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Mr. Brian Wilson (Cunninghame, North) : Will the Secretary of State clarify the position on the standard community charge? Will the standard community charge be a multiple of the new individual community charge? As I see the Secretary of State nod, does that mean that there will be a substantial reduction in the standard community charge for some enormous second homes?
Mr. Heseltine : If the hon. Gentleman had been here from the beginning of the debate, he would have known that my hon. Friend the Member for Surbiton (Mr.
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Tracey) raised exactly that point, and it so happens that this is precisely the moment in my speech when I wish to deal with it. There is an incorrect report in The Times this morning that councils will not be compensated for the loss of income from standard community charges. In fact, grants will be paid to compensate authorities for loss of community charge income from all charge payers--that is, personal, standard and collective charge payers alike. I welcome this opportunity which my hon. Friend has given me to set the record straight.Mr. A. J. Beith (Berwick-upon-Tweed) : Does that mean that, in those authorities where the standard charge is a multiple of twice the personal charge, the authority will be reimbursed for twice the charge?
Mr. Heseltine : That is correct.
The charges that we have announced involve local authorities in rebilling. There was no alternative way of achieving our purpose. We could not have made a switch of funding of the size involved outside a proper Budget statement. The House and the wider financial community would have expected to be told how such a switch was to be financed. We could not have acted, either, until all local authorities had set their budgets. There are simply too many authorities which, if they had had any idea that there was more money coming, would have wanted to use it to increase their spending and not to help local people. We were not prepared to put up with that.
Mr. Graham Riddick (Colne Valley) : Will my right hon. Friend confirm that the £140 reduction will also be available to local authorities and community charge payers next year? As Labour local authorities have been clearly setting the highest possible community charge that they can get away with this year, will my right hon. Friend confirm now that he will use his capping powers as ruthlessly as necessary to stop Labour authorities ripping off my constituents and those of all other hon. Members next year?
Mr. Heseltine : My hon. Friend raises an important point. I can confirm that we shall take what steps we think appropriate to prevent an explosion of local authority expenditure as a consequence of the generosity of the settlement that we have made today.
My hon. Friend's other point relates to our determination to keep the balance broadly in line. We have confirmed our intention to do that. Next year, it will probably be appropriate to do that through the aggregate exchequer finance arrangement as opposed to a specific legislative vehicle such as we are addressing today, but the upshot of it will be to preserve the balance broadly as my right hon. Friend the Chancellor has described.
Mr. Dennis Turner (Wolverhampton, South-East) : Will the Secretary of State also keep the balance between a poll tax in Wolverhampton next year of approximately £275 and that in Wandsworth, where charge payers will pay nothing? My constituents would like to know who will pay for the social workers and teachers in Wandsworth while my constituents, with their many social problems, will have to pay up to £300.
Mr. Heseltine : There is a simple way to meet the hon. Gentleman's objective. If he wants the community charge level of Wandsworth, all he has to do is to vote
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Conservative at the forthcoming election. I had not intended to make a divisive party point at this stage in my speech, but it is worth repeating that to vote Labour costs, on average, £50 across the country.Mr. John Bowis (Battersea) : Will my right hon. Friend also point out to Opposition Members that a great deal more central Government grant per head goes to the neighbouring Labour inner-London boroughs than comes to Wandsworth? One of the benefits of the Bill that he has not yet highlighted is the extent to which people receiving income support will benefit. The 20 per cent. put into income support is 20 per cent. of the national average community charge. For every council that comes in under the national average--and the Bill will help that to happen--such people will receive considerably more in income support than 20 per cent. of the national figure, and if the council comes in at zero, the whole amount will go into their pockets.
Mr. Heseltine : My hon. Friend has made a number of interesting points, and has reminded me of some interesting statistics. Wandsworth--a London borough--received £1,192 per adult, and then set a community charge of £137. Tower Hamlets received £1,862 per adult, and set a charge of £287. Hackney received £1,755, and set a charge of £462. Lambeth received £1,557, and set a charge of £590. If Labour Members want me to make comparisons, let me compare Wandsworth's £1, 192 with Manchester's £1,170. Manchester set a charge of £432, while Wandsworth's charge was £137. Labour Membrs should think carefully before suggesting that there is no relationship between authorities' profligate spending patterns and the fact that they are Labour -controlled.
