| Previous Section | Home Page |
Madam Deputy Speaker (Miss Betty Boothroyd) : That is a genuine point of order, although I must make the point that the hon. Member for Hendon, South (Mr. Marshall) has only just come into the Chamber and has not listened to what has gone before. Perhaps the hon. Member for Derbyshire, North-East (Mr. Barnes) will oblige me by returning to the motion.
Column 620
Mr. Barnes : All the factors with which I have dealt and the whole programme in which the Government have engaged--their monetarism, their general economic policies and the privatisation programme--are directed to undermining working-class people. Part of their tactic was to hit local authorities and those who have struggled to defend working-class people-- the trade union movement and the Labour party, including the Labour party in local authorities. People have now understood that. That is why the Government are on the way out and why we can now start the slow process of correcting mistakes made on local government finance and introducing a decent system of raising money based on people's ability to pay and on property.
We shall also be able to move to put right the devastation that the Government have inflicted on democracy by causing the removal of masses of people's names from the electoral register. It is astonishing that there is no movement in the Conservative party that is worried about the fact that 1 million people have disappeared from the register. If that had happened in the 19th century, there would at least have been one or two Tory radicals at the forefront of a movement to defend democracy. I have been defending democracy but the hon. Member for Derbyshire, South as not--nor has she defended South Derbyshire or said what grant it needs.
12 noon
Mr. Patrick Nicholls (Teignbridge) : I found that a most enjoyable and engaging speech. I hope that it receives wide circulation and receives as much attention as possible. I have to say to the hon. Member for Derbyshire, North-East (Mr. Barnes), speaking as one experienced politician to another, that I have rarely heard such bare-faced brazen check. It is quite extraordinary for someone who receives an income of more than £29,000 a year to stand up in the House and say with a straight face that he was justified in hanging on to his poll tax money for just a little longer. A Bill has gone through both Houses of Parliament and received Royal Assent--it is a law of the land. I regard it as quite extraordinary that the hon. Gentleman can say, "The charge is a constitutional oddity so if you don't mind I'll hang on to my superior earnings for just a little longer."
Mrs. Currie : Is my hon. Friend aware that the poll tax in Derbyshire last year was more than £450, which means that if the hon. Member for Derbyshire, North-East (Mr. Barnes) kept the money and put it in the bank or building society he will have ended the year about 50 quid better off?
Mr. Nicholls : My hon. Friend makes a valuable point. The problem with being a socialist is that one has to earn at least £29,000 a year if one is to be able to afford to enjoy the luxury.
Mr. Harry Barnes : I should like to point out that, when I got round to paying my poll tax, Derbyshire county council had been poll tax capped, and there was a reduction of £52. I paid that extra £52 so any money that I may have earned in interest in the meantime was more than compensated for. I asked the district authority to transfer that money to the much-maligned Derbyshire county council. It was a minor amount, but it meant that there was nothing dishonourable in what I did.
Column 621
Mr. Nicholls : The poor and huddled masses-- the down-trodden and horny-handed proletariat--of the hon. Gentleman's constituency must have been delighted to hear that he could spare an extra £50 out of his £29,000 income to contribute to local government services. His was a most extraordinary performance. As I said, I hope that we shall be hearing a great deal more from the hon. Gentleman in future.Mr. John Marshall : Does my hon. Friend agree that the extra £52 that the hon. Member for Derbyshire, North-East (Mr. Barnes) paid over for the year will be as nothing compared with the £50 that someone on his income will have to pay over weekly if there is ever a Labour Government?
