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Had it done so, we might have had an even better Bill. I believe that when the shouting has died down and the controversy of the next few days is over, the Labour party will think again and will realise that there is great merit in a mutually agreed system of local government finance. We do not want to enter another general election while people still feel uncertain.The new proposals are sensible and fair, but, of course, they are not perfect. No system will ever be perfect and various issues will need tidying up in Committee. However, if there is a spirit of consensus, there is more chance of sensible and suitable amendments being passed in Committee. I sincerely hope that that will be the case.
I intervened on my hon. Friend the Member for Hornchurch (Mr. Squire) to say that I was especially concerned--and I know that he is also concerned as, I believe is my right hon. Friend the Secretary of State about people who have lived in a house for a long time. The value of their property may have increased enormously but the income of the occupants may not have increased. In some cases, the occupants are not the owners but merely tenants. In Committee we should devise a mechanism to take account of that fact, because such people may not be eligible for any rebate but could still be badly hit by the new tax. I hope that my right hon. Friend the Secretary of State for Wales, who is a sensitive man and who thinks deeply about these issues, will discuss with the Secretary of State for the Environment whether something can be done to deal with the problem. In my constituency it causes heartache and anxiety.
We are all delighted with the return of the 100 per cent. rebate and the abolition of the 20 per centers. That is a sensible move. I join all hon. Members who wish that the 20 per cent. contribution could be abolished before 1993. I hope that even now we can think again.
Other issues have been raised by the bodies that must administer the tax. I have the honour of being a vice-president of the Association of District Councils which has submitted a paper that I know my right hon. Friends have seen. However, I draw to the House's attention two points in that paper that deserve careful consideration. The paper states :
"The Association does not accept that the long-term health of local government can be sustained on the basis of one locally variable tax yielding only 15 per cent. on average of the spending needs of local authorities. The Association believes that the national non-domestic rate should be returned to local control".
I understand why we introduced the uniform business rate, but, as we are reforming the structure and finance of local government, it would be wrong for us to say that we shall not consider the issue again. The points made by the ADC are worthy of careful consideration. It would not be appropriate to incorporate such reforms in the Bill, but I hope that after we have won the next general election we shall reconsider the matter seriously and do something about it.
The other point made by the ADC is, I know, contentious and I do not suppose that I shall carry my right hon. Friend with me. The ADC's paper states :
"The Association thoroughly opposes the principle and practice of capping local authority expenditure."
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I must say that I have always felt unhappy about it myself. If we are talking about accountability, we must give local authorities greater freedom and flexibility and call them to account.Mr. Janman : They have abused it.
Mr. Cormack : My hon. Friend says that they abuse it, and they frequently do ; I accept that. It is an entirely reasonable point to make, and I fully understand why we have indulged in capping and why it is written into the Bill. Frankly, however, capping does not sit easily with a belief in local government or the freedom of local government.
We shall have to keep the matter carefully under review. The ADC is not a body led by the extreme left. It is a highly responsible body, which has reached a considered consensus view on the matter. I know that that view will not be entirely popular with my right hon. Friend the Secretary of State but I commend it to him for further consideration. I am not unrealistic enough to suppose that the argument will be accepted during the passage of the Bill, but capping is both crude and unsatisfactory and I hope that we shall not have to live with it indefinitely.
My hon. Friend the Member for Leeds, North-West (Dr. Hampson) referred to the paper circulated to a number of us by the Committee of Vice-Chancellors and Principals. I saw my copy this morning. If people as erudite and eminent as the vice-chancellors can be under such misapprehensions, it is important that we should clarify the matter for them. I hope that, during the debate and in personal correspondence, my right hon. Friend will be able to do that, because it seems to me that we have moved a long way, and the right way, on the position of students.
I am glad to have had the opportunity to participate in the debate. The Bill is extremely important. I believe that it represents a milestone that we should all be glad to have reached, and I congratulate my right hon. Friends on having had the courage to introduce it. It will be widely welcomed in the country at large. It is an enormous improvement on what has gone before and an improvement, too, on the rating system that preceded that. We now have the possibility of a really sensible stable system of local government finance, and I wish the Bill well.
8.1 pm
Mr. Tony Banks (Newham, North-West) : I shall be brief, because I know that many hon. Members wish to speak.
