§ Mr. Patrick ThompsonTo ask the Secretary of State for the Environment if he will explain the basis of his estimate of the yield from non-domestic rates in 1990–91, which is to be distributed to local authorities for that year.
§ Mr. ChopeThe figure announced by my right hon. Friend on 6 November—£10,428.5 million—is the total amount which I expect to be paid by way of rates and a contribution in aid of rates in respect of Crown property. This has been derived by estimating the rateable value of all private business and nationalised industry properties, on the basis of the most up-to-date information available about the effects of the 1990 revaluation, and calculating a multiplier—36p—which will produce an amount that is consistent with the Government's commitment that the yield from those sectors should be broadly the same in real terms under the new system as in 1989–90; by applying that multiplier to the estimated new values of properties occupied by local authorities and the Crown; and by making certain allowances for income likely to be forgone, and adjustments to take account of the effect of transitional arrangements. The detailed calculation is set out in the table.
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£ million (1990–91) 1. Income from Local and Central Lists a) Total Local and central Lists RV × Multiplier (£27,590m × £0.36) 9,932 + b) allowance for net buoyancy in 1990–91 (1.5 per cent.) + 149 -c) charitable reliefs and other allowances -306 - d) transitional arrangements -38 - e) allowance for loss of income as a result of lower rating of empty property -497 - f) allowance for losses on collection (0.3 per cent. Of 1 a+ b- c- d-e) -25 - g) allowance for costs of collection - 42.5 Sub Total 9,172.5 2. Income from Local Authorities + Local Authority RV × Multiplier (and after transition) +635 3. Income from Crown Contribution in Aid + Crown RV × Multiplier (and after transition) + 653 4. Total 10,465.5 5. -City Offset (at 1990–91 prices) -37
£ million (1990–91) 6. Total NNDR Distributable Amount (at 1990–91 prices) 10,428.5 1 Excludes Central List. Notes:
1. Item 1(a): the estimated rateable value total represents the values of private businesses and nationalised industries on local and central rating lists.
2. Item 1(b): "net buoyancy" reflects changes in the rateable value base largely as a result of new buildings, demolitions and alterations to existing buildings. No separate allowance has been made for 1990–91 for appeals against the new rating list, which are likely to he settled in later years.
3. Items 1(c) and (e): these deductions take account of the effect of changes in statutory provision for charitable relief and unoccupied property rating.
4. Item 1(d): the adjustment for transition represents the amount by which it is estimated that the transitional arrangements will not balance in 1990–91, i.e. the amount of rates foregone as a result of protection against increases which will not be recoupled by way of the limitation on reductions.
5. Items 2 and 3: the figures for rates paid on local authority property and the Crown contribution in aid are net of buoyancy and reduced payments for empty property.
6. Item 5: the City offset is a preliminary estimate of the reduction in the amount which the City of London will be required to pay into the non-domestic rating pool on account of the local rate in the City. This is the amount which will be retained by the authority to meet its expenditure.