Mr. Nicholls : Yes, but we can give the hon. Gentleman some comfort. It may be a little while yet before he has to contemplate that idea. When the hon. Members for Derbyshire, North-East and for Bolsover (Mr. Skinner) pretend to champion the rights of the working classes, I sometimes wonder whether those so-called working classes realise just how well those hon. Members are paid in comparison. Having allowed myself to be seduced for a moment by what the hon. Member for Derbyshire, North-East said, let me explain that I propose to deal principally with the question of local government finance. I am grateful to my hon. Friend the Member for Stroud (Mr. Knapman) for framing his motion in such wide terms to enable us to discuss these matters. I have no doubt that, as we lead up to a general election, whenever that may be, the people of Britain will want to think more about local government matters and local government finance. The House owes it to them to give them every opportunity to consider the full range of options available. I know that the Minister will be seeking to catch your eye, Madam Deputy Speaker. I have written to him at some length suggesting one or two ways in which the banding arrangements for the council tax might be dealt with and about the discount. I do not want to go on at great length about those matters today and I certainly do not expect an especially detailed reply from my hon. Friend. I see that he is nodding. I am grateful that he has been thinking about the suggestions that I have made to him. There is no ideal way of raising local government finance--or national finance, for that matter. No one likes parting with his money, especially the hon. Member for Derbyshire, North-East. But in an imperfect world we have to find a mechanism. Having had experience of these matters both inside and outside government, I have no doubt that the council tax is the best available way of raising the money that has to be raised locally. It will be even better if the Minister takes on board the points that I have made to him, but it is pretty good as it stands.
Ignoring all the details that might be put in place, the essential point about the council tax is that it acknowledges the fact that the share of finance that was expected to be raised locally was too large. It is when one strikes the right balance between central Government's contribution and what should be raised by local electors that a proper system begins to emerge. For the reasons that I have given, I have no doubt that the council tax achieves that balance. I could go on at length about Labour's proposals. It seems that it is not only Labour Members who do not take
Column 622
their policies on local government finance seriously. It is fairly clear to me from my postbag and from those whom I meet in my constituency that many people do not take them seriously either. That is hardly surprising given that we are talking about a pledge to return to the rating system, with rolling yearly valuations based on what would appear to be four sometimes contradictory methods of assessment. Even the Leader of the Opposition has described the rates as the most unfair of all taxes. To suggest a return to the rating system is simply not a credible alternative. I do not feel that I am doing the policy an injustice by merely mentioning it and dismissing it.One of the other ideas about the way in which local government finance could be raised which receives a fair degree of attention and prominence is the idea of a local income tax. I waited in vain to hear from the Liberal Democrats--I see that the hon. Member for Southport (Mr. Fearn) has now left us--about their local income tax proposals. One does not like to be unpleasant to colleagues on either side of the House, but I must say that if the hon. Gentleman's speech had ever managed to ascend the heights of grinding mediocrity it would have been an improvement. No matter how preposterous one's pretensions to office may be, one owes it to the House to advance a coherent argument and, even if it has been scripted for one by someone else, to read it with a degree of panache or aplomb. I was absolutely staggered--given the comments made nationally by the Liberal Democrats about how the local income tax is a solution to all our local government ills--to hear a speech that was so banal and pathetic. I should like to think that it is mere embarrassment that has driven the Liberal Democrat spokesman from the Chamber. I suspect that he just popped in and then had a train to catch. The House deserves more than that.
Although we do not have the benefit of the intellectual rigours and powers of analysis of the hon. Member for Southport, I have brought with me a document called "Local Income Tax--The Best Way--How it Works" produced by the Liberal Democrats. It contains the sparkling headline "Shaping Tomorrow --Starting Today". I shall quote just one or two sentences from the publication. Those hon. Members who, like me, do the football pools will recognise that the copywriter for the publication must have been the same person who writes for Littlewoods, and sends letters saying, "Would you like to own a nice house and a nice car and be able to go on holidays?". One's name is inserted by typewriter, slightly askew. Such letters are not written by the most inspired of script writers, but we still open them just in case that elusive cheque is in the envelope.
The Liberal Democrats have obviously employed just such a copywriter to produce a marvellous document called
"Local Income Tax--The Best Way--How it Works".
