| Previous Section | Home Page |
Mr. David Bellotti (Eastbourne) : Is the hon. Lady aware that the PAYE system in the Inland Revenue offices contains the names, addresses and postal codes of everyone liable to pay it? If she does realise that, and as she
Column 846
quoted the phrase, "ability to pay" in her earlier comments, does she not realise that a local income tax added to the national taxation system would be easy to collect and would meet the other requirements that she mentioned earlier? Is she aware that all the required information exists and that such a proposal could be introduced within six months?Miss Nicholson : I do not deny that such information exists on computer records--I know it does and I am well aware of those systems. I argue against a local income tax for slightly different reasons. I believe that we are too small a country for a local income tax to work. It would produce large distortions in people's movements and inequalities for people living one side of a border if there were large differences in demands for local income tax from authorities on the other side of the border. I know that the information exists, but I do not believe that local taxation is a feasible system. Regarding the other proposals from the largest Opposition party, my comment is not that the information does not exist--indeed it does. For example, my right hon. Friend the Member for Blaby (Mr. Lawson) introduced a change in married women's income tax--which he promoted so heavily, and for which I honour him--that required matching tax points for married women with those of their husbands. Certainly the information exists. However, at the heart of the confidentiality which exists for the individual in the United Kingdom is the determination that the different systems should not be merged--the determination that tax, benefits and everything else known by Government about an individual should not be put on one computer record because then the destruction of personal confidentiality would be complete, and state control in place for ever.
If the Labour party really means what it stated in that paper about such a system offering civil rights protection and confidentiality, may I point out that, before Labour brings it in, it would have to introduce both a personal confidentiality Bill and a Bill that placed a value on information. Labour would have to introduce a sea change of legislation through the House which would take for ever and would be unique to the United Kingdom.
Thus, the Opposition may say that they can put aside the community charge-- nothing is easier than to tear up an existing piece of legislation--and immediately put in its place something that is fair, is related to the ability to pay and fulfils the contradictory proposals that I have read out from their document on the community charge and local government, to do so they would in practice have to go through many years of debate and the individual would still be at large risk of Government control.
Time is needed for any genuine alterations to the complexities of local government finance. That is why I believe that the Secretary of State, the Chancellor of the Exchequer and the Prime Minister have given that time properly. They have given time for their own proposals to come to fruition and for consultation and they have given time by reducing the community charge.
When we talk about mechanisms for reducing costs, I remind the House that value added tax has two large benefits which have not yet been identified. First, it is lower, as a proportion of equivalised disposable income, for retired people than for working people, so it is good for the retired and the elderly. Secondly, the United Kingdom has a total value added tax-- final, private, consumption
Column 847
expenditure as an annual expenditure percentage rate--that is the second lowest in the European Community. That is because one quarter of value added taxable goods are zero-rated and, on top of that, there are exemptions. No other European Community country offers that, and it gives us the second lowest average of the entire Community. The former Chancellor of the Exchequer, when he is critical of raising value added tax, surely cannot have looked at those figures and seen the extreme slowness with which we are pursuing our desired objective of shifting from tax on income to tax on expenditure.Mr. Tony Banks : Is the hon. Lady aware that the former Chancellor of the Exchequer seems to be very much in favour of bringing our VAT rates into line with the rest of Europe? In the end, that would also involve putting VAT on some essentials such as food. Does she support such a move?
Miss Nicholson : Again, I think that the former Chancellor's words may have been paraphrased inaccurately to reflect his speech. There is no possibility of bringing value added tax in line throughout Europe, because it is as varied as it is interesting. It is unique to each country. There is a 33 per cent. difference between the bottom and top band of value added tax, which would suggest that there will never be one VAT band for the Community in 1992, or whenever. I suggest that the hon. Gentleman studies again what my right hon. Friend the Member for Blaby said.
Mr. Dickens : I am grateful to my hon. Friend for giving way during her excellent speech. Does she agree that there is a certain appeal about value added tax, because the millions of foreign tourists that flood into the United Kingdom on holidays and shopping sprees will now contribute more to local government finance, as we do when we go on holiday abroad? That is important. Our system has to be fair and affordable. We are making it affordable at the moment to help people through this difficult time. Does she not agree that we shall produce a fair system?
