steadfastly supported the principles of regular revaluations and the introduction of a Uniform Business Rate…revaluation would redress this imbalance, whilst the introduction of UBR would provide a nationwide equitable system of business rating."
  The Minister for Local Government bandied about the figure of £700 million for the north of England. We are now told that the north of England will not benefit by that amount. The secretary of the Kirklees and Wakefield chamber of commerce and industry said that the chamber was writing to hon. Members to inform them of its very real concern that these benefits will not now accrue to local businesses. It is far from happy that the Secretary of State and the Minister for Local Government should initially have promised such significant revaluation benefits and the uniform business rate to businesses in the north. It suggests on behalf of industry and commerce in that area, that the Secretary of State should clarify how revaluation and the uniform business rate, will apply to the north.

  1055
  It certainly seems that support for the unified business rate will diminish, that any promises that have been made by the Minister for Local Government have been withdrawn, and that these proposals will deprive local small businesses in west Yorkshire of £700 million. This situation cannot be tolerated. I hope that there will be a retraction of what the Secretary of State has said, because it is creating problems in the north of England.
  Mr. Ridley rose—
  Mr. O'Brien: I am sorry, but I have to say that the Secretary of State has made this clear. [HON. MEMBERS: "Give way."] Conservative Members have shown their reaction to that decision. The presentation by the Secretary of State tonight—
  Mr. Ridley rose—
  Mr. O'Brien: Once again, hon. Members have shown that this is an unpopular Bill. It has no support in the House. and it has no support outside. We ask that the House supports amendment No. 7.
  Mr. Ridley rose—
  Mr. O'Brien: This will give an opportunity to the House to divide again.
  It being Eight o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to the Orders [22 February and 13 April] and the Resolution [18 April] , to put the Question already proposed from the Chair.
  The House divided: Ayes 206, Noes 329.

  Division No. 271]

  [8 pm

  AYES

  Abbott, Ms Diane

  Corbett, Robin

  Adams, Allen (Paisley N)

  Cousins, Jim

  Anderson, Donald

  Cox, Tom

  Archer, Rt Hon Peter

  Crowther, Stan

  Armstrong, Hilary

  Cryer, Bob

  Ashley, Rt Hon Jack

  Cummings, John

  Ashton, Joe

  Cunliffe, Lawrence

  Banks, Tony (Newham NW)

  Cunningham, Dr John

  Barnes, Harry (Derbyshire NE)

  Dalyell, Tam

  Barron, Kevin

  Darling, Alistair

  Battle, John

  Davies, Rt Hon Denzil (Llanelli)

  Beckett, Margaret

  Davies, Ron (Caerphilly)

  Bell, Stuart

  Davis, Terry (B'ham Hodge H'l)

  Benn, Rt Hon Tony

  Dixon, Don

  Bermingham, Gerald

  Dobson, Frank

  Bidwell, Sydney

  Doran, Frank

  Boateng, Paul

  Douglas, Dick

  Boyes, Roland

  Duffy, A. E. P.

  Bradley, Keith

  Dunnachie, Jimmy

  Bray, Dr Jeremy

  Dunwoody, Hon Mrs Gwyneth

  Brown, Gordon (D'mline E)

  Eadie, Alexander

  Brown, Nicholas (Newcastle E)

  Eastham, Ken

  Bruce, Malcolm (Gordon)

  Evans, John (St Helens N)

  Buchan, Norman

  Ewing, Harry (Falkirk E)

  Callaghan, Jim

  Ewing, Mrs Margaret (Moray)

  Campbell, Menzies (Fife NE)

  Fatchett, Derek

  Campbell, Ron (Blyth Valley)

  Fearn, Ronald

  Campbell-Savours, D. N.

  Field, Frank (Birkenhead)

  Canavan, Dennis

  Fields, Terry (L'pool B G'n)

  Carlile, Alex (Mont'g)

  Fisher, Mark

  Cartwright, John

  Flannery, Martin

  Clark, Dr David (S Shields)

  Flynn, Paul

  Clarke, Tom (Monklands W)

  Foot, Rt Hon Michael

  Clay, Bob

  Foster, Derek

  Clelland, David

  Fraser, John

  Clwyd, Mrs Ann

  Fyfe, Maria

  Cohen, Harry

  Garrett, John (Norwich South)

  Coleman, Donald

  Garrett, Ted (Wallsend)

  Cook, Frank (Stockton N)

  George, Bruce

  Cook, Robin (Livingston)

  Gilbert, Rt Hon Dr John

  1056

  Godman, Dr Norman A.

  Moonie, Dr Lewis

  Golding, Mrs Llin

  Morgan, Rhodri

  Goodhart, Sir Philip

  Morley, Elliott

  Gordon, Mildred

  Morris, Rt Hon J. (Aberavon)

  Gorman, Mrs Teresa

  Morrison, Hon Sir Charles

  Graham, Thomas

  Mowlam, Marjorie

  Grant, Bernie (Tottenham)

  Mullin, Chris

  Griffiths, Nigel (Edinburgh S)

  Murphy, Paul

  Griffiths, Win (Bridgend)

  Nellist, Dave

  Grocott, Bruce

  Oakes, Rt Hon Gordon

  Hardy, Peter

  O'Brien, William

  Harman, Ms Harriet

  O'Neill, Martin

  Hattersley, Rt Hon Roy

  Orme, Rt Hon Stanley

  Haynes, Frank

  Parry, Robert

  Heffer, Eric S.

  Patchett, Terry

  Henderson, Doug

  Pike, Peter L.

  Hicks, Robert (Cornwall SE)

  Powell, Ray (Ogmore)

  Hinchliffe, David

  Primarolo, Dawn

  Hogg, N. (C'nauld & Kilsyth)

  Quin, Ms Joyce

  Holland, Stuart

  Randall, Stuart

  Howarth, George (Knowsley N)

  Redmond, Martin

  Howell, Rt Hon D. (S'heath)

  Rees, Rt Hon Merlyn

  Howells, Geraint

  Reid, Dr John

  Hughes, John (Coventry NE)

  Richardson, Jo

  Hughes, Robert (Aberdeen N)

  Roberts, Allan (Bootle)

  Hughes, Roy (Newport E)

  Robertson, George

  Hughes, Sean (Knowsley S)

  Robinson, Geoffrey

  Hughes, Simon (Southwark)

  Rogers, Allan

  Illsley, Eric

  Rooker, Jeff

  Janner, Greville

  Rowlands, Ted

  John, Brynmor

  Ruddock, Joan

  Jones, Barry (Alyn & Deeside)

  Salmond, Alex

  Jones, Martyn (Clwyd S W)

  Sheldon, Rt Hon Robert

  Kinnock, Rt Hon Neil

  Shore, Rt Hon Peter

  Kirkwood, Archy

  Short, Clare

  Lambie, David

  Skinner, Dennis

  Lamond, James

  Smith, Andrew (Oxford E)

  Leighton, Ron

  Snape, Peter

  Lestor, Joan (Eccles)

  Soley, Clive

  Lewis, Terry

  Spearing, Nigel

  Litherland, Robert

  Steel, Rt Hon David

  Livsey, Richard

  Steinberg, Gerry

  Lofthouse, Geoffrey

  Stott, Roger

  Loyden, Eddie

  Strang, Gavin

  McAllion, John

  Straw, Jack

  McAvoy, Thomas

  Taylor, Matthew (Truro)

  McCartney, Ian

  Thompson, Jack (Wansbeck)

  McFall, John

  Turner, Dennis

  McKay, Allen (Barnsley West)

  Vaz, Keith

  McKelvey, William

  Wall, Pat

  McLeish, Henry

  Walley, Joan

  McNamara, Kevin

  Wareing, Robert N.

  McTaggart, Bob

  Welsh, Andrew (Angus E)

  McWilliam, John

  Welsh, Michael (Doncaster N)

  Madden, Max

  Wigley, Dafydd

  Mahon, Mrs Alice

  Williams, Rt Hon Alan

  Marek, Dr John

  Williams, Alan W. (Carm'then)

  Martin, Michael J. (Springburn)

  Wilson, Brian

  Martlew, Eric

  Wise, Mrs Audrey

  Maxton, John

  Worthington, Tony

  Michael, Alun

  Young, David (Bolton SE)

  Michie, Bill (Sheffield Heeley)

  Michie, Mrs Ray (Arg'l & Bute)

  Tellers for the Ayes:

  Millan, Rt Hon Bruce

  Mr. Robin Maxwell-Hyslop

  Mitchell, Austin (G't Grimsby)

  and Mr. Robert Adley.

  NOES

  Aitken, Jonathan

  Baker, Rt Hon K. (Mole Valley)

  Alexander, Richard

  Baker, Nicholas (Dorset N)

  Alison, Rt Hon Michael

  Baldry, Tony

  Allason, Rupert

  Banks, Robert (Harrogate)

  Amery, Rt Hon Julian

  Batiste, Spencer

  Amess, David

  Bellingham, Henry

  Amos, Alan

  Bennett, Nicholas (Pembroke)

  Arnold, Jacques (Gravesham)

  Bevan, David Gilroy

  Arnold, Tom (Hazel Grove)

  Biffen, Rt Hon John

  Ashby, David

  Biggs-Davison, Sir John

  Aspinwall, Jack

  Blackburn, Dr John G.

  Atkins, Robert

  Blaker, Rt Hon Sir Peter

  Atkinson, David

  Body, Sir Richard

  1057

  Bonsor, Sir Nicholas

  Goodson-Wickes, Dr Charles

  Boswell, Tim

  Gorst, John

  Bottomley, Peter

  Gow, Ian

  Bottomley, Mrs Virginia

  Gower, Sir Raymond

  Bowden, Gerald (Dulwich)

  Grant, Sir Anthony (CambsSW)

  Bowis, John

  Greenway, Harry (Ealing N)

  Boyson, Rt Hon Dr Sir Rhodes

  Greenway, John (Ryedale)

  Braine, Rt Hon Sir Bernard

  Gregory, Conal

  Brandon-Bravo, Martin

  Griffiths, Sir Eldon (Bury St E')

  Brazier, Julian

  Griffiths, Peter (Portsmouth N)

  Bright, Graham

  Grist, Ian

  Brittan, Rt Hon Leon

  Ground, Patrick

  Brooke, Rt Hon Peter

  Grylls, Michael

  Brown, Michael (Brigg & Cl't's)

  Gummer, Rt Hon John Selwyn

  Browne, John (Winchester)

  Hamilton, Hon Archie (Epsom)

  Bruce, Ian (Dorset South)

  Hamilton, Neil (Tatton)

  Buchanan-Smith, Rt Hon Alick

  Hampson, Dr Keith

  Budgen, Nicholas

  Hanley, Jeremy

  Burns, Simon

  Hargreaves, A. (B'ham H'll Gr')

  Burt, Alistair

  Hargreaves, Ken (Hyndburn)

  Butcher, John

  Harris, David

  Butler, Chris

  Hawkins, Christopher

  Butterfill, John

  Hayes, Jerry

  Carlisle, John, (Luton N)

  Hayward, Robert

  Carlisle, Kenneth (Lincoln)

  Heathcoat-Amory, David

  Carrington, Matthew

  Heddle, John

  Carttiss, Michael

  Hicks, Mrs Maureen (Wolv' NE)

  Chalker, Rt Hon Mrs Lynda

  Higgins, Rt Hon Terence L.

  Channon, Rt Hon Paul

  Hill, James

  Chapman, Sydney

  Hind, Kenneth

  Chope, Christopher

  Hogg, Hon Douglas (Gr'th'm)

  Churchill, Mr

  Holt, Richard

  Clark, Hon Alan (Plym'th S'n)

  Hordern, Sir Peter

  Clark, Dr Michael (Rochford)

  Howard, Michael

  Clark, Sir W. (Croydon S)

  Howarth, Alan (Strat'd-on-A)

  Clarke, Rt Hon K. (Rushcliffe)

  Howarth, G. (Cannock & B'wd)

  Colvin, Michael

  Howell, Rt Hon David (G'dford)

  Conway, Derek

  Hughes, Robert G. (Harrow W)

  Coombs, Anthony (Wyre F'rest)

  Hunt, David (Wirral W)

  Coombs, Simon (Swindon)

  Hunt, John (Ravensbourne)

  Cope, John

  Hunter, Andrew

  Couchman, James

  Hurd, Rt Hon Douglas

  Cran, James

  Irvine, Michael

  Currie, Mrs Edwina

  Irving, Charles

  Curry, David

  Jack, Michael

  Davies, Q. (Stamf'd & Spald'g)

  Jackson, Robert

  Davis, David (Boothferry)

  Janman, Tim

  Day, Stephen

  Jessel, Toby

  Devlin, Tim

  Johnson Smith, Sir Geoffrey

  Dickens, Geoffrey

  Jones, Gwilym (Cardiff N)

  Dicks, Terry

  Jones, Robert B (Herts W)

  Dorrell, Stephen

  Jopling, Rt Hon Michael

  Douglas-Hamilton, Lord James

  Kellett-Bowman, Dame Elaine

  Dover, Den

  Key, Robert

  Dunn, Bob

  King, Roger (B'ham N'thfield)

  Durant, Tony

  King, Rt Hon Tom (Bridgwater)

  Eggar, Tim

  Kirkhope, Timothy

  Emery, Sir Peter

  Knapman, Roger

  Evans, David (Welwyn Hatf'd)

  Knight, Greg (Derby North)

  Evennett, David

  Knight, Dame Jill (Edgbaston)

  Fallon, Michael

  Knowles, Michael

  Farr, Sir John

  Lamont, Rt Hon Norman

  Favell, Tony

  Lang, Ian

  Fenner, Dame Peggy

  Latham, Michael

  Field, Barry (Isle of Wight)

  Lawrence, Ivan

  Finsberg, Sir Geoffrey

  Lawson, Rt Hon Nigel

  Fookes, Miss Janet

  Lee, John (Pendle)

  Forman, Nigel

  Leigh, Edward (Gainsbor'gh)

  Forsyth, Michael (Stirling)

  Lennox-Boyd, Hon Mark

  Forth, Eric

  Lester, Jim (Broxtowe)

  Fowler, Rt Hon Norman

  Lightbown, David

  Fox, Sir Marcus

  Lilley, Peter

  Franks, Cecil

  Lloyd, Sir Ian (Havant)

  Freeman, Roger

  Lloyd, Peter (Fareham)

  French, Douglas

  Lord, Michael

  Fry, Peter

  Luce, Rt Hon Richard

  Gale, Roger

  Lyell, Sir Nicholas

  Gardiner, George

  McCrindle, Robert

  Gill, Christopher

  Macfarlane, Sir Neil

  Goodlad, Alastair

  MacKay, Andrew (E Berkshire)

  1058

  Maclean, David

  Shephard, Mrs G. (Norfolk SW)

  McLoughlin, Patrick

  Shepherd, Colin (Hereford)

  McNair-Wilson, P. (New Forest)

  Shersby, Michael

  Major, Rt Hon John

  Sims, Roger

  Mans, Keith

  Skeet, Sir Trevor

  Maples, John

  Smith, Sir Dudley (Warwick)

  Marland, Paul

  Smith, Tim (Beaconsfield)

  Marlow, Tony

  Soames, Hon Nicholas

  Marshall, John (Hendon S)

  Speed, Keith

  Marshall, Michael (Arundel)

  Spicer, Sir Jim (Dorset W)

  Martin, David (Portsmouth S)

  Spicer, Michael (S Worcs)

  Mates, Michael

  Squire, Robin

  Maude, Hon Francis

  Stanbrook, Ivor

  Mawhinney, Dr Brian

  Stanley, Rt Hon John

  Mayhew, Rt Hon Sir Patrick

  Steen, Anthony

  Mellor, David

  Stern, Michael

  Miller, Hal

  Stevens, Lewis

  Mills, Iain

  Stewart, Allan (Eastwood)

  Mitchell, Andrew (Gedling)

  Stewart, Andy (Sherwood)

  Mitchell, David (Hants NW)

  Stewart, Ian (Hertfordshire N)

  Moate, Roger

  Stokes, John

  Monro, Sir Hector

  Stradling Thomas, Sir John

  Montgomery, Sir Fergus

  Sumberg, David

  Moore, Rt Hon John

  Summerson, Hugo

  Morris, M (N'hampton S)

  Tapsell, Sir Peter

  Morrison, Hon P (Chester)

  Taylor, Ian (Esher)

  Moss, Malcolm

  Taylor, John M (Solihull)

  Moynihan, Hon Colin

  Taylor, Teddy (S'end E)

  Neale, Gerrard

  Tebbit, Rt Hon Norman

  Needham, Richard

  Thatcher, Rt Hon Margaret

  Nelson, Anthony

  Thompson, D. (Calder Valley)