To encourage us, it begins by saying that some countries have moved successfully from a poll tax to a local income tax--and it mentions the country that has done so. I hope that I do not cause my right hon. and hon. Friends in the Foreign and Commonwealth Office any difficulties by saying that, when the Liberal Democrats draw attention to the fact that Papua New Guinea has made the transition successfully, I do not find that to be the most persuasive authority. [ An Hon. Member-- : "And a head tax."] My hon. Friend may be right to suggest that that country also has a head tax.
Column 623
Mr. Harry Barnes rose --Mr. Nicholls : I shall give way to the hon. Gentleman as I am anxious that he has maximum exposure.
Mr. Barnes : Why did the hon. Gentleman support the Government when they introduced the poll tax, which was the system in Papua New Guinea at that time? I find it amazing that the hon. Gentleman should make such a point in an attempt to attack another party. He was guilty because he supported the Government.
Mr. Nicholls : I am not the slightest bit surprised that the hon. Gentleman should rally to the defence of an SLD document. It is worth remembering that every time that the Liberal Democrats have had an opportunity to enter into an alliance with another party they have always chosen the Labour party. It is interesting to note that the seeds of the next alliance are being sown.
I can tell the hon. Gentleman why, having been in favour of the community charge, I am now in favour of the council tax. As a politician, I have never found it embarrassing--although it is sometimes uncomfortable--to admit that I am wrong and that I have not carried the argument. The arguments in favour of the community charge were powerful. However, I have to admit that, in the end, we could not convince sufficient numbers of people of the case. For what it is worth, I suspect that that was because the whole structure of the community charge depended on local government raising too high a proportion of the money that would have to be spent. Once we had that wrong, there was no way that it would be accepted as being fair. If the Labour party were able to show the same contrition for the appalling way that the so-called moderates have run Liverpool for the past three years in the way that the Government have shown contrition with the community charge, there might he a little more hope for the Labour party.
The interesting Liberal Democrat document about a local income tax continues in the same chirpy style when explaining how it will work. It says :
"Collection happens like this : everyone, wherever they live, pays a uniform rate of LIT--for example, 4 per cent. At the end of the year, each taxpayer's actual liability is assessed, depending on where they live and their overall taxable income. Those living in areas where the LIT is below 4 per cent. get a refund ; those living in areas with higher LIT rates pay the difference. In practice, 70 to 80 per cent. of people get a rebate."
Nothing could be simpler than operating a system for local government revenue on that basis.
Just a moment's thought--and even a moment's thought by the SLD spokesman today, the hon. Member for Southport--would make us realise just how barmy that proposition is. Is Britain really to have a system of local government finance where a local authority can set any income tax rate that it wants, people then send their money to the authority in advance, and perhaps at the end of the year the authority returns some of it? We have heard about the bureaucracy created to run the community charge--just imagine the bureaucracy that would be involved with cheques coming in and out.
Since when has it been a sensible proposition that people should pay tax in advance of knowing what their tax computations might be? Why should either national or local government be entitled to sit on people's money for a year until it works out how much it intends to charge? What would happen in areas such as Eastbourne, which is
Column 624
represented by the Liberal Democrat spokesman on local government--the hon. Member for Eastbourne (Mr. Bellotti)? I imagine salaries are relatively high in Eastbourne, but no doubt housing costs and mortgages are also high. How will those people feel if, suddenly, a local income tax rate is set at a high level, but they are told, "Don't worry about it--at the end of the day we might return some of your money."I try to work out my budget for the year so that I can meet my commitments and aspirations and those of my family. I can usually estimate what my tax will be. I would be appalled if I thought that I would have to pay a sum of money in advance and that, perhaps, one day some of it might be sent back. It is a ridiculous and ludicrous idea. The fact that Papua New Guinea has followed that route is not something that I find especially encouraging.
Mr. Holt : My hon. Friend has emphasised the 4 per cent. mystical figure, which might result in a rebate at the end of a year. Of course, it could be that, having paid one's 4 per cent., the council is profligate, uncapped, and spends 6 per cent.--and so
retrospectively one has to pay another 2 per cent. How would people cope with that?