The Secretary of State's speech consisted mainly of an account of the article in the Financial Times rather than an explanation of the details of the Bill. It sounded very much like the speech made by the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) when he introduced the poll tax Bill--the Local Government Finance Bill 1987--on 16 December 1987. It is all on record : the right hon. Gentleman told us that the poll tax would be a fairer, simpler tax which would give rise to greater accountability. He claimed for the poll tax precisely the same advantages as the present Secretary of State now claims for the council tax. How can anyone in the House--particularly any Opposition Member--or anyone outside it believe a word that the Secretary of State says? It is clear that the present Bill will be rushed through the House because the Government decided that the poll
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tax is an electoral liability which must be replaced as fast as possible. It is all part of the general style that the Conservatives have adopted in dealing with local government ever since they were elected in 1979, and even earlier than that.I have been going through some of the major changes in local authority structure and procedures that have taken place in recent years, all of which have been introduced by Conservative Governments. In 1963, we had the abolition of the London county council and the setting up of the GLC. In 1972, we had the creation of the metropolitan county councils which nearly mirrored the GLC. Then, in 1986, we had the abolition of the GLC and the metropolitan county councils. After that, we had rate capping, to which the hon. Member for Staffordshire, South (Mr. Cormack) referred, and the poll tax. Now we have another proposal for further changes in local authority structures and the institution of unitary authorities outside London.
How on earth can anyone in the country say that the Government know how to organise local government structure or finance? Theirs is a record of interference, mess and confusion. Now they come back to the House not with an apology but seeking credit for clearing up the mess that they previously created. They will get no thanks from the Opposition and no thanks from anyone in the country. We know what all this is about. It is not really about finance but about politics and the Tory party's view of politics.
I did not hear the sedentary intervention of the hon. Member for Thurrock (Mr. Janman) in the speech of the hon. Member for Staffordshire, South, who was referring to rate capping, but I gather that the hon. Gentleman said that local authorities abused the system. The hon. Gentleman, in his directness and honesty, sums up the Tory party. The Tories do not trust local democracy. They do not trust local electors to get rid of local authorities if they do not like them and to support them if they do. They want local authorities to reflect precisely the views of the Tory party in government. Many Conservative Members have no respect for local democracy or any other form of democracy. They merely want local authorities to do what the Tory party would have it do.
Mr. Janman : What I actually said was that local authorities have abused the system. I was talking not about a theoretical position but about historical fact. Personally, I should like to see the implementation of a referendum system at local level on a non-party basis, because that would provide a mechanism to ensure local accountability. In the absence of that, however, we need a capping mechanism such as that proposed in the Bill.
Mr. Banks : I still do not agree with the hon. Gentleman, although I am glad to hear that he agrees that there should be some local control over the local decision-making process. That seems right, but, of course, we already have such mechanisms in place : they are called local elections and local democracy. Local government has thrived in Britain and, in many ways, our system is the envy of the world. The hon. Member for Thurrock may laugh, but I repeat that we have one of the finest local government systems in the world. It is as simple as that.
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Mr. Banks : It is no good the hon. Gentleman picking an authority that he does not like and trying to use it to knock every other aspect of local democracy. What worries me is that the Government have been totally cavalier in their attitude to the whole process of local democracy and accountability--indeed, they have used parliamentary sovereignty to destroy local accountability and, in the final analysis, such actions undermine democracy.
I had hoped that, with a gentler, kinder, more responsible and responsive Prime Minister in control, we would move away from all this, but it seems that the Government cannot get it out of their system : if they do not like what local authorities are doing--and they do not like what a lot of them are doing--they interfere. In the end, they will abolish them.
We all know what sort of local authority the Government would like. They would like them all to be Tory authorities. The City of London, for instance, is so totally Tory that its members can say that it is non- political. What they mean is, "It is Tory right the way through." When they say, "We are going to keep politics out of the City of London and out of this local authority," what they mean is, "We are going to keep your politics out of this local authority." That is what it is all about and the Bill is just another stage in the dismantling of local accountability and local sovereignty. The shadow that hangs over debates such as these is the right hon. Member for Finchley (Mrs. Thatcher)--the Finchley whinger. It was the right hon. Lady who said that the poll tax was the Government's flagship. Like a captain, she went down--temporarily--with her flagship. Unfortunately for the Conservative party, however, she keeps bobbing up again : her head keeps appearing above the waves. We therefore now have the ridiculous image of the new Secretary of State in his new lifeboat rowing away from the disaster and cracking the right hon. Lady on the head every time she emerges and tries to get into the lifeboat with him. The Tories do not want her in the lifeboat because they know that as soon as she gets on board it will overturn. The right hon. Lady will ruin the Tories' chances at the general election--it will not now be on the poll tax but, I suspect, on Europe. The former Prime Minister sends letters to Bruce Gyngell, of TV- am, saying "Dear Bruce, I am sorry. (Sob, sob.) I never thought it would end like this." She should send a letter to every single person in the country, apologising for the poll tax. That is the kind of task that she should be given. That is the punishment that should be inflicted on her. I would like to see her chained down and made to write out by hand a letter to every poll tax payer. That would undoubtedly give her writer's cramp.
