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The Home Secretary, as one would expect, said what was fashionable at the time. He is therefore firmly on record against a tax that is based on property values. Last February he, too, criticised the principle of property taxes. He warned :

"If you increase the value of your home, it will be hit by the new tax. If you save and invest in your home for your family and your children, it will be taxed."

The Home Secretary will vote for a property tax tonight. Last year's convictions will not prevent him from giving wholehearted support to this year's policies. The Home Secretary is always the first boy to leave the burning deck. But the Prime Minister should do better.

One of the Prime Minister's problems is his habit of saying the first thing that comes into his head on Tuesday and Thursday afternoons. Early last week, he was categorical in his promise that all questions about the future of local government finance would be answered on Thursday.

It is now clear that the Secretary of State for the Environment, far from giving all the answers, had not even asked himself all the questions. Changes were made to his scheme, even to the interim scheme, during the days that followed.

The hapless Minister was sent on the television to explain that, since the councils had "stopped their computers"--a charmingly archaic way in which to describe these things--there no great inconvenience would be caused by the Government changing their mind once or twice more. Local authority accountants, on the other hand, took a different view. They described themselves on the same programme as "suicidal".

The latest adjustment raises the essential question about the number of beneficiaries we can expect from the new scheme--the one-off Conservative rescue provision for 1991-1992, which the Secretary of State concedes cannot be reproduced next year.

My first question to the Secretary of State is how many poll tax payers will have their bills reduced by £140 as a result of last week's announcement? The first impression--it was certainly the Government's fraudulent intention--was that every poll tax payer would benefit by £140. That is clearly not so. [Interruption.] The Minister of State is perfectly entitled to make his calculations. The computers have stopped, so he can make whatever changes he chooses. I ask the Secretary of State again how many beneficiaries will receive the maximum poll tax reduction. That was the question asked by my hon. Friend the Member for Newham, North-East earlier this afternoon. Figures have been touted about, insinuated in headlines and repeated time after time in speeches this afternoon. How many will benefit?

I make a confession to the Secretary of State. I shall be one of them. My polls tax bill for two of us was £300, compared to rates of rather more than £1,000. It is now to be reduced to a joint poll tax bill of barely £70. I regard that as wholly indefensible. I believe that millions of people in Britain who are better off under the poll tax and will benefit from what the Secretary of State proposed regard it as a shame of the worst sort that they should benefit when services for poorer people are being cut and the poll tax paid by poorer people is being increased.

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I ask the Secretary of State again how many people will receive the full £140. Of course, we know that everyone will pay the extra VAT. We know that people far worse off than I am will contribute to the VAT in order that my poll tax bill can be cut again. But how many people will receive the maximum benefit ?

On 23 November, the Prime Minister addressed that very subject on the BBC "Six O'clock News". He said :

"I want to make sure that when we make changes they don't just re- distribute the burden from one pocket to another ... That is not the way to proceed."

If the Prime Minister had done the House the courtesy of being here this evening, I would have offered him the chance to make clear his real feelings on the subject. Does he still believe that moving the burden from one pocket to another is not the way to proceed ? If so, how does he justify the switch from poll tax to VAT ? If not, when and why did he change his mind ? Neither of those questions is unimportant, for they show that we have a Prime Minister who cannot remain constant to an idea for more than a few weeks at a time. This afternoon the Prime Minister made no attmept to answer my right hon. Friend's question, so I address mine to the Secretary of State, not least because he and the right hon. Member for Chingford (Mr. Tebbit)-- [Interruption.] My right hon. Friend the Leader of the Opposition suggets that the Prime Minister should come forth and be recognised. Perhaps he should come forth and see whether he is recognised. He sits below the Chair so I shall continue to address my questions to the Secretary of State. I do so not least because, as the right hon. Member for Chingford announced last night with such malicious glee, the Secretary of State is the man who four months ago said that he had all the answers to the poll tax ready in his pocket.

I hope that, when the Secretary of State has concluded the part of his speech which will be more appropriate to the Oxford union 1950, he will answer four questions. After all, he cannot go on being the juvenile lead for ever.

