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Mr. Steve Norris (Epping Forest) : I congratulate the hon. Member for Makerfield (Mr. McCartney) on his good fortune in coming first in the ballot. Many of us have worked with him in Committee and we know him to have an absolutely excellent sense of humour which, towards the end of his speech, once he had got the appalling business of delivering it out of the way, began to shine through.
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It was pretty obvious to Conservative Members that the hon. Member for Makerfield took his opportunity of coming first in the ballot to raise a subject which, for many of us, was a really funny one for the comrades opposite to debate today. The outrageousness of the subject reminds me of the wonderful story about the chap who murdered his parents and then threw himself on the mercy of the court claiming to be an orphan. To hear the Opposition talking about the appalling evils of high taxation is one of the greatest outrages, albeit a humorous one which it is extremely difficult to take seriously, that we have ever heard in these enjoyable Friday morning debates. I begin with an admission. For many Conservative Members it is a matter of great regret that it took our Government, who were first elected in 1979, as many years as it did to begin to bring down the burden of taxation to the levels that we are enjoying now. I remember very well the logic of my right hon. Friend the Prime Minister's position then ; it was not an easy position to take, but one that she took with the integrity and strength of character that are entirely typical of her. In 1979, she said,"Such is the state of the economy that we have inherited that we will never be a party that will follow the policies of the Labour party--a party that taxed to spend, borrowed what it could not tax, and printed what it dared not borrow."
That is the reality of life under the last Labour Government, and there are few people of any political persuasion who are not perfectly aware of it.
Mr Allen : Will the hon. Gentleman help hon. Members by talking in common terms? Will he refer to any reductions in taxation as reductions in income tax, and not confuse them with the reduction in the burden of taxation? Of course we accept that the level of income tax has been reduced, but the real burden of taxation, including value added tax, national insurance contributions and so on, has increased. It would help all hon. Members if we kept our terms clear. The burden of taxation is different from income tax.
Mr. Norris : I am grateful to the hon. Gentleman for that useful clarification. I shall deal with income tax because it is a particularly interesting example of the progress that we have been making. I shall leave the question of the overall burden of taxation in the capable hands of my hon. Friends.
Those who have experience of not only personal tax but corporate tax are in no doubt that the lessons that can be drawn from income tax can equally be drawn from corporation tax. The vivid lessons that we draw from income tax are those that impress themselves most readily on the consciousness of ordinary voters. It was with the greatest regret that one noted that Her Majesty's Government were unable more quickly to reduce the burden from 33p in the pound, which is what it was when we came to office in 1979, to the 25p in the pound rate that we currently enjoy.
The taxation policies of the two sides are fundamentally different in their philosophical nature and approach. The Opposition can never escape from that essential element of Socialism, the politics of envy--the idea that wealth is evil, that success is to be criticised and that those who create and initiate should never be allowed to be rewarded.
We have had a genuinely illuminating exchange. Opposition Members can talk about top salaries, for example, without ever once taking into account the fact that, in the world market, if we want to get top people who
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have the entrepreneurial skill and talent to make our companies successful and, as a recent survey showed clearly, the best in performance terms in the whole of Europe--28 of the top 50 companies in Europe were British--that talent might cost money. Why? If we choose to pay those people the national average wage, and no doubt a future Labour Government would intend to do so, they will exercise the choice-- provided, of course, that a future socialist Government allowed them exit visas, and experience of previous Socialist Administrations shows that that is not long behind--and I have not the slightest doubt that they will vote with their feet. They will go to Europe, the United States and elsewhere and make other companies the most successful in the world. Who will be the beneficiaries and losers under that policy?Of course, hon. Members know that to juxtapose a man earning £750, 000 a year with somebody earning £60 a week is not to look at one of the most important social dilemmas that a free market is likely to present. That must be a matter of concern to all hon. Members. Conservative Chancellors have never broken from the tradition that in their Budgets they, too, are involved in the process of redistributing incomes. That is what differential rates of direct taxation are all about.
The cardinal difference between the approaches of the two supplicants for votes is that the vision of the gulf between us drives Opposition Members to destroy incentive and success and to believe that one somehow makes the poor richer by making the rich poorer. The belief that property is theft contrasts starkly with Conservative Members' belief that there will be hewers of wood and drawers of water, that we must recognise skills and enterprise, and that we must reward it if we want to keep it. It is only by allowing the creation of wealth that we can understand the mechanism by which we distribute it.
Mr. Hoyle : The hon. Gentleman is making a great point about a possible brain drain under the future Labour Government. Is he aware that there is at present a brain drain of scientists whom we can ill afford to lose? Scientists Abroad, which is supported by all hon. Members, has drawn attention to that fact. The Government are driving those people overseas. Is the hon. Gentleman aware of that? He should be, given his position as Parliamentary Private Secretary to the Secretary of State for Trade and Industry, and he should be concerned about it.