We did not hear much about the Bill from the Secretary of State for the Environment. In his knockabout speech, he did not seem fully to understand the problems that he is going to create. The council tax is a rerun of the poll tax. Once again, it is being done in haste. When legislation is passed in haste, it is always repented at leisure. However, there is not much leisure time left to the Government betwen now and the general election.
The Bill will throw up just as many anomalies and problems as the poll tax Bill and we have less than 17 months before the tax is due to come into operation. Unfortunately, a Labour Government will have to clear up the mess. That is what really worries me. There should be poetic justice in letting the Tories clear up their own mess,
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but we cannot allow them to do that because we will then undoubtedly have poll tax mark III. That is what will happen if the Conservatives are re-elected.The local authorities are confused about the proposals in the Bill and that is not surprising because we will not see much of the detail until the spring of 1992. The Bill proposes that only 50 per cent. of the tax will be paid for second homes and for properties with low residence. That is grossly unfair. Why will local authorities in Wales be able to charge the full 100 per cent. for second homes while only 50 per cent. can be charged in England? Does that have something to do with the problems that second- home owners in Wales are experiencing with the Welsh Language Society? Why cannot local authorities in England charge the full 100 per cent? If people are lucky enough and rich enough to have two homes, they should be prepared to pay two taxes because they will undoubtedly require services in both the areas where their residences are located. The discount system and the benefits are very complex. Local authorities are not looking forward to the administrative nightmare that will be created if the Bill becomes law.
In Newham nearly 20 per cent. of the households are occupied by single people among whom there is a high turnover rate. Experience in compiling the poll tax register bears this out. In addition, the multiple occupancy nature of many Newham properties means that discount administration will be very complex as household structures change. The council tax is based on the Tory utopia of two persons, preferably married, households. The reality in Newham, as in most other London boroughs
Mr. Banks : One of the Newham officers wrote it and I want to ensure that the views of the Newham officers who have to administer the scheme are made clear in the House.
The Newham officers also wrote :
"Newham expects over 30 per cent. of council tax payers to be eligible for benefits. When this is combined with the 20 per cent. of single person households, high turnover and multiple occupancy, it is clear that by any stretch of the imagination, this is not a tax which will be simple and cheap to collect."
That is another problem that we will have to face in Newham. The system of discounts and benefits will be administratively complex. The vagaries of the property bands mean that the highest council tax payers will pay only three times more than the lowest, even though their property could be worth eight times as much.
In Newham, as little as 9 per cent. of overall income will be raised by the tax. That is the second lowest in the country. Our next door borough, Tower Hamlets, is the lowest--excluding the City of London. It is clear that a total catastrophe is to be replaced by chaos. That is what we are being asked to examine tonight. There will be a guillotine motion tomorrow and the Bill will be pushed through its Committee stage without the kind of detailed examination required by legislation as complex as this. One would have thought that some of the lessons and failings of the poll tax would by now have sunk into the thick skulls of Conservative Members. Obviously,
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that has not happened. They are so grateful to escape from the poll tax that they will grab any pig in a poke that happens to be passing by.The Bill is a pig in a poke. I am only grateful for the fact that people will not have to live with it for very long. My colleagues on the Opposition Front Bench will be in government in a few months' time and they will have to restore to local authorities the accountability and control over local decision making and local resource raising that they should have and had enjoyed in the past before this interfering bunch of incompetents stumbled into Westminster. Fortunately, they are on their way out and local government can be put back on to a fit and proper basis.
8.15 pm
Mr. Tim Janman (Thurrock) : There are two striking features about this debate. The first is unusual in that this must be one of the few areas of our work in this place that we can debate today without the European Community poking its nose into what we should or should not be doing. The other striking feature is very common in this Parliament and that is the lack of detail and genuine, constructive criticism from the Opposition. The hon. Member for Dagenham (Mr. Gould), in opposing the Second Reading, made the utterly vacuous speech that we have come to expect from him.