My four questions are these. First, in the Secretary of State's new hybrid tax, how is the balance to be struck--that is to say, the proportion of payment--between the roof tax and the poll tax? Secondly, what is the balance that he hopes eventually to achieve between local and national finance and council services? Does he regard the balance between national and local finance as about right now, or does he wish to change it? Thirdly, does he intend too maintain a register of poll tax payers, or has he devised some other way of enforcing individual collection? Fourthly, will a tax be levied on every individual adult whatever their circumstances and incomes? I must warn the Secretary of State now that there is no way that we shall be satisfied simply by the answer that these are proper subjects for consultation. It is almost, but not quite, inconceivable that the Government have not already come to a view on those fundamental matters. If the Secretary of State tells us otherwise, both the House and the country will have to decide whether that answer is pure invention to get him through tonight or a genuine admission that the Government are still lost and bewildered. The Secretary of State must not delude himself into believing that the word "consultation" is a magic charm which prevents him from suffering any harm. Everybody is in favour of genuine consultation. What we are against is bogus consultation, which acts as no more than an excuse for indecision, and that is what we have.

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Naturally, the Secretary of State is himself part of the problem. He is the worst possible man to do the job. His forte is the quick headline, like the promise made on 16 November that public anxiety could be dealt with at a stroke by switching education spending to central Government. Whatever happened to that idea? The Secretary of State has another problem. He is regarded by half the Tory party as the assassin, and they will not allow him to deviate too far from the policies of the Prime Minister whose fall he precipitated. He was appointed to his job for what the Prime Minister thought were party political reasons, but these days a Tory Prime Minister cannot even organise a decent conspiracy.

Yesterday evening, my hon. Friend the Member for Copeland (Dr. Cunningham) reminded the House that Benjamin Disraeli described the Tory party as an organised hypocrisy. Under this Prime Minister, it has become an utterly disorganised hypocrisy. It cannot even deceive the public for long. Its shabby manoeuvres are immediately exposed and its willingness to put party before national interest recognised and denounced even by those newspapers that three months ago were its warmest supporters.

The government have no direction and no purpose. They are doomed and acting as if they know that they are doomed. It is the knowledge that a whole decade of Tory government is almost at an end that has made them the most dithering Administration this century. The words of Sir Winston Churchill must now haunt the Prime Minister. The right hon. Gentleman has decided only to be undecided, resolved only to be irresolute, adamant for drift, solid for fluidity, and all-powerful for impotence. It is time for him and for them to go.

9.28 pm

The Secretary of State for the Environment (Mr. Michael Heseltine) : The whole House will have recognised the style of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), because we read it time and again in Punch . He will be as familiar as we are with the circulation problems that have attended his continuous contributions to it.

The House is entitled to ask the right hon. Gentleman a question. We heard his views about our proposals, but it will not have escaped the attention of the House that he did not tell us anything of his views or what he advocates. I dare say that the right hon. Gentleman, with the characteristic gloss that he brings to the detail of policy, will not have read the Labour party's "Fair Rates". If he had, he would know that he was urging the House that we should go back to the rating system.

Mr. Barry Sheerman (Huddersfield) : What is wrong with fair rates?

Mr. Heseltine : That is a helpful question, and I shall give the House the answer which is, in fact, contained in what the right hon. Member for Sparkbrook said. He said :

"I would like to see us getting rid of the rates and putting something else in their place. If we could come out with a practical solution in the next four years nobody would be happier than me." The right hon. Gentleman mentioned four years, but those words were uttered 12 years ago, and what policy is he advocating tonight--a return to the rates. There is certainly no quick headline in any of that, but there is no substance in the proposals either.

