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Mrs. Angela Knight (Erewash) : My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) said that he was sure that all parties wanted the introduction of the council tax, and for that tax to succeed. Judging from the contributions that I have heard from Opposition Members, I wonder whether they truly want the council tax to succeed.
The grants that we are being asked to discuss and agree today are to be used for the implementation of the council tax. In the few weeks that I have been a Member of Parliament I have learnt that if people are really concerned about an issue the first thing they do is to write to their Member of Parliament. I have received no letters from constituents about the introduction of the council tax and I have had no representations from my local authority. Most of the local authorities appear to be satisfied with the amount that we are being asked to grant to them. I trust that the £184,000 for Erewash will be used properly for the purpose for which it is intended. I am sorry that the hon. Member for Sheffield, Brightside (Mr. Blunkett) has left the Chamber. The hon. Gentleman said that local authority finance was a shambles. I spent five years as a member of Sheffield city council when the hon. Gentleman and the hon. Member for Sheffield, Attercliffe (Mr. Betts) were its leaders. If I had to attribute the word shambles to anything I would use it in connection with the way that that council was run, then and now.
There is a sad inevitability about the way that Labour councils are run, as those of us who have lived or still live in areas run by them are well aware. I had that experience not only as a member of Sheffield city council but as a resident in the area run by Derbyshire county council, which is notorious for the way in which it governs the area. Opposition Members mocked the Minister who said that counties should not just be known only by a cricket team. Derbyshire cricket team does the county far more credit than its council.
A recent article in Tribune, commenting on the local council elections, stated that several of the councils in which Labour fared worst did not deserve to do any better simply on the basis of Labour's dire record in office. I have seen the truth of that statement at first hand. I am glad to see that the hon. Member for Brightside has returned to his place.
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Mr. Blunkett : The hon. Lady and I have crossed swords in the distant past. She speaks about competence. What did the Audit Commission say in 1985 about the running of Sheffield city council when I was its leader? Will she confirm that the chairman of the Audit Commission at the time, who is now taking over the Local Government Commission, said that Sheffield was a shining example and the most efficient council in Britain? Will she also confirm that for the first time in history Labour won the Broomhill ward in the Hallam constituency in July 1985 at the height of the conflict with central Government?Mrs. Knight : The hon. Gentleman has since lost the Broomhill ward not just once but twice. Perhaps there was one occasion on which Sheffield did not do everything wrong. However, I urge him to look at the reports for successive years on Sheffield city council by the district auditor and the Audit Commission. The hon. Gentleman should submit his evidence to the current inquiry by the district auditor into the World student games and the overall running of the local authority. For such reasons I welcome the council tax.
I have heard much concern expressed about the alternatives proposed by other parties. Rates have been mentioned, but my constituents are loath to have any sort of return to the rates. Mention has been made of the business rate. The business communities in the midlands, the north and Sheffield are united in their opposition to a return to a system in which the rate is set by the local authority. If Opposition Members spoke to their chambers of commerce, they would find, as I have, that that is their view.
Accountability is surely fundamental to local government. There must be a direct link between the amount that people pay and the implementation of the policies for which they voted. That link is retained in the council tax. I welcome the fact that people have recently started to pay great attention to local government. The council tax will be most acceptable to my constituents, but there is still a need to ensure that bills are correct and fair and are seen to be reasonable. A system under which people will not examine so much how we pay for local government will enable them to pay more attention to what local government is doing and the services that it provides. There is great concern in Derbyshire about that. One of the worries relates to the funding of Derbyshire police force and the report--
Madam Deputy Speaker : Order. I am sorry to interrupt the hon. Lady, but it is clear that her speech is straying wide of the subject of the debate. She must relate more closely to the order, which is fairly narrow.
Mrs. Knight : The order deals with the granting of public money to local authorities. We are asking those authorities to spend that money wisely and advisedly. I am addressing that and the concern of many of my constituents about the use of public money and the services that are provided.
Madam Deputy Speaker : Order. I remind the hon. Lady that the public money that we are discussing is for the introduction of the new tax.
