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Column 888every demand, even if it is as low as 72p. Let us see Tory Members laugh now about sending bills in cases of bereavement.
I give a clear warning to the new Secretary of State that millions of people in England and Wales will not be able to pay and that millions more will be unwilling to pay the poll tax because of the unfairness of the system. A movement of popular resistance is growing throughout the country. I and a number of my colleagues, including my hon. Friend the Member for Dunfermline, West (Mr. Douglas) have said that we will not pay the poll tax. We have been saying that since last July, and we repeat it again today.
That is not a decision we take lightly. We do not come here as law makers to argue universally in favour of law breaking. I do not go out of this Chamber and say that people should run bairns down on zebra crossings. There are certain morally justifiable laws which we all accept should be kept for the good running of society. But the poll tax is not morally justifiable ; it is a class law, designed to benefit the rich at the expense of the poor.
Our great-grandparents broke the class laws at the turn of the century and gained the right for workers to join trade unions. Sixty or 70 years ago, in addition to those who threw themselves in front of horses in the Derby, women--and especially the working-class women at the cotton mills in Lancashire and the north-west--broke the class laws of the 19th century to give women the right to vote. The poll tax, which threatens people's democratic right to vote, their living standards, their jobs and their services from local councils, is in precisely the same mould as that class legislation of the 19th century.
I have no compunction about arguing that people should not pay. We shall not be alone. A major campaign is brewing up inside the trade unions. Only last month, the National and Local Government Officers Association at its conference in Blackpool passed a resolution that providing mass non-payment was a viable option and that there was a viable national campaign, the association would back that campaign. I have a message for the Secretary of State and his hon. Friend the Member for Salisbury (Mr. Key), who keeps interrupting him from behind. People in factories and offices throughout the country are discussing the formation of anti-poll tax unions. By the end of the year, the numbers will run into four figures.
I can mention only briefly those who presently pay their rates within their rents. In Scotland, people find that they are paying the same rent and being charged the poll tax, and that is perfectly legal. There is opposition to the poll tax in Coventry. I have received letters from club stewards in working men's clubs, such as that from Mr. Ron Nicholson from Canley, asking whether they too will face the same problems those living in Scotland already face. I have another question for the Secretary of State-- to which I shall return in the next Session--which affects two of his major responsibilities. At present, water rates are based on the rateable value of a house. What will happen when we do not have rateable values because we have the poll tax? I can predict what will happen. Along with privatisation, the water authorities will take the opportunity to hike up the level of the water charges. They will bring in a mirror image of the poll tax, with a water poll tax based on the number of people who live in a house.
What will the effect be on civil liberties? There are dozens of local authorities, such as Solihull, where
Column 889personal privacy has been invaded by over- detailed registration forms being sent out. [Interruption.] The Secretary of State should listen for a second. I have read many of the 736 sets of regulations, which we have not debated properly because they are introduced at dead of night, such as on 23 May, when we debated 94 pages in one and a half hours.
What will the Secretary of State do about a person who, at present, can go to the social services department of a local authority and say with confidence that he suspects that a bairn is being sexually or physically abused down the road? A person can give such information in confidence to the social services department knowing that an investigation can take place and he can hope that a tragedy like the case of Jasmine Beckford will be prevented. What will the Secretary of State say when those same officers are told by the community charge registration officer that they have to give up their confidential records and reveal to him the names and addresses of the people who had informed the social services department about potential child sex abuse? That is the depth of the invasion of personal privacy to which the poll tax reaches. I say to the hon. Member for Pembroke (Mr. Bennett) : read the regulations, sunshine, to find out whether that is legal or not.
The Chancellor of the Exchequer may escape getting his head chopped off, which was the fate of the Chancellor in the peasants' uprising in 1381, but I predict that the new Secretary of State and his mistress, the Prime Minister, will not escape the political decapitation that awaits them in the poll tax battle. The Prime Minister said that the poll tax was to be the flagship of her third term in office. I shall make one final prediction. The poll tax will go down in the history books not as the flagship, but as the Prime Minister's Titanic--and with a bit of luck, the captain is going down with the ship.
