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elderly people--they are usually widows--who often remain in highly valued family homes and who will not love us for reintroducing a property tax. The 25 per cent. rebate for a single person is extremely welcome, but who would not wish for more on behalf of his or her constituents?Even though some will blame us for bringing back a more expensive tax compared with their experience with the community charge, I ask them to compare what they will pay under the council tax with their old rate bills, the rates being a system to which the Labour party has promised to return. I remind the House and those outside that under a Labour Government, bearing in mind all the spending plans of the Opposition, it would not be long before all the valuable contents of many people's homes--for example, the cherished walnut table bought for 30 bob in 1937 that is now valued at over £2,000--would fall to be taxed. Not far from any Labour Government is the desire, after a while when they need the money, for a wealth tax.
Finally, I welcome the sensible arrangements in the Bill for students, which were caricatured ridiculously by the hon. Member for Glasgow, Garscadden (Mr. Dewar). I welcome also the recognition of other suitable candidates for special consideration, including student nurses. I ask my hon. Friend the Minister of State to take on board the fact that the relevant provisions will require detailed regulations. In the hope that councils can make progress in setting up the necessary arrangements, including the relevant software, I look forward to the rapid introduction of regulations. It is important that councils know where they stand so that they can pass on the relevant information to our constituents. I know that Labour Members are anxious that that should happen, as are Conservative Members. When the Bill becomes an Act and when Opposition Members find themselves on people's doorsteps, they will face the same questions--this always happens to them--time and time again. These are as follows : "What are you going to do? How are you going to pay for it?" When that happens, the virtues of what we propose will be extremely clear.
9.5 pm
Mr. David Lambie (Cunninghame, South) : I wish to make only one or two points in the short time available to me. I am disappointed with the attendance in the Chamber today, as I was with yesterday's attendance. This Bill is the flagship of the Government's legislative programme, and Labour Members are opposing it hook, line and sinker.
Mr. John Marshall : All six of them.
Mr. Lambie : It is a six-line Whip.
The general public and those who watch our proceedings on television must wonder whether we are really fighting. We should have had a general election last Thursday, rather than three by-elections. We have only to look around the Chamber to know that this Parliament is finished ; it is dead. A general election last Thursday would have settled once and for all the political policies that the country will follow for the next few years.
The hon. Member for Tayside, North (Mr. Walker) said that he was glad that there was only one Bill covering England, Wales and Scotland. That will not go down well in Scotland. Scotland has its own system of local government that is quite different from that in England
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and Wales. We have district councils and regional councils. We have a different system of valuation. In Scotland, it is carried out by assessors who are employed by the regional councils. In England and Wales, it is carried out by a branch of the Inland Revenue. I do not understand why we should be dealing with local government finance in Scotland in a Bill that covers the United Kingdom. The only reason is that after the by-election in Kincardine and Deeside only nine Conservative Members representing Scottish constituencies are left in the House, and the majority of those sit on the Government Front Bench. There would be no Scottish Tory Members to man a Standing Committee on a separate Scottish Bill. That is a disgrace both to this Parliament and to the Tory party in Scotland. If the Government cannot man a Committee, they should draft in English Members. The Scottish people would then realise that it is the Labour party, not the Conservative party, that represents Scotland.Scotland was the first area to have poll tax imposed on it. Why? I made many speeches during the passage of that legislation. I blame both local councillors in Scotland and Scottish Members of Parliament, from both sides of the House, who were stupid enough to allow revaluation in Scotland to continue after the English stopped it in 1973. The Inland Revenue said that it did not have enough workers to carry out the revaluation in England and Wales, so from that date there were no revaluations of property.
In Scotland, Members of Parliament from both sides of the House and local government employees and councillors stupidly said that they would continue with the revaluation, and so we had five-year revaluations until 1985. The way that the assessors in Scotland attacked the valuation of domestic property led to a revolt among Scottish Conservative voters living in the big houses of Scotland. As the Member of Parliament for my former constituency, I represented the town of Troon, a very Tory town that had more millionaires per head of population than any other area in the United Kingdom. That was the area that was attacked by the Tory Government in their valuations and that is why we had the revolt. That is why the people of Scotland rose up against the rating system. It was not because the rating system was bad, but because of the way in which the rating system was being carried out, attacking certain areas of domestic property, and, because the English had not carried out a revaluation since 1973, Scotland got out of line. Unfairly, the Scottish domestic ratepayer was badly hit and, in the area near to the constituency of the then Secretary of State for Scotland, the right hon. Member for Ayr (Mr. Younger), the majority were Conservative voters. We had to change and the poll tax was introduced in Scotland a year before it was introduced in England and Wales. Stupidly, the English followed us and made the same mistake.
