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Mr. Malcolm Bruce (Gordon) : The speech of the hon. Member for Tayside, North (Mr. Walker) came to a suitably abrupt end, and not before time.
Many of us have been through these debates before. It is sometimes difficult to find something new to say, but the hon. Member for Tayside, North gave us a brilliant idea to which we can perhaps look forward. He said that he hoped that this was the last debate of this kind that we should ever have in the House. It seemed to imply that there should be no revenue support grant at all in the future. Perhaps that was a revelation of the way in which Tory party thinking is moving.
The Minister said that this was a reasonably generous settlement and that there was no reason for a dramatic increase in the poll tax, because local authorities were getting a settlement broadly in line with inflation. If I am not mistaken, the hon. Member for Glasgow, Garscadden (Mr. Dewar) did not fundamentally dispute that ; the point that he disputed concerned the way in which the burden falls on the poll tax payer ; because of its fixed element, it is the only area of taxation that is flexible for local authorities. It does not need much intellectual power to understand that, when an authority has a shortfall in expenditure or faces unexpected extra costs, it has a disproportionate effect on poll tax payers because all the money must be recovered from that one component of revenue, although it accounts for only one quarter of the total tax base of local authorities. I ask the Minister to consider the pleas that I have received from local authorities about the timing of this settlement. Timing is a problem every year, but it seems to have become more acute. It is extremely difficult for local authorities to fix budgets in which a major component is
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not determined until--if they are lucky--the day before the budget must be presented, and often not until a day or two after the budget has been fixed.I can confirm that I received a fax this morning from Gordon district council pointing out that it determined its budget on the basis of information about what it expected the revenue support grant to be ; but the information was wrong to the tune of £21,000, which the council had to draw from surpluses. The Minister seems to deplore the idea of maintaining balances, but this is a good example of why they are a necessary and perfectly legitimate component of local authorities' budgets- -to ensure that they have the flexibility to cope with unexpected fluctuations in the demands made on them. Am I right in deducing that this is a case of the tail, in the shape of the Department of the Environment, wagging the Scottish Office dog? The settlement in England comes two months later than that in Scotland. The new leadership of the Tory party gave a clear sign that more money would be available, so local authorities in Scotland had to determine their poll taxes against that background, and they had much less time to play with.
I understand that the Secretary of State had to consider whether re-billing would have been necessary for Scottish authorities in circumstances in which it would not have been necessary for English authorities. I ask the Minister to bring forward the timing of the allocation of the grants, so as to enable local authorities to plan their budgets in good time.
Earlier, the Minister outlined his concerns about the relationship between the Government and the Convention of Scottish Local Authorities. I am not attacking COSLA ; it does an essential job well. I appreciate its value, but it often has to adopt a consensus position in which the interests of all local authority members are not necessarily represented. Authorities in COSLA that are in a minority, politically or geographically, tend to lose out to the majority view. They have a right, however, to expect to make direct approaches to the Scottish Office and to have their anxieties dealt with, and not to expect that the COSLA formula is the be-all and end-all of the settlement.
This is not the first time that I have made this plea. I have had to point out several times to the House how local authorities in my area and in other parts of Scotland have been adversely affected. The Scottish Office has not been willing to find a solution to accommodate those authorities. It should try harder to do so in the future.
We are moving into an era of change. The Government know my view that the poll tax is not reformable and that the sooner it is abolished the better. I hope that they will take to heart my belief that the sooner they are able to say categorically that the poll tax will go and that a new, fairer system will be introduced, the quicker we will be able to resolve the outstanding anomalies faced by local authorities under the present regime.
The hon. Member for Tayside, North (Mr. Walker) castigated members of the Labour and Scottish National parties for their militant non-payment stance. I am getting letters from my constituents telling me that they wholly endorse the position of the Scottish Conservative party in encouraging them to withhold payment of the part of this year's increased poll tax that is caused by non-payment. I represent the only party that has not encouraged people not to pay the poll tax. Ministers should be a little careful.