Mr. John Marshall (Hendon, South) : This debate was billed in advance as a major assault upon the community charge. It seems to be a major assault for which most of the troops have no enthusiasm. Throughout most of the debate, fewer than 12 or 15 Opposition Members have been present. During his speech, the poor Democrat, the hon. Member for Truro (Mr. Taylor), had no support from any of his colleagues.
Mr. Marshall : The hon. Member for Hammersmith (Mr. Soley) may regard it as cheap, but the Opposition's motion, and the fact that his colleagues do not want to support it, says something about their enthusiasm for it.
Debates on local government generate a great deal of humbug and synthetic indignation from the Labour party. As one who served in local government for 17 years, I cannot help but compare the concern expressed by the hon. Member for Copeland (Dr. Cunningham) about the level of community charges with the actions of Labour councillors. The Labour party objects to the fact that, in April of next year, voters in London will ask, "Why is the community charge £290 in Barnet when, in the neighbouring borough of Brent, it is £597, and, in the Labour-controlled borough of Haringey, it is £642?"
Column 890Opposition Members know full well that Labour councils combine poor quality service with a very high price to the ratepayer. [Hon. Members :-- "Rubbish."] Opposition Members may say that it is rubbish. In the London borough of Brent the cost per secondary pupil is £2,142, which is 40 per cent. above the average for outer London boroughs. Every day of the week, 2,000 pupils become refugees from the people's republic of Brent and choose to get their education in the London borough of Barnet. The London borough of Brent charges 40 per cent. more and has such a poor service that pupils go in droves to Barnet and Harrow, and a large number of teachers also leave the borough.
Mr. Marshall : Of course the community charge will help that. If the hon. Member for Dunfermline, West (Mr. Douglas) did not make so many sedentary observations, I could point out very simply how the community charge will benefit that. The people in Brent will ask, "Why should we pay twice as much for an inferior service as the people in Barnet?" I will quote one statistic to show how the London borough of Brent is twice as expensive for a poorer service. I refer to housing management. The London borough of Brent can boast of rent arrears of over £8 million, or 46.9 per cent. of its annual rent roll, compared with 3.7 per cent. in the London borough of Barnet. However, the London borough of Brent's housing management costs are 60 per cent. higher than in all the outer London boroughs. Anyone who believes that the Labour party is at all concerned about the level of the community charge should consult the ratepayers in Haringey who had to pay 61 per cent. more, or the ratepayers in Brent who had to pay 30 per cent. more. If anyone wants confirmation, he can ask the Leader of the Opposition himself. In the London borough of Ealing, he has had to pay 30 per cent. more in rates this year than he did last year.
The Labour party is against low rates. When I was a councillor in Ealing, we could boast that we had the lowest rates in west London. When the Labour party took control in 1986, the first thing it did was remove the sign from the town hall. The Labour party was determined that never again would Ealing have the lowest rates in west London.
The motion refers to increasing Government control. That comes ill from a party which, when in government, sought to legislate grammar schools away and to restrict the sale of council houses. One of the greatest benefits facing local government at present is the introduction of compulsory competitive tendering, a course of action to which the Labour party was always opposed. There is no doubt that compulsory competitive tendering is leading to a reduction of about 15 per cent. to 20 per cent. in the prices charged to the ratepayer.
Mr. Peter L. Pike (Burnley) : Is it not a fact that that is at the expense of the conditions and wages of those who work for councils and those who compete for service contracts? We have seen it in the bus industry and we are now seeing it in local authorities.
Mr. Marshall : As the hon. Member for Burnley (Mr. Pike) should know, a majority of the contracts that have gone out to tender have been won by direct labour organisations who, prior to compulsory competitive tendering, used working practices that were far out of date.
Mr. Marshall : No views could be more out of date than those of the hon. Member for Coventry, South-East (Mr. Nellist). If he regards the House as out of date, he can leave. There would be loud applause from Conservative Members and many of his own colleagues.
There is no doubt that compulsory competitive tendering gives local authorities the opportunity to provide better value for money and better services at the same time. In my experience of local authority work, whenever a contract went out to tender the ratepayer got a very much better deal, and the community charge payer will, too. In the London borough of Ealing, we were able to save hundreds of thousands of pounds on the school meals service. My son came back after a week and said, "Daddy, why are the meals so much better than they were last term?" I said, "Son, you are learning a basic political truth. When services are provided competitively, they are better than they otherwise would be."
