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were promised it would have. Authorities such as mine, which are low-spending, well-run Conservative councils, are being penalised, and authorities run by the Labour party, which overspend and waste taxpayers' money to a huge extent, are benefiting. That is why some of us will reluctantly be walking alongside the hon. Gentleman in the Lobby tonight.

Mr. Banks : I wish that I had not taken pity on the hon. Gentleman, in view of the unkind remarks he made about my local authority. As I said, the hon. Gentleman has been sold a pup and he and many of his hon. Friends have suddenly realised that, especially in view of the way in which the whole system has been moved around, tinkered with, manipulated and pulled and pushed to try to meet all the objections. Those movements have made it all the more grotesque and absurd. But I shall be pleased to be in the same Lobby as the hon. Gentleman, and at that time he may care to tell me how he sprained his wrist. Perhaps he was picking up some of those heavy wine crates that I know he disposes around-- [Interruption.] I appreciate that the hon. Gentleman is a very good vintner.

My hon. Friends and I object to the poll tax in principle, basically because it is unfair. How can anyone defend a system by which someone in a castle, and there are not many of those in London, pays the same as someone in a damp flat, of which there are many hundreds of thousands in London? That is grotesquely unfair and why we shall oppose it throughout.

We are now confronted with a new system of local authority finance. Frankly, if that is designed to make the whole thing simpler, the Schleswig -Holstein question would now be a good candidate for an entry in "Trivial Pursuit" or would be easy meat for some readers. I say that because the new system does not make any more sense than some of the other ridiculous systems that went before it. How do these systems work and who devises them? There must have been an outbreak of acromania at the Department of the Environment. That source gave us GREAs--granted-related expenditure assessments--and now we have SSAs, standard spending assessments. What does it all mean and how has it been calculated? A bunch of number crunchers at the Department of the Environment in Marsham street have decided that my borough has a certain sort of need and that this is how much our standard spending assessment should be. It bears no relation to reality for Newham people and councillors. Indeed, I suggest that SSA could easily stand for "some silly sod's assessment," because it bears no relationship to what goes on in the London borough of Newham.

Mr. Wilshire rose--

Mr. Banks : I will not give way, because other hon. Members wish to take part in the debate.

Mr. Wilshire : It is a good point that I wish to make.

Mr. Banks : It will be the first one the hon. Gentleman has ever made, so I had better give way to him.

Mr. Wilshire : I am fascinated by the hon. Gentleman's debunking of the attempts of other people to assess what Newham needs. Can he confirm that it is Labour party

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policy that Newham should simply state the figure that it wants and the Government should provide it, irrespective of whether the borough needs it?

Mr. Banks : I am rarely consulted over Labour party policy, but were I consulted, I certainly would not argue for such a ridiculous idea. That is not what we want. We want a realistic assessment of the needs of the area, determined by councillors who know and who have to stand for election --

Mr. Wilshire : And then have the Government pay it.

Mr. Banks : No, not at all. The Government will always set the broad parameters. The hon. Gentleman should bear in mind that those parameters have been very much narrowed by the Government. In 1981 central Government used to contribute about 60 per cent. to local government expenditure ; the contribution is now down to about 38 per cent. That is the essence of the problem. Local government finance has been squeezed and squeezed as the ground rules have been changed over and over again at the will of the Government.

We cannot have properly organised, efficient local government finance when councillors do not know what the rules will be from one year to the next. That is the ridiculous rubbish trotted out from the Dispatch Box every year since 1979. As we all know, the position has not got better ; indeed, it is far worse.

