| Previous Section | Home Page |
Column 923
structure. Does that mean that there could also be a rebate system in Wales to help the much-beleaguered Welsh water rate payers?Mr. Hunt : Nothing in the consultation paper deals with the water rates. On the hon. Gentleman's first point, we have a generous rebate system under the community charge. As he knows, under that rebate system, those who have to meet the 20 per cent. payment are allowed far more in income support than the amount that they actually have to pay. That is reflected in the latest figures for Wales, which show that not 90 per cent. --the figure used by the hon. Member for Alyn and Deeside in his calculations--but 96 per cent. of the community charge has been collected and that 98 per cent. of what local authorites expected to receive has been collected.
Mr. Ray Powell (Ogmore) : We all know that the reason we are discussing a new proposal to replace the poll tax is the result of the Ribble Valley by-election. I do not want to go on for long, but a great deal should be said and many questions should be put to the Secretary of State about his statement today. Does he accept that the best way of consulting--I have listened to him mention the word "consultation" 20 times since he began his statement--is probably the by-election that will take place in Monmouth? If a Labour Member of Parliament is elected there, will the Secretary of State scrap the proposal that he has offered us today?
Mr. Hunt : The hon. Gentleman has his own views on why the proposals have been made. I believe that they represent a fair and equitable way to proceed. On consultation, I ask again why the Labour party has decided to throw a cloak over its own proposals and refused even to discuss them with me. Plaid Cymru, the Liberal Democrats, my colleagues in the Conservative party and the local authority associations have come to consult me. The only people who were absent from the consultations were the shadow Secretary of State and his colleagues. I repeat that my door is open and I am willing to consider and consult with the hon. Gentleman, as and when he is ready at last to come in and see me.
The hon. Member for Ogmore (Mr. Powell) should study the figures for Ogwr. If he does so, he will see that our proposal is a good deal for not only the people of Ogwr but the people of Monmouth.
Mr. Alan Williams (Swansea, West) : Does the Secretary of State realise that he has put on the most brazen performance today? He came to that Dispatch Box over the dead body of his sacred principle that everyone must pay. It is the most humiliating about-turn that I have ever seen from a Secretary of State for Wales. Does he accept that it is particularly worrying that he has said with pride that we are to have no commission to give independent advice in Wales? Instead, a man of past evangelical single -mindedness will impose a system by diktat.
Mr. Hunt : I do not think that the right hon. Gentleman listened. If he had done so and if he had also listened to the voices of the district councils in Wales, including those being raised in his local council election campaigns, he would realise that all parties alike would like to see us resolve the matter within Wales. Why does the right hon. Gentleman want a commission? Who does the right hon. Gentleman think could sit on some great independent
Column 924
commission to tell us in Wales how to conduct our affairs? As far as I am concerned, we can do that in Wales with no help from a commission.Mr. Geraint Howells (Ceredigion and Pembroke, North) : I am sure that the Secretary of State is aware that thousands of university students live in my constituency. Can he clarify the position of four students sharing the same rented house?
Mr. Hunt : They will all be covered by the personal discount. Unless there are two adults in the household, the students will get the maximum personal discount. I refer the hon. Gentleman to the consultation paper, which sets out the position clearly.
Mr. Win Griffiths (Bridgend) : Does the Secretary of State regret not consulting widely about the introduction of the poll tax? Who does he believe was more correct a year ago in the Ogwr borough council chamber--he referred to that council earlier--was it a leading Labour councillor, Dick Power, who said of the poll tax : "This is ill thought out and a nightmare to administer"? Or was it the leader of the Conservative group on Ogwr borough council, Councillor David Unwin, who said :
"Next year, when we are deciding the poll tax for 1991-92, we will be wondering what all the fuss was about."
What does the Secretary of State think the former Prime Minister would have thought of that?
Mr. Hunt : I do not know what the hon. Gentleman is trying to do ; does he want to go back and rehearse past battles? Ogwr will get a very good deal out of the proposals. Whereas the rates paid in Ogwr in 1989-90 were £332, the average bill per household in 1991-92 under the proposed system would be £108. I work very closely with David Unwin, and I look forward to his joining us in the House after the next general election.