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Mr. Allan Stewart : I made the position of my right hon. Friend the Secretary of State and the Government crystal clear--in no circumstances do the Government condone or encourage anyone in Scotland to break the law.Mr. Bruce : I accept that point, but I am sure that the hon. Gentleman would not deny that active members of his party do that. They do not appear to be disciplined or to be called to account in any way--
Mr. Wilson : They are appointed to Greater Glasgow health board.
Mr. Bruce : They are promoted by the junior Scottish Office Minister.
Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : I agree with the hon. Member. A properly endorsed, prospective parliamentary candidate in Edinburgh, South, Councillor Struan Stevenson, is one of the leaders of the campaign to encourage people not to pay the additional part of the poll tax. Surely Ministers should renounced him and he should be deselected.
Mr. Bruce : The Minister heard that comment and can respond later. This tax is proving to be an extremely difficult constraint on local authorities, preventing them from providing the services that they are required to provide and, in most cases, are striving honourably to provide. It is administratively difficult to collect the tax. It is difficult to budget when the Government continually impose extra responsibilities on local authorities without always providing the necessary money and when the settlement on which local authority budgets must be based is sometimes made after those budgets have been set. We are legitimately entitled to ask the Government to address those issues.
The Government must recognise that Scottish local authorities need an annual settlement that is reasonably predictable and accept that local authorities have a job that they are elected to do and statutorily required to do and that no other organisation could do. There should not be constant attacks implying that local authorities are irresponsible but central Government are responsible. The opposite is also true. Democratically elected local authorities with clearly defined powers, financed by a properly accountable system, should be allowed to get on with the job. They should be allowed to budget properly, collect the tax because it is administratively simple to collect and deliver the services that people expect them to provide.
11.8 pm
Mr. Gavin Strang (Edinburgh, East) : The House can be in no doubt about the importance of these issues to our constituents. In my constituency, poll tax payers will be expected to pay £584 next year, which, as has been pointed out, is a high amount. A substantial number of my constituents cannot afford to pay it. I am grateful to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who knows that that figure was arrived at with great difficulty and was the result of hard decisions by the Labour Administration to hold the increase down. That is a measure of how unworkable the tax is. We should not lose sight of some of the fundamental flaws of the tax. In Edinburgh, and no doubt in other large cities, hundreds, if not thousands, of people have
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disappeared from the electoral register and the poll tax register. The most fundamental case against the poll tax is that it is a disincentive to people to vote. No one approves of that, but surely we should judge our democracy by the degree of the participation of communities in the system. It is wholly unsatisfactory that we should have a system of local government taxation that has resulted in the disappearance of thousands of people from the electoral process. Secondly, I repeat that we have seen a most massive transfer of the burden from the better-off areas of Edinburgh to the less well-off areas of the city. The same applies elsewhere. The amount of money being extracted from working people in my constituency is an absolute disgrace. At every constituency surgery, I come across the tragic cases of people who simply cannot afford to pay and, as a result, are in arrears and have actually had additional charges imposed on them. I am sure that many of my hon. Friends have had the same experience. The people to whom I refer are willing to pay, but they are simply unable to do so.The third, and final, point that I want to make in relation to the poll tax is perhaps demonstrated more clearly in Lothian than anywhere else. It is that the system is totally unworkable. For the third year of the poll tax-- 1991-92--the Lothian regional council is budgeting for a 10 per cent. loss on yield. What a state of affairs that is. Whatever controversy surrounds the Lothian collection procedures, no one--certainly not any Minister--can reasonably say that Lothian regional council has not taken steps to secure the poll tax. In fact, the case of every person whose poll tax for 1989-90 is due is in the hands of the sheriff officers, and every effort is being made to collect the amounts due for 1990-91. Not £1 of debt has yet been written off. The reality is that the authorities there have had to face up to the fact that the tax is unworkable. They have had to budget for a 10 per cent. loss on yield. What sort of tax is this if only 90 per cent. of potential yield can be collected? And that takes no account of the people who have disappeared altogether and are not on the register.