  Neubert, Michael

  Thompson, Patrick (Norwich N)

  Newton, Rt Hon Tony

  Thorne, Neil

  Nicholls, Patrick

  Thornton, Malcolm

  Nicholson, David (Taunton)

  Thurnham, Peter

  Nicholson, Emma (Devon West)

  Townend, John (Bridlington)

  Onslow, Rt Hon Cranley

  Townsend, Cyril D. (B'heath)

  Oppenheim, Phillip

  Tracey, Richard

  Page, Richard

  Tredinnick, David

  Paice, James

  Trippier, David

  Parkinson, Rt Hon Cecil

  Trotter, Neville

  Patnick, Irvine

  Twinn, Dr Ian

  Patten, Chris (Bath)

  Vaughan, Sir Gerard

  Patten, John (Oxford W)

  Waddington, Rt Hon David

  Pattie, Rt Hon Sir Geoffrey

  Wakeham, Rt Hon John

  Pawsey, James

  Waldegrave, Hon William

  Peacock, Mrs Elizabeth

  Walden, George

  Porter, Barry (Wirral S)

  Walker, Bill (T'side North)

  Porter, David (Waveney)

  Walker, Rt Hon P. (W'cester)

  Portillo, Michael

  Waller, Gary

  Powell, William (Corby)

  Walters, Dennis

  Price, Sir David

  Ward, John

  Raffan, Keith

  Wardle, Charles (Bexhill)

  Raison, Rt Hon Timothy

  Warren, Kenneth

  Rathbone, Tim

  Watts, John

  Renton, Tim

  Wells, Bowen

  Rhodes James, Robert

  Wheeler, John

  Riddick, Graham

  Whitney, Ray

  Ridley, Rt Hon Nicholas

  Widdecombe, Ann

  Ridsdale, Sir Julian

  Wiggin, Jerry

  Rifkind, Rt Hon Malcolm

  Wilkinson, John

  Roberts, Wyn (Conwy)

  Wilshire, David

  Roe, Mrs Marion

  Winterton, Mrs Ann

  Rossi, Sir Hugh

  Wolfson, Mark

  Rost, Peter

  Wood, Timothy

  Rowe, Andrew

  Woodcock, Mike

  Rumbold, Mrs Angela

  Yeo, Tim

  Ryder, Richard

  Young, Sir George (Acton)

  Sackville, Hon Tom

  Younger, Rt Hon George

  Sainsbury, Hon Tim

  Sayeed, Jonathan

  Tellers for the Noes:

  Scott, Nicholas

  Mr. Robert Boscawen and

  Shaw, David (Dover)

  Mr. Tristan Garel-Jones

  Shelton, William (Streatham)

  Amendment accordingly negatived.
  It being after Eight o'clock, MR. DEPUTY SPEAKER proceeded to put forthwith the Question on amendments moved by a member of the Government up to the end of clause 81 and new clause 15.

  OCCUPIED HEREDITAMENTS: LIABILITY
    Schedule 4

      NON-DOMESTIC RATING: EXCEPTION
      Amendment made: No. 63, in page 94, line 1, leave out sub-paragraph (5) and insert—
      '(5) Regulations under sub-paragraph (1) above in their application to a particular financial year (including regulations amending or revoking others) shall not be effective unless they come into force before 1 January in the preceding financial year.'.—[Mr. Howard.]

    Schedule 5

      NON-DOMESTIC RATING: VALUATION
      Amendments made: No. 11, in page 94, line 22, leave out 'less than 51p' and insert '50p or less'.
      No. 12, in page 95, line 34, leave out 'less than 51p' and insert '50p or less'.—[Mr. Howard.]

    Schedule 6

      NON-DOMESTIC RATING: MULTIPLIERS
      Amendments made: No. 13, in page 95, line 47, leave out 'one decimal place' and insert 'three decimal places'.
      No. 179, in page 96, line 17, at end add
      '; but if the Treasury so provide by order in relation to the year concerned, B is a figure which is less than that index and which is specified in (or calculated in a manner specified in) the order.'.
      No. 180, in page 96, line 39, leave out from 'as' to end of line 40 and insert 'he determines'.
      No. 14, in page 96, line 42, leave out from beginning of line to end of line 46 and insert
      'three decimal places only—

      (a) adding one thousandth where (apart from this sub-paragraph) there would be more than five ten-thousandths, and

      (b) ignoring the ten-thousandths where (apart from this sub-paragraph) there would be five, or less than five, ten-thousandths.'.

      No. 181, in page 96, line 46, at end insert—
      '(10) The power to make an order under sub-paragraph (3) above shall be exercisable by statutory instrument.
      (11) An order under sub-paragraph (3) above in its application to a particular financial year (including an order amending or revoking another) shall not be effective unless it is approved by resolution of the House of Commons before the approval by that House of the revenue support grant report for the year or before 1 March in the preceding financial year (whichever is earlier).'
      No. 182, in page 97, line 2, after 'contain', insert '(a)'.
      No. 183, in page 97, line 3, at end insert
      ',and

      (b) the date determined by him under paragraph 5(8) above for the purpose of making the estimates.

      (3) A calculation under sub-paragraph (1) above is invalid unless one or both of the following conditions is fulfilled—

      (a) it is made after the revenue support grant report for the year has been approved by resolution of the House of Commons;

      (b) it is made on or after 1 March in the preceding financial year.

      (4) A calculation under sub-paragraph (1) above is invalid if made at a time when an order under paragraph 5(3) above which is effective in relation to the year has not come into force.'.
      No. 15, in page 97, line 11, leave out 'one decimal place' and insert 'three decimal places'.
      No. 184, in page 97, line 23, at end insert—
      '(3A) An order may be made under paragraph 5(3) above in relation to a financial year beginning in or after 1991 even if a multiplier is or may be specified for the year under paragraph 7 above.'.
      No. 16, in page 97, line 32, leave out 'one decimal place' and insert 'three decimal places'.
      No. 64, in page 97, line 40, leave out sub-paragraph (4) and insert—
      '(4) An order under sub-paragraph (3) above in its application to a particular financial year (including an order amending or revoking another) shall not be effective unless;it comes into force before 1 January in the preceding financial year.'.
      No. 72, in page 98, line 20, leave out 'expiry' and insert 'end'.—[Mr. Howard.]

    Clause 51

      NON-DOMESTIC RATING POOL
      Amendment made: No. 104, in page 28, line 24, leave out
      'establishment and maintenance of the non-domestic rating pool'
      and insert
      'keeping of non-domestic rating accounts, and for sums to be paid to and by the Secretary of State'.—[Mr. Howard.]

    Schedule 7
      NON-DOMESTIC RATING POOL
      Amendments made: No. 110, in page 98, line 25, leave out from beginning to end of line 35 and insert—
      NON-DOMESTIC RATING POOL
        'NON-DOMESTIC RATING: POOLING PART I

          NON-DOMESTIC RATING ACCOUNTS
          The accounts
          1.—(1) In accordance with this Schedule the Secretary of State shall keep for each chargeable financial year an account (to be called a non-domestic rating account).
          (2) The Secretary of State—

          (a) shall keep each account in such form as the Treasury may direct, and

          (b) shall at such time as the Treasury may direct send copies of each account to the Comptroller and Auditor General.'

          No. 174, in page 98, line 37, leave out 'accounts' and insert 'account'.
          No. 175, in page 98, line 38, leave out 'accounts' and insert 'account'.
          No. 176, in page 98, line 40, leave out from beginning to end of line 9 on page 99 and insert—
          'Credits and debits
          2.—(l) For each chargeable financial year the following shall be credited (as items of account) to the account kept for the year—

          (a) sums received by the Secretary of State in the year under section 46 above,

          (b) sums received by him in the year under regulations made under section 50(2) above, and

          (c) sums received by him in the year under paragraph 5 below.

          (2) For each chargeable financial year the following shall be debited (as items of account) to the account kept for the year—

          (a) payments made by the Secretary of State in the year under paragraph 5(10) below or under regulations made under paragraph 6(4) below, and

          (b) payments made by him in the year under paragraph 8, 11 or 12 below (as the case may be).

          3.(1) As soon as is reasonably practicable after the end of each chargeable financial year the Secretary of State shall calculate the following—

          (a) the aggregate of the items of account credited to the account kept for the year, and

          (b) the aggregate of the items of account debited to the account kept for the year.

          (2) If the aggregate mentioned in sub-paragraph (1)(a) above exceeds that mentioned in sub-paragraph (1)(b) above, a sum equal to the excess shall be—

          (a) debited (as an item of account) to the account kept for the year, and

          (b) credited (as an item of account) to the account kept for next financial year.

          (3) If the aggregate mentioned in sub-paragraph (1)(b) above exceeds that mentioned in sub-paragraph (1)(a) above, a sum equal to the excess shall be—

          (a) credited (as an item of account) to the account kept for the year, and

          (b) debited (as an item of account) to the account kept for the next financial year.

        CONTRIBUTION'
        No. 65, in page 99, line 29, leave out sub-paragraph (5) and insert—
        '(5) Regulations under this paragraph in their application to a particular financial year (including regulations amending or revoking others) shall not be effective unless they come into force before 1 January in the preceding financial year.'.
        No. 111, in page 100, line 12, leave out 'from the pool' and insert
        'under the relevant provisions (within the meaning given by paragraph 6(7) below)'.
        No. 112, in page 100, line 14, leave out 'from the pool' and insert
        'under the relevant provisions'.
        No. 113, in page 100, line 22, leave out 'be liable to'.
        No. 114, in page 100, line 23, leave out 'by' and insert 'at'.
        No. 115, in page 100, line 25, leave out 'be liable to'.
        No. 116, in page 100, line 26 [Schedule 7], at end insert
        '; and the amount shall be at such time as he decides with the Treasury's approval.'
        No. 117, in page 100, line 50, at end insert—
        '(7) For the purposes of paragraph 5(7) above the relevant provisions are—

        (a)paragraph 5(10) above.

        (b) regulations made under sub-paragraph (4) above, and

        (c) paragraphs 8, 11 and 12 below.

        Recovery
        6A. Where an amount has become payable under any provision of or made under this Part of this Schedule, and it has not been paid, it shall be recoverable in a court of competent jurisdiction.'.
        No. 185, in page 101, line 1, leave out from beginning to end of line 15 and insert—

        DISTRIBUTION
        Distributable amount
        7.—(1) Before a chargeable financial year begins the Secretary of State shall estimate—

        (a) the aggregate of the items of account which will be credited to the account kept for the year, and

        (b) the aggregate of the items of account which will be debited to the account kept for the year under paragraphs 2(2)(a) and 3(3)(b) above.

        (2) In making any estimate under sub-paragraph (1) above the Secretary of State may make such assumptions as he sees fit.
        (3) If the aggregate estimated under sub-paragraph (1)(a) above exceeds the aggregate estimated under sub-paragraph (1)(b) above the Secretary of State shall calculate the amount equal to the difference.'.
        No. 186, in page 101, line 22 leave out from beginning to second 'the' in line 23 and insert
        'If the revenue support grant report for a chargeable financial year is approved by resolution of the House of Commons, as soon as is reasonably practicable after the report is approved'.
        No. 17, in page 101, line 40, leave out 'less than £51' and insert '£50 or less'.
        No. 187, in page 102 line 13, leave out from beginning to 'the' in line 15 and insert
        'If the revenue support grant report for a chargeable financial year is approved by resolution of the House of Commons, as soon as is reasonably practicable after the report is approved'.
        No. 18, in page 102, line 33, leave out 'less than £51' and insert '£50 or less'.
        No. 188, in page 102, line 44, leave out from beginning to third 'the' in line 45 and insert 'If the revenue support grant report for the year is approved by resolution of the House of Commons, as soon as is reasonably practicable after the report is approved'.
        No. 119, in page 103, line 49, at end insert—
        'Recovery
        15. Where an amount has become payable under any provision of this Part of this Schedule, and it has not been paid, it shall be recoverable in a court of competent jurisdiction.'.—[Mr. Howard.]

  Schedule 8

    NON-DOMESTIC RATING: ADMINISTRATION
    Amendments made: No. 55, in page 104, line 42, leave out paragraph 3 and insert—
    '3.—(1) This paragraph applies to any sum which has become payable to a charging authority under any provision included under paragraph 2 above and has not been paid.
    (2) Regulations under this Schedule may include, as regards the recovery of such a sum, provison—

    (a) allowing a liability order to be made:

    (b) allowing distress and sale of goods:

    (c) allowing commitment to prison.

    (3) The regulations may include provision equivalent to any included under Parts II and VII of Schedule (Community charges: enforcement) above subject to any modifications the Secretary of State thinks fit.
    (4) The regulations may include provision that—

    (a) a sum to which this paragraph applies shall be recoverable in a court of competent jurisdiction, and

    (b) such method of recovery shall be available as an alternative to any method included under sub-paragraph (2) above

    3A.—This paragraph applies to—

    (a) any sum which has become payable to the Secretary of State under any provision included under paragraph 2 above and has not been paid;

    (b) any sum which has become payable (by way of repayment) to a person other than a charging authority or the Secretary of State under any provision included under paragraph 2 above and has not been paid.

    (2) Regulations under this Schedule may include provision that such a sum shall be recoverable in a court of competent jurisdiction.'.
    No 33, in page 105, line 29, leave out '(g)' and insert '(f)'.—[Mr. Howard.]

  Clause 54

    HEREDITAMENTS
    Amendment made: No. 68, in page 29, line 29, leave out from beginning to end of line 32 and insert—

    1063

    '(a) a county council.

    (b) a district council.

    (c) a London borough council.

    (d) the Common Council'.—[Mr. Howard.]

  Clause 56
    DOMESTIC PROPERTY
    Amendment made: No. 195, in page 31, line 9, leave out 'purposes' and insert 'purpose'.—[Mr. Howard.]
  Schedule 9

    RESIDUAL RATING MULTIPLIERS
    Amendment made: No. 19, in page 107, line 26, leave out from 'to' to end of line 31 and insert
    `three decimal places only—

    (a) adding one thousandth where (apart from this sub-paragraph) there would be more than five ten-thousandths, and

    (b) ignoring the ten-thousandths where (apart from this sub-paragraph) there would be five, or less than five, ten-thousandths.'—[Mr. Howard.]

  Schedule 10
    RESIDUAL RATING: STANDARD AMOUNTS
    Amendment made: No. 20, in page 108, line 21, leave out 'less than 51p' and insert '50p or less'.—[Mr. Howard.]
  Schedule 11

    RESIDUAL RATING: ADMINISTRATION
    Amendment made: No. 56, in page 109, line 14, leave out paragraph 3 and insert—
    '3.—(1) This paragraph applies to any sum which has become payable to a charging authority under any provision included under paragraph 2 above and has not been paid.
    (2) Regulations under this Schedule may include, as regards the recovery of such a sum, provision—

    (a) allowing a liability order to be made;

    (b) requiring information to be given;

    (c) allowing attachment of earnings;

    (d) allowing distress and sale of goods;

    (e) allowing commitment to prison;

    (f) creating associated offences.

    (3) The regulations may include provision equivalent to any included under Parts II and VII of Schedule (Community charges: enforcement) above subject to any modifications the Secretary of State thinks fit.
    3A.—(1) This paragraph applies to any sum which has become payable (by way of repayment) to a person other than a charging authority under any provision included under paragraph 2 above and has not been paid.
    (2) Regulations under this Schedule may include provision that such a sum shall be recoverable in a court of competent jurisdiction.'.
    No. 34, in page 109, line 47, leave out '(g)' and insert '(f)'.—[Mr. Howard.]

  Clause 73

    HEREDITAMENTS AND DOMESTIC PROPERTY
    Amendment made: No. 69, in page 40, line 8, leave out from beginning to end of line 11 and insert—

    '(a) a county council.

    (b) a district council.

    (c) London borough council,

    (d) the Common Council.'.—[Mr. Howard.]

  Clause 77

    GENERAL AND SPECIAL EXPENSES
    Amendments made: No. 24, in page 42, line 22, at end insert 'and'.
    No. 25, in page 42, line 23, leave out from 'Authority' to end of line 24.—[Mr. Howard.]

  New clause 15

    PAYMENTS TO AND FROM AUTHORITIES
    '(1) The Secretary of State may make regulations in relation to any case where—

    (a) he is liable to pay to a receiving authority at any time an amount or amounts under one or more of the first relevant provisions, and

    (b) the authority is liable to pay to him at the same time an amount or amounts under one or more of the second relevant provisions.