The hon. Member for Copeland was concerned about the average community charge bill facing pensioners in the London borough of Barnet. He did not tell the House that the average rates bill there at the moment is £708 or that, next year, under the community charge, it will be £290, or that, if the misguided safety net could somehow be spirited away, it would be £235. Charges for the vast majority of single pensioners in Barnet, be they in my constituency or in those represented by my right hon. and hon. Friends, will be substantially lower than they are today.
It is all very well for the hon. Member for Coventry, South-East to talk about groups such as the disabled. He knows very well that all those groups are currently paying domestic rates. If the Labour party thinks that they should not pay the community charge, why did it not legislate to prevent them paying domestic rates?
The most irresponsible speech that we have heard today was by the hon. Member for Coventry, South-East, who talked about morally justifiable laws. To quote the hon. Member for Dunfermline, West, it is nonsense. It is a recipe for anarchy.
Mr. Marshall : No, I will not give way. The hon. Member for Dunfermline, West makes sedentary interventions which become tedious in the extreme. To give way to him would be to invite a lengthy speech with, no doubt, little relevance to the subject under discussion. He and the hon. Member for Coventry, South-East are seeking to incite--
The hon. Members for Coventry, South-East and for Dunfermline, West and their boroughs are producing a recipe for anarchy. They are seeking to put forward a course of action that can only interfere with local authorities' cash flows and mean a decline in the quality of services provided next year.
Mr. Nellist rose --
Mr. Salmond : If I am not mistaken, the hon. Gentleman is a campaigner on behalf of refuseniks in the Soviet Union who are fighting against unjust laws. At the last election, when the poll tax was clearly declared as an election issue, the people of Scotland voted overwhelmingly against it. People in Scotland are fighting against unjust laws. Will the hon. Gentleman summon up some sympathy for the refuseniks in Scotland?
Mr. Marshall : When I visit Scotland this coming weekend, I shall compare it with the Soviet Union, which I visited last year. I suspect that the comparison will be very much to Scotland's advantage. It is absurd to relate the condition of the people of Scotland to the plight of the refuseniks in the Soviet Union. The people of Scotland are part of a unitary United Kingdom. They made England suffer Socialist Governments in 1964 and 1974. They should not be surprised that the Conservative Government of 1987 adhere to the policies on which they were elected.
I want to continue my remarks about the safety net, because people in the borough of Barnet feel as strongly about it as those represented by my right hon. Friend the Member for Brent, North. Under the safety net provisions for next year, the London borough of Lewisham--which the Department accepts is a heavily overspending authority--will receive a safety net provision of £293 and pay a community charge of £215. The London borough of Lambeth, which has long been recognised as one of the most profligate local authorities, will receive a safety-net provision of £246 and will pay a community charge of £297. That will be only £7 higher than that paid in the London borough of Barnet. Why should the ratepayers of Barnet pay £55 in safety-net provision towards the extravagant, high-spending authority of Lambeth?
Mr. John Fraser (Norwood) : Perhaps, as a very late act of conversion, the former Secretary of State recognised the enormous problems in Lambeth. He might have thought that, as a substitute for the old equalisation scheme, it would be a good idea to transfer money from the richer boroughs to the poorer boroughs. That is what happened for many years under the old equalisation scheme.
The safety-net provision is a tax on low-spending authorities. It is a penalty for prudence and a premium for extravagance. I hope that my right hon. Friend the Secretary of State will reconsider the safety-net provision and, when he comes to the House in the autumn, tell us that it has been substantially refined.
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Mr. Jeff Rooker (Birmingham, Perry Barr) : I join in the congratulations expressed by hon. Members to the new Secretary of State. As his former responsibilities concerned overseas development and Northern Ireland, our paths have not crossed very often. He will get away with his faux pas at the Dispatch Box today simply because of the regard in which he is held on both sides of the House--and I say that quite sincerely. The right hon. Gentleman has made many trips abroad and his experience is rather more global than mine. I was surprised that he did not bring to the Dispatch Box examples of other countries that operate a flat-rate poll tax system to fund local government.