Mr. Norris : I have heard various debates between my right hon. and hon. Friends at the Department of Education and Science and Opposition spokesmen in which there has been a vigorous discussion of the validity of the statistics that have been adduced about the apparent brain drain. Many studies have concluded that there has been a net migration to Britain of people from elsewhere in the world to exploit the opportunities of British universities. The hon. Gentleman will know that, as a proportion of gross domestic product, our research and development expenditure is higher that it is in Japan and the United States of America. We need not detain ourselves indefinitely on that point. I wish to refer, as I am sure the hon. Member for Warrington, North (Mr. Hoyle) would want me to, to taxation.
Mr. Hoyle : What percentage of research and development money is spent on military expenditure as opposed to civil expenditure?
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Mr. Norris : The hon. Gentleman makes a valid point that there is a difference between military and civil research and development. I have no doubt that one of the benefits of the peace dividend, as we understand it to be, is that that balance is likely to change. To obfuscate the essential truth of a point that Conservative Members make time and again is, frankly, not relevant to the issue today. We heard from the hon. Members for Bolsover (Mr. Skinner) and for Makerfield a typical exchange between a couple of dyed-in-the-wool Socialists. "It's absolutely appalling, isn't it, that people should be rewarded on the basis of what they are worth. It is appalling and morally corrupt and we should stamp on the idea that people should earn more than the national average wage and that there should be differences in wealth that might be based on something as peripheral as ability."
My goodness me, we must contrast that view with what is recognised by many western observers who have now had the benefit of examining the Soviet economy in its desperate struggle to turn itself into a free market economy : what the Soviets come up against time and again are not all the other inherent failures of socialism, with which we could occupy all our deliberations this morning if we had a mind to, but the fact that, when there is absolutely no distinction in terms of reward between those who might take on responsibility for management and those who might as well have a cushy life pushing a broom, people simply cannot be bothered to take on those responsibilities. As a result, the Soviet economy is in a state of total collapse.
That is the reality of the social engineering that lies behind Socialist taxation policy. There can never be merit in taxation policies that do not recognise that incentive is desirable and that success is not a dirty word, but one that we should be prepared to be proud of and to reward.
Mr. Nicholas Brown (Newcastle-upon-Tyne, East) : Does the hon. Gentleman think that it is worth giving way?
Mr. Brown : I rise to help the hon. Gentleman and to offer him a few words of reassurance from a representative of the hewers of wood. But first I reassure the hon. Gentleman that he will, of course, be allowed to flee the country in the event of a Labour election victory in 1991 or 1992.
On differentials, my hon. Friend the Member for Makerfield (Mr. McCartney) mentioned the chairman of Glaxo Holdings, who rejoices in the splendidly English name of Sir Paul Girolami, who earned £598,081 last year. Does the hon. Gentleman really think that the chairman of a company the size of Glaxo should be paid just over £0.5 million for a year's work?
Mr. Norris : I am desperately disappointed by the hon. Gentleman's intervention. After all, he is a Front-Bench spokesman for a party that pretends to be a party of Government. We all enjoyed the speech of the hon. Member for Makerfield. After all, Fridays in this place can be desperately tedious and it is a good thing to kick off with a fun debate in which the Opposition pretend that they are horrified by high taxation. I congratulate the hon. Member for Makerfield on his very good choice of subject.
However, it is interesting to hear a Labour Front-Bench spokesman laying down a clear marker about the way in
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which a future Labour Government would regard a company with the history of Glaxo. I had not come to this debate prepared to discuss the history of Glaxo, but I shall link what I know of it to the observations of the hon. Member for Warrington, North (Mr. Hoyle). The hon. Gentleman will find that Glaxo has one of the best records for R and D of any major company in Britain. It is an excellent company, which is taking on more workers all the time and developing life-saving products for the benefit of the British economy and others. I believe that the shareholders of Glaxo, who are ultimately repsonsible for approving the salary accorded to their chairman, took those factors into account when fixing his remuneration and I, for one, am not in the business of second- guessing them.Sir Trevor Skeet (Bedfordshire, North) : Does my hon. Friend agree that quite apart from the new drugs that it has supplied, Glaxo provides a great deal of assistance to our national health service, without which it would not be so successful?
Mr. Norris : My hon. Friend is entirely correct.
It is a serious matter to hear Opposition Front-Bench spokesmen making statements that appear to sit uncomfortably alongside the progammes in which some of their hon. Friends are supposed to be indulging when they go round the City, clapping people on the shoulders, saying, "Do not worry, when a Labour Government come in, you will be all right on the national average wage because we will have a wonderful welfare system." It is interesting that over the past few weeks the financial press has made it clear that, despite the Labour party's protestations to the contrary, the City has not been conned by a word of what the Labour party has said. It is when the mask slips and one hears such observations from Labour party spokesmen that one realises why the City has been sensible enough not to be taken in.