Mrs. Knight : The council tax will lead to greater accountability because it will bring greater fairness, awareness and equity to local government finance. I am addressing those issues, which are surely important to all
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hon. Members. It is important for the grants to be made and for the council tax regime to be implemented so that equipment can be bought and wheels set in motion. The new tax must be introduced fairly and on time.The fairness of local government finance is also a subject for debate. The unfairnesses in many local authorities such as mine are practised in what is called the name of the people. Those councils have not provided the services that people want. They have not funded the police in the way that people want. I understand that this is a narrow debate.
Madam Deputy Speaker : Order. I am sorry to interrupt the hon. Lady again. I have no doubt that the matters that she is raising are important to her, but they do not fall within the scope of the debate.
Mrs. Knight : Thank you, Madam Deputy Speaker.
I applaud local government. I applaud many local councils for the efforts that they have made to ensure that services are delivered in the areas for which they are responsible. I applaud them for the efforts that they have continued to make during times of change, and we must change the ways in which local authorities are financed. Unfortunately, I cannot applaud all local authorities or councils, and some of the worst are those that are ruled by the Labour party. 5.20 pm
Mr. George Howarth (Knowsley, North) : I shall try to keep my remarks strictly within the terms of the orders.
The two most recent speeches that we have heard from the Government Benches had a profoundly depressing ring about them. The hon. Member for Brentwood and Ongar (Mr. Pickles), having failed to maintain control of Bradford city council for the Conservative party, decamped to another part of the country. He chooses now to use his seat in the House to berate local government in general and the part of it that would not continue to elect him in particular.
The same can be said of the hon. Member for Erewash (Mrs. Knight). Having failed on any occasion to take control of Sheffield city council, the hon. Lady decamped to Derbyshire. Having failed to listen to your strictures, Madam Deputy Speaker, she is now failing to follow the debate, but that is probably par for the course. It seems that she prefers to talk to her colleagues.
Madam Deputy Speaker : Order. I think it unwise for one Member to talk about the conduct of another. There is some unbecoming conduct in the Chamber, and I refer to the amount of conversation that appears to be taking place among those on the Opposition Benches. I am anxious to hear what the hon. Member says.
Mr. Howarth : I am grateful to you, Madam Deputy Speaker. I wish to say specifically that, having failed ever to take control of Sheffield city council, the hon. Member for Erewash had to find a seat that could accommodate her in Derbyshire. From that safe warren the hon. Lady attacks the city council of which she used to be a member and of which she could never take control.
The hon. Members for Brentwood and Ongar and for Erewash, having been rejected by their local authorities,
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have come to the House to turn the full heat of their hatred back on the electorate. It seems that it is to be punished for not electing them at local authority level.I wish to talk specifically about the application of the council tax in Knowsley, part of which I am proud to represent. The first issue that I intend to raise was covered in part by my hon. Friend the Member for Normanton (Mr. O'Brien), when he intervened in the Minister's speech. I am concerned about how the council tax will bear on those whose properties have been adapted because of their disabilities. I spoke to officials of Knowsley borough council this morning, who told me that they are desperately concerned about the way in which the system will operate. They feel that it will be difficult to ensure that adapted properties are subject to appropriate banding. It seems that the onus has been placed on local authorities to seek out disabled people. The officials to whom I spoke feel that that is not necessarily the best approach. More to the point, they feel that there is much scope for disabled people being overlooked. Another consideration is that if a property is already on the lowest band and then it is adapted, there is no further band to which it can drop. That discriminates against those who live in properties that fall within the lowest band. There is no scope there for any improvement.
My second complaint is that the discount system seems incredibly difficult to operate. The onus is on the local authority to identify who is and who is not a single-person occupier. It seems that the Department of the Environment takes the view that the benefit of the doubt rests with the council tax payer. That is the advice that is being received by local authorities through the Department. I understand, however, that a recent Audit Commission circular states that the onus is on the occupier to establish his or her status as a single occupier. It seems that the Audit Commission has made that clear in recent contacts with local authorities. There is an area of confusion which needs to be clarified.
If I thought that informative circulars and guidelines were to be issued within the next few days or weeks, that would be all right. Unfortunately, that seems not to be the position. I was told this morning by officials of Knowsley borough council that, apart from the relevant legislation, only three practice notes have been issued. The practitioners feel that there are huge grey areas and overlapping confusion that still has to be cleared up. A vast amount of additional information will have to be made available if the practitioners are to be able to sort out the proposed system in time for its implementation.