The community charge is no longer a big issue. In many parts of the country, until it was announced that the community charge was to be abolished, non-payment of the charge was not particularly different from previous non-payment of domestic rates in any given locality. For the whole of the borough of Thurrock, non-payment of the community charge in March 1991 was down to 6.4 per cent.--a level at least commensurate with non- payment in the last year of the rating system and probably slightly lower than that. We must bear in mind that the system that we are leaving behind, until the announcement of its abolition, had not been the unmitigated failure in terms of its implementation and collection that some hon. Members believed it to be.
We are considering today the council tax, a major piece of legislation to introduce a new way of raising local revenue for the financing of local government. I will be voting for the property tax tonight--
Mr. Tony Banks : If the hon. Gentleman does that, he will be the only one because we shall be voting tomorrow night.
Mr. Janman : I am grateful to the hon. Gentleman. I will be voting for the property tax tomorrow night. The most important reason why I will do that is that the vast majority of my constituents will gain from the replacement of the community charge with the property tax. Before any Opposition Member pipes up with the question, "Why did you vote for the community charge in 1988?", I must explain that compared with the revaluation of rateable values which would have occurred if the community charge had not replaced the rating system, most of my constituents were gaining from the advent of the community charge. I am being consistent. I am voting for a change in the system of local government finance that will benefit my constituents compared with the other options on offer.
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It does not matter what system a Government introduces, there will always be winners and losers when one system of local government finance is replaced with another. However, even those who will lose, primarily people who live on their own in properties in the higher bands--of which there are not many in my constituency--will not be losing as much as they would lose if we had a Labour Government introducing their so-called fair rating system.We have an opportunity with this Bill to introduce a system of local government finance that will be a middle-of-the-road option in comparison to its two forerunners. The old rating system took no account of the problem whereby one person living on his or her own would be expected to pay the same for their local government services as, say, four people all earning a wage and living in an identical house.
It is correct to differentiate between the fundamental principle of the community charge and the exact implementation of it. Some of my hon. Friends say that that is not a fair differentiation, but it was fair. The community charge took us from one extreme, in which there was no account of the number of people living in a household, to another extreme. For example, in my constituency, due to the high overspending of my local Labour-controlled council, four adults living in a three-bedroom semi- detached house would have been paying £1,700 because of the profligacy of my local Labour council. Under the community charge, the straight line relationship in terms of how much a household paid and the number living in it was just that--a far too straight line. With this legislation, we are moving towards a better balance between protecting households of only one person and not overcharging households of a greater number of people.
Given that we are replacing the community charge, we must ask whether it improved accountability. The hon. Member for Newham, North-West (Mr. Banks) made much of that point. There is conflicting evidence. It is true that, in almost two years since the community charge was introduced, there have been far more letters to the Thurrock Gazette about the inefficiency and wastage of my local Labour council than there were in the days of the rating system. By making everybody make some contribution, however small, the community charge concentrated people's minds on what the local council was or was not doing and on whether it was effective and efficient. I take issue with the hon. Member for Newham, North-West, because we must consider whether the community charge made any difference to voting patterns in local government elections and whether it made any difference to whether people fully understood their local council's revenue-raising powers and other powers. The theory of the community charge was that, with every person making some contribution, there would be a much higher turnout in local elections and a trend towards the electorate understanding that the people they put in office had revenue-raising powers and it is therefore important to examine critically their proposals. Perhaps with the exception of certain London boroughs, that has not happened.
I have spoken to hundreds of constituents about this matter because it genuinely fascinates me. A substantial percentage of the electorate do not vote in local elections,
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according to what the Labour party and Liberal Democrats are saying ; they vote on the basis of the performance of the national Government. One has only to look at the correlation between local election results and the party in power and how it affects the same party at local level to realise that that is true.In the 1970s, probably some reasonable Labour councils were chucked out of office because of the appalling Labour Government of the day. [Interruption.] I am not making a party political point. Whether the hon. Member for Newham, North-West likes it or not, local government democracy, which he clearly loves and talks about often, actually breaks down because of the party political system. As he knows, the vast majority of people do not even bother to vote in local elections. My local Labour party, which has 33 of the 39 seats on Thurrock borough council, saw its hegemony reinforced in May this year by getting fewer than 17 per cent. of the votes of those who are eligible to vote.
Mr. McCartney : How many voted for Tory candidates?
Mr. Janman : That is not the point. It does not matter which party it is. I am not trying to make a party political point in the way that the hon. Gentleman normally does. Irrespective of which party it is, it is ridiculous to say that, in most local authorities, the party in power has the overwhelming support of the local people, based on the percentage of the local community who actually voted and put their cross by the name of that party's candidate.
