House of Commons Hansard Debates for 14 Mar 1991

Mr. Keith Raffan (Delyn) : I want to raise an issue that affects more than 400 of my constituents--the fact that permanent residents living on seasonal caravan sites are liable to value added tax on caravan pitch rentals. I have raised this issue with successive Treasury Ministers over the past four years. I did so first with my right hon. Friend the Member for St. Albans (Mr. Lilley), now Secretary of State for Trade and Industry, then Economic Secretary to the Treasury ; then with my right hon. and noble Friend Lord Caithness, now Minister of State, Foreign and Commonwealth Office, but formerly Paymaster General ; with my right hon. Friend the Member for Mid-Norfolk (Mr. Ryder), when he was Paymaster General ; and with my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard), the Minister of State, Treasury now responsible for such matters.

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Their replies have a depressing similarity, which bears the imprint more of civil service minds than of independence of mind. However, that has not prevented each of them from being promoted to higher office--probably leaving them greatly relieved that they did not have to deal further with my representations. In case my right hon. Friend the Leader of the House feels that I am picking on him, I may point out that he is the sole remaining Member for a Norfolk constituency to whom I have not presented my case. I do so now, in the hope that I will be third time lucky.

Three years ago, the Government decided to introduce VAT on seasonal caravan pitches to bring them into line with other holiday accommodation and services provided by the tourist trade. It was never the Government's intention that VAT should apply to residential caravan owners. They wanted and meant them to retain relief from VAT, in line with that extended to other permanent domestic accommodation. As the then Economic Secretary to the Treasury, my right hon. Friend the Member for St. Albans, wrote to me on 27 June 1989 :

"I should emphasise that VAT is only being applied to seasonal caravan pitch rentals which, because of the seasonal nature of the site, can only be used for holiday or recreational purposes. VAT will not be charged on pitch rentals where the caravans can be occupied as the owner's permanent residence, i.e. where it can be lawfully occupied throughout the year."

However, that is exactly what happens.

Seasonal sites can be, and frequently are, used by those whose caravans are their sole permanent residence. The problem arose because the Government decided that the sole and most equitable yardstick for those liable to VAT was the nature of the licence granted to the park owner--that is, whether the site was licensed as seasonal or permanent.

VAT legislation was drawn deliberately to apply to all pitch rentals at seasonal sites, without regard to the precise length of the season or the personal circumstances of individual caravan owners. It also assumed that all permanent residential caravan owners would seek the protection afforded by the Mobile Homes Act 1983 and choose to live on sites licensed under that legislation, specifically designed to accommodate them. In fact, many permanent residents do not have that choice.

In my own constituency, only one site offers permanent pitches for permanent residents who number just 40. In fact, 387 of my constituents are distributed among just three caravan parks--Talacre Beach, Willow Grove, and Point of Ayr--and a few others are spread throughout smaller sites in the area. They would all prefer to live on a permanent site, but none is available.

Talacre Beach caravan park has about 120 to 130 permanent residents, but it is not currently licensed as a permanent site, and must close for about eight weeks each year. That means that the permanent residents can lawfully stay on that site only for about 10 months. In midwinter they have to move to temporary accommodation--this year it was from 5 January to 2 March-- which is usually in bedsits or flats in neighbouring towns, such as Rhyl. They frequently have to pay high rents for accommodation--£80 or more. They would also certainly rather not move out of their permanent homes to the seaside in the worst possible weather, when no one else is there. Most of them are retired, many are pensioners and none of them is well off. The Government are aware of the position, but are not prepared to make permanent residents of seasonal caravan parks a special case.

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On 6 March, my right hon. and noble Friend the Earl of Caithness, who was then Paymaster General, wrote to me saying :

"It is our understanding that seasonal sites are not designed or intended for use by residents as their sole home, although clearly this does happen."

Indeed it does. It happens to more than 400 of my constituents. There must be many other constituencies throughout the country, especially those in tourist areas, where this problem occurs. My constituency is predominantly industrial and is on the edge of the so-called north Wales tourist belt. The problem is even more severe in many other constituencies. Thousands of people must therefore be affected throughout the country.

