To ask the Secretary of State for Scotland if he will make a statement on non-domestic rates for 1991–92.

As a result of our policy of reducing Scottish business rate poundages to the level of the English national non-domestic rate, Scottish businesses will pay £58 million less in rates next year than they otherwise would have done. This is a reduction of almost 5 per cent. The total reduction due to this policy and our earlier decision to limit increases in poundages to no more than inflation from 1989–90 onwards is £230 million. That saving has been of great value to Scottish business and therefore to investment and employment levels.The reduction of £58 million is larger than had been allowed for in drawing up the spending plans we made last year and £48 million of it will be met by increased revenue support grant to local authorities. Local authorities are being asked to contribute the remaining £10 million through efficiency savings.The table shows the rate poundage which I intend to prescribe for each local authority in regulations that I shall lay before Parliament this week.I am aware that Scottish business would like us to make faster progress towards full harmonisation, but we have to balance the costs of funding this policy with the pressures on the taxpayer and with the level of community charges. The decision to reduce business rates and to increase revenue support grant next year beyond our original plans at a time when resources are scarce does, I believe, demonstrate the high priority that we give to it. We remain committed to eliminating the difference between Scotland and England over the same timetable as the national non-domestic rate is phased in south of the border.As last year, the reduction in poundages will be accompanied by an associated reduction in derating: from 35 to 32 per cent. Also as last year, this will apply across the board to all authorities in Scotland. However, a number of representations have been made to my Department suggesting, for example, that reductions in rates should be made differently in future, in order to give earlier benefits to higher-rated areas, or that a single level of derating for manufacturing and freight industry is particularly generous in those areas which have relatively low rates. I shall be reviewing these matters and our progress towards harmonisation, including the powers available to me, during the coming year to see whether a different approach might be adopted in future. In this context I will welcome the views of interested bodies.