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Mr. Allan Stewart : The hon. Gentleman makes several perfectly proper and constructive points. The Commissioners of Inland Revenue will ensure consistency of approach north and south of the border. The responsibility for carrying out valuations will lie with the assessors.
Mr. Douglas : I am sorry to pursue the matter, but that is not what the definition of a valuation officer says. I refer the Minister to clause 4(6), which says :
" valuation officer' means any officer of the Commissioners of Inland Revenue who is for the time being appointed by them to be a valuation officer or a deputy valuation officer for the purposes of the valuation under section 3 above."
The Parliamentary Under-Secretary of State will have an opportunity to clarify that when he winds up, which I would welcome.
My major objection is to the regulations that could be made under the Bill, which is an important one for local democracy. It is a departure from the procedures that have existed hitherto. It will be an enabling Bill, but the Government have the audacity to provide in clause 7(3)(a) that the power to make orders will be done under the negative procedure for statutory instruments.
It surprised me that the hon. Member for Garscadden made no real attempt to state what the Labour party would do if and when it entered office to overcome the massive difficulties that local authorities are encountering in ending the poll tax.
In the interim, the Government have a responsibility to abolish the poll tax a year earlier in Scotland. I have suggested some ways in which they could do that, and they have a major responsibility to consider the collapse of local authority finance in Scotland. The Government cannot wash that away and say that it is a result of massive campaigns of non-payment. The situation has been imposed by the Government, and anyone with credibility in the Government has a responsibility to consider what is happening in Strathclyde, Lothian and other regions of Scotland. The Government will rue the day if they do not take action immediately.
8.21 pm
Mrs. Edwina Currie (Derbyshire, South) : I rise to support the changes in the Bill as I think they are very welcome indeed. May I take the House back to the question of capping powers that are included in the first part of the Bill? My main local authority is Derbyshire county council, led by the estimable Mr. Bookbinder, who is rapidly becoming known throughout the country, as we have known him for some time in Derbyshire, as the epitome of irresponsible local government. It is a Labour-controlled authority and it was capped last year. Its budget was reduced from £560 million to £520 million which, given the size of Derbyshire and the fact that on the whole we have relatively few problems, is one hell of a lot of money to be spending and to be lifting from local people. This year, Derbyshire has not been capped and that gives point straight away to the suggestion that the existence of effective capping powers has a substantial effect on the councils concerned. The very fact that the powers exist means that often they do not have to be used. Fewer councils are being capped this year than were being capped last year, and some of the councils that were capped last year, such as Derbyshire, have decided to behave themselves, with the consequence that they are
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being much more sensible. As a result, in Derbyshire, the budget is up 7 per cent.--just a smidgeon under 7 per cent. --from last year to around £556 million. That is exactly the amount to the whisker that the county council could increase its budget to under the stated capping rules set out by my right hon. Friend the Secretary of State for the Environment last autumn without being capped this year. I would suggest that Labour-controlled county councils such as Derbyshire are very cute indeed about the capping procedure. They know exactly what the rules are, they are smart enough to work it all out, and they are being entirely and thoroughly cynical about the way in which they operate the rules. Let me illustrate one result of their cynicism.Last year, Derbyshire county council was capped but, hey presto, there were no redundancies. This year, the county is not capped and has seen a 7 per cent. rise in its budget. Suddenly, 400 teaching jobs are to go, other redundancies have been announced, music lessons have been cut, swimming lessons were stopped in March, libraries all over the county have been closed and museum pieces have been sold to raise money, which has resulted in the authority being thrown out of the Museums Association and thus losing grants. In other words, everything has gone completely berserk up there, and my constituents are extremely worried.
What puzzles me about this is that, if there has been an increase of 7 per cent. of spending in Derbyshire--a 7 per cent. increase is not a cut--why do we need any redundancies at all ? What on earth does the county think it is playing at ? Other councils have been capped and made similar judgments, and if they can manage, why cannot Derbyshire manage as well ?
If one takes the trouble to read Public Service, the newspaper of the National and Local Government Officers Association--NALGO--one sees that Basildon has made it clear that it can be capped without cuts and redundancies and that Bristol and Lambeth have also made that clear. That leaves open the question : why do we need redundancies in Derbyshire at all ?
The answer is that we do not need redundancies in Derbyshire. They have occurred in the most cynical way possible. It would have been very easy for the council to keep within its budget in the way that other councils have kept within theirs since councils were created, by, for example, marginally increasing some charges. The council has failed to increase, and has made a virtue of its policy of refusing to increase, the charge for school meals for 10 years. Therefore, much of the spending has gone on an increased subsidy for school meals. That subsidy is not to free school meals which are covered by statutory policy, but to others. Children in my constituency and that of the hon. Member for Derbyshire, North-East (Mr. Barnes) arrive at school in big cars and yet have their food subsidised because the council believes that without the subsidy they would not eat. What absolute, impossible, irresponsible nonsense. That is where much of the increased spending in Derbyshire is going.
