House of Commons Hansard Debates for 12 Nov 1991

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the guillotine procedure when they deal with the damaging legislation on the health service, the poll tax and many other matters that Conservative Governments have passed through this House during the past 13 years.

As I shall leave the House at the general election, one of the saddest features of this debate is that the Bill is one more attack on local councillors. In more than 20 years here I have seen many pieces of major legislation which were designed to attack the standing of local councillors. I do not care whether they are Conservative, Labour, Liberal Democratic, independent or, in Scotland, Scottish National councillors. All those who stand for election submit themselves on a sincere platform and with a will to serve the electors from whom they ask for support.

When the hon. Member for Hendon, South attacks Labour councils as he did so vehemently, it is almost as if they were not elected. People voted for them. He must have fresh in his memory the fact that in May this year, not many months ago, the Conservative party lost 500 seats in England and Wales in the local government elections. Despite all the criticisms that he has levelled at Labour-controlled local authorities, it is an inescapable fact that in England, Wales and Scotland Labour-controlled authorities are there by virtue of the democratic decision of the people. That is how it should be but, of course, that is not what the Government want.

If I may, I shall for a minute trace the history of attacks on local government, the constant reorganisation of local government and the uncertainties created for councillors in my time here. In 1972 local government reorganisation in England and Wales set up the Greater London council and the metropolitan borough councils, and brought changes to all local government. It was quickly followed in 1973 by the reorganisation of local government in Scotland. At that time there were also two major housing acts : the Housing Finance Act 1972 for England and Wales and the Housing (Financial Provisions) (Scotland) Act 1972--the Rent Acts as they were referred to. Later legislation abolished major elements of the local government structure that had been set up under the 1972 Act. The metropolitan borough councils were abolished, not because they were not doing a job but because they were Labour. The authorities were abolished to silence them.

I think that it was the hon. Member for Tayside, North (Mr. Walker)--I apologise if I am misrepresenting him--who said that councillors no longer run councils and that councils are run by officials. The simple explanation for that is that when local government was reorganised we reduced by 50 per cent. the number of elected members. In other words, we reduced the democratic element by 50 per cent. It was as plain as a pikestaff, as sure as night follows day, that the bureaucratic element would double. When people complain that local government is being run by bureaucrats, it is simply because there is not enough democratic input.

I do not know what form the reorganisation of local government or local government finance will take in the years to come. However, I do not waver from my belief that the democratic input in local government must increase not only in Scotland--I say that in the presence of the Secretary of State and the Parliamentary Under-Secretary, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton)--but throughout England and Wales. If the House moves further down the road of bureaucracy, all it will do is store up trouble for itself.

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We are now faced with another piece of major legislation that represents another attack on local government and yet another major reorganisation of its structure--the seventh we have had in the past 20 years. How on earth can any organisation be efficient when it is continually subjected to the type of reorganisation that the House has inflicted upon local government in the past 20 years? There has been no cohesion or consistency of approach.

By and large, councillors do everyday jobs and devote some of their leisure time to try to make conditions better for the people in their locality. It is unacceptable to expect such councillors to adjust to the changes that are imposed upon them by the House in such a draconian way and with such monotonous consistency.

The council tax Bill has its origins in the demise of the former Prime Minister and the loss of 500 seats in the local government elections. It was cobbled together in a hurry, as is obvious from reading it. The hon. Member for Hendon, South has already demonstrated, and far more ably than I could, the deficiencies and anomalies in the Bill.

If any local authority had squandered the amount of money that Ministers are guilty of squandering on the poll tax in the past four years there can be absolutely no doubt that councillors would have been surcharged under local government legislation. How can one try to explain to a councillor how on earth inefficient Ministers can get away with squandering millions of pounds of taxpayers' money? However, if that same councillor is "seen" to squander between £40,000 and £50,000, the Secretary of State for Scotland or the Secretary of State for the Environment would be on his neck like a ton of bricks. The councillor would be surcharged for seemingly squandering that money. However, the real guilty people are Ministers who have squandered billions of pounds of taxpayers' money, but they have got off scot-free.

Those same Ministers then come to the House and with brass neck defend the introduction of a council tax with the same conviction with which they condemned the principle of a property tax when the poll tax was introduced. Recently the Secretary of State for Scotland and the Minister of State went around Scotland attacking the concept of a property-based tax. The Minister said that we would never return to a property-based tax. In fact, the Minister is on record as saying that just three years ago, but the backbone of the Bill is a return to a property-based tax.

I believe that the rating system of England and the revaluations that should have taken place, but never did, were the basis of the problems in England. However, I bow to the superior knowledge of English colleagues in all parts of the House when it comes to the English system.

In Scotland, however, at the time of the 1983 revaluation three factors combined, the effects of which no local taxation system could have withstood--not even the Liberals' proposal for a local income tax. The first factor was the reduction of 12 per cent. in the rate support grant from the Government to Scottish local authorities. The then Secretary of State for Scotland, the right hon. Member for Ayr (Mr. Younger), directed the assessors to switch the burden from industry to the commercial and domestic ratepayers. That was followed by a dramatic

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increase in the property values valued by the assessors. No system of local government taxation could have withstood those three factors and their combined effect.

