House of Commons Hansard Debates for 3 Dec 1990

Mr. A. J. N. Beith (Berwick-upon-Tweed) : I cannot imagine that there is another legislature in any democracy in the western world that is currently attempting to digest

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a piece of legislation remotely comparable to the Bill. Can anyone imagine that Chancellor Kohl, fresh from his election victory, and his Free Democrat allies are rushing down to the Bundestag to legislate that

should be the formula for the local citizens of Bonn to contribute to their local affairs? That is utterly inconceivable. No sensible legislature at national level would attempt to legislate in such absurd and complex detail for the affairs of local government, which most other countries believe can be better settled and resolved at local government level.

If the events of the past two weeks had not taken their rather dramatic turn, the Bill would have been introduced on the basis that it was a small technical refinement to an otherwise excellent piece of legislation on the community charge, which was described by the outgoing Prime Minister as the best local tax that has yet been invented. It remains to be seen whether that was intended as a challenge to the inventive powers of her then opponent, the right hon. Member for Henley (Mr. Heseltine), who is now the Secretary of State for the Environment. Obviously the Secretary of State for the Environment has left the Chamber and gone away to invent something as rapidly as he can.

The Minister introduced the Bill with a slight air of apology, and said that the review must go ahead. He said that the Bill should be on the statute book notwithstanding that review. Why must we have the Bill at all? Why must we have substitute setting with or without the formula of A plus B times C and all the rest of it? Surely the poll tax was intended above all to produce such high accountability for local spending that no one would elect an authority that would land him with an unreasonable charge.

Many people now have to pay unreasonable levels of poll tax. However, the outcome of legislation so far, which will not be solved by the Bill, is that no one can agree who is to blame for the unreasonable levels of poll tax. The Government claim that it is all the fault of the wicked socialists and sometimes they are right. However, that does not entirely explain the situation in many Conservative-controlled areas. It does not even explain the situation in local authorities where Conservative oppositions have argued that the spending assessments are inadequate and that something near the authorities' proposals should be spent.

Mr. Corbyn : Does the hon. Gentleman believe that local authorities should have an unfettered ability to spend their own money without control from central Government? That is the heart of this legislation.

Mr. Beith : I shall come to that later and consider what we should put in place to prevent all this nonsense. The principle by which local government should operate, and does operate in many countries, is that local authorities are accountable to the local electorate for what they spend. Central Governments do not need to interfere. Certain conditions must be met for that, and I shall consider those in a moment.

Even before the Bill--and probably more so after it is enacted--people were completely confused as to who is to blame for high poll tax charges. Much of the blame is laid at the door of the Government's standard spending assessments, not least by some of the Government's

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supporters who, in Northumberland, argue that Northumberland's standard spending assessment is not satisfactory.

When the poll tax was introduced, it was said that it would be an easier tax to collect than the rates. No one involved in the rating system believed that for a moment. It was clear that the poll tax would be more difficult to collect. The central issue in the Bill is whether a local authority will be allowed during the year to revise upwards its estimate of the cost to it of non-payment.

In my part of the world, there is quite a lot of non-payment, which is not based on political campaigns. Some people campaign for non-payment, but many are struggling desperately to keep up their payments from an income that does not meet their costs. They do not want to take part in a campaign or to be in the firing line. They just wonder where they will find the next payment. As a result, local authorities find it difficult to meet their bills and in particular to come to terms with the levels of revenue that the Government said that it was reasonable for them to expect.

The anomalies produced by the poll tax could not have been dealt with in a Bill as small as this. Even if we consider the anomaly on which the Bill is based, why did the Government start by capping expenditure if they are now dissatisfied with that arrangement? The Government introduced the Bill because they now believe that they should have capped the poll tax levels in the first place and not the levels of expenditure. If the Government could not get that right, it is not surprising that they got so much else wrong in the poll tax. However, no one has explained why they did it that way in the first place. Was it an extraordinary discovery that at the end of the day there might be a difference between the effects of capping expenditure and the effects of capping the tax level? The Government did not seem to realise that such a difference might arise. We should not have needed this Bill if the Government had got that right in the first place.