Next year, the cost of collecting the tax will be £18.2 million, compared with the £7.4 million that it took to collect the rates in 1988-89--the last year of the rates. These figures are based on prices at September 1990. Surely, a tax that is unworkable, imposes a huge burden on our people and costs the Lothian regional council so much to collect is the ultimate folly.
11.13 pm
Mr. Harry Ewing (Falkirk, East) : It is appropriate, though tragic, that we should be debating this order on the eve of the day when we shall see figures that show a massive increase in unemployment throughout the United Kingdom--and Scotland will bear its full share of that massive increase. It is almost as though Ministers ignore the fact that flowing from that massive increase in unemployment is the responsibility on local authorities to care for the families who are the victims of Government economic policy which has resulted in breadwinners losing their jobs.
I regret to say--for I have never before seen it in politics--that the present Government's attitude is that they could not care less what happens to family life. The poll tax, the revenue support grant and the services that are provided by local authorities are all aspects of family life. If the
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Government turn their back on what is happening to families--I am thinking of people's ability or inability to pay the poll tax, of the suffering that is caused by unemployment and of the effect of almost every other aspect of the Government's economic policy --they will sow the seeds of serious discontent.As the hon. Member for Gordon (Mr. Bruce) said, the Government, and in particular the Minister who opened the debate, are generating a feeling that local government should be shunned or despised. The Minister's former colleague, Michael Ancram, even built a career on living off the back of local government. Since the Government came to office in 1979, the people of Scotland have every reason to be thankful to local government for the protection that councillors have provided the people whom they represent.
The Minister took pleasure in deriding local authorities in Scotland. However, he should think carefully about his constituents and the protection afforded to them by the councillors and the local authority in his constituency. They offer greater protection than does the Minister. The councillors offer protection that his constituents will welcome, cherish and appreciate because of the impact of the Government's policies on the people of Scotland. I noticed that, when I rose to speak, the Minister of State, the hon. Member for Stirling (Mr. Forsyth), left the Chamber. I would not hold that against anyone and I do not blame him for doing that. However, it is noticeable that the Under-Secretary of State took every opportunity to criticise local authorities that increase their poll taxes. He did not take the opportunity tonight to praise Stirling district council for holding its poll tax level. Local authorities cannot win even when they hold the poll tax at last year's level. The Stirling Observer is full of letters from supporters of the Minister of State criticising Labour councillors in Stirling for opportunism because they have held the poll tax at last year's level. If they had raised it, the paper would have been full of letters from the Minister of State's supporters criticising councillors for increasing the poll tax. Councillors in Scotland are doing an excellent job and they deserve the Government's support, not their criticism.
A new phenomenon is developing on the industrial scene in Scotland, involving large industrial conurbations comprising petrochemical industries that are highly capital-intensive, but low in terms of labour involvement. Indeed, BP has just announced that it is about to pay off another 100 people. The rate income to Central region, from those industries is high, but the job content is low. That has a social impact particularly on Central region and I hope that the Minister will consider the problem.
The Minister's main problem tonight is that he has been here before. He was a Minister, then he was a Back Bencher--
Mr. Thomas Graham (Renfrew, West and Inverclyde) : A never-ending story.
Mr. Ewing : The Minister is a retread. The Government seem to have more retreads than Kwik-fit.
The Minister has a past to live down. In this debate he has been unable to defend that past, and he has no future. In less than a year, we look forward to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and his colleagues occupying the Government Front Bench.
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Mr. Ian Bruce (Dorset, South) : On a point of order, Mr. Deputy Speaker. I do not know whether you or your colleagues have any control over the annunciators, but it was rather surprising, while working in the Library about 10 minutes ago, to see that I was speaking in the Chamber. Is there some form of misrepresentation in this place? I had to rush in to find out what I was saying. Can that matter be reported to the authorities?
Mr. Deputy Speaker : I hope that the hon. Gentleman does not feel too embarrassed about being in two places at once.
11.19 pm
Sir Nicholas Fairbairn (Perth and Kinross) rose --
Mr. Foulkes : If the hon. and learned Gentleman rushes out, he will see his name on the annunciator.