Mr. Harry Barnes (Derbyshire, North-East) : What has that to do with the Bill, which is about poll tax capping for authorities with budgets under a certain size and relates to, for example, South Derbyshire district council ? Does the hon. Lady feel that South Derbyshire needs such a Bill ?
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Mrs. Currie : I do not think that the hon. Gentleman has been listening. Perhaps if he listened a bit more he would learn a bit more. If he more willingly paid his own community charge and gave a lead to the whole of Derbyshire to do that instead of pretending that people on salaries of the kind that we pick up here should not have to pay anything, I should listen to him more carefully. I shall do him the courtesy of listening to him again.Mr. Barnes : The hon. Lady is behind the times, because my community charge has been paid. I was not going to leap to the position in which it would cross into another financial year. The hon. Lady's circumstances are such that she gained considerably from the operation of the poll tax and now wants further legislation that would benefit her still further. She has benefited from the £140 reduction, she benefited from the original legislation, and now she seeks to benefit from this Bill. If the hon. Lady wants to talk about individuals, she should talk about herself.
Mrs. Currie : The hon. Gentleman did not pay a bean until he was threatened with a summons. He and his colleagues in the north of the county had to be threatened with being taken to court by his own Labour-controlled council a year after he received his community charge bill, like all the rest of us. He has a long way to go before he has any credibility. In response to his point, let me say that I am interested in protecting all my constituents, from the very poorest upwards. I am trying to do my best to protect the hon. Gentleman's constituents as well.
Mr. Brandon-Bravo : My hon. Friend touches a point when she speaks about trying to protect the poorest and most vulnerable in our society. She has spoken of the cuts and redundancies that Derbyshire introduced for purely party political purposes and for the publicity it wanted to achieve. Does my hon. Friend accept that much the same happened in Nottinghamshire? It was not capped and had a substantial increase in its budget, but to make a political song and dance, the council wanted to close 12 old people's homes. Happily, it was its own supporters that forced it off that political nightmare.
Mrs. Currie : My hon. Friend, who is also my neighbour, is absolutely right. In my home county, school meals alone are now subsidised to the tune--an admitted tune--of over £13 million, while cuts are being sought to the tune of £16 million. Derbyshire needs no cuts, and it would be easy for the county to balance its books. The cause of the problems in Derbyshire, Nottinghamshire and other such councils is not the Government's action on capping but cruel, stupid and short-sighted administration at county headquarters. I am convinced that, before the end of this financial year, members of Derbyshire county council will be disqualified from public office--and good riddance, too.
This debate not only concerns Derbyshire but is of national significance-- [Interruption.] Opposition Members have spoken about their constituencies and would criticise me if I did not speak about mine. I am delighted and honoured to have the opportunity to do so in the House, and shall continue to do so after the next election--so they can put that in their pipes and smoke it.
Mr. John Maxton (Glasgow, Cathcart) : Did the hon. Lady vote for the poll tax Bill? If so, did she do so for one of the good reasons that was put forward by the
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Conservative party--because it would make local government accountable? Accountability means giving local councillors the right to take decisions and to pay the price through the ballot box. Why is the hon. Lady now so much in favour of removing that accountability?Mrs. Currie : I shall follow the hon. Gentleman down the route that he suggests. I voted for the community charge legislation, and have always voted for accountability in local government. I spent 11 years in local government and developed a considerable knack at spending enormous amounts of public money and explaining myself afterwards to the electorate. The hon. Gentleman is really saying that the Labour party has a devil-may-care approach to running the economy, which is of far greater concern than the accountability of local councils. I understand that the Labour party is, more or less, against capping, although some Labour Members talk of reserve powers. Indeed, Opposition Members from Derbyshire have been amongst the strongest advocates of doing away with capping and say that they would rely on the ballot box. That was the approach that we took and it does not work. I wish to heaven that it did. The hon. Member for Glasgow, Cathcart (Mr. Maxton) has only to look through today's vote and the blue pages of more than 800 motions signed by hundreds of hon. Members to see how often we would vote for more money to be spent and how seldom we would vote, in this House, this country or this world, for taxes to be raised to match that spending. That is the problem Over and over again in local government, in my constituency, in the wards that I represented in the city of Birmingham and the wards and constituencies of Opposition Members, we find that, given the chance, people vote to spend more money and to defer the tax or have it sloughed off on to somebody else. That is human nature and is, ultimately, why this Bill has been introduced.