I take a close interest in what the London borough of Newham does. I am proud to say that it is a Tory-free zone. We have no fears of the Dispatch Box. There is not a Tory on the local council. The Tories could not win in Newham for the simple reason that the people can see through them every day of the week. Looking through the budget papers of Newham, I notice that in the second most deprived local authority area in the whole country, according to the Department of the Environment's indices, if we just maintained our current services for next year at £220 million of expenditure, the poll tax would be £503 per person against the Government's estimate of £337. The average rate bill in Newham is £628. Therefore, with a poll tax of £503, two adults in a household will have to pay £378 more. The increase for three adults will be £881, and so it goes on. Newham's standard spending assessment has been reduced to £195 million. At the current rate of expenditure we will spend £25 million or about 13 per cent. over the SSA. I understand that we might be capped at that level. The old capping used to start at about 12.5 per cent. As the Secretary of State mentioned the possibility of capping, I should like the Minister to tell us how it will work. At what level will capping be triggered? What mechanisms exist for it? We do not know how the mechanism of capping will work for the poll tax. What really rankles is that Newham, despite its manifest problems, will still have to make a net contribution to the safety net of £21 per head. Next-door Tory Redbridge, which has far more facilities and is a more affluent area, will make only a £1 per head contribution. The Minister has had complaints from his own side, but what about the complaints from our side? How have we got into a position where a deprived local authority area is contributing more than an affluent area? Why is the money going to the London borough of

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Waltham Forest? When my hon. Friend the Member for Leyton (Mr. Cohen) mentioned it, the hon. Member for Lancaster (Dame E. Kellett-Bowman), who has nipped out to get a fresh pint of blood, said, "Good, that is what we want." That aside demonstrates the manipulative nature of the Government and the way they are prepared to twist the system to suit their party political purposes. That is what it is all about.

I objected strongly to the hon. Member for Surbiton (Mr. Tracey) saying that London Labour boroughs, which must include mine, as the strongest Labour borough, would go for the highest possible poll tax and then try to blame it on the Government. We would have great difficulty trying to put the blame on the Government because part of the strategy is to shift all the blame on to local authorities. The Government strategy is to keep attacking and vilifying local authorities, and to keep taking money away from them. As the services deteriorate, people are expected to blame the local authorities when the Government are entirely responsible. We know what is going on. We are not stupid.

We will not impose great burdens on the people who live in Newham. We will have to consider cuts of about £17 million so that we can get down to a poll tax that is at least reasonably acceptable. We do not need lectures. We are not playing politics with the people. We are trying to protect the people from the vicious, avaricious and disreputable Government who are attacking them.

It is not just the poll tax that we face. Council tenants also face an increase of £10 a week in rents because of Government diktat. Then the Government start lecturing us about high-spending and spendthrift local councils. We do our best in Newham and we get very little assistance from the Government ; indeed, we usually get a great deal of abuse.

The poll tax, which has been dreamt up by some halfwit in the Department of the Environment, is unfair, unloved and unclear. That is a reasonably good description of the Minister and of the Government.

8.56 pm

Sir George Young (Ealing, Acton) : I want to deal head on with the question that is legitimately posed to those on the Conservative side who plan to vote against the report. We are asked what we hope to achieve, given that defeating the report would not remove the community charge but would simply deprive local government of resources. I hope to answer the question in three parts.

Some of us have consistently opposed the policy that underpins the report. We voted against Second and Third Readings of the Bill, and we voted in favour of the amendment moved by my hon. Friend the Member for Hampshire, East (Mr. Mates). We came within 25 votes of changing Government policy. Nothing that has happened since has allayed our fears. On the contrary, those fears are now shared by more colleagues in the party who at the time were prepared to give the Government the benefit of the doubt, but who have seen some of our predictions come true. At a time when more colleagues are voicing their unhappiness, when there is a better chance than ever of defeating a policy-related motion, it would be absurd to abandon one's opposition and support the Government. For that reason I plan to vote against the report.

It is said that opposing the report is not a vote against the poll tax but a vote against local government, and that

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the House should give local authorities the resources to carry through the reform. Conservatives voted against the RSG measures between 1974 and 1979 without being accused of being anti-local government. We did not do that because we were anti-local government. How could we? We controlled most of local government then. We did it because the RSG contained a broad political statement with which we disagreed. We took a broader view then and we are entitled to take a broader view now.