What did the Government do? To try to repair the damage that they had done they switched the burden to the commercial and domestic ratepayer. The Government told the assessors to make that switch and they then introduced a system whereby any ratepayer, commercial or domestic, whose rates had increased by a factor of three could get rating relief. A small number of people qualified for such relief, but the Government wondered at the outburst that followed. As a result of that we got the ill-thought-out and ill-fated poll tax. I am a devotee of the rating system--I speak for myself when I say that--and at the time of the introduction of the poll tax I do not believe that a sufficiently vigorous defence of the rating system was made. Those of us who supported the rating system failed miserably to argue for its retention and development.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key) : I am listening with great interest to the hon. Gentleman as I respect the fact that he has been a Member of the House for 20 years and a member of a Government for five years with special responsibility for devolution. The hon. Gentleman understands the working of Government and the inter-relationship with local government.

What is the hon. Gentleman's opinion of the current attempts to reorganise local government? I share his frustration at the fact that for many years local government has been considered from a financial point of view only. Local government finance has been reorganised many times, but now the Government are considering that together with local government structure and its functions. The Government are also considering the internal management of local government--how and who makes the decisions. Does the hon. Gentleman agree that such an approach is likely to be more constructive?

Mr. Ewing : To be honest, I would have to study the hon. Gentleman's question before I answered. To study local government finance and local government structure at the same time is not a new concept. The Layfield commission sat at the same time as the Wheatley commission in Scotland--one studied local government finance, the other studied local government structure. Whichever Government are in power--I hope and pray that it will be a Labour Government next time--they must tread carefully when it comes to the reorganisation of local government to ensure that we do not throw the baby out with the bathwater. There is a lot to be said in favour of local government, but because other hon. Members wish to take part in the debate, I will not be led down that path.

I have made it clear that I am a supporter, indeed a devotee, of the rating system. I would be willing to debate that issue in public with any hon. Member and to explain the advantages of the rating system. It had the one major advantage of being collectable ; 90 per cent of people paid their rates bills. Nobody could claim that for the poll tax, and the council tax will, I fear, have the same fate. To keep the value of properties up to date, it would have been simple to update valuations each year in line with inflation.

Do the Government wish to be responsible for central economic management, including managing the finances of local authorities? If so, that is bound to lead them to the

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100 per cent. financing of local government services. The Government must make up their mind on this issue. Do they wish to decide the level of services that local communities should have? If so, will they use their capping powers to achieve that end? The Labour Government of which I was a member never used capping powers. We had a system of indicative costs in Scotland. If the Government intend to be responsible for the level of services of local government, they must be prepared to take the responsibility for funding those services. Or perhaps they will do what I would prefer, and that is to allow councils to decide the level of services that their communities should have. If low rating levels are satisfactory to an electorate, that will be expressed through the ballot box. If higher rating levels resulting from the provision of better services are acceptable to the electors, that too will be expressed through the ballot box.

I cannot understand why the Government want to become so involved in the management of the affairs of local authorities. In the last 13 years they have made a big enough mess of the nation's economy. Why do they now wish to get so involved in local authority expenditure? The Bill should go no further and I advise the House to reject it absolutely.

8.2 pm

Mr. Phillip Oppenheim (Amber Valley) : I welcome the Bill. In effect, the council tax will be a modernised and updated version of the rates. One of the biggest problems with the rates was that the system of assessing rates on the basis of notional rentable values created enormous difficulties. Not only was virtually every house rated differently, but problems were caused when people went in for relatively minor improvements to their properties and suffered disproportionate rates increases as a result. Capital value bands will not solve the problem entirely, but the system will address the issue to a significant degree.

All hon. Members must have received complaints, and been told on the doorstep, about the way in which the single person living alone in exactly the same house as that of his or her neighbour paid about the same rates, even though the neighbour may have had a large family with a number of people living in the house. The council tax will, to a significant degree, deal with that injustice which was inherent in the old rating system. I also welcome the protection enshrined in the Bill for students and student nurses, with rebates for those on low incomes, rebates for people in training and a rebate of 25 per cent. for single person households.

Most Opposition Members believe that the rebate for single person households is unfair. I appreciate that the basis of their argument is that the council tax is son of poll tax and that some account is taken of the number of people in households. If they believe it unfair to give a discount, even a small one of 25 per cent., to people living alone, I hope that when he winds up the debate for the Opposition the hon. Member for Sheffield, Brightside (Mr. Blunkett) will make it clear that the Labour party is committed to abolishing the single person household discount. I will gladly give way to the hon. Gentleman if he will give a clear commitment to that effect. Does he intend to intervene now?

Mr. David Blunkett (Sheffield, Brightside) : I will make my own speech in my own time.

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Mr. Oppenheim : Characteristically, the hon. Gentleman backs off from giving a firm commitment. I do not blame him. After all, a commitment to abolish that discount would be fiercely unpopular in the country, not simply among those who live alone but among those who live in homes containing several people and who recognise the fundamental injustice of people living alone having to pay exactly the same rate as themselves. The country will have noted the failure of the hon. Gentleman to answer my question.

