HC Deb 17 December 1991 vol 201 cc155-91 3.55 pm
Mr. David Blunkett (Sheffield. Brightside)

I beg to move amendment No. 62, in page 1, line 10, after 'beginning', insert 'in 1992, the Secretary of State shall by order provide that 100 per cent. of liability for personal community charge shall be eligible for community charge benefit and in the year beginning in '.

If there is one single step that we could take to relieve the suffering and misery of millions and, at the same time, remove chaos and costs from the administration of the last year of the poll tax, it is surely the abolition of the 20 per cent. contribution. If we lived in a sensible world in which democracy worked effectively, that is what would happen, for hon. Members on both sides of the House have repeatedly pressed for the abolition of that contribution. Successive Conservative Members did so on 13 and 26 March.

I welcome the fact that the principle that no one should make a 20 per cent. minimum contribution to the Government's alternative to the poll tax has already been conceded, as has the principle that there should be no clawback from the amount allegedly put into benefits to compensate for that contribution; an announcement to that effect was made at a Government press conference.

Although we welcome those measures wholeheartedly, we wish to ask a simple question. The principle has been conceded; no clawback will take place after April 1993. Why can that not happen immediately? In Committee, the Minister of State said that the new tax would he a different tax. The poll tax was a people tax, he said—a personal tax—and it was therefore impossible to abolish the minimum contribution before the introduction of a property tax.

That is a trifle strange, because the 20 per cent. contribution was introduced under the old rating system. The Government have conceded that they were meddling with the previous principle of allowing those on nil or very low incomes to pay nothing when they introduced a 20 per cent. property tax contribution. They seem to think, however, that the principle that the poll tax must engender a universal contribution of at least 20 per cent. cannot be removed between now and April 1993.

The truth is that a dispute is in progress within the Government, and even within the Department of the Environment. The Secretary of State believes, and has made it clear—

The Minister for Local Government and Inner Cities (Mr. Michael Portillo)

Here we go.

Mr. Blunkett

We do not have to go far: we always find disagreement in the Conservative ranks. The Secretary of State believes that the contribution should have been abolished months ago, and we are very pleased about that; the Under-Secretary of State—who, bless his cotton socks, lives in a world of his own—cannot even understand why we want to abolish it. When, a few weeks ago, my hon. Friend the Member for Leyton (Mr. Cohen) made a simple statement—that the 20 per cent. contribution should go now—the Minister said, "Why'?" The Minister for Local Government and Inner Cities does not believe in the abolition of the 20 per cent., so we do not even have to debate with him why; he understands why he does not want it to be abolished. He thinks that every person, whatever their means—even if they have no income to pay it, which applies to 3 million women who are subject, with their husbands, to joint and several liability—should make a contribution, because he still believes in that charge. Everybody else, however, is left with the mess that has been created, not merely in terms of individual difficulty and suffering but in terms of the administrative and legal chaos engendered by the problems of collection. The cost of collection is something that even those who are willing to contemplate the misery of the poll tax are able to understand.

In the first short debate yesterday, when my hon. Friend the Member for Dagenham (Mr. Gould) raised the 20 per cent. question and the difficulty that faces students who have never been compensated for the 20 per cent. contribution, the Minister of State suggested that the Audit Commission had not come down firmly in favour of the abolition of contribution and questioned my hon. Friend's figures. It may be instructive, therefore—in order to prevent the waters from being muddied—to put on record what the Audit Commission said. In response to the Government's original consultation paper on the council tax, "A New Tax for Local Government", in paragraph 15 the Audit Commission said: The administrative costs of the principle of universal payment of community charge are high. On average, after taking into account the uplift in income support which they have received, charge payers, who receive 80 per cent. relief, contributed about £6 a year net to the public purse in 1990–91.

In paragraph 16 the Audit Commission said: Pursuing these defaulters for such small amounts is not a good use of scarce recovery resources when there are much larger debts outstanding.

In the document entitled "Administration of the Community Charge: Some Longer Term Considerations" the Audit Commission said: Exempting 20 per cent. of payers would more than pay for itself and would ease the pressure on the system, particularly in areas where collection is very difficult, anyway. Those clear quotations from what the Audit Commission said vindicate my hon. Friend the Member for Dagenham and suggest clearly that there is widespread support for abolishing the 20 per cent. contribution now in order to prevent the chaos that already exists over collecting the poll tax now.

I should have thought that the problems of collection would have been a matter of concern for anyone who claimed that he or she was in favour of probity and prudence in respect of public finance. The problems of collection are mirrored nationally in other forms of taxation, with £4 billion of tax outstanding from the last financial year in income tax, value-added tax, corporation tax and duties. Over £1 billion is outstanding on VAT. As much as £364 million of income tax was written off last year, never mind awaiting collection. I must be compensating for some of that lost revenue because I am still trying to get the Inland Revenue to pay back some of the money that it owes me.

The problems of non-collection of the poll tax are exacerbated at local level in a way that none of us could have foreseen. We made strong predictions about the problems which would occur. That is why we believe that it is crucial to tackle them head on, not in the daft ways about which we heard in Committee. We were told that local authorities that were struggling to collect the tax should be penalised by ensuring that their services had to be cut still further—a more insensitive suggestion is unimaginable. Lord Boyd-Carpenter repeated that suggestion from somewhere in the depths of the countryside.

Inner-city local authorities have had to face the problems of deprivation, education, housing, transport, the environment, leisure and public health while struggling through the courts with the 7.5 million summonses which had to be taken out this year to enforce collection of the poll tax.

Conservatives in this House and in the other place have made stupid suggestions about how to deal with this genuine problem. Some people ask, "Could not the tax be collected through deductions in benefits?" The need to go through the courts and obtain deduction orders contributes to the administrative and legal difficulties. Even if deductions from benefits could be managed—suddenly, that has become a favoured solution to the problems engendered by inadequate incomes and by increased interest rates and mortgage charges—we cannot continue to pile deduction on deduction. There are deductions for mortgage interest payments, deductions for the direct fuel costs of people with small children or elderly relatives who would otherwise be threatened with having their service cut off, deductions for outstanding community care loans—another Government invention—and deductions for water charges.

One cannot have all those deductions and expect people to have their poll tax contributions deducted as well. They would be left with virtually no money with which to buy their food and clothes. Presumably, their only recourse would be to EEC handouts and the Salvation Army. If one took that into account—and presumably a gift at Christmas to salve someone else's conscience—they would still be left in the new year with the impossibility of making ends meet. That is the reality of the struggle that people face in paying the poll tax.

What are we to do? How do we persuade the Government about the reality? Yesterday, my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) pointed out the struggle that occurs in Strathclyde, which has faced an additional year of the poll tax, and the £34 million of cuts which had to be made to cope with last year's problems of non-collection. Those are real cuts and difficulties, not imagined ones.

Conservative Members would dismiss that point on the ground that a Labour authority cannot manage its affairs, but it would be difficult to pursue that case. Strathclyde council has never been pilloried as a loony-left council. It struggles with the problems that occur in major inner-city areas of Glasgow and a major rural hinterland.

We must try to persuade Conservative Members that there are other reasons why it would be prudent for them to agree to the abolition now of the 20 per cent. contribution. The cost of doing that would be small.

Conservative Members keep exaggerating what the cost of abolition would be. It seemed to my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) in May and to myself in June and November that the cost of the 20 per cent. contribution kept going up, sometimes by as much as £200 million! It has been spelt out again and again—and I have already mentioned the Audit Commission—that the cost of not collecting or of struggling to collect is so great that it would be a saving if we abolished the 20 per cent. now. It would allow local authorities to concentrate specifically on those people who can afford to pay the poll tax but who are currently not paying. It would allow them to ensure that their administrative time, their legal expertise and the time of the courts could be spent in endeavouring to do what Conservative Members are constantly telling us should be done and which they now have the opportunity to help us to do.

Abolition would not only help those who are struggling to raise the 20 per cent. contribution but would have a beneficial economic effect nationally. [Interruption.] I might be able to enlighten the Under-Secretary of State for the Environment, the hon. Member for Salisbury (Mr. Key), if he listens carefully. I am keen that he should understand why we want to abolish the 20 per cent. in case he again makes the mistake of saying that he does not understand why. The national debt is also dramatically affected by the non-collection rate. Authorities have to borrow to pay the basic revenue running costs and because the cost of borrowing is so great for them, and because the increased public sector borrowing requirement to cover that has an effect on the national debt and on the inflation rate, it is important that the Government take that into account. In that way, we might persuade the Government that the abolition of the 20 per cent. contribution could help to solve the problems of the nation as a whole.

Abolition would not cost very much because nobody has been able to prove what the true cost would be. In Committee I think it was the Minister of State who for the first time came up with some figures for the earmarked contribution. For next year I think that he suggested that with the uprating the figure would be £1.40 a week for a single adult under the age of 25. That is the contribution that they claim that they have made towards the amount that has to be raised, but only a few months ago the Government made their position very clear. They said: There is no specific amount for the community charge in any one individual's benefit."—[Official Report, 27 March 1991; Vol. 188, c. 446.] The Government said that the compensation formed "an integral part" of overall rates. Either it does or it does not; either it is included in those benefits as a general contribution or it is not. The abolition of the contribution and the decision which has been taken for 1993 that it should not be clawed back could easily be applied to the poll tax. If it were, there would not only be a sigh of relief from those affected but we could get on with the job of trying to see out the poll tax in a reasonably orderly fashion.

Those on the lowest incomes and those who are struggling to pay the 20 per cent. contribution and to make ends meet would not only be relieved of the contribution but would have gained their share of the benefit from the switch to value added tax. Those on the least income were the ones who gained the least from having the £140 flat rate reduction last March, but they end up having to pay the VAT increase for the benefit of those who gained most.

I hope that the Government will take on board what I have said and will be willing to respond in a reasonably acceptable fashion. I have presented the case without rhetoric and in a mild and gentle fashion. I have not even had to resort to my box of tissues which I offered round in Committee to try to avoid getting the cold that I now have. I hope that I have managed to get across a reasonable case in a reasonable fashion.

If there was ever time when the Prime Minister could make reality of the gentle rhetoric of his conversion from the harsh and uncaring doctrines of she who nurtured him—and he has shown no real signs of that in domestic, political and social policy—it is now through this measure. The Government should abolish the 20 per cent. contribution and help the individuals affected which would help to abolish the poll tax with some semblance of order, financial competence and common sense. It is not a lot to ask.

4.15 pm

If the Government abolish the 20 per cent. contribution now—they may choose to do so just before the election—they would do a great favour to millions of people who are not written about in the papers, who do not appear on front-line news programmes on television and who probably do not even get a mention on "Yesterday in Parliament". We are not talking about 100,000 people who

Sir Nicholas Fairbairn (Perth and Kinross)

I will make some brief points which arise from the speech of the hon. Member for Sheffield, Brightside (Mr. Blunkett). He said that if it is expensive to collect a tax, it should not be imposed or collected. I hope that that will be the principle of any Labour Administration who take office in the 21st century. It will be very expensive to collect my tax, so I look forward to its not being imposed.

There is a slight contradiction in one concept. We always hear from the Opposition that local authorities are starved of money, yet it is proposed that local authorities should be more starved of money by exempting people who, I take it, the Opposition imagine might vote for them from having to pay anything into the kitty.

There is nothing unfair about what the hon. Member for Brightside calls the poll tax, which is in fact the community charge. It is a simple licence fee for local authority services. If we have the benefit of those services—I do not—we use them. What is wrong with paying a licence fee for that? To bleat that there are people who cannot afford it, although they can afford to drink in pubs, to have television sets, to run motor cars, to go to football matches and the like, is special pleading. It is extraordinary that the hon. Member for Brightside should suggest that if it is expensive, as it is, to collect something as simple as a television licence fee, one should merely be told that one does not have to pay. If it is expensive for somebody to clean out the dustbin, presumably one does not get the dustbin cleaned. That is the other side of the coin. Under the socialist millennium and other Kinnocchio, we shall have in our imperial concept—

Mr. Speaker

Order. It is not in order to refer to the Leader of the Opposition by such a name.