I went some of the way with the hon. and learned Member for Montgomery (Mr. Carlile) when he made his measured remarks about non-payment and the aftermath of it. I do not think that any of my hon. Friends ever advocated non-payment. It was-- [Interruption.] We never did. There were a couple of Members who did so, and it may have escaped the notice of some Conservative Members that they are no longer Members. The two things may not be entirely unconnected. Apart from a minority, my colleagues in the Labour party--in the House and elsewhere--were careful not to advocate non- payment. The problem arose--the Government were warned about
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this--because of the uncollectable nature of the poll tax. My colleagues and I never advocated the non-payment culture, a term which Ministers seem intent on using.The local authority in my constituency and other Labour authorities throughout the country have taken determined measures to recover the tax that has not been paid. There must come a point, however--I do not know whether we have arrived at it yet--when the law of diminishing returns starts to operate. Local authorities are expected to pump in resources to collect sums that may prove to be uncollectable. The cost to the local authorities may outweigh whatever it is able to recover. I am not saying that recovery should not be sought where a person who should have paid the tax is clearly identifiable. There should not be a general amnesty, but perhaps there should be a more intelligent approach. Perhaps there should be greater co-operation between central Government and local government to decide what is reasonable and what is not in determining whether those who should have paid poll tax and have not should be pursued, and for how much longer.
The hon. and learned Member for Montgomery raised a matter that should be given thoughtful consideration by the Government. I hope that I have made it clear that we should adopt a measured approach to the problem. I am not advocating any wild action.
The council tax is an improvement on the poll tax. It would be miraculous if even this Government could come up with anything less acceptable than the poll tax. However, despite all their claims, the council tax is still not the best solution for the financing of local government. The test should be whether the tax will be with us for at least a generation. I believe that a future Government of another persuasion, or the present Government, will have to return to local government finance legislation, possibly annually. Indeed, that seems to have happened over the past 13 years or so. The Government do not have the right formula and the tax does not reflect the necessary balances. There is a need for accountability and there is a need for central Government to be able to adjust the formula to compensate for the different levels of poverty, for example, that are to be found in different areas.
I regret the fact that these reports make no contribution towards a long- term consensus on financing local government. The Government know that that is so. The pity of it is that they have been unwilling to consider a long- term solution. Instead, they have tried to find a short-term solution that will dig them out of a hole. It does not, however, provide a solution to the long-term problem.
5.30 pm
Mr. David Congdon (Croydon, North-East) : I had not intended to make this point, but, having heard the point made by Opposition Members about community charge arrears, I really do think that local authorities must make every effort to collect them. One of the biggest complaints that constituents make to me is the additional amount that is added to their community charge bill because others have not paid their community charge. We know that under the old rating system people had to pay for those who did not pay the rates, but that was not visible. It was the visibility of the community charge which caused so much resentment. It is very important, therefore, to collect it.
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The new council tax will be much fairer than the community charge. As a member of a local authority for 16 years and chairman of Croydon's finance committee for six years, I was pleased to play a part in that authority's efforts to ensure that the community charge was collected properly and efficiently. Many authorities decided not to do so but to make the biggest mess that they could of it and then to complain when they were unable to collect the amounts demanded. It is imperative that all local authorities do their best to collect the council tax. That is why I welcome the reports. They provide a proper basis for local authorities to set in train the procedures, computer systems and so on that are needed to collect the new council tax. It is easy to argue that the Government ought to make more money available. I am not convinced that the Government ought to fund the full cost to local authorities. That would provide no incentive for authorities to ensure that they collect the council tax efficiently. It is too easy to say, "We need another 30 staff here and another 40 staff there if we are to collect the new tax." The truth, however, is that the new tax can be properly collected if efficient systems are set up. It can be collected for an amount significantly less than that which is needed to collect the community charge. Therefore, I welcome the proposals contained in the reports.The hon. and learned Member for Montgomery (Mr. Carlile) suggested that the Government ought to pay more towards the cost, but where does the Government's money come from? It comes, in any event, from the taxpayer. It is taken from either one pocket or another.