The Government must reframe the law to take caravan owners' individual circumstances into consideration. VAT liability should depend upon the personal circumstances of each caravan owner and not on the planning status of the park.

The Government say that that would cause considerable extra administrative and accounting burdens for park proprietors. I have spoken to many of them in my constituency, and they disagree. Most of the parks are computerised, and proprietors would not have to spend an inordinate amount of extra time dealing with these problems. All the proprietors I have spoken to say that they would be glad to do so.

The Government say that there is a verification problem. Again, park proprietors disagree. They know the residents. They know who are permanent residents, and they know immediately when their circumstances change. Most of these caravan parks are not large, few containing more than several hundred people. The caravan park proprietor and his staff keep close tabs on what is going on within the park, and know immediately if someone ceases to reside there--they certainly know within 24 hours. They can produce lists immediately from their computers to show which people are permanent residents. I am talking about small businesses, not large ones.

The Government say that if they were to change the law and to reframe it to take each caravan owner's personal circumstances into account it would lead to a "plethora of anomalies". Again, park proprietors disagree. They think that anomalies and unfairnesses exist at the moment and they want them to be corrected.

Finally, the Government say that park proprietors

"have a right to expect clear, workable guidelines."

All the park proprietors I have spoken to would say, "Hear, hear" to that. They do not think that the guidelines are workable at the moment, nor do they think that they are fair.

The Government are wrong to say that it is "impracticable" and "totally unworkable" to grant VAT relief to caravan owners who make seasonal sites their only home.

In conclusion, I quote my right hon. and noble Friend the Earl of Caithness, who said in his letter of 6 March :

"It is the intention with any taxation system to implement it fairly and impartially whilst giving full regard to any potential injustices which might arise from it."

As I have shown to the House, the injustices are not potential but actual. The Government may intend to have a fair and impartial taxation system, but that is not the reality in this case. They are certainly not giving full regard

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to this injustice--they are not even giving partial regard to it. More than 400 of my constituents are affected. The local economy of my constituency is not based on tourism. How many more people must be affected in neighbouring constituencies along the north Wales coast, or along the south coast of England and in tourist areas in other parts of the country? I am sure that the problem also exists in the county in which the constituency of my right hon. Friend the Leader of the House is situated.

Many people are affected by this unfairness, by this injustice. Most of them are retired, many are pensioners and none of them is well off. The Government must redress this injustice. I am not over-hopeful that they will do so immediately. Having spent two years shelving it in correspondence with me, it is probably too much to ask the Government to redress it before Easter. Although, technically, those are the terms of this debate, I shall not insist upon that, but will my right hon. Friend the Leader of the House bring this matter once again to the attention of the Treasury?

In a recent notable speech in Bonn, my right hon. Friend the Prime Minister quoted--I think it was the only Conservative he quoted--his hero and mine, that great Conservative the late Iain Macleod, when he spoke of creating a society

"more efficient, more tolerant and more just."

The VAT law is unjust to these people. I ask the Government to correct that injustice.

6.55 pm

Mr. Harry Barnes (Derbyshire, North-East) : I thought that the speech by my hon. Friend the Member for Coventry, South-East (Mr. Nellist) about Iraq was tremendously moving. He revealed the massive suffering which has occurred because of the bombing and the war that has taken place in the Gulf, and he stressed the terrible problems of disease, further destruction and destabilisation that still exist in the area.

I feel especially affected by the devastation that has occurred in Basra, which is where I did my national service for most of 1955 and 1956. The sons, daughters and grandchildren of the people I mixed with during that period are among those who have gone through tremendous devastation and destruction.

I wish to deal with the poll tax and electoral registration. The right hon. Member for Henley (Mr. Heseltine) said that nothing is ruled out and nothing is ruled in in the review of the poll tax, but that does not seem to apply to me. I wrote to the right hon. Gentleman on10 January, asking for an opportunity to discuss the problems of electoral registration and the community charge. Finally, the hon. Member for Salisbury (Mr. Key) replied :

"I regret that diary pressures prevent a meeting at the present time."

So I have been ruled out, or perhaps the issue begins to be considered as nothing.