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The House was not as full as I should like it to have been when the leader of the Liberal party gave us his views on the debate. I have never listened to a more sanctimonious speech in all the years that I have been here. The case that the right hon. Member for Yeovil (Mr. Ashdown) deployed was that the Labour and Conservative parties indulged in beastly party politics, while the Liberal party was above it. In the House, his party is not so much above it as irrelevant to it. For a Liberal leader to claim that his party's behaviour sets it apart from political infighting is one of the most preposterous statements that I have ever heard. Everyone knows that, when it comes to by-elections and local elections, there is no trick that the Liberal Democrats will not pull, no funny statistics that they will not use, no poll that they will not rig, no device that they will not contrive and no sharp practice in which they will not engage. I do not need to consult the Labour party on that--at least we can agree a consensus there.

The debate about local government did not begin in 1979. The real issues that we have to address in the debate began when the Labour party was in power. It began the process of trying to bring local government under some sort of control. It was a Labour Environment Secretary who said that the party was over. It was the right hon. Member for Bethnal Green and Stepney (Mr. Shore) who introduced to the House, admittedly at the behest of the International Monetary Fund, the biggest planned cut in local authority current expenditure that we have seen.

What is the totality? My right hon. Friend the Prime Minister asked the critical question : how would the Labour party constrain local government any more successfully were it to win a general election, than it succeeded in doing when it was last in power, particularly as it lost power because it ran from its own organised unions, which it could not resist?

Mr. Shore : As the right hon. Gentleman well knows, the phrase, "the party's over" did not come from my lips,but that does not matter. I willingly plead guilty to the charge that we reduced the rate support grant from 66 to 61 per cent. of local government expenditure--the level at which we held it for three years. The first thing that the right hon. Gentleman did when he stepped into the Department of the Environment was to cut it to 59 per cent., from which it has never ceased to be cut, until it reached 38 per cent., as he told me in a written answer today.

Mr. Heseltine : The right hon. Gentleman has made my point. In the last three years on average under the Labour Government, the rate support grant went down by 2 per cent. In my first year, it went down by another 2 per cent. That is precisely the point that I was making.

We understand that the Labour party's policy in the first year is to go back to the rates, and that it will then move on to another system of local government finance. In the course of his excellent speech this afternoon, my right hon. Friend the Prime Minister asked the simple question, "What will it cost?" The debate has been clearly conducted around the question of whether the Opposition would produce the figures. My right hon. Friend challenged them to put the figures in the Library. Five hours have gone by. We have checked the Library of the House of Commons and the figures are not there. Why are the figures not there ? We know that the Opposition have the figures because

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when my right hon. Friend asked whether anybody had seen the figures, the hon. Member for Edinburgh, Central (Mr. Darling) put up his hand. He has seen the figures. He should be so lucky. So we have another question for the Opposition, and this is all about whether people will play any part in the Opposition's calculations. Would a single person with an income just above the help afforded in Labour's extended rebate system pay the same as a family of wage-earning adults living next door ? If so, how conceivably could such a situation be justified ? We need an answer, because in 1989 the hon. Member for Sheffield, Brightside (Mr. Blunkett) was quoted in Tribune as saying that Labour would "get round the disparity between someone living alone living next door to three or four earners."

In addition, we now know that the Labour party intends to revalue every domestic property on the basis of four different factors--market value, rental value, rebuilding costs and repair and maintenance costs. It will do that every year. We have four factors and an annual revaluation. However, there is then a fifth tax. The Labour party would help single retired people living alone, so there would be a people tax as well--an old persons' register. What does it mean ? How will the Labour party help old people unless it knows where the old people are living ? Has the Leader of the Opposition got an answer to that question ? He says that in going back to the rates system, this time the Labour party will have a system of sensible rebates. Will the right hon. Gentleman tell us one thing ? How much will a system of sensible rebates cost ?

My hon. Friend the Member for Thanet, South (Mr. Aitken) made a most telling point. The Leader of the Opposition told us how much the system of sensible rebates would cost--nothing. That is what he said. Let all those elderly people who will be helped by the system of sensible rebates know exactly how much cash is coming their way--nothing.

So it is no wonder that the Labour party is not prepared to discuss its proposals--self-evidently not with us, but apparently not even in detail with the party. That is in sharp contrast to the claim that my right hon. Friend the Prime Minister rightly made today that we are conducting the most important and comprehensive review of local government this century.