Mr. Alex Carlile : That is a bogus argument.
Mr. Congdon : It is not a bogus argument. The Government have no money of their own. They have to raise money. The problem with some Opposition Members is that they seem to think that the Government's money grows on trees. It does not. We have to exercise proper control over the nation's finances. We ought not to tax people any more than is needed. It is right to set targets for local government by making sure that central Government pays only a percentage of the cost. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) said that most local authorities believe that the amounts that have been provided by the Government are fair and offer the proper way forward.
I have already said that I believe that the council tax will be easier to collect. There will be no need to have a council tax register. Opposition Members have repeatedly suggested that there will have to be a register. One reason for that suggestion is that they want to demonstrate that the council tax will be very difficult to collect. I have no doubt that one or two authorities will be determined to demonstrate that it is very difficult to collect, but there is absolutely no reason why it should be difficult to collect. I believe that the people of this country will judge it to be a fair tax and that it will prove to be easy to collect.
Fewer people will pay the council tax. That will make it easier to collect. There is no minimum 20 per cent. payment by everybody. Students will be exempt--
Madam Deputy Speaker : Order. I hope that the hon. Gentleman will not go too far down that path. As I said earlier to another hon. Member, we are not debating the principles of the council tax.
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Mr. Congdon : Thank you, Madam Deputy Speaker. I was trying to demonstrate that, because the council tax will be easier to administer, the amount required to collect it will be reasonable. The computer systems that will be needed will not be so costly. Fewer staff will be required, because not so many people will be paying the council tax. There will be a bonus for local authorities, for in future the revenue cost of administering the local tax will be significantly less than that required to administer the community charge. We ought not to forget that point when we consider the funds that are to be made available to local authorities by means of these reports.
This is the right way forward. The reports provide for sensible levels of funding. Some local authorities will complain that it is not sufficient to meet their needs. The challenge for them is to demonstrate to their local council tax payers that their proposals for collecting the tax in their area are reasonable, fair and efficient. These reports should enable them to do so at minimum cost.
5.35 pm
Mr. George Stevenson (Stoke-on-Trent, South) : The Minister said that these reports will enable local authorities to prepare for the introduction of the council tax. That statement may be consistent with the political convenience by means of which the Government hope to extricate themselves from the mess that they have created in terms of local government finance. However, it will add to the confusion of many of my constituents and, I suspect, will add to the confusion of many people throughout the country. Having listened to the speech of the hon. Member for Brentwood and Ongar (Mr. Pickles), I suggest that the Government may find themselves in a right old pickle. Confusion grows on account of the fact that we are told that the council tax will be fairer and will be understood by everybody. I wonder. Recent reports suggest that no less a person than the Prime Minister is concerned about the effects of the Government's community care policy on the council tax. No Conservative Member referred to that, although between £500 million and £600 million will be required to implement that policy--if it ever is put into effect.
Confusion still reigns over the poll tax register. I am trying to be fair when I say that many hon. Members in all parts of the House have local government experience and know how difficult the situation is. Misleading and controversial statements are not what we require if we are to be clear about the Government's proposals.
It has been stated that the poll tax register will not be required. Before I became a Member of Parliament I read ministerial reports that suggested that if local authorities thought that they were going to use the poll tax register they were sadly mistaken ; it would not be required and they should not use it. The same Ministers now say that the poll tax register will have to be used. However, some Conservative Members have said that there will be no need to use it. What are the Government saying ? My constituents will want to know what they are saying. People throughout the country and local authorities throughout the country will also want to know exactly where the Government stand when it comes to the poll tax register. It is clear that if the reports determine the basis of local authorities' expenditure, and if there is an individual input, a register will be required. In spite of what has been said
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and in spite of the denials, I submit that the poll tax register is the one that will be required. My constituents will want to know what it will cost. We have heard that it will be cheaper, but I suppose that anything would be cheaper than the poll tax, so the cost depends on the criteria on which the Government have based their conclusions. It occurs to me that if an organisation other than the Government were making such proposals and trying to maintain a sense of credibility while suggesting that they would be cheaper, it would be laughed out of court by the Government themselves. We should take what the Government are saying with a large pinch of salt. The confusion is increased by the valuation process. I do not know how Ministers view it, but I shall respectfully suggest how my constituents view it. They have a picture in their minds of anonymous people wandering the streets, having a look at properties but not going inside or consulting anyone. They envisage those people then placing a valuation on a property and extending it to a number of properties in the same area. We are asked to believe that such an innocuous and ambiguous system--carried out by anonymous people using subjective rather than precise judgements, as the Government and the hon. Member for Brentwood and Ongar admitted--will reduce the number of appeals. Conservative hon. Members will know--Mr. Roy Thomason (Bromsgrove) rose--
Madam Deputy Speaker : Order. Before the hon. Gentleman gives way, may I point out to him that he is beginning to debate the merits or otherwise of the council tax, whereas we are considering the funding of the changeover to the council tax.