At present local taxation accounts for only 14 per cent. of local government expenditure in England and Wales and only 11 per cent. in Scotland. This is a point that I have made often in the House and on which I think that I have the support of the Adam Smith Institute which I hope will also be supported by many Conservative Members. Instead of local taxation in Scotland accounting
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for only 11 per cent. of total local government expenditure, why do not the Government pay 100 per cent.? Why do not we set an example in Scotland, as we did for the poll tax? Why do not the Government abolish local rates in Scotland and pay a 100 per cent. grant to the Scottish local authorities, basing local accountability on the principle that local councillors will determine how that money should be spent?If we did that, we would do away with all these debates about local taxation, whether we should have the rating system or another system such as the poll tax or the council tax, and we would have a system which, at the end of the day, would give the local people the opportunity to determine priorities. This is one case where, again, I make the point that I am proud to stand here and support the policies of the Adam Smith Institute which every Tory Member should also support, but unfortunately they are afraid to do so because they are facing a general election, knowing that they will be out of power within six months.
9.12 pm
Mr. David Blunkett (Sheffield, Brightside) : During the past two days we have heard a vast number of contributions and I pay tribute to the common sense and foresight of Labour Members who have not only pointed out the inequalities of the system that is still in being but the pitfalls that we see ahead of us.
To begin with, I pay tribute to an intervention made by the hon. Member for Wolverhampton, South-West (Mr. Budgen) who, earlier today, rightly pointed out that in a democracy Parliament should be expected to debate a measure such as this in a sane and sensible fashion. The guillotine motion after 10 o'clock tonight will attempt to preclude sensible contributions, attempt to preclude people from dealing with the difficulties and technicalities in the Bill, and pose a real problem for those of us who believe that local government is not a political football to be kicked about at whim, but an essential part of our democracy for the provision of essential services. The hon. Gentleman was brave to say what he did. The hon. Gentleman was far more brave than the hon. Member for Torridge and Devon, West (Miss Nicholson) who has adopted the role of reading out central office briefs in the House to apologise for the Conservative party. She invented a new phrase tonight about the council tax being a light touch on people's wallets. I believe that Dickens used that phrase in "Oliver Twist". It will have a similar connotation when people discover what drops through their letter boxes if they are foolish enough to vote Conservative at the next general election.
We have also heard some honest interventions, however, The hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) staggered to his feet to tell us that he did not believe a word of what Ministers were saying. He did not believe in the new property tax ; he believed that it would constitute theft from the old ladies living down the road, who would consequently vote against the Tories.
The right hon. Member for Shoreham (Sir R. Luce) thinks that we should change the standard spending assessments. The hon. Member for Gravesham (Mr. Arnold) said the same yesterday, but Ministers were unable to enlighten him about the method that might be used. The previous Secretary of State--the right hon. Member for Bath (Mr. Patten), now chairman of the
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Conservative party--had promised two years ago that he would have a look at SSAs ; that promise, however, came to nothing, as has every other Government promise relating to local administration. Yesterday, we heard 10 interventions from the Tory Benches on the Secretary of State's speech. They came from the right hon. Member for Brent, North (Sir R. Boyson) ; from the hon. Member for Hendon, South (Mr. Marshall) ; from the hon. Member for Lancaster (Dame E. Kellett- Bowman), who wanted to retain the poll tax--I do not think that anyone has told her yet that the Conservatives propose to do away with it. The hon. Member for Rochford (Dr. Clark) had some worries. The hon. Member for Norfolk, North (Mr. Howell) said that VAT should be increased : I suspect that he was giving away a secret Tory agenda.We heard from the hon. Member for Leeds, North-West (Dr. Hampson), and from the hon. Member for Warrington, South (Mr. Butler). The hon. Member for Honiton (Sir P. Emery) spoke of abolishing the poll tax by April 1992. We could not agree more with that ; we proposed it on 13 December last year, when the Government were introducing the Community Charges (Substitute Settings) Bill. A bigger waste of time has never been seen, for that legislation will be overturned by this Bill. We offered the Government time, saying, "Let us not waste each other's time : let us abolish the poll tax now, and get rid of it by April 1992." Would the Government agree? Of course not ; at that stage, they were still clinging to the poll tax.