Mr. Gareth Wardell (Gower) : Since the community charge was introduced after hon. Members spent a great deal of time in Standing Committee considering the legislation, and since not one amendment was accepted by the Government, will the Secretary of State now put forward in a consultation paper to the Cabinet the proposal that the work that we do in Standing Committee is reformed to ensure that the Government do not remain intransigent to every good amendment?
Mr. Hunt : What I will rehearse again to the House is the fact that, whenever we discuss local government finance, we all should reflect that the actual level of every local bill depends on the spending plans of every local authority. That is true under any system. The clear message for everyone in Wales on 2 May is that, if they have Conservative councils, they cost them less and they get better services.
Mr. Alan W. Williams (Carmarthen) : On banding, will the Secretary of State confirm that people in the most expensive houses will have to pay only two and a half times what people in ordinary houses will pay? There is a much greater disparity in house prices, with the largest houses being 10 times as valuable as smaller ones. Would not a linear relationship between liability and house values be fairer? Is not the purpose of banding to protect people in very large houses and to protect the rich?
Mr. Hunt : No. When the hon. Gentleman has an opportunity to look at the documents which I have placed
Column 925
in the Library, he will see that the vast majority of properties in Wales fall into the middle and lower bands ; 5 per cent. of all properties in Wales fall into band G, which covers properties valued at over 200 per cent. of the average property. Those householders will pay two and a half times as much as those in lower bands. I believe that that is an adequate reflection of the fairness of the new system.Mr. Peter Hain (Neath) : Does not the Secretary of State agree that the logical flaw in his proposals for the reorganisation of local government is the absence of any strategic authority for the whole of Wales? Will he stop dithering on the subject and agree to set up an elected assembly for Wales here and now?
Mr. Hunt : Despite the hon. Gentleman's attempt to move from the Prime Minister to myself the "dithering" appellation, which failed as much with the Prime Minister as it will with me, I am not persuaded by the case that has been put to me on an assembly. [Interruption.] Yes, I have said this before and I will say it again and again and again. I still await an adequate explanation of how the work of such an assembly could sensibly interact with that of the Secretary of State. There was a noticeable lack of interest in the idea shown by the local authority associations that I met recently. District councils were very fully represented and many speakers put forward the same view as one from west Wales, who said that he did not think that we should even begin to think about setting up an assembly until we had resolved the whole question of the structure of local government.
Mr. Paul Flynn (Newport, West) : Does the Secretary of State recall that I have written to him and asked him oral and written questions on the loony feature of the poll tax as it is administered in Newport? What will he say to the lady from Bassaleg and Rhiwderin who last night in The Argus asked why she should be paying £50 more in poll tax than people are paying a few yards away in Wentlooge? Is it not likely that the crazy system of the charge reduction scheme will be repeated in the new poll tax, which will be equally irrational, absurd and unjust?
Mr. Hunt : I do not know whether the hon. Gentleman was in the House when the shadow Secretary of State for Wales asked me a question, and also when questions were asked earlier by the shadow Secretary of State for the Environment. They both conceded that there was now an end to the poll tax. For the hon. Gentleman to continue to perpetuate this nonsense that the proposal is still the poll tax is an absurdity.
Column 926
As to Newport, the hon. Gentleman will know that the community charge reduction scheme was based on the average rates paid in a community. That is the basis on which the calculation is made ; it is very simple and easy to understand. In Newport, the average rates paid in 1989-90 were £381 ; in 1991-92 the average council tax per household will be £199. The people of Newport will be able to see how much they will benefit through the action taken by the Government both in resources and under the new system.Mr. Alex Carlile (Montgomery) : Will the Secretary of State remember that many farmhouses in Wales, for historical reasons which no longer apply, are substantial buildings, much larger in proportion than the income of those who occupy them and work from them? Will he advise the Inland Revenue of that to ensure that, when the district valuer has to band farmhouses, farmers do not find their homes put in an unfairly high band?
Mr. Hunt : Yes, I hope that hon. Members have understood that the proposal that I have brought forward looks at Wales as a country in itself. There is no transposition to Wales of values in England. We will adjudicate on our own values through the help of the Inland Revenue valuation office. That is clear.