Mr. Stevenson : I am grateful, Madam Deputy Speaker. I shall give way if it is in order to do so on a point which you have ruled out of order.
Mr. Thomason : I am responding to a point that the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) made a moment ago, so I may be out of order. I was going to ask in what way he thought the Labour party's proposals, involving a formula with four different methods of valuing a property, were an improvement on the Government's proposals.
Madam Deputy Speaker : I advise the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) not to pursue that point.
Mr. Stevenson : I am grateful for your advice, Madam Deputy Speaker, because you have saved me the trouble of answering that question. We were told that £156.1 million will be available for the introduction of the council tax--75 per cent. to come from the Government and 25 per cent. from local authorities. I had intended to emphasise the fact that that will be an extra unfair burden on local authorities, but many hon. Members have said the same thing so I shall not take up the House's time by repeating it. However, it is important to underline other elements that were mentioned by the Minister when he spoke of the ability of local authorities to meet additional expenditure.
First, we are talking about local authorities that have consistently been subject to cuts in Government
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expenditure. The Government should take that fact into account. Secondly, as I understand the system, supplementary credit approvals may be available to local authorities in certain circumstances after the event. In other words, local authorities will have to find the money by borrowing or by some other means and only then might they receive supplementary credit approvals from the Government. That is hardly a realistic way for the Government to encourage local authorities to fund the changes. I urge the Government, even at this stage, to examine carefully the system of supplementary approvals so that it can be made to assist local authorities to meet the requirements of the introduction of the council tax. It is not good enough for the Government to say that there is a possiblilty that supplementary approvals may be available when, on the day and at the time the resources are required, they are not available. That is hypocritical and will not deal with the problems that local authorities will face.I look at you, Madam Deputy Speaker, with fear and trepidation because I am about to refer to a crucial factor. It has been mentioned, although not in detail, so I hope that you will give me sufficient licence. I wish to mention the way in which the resources for the introduction of the council tax are tied to the overall standard spending assessments. It is nonsense to think that one can pigeonhole such resources or expenditure without considering the total sum that the Government are making available to local authorities, because they are closely interlinked.
I offer an example of how unfair and discriminatory the SSAs have been. The report states that the boroughs of Wandsworth and Westminster are likely to receive about £500,000 from the Government for the introduction of the council tax whereas my city of Stoke-on-Trent is likely to receive £432,000. I am not surprised that Stoke-on-Trent is likely to receive less because if it received 58 per cent. of what Wandsworth and Westminster receive in SSAs, it would not have to levy a poll tax--and that is a good Labour authority.
We must examine how the Government are applying the formula for the introduction of the council tax. If the formula is as discriminatory as the SSAs, local authorities--I suspect that they will be mainly Labour- controlled authorities--will be in greater difficulty, as a result not of their inefficiency but of the Government's discrimination. [Interruption.] I hear the hon. Member for Erewash (Mrs. Knight) whispering to her hon. Friend the Member for Croydon, North-East (Mr. Congdon), to whom I give way.
Mr. Congdon : The hon. Member for Stoke-on-Trent, South (Mr. Stevenson) says that the proposals will favour Conservative authorities. How does he explain the fact that authorities such as Lambeth, Lewisham and Southwark benefit considerably simply because they are inner-London authorities?
