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Mr. Hunt : The assumed level of spending is based on last year's spending plus 4.64 per cent. That applies throughout the country, and it does not bear a direct relationship to what my hon. Friend was talking about when he referred to the standard assessment. It is designed purely to cover the consequences to a ratepayer for a
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change in the system and not to cover changes in the spending pattern of his local authority. That is key, and that was the basis on which the scheme was announced.I must take issue with the hon. Member for Dagenham. I cannot recall being accused--perhaps the hon. Gentleman has levelled this accusation at others- -of misleading the House. Let there be no misunderstanding about this : what the Labour party has said about transitional relief is entirely untrue and has led to much uncertainty in the country. There are many who believe that they will not be entitled to transitional relief because of statements made by Opposition Members when they will be entitled to it.
Mr. Tony Marlow (Northampton, North) : We are grateful to my hon. Friend for the relief that has been made available, but there are many hundreds of thousands, if not millions, of people who are faced with considerably higher bills than they had last year. Some of them are relatively low paid, yet they are faced with increases of up to £8 a week. Many pensioners are still concerned about the rate of attrition of their savings. Can my hon. Friend tell the House--many of his hon. Friends are deeply anxious--that the Government will be introducing further support and relief this year for those who are most hard pressed?
Mr. Hunt : We are debating a transitional relief scheme which, despite the accusations of the Opposition, has not been changed one jot from the moment when we announced it, although its scope has increased. My hon. Friend has drawn attention to a serious circumstance in which local people are facing the consequences of their local councils deciding to increase their spending by substantially more than the rate of inflation. I can offer no immediate sustenance by means of the scheme to deal with that. The level of the community charge depends much on the spending decisions of a local authority. The scheme provides transitional relief at a cost of £350 million in the first year to 7.5 million people to cover the changes in the system. It is nothing to do with the change in the system that there have been spending decisions that would mean an increase in rates of 33 per cent. That is nothing to do with the change in the system. It has everything to do, however, with the way in which spending decisions have been made.
Mr. Stuart Bell (Middlesbrough) : I ask a question as a naive constituency Member without an understanding of the variety of figures which have been quoted. I have a letter from one of my constituents, Amanda Dawn Singleton, who has received a document which tells her that she will have to pay £42.90 a month on the introduction of the community charge. She receives £44 and a £10 training allowance per week. She writes :
"I cannot afford to pay this amount. I am in a desperate situation, could you please please help me."
I have her community charge bill with me. It states :
"Less your Government transitional relief 0.00
Less your Government rebate 0.00"
What can I say to my constituent?
Mr. Hunt : I always dislike trying to deal with complicated cases across the Floor of the House. I do not know the particular circumstances. If the hon. Gentleman wishes to put those facts to me, I shall consider them. Transitional relief is intended to benefit those who are currently ratepayers or members of ratepaying couples
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and we have singled out pensioners and disabled people who do not fall into that category and given them special relief, which means that they will pay a community charge of £158 in the hon. Gentleman's area and £156 in Wirral.Mr. Keith Speed (Ashford) : Does my hon. Friend agree that the burden of the Opposition's case is that they endorse local government expenditure increases of 35 per cent. and expect the taxpayer to underwrite them?
Dame Elaine Kellett-Bowman (Lancaster) : Does my hon. Friend agree that it would be--
Madam Deputy Speaker (Miss Betty Boothroyd) : Order. I ask the Minister to respond to each intervention. We cannot have one on top of another-- [Interruption.] I should like a little less noise from the Benches below the Gangway.
Mr. Hunt : My hon. Friend the Member for Ashford (Mr. Speed) is absolutely right. The transitional relief scheme covers and protects ratepayers and members of ratepaying couples from changes in the system. My hon. Friend has clearly demonstrated that what is now arising is the result not of the change in the system but of spending decisions that would have meant a 33 per cent. increase in domestic rates.
Dame Elaine Kellett-Bowman : Am I right in believing that in my hon. Friend's constituency ratepayers had a choice between the lower Conservative community charge and that suggested by the Liberals, which was higher? Would it not have been an enormous advantage to the citizens of Lancashire if they could have chosen between the additional £123 million of expenditure by the Labour party and the reduction of £60 million by the Conservative party?
Mr. Hunt : I could not agree more with my hon. Friend. In Wirral the Conservatives proposed a community charge, and so did the Liberal- Democrats, but the Labour party refused to put forward a figure--
Mr. Gould rose --
Mr. Hunt : Wait a moment ; let me answer my hon. Friend. The Labour party decided not to propose a charge, although it is believed that if it had it would have been about £450. Some 12,500 people voted in the telephone poll--64 per cent. opted for the Conservative suggestion.