Mr. Brandon-Bravo : Perhaps my hon. Friend would like to develop this point a little further in the light of the comments of the hon. Member for Eastbourne (Mr. Bellotti), who was, I believe, speaking on behalf of the Liberal Democrat party. He said that, over the past few years, local authorities should have had another £58,000 million. That figure was based on spending during a period when there had been spending limits and capping on those local authorities. I do not know whether the Liberal Democrats and the Labour party would impose limits or whether that £58,000 million would then become £68,000 million or £100,000 million. Where on earth do they believe that that money will be found? It is the biggest con that I have ever heard.
Mrs. Currie : May I suggest to my hon. Friend that the money would come from the same place as it has always come from when Labour Governments have been in office and when Labour Governments have been backed up by Liberals because they have not had a majority in the House. It would come from the printing press. It is the easiest thing in the world to print or borrow money, and to see inflation rise and then wonder why it has risen. The net result of all those promises would be an increase in taxes, borrowing and inflation--there would be no choice--because that is the inevitable result of the promises and policies that Opposition Members offer.
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The appalling speeches that we have heard from the Opposition tonight show that the Labour party is not ready or fit to govern--Mr. Maxton : We are going to govern.
Mrs. Currie : No, they are not going to govern. That is what the hon. Gentleman said before the last election and the election before that, and look what happened. Indeed, that is what they said before the 1979 election. The electorate knows that the Labour party is incapable of running the economy because it makes promises that it cannot, could not and should not keep. There is no such thing as Labour probity or prudence on public spending. The fact that it is against the Bill proves that.
The Labour party would replace the Audit Commission with a quality commission, which appears to be designed so that more money can be spent instead of being kept under control. It would abolish compulsory competitive tendering which, by any measure, has produced major savings and improvements in quality in local government. The Opposition would have regional assemblies so that, on top of Derbyshire county council, we would have a regional assembly in the east midlands. My hon. Friends and I would have to cope not only with parish councils, district councils and county councils but also with a regional assembly. I presume that that, too, would be financed out of thin air. I remember when we got rid of west midlands county council, which we brought in, and how no one noticed that it had gone because it did nothing of value. Heaven help us.
It is apparent that the Labour party has no policy to control local government spending. It is simply against ours and against every sensible effort that we make in Bills such as this. Their approach is neither subtle or intelligent nor plausible. Capping is absolutely necessary in the national interest. It is part of the long hard struggle to reduce inflation and to keep it down. Clearly there should be no exemptions, and that is why the Bill is necessary. The greatest pity of all is that we did not take such a measure when we introduced the community charge in 1990.
Mrs. Currie : I agree with the hon. Gentleman, as he is right about that.
We should have taken powers in 1989 to cap every local authority in the country, knowing that it would probably not be necessary once those powers existed. If we had done so, I am sure that the introduction of the community charge would have been much less traumatic. Councils would not have been able to increase spending and load it on to the community charge. We may have been able to keep our promise of a community charge of about £250, which is the present average, and it is possible that we would not have needed to seek a third system of local government finance in as many years. However, I am convinced that the third system will be better than the previous two. If I say it often enough, I may convince my electors, too. I hear the bone-crunching sounds of a Government who have learnt their lesson. My right hon. Friend the Secretary of State said that they do not intend to be caught again. However, in the background I hear the snorting
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noises of a Labour party that has not learnt its lesson about inflation, and never will. On that basis, I am more than happy to support the Bill.8.39 pm
Mrs. Maria Fyfe (Glasgow, Maryhill) : During this lengthy debate, I have been making a careful note of the issues that Conservative Members seem to feel have some substance. The hon. Member for Derbyshire, South (Mrs. Currie) said that it was necessary to cap councils as part of the Government's macro-economic control of the economy, but at the start of the debate my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) asked the Secretary of State to explain how councils making local decisions would affect the country's economy in a macro-economic sense, to which he received absolutely no answer. The answer has never been given. Conservative Members keep asserting that that is so, but never give evidence to prove it. There is quite a weight of academic evidence to show that the idea is nonsense.
The hon. Member for Teignbridge (Mr. Nicholls) gave three reasons why councils had to have their poll taxes capped. His first curious reason was that a council can go on and on, never change hands and remain in the power of one party. Most distressing to him was the idea that a council could remain in the hands of the Labour party for years and years. It does not seem to have occurred to the hon. Gentleman that that is so because the local electorate want it and, if and when the day comes that they are dissatisfied with the council, it will be removed from office. That is why there are elections on a fixed term of every four years. Incidentally, that is a fairer system than the one in Parliament, where the Prime Minister holds the starting gun and can decide to hold an election when he or she feels that the time is appropriate.
The hon. Member for Teignbridge also said that the local electorate could not respond to decisions that they did not like because the time span involved meant that they had to respond too long after the decisions were made. He must think that his local electorate are incredibly stupid and have short memories if he believes that they cannot recall decisions made by their local authority that they did not like. All of us, particularly those who have been involved in local government, are well aware that local authorities do not always please all the people all the time. People can be annoyed with some decisions, but in local elections most electors have the common sense to make up their minds based on the whole scheme of things, not one issue that may have annoyed them two or three years before. They take the rough with the smooth and decide accordingly on the general performance of the party running the council and the opposition parties.
