House of Commons Hansard Debates for 22 May 1990

Some have referred to accountability in electoral terms. I defy any Scottish Member--and I must be careful as there are four here at present-- [Hon. Members :-- "There are five."] Yes, there are five if I include myself. I defy any Scottish Member to go out into the street in his authority and to ask 100 electors which authority--district or regional--is responsible for the various services. They would not know.

I stood in a local election. I now have stabs in the front from the Labour party instead of stabs in the back. For me, the issues in the local election were the poll tax and fighting the Tories. The issue for the Labour party was fighting Dick Douglas. I have been called a traitor in this House. I was called far worse by so-called Labour supporters in the election campaign. However, as my old mother used to say in Govan, "Sticks and stones will break

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your bones, but names will never hurt you." If that is all that will happen to me here and elsewhere, it will not worry me too much. There is a problem of distinguishing between the services and between the responsibility of local authorities for those services. In a system where 75 to 90 per cent. of revenue is redistributed by central Government, it becomes a farce to talk about local government finance. In Scotland, it is eminently suitable and desirable that we move towards a system of local income tax. There is no gainsaying that. We have had the poll tax for 14 months. All the Conservative Members, such as the hon. Member for Pendle (Mr. Lee), who pronounce for Scotland on the poll tax, who now cavil about having to pay it because it has hit their constituencies and who walked through the Government Lobby should now recognise that, if we call ourselves a United Kingdom Parliament, we must have regard to national circumstances--and Scotland is a nation. As was illustrated yesterday over Ravenscraig, this House and the Tory Government are putting great strains on the Union, and nothing is putting greater strains on the Union than the issue of the poll tax and local government finance.

I want to deal with the Labour party's so-called alternative. The hon. Gentlemen who were calling me names are absent now. The hon. Member for Glasgow, Garscadden (Mr. Dewar), that great whiz kid--and I have called him a dunderhead, which is a term of endearment--and others propose that we should have a roof tax. A roof tax is just the rates in another guise. We have had some answers from the hon. Member for Sheffield, Brightside (Mr. Blunkett), but they were guarded and cryptic non-answers. It would take by any estimate three to five years to introduce such a tax. What will happen to this great party, the guardian of the Scottish people?

A few months ago, we all signed the "Claim of Right" and said that we believed in the sovereignty of the Scottish people--a valuable and historic concept. If one believes in that, the votes of the Scottish people count not only in British terms but in Scottish terms. The overwhelming majority of the Scottish people, in regional and general elections, voted against the poll tax, yet it was still imposed on us.

Labour Members have been careful to say that they will repeal the poll tax, but that may take three to five years if and when there is a Labour Government. What happens in the interim? Will the poll tax roll on? I predict that the vast majority of the Scottish people will cease to pay the poll tax the Monday after a Labour Government are elected. What does one do then? What are the contingency plans of the right hon. Member for Islwyn (Mr. Kinnock) and the right hon. and learned Member for Monklands, East (Mr. Smith)? They have a dilemma. Having marched us up to the top of the hill and having said how much they disliked the poll tax, they are being very careful.

I am called a traitor by the Labour party because I say that I will stand beside those who cannot pay. I am proud to be a traitor on that ground. When the leader of the Labour party came to Scotland in January 1988, he said, "Pay up." He said that for good reasons from his electoral point of view, but he was neglecting the history of the Labour party in defending the poorer sections of the population. We must have cognisance of that. The great

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party of idealism now says, "You can have a conscience clause and you can refuse to pay, but, for goodness sake, do not tell anyone you are doing it. Keep it secret. If you appear on a platform with other supporters and say that you are not paying, that is a terrible crime." That is a great position for the party of idealism to adopt, is it not?

There is no way that we can reform the poll tax. We can ameliorate it and, in all humility, I shall suggest some ways in which we might do that which have occurred to me since I was elected honorary president of the students' union at Stirling university. Students are especially severely handicapped by the tax. If we start pursuing students for non-payment of the poll tax, we will lose more money than we collect. The Government should realise that. I am not necessarily pleading ; I am fulfilling a responsibility by suggesting that the Government might consider excluding all students, and certainly all those under 21.