Miss Nicholson : I agree with my hon. friend that the millions of incoming tourists will enhance our local government tax-raising capacity by spending more, especially since tourists will spend more on the sort of items that take them into the higher bands of expenditure. It is worth remembering that people have to spend £13, 500 a year before the additional 2.5 per cent. would affect their expenditure. I certainly agree with my hon. Friend that tourists will contribute more.
My right hon. Friend the Secretary of State introduced the Bill with his usual intellectual rigour, clarity of expression and-- [Interruption.] I am fascinated that Her Majesty's Opposition, having had their own cover blown wide open by me, have not even come back on my central point of attack on their proposals--I am bound to think that the admitted deficiencies in our education system are being reflected in their lack of numeracy. Is it possible that Opposition Members have not read their own document? Is it even more possible--or even probable--that they cannot add it up?
My right hon. Friend the Secretary of State has shown an openness to the House and the electorate in embarking on various stages of consultation as he develops these
Column 848
matters that affect us all domestically and locally. I believe that that true consultation will be a hallmark of this Prime Minister's Administration. The electorate will welcome it, just as we welcome the Bill tonight.8.40 pm
Mr. Dave Nellist (Coventry, South-East) : There is a certain pleasure in seeing the rout of the Government over the past eight days. Eight days is, indeed, a long time in politics, because it was only last Monday that the Prime Minister spoke to Tory Back Benchers, explaining that the poll tax was "uncollectable" because of the number of people not paying it and the courts being overloaded. On Tuesday, the Chancellor made his announcement about "shifting finance". On Thursday, we had a classic understatement from the Secretary of State for the Environment that "people are not persuaded" that the poll tax is fair. Last night, the right hon. Member for Blaby, (Mr. Lawson) who made one of his rare appearances in the House to collect his pocket money, told us all about "Son of Poll Tax". If the Government stay in office, we may well get what a Hammer horror producer might introduce as "Poll Tax II : Return of the Undead", so much is the poll tax still part of the thinking of the Government.
Those of us who have been most directly involved in the anti-pool tax campaign take a certain vicarious pleasure in witnessing the past eight days of Government by the headless chicken tendency. We now have an unprecedented "24-hour Bill" in the Chamber, which will pass through Parliament in just one week.
As was suggested earlier, what is happening has not passed unnoticed in my learning curve. When we have a Labour Government, I hope that Conservative Members will find no cause to complain if I venture to suggest to my hon. Friends on the Front Bench that they can abolish the House of Lords in a week or introduce a "General Nationalisation of Industry Bill" in one night. Such measures could also be applied to Scotland and we could give a future Secretary of State for Trade and Industry the general power to nationalise. I advise Conservative Members that they will see in the months ahead what we have learnt tonight.
However, the real victory does not belong to tonight's debate--it belongs to the millions of people outside this place who refused to be browbeaten or intimidated and who participated in what an article in tonight's Evening Standard calls the
"most successful civil defiance campaign in living memory". The Chartered Institute of Public Finance and Accountancy has said that 14 million people have either stopped or never started paying the poll tax. On Tuesday last week "Newsnight" put the figure at 15.7 million people--I presume that Scotland has at last been included in the figures. On Monday, the Prime Minister said that the figure was 18.5 million people. That achieved what many of us were told was impossible, especially by the press. It forced the Government to make a humiliating U-turn before a general election. I have no doubt that, in drafting the Bill, the Tories had a general election in mind. The Bill legitimises non-payment for the next three or four months. In a written answer on 19 March, the Secretary of State stated : "The Bill will suspend the liability of charge-payers to pay any 1991-92 charges until a charge bill has been received reflecting the reduced charges."-- [ Official Report, 19 March 1991 ; Vol. 188, c. 49. ]
Column 849
That answer means that people need not pay at least until May, or perhaps even until August. The Government have at last legalised non-payment.As I have said, victory belongs to those millions of people. It is not a victory against the poll tax but, as I know from personal discussions during the past eight days, it is a catharsis for all the Government's attacks and intimidations on ordinary people in the past 12 years. I refer to their attacks on the miners and on other communities, to the hospital and school closures, to what happened at GCHQ and to other unions, and to the privatisations. The past eight days are a sweet revenge on the Government for all those past attacks.
