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I am in favour of consultation. It is an important matter of courtesy and good manners. I congratulate my right hon. Friend and the Government, as I think that they are going exactly the right way. However, if there is to be a high level of Government spending in support of local authorities, the Government must have greater control over the expenditure of local authorities, particularly in major services. That is what leads me to think that it is now necessary to review carefully the role of education which is run by local authorities at present. I say that not just because of the severe financial aspects of the problem but because of the totally unacceptable variation in standards between one part of the country and another. It is a disgrace that in certain parts of the country it is not possible for young people to get a good education because of the nature of their local education authority. For that reason, I wholly applaud what I understand to be the Government's policy of devolving responsibility upon the schools themselves. It is also necessary to revise and review the role of inspectors and to tighten up the curriculum. My right hon. Friends are already doing that. Far from today's debate being a matter of censure, it is an opportunity for me and other Conservative Members to applaud what is being done, the range of consultation taking place and the fact that it has now been recognised that support grant to local authorities has not been sufficiently high and is now being properly addressed. I wholly support the Government's policy, not only in this respect but right across the field, and I wish my right hon. Friend the Prime Minister and his colleagues every success.6.22 pm
Mr. Eric Illsley (Barnsley, Central) : I support the no confidence motion, and I should like to explain why it has been related solely to the poll tax. The Government labelled the community charge their flagship, so now that they are in such a mess over the poll tax, the Opposition have every right to table a motion of no confidence. I represent an area which has been capped under the poll tax legislation not once but twice. As I have said in previous debates, my local authority is not high-spending or profligate. It is a responsible local authority which faced immense difficulties in trying to implement budgets because the grant it received was insufficient to meet local needs.
The administration and implementation of the poll tax has been a complete disaster and billions of pounds have been wasted on collecting the poll tax and compiling a register which put the electoral register in jeopardy as people believed that the electoral register and the poll tax register were one and the same thing. There was also the cost of the shortfall in collection. I should point out that my local authority has already collected 96 or 97 per cent. of its poll tax, unlike some authorities that have been mentioned. The poll tax was based on two principles-- accountability and universality, in that everyone contributed something. Those principles have now disappeared. The idea of accountability was removed last year, when poll tax capping was introduced. No capped authority has been allowed to test its spending or its budget at the polls. In Barnsley the poll tax was set at £320. It was then capped for something like £270. Yet even with a poll tax of £320, one third of local authority seats were uncontested Labour
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victories at the May elections. There was no accountability but simply the Government's intention to cut local government expenditure by capping budgets.Time and again in the House, my hon. Friends and I have attacked the credibility of standard spending assessments upon which budgets were based. My hon. Friend the Member for Wentworth (Mr. Hardy) pointed out the difference between the local authority in Rotherham and Westminster council and the difference in the amount of money that a local authority is allowed to spend to provide a standard level of service. The SSAs have been a complete fiction. The points raised by Opposition Members about SSAs have never really been answered. Standard spending assessments bear no relation to the particular needs of an area and take no account of levels of unemployment, deprivation or anything else. They are based on out-of-date and irrelevant information. As I have pointed out previously, the SSAs for my area are based on the 1981 census information and are absolute rubbish.
This year the Government laid down percentages by which budgets could be increased to avoid capping. The figure for my local authority was 7 per cent. There was absolutely no accountability ; simply more management from the centre. As the right hon. Member for Blaby (Mr. Lawson) pointed out, if there is to be more centralisation why not simply abolish local government altogether and go one way or the other instead of hanging about in the middle?
The hon. Member for Horsham (Sir P. Hordern) mentioned the revenue support grant and its reduction from 60 to about 40 per cent. It is interesting that the revenue support grant this year has increased by 1.9 per cent. External finance has increased by something like 19 per cent. The burden is on business rates and poll tax and not on the revenue support grant from the Government.
The Prime Minister referred to profligate councils and high-spending authorities. Councils are simply not allowed to spend profligately, particularly those in my area which have been capped. On the subject of profligacy, perhaps someone should say something about Westminster council selling off cemeteries at 5p a time and the rest of that lunacy.
The second principle was that everyone should contribute. Even people without any income were required to contribute 20 per cent. That could never be fair. Even now, because of the £140 reduction, the people in Wandsworth will pay nothing for local goverment services, yet my authority's budget is capped yet again. We simply do not have the grant that we need to maintain our services. So what price the principle that everyone contributes if people under one authority will pay absolutely nothing this year?