Mr. Den Dover (Chorley) : I listened carefully to my hon. Friend's speech at Blackpool. It was my opinion--shared, I am sure, by the many thousands present--that each individual in a married couple would benefit to the tune of £3 a week. Many of my constituents now think that there has been an act of bad faith. They are now told that it is £3 a week maximum--assuming that the spending levels are adhered to--shared between two or more people. Can my hon. Friend assure us that that was never the intention? My constituents are very concerned about this matter.
Mr. Hunt : I said clearly at the party conference that, with the proviso I made about spending by local authorities, the new scheme would ensure that in areas where local authorities spent sensibly no ratepayer or ratepaying couple would be more than £3 a week worse off when the community charge was introduced, whatever
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their income. I can add that we shall now single out pensioners and the disabled for special treatment, whether or not they pay rates. "If the local authority decides to spend above Government guidelines, it is right that the full amount of the excess" -- these are my exact words at the party conference--"should fall to be met by the local charge payer".
Mr. Rooker : Does the Minister appreciate that, if that statement had been made where it could have been tested by questioning--for example, in the House--the misinformation and false promises would not have been planted in people's minds? It was reading that from the conference platform that caused the difficulty. I have one general question.
Mr. Hunt : May I get this absolutely straight? The hon. Gentleman was not listening. I said that my comments at the party conference were repeated in the other place at almost exactly the same time by Lord Hesketh. It may well be that the hon. Gentleman has some criticisms of his hon. Friends in the other place, but on 11 October 1989, at column 344, Lord Hesketh--
Madam Deputy Speaker : Order. I am sure that the Minister is a sufficiently practised parliamentarian to paraphrase that for me.
Mr. Hunt : If the hon. Member for Birmingham, Perry Barr (Mr. Rooker) checks the facts, he will see that there was no misunderstanding whatever.
Mrs. Currie : May I refer my hon. Friend to the Library research note No. 477 of 3 November 1989, almost immediately after we returned to the House, in which the details that he has set out on the transitional relief, which will go to 10,000 families in my constituency, are set out precisely? The only difference since then has been that the allowance for inflation has been raised. Does my hon. Friend agree that, if Labour Members did their homework in the Library, they would not have made the mistakes that they have made tonight--unless they are doing it deliberately?
Mr. Hunt : The Labour party has done its homework, but it has chosen to ignore the facts.
Mr. Gould rose --
Mr. Hunt : Just one second. That has caused much misunderstanding throughout the country. The circumstances of this scheme have not changed one little bit, except in one respect : whereas before we thought that the total scheme over three years would cost £600 million, it now will cost £810 million.
Mr. Gould : I am grateful to the Minister for at last giving way. [Interruption.] Before his hon. Friends attempted to rescue him, he was making an interesting point about the special relief, as he termed it, which would be available to elderly and disabled people. He will know that in the regulations relief takes the form of a limit to what they must pay of £156 plus Z, Z equalling the difference between the assumed poll tax and the real poll tax. He will accept that Z on average throughout England and Wales amounts to £90. That means that the average bill for an elderly and disabled person will be £246 a year. As we are talking about elderly and disabled people who
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hitherto have paid nothing whatever, how can he describe an obligation to pay £246 as special help and transitional relief?Mr. Hunt : It is special help under the transitional relief scheme. The individuals have full entitlement to rebate, if they fall within the guidelines.
Mr. Barry Porter : The hon. Member for Birmingham, Perry Barr (Mr. Rooker) talked about mist. There is no mist surrounding the rebates available to pensioners and the disabled in the Wirral. I am glad that my hon. Friend gave us the figures for those groups. The mist is when Labour Members talk of honesty, seriousness, promises and a better scheme. That is more than a mist ; it is a complete fog. I have heard nothing. Perhaps my hon. Friend can enlighten me.
Mr. Hunt : My hon. Friend is right to emphasise yet again that transitional relief is just a part of the picture. The scheme has not changed one little bit since we announced it last October. It is in no way related to people's means. It would have been impossible for us to give a blank cheque and to say that we would cover the difference between this year's rates bill and next year's community charge whatever the level. I do not think that anyone in his right mind could have expected that. So we announced the scheme, and we have fulfilled our pledge.
My hon. Friend the Member for Wirral, South (Mr. Porter) is right to point out that there is also a rebate system, which is another part of the same picture. He is equally right to point out that in Wirral no pensioner or disabled person who is a ratepayer or a member of a ratepaying couple will be worse off by more than £156.