The Bill and the Secretary of State's review will result in an alteration to the law after the challenge to that law took place outside Parliament. It was ever thus. The right of people to vote for Members of this place, the right to join a union or to take industrial action were first established outside Parliament and later legitimised by the passage of legislation or by bad laws being repealed. That is what we are seeing beginning tonight--the repeal of a bad law because of a challenge from outside Parliament. Unlike the charges that I and others have faced from Conservative Members, there was never what was so perversely pictured by Conservative Members--there was never any intention to widen the battle or to generalise law breaking. I challenge any hon. Member to prove the opposite. Those who have not paid their poll tax or who delayed paying it have not in any way encouraged general lawlessness. They simply wanted to see the repeal of the poll tax legislation, and we are seeing the start of that tonight.
If the Bill is enacted, the reduction of £140 in bills will have been brought about by individual sacrifice. I should like to mention by name some of the people who have made sacrifices so that they are part of the record. They include Brian Wright, Pat Westmore and John Aves. They are the three people who have gone to prison in England for not paying the poll tax --only two days ago in the case of John Aves.
Mr. Roger King (Birmingham, Northfield) : Good.
Mr. Nellist : You will notice, Madam Deputy Speaker, that a Conservative Member has said, "Good." Presumably he is the same hon. Member who voted for the Tories to change the law in November 1988 so that no one in Scotland could go to prison for being in debt. That can happen only in England and Wales.
I pay tribute also to those who lost their liberty through arrest during the past two years, most notably a year ago at Trafalgar square. I pay tribute also to my constituent, Bob Pheelan, who died outside Coventry magistrates court after being forcibly removed by the police during a poll tax hearing last year.
After what has happened and the passage of the Bill, there will be a reduction of £140 in the poll tax. But what would have happened if we had all paid or tried to pay the poll tax? Many millions of people would have had to go into debt, take their cars off the streets, cancel their holidays or deny things to the kids. We would not have had the extra transitional relief that was given in recent months, or the relief that the Government have offered to millions of families in the past 24 hours. There would have
Column 850
been no review and no climb-down. The right hon. Member for Finchley (Mrs. Thatcher) would still be ensconced in No. 10 Downing street. Those who told us that by not paying our bills we were increasing other people's poll taxes will have to realise that by not paying our bills we have reduceed everybody's poll tax by £140. The Secretary of State has said that there is "no other way" than the way that he has chosen. He is almost resurrecting "TINA" to justify what he has done. He has said that there was "no other way" to achieve the reduction other than by raising VAT. I shall suggest another way to him in view of the answers that he and his Department have given me this week. They provided the figures to prove it. The right hon. Gentleman could have cancelled the debts of all the local authorities in this country and relieved them of more than £6,000 million a year in interest charges alone, which could have reduced the poll tax by £200 per person.If the Secretary of State thinks that that is not possible, I refer him to the figures that he gave me on 19 March about the exact amount of local authority debt. A year ago, his Department gave me the figures on the amount of interest charges paid by local authorities each year. If the right hon. Gentleman were to cancel those debts, it would have the additional welcome effect, even for Conservative Members, of reducing every pound of rent paid by council tenants--by 27 per cent. in the shire counties and by 34 per cent. in the metropolitan authority areas. That is the percentage of rent that passes immediately out of the back door of the council buildings on debt interest charges.
Some Conservative Members may say that that policy is impossible, but they would have said that this Bill was impossible just two or three weeks ago. I must advise them, however, that debt cancellation is a regular tool of this Government. In a reply to the hon. Member for Glasgow, Govan (Mr. Sillars) on 13 March, the Minister showed how £15 billion-worth of debt was cancelled--£3 billion for British Telecom £1.7 billion for the new towns £4 billion for British Steel and £5 billion for the water companies--to ensure that the Government's mates in the City had a better deal on privatisation. In a press release the Government said that the average community charge or poll tax after the Bill would be £252. If they cancelled debt they could have brought it down by a further £100 per head--in other words, to £152. They admitted on 26 February to the Tory Member for Stockport (Mr. Favell) that that is what the poll tax would have been if they had kept the rate support grant at the same rate since 1979 when they took office, instead of cutting over £57 billion from local council support in the last 10 years.