There is a good democratic reason for that suggestion. My hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) has taken time to analyse these matters and has discovered that young people do not want their names to appear on the electoral register because they see a correlation, which the Government do not see, between registering for electoral purposes and registering for poll tax purposes. That is a persuasive argument for saying that

Mr. Harry Barnes : My hon. Friend argued that the tax could not be reformed. The reason for that is that there is a relationship between the electoral register and the poll tax register. Current figures show that at least 600,000 people over the age of 18 are missing from the electoral register. The average is 1,000 per constituency, although the distribution is uneven. Nearly 10 per cent. of those eligible are missing in Finchley, the Prime Minister's constituency. Whatever banding arrangements we introduce, we shall not alter that. The tax bills are directed to individuals in their homes and that links the poll tax and electoral registers.

Mr. Douglas : I accept what my hon. Friend says. That is why I plead for a local income tax in Scotland and why I have made my feelings clear. But I am being cautious and my concern at present has to do with the interim period and what the Government might do. I realise that certain sections of the population are severely imperilled by the poll tax, and students are certainly among them. Theirs is a pressing need for which the Government could cater more quickly and easily than they could cater for non-working spouses. The Minister has an enormous task ahead of him. The Government have a self-inflicted wound which he must heal. No one asked the Government to introduce the poll tax. What makes the poll tax such a farce is that it does not result in the collection of more revenue. No one forced it on the Government ; they panicked about Scotland. I suggest that the Minister is wrong in thinking that opinion about the tax is settling down in Scotland. It is not. It is difficult to get hold of the figures because local authorities are not clear about them, but it appears that we may have between half a million Scots who have not paid and who have been in default for a whole year and 1 million who have not paid part of the tax. Personally, I have not paid for 14 months. I do not know what will happen to

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non-payers--it may be the arrestment of wages, the poinding of furniture or warrant sales--but the Scots are resisting, and will continue to resist the poll tax.

In the end, Labour-controlled local authorities will have to decide between poinding and warrant sales to enforce the legislation. What will Labour councillors do then? Should they echo the words of the Labour leader and say that the non-payers are terrible and are embarrassing local authority workers, or should they stand up and be counted? I do not know which way it will go, but I can assure the Minister that resistance in Scotland will not disappear. If hon. Members such as the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) call me a traitor for continuing to stand my ground, I will take the epithet from them. I know that the view by which I stand is the view that will have support in the long run. I suppose it will be said that, in the long run, we are all dead, but in the long run the people of Scotland will certainly respect those who stand by their view on this issue of principle.

6.5 pm

Mr. Donald Thompson (Calder Valley) : I did not intend to follow the hon. Member for Dunfermline, West (Mr. Douglas) down the ways and glens of Scotland, but I agree with him on one point. The Government should have introduced the community charge in England and Wales at the same time as it was introduced in Scotland--at least a year ago and, as my hon. Friend the Member for Wellingborough (Mr. Fry) suggested, perhaps even four or five years ago. We were in error in not introducing the tax earlier across Great Britain. With his wise and disparate views, the hon. Member for Dunfermline, West seems to have spent his time in the wrong party. Had he been a Conservative Member he could have held those views and no one would have noticed ; he would not have ended up being called a traitor at all. I join hon. Members in welcoming my hon. Friend the Minister for Local Government and Inner Cities to his new post. He and I have been friends for a long time and hope to remain so for a long time. In introducing the debate, the hon. Member for Truro (Mr. Taylor) said that the Liberal Democrats had tabled the motion so that the Government would not spring anything on the House--unlike the Liberal Democrats, who sprung the motion on us. Twenty-four hours ago, the motion was not even written ; they had no idea what they wanted to say. They crept into the Table Office at dead of night and tabled the motion because if they had tabled it earlier I should have been able to report its contents to people in my area and we should have been able to win more than the two seats that we won from the Liberal Democrats in the local elections.

The hon. Member for Normanton (Mr. O'Brien) asks for aid with future policies. Had the Government had help from Labour Members and local government representatives at all levels during the past three years--the gestation period for the community charge--we should have had a stronger and better community charge now. Instead, they have ruthlessly taken every opportunity to terrorise those sections of the community about whom they bleat the most--the old, the sick, the disabled and the young.