Sir Nicholas Fairbairn

I beg your pardon, Mr. Speaker. I was not referring to the Leader of the Opposition, because it does not occur to me that he will ever be Prime Minister of Britain. I was referring to an imaginary empire.

Mr. John Maxton (Glasgow, Cathcart)

First, the hon. and learned Gentleman obviously has not grasped the point. What we propose will save local authorities money by taking away from them the duty to collect the 20 per cent. charge. Secondly, can we assume from the nature of the speech that the hon. and learned Gentleman is making that he intends to vote against the Third Reading of the Bill at 10 o'clock tonight? What he is saying does not match the principles of the council tax. There will be 100 per cent. rebates, so many people will have nothing to pay for local services. He opposes not the socialist millennium, but the millennium of his hon. Friends on the Front Bench.

Sir Nicholas Fairbairn

I have not yet come to my hon. Friends on the Front Bench. I am dealing with the hon. Members on the Opposition Front Bench. What I do at 10 o'clock tonight is a matter which is deep in my conscience and will not be revealed even to the Whips at this time.

The philosophy of the Opposition is easy to follow. It goes this way: "The local authorities are starved of money. Those whom we think will vote for us should not have to contribute to that money." Are we seriously saying that, because it costs as much to issue a 1s 6d postal order as it does to issue a £25 postal order, the people who buy the Is 6d ones should not have to pay for them? That is essentially what the hon. Member for Brightside is saying. It is a fatuous concept.

If the hon. Member for Brightside can produce for me cases of people who have deprived themselves of paying the television licence fee or the car tax, never go to a pub and live in meanness because of the 20 per cent. factor, I will say hurrah. But I believe that the whole thing is a charade of whingeing and whining, complaints and mercy begging. Let us all simply pay our licence fee for local authority services. Let the Opposition stop complaining that local authorities are underfunded while suggesting measures by which they should be further underfunded.

Mr. Allen McKay (Barnsley, West and Penistone)

The hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) has completely missed the point. We are well aware that he does not like the new council tax and that he favours the poll tax. That is fair enough. He has made his objections clear. I respect his view, although I do not agree with it for many reasons, which we discussed in Committee. One reason is that the tax should be based on a person's ability to pay. That is what it is all about.

By no stretch of the imagination could we say that many of the people caught by the 20 per cent. rule have the ability to pay. That is why they do not pay. There is no question of going to football matches for the people who pay the 20 per cent. There is no question of having a car or going out to the pub at night. They simply cannot afford it. Many of them have about £42 a week to live on, to clothe themselves and so on. On the social argument alone, on which the hon. and learned Gentleman touched, we should do away with the 20 per cent. rule because the people to whom it applies are the least able to care for themselves with the money that they have.

But we do not argue on the social point. We are arguing on the basis of the cost of collecting the 20 per cent. I see my borough treasurer fairly regularly. The local authority is short of money because of the difficulties that it faces. When we debate the standard spending assessment, we will deal with the reasons why the authority is short of money. When we discussed the new council tax, the borough treasurer wanted two things. One was to stop having to collect the 20 per cent. from people whom he was having to pursue through the courts. If they cannot pay the 20 per cent., how can they pay the 20 per cent. plus the cost of going to court? That does not bear argument and will merely increase the debt.

In Committee, we argued about the impossible position in which local authorities would find themselves when they tried to collect the poll tax. My local authority, which is small compared to many, made 60,000 alterations to the register in nine months of the financial year. It issued 57,007 reminder notices, 46,164 final notices and 12,457 summonses.

The police can no longer take the summonses out as they are too bogged down. If they do, the courts cannot deal with them because they are too bogged down. My authority has issued 9,680 liability orders and 5,698 financial information requests and has authorised attachment of earnings in 438 cases, attachment of income support in 371 and issued 149 warrants to bailiffs.

All those transactions w ill continue while the authority introduces the new tax. The death of the poll tax arid the birth of the new council tax are causing problems within the financial department and the treasurer asks two things: first, do away with the 20 per cent. rule and, secondly, allow local authorities to design the new format for the tax, rather than running it centrally. The people on the ground are more capable of dealing with the problem than are central Government.

The disadvantages of the 20 per cent. rule for local authorities—its collection, the routine of trying to get it, and finishing up in court—so far outweigh the financial benefits which accrue from it that it would save them money if they could do away with it. Under the old system, local authorities would review the rent liabilities—people who had not paid the rent and thus had not paid the rates, as they were built into the rent structure. As hon. Members will know, treasurers used to cut their losses. When they felt that it would cost more to pursue liabilities than they were likely to get back, they wiped out the liability. That is what is happening at present with those people who have to pay 20 per cent.

If borough treasurers find that they have crossed over the border and can no longer recoup their money, surely in any financial circles it would be argued that it would be sensible for them to cut their losses. If authorities pursue 20 per cent. of the tax through the courts, they will only get themselves into more debt rather than recoup their money.

Abolition of the 20 per cent. rule would give local authorities room to manoeuvre to pursue those who owe the largest amount, as it would release staff, and save police time and court time. It would be a saving all the way down the line, rather than a loss. It seems too ridiculous for words if, for the sake of ideology, we force local authorities to spend more to recover less. It is time that we considered the problem more seriously than the Government have done until now. Let us do away with the tax and get down to the business of running local authorities in a sensible way.

Mr. Bill Walker (Tayside, North)

It will not surprise Opposition Members who served on the Standing Committee that I rise to speak on the amendment because we must consider what the Opposition are asking. The Opposition spokesman, the hon. Member for Sheffield, Brightside (Mr. Blunkett), in reasonable terms, suggested that we should allow local authorities to wipe out the responsibility of those who fall into the 20 per cent. community charge category, and that we should put that in the statute—[Horn. MEMBERS: "No."]—I am merely quoting back what the hon. Gentleman said in his speech. The Opposition give the cost of collection as the reason.

Mr. Blunkett

For the sake of clarity, I must put it on record that we did not suggest an indemnity, or wiping out the debt that is currently owed.

Mr. Walker

I am glad that the hon. Gentleman made that clear, because it is a fundamental point.

The important aspect of the argument of the hon. Member for Brightside was that, because of the cost of collecting the debt and the involvement of so much manpower—he drew attention to the situation in Strathclyde, and the splendid councillors there; I imagine that that is why Strathclyde is so short of policemen—[Interruption.] The Opposition are suggesting that, if their proposal were adopted, local authorities would be able to concentrate their energies on collecting the remainder of the debt. He claimed that some people were able to pay but had not paid.

4.30 pm

What is to prevent a local authority from taking that action now? If a local authority wished to separate debts between the 20 per cent. and other categories—it would not be difficult to do that because it is clear from the value of the debt whether people are in the 20 per cent. or another category—it could chase the outstanding higher debts. That would be a businesslike and logical approach to the problem. Obviously, one should go for the bigger debts first. The cost of collection makes that the logical approach to take. That would allow the authority the scope that the hon. Gentleman claims the amendment would provide. In other words, I argue that authorities already have that scope if they wish to use it.

Mr. Maxton

indicated dissent.

Mr. Walker

The hon. Gentleman is wrong. The local authority determines whom it takes to court and which debts are chased. The hon. Member for Barnsley, West and Penistone (Mr. McKay) explained what happened with rent arrears. As he said, when it was known that certain arrears would never be recouped—because the cost of chasing them would be so great—they were written off.

Mr. Maxton

The hon. Gentleman served, as I did, in Committee on the Abolition of Domestic Rates Etc. (Scotland) Act 1987 and will be aware that the law was changed under that measure in terms of collection between the rating system and the poll tax. He is right to say that, under the old rating system, the local authority had the ability to write off a sum if it wished to do so. That course is no longer available to an authority under the new system, and that is one reason why we are in our present mess.

Mr. Walker

The proposal about which I was speaking was put forward by Labour Members, and I was simply commenting on it. Local authorities can chase such debts as they determine in law shall be chased. If authorities do not chase higher debts, as against those in the 20 per cent. category, it is their decision not to go after them. I understood the hon. Member for Brightside to claim that Strathclyde faced financial problems because of the number of people in the 20 per cent. category and the need for the authority to use so much manpower to chase that debt. He went on to say what ratio of the total debt was represented by the number of people in the 20 per cent. category.

Mr. Maxton

Representing 70 per cent.

Mr. Walker

Yes, 70 per cent. of the debt in Strathclyde, being the number in the 20 per cent. category. Hence, the authority should be chasing those in the 30 per cent. category, if it thinks it can get the money which is owed.

Mr. Maxton

It is clear that the hon. Gentleman does not understand Scottish law on this matter, and I leave it to my English hon. Friends to deal with the law applying to authorities elsewhere in the country. Local authorities in Scotland are obliged to take out warrants against those in debt. The Act instructs them to do that. Once a warrant is taken out, it is for the sheriff officer to decide who will and who will not be proceeded against.

Mr. Walker

I suggest that the hon. Gentleman consults his former hon. Friend the Member for Dunfermline, West (Mr. Douglas) about that, for he probably knows more about the detail of the provision of the Act than any other hon. Member. Having travelled the route of a non-payer, he was on the receiving end of what a local authority is capable of doing under the law as it stands. The hon. Gentleman's case fell down because he said that, if we gave local authorities the ability to write off and do what they wished with the 20 per cent. payers, they could then concentrate their energies on the rest. Nothing under the present legislation stops them proceeding against those who cannot pay but should pay.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

The hon. Member for Tayside, North (Mr. Walker) is simply confusing the argument, and I suspect that he is doing so deliberately.

In a previous incarnation, I used to issue warrants. I was a provincial solicitor for the South of Scotland electricity board, so I know the warrant system perfectly well. As the hon. Member for Glasgow, Cathcart (Mr. Maxton) said, before the Abolition of Domestic Rates Etc. (Scotland) Act 1987, agents acting on behalf of a person who was owed money, whether substantial or insignificant sums, could pick and choose between the debtors against whom they proceeded.

Mr. Dick Douglas (Dunfermline, West)

Will the hon. Gentleman give way?

Mr. Kirkwood

I shall give way in due course.

It is significant that, under the 1987 legislation, local authorities were obliged to take out warrant proceedings against all and sundry. The hon. Member for Dunfermline, West (Mr. Douglas) may speak about this point, but I understand that the only discretion allowed by the 1987 Act was that priority could be given to the order in which instructions were given to sheriff officers to pursue debtors. Local authorities had discretion to that extent only. If that is what the hon. Member for Tayside, North is trying to say in his confused way, I agree with him, but I suspect that he is pursuing the argument simply to confuse the matter, which amounts to administrative chaos and much hardship for those who cannot pay.

Mr. Douglas

The hon. Gentleman is getting it right.

Mr. Kirkwood

That is encouraging.

I have been following the argument from a social security viewpoint. Alas, I was not privileged to be one of the chosen few who served on the Standing Committee, although I read some of the proceedings with interest. When the Minister winds up, will he say what consideration the Department gave to that question before the legislation? I perfectly understand the exigencies of a political emergency that had to be dealt with quickly, but was active consideration given to dealing with that problem and abolishing the 20 per cent. contribution? What is the current assessment of the cost of that? It would be helpful to the debate if the Minister could say a word about that, because his Department must have an estimate, although it may be difficult to arrive at an accurate figure.

I welcomed the statement by the Secretary of State for Social Security that compensation would not be clawed back, because £700 million is not an insignificant figure. There was much uncertainty about whether the Government would go all the way and haul that money back out of the pockets of those who qualified for income support, to add to the other misery that such people were suffering. The Government's made the right response to that problem.