Mr. William Ross (Londonderry, East) rose --
Mr. Nellist : I am afraid that I cannot give way, as I know that other hon. Members want to speak.
Why are the Government in retreat? It is certainly not because they have seen the error of their ways or realised the injustice and unfairness of the poll tax. They have not even offered to reinstate the social security cuts, the axing of benefits to 16 and 17-year-olds, or the ending of housing benefit in certain areas, which has hit many of my constituents even more than the poll tax. I vividly remember accusing the right hon. Member for Finchley for her treatment of a 33-year-old widow in Coventry who had lost £25 a week because of the axing of
Column 851
school meals for her four children and the cuts in housing benefit. Cuts in minimum wages, maternity grants and health and safety will not be restored. The difference was that, while we had to co-operate in our own robbery by going to the post office and paying over the money owed to the council, 18.5 million people not only said no, but had a framework in the Federation of Anti-Poll Tax Unions, which allowed battle to be joined and won against the Tories.Those who said that that was impossible must realise that millions have crossed a barrier in the last 12 months. They remember what a famous American president said at his inauguration ceremony : "the only thing we have to fear is fear itself."
Millions realised that, if they did not pay a civil debt, the Government would be forced into the most humiliating retreat. It will not finish now. If the Chancellor can cancel £870 million of corporation tax in a full year by reducing the tax from 35 per cent. to 33 per cent. and backdating the cut to 1 April last year, we can demand that poll tax payers who went into debt to pay to pay their poll tax should get the same alleviation from this year's bills as the Tories are prepared to give off next year's hardship. [Interruption.] The hon. Member for Dunfermline, West (Mr. Douglas) reminds me that people in Scotland ought to receive compensation for the previous year's poll tax.
If the Government can cancel debts for their friends in Rover, Rolls-Royce, Harland and Wolff, British Telecom, the electricity and water undertakings, and so on, they can cancel the outstanding debt of the people who are facing prosecution for not paying their poll tax. The Secretary of State has said that he will continue to enforce payment. Do Tory Members realise that that means that 18.5 million people face court proceedings? According to information given to me by the Department, as at 31 December 2.2 million people had been summonsed, 77,585 had turned up in court, and 9,785 hours of court time had been taken up.
The Prime Minister has said that the courts are overloaded. What will he say if the Government try to prosecute another 15 million people? Where will they put all the people if seizure by bailiffs and deductions from wages and benefits do not work, as will be the case? Will they send them to prison? Do they not understand that there are already 45,000 people in prisons which were built to hold 43,000? There is no way the Government could put 15 million more people in prison, and even if they could, do they not realise that it costs £380 per week to keep a person in prison? That should be compared to the amount owed in poll tax.
The position is not getting better. Only 10 days ago the Audit Commission said that in the shire counties only 82 per cent. were paying the poll tax, in the metropolitan counties 73 per cent., in outer London 77 per cent. and in inner London 66 per cent. Collection is dropping like a stone.
When the Tories had their leadership contest in November, people stopped paying because all three candidates said that they would abolish the poll tax. When the Government announced the introduction of the Bill last week, people stopped paying in droves. Let the Government ask any local authority treasurer if they want to find out what the position is. It can only get worse, because the Government are legitimising non-payment for the next three months at least. Under the Bill, the Government will be robbing Peter to pay Paul. We are supposed to feel grateful for the increase
Column 852
in VAT. According to an article in "Economic Trends" in May 1990, the poorest 10 per cent. in the country spend 9.2 per cent. of their disposable income on VAT, compared to 5.7 per cent. for the richest 10 per cent. The Library has worked out for me that, with the increase of 2.5 per cent. in VAT, those percentages will become 10.8 and 6.6. Again, the poorest will pay so that the richest can benefit. That will not go down well.We should have had not this Bill but a measure immediately to abolish the poll tax. I and millions of people welcomed the motion put before the House by my party on 13 March. That was the clearest statement ever that our real alternative is the abolition of the poll tax.
The Government are in retreat. On the middle east they said that there should be no ceasefire until there was agreement on all the terms. Those involved in the anti-poll tax movement should follow the Government's advice. They should seek the complete abolition of the poll tax, an amnesty for those facing court proceedings, and compensation for those who tried to pay their poll tax.