Miss Emma Nicholson (Torridge and Devon, West) : I am convinced that my hon. Friend means the transitional relief to effect exactly what he has said it will effect. Will he, most kindly, assure me that he will continue to consider its operation very carefully, since neither he nor I can be comfortable when, in one of the lowest-spending boroughs in England--West Devon borough--not one single person will qualify for transitional relief, and very few couples--perhaps a few thousand--will qualify. That means that three quarters of the people in West Devon borough will pay more than £3 extra a week.
Mr. Hunt : I would just say--[H on. Members :-- "Answer."] Give me a chance. I do not believe that there is no one in my hon. Friend's area who could claim transitional relief-- [Interruption.]
Mr. Bell : On a point of order, Madam Deputy Speaker. Could you confirm that you heard, as we heard, the hon. Member for Derbyshire, South (Mrs. Currie) say earlier that 10,000 of her constituents--
Madam Deputy Speaker : Order. That is not a point of order.
Mr. Hunt : It may well be that my hon. Friend the Member for Torridge and Devon, West did not mean nobody in her area, but meant no single person in her area. That may well be the case. The whole purpose of this
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scheme is to protect the ratepayer and the ratepaying couple from changes in the system. In the main, the system benefits single people.The hon. Member for Dagenham said a few moments ago that one of the defects of the system was that it did not give relief to single people, for instance, in a borough such as Wandsworth. That was a direct quote from the press release by his hon. Friend the Member for Brightside which said, "e.g. Wandsworth". The reason why single people do not benefit--except pensioners or disabled people who do not presently pay rates or are not part of a ratepaying couple--is that the majority of them are generally better off. In Wandsworth they will pay £148 and therefore they will pay only three-- [Interruption.] Wandsworth gets the second lowest amount of Government help of any inner London borough. In Wandsworth the charge is £148. As the scheme protects people against a payment of £156, that is why single people in Wandsworth do not benefit.
Mr. Dave Nellist (Coventry South-East) : The Minister says that single people will be better off. Is he aware that in Coventry those under 25 who earn more than £70.85 a week do not qualify for any form of rebate and will have to use between a month and a month and a half of their wages just to pay the poll tax? According to yesterday's opinion poll in The Sunday Correspondent, 7.6 million people, including a third of all those under 34, will refuse next Monday to pay this Tory tax.
Mr. Hunt : One of the sad features of what the hon. Gentleman has just said is that he appears to show no shame for having said it. He has the privilege of being a Member of Parliament. In using that privilege, he should be aware that people listen to Members of Parliament when they say something about whether they should obey the laws of the land. By urging people throughout the country not to pay, which is what he is doing, he is putting an increased burden on the remaining people in his constituency who will have to pay for the free ride that he is seeking and that he is urging others also to seek.
Several Hon. Members rose--
Mr. Hunt : It is about time that, instead of turning silently away from the hon. Gentleman and pretending that his words had not been spoken, the Opposition Front Bench-- [Interruption.]
Mr. Hunt : It is about time that those individuals there
Mr. Brian Wilson (Cunninghame, North) : Will the Minister give way?
Mr. Wilson rose--
Madam Deputy Speaker : Order. I request the hon. Member for Cunninghame, North (Mr. Wilson) to resume his seat.
Mr. Hunt : We on this side will never stop demanding that the Opposition Front Bench should condemn that sort of law breaking. It is about time that they spoke out. I commend the regulations to the House.
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11.23 pmMr. Jeff Rooker (Birmingham, Perry Barr) : I intend to make only a few points, just to give the Minister a chance to calm down. Twice as many people will pay the poll tax as paid the rates. According to the Government, the same amount of money will be collected. People do not understand why so many people will qualify for relief. That has to be explained. It was never explained while the legislation was being considered. I remind the Minister that it was pushed through the House by a party which got only 42 per cent. of the votes at the last election and which used the guillotine. The legislation was never fully and properly discussed. We were unable therefore to consider every possible defect that was alluded to either in the other place or in this House. I suspect that many more defects have still to come to light.
The Minister discovered a few months ago that transitional relief would be needed for all the losers. How can hundreds of millions of pounds be required when only the same amount of money is to be collected from twice as many people? Ministers must explain that, outside the House.
Mr. Roger King (Birmingham, Northfield) : May I help the hon. Gentleman? As a Birmingham Member, he will know that Birmingham city council's approved budget for last year--1989-90--was £622 million. The budget for the coming year has risen to £744 million : that is why we are paying more. He will have observed, in his travels around the city, that Birmingham has not spent this year's budget. That is clear from the fact that it is repairing roads, and doing a number of other things that it should do in any case.