Mr. Stevenson : If the hon. Gentleman examines the proposals as a whole he will see that a different picture emerges--it is a system as discriminatory as the SSAs. He did not challenge the example that I gave of my local Labour-controlled authority being so heavily discriminated against in terms of the SSAs, and nor did he challenge my contention that the attitude behind the SSAs is
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absolutely critical to our consideration today. I make that point to urge the Government to look carefully at that relationship. I suppose that anything that replaces the poll tax must be welcome ; nothing could be worse. However, in presenting the reports the Government are trying to give the impression that local authorities are to blame for the present situation. They are laying out the ground to try to convince the public to give local authorities the blame again if the council tax does not work--and it certainly will not work. That is disingenuous and does not relate to the Government's mishandling of local government finance over the past decade. I hope that the public will take note of what we say and will not be taken in by the Government's attempt to ensure that if the council tax creates problems it will be someone else's fault, not theirs.I hope that the Government's attitude to the introduction of the council tax will give more encouragement than the Under-Secretary of State, the hon. Member for Hornchurch (Mr. Squire), gave us. I was staggered by his complacent attitude when he said that the Government were aware how important the subject was, and of the problems that local government might face--and then said what they were doing about that. Ministers visited 30 local authorities. Big deal ! Wowee ! Blimey ! I wonder which authorities those were, and what their representatives said to Ministers. I hope that the Government will have a more positive approach to the subject than Ministers have so far shown.
Apparently, visiting authorities--no fewer than 30 of them--was not the only thing that the Government were doing. They were organising seminars, too, so that Ministers could go round the country telling intransigent, irresponsible, ineffective, inefficient local authorities how good poll tax mark 2 would be. I hope that the Government will show a more positive and constructive approach to the subject than that.
Local authorities need to know that the council tax will not be implemented at their cost. That tax is a reaction to the mess that the Government created with the poll tax, so the Government should shoulder the responsibility, and not seek to blame local authorities for their own incompetence.
5.53 pm
Mr. Michael Bates (Langbaurgh) : I have been interested to see a certain amount of hand-washing going on among the Opposition. They are quick to take the credit when things go well with their councils, but as soon as league tables are produced showing how clever or otherwise councils have been about bringing in the money, they seem to wash their hands of all responsibility. They claim that that is not their problem but results from the Government's under-resourcing. That seems to be the knee-jerk socialist reaction. Whenever socialists see a table of grants available, they immediately scream for more to be able to do their jobs properly. In contrast, the culture that Conservatives are trying to create means that we are concerned not with the money coming in but with the services going out. I shall focus my attention on that.
If the grants are to be made for the implementation of the council tax, which we all support--Langbaurgh is to get £245,000, and Middlesbrough £243,000--it is right to ask what value for money people in those areas will get for those sums. That is a fair question. The last time that such
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special grants were made they were to assist with the introduction of the community charge. Councils said, "Give us the money ; give us the resources. We shall introduce high technology, and collect the charge." Clearly they have failed in that objective. How many councils have failed to deliver?My hon. Friend the Member for Erewash (Mrs. Knight) said that her postbag was not bulging with questions about the council tax, but perhaps it was bulging with letters from people wrongly accused of not paying the community charge, or people who have not been asked to pay. The information technology systems in place do not seem to offer value for money. I suggest that one way round the difficulties in which some Labour councils find themselves would be to go back to the suppliers of the information technology software and ask for a discount on the basis that its performance in dealing with the community charge over the past five years has not been too grand. We need to focus on one key factor--accountability. That is what is needed in local government, and we seek to introduce it. To achieve accountability, a system needs to be easily understood. I am amazed at the nostalgia for the rating system. Hon. Members talk about complications, and claim that people cannot understand the capital value of their homes. Of course people understand that ; it is manifestly easy to understand. Do the Opposition claim that people understood the system for calculating the rates--that notional system of applying some multiple to a rent that had been calculated for 1973? Of course people did not understand it. That is one reason why we introduced the community charge. People understood a flat rate charge for local services. That is why we are introducing the council tax, which is a further improvement, and an attempt to create even more accountability. It is important that we get that message across.
Mr. Stevenson rose --
Mr. Bates : No, I shall not give way, because I want to develop my argument a little further, if I can.