We must seek an answer to the real question put by parents today from Tory Warwickshire. I do not see any right hon. or hon. Members from Warwickshire in the Chamber. Those parents came to appeal to hon. Members not to agree to anything which would allow capping to remain or insufficient funding of local authority services. The parents told me today that in Warwickshire, which has been a Tory shire for 100 years, pre-school education is under threat and they face the closure of homes for the elderly, the closure of day centres for people with learning difficulties, and curtailment of youth services. That is not in a Labour inner-city London borough but in a Tory shire county.
The main lesson that the people have learned over the past three years in Scotland and the past two years in England and Wales, epitomised by the climb-down of the Government, is that if they struggle they can win. They can force concessions and even beat back the confident Tory Government. That knowledge will be absorbed not only on the poll tax but by those facing hospital closures, school closures, factory closures or redundancy. They will realise that if they get off their knees and stand up they can beat the Tories. Several Hon. Members rose --
Madam Deputy Speaker : Order. Several hon. Members are seeking to speak. I appeal for shorter speeches, so that I may call all those hon. Members.
8.58 pm
Mr. Simon Burns (Chelmsford) : I trust that the hon. Member for Coventry, South-East (Mr. Nellist) will forgive me if I do not follow his unreconstructed approach to life. His was the sort of speech with which the late Enver Hoxha would have been pleased, but I suspect that it would not play all that well with the Leader of the Opposition. Listening to the sheer horror of some of his ideas about what he would like a future Labour Government to enact sent shivers down the spines of not only his right hon. Friend but all my right hon. and hon. Friends on this side of the House.
I am disappointed that the hon. Member for Dagenham (Mr. Gould) is not in the Chamber. I wanted to congratulate him on spinning out for 25 minutes a speech that basically said little. I knew that he was in serious
Column 853
trouble when he started recycling the jokes that he made to the House 13 days ago during the Supply day debate initiated by the Labour party on the community charge.Only the most churlish of people will not welcome the £140 reduction in community charge bills throughout England. It is to be welcomed, because it will mean that the bill of every community charge payer in the country will be slashed. I believe--I have never made any bones about it that the principle behind the community charge was right. I genuinely believe that everyone who uses local authority services should make some contribution to the provision of those services. Regrettably, the community charge was made unacceptable by the level of bill imposed on far too many people for the provision of those services. That is why it was necessary to produce a Bill of this nature. I congratulate my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for the Environment on the way in which they have acted to reduce people's bills. My right hon. Friends will bring genuine help to everyone in England and correspondingly in Scotland and Wales.
The Government have identified a problem which has been apparent to all-- the level of community charge imposed by the vast majority of local authorities. The Government listened to the arguments and decided to take action. Several Opposition Members have criticised the fact that the Bill is proceeding through the House in one day. If we had not made it do so, we would have been criticised for not taking decisive action when it was needed.
Some Opposition Members said that we should have introduced the Bill two, three or four weeks ago. If we had done that, local authorities would have known what we intended to do before they set their community charges, and would simply have hiked up their spending to thwart the change that is bringing the benefit to people.
Mr. Wilson : As he is on the chronology of these matters, and for the benefit of those who read the debate, the hon. Gentleman will wish to place on record his proud membership of the Committee which considered the Local Government Finance Bill and the fact that he supported every dot and comma of the Bill. All the points made by the hon. Member for Torridge and Devon, West (Miss Nicholson) and all the other Tory Members who are now being held to account were spelt out to them in Committee. Will he confirm that?
Mr. Burns : I am grateful to the hon. Gentleman. I was disappointed when he left the Chamber about 15 minutes ago, because, having read the newspaper article that he wrote in a Sunday Scottish paper--
Mr. Wilson : The Independent on Sunday.
Mr. Burns : --I apologise ; it was in The Independent on Sunday about six months ago about hon. Members such as me who served on that Committee and some of the comments that we made, I suspected that the hon. Gentleman would raise the matter again during this debate if I had the opportunity to speak.
I will answer his point. I reiterate what I said about three minutes ago. I make no apology for believing that everyone who uses local government services should make a financial contribution of some degree to the provision of those services.