Some of the sentences in the right hon. Gentleman's brief struck a chord with me. I had already heard them in Committee and on Report more than a year ago. I caution him to look behind the jargon to ensure that he is not fed a duff line. I have no doubt that he will come to understand the differences between tax units, households and individuals. There will always be arguments about the number of single pensioners who might gain from the poll tax, but the right hon. Gentleman should recognise the difference between a single pensioner and a single-pensioner household. The fact is that 1 million single pensioners will lose because not all single pensioners live in single-pensioner households. Such crucial distinctions in the terminology used about the poll tax can sometimes be used to feed new Ministers a bad brief.
In the short time available I shall concentrate, rather more positively than did the hon. Member for Truro (Mr. Taylor), on the effect of the poll tax on living standards. That is where the essential unfairness of the system arises. The poll tax cannot be separated from the changes in social security legislation, especially the compulsory 20 per cent. payment that was introduced in 1986, before the election, but did not come into effect until 1988, after the election. The analysis of how that is provided for in income support shows that it is a crucial factor. There is no doubt that some people will lose and some will gain because of the so-called average amount of 20 per cent. By definition, no one could be poorer than those on income support. Some of them will be worse off, because their income support will not take account of the 20 per cent. of poll tax that they will have to pay.
Any simple system is unfair. That is why life is so complicated in a country of 55 million people. If everyone received the same pay, paid the same amount of income tax and had the same outgoings, the system would not be so unfair. It would be a simple head tax. However, the income and outgoings of families are not the same, so the poll tax will unfairly affect household incomes and family budgets. The Government argue that the cost of local services should not be hidden by allowing those on low incomes to pay a lower tax. There is a paradox--they want people to pay as high a tax as possible, but it is hidden in the rhetoric of rebates. However, the argument changes slightly when it comes to the safety net, which will severely affect those who will not receive rebates.
I want to give only one brief example from the tome that I collected from the Vote Office yesterday. An average poll tax couple with two children, claiming family credit and housing benefit and with a gross income of £100 a week, will receive a rebate of £2.62 a week. However, the interaction of income tax, national insurance, lost benefit
Column 894and the poll tax rebate means that they will have to pay a marginal tax rate of 83p in the pound for every extra pound that they earn over £100 a week. Should that family have a gross income of only £80 a week, their marginal tax rate would rise to 94p in the pound. Yesterday the Child Poverty Action Group produced a useful publication setting out certain calculations. They have not yet been challenged, but I do not doubt that Ministers will be put up to challenge them, if not tonight then during the recess. However we look at the figures on the poll tax, nothing can hide the fact that only the rich will gain. The poor will lose significantly and the middle-income groups will lose most of all.
Two examples are clearly shown in the publication. The first table gives a simple comparison between poll tax and rates, and ignores all the changes to social security benefits in 1986 and 1988. Only the top three deciles show a gain--the top decile gains £3.65 a week--and the other seven deciles show losses. The greatest loss is in the fifth decile--the middle range. Three quarters of all the families in the bottom 10 per cent. end up worse off. Fifty-six per cent. of families lose and 44 per cent. gain.
That is the position before we take into account the effect of the social security changes. Table 6.2 shows that 63 per cent.--not 56 per cent.--of families lose, and 83 per cent.--not 79 per cent.--of the bottom decile lose more than £1 a week on average. Again, the biggest single losers are the fifth decile, the middle-income groups, with an average loss of £1.72 a week. Only the top 10 per cent. gain. Those figures are produced using average poll tax figures which smooth out many of the unfairnesses. A high poll tax will be paid in deprived areas where income tends to be low. Everyone accepts that that is the case.
I make no apology for taking my constituency as an example. We were told last week that the poll tax for Birmingham will be £307, fully safety- netted. This year, Birmingham is one of five authorities with zero underspend and zero overspend. Were it not for the safety net, the poll tax in Birmingham would be £240 this year. As it is, it will be £307- -a poll tax surcharge for the safety net of £67. I do not deny that it will be different in later years, but it is the first year that my constituents will be worried about next April.