I appreciate the generous tribute of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath). Our position is clear on this matter-- the community charge will go. It will be replaced by a new local tax. We have already established a better balance between national and local taxpayers. Our new local tax will reflect the number of people in the household and the value of the property in which they live. We are consulting fully and thoroughly about the structure, finance and management of local government.

I express gratitude to many of my right hon. and hon. Friends, including the right hon. Members for Southend, West (Mr. Channon), for Aylesbury (Sir T. Raison) and for Shropshire, North (Mr. Biffen), and my hon. Friend the Member for Pudsey (Sir G. Shaw), who said that we are absolutely right to consult thoroughly on this matter and at a pace which ensures the proper decisions.

If there is any doubt about the synthetic nature of the opposition that the Labour party has mounted it is that it

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is impossible to understand why we were kept here until 2.30 am to carry the necessary legislation when the Opposition did not divide the House on clause after clause. The fact is that the Labour party had gone home to bed.

If I described all that as the consequence of Labour policy options, I should mislead the House. There are no conclusions. The purpose of "Fair Rates" is to deceive the public about the chaotic state of Labour's thinking. During the past three and a half years, leading Labour spokesmen have given 65 different policy positions on local government finance.

As we have pointed out, the truth has never been better expressed--no one put it more clearly--than by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) when he cried in despair : "I'm saying to the NEC policy makers Hang on a minute, what's our policy on local government?' Putting it at its boldest, we haven't got a policy."

That is the actual truth. It was true then--in 1987--and it is true today.

The reality is not that no one has ever tried to design a policy for the Opposition. The hon. Member for Brightside certainly tried. In October 1987, the Financial Times reported that he had made an apparent spur-of-the -moment suggestion that fresh consideration be given to the possibility of a local income tax. Then, some Opposition Members wanted a property tax and some wanted a local income tax. There was only one way forward. In April 1988, the hon. Member for Copeland (Dr. Cunningham) spelled it out :

"We shall replace the poll tax with a property tax and a local income tax"- -

the smack of firm resolution. He continued :

"We have agreed these matters today."

Next, the Leader of the Opposition took a permanently personal grip of the situation. On 22 July, the right hon. Gentleman determined that the policy had to be "sophisticated". The hon. Member for Copeland quickly got the message. He began to back off from local income tax. Three days later, we read in Hansard that he said : "We will dedicate an element of income tax to local government." The hon. Member for Brightside had not been let into the secret at that stage, and said :

"There has been no change this afternoon."

Later, after two months of "sophisticating", nothing had changed. The right hon. Member for Islwyn was able to say in September : "What we are contemplating may involve a tax based on the value of a property supplemented by a small local income tax."

Enter the hon. Member for Dagenham (Mr. Gould), centre stage. [ Hon. Members :--"Where is he?"] At this point, the process assumes a real sophistication. On 10 November, the hon. Gentleman told us that Labour would look at

"a range of options--some of which will be single taxes and some of which won't . Nothing is set in concrete."

By then, the hon. Member for Brightside had caught up with what was going on. Of the two-tax policy, he said :

"It is politically dead. Personally, I was quite happy to bat on with it, but you must look reality in the face."

By that time, the hon. Member for Dagenham was driving ruthlessly on. On 18 January 1990, he was able to share the results with the House :

"We are making very good progress with the work we have undertaken to prepare our alternative We have every confidence that in the coming months we shall reach a

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conclusion that we shall be able to bring forward with confidence."--[ Official Report, 18 January 1990 ; Vol. 165, c. 438-39.]

Two months later, the hon. Gentleman was asked who would pay under Labour's system. He replied :

"That's the one thing we have yet to decide We will reach a decision very shortly."

That was a year ago today.

It was then that the hon. Member for Dagenham realised the dangers of revealing the truth. Early in April, he declared that Labour would not reveal the details of its policy until after winning power. Some people were embarrassed by that apparent coyness, as a result of which the new policy statement lasted two weeks. Then the hon. Member for Dagenham said that Labour would certainly give people "plenty of information in good time so that they will have some idea of what the relative size of their bill will be."