If we enact this change in the poll tax, it will not deal with the grinding unfairness of the poll tax or with the crude inequity of the system, in which some areas cannot fix reasonable levels of poll tax because of the way in which the grant system works. For example, in my constituency, the poll tax is more than £435 in Castle Morpeth. That is £100 a head higher than in the neighbouring areas of the same county. That difference is not related to the level of expenditure in Castle Morpeth ; it stems from the system of reliefs and transitional provisions in which the council finds itself enmeshed and the crude way in which the Government have lumped together areas of high and low rateable values and treated them as if they were the same. The same lack of attention to detail gives rise to the Bill. The Government have failed to consider the precise consequences of legislating in a particular way. The Bill will not help those in sheltered housing schemes who do not qualify for transitional relief. It will not help people who are struggling to pay their own way, who do not receive benefits and are not dependent on housing benefits or community charge benefits, because they have just enough capital to exclude them from such benefits. They do not receive any benefit from transitional relief.

A little later this evening, hon. Members will discuss another Bill that deals with another anomaly that is illustrative of the Government's failure to get it right. I refer to the Bill dealing with caravans and caravan sites. As

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the Government have got so many things wrong, including the central issues of this Bill, that it is difficult to give them the benefit of the doubt and assume that the current review will bring an end to all the problems.

We do not know how the Bill will fit in with the results of the review that the Secretary of State has rushed away to work on. We do not know whether we shall get banding or, a scrapping of the tax, or how far the Secretary of State is prepared to go towards local income tax. During his election campaign he was asked why he was not prepared to support the Liberal Democrat proposal of a local income tax. His reply was

Mr. Deputy Speaker : Order. I do not think that it is in order for the hon. Gentleman to try to identify all the various aspects of the community charge that are not included in the Bill and then seek to debate them. I very much hope that the hon. Gentleman will confine his remarks to what is contained in the Bill.

Mr. Beith : I am seeking to establish how, according to the formula in the Bill, substitute setting would work, if, as appears to be the Minister's intention, the Bill remained on the statute book, but fundamental changes were nevertheless made in the tax to which it applies. For example, local income tax, which would clearly be one of the directions in which we could go--

Mr. Deputy Speaker : Order. That matter is not relevant to the Bill. I hope that the hon. Gentleman will confine his remarks to the Bill.

Mr. Andrew F. Bennett (Denton and Reddish) : On a point of order, Mr. Deputy Speaker. I thought that it was a long-standing tradition of the House that it was always reasonable on Second Reading for the debate to be fairly wide and for hon. Members to speculate about the implications of a certain measure on other measures. I thought that it was only on Third Reading that we must refer narrowly to the Bill. It seems that the hon. Member for Berwick-upon-Tweed (Mr. Beith) is legitimately raising issues that many hon. Members have already raised and that many others would wish to raise.

Mr. Deputy Speaker : I have allowed a wide debate. I thought that I had been the object of some reproach for allowing too wide a debate. [Interruption.] It must be for the Chair to judge how widely a debate can range. I do not see anything in the Bill that gives rise to a debate about alternative methods of raising local government finance, such as local income tax. Perhaps we may proceed.

Mr. Corbyn : Further to that point of order, Mr. Deputy Speaker. I do not wish in any way to challenge your ruling, but it occurred to me that it is impossible to oppose the Bill or, indeed, to speak in favour of it without speaking within the circumstances of it. There are apparently now no Tory Members, or perhaps there is one, who have supported the poll tax anyway. They are about to bring forward legislation to remove the basis of the Bill, which is the 1988 legislation. Perhaps you could enable the hon. Member for Berwick-upon-Tweed (Mr. Beith) to explain what the alternative would be for controlling expenditure in the Lambeth case in the event that the 1988 Act were repealed.

Mr. Deputy Speaker : I call Mr. Beith.

Mr. Beith : I hope that you will understand my difficulty, Mr. Deputy Speaker. I accept--it was in the

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process of accepting it that I was making my point about what the Secretary of State had said--that the Secretary of State will not introduce a local income tax. He gave a reason for that, and it is relevant to the background--that he was not a Liberal Democrat. I do not think that that is a sufficient reason.

However, let us take it for granted that, on that narrow doctrinaire ground, he has decided not to introduce a local income tax. What I think he may do and what will enable him to keep the Bill on the statute book while he does so is to get as near as he can to a local income tax within the framework of the community charge and preserve the poll tax-capping powers that are in the legislation, refined as they would be by the Community Charges (Substitute Setting) Bill.