Mr. Nicholls : My hon. Friend makes a good point. I think that people would be very miserable. It is impossible to budget our family finances in such circumstances.
There might be a case to be made--and I say this in my usual spirit of fairness--in favour of local income tax if there were to be some form of capping as well. However, the hon. Member for Southport had clearly been briefed--in so far as he was briefed at all--to confirm that the SLD is not in favour of capping. I am reminded of a debate in the House a couple of weeks ago when the hon. Member for Eastbourne was in his place, and I mentioned that his party was committed to not having any form of capping. I asked whether it was true. The hon. Gentleman nodded, and Hansard recorded it as "indicated assent". Anyone who saw him would realise that that did not for a moment do justice to the hon Gentleman's enthusiasm for the idea of no capping. He was positively bouncing. Indeed, he looked like a whippet on steroids. He was obviously trying to put across the message that there would be no capping under an SLD Administration. Today, the hon. Member for Southport justified that by saying that people should be entitled to vote to pay that sort of money. That appears marvellous until we pause and think about it. We must face a central point about local government, and that is that it is the creation and creature of this House. It is this House which has set up structures for local government ; it is this House which has the ultimate responsibility for it ; it is this House which, in the end, has to change the arrangements. I do not discharge my constitutional duty by saying to someone in a constituency where the local government levy is wrong and unreasonable, "I am sorry, but it has nothing to do with me. If you want to, you can move out of the area." That would be monstrous. This House has an ultimate obligation to protect charge payers, ratepayers, council tax payers and so on. Even if the hon. Gentleman was correct in saying that it should be a matter just for local government, imagine what the consequences would be. Better still, let us remember what the consequences were when left-wing authorities were able to levy rates without any capping. It drove out those who might have been able to afford to pay
Column 625
them. It drove out businesses and left those remaining in a vortex of despair. That is what happens when we say that it is no part of national government if local government chooses to act irresponsibly. The idea that Britain could have a system of local income tax but no capping is monstrous.As with all Liberal Democrat ideas, the local income tax is intended to appeal to the nice people's society. Their ideas are always squeaky clean. The late Lord Stockton said that the trouble with the Liberal Democrats was that they always produced sound and original ideas, but none of the sound ideas was original, and none of the original ideas was sound. That is true about local income tax. It was interesting to note that when the SLD's shadow Chancellor--the hon. Member for Berwick-upon-Tweed (Mr. Beith)--gave a press conference to launch the publication of their bizarre document, he came under some pressure from The Independent, a very good newspaper. It is probably common knowledge that that newspaper is not wholly uncritical of the Government. In an article headed "Liberal Democrats promise fair' local tax",
Nicholas Timmins said that households with incomes above £20,000 a year, whether with one earner or two, would pay more. Mr. Timmins stated :
"Mr. Beith said, We do not attempt to hide that. Those on higher income will pay more ; that is the principle of fair taxation.' " Indeed it is. I wonder how many people who were beguiled by the prospect of a local income tax realise that a husband and wife who earn £10,000 a year each and who are assessed for local income tax will be among the wealthy of the land. Although in some places £10, 000 a year will be above average income, as many hon. Members know, that is not a lot of money in the south- east or the south-west, although it is certainly better than not having that amount. The idea that it is so much money that it qualifies people to pay more is bizarre.
Yesterday, we found from costings of the Labour party's policies that its proposals will mean an extra 15 per cent. on income tax for someone in that bracket--£20 a week more.
Mr. Paul Boateng (Brent, South) : That is bunkum.
Mr. Nicholls : The hon. Gentleman who speaks for Lloyd's for the Labour party thinks that that is bunkum. He knows as well as I do that those proposals have been properly costed. That will be the effect. The hon. Gentleman can shake his head as much as he likes, but he knows that those proposals have been costed.
The Liberal Democrats have identified people with a joint income of £20,000 a year as ready to be soaked. Is it not interesting that the figures tie in neatly with the Labour party's proposals?