There are 35,000 front doors in my constituency. Most hon. Members know the number of letterboxes in their constituencies. I have taken 50 roads, with 7,000 dwellings and 14,000 adults. They comprise one fifth of my constituency--the biggest in Birmingham. This year, those 7,000 dwellings will pay £3.3 million in rates. I have not taken rebates into account because I would not dream of asking for such personal information. Using national averages for empty dwellings and a figure of £307 for each adult's poll tax, the poll tax for the equivalent period would be £4.3 million--£1 million extra from one fifth of my constituency.
A few of the 50 roads that I chose will be gainer roads. I challenge anyone to say that I have not used a representative group of roads. My constituency will pay an additional £5 million in poll tax. The dislocation that that will cause to the local economy and to families in my constituency does not bear thinking about. The reality is not people refusing to pay ; rather it is of paying the poll tax or buying food.
I have four wards in my constituency. Wards in Birmingham are all large, with electorates of between 18,000 and 21,000. In Tintern road in the Handsworth
Column 895ward, which is fairly typical and being done up under the urban development scheme, the rates this year will be £33,535. The poll tax will be £70,600--almost double. In Leonard road the rates will be £64, 600 ; the poll tax will be £125,000. The dwellings there are pre-first world war with a less than average rateable value, occupied by average families. However, in the Handsworth ward I am one of an ethnic minority. Some of those dwellings house extended families with six or seven adults and there is no way in which they will be able to pay such sums. In Freer road the rates will be £58,000 and the poll tax will be £111,000.
In the outer-city ward of Kingstanding in my constituency, with 12, 000 dwellings built in the 1920s and the 1930s having rateable values within £5 of each other, every couple household will lose because of the nature of the rateable values. In Hurlingham road, the rates will be £69,000 and the poll tax will be £106,000. In Dovedale road, the rates will be £113,000 and the poll tax will be £174,000. Perry Barr, an outer-city ward from which my constituency takes its name, is a middle-income ward. It is usually the only ward in Birmingham, along with the three wards in Sutton Coldfield, with a below average unemployment rate. Therefore, compared with the others, it is a middle income ward. In Rocky lane, where 800 people live in outer suburban semis--an awful lot of Tory voters--the rates will be £189,000 and the poll tax will be £245,000. In Mildenhall road, which is similar, the rates will be £113,000 and the poll tax will be £151, 000.
The Labour party does not get the majority of the votes in those roads. It has come close to winning that ward, but it has not done so since 1963. That is middle-income territory in outer suburban Birmingham. I do not deny that there will be gainers and losers in those roads. In three of my wards, single people will gain, but those living in single dwellings, pre-first world war, in the Handsworth ward, will lose because their rates are less than they will pay in poll tax. That is the reality in low rateable value, deprived, inner-city areas. That is why there will be trouble next year. No Conservative Member can explain how making a person pay more in poll tax than he pays in rates will put an extra burden of accountability on the city council. Why a constituency such as mine will pay £5 million more in poll tax than in rates cannot be explained away. When one examines the income distribution of other parts of Birmingham such as Edgbaston and Sutton Coldfield, that cannot be defended.
The poll tax is unfair. It is designed to be unfair. That realisation has not come in a blinding flash to me and my hon. Friends. It does not matter how one tinkers with the rebates or what the new chairman of the Tory party will say. There is no way in which, with the best will in the world, pushing back all his previous doubts, trying to present the package in another way and winning a few more million pounds from the Treasury, the Secretary of State and the new Minister for Local Government will ever be able to sell the poll tax. It is too hot to handle and they will soon realise that. The tax's inherent unfairness means that it cannot be sold to the electorate. The Government may face most pressure from Conservative Members in respect of the safety net, but when the bills start dropping through the letter boxes in marginal Conservative constituencies next year, the message will come home.