Mr. Paul Murphy (Torfaen) : Since the Secretary of State, more than any other member of the Cabinet, personally imposed the poll tax upon an unwilling Wales, since he personally presided over the squandering of over £100 million on administering the tax in Wales, and since, in trying to get out of the mess, he has plunged Welsh councils into financial and administrative chaos, how can he in all honesty remain in his job?
Mr. Hunt : It is quite disgraceful of the hon. Gentleman to say that his colleagues and my colleagues in local government have moved into administrative chaos. I have met the local authority associations many times. The one thing that I have said to them consistently and with great pride is that I believe that the way in which they dealt with the community charge system was an example to every other local authority in the United Kingdom. The way in which they have collected the community charge is an example to everybody else in the United Kingdom--viz. the fact that they have been able to collect 98 per cent. of what they calculated they would raise through the community charge system.
I take as much pleasure in abolishing the poll tax or community charge as I did in abolishing the unjust domestic rating system to which the hon. Gentleman's party plans to return Wales after the next election, if it were to come to office.
Column 927
Local Government Review (Scotland)
5.7 pm
The Secretary of State for Scotland (Mr. Ian Lang) : With permission, Mr. Speaker, I should like to make a statement about the application in Scotland of the Government's proposals for the new council tax.
The consultation paper that the Government are publishing today describes proposals for Great Britain as a whole, and the new council tax will operate in Scotland in the same way as has been described for England and for Wales. I set as objectives in my statement of 21 March the requirement that the new tax should be easy to administer, that it should spread the burden as widely as possible, and that it should enable councils to remain accountable to their electors. I also told the House that the tax would have elements based both on the value of each house and on the number of people living there. All these objectives are achieved in the new council tax.
As elsewhere, for the purposes of assessing the property element in the new council tax, domestic properties in Scotland will be divided into seven bands centred on the value of the average Scottish domestic property. Each household will get a single bill. The tax will assume a two-person household, with a 25 per cent. discount for single households and 50 per cent. discounts for unoccupied properties. About 3.5 million adults in Scotland would therefore be taken into account ; that is about 90 per cent. of the total. The discount, rebate and transitional arrangements will also be the same as in England and Wales.
I assured the House, in my earlier statement, that the new tax would not suffer from the defects of the old domestic rating system : that disproportionate burdens would not be placed on a small minority of households and that there would not be the unreasonable fluctuations that we had following revaluations. Those objectives are also achieved by the proposals that we have published today. I am today placing in the Vote Office estimates of likely tax levels for single and two-adult households in each local authority area in Scotland in each of the proposed seven property bands. The majority of Scottish households are in the lowest three bands, where the average bill for a two-person household is £380 or less, and £280 for a one-person household. The range of bills depends on local authority spending decisions, but at this year's spending levels, bills for two-adult households would range from £260 to £730 throughout Scotland--the average being £420. However, if local authorities spent at the level of grant-aided expenditure--the basis for grant distribution--the bills would be much lower.
Two proposals in the consultation paper are specific to Scotland. I undertook in my earlier statement to ensure that the now reduced burden that local taxpayers will face is not increased, once again, to unacceptable levels by local authorities' spending decisions. I therefore propose to bring my capping powers into line with the powers of the Secretaries of State for the Environment and for Wales in order to achieve this. I also propose, as a consequence of the ending of the community charge, to introduce new arrangements for the payment of water and sewerage charges in Scotland. The proposed new system is the subject of a separate consultation paper, which I am also publishing today.
Column 928
As I said in my statement of 21 March, I retain the right to vary details of the new tax slightly in Scotland, to take account of distinctive Scottish circumstances and to ensure consistency with the rest of Great Britain. At present, I see no need to exercise that right, given the satisfactory formula that we have now achieved for the new tax.The consultation paper confirms that there will be separate consultation about the structure of local government in Scotland. I intend to publish two consultation papers on this subject, the first of which will appear in a few weeks' time and will deal with the broad principles that should underlie a reform and a possible move to a new single-tier structure.
I am confident that the proposals that we are announcing today represent a major advance in the way in which we fund local government in Scotland. They have my strong support and I believe that they will be well received in Scotland. I look forward to wide consultation on them, and I commend them to the House.