Under questioning, the hon. Member for Berwick-upon-Tweed admitted that his proposals could lead to a local income tax of 17.3p in the pound. His justification was that national income tax might fall to 11 per cent.-- perhaps it might. He then misread his figures. In working out what the average local income tax rate would be for the time being, he forgot that he was taking advantage of the transfer back to central Government in the £140 reduction which was made possible by an increase in VAT. Having voted against the Government's proposals, he then took advantage of them. Taken together, we are talking about a standard income tax rate
Column 626
of more than 30 per cent., just to implement the proposals and have a standard tax rate. The local income tax does not bear examination. I do not suggest that there is an ideal way of raising of tax locally. If anyone has any illusions about what a crazy, barmy, nightmarish system the Liberal Democrat proposals would provide, he could do a lot worse than read "Local Income Tax--The Best Way--How It Works". Its best point is probably the Papua New Guinea example. After that, it is downhill all the way.12.23 pm
Mr. William O'Brien (Normanton) : This is a significant motion. People who have served on local government are best able to contribute to a debate on local government services. The hon. Member for Teignbridge (Mr. Nicholls) has experience in local government, so one must give credence to some of his points. I support some of his comments on why a local income tax would not be an acceptable way of funding local government. I wish that I could say the same about the hon. Member for Stroud (Mr. Knapman), who moved the motion. I cannot find much information about his local government experience. It is sad that such people criticise local government without having served in it and without having helped to provide the services upon which many people rely.
The hon. Member for Stroud asked why local authorities should provide recreation facilities. A couple of years ago, the hon. Member for Teignbridge and I shared a platform, when we discussed sport and recreation with a national association. We were at one in our belief that local authorities need to provide such services. Many schoolchildren and elderly people rely on local authorities to provide those facilities.
The hon. Member for Stroud said that the provision of local government services had not been considered in detail. He wanted to have a productive debate, but the outcome of his speech was less than productive. The hon. Member for Wirral, South (Mr. Porter) made a more productive contribution than the hon. Gentleman.
During the past 12 years, the House has passed a substantial number of Bills targeted at local government. The way in which the subject was introduced today was not in the interests of local government services ; it was a further attack on local government. After 12 years of ruling this country, the Conservative party appears to have nothing constructive to offer people in terms of local government services. More than 52 Acts of Parliament have been directed at local government. There have been reviews and consultations. There has been no request for the views of elected representatives, although we are told that that will be the subject of a review in due course. I hope that there will be consultation on the role in local government of elected representatives.
Over the past 12 years, there has been greater centralisation of local government services as they have been pulled into the centre. In 1979, the Government campaigned for more freedom for local communities. Departmental committees and quangos costing more than £11 billion to administer were set up. However, it costs less than £42 million across the country for local councillors to run our local authorities. We should compare the cost to the country of the elected members who serve in local
Column 627
government and who are responsible to their electorate with the costs of the quangos that have been appointed by the Government. In addition to those 52 Acts of Parliament, the review of local government services, greater centralisation and all the quangos, we now face capping. We also have a Minister who is responsible for our cities. Furthermore, the Secretary of State for the Environment comes to the Dispatch Box to appeal for consultation because the Government have no idea how local government should be administered. In addition to those impositions and to increased centralisation, the Government now control 80 per cent. of local government revenue spending. That is what has happened under the past 12 years of the Tory Administration.Mr. Knapman : I have been following the hon. Gentleman's argument with some interest. Are there any circumstances in which the Labour party would support the capping of local authorities?
Mr. O'Brien : Our document, "Fair Rates", states exactly how we would approach the financing of local government. The Labour party has also made it clear that we believe that choice belongs with the electorate. If there is to be capping, that should be the electorate's choice. It should not be imposed by faceless Ministers-- [Hon. Members :-- "Faceless?"] They are faceless to many of my constituents who have no idea of the identity of the Minister or the Secretary of State who says to them, "You will have X, Y and Z services." However, they know who their councillor is, because they see him or her regularly in connection with the services and facilities that are provided by the local authority.