Nevertheless, the problem in Scotland is peculiar to the extent that the legislation applied for a 12-month additional period. Nineteen-eighty-nine was a particularly difficult period for those on low incomes, because they had just begun to feel the effects of the Social Security Act 1986, which took effect in 1988. Water rates, particularly north of the border but also I suspect in other parts of the country, started to bite. Many people lost single payments to which they were entitled. Much of the transitional relief was taken out of the system as the relief funds that had quite rightly been introduced ran out.

The combination of all those factors in 1989–90, particularly in Scotland, took a heavy toll of pensioners who used to qualify for supplementary pensions and, under the new income support system, received pensioner premiums. Much hardship was caused. All of us north of the border—I speak for all parties—heard people on low incomes, particularly pensioners, explain how they simply could no longer make ends meet. When two-pensioner households had to pay two 20 per cent. contributions, it made the difference between profit and loss. Those who had previously been able to manage found that the combination of changes, including the 20 per cent. contribution, made it impossible for them to make ends meet.

As a result, a high proportion—some estimates make it 15 per cent., some as high as 40 per cent.—of people subject to the 3 million warrants issued north of the border have found it impossible to make ends meet. Discussions that I have held with representatives of citizens advice bureaux and other poverty pressure groups suggest that there is a continuing problem which has been rolling on since 1989–90 during the two or three years of the poll tax. Those problems are getting worse.

Many pensioners are now taking recourse in the deregulated credit market; they borrow money from money lenders. Some of them buy their consumer durables and clothing from catalogues that enable them to buy on credit. Many of them are storing up problems that will get worse before they get better. The Department had a duty to consider that combination of circumstances, and I hope that the Minister will say that that aspect has at least been considered. The Department faced a difficult political problem, and, like everyone else, I welcome the fact that the poll tax has been abandoned. However, when considering alternatives, the Department had a duty to consider all the circumstances before it opted for the Bill.

It is a great shame, a tragedy, that the opportunity was not taken to abolish that level of difficulty in 1992, as the amendment suggests. I accept that it may have been expensive to do so. However, no other single act of the Government could have more effectively ameliorated the continuing problems of financing the poll tax.

I subscribe entirely not just to the content of the excellent speech of the hon. Member for Sheffield, Brightside (Mr. Blunkett), but to the way in which he deployed the argument. I do not think that we should give the issue a high political profile, although of course it contains political aspects. The hon. Gentleman made his proposal in a measured way. His suggestion was underscored by the essential administrative argument and the Audit Commission's claims, which I think are now widely accepted by hon. Members.

Huge administrative costs are involved in collecting the 20 per cent. contribution from those who are least well-off and sending out poll tax book after poll tax book through doors every time there is a change, keeping the registers up to date and employing extra staff in local government. One aspect that riled people in the small market towns that I represent in south-east Scotland involved the adverts that were seen week after week for local government officials in finance departments on wages that were, for my part of the country, relatively high. Such officers were being employed in droves. New computer equipment and computer operatives were also being taken on to keep the administration under control.

They have managed to do remarkably well in south-east Scotland, where the non-payment rate is relatively low. That is because people in my district of the country are honest, law-abiding citizens, as they were in the 16th century, when they used to murder Englishmen with gay abandon. We celebrate that every year in our common riding festivals, to which hon. Members are hereby invited——

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

rose——

4.45 pm
Mr. Kirkwood

I give way to the Minister, who is obviously going to come next summer.

Mr. Stewart

I do not dispute what the hon. Gentleman is saying about the honesty and integrity of his constituents. I hope that he will agree that the other reason why Borders regional council has done well in collecting the tax is that, from the outset, it enthusiastically tried to maximise collection.

Mr. Kirkwood

Yes, that is absolutely right. One scheme that the council came up with, of which I was fortunate enough to be able to take advantage, was the allowance of a small discount for people who paid straight away. That worked extremely well. However, such a system is open to people such as me, but not to all my constituents.

Mr. Douglas

Will the hon. Gentleman refer to the record? In the Borders in October 1990, 42 per cent. of the community tax was unpaid and in October 1991 it was 49 per cent. Is that what the hon. Gentleman considers a relatively good record?

Mr. Kirkwood

Yes, it is for that stage of the year. If the hon. Gentleman looks at the end-of-year figures, he will see that the total collection rate is 96 and 97 per cent. Therefore, he will find that the lower percentage was a statistical freak.

It would create huge administrative costs and be sheer lunacy to proceed with the tax for the year 1991–92, which will be an extremely difficult year for many people on low incomes. It would fly in the face of the evidence from local authorities, the Chartered Institute of Public Finance and Accountancy and other organisations that have studied the problems. The Government should accept the timeous amendment, which will make a substantial difference to those who are least welloff and would go a long way to easing the transition between the hated poll tax and the new council tax when—God help us—it is introduced in 1993.

Mr. John Bowis (Battersea)

The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) started by saying that he agreed with the Labour party spokesman and ended up by giving a fine display of how community charge collection could work in practice. Perhaps that explains why his pressing bid to serve on the Bill's Committee was rejected by the hon. Member for Argyll and Bute (Mrs. Michie), who leapt in to take her rightful place.

I question two aspects of the amendment: first, what it says and, secondly, what the Opposition have said it says and their reasons for doing so. The hon. Member for Sheffield, Brightside (Mr. Blunkett) waxed gently but eloquently in favour of the abolition of the 20 per centers. I do not believe that the amendment removes the 20 per centers. If it did, there would be a considerable new poverty trap for the many people who are one step above the income support requirements and who consequently miss out on so many benefits. There would be a sudden drop from the 20 per cent. qualifying level to zero. The amendment produces a sliding scale down from 100 per cent to zero, to which I do not object in principle—it is something that we shall enact in future legislation.

However, the hon. Member for Brightside cannot suggest that everyone on a 20 per cent. charge will be excluded from payment under his proposals. In addition, he cannot say that the collection problems will be less, as instead of pursuing people for their 20 per cent. bills he would have to pursue them for 1, 2 and 5 per cent. bills.

Mr. Blunkett

I want the hon. Gentleman to concede that if the taper were kept at the present 15p, as opposed to sharpening it to the 20p proposed for council tax benefit for 1993, people would be better off with the abolition of the 20 per cent. contribution—with 100 per cent. available rebate. Instead of being penalised from 1993, as some who are struggling just above benefit levels will be, they will be pleased to find that they, too, are helped.

Mr. Bowis

The hon. Gentleman has not answered my point. He suggested that a few people who have their charge removed altogether might benefit, but I maintain that the sliding scale would still exist, which would make the system that much more difficult to implement.

So much for the wording of the amendment; what about its purpose, as spelt out by the hon. Member for Brightside? It is supposed to relieve people who are liable for up to 20 per cent. of the charge. I must tell the hon. Gentleman that it is in his hands and those of his colleagues in local government to relieve such people in the coming year. We already have a system to enable people to meet the challenge and remove the charge from everyone on income support. All that local authorities need to do is set their spending requirements at such a level that they come in at or below target. The 20 per cent. of community charge incorporated in the income support system will then pay, or more than pay, the amount required by local authorities.

It has been said time and again that my council provides good-quality services at low cost. I do not wish to repeat the fact that this year and next we will have a zero charge, good though that is. I want to cite the fact that last year we had a £148 charge. This year, before the Budget change, we had a £136 charge. So we are talking about collecting from our 20 per centers about 50p a week, which is more than adequately compensated for in the income support system. Each and every one of my less well off constituents benefited considerably—they were in pocket as a result of the system.

The system that enabled that to happen depends crucially on good management by local authorities, on councils looking after taxpayers' money that they receive from the centre and charge payers' money that they collect locally, and on their spending it wisely. My borough of Wandsworth has achieved the zero charge so that every less well off constituent is in pocket, not by means of additonal grant from Government—as I have often said, the neighbouring borough of Lambeth received one third more in Government grant last year, has done so this year and will next year—but by spending the money wisely.

The ability to set a low charge while maintaining quality is entirely due to the fact that over the past decade my council has been able to make £50 million efficiency savings. Let us compare that with the activities of many Labour authorities. The Labour-run council of Leeds, for instance, sent about 800 people to celebrate twinning arrangements in Germany, at a cost of about £76,000. Was that really the right priority, the one that the less well off people of Leeds wanted?

Mr. John Battle (Leeds, West)

The hon. Gentleman should check his facts and spell out to the House the precise amount of the contribution of the local chamber of commerce, which wanted to establish trade links.

Mr. Bowis

I even missed out one item: the sum of £17 a day expedition given to each of 12 councillors who accompanied the 800.

The former leader of Wakefield council had his room rebuilt three times in four years. He then moved into the chief executive's office because his room was not big enough and had a shower installed in it. When a new chief executive arrived, he decided that his room was not big enough either and had it expanded at a cost of £16,000. Wakefield council spent up to £1.5 million refurbishing the town hall. Are these priorities helping the less well off people in these boroughs, or are those councils overspending wastefully? Those Labour authorities could not care a fig about the less well off—if they could, they would ensure that their spending was on target so that the element of 20 per cent. in the income support system would pay for poor people's contributions.

Mr. Allen McKay

It is all very well the hon. Gentleman pointing a finger at some councils' expenditure without asking why it was incurred in the first place. We in Parliament need more room across the road and have spent millions of taxpayers' money on moving across the road. The hon. Gentleman is in favour of that, but he complains about local authorities doing the same. He did not mention Wandsworth's standard spending assessment, but could he tell me why it costs my authority £1 less per person to run the authority than it costs Westminster? Why does Westminster get £2 a head to educate its children when my authority gets only £1? Where is the justice in that? The hon. Gentleman should give us the whole story and compare like with like.

Mr. Bowis

We certainly should compare like with like and it is difficult to do that across the country, but we can do it across boundaries in London, where it is fair to compare allocations. One third more is allocated to Lambeth than to Wandsworth, but the latter makes the money work efficiently so that costs are kept down.

I was not talking about debt charges; I was talking about £1.5 million redecorating costs and questioning that sort of priority. I do not know whether the hon. Gentleman occupies a lavish new office. I still make do with my shared office in Dean's Yard. No doubt one day it will be brought up to the standard to which the hon. Gentleman has become accustomed.

Mr. Martin M. Brandon-Bravo (Nottingham, South)

My hon. Friend is right to illustrate some of the absurd spending by Labour councils. Our Labour-controlled county council wanted to close an old people's home in my constituency for want of a few thousand pounds, yet it cleaned up the front entrance to county hall and carved the name "Nottinghamshire County Council" in stone over the entrance—as though we did not know that is what it was called. It also carved the name of every councillor to win a seat two years before, at a cost of £250,000. It is that sort of absurd expenditure which irritates us.

Mr. Bowis

That is an eloquent example of exactly what I am talking about. I should imagine that Nottinghamshire carved her name with shame, not with pride.

I close with two more reasons why overspending can lead to overcharging vulnerable people and they explain why we get angry when we hear Labour Members talking about vulnerable people. Their wasteful policies result in poor people paying more. I refer first to collection. The hon. Member for Roxburgh and Berwickshire rightly highlighted his council's policy in this respect and my hon. Friend the Under-Secretary of State for Scotland confirmed what he said. Most good collectors are Conservative councils, but not all. There are councils of all parties and of none which manage to collect. Salford manages to collect 103 per cent. of target and Gateshead collects 104 per cent.; so we know that Labour authorities can do it, too. That must include a large number of people on the 20 per cent. who are paying legally and rightly, if not willingly, and at least doing their duty by their fellow citizens.

The campaigns that we have seen by the Opposition parties—not, I must say, the Liberal Democrats, but some other parties, particularly the Labour party—to persuade people not to pay have resulted in surcharges on the vulnerable this year. Those surcharges stand as a record of shame to the Labour party and to any other party that supports that policy of non-payment. The people who are having to pick up the tab for that policy and that connivance in non-payment are not just the Mr. and Mrs. Average in any constituency, but the less well off, those who are in receipt of income support, but who have honestly paid their contributions and now find that people better off than them are causing them to be surcharged to pay for that non-payment.