Column 896The Labour party did not want the poll tax and saw no benefit in its inherent unpopularity. We did not say to the Tories, "Please bring in the poll tax because we know that it will make you even more unpopular." Instead, we took every opportunity in Committee and on Report to alter the flat-rate nature of the tax. We also warned the Government that if they persisted, we would screw every ounce of political capital out of their policy at the hustings and at the ballot box. We shall do so, and we do not apologise for that. Nor do we need to be defensive about out replacement for the poll tax. Any tax, be it based on the occupancy of a property or on the occupant's income, that is directly related to the occupant's ability to pay will always win the argument over a flat-rate tax. That is why the poll tax will not stand the test of time, a change of Government, or even a change of Prime Minister.
Mr. W. Benyon (Milton Keynes) : I warmly welcome my right hon. Friend the Secretary of State on taking up his new appointment. He comes to it with a fresh mind, and his concluding remarks showed his appreciation of the great difficulties that confront him on the community charge.
I have always opposed the community charge and voted against it on every possible occasion. I do not intend to change my record tonight. I shall not rehearse the arguments against the poll tax, because right hon. and hon. Members have heard them over and over, and again this afternoon. Nevertheless, I emphasise to one or two Opposition Members that the tax is now the law of the land and that that law must be obeyed. Conservative Members have a particular duty to make the best of it, because to do so is extremely important in electoral terms.
Whatever method one uses to raise local government finance--be it rates, a community charge, local income tax, or the combination proposed by the Labour party--if the burden on local authorities is too high, people will resist the tax and blame not the local authorities but the Government. I sometimes wonder about the nature of the constituencies that some of my right hon. and hon. Friends represent. Not one of my constituents has said to me, "I am worried that my local authority will be extravagant." Instead, constituents have asked, "Will the local authority be given enough Government grant?"
Reading the Layfield report after so many years repays itself, because the situation is exactly as Layfield described it all that time ago. I say to the Government that they are being blamed now, and if things continue as they are, they will be blamed even more at the next general election. The Treasury's restrictions on any further relief on the tax will be bought at a very high price.
The solution is twofold. First, as has been mentioned by a number of my right hon. and hon. Friends, one must rid the community charge payer of the safety net, which must be borne instead by the Exchequer. I made the point to my right hon. Friend's predecessor last Monday that if there is to be accountability, which is the real reason for the tax, the community charge must get off on the right foot, so that the taxpayer can say, "I know that the community charge being imposed by my local authority is just that and not something different."
Secondly, either the revenue support grant must be increased or a major item of local authorty spending must
Column 897be transferred to the Exchequer. If that is not done, the community charge will start life in the worst possible way. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) gave detailed examples of certain wards in his constituency, and they are repeated throughout the country.
If it is found after the community charge is introduced next year that concessions are necessary, they will have to be wrung out of the Government and will be confessions of failure, rather than tokens of success. I urge those of my right hon. and hon. Friends who have joined the Treasury Bench to act now, while there is still time. 6.34 pm
Mr. George Howarth (Knowsley, North) : I congratulate the Secretary of State on his new appointment. He must realise from listening to his own hon. Friends on the Conservative Back Benches that the task ahead of him is not to be envied. The poll tax was bad enough in its conception, but its presentation last week by the right hon. Gentleman's predecessor was absolute chaos. The comments of all Conservative Members today, and particularly the eloquent remarks of the right hon. Member for Brent, North (Sir R. Boyson), must leave the Secretary of State in no doubt about the problems confronting him.
The former Secretary of State for the Environment tried to improve the poll tax by softening the blow in Tory constituencies through his use of the safety net. However, this afternoon, speaker after speaker from the Conservative Benches has complained about its effect on his own constituency. My constituency is, by any measure, one of the most deprived in the whole country, yet as a result of the safety net, each payer of the poll tax will have to find £311, for which there can be no justification.
That inequality is not confined to my own constituency. The hon. Member for Wirral, West (Mr. Hunt), who has been elevated to Minister of State, Department of the Environment, may be aware that, as a consequence of the incompetence of the former Secretary of State for the Environment, the Wirral--which is represented also by the right hon. Member for Wallasey (Mrs. Chalker) and the hon. Member for Wirral, South (Mr. Porter)--is the highest-rated on Merseyside, yet still it will contribute to the safety net. I speak up for those right hon. and hon. Members because they are not present in the Chamber to speak for themselves. The hon. Member for Crosby (Mr. Thornton) is in the same position.
