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Mr. Norman Tebbit (Chingford) : I congratulate my hon. Friend the Member for Walthamstow (Mr. Summerson) on using this Adjournment debate to raise an important issue which affects his constituents and mine. It also affects the constituents of the hon. Member for Leyton (Mr. Cohen), who is not here--perhaps because he could not speak on the matter without shame at his record.
This is a disgraceful matter, and I have received many letters from my constituents who are deeply upset and question the legality of a process by which they are called upon to pay the debts of others who wilfully refuse to pay. As my hon. Friend the Minister will explain, that is the law and there is no other option, but it is deeply regrettable that this should have occurred.
As my hon. Friend said, the administration of the local authority is a total shambles. He might also have mentioned, with good cause, the disgraceful state of affairs in the social services department. Many of our constituents and, I am sure, many constituents in Leyton are left without the services that they should have, not because of a shortage of money, but because of an administrative shambles and a gross waste of money.
It is a sad thought that if the council's collection rate is as bad in the current year as it was in the year just ended, there will be a further surcharge of about £12.50 in respect of the uncollected £50 surcharge from this year. That is a measure of the scandalous waste, the scandalous politicking and the scandalous shambles of this council. I hope that my hon. Friend the Minister will take up all the
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suggestions made by my hon. Friend the Member for Walthamstow and that he will act on the matter. Something must be done.2.45 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key) : I congratulate my hon. Friend the Member for Walthamstow (Mr. Summerson) on his success in being able to raise this important issue on the Adjournment. Following his question to my hon. Friend the Minister for Local Government and Inner Cities last Wednesday, it is yet another example of his commitment to ensure that his constituents' concerns are voiced in the House. Those constituents are very well served by him and by my right hon. Friend the Member for Chingford (Mr. Tebbit), whom I am delighted to see speaking in support of my hon. Friend the Member for Walthamstow. My right hon. Friend is right. The most destructive kind of politicking goes on in authorities such as Waltham Forest. It is not as if the authority is typical of many Labour authorities. Will the Labour party suggest that Labour authorities that manage to collect the community charge should be disregarded or expelled, as the lunatics, who now appear to be unpopular, have been? Of the best four authorities in terms of collection charge record, two are Labour--Cannock Chase and Copeland. Cannock Chase has managed to collect 110 per cent. of its charge and Copeland has managed to collect 105 per cent. of its charge. The Labour party needs to get its act together.
Before dealing with my hon. Friend's specific concerns, I should like to set out some background on the level of charges, billing arrangements and enforcement. The Government accepted earlier this year that the burden of taxation falling on local community charge payers was too high. The Chancellor took steps in his Budget to redress the balance. This year, therefore, only 15 per cent. of the cost of local services is met directly by community charge payers, with more of the burden shared nationally through the increase in value added tax. This was reflected in a £140 reduction in the headline community charge. We have held down the charges of the highest spenders through capping. In addition, we have significantly improved the relief available to those whose community charge bills taken at household level were higher than their old rates bill. This year, a couple should pay no more than £52 in combined community charge above the total of the 1989-90 rates bill for the household. Each additional adult is required to contribute only an extra £52. In this way, we have brought down the average community charge payable to £215. We believe that that is affordable. For those on income support and benefit, effective assistance remains in place. At the same time, we believe that the arrangements for billing people are fair and reasonable. Everybody has a statutory right to pay the community charge in manageable instalments. Nobody becomes liable to pay the community charge until he or she receives a demand notice from the charging authority in whose area he or she is resident. When he or she gets the bill, the charge payer is given a specified date, no sooner than 14 days after the issue of the Bill, by which he or she should pay the first instalment. If the charge payer does not meet that instalment, he or she is given a number of further opportunities to pay.
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A first reminder notice is issued, requiring the outstanding amount to be paid within seven days. After this, the authority may also issue a second reminder notice, but it is under no obligation to do so. Our regulations ensure that a charge payer is given at least two and possibly three opportunities to pay his or her community charge instalment. There is a further step before the local authority has to consider enforcement action. If he or she fails to pay the first instalment following the issue of reminders, the charge payer becomes liable to pay the authority the full amount of the community charge for the whole year. He or she has a further seven days in which to pay.We believe that the charges set this year are affordable and that charge payers are given every opportunity to pay them in a manageable way. There can therefore be no excuse whatever for non-payment, and let me make it very clear that there will be no amnesty for non-payers.
Sadly, there has been significant non-payment. To deal with that we provided local authorities with wide powers to take enforcement action to recover sums due. This procedure starts when the council applies to a magistrates court for a summons to require a person involved to attend a court to explain to the magistrate why he or she had not paid the charge. If the Bill and the reminder have been issued in accordance with the regulations and the person cannot show good cause why the required sum has not been paid, the magistrate will issue a liability order to the council so that it can take action. This order covers both the community charge payable and the costs incurred by the charging authority and the court in obtaining and issuing the order.
We have seen to it that local authorities have stronger and wider powers to recover sums due than they did in relation to the old domestic rates. Local authorities may use distress, with bailiffs removing and selling goods to the value for the debt and their own fees. In addition, we have given authorities the power to attach a defaulter's earnings or to require the Department of Social Security to make deductions from his or her income support payments. These are powerful instruments and, of course, ultimately there remains the possibility of imprisonment for persistent and wilful non -payers. Most authorities use bailiffs as their first port of call in enforcing the community charge. It is important that the activities of bailiffs are subject to fair but stringent controls. I know that local authorities have individual codes of practice. It is, of course, the isolated instances when something goes wrong that attract the media attention.