The hon. Member for Birmingham, Hall Green (Mr. Hargreaves) also intervened in the Secretary of State's speech yesterday, expressing anxiety about the new tax. The hon. Member for Amber Valley (Mr. Oppenheim) mentioned Derbyshire county council ; I remind the hon. Gentleman that Labour took Amber Valley in the local elections in May.
Hon. Members seem to think that the council tax is the best thing since sliced bread, but we know that the sliced bread is extremely stale. This is the same sort of tripe that Conservative Members came out with when they were defending the poll tax ; the poll tax was indefensible, and the council tax is going the same way.
As my hon. Friend the Member for East Lothian (Mr. Home Robertson) rightly pointed out, surely it is time for a little contrition. Surely it is time for the present Home Secretary--who started all this in Cabinet, along with the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley)--to apologise. The present Secretary of State for Employment saw the poll tax legislation through its Committee stage ; perhaps he too will apologise. Perhaps the current Minister of Agriculture, Fisheries and Food, and the current Secretary of State for Wales--both of whom were responsible for the implementation of that legislation--will do the same. All those Ministers were promoted as a result of their work in that regard.
The present Minister for Local Government and Inner Cities was still defending the poll tax at the time of the fated Ribble Valley by-election, only a few months ago. I shall not go into details about his speeches ; that was done at great length on 12 June, and people can read the speeches at their leisure. The Minister declared, however, that any form of property tax would constitute a betrayal of what was then seen as the Thatcherite mantle, of middle England--Conservative England--and of those who had scrimped and saved to secure their homes. But times
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change. People stand on their heads and wiggle their feet in the air. Some cannot tell whether people are standing on their heads or their feet, because the same kind of rubbish comes out. That is why we should be receiving apologies tonight from Conservative Members. Some bare their souls on their feet and some bare their souls in the bars.Behind the scenes, many who sit on the Conservative Benches are betraying their concern even before the Bill has received its Second Reading. They are as worried as we are about the implications for the people of this country. Those Conservative Members and the electorate know that we are not to blame for the mess that we are in. The Conservatives introduced the poll tax and made a mess of implementing it. The British people will hold them to account at the election. Local government faces nothing short of a catastrophe. Debt stands at unprecedented levels. The debt in England alone amounts to £1.5 billion. Two thirds of the Scottish population have warrants out against them. We expect 7.5 million orders to be issued against people in England. The law is in disrepute. Collection of the tax is in a shambles. Conservative Members, however, have the cheek to suggest that that is the fault of local government, not theirs. My hon. Friend the Member for Leyton (Mr. Cohen) yesterday asked the Under-Secretary of State for the Environment, the hon. Member for Salisbury (Mr. Key), whether he would consider the abolition of the minimum 20 per cent. contribution. That is to be found at column 860 of Hansard. My hon. Friend said that it should be abolished this year, or at least in 1992-93. The hon. Member for Salisbury got to his feet and made the most amazing pronouncement in the two-day debate. It was one word. He asked "Why?" Why? Because it costs two and a half times as much to collect as the money that is received.
The Audit Commission pointed out that 4 million people would be lifted out of the penury of having to pay it and that it would be possible to concentrate on those who can genuinely afford to pay but who do not. The administrative burden would be lifted from local government ; it would then be able to concentrate on the job in hand. The Minister, however, does not give a damn about what is happening to people on the lowest incomes ; he does not even understand what is happening to local government.
It is no wonder that Ministers do not understand the problems local government faces in having to prepare for the final year of poll tax, in having to work out how to collect the current year's poll tax, in having to prepare the software for collection of the council tax. Local government is on the verge of collapse, but who gives a damn on the Conservative Benches about that and what it means for local government services? Instead of contrition, instead of apology, constant and unmitigated attacks are made on Labour councils that are struggling, in the most difficult areas of the country, to provide services.
Dame Elaine Kellett-Bowman (Lancaster) : What about rents?
Mr. Blunkett : Does the hon. Lady wish to intervene? I see that she does, so I shall certainly give way to her.