    (2) The regulations may provide that if the total of the amount or amounts mentioned in subsection (1)(a) above exceeds the total of the amount or amounts mentioned in subsection (1)(b) above, he may set off the latter in paying the former.
    (3) The regulations may provide that if the total of the amount or amounts mentioned in subsection (1)(b) above exceeds the total of the amount or amounts mentioned in subsection (1)(a) above, the authority shall set off the latter in paying the former.
    (4) The regulations may provide that if the total of the amount or amounts mentioned in subsection (1)(a) above is the same as the total of the amount or amounts mentioned in subsection (1)(b) above no payment need be made in respect of the former or the latter.
    (5) Without prejudice to section 136(2) below, the regulations may include provision—

    (a) treating any liability mentioned in subsection (1) above as discharged accordingly;

    (b) requiring prescribed provisions of this Act (such as sections 85(2) and 92(2)) to be read subject to the regulations;

    (c) requiring prescribed provisions of this Act (such as paragraph 2 of Schedule 7) to be read as if references to sums received or payments made were to sums or payments which would have been received or made apart from the regulations.

    (6) Each of the following is a receiving authority—

    (a) a charging authority, and

    (b) in the application of this section to Wales, a county council.

    (7) The first relevant provisions are sections 89 and 92 above, paragraph 5(10) of Schedule 7 below, regulations made under paragraph 6(4) of that Schedule, and paragraphs 8, 11 and 12 of that Schedule.
    (8) The second relevant provisions are section 89 above and paragraph 5 of Schedule 7 below.'.—[Mr. Howard.]
    Brought up, read the First and Second time, and added to the Bill.

  Clause 84

    REVENUE SUPPORT GRANT
    Mr. Jeff Rooker: I beg to move amendment No. 173, in page 46, line 6, at end insert and (c) shall take into account—

    (i) the latest information available to him as to the aggregate of all authorities' expenditure.

    (ii) any probable fluctuation in the demand for services giving rise to additional expenditure,

    1065
    so far as the fluctuation is attributable to circumstances which are not under the control of the local authorities;

    (iii) the need for developing those services and the extent to which, having regard to general economic conditions, it is reasonable to develop them; and

    (iv) the current level of prices, costs and remuneration and any future variation in that level which in the opinion of the Secretary of State will result from decisions which appear to him to be final and which will have the effect of increasing or decreasing any particular prices, costs or remuneration.'.

    Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to consider the following amendments: No. 156, in clause 86, page 46, leave out lines 34 to 41 and insert—
    '86 (1) The Secretary of State shall—

    (a) determine in relation to each charging and precepting authority notional expenditure assessments having regard to their functions and needs in accordance with principles to be applied to all authorities, and

    (b) make report containing the basis on which he proposes to distribute among receiving authorities those amounts of revenue support grant which fall to be paid to such authorities under this Part, being a basis which has regard to the notional expenditure assessment determined under subsection (1)(a) above.

    (2) Before determining the notional expenditure assessment or making the report under subsection (1) above, the Secretary of State shall consult such associations of local authorities as appear to him to be concerned and with any local authority with whom consultation appears to him to be desirable.
    (3) This report shall be laid before the House of Commons and shall specify the principles on which the notional expenditure assessments and basis of distribution are determined'.
    No. 268, in page 46, line 37, at end insert
    'after consultation with receiving and notifiable authorities concerned'.
    Mr. Rooker: Amendments Nos. 173 and 156 are both official Opposition amendments replicating amendments that we dealt with in Committee. In Committee the amendments were numbered 751 and 756. We make no apology for returning to the same subject in precise form. Under the problems of the guillotine, we wanted to have as general a debate as possible on the proposed English grant system.
    In one and three quarters hours of this long five-day report stage, we are dealing with no less than 50 per cent. of local government revenue in England. That amounts to some £14 billion or £15 billion, give or take the odd £100 million in case I am accused of getting the figures wrong. That is an enormous sum of money and we are dealing with the way in which that is to be distributed by the Government.
    8.15 pm
    The Government have produced some Yellow Papers. One of those papers was on the new grant system. It is worth informing the House of what the Government said. I will not read out all the proposals but the idea that the new system will be simpler is a main feature, as is the fact that the method of distributing the grant will be more stable from year to year and that there will be full compensation for differences between areas so that local
    1066
    services can be provided on a common basis. In Committee the Minister constantly referred to a standard level of service. I know that some of the proposals in the documents have now changed but I understand that the grant will not be split between tiers of authority.
    At one time in Committee, we dealt with a model poll tax form. It was mesmerising in its complexity and that is how it will be seen by the poll tax payers and the electorate. We look forward to the modifications and greater sophistication that will be put into that form and the proposals so that people can see the connection between the grant that the Government allow to local government, the effect of the business rate and the way in which those two figures will be manipulated in order to cause tremendous damage to the poll tax payments that citizens will have to make.
    The Bill says nothing about how the grant system will operate. It says nothing about the arrangements for distribution of the massive sum of £14 billion or £15 billion. It simply sets out procedures for payment. The Department of the Environment has been dragged to court so often by local authorities to get the judges to review ministerial decisions that one might think that the Bill has been drafted without information about the arrangements for distribution or about how the grant system will operate so as to make the idea of a judicial review a non-starter. If that is the case, we are heading for real problems in local government.
    The absence of detail is of major concern to all sections of local government, of whatever political complexion. One of the Yellow Papers sent out in the months before our debates dealt with the way in which a system might work. However, the powers that the Secretary of State is taking in the Bill will enable him to cobble together any system he chooses. That causes a problem for the House because we will not be able to hold Ministers truly accountable. The number of clauses, subsections and paragraphs of the Bill enabling the Secretary of State to do things as he sees fit ought to make one's hair curl. It will if one cares about parliamentary democracy and holding Ministers to account in a free and democratic Parliament, which will be extremely difficult given the way that the Bill is drafted.
    One of the key points made by Ministers—I have heard it often in interviews on radio and television—when they have been explaining the poll tax is that it is only a quarter of the money. All the other money comes from progressive taxation. I am not going to go into arguments about whether it is progressive; it is slightly progressive. The broad general figures are that half comes in Government grants and a quarter comes from the business sector. So that is a quarter, a quarter and a half.
    At the moment, of course, Government grants do not represent one half of local authority spending. I do not want to open up a fresh debate, but simply to put this on the record. In 1980–81, Government grants were 61 per cent. of local government spending. In 1988–89, the current year, they are 46 per cent. There is no need for the Minister to make a speech saying that I have missed out a decimal point, because I am using round figures. It is 46 per cent.—that is, less than one half.
    If the grant to local government had been kept at the level it was at when the Government came to power, 61 per cent., it would this year, in cash terms, be some £4·4 billion higher. Put in terms that we can all understand, it is a poll tax of £122. That is the effect of the Government's

    1067
    manipulation of what we can call rate support grant, or the new revenue support grant. It is useful to keep the initials the same, if only for those who want to use the jargon and initials all the time, which I try not to do. At any rate, it is the RSG, the amount of grant that the Government pay.
    If the poll tax system had been in operation when this Government came to power, leaving aside all other changes in local government expenditure, changes in the business rate and what have you, poll tax payers today would be able to say that £122 of their poll tax was additional poll tax solely because the Government had cut the grants to local government from 61 per cent. to 46 per cent. That is the effect of what has happened since the Government came to power.
    It might seem that we are looking at something that is very technical—Government grants—as though the Government were doing a favour to local government and paying out a lot of money. But it is the way that that is paid out and the proportion of the total amount that is important. A slight variation in that by the Government could have disastrous effects on the amount of poll tax that individuals will be required to pay. I will come back to some of the weird ways in which that can work in a moment.
    To paraphrase amendment No. 173, this simply requires the Secretary of State, before setting the amount of revenue support grant to be made available, to take account of the likely level of expenditure to be incurred by local authorities. This means, of course, that we would like the Secretary of State to think about it beforehand, and that the House and local government should be able to share his—or, after the reshuffle, presumably, her—thoughts.
    It is tempting to believe that the Government do not wish to forecast the likely levels of local authority expenditure in the chargeable financial year in order to conceal the link between Government grant and the levels of poll tax. Quite clearly, the Government are not going to make a big thing of this connection when they want to change the levels of grant. If they did so it would show that the Government are keeping authorities' needs assessments artificially low by what is called the unallocated margin—that is, the gap between the needs assessment and the public expenditure provision. Secondly, it would conceal the reductions in the grant support, which I have just touched on. So the specific purpose of amendment No. 173 is to get the Secretary of State to take account of likely levels of expenditure.
    Amendment No. 156 has a slightly different purpose. It requires the Secretary of State to carry out some consultation on the basis on which he proposes to distribute the grant. The amendment would change the guidelines that are in the Bill and make them mandatory for the new needs assessments. The guidelines, briefly, relate to consultation and common principles for all authorities having regard to their functions, because county councils have different functions from district councils, the metropolitan districts are different from ordinary districts, and there are other councils, such as parish councils. And there would be specification of the principles adopted in the distribution report to the House.
    The existing subsections (1) and (2) in the Bill, which would be replaced by amendment No. 156, would allow the Secretary of State to prepare a distribution report without consultation and to produce a report which described only the outline of the method of grant
    1068
    distribution without being clear as to the principles by which the relative needs of authorities have been assessed. This is a crucial aspect, because the needs assessments of local authorities are not scientifically precise and are definitely not politcally neutral tools. To treat them as such is to deny the possibility that local councils may have genuine differences with central Government over the level of local needs.
    I do not want, and I do not think that any of my hon. Friends want, all local councils to be the same. The purpose of local government is variety and choice. I would like the Minister, even though he has to use the term "the standard level of service", to share with us some of his thoughts about local government and variety. He has not done that since his appointment. If only he would say that there ought to be differences between local councils at the same level that would be helpful. I am talking about the same kind of councils, because a district council in Cornwall will operate differently and have different needs
    and maybe different priorities from a district council in Cumbria. We do not want all councils to be the same. If we did, we might just as well scrub the whole idea and leave it all to Whitehall. We know that that is the natural progression of this Bill, but we do not start from the same premise as the Minister and we do not want them all to be the same.
    We dealt with the needs assessment aspect in Committee and I make no apology for coming back to it on Report. It is important what factors are taken into account. We understand that the system will be simpler. That is what was said in the Yellow Paper. Any system that is simple will by definition be fairly crude. When dealing with such a large sum of money and a population the size this country's is, it is inevitable. We understand from the question and answer section of the Conservative research department document "Politics Today", edition No. 11, produced last August—and I do not think that the position has changed—that
    "The needs assessment calculated for each local authority area would follow similar principles to those used for the Grant Related Expenditure Assessments (GRE's) under block grant, but would be considerably simplified. Only six criteria will be employed."
    That is, there would be only six criteria for all the kinds of work that local government has to do.
    We spent some time in Committee on one of the possible criteria—at least, we assume that it is a possible criteria—that of population. How is the population of each local authority to be measured? Will it be the census figures provided by the census office and updated from time to time by the Registrar General? Will it be taken from the poll tax register? One point is crucial: will it be the day-time as opposed to the night-time population? The day-time population of the local authority area in which the House is situated is considerably more than the night-time population. The hundreds of thousands who travel to work in the Westminster area mean that the local authority has to provide services which must be taken into account. At some time during the passage of the Bill we would like a statement about how the population will be counted. It is crucial not just for the needs element but because of the previous debate. I apologise to hon. Members because that was the only debate that I missed from start to finish.
    8.30 pm
    Mr. Butterfill: The hon. Gentleman will recall that in Committee we said that there was a problem for local authorities in holiday areas where the summer population was much larger than the winter population. The hon. Member for Caernarfon (Mr. Wigley) also made that point. It is a serious point.
    Mr. Rooker: The hon. Gentleman is right. The next one on my list was the seasonal population. It is a crucial element.
    The Government have to make up their mind. I presume that this will not be kept as a mystery until the last minute. Local government needs to know. The people who make the plans need to know. The proposal is that a year from now, after the House has dealt with umpteen sets of regulations, the register for England will start the process, and two years from now, assuming that the Bill goes through, the people of England will be paying poll tax. The budgets will have been calculated. Local government budgets are not fixed at a few hours', a few days' or a few weeks' notice. They are fixed months in advance. Therefore, it is crucial to know how the population will be counted.
    At the second or third sitting in Committee I asked the Minister about this and he answered in the classic ministerial phrase. I think his words were, "It is under active consideration." The Committee stage started in January and that was said at the second or third sitting. As it is nearly the end of April, I think we are owed an answer on the population aspect.
    Mr. Wigley: I well remember the numerous debates we had in Committee. Does the hon. Gentleman recall the difficulty we had in getting an indication of the Government's thinking, not just on the seasonal population but on the population in relation to caravans? I welcome the changes which the Government have made about caravans. Nevertheless, the Government must ensure that local authorities have grants to meet the additional cost associated with caravans or that part of the population formula ensures that adequate resources are available.
    Mr. Rooker: That is a crucial point. It is obvious that all the points that should be made cannot be made before 10 o'clock. I shall make just one further point before I finish because many hon. Members, some of whom have not spoken this week, are keen to make a contribution.
    My final point relates to the gearing effect which, I presume, was raised in the previous debate. If the population does not learn anything about local government expenditure, it will soon know what the gearing effect means. I attempted to explain it—inadequately, I suspect—at a public meeting in my constituency last Sunday afternoon. I am pleased that my constituents got the message about the effect of the manipulation of the Government grant on the poll tax. We have been told that a 1 per cent. shift in one part of the calculation may require them to pay 4 per cent. more in poll tax. I am using round figures.
    If a local authority wishes to spend 1 per cent. more than the Government say it should, and the Government hold level the grant and the business rate, then to collect that 1 per cent., the local authority will have to add 4 per cent. to the poll tax.
    Mr. Leigh: It sounds like a good idea.
    Mr. Rooker: The hon. Gentleman says that it sounds like a good idea. It is designed to make sure that people scream at councils, "The gearing, watch the gearing." It will become a slogan during elections—"Don't gear us up." That will be the phrase that will be used. [Interruption.] The Minister says that that is a good one. It would be all right if it applied equally all over the country and there was logicality about it, but there is not.
    A 1 per cent. change in one part of the calculation will mean a 4 per cent. increase in poll tax on average, or so we have been told. It does not work out like that. In a written answer, the Minister said:
    "It is also the case that for each local authority there should be a 1 per cent. increase in its gross charge for each 1 per cent. increase in its expenditure." [Official Report, 21 October 1987; Vol. 120, c. 819.]
    I may be wrong but the range seems to go from 2·1 per cent. to 4·5 per cent. However, it does not work like that. The use of percentages for gearing is misleading. We need to use cash.
    The purpose of the Government's test of accountability is that a £1 per head increase in expenditure results in a £1 increase in poll tax. That is not a percentage but money. I want to give examples of what happens in money terms for three local authorities. I shall have to stick to my text because this is technical. The gearing effect will result in a given percentage increase in expenditure having a different proportionate affect on the poll tax in different authorities. So the same percentage increase in total expenditure will not necessarily have the same percentage effect on the poll tax.
    For example, if Islington spent at a level of 10 per cent. above its grant-related expenditure, it would be required to levy a poll tax 66 per cent. above that necessary for sticking to its grant-related expenditure. The London borough of Sutton, on the other hand, for spending at 10 per cent. above its grant-related expenditure, would need to levy a poll tax only 37 per cent. higher. In Reigate and Banstead the poll tax would be only 29 per cent. higher.
    It is the level of service provided in relation to the needs assessment which should be the crucial factor in establishing accountability, not a simple £1 per head measure. In the examples I have quoted, none of the authorities can be said to be providing a higher level of service to the community. The needs of each authority as measured by needs assessment per head will differ. They will all be spending 10 per cent. above the Government's fixed level but the gearing effect on the poll tax will vary not by 1 per cent. to 4 per cent. but by 1 per cent. to 6·6 per cent.
    Where is the accountability in that? Where is the communality of purpose and accountability in the gearing effect? The system will be more mysterious and more unfair and will have a disastrous effect on the conduct of local government. People will be bewildered and it will not take them long to begin to say, "Watch the gearing effect." The Minister may think that they will say that to their councillors at election time, but they will not. As they walk to the ballot boxes they will advise their fellow citizens to watch the way in which the Government have manipulated their council's spending and needs and grant. That manipulation will have forced up their council's poll tax unnecessarily.
    If ever there was an example of the need for this Chamber to have a screen with a little laser gun—