Several Hon. Members rose --
Mr. Heseltine : I think that the House has heard enough to be convinced that the legislation is essential. We should make progress. We intend to secure the passage of the Bill and any appropriate regulations this week. We have already informed the House in detail of our intentions, and we are writing again to local authorities today, sending them copies of the draft regulations on billing and enforcement. Before the financial year begins, authorities should have all that they need to send out the revised bills. We have made it clear that we shall advance cash from non-domestic rates to compensate local authorities for the unavoidable delay in the collection of their community charge income.
I have been impressed by the determination evident in local government generally--and especially among those to whom I have spoken directly--to convey this excellent new arrangement to local people as quickly as possible. What they have told me destroys the arguments of those who say that, inevitably, no new bills will be issued before June. It would be unforgivable if local authorities now delayed issuing their bills to hide from the electorate the substantial help that the Government have given. I am confident that the great majority will want the new bills to be sent out very soon, and that that end will be achieved.
The Bill is as short as it is important. It helps people. It shifts the burden from local to central taxation. It is a constructive and decisive product of our local government review, and I commend it to the House.
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7.53 pmMr. Bryan Gould (Dagenham) : I do not often feel sorry for the Secretary of State for the Environment, but I confess that I felt a twinge of sympathy for him this evening. He could not quite conceal his embarrassment, which was bespoken by the brevity of his remarks in support of the Bill.
That embarrassment was partly as a result of the breathtaking cynicism of the measure that the right hon. Gentleman had to propose, and partly due to the extraordinary circumstances--an unprecedented guillotine motion. Mostly, however, it was a consequence of what the Bill, and the Secretary of State's role this evening, tell us about the right hon. Gentleman's part in the attempt to bring the poll tax fiasco to an end.
I think that the right hon. Gentleman's embarrassment stems from the fact that he is now required to present a Bill--in extraordinary and unprecedented circumstances--to implement a measure in whose formulation he really played no part. In this Government of faction and cabal, he was treated as an outsider by the Treasury-dominated group that decided that the Budget strategy should be completely distorted by the need to throw money at the poll tax problem. The Bill may be a Department of the Environment measure, but it was conceived and promoted in the Treasury--a Department that has no understanding of local government, and even less sympathy for it. We must assume that the decision to promote the measure was made without consultation of the Secretary of State. Presumably even he would not easily have consented to legislation that would require him to stand on his head in quite so spectacular a fashion. It is, after all, less than three months since he came solemnly to the House to present his revenue support grant settlement.
That settlement was presented as the culmination of long and responsible consideration by the right hon. Gentleman. He had, he told us, made his judgment about how much of local government spending should be funded by central Government. He dismissed any suggestion that the settlement represented anything other than a prudent and accurate judgment of the amount that central Government should provide. Yet here we are, less than three months later, with the Secretary of State compelled by his Treasury colleagues to concede that his judgment was wrong--to the tune of a small matter of £4.25 billion. No wonder he seems more than a little discomfited.
Mr. David Nicholson (Taunton) : Will the hon. Gentleman give way?
Mr. Gould : I shall give way in due course ; I want to develop this point first.
Nor can the Secretary of State get away with the excuse that he may want to make : that he inherited the revenue support grant from his predecessor, and has recast the settlement according to his own long-held ideas and principles. The settlement that he announced in January did not, after all, come out of the blue. It was very much in line with earlier settlements, which had made a point of reducing the proportion of local government finance to be funded by central Government from that inherited from the preceding Labour Government--a steady reduction over the whole period from 62 per cent. to 35 per cent.
The Minister who initiated that long, consistent and steady process of disengagement--
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Mr. Robert G. Hughes (Harrow, West) : Will the hon. Gentleman give way?