The hon. Member for Teignbridge offered another curious reason why councils need to be capped--that people decide that, although they are dissatisfied with local government, central Government are to blame. Could they not be right? Perhaps the Government are to blame for the decisions that the council have to make. We have only to think of occasions such as tonight when the Government are giving themselves powers to impose on a council decisions that the voters of that council did not want and clearly voted against. It is understandable but not satisfactory that people react by blaming the local council. When they decide that the Government are to blame, they are perfectly correct.
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One Conservative Member said that one reason for imposing capping was that some people who vote in local elections do not pay rates and so are not entitled to a say. That is a curious argument that we have heard throughout the debates over the years about central Government control of local authorities. It was pointed out that, in reality, nearly everyone paid a share of the rates by making arrangements within families and households. Even if that were not so, it does not seem to have occurred to that Conservative Member that people who do not pay income tax have the right to vote in a general election. Is he saying that that should not be so? If so, let him say so clearly now. The principle is exactly the same : if one is entitled to vote for national Government whether or not one pays taxes, one should be entitled to vote for local government whether or not one is able to contribute to the local authority coffers. To say otherwise is simply an attack on the poor, because the only people who would be ineligible to pay would be those without the funds to do so. Although it will be 1993 before the poll tax comes to an end, people are still being forced to live with it. Councils that are desperate to spend money on much-needed services are having to advertise and take out large, almost full-page, adverts in newspapers urging people to pay their poll tax bills. People have been under the mistaken impression that they need no longer pay because the Government have put an end to the poll tax. It is an act of gross irresponsibility on the Government's part to allow people to believe that, because the poll tax is being brought to an end, there is no need to pay it. The Government should convey more clearly the message that the poll tax will not come to an end till 1993. They are not facing up to their responsibility to ensure that they play their part in running local authorities. Far from contributing to what councils need, the Government are already capping local authorities in Scotland. The case of Lothian council has already been mentioned. Earlier in the debate, some of us asked why the Government felt that there should be seven bands, and those fortunate enough to come within the highest band would have to pay only 2.5 times what those on low incomes and in poorer housing who fell in the lowest band would have to pay. I said that surely, if some hon. Members were so wealthy that they were immeasurably better off than others, were in the top band and were voting in the House, they should declare that fact when making their speeches. Conservative Members cried out that that was the politics of envy. In reality, we are talking about the politics of greed and of people who are extremely well off. As my hon. Friend the Member for Dagenham (Mr. Gould) said, if some people save money, other people--those who are far less well off--end up paying a higher proportion of their low incomes. However, that is not the worst of it : such people pay more and suffer the effects of cuts in local authorities.Mrs. Currie : Will the hon. Lady give way?
Mrs. Fyfe : I shall give way in a moment.
Conservative Members have argued that we need not believe it when councils forecast large cuts, because they are not necessarily accurate. Conservative Members say, "Don't worry--it won't turn out to be as bad as they predict." Let me tell the hon. Member for Derbyshire,
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South in particular that the Secretary of State for Scotland is currently forcing Lothian council to make budget cuts of £18.5 million, which is not, as Ian Bell said, a small sum of money in anyone's terms. It is a reality, not a day dream, that Lothian council is having to consider closing schools, old people's homes, children's centres and evening classes, bringing to an end free bus travel for the elderly, and cutting road repairs. Will the Government say which, if any, of those proposals they think would allow acceptable and decent levels of service? They never answer that question, but tell the councils to make the cuts and leave them to pick up the pieces as best they can.Mr. Allan Stewart : Why does not Lothian council simply adopt the budget increase of Strathclyde--the hon. Lady's authority? If Lothian had done so, it would not have been subjected to selective action.
Mrs. Fyfe : That was an incredible intervention, when we bear in mind that Strathclyde council faces major cuts and will have to decide how to cope with them. [Interruption.] The people of Lothian voted for Lothian council's policies because they approved of them.
Mrs. Currie : The hon. Lady and I will ignore the comments of the chaps sitting around her who are trying to stop both of us speaking. Would her point about wealthy people paying more apply also to the hon. Member for Linlithgow (Mr. Dalyell), who lives in a castle, to the right hon. Member for Leeds, East (Mr. Healey), who has done well out of the sale of his autobiography--I congratulate him on that--or to the hon. Member for Kingston upon Hull, East (Mr. Prescott), who lives in a castle and who drives to work in a ruddy great Daimler?
