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Business Rate Supplements Bill

I can give my hon. Friend the figures that he seeks. In 1997-98, business rates formed 25 per cent. of the money that was given to and spent by local government. Last year they formed 20 per cent. The reason is that we have been keen to restrict the annual increase in the small business non-domestic rate to the rate of inflation. At a time when significantly above-inflation Government grants have been given to local authorities, that proportion has therefore fallen. We do not propose to change that policy approach, and any business rate supplement levied in a local area or a combination of areas will be entirely in addition to the core commitment of the business rate take as a whole rising in line with inflation. That commitment will remain. The present economic circumstances underline the need for active government and an active public sector to protect the poorest, to correct flaws in the market and to exert the leverage needed to secure the proper role and contribution from our private sector. The alternative is to let the recession run its course and leave the upturn to the market—precisely the approach that was taken during the recessions in the 1990s and 1980s. We are determined not to repeat that approach.