It was commonly said of the community charge that it would have worked if only the bills had been lower. I accept that had the Government limited increases in local authority spending in year one of the community charge, the bills would have been significantly lower, not least due to the gearing of the system, and that may have made the charge more acceptable.

Hon. Members in all parts of the House must face the fact that, whatever system is introduced, if councils, whatever their complexion, spend unwisely--I accept that some Conservative-controlled councils are equally guilty--bills will become high and possibly unacceptably high. In my area, the rates for many years, including the poll tax, ended up being far too high because of the profligate spending of the county council. I shall not dwell on that subject. We accept that priorities in public spending at national and local level are difficult issues because choices must be made and it is difficult to make them. Even so, some priorities appear strange. When a county council has, since 1981, increased its overall staff by 8,000, the largest increase in England and Wales, yet is the only county with fewer policemen in the Derbyshire police force, that is strange. It is a strange set of priorities for a council to spend millions of pounds pegging school meals to 1981 prices in a way that does not benefit even the children of the least-well-off--because they get free school meals anyway-- yet is in the process of sacking hundreds of teachers. It is strange for a council which pleads for more capital for school buildings and repairs to spend £5 million of its capital allocation on the redundancy costs of sacking teachers.

A council has a strange set of priorities when it says that it cannot afford Home Office offers of more policemen, yet can find plenty of jobs for the cronies and friends of the leader of the council, such as the former Labour councillor who got the plush job, at £40,000 a year, of being in charge of the so-called Derbyshire enterprise board, or such as the chairman of Derbyshire Labour party, one David Skinner, who got a well- paid job supposedly escorting Japanese business men around Derbyshire, despite the fact that he had been sacked for corruption by the council in the 1970s from his job as a road ganger. The former Labour Member, Reg Race, was given a highly paid job as a chief executive of Derbyshire county council, despite the fact that most people believed that he was unsuitable for that task. In defence of Mr. Race, I should say that, when he realised the policies that the council was following, he had the honour to resign his post. Unfortunately, he did not have enough honour to refuse the golden handshake which the council offered him to buy his silence about what he had learnt during his brief tenure as chief executive.

Should a Labour Government come to power, would they cap such excesses? The hon. Member for Dagenham (Mr. Gould) has criticised the Government for capping local authorities, yet he said on the "Today" programme

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that a future Labour Government would cap local authorities "in extremis". What did "in extremis" mean? Would they cap Lambeth, Derbyshire or Haringey, or are they not in extremis enough? It should not be forgotten that the Labour party supported Liverpool council against the Government in the mid-1980s. Yet history has shown what a discredited bunch those Liverpool councillors were. Would they have been in extremis enough to be capped by a Labour Government? I condemn the Opposition's attempts to slay the Bill. Indeed, I do not know how they have the face to do so when, after 12 years in opposition and almost as many changes to their policies on local government finance, they have simply come up with a system that deals with none of the fundamental problems inherent in the old rating system. The individual household valuations which they propose would be extremely complex, and they have already said that they would take no account of single person households. Those are two of the most basic problems of the old rating system which they want enshrined in their so-called fair rates. Above all, they have not said how their valuations would be carried out under their so-called fair rates scheme. How do they have the cheek to oppose the Government's proposals when they have no real alternative? They should be ashamed of themselves.

The confusion goes further, because the Opposition do not even know what they would do if they came to power. On 5 October, the shadow Chief Secretary, the hon. Member for Derby, South (Mrs. Beckett), said that Labour, should it come to power, would replace the council tax with fair rates. However, 12 days later, the hon. Member for Brightside said that it would not abolish the council tax but would simply amend it. On 27 October, the hon. Member for Dagenham said that the Labour party would repeal the council tax. Clearly the Opposition Front Bench do not even know what the Labour party would do if it came to power. It is confused, is talking at cross purposes and has no real proposals to put before the House.

I welcome the Bill. It offers a relatively simple system that ensures that a high proportion of people will pay but, at the same time, takes account of people's ability to pay. I recognise that no tax will ever be popular. But I do not see how the Opposition can, in all honesty, oppose the Bill when they have called for the abolition of the poll tax and cannot even say what the basis of the valuations that they propose would be. For a party that has been in opposition for 12 years, that is a disgrace. Above all, it shows that it deserves to remain in opposition.

8.15 pm

Mr. Harry Barnes (Derbyshire, North-East) : There is something odd about this debate. Those hon. Members who served on the poll tax Committee and were therefore involved in the last great discussions on local government finance have been represented among Opposition Members but not by Conservatives. Conservative Members who were on the Standing Committee that dealt with the poll tax have deserted the Floor of the House rather than bring their expertise to bear. We had a third day's discussion of this subject during the debate on the Queen's Speech. The hon. Member for Spelthorne (Mr.

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Wilshire), who was on that Committee, turned up on that occasion but he talked about the reorganisation of local government rather than local government finance. So why is there this great peculiarity? Why are the Conservative Members who have tussled with the arguments and listened to the alternatives not around? When a Bill of the magnitude of the Local Government Finance Bill is presented to us, those who speak in its favour should say how it overcomes some of the manifest defects that need to be altered. In that general context, we need to understand what they are saying about this Bill. That is never done by Conservative Members, with the exception of the hon. Member for Aldridge- Brownhills (Mr. Shepherd), who talked yesterday about some of the things that were wrong with the poll tax. People outside will be very cynical about the Government's position if Conservative Back-Benchers refuse to say what they think is wrong with the current situation and why fresh legislation needs to be introduced.