Column 854
Mr. Donald Dewar (Glasgow, Garscadden) : Presumably the hon. Gentleman does not take the view that paying general taxation is sufficient, because that was rejected with contempt during the debates on the poll tax. Is he distressed by the fact that apparently we are now committed under the Government's new scheme to a household bill which will mean that there will be no legal liability for anyone but the householder? [Laughter.]
Mr. Burns : Before Opposition Members start giggling like schoolgirls, they should listen, because they may learn something. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) correctly said, there will be a single bill. But as far as the plan has been announced--it is only the skeleton-- [Laughter.] Hang on. We know that part of the bill will be based on the value of the property and the other part will take into account the number of adults living in that property. Although the bill will go only to the household, it will contain an element that reflects the number of people living in the property, and therefore the number of people using and benefiting from the services.
The Bill will result in my constituents receiving a reduction of £140 in their community charge bills. For a household of two, there will be a reduction of £280. The community charge set in Chelmsford on 6 March was £363, a reduction on the previous year. There would have been an even greater reduction, because Essex county council came in at £49 million below SSA, but, sadly, the Liberal-controlled Chelmsford borough council again increased its spending by substantially more than its SSA. So Chelmsford was to have paid for the profligacy of that council, which will be getting its marching orders on 2 May, after which it will no longer control Chelmsford. As the Bill will mean a reduction of £140 from the £363 that would have been charged, excluding some of the parishes in parts of my constituency, there will be a community charge of £223 per person. For two people in one house, the bill will be £446, substantially less than the average rates bill of £680 in the last year of rates. Calculating from the community charge what the rates would have been had the old system been maintained--I understand that it would mean a 10 per cent. increase on the rates--the average rates bill in my constituency would have been £750. So the vast majority of my constituents will benefit from 1 April in the coming financial year as a result of the Bill. I shall vote wholeheartedly for the measure, because it will be in my constituents' interests.
Mr. Rooker : And in the hon. Gentleman's interests.
Mr. Burns : That is so, because my wife and I live in my constituency and will pay the community charge there. What applies to my constituents applies to me, so the hon. Gentleman's comment is self- evident. The same is true of all hon. Members who live in their constituencies.
At £446 for two community charges in my constituency, the vast majority of my constituents will be winners and will not mind making a contribution to local government finances. They objected, with reason, to the unacceptable charge of £392 in the current year, which represented £784 for two people. That caused hardship and was considered to be unfair. Let us not forget that the reduction as proposed has nothing to do with the local authority that set the charge in Chelmsford. The Government have simply taken steps to rectify the problem.
Column 855
The Government will also be helping local authorities with the bills that will be going out for the new community charge. I urge the Secretary of State for Scotland to raise with the Secretary of State for the Environment an important point concerning the sending out of those bills. Chelmsford borough council set its community charge this year on 6 March. By 20 March, within a couple of weeks, the bills had gone out to 20,000 households.This legislation will probably be on the statute book by Thursday, when we go into recess. We have been told that instructions are being sent to local authorities to enable them to begin preparing the new bills. I assume that they will receive all the instructions and information that they need by the end of next week. If so, it is in the interests of many local authorities throughout the country to ensure that those new bills are not delivered through the letterbox before 2 May, so that they can spread confusion and misunderstanding about the community charge reductions until after polling day. That will enable them to milk that confusion for as much political advantage as possible.
Can my right hon. Friend the Secretary of State for Scotland do anything, even if it means amending the Bill, to ensure that bills are delivered before polling day? Unless local authorities can show the Department of the Environment that there is a good reason why they could not be delivered, I believe that should be done. Too many councillors and political parties are afraid of the implications of the Government's reduction of the community charge. Many hon. Members are trying to denigrate the scheme and spread confusion because they do not want people to be able to judge those implications before they cast their votes. They should be allowed to vote knowing precisely what they must pay. I hope that, notwithstanding the reassurances from my right hon. Friend the Secretary of State for the Environment the Government will ensure that, however people vote, they do so knowing exactly what they will pay for their local government services in the financial year 1991-92.
9.11 pm
Mr. David Bellotti (Eastbourne) : That is an extremely difficult act to follow. It is now clear that, whereas Eastbourne disposed of the right hon. Member for Finchley (Mrs. Thatcher) and Ribble Valley disposed of the poll tax, this Bill, which is being rushed through the House in one day, is an attempt by the Government to stop their being disposed of at the forthcoming general election.