Mr. O'Brien : Will the hon. Gentleman give way?

Mr. Thompson : No, I shall not give way.

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Labour Members have gone about their constituencies exaggerating the effect of the charge and minimising the effect of rebate. The amendment to the motion states that

"10 million people have received bills reduced by rebate whilst 7.5 million have been protected by transitional relief".

In my constituency there have been bitter rows about rates ever since I began serving in local government. Since 1967, the issue on every doorstep at every election has been the rating system and its unfairness. The same applied to elections for the county councils--God bless their absence ; we ought to get rid of them if we possibly can as, like Caesar, they are remembered only by their misdeeds--and to local elections. We have heard nothing from the Opposition about what they would put in place of the rates.

Mr. O'Brien : Will the hon. Gentleman give way?

Mr. Thompson : I am not giving way.

Having said that, I express my genuine thanks to the officers in Calderdale --Malcolm Fearnley and his team--for their efficient implementation of the community charge in my constituency. They have managed to deal with 32,000 applications for rebates and 40,500 applications for transitional relief. They have done that efficiently and speedily and they have also dealt with extra help. [ Hon. Members :-- "They are poll tax capped."] It is not a poll tax--it is a community charge, and it provides the biggest cushion to help the old and the disabled that we have ever had.

Mr. O'Brien : What about capping?

Mr. Thompson : I will consider capping in a moment. In a poll run by the local paper, people in my area voted 3 : 1 in favour of it.

Dame Elaine Kellett-Bowman : My hon. Friend said that his local council had processed 32,000 rebates and some 40,000 transitional reliefs. How many staff were required to process that work? My local council is asking for extra staff because it claims that it is behind with claims. I should like to be able to tell my local council that it ought to have been able to cope without extra staff. How many staff were needed in my hon. Friend's constituency?

Mr. Thompson : Quite honestly, I cannot answer that and I do not wish to give a dishonest answer. Whether or not extra staff were recruited, the council had the foresight to act as it did rather than sulking, and the chief officer told me today that the money is rolling in.

I want to translate what my hon. Friend the Minister of State has said about the vast amounts that we are spending in local government support into what happens in a local government area. My figures are taken from the minutes of a meeting of the metropolitan borough of Calderdale in March 1990. For the year 1990-91 in my area the total expenditure per person on the Labour budget would be about £1,020. On the Conservative budget it would be £969 per person. The revenue support grant from general taxation is £277 per head--not an inconsiderable sum. The unified business rate from the business community is £293 per head. That gives a real community charge under the Labour figures of £450 per head and under the Conservatives of £398. However, the Government in their wisdom have left a safety net of £137 less a low rateable value grant of £25. That reduces the real community charge to £296 under Labour and £245 under the Conservatives.

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The hon. Member for Normanton asked me about capping. The £245 is the figure that the Government expect under a capped system.

Mr. O'Brien : I raised a couple of anomalies with the hon. Member for Calder Valley (Mr. Thompson) in a discussion on Radio Leeds a few weeks ago and he said that they would be amended. I am sure that the hon. Gentleman will recall that I asked about properties not connected to a main sewer, which received a concession under the rates system but no concession under the poll tax system. People in those properties will have to pay the full poll tax in addition to charges for entering the sewer. I also asked about corner shops where the person living above the shop will have to pay poll tax as well as paying the business rate for the shop. The hon. Member for Calder Valley said that those anomalies would be amended. What has happened about those anomalies?

Mr. Thompson : I have put those points to my hon. Friend the Minister. I am pleased that in this new spirit of glasnost Labour Members are now making sensible and reasonable suggestions. Had they done that three years ago, we should have had a much better tax. It is a shame that Labour Members are not in the Chamber tonight--they have run away from this debate in their masses, leaving only the Labour Whips.

Mr. Allen McKay : If the hon. Gentleman cares to examine the reports of the Committee stage of the Local Government Finance Bill which introduced the poll tax, he will discover that all those amendments were suggested, but the Government arrogantly refused even to consider them.