Mrs. Fyfe : The hon. Lady seems to miss the obvious point. Some Opposition Members are considerably better off than the average person, but they are not trying to dodge their responsibilities and get out of paying their fair share. That is the difference. Some Conservative Members are doing that, and have been doing it for years. That is their whole raison d'etre : making sure that the better-off can dodge their responsibilities, sometimes by allowing employers who are subsidised by the taxpayer to pay low wages and sometimes by other dodges that have been thought up in the past 12 years.
Mr. Dalyell : To return to the Minister's intervention, does my hon. Friend accept that, on the figures, Strathclyde receives £914 per capita on the budget estimates, and £733 in respect of Government support per capita? Lothian's figures are £922 and £645 respectively, so the Minister's attempt at a comparison with Strathclyde was quite wicked. The figures for Dumfries and Galloway are £941 and £762. So what has happened to Lothian is a matter of pure political vindictiveness and spite.
Mrs. Fyfe : My hon. Friend is absolutely right. He made a point about the Secretary of State's own area earlier, and the right hon. Gentleman failed to respond to it.
I ask again : which cuts should Lothian make which the Government believe would be acceptable? People voted for those services and it is sheer effrontery on the part of the Government, who can muster only 10 seats in Scotland and only tiny minorities in local authorities, to turn aside electors' decisions in this way.
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Ian Bell's article in The Observer has been mentioned. He was of course right to attack the nature of the cuts and the way in which the Government are undemocratically imposing their will on the people who voted for the services provided in Lothian. The article comes up with one way of opposing such cuts which the Labour party has not yet contemplated. Bell asks :"Why not resign and allow the Tories to administer their own cuts? Why not fight local elections on this one issue?"
I do not see the point in--perfectly legally--resigning a seat and standing again for election. Councillors who had resigned their seats would have to stand on doorsteps asking local electors who voted for them in the local elections to do so again. Householders would want to know why, to which councillors would have to reply that they were seeking authority for the council to keep to the budget that it had set. Householders would rightly say, "We gave you that authority when we voted for you in the local elections. Why do you want it all over again?" If elections are held anyway and these councillors are re-elected, will the Government cave in? Not a bit of it. They will continue to impose their will because they believe that they have a sacred right to impose their views on local authorities, regardless of the outcome of local elections.
I certainly admire Mr. Bell's support for people to have what they voted for, but I suggest that his remedy does not work. I keep on telling people that if they believe seriously that local government should be local government and not an arm of the state--if they believe that it should have the right to run local authorities--there is no recourse but to vote at the general election for a party that genuinely believes in local autonomy, local democracy and local government. That is the answer. It is not an exciting one, but it is the truth, and soon the time will come when people can vote for such a party.
8.54 pm
Mr. Martin M. Brandon-Bravo (Nottingham, South) : Like many other hon. Members I came to the House with a background of quite a few years as a local councillor at county borough and district level. That was a satisfactory and worthwhile role, yet until I had been in this place for a year or two I had not truly appreciated the enormously important role that local government plays in our national life. I would be the first to admit, eight years on, that I probably appreciate even more now the necessary part that local authorities play and that they must go on playing it.
I am a great devotee of the role of local authorities. Although I understand the growth of anxiety in the past couple of years, I do not subscribe to the view that local authorities are too troublesome or that local finance is too complicated--"Scrap it all ; let's do it all from Westminster." It would be tragic if that view were adopted, and I hope that it does not get to the starting gate.
Way back about 20 years ago, there was an understanding between this place and local authorities that here in Westminster resided the sovereign power, the law makers and the guardians of what the nation could or could not afford to spend. The parties were agreed on that. I do not recall capping in those days but I do recall that if the Government of the day in their wisdom wanted to rein in expenditure, as was their right, local authorities did their best to comply. All that was necessary was a circular from the Secretary of State at the Department of the Environment, or whatever it was called in those far-off
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days, and we in local government did our best in response. It never occurred to us in a major county borough such as Nottingham, whether Labour or Conservative-controlled, to do otherwise, because we accepted that the Government reside in Westminster.All this changed, sad to say, when too many people began to think--and, almost by accident, legislation began to speak--of local government instead of local authorities. They began to think of local authorities as little governments in exile with almost unlimited powers in their areas. Piling absurdity on absurdity, such people developed the notion that someone else should pay.
The Labour party talks about the generality of taxpayers. In an intervention, I drew attention to the large sum that the Liberal Democrats say should have been given to local government. I do not believe that that sort of money is ever likely to be available. The change in philosophy and the loss of understanding between central and local government led to everything going badly wrong. The Liverpools, Sheffields, Hackneys and Lambeths have much to answer for when we reflect on the relationship between this place and local authorities over the past few years.