Conservative Members who feel squeamish about voting against the RSG report should read a speech that was made against the RSG order. It says :

"The Secretary of State"--

which of course was a Labour Secretary of State--

"claims that his is an equitable solution. We claim that he has abandoned equity and substituted an arbitrary decision. He claims rough justice. We say that he has abandoned any semblance of justice in what he is doing in the Rate Support Grant Order."

The speaker continued :

"It is no good trying to explain to them"--

our constituents--

"an increase in rates by reference to the resources element, the domestic element, the needs element, the relevant expenditure, and so on. They say I still have to bear a certain percentage of the increase in rates, and what are you going to do about that?'" The action urged on me and my hon. Friends was to protest in the only way possible and

"to vote against the order tonight."--[ Official Report, 25 March 1974 ; Vol. 871, c. 60-61 and 70.]

My right hon. Friend the Prime Minister led the Conservative party into the Lobby against the RSG order, having made that excellent speech. Therefore, let us not lean too hard on the argument that Conservatives should not vote against the RSG report. That argument does not hold up.

The final reason for voting against the report is not just about money. This is the first time that we have debated the new style RSG--the new regime and structure for funding local government. A better grant system was an intergral part of the reforms, of which the poll tax was but a part.

I shall quote from "Paying for Local Government", which was written in the optimistic prose of the present chairman of the Conservative party almost exactly four years ago. It says :

"Effective local government must be the cornerstone of successful local government. All too often this accountability is blurred and weakened by the complexities of the national grant system." Amplifying that criticism, the Green Paper says :

"Central Government grants are calculated in a complicated say that conceals the real cost of local services from the electorate." Looking ahead to the new system, we were promised

"a grant system which compensates for real differences in local authorities' needs, and provides additional help in the form of a flat-rate sum per adult."

Chapter 10 stressed the need to

"develop a grant system which was more understandable and did not obscure the link between changes in local spending and changes in local taxation."

The House is entitled to ask whether the report lives up to those high expectations.

I listened to my hon. Friends say that they can live with the community charge but do not like the RSG settlement, but the reasons why they do not like it are inherent in the philosophy of the community charge--the jump in taxes for those who live in low-rated property in the north-west ;

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the redistribution of wealth from the less- well-off to the better-off ; the problems for those who move to smaller accommodation to reduce their costs but find it not worthwhile ; the increase in the number of people on benefit--that objection was voiced by my hon. Friend the Member for Brent, North (Sir R. Boyson)--the sheer bureaucracy and expense of a tax designed to catch everybody, regardless of means ; and the problems of evasion and enforcement. Those are objections not to the RSG settlement but to the principle of the community charge.

Tonight, the House is asked to pay the bill for this reform. Despite the respect and admiration that I have for my right hon. Friend the Secretary of State, that cheque will not have my signature on it.

9.2 pm

Mr. Eddie Loyden (Liverpool, Garston) : I shall try to be brief. All the fears that we had about the poll tax have been more than confirmed by the reports before us. The figures bandied about by Ministers will be meaningless to many people. We should concentrate on why the Government decided to introduce the poll tax, which has no friends of any standing in the political, industrial or economic world. It stands condemned by almost every section of society. The revaluation in Scotland panicked the Government into taking ill-thought-out measures, the evidence of which is before us tonight.

I want to deal with the points made by my hon. Friend the Member for Newham, North-West (Mr. Banks). The Government have conducted warfare against local authorities since 1979. They have made it virtually impossible for local government to fulfil the needs of people at a time when public expenditure has become more necessary for several reasons. One reason of which we are all aware in my area--and it is probably true of all the major conurbations--is the aging population, which requires more help from social services. A commitment from local authorities is necessary to relieve the worst excesses of unemployment. Changes are taking place in local government because of falling rolls. Although the population is declining, it is still the responsibility of local government to maintain excess school buildings, and roads. That has created great problems for local authorities. I wonder whether the Prime Minister ever visits an inner city? If she did, she would realise that since the Government came to power inner cities have become impoverished to the extent that there is not a road to walk down in my constituency that is not riddled with potholes and in a state of decline and decay.