Mr. Rooker : As the hon. Gentleman knows, next year's increase in new money and new spend for Birmingham is £17 million--2.38 per cent.- -of which £13 million is going to education and social services. We make no apology for that. The Government have manipulated the figures so that the amount can be made to look like more than £100 million, but for the purposes of the people of Birmingham who will experience any improvement in services it is £17 million. I defend that, and will continue to do so ; what I do not defend are the funny-money figures that the Government have foisted on Birmingham. I do not wish to detain the House : I want to hear Conservative Members make the explanations that they must make. However, I will give way to my hon. Friend the Member for Burnley (Mr. Pike).
Mr. Peter L. Pike (Burnley) : Even when viewed in the most favourable light, do not the Government's proposals mean that a married couple must be more than £6 a week worse off before they can receive a penny of transitional help? To many people, that is a tremendous amount.
The Minister has said that the Labour party is to blame for giving the country false information. The last time that I looked up the figures, the Government employed 800 press and information officers ; to the best of my knowledge, the Labour party employs fewer than can be counted on the fingers of one hand. How can we have managed to put all that false information around the country? It does not make sense.
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Mr. Peter Hardy (Wentworth) : My hon. Friend has mentioned false information. The Minister appeared to approve the assumption of the hon. Member for Derbyshire, South (Mrs. Currie) that 10,000 families in her constituency would receive poll tax relief. If that is the case--unless the circumstances are extremely unusual--the prediction of 7.5 million beneficiaries and a figure of £350 million is surely a gross underestimate.
Mr. Rooker : We need to look at the figures to find out how many people, on average, will benefit in each constituency, but we shall not know for certain until the bills come through the letter boxes. The real row about the poll tax has not started yet. I know that Croydon, for example, has already sent out its bills--without any rebate details--but until all the bills arrive I do not think that the country will wake up. The Government may think that there is trouble now ; let them wait until next month and the month after.
11.28 pm
Sir Rhodes Boyson (Brent, North) : I know that many hon. Members wish to speak, so I shall be very brief.
Conservative Members are grateful for the transitional payment arrangements. The Minister has made no attempt to misrepresent the facts ; he has always been not only courteous but accurate, and any disagreement between him and me has nothing to do with
misrepresentation. The transitional arrangements will be helpful, but they do not go far enough. That is the problem. I consider that four categories require help.
First, it is wrong to take away the safety net in the second, third and fourth years and not the first year. In the first year, the built-in safety net will be at great cost to many careful Conservative boroughs where up to £70 per person is being transferred to what they consider to be spendthrift Labour boroughs. That will stick in the gullets of people there.
The second category was also affected by last week's Budget--a husband has to pay his wife's poll tax if she is at home. At the same time as the Government have separated taxation between the husband and wife, they have brought it back in the poll tax. That will cause great resentment in the country. If a wife stays at home to look after her children, her husband will have to pay her poll tax although they are taxed separately.
The third category is pensioners. If pensioners live in their own homes or with their relatives, they have to pay the poll tax, or their families have to pay it for them. If they live in residential homes, they do not have to pay the poll tax. That is another anti-family measure that was introduced, not without thought, but without considering the possible reactions to it, and some help should be provided.
Mr. Beith : Will the right hon. Gentleman give way?
Sir Rhodes Boyson : I shall not give way, as I know that other hon. Members wish to speak.
My fourth and final point is that I quite understand why my hon. Friend the Minister said that, if an authority spends more than what the Government intend, the charge payers in that area will have to pick up the bill. But that is hard luck on Conservative voters in Conservative areas swamped within Labour boroughs. They have voted Conservative all their lives, as in Brent where 19 out of 21 councillors are Conservatives. We cannot get many more
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than that. We have tried to get 23, but so far we have not achieved it. I have some sympathy with those Conservative voters in such areas, because they are doing all they can, yet they are penalised without any transitional help.I make only those four points, as I know that other hon. Members wish to speak.
11.31 pm
Mr. Ronnie Fearn (Southport) : I shall be factual, but not too brief.
I begin with a quotation :
"If your actual community charge bill is more than the assumed community charge bill the relief will be calculated on the basis of the assumed charge."
That is a quotation from the Department of the Environment press release of 7 March when it announced that 7.5 million people, rather than 6 million people, will get transitional relief.