Dame Elaine Kellett-Bowman : It is not only a question of many Labour-controlled councils not bothering to collect the community charge. Many of them do not even
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bother to collect rents. Not even the hon. Member for Sheffield, Brightside (Mr. Blunkett) can defend their policy not to collect rents.Mr. Allen McKay : The hon. Lady does not know what she is talking about.
Dame Elaine Kellett-Bowman : Rubbish.
Madam Deputy Speaker (Miss Betty Boothroyd) : Order. Come along now- -the hon. Lady has had her say.
Mr. Blunkett : My hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) could not have put it better. The hon. Lady's response admirably sums up, in one word, what the council tax is all about- -absolute and unmitigated rubbish.
Councils throughout the country are doing their utmost, including court cases that the police will not assist with and that the Home Office will not instruct the police to assist with, to collect the poll tax and, of course, any outstanding rates bills.
We have a system of local government finance which has concentrated its attention on the poll tax payer, bringing in gearing which has resulted in enormous increases in bills, without any material increase in spending or improvements in services. We have witnessed the abolition of the local domestic business rate, the introduction of the non-domestic business rate and the way in which that has concentrated the power of decision-making still further in the hands of Ministers. It is a shambles, which has resulted in local government being undermined and the role of the local community being seen as a threat rather than as a partner trying to rebuild broken economies, help the unemployed and do something about essential services.
Every time that Labour local authorities spend more money on education or social services Ministers claim credit for the increase in spending. Every time that it comes to capping regulations, those same authorities are blamed and pilloried for the spending for which Ministers have happily claimed the credit.
Instead we need a sensible system with decent values, not a tax which assaults families. The present proposal, in all its glory, with the present valuation and discount system is an attack on the family.
I do not know whether Conservative Members have given any thought to what the present discount system is likely to do--it is more likely to accelerate the disintegration of the family than to bring people together. It is the Norah Batty syndrome, if I may be sexist, where far from losing a million people off the register as happened during the last census because of the poll tax, in the next census men will be sent to the shed at the bottom of the garden to keep out of the way. We will have a nation of single widows, with men escaping from the tax and their spouses claiming the 25 per cent. discount. In the past two days we have heard a lot about students. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) rightly pointed out some of the anomalies that the Minister says he will reply to, such as the marrried student with two children who will receive a 25 per cent. discount but who will be exempt from the tax if he leaves his wife and family and moves in with his student friends down the road. That is the nonsense. Students in halls of
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residence will allegedly be exempt from the tax. However, many halls of residence will have to pay business rate because many of them undertake business activities in the recesses. Those who know anything about the way in which universities and polytechnics work know that they are businesses and not merely halls of residence. Are we presuming that those students will not be expected to pay anything in the charge that they pay for staying in the halls of residence ? If not, will halls of residence pay a business rate only during the recesses ? Will it be assessed on a daily basis as the amount of council tax will be ? Those are the types of question that need answers before we know what sort of chaos we are going to face with the council tax.Mr. Oppenheim : As the hon. Gentleman is clearly so hostile to the concept of a single person household discount, will he state clearly and unequivocally whether any future Labour Government would abolish it ?
Mr. Blunkett : Our fair rates proposals make the situation unequivocally clear. We say that we will protect single retired people, we will ensure that the rebate system is improved not only to help those people, but to target help on all those who need it and we will ensure that what people pay is based on their ability to pay and not on their status. We are not in the business of giving handouts to the Duke of Westminster because he happens to move out of the present matrimonial home and into a single person's flat. We are not in the business of expecting other people who can ill afford it to pick up the cost of a single person's discount for the rich. We are not in the business of putting on the backs of the poor the cost of the 50 per cent. discount that second homes will be accorded. That, too, is in the Bill.
Every time the Government bring in something to protect the rich, the burden is passed to the rest of us. The poor will pay for the protection accorded to the better-off. That is what the proposed valuation and banding are all about. That is why we are so opposed to the system that charges the richest person in Westminster only £273 a year but the poorest person in Wigan £339 a year. That is why we are opposed to the poorest person in Westminster paying only £3 a week less in council tax than the richest, including some Tory Members. The banding system and property valuations are devised deliberately to protect the rich at the expense of the rest. That is why we know that people will not only feel that it is unfair and understand that it is unfair, but will at the general election bring home to roost the chickens that many Tory Members will be voting on at 10 pm tonight.