Government policy has left local government incapable of providing for the needs of the people whom it represents. When the Liverpool city council decided to tackle the prevailing slum conditions and the badly designed post-war housing, and it began building bungalows for elderly people and pulling down the worst types of multi-storey flats, it was accused of being irresponsible. If the Government think that it is irresponsible to house people decently or to make provision for leisure centres, there is something wrong with their thinking. Those changes were necessary to benefit the local people.

The Government know nothing about what is happening in the inner cities. If they did, they would not introduce the poll tax. In my area and those of all my hon.

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Friends, it will be a question not of people not paying, but of being unable to pay, the poll tax--they will have no choice in the matter. With existing levels of poverty in our towns and cities, that is the inevitable consequence of the imposition of the poll tax for many people. The party that is supposed to represent the retention and sanctity of the family unit will be responsible for parents chasing their children from home because they cannot afford to pay the additional costs of having two or three young people living with them. The Prime Minister should accept that the responsibility for that lies at the door of the Government.

I hope that tonight it will not simply be a question of the nitty-gritty of the poll tax that is opposed by Conservative Members. No comprehensive view has been expressed by the Tory party on the poll tax. Conservative Members are looking for minimum concessions to satisfy their constituents while they are biting on the ballot before the next general election.

The tax is unfair and iniquitous and has no right to be introduced. If this is an honourable House--as it is supposed to be--the No Lobby will be packed and this legislation ditched in the dustbin of history, where it belongs.

9.3 pm

Mr. Neil Hamilton (Tatton) : I have had two unusual experiences this evening, one of them pleasurable. The pleasurable experience was that I agreed totally and enthusiastically with my right hon. Friend the Secretary of State for the Environment. The unpleasurable experience was that, unfortunately, I had to disagree with my right hon. Friend the Member for Brent, North (Sir R. Boyson), whom I have known for a long time. I used to have even more in common with him as, when we first met, I also had whiskers. We have diverged in few other respects during the past 20 years, so I am sorry to have to diverge from him this evening.

Some Conservative Members take a principled view on the reform of local government expenditure. My hon. Friend the Member for Ealing, Acton (Sir G. Young) has a principled objection to the basis of the change to the community charge. Other Conservative Members, who will oppose the Government in the Division Lobby, do not take the principled view against the change in the tax but object to a facet of it. I regret that some of my hon. Friends will join the principled rebels in the Division Lobby, because that is unnecessary. Unfortunately, there is an air of utopianism about those who oppose the change to the community charge. They seem to seek a perfect solution. As my wife continually reminds me, when she was looking for a husband she was realistic and sought the least imperfect of the available options, so she chose me. In respect of local government finance, we must choose the least imperfect of all the options. The community charge corresponds to that description. Everyone knows that the existing system is arbitrary and incomprehensible. Because of that arbitrariness and incomprehensibility, the system lacks any meaningful accountability. Most of the complaints that we have heard in the debate arise from the revelation of the arbitrariness and incomprehensibility not of the new

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system but of the old. The revaluation of the rateable values of property, above all else, reveals for the first time the iniquity and inequity of the previous system.

I shall support in the Division Lobby not the move to a perfect system but the move from an unfair system to a less unfair system. The virtue of the new system is that it has simplicity and transparency. That transparency is to some extent diluted because of the introduction of community charge benefit. One in four of all community charge payers will receive some form of benefit to cushion the effect of the change. That will cost nearly £2 billion next year. In addition, transitional relief will cost £700 million over three years and will have 6 million beneficiaries. No Conservative Member can say that the Government have not attempted to meet the criticisms of those who oppose the new system, many of whom will, alas, vote in the Division Lobby against us this evening.

The Government are correct to keep the lid firmly down on aggregate local government expenditure, because it constitutes about one quarter of all Government expenditure. Any Government who believe in keeping tight, firm control over public spending as a macro-economic tool must appreciate that local authorities cannot run riot with public spending, because that undermines the Government's economic policy. That tight, firm control must be the aim of any Government, even a Labour Government. Previous Labour Governments had difficulties of this kind, too. I welcome the change from the incomprehensible old system of GREA to the new standard spending assessments.