I am prepared to meet the Secretary of State, or anyone else within that office, to discuss the key item of electoral registration and the impact that the poll tax has had upon it. Hon. Members should be tremendously worried about that issue.

The community charge undermines the operation of the Representation of the People Act 1983--certainly de facto, and perhaps even de jure. I must also point out that the 1983 Act has a higher legal status than the Local

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Government Finance Act 1987 which introduced the community charge ; the 1983 Act should be considered as the prior piece of legislation dealing with these matters.

I feel that it is hon. Members' duty to consider this matter closely, and it is the duty of the Secretary of State and of the Government to consider the electoral consequences and franchise consequences of what they have been up to in the past few years, during this review.

The evidence that the Representation of the People Act 1983 is undermined is contained in the Local Government Finance Act 1987. The exemptions from the poll tax register and the electoral register are almost similar. For instance, certain handicapped people are excluded from electoral registration and from poll tax registration--the severely mentally handicapped. Physically handicapped people appear on both registers. They are not excluded from the poll tax register, although they may be badly in need of financial assistance. Their condition is not taken into account, because they are

entitled--rightly--to exercise their franchise. Certain concessions have been made--for instance, to monks and nuns--but in general the two registers are almost interchangeable. Some people will be listed on different registers ; students may be on the electoral register in one area and on the poll tax register in another.

The other problem relates to the much-vaunted principle of accountability-- the principle that everyone living in the same district must pay the same, except those who receive rebates. There is a danger that other legislation will also include that principle, even if smaller payments are involved. One of the worst aspects of the poll tax legislation is the fact that it covers everyone. That does not apply to other forms of taxation.

Obviously, people who find it desperately difficult to pay the poll tax will duck for cover. There is evidence that attainers--those who are about to appear on the register for the first time--are disappearing in large numbers. The fact that those who avoid poll tax will also avoid electoral registration should worry a House of Commons that prides itself on its involvement in the extension of the franchise, and in the battles over the great Reform Acts of the 19th century and the extension of the franchise to women in the 20th. I am not talking only about theoretical evidence ; there is increasing evidence of a link between electoral and poll tax registration. According to a circular issued by the Home Office to electoral registration officers on 10 August 1990, people will be removed from the electoral register if they have not yet registered, and if their names cannot be found on the community charge register. That is surely a clear recognition by the Government of the connection between the two.

The Census (Confidentiality) Act 1991 provides, reasonably, that census information cannot be used by poll tax registrars. The aim is to protect the census, but we should be equally anxious--if not far more so--to protect the franchise. Both should be protected, because both are necessary in society ; but the franchise has an additional constitutional importance.

The Caldey Island Act 1990 highlighted the exclusion of monks and fishermen on the island from either register. The statistical evidence backs up the evidence in section after section of that Act of a connection between the two registers. In the Finchley constituency, for instance, there has been a reduction of 8.5 per cent. in the franchise over two years ; over the same period, some 600,000 people have

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disappeared from the electoral registers in England, Scotland and Wales. That takes into account the number of people aged over 18. There has been no such development in Northern Ireland, which has no poll tax.

I believe that the undermining of the 1983 Act is illegitimate. The Act has an important constitutional status. We have no written constitution, but it is generally recognised by a host of constitutional authorities that certain measures have such status. If time permitted, I could quote such authorities as Dicey, Blackstone and De Smith, but I shall content myself with a reference to the Statute of Westminster, the First. That 1275 statute says : "because Elections ought to be free, the King commandeth upon great Forfeiture, that no Man by Force of Arms, nor by Malice, or menacing, shall disturb any to make free Election."

The statute does not say who should have the vote, but it establishes the importance of free elections under sovereign authority. Such statutes were used by constitutional authorities such as the 18th-century Blackstone to establish the significance of electoral provision as a cornerstone of the British constitution. That cornerstone is under serious attack from a measure that should be repealed. I have been refused the right to meet the Secretary of State for the Environment ; I therefore hope that the Leader of the House will convey to him what I have said tonight, which should be taken into account in any review of the poll tax. If we are to re-establish and protect the full franchise, the poll tax must go.