The idea that everybody should pay is linked to the idea of joint and several bills. Under the rating system both members of a joint household would have been responsible for the bills. It was a fiction for the Government to believe that only one person in a household was responsible for paying the rates bill, while everyone else in the household over the age of 18 was allowed to vote for whatever council they chose. Obviously, other members of a household would contribute jointly to its management and there is nothing wrong with allowing the head of the household to be responsible.
As I have said, my local authority has been earmarked for capping for a second time, despite following to the
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letter the Department of the Environment's guidelines. It followed the guideline of a 7 per cent. budget increase. It also followed the guideline issued as the result of an announcement in December 1990 by the Minister for Public Transport that money would be available for the Sheffield light rapid railway transit system--supertram. Because of the removal of South Yorkshire county council, my authority, together with that of my hon. Friend the Member for Wentworth, have jointly to fund that project with Rotherham and Doncaster. On a visit to the area, the Minister for Public Transport said that the money would be available. Yet, because my authority took the Minister at his word and thought or hoped that £387,000 would be provided in respect of our contribution for the supertram, we were marked down for capping because the budget was £387,000 above the Department of the Environment's limits. My authority was misled by the Minister in December. The authority was led to believe that the money would be in addition to the budget, yet my authority now has to cut its provision for child care in order to fund the public transport system for another area.Mr. Key : I should be grateful if the hon. Gentleman would allow me to respond to his accusation that Ministers have misled him. That is not the case. That is a complicated problem. I have spoken to local authority leaders in the Dearne valley and corresponded with them, as has my right hon. Friend the Secretary of State. We are trying to get to the bottom of the problem and to be as helpful as we can.
Mr. Illsley : My authority met last week to take £387,000 out of the budget that had been put aside for child care because it has to fund the supertram. Unless someone says, "Okay, put that back in your budget," that is what will happen. I am grateful for the Under-Secretary's offer of help, but it should have been made a little sooner.
Mr. Allan McKay : We shall be placing on the Table the evidence that the Minister has just described. The letter from the Department of the Environment can be read two ways. The statement from the Department of Transport can be read only one way. The statement published in the local press from a speech by the Secretary of State for Transport can be read only one way. He said openly that costs will not fall upon the community charge payer but will be entirely tax-borne.
Mr. Illsley : It would be helpful if, in the near future, the Minister were to meet me and my hon. Friend the Member for Wentworth together with members of the authority to sort out the proposals.
Mr. Key : I acknowledge the contribution made to the important debate on the supertram by the hon. Member for Barnsley, West and Penistone (Mr. McKay). I shall pass on that request to my right hon. Friend the Secretary of State.
Mr. Illsley : I am grateful for that. Unless some action is taken about the problem facing my authority and Rotherham and Doncaster, the future of that transport
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system will be in jeopardy. My authority will not be willing to fund it by using money that would have been spent on other provisions.That is an example of the problems of capping brought about by the introduction of the poll tax. The Secretary of State said last year that there would be a parade of bleeding stumps when we informed him of the cuts that authorities had made. Already, the fire service and police provisions in my area are below Home Office recommended levels. This year the Secretary of State boasted about a newspaper produced by the National and Local Government Officers Association which refuted cuts that had taken place in local authorities around my area.
In my area, we have sacked teachers and closed a music teaching centre, and charges have been increased or introduced for all social services provision. The light rail transit system is now in jeopardy and the funding for the passenger transport authority has put in jeopardy other projects, one of which is the reorganisation of my local authority's town centre passenger interchange. Those are real cuts in service provision for the people in my area.
This is a halfway house--a bed-and-breakfast tax added to a property tax. The Secretary of State asked the Labour party to take part in the review of local government finance, presumably because he wanted to adopt some of the proposals in the fair rates document. The Government are between two stools --abolishing the poll tax and returning to the old rates.
Of course, there is the £140 reduction, but that will only be for the better-off. People on low incomes in receipt of community charge benefit will not qualify for the payment because it comes off the headline rate. They are the hardest hit, but they will receive no reduction as a result of the increase in VAT. If it is right for everybody to contribute to the poll tax, is it not also right that everybody should receive a rebate when they are allocated? Value added tax is a regressive tax and the increase in VAT will be detrimental to people on lower incomes.
What is to happen in future years? The poll tax is not going away. Legislation to introduce the new system will take time and people will have to face the fact that the poll tax is here for another year and perhaps a further year after that.
The Prime Minister said that people deserve consultation. I agree entirely. They deserve consultation through the ballot box, and the sooner the Government call an election, the better off we will all be.