As I have said, although 80 per cent. of local government revenue spending and 100 per cent. of its capital expenditure is now controlled by central Government--by the Tory party--Conservative Members criticise local authorities that are struggling to provide services for local people.
The hon. Member for Stroud said that local government monopolies were a bad thing in a strong party system--
Mr. Knapman indicated assent.
Mr. O'Brien : I notice that the hon. Gentleman is nodding in agreement. Does he agree that the private monopolies, such as the water companies, are also a bad thing? As a result of the monopoly in Yorkshire, water customers face a 13 per cent. increase on last year's charges, although inflation is now running at about 6 per cent. Does the hon. Gentleman believe that that kind of monopoly is fair and that faceless people should be able to tell Yorkshire Water's customers that the charges this year will be 13 per cent. greater than last year? British Gas and British Telecom are both monopolies, but the hon. Gentleman did not refer to either. The hon. Gentleman also forgot to mention the continual reduction in the rate support grant given to local authorities during the 12 years since 1979. That reduction is a further reason for the increased charges that local authorities have had to impose on their rate and poll tax payers. If services are to be maintained, they must be paid for. If the Government withdraw their support for the
Column 628
provision of those services, the local people invariably have to make up the shortfall. The Government cannot have it both ways : if they want to cut their revenue contributions for local services, the maintenance of those services will depend on the local community paying for them. That is what has happened in many local authorities.After all the Government intervention--after those 52 Acts of Parliament, all the reviews, the greater centralisation, the quangos, the capping, the Ministers who are responsible for our cities, the appeals for consultation and Government control of
expenditure--Conservative Members still have not found any satisfaction in the Government's control of the provision of local authority services. In my opinion, that is because the Conservative party and the Government do not believe in local government. There is no genuine approach from Conservative Members who believe in local government. That has been demonstrated more than once.
The hon. Member for Southport (Mr. Fearn), who is not in his place--
The hon. Member for Southport referred to the poll tax. There is a great deal to be said about the dissatisfaction with the poll tax that poll tax payers have shown over the past 12 months. The poll tax was in force for less than 12 months in England and Wales before the Government decided to do a U-turn and scrap it. If there is one subject that the Government do not want to discuss, it is the poll tax, because it has cost a great deal of money, a great deal of hardship and has caused the greatest U-turn by any Government and especially the greatest U-turn by this Government in this decade. A few months ago, the hon. Member for Stroud and many other Conservative Members were proving how good the poll tax was, both in their constituencies and in the House, and saying how important it was for local government. How they followed through the Lobby to ensure that it would be in place. How they told us, both in the House and throughout the country, that councillors would now be accountable because everyone would have to contribute to the cost of local services--that was the argument for the poll tax.
The right hon. Member for Finchley (Mrs. Thatcher) insisted that the poll tax should be on the statute book, and that local government finance should be raised by the tax. If the right hon. Member for Finchley were here today, she would still be insisting that the poll tax should be in place.
I remind the House that the right hon. Member for Finchley has gone and that the poll tax is due to follow her. We have been told that the poll tax is dead, but no one can say that until it is taken off the statute book completely. Labour Members of Parliament offered to support the Government to introduce a Bill to abolish the poll tax forthwith. There would have been no opposition whatsoever if the Government had wanted to abolish the tax. However, that offer was not taken up.
