Orders of the Day — Rates Bill

Part of the debate – in the House of Commons at 7:43 pm on 17th January 1984.

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Photo of Nick Brown Nick Brown , Newcastle upon Tyne East 7:43 pm, 17th January 1984

At the risk of inciting dissent from those behind me, I congratulate the hon. Member for Basildon (Mr. Amess) on his maiden speech. I do not agree with what he said, but it was no worse than the speech of the Minister. I wish the hon. Member well in what time he has in Parliament.

The Bill is appalling. The only good thing I could find in it was schedule 1, paragraph 19, which gives a small measure of rate relief to disabled people's organisations.

The Bill is born of dogma, not necessity, and of the argument about the nature of wealth in our society. It is the child of those who believe that all wealth is generated in the private sector and that a good education or a high standard of health care is not wealth but a luxury. This measure is not necessary for the Government's management of the economy. Local rates do not affect the public sector borrowing requirement or the money supply except in the area of capital schemes and borrowing. The Executive already have power to control these. Even what the Conservative party would regard as the most excessive local government expenditure is covered by revenue so it does not affect the borrowing requirement. If inflation is the issue in the management of the economy, the Government must explain the inconsistency in their approach which leads them to see rises in rates as an evil but to insist on rises in fuel costs.

The real reasons for the Bill are to be found in the parliamentary brief circulated by the Confederation of British Industry and also in the prejudices of the Conservative party. The CBI tells us about the burden of the rates, yet, as we have heard in the debate, nationally rates amount to less than 1 per cent. of industry's costs. The CBI brief states this key fact in a different way; it says that rates yield more than mainstream corporation tax. Quite so. All that proves is that, no matter how agile the accountant is, he cannot find a way for a business to avoid paying the rates.

We were told that enterprise zones, with their nil rate burden, would help enterprising business men. They helped some enterprising business men but not those they were supposed to help. While the rates have gone altogether, site owners have been able to put the rents up. That is enterprising, but it does not create wealth for anybody except the owners of the sites. I am sure that that is not what was intended.

The Minister told us of companies whose owners allege that rates have driven them out of business or forced them to reduce the size of their businesses. He has told us that he wants only to curb a few naughty councils and that the rest will be all right if they are good. The Minister is a good Conservative and I am sure that he believes in market forces and leaving business free to respond to market forces. If that is the case, why does he not leave it to market forces, let businesses choose which area they will be based in and let them move from high-rated to low-rated authorities if they wish? Why legislate on the rates?