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Mr. Maxton

First, as an hon. Member who presumably supported his Government in wasting £14 billion on imposing this tax, the hon. Gentleman might show some humility and apology rather than doing what he is doing. Secondly, will he stop smearing the Labour party as regards non-payment? The Labour party has been absolutely clear in its opposition to non-payment of the poll tax. As the hon. Member for Dunfermline, West (Mr. Douglas) will bear out, we have always opposed non-payment as a policy and we will continue to do so.

Mr. Bowis

When I see the leaders of the hon. Gentleman's party throwing out hon. Members on the Benches behind him who advocated non-payment and throwing out leaders of councils throughout the country who have advocated non-payment, I will accept from him lessons about standing four square behind law and order and willingness to pay one's taxes.

This is a debate about the 20 per centers. The Bill introduces a scale down to zero. I do not disagree with the principle of that scale for the future, because once we move to the new tax, when in theory at least the system will change in terms of both income support and the community charge, we are into a new ball game. I am very happy to add as a postcript, as a result of my question to Social Security Ministers, that everyone on income support is given the added bonus. They will not have to hand over to the councils the 20 per cent. element in income support because of the new scale; they will have the benefit of keeping that in their pockets. So the whole country will benefit, as citizens of Wandsworth have to date.

Mr. Battle

The contribution or the hon. Member for Battersea (Mr. Bowis) came across as a last-ditch defence of the poll tax. I shall be surprised if the hon. Gentleman does not vote against the council tax, on the basis that he would prefer the poll tax to remain. Some of his speech sounded exactly like the arguments that we had when the poll tax was introduced—a mish-mash of half-baked myths and half-truths about Labour local authorities and others which do not stand close scrutiny. They are unfounded allegations that could be challenged anywhere within or outside the House.

The hon. Gentleman referred to Leeds city council, which has never been rate-capped or poll tax-capped. Indeed, Conservative Ministers have commended the prudence of Leeds city council. He may find that he will fall out with some members of his own party who support trade links with Europe, while he seems to be running with the Prime Minister and suggesting that we should blow cold on Europe and not build the vital trade links that our cities need to ensure that our industries are taken through to the next century and not rubbed out by this Government's economic policies.

Getting back to the amendment, I find it difficult to understand why the Government are holding out any longer—or, more precisely, who in the Government is holding out—against withdrawing the 20 per cent. rule from next April. Why can it not go through tonight? There are overwhelming arguments for getting rid of it from next April. We would welcome the reintroduction of the 100 per cent. rebate, with the council tax as part of that. It is the only part of the council tax Bill so far which has met with universal acclaim.

There is also general relief, as others have said, that the Government agreed in Committee that there would be no clawback of the compensation element when the council tax is introduced. That is welcome, because it perpetuated a further injustice in the poll tax. Now that the Government have got as far as accepting the principle that there should he no minimum contribution to local government, it is hard to see why the question of timing should hold matters up. It seems to me that that is all that is left; it is simply a question of the timing of the introduction. It certainly cannot be the principle of the 100 per cent. rebate, because that is now universally accepted.

It has been helpful that some Government Members agree with us that the 20 per cent. rule should be abolished now. I was on television with the right hon. Member for Brent, North (Sir R. Boyson) on the "Scrutiny" programme when he agreed that it would be much better if the Government abolished the 20 per cent. rule now; and I know that he is not alone. Many Tory Members agree with that point of view.

That reflects a change of approach by Conservative Members. I believe that they all see and acknowledge that the time is now up for the 20 per cent. minimum rule, on which the former Prime Minister insisted. I hope that the Government will accept our amendment tonight and agree that it is unnecessary to perpetuate that injustice.

All that seems to remain is a lingering confusion about what means-tested income support is and what it is supposed to do. Income support is not part of the tax system, whether local or income tax. It is for people who pay no tax because they are on a very low income or have no job. It should be separated, and is separated by the benefits system, from the tax system. It is part of the income maintenance system and should never have been confused with the taxation system. From the start the Government have presented that basic contradiction in their ideology. They have insisted on the notion of universality, that all must pay, regardless of their ability to pay, or, more important, their inability to pay and regardless of their lack of income. It may, on the face of it, seem laudable that everybody should make some contribution. The problem is that that principle comes into direct conflict with a means-tested benefit system, where people are asked what income they have and, if they do not have an income, are given support from the state.

The Government now refer to means testing as "targeting". The problem is that universality clashes and cannot operate with means testing, or targeting. Universality and means testing are incompatible. That is the basic contradiction built into the poll tax from the outset and that is why it is unfair to poorer people.

The whole purpose of income support is to support the incomes of poorer people. It can be argued that everybody should pay their rent and rates or rent and poll tax and we agree with that. But people should not be expected to pay them out of income support if no allowances have been put into income support in the first place. If they have no other source of income, because they have no jobs, the money that they receive from income support should pay their basic bills. That is the basis of income support, but the Government approach has been to lower the level of income support and to deduct, as it were, rent, rates or poll tax. As a result, that income support has been penalised and that is the injustice in the poll tax. I believe that it is not necessary to continue it any longer.

I remind the House of the history of the 20 per cent. rule. Until 1 April 1988, all those on supplementary benefit, as it was then called, received a 100 per cent. rebate if they paid rates because the system was means tested. If someone did not have enough money to pay his or her bills, the principle could take that into account.

The new system of income-related benefit which was introduced in April 1988 allowed only those who received rate rebates to qualify for a maximum rebate of 80 per cent. Everyone at that stage was required to pay 20 per cent. of the rates. In other words, the 20 per cent. principle was introduced during the last year of the rates to prepare for the universal principle of the poll tax. Therefore, the principle of the 20 per cent. contribution was simply carried forward from the end of the rate rebate system to the poll tax rebate system. No matter how low one's income, everyone was required to pay at least 20 per cent. of his or her poll tax bill.

I am surprised that the Government have now conceded that that principle is unjust and are prepared to return to the full 100 per cent. qualification for rebates from April 1993. The Government appear to have acknowledged that they were wrong to try to use the income support system as a means of deducting local tax, or the poll tax as it was.

Why are the Government holding out against all critical opposition, whether from the Labour party, public bodies outside the House, other parties and even some Conservative Members from the Back and Front Benches? There seems to be no logic or economical reason for holding to the 20 per cent. rule any longer. There certainly is no reason of principle.

I emphasise that those people who have been asked to pay the 20 per cent. minimum contribution may have had to face severe financial difficulties. I am sure that most hon. Members will have heard from such people at their advice surgeries, particularly pensioners, who say that the 20 per cent. contribution can cause real hardship if poll tax levels are high. Nor do those levels have to be above the rate for poll tax capping. That should have been taken into account. When the poll tax was introduced, it was simply assumed that 20 per cent. was a notional figure and that people could chip in a small amount to make a contribution because it would not make a real difference to their disposable incomes. In fact, as we have all learnt during the past few years, that 20 per cent. can make a considerable difference to people's incomes.

It was the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), one of the great architects of the poll tax, who, in The Guardian on 8 March, said: The charge is higher than people on low incomes can afford because the rebate system has become totally inadequate. It was designed in 1988 when we expected community charges to be much lower than they turned out to be. I agree with that statement. It precisely highlights the problem.

In the responses to the consultation paper "A new tax for local government", those calling for the immediate abolition of the minimum 20 per cent. contribution included the Chartered Institute of Public Finance and Accountancy, the Rating and Valuation Association, the Association of Metropolitan Authorities, the Association of London Authorities, the Association of District Councils, the Convention of Scottish Local Authorities and the Society of London Treasurers. In other words, evidence of the need to abolish immediately the 20 per cent. payment has been building up.

In support of the abolition of the 20 per cent. contribution, the audit commissioners said: It is worth mentioning one change which would assist authorities in their current collection arrangements and therefore, indirectly, facilitate the introduction of the council tax. That has to be a helpful suggestion. It is a friendly remark suggesting to the Government that the abolition of the 20 per cent. rule will ease in the council tax and ensure that the kind of confusion and chaos that we have seen in local government finance in the past year is not repeated next year.

5.15 pm

In a memorandum in March this year the Child Poverty Action Group said: The strong reluctance to make this change— the immediate restoration of the 100 per cent. rebate stems from the principle underlying the poll tax that everyone should make a financial contribution to local services. We believe this argument is flawed on both principle and pragmatic grounds.

The Government have already accepted the principle that the 20 per cent. contribution is flawed. That is why they decided to reintroduce the 100 per cent. rebate. I hope that the Minister will not cling to it. When he gave his press conference on 28 November he seemed to suggest that it would be inappropriate to introduce some of the changes and that it would be better to wait and introduce all the changes at the same time under the new system. He seemed to be arguing that, as long as the poll tax had a shelf life, the principle that everyone must pay regardless should be held to, as though it were irrevocably wedded to the principle of the poll tax. I hope that he does not believe that; that he now fully subscribes to the notion that there should be a 100 per cent. rebate system. The working out of the income and benefit system is different from that of the tax system, whether it is based on property or personal income, or on a combination of the two, as is the council tax. I hope that the Minister is not holding on to a residual principle that everyone must pay.

On 26 March, the hon. Member for Leeds, North-West (Dr. Hampson) said: About 70 per cent. of defaulters are those who are supposed to pay 20 per cent."—[Official Report, 26 March 1991; Vol. 188, c. 858.] If the 20 per cent. deduction has become the problem of the whole system, it is nonsense to continue for a further year. If that is the case, it should be tackled now, not simply compounded, allowing problems to build up in the future.

I hope that the Minister will take seriously the Audit Commission's argument for abolishing the 20 per cent. minimum contribution. In its report, "Administration of the Community Charge: Some Longer-term Considerations", it says: exempting 20 per cent. payers would more than pay for itself and would ease the pressure on the system, particularly in areas where collection is very difficult anyway." If the Government cannot accept the amendment and do not agree to abolish the 20 per cent. rule now, the inevitable result will be that the problems that have been experienced this year will be experienced on exactly the same scale, if not worse, next year. It must be good economic management and common sense to abolish that 20 per cent. contribution now.

We are pleased that the Government have at least acknowledged in principle that the 20 per cent. rule should go, but I hope that the Minister can now assure me that there are no pragmatic reasons for not making the change now to be effective from next April rather than having to wait longer. Not many changes were made to the Bill in Committee, but I hope that, as on the clawback, the Government will say that the amendment is common sense and that they are prepared to accept it.

Mr. Harry Cohen (Leyton)

In a rare moment of wit in Committee, the Minister referred to one Labour policy as Rowland revaluation—rolling revaluation. The Conservatives who supported the poll tax should be called "Bill 'em High" and their corollary "Owen a Lot". Certainly a lot of people owe the 20 per cent. minimum charge under the poll tax. As my hon. Friend the Member for Leeds, West (Mr. Battle) said, it has been said in the House that about 70 per cent. of all poll tax defaulters come in the 20 per cent. category.

Continuing that charge for the next 15 months has been slammed by many pressure groups such as the Child Poverty Action Group. The National Association of Citizens Advice Bureaux says: Clients are finding it increasingly difficult to manage on present levels of benefit. Meeting their basic needs such as food, clothing, water and heating more often than not means that they are unable to meet the 20 per cent. payment in full. The association added: Introduction of a 100 per cent. rebate would relieve considerable hardship for many of our clients". The Child Poverty Action Group says that the 20 per cent. contribution places a considerable financial burden on many households and NACAB adds: While the sums concerned may appear to be small, they are payable for each adult in the household and come on top of many other rising costs that have to be met from benefit. Those are scathing remarks from organisations that have to help the poorest in our communities—who are hammered by the 20 per cent. minimum payment which the Government insist on continuing for another year at least.