The Labour party's argument about the evils of wealth is invalid in practical terms. I refer to the figures, which the hon. Member for Makerfield was sensible enough to acknowledge, which show clearly that as the burden of the top rates of tax has fallen, the amount paid in tax by the top 5 per cent. of earners has comprised a bigger proportion of our total tax take. It is extraordinary that even the Labour party's theorists accept--this acceptance is not yet circulating among Labour Back-Benchers-- that there is a law of diminishing returns in terms of top tax rates. If one were to push top tax rates back up to their level under the last Labour Government--for the benefit of the hon. Member for Nottingham, North (Mr. Allen), I am referring to both income tax and corporation tax--people would simply put their incomes elsewhere.
As anyone who was involved in business in the 1970s knows--the figures can be examined--corporation tax became a voluntary tax because companies employed armies of lawyers and accountants to work their way through page upon page of Labour tax law. The rates were so punitive that it was in companies' interests to develop one of the most extraordinary industries of all--the tax avoidance industry. One would have thought that the Labour party would have learnt the lesson that as the top
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tax rate has been reduced to 40 per cent., the top 5 per cent. of earners are no longer contributing 25 per cent. of the total tax take, but 31 per cent.Any hon. Member who has experience of business knows that there is one great difference between the way in which company financiers looked at their businesses in the 1970s and the way in which they did so in the 1980s. In the 1970s when I was involved in running the finances of a company, three quarters of our time was spent on tax planning and only 25 per cent. on managing the business. The great thing now is that the proportions have been reversed. Companies are devoting their time and their financial resources to making their businesses more efficient and entrepreneurial. Fortunately, tax planning occupies much less time because the rates are perceived as being bearable and reasonable.
In a sense, one could set all that to one side, except for one vital consideration. The Labour party not only deludes itself into believing that the poor are made richer by making the rich poorer and that the interests of those who are poor, homeless and who do not receive adequate services are served by attacking the mythical super-rich--who, incidentally, on the best estimates contribute about one fortieth of what might be needed to finance Labour's programmes, if one aggregates the spending that would be needed for all the statements that Labour party spokesmen have made--but it commits an even greater philosophical illogicality because none of its great discussions on how the wealth of the country is to be dispersed has ever referred to the way in which that wealth is created. As Conservative Members have often said, the difference between socialism and capitalism-- which is, after all, the essence of the difference in the taxation policies of the two main parties in the Chamber--is that socialism is what one believes in at the age of 20 and capitalism is what one realises is right when one is 30. There is an old adage about that, but I shall not bore hon. Members with it because we have all heard it many times. The fact is that capitalism works. Even with what Opposition Members would regard as its manifest inequities, capitalism allows us to create the wealth with which we can then begin to address Britain's social problems.
The country as a whole, not only Conservative Members, has seen the truth that in the Britain of the 1970s, a Labour Government, who were elected on what I grant them were the best possible motives, genuinely believed that the problems of our nation--neither side would dispute the problems of homelessness, poverty and social disequilibrium--could be addressed by a high-spend, high-tax, high-borrow and high-print policy. However, those great and magnificent plans crumbled into the dust because the Labour Government never recognised that to finance public expenditure at any level, one must first set in place the economic conditions that will allow wealth to be created.
Whatever the economic difficulties of Britain, whether short term or longer term, underlying difficulties, the Conservative Government are dedicated to the proposition that a country must generate wealth before it can afford to indulge itself in discussions about how that wealth is to be dissipated. No wealth creator worthy of the name seriously believes a word of the policies being peddled by the Labour party on taxation. We know that by effectively removing the ceiling on national insurance
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contributions and introducing an immediate 50 per cent. top tax rate, Labour will tax people at 60 per cent. immediately. We also know from the commitments that we hear from Labour Front-Bench spokesmen every day of the week for every Department that they shadow that a Labour Government could never keep pace with Labour's spending commitments.What price the prospect of returning to the days under a Labour Government when we enjoyed--if that is the appropriate word--a rate of tax payable on so-called unearned income of 98p in the pound? The Labour Government wondered why capital and enterprise fled Britain when the prospect was working to make one's company or oneself a pound and being left with tuppence. If I may be forgiven for using the worst politician's euphemism of all time, in the real world people are not prepared to work for tuppence in the pound. Yet that is the prospect under the next Labour Government.