    1071
    something more sophisticated than an overhead projector—this is it. We need one to show what happens with the gearing effect. It will not take more than three or four years of the operation of this system under this Government for the poll tax payments under most local authorities to spin out of control exponentially up through the roof into the stratosphere—and all because of small Government manipulations of the grant and the business rate and their consequent effect, through the gearing mechanism, on the poll tax. They will bring total discredit to the Government and the system that they are introducing.
    The Government cannot say that we did not warn them. We have done so every day this week and will go on doing so until next Monday evening. If Conservative Members have any sense—many of them have a private sense of foreboding—they will join us in the Lobby next Monday and chuck out this Bill. That is the only way in which to force the Government to think again. I cannot adequately emphasise the effects of the manipulations of the Government system. We may fail to convince Ministers, but they will reap the consequences.
    Sir George Young: Having supported the Government with enthusiasm in the last Division, I must tell my hon. and learned Friend that we have reached another part of the Bill about which I have some doubts.
    The Government are staking everything on accountability. Time and again it has been maintained that under the new system everyone who gets a bill for more than the national average will know that the reason is the extravagance or inefficiency of his or her council. The Prime Minister has referred to that as the ready reckoner. The theory is that if a person lives in an area in which the standard community charge is above the national average, he can exact retribution from his local authority through the ballot box.
    However, the whole principle is credible only if the Government get the grant system right. The community charge, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) has just said, will raise only one quarter of the sum to be spent. The other three quarters is accounted for by the Government, and that money will be distributed according to some formula. The Government claim that it will be so accurate that each local authority will have to raise only a standard community charge to deliver a standard level of service.
    Any Minister who has been in the Department of the Environment knows that this is moonshine. No one has ever been able to devise a grant regime that accurately reflects the different needs of each local authority. The present regime takes into account about 60 factors—the number of schoolchildren, the number of road miles and so on—and it is for ever being criticised. Every hon. Member can find a reason why the present regime does not do justice to the constituents he represents.
    Some hon. Members represent areas that have a growing population and can argue that the grant is based on historic population figures that are out of date. Some areas were far more badly affected by the storms of last October than others. Some have coastal erosion. Some have a big tourist population, which puts pressure on their expenditure. Some have buildings built of PRC, which costs a lot to put right. Others have a housing stock which, although relatively new, entails much expenditure. Some may have a wholly different debt position. So the argument that No. 2 Marsham street can look at all local
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    authorities and get the grant figure right so that the authorities have only to level the standard community charge is nonsense, and anyone who has ever been in that Department knows it.
    8.45 pm
    The new system will be less fair than the old. Fewer factors will be taken into account under it. At one stage, it was said that there would be only six. I understand that that claim has been withdrawn and the figure will be higher. This is being done because, in theory, the system will be simpler, but local authorities will only too easily be able to claim that their charge is above average because the Government have withdrawn recognition of some pressing local problem.
    At present, one can just about tolerate an unfair grant regime, for a number of reasons. If the Government get it wrong, the consequences are borne at present not only by the domestic ratepayer but by the business community. Secondly, until relatively recently, the poor were insulated against the consequences of the Government getting it wrong because they did not pay rates. The third reason why the present system is more defensible is that what was paid bore some relation—not an exact one—to ability to pay, because it was based on rateable values.
    Under the new regime, these three arguments no longer apply. The consequences of error will be far more serious and the likelihood of error greater. We have heard about the gearing ratio from the hon. Member for Perry Barr. For every 1 per cent. that the Government get it wrong, the local community will have to pay 4 per cent. more. There will not be a contribution from the business community if the Government's grant regime is incorrect.
    Then there will be the inequity of distribution among poll tax payers because everyone will have to pay the same and there will not be the relatively progressive system that there is now. To use a metaphor, there will be more potholes in the road and the car will have fewer springs. The notion that there will be accountability is wrong, because for the first four years the transitional arrangements will exist. Some poll tax payers will have to pay an extra £75 in year one. From years one to four no one will be able to say that his poll tax bears any relationship to his local authority's expenditure because of the transitional provisions. So in the very years when people form their opinion of the new regime, accountability will not be working.
    To find an example of why the Government will have to change the grant regime from one year to the next, I have only to look at my local authority. Last July, it was announced that Ealing council would be rate-capped. That was absolutely right—it was a grossly extravagant authority. The Government came up with a figure that they thought the local authority should spend this year. It implied a reduction in the rates of 44 per cent. We were all looking forward to that sort of reduction, but in February, when the figure was fixed, the Department of the Environment announced that it had new information that was more up to date, and the rates were only going to fall by 23·4 per cent. That was a major change in central Government's perception of what a local authority needed. If that sort of change is possible within a few months, it is perfectly possible that the same magnitude of error can occur in future under the new grant regime.
    Mr. Elliot Morley: In the argument about extravagance, in some ways a good case has been weakened by not conceding that many of local authorities' problems have been due to the changes in the rate support grant over the years. In my county, £53 million has been deducted since 1979 in changes in the rate support grant. That has added 52p in the pound to the average rateable value, which means that Humberside ratepayers pay £78 more a year under the Government changes than they should. The same danger exists with the new system. That was illustrated by the hon. Gentleman's point, but he should concede that the Government have played a role in forcing up rates and there is a danger that they will do the same under this system.
    Sir George Young: I may have saved the hon. Gentleman from making a constituency speech later on.
    My point is that, under the new regime, every hon. Member will be able to make the sort of contribution that the hon. Gentleman has just made and produce plausible reasons why the Government's grant regime has discriminated against his or her local authority. Local councillors will also be able to make that point. Therefore, the argument that the poll tax payer will believe the Government when they say that they have got the grant spot on and that the local authority is over the top because it is extravagant, will be negated at the local level, probably by the Member of Parliament, of whatever party, and almost certainly by local councillors and officers.
    Because there will be good examples of where the Government have got it wrong, the credibility of their case will be shattered. For that reason, if there is a Division at 10 o'clock, I shall be supporting the amendment. The Government's case cannot be maintained unless the grant regime is right and the grant regime will not be right. The amendments try to sketch in some of the detail and we are entitled to that information.
    Mr. Ron Leighton: The level of the poll tax is sensitive to the Government's decisions on grant. As my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) explained, had the level of rate support grant been maintained at its 1981 level of 61 per cent., grant in 1988–89 would have been £4·4 billion extra. He told us that that was equivalent to a poll tax of £122. Instead, over the past eight years, the rate support grant has been constantly reduced until it is now only 46 per cent. The limited point that I want to make about that is that Government grant is unlikely to cover the extra cost of collecting the poll tax or to recognise the extent of the inevitable evasion.
    Using the London borough of Newham as an example, I want to show what a costly administrative nightmare collecting this ugly and unfair tax will be. There will be major public disquiet over the large number of Newham residents who will have to pay more under the poll tax. At 1987–88 expenditure levels, the poll tax would be set at a level £309 per person. The average rates bill per household is currently £518. Therefore, some 88 per cent. of the population of Newham will have to pay more.
    About 45 per cent. of Newham adults live in households with two adults and will have to pay about 19 per cent. extra. But the main concern is for the 68,000 adults—43 per cent. of the borough's adult population—who live in households with three or more adults who will suddenly be faced with considerably larger bills.
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    Newham has a particularly high proportion of large households. Over 27,000 adults—over 17 per cent. of the borough's adult population—live in households of five or more adults. The majority of those large households comprise people of ethnic minority origin. In many cases, they have decided to live in extended families to ease the cost of buying a house. We learn that from building societies such as the Halifax.
    A six-adult household would have its rates increased from an average charge of £518 to a poll tax of £1,854. An ordinary four-adult household—say, a middle-aged couple with children aged 18 and 20—will have an immediate 139 per cent. increase imposed on them, a rise from £518 per annum to £1,236 per annum. The poll tax will hit hardest those who live in larger households. In Newham, that means mainly people of ethnic minority origin.
    Mr. Leigh rose—
    Mr. Leighton: Time is short, so I shall not give way on this occasion, but I look forward to hearing the hon. Gentleman's speech.
    A major part of the nightmare will be the compilation of the register. Currently in Newham, only 70 per cent. of those eligible are on the electoral register. How many of those not on the electoral register will voluntarily register for the poll tax? Who will track them down? The attempt to compile such a register will involve regular canvasses, inspections, information from other authorities and council departments and from other computer systems. That will be extremely complex and onerous and will need a large army of newly employed council snoopers.
    It will be necessary to know how many beds there are in each house and who is sleeping in them. There is a high degree of mobility among the local population. We know that from the annual turnover on the electoral register. Some younger people may move four or five times a year. It will be difficult to establish who is resident and to ascertain responsibility for registration where there are joint or multiple tenancies. The whole exercise will involve a distasteful and massive invasion of privacy.
    It has been estimated that anything up to 15 per cent. of people will not register in order to evade the charge. That will load extra burdens on those who do pay. Will that be recognised by the level of Government grant? I think that we all know the answer to that.
    One certain effect of the Bill will be the huge extra cost of the vast increase in staff that will be needed to produce the register, to collect the tax and to recover debts. As all eligible adults will have to pay the tax, there will be a huge increase in the number of accounts. At the moment, Newham has 57,000 rate accounts. That will increase to 163,000 poll tax and uniform business rate accounts. That is because of the change from houses to people as a base for the tax, and because council tenants will not be able to include poll tax payments in their rent.
    However, matters will be much worse because all payers must be given instalment facilities. In addition, each person must be sent a personal bill. That will increase the number of payment transactions in Newham to between 350,000 and 1·5 million. In other words, there will be an enormous increase in paperwork.
    The council estimates that the number of summonses issued for non-payment will increase from 8,000 to 35,000. There will also be a requirement to collect fines from those

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    who fail to register. That will do a great deal of damage to the council's relations with the public. Extra accounts, valuation, inspection, control, recovery and register staff will be needed. Altogether the council bureaucracy will have to be increased by 160 staff. Apart from the cost, there will be difficulties in recruiting suitably qualified staff with local authorities competing for qualified people. In addition, there will be a need for more computer systems, both hardware and software. At the moment the town hall is bursting at the seams, but extra accommodation will be required.
    How much extra will that cost? Quite apart from the cost of evasion, the cost to Newham of the extra staff, accommodation, computer hardware and software, training and other overheads is put at £2·75 million. That is a heavy and needless burden in order to collect not more, but almost certainly less, revenue.
    Not only is this a grossly unfair tax, it is extremely inefficient and expensive to collect. I ask, without much hope of succeeding, for extra grant to cover those costs.
    9 pm
    Mr. Nicholas Winterton: This is the first time that I have spoken during the Report stage of this very important Bill. It is not that the many hon. Members who have not spoken are not interested in the Bill, but unfortunately, due to the method and system of this House called the guillotine, meaningful debate is not now possible. Many amendments tabled in good faith by hon. Members on both sides of the House do not have the benefit of considered and sensible debate, and I deeply regret that.
    I listened with great interest to the opening speech of the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and I found myself in great sympathy with him. Sadly, I do not think that I can vote for his amendments, but I shall certainly not vote against them, because there is good sense in the hon. Gentleman's argument. Furthermore, irrespective of the precise size of the majority, what happens in this place will be a signal to the other place, which has a valuable role to play in determining the form of the Bill as it eventually reaches the statute book.
    I speak particularly in the interests of the small councils, which are seldom represented in this place—although the hon. Member for Caernarfon (Mr. Wigley) will, I hope, contribute to the debate and add to my argument. My concern is with the position in which parish, town and community councils will find themselves—a subject that is very relevant. Given that we are discussing amendments to clauses dealing with revenue support grants and distribution reports on that money, it is important that the position of the small council should be fully understood.
    I know that my hon. and learned Friend the Minister for Local Government is well aware that at present the whole expenditure of a parish or community council is financed by a rate levied on all properties in its area, domestic and non-domestic alike. However, under the Government's new system, the expenditure of the councils would be met out of what is known as the "collection fund" maintained by the district or borough council. Payments would also go out of that fund to the county and district and borough councils. In England, into that fund would go all the community charges and the share for the
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    area of the national non-domestic rates and the Government grant to local authorities. In Wales, into that fund would go all the community charges. No doubt the hon. Member for Caernarfon will refer to Wales specifically.
    To complaints that parish councils will no longer share in non-domestic rates, the Government reply that they will, because the fund out of which their expenditure is met is composed of the three elements of charge, non-domestic rate and grant from central Government. Parish councils, however, do not see how that has any effect on their position, because they foresee the whole of their expenditure having in the end to be met out of the community charge for their parish.
    Let me cite a straightforward and simple example. In a parish—parish A—there is no significant parish expenditure. Let us estimate that the charge for parish purposes is £1 per person. The district charge is £200 per person and the county charge is £400. The non-domestic rate returned and Government grant together amount to £300 per person. Subtract £300 from £601 and one is left with £301.
    Parish B, a neighbouring parish in the same county—it could be Cheshire—incurs considerable expenditure, thereby incidentally reducing district expenditure, so let us estimate that the charge for parish purposes is £20 per person. Worked out on the same formula as parish A, the total net charge per person in parish B is £320. Thus, I he whole of the parish council expenditure—not only the extra, above the amount expected by the Government to be proper for the area—falls on to the community charge. This matter is very relevant to the amendments, and it is appropriate that we should discuss it now.
    To complaints that community councils have no share in the non-domestic rate, the Government say that they should not expect to have such a share because their activities are essentially what the Government describe as "person-related"—they provide playing fields, for example—and the councils should not expect businesses to pay for such expenditures. In any case, the community councils are in the same position as the parishes in the example that I cited.
    I have been in local government myself and have long taken an interest in it. To me, the provisions show ignorance on the part of Ministers of precisely what is happening in local government and of the roles and functions of its various levels. If to all intents and purposes the Government want to do away with local government, they should tell us that that is what they want and let us debate it. If they want meaningful local government, they must not carry on as they are doing. I say that with some experience of local government.
    Parish and community councils fear that a massive rise in payments from community charge payers will be needed to cover long-running existing expenditure. The problem is especially acute in places where there are loans outstanding or with small populations. In many places, non-domestic property accounts for more than half the rateable value in a community, parish or town council. In one area in the south of England, the rateable property value is 95 per cent.
    Parish and community councils have good spokesmen in both Houses of Parliament but, unfortunately, they are not always heeded. I repeat that I do not think that the benefits of parish, community and town councils are

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    always understood by Government. I know that in my constituency they are well appreciated and understood by the electors whom I have the honour to represent.
    Parish and community councils do not see why they should not share in the money that is paid from the centre to support local government when all their functions are the same as those dischargeable by district councils, which will get such support from central Government by way of the contribution under the new system. It is said that central Government's contribution will be 75 per cent. but it is likely to be closer to 77 per cent. of the cost of local government. Central Government have a major role to play and should recognise the important role of councils down to the lowest level.
    A long-term result of what my hon. and learned Friend the Minister proposes might be a reduction in cheap, effective parochial activities and a transfer of those activities to district or borough councils with their generally higher overheads. Inevitably, that will bring higher costs to the ratepayers or community charge payers, and I suspect that in the long term it will also bring higher costs to business.
    Perhaps my speech will be more relevant in the House at a later time than it will be now in changing the mind and the views of my hon. and learned Friend the Minister, for whom I have immense regard and respect. I am sure that it is possible to devise a reasonably simple method by which parish and community councils can be assured by law of a proportionate share in the non-domestic rate. They are not guaranteed such a share in the legislation that we are debating and which will shortly pass to another place.
    Town, parish and community councillors are the unsung heroes of local government. Those councillors do not claim the grand allowances and responsibility allowances that are costing ratepayers so much. I served in local government at a time when councillors received very modest subsistence and mileage allowances. I never received the huge allowances that make council work for many of today's councillors a full-time occupation. However, I am not arguing that matter in this debate.
    My hon. and learned Friend the Minister has promised to visit my constituency towards the end of the year. He will receive a courteous and friendly welcome from many people. I plead with him to appreciate the valuable role that is played in local government by local town, parish and community councils. We would be worse off if they disappeared.
    Mr. Paul Murphy: I support the remarks of the hon. Member for Macclesfield (Mr. Winterton). For many hours in Committee, hon. Members on both sides of the Committee and I were very much inclined to the hon. Gentleman's point of view that community councils in Wales and parish councils in England fulfil an extremely valuable function and that, by taking the non-domestic rate away from those local authorites, they will have to rely entirely upon the community charge for their income.
    In my constituency, that will mean a loss of no less than 60 per cent. of the income of community councils and in some areas the ironic situation will arise in which the community councils will have to precept a higher poll tax than the district councils which have a much greater area of responsibility. If the Minister will not listen to
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    Opposition Members, I hope that he will listen to Conservative Members and take those matters into consideration.
    I wish to refer to the effects of the changes in the grant system on the Principality of Wales. We have our own Secretary of State, and occasionally the Under-Secretary of State for Wales is present to discuss matters, although he is not here this evening. I know that the Minister, as a Llanelli boy, will undoubtedly answer some of the points that I intend to raise about Wales.
    There is a separate system in Wales. The grant will be paid separately to districts and counties, whereas in England it will go only to the districts. We were told that the system in Wales would be different from that in England because the local authorities in the Principality were reasonable ones. They had never been profligate. According to the Welsh Office, they had been responsible, ideal local councils.
    The reward for the good work of those councils in the past eight years has been an increasingly complex grant system which gave them ever-decreasing amounts of grant. If, as the amendment suggests, the new grant system will bring simplicity, it will also unfortunately bring unfairness because it relies on the crudest possible factors.
    In Wales especially, those factors are insufficient to mitigate the worst effects of the tax. Undoubtedly, matters such as unemployment, low wages and the number of low-cost terraced houses, which have been up for almost a century in the Welsh valleys, have to be taken into account when the needs element of the grant is distributed in the principality. In Wales, the average wage for a manual worker is £204 a week, which is £20 below the British average and £50 below that in the south-east. White-collar workers earn under half what their counterparts earn in London.
    We must take those factors into account and add to them the fact that, of the 37 districts in Wales, 25 will be worse off as a consequence of the poll tax. My hon. Friend the Member for Birmingham, Perry Bar (Mr. Rooker) referred to the gearing effect. It will have a great significance because, in Wales, for every 1 per cent. increase in local authority expenditure there will be over a 6 per cent. increase in the poll tax for those communities.
    The Minister knows that the rateable values in the south Wales valleys are much lower than elsewhere—not only in the Principality, but in the whole United Kingdom. There are 250,000 homes with rateable values of less than £75 a year and 175,000 homes with rateable values of between £75 and £100. Because of those low rateable values, and assuming that local authorities remain responsible and their expenditure remains the same, a household of one adult will have to pay an increase in cost of 10 per cent., a household with two adults an increase of 119 per cent., a household of three adults an increase of 229 per cent. and a household of four adults an increase of 339 per cent. The only way in which we can mitigate those worst effects is by ensuring that the grants in the Principality are geared to take account of those disparities, so that the wild variations that result will disappear.
    9.15 pm
    Let us look at certain local authorities. The Rhondda, by any measure of deprivation, has to be regarded as the worst example for unemployment, low pay and bad housing. In that area, a household of two will have to pay no less than £158 a year in poll tax. The same is true of all