6.37 pm
Mr. John Biffen (Shropshire, North) : It is always an experience to listen to the leader of the Liberal Democrats. He is such a persuasive exponent of the politics of certainty. His speech today was no exception. Of all subjects, the tangled issues of local government should inspire the most circumspection rather than the most easy-going certainty. I say that in the context of the House grappling with the situation where, as my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) observed, what is desired is the synchronised reform of the structure, powers and financing of local authorities. A synchronised reform would be the most logical and comprehensive, yet we know from the experience of post-war politics that that is a holy grail with very little likelihood of success.
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My right hon. and hon. Friends have been confronted with an attempt to fashion local government on a medium-term basis that will pay regard to structure, powers and finance, but not necessarily on a comprehensive basis. It is my view that, on any judgment, they have made a commendable start to that task, and I shall enthusiastically offer my support in the Lobby.I shall race through my speech under the exigencies of time. However, I should like to judge the proposal by six immediate criteria. First, there is the necessity of increasing central Government's finance of local authority activity. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) is no longer in the Chamber, but he was confronted with the fact that he had increased the local content of local authority financing. He looked rather shamefaced about the parentage, but those are the facts. I am much more brazen.
I went into office in 1979. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), who at that time was in charge of the Treasury team, consigned my right hon. Friend the Member for Blaby (Mr. Lawson) and myself to the job of securing a higher local authority contribution. I remember the experience well. Confronted with this request, my right hon. and learned Friend the Lord Carlisle of Bucklow, who was then Secretary of State for Education and Science, appealed to my heart, as, clearly, my judgment had been concreted over by Treasury officials. It was quite simple. My right hon. and learned Friend said, "Don't you know that people pay their taxes in sorrow but their rates in anger?" He was absolutely right. We have now lived with the consequences. We have placed upon the local content of local authority finance a burden that simply cannot be borne politically. The tangled events of the last couple of years have demonstrated that. Let there be no misapprehension : we experimented with the community charge because the rates could not bear politically what was demanded of them. That being the case, the value added tax decision was crucial. Everything else that I say is in the context of the financing of local authority spending. To my mind, this was the most important single judgment.
Secondly, it was right to preserve the uniform business rate as a Whitehall determinant in local authority finance, and not to expose it to local authority determination. That very important decision might be said to amount to nationalising the structure of local authority finance. I am certain that, if we are to protect business from high-spending local authorities, which would use business rates as a way out, it is quite right that this type of protection should be preferred. It would be nice to know that it was underwritten by the Opposition.
Thirdly, it is quite wise to be modest and evolutionary about the recasting of local authority responsibilities. Inevitably, authority will follow money. If this House is to use central taxation increasingly as a means of providing local authority services, the functions of local services will inevitably be recast. I welcome the decision in respect of further education. It is the beginning of a debate that will continue.
We must be quite undogmatic in our approach to the question of single-tier local authorities. I am glad to see the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) in his place. For once, the Liberals are aligning themselves with the more progressive House of Commons elements, whose Members sit on the Government side, in
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saying that that is an objective. We must have a rigorous system of capping. It is not possible for central Government simply to walk away from the total activities of local authorities. These will continue to represent a major sector of the economy, even if on an attenuated basis.The most crucial element in this debate is the local authority tax that is to be established. I take no strong view on this matter. I am sad to part company with my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) in accepting that property will be an element of that tax system. When I consider how property is taken into account in the overall system of taxation in this country, I cannot say that it is treated unfairly.
I do not start by resiling from the principle that there must be a property element, but I quite understand that, in terms of equity, there should be some adjustment to take account of occupancy. That will not be an easy task, and I guarantee that the outcome will not be popular. Unpopularity is inherent in the system. In respect of this matter, I do not travel with the politics of certainty ; I travel with the politics of nervous hope.
All of which I have said should be underpinned by a certain philosophy-- insistence that the United Kingdom is a unitary state, and that we do not see a situation in which powerful disaggregated elements can challenge the authority of Government. I do not want to raise the temperature unnecessarily, but I have to say that this principle will be even more important when there is a developing relationship between the institutions of the European Community and this country. In particular, the Commission will be looking for points of reference within this country that leap over national government and find other ways of fulfilling and extending Community influence and Community finance. We shall be no less good Europeans if we wish to maintain the structure of a unitary authority, and we have that clearly in mind as we proceed with the reforms that are now in hand.
I told my right hon. Friend the Member for Blaby that I would make a reference to his contribution to the Budget debate. That contribution was dramatic, and it certainly embellished the debate. I have shared office, including office in the Treasury, with my right hon. Friend, and I have warm recollections of those times. He was a good colleague, who has made a very powerful contribution to the fortunes of this Government and of the Conservative party. However, I should like to make a slightly dissenting observation about his speech this week.