The press release highlights so well the Government's inability to estimate or forecast anything correctly. It is worrying that the entire poll tax system is based on estimates and assumptions. It is quite clear that the Government have got their assessments totally wrong and it is not surprising that the country is now in uproar. It was not long ago that the Government, desperate to sell the poll tax system to the electorate, were suggesting that no one would have to pay an increase of more than £3 a week. It is abundantly clear that that figure is no more than fiction, as are most of the other figures that we have heard tonight.
The Government have hugely underestimated the cost of vital services. That is probably due to their ignorance of the needs of local people, the elderly, children in state schools and those less able than themselves to participate fully in our communities and to their ignorance of the recreation needs of children and adults in small and large communities.
The Department of the Environment's statement in the press release that I quoted is without explanation or apology and does not spell out that more than 90 per cent. of local authorities are setting poll tax rates well above the assumed charge. That means that the 7.5 million who are entitled to relief will not get the full amount. This lack of clarity is reprehensible. It is clear that the Government hope to ride out the storm and that they hope that, once the system is up and running, people will get used to it and complain less. With other kinds of policies, that attitude may work, but I am afraid that it will not work with this one.
People were misinformed about this tax, and they are still being misinformed. They believed that the Government had guaranteed that increases would be no more than £3 a week, but they are finding that they have to pay far more, without any means of relief, but also without fully understanding why. On top of that, many people did not realise that in households where there are more than two people the relief will be calculated on the basis of only two persons, and the amount of relief will be shared between all the poll tax payers in that household.
Mr. David Hunt : I may not have dealt properly with that point when I responded to my hon. Friend the Member for Chorley (Mr. Dover), so I am grateful for this further opportunity.
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Before making our announcement, we consulted the local authorities. They told us that if they were to come anywhere close to completion of the scheme in time--and at that time they thought that it might not be possible to complete all the administration, and so on --there would have to be an automatic allocation of relief for households with more than two people. We considered that view very carefully, and, in response to local authority pressure, we conceded the point and allowed the relief to be spread equally between all occupants. But that does not prevent the pensioner or the disabled person who has not been a ratepayer, or part of a ratepaying couple, from claiming his special relief in addition to the automatically allocated relief. I hope that that explains the position.Mr. Fearn : I am very grateful for the Minister's explanation. The point was not explained fully in the response to the hon. Member for Chorley (Mr. Dover).
Mr. Beith : The Minister still has not explained why this relief is not available to pensioners living in sheltered housing, whose rates were paid through housing schemes. They are not allowed to qualify for the special relief, because they previously contributed to the rates through their payments to the housing association.
Mr. Fearn : I thank my hon. Friend for his intervention. So far, the Minister has nodded twice to that question. No doubt he will have an answer later.
I want to refer now to the problems of young people on low incomes. Often these people come from low-earning families. They are less likely to be able to move out of their homes or to do what their better-off neighbours do. The number of such people is increasing as Government policy impairs moves by young persons to become independent by finding their own homes. These people are to be penalised even further. They are not being treated as deserving of full participation in the transitional relief scheme. They are, however, seen as being deserving when it comes to paying the poll tax. They are not entitled to a rebate--they will pay in full. A young person earning less than £3,750 per year will have to pay as much as 11 or 12 per cent. of net income.
As I said earlier, the whole poll tax system is based on assessment and assumption, which is bound to create anomalies. But of even more concern to local authorities is that, for many counties, the notional expenditure level to be used in the calculation of transitional relief is significantly below the standard spending assessment. The Association of County Councils requests that, for the purposes of calculating transitional relief, the 1990-91 community charge calculation be based on the higher of the notional spending level and the standard spending assessment.
It would be even better if the Government were to take this opportunity to increase their benchmark figure of £278 for standard spending, which was calculated and set many months ago--before there was any concrete evidence of the real spending levels of local councils for 1990. I note that the Government have promised £21 million to cover the cost of administration. I believe that, so long as the full amount is distributed in such a way that the councils get the benefit and that part of it is not clawed back into the Treasury, local authorities will consider the amount to be reasonable. But I wonder whether the Minister has any idea of the sheer weight and physical effort that will go into the administration of the poll tax scheme. The massive
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volume of paperwork, claims and rebates will lead to long delays, and that will result in hardship for many of those least able to manage.Already, 40,000 people have applied to Sefton council's finance department for rebate forms, 10,000 have applied to the social services department, 20,000 to the housing department and a further 5,000 to the Department of Social Security. So far, a total of 75,000 applications have been made. Since Budget day and the doubling of the limit on savings, there has been a further deluge.
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