No one can argue that the increase in SSAs for next year is unreasonable. The Government have accepted that an 11 per cent. increase in local government spending for the coming year is reasonable--that is much higher than inflation. The total amount that local government should spend, according to the Government, can increase by what I regard as a more than reasonable amount. There are local authorities--usually Labour--that intend to spend a good deal more than that. My council, Cheshire county council, which is responsible for 92 per cent. of all local government spending in the county, proposes to increase its spending next year not by 11 per cent. but by more than 19 per cent. In addition, it will have to find the equivalent of another 5 per cent. of its total spending because, having emptied the tills last year in advance of the county council elections in order to blow the lot on a vote-buying spree, it will have to top them up again. Next year, Cheshire county council will have to find the equivalent of a 25 per cent. increase in its income. My prophecy about the likely levels of the community charge has been undermined by that proposal.

Mrs. Ann Winterton (Congleton) : My hon. Friend has been describing the overspending of Cheshire county council. Does he agree that to make the county councils more accountable, we should have elections every year rather than once every four years? Does he agree further that the time is fast approaching when the county councils should be abolished and that many of their services should be devolved to the boroughs or to central Government?

Mr. Hamilton : I have no difficulty in agreeing with my hon. Friend and neighbour, the Member for Congleton (Mrs. Winterton). The role of county councils will diminish gradually and "wither away", to use a Marxist phrase which is now out of fashion in the Labour party. As

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more and more schools opt out of the local education authority system, the rationale for the county councils will ultimately disappear.

Cheshire county council is controlled by an alliance of the Labour party and Liberal Democrat councillors. In my constituency, the Liberal Democrat councillors are now squealing about the high level of community charge that the county council will impose on us, which is the direct result of spending decisions that they themselves have taken. They are now trying to disclaim any responsibility and are trying to have the penny and the biscuit. Fortunately, they will not get away with it. In future local government elections, the electors will have a simple choice--whether they want the council to spend more or less. That will not only make local government more accountable, but will restore the importance of local government issues in local government elections. They will no longer be the equivalent of opinion polls on the standing of the Government at Westminster, but will restore interest in local government and accountability. That will transform the basis of local government, which will benefit everyone.

As my hon. Friend the Member for Congleton pointed out, we shall not have county council elections for several years. The results of the county council elections last year will prevent the community charge from having the beneficial effects for which we all hope for at least another two or three years, not because we are stuck with this Government, but because the decisions that local government electors took last year were not based on sensible local government issues, but on national issues. In the case of a county council such as Cheshire, which intends to spend enormously above the standard spending assessment, my right hon. Friend the Secretary of State should seriously consider charge capping. There is every reason for doing so. If the electors do not have the opportunity for several years to pass their judgment on the spending pattern of the local authority, that is the only way in which the interests of the community charge payers in Cheshire can be protected.

I also very much welcome the change from the old business rate to the national non-domestic rate, which will especially benefit the north. I am astonished that Opposition Members object in such vocal terms to the change in the business rating system as there is no bigger boost for the north and for the midlands. Manufacturing industry especially will have enormous reductions in its charges in cities such as Liverpool and Manchester.

I had much sympathy for the hon. Member for Dagenham (Mr. Gould) when I heard him earlier because he was unable to demonstrate a policy in opposition to the policy that my right hon. Friend put forward. I had thought that the Labour party policy review was intended to decide what policies the Labour party should propose, but in fact the Labour party policy review was intended to decide whether to have a policy. It seems that the Labour party has decided that it is far safer not to have a policy. I hope that the hon. Member for Dagenham will be present tomorrow for the debate initiated by my hon. Friend the Member for Eastbourne (Mr. Gow), when we shall be debating a motion which says that the Labour party's policy deserves scrutiny by the House. He may then be able to give some of the answers that he was unable to give us today.