Mr. Bryan Gould (Dagenham) : On a point of order, Mr. Speaker. Earlier this evening, Independent Television News reported that the Prime Minister had made a statement in the House to the effect that the poll tax was to be abolished. It is a simple matter of fact that no such statement was made. This may be no more than misreporting by ITN ; but reports that a decision has indeed been reached, and that it is a decision to abolish the poll tax, are being carried this evening by the BBC, and also by some of tomorrow morning's newspapers.

What appears to have happened is this. The Prime Minister had intended to make a statement during Prime Minister's Question Time this afternoon, but failed to do so. The obvious explanation is that he had so little confidence in what he had to say that he funked it. He says that no one asked him the right question--notwithstanding the fact that he was asked, on the first question, whether he believed that the poll tax would endure. The statement that he had intended to make was, however, issued in his name later in the afternoon. That statement, of which we have a copy, makes it clear that no decision has yet been reached.

This is the position. The Prime Minister did not make a statement, and the statement that he did not make does not mention any decision to abolish the poll tax. Nevertheless, Lobby and other journalists have been briefed to that effect. A Prime Minister who was too frightened of the House, his own party and of the country to make the statement in his own name has nevertheless found a behind-the-stairs way of making a statement which goes well beyond the statement that he was too frightened to make to the House. If a decision has been made on the most pressing political issue of the day, should it not be made to the House by a Prime Minister prepared to defend it? If the Prime Minister's explanation of his failure this afternoon to make a statement is that no one asked him the

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right question, I am glad to remedy that deficiency right now. Will he now come to the House and answer the many pressing questions about the decision that he claims to have taken?

If the Prime Minister continues to duck and weave, if he continues to refuse to face the House, is this not a fittingly disreputable and cowardly end to the whole disreputable saga of the poll tax? If the Prime Minister has at last nerved himself to take a decision that the poll tax must go, why will he not have the courage to come to the House and face the music?

Will you, Mr. Deputy Speaker, inquire whether a statement is now to be made either by the Prime Minister or by a senior Minister--the Leader of the House is present--so that the House is not treated in this contemptuous way, so that the people of this country are offered both an explanation and an apology, and so that the Prime Minister can at least explain whether it was a lack of honesty or a lack of nerve which led to that disreputable subterfuge?

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor) : Further to that point of order, Mr. Deputy Speaker--I was almost inclined to say that it was a contemptuous abuse of those of us who have been engaging in a debate in the House, because it really is a tortuous question that the hon. Member for Dagenham (Mr. Gould) has raised. However, in view of what the hon. Gentleman has said, I will make the position absolutely plain.

My right hon. Friend the Prime Minister may often have the opportunity to say many things at Prime Minister's questions if he is asked particular questions and if he has the time to do so, so there is absolutely nothing significant in that whatever. I made our present position on the community charge clear in business questions. I made it quite clear this afternoon-- this is what I think is the guidance that has been given--that the Prime Minister chaired a meeting of ministerial colleagues this morning, that he will chair a further meeting of ministerial colleagues next week, that the committee's conclusions will need to go to the full Cabinet and that we will announce our proposals after that.

Because I have been in the Chamber all afternoon, I have not seen what has been on the news bulletins tonight, but if they are saying either that the Prime Minister has made a statement to the effect that the poll tax is being abolished or that authoritative sources are saying so, I can say that there is no truth in that at all. The Prime Minister has not made such a statement, and nor have authoritative sources.

We seek to achieve proposals which are fair, which will not impose undue burdens on local taxpayers and which will provide a practical and lasting basis for the relationship between central and local government.

I think that I have made the position absolutely clear, and that we should not proceed further with this point of order, Mr. Deputy Speaker. We are in the middle of a debate in which other hon. Members want to take part.

Mr. Deputy Speaker (Sir Paul Dean) : We must now resume the debate. It is quite irregular--

Mr. Gould rose--

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Mr. Deputy Speaker : Order. I shall listen to the hon. Gentleman in a minute. I remind hon. Members that we are cutting into valuable private Members' time. I deliberately allowed much more flexibility than I would normally allow on points of order.