Mrs. Currie : Does my hon. Friend agree that the real tragedy that underlines the stupidity of the cuts that have been introduced by some Labour-controlled councils is that the most vulnerable in our society are hurt? Social services budgets are cut and old people's homes are faced with closure. Even in areas such as my constituency, libraries and other facilities are proposed for closure. In many instances, there is nowhere else for people to go. It is the very people who socialists tend to say they are trying to protect who are hurt the most in Labour-controlled authorities.
Mr. Brandon-Bravo : My hon. Friend is right. Whenever a Labour authority is faced with trying to restrain its budget, its immediate reaction is, "Who are the most vulnerable in our society? If those people are hurt, there will be headlines in the local press. We shall be able to say that the wicked Tory Government are forcing us to stop meals-on-wheels services or to cut home-help provision." It is always the sector that deals with the most vulnerable people which is under threat. Those are the people who are nailed to the wall by the so-called caring Labour party.
If the Labour party and the Liberal Democrats want a vast sum to be found in addition to that which is already spent, and that is no small sum, and if expenditure is to be unlimited, who do they think will pick up the bill? I fear that those who are in a position to do so--the enterprising, the highly educated and the highly qualified--will not stay around waiting to be robbed, and penal taxation comes down to plain robbery.
Under the Labour Government there was penal taxation. Income tax was levied at 83 per cent. in some instances, and it was possible to be faced with 98 per cent. taxation. Even the basic rate which the ordinary working-class person paid was 37 per cent.--and that was before national insurance. In those days, we came to realise, as we are saying now, that a Government can have 40 per cent. of something, which is better than the Labour Government's take, which was 100 per cent. of nothing. In many instances, the Labour Administration lost because of emigration. That must not happen again.
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When the opposition parties talk about unlimited spending, we must remind them that the able, the skilled and the highly qualified will pack up their bags and go. It is a small world, and we cannot ask people to stay loyal when they are being robbed through penal taxation.I have no doubt that it is necessary for the Bill to be enacted. As my hon. Friend the Member for Derbyshire, South (Mrs. Currie) said, "Oh that we had had draconian capping powers when we voted willingly for the concept of the community charge." When the bills came through for the first year--I accept that this is a simple rule of thumb but the result would have been not one cut--we could have provided that no local authority could spend a penny more than it had spent the previous year plus the rate of inflation. I agree that that is a somewhat simplistic approach but it serves to make my point. If that approach had been adopted, the community charge overall would have been £2.5 billion less than it was, roughly £70 less for every adult in the United Kingdom. As my hon. Friend the Member for Derbyshire, South said, "Oh that we had had that sort of limit imposed when we changed from the rating system to the community charge." Who knows, perhaps the charge would still have failed, but we would have had a charge reasonably in line with what we thought it would be when we voted for the enabling legislation. If that had been done, it is possible that we would now be in a different ball park. I hope that the powers in the Bill will be as tough, or even tougher, when we have the new tax. For the first, perhaps, two years I would like to see an absolute limit on spending, so that the new system can be seen and judged on its true merits--and, unlike the old system, cannot be wrecked because authorities up their spending to discredit it. Let us not fool ourselves ; many local authorities were determined to ensure that, whether they agreed or disagreed with the community charge, they wrecked it by whatever means at their disposal.
In my county council, the charge was upped by over £100 for every adult in our city. I thought that that was outrageous, but we could do nothing because my lords and masters--my senior colleagues on the Front Bench--never believed that local authorities could be so wicked as to screw their constituents to the wall by charging them an extra £100 for the pleasure.
Even now, after all the publicity and the details that appear on our community charge bills, I still receive the usual crop of queries from constituents. They ask why on earth they are charged some £20 for excess county council spending when they live in the city. If ever there was a case for a great city such as Nottingham to be able once again to run its own affairs, what has happened in the past couple of years says it all. That change cannot come about too soon--yesterday, please, Minister.
It is a pity that, having taken powers to cap authorities, we have not taken powers to force local authorities to collect their dues and taxes. Uncollected dues and taxes should not be lumped on to the backs of the innocent majority. Perhaps the district auditor should have the power to take action where, in his view, the local authority has been dilatory in sending out bills, never mind lax about collection. As a result of that laxity, a further financial burden is placed on the long-suffering charge payers--usually the majority of honest people.
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The percentage of local spending funded from central taxation has now been increased so that only 14 per cent. is raised locally. We must have a system that avoids the trap that even the previous Labour Government recognised. Those of us who were on local authorities in those days--the 1970s--know that to be true. Today, a project may cost £100,000, and local councillors may say, "Never mind, we only have to find £14,000 and Westminster--the taxpayer--will find the other £86, 000."Capping is a necessity. It is even more essential when we are dealing with a ratio of 86 per cent. to 14 per cent. That gearing effect worries me most. If a local authority has to raise only 14 per cent. of £100 of spending and only spends £100, the Secretary of State's figures, which were quoted by both Front Benches, will hold water. But if that local authority spends £114, the poor charge payer must find £28. Therefore, his charge doubles. We cannot permit that because it would be an unjust reflection on a good Bill and a good scheme. We must ensure that that does not happen.