Mr. Thompson : I think not, Sir.

I hope that Calderdale council will accept one of the two budgets to which I have referred. Unfortunately, the safety net--£137 this year--will be unwound perhaps over three or more years. Although the business rate will rise with inflation and we expect revenue support grant to increase in the same way, the safety net will unwind giving us less and less.

Therefore, it is imperative that all councils should do as the hon. Member for Rochdale (Sir C. Smith) suggested and constantly re-examine spending that in the past they have taken for granted without having regard to the ratepayer who seems to have been a hidden person.

Reference has been made to married women who do not work and the poll tax. How do people budget their accounts? Surely couples sit down together and say, "Look, love, we've got the electricity bill to pay, the rates bill to pay, the water bill and then there's the car--are we going to Malaga or Malta or are we going to our pal's little place in Bridlington?" Apparently it is a revelation to Labour Members to learn that that is how people budget their accounts. One wonders whom Labour Members are visiting at the moment.

The safety net and the rebates have left anomalies which are difficult to explain to people in our surgeries and advice centres. There is a sewing shop in Todmorden in which every lady pays a different community charge. They told me that they had thought that they would all pay the same but because of transitional relief and rebates they all pay a different charge. Anomalies will crop up everywhere.

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We have already heard about farms. I received a letter today from Mrs. Janet Nelson of Todmorden asking me about Methodist ministers and the way in which they receive remuneration. I will pass the letter to my hon. Friend the Minister and discuss it with him. Indeed, I have several hundred other letters to give him and I am sure that we shall be able to reach some kind of accommodation.

The double rating of holiday homes seems to be causing a great deal of distress, as the hon. Member for Rochdale explained, but my hon. Friend the Minister should not let local authorities off in relation to their void houses. Local Government should not be allowed to avoid being charged twice, three times, four times or even five times for those houses. They should be charged as much as possible for the empty houses that have led to so much homelessness.

The hon. Member for Dunfermline, West referred to students and my hon. Friend the Member for Wellingborough mentioned double charging. Much still remains to be done to get this revolutionary new community charge right, and we shall press on and do it.

6.16 pm

Mr. Andrew Welsh (Angus, East) : The hon. Member for Calder Valley (Mr. Thompson) believes that the poll tax can be reformed. I do not agree. It cannot be reformed ; it can only be abolished. The poll tax is fundamentally flawed and is not based in any shape or form on the ability to pay. Any such taxation must be unfair and must throw up a series of anomalies. That is precisely what the poll tax has done. The Government had no mandate to introduce the poll tax in Scotland. It is one of the most hated taxation systems of modern times. The Government have not learned from the Scottish lesson and England is now adjusting to the fact that the chickens have come home to roost. There have been a series of demands for changes or improvements in the poll tax. Those calls come as a great irony to the Scots who have had to live with the tax. There was no talk of improvements when Conservative Members inflicted the ghastly tax on the Scottish people more than a year ago. Now that the reality is dawning in England, Conservative Members will feel the full force of public opinion as people discover exactly what the tax is and what it does.

Scotland has been the guinea-pig for the poll tax and it has proved it to be wrong-headed and disastrous. It is callous and unfair for all the people on whom it is imposed, and it does absolutely nothing to assist local government funding or finance. The Scottish National party warned that the tax would be a bureaucratic nightmare. In Scotland, staff morale is low and there is stress among those who must impose the tax.

The poll tax is unworkable. The people in local government are paying the penalty for it. In Scotland there have been more than 2 million changes in the registers. That will be as nothing when the tax is imposed on English cities such as London, which has a large transient population. The tax is bureaucratic and expensive to implement. Computers in Scotland have been spewing out

ever-increasing numbers of poll tax books and other bits of paper. The rebate application forms are massive and their demands for information about private citizens are impertinent and deter people from applying.

The poll tax is costly, inefficient and massively bureaucratic. The SNP warned about in-built expense and

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the difficulties of collection. It cannot be otherwise with annual updates and clumsy rebate systems to try to iron out the inherent unfairness of the tax. Again, my party warned about anomalies and unfairness in a tax that is not based on ability to pay. Scotland has suffered--

Mr. Malcolm Moss (Cambridgeshire, North-East) : The hon. Gentleman has said that.