The Opposition know why fresh legislation needs to be introduced. We have constantly said what is wrong with the poll tax. We have expressed our opposition in the House, in debates on the subject, on the guillotine motion that was debated on that measure, in Committee, in Committee debates on statutory instruments, some of which emerged only recently, and in meetings and campaigns. We have strutted the country and argued about what is wrong with the poll tax. I have been to the constituencies of two of the Conservative Members present--the hon. Members for Amber Valley (Mr. Oppenheim) and for Portsmouth, South (Mr. Martin)--to tell people what is wrong with the poll tax. The hon. Member for Amber Valley has already spoken, but it would be nice if the hon. Member for Portsmouth, South would say what he believes is wrong with the measure and needs to be overcome. Plenty was wrong with the poll tax. It was the worst taxation system that was ever introduced into a democratic society at any time. It was quite unbelievable. Its unfairness was astonishing and led to all sorts of interferences with civil liberties and rights, with knock-on consequences. The Government had engaged in a vast centralising activity, so that the Department of the Environment took over masses of power and local government was run even more centrally than through other measures which the Government had introduced. Conservative Members, who are supposed to believe in great freedoms--freedoms of the market place and decentralisation--could not see that point. If they saw it, they chose to ignore it in their contributions.

Compared with the poll tax legislation, the Bill makes significant changes, which the Government should tell us about. For instance, although there is a minor distinction between the bottom and the top bands--those on the top pay only three times as much as those on the bottom--it is an important principle. The House debated that principle in the so-called Mates amendment. Under the provision suggested by the hon. Member for East Hampshire (Mr. Mates), people on salaries below taxation levels were to pay half the poll tax and some were to pay the full poll tax, while those on a surtax level were to pay one and a half times the normal poll tax. The difference between the highest and lowest amounts to be paid was a multiple of three. For many Opposition Members that provision did not seem to make a great difference, but it was important to Conservative Members because it

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involved a change of principle that could later be extended. If some people were to pay three times the amount paid by others, that principle should have been discussed. In the same way, the property-based aspect of the legislation is significant and should be debated, but we have not heard much about that.

The present Bill also differs from the poll tax legislation in that the exemption list has been improved. Under the poll tax provision, those serving in overseas forces and residing in this country and foreign diplomats are excluded from paying the tax. As far as I understand it, under the new Bill they are not excluded from paying the tax. If I am right, why do we not hear Conservative Members arguing in favour of that change?

The case is being argued in a most cynical fashion. The argument has not been in terms of the principle of local government finance, but merely on the grounds that political difficulties arose in relation to implementing the poll tax and urgent action had to be taken, especially in the light of the election of the new leader of the Conservative party, the promises being made and the general position of the party at the time. Therefore, this measure was introduced and attempts are being made to push it forward as quickly as possible.

We should keep producing within their constituencies the voting records of Conservative Members to show where they stood on the poll tax. Conservative Members who have spoken in the debate have tried to show that they were minor rebels and to imply that some sort of mass rebellion took place. When was that rebellion and when did we eagerly await votes in the House to see which side had won? The voting results were not close, but showed solid majorities.

The Committee that debated the poll tax legislation included three Conservative Members who were liable to rebel at any time, but never rebelled in unison because that might have caused a drawn vote and could have resulted in the legislation being returned to the Floor of the House. The hon. Member for Ealing, Acton (Sir G. Young) has since repaired his breach with the Conservative party. The mildest of the rebels was the hon. Member for Harrow, East (Mr. Dykes) and the late Sir Brandon Rhys Williams was probably one of the major rebels. He wanted to have a low poll tax instead of a high one, but was not particularly arguing against the principle.

Where did the Secretary of State for the Environment stand on all those issues? What of his famous rebellion that was supposed to take place in the House? He made three speeches and two interventions on the subject during the 1987-88 Session proposing differing views. When we debated subsequent measures such as statutory instruments he was not present. During the 1988- 89 Session and the 1989-90 Session he made no contributions when we discussed measures associated with the poll tax. Where was the rebellion? As the parliamentary record shows, the Secretary of State was not present very often. He was out canvassing for the leadership of the Conservative party and did not take part in many of the votes.

The measure includes some other oddities. Why does clause 117 (5) state that the legislation does not extend to Northern Ireland? The poll tax was never introduced in Northern Ireland, but the argument being used in favour of the new tax is that it is superior and will be the answer to all sorts of problems relating to local government finance. If so, is it the intention to introduce legislation relating to Northern Ireland? We are normally given some

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sign that that is to happen. It is possible to introduce wide measures via Orders in Council whether by negative or positive procedure. It seems that Northern Ireland will not be touched by the legislation because it still has a reasonable and viable system of raising local government finance which the mass of the people pay. The rating system still applies in Northern Ireland, where they have never suffered the nonsense of the poll tax.