The same applies to much else that languishes in this tax as an alternative to the ill-fated poll tax. Not for Tory Members the speed, simplicty and certainty of the broad-based tax that we should have. Not for them the buoyancy, cost-effectiveness, fairness and progressiveness that "Fair Rates" offers to the British people. Not for them the comprehensibility or even the logic spelt out by the Prime Minister shortly after his election as leader of the Conservative party when he rightly said that there was something wrong with a tax that resulted in 50 per cent. of the population having to receive a rebate or discount on the amount that they paid. Yet that is exactly what the council tax will involve.
With the intricacies, unfairness and technicalities, it is no wonder that the Secretary of State for the Environment has declined to serve in Committee. No wonder he will not
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join us three days a week from now until Christmas. Instead, he will have a fortnightly visit to Brian Walden on Walden's weekly interview. [Interruption.] My hon. Friend the Member for Dagenham (Mr. Gould) corrects me : it is rather that Brian Walden will visit the Secretary of State for lunch and take the cameras with him. No wonder the Secretary of State has been given a roving brief across Europe. He fails to understand even the one that he has.Mr. Oppenheim : Get on with it.
Mr. Blunkett : A Tory Member shouts, "Get on with it". That is not surprising because it is difficult to protect the Secretary of State from his own inadequacies. As my hon. Friend the Member for, Garscadden said earlier this afternoon, the Secretary of State has to rely on his Minister- -the AA man, as he was described in the Financial Times . Although the Secretary of State knows nothing about the Bill, he knows the man who does, and that man does a good job. In the 40 minutes that we shall have to debate each clause it will be difficult to point out to Tory Members the Bill's inadequacies. It will take us until clause 100 before the poll tax is abolished. It will take more than the three weeks to reveal the confusion that abounds, but we shall do our best.
We know that if, in the introduction of the council tax, the Government inflict on the British people what they did with the poll tax--the £10 billion that it has cost us, the increase in VAT to manipulate it and the innumerable changes to make it more acceptable--local government and the British people will face the same sort of inadequacies and misery.
We have heard Conservative Members talk about the necessity of capping. We were told that capping would be necessary until the poll tax was introduced as that would bring accountability. We were then told that only a handful of high-spending authorities would be capped. Then we were told that when the poll tax really bit, capping would not be necessary. Now we are told that universal capping is necessary because the Secretary of State and his colleagues are frightened of trusting local people to make local decisions under the new banded system. No wonder they are frightened, because the way in which the council tax will be implemented will confuse people to the point where they will be unclear about who is paying what and who is making the decisions.
The gearing procedure will result in a 1 per cent. increase in spending, incurring an average increase of between 7 and 8 per cent. in the local tax. The proposed national business rate will ensure that the narrowness of the domestic base under the council tax will inflict misery on local people. That is why our "Fair Rates" proposals offer a different solution.
The 20 per cent. contribution will be abolished, the rebate system will be improved and single retired people will be protected. All that will ensure that the tax is fair and progressive. It will also ensure that it has a broad base and that the business rate is decentralised. We will introduce rebates for small businesses to protect those who are setting up in business or struggling to stay in business.
The Labour party believes in fairness and justice. In the weeks ahead it is therefore beholden upon us to get across
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the message that, once again, the Government have got it wrong. We are witnessing the third change in three years, a change that will produce further misery and confusion.My colleagues and I do not believe that the British people will be fooled a second time--one can take a horse to water but one cannot make it drink. The general election will be the opportunity for which we have waited. That opportunity has been delayed too long. That general election will be fought not simply on fair rates, but on a fair Government. The people of Britain will understand clearly that to achieve that they must vote Labour.
9.36 pm
The Minister for Local Government and Inner Cities (Mr. Michael Portillo) : We have reached the end of the third full day's debate othe council tax. We had one day on the Queen's Speech, and now we have had two full days on Second Reading. I am bound to say that I do not believe that this debate has reached the level of fizz that one might have associated with a Bill that was to be fought doggedly tooth and nail by the Opposition.
At the climax to the debate a few minutes ago the hon. Member for Cunninghame, South (Mr. Lambie) was addressing a single Labour Back Bencher. During much of the debate we have had no representation from the Liberals or the Scottish Nationalists. Indeed, when the wind-up began this evening there were no Liberals or Scottish Nationalists present.