My Department has been told by the Institute of Revenues, Rating and Valuation that it aims to establish a national code of practice to cover bailiffs work on collecting the community charge. It aims to have this code agreed between the local authority associations, the Certificated Bailiffs Association and consumer groups, such as the National Consumer Council. There is a great merit in that suggestion and I urge all parties involved to do their utmost to ensure that a code of practice agreeable to to all parties emerges from these discussions as soon as possible.
If authorities use their powers to the full extent, they will be able to recover the charge from people who have
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not made payment. I acknowledge that last year when enforcement proceedings started some authorities had difficulty getting sufficient magistrates court time to hear the necessary amount of summonses. That situation is much improved and most authorities have reached agreement with their local court. We are greatly indebted to our magistrates for taking on this task in addition to their already heavy agenda of duties. I note what my hon. Friend the Member for Walthamstow said about the need for more magistrates, especially stipendiary magistrates. I shall draw that to the attention of my right hon. Friend the Home Secretary.Against that background, how is collection going nationally? We have yet to see the local authorities' returns for the first quarter of this financial year. Returns received from local authorities at the end of the last financial year showed that in England authorities had on average received 90 per cent. of the community charge they expected to collect. That is, of course, an average--some did better and some worse. As an average, it is somewhat lower than what was achieved under the old domestic rates. But it is not a lot lower and it is far from being the horror story that we usually read about in the press.
Looking at individual authorities' records, it is no surprise to find that responsible boroughs such as Westminster have a considerably better collection record than for instance Lambeth, and Islington which my hon. Friend mentioned.
It may help if I say a little about how Waltham Forest fared in this year's revenue support grant settlement. As my right hon. Friend the Member for Chingford and my hon. Friend the Member for Walthamstow will know, it did well. Its standard spending assessment rose by nearly 21 per cent. to £194.1 million and its external support--grant--and non-domestic rate income rose, before taking account of community charge reduction grant, to £160.2 million, an increase of nearly 20 per cent. which is the equivalent of £998 for each adult in the borough of Walthamstow. That is a remarkable amount for each taxpayer to share with the people of that borough. The community charge originally set by Waltham Forest in 1991-92 was £437, almost the same as in the previous year. The headline charge was reduced to £297 by the Government's general reduction of £140. So in my hon. Friend's borough, as in the rest of the country, people are paying substantially less in community charge thanks to the Government's decision to shift the burden of local spending away from charge payers.
I shall now move on to the specific points raised by my hon. Friend. He was most concerned about the size of losses on collection in his own authority and others which were being passed on to law-abiding community charge payers to meet. I have every sympathy with him. Such losses should not arise. First, it is unlawful and irresponsible for individuals to withhold individual community charge payments, and to attempt to transfer the burden of payment on to those who are rightly making their contribution. That is simply unreasonable. Secondly, as I outlined earlier, we have given authorities very substantial powers to enforce payment of the community charge. If authorities use those powers effectively, they can keep uncollectable losses to an absolute minimum.
I agree that substantial allowances for uncollected charges are unacceptable. Nevertheless, where there are such uncollectable charges, the local authority has a duty to make allowances for the amount of debt that it will not
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be able to recover and then set a community charge that takes this into account. I understand and sympathise with those who feel that it is unreasonable to pay for the losses created by the non- payment of others, but they should not break the law themselves. All charge payers are under a legal duty to pay the community charge set by their authority. The element in the bill for uncollected community charge forms part of that charge and charge payers must pay it, as my right hon. Friend the Member for Chingford said.I fear that it is a general rule of life that the law-abiding pay extra to make up for the behaviour of the feckless, the irresponsible or the criminal. Ask the manager of any High street store how much lower prices would be if it were not for theft and pilfering. My hon. Friend the Member for Walthamstow then mentioned the case of the hon. Member for Liverpool, Broadgreen (Mr. Fields). I find it beyond comprehension that someone who was elected to represent his constituents in the House should behave in such an irresponsible manner. As the leader of his party pointed out, Members of Parliament are elected to make the laws, not to break them. The chairman of Bootle magistrates clearly took a serious view of this when he imprisoned the hon. Member for Broadgreen for 60 days. The hon. Gentleman has set an appalling example, and I hope that this does not lead to other people following his irresponsible action.
I understand that the Freedom Association has sent the Labour party a cheque with which to pay the bill of the hon. Member for Broadgreen but that the Labour party
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has rejected it. Labour wants to wash its hands of this. I have some advice for the Labour party, which I am glad to see is represented by one of its hon. Members. It will continue to lose credibility in the House and outside until it disowns all hon. Members who do not pay their community charge.We have recently looked at the provisions for the surcharge and disqualification of councillors in the context of the Widdicombe committee's recommendations and concluded that the provisions were already sufficiently stringent.
Payment of the community charge will remain an important issue this year and next, but perhaps I can end by looking to the future. We have, of course, announced that the community charge will be replaced by the council tax. We have recently completed wide consultations on the new tax and we are currently considering responses to that consultation very carefully. We shall make clear the next steps in due course. Ease of administration and collection have been two of the key factors in designing the council tax. We believe that the proposals that we have put forward will meet all our objectives in this area while maintaining fairness and accountability.
I congratulate my hon. Friend the Member for Walthamstow on raising this important issue on the Floor of the House. I repeat what I said at the beginning--his constituents are fortunate to be represented by so diligent a Member.
Question put and agreed to.
Adjourned accordingly at two minutes to Three o'clock.
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