Mr. Gould : Let me deal first with what the Secretary of State falsely said in his opening remarks. The proportion of local government finance provided by central Government was the same at the beginning of the last Labour Administration as it was at the end : 62 per cent. There was indeed a bobble upwards in the middle to about 65 per cent., but the level remained stable throughout that Administration. The real reduction began when the Secretary of State of the day decided to initiate the process that culminated in central Government funding of only 35 per cent.
Who was that Secretary of State? Who began that process? None other than the present incumbent. The Bill that the Secretary of State has been forced to present to the House today not only runs counter to a 12-year-old pattern set by the present Government ; it runs counter to the whole process launched by the right hon. Gentleman himself. There is just a little inconsistency for him to explain away.
Mr. Heseltine : I know that figures are always an embarrassment to the hon. Gentleman, but the fact is that, in 1976, the proportion was 66 per cent. It went down by about 2 per cent. a year until the present Government were elected, and, broadly speaking, it did not go down much more than that throughout the 1980s. The switch began in 1976. Can the hon. Gentleman deny that?
Mr. Gould : I note with interest--and so, I am sure, did the House-- that the Secretary of State took great care not to contradict my assertion, which, for the sake of those who failed to grasp it the first time, was that the level of central Government support for local government remained stable at 62 per cent. throughout the term of that Labour Government. The real reduction began in 1979 and reached a low point of 35 per cent. in the right hon. Gentleman's revenue support grant settlement this year.
Mr. David Nicholson : The hon. Gentleman's opening diatribe completely ignores the fact that the £4 billion in the Budget, which will be enacted by this legislation, is intended to reduce the charge to charge payers, not to add to resources for higher spending. As my right hon. Friend pointed out, if the money had been made available before many local authorities had set their budgets, they would have used it to increase spending.
Mr. Gould : What I find interesting about that
intervention--although it had no bearing on my argument with the Secretary of State--is that it points to an absolute and unavoidable necessity. If, by any misfortune, this Government are still running things next year, as this trick cannot be turned a second time, the only way to avoid the trap that the Secretary of State has set himself is the solution offered from his own Back Benches--universal capping. That would, in turn, require the Secretary of State to stand on his head all over again. He has gone on record time and time again as against capping and in favour of accountability yet, once again, he has contradicted himself in the space of just a couple of weeks. Dr. Keith Hampson (Leeds, North-West) rose --
Mr. Gould : When the Secretary of State announced his community charge reduction scheme, he assured us that it was the last word in making the poll tax fair and workable.
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It is no doubt true that a scheme designed to win the Ribble Valley by-election looked a little less attractive and persuasive when Ribble Valley was duly lost. However, it is still a remarkable volte face for the Secretary of State to come to the House so soon to admit by implication that he was wrong and to propose what is, in effect, a general election reduction scheme. To judge by its immediate reception, the new scheme looks as certain as its predecessor to be unsuccessful in its chosen aim.If the timing of the measure is embarrassing for the Secretary of State, his embarrassment pales into insignificance by comparison with the upheaval that the Bill has inflicted on local government. Virtually every poll tax bill had been calculated, many had been printed and a large number had been dispatched. I have received mine, and I am sure that many hon. Members have also received theirs. The consequence of this last-minute reversal is that 35 million poll tax bills will have to be recalculated, and the millions of bills awaiting dispatch will have to be shredded. There has been nothing more damaging to the Government's reputation than the sight of bales of millions of poll tax bills waiting to be destroyed--a sight that we have seen on our television screens over the past couple of days. What drove the Government to reverse the position to which they had adhered for 12 years and to inflict such chaos on local government? The only conclusion that we can safely reach is that we are dealing with a Government who are in a blue funk. They are now desperate and cynical in equal measure. They are so desperate that they will clutch at desperate measures. They are ready to try to save their skin at any cost. The cost is not borne by the Government because--as they never tire of telling us--they have no money. The money that they are throwing at the poll tax problem--all £4.25 billion of it--is not theirs. It is the taxpayers' pockets that are being raided. If there is any justice, there will be a cost to the Government, and they will pay that cost. The whole shabby and disreputable exercise will be carried through at the cost of what shreds remain of the Government's tattered reputation for competence and prudence. Are they competent? To say that they could not run a whelk stall is to insult those in my constituency who continue to run such businesses successfully. If the Government were running a public company, the shareholders would have sacked them long ago before calling in the fraud squad. If they were in local government, whose fortunes they presume to treat in such a cavalier fashion, they would certainly have been surcharged, bankrupted and disqualified.