The Audit Commission argues that it is nonsense to try to collect that payment. It says that 20 per cent. payers contributed £6 a year net to the public purse in 1990–91…while the average collection cost per charge payer was around £15. It cost more to collect those 20 per cent. payments than they produced in revenue. The commission's pragmatic arguments for abolishing the system include this: Exempting 20 per cent. payers would more than pay for itself and would ease the pressure on the system, particularly in areas where collection is very difficult already. Council rebate and benefit systems are under enormous pressure in trying to process claims and have been forced into chaos. That is the case in my local authority and in many others throughout the country. Many of my constituents have written to say that incorrect bills omitting rebate which are the consequence of that burden on local authorities have resulted in their being summoned to appear before the courts. I know that that is true of charge payers in several other constituencies.

The staff who deal with 20 per cent. rebates could he engaged instead on collecting the poll tax from those who owe the full amount and do not pay it. The Government are preventing councils from effectively collecting those moneys.

As to the benefits clawback and the Government's argument that the poorest should use their benefit payments to meet their 20 per cent. poll tax bills, the Child Poverty Action Group says that it and other organisations query the basis on which the Government calculate compensation, since benefit rates in April 1988 were set 50p per week lower for each adult than the illustrative benefit levels given in the 1985 White Paper, uprated in line with the Rossi index. Claimants have also been paying additional VAT…The arguments about the exact amount of compensation can get very complex…But the figures"— that is, those produced by the Government— take no account of community charge levels higher than average". Many are higher than the average and the poorest end up losing. The Government do not seem to care. The CPAG adds that the figures take no account either of the losses that many claimants have suffered in previous years, when the Rossi index, used to uprate means-tested benefits, did not include increases in community charge levels. The CPAG concludes that the Government accepted that they will not claw back the compensation element in means-tested benefit when the council tax operates, so they have already accepted that the double counting argument is no longer relevant. As the Government have done that in relation to the council tax, they should do so in respect of next year's poll tax, abolish the 20 per cent. payment, and not reduce benefits.

When my right hon. Friend and hon. Friends and I make that argument on the Floor of the House, we are met with stony silence by the Secretary of State and his Ministers. The Government's nastiness in refusing to abolish the 20 per cent. payment proves that, although the Tories claim to be different since the departure of the right hon. Member for Finchley (Mrs. Thatcher), they remain intent on punishing the poor.

Ms. Dawn Primarolo (Bristol, South)

My hon. Friend the Member for Leyton (Mr. Cohen) concluded his remarks sooner than I expected.

The continuation of the 20 per cent. poll tax payment is unfair, uneconomical, and unreasonable. The Government do not have a leg to stand on in view of the arguments that they previously deployed as to why it is necessary to maintain the 20 per cent. payment until the introduction of the council tax in April 1983. It is clear that nothing but meanness of mind on the part of the Government prevents them from implementing 100 per cent. rebates from April 1992.

The Government's action is unfair because of the hardship, distress, illness, and other problems that it will cause for many in our communities who cannot afford to make a 20 per cent. contribution. Conservative Members say that that represents only a few pounds a week—but if a person's income is only a few pounds a week, that contribution represents a considerable amount of money to him or her.

I will not rehearse all the problems that people face in trying to make that payment, but I cite the example of a 22-year-old man in my constituency who is unable to obtain full-time work. After he has paid his rent and modest food costs, he is left with £3 a week from which to pay the bus fares—which are expensive in Bristol—that he incurs in attending job interviews, and his community charge contribution. It is beyond belief that such a person should be expected to continue paying poll tax when the Government have accepted in principle that a 100 per cent. rebate ought to be introduced.

The same applies to pensioners. Right hon. and hon. Members in all parts of the House have experience of pensioners coming to surgeries and experiencing the humiliation of having to say, "This is how much pension I receive a week, and this is how much I spend on gas, electricity, and rent. The two do not balance, and I cannot afford the poll tax."

Often, pensioners cannot afford to pay even for the fuel needed to keep them warm in cold weather. They need constantly to balance their meagre finances—paying one bill this week, and another bill next week. It is cruel of the Government, having accepted the principle of a 100 per cent. rebate, to make people suffer for yet another year. That is the unjust nature of continuing to force a 20 per cent. poll tax payment on the poorest in our communities.

Many people are struggling to meet their poll tax liability. They are the very people at whom the amendment is directed.

Mr. Cohen

I am grateful to my hon. Friend for giving way, but, as she said, I did keep my remarks succinct. My hon. Friend made a good point about high public transport costs in Bristol. Is she aware that in London they account for about one third of the benefit level?

Madam Deputy Speaker (Miss Betty Boothroyd)

Order. Although transport costs are interesting, they do not come within the amendment.

Mr. Cohen

My point was that claimants must pay their 20 per cent. poll tax contribution out of the benefit that they receive, although a third of their benefit is taken up by transport costs. Is that not deporable?

5.30 pm
Ms. Primarolo

It is indeed. It is even crazier that qualification for benefit depends on claimants' ability to prove that they are actively seeking work and attending interviews—which, of course, requires them to travel.

Council after council has clearly demonstrated that it costs more to collect the 20 per cent. minimum contribution than is gained through that contribution. Its abolition would mean a net saving for poll tax payers who are not receiving benefit. Hon. Members have explained that this afternoon, quoting from the Audit Commission report and from what local authorities have said. The 20 per cent. contribution is unfair, forcing people to endure unnecessary suffering; it is also uneconomic and unreasonable, even when judged according to the Government's logic.

The Government's consultation document on the council tax stated clearly that 100 per cent. rebates would be introduced, and we welcome that. The Government also said that they would have to consider adjusting benefit rates when the council tax was introduced because of the "compensation element" given in means-tested benefits in April 1988 and 1989, when claimants were required to make a 20 per cent. contribution.

On 28 November, the Government themselves kicked that stall away by announcing that there would be no clawback when the council tax was introduced. They have now accepted the two main principles involved: first, that the poorest should make no contribution to local government taxation, and, secondly, that there should be no clawback to compensate for the changes made in the social security system.

There is, to put it mildly, a strong case for putting both principles into practice immediately so that they are operational by April 1992. The arguments for reintroducing 100 per cent. rebates have already been well rehearsed, but the Government's arguments for not introducing them in 1992 should also be considered. First, they have claimed that the poll tax—the community charge—is different from the council tax; secondly, they have said that benefit levels for 1992–93 have already been set and that change is therefore impossible.

In Committee, the Minister said: In 1993, we shall move to a new system that is based on property. Until then, the system of taxation will be based on people. We increased people's social security benefits so that they could contribute to the personal tax".—[Official Report, Standing Committee A, 5 December 1991; c. 963.] According to the Government's own description, however, the council tax is only partly a property tax; it is also a personal tax. The single-person discounts are an obvious example of the way in which the personal element is retained.

The Government have said that there will be no clawback of the minimum contribution. They have kicked away that stall quite nicely, too. It has been difficult to sustain the argument that the community charge is a charge for services in practice. The Government's own statements comparing the distributional impact of the poll tax with that of the council tax lend weight to the view that the poll tax is just another form of local government taxation.

Finally, the Government imposed the requirement for a 20 per cent. minimum contribution to domestic rates before the poll tax was introduced. Their argument that the 20 per cent. payment cannot be abolished because of the personal-taxation element is a load of rubbish. Although the council tax is both personal and property-based, the Government are providing 100 per cent. rebates, and in any case the 20 per cent. contribution was orginally introduced under a property-based system.

Yet again the Government have trimmed their arguments to suit whatever they choose to do at any time. Perhaps we all do that to some extent, but this is an important issue: we are discussing whether the poorest and most vulnerable members of society should make a 20 per cent. contribution. The Government have admitted that there is no reason for that contribution to be made any longer, and have said that it will not be made after 1993. Why, then, do they not abolish it from 1 April 1992?

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)

I deliberately waited until what seemed to be the very end of the hon. Lady's speech before intervening; after all, she did say "Finally" a few moments ago.

At the beginning of the debate, the hon. Member for Sheffield, Brightside (Mr. Blunkett) taunted me: indeed, he invoked the Almighty's attention to my cotton socks, so annoyed was he by the fact that, in Committee, I had asked the hon. Member for Leyton (Mr. Cohen) why he wanted to abolish the 20 per cent. rule. I have not yet received a full reply to that question.

One point has not been raised either today or in Committee. Opposition Members seem blindly to assume that abolishing the 20 per cent. rule would cost local authorities nothing. That is not true. Has it occurred to the hon. Lady that local authorities would still incur a cost in working out who should be exempted? She cannot duck that part of the equation. We have heard only a partial argument today, as we did in Committee.

Ms. Primarolo

I wish that I had more time. I can say "Touche" to the Minister, for we have already made that very point to him. We asked whether local authorities would be burdened with costs when trying to calculate who would be entitled to the 25 per cent. single-household discount under the new system, and suggested that without a register it would be difficult for local authorities to establish who was receiving income support. In Committee, Ministers continually told us that there would be no problem: council tenants, even if they were not receiving 100 per cent. rebates, would receive housing benefit and income support.

The Government have now decided not to claw back the compensation element in means-tested benefits—[ Interruption.]

Madam Deputy Speaker

Order. Only one debate can take place at a time, and the hon. Member for Bristol, South (Ms. Primarolo) has the Floor.

Ms. Primarolo

Thank you, Madam Deputy Speaker.

The 100 per cent. rebates will be very welcome, but they will not be introduced until 1993. We should like them to be introduced in 1992. On the Government's own admission, abolishing the 20 per cent. minimum contribution is logical. The Government have accepted that claimants should continue to receive compensation, as well as ceasing to pay the 20 per cent. contribution.

The conclusion is simple. The Audit Commission's pragmatic arguments for the abolition of the 20 per cent. contribution have always been convincing. According to "The Administration of the Community Charge: Some Longer-term Considerations", published in 1991, the Audit Commission said: exempting 20 per cent. payers would more than pay for itself and would ease the pressure on the system, particularly in areas where collection is very difficult anyway. That answers the Minister's point. The Audit Commission is supposed to be expert in knowing what local authorities can or cannot do.

I hope that even at this late stage the Government will realise that they are being unfair, unjust, unreasonable and illogical and that they will therefore vote for the amendment so that 100 per cent. rebates can be introduced for those on benefit from 1 April 1992.

Mr. Peter Hardy (Wentworth)

I wish to refer to the position in my area, which will not have escaped the Minister's notice. He is aware that I am deeply concerned about those in Rotherham who will have to pay 20 per cent. of the poll tax next year and who will have to pay 20 per cent. of that part of the successor tax that relates to property when the new system is introduced. While the Government determine the level of poll tax, in so far as they determine the standard spending assessment, those areas that receive an unfair and excessively low standard spending assessment will find that they have to continue to raise a much larger figure, even from the poorest who pay 20 per cent., than should be the case.

Three years ago, the Department of the Environment could not include employment as a factor in determining standard spending assessments, or refer to the tourist character of an area in determining SSAs, but now it has given way and allowed contributions to be made and support to be given to tourist areas. However, it has not allowed unemployment to he taken into account in areas such as mine. That inevitably means that those who live in poor areas or in areas with high unemployment will find that the poorest in the community, even though they have to contribute only 20 per cent., will inevitably have to pay, proportionately, a great deal more.

The Minister and others believe that people ought to pay 20 per cent., but I notice that their belief does not extend to Wandsworth, where no one has to pay anything. The residents of Wandsworth paid nothing last year and they will pay nothing next year. I suspect that, if the Government remain in office, the people of Wandsworth will not even have to pay anything the year after that. However, it does not seem to have dawned on Ministers that they may not be providing a fair level of SSAs to areas that refrain from levying a poll tax and that then receive the benefit of not having to incur administrative costs of at least £2 million.

The request that the 20 per cent. relief should be changed so that the poor receive 100 per cent. benefit should be extended to the rest of the country and not concentrated merely on the borough of Wandsworth. I take a dim view of the unfairness that is inherent in the methods of grant determination, an unfairness that inevitably will continue. The Government have been told during the last two or three years of the inherent unfairness of the system. Until that unfairness is dealt with, it is wrong for the Government to impose burdens on the poorest and for the poorest to continue to experience higher burdens of taxation simply because they live in poorer areas.