The Secretary of State wants to get as near as he can to a local income tax without having to admit that we were right and so many of his colleagues are wrong. If he proceeds along that road, unless he is prepared to go virtually the whole way, he will end up with even more anomalies than the Bill addresses. Any attempt to use banding is likely to cause extremely complicated arrangements and substantial poverty traps. Instead of having the substitute setting Bill, we shall have a series of fresh Bills to deal with all those matters, and the Secretary of State will be in a similar difficulty. Night after night, hon. Members will be faced with another Bill to modify yet another aspect of this ludicrous tax--it is so ludicrous as to be virtually unreformable without total abolition and replacement. An important core principle has been raised by Ministers and by Opposition Members. Is it possible to have a system of local taxation, even one based on the community charge, in which we do not have the capping mechanism and we do not need legislation to set out in detail what authorities individually are allowed to charge? I maintain that it is, but we must get the conditions right. The Secretary of State has shown some awareness that there are such conditions in the wide-ranging ideas which he has put forward and which certainly go far wider than he is proposing tonight. He obviously recognises that accountability must be genuine and that people must see what they will be charged and who is responsible for the level of charge. It is possible to leave freedom to local authorities if we have a fair tax--I propose a local income tax--and a fair voting system, so that the outcome of the votes that are cast is representational of the council chamber, and if we recognise that, in that context, we can have some reasonable diversity around the country about the choices that people make.

At the heart of the Bill is a belief on the part of the Government that diversity is not allowed and that it is not reasonable for one part of the country to choose a higher level of expenditure than people in another part. If that is their belief, they are flying in the face of centuries of tradition of local diversity--centuries of tradition to which Bills such as this are completely foreign. If one were to show such legislation to many past prominent local government leaders, even people who have been Conservatives, they would find it extraordinary that any Government of any party, least of all their own, should want to propose such legislation.

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Mr. Hind : The hon. Gentleman makes the point that past local government Conservative leaders would be astonished by the legislation. Those people recognised the need for prudent financing. They did not collect high rates. They did not need this sort of legislation. This matter is one of the problems that has come out of the 1970s and 1980s. Surely the hon. Gentleman must agree that, if there are high levels of local income tax, if he were in power he would want to protect payers on a local basis and would need such legislation.

Mr. Beith : I believe in democracy. If the system is right and it is clear who is responsible, which it certainly is not at the moment and will not be under the Bill, I do not see why a case as strong as that should not be put by those very Conservatives to their own local electorates so that they win elections for those councils if the public support their case. That is the principle for which I am arguing.

I hope that, in all his considerations, the Secretary of State will get a little nearer to that principle, but it is far from clear what will happen. There has been a major change of heart in the Government in respect of the poll tax. The tradition is that if one is greeted by a blinding light on the road to Damascus, one of one's first actions is to cease to make further arrangements for the persecution of Christians. The essential steps following conversion do not seem to have been taken by the Government, and there is no better illustration than this ridiculous Bill.

5.57 pm

Mr. Andrew Mitchell (Gedling) : I am grateful for the opportunity to make a few comments.

The hon. Member for Dagenham (Mr. Gould) asked why it was necessary to debate the measure in the light of the events of recent days and the announcements by the Prime Minister and the Secretary of State for the Environment. He missed the point, which was well made by my hon. Friend the Minister for Local Government and Inner Cities, that capping is not simply germane to the community charge but that it was also necessary and used under the iniquitous rating system that the Opposition seem so enthusiastic about reintroducing in a slightly modified way. It needs to be used now, and it may need to be used in future. The hon. Member for Dagenham was being uncharacteristically obtuse in not realising that the measure is extremely important as an effective mechanism for controlling high local government expenditure.

Mr. Corbyn : Could the hon. Gentleman explain to the House how, if 373 Conservative Members no longer believe in the poll tax, it ever got through the House? Was it just a trick of the light?

Mr. Mitchell : First, the hon. Gentleman knows perfectly well that if I were to stray too far down that path you, Mr. Deputy Speaker, would not permit me to proceed, and I should not dream of trying your patience in that way. Secondly, the Government have always made it absolutely clear that they have every intention of keeping the community charge under continual review until it has settled down. Therefore, it is not surprising that there have been three, possibly four, reviews since its introduction.

Mr. Brandon-Bravo : Does my hon. Friend agree that, when our colleagues voted for the principle of the poll tax it never occurred to them that local authorities such as our own in Nottinghamshire would have the nerve or the gall

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to impose on the citizens of Nottinghamshire what has been described as £104 million-worth of improved services, which amounts to £100 extra from every adult in our county?