We should not mince words. On the evidence of this passage of events, we are dealing with a bunch of craven incompetents whose only saving grace is that they are so bad even at incompetence that they have been rumbled straight away.
Are the Government a prudent Government who look after public finance? That can produce nothing but a horse laugh.
Mr. Robert G. Hughes rose --
Mr. Gould : The Government have generously agreed to cover the cost of their bungling. Even they did not dare to ask the poll tax payer to pick up the tab, but we have been given only a blithe estimate that the exercise will cost a mere trifle--just £60 million. Even that little bauble seems
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certain to be an underestimate on the basis of evidence given to me over the past few days by local authorities, which are aghast at what the Bill will mean to their costs, administration and financial position.I should like to give some examples. Birmingham says that if--as it will be compelled to do--it must use different software, the printing and dispatch of new bills will cost £100,000 in additional administrative costs, and it will suffer a loss in cash flow of £1.25 million. Newcastle estimates £200,000 as the cost of new calculations and dispatch of bills and a further loss of £700,000 in loss of interest. Peterborough says that its administrative costs will rise by between £50,000 and £100,000 and it will lose £200,000 in interest in one month alone.
The £60 million--unacceptable though it is as the price tag of the Government's folly--will not, on that basis, go very far. I want to know, either from the Secretary of State of from his Minister of State, what calculation lies behind the blithe estimate of £60 million. On what basis was it calculated? How confident is the Secretary of State that he knows the true figure, or is it just one more example of a stab in the dark by a Government whose claims to prudent management must now be met with derision and contempt?
Mr. James Paice (Cambridgeshire, South-East) : The hon. Gentleman has spent 15 minutes telling us his views of the Government. Will he, at any stage, tell us why he is opposing the Bill? Is he against the idea of reducing the bills by £140? If he were to have his way and the Bill were defeated, how would he answer the accusation from charge payers that he would have cost them £140 each?
Mr. Gould : It never ceases to amaze me just how out of touch some Conservative Members are. We have here the luminaries of the Tory Back Benches, people who allegedly devote their professional lives to keeping abreast of public matters--
Mr. Geoffrey Dickens (Littleborough and Saddleworth) rose --
Mr. Gould : I have not finished demolishing Tory luminaries yet. We have here luminaries who profess to be abreast of all matters of public concern, but they do not yet know what any idiot could have read in today's newspapers. We are not opposing the Bill--we do not intend to stand in the way of a welcome reduction in the poll tax burden--but we reserve the right to explore the cynicism and disreputable nature of the Bill itself.
It must be recognised that the £60 million fleabite is of little consequence when compared to what the poll tax has already cost, and when we look at the start-up costs and the admitted additional administrative costs per year. The Minister of State is on record as conceding that it will cost £300 million additionally each year.
Mr. Robert G. Hughes : Will the hon. Gentleman give way?
Mr. Gould : We must look at the burden of the lower-than-forecast collection level, which runs at £1.4 billion, and at the sweeteners already announced by the Secretary of State, which amount to £5 billion or £6
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billion. We now add £4.25 billion from VAT. No wonder the Secretary of State can pretend that £60 million does not matter.Mr. Hughes : Will the hon. Gentleman give way?
Mr. Gould : I give way to the hon. Gentleman to reward him for simple persistence.