Although Merseyside is, justifiably, barely represented by Conservative Members, the Government will penalise not only Labour-held constituencies such as my own but Tory-held constituencies in my area. The malice was bad enough, but the incompetence and chaos that followed penalises even Conservative constituencies.
The poll tax is a bad measure, made worse by the former Secretary of State for the Environment--and I do not think that the mess can be cleared up, even by his successor.
Column 898I shall miss the former Minister for Local Government, the right hon. Member for Suffolk, Coastal (Mr. Gummer)--not because of his personality but because the Chamber will be free of the growling, barking and snarling that so upset my dog very time that the right hon. Gentleman rose to speak. Having now savaged the General Synod, the right hon. Member for Coastal has moved on to do something miraculous with loaves and fishes.
We are talking not about personalities or presentation, but about policies. This afternoon, the Secretary of State commented that the man has changed but the Government's policies have not. That sums up the dilemma facing the Secretary of State and the Government. I do not accept that the right hon. Gentleman believes in the Government's policy or in the words in the brief that he read this afternoon. If he does, he is a lesser man for it. Anyone who has a feel for progressive, reasonable and caring policies knows that the poll tax is not the solution to the problem of an alternative for the present rating system.
The poll tax is based on particular values and ideology that the former Secretary of State for the Environment was more than happy to articulate because he believes in inequality--and said so. He believes in reducing progressive taxation, and was honest enought to say so. It is difficult for someone who does not believe that to put forward a convincing case for a tax that involves equality and uniformity of contribution, but inequality in relation to the amount of misery that it produces. For that is what the poll tax is about : the poor will be hit hardest and the rich will gain most, not only in cash terms--although that is important--but in terms of services. The Cheshire study carried out not long ago showed clearly that the better-off gained most from the way in which local spending was organised. That applied to education, road use and even the relative cost of emptying dustbins outside large houses with long drives in sparsely populated areas. They will not be charged extra for their services ; they will be charged less. They will not feel the burden : it will be borne by the less well-off, the ragged-trousered philanthropists of the 1990s, who will contribute their income so that others may pay less for more advantageous services.
That burden, in terms of payment, is grossly distorted. the railway porter earning just over £100 a week could, in London, be paying 10 per cent. of his income in poll tax, while a Cabinet Minister will be paying 1 per cent. The ratio is 10 to one : that is how much worse off those in work but on low incomes will be than the better-off. That is the stark reality. There is no element of equality, or of payment for services received. It is the opposite : the less people receive, the greater the likely burden on their incomes.
That is why many of those who will gain believe that the poll tax is not only politically inept but morally bankrupt. Millions who will, at least temporarily, be better off will say, like us, that a system that takes from the poor rather than the better-off and distributes resources to the disadvantage of those who are struggling to escape from the poverty trap-- as described by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker)--is immoral, and must be rejected on those grounds.
We must recognise that this is not a charge for services rendered, but an unfair and grossly distorted form of taxation. Otherwise, the myth will be put about that we are merely making people pay for the first time. Some
Column 899interesting points have been made about that this afternoon. The hon. Member for Mid-Staffordshire (Mr. Heddle) suggested--becoming caught in a tremendously tangled web as he did so--that council tenants would somehow be disadvantaged by an alternative to the poll tax. As his right hon. Friend the Member for Henley (Mr. Heseltine) knows very well and has pointed out, those whose properties have low rateable values will be hardest hit.
Owner-occupiers living in small terraced properties--the category that the right hon. Gentleman described in the Report and Third Reading debates on 18 April last year--may have thought of voting Tory in the past. Let us make no mistake, however : they will not think of doing so in the future, and that applies equally to the people to whom the hon. Member for Mid- Staffordshire referred. We are talking not merely about the impact of the tax on each individual, but about the change in the distribution system that the Secretary of State described. The study carried out by the Child Poverty Action Group and the Local Government Information Unit has shown that, in the 50 most disadvantaged areas in the country, the average loss to the individual will be £58 a year.