The valuation is set out in clauses 3 to 5. Although the old rating system may have been inaccurate, anomalous or difficult to understand, the valuations were precise. Until a few years ago, if someone carried out a home improvement which I believe added less than £30 to the rateable value, that was ignored. If the improvement added more than £30 to the rateable value, the home owner was penalised for spending his own money on his property and doing what many would argue was a national service by preserving the state of our housing stock.
The message from the Government seems to be that we should have banding for local taxation purposes. If my right hon. Friend the Secretary of State meant what he said when replying to my intervention when he presented his case earlier, I hope that it will be clear that there will not be precise valuations and that properties will be placed in particular bands. There must be no disincentive to the generality of home improvements, and people should not be frightened to spend their money on their own homes in case they are forced into a higher band.
It was said earlier that the value should change only when a house is sold. I hope that we do not pursue that path. If houses are valued according to broad bands, houses in a particular street that are all much of a muchness should be in the same band. It would be ridiculous if a house in that street was sold and attracted a higher tax simply because it had changed hands a few weeks before. I hope that all properties of a similar nature in a street will stay in the same band.
Mr. Tony Worthington (Clydebank and Milngavie) : Sit down.
Mr. Brandon-Bravo : I will sit down when I am ready. I was told to continue until 9.15 pm
It has been said that there will be problems about appeals. Under the banding system someone would have to be convinced that the property was in the wrong band before appealing. If someone thinks that the property is broadly in the right band or somewhere near the top, he is unlikely to appeal in case the appeal body shoves the property into a higher band.
I hope that we mean what we say and that there will be rough valuations placing properties in bands and that houses will not change in value if home improvements are carried out and that they will not change in value for
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taxation purposes on resale. If I can have those assurances, this will be a first-class Bill and it will pave the way to the new local tax structure which I hope will be presented to the House in this year's Queen's Speech so that it can be up and running before the next general election.9.13 pm
Mr. Harry Barnes (Derbyshire, North-East) : In a sense, we are discussing two Bills today--a Local Government Finance Bill and a Local Government Valuation Bill--because the Local Government Finance and Valuation Bill falls clearly into two parts. The local government finance part is an extension of the 1988 legislation that introduced the poll tax and it is in keeping with the poll tax principles. We have not begun to get rid of the poll tax. We are building upon the earlier provisions for England and Wales contained in the 1988 legislation. The valuation part sets up what the Government call the council tax. I will not spend much time considering that as there will be a general election before the Government can introduce that principle and it will bite the dust in the long run. I should like to speak to clause 1 and about my authority in north-east Derbyshire, because that authority is seriously affected by the Bill. Much nonsense is talked about the operation of the standard spending assessment and its application in capping district authorities. District authorities are placed in a much worse position by capping than are larger authorities, because they do not have the leeway to manoeuvre with funds. My authority has a current budget of £7.3 million and would be £1.5 million or 27 per cent. over the SSA. According to the chop logic of the Government, that council is profligate and irresponsible, but nothing could be further from the truth. All the information supplied by the Audit Commission shows that my authority is well run and efficient and that it operates according to the normal tendering provisions. For example, its direct labour force has recently obtained the refuse collection franchise. However, it is close to the bottom of almost every list of grants and SSAs per head of the population or charge payers. That applies in the context of the 26 authorities with which it was compared by the Audit Commission.
A list in answer to a parliamentary question that I asked on 5 December puts my authority at No. 346 out of 366 authorities in terms of the percentage of grant that it receives from central Government. That being the case, one would expect it to have certain characteristics that the Government would think ideal, because it would seem to need little money. However, of the 366 authorities in England, only one receives a smaller proportion of SSA per charge payer--east Dorset.
That area and north-east Derbyshire provide a stark contrast. East Dorset is represented by the hon. Member for Christchurch (Mr. Adley), who has a majority of over 22,000, and by the hon. Member for Dorset, North (Mr. Baker) who has a majority of almost 12,000. North-east Derbyshire is represented by me with a majority of 3,700 and by my hon. Friend the Member for Bolsover (Mr. Skinner) who has a majority of 14,000. I understand that north Dorset feels considerably aggrieved about the SSA level that has been adopted for it but north-east Derbyshire's grievance is even greater.