Mr. Hughes : The important point about the Bill, which we shall pass tonight, is that it gives us a clear idea, not only for this year, but for the future, of how many billion pounds the new scheme is designed to raise. To help us understand what the hon. Member for Dagenham (Mr. Gould) is saying on behalf of the Opposition, will he tell the House how many billion pounds his scheme is designed to raise? We shall then know what size of bill people will get.
Mr. Gould : The hon. Gentleman talks about the House becoming clear by the end of the debate precisely how the scheme is to work. I look forward to that clarity. My constituents in Dagenham will be keen to know precisely how many of them will get the £140 reduction that they have been promised. There has never been any mystery about our assertion. The Secretary of State may have changed his mind overnight, but we have always been clear that the balance between central and local government spending has been rigged by the Government and has gone to an extreme that even the present Administration now have to recognise must be corrected.
The £13 billion or £14 billion now thrown at the poll tax is not money that is being spent on a great national project or to improve the quality of life of the people of this country. It is money spent solely and sordidly on saving the Government's skin. Do not let me hear again Conservative Members claiming to be prudent or responsible in the management of public resources.
The irony is that, like so much else about the poll tax, the Bill does not even deliver what it promises. Only half--perhaps not even half--of those who have been promised the reduction of £140 will receive it. Those who receive rebates or who qualify under the community charge reduction scheme will find that their reductions are far less. I do not blame a Government who can make a mistake and then correct it in 24 hours--a mistake of only 100 per cent.
It was a mistake that led the Minister of State to tell us last night, less than 24 hours ago, that only 8 million people would benefit from the community charge reduction scheme. The Secretary of State corrected him today and said that the figure was 16 million. I do not blame an Administration who have such difficulty with figures for being unable to tell us precisely how many people will get the £140. Nevertheless, it is a matter of abiding interest to my constituents. They would dearly like to know the answer, and I look forward to hearing the Minister's answer later.
It is characteristic of the poll tax that those who are most certain of the benefit of the full £140 are those at the top of the income scale. The benefit is worth £274.50 to someone paying top rate income tax. Those at the bottom will benefit to the maximum of only £28, and many of them will receive even less. There is no justice in the famous flat-rate principle, which did so much to discredit the poll
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tax. The flat-rate principle allows the people of Wandsworth to pay nothing. Whatever happened to the idea that everyone should contribute something? That principle allows the people of Wandsworth to pay nothing, while others get the same £140 and still have to pay £300 a year.Is it not typical of the Government that, when they filched billions of pounds from local government, they used it to finance income tax cuts to benefit the well-off? Now that they recognise that they have made a terrible mistake which must be corrected, and now that they have unwillingly decided that they must pay back the money, who do they expect to pay it? They expect it to be not those who benefited from income tax cuts, but the ordinary family, who are hard hit by the increase in VAT.
If the money is available, why is it not used to abolish the 20 per cent. contribution? Can the Secretary of State think of a better way? I believe that on this issue, his heart may be in the right place, but I suspect that, again, he has been outgunned by the Treasury. Is there any better way of spending the available money than to remove the misery and despair of people who are terrified by poll tax bills that they have no hope of paying because they have no income with which to pay them?
Mr. Wilson : Does my hon. Friend share my understanding of the reply that I received earlier from the Secretary of State on the flat-rate principle? Not only will the poorest people in the land receive £28 under the new scheme while the better-off obtain £140, but a very wealthy person who owns a substantial second home will obtain £420 from the scheme.
Mr. Gould : My hon. Friend is right. His intervention shows that, try as they may to wriggle off the poll tax hook, the principle of the poll tax remains to dog the Government. Wherever they go, the flat-rate principle, which the Secretary of State dare not abandon because of the uproar on the Conservative Benches, distorts everything he does in reforming the poll tax.
The real flaw in the Bill is not that it is confused, ill thought out, unfair and chaotic, but that it tries to prop up the poll tax rather than to abolish it. We could be debating today a short Bill which would ensure that this year's poll tax bills would be the last. The Government turned down our offer of co-operation on such a Bill. Instead, we have a Bill that does no more than offer a sop or a bribe, with no guarantee that it is the prelude to the abolition of a tax whose manifest and manifold deficiencies have made the distortions necessary.