The debate was preceded by headlines in the national press such as, "Everybody will get £140 off their poll tax bill." They will not. The press reported that because of a letter dated 19 March from the Department of the Environment to local authority chief executives, which said that there will be
"legislation to reduce the community charges set by local authorities for 1991/1992 by £140."
Local authority chief executives throughout the country who received that letter knew that it was ambiguous in the extreme, and they did not know how to respond to local inquiries. When picking up the information from the Government, the national press could do no better than translate what they thought the Government were saying. Earlier today, the Government gave more information to try to explain what they had in mind. The information given to local authorities has led to utter chaos.
Column 856
I am surprised that the hon. Member for Chelmsford (Mr. Burns) should want poll tax bills to land on the doormats of his constituents before 2 May. Thousands of his constituents think that they will pay nothing because, previously, they paid less than £140. In reality, they will pay a great deal, and their rebates will be less.The poorer people in our communities will be hit harder. There is little joy in the Bill for students or those on income support. I have just heard during the debate that there is rather more joy for people who own second homes. If that is the level of what the Government are trying to do to give the poor some economic relief, it would be better for those poll tax bills to arrrive on doormats before the elections on 2 May. I am surprised that Conservative Members have not received the same volume of letters as me in the past few months from people who cannot afford to pay their poll tax. In Eastbourne, the poll tax for the coming year has been set at just over £400. The council is controlled by the local Conservatives, who, I am glad to say, will not be there much longer. However, people who have to pay a 20 per cent. contribution will receive only between £20 and £30 relief under their proposals. The relief that they want is to pay nothing. They do not have the "ability to pay", whether it be £50, £60 or £82.80.
Mr. Keith Mans (Wyre) : Bearing in mind what the hon. Gentleman said earlier, will he encourage the chief executive of Eastbourne council to get the bills out before 2 May?
Mr. Bellotti : The chief executive of Eastbourne tried to rescue the poll tax bills from the post office and, due to co-operation from the staff, they have not been delivered. He and his staff now face the mammoth task of trying to understand the information sent out by the Department of the Environment. On television last Wednesday, the hon. Member for Leeds, North-West (Dr. Hampson) said that it should be an easy task, because one merely had to knock £140 off the bills. That is what he believed then, but today we know that it is not true.
Dr. Hampson : The hon. Gentleman knows that he is talking nonsense because what I said appears in the transcript. I clearly said that, for those councils that have sent out bills--only 15 per cent. have--there might be a way to ask people to make a deduction, which could be corrected afterwards, but that was not the point that the hon. Gentleman was making. It is perfectly clear to the hon. Gentleman, although he and others wished to distort it, that the £140 was to come off the figure fixed by the council, as he has just read out from the letter. Obviously, rebates and the reduction scheme apply after the figure has been fixed. He knows that, he has always done so, and he is simply trying to deceive people.
Mr. Bellotti : I am grateful for that intervention, because it clearly shows that the hon. Gentleman does not understand how the system proposed by the Government will work. If he thinks that the majority of people will be able to perform their own calculation of the rebate available after tonight's announcement, I challenge him to make his own calculation and see how long it takes.
Mr. Burns : Will the hon. Gentleman be kind enough to answer the question asked of him by my hon. Friend the Member for Wyre (Mr. Mans)?
Column 857
Mr. Bellotti : I am sure that, if the hon. Member for Wyre did not like my answer, he will be able to catch your eye later, Madam Deputy Speaker. I do not intend to take further interventions, because many other hon. Members wish to speak, and I have already been generous enough.
I am sure that there are hon. Members from Scotland here who wish to be called in the debate. The estimates of billing in Scotland will be even more difficult to send out to Scottish constituents than those in England, for reasons that I am sure Scottish Members will know--the timetabling of billing Scotland. I am sure that hon. Members who represent Scottish constituencies will outline those problems. It is interesting that the Minister for Local Government and Inner Cities is no longer with us. In October 1990, just five months ago, he said :
"The community charge is a courageous, fair and sensible solution. Far from being a vote loser it will be a vote winner and launch us on a fourth term."
If I had made that statement, I should want to leave the Chamber during the debate, despite my responsibilities.