Mr. Gould : Further to that point of order, Mr. Deputy Speaker. I shall not detain the House long. We have at least established, with regard to the reports based on briefing of Lobby journalists--and there is no question that that has happened, because all the radio and television journalists and the reporters for The Times and other newspapers have told the same story--we have now had it on the authority of the Leader of the House that the briefing is to be withdrawn and is inaccurate. If we are now to be told that no decision has been taken and the poll tax survives for the time being, we can at least establish that the House still awaits a statement from the Government--from the Prime Minister--when it is taken, on when the poll tax is to be abolished.

Mr. Deputy Speaker : Order. We now resume the debate.

7.14 pm

Mr. David Amess (Basildon) : It is outrageous and an abuse of our procedure, when I and other hon. Members have sat here waiting to make speeches, for Opposition Members to produce that sort of pantomime. Perhaps we can now return to the Easter Adjournment debate.

There are three brief constituency points that I hope the House will consider before we adjourn for the Easter recess. The first is what I describe as the protection of the consumer from unfair and misleading timeshare promotion schemes. Many hon. Members will have received complaints from their constituents about unsolicited mail, but I think that the present level of letters coming through our doors bearing American postmarks and inviting us to attend timeshare promotion schemes has got out of hand, and many of my constituents have made representations to me.

My wife and I have been invited to three such schemes. We are very lucky people. The first letter told us that we are category A winners and that we have won either a Volvo sports car, an Electra sport boat with outboard motor or £2,000 in cash. The next piece of mail told me that I have won a 1991 Ford Escort or a Bahamas cruise or £1,000 in cash. The third, which arrived this morning, tells me that I am a gold card winner and that I have won either a Ford Fiesta or an Electra sport boat. What on earth my wife and I will do with all these electric motor boats I do not know. Perhaps we will be able to sell them off Southend pier.

On a more serious note, my wife and I responded to one of these invitations, which told us that we had both won cars. I telephoned the company to find out if that was the case. I then engaged the company in correspondence and we received the following reply--I shall not mention the company's name on this occasion--

"I was very surprised to learn you went as far as discussing what colour Fiesta you and your wife would choose and how excited your household were on the morning that you received the letters. I did however detect a certain tongue-in-cheek tone and if you were truly under the impression that you have both won Ford Fiestas, which I seriously doubt, I should bring to your attention two main points included in the letter"--

in very tiny print, of course--

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"Firstly, the opening line begins If you bring the number' and, secondly, in the sentence below the first box section, it clearly indicates that this is an illustration."

What utter nonsense. Many of my constituents and, I am sure, other constituents represented by hon. Members are deliberately being misled by these promotions.

Mr. Cormack : Name the company.

Mr. Amess : At the end of the letter, it says that if one wants evidence from some of these so-called winners one should telephone them. When I asked for the telephone numbers of these individuals I was told,

"You request finally to take advantage of my offer of contacting Mr. Noakes and Mrs. Aspinall. This is purely a figure of speech, but if the purpose of contacting them is to verify whether or not they were genuinely awarded motor cars, I can assure you that written and photographic evidence has been submitted to the Office of Fair Trading and the Advertising Standards Authority."

I have two other brief points to make and do not want to deprive other hon. Members of the opportunity of taking part in the debate, but--

Mr. Cormack : Name the company.

Mr. Amess : I am applying for an Adjournment debate, and on that occasion I may very well seek to name the company.

My second point is about hospital radio broadcasting. I have the honour to be the unpaid spokesman for Hospital Broadcasting. There are 312 hospital radio outlets throughout the country. My right hon. Friend the Member for Southend, West (Mr. Channon) has an excellent radio at his hospital, and I have an excellent one in Basildon. It is the largest national charity to possess no paid workers and the third largest radio network after the BBC and the independents. The therapeutic effect of hospital radio broadcasting is proven. I plead with my right hon. Friend to pass a message to our right hon. Friend the Chancellor of the Exchequer that when he comes to the Dispatch Box next Tuesday, he should say that he will treat hospital radio broadcasting in exactly the same way as he treats talking books for the blind and zero-rate hospital radio broadcasting equipment for VAT. That would mean an enormous saving to voluntary bodies. Currently, the organisers of hospital radio are having discussons with the IBA in the hope of obtaining a separate frequency. I hope that they will make good progress.