While the Government continue to classify poor areas as rich, needy areas as affluent and necessitous areas as salubrious, the system will remain grossly unfair. If the Minister looks again at the figures for my constituency, he will have to confess that they are grossly unfair. While that unfairness exists, I object to my constituents having to pay an unfair burden of poll tax. That is particularly acute when it comes to the neediest in the community.

5.45 pm
Mr. Portillo

The hon. Member for Wentworth (Mr. Hardy) raised topics that were not raised by any other speaker. We do not take account of unemployment when establishing the standard spending assessment. However, we do take account of social factors. If unemployment continues apace for a period, it is reasonable to assume that its effects will be reflected in social factors. It is precisely the measurement of social factors that gives a higher standard spending assessment to Tower Hamlets, Lambeth, Hackney and to a lesser extent to Wandsworth than to Rotherham. The hon. Gentleman must not say that social factors are not taken into account. They are. It is precisely that which leads to the higher settlements for the places that I mentioned.

The hon. Member for Sheffield, Brightside (Mr. Blunkett) opened the debate by speaking softly and gently. He urged me to reply in the same tone. I am not entirely sure that I shall be able to do so. There were elements in his speech that excited me somewhat. In particular, I found a deep contrast between the hon. Gentleman's approach and that of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). Perhaps unusually, I found a certain amount of good sense creeping into the argument on the Liberal Benches. The hon. Member for Roxburgh and Berwickshire appears to recognise that the proposal would have a cost. He asked me, very reasonably, what that cost would be. I shall answer his question.

The hon. Member for Brightside seemed, for most of his speech, to assume that the proposal would cost nothing. It was an extraordinary approach, particularly when one recollects that his, hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) accused the Government of having wasted £14 billion on the community charge—not a figure with which I agree. Money has been spent, but that money has not been wasted. It has been provided for the community charge reduction scheme—to reduce the community charge by £140. That money has gone into benefits and has been used to help people to afford to pay their community charge in one way or another.

Although the hon. Member for Cathcart plucks the figure from the air, if he recognises that all these measures are designed to help people to pay the community charge and that they have a cost which has to be found from the central taxpayer, it follows as night follows day that the Opposition's proposal would also involve a substantial cost.

Mr. Maxton

rose——

Mr. Portillo

After I have given way to the hon. Member for Cathcart, I shall tell the House what that cost is.

Mr. Maxton

If the Minister is so concerned about ensuring that people can pay the poll tax, he should accept the amendment. That would be the best way of ensuring that the very poorest get out of the poll tax net altogether. I gather that, as the Minister had £4 billion to provide the £140 discount, all he would have had to do was to make a reduction of £126 and use the other £14 to abolish the 20 per cent. rule, not from 1 April next year but from 1 April of this financial year.

Mr. Portillo

We shall come to the figures in a moment, when the hon. Gentleman will be "illuminated".

I thank the hon. Member for Brightside, the hon. Member for Leeds, West (Mr. Battle) and others, including the hon. Member for Roxburgh and Berwickshire, who applauded what the Government are to do when the council tax is introduced, which is to provide 100 per cent. rebates. I confirm that there will be no clawback of the amounts that were put into the social security benefits. The hon. Member for Roxburgh and Berwickshire was absolutely right to say that the implied cost—£680 million—is not insignificant. It means that the benefits will be £680 million higher than they would otherwise have been had they been increased simply in line with inflation since 1989. Whether it is expressed in terms of the burden that it imposes on income tax, corporation tax, value added tax or in any other way that one chooses to express it, £680 million is, as the hon. Member for Roxburgh and Berwickshire said, not an insignificant amount.

The hon. Member for Bristol, South (Ms. Primarolo) did not deal with what concerns the Government—our priorities, what can be afforded and what it is right to do. She seemed to be engaged in a debating society debate about whether giving up contributions to local taxation from April 1993 meant that the Government had no logical basis on which to sustain them during 1992–93.

In a personal tax—the community charge—based on the principle that everyone should pay something, it is appropriate that those payments should continue to be made. I say that not merely as a matter of dogma but as a reflection of many expectations outside the House. Moneys have been put into people's benefits. Those moneys have been raised by taxpayers. They are the rich and those on low incomes—the spectrum of people in this country.

People have a right to expect that the moneys that have been provided to meet the 20 per cent. contribution to the community charge should be used for that purpose, that that policy is sustained and that local authorities should make every effort to collect the contributions.

Mr. Bryan Gould (Dagenham)

The Minister tried to peddle that argument in Committee. It was unconvincing then, and it is unconvincing now. If the basis of the 20 per cent. contribution is that it is a necessary corollary of a personal tax, and as we have it on the authority—often repeated—of the Under-Secretary of State for Scotland—the hon. Member for Eastwood (Mr. Stewart)—that the council tax is 50 per cent. a personal tax, logically, there should be a 10 per cent. contribution under the council tax. That is manifestly not the case. What has happened to the Minister's principle?

Mr. Portillo

I wish to express the thanks of the House to the hon. Gentleman for appearing near the end of the debate——

Mr. Gould

rose——

Mr. Portillo

The hon. Gentleman is very sensitive, but I shall give way.

Mr. Gould

I think that everyone present believes that the Minister's remark was a particularly cheap shot. I was out of the Chamber for only a brief period and, unlike the Secretary of State, I have religiously sat through all the debates today and yesterday.

Mr. Portillo

As ever, the hon. Gentleman's sensitivity leads me to believe that I must have been closer to the target than I suspected. The hon. Member signs up as a member of the Bristol, South debating society. I am not saying that it is impossible to abolish the 20 per cent. contribution; this is a tax under which a contribution is expected from everyone and under which those moneys have been made available. The problem of non-payment has been made much worse by the activities of some Opposition Members to whom I shall come in due course.

The amounts which have been put into benefit, as presently uprated, are £1.31 for single people under 25, £1.48 for single people over 25 and £2.62 for couples, yet the 20 per cent. contribution averages about 80p a week for single people and £1.60 a week for couples. We do not know what the charges will be next year—I hope that they will be not much higher. The benefit rates will rise to £1.40 for single people under 25, £1.58 for single people over 25 and £2.80 for couples. The House can see that the amounts that are available under income support are well above those that people are asked to pay.

Mr. Blunkett

I shall not delay the hon. Gentleman, but perhaps he will tell the House from where he has extracted those figures. Earlier this afternoon, I quoted an answer by the Under-Secretary of State for Social Security—the hon. Member for Maidstone (Miss Widdecombe)—at column 446 of the Official Report of 27 March, which suggested that those figures could not be extrapolated from the benefit levels and that they had never been included as a specific amount.

Mr. Portillo

As the hon. Gentleman knows from his experience, the theology of social security is that social security benefits cannot be broken down into amounts for particular purposes. None the less, a specific amount was added when the upratings were first made. I have uprated the amounts for the years since then.

The hon. Member for Roxburgh and Berwickshire wanted to know the costs of implementing the measure. One must remember that we would have to pay 100 per cent. rebates to those on income support and, to avoid a cliff edge, have a sliding scale for those who were above the income support level but on low incomes. The total cost of increasing benefits not only to those on income support but to those further up the income scale would he £440 million this year and £500 million in 1992–93.

Mr. Kirkwood

Are those English and Welsh figures, or are they national figures including the Scottish figure? Perhaps the Minister would like to write to me about that matter.

Mr. Portillo

I believe that they are Great Britain figures. It is a considerable sum.

Much has been made of the Audit Commission's figures. I tried to deal with them to the satisfaction of the House. The Audit Commission was looking at 1990–91. In that year, £71 was the average amount that the people paying 20 per cent. were asked to pay. The Audit Commission compared the £71 that those people were asked to pay and the amount that had been added to income support, which, on average, was £6 below the £71. That seems to be a wholly spurious comparison and is not of any interest. If one were to relieve people of the 20 per cent. contribution, one would have to increase the benefit levels, and I have outlined the cost of doing that.

In any case, I do not agree with the Audit Commission's collection figure, which it puts at £15 but which I put at £12.50, on average. Taking 1990–91, when the average contribution was £71, the net revenue that was collectable after deduction of costs was about £60.

My hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) made a good point when discussing the costs of collection. The good sense which he talked was met by an intake of breath among the Opposition. The Under-Secretary of State for the Environment—my hon. Friend the Member for Salisbury (Mr. Key)—made a good point, which was echoed by my hon. Friend the Member for Battersea (Mr. Bowis), when he said that the cost of administration did not go away when 100 per cent. benefit was paid to people. One must still assess them and provide them with the benefit, so there is still a lot of administration. The Labour party has managed to avoid that point throughout the debate.

It was breathtaking that the Labour party has talked about all the difficulties of non-payment and collection. The Labour party has shown extraordinary irresponsibility in concluding that the only response if a tax is difficult to collect is to abolish it or, if it is difficult to collect from a portion of the population, to let those people off.

There was something even more breathtaking than that. We sat here yesterday and listened to Labour Members attack the Scottish National party for advocating non-payment. History is now to be rewritten—as though by a group of Soviet historians—to remove from the history books the contribution of Labour Members who advocated, and set the example of, non-payment.

I should like to put on record the names of those Labour Members who signed the statement that advocated non-payment. The hon. Members for Coventry, South-East (Mr. Nellist) and for Liverpool, Broadgreen (Mr. Fields), the right hon. Member for Chesterfield (Mr. Benn)——

Mr. Cohen

On a point of order, Madam Deputy Speaker.

Mr. Portillo

—the hon. Members for Liverpool, Garston (Mr. Loyden), for Edinburgh, Leith (Mr. Brown), for Halifax (Mrs. Mahon), for Glasgow, Provan (Mr. Wray), for Tottenham (Mr. Grant)——

Mr. Cohen

On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker

Order. The hon. Member wishes to raise a point of order.

Mr. Cohen

On a point of order, Madam Deputy Speaker. It is incumbent on the Minister as a matter of order to read the statement to the House.

Madam Deputy Speaker

It is up to the Minister whether or not he reads it. It is not a point of order for the Chair.

Mr. Portillo

I was just about to come to the hon. Member for Leyton (Mr. Cohen), who signed the statement, so he will be able to read it out himself. Other hon. Members who signed were the hon. Member for Bradford, South (Mr. Cryer) and Mr. Eric Heifer, the hon. Members for Hackney, North and Stoke Newington (Ms. Abbott), for Derbyshire, North-East (Mr. Barnes), for Newham, North-West (Mr. Banks), for Islington, North (Mr. Corbyn), for Bolsover (Mr. Skinner), for Dunfermline, West (Mr. Douglas)—he is now in his place—for Bradford, West (Mr. Madden), for Liverpool, Riverside (Mr. Parry), for Leyton, for Sunderland, North (Mr. Clay) and Mr. Pat Wall, the hon. Members for Falkirk, West (Mr. Canavan), for Brent, East (Mr. Livingstone), for Bristol, South (Ms. Primarolo)—also in her place—for Glasgow, Hillhead (Mr. Galloway), for Hackney, South and Shoreditch (Mr. Sedgemore), for Bow and Poplar (Ms. Gordon) and for Blyth Valley (Mr. Campbell).

6 pm

That is not all—three Scottish Labour Members of Parliament declared that they would not pay the community charge when they launched the Committee of 100 to campaign against the community charge in Scotland. They were the hon. Members for Dundee, East (Mr. McAllion), for Glasgow, Maryhill (Mrs. Fyfe) and for Kilmarnock and Loudoun (Mr. McKelvey).

The hon. Member for Kilmarnock and Loudoun yesterday said, extraordinarily, that he had not paid himself but that he had not urged anyone else not to pay. Do the Opposition know nothing about the example that legislators set? Do they know nothing about the effect that people who are sent to Westminster to make laws may have on their constituents if they say that they will not pay taxes that have been passed in the House?