It is utter hypocrisy for the Labour party to oppose the motions tonight, as it is unable to offer an alternative and

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only criticises for the sake of it. However, the day of reckoning will come for all those overspending Labour authorities because at the general election, the people will see the cynical trick that the Labour party is trying to impose on us and once again, they will restore a Conservative Government to Westminster. These motions and our policy on the community charge will contribute considerably towards that.

9.19 pm

Mr. David Blunkett (Sheffield, Brightside) : First, let me thank the Minister for Local Government and Inner Cities and his office for providing me with information in a Brailleable form.

I understand from the media that he has been invited to advise the Polish Government on decentralisation and the establishment of democratic local government. I wish the Poles well. Once they have learnt about our system they may well feel that General Jaruzelski has a great deal to offer. I imagine that they will yearn for a poll tax and for water privatisation like a hole in the head. I wish the Minister luck with his advice.

It is 11 years since the big experiment in tinkering with local government and local democracy began. Today's debate and its subjects--the standard spending assessment, the safety net and the new distribution system--are the culmination of 11 years of interference and muddle. As we have said on a number of occasions, each change has brought its own nightmare for the Ministers responsible. Ministers have asked civil servants again and again to devise new ways round the labyrinth that they have created. They have created new obstacles that have had to be overcome. They have tried to find ways of preventing local government from using ingenuity. Then they have blamed local government for using ingenuity. Then they ensured that there were low spending targets that bore no resemblance to reality, and blamed local government for not managing to meet those targets. When local government could not meet those targets, the Government cut grant and suggested that local government was to blame for not managing the impossible.

We have come full circle since the Local Government, Planning and Land Act 1980 and the introduction of the new block grant system--all the way round to the poll tax and the new standard spending assessments. Environment Ministers are facing the dilemma that every Environment Minister has faced since 1979. If they are determined to block the local democratic system and to fix the amount that local authorities should spend, they must take the consequences. Earlier today, we had the challenge from the Secretary of State : if local authorities do not spend near to the targets that they have been set, the Government will introduce poll tax capping. The chairman of the Conservative party advised strongly against rate capping four years ago. He was rapidly moved from his post, but since then he has undergone a resurgence, so perhaps there is hope yet for the Secretary of State for the Environment. The chairman of the Tory party advised that capping was undemocratic and intellectually unjustifiable. Of course it is, especially coming from a Government who claimed that the poll tax brought new accountability and new choice to the voter.

The Government cannot have it both ways. They cannot suggest that local electors will be able to choose the

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local administration that they want and determine the amount that it spends through the new system and then, in the next breath, propose to stop that happening. Matters are made worse by the fact that the Secretary of State has so often repeated the brief that he was originally given, which said that the community charge puts the community in charge. It was a trite phrase when it was used on 6 November. Now that poll tax capping has been dreamt of so that the Government may wave a stick over local authorities, and that phrase has seemingly been forgotten, it is shown in a hypocritical and disgraceful light.

One Conservative Member had the audacity to let the cat out of the bag when he said that capping would be necessary until democracy "started to work better". In other words, democracy is fine, so long as it yields results for the Conservative party. As the right hon. Member for Brent, North (Sir R. Boyson) would put it, that is quite immoral. It is unnecessarily provocative and leads to the assumption that the Government have not only got their figures wrong, but their assumptions that the poll tax would prevent public spending and hold down spending levels by resulting in further cuts in public services have also been proved wrong.

I challenge the Secretary of State on the figures he gave this afternoon in relation to whether central or local government has increased its spending most in recent years. Taking 1978-79 as the base level--the year the Conservative Government came in to office--and the current financial year of 1989-90, central Government spending has increased by 177 per cent. in cash terms, whereas local government spending in cash terms, even taking into account the transfer of housing benefit to local government, has increased by 146 per cent.