My final point relates to dyslexia. I understand that as a five-year-old I was unable to communicate with my peers. My class teacher pointed out that I had special learning difficulties, and I had speech therapy for three years--"How now brown cow," and so on. Dyslexia is a problem which concerns many of my constituents. The Department of Education and Science categorically recognises dyslexia but, sadly, Essex county council does not believe that it exists. It has no clear policy for helping children who suffer from word blindness. It will accept only that there may be learning difficulties. Many of my constituents came to my previous surgery and expressed concern about that.

I am happy to say that this Saturday we are launching the Basildon dyslexia association. The Government are encouraging county councils to provide special tuition for dyslexic children, so it is not their fault that it is not provided in Essex. We intend to lobby Essex county

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council until we obtain a centre of excellence within the Basildon constituency to help those children identified as suffering from dyslexia.

7.22 pm

Mr. Allen McKay (Barnsley, West and Penistone) : I wish to bring the debate back to the subject of local government finance, and in particular to local government finance in my area. I do not think that the House should adjourn until the question of the poll tax is settled. The issue concerns many people in many ways. I make no apology for speaking emotionally about the poll tax, because it is a broadly based tax that affects people in different ways in different areas, depending on how they live, where they live, and what they live in. It is a more complicated problem than is generally realised.

My local authority has, once again, been capped, and quite unfairly. When the Secretary of State announced the criteria for poll tax capping, my authority complied with them and set a figure just below the capping level. Before that, the Department of Transport was considering a light railway system for Sheffield. The fact that there is a South Yorkshire transport executive affects the finances for the whole of south Yorkshire, which includes Sheffield, Rotherham, Barnsley and Doncaster. My authority was assured that the provision of a light railway system would not be taken into account for poll tax capping. It came as a complete surprise when my authority was capped, and especially as the reason was the expenditure on the light railway system in Sheffield. It had nothing to do with Barnsley, which simply happened to be the clearing station for the method by which local government finance was determined for the light railway system.

My authority is now faced with deciding between whether to try to save £368,000 in its budget or to say no to the light railway system--a system that the Department of Transport wants and that is essential for Sheffield. I have made my feelings clear. I could not justify to my constituents the closure of six schools so that £368, 000 could be spent on a light railway system. I could not persuade them of the justice of so doing. The issue must be examined quickly and clearly.

If the Department of Transport wants the light railway system to proceed, it must remove it from the capping criteria. I have discussed the matter with my colleagues who represent Doncaster, and they are of the same opinion. Of course, the problem is one for local government, not for us, but I felt it necessary to make my position clear, because I have to justify what happens to my constituents. Barnsley has not built a nursery school for five years, simply because finance has not been available. It closed schools in the last session, and it is closing schools this session. In no way can I justify the expenditure of £368,000 on a light railway system. I want the Government carefully to consider what is happening to Barnsley and Doncaster. We would love Sheffield to have its light railway system--it would be opportune for the world student games. Sheffield is a neighbour in many, many ways, and my local authority will have to consider the matter very carefully. There is need for a light railway system, and that need has been accepted by the Department of Transport because it has approved the finances for it. The problem is not just that my authority has to find £368,000 this year ; the light railway system is a

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multi-million pound project. It will affect us not just this year, but next year and the year after. I do not believe that my local authority can go along with that, although that is for it to decide. It will have to reconsider its budget. Before it does so, the Government should think carefully about the way that it is being treated. My authority has been unfairly dealt with, and unfairly and unwisely advised. The assurances given by the Department of Transport have not been honoured, and matters look bad for my authority. We must consider the whole system of local government finance. I hope that, as has been rumoured this evening, the poll tax is to be abolished, but we will have to wait a week before we have the official verdict. We must examine what has happened to local government finance since 1979, why it has happened, and what system should be introduced. There has been a war between central and local government. They have battled about finance since 1979. Central Government grant to local government has been reduced from 79 per cent. to about 35 per cent. That is why local government is in trouble.