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    the other south Wales valleys—for example Merthyr and Cynon. Other local authorities are much better off, although their rateable values are higher. The contrast is considerable in Cardiff, where the local authority may have to start paying £2 a year back to people, so they will be paying nothing in poll tax. Those massive variations can occur because, as a result of these changes, the resources element in the grant has gone.
    The Government can do something about this. Ministers have said that they will look at the question, and they must do so and take into account the views of the district and county councils and all political parties in Wales. Some 70 per cent. or more of the Welsh people last year rejected an unwelcome tax. This phrase may be trite, but it bears a warning—the poor will get poorer and the rich will get richer as a result of this tax. That phrase will echo throughout the valleys of south Wales.
    Mr. David Wilshire: When I came here for the for first time last June, I thought that my direct interest in the grant system was gone for ever, because the borough council and part of the county council that I represent are out of grant because of Heathrow airport. However, the national non-domestic rate changes will put paid to that, and bring both my borough and county councils back within the system, so I have had to put on my thinking cap and decide whether I support these proposals. Before my hon. and learned Friend the Minister gets worried, I assure him that I support the proposals, and I do so without having had my arm twisted, and for reasons I shall develop.
    Before I do so, I shall touch on the points raised by the hon. Member for Newham, North-East (Mr. Leighton)—I am sorry that he is not here now. I took him to be making a plea for more grants, so that his local newspapers could report it, but he told us only half the story. Perhaps I and others would have some sympathy for it if Newham council would put its house in order first and ask for help afterwards. I can give three examples of what is going wrong in Newham so that we can judge properly whether it needs more money or needs to sort itself out.
    The Evening Standard on 7 August last year said that the ombudsman had said that Newham council had
    "no effective management of modernisation of a block of council flats."
    Therefore, money was being wasted. There is the ombudsman saying what happens to the grant that Newham gets. On 9 December last year, The Guardian reported that Newham was advertising for three jobs at £15,000 each for a policing unit when it has no police responsibility. That is another waste of the existing grant going to Newham. Even when it tries to use its money, things go wrong. On 7 September last year, the Evening Standard reported that Newham borough council refused to give housing improvement grants to some of its tenants because the accounts of those tenants were with Barclays bank. Let us get the whole story right if we are to have pleas for grants.
    I do not need any persuasion to support these changes, because the system is useless and discredited and no one Government are to blame. When I was in local government, and particularly when I led a local authority for five years, I found the grant system incomprehensible. This was an advantage if one worked it properly, because if one asked one officer what it meant and did not like the answer, one asked another one and got a different answer.
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    Even if one did receive an answer that one liked, it did not matter very much because either later that year, the year after or even the year after that, one might be told that everything had changed anyway.
    In the end, one tended to shrug one's shoulders. If the situation did change, people would put on their thinking caps and ask, "What can we do about this crazy system?" I confess that it was not only Labour authorities who worked the system to their advantage. My own authority, like many others, decided that it should read the small print. I make no apologies because, provided one stays within the law, the law is there to work to one's advantage.
    My own authority discovered that if, towards the end of March each year, it examined how much had been spent and what were the rules for grant in that particular year, it was sometimes found that lending money to the housing revenue account increased current expenditure and made the authority eligible for more grant. In other years, it was found that borrowing money from the housing revenue account reduced current expenditure, which was again a qualification for more grant. If my hon. Friend on the Front Bench is now writing all that down so that he can put paid to it, I may tell him that it has been put paid to already—otherwise I would not have reported it tonight.
    The current system is incomprehensible, unpredictable and eminently abusable. The new system, despite the reservations expressed by my hon. Friend the Member for Ealing, Acton (Sir G. Young) is comprehensible. If it has some elements that make it less refined, the understanding enjoyed by councillors of what they are doing will more than make up for any other deficiencies. The new system will also be predictable. Knowing how much money will be available before the year starts will, above all else, be the one factor that will make the work of local government a great deal easier. For that reason alone we must press ahead with it.
    The new system will also be even-handed. I began by saying that I thought I had seen the last of the grant system so far as my own local authorities were concerned. I am glad that I have not, because when there are some authorities in grant and others out of grant, that is not even-handed. The wishes of the DOE affect some authorities more than others when that system prevails. I welcome the change so that the business rate is centralised and is calculated per head of population, and is not influenced by the fact that there happens to he a huge airport in the constituency. If the DOE can get it right, one hopes the system will also be unabusable.
    Apart from commenting generally on the old and new systems, I should like to say something about Labour amendment No. 173. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) did not say very much about it. I have a feeling that I know why. In my time in politics I have learned that one must beware helpful references and plausible explanations.
    I took the trouble of looking at the small print of amendment No. 173 and paragraph (i) caught my eye, which states that the Secretary of State shall take into account
    "the latest information available to him as to the aggregate of all authorities' expenditure."
    That sounds fair enough; to consider what is being spent and then calculate a figure accordingly. However, if understand that wording correctly it means taking into account authorities such as Camden, which is 50 per cent. overspent, and Greenwich, which is 41 per cent. overspent,

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    and persuading the Secretary of State to stoke up, compound and multiply their overspending of previous years in deciding his grant. If that is what amendment No. 173 means, the quicker it is voted down the better.
    Paragraph (iii) states that the Secretary of State shall take into account
    "the need for developing those services and the extent to which, having regard to general economic conditions, it is reasonable to develop them."
    That provision also sounds fair enough, and straightforward, if one reads over it quickly. However, the Labour Front Bench offered no definition of "services" or "developing"—or of who is to judge what is the state of the national economy. If experience is anything to go by, that will be a Labour definition, to the advantage of local government and the lunatics within the Labour party in local government. I suspect that the amendment means more of this kind of developing service. Brent will sponsor more graffiti classes; Ealing will employ more animal rights officers; Haringey will run more training courses for women bricklayers.
    I need no persuasion. I rejoice that the current system is on its way out, and I welcome a new system that will be simple, predictable and even-handed.
    I shall vote enthusiastically against the Labour amendments. I will not be taken in—as I hope that the House will not—by their plausible line, which conceals gross overspending and waste in Labour authorities, major manipulation by them of the current grant system and a scandalous abuse of other people's money. The aim is to undermine our society and further the revolution, and I am against that.
    Mr. Simon Hughes: The hon. Member for Spelthorne (Mr. Wilshire) surprised no one when he said that he would support the Government. He also surprised no one with his usual argument that crude over-simplification was the way out. If he had listened properly to the debate—and, indeed, to the contributions of his hon. Friends who spoke before him—the hon. Gentleman would have recognised the strength of arguments which, even if they did not convince him, should at least have given him cause for reasonable doubt about whether the system proposed by his Government will be an improvement rather than a considerable disimprovement.
    I agree that the present system cannot be supported, and that it can be validly criticised. But the way forward is to ensure that the system that replaces it is agreed with those who have to practise it: that those people are consulted, and use their expertise and practical implementation as partners in deciding on the system.
    Of course I accept that central Government will decide the total amount. Thereafter, however, there should be consultation. The amendment in my name, and one of the Labour amendments, argue that there should be not only notification but consultation—that people in local government should be partners in deciding on the process of distributing whatever central Government gives out from taxpayers' resources. We shall never have a satisfactory system of allocating funds until the decision on who gets what is made jointly by the two of them, central Government and local government, and both have available to them—in a tripartite forum—the services of
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    independent assessors and financial experts, who can advise them on the implications of the options that are proposed.
    The hon. Member for Birmingham, Perry Barr (Mr. Rooker) made a valid point about gearing. The proposed system will not do what the Minister wanted his system to do: it will not render local government more accountable in that, when local government puts up the cost of its services in a given area, the poll tax will go up by the same amount. It is now obvious from a survey by the Chartered Institute of Public Finance and Accountancy that in not one local authority in England and Wales will the percentage increase in services, and in the cost of those services, be reflected by the same percentage increase in poll tax. Indeed, in some instances, the local authority will spend more in a year, and the poll tax will go down. That is hardly the accountable system that the Government have sought.
    If pushed to a vote, I shall support the amendment. Because of the guillotine, I shall not be able to force a vote on my amendment. It is not perfect either, but it allows the system to take into account many more factors than the few crude factors in the system proposed by the Government. One of the concerns of those interested in local Government should be the extraordinary crudity of the proposed new system.
    I have pointed out that local government will be carved out of the working out of grant distribution and will only be notified of the report. Two revisions will be possible in any one year—the calculations and additional grant. The additional grant will not, however, take account of massively increased take-up of housing benefit in a particular local authority area and other such unpredictable factors. It may allow for compensation for a hurricane, or something like that, but not for many practical matters.
    9.30 pm
    As for the transitional arrangements, which will have horrendous implications in terms of administration and practicability, the Government will be able to make such assumptions and estimates as they see fit. Even if information is sought in other cases from local government, the Government will be able to proceed without it, or with information that they have no obligation to test for accuracy. There will be enormous additional centralised power.
    A system which is sophisticated need not be, by definition, incomprehensible. Part of the present system is certainly that and we could improve on it, but we need not go to the other extreme. The problem with the whole of the proposed assessment is that the needs of all the local authorities—all of which have an enormous number of different components—will not be taken into account. As the hon. Member for Perry Barr said, once one gets the basic assessment wrong, the gearing effect compounds the injustice and inequality. The Government could have learned from the mistakes of the past, but they have not.
    I endorse, without elaborating, the points made by the hon. Member for Macclesfield (Mr. Winterton). Over Easter I went away for a few days and called on my family who live in Herefordshire. My mother is chair of the parish council in a small village which has seven people on the parish council. Those people are alarmed about how they and their colleagues on other parish councils will be able to do their job at that important level of local government.

    1083
    That common concern has not been allayed by the Government's responses so far. In London we do not even have parish councils—would that we did—but parish, community and town councils deserve to have their voices heard. The hon. Member for Macclesfield made a good case to which I hope the Government will listen.
    I should like to reflect the general tenor of the points made by the hon. Member for Newham, North-East (Mr. Leighton). There will be enormous administrative costs. We are not told how much the grant will reflect them. We could quibble about some of the figures. In a press release issued by the Department of the Environment on 13 April, the Government are said to have made a capital allocation of £25 million to help local councils in preparation for the arrival of the community charge. The hon. Member for Newham, North-East talked about the particular problems in his borough. There is no doubt that the sheer number of bits of paper will be multiplied—it has nothing to do with a local council's efficiency.
    In Southwark, 66 per cent. of people are council tenants, and they pay with their rents. They will have individual poll tax forms. According to the current figures, the 40,677 rate accounts will become 185,000 poll tax accounts—355 per cent. more. The number of payments are likely to increase by nearly 2,000 per cent.—a staggering number. People will have to go on to estates, where they may well be mugged or be in physical difficulty. There are rates arrears of £30 million in Southwark, and I am critical enough of the local council for that. What will be the amount when there is the new system to police—[Interruption.] I did not hear that comment. I do not defend Southwark's £30 million rates arrears, but that is in a system in which the money is supposed to be relatively easy to collect. This is a system whereby we shall have to chase people around the boroughs.
    The costs, the needs and the realities of local government will not be reflected in the new system. I hope that central Government will learn one lesson even at this late stage, even though the Minister has shown no sign of doing so. The only way in which central Government will ever be able to have a decent relationship with local government is through a partnership and not by saying, whatever the issue, "We know best. Marsham street will tell you what to do. We shall impose our system." The Bill is about a Marsham street system instead of local government choosing its own way forward.
    Mr. Leigh: The hon. Member for Southwark and Bermondsey (Mr. Hughes) said that the reform would be a disimprovement on the present system. I do not know whether that is new SLD-speak, but I wish to take five minutes of the House's time before my hon. and learned Friend replies to the debate to say that I consider that the reform will be an improvement on what is without doubt a chaotic situation.
    My hon. Friend the Member for Ealing, Acton (Sir G. Young) made a typically coherent speech. However, he did not mention that in 1987–88 his borough of Ealing overspent by the colossal amount of £100 per head. Of course, my hon. Friend has an advantage over me in that he was a Department of the Environment Minister. He should ask himself why he presided over a grants system that allowed Ealing to overspend by £100 per head, which allowed Ealing to return its street cleaning operation to its own work force and remove it from the private firm, with the cost of the service increasing from £900,000 a year to
    1084
    £1·7 million a year in 1987–88. He should ask himself why he presided over a grants system which allowed Ealing, since Labour took control in May 1986, to create 1,435 new council jobs. He should ask himself why the council is spending £16,000 a year to employ a worker with a vehicle to put up its political posters.
    The hon. Member for Newham, North-East (Mr. Leighton), who made an effective speech, has to ask himself why Newham is spending £126 per adult above what it should be spending in 1987–88. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) said that every £1 extra per head of local authority spending might result in a considerable loss of grant. That is true. We want local authorities to be made aware of the effects of their decisions and the real costs to their citizens of decisions such as those being made in Ealing, Southwark and Bermondsey and many others. If I had sufficient time I could quote many other examples.
    Lincolnshire benefits from having enjoyed Tory control for a generation under county councillors who provide effective services that people need. However, we and our colleagues in other shire areas have repeatedly been penalised by the present chaotic rate support grant system.
    In Committee my hon. and learned Friend said that the present rate support grant system resembled the Schleswig-Holstein question in the last century. It was said that only three people understood it, and that of those one was dead, one had forgotten, and one had gone out of his mind. A former Secretary of State for the Environment admitted that he did not understand the present system. [Interruption] It was not the current Secretary of State but a previous incumbent of that office, who admitted that he did not understand the system. The present system is incomprehensible, easily abused and far too complex.
    So far in the debate no one has said what the new system will do. I shall attempt to do so briefly in one paragraph. It will achieve equalisation of what people have to pay in different areas to achieve a standard rate of service. Surely that is a sensible reform. Should the House turn its back on a system which is fairer, simpler, and less complex and which will provide a level playing field that the electorate can understand? I shall vote enthusiastically for the Government's proposals.
    The Minister for Local Government (Mr. Michael Howard): We have had an extremely interesting and vigorous debate on this aspect of the Government's proposals. As usual, there was an interesting speech by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), but he rather overdid it when he suggested, quoting from a Central Office document, that the Government are proposing a system that relies on only six indicators. I made it plain in Committee, at column 1355, that that was a rather over-optimistic assessment. We recognised that there would need to be considerably more than six elements but considerably fewer than the 63 or so that are used in the present system. I cannot tell the hon. Gentleman how many there will be because we have not yet reached a final decision on the grant system.
    The hon. Gentleman made a number of points about the effect of the system that we propose to put into place. He referred at length to the gearing effect and gave some interesting examples. But what is interesting about the Opposition's approach to gearing is that they always talk about its effect on increases in council spending. We never hear a word pass the lips of the hon. Member for Perry