Mr. Mitchell : My hon. Friend is absolutely right to make that point. I have no doubt that, if he catches your eye, Mr. Deputy Speaker, he will draw to the attention of the House the effect that the capping legislation might have on Nottinghamshire next year at a time of such heavy increases in expenditure and when everyone in my hon. Friend's constituency and in mine has recognised the almost undisguised glee with which Nottinghamshire's Labour-controlled county council has bumped up its expenditure under the disguise of implementing the community charge.

Mr. John Battle (Leeds, West) : The hon. Gentleman said that he could not see what connection the Bill had with the poll tax. Perhaps he could explain why the Bill simply changes sections 35 and 107 of the Local Government Finance Act 1988, which deals only with the poll tax. If the Minister was concerned about capping in general, why has he not changed some other pieces of local government legislation, of which there are many? How on earth can the hon. Gentleman defend changing that legislation which I hope that he would vote to repeal? We certainly intend to vote for the repeal of that Act as soon as the Secretary of State has the nerve to put such a motion before the House.

Mr. Mitchell : The answer to the hon. Gentleman's intervention need not come from me. My right hon. Friend the Minister for Local Government and Inner Cities spelled it out clearly when he dealt with the need for this Bill at this time. As he made clear--perhaps it bears repeating one more time--the Government attach considerable importance to effective capping, which was necessary under the rating system and which is even more necessary under the present system. I should like to put on the record my intense gratitude to my hon. Friend the Minister for Local Government and Inner Cities who, during the last review, took many soundings from Conservative Back Benchers. I am grateful for the time that he afforded to me, and I am delighted to hear that there is to be another review. I very much hope that many of the points that were made during the last review will now, in view of subsequent events, be worthy of greater consideration than they were given at that time. I am sure that there is now determination and great scope for changing the community charge in a helpful manner.

Mr. Hind : Does my hon. Friend agree that there is now no excuse for any authority to be capped because my right hon. Friend the Member for Bath (Mr. Patten), the former Secretary of State for the Environment, set out the criteria for capping some weeks ago? When preparing its budget for the start of the next financial year, every local authority knows exactly what its limits are. Therefore, any authority that is capped has volunteered for it and is deliberately taking on the Government head on.

Mr. Mitchell : My hon. Friend is absolutely right, and that point bears underlining. Many local government bodies and amalgamations of them made it clear that, if there was to be any capping criteria for next year, they wanted it spelled out clearly by the Secretary of State for

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the Environment well in advance of determining their budgets. As my hon. Friend has said so clearly, those criteria have been spelt out in the House and to all local authorities. So any local authority that decides to breach those guidelines will be volunteering itself to be capped. I believe that that extremely important message has now gone out.

In his speech my hon. Friend the Member for Lancashire, West (Mr. Hind) referred to the critical importance of paying the community charge and of ensuring that authorities are not capped. He spoke about the effect that non-payment can have on meals-on-wheels and other critical services. It is extremely important that anyone who decides not to pay the community charge --we heard something about this from the hon. Member for Dagenham--should realise the effect that that can have on the services which, no doubt, that person seeks to defend.

One would have preferred to hear the hon. Gentleman make a clear statement calling on everyone to pay his or her community charge. Perhaps he should have made a few comments about the 28 Opposition Members who have declined to pay their community charge. It would have been more helpful to the House and to the local authorities that are struggling to collect the community charge if the hon. Gentleman had done so.

When considering capping, one should not neglect the fact that it is extremely popular in the country. A recent survey showed that only 36 per cent. of those who were asked were not in favour of the capping procedure and would not wish the Government to use it where necessary. That is a powerful boost from public opinion in support of capping.

One should also bear in mind the effect of capping on services. My hon. Friend the Minister said that, whenever capping is raised as a proposition, the local government units affected immediately shout and scream about the dire effects that the capping will have on the services that they seek to provide for the needy in the areas that they look after. Is it not the case, however, that even organisations such as the National and Local Government Officers Association now acknowledge that there is clear evidence that capping is not having anything like the effect that was threatened when the Government set out their capping proposals?