Madam Deputy Speaker : Order. I am not sure that the hon. Gentleman can, as he seems to be going wide of the subject under consideration. I have made that point before. The hon. Gentleman must look more closely at the reports.
Mr. Bates : I shall certainly bear those points in mind, Madam Deputy Speaker. However, given the amounts of money in the grants that will go towards the purchase of equipment to assist the smooth transition to the council tax, it is fair to examine the effectiveness of the staff and technology which is in place to run the community charge. Clearly, when 30 per cent. of the community charge for Langbaurgh remains uncollected, the system is not a great success--it costs individual charge payers an average of £37 each. That is why it is right to introduce the system that makes people aware of that fact, setting out on the charge bill the sum that people have to pay because other people sought to evade their responsibilities.
The Opposition have given assurances that there is no campaign to support non-payment, yet they will understand that there is a certain scepticism about that. The fact that 27 to 30 Labour Members of Parliament have yet to pay their full community charge is hardly a lesson or
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an encouragement to people to pay their full contribution for local services. It is shoving the burden and the responsibilty on to somebody else--a familiar tack.That behaviour has not been accepted. The record was the subject of some elections in Langbaurgh last week. I am delighted to see that the hon. Member for Redcar (Ms. Mowlam) is present. I am sure that she, too, recognises the tremendous achievement of the two Conservative councillors who, by taking over Labour seats, returned a formerly Labour-controlled authority to an absence of overall control--if, that is, there can be said to be any real difference between an absence of overall control and Labour control.
Ms. Marjorie Mowlam (Redcar) : No one welcomes a hung council, which presents additional problems of administration and management. I agree with the hon. Gentleman that the current high rate of non-payment and uncollectability of poll tax in Langbaurgh is unacceptable and does no service to the people, but will he tell us why that position exists? Is he saying that local government officers are incompetent? What is his explanation of this serious problem?
Mr. Bates : I am happy to answer that question. Should an authority claim that the collection of community charge is someone else's responsibility, or should it accept responsibility for the task? I think that, if an authority has been put in place to provide services and therefore to collect revenue, that authority is accountable for the collection of community charge. The chairman of the council and the leader of the ruling group are responsible for directing the council.
I can offer some sympathy to Langbaurgh on one ground : only 109 per cent. of the money paid to the district council stays there, because 90 per cent. is passed on to Cleveland county council. People feel that they are not directly accountable for the moneys that are raised and spent simply because they do not see the correlation between what is paid to Langbaurgh and the services provided by Cleveland.
Madam Deputy Speaker : Order. I fear that the hon. Gentleman has forgotten all about the report.
Mr. Bates : I am merely responding diligently to Opposition interventions, Madam Deputy Speaker.
The council tax is fair. To say that the grants are not sufficient is a knee-jerk reaction--a washing of hands and a cop-out. The amounts involved represent huge investments on behalf of the British taxpayer, and the British taxpayer will demand results.
6.2 pm
Mr. Rhodri Morgan (Cardiff, West) : I shall try to adhere more closely than other hon. Members to the strictures that you have placed on them, Madam Deputy Speaker, and relate my comments directly to the reports that we are discussing. I believe that I am the first Welsh Member to speak today--or, at any rate, the first Welsh Opposition Member.
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Mr. Morgan : Well, I am the first Welsh Labour Member to speak. Anyway, I wish to concentrate on the Special Grant Report (Wales). The position of Wales in respect of central Government funding has always been different from that of England. The hon. Member for Langbaurgh (Mr. Bates) said that people did not understand the old rating system, but that is not really true of Wales. When Wales was subject to a rateable value-based system, the low capital values in the area clearly required a larger Government contribution to bring the quality of services up to the required England-and-Wales average. Under the poll-tax system, there was no formula that people could easily grasp as they grasped the link between lower property values and a larger Government contribution. A sword of Damocles was poised over Welsh local government finance : the only basis on which Wales could expect a larger contribution from central Government was the previous system.
Now, five years later, we find ourselves entering a second transitional phase. It can be seen from the figures included in the two reports that Wales needs a larger Government contribution to provide the same average level of services as we begin to return to a property-based--or semi- property-based--formula, including a new banding system.