Many people--it is only because nobody has told them do not understand how much power county and borough councillors have. When I say to people that elected councillors on Essex county council, when its gets its massive dollop of revenue from the Government, can decide how that massive dollop of taxpayers' money is divided, they look at me aghast. They do not understand how much power elected borough and county councillors have.
Rightly or wrongly, and conveniently or inconveniently for the concepts and theories of local government of the hon. Member for Newham, North-West, most people look to central Government to rescue them from the overspending and largesse of local councils. In Thurrock, where my local Labour- controlled council is overspending to the tune of £50 a head, that is certainly no exception. I agree, certainly in respect of my own locality, that it is a shame that people do not rescue themselves by voting in local elections in the way that they vote in a general election. If they did that, we would not have a Labour council any more. Because of that, I support the Government's capping proposals.
I support the capping proposals in the absence of a radical reform of finding a local mechanism for holding local politicians to account. I would much rather a system where, if local councillors, having been elected, wished to spend more than central Government thought they should, they did not have to stand for re-election as my right hon. Friend the Member for Henley (Mr. Heseltine) suggested, but faced a yes-no referendum on whether councils should be allowed a budget that was bigger than that commensurate with the standard spending assessment set for it.
I hope that Opposition Members agree that, although that would take away the party political aspect, which would reduce confusion in the electorate about who has
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authority for what and exactly what the power relationship is between central Government and local government, it would make matters clear cut. People would be asked, "Do you vote yes or no to local councillors in effect challenging the authority of central Government, who obviously have the duty to protect public spending as a whole?" That would give an accurate and specific local mechanism which was better than the current mechanism which is clouded by party labels and national party politics.We must not make the same mistake that we made when we changed from the rating system to the community charge, when councillors--mainly socialist but including some Tory councillors who were only Tory in name and description but not in action--took their community charge payers, the Government and this Parliament to the cleaners. They used the opportunity that was presented by the change in the system to whack up their spending in a cynical fashion. When Thurrock council did that, I said in the local papers that its cynicism was worse than that of Ceausescu in Romania. That ruthless political cynicism went on up and down the country and the main victims were those who were least able to pay. However, Labour councils were determined to ensure that people were fleeced. They banked on the fact --with some success, unfortunately--that the electorate would blame the change in the system, whereas it was the promises and decisions that those Labour councils were making within the system that were to blame for millions of citizens being fleeced.
I also support the courts retaining strong powers to extract payment from those who will not pay. My Labour opponent in Thurrock trotted along to the inaugural meeting of the Thurrock branch of the Anti-Poll Tax Union, which was held at the Thameside theatre at Grays, thus giving that organisation succour and support. With the odd exception--I accept that there will always be odd exceptions, especially in relation to the standard community charge on houses that are no longer lived in and where there are problems in selling the property--because of the generous rebate system that exists, and the even more generous rebate system that is proposed under the new legislation, there is no valid excuse for non-payment for the person paying one personal community charge.
The most important improvement under the new system as compared with the old rating system is the provision for a 25 per cent. discount. However, I should like to know how the figure of 25 per cent. was arrived at. Is there any likelihood, on reflection, of its being increased? Although I would not go as far as some of my hon. Friends who believe that there should be a discount of 50 per cent.--although none has said so in the debate--I suggest that the discount should be about 40 per cent. For reasons that I shall not go into in detail now, and although I believe that the 50 per cent. figure is illogical, I believe that the 25 per cent. discount is possibly too low. Could not larger households, containing more than two adults, pay a small supplement to the council tax and thus, in effect, fund the increased reduction of 40 per cent. for single householders?