Mr. John Butcher (Coventry, South-West) : On his point about the popularity or otherwise of capping, is my hon. Friend aware that the Labour -controlled Coventry city council introduced an innovatory technique in the early 1980s when it decided to hold a local referendum in all the Coventry constituencies, asking, "Would you like to see a supplementary rate? Are you aware that we can only improve services by a supplementary rate?" None of the four Coventry constituencies voted less than 80 per cent. against any increase in expenditure. Does my hon. Friend agree that that is yet another verification of the fact that when people are asked whether they want unnecessary increases in expenditure for increases in services--when given a chance to express themselves--they invariably vote against such a proposition?

Mr. Mitchell : I am extremely grateful to my hon. Friend for his sensible and constructive intervention, demonstrating the critical point about accountability, which is at the heart of what so many of my hon. Friends

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have said. My hon.Friend has also demonstrated that, when accountability is put to the test of public support, it receives that support every time.

Not only is capping popular, but it has been demonstrated that it does not have the dire effects that we were promised would be visited on authorities where it was used. I can do no better than quote from a survey on the likely effects of charge capping published by the newspaper of the National Association of Local Government Officers, Public Service, with which all of us are familiar. My hon. Friend the Member for Basildon (Mr. Amess) has had to depart for a meeting with his constituents, but, according to the newspaper, in his constituency,

"No redundancies were anticipated."

The newspaper continued that, in Brent, there were

"No cuts required as a result of capping."

In Bristol, there were

"No redundancies, no cuts in services, no charge increases." Calderdale was

"Holding growth, increasing some charges and cutting some non-essential services."

In Camden there were

"No cuts necessary. Cap was £4.4 million. Council said, Our income was sufficient for us not to need to make cuts.' "

In Greenwich there were

"Some redundancies expected, but no large-scale job cuts." Lambeth

"Managed to avoid closure of front line services and no redundancies."

In Rochdale there were

"No compulsory redundancies."

Those are not the quotes of a Government Back Bencher, from the Department of the Environment or from one of its Ministers, but come from NALGO's own newspaper, and I have given them to the House as they appeared in it.

Mrs. Mahon : I thank the hon. Gentleman for giving way and acknowledging that Calderdale, my local authority, tried its best to minimise the effects of capping and, by and large, avoided compulsory redundancies. However, is he aware that, night after night in the local press, Tory councillors complain bitterly about swimming baths being closed, repairs not being done in schools and the many losses of services? Matters could have been worse had Calderdale not used balances and been careful about how it made the cuts. It cannot do that year after year.

Mr. Mitchell : It would not be appropriate for me to comment on the effectiveness or otherwise of the way in which Calderdale runs those services--

Mr. Robert N. Wareing (Liverpool, West Derby) : The hon. Gentleman was doing just that.

Mr. Mitchell : As the hon. Gentleman will have heard, I was quoting from the NALGO newspaper. Any authority must seek to provide services for which the people they represent can afford to pay.

It has been widely argued that the Bill is an attempt to deal with the Lambeth loophole. Although I do not represent a London constituency, I am sure that all my hon. Friends were appalled when, after the court case, Lambeth councillors and the leader of Lambeth council literally danced on the steps of the town hall because of their delight at being able to send out to the people they

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purport to represent a larger bill than the Secretary of State wished them to do. That is one reason why, as the survey also clearly demonstrates, capping is popular in the country. Many of my constituents wished that Nottingham county council would be capped and could not understand why the Government did not do so. That is why we must salute the outgoing Secretary of State for the Environment for the way in which he has made so clear the criteria that will apply this year and acknowledge that there are many people up and down the country who will be pleased that he is determined--and his successor is equally determined-- that the effectiveness of proper capping should be seen to be clearly maintained and enhanced. It would not be right for the Secretary of State to go in and out of the courts over narrow points of law. The ground rules of this important system need to be set out well in advance.

In his opening speech, the Minister rightly made much play of accountability and the important fact that elections, the benchmark of accountability, are out of sync with the introduction of the community charge. My hon. Friend said that county councils will not have to stand for re-election until 1993, so that there is a long period before many of them will be brought to book for their high spending.

When looking at the exact terms and measures enshrined in the Bill, it is important to recognise that accountability is made much more difficult when two tiers of authority cost the bill every year. In my district we have a prudent, low-spending, effective,

Conservative-controlled borough council which is responsible for only 10 per cent. of the community charge bill, and a high-spending Labour county council which is responsible for 90 per cent. of the cost. My hon. Friend the Minister rightly described accountability as the benchmark of the Bill. It is also right to make it clear that, in a district such as that which I represent--Gedling--two tiers of authority make accountability much more difficult and blur the issue. The capping measure, which is tightened in the Bill, is essential to save charge payers from the high charges that can be imposed on them, particularly in districts such as Nottinghamshire, where it will be another three years before we can bring the high-spending county council to book.