Those figures come from table 4.4 of the public expenditure White Paper and they are the honest truth. Under the Conservatives, central Government have increased their spending whereas local government has had to cut its spending. Of course, it is central Government who have increased the overall general level of taxation and local government which has got the blame for what has happened at local level. As inflation has risen, as the problems of local government have increased, as grants have been cut to the tune of 5p on national income tax, local government and the rating system have been blamed for the resulting anomalies and difficulties.

However, tonight, some Conservative Members have had the audacity to say that, if the electors of Conservative authorities are faced with large poll tax bills, it is because of a mistake in the way in which the Government have operated the safety nets, the transition, or the standard spending assessment formula. However, if Labour authorities are likely to be spending over the Government's targets, they say that that is because of profligacy and uncontrolled public spending. The Government cannot have it both ways. If Tory authorities are miles over the likely spending targets-- if Conservative boroughs cannot keep down to the £278 level--and if neighbouring Labour-controlled authorities are in exactly the same position, the same reasons must, of course, apply.

The reasons that apply tonight are simple. The system is not working properly. Indeed, it cannot work properly because it was predicated on the wrong assumptions in the first place. If a tax initially attempts to take a flat rate from

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every adult, but rebates, transition, and safety nets then have to be introduced, if the standard spending assessments then have to be altered to try to help, and if there is then something called special grants, which are commonly known in the Department of the Environment as "the Pendle factor", which means "saving Conservative seats", all that adds up not only to muddle and confusion, but to an impossibility for local government which is already struggling with a variety of problems and difficulties.

Mr. Thomas Graham (Renfrew and Inverclyde) : Does my hon. Friend know that in Scotland many people who are entitled to a rebate are not getting it? When I wrote to the Minister, I was told that rebates were too costly to administer if they were for less than, say, £25. Many people in Scotland, including elderly and disabled people and desperately poor people, are not getting their rebate because the Government do not think that £25 is enough for them to claim. That is lamentable. The problem is that the Government are taking from the poor. Although they guaranteed to give folk their rebates, people who are entitled to them are not getting them.

Mr. Blunkett : I appreciate the particular problems that have already been experienced in Scotland, and especially the difficulty and confusion that there has been about the rebate system. I advise the Secretary of State and his Minister of State that if they introduce poll tax capping this year on top of the existing administrative chaos that will result from transition, special help and the rebate system, they will create the most incredible havoc in local government, which could not possibly have been envisaged, as local authorities try to return to poll taxpayers the amount that the Government have specified, while cutting services to make that possible.

I must make it clear that the rebate system already results in major confusion. Even in a Tory borough such as Harrogate, which is fairly well off, the Government's television advertising has resulted in 5,000 coupons being returned. The district treasurer believes that only 2,000 people will be found to be entitled to relief. There is already a problem in local government administration. District treasurers across the country are spelling it out. Two thirds of local councils will have to raise between £60 and £100 on top of the Government guidelines in order to maintain their present level of spending. The Chartered Institute of Public Finance and Accountancy has already spelt out in a recent study that the Government's belief that only 15 local authorities in England will spend over £350 in the coming year is sheer mythology. At least 139 authorities, and probably many more, will spend more than £350. If the Secretary of State chooses to rate-cap authorities on the basis that they spend 25 per cent. or more above their assessment or notional figure, he will have to rate-cap in excess of a quarter of local authorities in England.

On the figures currently available, the Secretary of State will have to rate-cap his own district council in Bath. I look forward to his going to Bath, Roman helmet in hand, to say that the figures that he dreamed up, upon which the council will be rate-capped, are right.

Mr. Chris Patten : The hon. Gentleman will be interested to know that if it was left to the district council in Bath, it would have no difficulty in coming within the

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figures that we have suggested. If there are problems in Bath, it will be because of the overspending by the county council, which proposes a budget increase of 15.7 per cent. next year.

Mr. Blunkett : It is always someone else when it is a Tory council. The burghers of Bath must be seething about what is happening to them. Whatever the reason, it will be the district council that the Government will have to cap. It would have to levy that particular rate in that district. The Secretary of State should face his poll tax capping with open eyes. As we advised the then Secretary of State six years ago that rate capping would not achieve its goal, I advise this Secretary of State that poll tax capping will not achieve its goal. He will have to invent something else. That something else in the end will be that central Government will take over direction of local government spending and will fix local authority budgets. When that happens, the Government will be held accountable for massive cuts in education spending, and social service spending on care of the elderly, the disabled and the disadvantaged.