Then we marched on to July, when Labour published its "Fair Rates" document. There was not a fact in it, or a figure of any sort ; the only precision that it contained was a firm pledge to return to the rating system--the very system that the Leader of the Opposition had described as the most unjust of all taxes. We got rid of that system and, however unjust Labour Members may once have considered it, they are now determined to bring it back, with rebates which--in the indelible language of the right hon. Gentleman--will be so generous that they will cost nothing. But you get nothing for nothing. There we have it : a brief history. The Opposition have got nowhere, but they dare not admit it. They will not--cannot--come and talk to us, because they know that they will be flushed out and exposed. I do not want in any way to suggest that the Labour party does not believe in consultation. However, although we have asked Labour to consult- -all the other parties have consulted, and we have consulted their councillors up and down the country--it will not do so. That is not because Labour is against consultation in principle. The one clear statement that is worth recording can be found towards the tail end of "Fair Rates". This is what the Labour party says about consultation :

"The Labour Party intends to consult widely on the basis of the proposals set out in this paper. There is no reason why Labour should fall into the same trap as the Conservatives in announcing an immovable and predetermined policy irrespective of expert and political opinion or regardless of constructive observation. We seek to find a sensible and lasting solution which can gain the maximum consensus both inside and outside the local government arena." That is what they said until we asked the Labour party to do it. What rank hypocrisy.

Mr. Robert Sheldon (Ashton-under-Lyne) : I have been listening for a long time to the right hon. Gentleman's speech. A serious matter is before the House. As £4.5 billion of public money is to be spent, the right hon. Gentleman owes it to the House to explain how it will be spent.

Mr. Heseltine : The right hon. Gentleman knows precisely how it will be spent--on reducing the cost borne by local people. The levels, on average, will be lower than they paid in the last year of the rating system, because we intend to take £140 off the headline charge. If I am asked how many people will benefit, I can say that about 14 million people will benefit from the full £140 reduction. The truth is that the Opposition have been flushed out. They will not talk--

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Mr. Hattersley : Now that the right hon. Gentleman has attempted to answer a question, he has answered a question that I did not ask. He has also given a different answer from the one that he gave on Thursday. It is also a different answer from the one that the Leader of the House gave yesterday. Can I ask him a question that I did ask : how many beneficiaries will enjoy the £140 that he has trumpeted during the past week?

Mr. Heseltine : That is exactly the question that I did answer. When I answer the right hon. Gentleman's questions, he does not understand the answer that I give him.

The fact is that the Opposition have been flushed out-- [Interruption.]

Mr. Speaker : Order.

Mr. Heseltine : The Opposition will not consult because they dare not produce the facts behind their consultation. The party of "won't pay" has become the party of "won't say". It is not simply a question of the Opposition not being prepared to answer basic questions about the cost of their proposals. The issue that the Opposition must face up to is the level to which they have brought so many

Labour-controlled authorities.

At least let us be clear about this : the Opposition are not going to win this vote of confidence tonight. [Interruption.]

Mr. Speaker : Order. Applause is not the way that we show our approbation in the House.

Mr. Heseltine : But there is a consolation prize for the Labour party. It will win the vote of no confidence that was passed today in its Labour candidates in Lambeth. The House is entitled to the latest up-to-the -minute information. Today the Labour executive kicked out 13 of Labour's councillors in Lambeth. The Labour leader, Joan Twelves, is out. The mayor, George Huish, is out. The deputy leader, John Harrison, is out. The chief whip, Julian Lewis, is out. Greg Tucker, Mrs. Twelves's partner, is out. I leave it to my right hon. and hon. Friends to interpret that for themselves ; whatever he happens to be, he is out on his ear. As all those great luminaries of the Labour establishment get the chop, they have given a new political significance to the meaning of the Lambeth walk. [Interruption.] It is a long way to Tipperary and it is quite a long way to Sheffield as well.