The principle of the community charge was never all that unpopular-- [Interruption.] Opposition Members
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may make strange hissing noises, but, as has already been said, the vast majority of the British people are fair-minded, and they saw nothing wrong with the principle that all those who have the right to vote in local elections should, in some degree or another, make some contribution to the revenue that has to be raised. The Labour party will come unstuck on that point. Opposition Members may glibly adopt slogans and dub the council tax "poll tax mark II", but they will come unstuck if they make such comments as a way of buttressing their attack on the principle that any system of local government finance should take at least some account of the number of people living in a household. The proposed reduction for single person households is the only element of the previous system that has been retained. I cannot put it any more strongly than "an element". The Opposition will come extremely unstuck if they attack the Bill on that basis.One weakness of the current system is that community charge payers do not see the separate charges imposed by the county tier as opposed to the borough or district council tier of local government. Therefore, I am pleased that the legislation proposes to give a separate council tax figure for each tier of local government for those parts of the country, such as mine, where there are two tiers. However, may I also ask--if the answer is no, I hope that it will change--that the individual comparative standard spending assessment be set against the individual amounts? If that does not happen, we could end up with the tricky situation of a Tory-controlled county council, such as Essex, spending 2 per cent. under its SSA but, because it is a county, it will be raising a much bigger proportion of the total tax bill than the borough. Thurrock, for example, has a much smaller budget and raises a much smaller amount of money, but is overspending by £50 per head against its SSA. Given the deviousness of the people who run that council, I know that they will come out with all sorts of claptrap about the Labour local council taking much less money than the Tory county council. If the two figures are separated and given as individual amounts, it is essential that the individual SSA comparatives are also given so that people can put the figures in their proper context when they receive their bill. I am pleased to support the Bill tonight and shall be pleased to vote for it tomorrow on Second Reading. I am always grateful to the hon. Member for Newham, North-West for making sure that I know where I am going and what I am doing. He does a good job on that. Surely, however, it cannot be beyond the wit of man to find a system of local government finance which is practical to implement and enforce, which is fair and is perceived as being fair by the public, which is comprehensively accepted by them and which gives accountability. Let us hope that the council tax is it.
8.35 pm
Mr. Ian McCartney (Makerfield) : First, I should like to assure the hon. Member for Aldridge-Brownhills (Mr. Shepherd) and my hon. Friend the Member for Leyton (Mr. Cohen) that I shall stick to what I understand to be the agreement behind the Chair to ensure that every hon. Member who wishes to participate in the debate has the opportunity to do so, especially those who have stayed for the whole debate--
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Madam Deputy Speaker (Miss Betty Boothroyd) : Order. I must correct what the hon. Gentleman has just said. The Chair is not involved in the question of the length of hon. Members' speeches. It is of course very nice if all hon. Members can be called, but a debate is a debate.Mr. McCartney : I did say "behind the Chair", Madam Deputy Speaker.
As someone who has spent most of the last decade as an elected member of a local authority and having continued to serve in that capacity for a period after being elected to this House, I have listened with anger to those Conservative Back Benchers who are on the road to Damascus tonight and who have given us the reasons why they did not really support the introduction of the poll tax. They have said that it was all the fault of the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) ; that it was the fault of the former Chancellor of the Exchequer for not providing sufficient resources when the legislation was implemented ; that it was the fault of the profligate Labour local authorities and that the local authorities failed to play fair with the central exchequer and to develop adequate systems for ensuring payment for local services. However, none of that is true.
As my hon. Friend the Member for Newham, North-West (Mr. Banks) has said, the poll tax was the Government's flagship. Last November, however, when the captain was ashore in Paris, restocking the victuals, the right hon. Member for Henley (Mr. Heseltine) delivered the black spot. But it was not the right hon. Gentleman who delivered the final blow ; it was the former Prime Minister's most trusted and personally appointed Chancellor--the man who would ultimately replace her--who made the right hon. Lady walk the plank because of the poll tax.
The right hon. Member for Henley delivered a 52-minute speech earlier today, of which five minutes dealt with the council tax while he spent 47 minutes on anything but the council tax. That was a signal that the admiral had finally scuppered his own flagship. Not since the sinking of the Graf Spey have we seen so many rats deserting a sinking ship at the same time.
Unfortunately, Conservative Members have sought only to defend themselves tonight. They have not apologised for the poll tax's consequence for local government, its cost to local government or to the individuals who have suffered from it. At one stage, some Conservative Members even gloated over the fact that people in Wandsworth who can pay the poll tax do not have to pay any in the current year. That is grotesque when hundreds of miners' widows in my constituency, whose husbands died of pneumoconiosis, now have to pay the full poll tax because their widows' pension is taxed at 97p in the pound. They do not qualify for poll tax rebates simply because of that level of taxation. It was because of such grotesqueness that people recognised the unfairness of the poll tax. Many of my constituents who are Conservative voters and who can afford to pay the poll tax have been turned against that party because of its basic unfairness. It was only in November last year when it became clear that the right hon. Member for Henley was making a major grab for the Conservative leadership that the Cabinet was forced to do something about the poll tax.
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Conservative Members have blamed everything bar themselves. What did the Prime Minister say in an interview with the Daily Mail shortly after being elected Prime Minister ? He said :"I'll tell you the trouble with poll tax. We were bounced into it quickly because there was such a fuss about rates in Scotland and we were bounced without thinking because of the political fuss". Without thinking, the Chancellor of the Exchequer and his colleagues in the Cabinet bounced the poll tax and its consequences on the electorate of Britain. Tonight they ask us and the people of Britain to believe them when they say that they have got it right this time.
