The hon. Gentleman makes a valuable point, but what he says is not surprising, because it was clear even at that time that the revaluation would result in enormous changes to business rates and that some sort of transitional arrangement would be needed for a long time.

The transitional relief was expected to be, and, indeed, was to start with, self-financing in the sense that businesses which suffered big increases in rates were compensated by those that were likely to gain from a reduction. But the gains were not given to them straight away, and that meant that the original scheme was self-financing. However, shortly afterwards, we entered a recession and the Government faced a general election. Just before that general election, the Government decided to allow all the benefits for firms and businesses that were looking for a reduction in their rates to be given to those businesses.

That was clearly an electoral bribe and it has made necessary the increase in other funds to make up for that drop in rates coming in; that bribe has, therefore, caused the problems that we are facing today—the need to change the transitional relief year by year. The challenge that I gave to the Government last night—I would welcome an answer today, as they did not have the courage to answer last night—is: do they agree that the electoral bribe given in March 1992 is the main cause of the problems now?

I shall go a little further into how the need for huge transitional relief has arisen and point out that it has been necessary in some areas of the country, particularly the rather more prosperous south-east, which had the tremendous economic boom of the late 1980s, spurious though it has turned out to be. As a result of that boom, there were huge property value rises in the south-east.

In areas around my constituency, large rateable value increases have led to large increases in the NNDR payable. That has put the south-east and similar parts out of kilter with less prosperous parts, which did not perhaps gain such benefits as were gainable from that boom. We have found, of course, that the recession has had almost the opposite effect. Those parts of the country that benefited in the short term from the boom have been the same parts that have been hit—often worst—by the recession.

The areas where property values rose at the time of the revaluation of 1988 are often the same areas that will be revalued at a much lower rate under the property revaluation of 1 April 1993. That has led to a curious situation in which there had been huge increases in business rates, which have had to be reduced by transitional relief. But those increases may lead to reductions in the total amount payable once next year's revaluation—it was introduced on 1 April 1993, but the new business rates will become payable next year—comes into effect.

Those huge increases have led to a number of business bankruptcies in the meantime. It is my fear that if the increases are allowed to go ahead, even at the levels that are being contemplated over the next year, a number of businesses will become bankrupt during that year—businesses that would have found their rates reduced by the revaluation had they survived as long as the beginning of next year.

I therefore believe that it is foolish of the Government to go ahead with increases in rates charged this year for some of those firms which are likely to be, or could be, put out of business during the next 12 months, but which, if they could survive that period, might survive thereafter and become viable once more.

There is a good case to be made for saying that the amount of rates relief that has been allowed—or will be if the Bill is passed—is insufficient and will lead to a loss of businesses, which the Government could avoid if they chose to do so. If the Government chose to avoid that loss of business, that might be self-financing because the loss of businesses inevitably means that rates will be lost as well and the country's general level of prosperity will fall.

I shall now deal with the details of Labour's amendment, because I have certain sympathy with much of what Labour Members have talked about and much of their amendment in terms of the apparently illogical way that the Government were planning at first not necessarily to make up losses, but now, as promised, are to make them up.

However, it seems that we should on this occasion support the Government on Second Reading and not support the amendment, because although I have certain sympathy with some of what the Labour party has said today, the point that it is making is a rather technical one. I say that for the following reason. The amount that council tax payers will have to pay in any year depends on what comes back to them not only from the NNDR—the distributable amount—but from the revenue support grant.

It is open to the Government to make increases or decreases in the revenue support grant as they wish. Were they, for example, not to make up the full amount in the distributable amount as a result of changes to transitional arrangements, it would still be open to them to make up that amount by increases in the revenue support grant. Equally, if they chose to make up the whole amount lost in transitional arrangements, they could nevertheless reduce the revenue support grant. So the ultimate effect on the council tax payer is not in itself determined by the passing or otherwise of the Labour amendment.