The Parliamentary Under-Secretary of State gave me some staggering figures on 25 November last year relating to the losses in the regions. The northern region would lose £156 million, the Yorkshire and Humberside region £256 million and the north-west £91 million. The Secretary of State described the abolition of the equalisation system as a great bonus for the country as a whole. Under that system, inner London loses £493 million. The south-east gains by £525 million, but that can hardly be described as the righting of a great wrong. Clearly the Government have not stepped in like a knight in shining armour to correct a distortion. The effect of what they are doing will be felt throughout the country.
The right hon. Member for Brent, North (Sir R. Boyson) is rightly concerned about the impact of the safety-net provisions. I wondered whether the previous Secretary of State did not have a few tricks up his sleeve a la Lady Porter : if we examine the figures closely, some interesting political conclusions can be drawn. Is it not in the Government's interest for certain London boroughs to find that next year's tax is very high? Is it not in their interest that residents of the borough of Ealing, which they have been attacking, must pay an extra £21 each because of the safety net? In Brent, referred to by the right hon. Member for Brent, North, the figure is £36, and in Haringey it is £15. Is it not advantageous for them to award the borough that I live in, Wandsworth--the jewel in their crown, as they have described it, and the borough that the Conservatives are hanging on to--an incredible safety-net benefit amounting to a staggering £227, reducing my poll tax to £148? Bradford, the other jewel in their crown, will benefit by £36.
The chickens will come home to roost, but presumably, once next year's London and metropolitan borough elections are over, the system will be readjusted to take account of the approaching general election. The Secretary of State would be well advised to put his mind not only to the survival of his Back Benchers in the election--those representing marginal seats containing properties with low rateable values--but to whether the electorate as a whole will begin to suss out what is going on, and what their reaction will be.
Column 900I was pleased when the Secretary of State said that he would look again at registration after the shambles that we have already seen, but it is now far too late : people have filled up their forms, believing that they would be behaving illegally if they did not answer questions that have now been ruled intrusive and unnecessary. Any action would be welcome, however. It would also be helpful if the Secretary of State re-estimated the true poll tax average : the Government's 1987 estimate of £178 had risen to £275 in their latest estimate, produced last week. Even then they performed a conjuring trick, assuming that local authorities would be able to contribute the same amount from their balances as last year. Last year, the Government estimated the average poll tax at £274, so Lord knows what the figure will be when they finally get round to being honest about it.
We need an alternative to the poll tax, based on fairness and ability to pay. I give an absolute pledge from the Dispatch Box that our proposals will benefit not only the very poor but those on average incomes above the poverty line, who will pay according to their ability to find the cash. They will not be penalised through capital-value rating ; they will not be discriminated against in areas with high property values. This party will treat them decently.
We believe in a system which is fair for the individual and equal in its distribution of the burden throughout the community, and which makes it possible to raise and spend money fairly and equally on decent public services. Our policy will be pitted against the Government's and although the cost of the poll tax must be borne by the people, its price will be paid by the Government in defeat at the polls.
The Minister for Local Government (Mr. David Hunt) : Unaccustomed as I have been for two years to speaking from the Dispatch Box, I welcome the opportunity to do so in a debate on a rating system that I have long believed to be discredited and unworkable. I welcome the community charge system, to which I was committed at the last election and to which I remain committed as a much fairer and better system.
I much appreciate the generous words of welcome from hon. Members to my right hon. Friend the Secretary of State and me. I much welcome the warm tributes that were paid to my right hon. Friends the Members for Cirencester and Tewkesbury (Mr. Ridley) and for Suffolk, Coastal (Mr. Gummer)-- [Hon. Members :-- "What tributes ?"]. The small group of Labour Members present would be much wiser men if they had listened more carefully to the debate, because they would have heard such tributes.
Mr. Alex Salmond (Banff and Buchan) : Will the Minister use his previous experience in the Whips Office to tell the House whom of his hon. Friends will give him the most trouble? Will it be the hon. Member for Milton Keynes (Mr. Benyon), who, in ignorance, voted for the Scottish poll tax, rebelled against the poll tax in England and now wants us to make the best of it? Will it be other Conservative Members who, in ignorance, voted for the poll tax in England and Scotland but are now whining about its impact on their