In terms of property valuation, Wales is a different world. The Welsh do not move around so much ; they do not expect to market their houses and thus to establish high property values, which makes a property-based local finance system very tricky. Let me illustrate that by means of an anecdote. I recall, in my younger and fitter days, running a half-marathon in the Cynon valley, which has perhaps the lowest average property values in the United Kingdom. At the halfway point I crossed the river and ran up the Mountain Ash side of the valley. As I crossed the river in a state of fearful exhaustion, a dogleg in the road revealed a house directly in front of me. A sign on it read "Asbestos prefab for sale : apply within".
Where in Brentwood and Ongar could such a simple description of a property asset be found? No marketing techniques taught at Harvard business school would be needed to extract the best price for such a house ; if it is an asbestos pre-fab, the vendor should say as much. He will thus secure a quick sale, perhaps within a couple of days. That house may have been of better quality than others in the area, but, in any event, properties are sold for £1,000 or £1,500 in parts of Wales. It is an entirely different world--which is why Wales still needs a larger Government contribution than England during the transitional period. I trust that the 90 per cent. contribution that obtained under the rating system will be returned under the new property-based system, although it became hard to justify under the poll tax. I hope that the Minister will give us a guarantee to that effect ; otherwise, the level of services will fall.
The other problems involved have been mentioned many times, and, of course, they affect my constituents enormously. Morale is low in local authority treasurers' departments. They have invested in computers and staff training, and have got the magistrates courts tuned up to deal with the uncollectability of the poll tax. Now, suddenly, the Government are trying to approve transitional expenditure and to return to property valuation, albeit with a banding system, and all that work has been thrown into reverse. The magistrates courts have been told that they can go on short time in a couple of
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years, once the hangover of five years of the poll tax has been dealt with--five years of perhaps the biggest single mistake that any post-war Government have made : the Tory groundnuts scheme multiplied by 10. I suppose that that is what historians will refer to the poll tax fiasco as--if you do not mind my finishing a sentence with a preposition, Madam Deputy Speaker ; I half expected to see you rise at that point.The worst thing of all about the yo-yoing from property tax to head-based tax back to property-based tax with banding is the effect that it has had on our democracy. I shall not go into detail, but it is especially true in constituencies such as mine with large inner-city populations, numerous bedsits, a high turnover of rented accommodation and many people on social security living in bed and breakfast accommodation. Where turnover is high, many people have been lost from the electoral register, and that must have an adverse effect on the health of our democracy. I am sure that, whatever your doubts about its relevance to the reports, Madam Deputy Speaker, you will agree with the proposition that our first job as Members of Parliament must be to defend the efficacy of British democracy. The poll tax fiasco has done more to damage that than anything else that has been done in the past 100 years.
6.10 pm
Mr. Michael Stephen (Shoreham) : I have listened with interest to the speeches made by hon. Members on both sides of the House. I agree with the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) that we must consider the money that we are being asked to give local authorities today in the context of the huge sums that our constituents, as taxpayers, contribute to local government yearly. They give local government no less than £39.9 billion--nearly one quarter of our total national expenditure.
I cannot help feeling--I may be wrong--that some Opposition Members think that the Conservative party does not care about local government or value its work. I have to tell them that I have often discussed local government matters with my hon. Friends and with ministerial colleagues and I have not detected any such feeling. I have served in local government for six years myself and I greatly value the work that local government does. It has a long and proud tradition and I pay tribute to the numerous councillors of all political persuasions who work very long hours for very little money and for the most part deliver very good services to those whom they represent.
My hon. Friends and I value the work of local government, but we are not uncritical. We think that the British people may not be getting quite such good value for money from local government as they might. I believe that there are too many councils, that they are too expensive and that, in some councils, there is a degree of incompetence which should not and cannot be tolerated and which certainly would not be tolerated in the private sector.
In England and Wales alone, there are 47 county councils, 333 non- metropolitan districts, 36 metropolitan districts and 33 London boroughs. Ours is a small island and, bearing in mind that we could add to that figure the hundreds of parish and town councils, we are perhaps the most over-governed country in the western world. As if
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