The details of the standard spending assessment require a full debate in the House. If I had the opportunity to
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speak in such a debate, I would deal with how the SSA is assessed, the different factors that are taken into account and the nonsense of the system in the context of north-east Derbyshire, which is seriously handicapped by the different methods of calculation. It is left with very little money from central Government and is now being handicapped by the total SSA level that will be provided. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has yet to speak, I do not have time to describe that aspect in detail. However, I hope that the Minister will agree to meet a deputation from north-east Derbyshire, to explain the iniquities of the SSA as it applies in that area. It has become doubly dangerous. Before, we had higher poll tax levels than we would have had with a reasonable SSA. Now, we are likely to face poll tax capping and to be unable to provide essential services. Once one takes into account the statutory provisions and the parish precept, which has not been ignored in the figures, little leeway is left. Non-statutory money remains, so that expenditure of £2.5 million would have to be reduced to £1 million, which would have a devastating effect on a whole range of services. I hope that the Minister will agree to meet our deputation.9.20 pm
Mr. Donald Dewar (Glasgow, Garscadden) : The Bill is clearly born of the chaos that was the poll tax. Over the past few months, we have witnessed the failure of every policy for which Government supporters have argued, every principle for which they have fought, and every prejudice that they have defended with the blind faith of the zealot.
We were told by Ministers--the Secretary of State for Scotland was prominent among them--that the poll tax would make it possible to abolish the sad and arbitrary use of central Government capping powers. Responsibility was to be built into the system, and the electorate would be master of the instance. All that is in the past. Accountability is no longer in fashion. It has become one of the many casualties of the Government's disordered retreat. We have seen also the abandonment of the 20 per cent. rule, although that is to live on illogically--because, if it is inappropriate or unjust in 1993 or 1994, it is equally so now.
We have seen the most unlikely people come to the Dispatch Box to defend the principle of a household tax for which only the householder is liable. I remember the abuse--I use that word advisedly--to which my right hon. and hon. Friends were subjected when they tried to defend exactly the same principle. It is extraordinary to hear the Secretary of State for the Environment and the Secretary of State for Scotland say that one of the virtues of the new council tax is that it includes in the payment net 90 per cent. of the citizens of this country--when they would have treated with contempt any such claim for the old rating system.
We have seen a display of intellectual flexibility that beggars belief, as the same right hon. and hon. Gentlemen have swallowed their pride, capital valuation, and the rate poundage system. I say this to the hon. Member for Eastwood (Mr. Stewart), who I understand is standing in for the Secretary of State. If, a few months ago, I had come to the Dispatch Box and offered him a vision of a property-based tax and a capital valuation system that
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provided an individual valuation for each property and then applied a rate poundage--and suggested one or two other small changes to the rebate system, with a small concession here and there- -and had asked the hon. Member for Eastwood if that would do, he would have condemned it root and branch. He would have said that it represented a return to the old rating system and as such was totally unacceptable. If the hon. Gentleman is intellectually honest, he knows that would have been his reaction.It is amazing what party loyalty will do to principle. The hon. Member for Eastwood and most of his right hon. and hon. Friends are examples of intellectual schizophrenia. They have been compelled to make the bitter pill more palatable. As everyone knows, the cost is £4.25 billion. The Secretary of State made a remarkable reference to the Chancellor's generosity, as though he had taken out his cheque book and dashed off a quick personal promissory note for the sum of £4.25 billion--when, at the end of the day, every person in the country with purchasing power will make up that shortfall by paying more value added tax.
It is clear above all that local democracy will be the victim. The Conservative party once saw itself as the defender of local democracy. It had an honourable tradition of arguing that local communities should run their own affairs, and ought not to be bullied or overshadowed by the power of central Government. Yet members of that same party now say that it is not only right--as a temporary expedient, to get them out of an electoral difficulty--that local government should control only 13 or 14 per cent. of the revenue that it spends, but that such a concept should be enshrined in our system in a way that I think is quite indefensible.
We are promised a great future of fierce and determined capping. There will be no diversion of resources, whether it be for a child at school or for an elderly person looking for improved day care facilities, without the say-so of central Government.
Mr. Marlow : The hon. Gentleman, flushed with moral indignation, is complaining about the Government developing their policy. He belongs to a party that has said for many years that the rating system is totally wrong and should be scrapped as it is unfair and unreasonable. I understand that the Labour party is now proposing its solution to the problem--a fair rating system. What is the difference between a rating system and a fair rating system? That is the sort of thing of which Alice Through the Looking -Glass would be proud.
Mr. Dewar : If we had time, I could explain to the hon. Gentleman the difference between a fair rating system and an unfair system. He could find that difference by reading our policy and that of the Conservative party.
The Secretary of State for Scotland courteously wrote to me on 31 May about the Bill. I found it extraordinary that he said that he did not accept
"that the proposals in the Bill represent a major change in the relationship between central and local government. The provisions in the Bill concerning charge capping do no more than bring my powers in this area into line with those of my colleagues south of the border."
It occurred to me that "into line" was an appropriate phrase ; it has the ring of the drill square about it, which, I suspect, tells us much about the Government's approach.
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