When the review--the subject of Wednesday's debate in the House--takes place, I hope that Conservative Members will accept that the basic principle of the community charge is not at fault, but the heavy amount which people such as my constituents will have to pay. Almost no one in my constituency disputes the principle of the community charge, but many people do not believe that the amount charged can be, or should be, supported.

It is impossible to view the Bill in isolation and separate from the new review of the community charge now being undertaken. It is essential that, as part of that review, we consider local government structure and ensure that fundamental to any review is the notion of bringing local government as near as possible to those it seeks to serve. That should not be forgotten when we consider the review. This short and technical Bill makes it absolutely clear that the local authority must pass on to its charge payers the reductions sought and granted under capping legislation. It is astonishing that any authority should not seek to do that. I am delighted that the Bill, which will, I hope, receive a Second Reading tonight, will ensure that there is no way that that cannot happen.

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I am also delighted that my hon. Friend the Minister made it absolutely clear that he finds it appalling that some hon. Members are still not paying their community charge, thus entailing a loss of revenue to local services. It means that all too often people sponge off their less-well-off neighbours. As my hon. Friend the Minister said, it is astonishing that the Labour party, which claims to want to see bills reduced, is to oppose the Bill.

My hon. Friend the Minister talked about the control of public expenditure- -and as though on cue he walks back into the Chamber. He made it absolutely clear that, while the Government have done a great deal to control their expenditure, local authorities have consistently failed to bring their high expenditure under control. He mentioned that in the past two years alone local government has increased its expenditure by 25 per cent. That is a formidable statistic which underlines the point that neither Conservative nor Labour Members have been able to grasp in recent years : local government expenditure remains uncontrolled and out of control. I believe that I was a former Member of this House, Dick Crossman, who said on the steps of one of our great town halls that the party was over in local government spending-- [Interruption.] I may be wrong about that ; if so, I am sure that it will be corrected by one of my hon. Friends. But, whether he said it or not, the party is not over. We have never been able to control local government expenditure effectively. My constituents have reached the point of demanding that it should be effectively controlled, and I very much hope that that fundamental point will be dealt with in the review.

The community charge and its introduction have been used as a scapegoat for higher expenditure by local authorities. The criteria for capping this year make it plain that local authorities will not be able to get away with that. I welcome that, just as I welcome the Bill. I wish it a speedy transition into law. It deals with only a small part of the major difficulty with the community charge that the Government must now address, but it makes a good contribution to that small part.

6.20 pm

Ms. Dawn Primarolo (Bristol, South) : This debate arises out of the appeal of the Secretary of State against Lambeth. To judge from the contributions of Conservative Members, local authorities--especially Labour -controlled authorities seeking to protect services--are wicked.

It is as well to remind the House of what the judges who heard the appeal in the Court of Appeal said. Lord Justice Glidewell said : "In my view there can be circumstances in which a council can properly decide, provided it bases itself solely upon the information which was originally in its possession, to adopt as the basis of its second calculation a different non payment rate. I am not persuaded on the material before us that Lambeth's resolution on 6 August 1990 was a breach of Section 35(5). I would therefore dismiss the application."

Mr. Justice Otton said that the Lambeth councillors had approached "their task with the utmost care What happened in August was the substitution of one reasonable decision for another",

said Lord Justice Mustill. He went on to say :

"In the growing conflict now in progress between central and local government for the control of local taxation, central government has the whip hand because it initiates legislation."

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That blows an almighty hole in the Government's argument about whom people should look to for accountability in the administration of their funds.

Yet again we see that the law is based not on morality but on the political will of the day. This legislation is about making sure that the Government's desire to destroy local authorities by cutting the money provided for services succeeds.

What does the Bill set out to do? The formula is as follows. Under the proposals, if a council is capped, the new poll tax will be calculated by using the formula : new poll tax equals old poll tax minus old budget minus capped budget divided by the relevant population. That is supposed to make local authority finance more understandable, more accountable and simpler.

Furthermore, when an authority is capped and there is also a capped authority that precepts on it, the council has to calculate and undertake a separate substitution. That is what happens in Avon. Avon county council and Bristol city council are capped authorities. The problem with the formula is that it is based on various other decisions that continue to compound the agonising problems that local authorities face. For instance, the Government assume a 100 per cent. collection rate when the new poll tax rate is set, yet we know full well that 100 per cent. of the poll tax is not collected--just as the rates were never fully collected.