What an admission for the Prime Minister to say that he did not think about the introduction of such a major piece of legislation. The poll tax being introduced in its second form this evening is a panic measure. It is an attempt to get the Conservatives over the next general election and give the impression, as they seek to do with the economy, that things are going well and are about right. They say, "Leave it to us chaps. With a steady hand on the tiller over the next few months, everything will come right and after the next election that will prove to be the case."
The timescale is out of sync for one major reason. We have a crisis in local government funding in the United Kingdom. Whether local authorities are Conservative, Labour, Scottish National party, Liberal Democrat or Plaid Cymru, in the length and breadth of Britain there is a major crisis in the funding of local government. There is a crisis in the structure of local government, people's expectations of local government and the delivery of services. The reason is that for over a decade local government has been undermined, underfunded and placed in a hostile position by the Government.
The consensus about delivery of local authority services in Britain was smashed deliberately by the Government and continues to be smashed by the introduction of this legislation. The measure will be unsuccessful. The tragedy is that the unsuccessful nature of the Bill will result in many of our constituents continuing to pay huge amounts towards local government finance while resources are ploughed into not improvement and development of services at local level but the administration of a system which is about hoping to ensure the return of the Conservative party to power.
The council tax is clearly poll tax with another name. It has three basic and fundamental weaknesses which were present in the poll tax. It is not simple to understand--it is complex. Its complexities will mean that whether hon. Members support it or not, they will be unable to do anything to improve it within the parliamentary timescale. Therefore, a flawed Bill will go on to the statute book, just as the Bill which introduced the poll tax was flawed. The way in which the Bill will be put through the House will be a negation of the House of Commons' right to develop a strategy to create good legislation. Surely that is what the House should be about, irrespective of hon. Members' party political differences about the concepts and principles of legislation.
When the Bill leaves the House it must be understood and it must be workable. To be workable it must be good law and have a benefit flowing from it. There is no way in which misuse of the guillotine can ensure that the Bill will
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go out as a good and acceptable measure which will improve local government finance and the way in which the British people pay for it.The link between the concept of paying for local Government resources at local level and the maintenance of those payments has been the greatest disaster and tragedy of the poll tax. Previously, 99 per cent. of people paid the rates. More than 99 per cent. of local businesses paid the rates. In my area the figure was 99.7 per cent. The system was understood. It was simple and, despite people's grumbles, there was a commitment and an understanding that local government services had to be funded proportionately at local level. The poll tax ended that consensus for ever. No matter what system is brought into operation, millions of people will decide not to contribute to paying for local government services. In my view, that is a wrong decision. The Government broke into that basic tradition of life in the United Kingdom.
The council tax will be expensive to administer and collect as was the poll tax. The council tax does not relate to people's ability to pay. That is one of the major reasons why the speech by my hon. Friend the Member for Neath (Mr. Hain) was important. How can it be that someone who has in excess of £150,000 per year disposable income can pay the same or less than a miner's wife in my constituency? Under no circumstances is that a fair system of local taxation. Not only the Labour party says that the council tax is unfair. The Secretary of State for Wales will reply to the debate tonight. He owes it to those of us who are worried about it to clarify exactly how students, and especially nursing students in the national health service, will be treated. The Royal College of Nursing has made it clear that the regulations which currently define students for the purposes of the community charge distinguish between nursing students pursuing Project 2000 courses, who are in receipt of a bursary, and students pursuing conventional nursing courses, who receive a training allowance. The incomes of the two groups of nursing students are similar but under the community charge Project 2000 students pay 20 per cent. of the tax while the others pay 100 per cent. In the same health authority student nurses may work together making beds and caring for patients. But when they leave the ward, one is exempt from the new community charge and others make an immediate payment. The Government must clarify the position under schedule 1 for nurses on the two types of courses. If they do not do so tonight, they should table amendments in Committee. It cannot be acceptable in terms of either logic or good administration to discriminate between the two types of student nurse.