Mr. Donald Dewar (Glasgow, Garscadden) : Seldom can a Minister have made a more embarrassing appearance at the Dispatch Box. The right hon. Gentleman has had to concede that, on the essentials, the Labour party has been right all along. He is here to bury the poll tax which he was once so determined to praise as a remarkable success story. The Secretary of State and the hon. Members for Eastwood (Mr. Stewart) and for Stirling (Mr. Forsyth) have been scathing in their denunciation of any form of property- based tax. Do they really believe that they carry credibility if they now argue the merits of exactly such a system? What explanation can the Secretary of State offer to hide the plain fact that the policy that he now advocates is demonstrably humbug and hyprocrisy? It is sad that, having accepted the general principle, Ministers have managed to get so wrong the practicalities dictated by logic and the Labour party.
I welcome the exemption from the present 20 per cent. rule for those on income support. It would be monstrous if those on subsistence incomes faced cuts to compensate for the increases allegedly to meet poll tax payments, as suggested in the consultation document. The consultation document also suggests that students, student nurses and those on youth training schemes will be entitled to personal discounts. At present, students pay 20 per cent. What will they pay under the new system? How many households in Scotland, and what percentage of the total households, will qualify for 100 per cent. rebates? Does not the Secretary of State recognise that Scotland expects the 20 per cent. rule to go now? If it will be wrong in 1993, when the new system will be introduced, it is wrong now. A key objective of the Labour party has been to help people who were struggling to meet local tax bills. The 25 per cent. rebate system is a gesture that does not effectively target those in greatest need. How will applications for the 25 per cent. personal discount be checked? Will the Secretary of State guarantee that, whatever emerges from the muddled consultation document, the electoral register will not be involved? Otherwise, there will be a clear incentive for many people to opt out of the democratic process.
It is also clear that many of those who will benefit from that 25 per cent. discount are unlikely recipients of such help. Some will be well off, some young single people in employment and some single people living alone, but by no stretch of the imagination in financial difficulty. It is not a
Column 929
targeted benefit but a clumsy device unrelated to the ability to pay. Help must be given, but surely it would be better to concentrate on a targeted scheme or an effective rebate system in which all the money available would be concentrated.Why should I be offered a 25 per cent. reduction when so many of my constituents have been left in poverty? Is that a realistic and effective use of scarce resources? Can the Minister confirm that the cost of this 25 per cent. discount or rebate--perhaps he could give the figure--is not being met by central Government but will be paid for by higher contributions from other households?
Is it not the case that the system has been rigged to protect the better off living in top-range properties? Is not the key the Secretary of State for the Environment's threat that the amount payable will vary
"only within a limited range"?
Are not those weasel words--a dishonest way of saying that those in modest houses will subsidise those who live in top-range properties? Will those proposals apply in Scotland and, if so, can it be right that the most expensive property in Newtown Mearns or Morningside pays, at the most, only two and a half times the most battered council house in Easterhouse or Pilton?
Will not the seven-tier banding system be cumbersome and complex and seen by many as rough justice? The Secretary of State has unveiled figures for what average bills would have been if his scheme had been in place this year. Clearly, to do that he would have required a valuation base. Can he tell the House what that was, whether it was based on capital values and who supplied it? There is a rumour, which I find it difficult to believe in terms of its ingratitude, that the assessors' departments of local authorities, which have been martyred by their attempts to make an unworkable poll tax work, will now lose responsibility for valuation under the new system, and that, in Scotland, it is to be handed over to the Inland Revenue. Why? Is that a tribute to the tremendous job done by the Inland Revenue in keeping the valuation base in England and Wales up to date in recent years?
Is it not totally unacceptable that the system cannot be in place before 1993 at the earliest? If the Secretary of State started with the present valuation roll now, with drive and initiative, he could end the misery of the poll tax within a much shorter time scale than he sets out. Is it not essential that he does so? If the poll tax limps on for two full years it will destroy confidence and leave local government with appalling problems of collection. Does he not see that the faults that he is building into this Tory tax will hit services and, in a blatant attempt to placate those at the opposite end of the income scale, those, who are often the most vulnerable, who rely on those services?
If the new system means moving to the English system of standard spending assessments and fierce cutting powers that leave the Secretary of State as a virtual dictator, it will be no service to local democracy. The Secretary of State boasted that he would have great powers of discretion over the Scottish system. Is it all to boil down to restrictions imported from the Department of the Environment, a power to vary the details slightly, and a promise that, in any event, the powers will not be used, at least in the immediate future?