It has been an exhausting three days for the Labour Whips as they trawled the corridors of the Palace to try to find people who they could wheel in to speak in this debate. None the less, fortunately there have been fine contributions to the debate from the Conservative Benches. We have had such contributions from my hon. Friends the Members for Torridge and Devon, West (Miss Nicholson) and for Tayside, North (Mr. Walker). My hon. Friend the Member for Hendon, South (Mr. Marshall) included in his speech one of the pithiest denunciations of the rates that I have ever heard. We also heard fine contributions from my hon. Friends the Members for Amber Valley (Mr. Oppenheim) and for Battersea (Mr. Bowis), who has a quarry of good stories from the London borough of Wandsworth.
My hon. Friend the Member for Portsmouth, South (Mr. Martin) provided us with a model of how much can be put into a brief speech. My right hon. Friend the Member for Shoreham (Sir R. Luce) asked me to consider the standard spending assessments. I assure him that we look at them every year, but he is aware, as he said during his speech, that there are two different objectives : one is to make the assessments as simple as possible ; the other is to make them as fair as possible. The two objectives do not necessarily lie in the same direction.
The Opposition raised the canard that some sort of register is required under the council tax. We have denied that categorically. It can only be obtuseness or a refusal to believe that can still lead the Opposition to make that claim.
The basis of the council tax is, first, a property element. In that respect it is like the rates. We want to give discounts to single people--the Labour party does not--and single people will have every incentive to make themselves known. It is not like a council tax register with people not wishing to make themselves known. Single people have every reason to come forward and declare that they are
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entitled to a discount. But if they do not come forward, there is no penalty. There is no statutory requirement to hold a register of such people. There is all the difference in the world between finding out who the single people are and having a statutory register as we have under the community charge.There is no difference in principle between what we propose for finding out about single people and what is proposed in the so-called Bill put forward by the hon. Member for Sheffield, Brightside (Mr. Blunkett), in which he would need to identify pensioners, pensioner couples and people on low incomes. There is no difference, either, between what we have under the community charge and under the rates in respect of identifying people who are entitled to help through social security benefit, if they are on low incomes.
There has been a misunderstanding of the Government's plans from the point of view of social security benefits. Just as with the rates, when people in receipt of social security benefit had living with them someone who was not in receipt of benefit, there was a system known as non-dependent deductions --the hon. Member for Brightside will be well aware of that system--so, too, under the council tax it will be possible for the claimant--the person liable to the tax--simply to let us know, through a single declaration, about the other people in the household who may not be eligible for income support and who may be eligible to make a contribution to the council tax bill. There has been some confusion--I do not know why there should have been because it was made clear last night by the Secretary of State for Wales--about the position of students. There are two issues. First, students should not be counted as adults when we are deciding whether the single person discount should be given to a household. Students, including all student nurses, YTS trainees and apprentices, will be invisible. In other words, they will not count as though they were adults in a household. They will not stop a single person who is not in one of those categories from being able to qualify for the single person household discount.
The second issue is that, if a household is composed entirely of students, it should be exempt. It is easy to do with halls of residence, but it is also easy to do where students are living in digs or even when they are the owners of properties. Where they are all students, they will be exempt and no payment will have to be made. In this case we include student nurses on Project 2000 because they are, like other college students, not eligible for social security benefit. In this second category we do not include other student nurses, YTS trainees and apprentices because all those people are entitled to social security benefits.