In any political situation, I am the statutory vegetarian, whereas my right hon. Friend is carnivorous by temperament. It was in that sense--although it may have led to undue indigestion--that he approached the reforms that he had in mind. It is very easy to talk about the elimination of all local government. Would that mean all authority being attached to the money, or would some authority be subcontracted to be free of the money?
Mr. David Harris (St. Ives) : That is what the Liberals believe.
Mr. Biffen : My hon. Friend should not incite me. I am merely saying what the questions are. There is no point in strutting in here, making headline remarks, and thinking that people will not bother with the footnotes.
My right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) has referred to the financial implications of
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changes in value added tax. A change from zero rating to 5 per cent. would result in a charge on books and newspapers, talking books for the blind and the handicapped, wireless sets for the blind, fuel and power, construction, transport and, above all, food. Let us not think that a Chancellor can breeze into the House on a Tuesday afternoon with an imaginative Budget and produce these increases for starters. Government is not quite like that.I suggest that government should be government by explanation, government by trying patiently to guide, especially in this instance, when the Government have in mind a major switch in taxation policy. I am not saying that there should not be a switch. Indeed, the Liberal party, at one stage, enthusiastically endorsed the idea of a major switch towards extension of value added tax. This is a legitimate area for public debate, but it is not something that should simply be asserted from the Dispatch Box. That might be good for the Government, but it is thoroughly bad for the House of Commons. Consultation has been our tradition. Corporation tax, capital transfer tax and nearly all other major fiscal changes have been subjects of consultation. The speech of my right hon. Friend the Member for Blaby was immensely unfair in respect of my right hon. Friend the Prime Minister. However, as usually happens in no confidence debates, my right hon. Friend the Prime Minister has emerged in no particular need of friends or allies. We have had the debate. Inevitably, the Opposition will believe that their best bet for the next election is this relatively narrow issue. They are almost latter-day Disraelis--Disraeli having had such great faith in sanitation as a political issue. This is the ground on which the Opposition have chosen to mount their attack. We have watched the debate, and heard the argument. The Prime Minister will lead, and we shall proudly follow.
6.49 pm
Mr. Stuart Bell (Middlesbrough) : It is always a pleasure to follow the right hon. Member for Shropshire, North (Mr. Biffen) and to imagine him in Cabinet with the right hon. Members for Sutton Coldfield (Sir N. Fowler), for Cirencester and Tewkesbury (Mr. Ridley) and for Blaby (Mr. Lawson), and with the present Prime Minister. What a Cabinet that was. Even with hindsight they cannot get it right. The right hon. Member for Sutton Coldfield paid a great compliment to his right hon. Friend the Member for Blaby, and the right hon. Member for Shropshire, North made another attack on him. What must they have said to each other in Cabinet ? Can one imagine the harmony that reigned in all those years in office. ?
When the right hon. Member for Shropshire, North began his speech, he seemed to be saying, "Yes, local government finance is complicated and difficult and, yes, local government needs finance," but he was really telling the House that it is a mess. Who has created that mess? Who has been in government all these years? Who reduced central Government's contribution to local government finance from 61 to 38 per cent.? It was the Tory Government.
I was a member of Newcastle city council when the Government began all this. The education committee had to consider where to start making cuts. We began with
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buildings and moved on to school books. Over the years, we saw how things unravelled and how arithmetic, reading and writing were affected. A succession of Secretaries of State for Education and Science have tried to explain that away. The Tories are now talking about taking the education budget away from local government. They are saying that it is all the fault of local government.If central Government squeezed local authorities over education spending, how much more did they squeeze them on housing? The housing investment programmes were cut, and what happened? The number of homeless increased. When the Government then came along with their doctrine about selling council houses, we found that the councils were not allowed to spend the money that the sales generated and that they had to put it all on deposit, apart from only 20 per cent. That was what happened when the Government began to squeeze local government's money.
However, the Government have not only squeezed local government on money ; they have added to the burdens of local government. On 1 April the Environmental Protection Act 1990 will come into force. The provisions of the Children Act 1989 also have to be implemented. Who is to finance those new Acts of Parliament or the new duties that they impose? To implement even part of the Environmental Protection Act would cost £3 per head on top of the old poll tax figures. Implementing it fully would cost £12 per head. Who will finance that?
We have heard a lot from the Government about community care. They have said that care should take place in the community, not the national health service--what a fine concept. We have heard about how we should liberate hospital beds and look after the house-bound. All that is fine policy, but where are the resources? Where is the money? Will the Government find the money for that? Will they tell us today where that money will come from? No, they have no idea. They simply pass the responsibility to local government and, like Pontius Pilate, wash their hands of it. Former Cabinet Minister after former Cabinet Minister has attacked our motion of no confidence, but seek to wash their hands of all the rest.