Column 930
Can the Secretary of State define the powers that he has achieved and the battles that he has won in Cabinet? His answer to that question should not greatly elongate his reply. He must know that his folly and that of his Government has cost Scotland dear. We have suffered years of chaos, extravagance and destructive waste. His blind loyalty to a system that he now concedes is fatally flawed has damaged local democracy and divided communities in bitterness. After a decade, the Government are back where they started. Those who are responsible still enjoy office and power, but this shameful story of malice and indecision will not be forgotten. The errors and miscalculations behind today's insincere charade will not be forgiven.Mr. Lang : The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked many questions and welcomed certain aspects of our proposals. He seems to be uncertain whether to welcome the scheme because he thinks that it is the same as rates, or to oppose it because he thinks that it is not. Let me assure him that the scheme is not the same as rates. The electorate will have a clear choice between our new council tax and Labour's "back to the rates" policy at the next election. If rates in Glasgow, and probably in the hon. Gentleman's constituency, had been retained, the average rate for a £75,000 house would be about £1,100. Our council tax would produce about £490. The hon. Gentleman asked what students will pay. Students will be eligible for a discount. A student will be likely to pay the council tax only if he is a householder and owned a property. He will then be liable to pay for the property element.
The hon. Gentleman asked me who will qualify for rebates. The consultation paper indicates that those on income support--students, student nurses, apprentices and YT trainees--will qualify. We are, of course, consulting on the rebate scheme.
The checking of applications for discounts will be a matter for local authorities to decide on. I see no need for the electoral register to be involved in the process. The hon. Gentleman asked me whether discounts will be funded from within the local government system: yes, indeed they will. All our calculations take account of the likely number of discounts that will arise.
The hon. Gentleman referred to top-rate properties and suggested that our proposed banded arrangements will introduce protection for them. Yes, indeed they will. That will be one of the important differences between our proposals and the old domestic rating system. Under the old system, higher- valued property bore a grossly unfair proportion of the burden of local government expenditure. I believe that it is right to have a system in which the range will vary no more than two and a half times between the top band and the bottom band, bearing in mind especially that the system will contribute about 11 per cent. of the total cost of local government spending in Scotland, the rest coming from business rates and a central Government through income tax, value added tax, and other such taxes.
The hon. Gentleman has suggested that the seven-tier banding system might be unwieldly and a form of rough justice. The very fact that there will be seven bands shows the range within which different types of property and
Column 931
different values of property can be accommodated. It will lead to a smooth and progressive relationship with the liability of residents to pay within the bands. Valuation will be supervised by the Inland Revenue's valuation office. Private sector valuers will be used to achieve a valuation base and to locate individual properties within the bands. We are still considering the possible role of Scottish assessors in the system. If the hon. Gentleman chooses to consult us, we shall be interested to hear any suggestions that he has to offer. We propose to introduce the new tax in 1993. I hope that the Opposition will give us as fair a wind as they can to ensure that we keep to that objective.I have the power to vary any arrangement in Scotland so as to meet any difficulties that could arise for payers in Scotland as a result of the different nature of the Scottish domestic property base and the different levels of spending, and of central Government funding. I do not believe that it will be necessary to make use of that power because of the formula that we have achieved, but it remains in place.
When I reflect on the hon. Gentleman's peroration I reflect also on what the Leader of the Opposition said about domestic rates, which he described as the
"most unjust of all taxes."
The right hon. Gentleman was right, and I am surprised that he is prepared to lead a party that wants to return to domestic rates. Several Hon. Members rose--
Mr. Speaker : Order. May I repeat to the House what I said previously? The House knows that we are discussing a consultation document. There will be plenty of opportunities between now and June to discuss it further. As there are 18 groups of amendments to the Ports Bill, in which there is a great deal of interest, and a ten-minute Bill, I shall allow questions on the statement to continue until 5.55 pm. I hope that during that time I shall be able to call all those who wish to question the Secretary of State for Scotland. That should be possible if they ask only single questions. We shall start with Sir Hector Monro.