I will probably be one of the Opposition members of the Standing Committee that will consider the Bill. Although we are opposed to it in principle, I genuinely hope that the Government will provide an opportunity to examine the workings of this complex piece of legislation and ensure that when it leaves the House it has some semblance of a workable piece of legislation. Local authority treasurers, irrespective of local authority and party, all say that the timescale within which the Government intend to introduce the council tax and the way in which they intend to force through the proposals will leave local authorities in administrative trauma. The Government owe it to the
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House, local government and, more importantly, to the British people to introduce workable proposals. I hope that when it is seen in Committee that there are major flaws in the Bill, the Government will be big enough to accept Opposition amendments to improve it. Britain cannot afford either financially or in terms of its democratic structures to go through another debacle like the poll tax.8.47 pm
Mr. Richard Shepherd (Aldridge-Brownhills) : It is clear from the debate that every right hon. and hon. Member wants an equitable and bearable form of local government taxation. Indeed, as was rightly pointed out, this is not the first time that we have sought that end. My right hon. Friend the Home Secretary and my right hon. Friend the Health Secretary set about devising such a form of taxation and it was the poll tax and the uniform business rate which brought us to this stage and so low in public esteem.
My hon. Friend the Member for Teignbridge (Mr. Nicholls) said that the central proposition of the poll tax was that everyone should pay a little. Of course, if one recalls, that was not the first principle of the poll tax. The first principle was that we should all pay equally. On Second Reading of the poll tax legislation I accepted the advances of the Government and voted for the Bill. I am grateful for the processes of legislation in the House, because as the Bill unfolded it became clear that the original principle was unsustainable. It was so unsustainable that the Government had to accommodate the changes, inadequate as they turned out to be, which enabled my hon. Friend and other Conservative Members to argue that the principle of the poll tax was that everyone should pay a little, almost as if it were a discretionary tax. But the original concept was that everyone should pay equally and it was swept up by the magnificent phrase of my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) with his usual panache--"Why should a duke pay more than a dustman". That phrase swept round the country and concentrated our minds on what the debate meant more than any other contribution.
During the parliamentary discussions one began to understand the principles that underlay the debate, what it amounted to and why the tax could not be borne by our constituents. We could genuinely signify neither acquiescence nor consent.
The spokesman for the Liberal Democrat party pointed out something about the process of legislation that was very true. At our first attempt to reform local government finance in the House, taking three bites of the cherry, there were 218 Government amendments in Committee--not the perversities of modest Back Benchers such as ourselves--135 on Report and 268 on Lords Report. That was the scale of amendments to a thought-through, carefully designed Bill that we were told was certain. We were told that we could return to our constituents and assure them that the tax was bearable, just and equal.
I wish this Bill the best in the world. I want an equitable and bearable form of local government taxation. Normally, I would vote for the Second Reading, but the most extraordinary guillotine that has ever been introduced into the House is marching with the Bill. We are talking about a guillotine, which will be moved tomorrow, but in the knowledge of the Bill and of the fact,
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fundamental to its passage, that we shall discuss in Committee for only nine days a Bill whose predecessor required more than 700 Government amendments. We have witnessed Ministers unable even to argue their new clauses let alone understand, for the conviction of the House, what the Bill means.The Government are insistent that by 6 December--St. Nicholas' day, that is Father Christmas' day--they will bring back to the House a Bill that they will claim has been thoughtfully considered. Conservative Members understand Burke's understanding of the British constitution. As Back Benchers of a constitutional party our role is to scrutinise legislation and to attest that our constituents, our people, will bear it. That is the justice of the system of Parliament--Parliament meaning that we have the right to free speech on behalf of our constituents. Yet, on the same Order Paper as this measure, the Government propose to restrict debate to nine days in Committee. It is a travesty of parliamentary procedures. It will do us down--not because the Bill may be wrong, but because we will be unable to judge it. Driving through a major piece of taxation legislation to secure their purpose this side of Christmas is the most high risk strategy that a Government can undertake.
There is no point in imploring the Government because they have cast their die. I hope and pray that this Bill has integrity, because the assumption behind it is that my right hon. Friend the Secretary of State for the Environment has spent his days since he came to office with the Lord above and the accounting angels to forge the most perfect piece of legislation that has been known. That is an absurdity. I cannot imagine that the Government will not come forward with a large number of amendments.
In the justice of this argument we are talking about the Local Government Finance Bill, but we have not heard one word from the Government about the uniform business rate which has been a fundamental element in the finances of our local authorities for many years. That issue has not been tackled.
Whether the Bill is enacted before a general election is also a moot point, as we have no call over the processes and the time that the House of Lords takes for consideration of the Bill. Therefore, it may or may not come about. All that the Government will demonstrate is that by the brutal use of a guillotine they will certainly ensure that the Bill is enacted without proper and adequate debate. As a constitutional party, we have a duty to have regard to the form of debates and procedures in the House.
8.55 pm
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