Mr. Key : I hesitate to interrupt the hon. Gentleman's entertaining flow, but if his thesis is correct, can he explain why local government expenditure has increased by 25 per cent. in two years? He knows very well that the factors that he has mentioned, including the new legislation, are included every year in the standard spending assessment arithmetic.
Mr. Bell : The standard spending assessment was well dealt with by my hon. Friend the Member for Barnsley, Central (Mr. Illsley), who pointed out that the figures that are used go back to 1971--
Mr. Bell : My hon. Friend said 1971, but the year may well be 1981.
I remember the regression analysis that was used in 1977. All the figures were poured into a computer. It churned around the arithmetic and mathematics, and out came the standard spending assessment. Middlesbrough was given a standard spending assessment and we tried to comply with it, notwithstanding all the additional obligations that had been placed on our council. We are
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still short and will probably be faced with community charge-capping. The Government and the poll tax are confusion confounded. Not only do we not know whether there will be a poll tax after the review or whether the poll tax will be based upon rental or capital values, but we in Middlesbrough still do not know today whether we will be community charge-capped at the end of the month.Mr. Hardy : The Minister will have overlooked the fact that in the 1990-91 determination of the standard spending assessment, Yorkshire and Humberside region lost about £500 million in central support while an equivalent sum went to the south-east, the richest area in the land. I suspect that my hon. Friend's area was a net loser in that exercise--as well as Yorkshire and Humberside.
Mr. Bell : Not only are we a net loser in that exercise, but the people of Middlesbrough and my constituents wonder why they should pay more in VAT to subsidise the people of Wandsworth. Why should the people of Wandsworth not pay any poll tax and the people of Middlesbrough pay an extra 15 per cent. in VAT to subsidise them? Where is the accountability principle about which we have heard year after year when the cry of the right hon. Member for Cirencester and Tewkesbury was "Make your local council accountable"? I may have missed out the right hon. Gentleman in my litany of Cabinet Ministers sitting around the green baize table in Downing street all those years ago. But what has happened to accountability? It has completely disappeared.
When I asked the Chief Secretary to the Treasury about accountability in Wandsworth last week, he said that there was still accountability, but how can there be accountability if no money is being paid to the local treasury? What about all the services to which the right hon. Member for Shropshire, North referred, such as books that have to be translated into braille for the blind? Where is the accountability for services if no one is paying the poll tax? How can it be? The answer is that it cannot be. All that we get from the Government is the confusion and obfuscation that we have heard tonight.
One good thing that has come out of our debates in the past few days has been the reference to Pierre Mende s France, the French socialist leader. I never thought that he would be so popular among Tory Members, Cabinet Ministers and the like. The right hon. Member for Sutton Coldfield referred earlier today to the former Chancellor of the Exchequer, the right hon. Member for Blaby, and the phrase "To govern is to choose". He said that there had been a free vote on German re-armament in 1954. However, he did not tell the House that Pierre Mende s France was the Prime Minister of the time who extricated France from its involvement in Indo-China, which was the most important and significant event of the post-war years. I remember Pierre Mende s France for saying that people are not tools, and that they cannot be used as tools or disposed of as tools. The Conservative Government, however, have used people as tools for more years than we can remember and are indifferent to their plight. My hon. Friend the Member for Workington (Mr. Campbell-Savours) said that about £4 million has been spent sending out poll tax bills that will have to be torn up. That is using people as tools and being indifferent to them.
We all know that the House is living theatre. We come into the Chamber every day to see the play acting. Today,
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we saw a former Cabinet Minister raising points of order before the speech of my right hon. Friend the Leader of the Opposition. We saw flag-waving when the Prime Minister sat down. I kept looking at the monitor but it said "The Prime Minister". I had begun to wonder because I thought I was listening to a speech from a Leader of the Opposition.I thought that the right hon. Member for Huntingdon (Mr. Major) was getting some practice. He is obviously going to have a long time to practise in the future. It was knock-about stuff, but he said nothing that his right hon. Friend the Secretary of State for the Environment did not say the other day. I have read the Hansard report of the right hon. Gentleman's speech and know that the Prime Minister stood at the Dispatch Box today and almost quoted, word for word, the speech made the other day by his right hon. Friend. He did not answer any of the questions that were asked by my right hon. Friend the Leader of the Opposition, such as who in a household is to be legally liable for the poll tax bill and will the 20 per cent. rule still apply? We may know in due course whether the rental or capital values will be used. But it is not surprising that there is confusion in the country about whether the poll tax is to stay or to go, the status of the new tax and who will be responsible for it, because, having listened to the Prime Minister this afternoon, I suggest that he is really the Leader of the Opposition and should be referred to as such in the House.