Sir Hector Monro (Dumfries) : Does my right hon. Friend agree that, coupled with the current reduction of £140 in the community charge and his insistence on keeping down local government expenditure, the new scheme will be widely welcomed in Scotland? Will he say a little more about standard charges and any other anomalies that he has had to remove from the current community charge with the welcome changes that we have following the abolition of that and of the old rating system?
Mr. Lang : I thank my hon. Friend for the welcome that he has given to our proposals. He might like to know that the average bill for the two- person household in Annandale, Eskdale and Nithsdale would be about £290 under our proposals as we are illustrating them today. My hon. Friend is right to draw attention to the reduction introduced by my right hon. Friend the Chancellor of the Exchequer by which a switch of emphasis took place between local government and central Government, thus reducing the overall level of moneys required to be raised at local level.
My hon. Friend will know that the standard community charge was considerably modified over the past two or three years to remove some of the worst of the
Column 932
anomalies. I believe that the system is much more stable now. To a large extent, the sort of arrangements that exist for the standard charge will carry over to the new arrangement.Mr. Malcolm Bruce (Gordon) : Is it not extraordinary that, after the debacle of the past two years--the abolition of rates and the introduction of the poll tax--both the Labour and Conservative parties are now united in their commitment to bring back the rates with added confusions of their own? Surely it is extraordinary that the Secretary of State should be remitting the matter to the Inland Revenue. As it is qualified for tax assessment, would not it be more appropriate to ask it to assess for local income tax rather than property valuation, for which it is not qualified? Is it not a fact that capping will become a feature of the scheme, which makes accountability--the original claim of the Government--a mockery? For the next two years we shall continue to have the shambles of the poll tax, only worse.
Mr. Lang : Every hon. Member should reflect on the fact that we are putting a much more substantial proportion of resources into local government from central Government. It is important to ensure that that does not leak away in the form of higher spending by local authorities but goes to the benefit of local residents. It is important that we have an adequate capping mechanism.
The hon. Gentleman seemed to suggest that the proposals that we are now putting before the House are the same as rates. He could not be more wrong. Rates on a £50,000 house in his constituency would have risen to £540, compared with £250 under the council tax. A personal element is provided for within the council tax, and there is a banding of properties that affords a protection that the old rating system never did.
Sir Nicholas Fairbairn (Perth and Kinross) : I should declare an interest as chairman of Historic Scotland. May I ask my right hon. Friend to bear in mind--I think that it is a matter that will be borne in mind by Members of all parties--the fact that the value of a house is not a sign of people's ability to pay and that the fragility of the heritage of Scotland, of which I am privileged to be in charge, is an extremely subtle matter ? If buildings that require normal duties of upkeep as part of the heritage of Scotland are to be burdened with a tax that has nothing to do with their upkeep, my right hon. Friend must be careful to ensure that the Government, in giving a grant for their upkeep, do not destroy them by the tax that is being introduced.
Mr. Lang : My hon. and learned Friend makes an important point. He is right to draw attention to the important advantages that will be derived by the owners of Scotland's historic buildings. It was precisely such buildings that bore an undue proportion of the domestic rating burden and a lack of incentive to improve and maintain. Now, because the burden will be more evenly and equitably spread, they will be protected from such burdens, and from the depredations of high-spending local authorities. That will lead to a continuing improvement in the quality of the fabric of Scotland's built heritage.
Mr. Robert Hughes (Aberdeen, North) : The Secretary of State, after turning somersaults on a full stomach, having eaten a bellyful of his own words, is understandably queasy and cannot focus on the main issues. Is he aware that the shambles that he has now produced means
Column 933
that the poll tax will exist for another two years, that councils will be in great difficulty, that low-paid people will still not have the full rebates to which they are entitled and that we need swift action to move much faster than the right hon. Gentleman currently proposes, rather than wait for another two years? Will he think again, withdraw this nonsensical review and introduce proposals for a rapid change which, with the co-operation of the Opposition, he would get through?Mr. Lang : We are moving as quickly as is sensible, practical and prudent, and I believe that the new system, when in place, will be found to work smoothly and effectively and be simpler and fairer than what has gone before. In the meantime, the fact that we have reduced the burden that falls on local government by a substantial amount as a result of the switch from local to central taxation will considerably reduce the difficulties and anxieties that people will face. In addition, as I said, I am taking powers to strengthen my ability to cap local authorities that overspend. If the need arises, I shall use such powers to protect residents from high spending.