Mr. Welsh : It cannot be said enough, as the hon. Gentleman will find in his own constituency as anti-poll tax feeling in England grows. The hon. Gentleman helped to inflict this tax upon my country and did nothing to change the anomalies in it. That is what I find objectionable. It is well worth repeating that.

Anomaly after anomaly was thrown up by the tax as it was implemented in Scotland, as English hon. Members have been finding out. There are problems for students, student nurses, people who suffer from Alzheimer's disease and other diseases, housewives who are fully charged and are unable to earn income, and so on. That circumstance could have been foreseen by the Government as they introduced the tax over a year ago in Scotland.

This taxation system is riddled with unfairness and anomalies. The Scottish experience gives fair warning of the problems to Wales and England. Annually updated registers have been a bureaucratic disaster. It is a highly expensive tax to collect. If Conservative Members are worried about expense to poll tax payers, they should think about that very expense of the collection of the tax being imposed on poll tax payers.

Again, the scope for poll tax non-payment campaigns, which have led to about 1 million Scots paying little or nothing in protest against this ghastly tax, will be as nothing compared with the effect of and the opportunities for non-payment in English cities. No amount of ministerial mumping or accusations about law breaking will prevent that from happening as people take the protest into their own hands in the only way that is open to them as free citizens in a free country to protest against a tax that they totally abhor. The poll tax is not based on ability to pay and merely transfers the unfairness of rates. Rates were unfair in terms of property, and the poll tax is unfair in terms of people. Both taxes are levied without reference to ability to pay, and the Government must tackle that problem. No amount of banding or any other messing around will replace the need for a local income tax.

I contrast the anomalies, unfairness and callousness of the poll tax with our belief that ability to pay must be the criterion of any taxation system. On all counts, a local income tax scores. It has a low cost of collection. Unlike the poll tax, it would use the existing tax collection machinery. If a person has little or no income, he or she will pay little or no income tax, which is fair. Assessed on the same basis as national income tax, local income tax could easily be integrated into the existing system. With LIT there would be no need for the present Government's panoply of sheriff officers, warrant sales, local bureaucrats, annual registers, and a complicated structure of rebates. Indeed, there would be no need for massive collection costs and the other paraphernalia of the poll tax or of the roof tax.

We believe that people should pay for public services according to their means and be able to use them according to their needs. People who are too poor to pay income tax would not have to pay local income tax either.

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Local income tax would also guarantee civil liberties because there would be no registration forms, no Tory snoopers checking the value of a person's house, and no means-tested rebate applications. All the information required for local income tax is already collected by the Inland Revenue. There would be no need whatsoever for council officials to know the financial circumstances of an individual. A local income tax system would not need to be implemented from scratch because relevant information on employment and wages is already stored in national income tax records. Certainly an SNP Government would abolish the poll tax immediately, as indeed could a Labour Government if they had the courage of their convictions and the will to do so.

Our calculations show that a basic local income tax would be about 5.5p, and the higher rate of about 10p in the pound would be sufficient to replace current poll tax levels. No amount of fiddling with gross amounts and the other aberrations that the Government have tried to introduce into the debate will change the fact that local income tax is cheaper to collect, efficient and fair.

Mr. Bill Walker (Tayside, North) : How will the hon. Gentleman do that?

Mr. Welsh : With the figures that I have mentioned--5.5p and 10p in the pound, the higher rate level. They are maximum figures. They reflect a situation in which this Administration have slashed their contribution to local authorities from 75 per cent. down to 55 per cent.

We propose major changes in central Government support for local authorities, which would substantially reduce the burden on local taxation. Our proposed responsibility grant, needs element and equalisation grant would mean that local income tax contributions would focus on purely local expenditure and would obviously mean minimal variations in local income tax levels throughout Scotland. Unlike other parties--the exception is the SLD, which has done something on these lines--the SNP proposes a package of local government finance measures allied to the reform of the structure of local government, and in-built guarantees of the independence, status and standing of local authorities in Scotland.