    1085
    Barr about the effect of gearing on reductions in council spending—about the incentives to real economy and efficiency and to the provision of real value for money, to the benefit of residents, that the system that we shall put into place will offer.
    The hon. Gentleman quoted a number of interesting examples that were based on percentages, but when people consider the effects of the spending decisions of their councils they are not concerned with percentages; they are concerned about the money that they will have to pay. The fact that a pound of additional spending will mean a pound more in community charge and that a pound less in spending will mean a pound less in community charge is something that they will readily grasp. They will see the importance of it and will understand its significance for their pockets.
    In the interesting comparison that he made in percentage terms about the effect of increased spending on the London borough of Islington compared with the other boroughs to which he referred, the hon. Member for Perry Barr did not bring out the fact that the reason why an increase in spending led to a percentage increase in the community charge for Islington, compared with those other boroughs, is that Islington receives a much larger central Government grant than the other boroughs. It will no doubt continue to receive a much larger central Government grant than the other boroughs. The important point is not the percentage comparison but the fact that, under the new system, residents will know that for every pound increase in spending by their local authorities there will be a pound increase in community charge—and vice versa for reductions.
    The hon. Gentleman asked me, as Minister for Local Government, to recognise the need for, and the importance of, a variety of approaches by local authorities because they are situated in different parts of the country. I readily accept that there can and that there should be differences of approach. There will be a variety of approaches, not simply because local authorities are situated in different parts of the country but because even side by side, there will be differences of approach. The importance of the system that we are putting into place is that differences of approach will reflect the democratic views of residents in local authorities. They will he based on true accountability. Residents will know that they will have to pay for extra spending but that, if their local authority pursues economic policies, they will save. That great element is missing from the present system.
    9.45 pm
    The one factor, above all, which will improve accountability is the comprehensibility that we shall strive to introduce into the system. The hon. Member for Perry Barr and my hon. Friend the Member for Ealing, Acton (Sir G. Young) were right when they said that there will be arguments whether the local authority has had the amount of Government grant to which it contends it is entitled. It is idle to suppose that one could ever devise a system of Government grant that would eliminate such arguments.
    There will always be arguments of that kind—but only if they take place against the background of a grant that people understand can we hope to get some real democracy back into local government, so that people take decisions knowing whether their council gives them value
    1086
    for money. They can make their own judgments on those arguments, and on the level of spending that they want to support and think appropriate. Those judgments will be based on an understanding of the situation and the performance of the councillors for whom they will be voting.
    I want to say a few words about the characteristically forthright comments of my hon. Friend the Member for Macclesfield (Mr. Winterton). I understand his concerns, but I should say at the outset that, however strongly he feels about the parish councils to which he referred, that would not afford him a reason to refuse to support the Government at 10 o'clock.
    Amendment No. 156 is a Labour amendment. Despite that, as my hon. Friend the Member for Spelthorne (Mr. Wilshire) pointed out, the hon. Member for Perry Barr said precious little about it in his introductory remarks.
    The amendment will do nothing at all to help ease the difficulty to which my hon. Friend the Member for Macclesfield referred, as it may affect parish councils under the new system. I listened with great interest to my hon. Friend; I know of his distinguished service in local government before he entered this House. I listened with particular interest to the example that he gave of two neighbouring parish councils with different spending levels, and the way in which that situation would affect the level of community charge paid by people in those parishes.
    There will be a power for the district council to levy a lower community charge for the residents of a parish, where the parish is providing the service which the district council would otherwise have provided for a non-parished area. That I believe, would go a considerable way towards meeting my hon. Friend's concern. The service that the parish provides may not be a service that the district provides for unparished areas, and, indeed the parish may have a higher level of spending, as a result of extravagance or, perhaps, of a higher level of service.
    I accept that my hon. Friend was right when he said that, in general, parish councils are a cheap and effective form of local government. But if a parish council is spending to provide a higher level of service than the district provides for unparished areas—I hope that my hon. Friend the Member for Macclesfield will reflect upon this—then it is right that in those circumstances that higher level of service should be paid for by the residents of that parish.
    It is unsatisfactory that the parish should be able to offload that spending and the cost of an additional level of service to businesses that happen to be in the parish area or to non-domestic rates. That approach does not contribute to accountability. I do not think that the House would wish to support such a system.
    I hope that, upon reflection, my hon. Friend will see the force of that point. Whether or not I have succeeded in persuading him, the fact remains that this matter will not he affected by the amendment that we shall vote on at 10 o'clock. Whether or not I have persuaded him on the merits, I hope that my hon. Friend may yet nevertheless join us in the Lobby.
    Mr. Wigley: I failed to catch the Chair's eye earlier but I wish to make a point about community councils. Since there is strong feeling among community councils, parish councils and the organisations that work on their behalf on this point and since there are amendments tabled by the

    1087
    hon. Members for Macclesfield (Mr. Winterton), for Clwyd, North-West (Sir A. Meyer) and myself and my colleagues, if, those amendments come up in another place and the case is put coherently, will the Minister give an undertaking that the Government will have an open mind? There are real fears that the work of those councils may be undermined by the changes that are taking place.
    Mr. Howard: Of course, we always have an open mind and we always listen most carefully to the points that are made in this place and in the other place and, indeed, in the course of meetings and discussions that take place in neither place. Therefore, I can give the hon. Gentleman that assurance.
    The hon. Member for Torfaen (Mr. Murphy) rather over-egged the pudding when he discussed the different ways in which the collection fund would be treated in England and Wales. He suggested that the reason for the difference was that local government in Wales had reached some ideal state that put it beyond any sort of criticism. I do not think that I ever said anything quite as complimentary as that about local government in Wales during the course of our deliberations in Committee. We justified the difference in treatment on the basis of the different history and traditions of local Government in Wales, compared with that in England.
    The hon. Gentleman concluded his remarks by saying that serious problems would arise in the Welsh valleys in particular if there were not a proper reflection of different needs in the Government grant. I understand the hon. Gentleman's point. We have at all times made it clear that there would continue to be an effective, proper needs element in the Government grant.
    Of course we recognise that it costs different amounts of money to provide a standard level of service in different areas that have different needs. We have always made that plain. The arguments have sometimes been distorted by others but we have always made it plain that it is our intention to do that and we shall seek to have as effective a needs element in the grant as possible.
    The overriding fact remains—it is at the heart of our approach to these matters—that we want and intend to introduce a grant system that is comprehensible. We believe that only against the background of a comprehensible system can we achieve true accountability. I understand why it is not necessarily in the interests of the Labour party to have a comprehensible grant system. If we have a system that cannot be readily understood and on which there cannot be any sensible argument because so few people understand the argument, accountability is clouded and goes out the window and we encourage and foster the sort of high-spending irresponsibility that we have seen time and again from local authorities controlled by the Labour party over recent years and earlier.
    Because we wish to put an end to the way in which those authorities have been able to shelter behind incomprehensible grant arrangements and because we want to encourage true accountability, I commend to the House the grant arrangements presently contained in the Bill.
    Mr. Rooker: With the leave of the House, I should like to make a couple of points. It has been an interesting debate. It has been a short debate, but that is necessary under the guillotine. Two Conservative Members spoke for the Government and two Back-Bench Conservative Members spoke against. There was the unjustified attack
    1088
    by the hon. Member for Spelthorne (Mr. Wilshire) on his hon. Friend the Member for Ealing, North (Mr. Greenway), in his absence. He criticised him not for the fact that he is not supporting the Government today but because when he was a Minister in the Department of the Environment he allowed—
    Mr. Wilshire rose—
    Mr. Rooker: I will not give way. The hon. Member for Spelthorne criticised his hon. Friend for allowing his own council to overspend. —[Interruption.] I am sorry. I withdraw completely and utterly, with full apologies all round. I have it written down here. It was the hon. Member for Gainsborough and Horncastle (Mr. Leigh). But I think that the point was made, and it was an unjustifiable attack on the hon. Member for Ealing. North—
    Sir George Young: I am not the Member for Ealing. North.
    Mr. Rooker: Mr. Speaker, it has been a long week. I am prepared to concede a throw-in to the Government, because we have won four-nil every day this week. The Government have not had a good week.
    One of the main points in this short debate has been the question of grant distribution, because the way grants are distributed is crucial. We are talking about 50 per cent. of local government expenditure. Going back to the point that I raised originally concerning the factors on which the grant will be based, we are told that they will be fewer than at present. The Tory document issued last August from which I quoted said that there would be only six. The Minister reminded us that he conceded in Committee that there would be, not six, but fewer than the 83 that there are now, but he cannot say what the figure will he.
    The hon. and learned Gentleman has also admitted, because he has not given us the answer to the question, that the Government do not even know how to count people. It is crucial that the number of people relevant to the grant distribution is known. Is it the poll tax number, the census number, the daytime number, the seasonal number? That is absolutely crucial and they still have not made up their mind during the passage of this Bill how they will count people for the grant distribution purposes of the poll tax.
    As the Minister said, people will know, there will be more accountability and they will find out. Well, the people are finding out. In February this year, 45 per cent. of the people of this country thought that the poll tax was a good idea. The figure had dropped from over 60 per cent. last autumn. We had had the Second Reading and the Committee was under way. Last week 26 per cent. thought that it was a good idea. So, yes, the people are finding out about this tax. Only 48 per cent. of Tory voters now think that it is a good idea. The more people find out about the poll tax, the more convinced they are that it is a bad idea. The percentage that thinks that it is a bad idea has gone up from 39 per cent. in February to 62 per cent. while those communication whizz-kids have been dealing with the Bill in Committee. So, yes, the people are finding out, and the more they find out, the less they like it.
    It is not surprising that Ministers have not yet decided how they will count people. What happens with all the mechanisms that are being constructed if people still end up voting Labour, because it is a very political tax? We

    1089
    know what will happen, because the first debate on Monday will be on the mechanism for capping the poll tax. Whatever happens with the grant, the business rate or the poll tax, or indeed at the ballot box, if this bunch of dictators do not like the result, they will change it.
    The Government have had a bad week and if hon. Gentlemen want them to have a better time next week they know what they can do at 10 o'clock on Monday. We do not have to whistle. More than sufficient Tory Members have already voted against the Bill to destroy the Government's majority. Every day, in every vote, this week different Tory Members have voted against different parts of the Bill. They should have the guts to do the right thing on Monday.
    I cannot finish on a high note because I have to beg to ask leave to withdraw amendment No. 173 and seek a Division on amendment No. 156.
    Amendment, by leave, withdrawn.

  Clause 86

    DISTRIBUTION REPORTS
    Amendment proposed: No. 156, in Page 46, leave out lines 34 to 41 and insert—
    '86(1) The Secretary of State shall—

    (a) determine in relation to each charging and precepting authority notional expenditure assessments having regard to their functions and needs in accordance with principles to be applied to all authorities, and

    (b) make a report containing the basis on which he proposes to distribute among receiving authorities those amounts of revenue support grant which fall to be paid to such authorities under this Part, being a basis which has regard to the notional expenditure assessment determined under subsection (1)(a) above.

    (2) Before determining the notional expenditure assessment or making the report under subsection (1) above, the Secretary of State shall consult such associations of local authorities as appear to him to be concerned and with any local authority with whom consultation appears to him to be desirable.
    (3) This report shall be laid before the House of Commons and shall specify the principles on which the notional expenditure assessments and basis of distribution are determined'.—[Mr. Rooker.]
    Question put, That the amendment be made:—
    The House divided: Ayes 209, Noes 328.

    Division No. 272]

    [10.00 pm

    AYES

    Abbott, Ms Diane

    Boyes, Roland

    Adams, Allen (Paisley N)

    Bradley, Keith

    Anderson, Donald

    Bray, Dr Jeremy

    Archer, Rt Hon Peter

    Brown, Gordon (D'mline E)

    Armstrong, Hilary

    Brown, Nicholas (Newcastle E)

    Ashley, Rt Hon Jack

    Buchan, Norman

    Ashton, Joe

    Buckley, George J.

    Banks, Tony (Newham NW)

    Callaghan, Jim

    Barnes, Harry (Derbyshire NE)

    Campbell, Menzies (Fife NE)

    Barron, Kevin

    Campbell, Ron (Blyth Valley)

    Battle, John

    Campbell-Savours, D. N.

    Beckett, Margaret

    Canavan, Dennis

    Beith, A. J.

    Carlile, Alex (Mont'g)

    Bell, Stuart

    Cartwright, John

    Benn, Rt Hon Tony

    Clark, Dr David (S Shields)

    Bennett, A. F. (D'nt'n & R'dish)

    Clarke, Tom (Monklands W)

    Bermingham, Gerald

    Clay, Bob

    Bidwell, Sydney

    Clelland, David

    Boateng, Paul

    Clwyd, Mrs Ann

    1090

    Cohen, Harry

    Litherland, Robert

    Coleman, Donald

    Livingstone, Ken

    Cook, Robin (Livingston)

    Livsey, Richard

    Corbett, Robin

    Lofthouse, Geoffrey

    Corbyn, Jeremy

    Loyden, Eddie

    Cousins, Jim

    McAllion, John

    Cox, Tom

    McAvoy, Thomas

    Crowther, Stan

    McCartney, Ian

    Cryer, Bob

    McFall, John

    Cummings, John

    McKay, Allen (Barnsley West)

    Cunliffe, Lawrence

    McKelvey, William

    Cunningham, Dr John

    McLeish, Henry

    Dalyell, Tam

    McNamara, Kevin

    Darling, Alistair

    McTaggart, Bob

    Davies, Rt Hon Denzil (Llanelli)

    McWilliam, John

    Davies, Ron (Caerphilly)

    Madden, Max

    Davis, Terry (B'ham Hodge H'l)

    Mahon, Mrs Alice

    Dixon, Don

    Marek, Dr John

    Dobson, Frank

    Martin, Michael J. (Springburn)

    Doran, Frank

    Martlew, Eric

    Douglas, Dick

    Maxton, John

    Duffy, A. E. P.

    Michael, Alun

    Dunnachie, Jimmy

    Michie, Bill (Sheffield Heeley)

    Dunwoody, Hon Mrs Gwyneth

    Michie, Mrs Ray (Arg'l & Bute)

    Eadie, Alexander

    Millan, Rt Hon Bruce

    Eastham, Ken

    Mitchell, Austin (G't Grimsby)

    Evans, John (St Helens N)

    Moonie, Dr Lewis

    Ewing, Harry (Falkirk E)

    Morgan, Rhodri

    Ewing, Mrs Margaret (Moray)

    Morley, Elliott

    Fatchett, Derek

    Morris, Rt Hon J. (Aberavon)

    Field, Frank (Birkenhead)

    Mowlam, Marjorie

    Fields, Terry (L'pool B G'n)

    Mullin, Chris

    Fisher, Mark

    Murphy, Paul

    Flannery, Martin

    Nellist, Dave

    Flynn, Paul

    Oakes, Rt Hon Gordon

    Foot, Rt Hon Michael

    O'Brien, William

    Foster, Derek

    O'Neill, Martin

    Fraser, John

    Orme, Rt Hon Stanley

    Fyfe, Maria

    Parry, Robert

    Garrett, John (Norwich South)

    Patchett, Terry

    Garrett, Ted (Wallsend)

    Pendry, Tom

    George, Bruce

    Pike, Peter L.

    Gilbert, Rt Hon Dr John

    Powell, Ray (Ogmore)

    Godman, Dr Norman A.

    Prescott, John

    Golding, Mrs Llin

    Primarolo, Dawn

    Gordon, Mildred

    Quin, Ms Joyce

    Gould, Bryan

    Randall, Stuart

    Graham, Thomas

    Redmond, Martin

    Grant, Bernie (Tottenham)

    Rees, Rt Hon Merlyn

    Griffiths, Nigel (Edinburgh S)

    Reid, Dr John

    Griffiths, Win (Bridgend)

    Richardson, Jo

    Grocott, Bruce

    Roberts, Allan (Bootle)

    Hardy, Peter

    Robertson, George

    Harman, Ms Harriet

    Robinson, Geoffrey

    Hattersley, Rt Hon Roy

    Rogers, Allan

    Heffer, Eric S.