Why does the legislation contain no mention of the changes that need to be made in standard spending assessments? With the exception of an authority in Dorset, my constituency receives the lowest grant per poll tax payer and has the lowest standard spending assessment. Anyone who knows anything about the district will realise that it suffers from social deprivation and requires funds. How can a formula be worked out which does not allow decent standard spending assessments and decent grants for such districts? I have previously explained to the House the fiddles involved and why the conditions of the standard spending assessments hit North-East Derbyshire harder than any other authority, although others are sorely hit. If we are reviewing the whole of local government finance, we should include debates on that subject. It was not just the principle of the poll tax that hit the authorities ; the nonsense of standard spending assessments helped to push up the poll tax in many districts because money was not made available to local authorities.

The most important element missing from the legislation involves what is to be done to overcome the harm to electoral registration that was and continues to be caused by the poll tax. A survey carried out by the Office of Population Censuses and Surveys revealed that 1 million people are missing from the register. The problem began in Scotland when the poll tax was introduced there and moved to England and Wales. It did not occur in Northern Ireland because it never had the poll tax. What action is being taken to restore 1 million people to the electoral register? What will the council tax do about that? Why are we not spending as much to encourage electoral registration as is being spent overseas to encourage expatriates to register and vote in this country?

The hon. Member for Tayside, North (Mr. Walker) said that the poll tax was not a poll tax because it had nothing to do with the electoral register. It had everything to do with it. We have a little time before the next election in which to put matters right if it is fought on next February's register. In the meantime, what legislation will we pass and what expenditure will we sanction to overcome this greatest of evils? Hon. Members should be more worried about the electoral register problem than about any of the other erosions of our civil liberties. The problem arose because of the unfairness of the poll tax. People dived for cover and kept themselves off the register--an understandable mistake by people facing bills which they could ill afford.

I conclude with an historical analogy and a warning to the Government. It concerns the introduction of the first poll tax, which was promulgated not in 1371, but was introduced in 1367 as a flat rate measure which great masses of the poor did not pay. That is fantastically similar to the modern poll tax. Two years later, in 1369, a further measure was introduced--the poll tax mark II--bearing some similarity to this poll tax mark II. It was to be banded according to differing levels of wealth. On that occasion it was the rich who did not pay and who thus breached the legislation.

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So in 1371 the country returned to the principle of a flat rate payment and that was when the peasants' revolt broke out. Thank goodness, in this repeat performance we will not have a mark II or mark III version of the poll tax. The legislation for the mark II version may be passed, but because of the coming election it will bite the dust along with the poll tax. Labour's proposed measure will be enacted instead. If it is not, and if Labour does not win the election, the farce that took place in the 14th century may be repeated.

8.32 pm

Mr. John Bowis (Battersea) : I shall refrain from returning to the 14th century.

This evening we have heard two confessions of paternity. The hon. Member for Falkirk, East (Mr. Ewing) claimed to be the father of the Labour party's return to the rates. My hon. Friend the Member for Tayside, North (Mr. Walker) suggested that he had some involvement in the conception of the council tax. I shall not compete with him for that paternity because I suspect, along with the hon. Member for Woolwich (Mr. Cartwright), that paternity in matters of taxation is to be avoided if at all possible.

There may be some surprise that I, who represent Battersea in the London borough of Wandsworth, should welcome the transfer of local government finance from the community charge to the council tax. In Wandsworth we showed how the community charge could and did work. I am not ashamed of the principles behind the community charge. They were the right answer to the hon. Member for Derbyshire, North-East (Mr. Barnes). But there were good reasons why those principles could not be followed in practice.

The proof of the pudding was in the electoral results in Wandsworth. In my constitutency last year the number of Conservative councillors there increased from six to 18, an increase repeated throughout Westminster, Ealing, Hillingdon and places such as Derby and West Lancashire. That showed that when people perceived that their vote could make a difference to the community charge, they used it in the Conservative cause.

The electors in boroughs such as Lambeth, however, did not perceive that a vote could change control of the council, so they said "Ouch" to the Government, in effect. In Wandsworth the community charge has not even been an issue-- [Interruption.] The hon. Member for Sheffield, Brightside (Mr. Blunkett) will pay our zero rates this year, so no doubt he will support me. There is no point in our romping to victory in Wandsworth, with the help of the secret vote of the hon. Gentleman, if our party is not as successful elsewhere.

Mr. Tom Clarke (Monklands, West) : The hon. Gentleman seems to feel that his party met with great success in Wandsworth. Would he be willing to agree to the same financial contribution by central Government being provided to my district of Monklands so that we can see whether his enthusiasm will be shared there?

Mr. Bowis : I will not contrast like with unlike, but I can compare like with like in the form of Wandsworth and next door Lambeth, a similar London borough. The grant per head of population from central Government to

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Lambeth council was £1,500 compared with £1,000 to Wandsworth, in the year when Wandsworth's community charge was £148 and Lambeth's £548. I hope that the hon. Gentleman will learn and inwardly digest those figures and then ask his colleagues in the Labour party why they could not produce the same high- quality services at the lowest cost as those for which Wandsworth--unlike its socialist neighbours--has been known in London.