It is interesting that, whenever the Government want to say that they have done something good, for example, in education, care of the elderly or taking care of the environment, they are happy to parade how much local government spends. When the tables are turned, and people talk about high- spending local authorities--which are responsible for the statistics that the Government wheel out on education spending, pupil-teacher ratios and spending on books and equipment in schools--it is always the Labour authorities who are to blame.

Let us get the matter clear. Local government spending is spending on our children, our parents, the family next door and creating a decent, caring community. The poll tax was devised to prevent that and to push down public spending. When the Government do that, even in their most-favoured authorities such as Wandsworth, in which I live when I am in London, the worm will turn. When that council saw its figures, it dissociated itself from the Secretary of State's spending assumptions. Next time the Secretary of State wheels out Wandsworth, he should remember what it told him. Even with a favourable safety net, it does not agree with the Secretary of State.

The figure of £278 is a myth. The spending assessments are compiled out of fairyland. The safety net does not work. The special grants have failed to mollify the Secretary of State's own Back Benchers. The electorate are not fools. They have woken up to what is happening. The simplified system has turned out to be a sillier system. Assessment of needs has become political gerrymandering. In the end, that will catch up with everyone in the Conservative party. That is why tonight it is important that those who have wavered, those who are unsure, should make a concrete decision, not simply on the spending assessments or on the safety net, but on the Government's failure to spell out what their cushioning effect will mean to the unified business rate.

Conservative Members from the north must not delude themselves. After five years, manufacturing industry in their areas will reap the bitter fruits of the revaluation. In the end they will not benefit. The combination of redistribution of cuts in grants and the delay in implementing the revaluation will cost them dear.

When the safety nets are off, Yorkshire and Humberside will lose £289 million, the north will lose £171

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million, the east midlands will lose £41 million, the north-west, I must tell the hon. Member for Lancaster (Dame E. Kellett-Bowman), will lose £113 million and inner London will lose £515 million. Far from there being automatic gains and windfalls, if hon. Members examine the figures more closely they will see what is really happening in their own back yards.

Mr. Rooker : As my hon. Friend is appealing to Tory business men and reflecting on the back yards of Conservative Members, would he care to reflect in his final few minutes on the dwellings of Conservative Members, not one of whom will lose under the poll tax? They will march into the Lobby for massive personal gains under the poll tax at 10 o'clock tonight. The larger the property in which they live, the bigger their gain. They will vote for themselves at 10 o'clock.

Mr. Blunkett : If they vote for themselves, they might have a lower poll tax for two years, but in two years' time they may not have a job in the House to come to. As we have seen with some Cabinet Members, that may mean for some a trebling of their salaries rather than a downturn, so there may not be the interest in that which we would expect. But perhaps tonight Conservative Members will take cognisance of what the right hon. Member for Brent, North had to say about that shining light on the "Rhodes" to Damascus that he described. Perhaps they will have in their minds the moral wrong and the political ineptitude that he described as they go through the Lobbies tonight. Perhaps they will hear in their minds his words about a "death-inducing draught". Perhaps they will take on board that immovable and ingenious phrase "the big fleece"--the big fleece that attempts to pull the wool over the eyes of the electorate, the big fleece that comes from those who, like sheep, will go into the Lobby with their tails between their legs tonight.

The challenge to every Conservative Member is not to be frightened of the Whips, not to be worried about what will happen to them next week, but to be more concerned with what will happen to them in their localities at the local elections and in their constituencies at the general election.

The challenge tonight is to those who care, to those who have a conscience about what is happening to those who cannot afford the poll tax. It may be that tonight cowards will flinch and their colleagues will sneer, but tomorrow the electorate will ensure that they have something to fear.

9.30 pm

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