Sir Nicholas Fairbain : I hope that I do not see the name of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on the annunciator because I should not wish to be confused with him. The hon. Member for Falkirk, East (Mr. Ewing) made the important point that the Minister has a past to live down. It is important that the House should know that the hon. Member for Falkirk, East has no past to live down, nor has he a future. It is remarkable, as the hon. Member for Falkirk, East demonstrated, that there is great praise for central Government. All government is bad and should be small. The great benefit of Scotland and the reason why the Scots are so popular worldwide is that we are the only recognisable race on earth that has the benefit of not having a Government. That is why the Scottish assembly and all that nonsense shall never come to pass.
It is extraordinary that the proposed tax to be raised by local government, which Opposition Members so greatly praise, should rise by a third. I should have thought that it was a considerable criticism of their capability and their efforts that local authorities should be increasing taxes on pensioners, on the retired, on the sick, and on everybody else by one third. I do not know whether Opposition Members think that that is a good idea--they never stop whingeing about hardship. That tax is a formidable hardship for every person in Scotland, and let us not forget it. Who is praising those who are increasing the burden by a third? Opposition Members are praising them. There are those who say that local authorities are wonderful. Nevertheless, whatever services they give, local authorities are a burden on the back of every citizen. [ Hon. Members :-- "Nonsense."] I notice that those who said "nonsense" have all been members of local authorities--
Sir Nicholas Fairbairn : --and proud of it, and no doubt proud that they are increasing the burden on the backs of the citizens this year by a third.
Mr. Ron Brown (Edinburgh, Leith) : The hon. and learned Gentleman knows that, for the past 10 or 11 years, the clawback from his Government has meant that Scotland has lost in excess of £10 billion of taxpayers' money which should have gone back to local authorities. It was our money. There is an element of dishonesty in the hon. and learned Gentleman's argument, because most of the funding comes from central Government. Local authorities--Tory, Labour or whatever--have a job to do
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as subcontractors to central Government, but they have to be paid. If they are not paid, who is at fault? It is central Government, his Government. It is not a question of the poll tax. He is being dishonest by trying to kid people that it has something to do with the poll tax. It is about reality. The hon. and learned Gentleman should face up to that.Sir Nicholas Fairbairn : Once or twice in my life, I have faced up to reality--[ Hon. Members :-- "When?"]--and I will do so now. When I was defending people against the death penalty perhaps I faced up to reality, so let it not be mocked.
Let us be clear about this. I do not know where the hon. Member for Edinburgh, Leith (Mr. Brown) gets his fantasies from about what he cares to call "clawback". In Scotland, we enjoy 30 per cent. per head more of all services than anybody in the rest of the kingdom. If he is looking for clawback, that will be the first thing to be affected if there is a Scottish assembly, whatever form it may take. There will never be another Labour Government, but if the hon. Gentleman cares to fantasise, he will lose 30 per cent. of what is spent on everybody who lives in Scotland. That will make whatever he fantasises about clawback look like major destruction. So let us have no nonsense about that.
The Government have obtained for the people of Scotland a level of life--
Mr. Jimmy Dunnachie (Glasgow, Pollok) : Poverty, unemployment, bad housing.
Sir Nicholas Fairbairn : No. Who said poverty? Let us be clear : when the Government came to office, Scotland had the lowest industrial wage in Europe ; now it has the highest. We have obtained a quality of life for the people of Scotland which is denied to the rest of the people of the United Kingdom. It is perhaps something about which we should keep quiet lest we lose it. If we had an assembly, we would lose it.
Let us understand that there is nothing good about government, central or local, spending the money of those from whom they have to obtain it. I do not take pride in the concept that the people of Scotland may have to pay a third more next year because the people who will benefit from that are not those who pay it but those who spend it. I regard that as a Caledonian shame.