There are reasons for this change. There have been some anomalies, and this Bill tackles some of them, not least those involving students, student nurses, apprentices and people on youth training schemes. Perhaps, too, we underestimated the involvement of spouses in joint decisions on households and family spending--they were probably more conscious of the costs of local government than we thought.

Some Opposition Members question our failure to abolish the 20 per cent. minimum, but the reason for that is that it is incorporated in income support levels. People on income support in Wandsworth are not particularly anxious that the system should be changed, because if an element for the community charge is incorporated in income support but a person pays zero community charge, he is inevitably quids in. A person living in a high- spending Labour authority begins to suffer, however--

Mr. Ieuan Wyn Jones (Ynys Mo n) : Does the hon. Gentleman acknowledge that the majority of people being hauled before the courts for non-payment of the poll tax are the very people who should have paid the 20 per cent. contribution? Would it not make economic sense if the Government acknowledged that and abolished it immediately?

Mr. Bowis : The people being hauled before the courts in Labour council areas are being so hauled because those councils did not keep the community charge low enough for them to afford to pay it. The overspending by Labour councils has been a prime reason for this change. We know that in the year that the community charge was introduced Labour local authorities' spending plans increased by 30 per cent. That is why the system was painful and why we had to find a better way to raise money. Conservatives care not only about the quality of local services but about the cost to the local charge payer because that is as important to the vulnerable as the quality of service.

The Opposition seek to return to the discredited rates system and the hon. Member for Falkirk, East can claim the credit for that. It would be a return to a system in which each property has to be valued and where home improvements are deterred. Its rolling revaluation would be based on a valuation that is 20 years out of date. Labour would insist that 20 per cent. of local government's costs be raised by local taxation. Overnight, that would increase every household bill by 50 per cent.

The Leader of the Opposition is often quoted as having condemned the rating system. I shall quote not the right hon. Gentleman but his right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). Writing in The Daily Telegraph, and probably hoping that his hon. Friends would not see it, the right hon. Member for Gorton said : "The rates are irrational, inefficient and highly resented. The rating system makes no sense whatsoever. The right thing to do is to abolish it once and for all."

I am not surprised that the right hon. Gentleman was banished to foreign affairs.

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Much of the debate has centred on whether it is right to cap. It is argued that capping is wrong if accountability suffers, but capping is necessary because of the unwillingness of Labour authorities to be reasonable in their spending. Wandsworth has shown that targets can be met or even bettered. That is why Wandsworth's community charge started at £148, dropped to £136 and was reduced to zero as a result of the Chancellor's £140 grant last year. Wandsworth now provides much better services than before.

I had to look at services in Lambeth during the Vauxhall by-election and I saw dereliction and despair and people who are desperate for home ownership, which has been denied them. By comparison, the neighbouring council in Wandsworth has made efficiency savings that have enabled it to improve the quality of service. Tendering has produced savings of 33 per cent. and even when work remains in-house, tendering results in savings of 25 per cent. Staffing ratios have been cut to 2.1 per 1,000 compared with the inner London average of 3.7 per 1,000. A saving of 50 per cent. has been made in refuse collection. One tonne of refuse is collected per man per day in Southwark compared with 4 tonnes per man per day in Wandsworth.

Library costs have been reduced by 45 per cent. but there has been a 30 per cent. increase in book lending. In the first 12 years of Conservative control in Wandsworth there have been £50 million worth of efficiency savings, and the 123 services provided by that council cost each resident £136 before the change in the last Budget. The results in Labour authorities are quite different. In Hillingdon the Labour council was ousted last year and the new Conservative council dropped the community charge from £435 to £370. In Merton the reverse was the case because on the day after Labour took control it announced that it would double the community charge.

I shall give some more examples of how cost savings do not mean lowering the quality of service. Wandsworth recently took over education from the discredited Inner London Education Authority and is already providing free nursery education for every child. It is spending £71.03 per 1,000 of population on higher and further education compared with the inner London average of £51.50. The inner London average on special needs is £38 but Wandworth is spending £49. The inner London average at the chalk face, the money that goes to schools, is £144 per 1,000 of population but the figure for Wandsworth is £146. Bureaucracy in inner London costs £124 per 1,000 of population whereas Wandsworth spends £50.

That is why we need to consider capping. Overspending does not have to occur because good quality services can be provided at reasonable cost. That is what capping is all about and it is why I welcome the element in the Bill which provides for that and deplore the Opposition's commitment to abolish it.

We must look at income as well as spending. Wandsworth has rent arrears of £4 million. In Lambeth the amount is £35 million and in Southwark it is £60 million. In Wandsworth there are 90,000 housing benefit claims per year and 1 per cent. await assessment, not for weeks, which is the average in inner London, or for months, which is the average in Lambeth, but for two days. Labour high spending is not to improve services as the Opposition would suggest. Labour Liverpool spent £250,000 on councillors' media rooms and the Labour council in Dudley spent £21,000 teaching teachers how to

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clap. Labour Hackney spent £70 million on new offices and Labour Lewisham sent advisers to the Caribbean for two months to learn about youth and leisure.