The core reason for tonight's debate has been referred to. Since 1979, the Government have taken back from local authorities nearly £58 billion that they should have given. The £4.25 billion that they now propose to make available to enable local authorities to reduce the poll tax is but a mere trifle compared with the funding that should be there.
The principle of the poll tax is that everyone should pay. What about Wandsworth, where no one will pay for the services because of the high Government grant? The Bill is no more than a bus stop on the road to a new system of taxation--two taxes instead of one. Only one system of taxation will meet the needs of local communities and ensure that services are delivered. People who can afford to pay will do so, but those who cannot need not. That system is, of course, a local income tax. Such a system works in Japan and in Denmark, which is smaller than this country. It works in America and Germany, and it would work here. The Government should urgently examine a system of local income tax. Conservative Members seem to advocate the return of some form of property tax, combined with a poll tax of sorts, but that would produce burdens for millions of people.
Mr. William Ross : Will the hon. Gentleman give way?
Mr. Bellotti : I shall give way for the last time.
Mr. Ross : Perhaps the hon. Gentleman can clear up a matter which puzzles me and, I am sure, puzzles many hon. Members. How much of local government expenditure would be met from his party's local income tax, and what would be done about the business rate?
Mr. Bellotti : Our system of local income tax is extremely easy and would mirror the systems in some of the countries that I have mentioned. The level would be about 5.5p on the standard rate of income tax. That is a Government figure that we asked for. The Bill will make it more difficult for local authorities to collect the money they need. For example, people on income support and students, who last year could not pay the poll tax, will have to contribute next year, and that money will cost a great deal to collect. Conservative Members say that everybody should pay something towards local services. If the cost of the collection is
Column 858
greater than the sum that would be realised, should the local authority continue to pursue the collection? That is not cost-effective government or cost-effective taxation.The Bill is designed to dig the Government out of the poll tax pit. Its effect is to draw attention to a Government who have clearly run out of steam and out of policies. They should soon be run out of office.
9.22 pm
Dr. Keith Hampson (Leeds, North-West) : I agree with the hon. Member for Eastbourne (Mr. Bellotti) that whatever system we move to should not be based on the principle that everybody should contribute to the cost of local government. About 70 per cent. of defaulters are those who are supposed to pay 20 per cent., and it is nonsense to pretend that an increase in social benefits will be passed by the recipient to his local council. That has been proved not to be true, and we should stop pretending that it will be. We should acknowledge that, if people do not have enough money to contribute to local government, they should not be expected to do so. That principle applies to central Government taxation.
It is clear that there is to be a reduction of £140 which applies to the charge set by councils. On that there will be rebates and the benefits of the reduction scheme. The central question relates to the proportion that is to be raised locally. This scheme reduces that sum from about £12 billion to about £8 billion. That seems perfectly reasonable, because the last time that the rates were used, they raised about £8.7 billion after rebates and reliefs. That is about where it should be.
I do not understand the figures used by the hon. Member for Dagenham (Mr. Gould), who opened for the Opposition. He said that, when my right hon. Friend the Member for Henley (Mr. Heseltine) was last at the Department of the Environment, the proportion of the rate support grant fell to 35 per cent. That is not true--or is true only on the basis of a peculiar calculation. I have figures from the Library showing that, in 1986, the proportion was still 54 per cent. Despite what my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) may now claim, he was the man responsible for slaughtering the proportion of that grant and hence the poll tax mess we are in. It could not be said to have happened earlier, unless one works on the calculation used by my right hon. Friend the Member for Blaby (Mr. Lawson), which includes all local authority revenues, such as the housing revenue account. That is how he can say that the local proportion has gone down from 20 to 11 per cent., but one cannot then claim, as the hon. Member for Dagenham did, that it was 60-odd per cent. under Labour Governments. On the basis of that calculation, we brought the proportion steadily down to 54 per cent. Then, with the community charge, it fell significantly.
In the last financial year, the community charge raised 37 per cent. of local authority income. We have now reduced that by just over £4 billion. I believe passionately that that position should be maintained. To say that that will be the approximate contribution from now on should be the Government's first commitment in the new system, but I do not want the money to be poured out indiscriminately in the form of untargeted central grant. If a proportion of funding is to be transferred to the centre--which is what the Government are doing--it should be
| Next Section
| Home Page |