Why did the Labour party stop at Lambeth? The truth is that it did not. The national anti-poll tax campaigner, Steve Nally, was heaved out as well. Let us be generous and say with one accord to the leader of the Labour party, "Well done, but why did it take you so long? Now what will you do about all the other councillors and Labour Members of Parliament who will not pay their poll tax? What will you do about the Labour party in the constituency of the right hon. Member for Sparkbrook, which was urging us to put a spanner in the works?" The Labour party is unfit to govern. The House has no confidence in the Labour party. It has no confidence in the leadership of that party that had so to narrow the terms of the censure motion that it became a one-issue debate. In the whole history of the Mother of Parliaments, never have we seen a motion of confidence so narrow because the Labour party was frightened to let its leader loose. He cannot be trusted, even by his own party, to cover all the national and international issues.

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We have no confidence in a party which, if we could have discussed the matters, we would have shown to be prepared to bargain away our nuclear defences. We have no confidence in a party that would capitulate to union aggression or that would put up the cost of local authority finances, put up taxes, put up borrowing, and put up inflation. We have no confidence in a party which tolerated the disgrace of Lambeth council and dozens of others. We have no confidence in a party whose councillors and Members of Parliament openly flaunt the breaking of the law.

If that is the alternative, thank heavens that the House can have confidence in Her Majesty's Government. The Prime Minister has achieved more in local government reorganisation since he became Prime Minister than the Labour party has designed throughout the decade that it has been in opposition.

We can be clear. We have a choice of Government. We have a national Conservative Government in charge, on top, leading Britain forward. We have a Labour choice in local government--wasteful, divisive and expensive. There is no contest at all. We shall make sure that the Opposition parties stay on the opposition Benches and we shall ensure that we drive them into opposition increasingly in local government as well.

This House has confidence in the Government, and I invite it to join the Government in the Lobby tonight.

Question put : --

The House divided : Ayes 238, Noes 358.

Division No. 106] [9.59 pm


Abbott, Ms Diane

Adams, Mrs Irene (Paisley, N.)

Allen, Graham

Alton, David

Anderson, Donald

Archer, Rt Hon Peter

Armstrong, Hilary

Ashdown, Rt Hon Paddy

Ashley, Rt Hon Jack

Ashton, Joe

Banks, Tony (Newham NW)

Barnes, Harry (Derbyshire NE)

Barron, Kevin

Battle, John

Beckett, Margaret

Beith, A. J.

Bell, Stuart

Bellotti, David

Benn, Rt Hon Tony

Bennett, A. F. (D'nt'n & R'dish)

Benton, Joseph

Bermingham, Gerald

Bidwell, Sydney

Blair, Tony

Blunkett, David

Boateng, Paul

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Brown, Gordon (D'mline E)

Brown, Nicholas (Newcastle E)

Brown, Ron (Edinburgh Leith)

Bruce, Malcolm (Gordon)

Buckley, George J.

Caborn, Richard

Callaghan, Jim

Campbell, Menzies (Fife NE)

Campbell, Ron (Blyth Valley)

Campbell-Savours, D. N.

Canavan, Dennis

Carlile, Alex (Mont'g)

Carr, Michael

Clark, Dr David (S Shields)

Clarke, Tom (Monklands W)

Clay, Bob

Clelland, David

Clwyd, Mrs Ann

Cohen, Harry

Cook, Frank (Stockton N)

Cook, Robin (Livingston)

Corbett, Robin

Corbyn, Jeremy

Cousins, Jim

Crowther, Stan

Cryer, Bob

Cummings, John

Cunliffe, Lawrence

Cunningham, Dr John

Dalyell, Tam

Darling, Alistair

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Davis, Terry (B'ham Hodge H'l)

Dewar, Donald

Dixon, Don

Doran, Frank

Douglas, Dick

Duffy, A. E. P.

Dunnachie, Jimmy

Dunwoody, Hon Mrs Gwyneth

Eadie, Alexander

Evans, John (St Helens N)

Ewing, Harry (Falkirk E)

Ewing, Mrs Margaret (Moray)

Fatchett, Derek

Faulds, Andrew

Fearn, Ronald

Field, Frank (Birkenhead)

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