Too often those problems have been viewed in isolation. Finance is reformed without any thought of the structure or status of local authorities. Structure is reformed without any thought of the finance or status of authorities. It is time that local authorities were given their due standing, status and importance within our society and given a package of measures that considers them in the round and within their context as part of the democratic process of providing services for the people.

Our income tax system would take Scotland into the mainstream of European local government finance, along with countries such as Sweden, Denmark, Switzerland and West Germany. In joining with Labour Members in opposing local income tax, the Tories have taken us into the mainstream of only one other comparable country, Papua New Guinea, and even that country is now retreating from the poll tax. The SNP proposes that, by adopting a local income tax, the United Kingdom and Scotland would join the mainstream of European methods of financing local authorities. We propose a package of measures to restore local government to independence, status, structure and finance, which will let it do its proper work on behalf of the people of Scotland. Anything less

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would be a betrayal of Scotland's interests. That is precisely what the Labour and Tory parties have been doing for too long. It is about time that local government finance were treated properly, with a sensible, fair system for domestic local taxpayers and a much-needed reform of business taxes. The Government have got themselves into a massive fankle over local government finance, which is not good for local authorities or for the people whom they serve. Let Wales and England be warned. The Scottish example clearly shows what a disaster the poll tax is. Be warned and dump this unwanted and unfair tax.

6.27 pm

Mr. Harry Greenway (Ealing, North) : I shall not adopt the line advocated by the SNP, which is the non-payment of the community charge. That line advocates illegality, and that must be wrong.

Mr. Andrew Welsh : Will the hon. Gentleman give way?

Mr. Greenway : Certainly not.

Will my hon. Friend the Minister consider exempting people under 25 from the community charge? [Laughter.] Perhaps that is a radical suggestion. Up to the age of 25, young people are getting married and are required to save money and to establish themselves. That often entails the purchase of a home. Additionally, such people are new in their jobs and are usually on low pay and therefore are not equipped to make the contributions to local expenditure that people over 25 can. We should do all we can to encourage people at all ages, but certainly up to the age of 25, to take time out to improve their qualifications. The exemption of under-25s from the community charge would greatly assist youngsters to improve themselves in that way. I have told the Minister in writing that I welcome the separation of husband and wife for taxation purposes, but that we should carry that principle into the community charge. We could do that in terms of savings by couples and individuals. For example, a man and wife could be assessed separately for savings and not have them amalgamated. I appreciate that such a system might be difficult to implement and could be open to abuse, but savings should be assessed separately because husband and wife are charged separately for the community charge. While I envisage difficulties in applying my suggestion, the principle of it is right and fair.

Difficulties lie in the way of any form of local taxation, bearing in mind the way in which local expenditure generally is administered by Labour compared with Conservative authorities, leaving aside any SLD-controlled authorities. Local taxation, like national taxation, as implemented by the Labour party is always high. Indeed, Labour supporters pride themselves on that, and to illustrate it one need only consider what has happened in my borough of Ealing.

Up to 1986, the Labour party was describing Ealing's rates as a disgrace, since they were the lowest in west London. We were proud of that, and the services provided in Ealing were as good as those provided anywhere. The Labour party was ashamed of the fact that on one side, the Conservative represented side, of Whitton avenue east, in

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my constituency, the rates were half those levied on the other side of the road, which then lay, as it still does, in the then Labour-controlled borough of Brent.

Mr. John Carlisle (Luton, North) : I remind my hon. Friend that the hon. Member for Workington (Mr. Campbell-Savours), who is not in his place, said it was shocking that people were now getting much lower bills. In other words, the desire for increased charges is still part of Labour philosophy. Ratepayers or charge payers in

Labour-controlled areas must remember to vote accordingly at the next elections.

Mr. Greenway : The nation must heed the attitude of Labour supporters, who expect the community charge and local taxation to be high. They will see that it is high. In Ealing, from 1986 until Labour was rejected a few days ago, that was their attitude, and they would continue to adopt it nationally if they were elected to government.