I was reminded that Stanley Baldwin ran an entire election campaign on "Safety first". If the Prime Minister continues in his present vein, he will say, "Wait and see"--wait and see on the poll tax, capital values, rent values, implementation, legal liability and the 20 per cent. The waiting must stop soon. Then the voting will begin, and we will see the Prime Minister as the veritable Leader of the Opposition.
Several Hon. Members rose --
Madam Deputy Speaker : Order. I remind the House that hon. Members speaking between now and 9 o'clock should limit their speeches to 10 minutes.
7 pm
Mr. Derek Conway (Shrewsbury and Atcham) : It is always interesting and enjoyable to listen to the hon. Member for Middlesbrough (Mr. Bell), but I do not believe that his heart was in his speech. Those who listened to the Leader of the Opposition move the motion realised that we were listening to a void. The hon. Member for Middlesbrough has been a Member long enough and was in politics long enough before then to know that the electorate is not that gullible and that the Labour party will not be able to dance around the issue much longer. When my right hon. Friend the Secretary of State for the Environment announced last Thursday that Cabinet had decided in principle to embrace a property tax, I wished to have the opportunity to speak out and in due course to vote against that proposal. I therefore tendered my resignation. I should like to place on record my thanks to my hon. Friend the Minister of State, Welsh Office, who gave me the opportunity to serve as Parliamentary Private Secretary from 1988. He is a man of infinite patience and kindness, as is recognised by hon. Members on both sides of the House. If I had been able to garner some of his wisdom, perhaps I would not be in my present position.
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My experience as Parliamentary Private Secretary was interesting. At first, I found Welsh Members, particularly Labour Members, slightly intimidating, but I came to know them as a rather good crowd. I confess that I was a bit terrified by my first Welsh Grand Committee and the working over I was given by the hon. Member for Ogmore (Mr. Powell), whose bark turned out to be worse than his bite and who subsequently discovered that I, a Member representing an English seat, was required many times to keep the quorum in that Committee.Many of us have observed the procedures of the House which, rightly, give Privy Councillors priority, but I had not realised that it would be such an educative experience. Perhaps its purpose is to enable former Cabinet Ministers to snap at one another. Over the past few days, I have found that a less than edifying experience. It was regrettable. We cannot deny, and will not be able to fool the electorate, that we are in something of a mess on this issue. Many of those at senior level who have contributed to this debate must carry the blame. So, too, must those of us who tamely voted for them as they led us.
As the Local Government Finance Bill was moving through its 188 hours of debate in this place, several of us issued warnings. I remember sitting around a table in the office of the then Prime Minister, my right hon. Friend the Member for Finchley (Mrs. Thatcher), and arguing that we had to have a rates revaluation to make a community charge acceptable and that it was essential that we limited the base budgets of councils in the year of transition, or they would screw our backs to the wall, as ultimately they did. As my right hon. Friend the Member for North Shropshire (Mr. Biffen) knows, Shropshire left the rating system spending £140 million and now, under the community charge, spends £246 million. That is not the Government's policy ; it is the action of the Labour Liberal-supported controlling group of Shropshire county council. At meetings with Ministers, I argued constantly for single-tier councils. I do not believe that any of us who argued for that wanted the abolition of parish councils--far from it. Either the district system or the county system must go, and I should prefer the county tier to go. Whatever is left must be subject to rotating annual elections. My right hon. and hon. Friends cannot avoid the fact that we must abolish the community charge. When we introduced it, we were scared to go the whole hog, and we are now paying the price. During the past few days, several of my hon. Friends have urged me to be quiet and not to rock the boat. Sadly, many of our earlier warnings went unheeded. Members representing northern seats know the famous Geordie saying, "Catch me once, shame on you. Catch me twice, shame on me." I hope that some of us will have the courage not to be caught twice.
My right hon. Friend the Prime Minister, in his defence of consultation, is right to take that attitude and not be bounced quickly on this issue. Sadly, Cabinet endorsed the property tax. Regrettably, it may yet be called a "Heseltax" and haunt him. It will not work. Environment Ministers have put on record many words explaining why a property tax will not work. There is a proposal to calculate a percentage discount for occupancy. As no more
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money will come from central Government, we have yet to find out where the balance will come from for local government. Presumably, the jam will have to be spread even more thickly over existing property taxpayers.The House cannot escape the conclusion that local government is spending £66 billion this year. With only £7 billion of that raised locally, according to the Red Book, and an administration cost of £750 million to obtain that minor sum, is it worth the bother for the sake of 10 per cent.?