Mr. Bill Walker (Tayside, North) : Will my right hon. Friend confirm that the sensible use of VAT to reduce bills will produce a bill for North Tayside for the lowest band of property of about £250 and for the highest band of about £600? If those figures are accurate, they show clearly that the new tax will be seen by the Scots as a big improvement on rates or community charge.
Mr. Lang : The figures that my hon. Friend uses sound about right to me. The arrangements that we are introducing into the new system will give protection to property owners, will ensure that local authorities are not able to impose an unduly high burden on them and will see that the burden is sensibly spread across the whole population.
Mr. Alexander Eadie (Midlothian) : Does the right hon. Gentleman, in introducing this form of roof tax, make the same claim that the Secretary of State for Wales made, which is that, when the new scheme is introduced in three or four years' time, that will be the final death of the poll tax? Has the right hon. Gentleman costed the new scheme? For example, what will it cost to advertise and administer?
Mr. Lang : The hon. Gentleman is unduly pessimistic. I sincerely hope that it will not take three or four years to introduce the new tax. I hope that we shall be able to introduce it by 1993 and abolish the poll tax then, because this is an infinitely better and more efficient system. I anticipate that the costs of administration and collection will be substantially reduced over those of the poll tax.
Sir David Steel (Tweeddale, Ettrick and Lauderdale) : I hoped that, as Scotland was lumbered with the poll tax a year earlier than England and Wales, the Secretary of State would be leading the campaign to get rid of it a year earlier than in England and Wales, instead of which he is reported as trying to fight a rearguard action to keep it. Will the valuations take account of the condition of property, given that there will not be individual house valuations, or will a person living in a large slum pay more than someone living in a small decent house?
Column 934
Mr. Lang : As for the alleged reports to which the right hon. Gentleman refers, I hasten to reassure him that they are and were entirely without foundation. I have never read so much fantasising as I have in the last few weeks. The valuation process is intended to achieve as accurate a valuation as possible. It will not be such a detailed valuation as existed under the old rating system, and it will be open to any householder who feels that his property has been placed in the wrong band to appeal against that. The incentives will be that much less to do so because, with a range of seven bands, the variation in bills between the different bands will not be so substantial.
Mrs. Maria Fyfe (Glasgow, Maryhill) : Will the right hon. Gentleman now answer the question that was put to him earlier by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar)? Why should a person who is so rich that he lives in a large mansion set so well back from the road that his house is out of sight from the ordinary public pay only about two and a half times the amount paid by a council tenant? The right hon. Gentleman said that that was fair. Will he kindly explain why he thinks it is fair?
Mr. Lang : It is fair because what happened under the domestic rating system was unfair, when there was no protection for those in more valuable houses. A range of two and a half times between the highest and lowest bands is about right, given the rebate scheme which we shall be introducing and given the fact that we are talking about 11 per cent. of the cost of local government. A substantial proportion of the rest will come through indirect and direct taxation, to which the better-off in society will contribute much more than those on low incomes.
Mr. Norman Hogg (Cumbernauld and Kilsyth) : Will the Secretary of State pay tribute to those local government officers who, in council offices throughout the country, have tried to make the poll tax work and who will continue to have that job? Will he clarify the manpower implications to today's statement for local government and explain why he is encouraging the use of assessors from the private sector when there are skilled and professional people in local government well capable of discharging that task?
Mr. Lang : I pay tribute to the officials in local authorities that have administered the poll tax efficiently, as some of them have. As for the manpower implications of the change to the new arrangements, I cannot give the hon. Gentleman detailed figures now, but in the course of the consultation process a clearer picture may emerge. The answer to the hon. Gentleman's question about valuation is that the Government took the view that the most effective way to get the new system up and running quickly and with the appropriate accuracy of valuation was to use Inland Revenue valuation officers, supervising the arrangements and employing, as appropriate, valuers from the private sector. It is in everybody's interest that we get the new system up and running as quickly as possible, and I believe that what I have described will achieve that.