    Rooker, Jeff

    Henderson, Doug

    Rowlands, Ted

    Hinchliffe, David

    Ruddock, Joan

    Hogg, N. (C'nauld & Kilsyth)

    Salmond, Alex

    Holland, Stuart

    Sedgemore, Brian

    Hood, Jimmy

    Sheerman, Barry

    Howarth, George (Knowsley N)

    Sheldon, Rt Hon Robert

    Howell, Rt Hon D. (S'heath)

    Shore, Rt Hon Peter

    Howells, Geraint

    Short, Clare

    Hoyle, Doug

    Skinner, Dennis

    Hughes, John (Coventry NE)

    Smith, Andrew (Oxford E)

    Hughes, Robert (Aberdeen N)

    Snape, Peter

    Hughes, Roy (Newport E)

    Soley, Clive

    Hughes, Sean (Knowsley S)

    Spearing, Nigel

    Hughes, Simon (Southwark)

    Steel, Rt Hon David

    Illsley, Eric

    Steinberg, Gerry

    Janner, Greville

    Stott, Roger

    John, Brynmor

    Strang, Gavin

    Jones, Martyn (Clwyd S W)

    Straw, Jack

    Kirkwood, Archy

    Taylor, Matthew (Truro)

    Lambie, David

    Thompson, Jack (Wansbeck)

    Lamond, James

    Turner, Dennis

    Leighton, Ron

    Vaz, Keith

    Lestor, Joan (Eccles)

    Wall, Pat

    Lewis, Terry

    Wallace, James

    NOES

    Aitken, Jonathan

    Cran, James

    Alexander, Richard

    Currie, Mrs Edwina

    Alison, Rt Hon Michael

    Curry, David

    Allason, Rupert

    Davies, Q. (Stamf'd & Spald'g)

    Amery, Rt Hon Julian

    Davis, David (Boothferry)

    Amess, David

    Day, Stephen

    Amos, Alan

    Devlin, Tim

    Arbuthnot, James

    Dickens, Geoffrey

    Arnold, Jacques (Gravesham)

    Dicks, Terry

    Arnold, Tom (Hazel Grove)

    Dorrell, Stephen

    Ashby, David

    Douglas-Hamilton, Lord James

    Aspinwall, Jack

    Dover, Den

    Atkins, Robert

    Dunn, Bob

    Atkinson, David

    Durant, Tony

    Baker, Rt Hon K (Mole Valley)

    Eggar, Tim

    Baker, Nicholas (Dorset N)

    Emery, Sir Peter

    Baldry, Tony

    Evans, David (Welwyn Hatf'd)

    Banks, Robert (Harrogate)

    Evennett, David

    Batiste, Spencer

    Fallon, Michael

    Bellingham, Henry

    Farr, Sir John

    Bendall, Vivian

    Favell, Tony

    Bennett, Nicholas (Pembroke)

    Fenner, Dame Peggy

    Bevan, David Gilroy

    Field, Barry (Isle of Wight)

    Bilfen, Rt Hon John

    Finsberg, Sir Geoffrey

    Biggs-Davison, Sir John

    Fookes, Miss Janet

    Blackburn, Dr John G.

    Forman, Nigel

    Blaker, Rt Hon Sir Peter

    Forsyth, Michael (Stirling)

    Body, Sir Richard

    Forth, Eric

    Bonsor, Sir Nicholas

    Fowler, Rt Hon Norman

    Boswell, Tim

    Fox, Sir Marcus

    Bottomley, Peter

    Franks, Cecil

    Bottomley, Mrs Virginia

    Freeman, Roger

    Bowden, Gerald (Dulwich)

    French, Douglas

    Bowis, John

    Fry, Peter

    Boyson, Rt Hon Dr Sir Rhodes

    Gale, Roger

    Braine, Rt Hon Sir Bernard

    Gardiner, George

    Brandon-Bravo, Martin

    Gill, Christopher

    Brazier, Julian

    Goodlad, Alastair

    Bright, Graham

    Goodson-Wickes, Dr Charles

    Brooke, Rt Hon Peter

    Gorman, Mrs Teresa

    Brown, Michael (Brigg & Cl't's)

    Gorst, John

    Browne, John (Winchester)

    Gow, Ian

    Bruce, Ian (Dorset South)

    Gower, Sir Raymond

    Buchanan-Smith, Rt Hon Alick

    Grant, Sir Anthony (CambsSW)

    Buck, Sir Antony

    Greenway, Harry (Ealing N)

    Burns, Simon

    Greenway, John (Ryedale)

    Burt, Alistair

    Gregory, Conal

    Butcher, John

    Griffiths, Sir Eldon (Bury St E')

    Butler, Chris

    Griffiths, Peter (Portsmouth N)

    Butterfill, John

    Grist, Ian

    Carlisle, John, (Luton N)

    Ground, Patrick

    Carlisle, Kenneth (Lincoln)

    Grylls, Michael

    Carrington, Matthew

    Gummer, Rt Hon John Selwyn

    Carttiss, Michael

    Hamilton, Hon Archie (Epsom)

    Cash, William

    Hamilton, Neil (Tatton)

    Chalker, Rt Hon Mrs Lynda

    Hampson, Dr Keith

    Channon, Rt Hon Paul

    Hanley, Jeremy

    Chapman, Sydney

    Hannam, John

    Chope, Christopher

    Hargreaves, A. (B'ham H'll Gr')

    Churchill, Mr

    Harris, David

    Clark, Hon Alan (Plym'th S'n)

    Hawkins, Christopher

    Clark, Dr Michael (Rochford)

    Hayes, Jerry

    Clark, Sir W. (Croydon S)

    Heathcoat-Amory, David

    Clarke, Rt Hon K. (Rushcliffe)

    Heddle, John

    Colvin, Michael

    Hicks, Mrs Maureen (Wolv' NE)

    Conway, Derek

    Higgins, Rt Hon Terence L.

    Coombs, Anthony (Wyre F'rest)

    Hill, James

    Coombs, Simon (Swindon)

    Hind, Kenneth

    Cope, John

    Hogg, Hon Douglas (Gr'th'm)

    Couchman, James

    Holt, Richard

    1092

    Hordern, Sir Peter

    Nicholson, David (Taunton)

    Howard, Michael

    Nicholson, Emma (Devon West)

    Howarth, Alan (Strat'd-on-A)

    Onslow, Rt Hon Cranley

    Howarth, G. (Cannock & B'wd)

    Oppenheim, Phillip

    Hughes, Robert G. (Harrow W)

    Page, Richard

    Hunt, David (Wirral W)

    Paice, James

    Hunt, John (Ravensbourne)

    Parkinson, Rt Hon Cecil

    Hunter, Andrew

    Patnick, Irvine

    Hurd, Rt Hon Douglas

    Patten, Chris (Bath)

    Irvine, Michael

    Patten, John (Oxford W)

    Irving, Charles

    Pattie, Rt Hon Sir Geoffrey

    Jack, Michael

    Pawsey, James

    Jackson, Robert

    Peacock, Mrs Elizabeth

    Janman, Tim

    Porter, Barry (Wirral S)

    Jessel, Toby

    Porter, David (Waveney)

    Jones, Gwilym (Cardiff N)

    Portillo, Michael

    Jones, Robert B (Herts W)

    Powell, William (Corby)

    Jopling, Rt Hon Michael

    Price, Sir David

    Kellett-Bowman, Dame Elaine

    Raffan, Keith

    Key, Robert

    Raison, Rt Hon Timothy

    King, Roger (B'ham N'thfield)

    Rathbone, Tim

    King, Rt Hon Tom (Bridgwater)

    Redwood, John

    Kirkhope, Timothy

    Renton, Tim

    Knapman, Roger

    Rhodes James, Robert

    Knight, Greg (Derby North)

    Riddick, Graham

    Knight, Dame Jill (Edgbaston)

    Ridley, Rt Hon Nicholas

    Knowles, Michael

    Ridsdale, Sir Julian

    Lamont, Rt Hon Norman

    Roberts, Wyn (Conwy)

    Lang, Ian

    Roe, Mrs Marion

    Latham, Michael

    Rossi, Sir Hugh

    Lawrence, Ivan

    Rost, Peter

    Lawson, Rt Hon Nigel

    Rowe, Andrew

    Lee, John (Pendle)

    Rumbold, Mrs Angela

    Leigh, Edward (Gainsbor'gh)

    Ryder, Richard

    Lennox-Boyd, Hon Mark

    Sackville, Hon Tom

    Lightbown, David

    Sainsbury, Hon Tim

    Lilley, Peter

    Sayeed, Jonathan

    Lloyd, Peter (Fareham)

    Scott, Nicholas

    Lord, Michael

    Shaw, David (Dover)

    Luce, Rt Hon Richard

    Shaw, Sir Giles (Pudsey)

    Lyell, Sir Nicholas

    Shelton, William (Streatham)

    McCrindle, Robert

    Shephard, Mrs G. (Norfolk SW)

    Macfarlane, Sir Neil

    Shepherd, Colin (Hereford)

    MacGregor, Rt Hon John

    Shepherd, Richard (Aldridge)

    MacKay, Andrew (E Berkshire)

    Shersby, Michael

    Maclean, David

    Sims, Roger

    McLoughlin, Patrick

    Skeet, Sir Trevor

    McNair-Wilson, P. (New Forest)

    Smith, Sir Dudley (Warwick)

    Major, Rt Hon John

    Smith, Tim (Beaconsfield)

    Mans, Keith

    Soames, Hon Nicholas

    Maples, John

    Speed, Keith

    Marland, Paul

    Speller, Tony

    Marlow, Tony

    Spicer, Sir Jim (Dorset W)

    Marshall, John (Hendon S)

    Spicer, Michael (S Worcs)

    Marshall, Michael (Arundel)

    Squire, Robin

    Martin, David (Portsmouth S)

    Stanbrook, Ivor

    Mates, Michael

    Stanley, Rt Hon John

    Maude, Hon Francis

    Steen, Anthony

    Mawhinney, Dr Brian

    Stern, Michael

    Maxwell-Hyslop, Robin

    Stevens, Lewis

    Mayhew, Rt Hon Sir Patrick

    Stewart, Allan (Eastwood)

    Mellor, David

    Stewart, Andy (Sherwood)

    Miller, Hal

    Stewart, Ian (Hertfordshire N)

    Mills, lain

    Stokes, John

    Mitchell, Andrew (Gedling)

    Stradling Thomas, Sir John

    Mitchell, David (Hants NW)

    Sumberg, David

    Moate, Roger

    Summerson, Hugo

    Monro, Sir Hector

    Tapsell, Sir Peter

    Montgomery, Sir Fergus

    Taylor, Ian (Esher)

    Moore, Rt Hon John

    Taylor, John M (Solihull)

    Morris, M (N'hampton S)

    Taylor, Teddy (S'end E)

    Morrison, Hon P (Chester)

    Tebbit, Rt Hon Norman

    Moss, Malcolm

    Thompson, D. (Calder Valley)

    Moynihan, Hon Colin

    Thompson, Patrick (Norwich N)

    Neale, Gerrard

    Thorne, Neil

    Needham, Richard

    Thornton, Malcolm

    Nelson, Anthony

    Thurnham, Peter

    Neubert, Michael

    Townend, John (Bridlington)

    Newton, Rt Hon Tony

    Townsend, Cyril D. (B'heath)

    Nicholls, Patrick

    Tracey, Richard

    Walley, Joan

    Worthington, Tony

    Welsh, Andrew (Angus E)

    Young, David (Bolton SE)

    Welsh, Michael (Doncaster N)

    Young, Sir George (Acton)

    Wigley, Dafydd

    Williams, Rt Hon Alan

    Tellers for the Ayes:

    Williams, Alan W. (Carm'then)

    Mr. Frank Haynes and

    Wilson, Brian

    Mr. Frank Cook.

    Wise, Mrs Audrey

    Tredinnck, David

    Wells, Bowen

    Trippier, David

    Wheeler, John

    Trotter, Neville

    Whitney, Ray

    Twinn, Dr Ian

    Widdecombe, Ann

    Vaughan, Sir Gerard

    Wilkinson, John

    Waddington, Rt Hon David

    Wilshire, David

    Waldegrave, Hon William

    Winterton, Mrs Ann

    Walden, George

    Wolfson, Mark

    Walker, Bill (T'side North)

    Wood, Timothy

    Walker, Rt Hon P. (W'cester)

    Woodcock, Mike

    Waller, Gary

    Yeo, Tim

    Walters, Dennis

    Younger, Rt Hon George

    Ward, John

    Wardle, Charles (Bexhill)

    Tellers for the Noes:

    Warren, Kenneth

    Mr. Robert Boscawen and

    Watts, John

    Mr. Tristan Garel-Jones.

    Question accordingly negatived.
    It being after Ten o'clock, MR. SPEAKER proceeded, pursuant to the Orders [22 February and 13 April] and the Resolution [18 April] to put forthwith the Question on amendments moved by a member of the Government, of which notice had been given, to the end of clause 103.

  Clause 89

    PAYMENT OF SUMS
    Amendments made: No. 105, in page 48, line 35, leave
    out from 'be' to 'on' in line 43 and insert
    'paid by the authority to the Secretary of State'.
    No. 45, in page 48, line 45, leave out
    'as a simple contract debt'.
    No. 106, in page 48, line 47, leave out subsections (8) and (9).—[Mr. Howard]

  Clause 96

    PAYMENTS TO AND FROM COLLECTION FUNDS
    Amendment made: No. 107, in page 52, line 27, leave out
    'from the non-domestic rating pool'
    and insert
    'under paragraph 5(10) of Schedule 7 below, regulations made under paragraph 6(4) of that Schedule, or paragraph 8 of that Schedule'.—[Mr. Howard.]

  Clause 103

    REGULATIONS ABOUT FUNDS
    Amendment made: No. 62, in page 57, line 1, leave out subsection (5) and insert—
    '(5) Regulations under subsection (4) above in their application to a particular financial year (including regulations amending others) shall not be effective unless they
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    come into force before 1 January in the preceding financial year: but this does not affect regulations revoking others.'—[Mr. Howard.]
    Further consideration of the Bill adjourned.—[Mr. Durant.]
    Bill, as amended (in the Standing Committee), to be further considered on Monday 25 April.

    STATUTORY INSTRUMENTS, &c.
    Motion made, and Question put forthwith pursuant to Standing Order No. 101(5)(Standing Committees on Statutory Instruments &c.)

    VALUE ADDED TAX
    That the Value Added Tax (Confectionery) Order 1988 (S.I., 1988, No. 507), dated 15th March 1988, a copy of which was laid before this House on 15th March, be approved.— [Mr. Durant.]
    Question agreed to.

    EXPORT AND IMPORT OF DANGEROUS CHEMICALS
    Ordered,
    That this House takes note of European Community Documents Nos. 8251/86 and the Supplementary Explanatory Memorandum submitted by the Department of the Environment on 29th January 1988 and 10383/87 on the export and import of certain dangerous chemicals, and welcomes action by the Community to ensure that adequate information on dangerous chemicals is made available to importing countries.—[Mr. Durant.]

  PETITION

    Local Government Reform
    10.13 pm
    Dr. John Reid: On behalf of my constituents in Motherwell, North, I wish to, present a petition to the House which invites the House to use its influence to seek to repeal the Act of Parliament which will lead in turn to the poll tax or community charge which my constituents believe will be a regressive form of taxation which is unrelated to ability to pay and will cause severe hardship to the poor, large families and families with dependent relatives, pensioners and many other low income groups, such as student nurses.
    To lie upon the Table.