We must ask why that has happened. The only reason is that the Government realised that the majority of local government was Labour-controlled. They felt that if they could turn the blame towards local government and local councillors--which they unfairly tried to do--the local populations would get rid of their authorities. In fact, that did not happen. The local people rumbled what was happening and wisely said to the Government, "Not on your Nellie. We will vote for the authority we want, for the councillors we want, and for the policies we want." It is the local people who, since 1979, have said no to the Government. That is why the Government introduced the poll tax. The former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), was shooting from the hip. She said, "Get rid of high rates," rather than trying to find out the cause of those high rates. That is why the Government quickly introduced the poll tax.

I attended the first sitting of the Commitee that considered the poll tax legislation. The right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was taking the Bill through the House. We told him that it was a silly mistake, and that the Government did not realise what they were doing. Conservative Members know that we warned the Government at that time. We asked the right hon. Gentleman to abandon the Bill and, instead, to put our heads together to find a system for local government finance that would not have to be changed year after year. We wanted a system that would last for decades. We wanted to keep the old system. We wanted to identify the anomalies and remove them without throwing the baby out with the bath water. The right hon. Member for Cirencester and Tewkesbury decided arrogantly that the poll tax was the Government's flagship and that they would go ahead with it. Once the Government had the poll tax around their neck, they realised that they were wrong and they decided that they had to get rid of it. The Government will have to eat humble pie. They must recognise that they have made a mistake. The Government must also recognise that there is merit in the argument that everyone must pay according to his or her ability to pay. Clearly the poll tax is not based on the ability to pay. If we accept and recognise that local

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government is right and central Government are wrong, that the poll tax is wrong and that there is merit in asking everyone who has the ability to pay to do so, we can put our heads together once the political aspect has been removed and find a sensible way to finance local government.

Central Government must be big enough to say that they were wrong. They must say that the poll tax should not have been introduced and that they will get rid of it. We must then introduce a different system to finance local government.

7.30 pm

Mr. Jacques Arnold (Gravesham) : Before we adjourn for the Easter recess, I want to raise an issue of great concern to a major community in my constituency--the Sikh community of Gravesend and Northfleet.

My constituents are becoming increasingly anxious about the rising tide of violence and disorder in their homeland of the Punjab. The House will recall that at the time of independence for the sub-continent, it provided for a Muslim state of Pakistan and for an independent India for the Hindus, Sikhs and other minorities. At the time of independence, the Sikh leaders acquiesced to that arrangement following solemn assurances by Nehru and his associates.

In practice, as soon as India became independent, the majority Congress party broke all its promises of justice and equality made to the Sikhs before independence. The two Sikh representatives to the Indian constitutional convention refused to sign the final draft of the constitution because it contained no guarantee of the rights of minorities. In the Indian constitution today, the Sikh religion is not recognised, whereas Hinduism and Islam are.

The province of Punjab saw two new Hindu-dominated provinces hived off it-- the provinces of Haryana and Himachal Pradesh. The residual state of Punjab no longer has its own Government and is subject to direct rule from Delhi. That has led to a bottling up of Punjabi political pressures. Inevitably, some argue that the only solution is secession from the republic through the creation of an independent Sikh state of Khalistan. Both the Khalistan campaigners and the moderate Sikhs, the latter who want only their human rights and to live in peace and prosperity that they are more than capable of creating for themselves, have no democratic outlets for their views. Their views are repressed within the Punjab.

The House will appreciate that that has led to political unrest, protest, reaction, violence and repression. In Britain we were shocked in 1984 by the terrible violence and desecration at the Sikhs' most holy shrine the Golden Temple at Amritsar. Subsequent events, the violence, murders, emergency laws and detentions without trial have resulted in a torrent of reports of infringements of human rights about which the human rights groups in the House has heard. Those infringements bring shame on the republic of India which prides itself on being the world's largest democracy.

The Punjab has traditionally been the bread basket of India. In recent years wheat production in the Punjab has doubled and doubled again. The province is potentially very prosperous and its Sikh population has been

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