The Government are so confused and divided that they cannot decide whether the poll tax is eventually to go. The right hon. Member for Blaby (Mr. Lawson) spoke the truth--freed from the burdens of office, he had that unaccustomed luxury on the Conservative Benches. He spoke a truth recognised by millions when he said that what is known of the proposals of the Secretary of State can properly be described as "son of poll tax". He pointed to a Government who have lost faith in their own creation, but who dare not dispatch it for good.
In the meantime, we have a shoddy, shabby and cynical Bill. It is a measure designed to mask the stench of the poll tax rather than to bury its corpse. We regard the Bill as deeply disreputable. We shall seek to amend it so that it more nearly serves the interests of the 90 per cent. of public opinion that now wants to see the back of the poll tax.
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We regard the relief offered to reduce the burden of the poll tax for some of those who have been driven to despair by its unfairness as no more than a down payment. It is a payment on account on the way to the complete abolition of that hated tax. This is the down payment, but the full price will be paid by the Tory Government at the next general election. That is where the poll tax bill will finally be paid. It is now clear that we must look to that general election and to a Labour victory before we have any chance of abolishing the poll tax.8.18 pm
Miss Emma Nicholson (Torridge and Devon, West) : The Bill, with the other reductions that have recently been announced, will reduce the average community charge payment in England to about £170. So low now are the charges, that no one-person or two-person households will pay more than £2 more than they paid under the old rating system if they have not moved house. The strength of the Bill is that it is a small part of a far wider exercise which is designed to look throughout the local government system--not just at the payment issue or at the method of raising funds, but at services. I commend the Bill and will support it tonight.
The low level of the charge reminds one of the benefits of it. Before there are howls of disbelief from the Opposition, let me point out some of them. For the first time in the parliamentary memory of many of us, we gave the elector full knowledge of what his local authority was doing by making the elector contribute to that local authority expenditure. Putting one's hand in one's pocket--paying for a round at the bar--concentrates the mind marvellously. As a result of that change, local authority budgets were trimmed, sometimes dramatically--there can be no argument about that because that is the truth. The savings were not made in terms of the services given to those who need and deserve them, but by authorities undertaking internal cost reductions.
In my local authority, right down in the county of Devon, well known to my right hon. Friend the Secretary of State, the electors were able to consider what was happening at county hall and in the district councils. When the community charge arrived in Devon, the economic expenditure of those authorities was low, but it was still possible for them to make large and proper expenditure cuts internally.
Mr. Robert G. Hughes : My hon. Friend may be being a little unfair to the Opposition : my experience in London is that Conservative authorities cut administration while Labour councils cut services.
Miss Nicholson : Alas, that is so. Many Conservative councils have brought in outside experts to study their budgets to find ways in which they can be trimmed internally. We should not forget the magnitude of councils. They have swelled in recent years, rather like a queen bee fed on special pollen and honey. In this case, the pollen and honey came from the taxpayer's pocket.
Mr. John Fraser (Norwood) : Will the hon. Lady give way?
Miss Nicholson : No, I shall continue for a little longer if I may.
It would be foolish and inaccurate for Opposition Members--
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Mr. Fraser : Tell us about Somerset.
Miss Nicholson : I shall not give way.
It would be foolish and inaccurate for the Opposition to pretend, as they seek to do for the purposes of political debate, that councils are perfect organisations that never overspend and do not put 17 per cent. of their education budgets towards the cost of their staff in county hall.
Another benefit of the community charge is the reintroduction of accountability to local people. That had been lost for many years, particularly under Labour Governments. I believe that accountability is a great and continuing benefit of community charge.
Given that the community charge is so low, why do we not retain it? Many of my colleagues would like to do just that. I believe that there are two good reasons why we should not retain the community charge and I intend to demonstrate that those key weaknesses are even larger and are inherent in the alternative proposals offered by the Opposition.