My right hon. Friend the Member for North Shropshire, in a typically powerful speech and in the entertaining way in which he always addresses the Chamber, rightly related pay to accountability. What is "accountability" at 10 per cent.? Is it worth having? Perhaps we should accept that in this country Parliament has democratic control. We live in a parliamentary democracy, and we are proving this to local government by rushing through in the past 24 hours and the next a Bill to change the way in which they operate. That is proof positive of the power of this House over local government. Yes, abolish the community charge, but raise the entire cost of local government through income tax, VAT and excise duties. Spread the burden and ease the pain. The no confidence motion will fail, because people know that the economy is on the right track. My right hon. Friend the Prime Minister is undoubtedly the best Prime Minister for which this country could wish. He pointed the way ahead in his speech on Friday, and I am sure that many of us will support his approach. But his suggestions are too good to risk. My right hon. Friend the Chancellor told the House in the Budget that the art was to pluck the goose without it hissing. I warn Ministers that if they do not grip the neck of local government finance once and for all, the goose will not only hiss but bite.
I still have no difficulty in voting for the Government. Although they are wrong about the property tax, this is a good and able Government. I suspect that their curse will be the property tax. Shrewsbury has a long Tory tradition. This year, on 29 June, we celebrate the 150th anniversary of Disraeli's election as Member of Parliament for the town in 1841. I accept that the standard of Member has declined somewhat--[ Hon. Members :-- "No."] My hon. Friends are too kind. Fortunately, the standard of its people has not declined. It is a decent place and the majority are good, hard-working folk. Those who know me best in the House know that I do not regard Shrewsbury as a ticket to the House of Commons. It is a town where my youngest son and daughter were born and where my family, home and closest friends are. This bond has caused me to conclude that, if the choice is between ambition for office and serving what I sincerely hold to be the best interests of Shrewsbury, I cannot and will not deny them.
7.9 pm
Mr. Dafydd Wigley (Caernarfon) : It is a pleasure to follow the hon. Member for Shrewsbury and Atcham (Mr. Conway), having watched him in the Welsh Grand Committee abiding by his oath of silence and suffering those long hours. I am sure that he values his freedom now.
I congratulate everyone who campaigned against the poll tax, often at considerable expense to themselves. Good riddance to it. This debate is a bit of a shambles and
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somewhat unreal. Local government finance is certainly in a shambles, but that is not altogether unwelcome, because that has been caused by the Government's attempt to disembowel the poll tax, which is to be welcomed heartily.I welcome the £140 reduction in most bills--I should like to see the bills for those on lower incomes disappear. I am glad that we now see the end of the poll tax. I have some difficulty in understanding why the Labour party has confined its no confidence motion to the poll tax. To some extent we are at a burial service because the poll tax and the problems it has caused to our constituents are finished. There is no question about that. Many more pressing issues, however, will come on to the agenda.
Mr. Terry Lewis (Worley) : Will the hon. Gentleman give way?
Mr. Wigley : I should like to, but time is pressing as we are bound by the 10-minute limit on speeches.
There are many more pressing items that will come onto the agenda in the coming months including housing, regional policy, the failure to implement the Disabled Persons (Services, Consultation and Representation) Act 1986, cuts in railway services, the astronomical water rates--a near relation of the poll tax--the disastrous high interest rates and the high level of unemployment. They are worthy subjects of a no confidence motion, but I shall confine my remarks to the motion before us as it is the only one that we have.
I accept that no one should have any confidence in a Government who introduces as vicious a tax as the poll tax. For that reason, I shall support the motion. It is worth noting that the present chaos has arisen from the axing of the poll tax--I welcome its demise. The lack of confidence in the present Government arises from the appalling 12-year- record of the Thatcher Government. The present Government are only just starting to emerge in their own right, but I suspect that they stand condemned by virtue of their complicity in previous policies, including the poll tax, which caused so much anguish in Wales and elsewhere. I doubt whether the present Government will be able to strike an independent profile this side of a general election. The sooner we have that election the better, because all parties will then have to spell out their detailed policies. Sadly, those details have not been revealed in today's debate.
I accept what the Secretary of State for the Environment said in December about the need to know the future functions and structures of local government in order to work out its future financing. Failure to do so has been a common mistake in the past and it is right that we should grasp that problem now.