A few months ago, the hon. Member for Stroud and other Tory Members of Parliament were arguing how fair the poll tax would be and how important and necessary it was for the financing of local government. Now the hon. Member for Stroud and his colleagues are telling their constituents how unfair, undemocratic, unworkable and
Column 629
costly the poll tax is. That is the sort of U-turn that members of the Government have to face because they got it wrong in the first instance and because they have not got the guts to say, "Sorry" to the people of this country for the hardship that has been created. How wrong it is that people on income support still have to pay 20 per cent. of their poll tax and will have to continue to do so until after 1993. The Secretary of State and the Prime Minister have admitted that a fair system of financing local government should be based on a person's ability to pay, but not until after 1993. Why should people who are facing and witnessing hardship have to continue to face it until 1993 or 1994? I ask Conservative Members, and especially the hon. Member for Stroud, whose motion refers to "value for money", whether it is value for money to spend £15 to collect £5 from people on income support? That happens in many authority areas. The cost of collecting the 20 per cent. from people on income support is more than the value of the money realised. Is that value for money?Mr. Knapman : Value for money is indeed important, and I am glad that the hon. Gentleman is coming to that part of his speech. I hope that he will deal with the matter in some detail. My position is the same as that of Mr. Keva Coombes, the former leader of Liverpool city council, who said :
"In that particular case, the council's problems are not down to resources, but rather that it costs four times more to pick up a piece of litter in Liverpool than it does in other areas." Perhaps that has to do with value for money.
Mr. O'Brien : Again I ask the hon. Gentleman : does he believe that paying £15 to collect £5 from people on income support is value for money?
Mr. O'Brien : Obviously, the hon. Gentleman declines to answer. The hon. Gentleman referred to Liverpool. I shall refer to the city of Westminster--that well-run Tory authority. In 1991, it cost Westminster £42 per head to collect the poll tax--
Mrs. Currie : Which was how much?
Mr. O'Brien : It cost £42 per head to collect the poll tax. In Westminster, 20 per cent. of the 1991 poll tax was £39, so for every person on income support who qualified under the Government's terms to pay 20 per cent. of the poll tax, Westminster was losing £3 per head for collecting it. Is that value for money? That happened not in Liverpool, but in Westminster.
Mr. Knapman : Which would the hon. Gentleman prefer?
Mr. O'Brien : I would say that such people should not have to make a payment. It causes them hardship and problems, and it is administratively uneconomic. There is no justification for charging people when it costs the authority money to collect the payments. A sum of £300 million would exempt the poorest from the 20 per cent. poll tax payment. Not only would that help those in need who are on income support, but it would relieve the administrative burden on local authorities that find that collecting the 20 per cent. costs more than the
Column 630
money realised. Therefore, there are substantial benefits from abolishing the 20 per cent. payment for those on income support and low incomes.I remind the House that, in answer to a question on 6 February, which is printed in Hansard at column 153, we were told that rebates were costing £1.99 billion. A significant number of people are eligible for rebates, including Tory Members who earn their £29, 000 a year. That money should go to the people who need it most. It is not impossible for the Government even now to abolish the 20 per cent. payment that people on income support must make.
In the Budget, the Chancellor of the Exchequer announced that value added tax was to increase from 15 to 17.5 per cent. to help pay for local government services and rebates to poll tax payers. That 16 per cent. increase in VAT means that a further £4.3 billion will be added to poll tax rebates.
The Government are giving money to people who can afford to pay but are taking no action to ease the hardship of the very poor who suffer most from the payment of poll tax. Had the 20 per cent. payment by those on income support been abolished, the outstanding poll tax, as mentioned in the motion, would have been much less.
The motion also refers to delay in collecting the poll tax. Had the Chancellor of the Exchequer announced the Cabinet plans to reduce poll tax bills a fortnight earlier, he could have saved the nation's taxpayers over £200 million. Local authorities, being efficient, had all the poll tax bills printed and ready to be redistributed, and then the Chancellor said that they should be scrapped and the exercise done again. Was that value for money? Did the Chancellor's action secure value for the country? Some Government Departments could learn a lesson in achieving value for money by examining the way in which efficient local authority departments go about their tasks.
The motion refers to "rigorous controls on overspending". Let us be clear that that applies not only to city authorities. A recent announcement stated that poll tax capping would apply to all authorities--with the exception of parish and town councils--providing budgets. So all district authorities are now subject to poll tax capping.