The first weakness is that the system of collection is too expensive and intrusive. Even the most sophisticated official has found it extremely tempting to acquire more knowledge about the individual elector than he should have done in pursuit of his duty to collect the community charge. Some councils might be in contravention of the Data Protection Act 1984-- some are before the Data Protection Registrar now. We must remember the problems of such intrusiveness when we consider the Opposition's proposals.
The second weakness of the community charge is that its gearing bore down too heavily on the individual. Some bills rose greatly, largely under Labour councils that may have been indulging in inappropriate expenditure under current guidelines. I hope that the local government review will root out that problem. It is difficult to see why a special pressure group such as black lesbians in Newcastle should be taught karate, paid for by taxpayers' money. That was unusual. Perhaps the local government review will throw light on what local government does best and where the weaknesses of the current system inhibit decision making to such a degree that it becomes so expensive that it might best be scaled down or scrapped. Despite the current low level of the community charge, I find it difficult to argue that it should be retained, although I accept that it offers good benefits.
The community charge is too difficult and expensive to collect because people move around so much. Every year, 40 per cent. of the population of Islington moves. Given the behaviour of Islington council, one is not surprised at that. If I lived in Islington, I would move as fast as possible to get away from the enormity of the indiscretions committed with local taxpayers' money.
I believe that community charge collection could have been done economically had we had identity cards, enforcement and a single software provision from the centre. The privacy issue, however, is difficult to counter. The Labour party has complained bitterly about what the Government have suggested, but the plans proposed by the Opposition do not bear scrutiny.
The Liberal democrats have advocated a local income tax, but the Labour party has recognised that that is administratively impracticable and could produce enormous local variations. I agree with the Labour party that it would be a difficult tax to introduce. I shall not go into the detail of my arguments against that tax, as it is simply
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a non-runner because the Liberal Democrats will be unable to persuade the two large parties to adopt that policy.The electorate should be alerted to the danger in the Labour party's plans. The Labour party is offering a mixture of ideas. It proposes a return to the old rating system, but the Opposition will not recognise that the gearing of that system bears even more heavily on the minority of the electorate than the community charge gearing. It is so atrociously unfair that it is difficult to countenance the return of that system. I find it difficult to believe, however, that the Labour party would care about that unfairness. It would probably believe that such a change would not affect its voters. It would not mind about that small minority if it felt that it could get away with it.
But the Opposition say that the new proposals must be linked with the famous words "the ability to pay". That is where the Labour party gets into difficulty. The only way in which one can focus on the ability to pay other than through the type of proposals that we have on the household tax, which are a rough and ready calculation of how many people there are in a household combined with the rebates that people may receive if they are on income support, would swiftly become unacceptable to the public once they understood what lay behind the change.
Labour's paper states that computerisation of the Inland Revenue "offers the possibility that means tested rebates could be replaced by an automatic calculation of liability"
and that that
"could be an important step towards a much wider reform, encompassing the benefit system as well as taxation offering the prospect of a single tax benefit transaction between the individual and government".
With breathtaking gall, or with an innocent lack of understanding of modern technology that demonstrates the Opposition's unfitness for government--one can hardly believe that they are so naive--the paper continues by saying that the new system
"protects confidentiality and civil rights"
and
"is forward looking in terms of general taxation".
Of course, it is nothing of the sort. It is a destruction of civil rights and an utter and total destruction of individual privacy, because the only way to focus upon that famous and saleable quality, "ability to pay" is--as the Labour party document properly proposed, although it was improper as regards confidentiality and citizens' rights--by creating one large, Government-controlled computerised record on each citizen in the land. The Opposition do not know--because they do not have the knowledge and they do not even bother to find out--that the Inland Revenue is set up solely for the purpose of collecting inland revenue. It does not contain the number of one's house, where one lives, who one is, how many children one has, one's income, one's stocks and shares, what sort of car one has, and all the other bits and pieces that are needed if one is to tailor raising money for local income to what is so laughably called, "ability to pay".
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