We have seen an extraordinary display from the Opposition today. They want to forget their past. They say that the 20 per cent. contribution should be abolished because it is difficult to collect. They want to forget that they made it difficult to collect the 20 per cent. contributions because they urged people not to pay the tax, did not pay it themselves and set a terrible example. It is not for that reason that I ask the House to reject the amendment, but for the arguments that I have outlined. When hon. Members vote tonight they will bear in mind the heavy guilt felt by the Opposition.

Mr. Maxton

I have heard the Second Reading speeches from members of the Government Front Bench and I have sat through the Committee stage waiting to hear one Minister or one Conservative hon. Member say that they were wrong about the poll tax. I have waited for them to show some humility for having imposed the tax on the people of Scotland and then on the people of England and Wales and to apologise for the fact that they got it dramatically wrong. But what do we get? We have heard yet another arrogant speech from the Minister of State in which he tried to justify the unjustifiable.

Having listened carefully to the Minister and to all the Conservative hon. Members who have spoken, I do not understand why they are getting rid of the poll tax. All of them argued in favour of its retention. That is what they have been doing, so why on earth will the hon. Members for Battersea (Mr. Bowis) and for Tayside, North (Mr. Walker)—who is not here—and the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) vote for the Third Reading of a Bill to abolish the poll tax? The hon. and learned Member for Perth and Kinross may not be aware that clause 100 is entitled "Abolition of community charges". He will vote for the Bill tonight despite the speech that he made earlier.

It is clear that the Government are getting rid of the poll tax not because they no longer believe in it, but because they know that it is an electoral disaster which will bring them down. It will remain an electoral disaster until the general election. It is returning to prominence and the Government will suffer as a result.

If the Government are not prepared to accept any of the sound practical and principled reasons given by the Liberal Democrats and by Labour——

Mr. Jimmy Dunnachie (Glasgow, Pollok)

rose——

Mr. Maxton

Let me finish this point. If they are not prepared to accept our arguments, I shall offer the electoral argument. Their electoral chances will improve if they can show that they are doing something about the poll tax before the election. The one thing that they can do about the poll tax before the election is to abolish the 20 per cent. minimum payment on 1 April 1992 instead of leaving it until 1993. That is the one thing that they can do to improve their electoral chances, but they are not prepared to do it.

The truth is that the Government want to hang on to every last vestige of the poll tax for as long as possible. Tonight and during all the debates on the 20 per cent. minimum payment and on the council tax we have witnessed the struggle in the Tory party between those who want to get rid of the poll tax completely and those who want to keep it. As a result, the Government have come up with a half-baked compromise which satisfies neither element and which will create almost as big a chaotic mess as the poll tax did.

The Minister said that the principle behind the 20 per cent. payment was that everyone should pay something. However, the 20 per cent. minimum payment was first introduced not for the poll tax but for the old rating system. When it was introduced the Bill covering England and Wales had not yet been introduced into the House. Therefore, we can assume only that its introduction on 1 April 1988 was a wholly cynical way of trying to show that the numbers who would benefit from the introduction of the poll tax would be greater than would otherwise have been the case.

The Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart), looks rather puzzled, so I shall explain. The Government introduced the minimum payment under the rating system on 1 April 1988. All single people had to pay 20 per cent. of the rates which for, say, a council in Castlemilk in my constituency were about £450; so a single person would have had to pay £90 a year. That would have applied to any single person—to a widow, a pensioner or a single parent. From 1 April 1989 when the poll tax was introduced that person had to pay only £50 instead of the £90. Suddenly, the Government could claim that such people were beneficiaries under the poll tax. It was a wholly cynical exercise in statistical manoeuvring to justify the system.

I cannot use the word that I want to describe the arguments that I have heard from Conservative hon. Members but it is blatantly obvious——

Mr. Blunkett

Skulduggery.

Mr. Maxton

My hon. Friend suggests "skulduggery"—I am not sure whether that is a parliamentary term but it is good enough. The Government imposed the poll tax which meant that the poorest people just outside the rebate system paid exactly the same as a millionaire and that everyone paid a minimum amount. -They now intend to retain the 20 per cent., but they are happy about the fact that the Bill will give a 25 per cent. discount to every single person, whatever his income. They are happy to ensure that the maximum amount paid by the wealthiest person will be only three times that paid by those just outside the rebate system, but they are not prepared to get rid of a 20 per cent. minimum payment for the poorest in society.

I am sure that most people welcomed the £140 a year reduction because everyone welcomes a cut in taxes. but, as I suggested to the Minister, if instead of giving that reduction they had given only £126 a year, the remaining £14—or 10 per cent.—could have been used to get rid of the 20 per cent. minimum payment not on 1 April 1992, as is now suggested, but on 1 April 1991. That would have been the sensible and humane thing to do. The 20 per cent. payment was unfair from the beginning and it should never have been imposed. The Government now have an opportunity to get rid of it if only they would act with some humanity for once.

It is an impractical tax. Above all else, that has brought it into disrepute. The tax has brought the whole system into disrepute because the level of non-payment has not been due to the non-payment campaigns of Labour Members or of the SNP, but to the fact that the vast majority of people to whom the 20 per cent. applied simply could not afford to pay it.

The note that I have just received from the Whip, my hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvoy), does not say, "Sit down." It says, "Merry Christmas and a happy new year. Will you join me for a drink which I am prepared to pay for?" Anyone who believes that will believe anything.

The system is unworkable. The vast majority of those who have not paid the tax are those on rebates and especially those who are on the 20 per cent. minimum payment. Some 70 per cent. to 80 per cent. of those who have not paid the tax in Scotland are either on the minimum 20 per cent. payment or are on rebates. The non-payment campaign is not the cause. I opposed the principle of the campaign. which my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) enunciated last night. I also believe that it has always been a dangerous diversion away from the truth about the 20 per cent. minimum payment and non-payment, which is that people simply could not afford to pay. It has given Conservative Members the constant excuse to attack the hon. Member for Dunfermline, West (Mr. Douglas), the SNP and some of my hon. Friends. The poll tax remained in place for six months longer than it should have simply because the Government were able to attack those people and had an excuse for keeping the poll tax on the statute book. It would otherwise have collapsed and gone.

In Scotland, local authorities have now issued 3 million summonses for poll tax debt. The vast majority of them have been issued against the very poorest in our society. It is in itself an obscenity that we are hitting the widows, the single parents and the old-age pensioners. To tax such people makes the tax uncollectable and a waste of time.

Conservative Members suggest that local authorities could get the money deducted directly from income support. In the vast majority of cases in which that has been tried the social security departments have turned down the application because most people who have not paid already have deductions, which means that nothing more can be deducted. How do the local authorities get the tax?

I remember that during the passage of the Abolition of Domestic Rates, etc. (Scotland) Bill I said that we should finish up with warehouses full of Walkman radios which had belonged to youngsters who could not afford to pay the tax. That is what we are coming to. It is not a matter of whether local authorities try to collect the tax. The fact is that one cannot get money from people who do not have it. Local authorities have to try to get the money through the warrant sale and poinding procedure. To try to do that for 3 million people is impossible. We do not have the sheriff officers to do so and——

Mr. Bill Walker

It would be helpful for the hon. Gentleman to tell the House what the adult population of Scotland is today.

6.15 pm
Mr. Maxton

I know the point that the hon. Gentleman is making. Does he deny that there are 3 million warrants? I do not deny that some people have received more than one warrant for debt because the tax has been in existence for three years. The point is that the warrants have to be collected individually. If someone settles a warrant for 1989–90, he may still have a warrant outstanding for 1990–91 and another outstanding for 1991–92. That does not negate my argument that 3 million warrants are outstanding.

It is impossible to collect debts from people who do not have the money to pay and who have few goods which, under the Debtors (Scotland) Act 1987, can be taken from them. The hon. and learned Member for Perth and Kinross will know that the Debtors (Scotland) Act, which should have abolished warrant sales altogether, went only halfway down that road. It took out of the warrant sale procedure many domestic goods. As a result, there are few things, especially in a poor household, which the sheriff officers can poind and take away for sale. That is why I used the example of the Walkman. Often it is the only thing a young unemployed man or woman has which a sheriff officer could collect. What would one get for a second-hand Walkman? A fiver or £10 does not pay off the debt and is far less than the cost of trying to collect the money.

The Government are desperately trying to cling to the last remnants of the poll tax and especially to the one part of the tax which, above all, has been unfair and has made it unworkable—the 20 per cent. minimum payment. The Government have now deserted the principle that everyone should pay something towards local government finance. If they had any humanity left, they would get rid of the tax now. They would accept our amendment or at least admit the principle of it and then table amendments in the other place. Unfortunately, they do not have the humility or the guts to do that. They do not have the guts to stand by their principles, as is shown by the 20 per cent. minimum payment, nor do they have the guts to get rid of that payment on 1 April 1992. The whole problem is—[Interruption.] Conservative Members should know that I make my speeches in my own way without instructions from anybody.

The Government could have got rid of the poll tax itself on 1 April 1992 if they had taken our advice. That would have been the humane thing to do. Now they have an opportunity at least to get rid of the most obnoxious part—the 20 per cent. minimum payment—on 1 April 1992. If Ministers cannot bring themselves to do that, Conservative Members who urged the Government to get rid of the poll tax should join me and my hon. Friends in the Lobby to vote for the amendment, which aims to get rid of the 20 per cent. minimum payment now.

Question put, That the amendment be made:—

The House divided: Ayes 235, Noes 320.