When the mask slips we see our prospects under a Labour Government--a society in which wealth is regarded de facto as evil and reward is something that must be attacked. The salary of the chairman of Glaxo must be reduced because it is somehow obscene for shareholders to determine the appropriate level of his reward. The Labour party assumes that Glaxo will still be the thrusting company which my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) so accurately described. Contrary to what the hon. Member for Makerfield said about a lead or otherwise in the opinion polls, as is happening now, the policies--
Mr. Quentin Davies (Stamford and Spalding) : Does my hon. Friend agree that the hon. Member for Newcastle upon Tyne, East (Mr. Brown) has scored a remarkable own goal in suggesting that there is something unacceptable in Sir Paul Girolami of Glaxo being paid £0.5 million? First, the British pharmaceutical industry is an international leader. No pharmaceutical company in the world has the same track record in research and development--to which my hon. Friend referred--or the same quality of products in its current registration pipeline. If the Labour party suggests that a putative Labour Government should ensure that the chairman of Glaxo was not paid at the same level as the chairmen of Merck, Eli Lilley, Bayer, Hoechst, Boehringer or Ciba-Geigy, it is declaring war on one of the most successful industries--
Mr. Deputy Speaker : Order. The hon. Gentleman is making an intervention, I hope, not a speech.
Mr. Norris : It is entirely proper of you, Mr. Deputy Speaker, to intervene but I was enthralled by my hon. Friend's intervention. At least he had the decency to pronounce the name of the chairman of Glaxo correctly. There was a hint of real sarcasm-- Hansard will not have conveyed it, so I wish to place it on the record--in the way in which the hon. Member for Newcastle upon Tyne, East expressed the name of the chairman of Glaxo. That told us a great deal about the Labour party's attitude towards business generally. If I have any qualification to add to the statement of my hon. Friend the Member for Stamford and Spalding (Mr. Davies), with which I entirely agreed, it is that not only in pharmaceuticals--which has brought many benefits, for example, to the north -east where the industry is a large employer and to the whole country--but
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in industry generally the approach of the hon. Member for Newcastle upon Tyne, East will be the hallmark of a future Labour Government. Not only has the hon. Member for Newcastle upon Tyne, East predictably shot himself in the foot, but the hon. Gentleman who moved the motion has given us a useful weapon to use in the battle of convincing sensible people, who are as yet uncommitted about how they will employ their vote at the next general election, to vote for us. We have been given some very useful ammunition.Despite the introduction of all the filofaxes and red braces of the Labour party, and the fact that they have listened to the advice of my right hon. Friend the Chancellor of the Exchequer in the Budget debate that the most sensible thing that they could do was to smarten up and shut up--my goodness that is what they are doing--and even though Labour Members are under strict instructions not to say a word about the future spending plans of a Labour Government or their real attitude to business, it is on these quiet Friday mornings that we see the true face of Labour in the form of an innocent little motion. Guess what? It has not changed one iota from the old familiar face that we knew and, in a way, some of us even loved. I am rather glad that it has not changed. It would have been terribly boring if all that stuff about mobile telephones and braces had moved from these Benches, where it is rampant, to the Opposition Benches. I love the old class struggle. It is so pathetic as an intellectual argument that one can derive real pleasure from debates such as this.
Mr. Matthew Carrington (Fulham) : My hon. Friend is right that we are now seeing tooth and claw the politics of envy of the Labour party. It is the same politics of envy that we saw in the 1970s. The people on whom the hon. Member for Makerfield (Mr. McCartney) based his arguments were those on half average earnings. Of course, the people on half average earnings when the politics of envy were in full flood under the Labour Government saw their real take-home pay increase by a grand total of 4 per cent. over the period of that Government. Under this Government, the real take-home pay of the same group, with all the problems that Labour Members say that they have, has increased by about 27 per cent. That is the difference between the failure of the politics of envy and the success of the politics of rewarding enterprise.
Mr. Norris : I am extremely grateful to my hon. Friend. I hope that he may catch your eye, Mr. Deputy Speaker, during the debate to expand on those points.
I finish with this thought. Conservative Members still regard the burden of taxation in Britain as too high. We believe that, in general, taxation is a disincentive to intitative and enterprise. It is much preferable to finance an expanding public sector from a smaller slice of the infinitely larger cake that we can create in terms of the wealth of the nation.
I hope that Her Majesty's Government will continue to reduce taxes only when it is prudent to do so. Their record over a decade shows that that is exactly what they will do. [ Hon. Members :-- "The hon. Gentleman hopes so."] I do not have to hope because I know that the Government are committed to further reductions in taxation and I look forward to them as soon as they can arise. I say that not out of any wish simply to massage the paypackets of people in the top 5 per cent. of income, but because, as my
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hon. Friend the Member for Fulham (Mr. Carrington) rightly said, our policy has delivered better living standards, record numbers in employment, record output, record tax revenues and, therefore, record public expenditure in real terms for all the citizens of Britain to enjoy.The motion is amusing and trivial as it relates to the world that ordinary British people recognise. We should reject it out of hand. The gap between the two sides on tax and the central mangement of the economy is as chasmic as ever. The choice which the British people will be offered at the general election could not be starker. It is the choice between an economic system that has been roundly rejected throughout eastern Europe, where it held sway for 40 years at the point of a gun, and a system that has delivered record prosperity to the people of Britain, as I hope it will continue to do in the years to come.
