asked the Secretary of State for the Environment if he will now consider replacing the present rating system by a poll tax.

No, Sir. We have concluded that the disadvantages would far outweigh the advantages.

I appreciate that the Government will act to deter excessive rate increases, but does my right hon. Friend agree that that will do nothing to remove the basic unfairness of the present system whereby the occupants of one house may have three incomes, while another house, with a similar rateable value, may be occupied by a pensioner? What will my right hon. Friend do about that unfairness?

Over the past 18 months the Government have probably given more thought to that issue of local government finance than to any other since we took office in 1979. We have tried to find a way to meet the problem, about which I know many people feel keenly. For the moment there does not seem to be a way which would be acceptable and fair and not give rise to even greater anomalies than those to which my hon. Friend has drawn attention.

Will the Minister say whether, like his predecessors, he is the Minister for Merseyside? If he is, is he aware that the people of Merseyside think that he has already destroyed the rating system there? One of his first acts has been to take £13 million away from Merseyside county council — money which could be used to provide jobs and services there.

The phrase "Minister for Merseyside" was concocted by the press. It was used neither by my right hon. Friend the Secretary of State for Defence nor by my right hon. Friend the Secretary of State for Transport. However, I can confirm that I inherited from my right hon. Friends the responsibility for carrying forward the work of the task force and other notable initiatives which they started on Merseyside.

Will my right hon. Friend consider the way in which the rating system can militate against commercial premises? It requires them to pay water rates despite the fact that they do not have any water serving their premises, which places a great onus on many small businesses in the west country.

I am aware of the problem to which my hon. Friend has drawn my attention. I cannot offer an immediate solution, but the problem is one to which I shall give attention.

How can the Secretary of State justify imposing a fine of £280 million on local authorities for alleged overspending in the financial year 1983–84 when only three months of that year have elapsed, when the year will not be over until the end of next March and when the ascertained expenditure will not be known for a year after that? By what standards of justice does the right hon. Gentleman invent a crime and then punish local authorities which have not even committed it?

I am grateful to the right hon. Gentleman for giving me an opportunity to put the absurd remarks that he has made to the press and on radio and television into context. He has talked about this as though it were the death knell of local authorities. The total amount of rate support grant for the current year is £11,782 million, compared with the amount of holdback which the supplementary report which was published yesterday gave as £280 million, against an overspend in excess of their budgeted expenditure over target on current spending of £771 million. There is nothing in that statement which all local authorities would not have known perfectly well and could not have worked out for themselves last January. They knew to four decimal points of a penny precisely how it would be calculated and they decided to budget in excess of target.

Order. It is important that hon. Members make their supplementary questions relevant to the main question.

As the Secretary of State regards my statements as absurd, does he also regard as absurd the statement of Mr. Ian McCallum, the Conservative chairman of the Conservative-controlled Association of District Councils, that the Government's policy is unnecessary, unreasonable, unjust and has grave and far-reaching constitutional repercussions?

Order. That question had nothing to do with the main question.