London is fed up with Labour's level of service. People support the concept of capping and we support the Government's new proposals for the council tax because, ultimately, it will be fair. According to the Department's figures, in Wandsworth the A to G bands will produce a range of community charge on the same basis as this year--8 per cent. spending below target-- of £90 in band A and £224 in band G for a two-person household. That shows that the charge will be manageable, even in an area such as Wandsworth which has shown that the community charge can work. It will be manageable as long as the grant settlement continues to take account of the borough's needs. I welcome the Bill's provisions for dealing with non- payment. It is not a question of can't pay, but can pay won't pay, and that is deeply resented by law-abiding citizens. In March last year my right hon. Friend the Member for Mole Valley (Mr. Baker) wrote to the Leader of the Opposition saying that the Anti-poll Tax Federation was Militant- inspired. The hon. Member for Copeland (Dr. Cunningham) replied that that was a hysterical smear. He was right. Not only was Militant involved, but Mr. Steve Nally, the organiser, was also a member of the Labour party. About 30 members of the party and many Labour councillors have campaigned for non-payment. Such antics should be penalised when it comes to serving on a council and dealing with other people's money.

I deplore the statement by the hon. Member for Livingston (Mr. Cook) who, writing in Marxism Today, said :

"I do not describe not paying the tax as civil disobedience." Decent people do consider that to be civil disobedience and unacceptable. That is why I believe that when the people of this country have an opportunity to vote, they will vote against the party that stands for non-payment and for high spending, inefficient, low-quality councils. They will vote for the party producing better quality, lower-cost councils under the council tax system. 8.49 pm

Mr. John Home Robertson (East Lothian) : The hon. Member for Battersea (Mr. Bowis) spoke of the "can't pay, won't pay" campaign. In previous debates on the poll tax, I have pointed out that I and almost all hon. Members fall into the category of those who can pay, and should pay, more. What is so morally wrong about the poll tax is that those who are better off pay considerably less, with the consequence that people on the lowest incomes pay more. The people have found that out and that is why the poll tax is so unpopular. One of the most interesting changes that I have seen in any Parliament--I have been around for far too long--is that which has occurred in this Parliament. Back-Benchers who for years have been loyally supporting their Government are now performing in a different role. They seem to think that they are already in opposition, because they spend all their time attacking the Labour party. Conservative Members supporting the Bill have been signally absent in this debate, probably for a good reason.

As I said, I have been here for some time and I vividly remember the Second Reading debate and the Committee sittings not only on the Bill introducing the poll tax for

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England but on what became the Abolition of Domestic Rates Etc. (Scotland) Act 1987. We are all familiar with extravagant claims by Ministers in winding-up speeches in Second Reading debates. I have here a quote from a Mr. Michael Ancram, who once represented a Scottish constituency and who has most recently been seen in Devizes, seeking, for the third time, selection in a constituency. He will soon qualify for the golden carpetbag.

On 9 December 1986, in winding-up the Second Reading debate on that Bill, Mr. Ancram said :

"The Bill is no short-term stop gap."

Talking about poll tax, he continued :

"It is no hurried or temporary expedient. It is a well considered and well worked out reform which sets up a new and viable system for financing local government for generations to come. It creates a new balance, a new fairness and a strengthening of local democracy and accountability which will stand the test of time."--[ Official Report, 9 December 1986 ; Vol. 107, c. 275.]

He did not stand the test of time and nor did a number of his colleagues. [ Hon. Members-- : "Name them."] I served on the Committee and I remember them vividly. I have the Division list which followed that resounding speech from Mr. Ancram. Those who voted for Second Reading included John Corrie, Alexander Fletcher, Peter Fraser, Barry Henderson, Michael Hirst, Anna McCurley, John MacKay and Alexander Pollock, and Gerry Malone was a teller. They all lost their seats, as did the unfortunate person who chaired the Committee, Sir Albert McQuarrie.

Mr. Tom Clarke : My memory on these matters is not terribly good. Is the Mr. Gerry Malone mentioned by my hon. Friend the same Mr. Gerry Malone who, as a delegate to the Tory party conference, demanded the poll tax for England "now"?

Mr. Home Robertson : That may be so and he may be sorry about that because he will be standing in Winchester at the next election. What is even more interesting about the list is those who did not vote for Second Reading. The hon. Member for Tayside, North (Mr. Walker) did not vote for it, although he has told us that he supports the poll tax. A significant person who voted for Second Reading was the right hon. Member for Henley (Mr. Heseltine). Some of these people should show a little contrition.

Mr. Foulkes : As my hon. Friend is going through this list of people, can he tell us whether the hon. Member for Dunfermline, West (Mr. Douglas)--Honolulu Dick as he is known--was there?

Mr. Home Robertson : That is erroneous. He was not in Honolulu ; he was in Houston on private business. My hon. Friend must not go down that road.