Mr. Dick Douglas (Dunfermline, West) : Is the right hon. Gentleman aware that we in the SNP have extreme difficulty in accepting his figures, in view of the fact that it took him two months to respond to our statement about a local income tax? We shall wish to discuss the matter with him further. Is he further aware that the new scheme
Column 935
smacks of a band-aid tax, with the whole thing stuck together to give a spurious view of coherence that it totally lacks? Those who are interested in decision-making and responsibility in local government read centralising forces into the right hon. Gentleman's statement.If the right hon. Gentleman is really interested in getting the scheme up and running, why will he not, in view of the scarcity of Scottish legislation before the House, immediately introduce a Bill giving 100 per cent. rebates, so making it clear that students and others will not have to pay the tax and showing that local authorities in Scotland will not again have to go through the stupid exercise of trying to collect money from people who manifestly cannot pay?
Mr. Lang : The question of rebates in the remaining two years of poll tax is still under consideration. The hon. Gentleman says that the new tax lacks coherence. We have worked on the proposal carefully and gone into all the issues in great detail. I urge him to examine it more carefully, when he will find that, far from lacking coherence, it is an extremely coherent and effective system. I welcome the sign that I took from his remarks that he will take part in the consultation process. I shall look forward to his submissions once he has had an opportunity to study the detail of the matter.
Mr. Dennis Canavan (Falkirk, West) : Will the Secretary of State now eat humble pie and admit that he has been forced into a U-turn in the face of the massive demonstration of people power, including a disciplined, conscientious campaign of civil disobedience to an extent not seen in Scotland for centuries? Will he admit that, if everybody had dutifully touched the forelock and stumped up every penny of poll tax on demand, the right hon. Gentleman would not have been forced into making his historic statement to the House today?
Mr. Lang : The main reason why we had to decide that the community charge was no longer viable was its failure to control high-spending local authorities. It was perfectly clear from some of the levels of poll tax that some local authorities sought to impose on their residents that the tax was no longer an acceptable method of funding local government. Far from carrying out a U-turn, we are going on both from the discredited domestic rating system and from the community charge, with its shortcomings, to a new system which is infinitely better than both.
Mr. John McAllion (Dundee, East) : Since 1989, the Secretary of State has personally and passionately defended the defining characteristics of the poll tax--the liability of everyone to pay something, the requirement for a poll tax register, the rejection of any sort of property tax. This afternoon he has been forced to eat his words. How can he with any honour hang on to his high office when his personal credibility has been so undermined by the retreat of his right hon. Friends in the Cabinet? Should not he and the other poll tax fanatics in the Scottish Office do the decent thing and resign?
Mr. Lang : This is the first local government finance system that I have helped to design. I believe that it is more effective than the community charge system or the domestic rating system. I believe that it meets the objectives that I set out in my statement on 21 March. Once the hon. Gentleman has considered it further, he will think so, too.
Column 936
Mr. Jimmy Hood (Clydesdale) : Will the Secretary of State cast his mind back to the recent council elections when there were Tory party posters all over Scotland condemning what they called the roof tax? The Secretary of State and his right hon. Friends have today announced a seven- band roof tax for the United Kingdom and for Scotland.
Since we have a proposal today offering transitional benefits and payments to millionaires, why cannot we have immediately a one-clause Bill that will do away with the minimum contribution of 20 per cent.?
Mr. Lang : The roof tax was locked up so quickly when the Labour party realised how unpopular it was that it is difficult now to scrutinise its details. As far as I am aware, it had few of the features of our new council tax, which will limit the burden on householders in the top band to paying two and a half times what those in the bottom band will pay. The system includes a personal element in the form of the 25 per cent. discount for one-person households, and the new system avoids arbitrary revaluation leaps every few years. It will operate fairly and, unlike the roof tax, it will gain widespread acceptance.
Mr. Tom Clarke (Monklands, West) : Will the Secretary of State consult the Convention of Scottish Local Authorities to explain why England is to have a commission to consider structural changes but Scotland is not? Will he also meet representatives of the Keep Scotland Tidy campaign to consider the removal of the vultures from rooftops and advertising hoardings placed there by the hon. Member for Stirling (Mr. Forsyth) and now looking like chickens that have come home to roost?
| Next Section
| Home Page |