Hampton Court Palace
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]
10.14 pm
Mr. Toby Jessel: I am grateful for the opportunity to draw the attention of the House to the royal palace of Hampton Court—set between its splendid gardens, the River Thames and two royal parks. It is one of the most glorious and beautiful of the buildings of Britain. Hampton Court palace is of immense historical and architectural interest. As a cherished part of our national heritage, it has an obvious national importance, but hon. Members will understand that it also has a local dimension; thousands of my constituents, not only in the Hamptons but in Teddington, Twickenham and Whitton, know Hampton Court well, love it and are proud of its history and status as a royal palace, which they want upheld.
In the past two years, Hampton Court has suffered two grievous shocks. First, there was the disastrous fire on Easter Monday 1986 and then, in October 1987, the hurricane destroyed some 800 trees in the gardens and royal parks. These were dreadful tragedies, but we must now look forward rather than back. We must try to use what happened as an opportunity to strengthen and recreate all that is best in Hampton Court, so that as the years roll by it can enrich the lives of yet larger numbers of people.
The fact that Hampton Court has so much to give its visitors is not the only reason why it should try to attract more of them. There is the financial aspect. I make no apology for mentioning that. Apart from the exceptional fire reinstatement costs, which are about £5 million spread over three years, the annual running and maintenance costs amount to £6·6 million. That includes the cost of running not only the palace but the gardens, maze, home park, Hampton Court green and the towpath.
By contrast, let us consider the takings from admissions to the palace and maze, the souvenir shops, car park and real tennis courts. I know that you, Mr. Speaker, are very familiar with the real tennis courts at the royal palace of Hampton court because of the championships awarded to members of your family there, but 1 mention the real tennis courts as a part of the Tudor Hampton Court of King Henry VIII, another very distinguished figure.
The takings from Hampton Court amounted to £1·2 million in 1984–85, and these have increased to £1·6 million in 1987–88. The target for 1988–89 is about £1·8 million. It is encouraging, up to a point, to note that the takings for the Easter weekend, of which I was informed in reply to a written question on 14 April, suggest an annual increase of about 10 per cent.—a trend that is being sustained. However, it is encouraging only up to a point, because there remains an annual gap of not far short of £5 million, which is now being met by our fellow taxpayers.
As a royal palace, Hampton Court is a priceless part of our national heritage; it should never be considered as a mere business. I would certainly not consider it as such. Neither, I am sure, would Ministers in the Department of the Environment. But even if it were regarded as such, it would be fair to remind the House that as a beautiful historic royal palace, Hampton Court helps to draw in overseas visitors; they do not come to Britain for our
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weather, but for our history, royalty, traditions, arts, heritage and beautiful places; Hampton Court incorporates all those aspects.
The visitors spend money in hotels and restaurants and on shopping; and so generate incomes and jobs which produce a tax yield for the Government. Those effects cannot be measured exactly, but they certainly exist and it is proper that the House should have regard to them because we have a duty to scrutinise financial and economic matters.
It seems to me that £5 million a year is a needlessly large sum for Hampton Court to be expected to pull from the taxpayers. In that connection, I should like to make a number of suggestions. My first point is about access. The biggest obstacle to tourists visiting Hampton Court is the inadequate provision of car parking space, especially during peak seasons and in particular at weekends in peak seasons. It is essential to crack this problem, perhaps by using an area behind existing walls in the north-west corner of Home park or across the Thames at Hampton Court station.
Secondly, on summer weekends on all four approach roads to Hampton Court from Teddington, Kingston, Hampton and over the bridge there are traffic jams trailing back from the zebra crossings at the roundabout at the palace entrance. That is because of peak visiting times the flow of pedestrians is almost continuous. The traffic tailbacks and jams are bad enough to deter some visitors, and are inconvenient to many other people and must be dealt with. So far I have found a noticeable lack of enthusiasm on the part of Richmond borough council in seeking to deal with this by installing traffic lights. I hope that my hon. Friend the Minister will ask his colleagues in the Department of Transport to take an interest in this matter and to discuss it with Richmond borough council. This afternoon I asked London Buses to carry out a survey on summer weekends to find out how its buses are held up and to make the results of this survey available to the Government, to Richmond borough council and to the Metropolitan police.
Thirdly, parts of Hampton Court are rather bare. The Tudor kitchen, which should be an important feature, is empty. One should be able to go into that kitchen and see Tudor pots and pans and ladles and copper jelly moulds. Perhaps the Government can twist the arm of other great museums that have hoards of objects stashed in their cellars so that those museums will lend some of those objects to Hampton Court. Museums are always asking the Government for money for roof repairs, and I have no doubt that the Government have some pull and influence with the museums. They should be able to persuade them to get those things out of their cellars and into Hampton Court and other places where they can be shown to better advantage.
Fourthly, the presentation at Hampton Court could be modernised. Fifthly, there are empty parts of Hampton Court palace which could be opened up to tourists as tourism grows as part of a long-term trend. Sixthly, the marketing could be improved. Hampton Court is best known for its Tudor associations. The part designed by Christopher Wren is at least as prominent and may well be larger than the Tudor part. However, every schoolchild is taught about Wolsey and Henry VIII and the Tudor monarchs of Hampton Court. Many people are fascinated by the personality of King Henry VIII and his six wives. He could be much better exploited.

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Hampton Court can learn something from York. In developing its tourist trade, York wanted to use the Romans as a feature. It was advised by a public relations company not to do so, but to use the Vikings who were thought to have more sex appeal. York homed in on the Vikings, with tremendous success. There has been a terrific growth of tourism in York. Hampton Court could learn from that and make more use of its associations with King Henry VIII.
All this can and must be done in a way that does not cheapen Hampton Court palace. If its distinguished royal character is not maintained, we shall lose what people want to see.
Seventhly, the souvenir shops have been doing well, but they could do much better. It appears that, at other stately homes and tourist centres, souvenir shops have a booming trade. Much more still can be made of the Hampton Court souvenir shops.
Eighthly, plant sales could be profitable. Many people visit Hampton Court gardens and ask the gardeners where they can obtain some of the plants that they see. A plant sale point could be set up, perhaps at the new car park, if one is provided. I hope that the Minister will confirm that access to the gardens will continue to be free of charge.
Ninthly, more use should be made of the River Thames. A better, higher-grade quality of boat could be laid on. People could perhaps set out from Westminster pier, have a rather good lunch on the boat, see Kew, Richmond, Twickenham and Teddington, see Hampton Court and then return to London by train.
Tenthly, the marketing process should concentrate on increasing the flow of visitors in the months of March to May and September to November, because Hampton Court is at fairly full capacity in June, July and August.
Eleventhly, there are two blots on the landscape which should he removed. The first is the hideous new ticket office, and the second is the obtrusive white canopy overhanging the exterior of the Tiltyard restaurant. It should never have been put there. It is a disgrace to Hampton Court and should go.
There is also the threat of a further building which could be obtrusive. That would he in the constituency of my hon. Friend the Member for Esher (Mr. Taylor), whose deep concern for the environment is well known, not only in his constituency, but also in mine. I refer to the site of Hampton Court railway station at the south end of the bridge in East Molesey. There is a planning application for a new building there, which has not yet been decided by the local authority in my hon. Friend's constituency.
I have also received representations from my constituents at Hampton Court green who are concerned that, if they stand on Hampton Court bridge and look along the river downstream, with the historic palace of Hampton Court on their left, they might see a modern building on the right facing across the Thames to Hampton Court. As it is in my hon. Friend's constituency, it would be proper for me to write to the Minister on that matter, with a copy to my hon. Friend, rather than to give my views on the matter in the debate. I hope that that will be acceptable to my hon. Friend.
Mr. Ian Taylor: When my hon. Friend considers the transport problems, particularly in respect of the site that he has just mentioned, upon which I do not
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wish to comment now, will he pay attention to the siting of Hampton Court station, which serves Hampton Court and is in my constituency? Many of my constituents are worried about the intentions of British Rail in respect of that historic station and we are anxious to ensure that it is preserved in use. I am sure that that will be of assistance to my hon. Friend and to the visitors to Hampton Court.
Mr. Jessel: My hon. Friend is right. It is not only outside visitors to Hampton Court and his constituents in East Molesey, but my constituents who live in the palace and around Hampton Court green who use that station and regard it as an attractive old Victorian station. If my hon. Friend decides that he wishes to make any representations on that matter, he can count on my support and that of my constituents.
Finally, there is the administration of Hampton Court palace. It has been extremely fortunate in two most distinguished Chief Stewards—the present incumbent, Lord Maclean, the former Lord Chamberlain, and his predecessor, the late General Sir Rodney Moore. I also pay tribute to the excellent contribution both of the last administrator, General Thompson, and the present, acting administrator, Mr. John Yarnall. A new administrator is to be appointed. The right man must be found; but I wish that the Government would get on with it. I cannot see why it has to take six months. There is a need to end the uncertainty and to build up morale with leadership, zest and enthusiasm. That is the way for Hampton Court's future to be worthy of its great past.
10.30 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): I am particularly privileged to answer this Adjournment debate in your presence, Mr. Speaker, as your personal and family interests have rarely been surpassed in the history of the occupancy of that position, particularly in view of the sporting excellence of your son-in-law, Alan Lovell, whose great ability as a real tennis player, particularly at Hampton Court, has matched the outstanding historical surroundings in which he has played real tennis and the way in which he has always been the best possible ambassador for his sport.
It is also a privilege to be in the presence of my hon. Friend the Member for Twickenham (Mr. Jessel), whose interest in, and dedication to, Hampton Court has been a consistent feature of his contributions to the debates in the House, and his lobbying, often intensive but always dedicated, of the Minister who happens to be at the Dispatch Box. I know that he has Hampton Court palace very much at his heart, and is careful and considerate about its future. I appreciate the fact that I am now, as a result of his good fortune in securing this Adjournment debate, given the opportunity to explain the general background and some of the details about which I know that he is concerned.
My hon. Friend takes a close constituency and personal interest in Hampton Court. His detailed knowledge and constructive suggestions arising from that are very helpful. I shall deal with his individual comments in a moment, but first I shall say a few words about the palace and what we are setting out to do.
As hon. Members will know, Hampton Court is an unoccupied or "historic" royal palace. That is to say, it belongs to the Queen in right of the Crown, but it is not

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used as a royal residence. The Queen's policy interests at the palace are looked after by the Lord Chamberlain. Statutory responsibility for its daily running, including maintenance and opening to the public, rests with my right hon. Friend the Secretary of State for the Environment.
Hampton Court is one of the country's major tourist attractions, as my hon. Friend has rightly pointed out, with around 600,000 paying visitors a year. It is also a complex business. The total budget for the palace, gardens and park is currently around £8 million. This includes in the current year about £1·5 million for restoration work following the major fire at the palace in March 1986, and a further £2·25 million for other construction and maintenance work. Income is forecast at £1·8 million for 1988–89. About 150 staff are employed at Hampton Court, and although it is not a royal residence, some 60 or so people live there, comprising grace and favour residents, officials and retired officials, of the royal household and of the Department of the Environment.
Although visitor levels are high, the presentation of the palace to the public has fallen behind developments elsewhere, as my hon. Friend has said. In recent years, great strides have been made in improving the presentation of historic houses to the public. The leisure and tourism industries have become more sophisticated and developed, and it is no longer enough—as it was in the early days—simply to open the doors of historic houses to guarantee visitors or visitor satisfaction. Simply opening the doors is not a sufficient guarantee of a fair slice of the visitor market.
That is not a criticism of the way Hampton Court has been run, or of those involved in the past. I am not seriously suggesting that we have done literally nothing but open the doors of the palace in recent times. However, it is sometimes useful to step back and look at what is being done elsewhere. We have done that at Hampton Court and are in no doubt that improvements can be made. The burden on the taxpayer of running Hampton Court is high, and by attracting more visitors and enhancing visitor satisfaction we aim to improve revenues and reduce that burden.
My hon. Friend mentioned the appointment of the administrator and I take on board his comment about the timing. That appointment is the crucial element in the new unified management structure at the palace, introduced by my right hon. Friend the Secretary of State, to put into effect the improvements we are seeking. I am sorry about the resignation of the first administrator, but I give my hon. Friend the assurance he seeks this evening, that we will be recruiting a permanent successor to General Thompson as quickly as possible. Meanwhile, as my hon. Friend knows, we have appointed an acting administrator at the palace, who is taking forward the work already started by General Thompson.
As I have said, we will be looking to improve the presentation of the palace. We shall also be looking at ways to reduce costs. The first task give to the palace administrator has been to prepare, as quickly as possible, a five-year forward business plan and a five-year forward works and maintenance programme. Those plans and programmes will form the basis of future developments at Hampton court and will set out how the business position can be improved. The detailed arrangements for handling the plans and programmes have yet to be worked out, but
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final clearance will be necessary with both the Lord Chamberlain, on behalf of the Queen, and my right hon. Friend the Secretary of State.
It is too early to say what those plans will contain, but my hon. Friend has asked for an assurace, which I am happy to give. Any future developments will have full regard to the status and dignity of Hampton Court as a royal palace; it will not be turned into a Disneyland or a leisure park. What Hampton Court has to offer the visitor, as he rightly points out, is a unique part of our national heritage and we shall build on that. In trying to improve Hampton Court's presentation, we are well aware of the dangers of changing its unique character and status, which are its very attraction.
Before turning to some of the further specific comments and suggestions raised by my hon. Friend, I wish to assure the House that there are no plans—nor could there be—to privatise what is a royal palace. Wild reports that have appeared in the newspapers to that effect are just that. Lastly, my hon. Friend also asks for reassurance on the question of public access to the gardens. I am happy to repeat the firm assurances given by my predecessors that we have no plans at all for charging for entry to the gardens.
My hon. Friend highlighted traffic movement and parking facilities as crucial ingredients in the future development of Hampton Court. I agree with his comments and entirely endorse them, particularly in respect of weekends, holidays, and other busy seasons. Anyone who has been caught up in the traffic surrounding the palace on a summer Sunday will know that congestion is a very real problem there.
How to improve visitor access and traffic flows around the palace is one of the issues for the business plan. I know that the administrator will be tackling this as an early priority. I have to say that I think it unlikely that the Department of Transport will be prepared to finance the installation of traffic lights as recommended by my hon. Friend, as on the roads concerned that would be a local authority matter. However, I appreciate that he has raised the point in view of the importance of discussing the matter with the local authority. We have asked the administrator to talk to the local authority along the lines he requested this evening, to see what improvements can be made.
Car parking also is a serious problem. Facilities at the palace are at present limited and will have to be expanded. Without expansion, we would create serious difficulties by attracting more visitors, and without more car parking, we can do nothing to improve the woefully inadequate signposting on the roads around Hampton Court.
Finding space for new car parking will be difficult—given the special character of all the land in the park and gardens. We do not yet have any firm proposals on this, though I note my hon. Friend's suggestion that we might eventually acquire new land in the immediate area. I was also grateful for his suggestion of "cut and cover" parking provision—if I may summarise his observations and comments to my Department—although experience suggests that it is likely to be too expensive a solution for the return we are likely to get from car parking charges, given the seasonal nature of visitor patterns.
My hon. Friend raised interesting and constructive suggestions about marketing, which I think we should consider carefully, and for which I am grateful. His suggestions of high-quality river trips, the staging of

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concerts and ways of improving the presentation of the palace, especially the Tudor areas—he mentioned the Tudor kitchens—are all very much in line with the options that I see as presenting opportunities for the future. I shall ensure that those specific ideas are examined by the administrator and his advisers who are involved in developing future marketing strategies.
I note my hon. Friend's comments about the current planning application, for the development of the land on the British Rail site opposite the palace. I know that he has brought it to the attention of my Department. All development around the area of the palace is of course sensitive, and is scrutinised carefully by all concerned. I shall draw my hon. Friend's comments to the attention of my right hon. Friend the Secretary of State; but, as the applications are currently before the local planning authority, he will understand why it would not be appropriate for me to comment further at this stage.
Mr. Jessel: Although my hon. Friend cannot comment on planning aspects, can he make the procedure clear? If an application had been received by local authority, and the authority granted planning permission, would the Department of the Environment have any locus if it disagreed, or would it be too late?
Mr. Moynihan: If the local authority is content with planning applications that come before it, that is perfectly in order and not a matter for any further intervention—even if such intervention is considered wise by my right hon. Friend the Secretary of State. I am sure that it would not be, because the matters that the local authority will consider are purely for that authority. I hope that that helps to satisfy my hon. Friend's concern that any further delay on sensible planning proposals brought to the local authority's attention could be deferred further to the Secretary of State.
Work on the restoration contract, following the major fire on Easter Monday 1986, is now due to start in July or
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August. We expect the work to take about three years, and if possible to be completed just before the summer season in 1991. During the work, some disruption to the public visiting the palace, and to staff and residents, will be unavoidable. However, we are doing all that we can to minimise this, first by ensuring access routes for the deliveries and contractors' vehicles that are the least intrusive, and secondly by restricting deliveries of materials to between 8 am and 10 am on weekdays.
I appreciate my hon. Friend's feelings about the unfortunate appearance of, for instance, scaffolding during the summer season. The administrator is also very concerned about that, and discusses individual cases with the Property Services Agency. Wherever possible, areas to which the public have access, or which impact on their enjoyment of the palace, are kept free of works during the summer season, but this is of course not always possible. Sometimes there are emergencies, and in some cases good weather is required for the works to be carried out.
I was sorry to hear about the problems associated with potential vehicle damage to the towpath, on which representations have been made to me. Steps have been taken to instruct palace staff on the need to avoid damage to the grass verges when collecting litter. We shall look into possible solutions to the problem of speeding.
I hope that, in the brief time available to me, I have dealt with most of my hon. Friend's points. I will ensure that any that I have missed, or to which, because of lack of time, I have been unable to turn my attention—particularly those relating to the intervention of my hon. Friend the Member for Esher (Mr. Taylor)—will be considered by the administrator. I agree strongly with my hon. Friend on the need for a strong sense of direction following the major fire and the recent organisational changes. I hope that the changes that we have planned will build on the loyalty of the royal palace staff and add to their satisfaction. We should all recognise that loyalty as critically important and of great service to the palace.
Question put and agreed to.
Adjourned accordingly at sixteen minutes to Eleven o'clock.