If their incomes are low--if, for example, a student nurse has a low income --there will be no difficulty ; she will be able to claim social security benefit, so there is no reason why she should be entitled to the exemption available to other students. I hope that that puts the matter beyond doubt, and I believe that my hon. Friends will greatly welcome that important development in the new council tax. The Government have chosen to have regional banding for Scotland, Wales and England. The council tax is
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composed 50 per cent. of a property tax. I sometimes think that some of my hon. Friends who would like to see the tax in some way equalised between one place and another are hankering after a tax which this tax is not. With a tax based on property, it follows as night follows day that the amount people pay will vary according to where they live and the properties in which they live. Those who would like the tax to be the same for everyone, no matter where they live and no matter what property they live in, will be disappointed by the council tax because, frankly, it is not that sort of tax. Being a property tax--there is not now any contention between the two main parties about that--we can either tax the kind of house and say, for example, that all three-bedroom properties shall be taxed the same, in which case my hon. Friends should be aware that we would soon have tremendous anomalies as the same tax is placed on a Mayfair flat as is put on a flat in a mining village, or we can have regional banding, and then there must be boundaries between regions. There are no natural boundaries between property price regions, so let us assume that one would use the standard regions--the south-east, the east midlands, the west midlands and so on. There would then be extraordinary anomalies. For instance, taking a semi-detached house worth £60,000 in Milton Keynes and a semi-detached house also worth £60,000 in Northampton, the household in Northampton would pay £88 more in tax simply because it happened to be across the regional boundary. Hon. Members should try to explain that to people in Northampton and Milton Keynes.Alternatively, people in an average house in Southampton would pay £89 less than people in Salisbury. I doubt whether my hon. Friend the Member for Salisbury (Mr. Key) would be amused by that. People living in a semi- detached house in Cambridge would pay £89 more than people in a similar house in Oxford simply because they were in East Anglia rather than the south-east, even though the semi-detached house in Oxford had cost much more.
Therefore, the only basis on which we could have a property tax and valuation would be on a national banding system because that would be understandable and objective. I agree that such a tax system based on the capital value of houses, on a national banding system, would be unfair unless we had taken care to provide for compressed rates of taxation. We do not say that if a house is worth eight times as much as another the tax bill should be eight times as much. That has been the position of Labour speaker after Labour speaker, but we could not tolerate such an unfair system. For people living in the same area, those in the most expensive properties should pay not more than three times as much--the maximum variation--as those in the least expensive properties.
However, that is only part of the answer. The other part is what has already been done--the massive and permanent shift in funding from local to central taxation. In future, 15 per cent. of local spending will be raised in local taxation only in England and 11 per cent. of spending will be raised in local tax only in Scotland. My hon. Friends may fear that in some parts of the country we shall return to the oppressive and unfair bills which people received under the rates system. That is certainly not the Government's intention, and the Bill does not provide for that.
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For example, in Barnet, the borough of my hon. Friend the Member for Hendon, South, the rates bill on a four- bedroomed detached house used to be £986. We now propose a council tax that would have produced a bill this year of £617. Last year, two of my hon. Friend's constituents in such a house paid £676 in community charge, so this year's council tax would have been cheaper for them-- [Interruption.] My right hon. Friend the Member for Brent, North (Sir R. Boyson) takes the prize, because the rates bill in Brent on a four- bedroomed house was £1,826. The council tax bill would have been £706, making the bill £1,120 less under the council tax. We heard yesterday from my hon. Friend the Member for Harrow, West (Mr. Hughes). A four-bedroomed house in Harrow, West was charged £1,137 in rates. The council tax would have been £588, a reduction for his constituents of £549. My hon. Friend the Member for Rochford (Dr. Clark), whose rates bill on a four-bedroomed house was £1,280, would have received a council tax bill of £510--a reduction of £770.Mr. Gould : The Minister is giving extremely persuasive and interesting figures. Given the huge disparities which are of such enormous benefit to those at the top of the scale, who will pick up the bill? Who will bear responsibility for paying every penny of savings gained by top people?
Mr. Portillo : I have already explained that the most important change that we have made is to shift the balance between what is paid centrally and what is paid locally, so I can answer the hon. Gentleman's question. If he fears that in some houses lurk people on high incomes, those people will pay vast sums in income tax, VAT and corporation tax to provide the grants for local government.
Mr. Gould : Will the Minister give way?
Mr. Portillo : This is my speech, not the hon. Gentleman's, and I warn him that if I give way now it will be for the last time.
Mr. Gould : In what the Minister has just said, I detect exactly the same argument that he and many others used to justify the flat rate principle of the poll tax. Is he not conceding and making clear something that was always true : the 2.5 per cent. VAT required from everyone who buys anything, which is paid to local government taxpayers, is entirely for the benefit of those who are most wealthy and best able to meet the bills?
Mr. Portillo : As the hon. Gentleman knows, the people who spend most on VAT are those who spend most on goods that attract VAT ; they are not the poorest in society. Children's clothes, food, transport and fuel are all zero-rated under the VAT system. Is the hon. Gentleman saying that, if he were in power, he would repeal the increase in VAT? He spent much time today and yesterday denying that he would increase from 14 to 20 per cent. the proportion paid by local taxpayers. He now appears to be saing that he would repeal the increase in VAT. If he is not saying that he would repeal the increase in VAT, he is simply speaking out of both sides of his mouth at the same time.