It is an important feature of this system of central Government support that the needs of assessment for an authority and its grant entitlement are established with no reference to the extent and quality of the services that it actually provides. For instance, an authority with no museums, art galleries or public parks, with no programme of support for the arts, and with no crematoria, will be in no way worse off under its SSA than an authority that provides those services.

Bristol was poll tax-capped last year by £10 million. If it spends on a standstill budget next year, it will need to spend about £62 million, but the Government have set Bristol's SSA at £41 million. So the council has to cut one third--£21 million--of its budget to comply with the SSA.

To meet that shortfall, Bristol council officers are recommending that members consider the closure of all swimming pools in the authority, the closure and selling off of Colston hall, which is the main concert and arts centre apart from the Old Vic, and the selling off of all open space. The planning committee has suggested that all concessionary bus fares be stopped and that we should phase out paying the charges for giro payments, which are paid for now by the local authority--

Mr. Andrew Mitchell : Is not the hon. Lady being had by the oldest trick in the book? Surely she is the victim of precisely what the Minister outlined in his speech. Of course officers will always draw up the most unpalatable and dreadful list of possible cuts, but did not the evidence that I produced from the NALGO newspaper demonstrate that when it comes to it, sensible economies can be made without implementing the sort of swingeing cuts proposed by the officers that the hon. Lady mentioned?

Ms. Primarolo : I am not persuaded by the hon. Gentleman's arguments or by his quotations from the NALGO newspaper. I should like to take a look at them. In view of the unfairness of the basic calculations in relation to Bristol city council, I do not think that I am being "had". Avon county council was poll tax-capped last

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year and has to cut £26 million from this year's standstill budget if it is to avoid poll tax capping this year. That is a substantial amount.

The SSA for Bristol is calculated per adult head of population and that enters the formula for the setting of the new poll tax after capping. For Bristol it is £139 per head, compared with an average of £163 per head for what are referred to as the big nine, the nine large district authorities. Leicester, which has a population considerably smaller that that of Bristol, has an SSA of £236 per head. The figure for Nottingham is £184. However, Bristol, Leicester and Nottingham are all in the family of the big nine authorities. I am not questioning the amount that other authorities should receive, but merely pointing out how little Bristol receives.

The Average SSA per head for the big nine is 26 per cent. For Bristol it is 23 per cent. and for Leicester, which has the highest SSA, it is 31 per cent. The Secretary of State takes the view that the standard level of district services costs 70 per cent. more in Leicester than it does in Bristol. It is inconceivable that exactly the same services in Leicester should cost 70 per cent. more than in Bristol. The formula, which is acceptable to the Government, is crazy and Bristol is disadvantaged.

On that formula, the SSA produces for Leicester £46.3 million for an adult population of 196,000 whereas for Bristol it produces only £40.9 million for a population of 294,000. That same population formula will be used yet again to penalise Bristol if the political parties there are unable to identify £21 million worth of cuts. Local authorities are accountable to the electorate to provide services. The Government take the view that accountability is about making local government the puppet of their political will regardless of the views of local electorates.

The Government claimed that the poll tax was introduced to protect charge payers. It does not protect women in Bristol who have no income whatever but have to pay the poll tax. It is no protection for women there who will not receive services from carers, nor does it protect young mothers who have nowhere to take their children because the adventure playgrounds have been closed. The complexities and costs of the scheme work against local authorities. In Bristol it costs £5 million more to collect the poll tax than it did to collect rates under the old system. Less than 70 per cent. of people pay the poll tax.

The Government tell Avon and Bristol authorities to impose cuts and at the same time they impose legal duties. Those are the extra duties contained in the Education Reform Act 1988 and in what is left of the pitiful community care policy. Extra duties are also contained in the Children Act 1989 and there are extra but welcome duties in the Environmental Protection Act 1990. All those duties mean that local authorities have to spend money, and they are having to impose disproportionate cuts in other areas.

Avon is a joint police authority with Somerset. The precept percentage that the Home Office allows the police authority compulsorily to extract from a county council that is poll tax-capped is greater than the percentage by which the Department of the Environment is allowing Avon to increase its spending.

The Bill is not about dealing with excessive budgets, nor is it in the best interests of the poll tax payer. It is not about

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