10.49 am
Mr. Harry Barnes (Derbyshire, North-East) : It is always a pleasure to follow the hon. Member for Epping Forest (Mr. Norris) whose bunkum is always delivered with great elegance and style. He is here on a temporary visit once more, this time representing Epping Forest. I only hope that when we are in government some opportunity at a by-election will be found for him, so that he can return again to the House, representing one of the few Conservative seats that will be left.
The hon. Gentleman and I first clashed in the Committee considering the Football Spectators Bill. His arguments were based on the political philosophy and values of Swindon Town. In other words, one makes one's way as best one can and uses the system to achieve one's ends. He argues with style and even seems to believe what he says.
Mr. Norris : Is the hon. Gentleman saying that the Labour party approves of the demotion of Swindon Town from the first to the third division?
Mr. Barnes : As a Sunderland supporter, I certainly approve. I hope that the football league will act correctly and say that Sunderland should be promoted to the vacated position. However, as I live near Sheffield Wednesday, my remarks may not endear me to some of my constituents.
I congratulate my hon. Friend the Member for Makerfield (Mr. McCartney) on his motion, especially on referring to the unfairness of taxation burdens. He stressed that a great number of flat-rate taxes had been introduced and that the burden of taxation had been shifted by changing the method of collection, which had produced greater problems and greater levels of taxation than in the past. He includes the poll tax within the flat-rate provisions.
I am pleased that the poll tax is mentioned in the motion because otherwise Conservative Members, making use of the sophistry that they always produce on this matter, would argue that we could not discuss it in this debate because it is not a tax, but a charge. They argue that the poll tax is a flat-rate charge, like goods in a shop, whereas taxation is different. The motion correctly recognises that the poll tax is a tax.
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The poll tax has massive and serious effects on masses of people who are criticised and accused of the politics of envy. The politics of envy are significant in today's society because some people have a great deal to be envious of. They are envious of a decent way of living, a reasonable home and the opportunity to bring up a family in decent conditions. Those are basic provisions and any reasonable Government, even if they believe in the engine of the market and capitalism, should be redistributing them.Mr. McCartney : Does my hon. Friend agree that it is not the politics of envy, but the politics of ambition? Working people desire a proper standard of living for their families--their children and their grandchildren. Because of the Government's taxation and other policies, no matter how hard those people try, however hard they work, even if it is seven days a week, and however much they are exploited, they never get out of the hole. They are not envious of greed, but are ambitious to have the quality of life that others seem to have as a matter of right, whether or not they work hard.
Mr. Barnes : The problem with the word "envy" is that it suggests that the legitimate ambitions of poorer people to improve their conditions are in some way unreasonable and can only be seen as envy of what others have got justifiably, or so it is held, by their endeavours. Often those endeavours are associated with luck, such as where people are born and their power in society. Many people wish to get in a little on that act. They want to redistribute wealth to ensure that their living standards are decent and dignified. They want society to adjust, so that they have a proper role to play within it. The notion of democracy is important in that. Tory Members should realise that through their taxation policies and the burdens that result, they are hammering the operation and functioning of democratic society.
Since the franchise was extended in the late 19th and early 20th centuries, working-class people have used the vote to seek an improvement in their circumstances and some redistribution of the wealth produced, without ever having adopted a policy of an outright socialist nature to change the basis of society. They have tried to use the democratic system to improve their lot.
The first improvement probably came in the 1870s with the Education Act. That followed the enfranchisement in 1867 of various sections of the working class--the more skilled labour--in urban areas. Foster argued that we must educate our masters. People used pressure to ensure that it was recognised that they had a right to education. Now that very education is under serious attack as a result of the poll tax which is considerably reducing the sums available to local education authorities to run a decent education system. Democracy requies that a Government should respond to the concerns of society. If whole sections of society begin to be detached from the democratic process and feel that there is nothing in it for them, serious social consequences will result.
As I said earlier, I wish to refer to the poll tax in particular. It is the most unfair taxation system that has ever been introduced into any western democratic system. The poll tax that existed in the 14th century operated in three stages. Initially, there was a flat-rate payment. Then there was a graduated contribution, such as this
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Government may be pushed towards. Finally, as there was so much evasion among the upper classes, the flat-rate method was reintroduced, which led to the 1381 rebellion.The Government should be clear that if they pursue their present tactics, they will start to break the social bond. They should remove the poll tax because of its serious democratic implications. Economic and social policies cannot be divorced from the operation of democracy.