In Wales all four parties support the idea of a unified, all-purpose local authority. Given that consensus I hope that we shall be able to move towards that aim rapidly. There is also a growing consensus on the need to have an elected democratic forum for Wales. It is interesting to note that the Conservative Members for Delyn (Mr. Raffan) and for Clwyd, North-West (Sir A. Meyer) have advocated that recently. The need for such a tier of democracy in Wales has been recognised.
I regret that the Labour party, in its paper on Wales, has advocated such a level of democracy only as part of local government. I am not willing to accept that proposal, as it implies the centralisation of local government, while we want to decentralise central Government. I suppose
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that we do not have to worry, because the Labour party has said that that would not happen in its first five years of government, whenever that may start.The principle that we should accept in terms of the structure of government is that laid down in the European context--subsidiarity. Decisions should be taken as close as possible to the communities that they affect. We should have an all-purpose tier of local authorities with the power to take all decisions--those decisions that could not be taken on a local level should go to the all-Wales tier, and then be passed to Westminster or Europe.
The Government talk about the need for answerability. The government of Wales is represented by the Welsh Office, which spends £5,000 million. The three Ministers at the Welsh Office are not directly answerable to the people of Wales, and that vacuum in the decision-making process must be addressed.
The poll tax was not introduced because of problems associated with local government in Wales. Successive Secretaries of State have acknowledged that the record of local government in Wales is not one of gross overspending. There has even been close co-operation between Conservative Secretaries of State and Labour-controlled authorities in Wales. There has been a willingness to reach solutions that are not doctrinaire.
The poll tax has been unfair to those on low incomes, disabled people, students and nurses. I informed the Welsh Office of one case--the Secretary of State for the Environment may also be aware of it--of a man with a disabled wife who earned £102 a week gross, £93 net. He lived seven miles from his job. There was no bus service and he had to have a car to get to work. That couple were charged the two full poll taxes. That man either had to do away with his car, and therefore give up his work, or pay his car licence and not the poll tax. That case was indefensible and it was wrong that the poll tax should hit people in such circumstances. The poll tax had to be abolished.
About four weeks ago, I went to the court in Caernarfon, which was a sad occasion. About 1,000 non-payment cases came before the court and only about 50 people turned up to defend themselves. We were aware of the difficult circumstances of many in the court that day. I am sad to note that the unified business rate has not been abandoned, as the problems associated with that must be addressed. My party wants a local income tax, and that was the policy we advocated to the Layfield commission in the 1970s. That tax could be collected through the Inland Revnue system. It could use the same personal allowances as the income tax and it could be pitched at a level of 4p in the pound. Side by side with that tax, businesses that are not incorporated would pay local income tax on their profits. There could also be a surcharge on corporation tax for local purposes for those businesses that are incorporated. The local income tax is used in many other European countries--predominantly in the Scandinavian countries. We could use such a tax. Who knows, we may yet have to reconsider it.
My party has advocated a structure of uniform authorities, but we also need democratic control of functions connected with health, transport and water. In Wales the water rates will become as hot a political issue as the poll tax once was. Water rates are now about £200 per household--perhaps occupied by one person. No
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rebate or help is offered. That is an iniquitious situation and the Government must address it. We must have a rebate system to help those faced with such bills.The Labour party's alternative to the poll tax has many problems. Unfortunately, those problems have not been spelt out in the detail that I require. It would also take time to introduce the Labour party's alternative. It is interesting to consider what is said in the Labour party document :
"The costly shambles of the poll tax provides a salutary reminder of the need to undertake the most thorough and exhaustive testing before introducing significant changes in a local taxation system. We would, in any event, wish to consult widely on any proposals. By contrast with the Tories, the advantage of the step-by-step approach which we propose is that it gives us adequate time after our return to government for consultation and for testing any new scheme before it is introduced."
Presumably we shall not get the full benefit of the Labour party system at once. One wonders how long it will take to get that system implemented.
I regret to say that the Labour party's performance on the poll tax has been appalling. I recall its lack of policy in the early days when the issue was considered in Standing Committee and the answers were not forthcoming. The performance of local Labour councils in Wales has also been appalling as they have rushed to implement the poll tax and to take people to court at the drop of a hat. Meryl Davies of the Rhondda was taken to court at 11 o'clock in the morning, and by 3 o'clock in the afternoon the bailiff was at her house. In another case in the Rhymney valley, a pregnant woman found the bailiffs landing at her door before she was given any attempt to explain her circumstances.
Yes, we have a lack of confidence in any Government who introduced a poll tax, but we also have a lack of confidence in the official Opposition who do not have any coherent alternative to it. 7.19 pm
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