Mr. Gould : Will the Minister give way?
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Mr. Gould rose --Mr. Speaker : Order. I think that I heard the Minister of State say that he would not give way.
Mr. Portillo : We have just heard from the hon. Gentleman that all our proposals for discounts for single people and alleviation of the top rates of the tax are anathema to the Labour party, which wants to return to the full rigours of the rates. Under Labour, people in a house worth £200,000 must pay five times as much as people living in a £40,000 house, regardless of regional disparities or anything else.
Wherever the Labour party detects that there might be someone who could pay more under the rates, it wants every last penny out of that person. That is what we mean when we say that the Labour party is advocating an envy tax. We have just heard the hon. Member for Dagenham (Mr. Gould) dismiss the argument that people pay more income tax and VAT if they are on high incomes.
What about the discounts? We have heard many Labour arguments against them. The Labour party fears that somewhere there might be a single person who is also a millionaire who could benefit from a single person's discount, so it is absolutely against the proposal. Under a Labour Government, there would be no relief to widows, single mothers or young people starting out in life who live on their own. According to the hon. Member for Brightside, under Labour's proposals there is to be a discount for single retired people, even if they are billionaires.
There have been 70 changes of Labour party policy. I do not include in that 70 the number of occasions when the hon. Members for Brightside and for Dagenham have said contradictory things. I have always assumed that Brightside had it right and Dagenham was merely contributing a series of Gouldisms to the discussion.
Among the many popular items in this Bill is the provision that councillors who will not pay their community charge or their council tax will not in future be entitled to vote on setting a budget for their local authorities- -
Mr. Portillo : The hon. Gentleman says that because there is a lingering interest among Labour Members in people who have avoided the community charge. We heard it yesterday from the hon. Member for Dagenham, who referred to the community charge register as a threat to civil rights. He talked of the hundreds of thousands who traded away their votes so as not to register for the community charge. The Labour party cloaks under expressions such as "attack on civil rights" the fact that such people have not registered for the tax and have been indulging in tax avoidance, a practice for which the Labour party still shows some sympathy.
The Government are accused of changing their mind over local authority finance. I am accused of that ; I am even accused of changing my hairstyle because of my attitude to local authority finance. Certainly I defended the community charge, which gave Labour councils in many areas the fright of their lives. I am asked whether I am sorry. I am sorry that we did not manage to pin the overspending of Labour authorities on those authorities and that we did not have a chance to repeat across the
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country the electoral triumphs that we enjoyed in Trafford, Southend, Brent, Hillingdon, Ealing, Wandsworth and Westminster. So I am happy to say that the Government have changed their mind on local authority finance, but the world still goes round and the Conservative party is still a Conservative party. Has the Labour party ever changed its mind? Has it changed its mind on unilateral nuclear disarmament, or on the Common Market, or on nationalisation, or on trade unions, or on the free market? [ Hon. Members-- : "Yes."] Has the Labour party changed its mind on capitalism, or on the Soviet Union? Is there anything on which the Labour party has not changed its mind? [ Hon. Members-- : "Yes : the poll tax."]One principle has been rescued form the wreckage of socialism--the principle that local authorities should not be capped and should be allowed to spend and spend as though there were no tomorrow. For the Labour party, there is no tomorrow.
Is there one honest man left in the Labour party? Perhaps it is the right hon. Member for Blaenau Gwent (Mr. Foot), who fought an election on an honest programme and was defeated. Then there is the hon. Member for Coventry, South-East (Mr. Nellist), who is willing to go to prison for his views. Perhaps it is the hon. Member for Bolsover (Mr. Skinner), who is willing to continue to enunciate the principle that there is no such thing as a free lunch. And what is the uniting feature of all these people? I have discovered a dress code among Labour party members. If an hon. Member's jacket and trousers do not match and his clothing in general does not reach the heights of elegance, we know that he is an honest man. The dark suits of the Labour Front-Bench spokesmen betray those who have turned their coats.
The council tax is based on a new distribution of local and central finance. It consists of a property element and a personal element. It is fair and will be accepted as fair by the people. We shall take it through the House, despite the Labour party's opposition.
Question put, That the Bill be now read a Second time : The House proceeded to a Division --
10.2 pm
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