The Labour party, while in control in Ealing, increased the rates by 65 per cent. at a stroke in 1987. Happily, the authority was rate-capped by the Government, following a campaign conducted by my hon. Friend the Member for Ealing, Acton (Sir G. Young), who I am glad to see in his place, and me. That obliged the authority to reduce the rates in 1988 by 25 per cent. But the authority put the rates up again last year by 32 per cent.--the moment it got the opportunity to take such a step--and Labour's community charge in the area this year represents an increase, in the view of most of my constituents, of about 55 per cent. in rates equivalent. In other words, Labour is always high-spending and high-charging.

The same Labour council increased industrial rates in 1987 by 57 per cent., and it is worth considering the effect of that. It meant, for example, that Taylor Woodrow had to pay £315,000 more in rates. The company had to earn an extra £15 million simply to stand still, providing no extra profits or jobs.

That Labour council added £450,000 to the rates of Ealing hospital--so much did it care for the sick and disabled. About £750, 000 extra in rates was charged to the Lyons group of companies, which employs 2,500 people. That increase resulted in some of them losing their jobs because the company had to find the money to pay that extra sum to the local Labour council. The company's prices were forced up, with all that that entailed.

When industrial rates were increased by 57 per cent., people locally had to pay more in the shops for everything, including haircuts. Domestic rates having also gone up by 65 per cent., no wonder my pensioner constituents either could not pay or were having to go without food to finance the high rates forced on them by the then Ealing Labour council.

I cannot understand why Labour supporters are so inhumane as not to care about the matters that I have described. They go on forcing up rates and charges. But this year, in the local elections, they paid the price, having forced on my constituents a community charge of £435. Its own estimate was that last year the community charge equivalent to the rates was about £300, but despite that it forced on the local people a community charge of £435.

The Labour authority wanted to inflict a community charge of about £500, but happily, having campaigned strongly against that, we managed to force the authority to reduce it to £435, which is still an outrageous charge for my constituents, who are being forced to pay 250 per cent.

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more in local taxation than they were paying under the former Conservative council four years ago. No wonder the people of Ealing threw out that Labour council with such relish.

We are invited in this debate to consider the system. In doing that, I must highlight an abuse of the system by Ealing Labour council. It did not send out people's rebates at the same time as the demands for £435. It sent out a full demand for that sum, thereby causing consternation to many people. Some of them came to my surgery and said in effect, "Harry, I have been asked to pay £435. Look at my building society book. I have £1,500 saved and I am on income support. Surely I am entitled to a rebate."

I discovered, as a result of careful questioning of staff at the town hall, that 6,000 rebates in the area would not be processed until after 3 May. Let us remember that the elections took place on 3 May. The Labour party, then in control of Ealing, wanted to frighten the people of Ealing into believing that the community charge would be higher for everyone than it needed to be for many of them. That was a nasty and wicked abuse. It was totally heartless and showed that Labour does not care. I am happy to say that rebates are now being processed fast by the new Conservative administration in Ealing, and many of my constituents will receive good news.

While Labour was in control in Ealing, services deteriorated in many respects. Many letters went unanswered by town hall officials, and I was repeatedly told, "I have written to the town hall and not received an answer." The quality of street cleansing, the expenditure on education and the regularity of refuse collection services have all be reduced. In no way have extra services been provided commensurate with the additional charges that people were asked to meet.

It is reasonable to ask where all the money went. Some of it went on an equal opportunities unit which, I am happy to report, is now being abolished. It must have been wrong to put money into race equality and women's committees of various types, because such steps advantage only a section of the community. The same applies when money is put into committees concerned with gays and lesbians : it seeks to advantage, as the Labour council did--this happened not only in Ealing but in many parts of the country--some sections of the community compared with the rest. Lord Justice Scarman described that as the surest way to cause unrest, for such actions take away any sense of fairness that people have. Not only is such mis-expenditure of money wrong, but it causes social unease.

What happened in Ealing is typical of the Labour party, nationally and locally. The way in which the Labour council acted was appalling. Consider, for example, appointment panels for head and other teachers. A headmaster seeking to appoint a teacher would have a representative of the local women's committee on one side of him and another from the race unit on the other. They would sit there on either side of the headmaster marking the interviewer for such things as bad body language or any other action or comment by which he might display prejudice.