Under the poll tax everyone within a given district area except for those who are eligible for rebates and a small number who are exempt, pays the same, be they a duke or a dustman, a miner, a midwife or a millionaire. That cannot be right. The Government argue that the total tax burden should be considered because, when we do so, we see that the rich pay a higher rate of tax than the poor, so that adjusts the picture. Yet we know that that, too, is under attack. Indeed, we should probably look at the general pattern, as my hon. Friend the Member for Makerfield did, and point out that the total burden has increased, and that the maldistribution involved in certain forms of taxation has been seriously worsened.
There are pressures to achieve some harmonisation of the charges. The objective is a common payment system that operates throughout the country. There will be a flat-rate payment irrespective of the financial standing of the individual. There are exemptions, but they are not based on any principle of decency, fairness or justice. We are told that the principle of accountability is being applied, but that is what is wrong with the poll tax. Accountability means attaching the poll tax to the electoral register. There are two registers that are closely interlinked and interconnected. Who are exempted from the poll tax? There are some who deserve to be, but they have been exempted because they happen not to be on the electoral register, not because they are deserving cases. The severely mentally handicapped are thereby excluded from having to pay poll tax but the severely physically handicapped, who may well need the same provisions as are required by the severely mentally handicapped merely to exist, are not excluded. One group is on the electoral register and the other is not.
There are many others who do not deserve to be exempted from contributing through taxation to the services from which they benefit. Visiting overseas forces were subject to the rating system, but they are to be exempted from poll tax charges. Diplomats, who have immunity from so many things to which others have accountability, will not be subject to the poll tax. If anyone goes to prison, he is liable to be exempted. That is because the prisoner will not be on the electoral register, unless he is imprisoned for not having paid poll tax. There will be second-class prisoners who will be obliged to pay the charge.
The Government had the clever notion that they would introduce the pressure of imprisonment, so there will be imprisonment for the poorest in our society. It will be a threat for those who do not have earnings to attach and who do not have sufficient goods in their home to make them subject to the operation of the bailiff system. The Government recognised that there had to be a fall-back penalty to catch the poor. The result is that many people are drifting into debt. There is increasing indebtedness under this Government as people try to overcome the pressures that are introduced by poll tax charges.
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Much is made of the rebate system, but those who benefit from it often find that their circumstances are worse than they were under the rating system, which similarly entitled them to rebates. The Government worsened the rebate arrangements by introducing the 20 per cent. poll tax charge, which is linked to housing benefit.Mr. McCartney : The introduction of the poll tax was based in part upon electoral accountability. It was argued that those who pay poll tax, even the so-called minimum 20 per cent., have a responsibility and a right to expect services provided by the local authority to be Government approved. How does that argument square with the Government's policy of spending £4 million of taxpayers' money to advertise in South Africa, Zimbabwe, Canada and Australia? The Government are appealing to those who left the United Kingdom sometimes over 20 years ago--in many instances people who ratted on this country or who benefited from the apartheid system in South Africa--to register here and to vote in the next general election. How does that square with the so-called accountability that poll tax is said to introduce?
Mr. Barnes : My hon. Friend has made a powerful intervention. I do not favour the notion that the payment of a tax is a qualification to vote. One of my major objections to the poll tax is that the franchise extends only to those who pay the charges. As a result of many inconsistencies there is, in effect, a voluntary franchise. There is so much fiddling and manipulation. Expatriate voters will not pay poll tax charges and neither will they pay any of the other forms of taxation that are referred to in the motion. Worse still, they do not receive any of the benefits that can be provided in a democratic society. Therefore, they will not be concerned about the quality of life in the United Kingdom. This debate is of no significance to overseas voters but it is of great significance to the many poor people in this country--those on average or below average earnings who will find themselves in great difficulty because of the many flat-rate taxes that are being levied on them. This taxation will be increased by the introduction of poll tax charges. Another significant factor will be the increase in water rates, an issue which was raised on points of order at the beginning of the debate.
Those who can afford to contribute to the provision of local services will enjoy fantastic benefits under the poll tax system. Many hon. Members, especially Conservative Members, will benefit by as much as £1,000, £2,000 or £3,000 a year. The money that they do not contribute will have to be found elsewhere. In other words, it will have to be paid by others, including those who are eligible for a rebate. As I have said, the Government's policies are supposed to assist the poorest, but many of those who are on rebates will have to pay more than ever in poll tax charges.
There has been talk about free riders, and the term has been applied to those who have said that they will not pay poll tax charges. The free riders are not those who oppose the poll tax by the tactic of non-payment. Rather, the free riders are wealthy people who have enjoyed fantastic reductions in their contributions to local services with the introduction of the poll tax, and who will continue to enjoy them year after year for as long as the system is in place. They will be the perpetual free riders. They will be riding
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on the backs of the poor and ordinary people in our society who have little to manage on and who in many instances are in the most desperate circumstances.Mr. McCartney : Is my hon. Friend aware that the poll tax is so unpopular that the majority of those who benefit from it are extremely unhappy about their position? There has been a remarkable sea change in attitudes in Britain over the past decade. There has been a fundamental change from "Me, me" to thinking about others. That is one of the major reasons why the Government are running into trouble. I am dealing with the case of a 19-year-old student who is studying for more than 21 hours a week. Her mother and father are unemployed. On her 19th birthday her income support of £27 a week was withdrawn. Her parents have no income and she has to pay 20 per cent. of a poll tax charge of £382. As I have said, she has no income. All her benefits were withdrawn on her 19th birthday.