11.29 pm
Mr. Dick Douglas (Dunfermline, West) : Time is short, but I shall try to respond courteously to the hon. Member for Glasgow, Garscadden (Mr. Dewar), who asked a particular question. I can do no better than respond in a similar manner to that of his hon. Friend the Member for Falkirk, West (Mr. Canavan) who, the other day, when introducing his 10-minute Bill, said, as I would, that as soon as it is indelibly clear that the poll tax is abolished, he would pay all that he owed since that tax was introduced. That is as fair as we can put it. The hon. Member for Garscadden knows, as does the hon. Member for Edinburgh, East (Mr. Strang) and the hon. Member for Glasgow, Cathcart (Mr. Maxton)--representing the districts they do-- that the majority of people who are not paying the poll tax, cannot pay it. It is not sufficient to ask people who are in such a desperate plight to wait until there is a Labour Government. We
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must analyse the cruelties of the tax by asking the Government whether they are going to persist with their view that the tax is collectable, when every authority gives signs that it is not. The Parliamentary Under-Secretary for Scotland paraded the support grant order as though it were Government money that was being dispensed. We know well, as it has often been repeated to us, that Governments do not have any money-- merely taxpayers' money in one form or another, that is redistributed. A balance has to be struck, and we are discussing the centralising forces of Government, depicted by the revenue support grant, versus local autonomy.If we have any doubt about the nature of services asked for by central Government and called into being by the House, we should refer to appendix B of the report, which states :
"The following table shows the breakdown of current expenditure for 1991-92 as proposed by the Secretary of State".
The total valuation in terms of grant-aided expenditure is about £4.79 billion, which is what the Secretary of State decrees should be provided locally. Those are services that we in the House demand, and we ask that they be provided locally.
One service that I call, in shorthand, education, although its correct title is education, libraries and museums, receives £2.5 billion. We have the audacity to say that local authorities are profligate, when we know full well that they have to provide such services. We are discussing how to finance them.
The Parliamentary Under-Secretary spoke of the three elements of finance : the revenue support grant, the non-domestic rates and the specific grant. The balance is provided by the poll tax. How can it be right to gather tax from virtually all the population on the basis of taxes that are related to income and ability to pay, but when it comes to squeezing local authorities and trying to make them an example, the tax is totally unrelated to ability to pay?
According to the COSLA figures, 80 per cent. of expenditure by local authorities is determined by and comes from central Government. Local authorities are responsible for only 20 per cent., which now has to be collected by the most draconian measures, and the Government choose to ignore that percentage. They do so at their peril.
The law is being brought into disrepute. Civil liberties are being threatened. Labour Front-Bench Members paraded with me behind banners which declared, "No warrant sales". No doubt they will do so again in a month's time while simultaneously, to avoid breaching the Data Protection Act 1984, going through the list of local authority employees at great cost to embarrass those employees. Some of them may be making a political protest, but others may be lowly paid and cannot pay. I believe Jean McFadden, the leader of COSLA and an honoured member of Glasgow district council, who says that local government finance is in a state of crisis. The Government should make it plain that they will abolish the poll tax.
Yesterday we met the two Secretaries of State. There may well be deficiencies in our proposals for a local income tax, but they do not involve a tax which is unrelated to the ability to pay ; they relate strictly to the ability to pay. We may disagree about the particular poundage, but what is not in dispute is that the poll tax is wholly unrelated to the
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ability to pay and should be opposed and brought to an end as soon as possible, in the interests of social cohesion and justice. 11.36 pmMr. Allan Stewart : We have had a wide-ranging debate and several detailed points have been raised, particularly by the hon. Member for Gordon (Mr. Bruce). I shall try to deal with them, but if I cannot, perhaps we can meet or exchange correspondence about them. The hon. Member for Falkirk, East (Mr. Ewing) made some personal remarks about me. I speak as someone who has been a local government councillor.
Mr. Stewart : Indeed, in London.
Mr. Stewart : Not in Westminster.
I am happy to take the opportunity to pay tribute to Eastwood district council, which serves the people extremely well, and to the Labour district councillors and the regional councillor who represent the Barrhead and Neilston wards in my constituency. I may disagree with their policies, but they try to do their best for the communities which they represent.
My hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) and my hon. Friend the Member for Tayside, North (Mr. Walker) referred to the crucial point about the total level of public expenditure by local authorities. A fact which is not in dispute is that Scottish local authorities spend 30 per cent. more per adult than do local authorities in England or Wales. That figure needs more explanation than it has ever had. There is no obvious explanation for such a major disparity.
Both the hon. Member for Dunfermline, West (Mr. Douglas) and my hon. and learned Friend referred to the level of Government support to local government north and south of the border. In 1990-91, aggregate external finance in England represents 64.5 per cent. of the total. This year, the community charge payer in England pays 35.5 per cent. The comparable figures for Scotland--they may be of interest to some of my colleagues from south of the border who are listening to this debate--are that the aggregate external finance, the Government's contribution
Mr. Douglas : Not the Government's.
Mr. Stewart : I stand corrected. I should have referred to the taxpayers' contribution--
Mr. Wray rose --
Mr. Stewart : I shall not give way. The hon. Gentleman is a constituent of mine, but in view of the time I cannot give way to him.
Mr. Wray rose --
Mr. Stewart : In case the hon. Gentleman threatens not to vote for me, I shall give way to him.
Mr. Wray : The Minister has mentioned many facts and figures, but he did not mention the magnitude of the uncollected poll tax. Does he realise that he has left untold the 14.9 per cent. uncollected poll tax in 1989-90 in Scotland, 17.4 per cent. of which was in Strathclyde
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region? That meant a shortfall of £47 million. The latest figures provided by the statistical authorities in the House show that in late December 59.2 per cent. of the poll tax had not been collected. Some 63 per cent. of that was in Strathclyde. That makes a total of £623 million, with £289 still uncollected. How many warrant sales will that mean in Strathclyde?Mr. Stewart : I am not sure that I shall always give way to my constituent, but I am happy to deal with his point about non-payment. The point was also made by my hon. Friend the Member for Tayside, North and by other hon. Members on both sides of the House. Hon. Members should look at the precise figures. If it is so difficult to collect the poll tax, why has Borders collected 99 per cent. of its budgeted income for 1989, and is still receiving payments? It expects to collect in excess of its budgeted income this year. That shows that the system is adequate. It is an important fact that community charge income makes up only a little more than 20 per cent. of Scottish local authorities' total income.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) made a number of points, but he failed to recall his forecast of what would happen this year. I shall remind him of that. He asked my right hon. and learned Friend whether he accepted
"that on a standstill budget with no expansion of service, the average payment is likely to rise by about £30 a year?"--[ Official Report, 25 July 1990 ; Vol. 177, c. 490.]
If the hon. Gentleman's forecast had been proved correct, community charge payers in Scotland would be a great deal better off and much happier.
The hon. Gentleman referred to balances. The authorities have run down their balances in this financial year--
Mr. Stewart : The current financial year, 1990-91, not the year to which the debate refers. Their reason for doing so is not unconnected with the fact that that was the year of the regional elections. First, the authorities have increased expenditure ; secondly, they have run down their balances ; and, thirdly, they have piled two years of non-payment on to the community charge payer for the next financial year. That is undoubtedly an exercise in political cynicism. We have heard a lot from hon. Members about local authorities cutting their expenditure. We heard that particularly from the hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Edinburgh, East (Mr. Strang) in relation to Lothian. But, as I understand it, Lothian is proposing to increase its expenditure by some 11.4 per cent. It has cut planned increases in expenditure, but that is not a cut in expenditure.
This is a perfectly fair settlement, and I commend it to the House.
Question put : --
The House divided : Ayes 292, Noes 193.
Division No. 65] [11.45 pm
AYES
Adley, Robert
Aitken, Jonathan
Alexander, Richard
Alison, Rt Hon Michael
Allason, Rupert
Amess, David
Arbuthnot, James
Arnold, Jacques (Gravesham)
Arnold, Sir Thomas
Ashby, David
Aspinwall, Jack
Atkins, Robert
Atkinson, David
Baker, Nicholas (Dorset N)
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