The SSA for Stroud district authority for the current year is £7.68 million, not an excessive amount. Providing services for the community that the hon. Member for Stroud represents would involve expenditure by the district authority of £9.5 million, representing a 30 per cent. increase. Were that amount to be spent, that authority would be capped under the Government's procedures.
Does the hon. Member for Stroud consider that his authority should be poll- tax-capped on the basis of those figures? It is clear from his silence that he is not in a position to reply. Surely it is not exorbitant for Stroud district authority to want to spend less than £10 million on providing services. Before launching motions such as the one before the House today, the hon. Member for Stroud should discover what is happening on his own patch.
The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key) : The hon. Gentleman is being a little unfair to my hon.Friend the Member for Stroud (Mr. Knapman), who has the good sense not to fall for his ploy. My hon. Friend could not possibly answer his
Column 631
question until the Secretary of State had let local authorites know what capping criteria he would apply for next year.I know from the frequent correspondence I receive from my hon. Friend how assiduous he is. He has pointed out to me that Stroud has an SSA of £7.7 million, which is £1.8 million, or 19.3 per cent., below the 1990-91 income. However, the community charge is 20 per cent. less than in 1990-91. The hon. Gentleman is right to draw attention to Stroud's tendency to wish to achieve more than is realistic, and my hon. Friend the Member for Stroud is right to be cautious.
Mr. O'Brien : The hon. Member for Stroud tabled the motion. In opening the debate, he criticised local government, but when I ask about the position facing his constituents through his local authority, the Minister says that I am being unfair. Is the Minister implying that the Secretary of State will look favourably upon Stroud, and will allow a 30 per cent. increase in its standard spending assessment? If so, we have much to look forward to. The hon. Member for Stroud should tell his district authority that, if it does not reduce its planned expenditure and the services it provides, it will be poll-tax-capped.
Mr. Knapman : If Stroud district council overspends, bearing in mind the fact that we do not yet have all the information, Stroud, like every other district council in the country, should be capped. That is why I asked the hon. Gentleman whether there were any circumstances in which the Labour party would support capping. His answer carried no conviction one way or the other. The hon. Gentleman should read the motion, because his remarks suggest that he has not done so. It states :
"That this House notes the widespread discontent with the inadequacies of local government services in parts of Britain, particularly in many inner city areas".
Why does the hon. Gentleman not mention Liverpool and so many parts of London represented by Labour councils, which are now attracting the attention of newspapers?
Mr. O'Brien : I am discussing local government services, which is the title of the motion. The motion is framed
"To call attention to policies on the delivery of local Government services".
The delivery of local government services, depends on central Government saying exactly how 80 per cent. of local government income will be presented. If any reference should be made to the provision of local government services, it should be not to local authorities but to the Government, who provide 80 per cent. of their revenue. I am pleased that the hon. Member for Stroud says that, if his district authority wants to spend £9.95 million on services for his constituents, whether for recreation, for bus shelters or for housing and services connected with housing, he will support capping. If those services then cannot be provided because of capping, I hope that the hon. Gentleman will make it clear to his constituents that it is because his supports such a principle.
Mr. Knapman : The hon. Gentleman may be aware that, in Stroud last year, the direct labour organisation lost several million pounds.
Mr. O'Brien : I shall come to that later. The hon. Gentleman's motion refers to competitive tendering and
Column 632
value for money. Stroud is not the only Tory authority to be suffering as a result of capping. Services will be cut because the Government are now applying poll tax capping to district authorities.Mr. Harry Barnes : I thank my hon. Friend for giving way, and I do not think that we should move beyond Stroud at present. The figures produced in the answer of 5 December, to which I referred earlier, show that, before the £140 element was introduced, Stroud received only 12.9 per cent. support from the revenue support grants, which puts it at the bottom of the league. It does not receive anything like the 50 per cent. that the Government promised. If it sticks to the standard spending assessment provisions, it increasingly has to find money from the poll tax funds. The Opposition should seek to defend and assist Stroud, even if the hon. Gentleman who represents that constituency does not.
| Next Section
| Home Page |