Mr. Barnes : The longer the poll tax operates the clearer will become the circumstances of individuals, and more and more cases of the sort to which my hon. Friend has referred will emerge. There are those who are subject to the standard community charge as distinct from the collective community charge. They will have to pay a charge on second properties, but some of them may be obliged to own those properties. For example, a pub landlord might have a small terraced house in the street next to the one in which his pub is situated. He needs to have that property because he could be required to leave the pub at any time.
There have been numerous alterations to the law and to legal agreements following the introduction of the poll tax and the abolition of the rating system. The result has been a dramatic increase in social problems. Many people never realised that they would face deprivation because of the high charges.
The Government say that because it is a new tax there are complexities, but that they will get round to adjusting things. Some people cannot wait for that and have been driven into increasing indebtedness. They have failed to pay not because they are part of an orchestrated compaign not to do so, but because they cannot meet that bill.
The Government are reluctant to give us any decent information about the levels of taxation raised in different areas and the link between that and the grant provided by them. Perhaps by the end of the year we will be in a position to understand the full pattern. I have tabled a host of written questions but it is like detective work trying to draw bits of information from the Government. I have sought to discover how much of the money raised is accounted for by grant, the national business rate and the poll tax. In Committee and in the propaganda produced for the poll tax we were told that roughly 50 per cent. of moneys would come from Government support, 25 per cent. from the national business rate and only 25 per cent. from the poll tax. It is clear that that has not happened. The only way in which the Government could try to claim that some 48 per cent. of the sum involved comes from them is to throw everything into that figure. They would have to include all the provisions connected with their contributions to the rebate scheme and all Government grants inside and outside the aggregate external financial provisions. However, if one merely takes into account the
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revenue support grant and the figures that make up the standard spending assessment, one is confronted with an entirely different pattern. Instead of 50 per cent. being contributed from the Government it is clear that contributions from the Government, the national business rate and poll tax payers are equivalent to one third each. That represents a serious maldistribution among those groups.Instead of the Government providing twice as much in grant as is raised through the poll tax, they are providing the same amount, or perhaps even less. If the Government lived up to the promises they gave when they were pushing the tax through Committee and in their party-political broadcasts there would be a significant reduction in the level of the poll tax. Instead, the Government have engaged in a nonsense of fiddling the SSA and a poll tax-capping operation. That operation is directed at Labour authorities that are desperately trying to provide services for the mentally handicapped, as well as services such as meals on wheels and educational provision. Money will be taken away from those authorities and it will be yet another windfall for those who are already saving between £1,000 and £3,000 a year. Although that money might come as a relief to those in poorer circumstances it will not represent much of a relief for those on rebate.
Instead of poll tax capping the Government should provide a grant in place of the money raised through the poll tax in those areas. The poll tax- capped authorities would then be able to provide the services for which people have always voted. Those services represent a redistribution of the fruits of the engine of capitalism and market forces, which now run rampant in society. The majority of voters have little or no stake in the operation of society and therefore there should be a redistribution of resources to them.
The social, democratic and constitutional consequences of the poll tax are horrendous. The poll tax has led to a fiddling of the franchise based on the principle of accountability. If we compare mid-term estimates of the number of 18-year-olds in the population with those on the electoral register, we see that 600,000 people are now missing from that register. Throughout the 1980s, there was, as one would expect, a connection between those figures, but in 1987 things began to change. Then, in Scotland, people began to disappear from the register and the same has happened in England and Wales. Now on average 1,000 people per constituency are missing off the electoral register. People in desperate circumstances will take desperate measures and they have sold their franchise rights in an attempt to evade a tax they cannot pay. Such is the fear caused by the poll tax. No Government should put people into such desperate circumstances. That has not happened in Northern Ireland because the poll tax has not been introduced there.