Prior to the election of the Conservative council,

Labour-controlled Ealing council had established 44 steps that had to be followed to secure the appointment of a head teacher. No wonder it took so long to fill such posts and no wonder so many posts were vacant, not only in

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schools, but in the borough's departments as a whole. It was an absolutely hopeless and impossible system. That sort of abuse had to come to an end, and it is now ending.

Finally, Opposition Members might like to know that the new Conservative Ealing council has, among the other flags that used to be run up above the town hall, the flag of the African National Congress, which it wants to sell cheap. The Labour council used to run up flags in support of causes in which the Ealing ratepayers and now the community charge payers have no interest whatsover. That sort of abuse is now ending--thank God.

6.40 pm

Mr. Malcolm Bruce (Gordon) : This has been a productive and interesting debate, not least because of the number of Conservative Members who have pleaded for changes to the poll tax in a way that has helped to emphasise the stupidity of it and of the way in which it operates.

My hon. Friend the Member for Truro (Mr. Taylor) welcomed the Minister to his first appearance at the Dispatch Box in this capacity. In the circumstances, I do not blame the Minister for speaking almost entirely from a prepared text. When dealing with this subject, it is extremely wise for a Minister to ensure that he has first received advice from his lawyers. However, the Minister made a fair point about the injustice of the rating system and the need for it to be reformed. For many years, my party and the Conservative party have agreed that the rating system should be changed, but we do not agree with the Government's solution.

The Minister then referred to the various options that have been put forward. In seeking to discredit local income tax, he made some play of the calculation of equalisation grant, as if the equalisation grant would be calculated differently for a local income tax than for rates or the poll tax. The equalisation grant will apply in all cases and will be drawn from the same source in every case--from general taxation. It is therefore disingenuous of the Government to try to attack one form of local government financing on a basis that could be considered valid for every other form in exactly the same way. Mr. Bill Walker rose--

Mr. Bruce : No, I cannot give way, because I have only a few minutes in which to speak and I should like to reply to many points. The Minister made the reasonable--although not entirely fair--point that everyone should pay for local government services. The principle that people should pay is generally accepted, but surely everyone should pay according to their ability to pay. People who do not have an income cannot reasonably be expected to contribute but, of course, they are unreasonably expected to do so by a Conservative Government. They expect people to pay even if they do not have the means to do so. The Government have failed to address that point. They have created a rebate scheme which is extremely cumbersome and bureaucratic, and which approaches the problem from the wrong end. It would be much better if income was the first factor to be taken into account.

The Minister then drew out what we are now quite familiar with from the Government--a load of bogus figures about local income tax to try to discredit that idea. Anybody can produce any figures out of the air to try to

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discredit any tax. I remind the Government that, when they first proposed the introduction of the poll tax, we were all expecting to have to pay less than people are having to pay. The Government are therefore in no position to lecture any other party about the inaccuracy of its forecasts. I digress a little by referring to the Government's failure accurately to forecast the rate of inflation, the balance of payments or the level of interest rates. We need no lectures from the Government on how our system should be determined. Local income tax is a simple system. The mechanism that we propose is based on a year- end settlement, the level to be determined by equalisation grants that would be calculated in exactly the same way as for rates and the community charge.

With a local income tax, we are effectively talking about persuading central Government to give up some of the tax they take and to allow the local authorities to take that tax directly to ensure that they have access to the revenue from the public at large--[ Hon. Members :-- "Oh."] Yes, certainly--rather than the money being transferred back from central Government, who then pretend that it is their money. It is the people's money that is being recycled by central Government who want to have absolute control over every form of public service in the country. That is a matter of principle for them.

No hon. Member has referred to the buoyancy that would be produced by a local income tax or to the total lack of buoyancy that exists with the poll tax. The hon. Member for Lancaster (Dame E. Kellett-Bowman) made absolutely clear what she thinks of local government, which is basically that it should be abolished and that central Government should control everything--

Dame Elaine Kellett-Bowman rose --

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