In fairness to the Secretary of State for Scotland, who opened today's debate, he has been remarkably consistent in his attitude to the poll tax. He was supporting it through thick and thin, against all the evidence, until fairly recently. He described it as a great success story, while at the same time describing the council tax as a roof tax, something that he reviled only a few months ago. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said earlier, the vultures are coming home to roost for the Tory party in Scotland. However, the Tories must not be allowed to forget the

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misery and chaos of the poll tax, the distress that it has caused to so many of our constituents, of the disruption of local government that it has caused. Above all, they must not be allowed to forget the discredit that the poll tax has brought on the House of Commons and on Parliament. There is something fundamentally wrong with a Parliament that can allow such legislation to be inflicted on our people. Frequently, we hear Tories say that they voted for the Scottish Bill because it seemed a good idea at the time, or because they knew that the Tory party in Scotland was in difficulties and felt that it should be supported. That is the line taken by the right hon. Member for Henley. They did it, although they are now trying to wash their hands of it. They are responsible for the poll tax that has brought such discredit.

Even if the Bill is passed, the poll tax will be with us this year and next year. The poorest people will still have to pay 20 per cent. of that poll tax. To add insult to further injury, the people whom I represent in the Lothian region--this is true of other regions--are heavily penalised by the shamelessly discriminatory system of distributing revenue support grant in Scotland. I know that the same applies in England and Wales.

The quicker and far less risky way out of the poll tax--the way proposed by the Labour party--is a return to the rates. We know that that system can be made to work acceptably and efficiently. I would not leave it at that. Having returned to the rates, we should embark on a wide-ranging independent inquiry into local government finance, including local income tax and any other system. If a consensus were to develop that there was an alternative that should be pursued, we should get on with it.

The Government have learnt nothing. The last local government Act introduced the poll tax. It was a panic reaction to what the Government perceived as a problem arising from the revaluation in Scotland. They legislated from the hip and shot themselves in the foot and they are doing it again. This will be another disaster that will reflect badly on them. If we do not vote against the Bill, it will reflect badly on Parliament.

8.57 pm

Mr. David Martin (Portsmouth, South) : No new tax can be considered in isolation from what has gone before. The original Elizabethan rating system, as everyone knows, outgrew its useful shelf time some time during the 19th century. Instead of tackling increasing inadequacies at their roots, Governments from the end of the 19th century until almost the end of this century grafted on to the system changes of monumental and often Byzantine complexity. The one sacred principle until modern times seemed to be the retention of the notional rental system with periodic revaluations-- a system which few understood either in its origins or in its modern version. Government grants, both general and specific, funded out of central taxation took an increasing share of the burden of the rating system as the tasks of local government grew in quantity and depth. The way in which the various grants were calculated and distributed and the way in which they related to the original property element of the rating system meant that local government finance needed the ingenuity of an Abbe Sieye s for detailed explanations of their niceties and of precisely how they worked. Council treasurers began to be looked on almost

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as those who in ancient times understood the Eleusinian mysteries. At last the problems were faced radically and head on with the creation of the community charge.

Few people quarrelled with the principle that everyone should pay something. Even now, I find that people's minds have not changed on that. The crucial questions were how much and what was the bottom line in each individual case. If the headline amount of any tax is too much and the rebate or allowance system too miserly or unfairly based, the system will be unsustainable. Fortunately, these objections are met fairly and squarely in the proposals set out in the Bill.

The council tax, with its banding arrangements, does not take an unreasonable amount even at the top of the scale, while the discounts and exemptions are based on reason as well. I thoroughly approve of the transitional arrangements and the capping powers that are designed particularly to stop councils shielding greatly increased expenditure in the first year of the new tax, as happened in the change from rates to the community charge. That was the single most damning feature of the charge on its introduction in Portsmouth and elsewhere. It was expected that the final bill would be under £200 a head and it turned out to be £308.50. Overspending meant that the rebate system was not properly triggered and from then on, if only because of the amounts, the principle underlying the community charge became impossible to defend.

I spoke to a typical pensioner couple with a small occupational pension. Their rebated rates bill had been under £200 and between the two of them they were paying £617 under the community charge without a rebate being triggered. When told of that, I recalled Emperor Tiberius's answer to a governor who had written to him to recommend an increase in the burden of taxation. Tiberius replied that a good shepherd sheared his flock ; he did not skin it. The Bill has many features which makes the shearing--it must never be a pleasant operation for the sheep, I imagine--at least defensible.

The Labour party roundly criticises the Bill's provisions, yet Labour Members propose nothing better than a return to the old rating system, without any effective capping on unreasonable expenditure. During the afternoon and evening we have heard examples relating to the likes of Lambeth, Haringey, Hackney, Brent and Derbyshire. Such examples, when added to all the others, would result in a nightmare for London and many other unfortunate areas. However, under the Labour party--I think that it was Anthony Crosland who tried to stop this happening in the 1970s--it would be back in full swing. I turn briefly to an argument that has been advanced by some of my colleagues, including my hon. Friend the Member for Hendon, South (Mr. Marshall), for regional banding to be introduced for valuations in London and the south-east. Attractive though such an idea seems at first --who does not want his constituents to pay less, even if it is at the expense of others--the more the practicalities are investigated, the less it appeals. It would be extremely difficult, if not impossible, to define a fair boundary of any such region and outside that region there would be many with similarly valued properties who would clamour to receive the same treatment. This would be a fertile area of endless dispute. It would soon be reflected in the ballot boxes, let alone in further legislative changes in the House. Nor must we fashion a large and significant part of the proposed tax system, as we did with the community charge, around admittedly genuine worries about single,

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