The poll tax has led to a desperate franchise fiddle together with the other fiddles to do with overseas votes mentioned by my hon. Friend the Member for Makerfield--there are many others one could add if this was a general debate about the franchise. The poll tax has had a serious impact on the franchise, but that impact is not uniform. Its impact is felt much more seriously in Glasgow and other major Scottish cities, Liverpool and other odd patches of the country where people have failed to register. In Finchley, the Prime Minister's constituency, 8.5 per cent. of the population are missing from the electoral register
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--3.9 per cent. were missing in 1989 and 4.6 per cent. in 1988. Who or what is fiddling the franchise in Finchley and other areas? Opinion polls suggest that, in various circumstances, the Conservatives might just hold on to Finchley. That does not take into account any expatriate votes that Denis Thatcher has been able to organise for that seat ; nor does it take into account those who are missing from the electoral register. The Prime Minister, in a desperate attempt to hold on to her Government as well as her seat, is involved in the most significant fiddle of the franchise in Europe since that perpetrated by Mussolini. I am not saying that it is the same as that undertaken by him ; it is a more sophisticated, marginal fiddle. When a Government believe that they should perpetuate their term in office they start fiddling the franchise. Mussolini did it in an exaggerated way, but the Government are more subtle. We have not been able to observe it, nor have we been able to speak about it as we should have in this House.Mr. John Marshall (Hendon, South) : As the Member representing Barnet may I point out that there has been a concerted attempt to improve the accuracy of the electoral register throughout the borough, as my hon. Friend the Member for Chipping Barnet (Mr. Chapman) can confirm? The register was seriously inaccurate because the dead and those who had moved from the area were still appearing on it. The improvements may account for the drop that the hon. Gentleman has noticed. Can he enlighten the House about what happened in the St. Pauls ward in Finchley during the local elections when the three Labour councillors lost?
Mr. Deputy Speaker : Order. It is difficult to see any connection between that and the motion on the Order Paper.
Mr. Barnes : The Prime Minister wrote to me about the franchise after I had raised with her the type of difficulties about which I am speaking. She wrote that the shortfall that had occurred in the franchise in 1988 had probably been due to the postal strike of September of that year. But there was no postal strike in September 1987, at the very time when a similar shortfall was occurring in Scotland.
It is odd that while in certain places, such as Liverpool and Glasgow, a tidying-up of the electoral register is taking place, a similar exercise is not occurring in other areas. The shortfall is often linked to the working- class make-up of areas, even sections of Barnet.
In 1988 in the Rochester and Medway area there was a shortfall of 11 per cent. in electoral registrations. The situation has improved somewhat, perhaps because a tidying-up exercise has been happening there. Has some of the shortfall been made up by the use of poll tax information? I understand that the shortfall has fallen from 11 per cent. to about 7.5 per cent. There is a large immigrant population in that area, with many people living in poor circumstances. When large numbers of people live together in households, many of them will not appear on the electoral register.
Unfortunately, those who most frequently are not on the register are the attainers, those coming up to age 18 who were not on previous electoral registers. Generally speaking, one can discover the names of those who are missing--they may be missing for poll tax purposes--because they appeared on previous electoral registers.
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With the introduction of the poll tax, we find that the two registers are interlinked by computer in district council areas. It is disgraceful that, living in a democratic society, we should have taken such a step. It has resulted in our having a tax on qualifying to vote. It is like Chile when the referendum took place on Pinochet's future ; to qualify to vote, one had to pay the equivalent of a month's employment training money to get on the register. In other words, the vote that took place against him--Mr. Deputy Speaker : Order. I regret having to interrupt the hon. Member, but it seems that he is speaking more about the weaknesses, as he sees them, of the electoral system than about the burden of taxation.
Mr. Barnes : I have endeavoured to point out the problems that the poll tax is creating for the taxation system and the ramifications of that for the living conditions of ordinary people. But those problems have serious democratic implications. I argue that redistributed elements should be a natural part of democratic taxation systems, as is the case in many other countries. We should be debating the nature and extent of our taxation system and whether the burden is too great and causes other problems. We should not have a flat-rate system of taxation which is linked to the electoral register.
I accept that my example of Chile might have taken us far from today's debate. I made the point only to show that the vote that went against Pinochet did not occur on a full franchise, because vast numbers of people did not qualify to register. I fear that we in this country will find ourselves with that type of peculiar
democracy--democracy with a bit chipped off, one might say--which could allow odd results to emerge.
In other words, I fear that we shall return to the system we had before the introduction of the universal franchise. That was introduced in two stages. Women finally got the vote on the same basis as men, and the system was based on residence, in 1918 and 1928 respectively. We must at all costs avoid going back to what we appear to have had in some areas, with 40 shilling franchises and provisions designed to cull people out of voting.
It seems clear that the introduction of the poll tax is akin to our legislation on representation of the people being amended. I appreciate that new legislation is not bound by earlier legislation, but at present we must operate under the Representation of the People Act 1983, apart from the nonsense of extending its provisions to expatriate voters, an amendment against which I voted at every opportunity.
Mr. John Marshall : How did the shadow Cabinet vote on that?
Mr. Barnes : The members of the shadow Cabinet can make their own speeches. This is my speech.
We in Britain are supposed to have a system of democracy, having fought for it, but many people are now finding that they are oppressed by recent legislation. From the 1275 Statute of Westminster, which allowed free elections, to the latest Representation of the People Act
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