Division No. 29] [6.18 pm
AYES
Adams, Mrs Irene (Paisley, N.) Corbett, Robin
Allen, Graham Corbyn, Jeremy
Alton, David Cousins, Jim
Anderson, Donald Cox, Tom
Archer, Rt Hon Peter Crowther, Stan
Armstrong, Hilary Cryer, Bob
Ashley, Rt Hon Jack Cummings, John
Ashton, Joe Cunliffe, Lawrence
Banks, Tony (Newham NW) Cunningham, Dr John
Barnes, Harry (Derbyshire NE) Dalyell, Tam
Barnes, Mrs Rosie (Greenwich) Darling, Alistair
Barron, Kevin Davies, Rt Hon Denzil (Llanelli)
Battle, John Davies, Ron (Caerphilly)
Beckett, Margaret Davis, Terry (B'ham Hodge H'l)
Beith, A. J. Dewar, Donald
Bellotti, David Dixon, Don
Benn, Rt Hon Tony Dobson, Frank
Bennett, A. F. (D'nt'n & R'dish) Douglas, Dick
Benton, Joseph Duffy, Sir A. E. P.
Bermingham, Gerald Dunwoody, Hon Mrs Gwyneth
Blair, Tony Eadie, Alexander
Blunkett, David Eastham, Ken
Boateng, Paul Edwards, Huw
Boyes, Roland Enright, Derek
Bradley, Keith Evans, John (St Helens N)
Bray, Dr Jeremy Ewing, Harry (Falkirk E)
Brown, Gordon (D'mline E) Ewing, Mrs Margaret (Moray)
Brown, Nicholas (Newcastle E) Fatchett, Derek
Brown, Ron (Edinburgh Leith) Faulds, Andrew
Bruce, Malcolm (Gordon) Field, Frank (Birkenhead)
Caborn, Richard Fields, Terry (L'pool B G'n)
Callaghan, Jim Fisher, Mark
Campbell, Menzies (Fife NE) Flannery, Martin
Campbell, Ron (Blyth Valley) Flynn, Paul
Campbell-Savours, D. N. Foster, Derek
Canavan, Dennis Foulkes, George
Carlile, Alex (Mont'g) Fraser, John
Carr, Michael Fyfe, Maria
Cartwright, John Galbraith, Sam
Clark, Dr David (S Shields) Galloway, George
Clarke, Tom (Monklands W) Garrett, John (Norwich South)
Clelland, David Garrett, Ted (Wallsend)
Clwyd, Mrs Ann George, Bruce
Cohen, Harry Gilbert, Rt Hon Dr John
Cook, Frank (Stockton N) Godman, Dr Norman A.
Cook, Robin (Livingston) Golding, Mrs Llin
Gordon, Mildred Morris, Rt Hon J. (Aberavon)
Gould, Bryan Mowlam, Marjorie
Graham, Thomas Mullin, Chris
Griffiths, Nigel (Edinburgh S) Murphy, Paul
Griffiths, Win (Bridgend) Nellist, Dave
Grocott, Bruce Oakes, Rt Hon Gordon
Hardy, Peter O'Brien, William
Harman, Ms Harriet O'Hara, Edward
Hattersley, Rt Hon Roy O'Neill, Martin
Haynes, Frank Orme, Rt Hon Stanley
Hayward, Robert Parry, Robert
Heal, Mrs Sylvia Patchett, Terry
Healey, Rt Hon Denis Pendry, Tom
Henderson, Doug Pike, Peter L.
Hoey, Kate (Vauxhall) Powell, Ray (Ogmore)
Hogg, N. (C'nauld & Kilsyth) Prescott, John
Home Robertson, John Primarolo, Dawn
Hood, Jimmy Quin, Ms Joyce
Howarth, George (Knowsley N) Radice, Giles
Howell, Rt Hon D. (S'heath) Randall, Stuart
Howells, Geraint Redmond, Martin
Howells, Dr. Kim (Pontypridd) Rees, Rt Hon Merlyn
Hoyle, Doug Reid, Dr John
Hughes, John (Coventry NE) Richardson, Jo
Hughes, Robert (Aberdeen N) Robertson, George
Hughes, Roy (Newport E) Robinson, Geoffrey
Illsley, Eric Rogers, Allan
Ingram, Adam Rooker, Jeff
Janner, Greville Rooney, Terence
Johnston, Sir Russell Ross, Ernie (Dundee W)
Jones, Barry (Alyn & Deeside) Rowlands, Ted
Jones, Ieuan (Ynys Môn) Ruddock, Joan
Kaufman, Rt Hon Gerald Salmond, Alex
Kilfoyle, Peter Sedgemore, Brian
Kinnock, Rt Hon Neil Sheerman, Barry
Kirkwood, Archy Sheldon, Rt Hon Robert
Kumar, Dr. Ashok Shore, Rt Hon Peter
Lambie, David Short, Clare
Lamond, James Skinner, Dennis
Leighton, Ron Smith, Andrew (Oxford E)
Lestor, Joan (Eccles) Smith, C. (Isl'ton & F'bury)
Lewis, Terry Smith, Rt Hon J. (Monk'ds E)
Litherland, Robert Snape, Peter
Livingstone, Ken Soley, Clive
Livsey, Richard Spearing, Nigel
Lloyd, Tony (Stretford) Steel, Rt Hon Sir David
Lofthouse, Geoffrey Steinberg, Gerry
McAllion, John Stott, Roger
McAvoy, Thomas Strang, Gavin
Macdonald, Calum A. Straw, Jack
McFall, John Taylor, Mrs Ann (Dewsbury)
McKay, Allen (Barnsley West) Taylor, Matthew (Truro)
McKelvey, William Thomas, Dr Dafydd Elis
Maclennan, Robert Thompson, Jack (Wansbeck)
McMaster, Gordon Turner, Dennis
McNamara, Kevin Vaz, Keith
McWilliam, John Wallace, James
Madden, Max Walley, Joan
Mahon, Mrs Alice Warden, Gareth (Gower)
Marek, Dr John Wareing, Robert N.
Marshall, David (Shettleston) Watson, Mike (Glasgow, C)
Marshall, Jim (Leicester S) Welsh, Andrew (Angus E)
Martin, Michael J. (Springburn) Welsh, Michael (Doncaster N)
Martlew, Eric Wigley, Dafydd
Maxton, John Williams, Rt Hon Alan
Meacher, Michael Williams, Alan W. (Carm'then)
Meale, Alan Wilson, Brian
Michael, Alun Winnick, David
Michie, Bill (Sheffield Heeley) Worthington, Tony
Michie, Mrs Ray (Arg'l & Bute) Wray, Jimmy
Moonie, Dr Lewis
Morgan, Rhodri Tellers for the Ayes
Morley, Elliot Mr. Martyn Jones and
Morris, Rt Hon A. (W'shawe) Mr. Jimmy Dunnachie.
NOES
Adley, Robert Allason, Rupert
Aitken, Jonathan Amess, David
Alexander, Richard Amos, Alan
Alison, Rt Hon Michael Arbuthnot, James
Arnold, Jacques (Gravesham) Field, Barry (Isle of Wight)
Ashby, David Finsberg, Sir Geoffrey
Aspinwall, Jack Fishburn, John Dudley
Atkins, Robert Fookes, Dame Janet
Atkinson, David Forsyth, Michael (Stirling)
Baker, Nicholas (Dorset N) Forth, Eric
Baldry, Tony Fox, Sir Marcus
Banks, Robert (Harrogate) Franks, Cecil
Batiste, Spencer Freeman, Roger
Beaumont-Dark, Anthony French, Douglas
Bellingham, Henry Fry, Peter
Bendall, Vivian Gale, Roger
Bennett, Nicholas (Pembroke) Gardiner, Sir George
Benyon, W. Garel-Jones, Tristan
Bevan, David Gilroy Gill, Christopher
Blackburn, Dr John G. Gilmour, Rt Hon Sir Ian
Blaker, Rt Hon Sir Peter Glyn, Dr Sir Alan
Body, Sir Richard Goodhart, Sir Philip
Bonsor, Sir Nicholas Goodlad, Alastair
Boscawen, Hon Robert Goodson-Wickes, Dr Charles
Boswell, Tim Gorman, Mrs Teresa
Bottomley, Peter Gorst, John
Bottomley, Mrs Virginia Grant, Sir Anthony (CambsSW)
Bowden, A. (Brighton K'pto'n) Greenway, Harry (Eating N)
Bowden, Gerald (Dulwich) Greenway, John (Ryedale)
Bowis, John Griffiths, Sir Eldon (Bury St E')
Boyson, Rt Hon Dr Sir Rhodes Griffiths, Peter (Portsmouth N)
Brandon-Bravo, Martin Grist, Ian
Brazier, Julian Ground, Patrick
Bright, Graham Grylls, Michael
Brooke, Rt Hon Peter Hague, William
Brown, Michael (Brigg & Cl't's) Hamilton, Neil (Tatton)
Bruce, Ian (Dorset South) Hampson, Dr Keith
Buck, Sir Antony Hanley, Jeremy
Budgen, Nicholas Hannam, John
Burns, Simon Hargreaves, A. (B'ham H'll Gr')
Burt, Alistair Hargreaves, Ken (Hyndburn)
Butler, Chris Harris, David
Butterfill, John Haselhurst, Alan
Carlisle, John, (Luton N) Hayes, Jerry
Carlisle, Kenneth (Lincoln) Hayward, Robert
Carrington, Matthew Heathcoat-Amory, David
Cash, William Heseltine, Rt Hon Michael
Chalker, Rt Hon Mrs Lynda Hicks, Mrs Maureen (Wolv' NE)
Channon, Rt Hon Paul Hicks, Robert (Cornwall SE)
Chapman, Sydney Higgins, Rt Hon Terence L.
Chope, Christopher Hill, James
Churchill, Mr Hind, Kenneth
Clark, Rt Hon Alan (Plymouth) Hogg, Hon Douglas (Gr'th'm)
Clark, Dr Michael (Rochford) Hordern, Sir Peter
Clark, Rt Hon Sir William Howard, Rt Hon Michael
Clarke, Rt Hon K. (Rushcliffe) Howarth, Alan (Strat'd-on-A)
Colvin, Michael Howarth, G. (Cannock & B'wd)
Coombs, Anthony (Wyre F'rest) Howe, Rt Hon Sir Geoffrey
Coombs, Simon (Swindon) Howell, Rt Hon David (G'dford)
Cope, Rt Hon Sir John Hughes, Robert G. (Harrow W)
Cormack, Patrick Hunt, Rt Hon David
Couchman, James Hunt, Sir John (Ravensbourne)
Cran, James Hunter, Andrew
Currie, Mrs Edwina Irvine, Michael
Davies, Q. (Stamf'd & Spald'g) Irving, Sir Charles
Davis, David (Boothferry) Jack, Michael
Day, Stephen Jackson, Robert
Devlin, Tim Janman, Tim
Dicks, Terry Jessel, Toby
Dorrell, Stephen Johnson Smith, Sir Geoffrey
Douglas-Hamilton, Lord James Jones, Gwilym (Cardiff N)
Dover, Den Jopling, Rt Hon Michael
Dunn, Bob Kellett-Bowman, Dame Elaine
Durant, Sir Anthony Key, Robert
Dykes, Hugh Kilfedder, James
Eggar, Tim King, Roger (B'ham N'thfield)
Emery, Sir Peter King, Rt Hon Tom (Bridgwater)
Evans, David (Welwyn Hatf'd) Kirkhope, Timothy
Evennett, David Knapman, Roger
Fairbairn, Sir Nicholas Knight, Greg (Derby North)
Fallon, Michael Knight, Dame Jill (Edgbaston)
Farr, Sir John Knowles, Michael
Favell, Tony Knox, David
Fenner, Dame Peggy Lang, Rt Hon Ian
Latham, Michael Roe, Mrs Marion
Lawrence, Ivan Rossi, Sir Hugh
Lee, John (Pendle) Rost, Peter
Leigh, Edward (Gainsbor'gh) Rowe, Andrew
Lennox-Boyd, Hon Mark Rumbold, Rt Hon Mrs Angela
Lester, Jim (Broxtowe) Sackville, Hon Tom
Lilley, Rt Hon Peter Sainsbury, Hon Tim
Lloyd, Sir Ian (Havant) Sayeed, Jonathan
Lloyd, Peter (Fareham) Scott, Rt Hon Nicholas
Lord, Michael Shaw, David (Dover)
Luce, Rt Hon Sir Richard Shelton, Sir William
Lyell, Rt Hon Sir Nicholas Shephard, Mrs G. (Norfolk SW)
Macfarlane, Sir Neil Shepherd, Colin (Hereford)
MacGregor, Rt Hon John Shersby, Michael
MacKay, Andrew (E Berkshire) Sims, Roger
Maclean, David Skeet, Sir Trevor
McLoughlin, Patrick Smith, Sir Dudley (Warwick)
McNair-Wilson, Sir Michael Smith, Tim (Beaconsfield)
McNair-Wilson, Sir Patrick Soames, Hon Nicholas
Madel, David Speed, Keith
Malins, Humfrey Speller, Tony
Mans, Keith Spicer, Sir Jim (Dorset W)
Maples, John Squire, Robin
Marland, Paul Stanbrook, Ivor
Marlow, Tony Stanley, Rt Hon Sir John
Marshall, John (Hendon S) Steen, Anthony
Marshall, Sir Michael (Arundel) Stern, Michael
Martin, David (Portsmouth S) Stevens, Lewis
Mates, Michael Stewart, Allan (Eastwood)
Maude, Hon Francis Stewart, Andy (Sherwood)
Mawhinney, Dr Brian Stewart, Rt Hon Sir Ian
Maxwell-Hyslop, Robin Stokes, Sir John
Mayhew, Rt Hon Sir Patrick Sumberg, David
Meyer, Sir Anthony Summerson, Hugo
Miller, Sir Hal Tapsell, Sir Peter
Mills, Iain Taylor, Ian (Esher)
Miscampbell, Norman Taylor, Sir Teddy
Mitchell, Andrew (Gedling) Tebbit, Rt Hon Norman
Mitchell, Sir David Temple-Morris, Peter
Moate, Roger Thompson, D. (Calder Valley)
Monro, Sir Hector Thompson, Patrick (Norwich N)
Montgomery, Sir Fergus Thorne, Neil
Moore, Rt Hon John Thornton, Malcolm
Morris, M (N'hampton S) Thurnham, Peter
Morrison, Sir Charles Townend, John (Bridlington)
Morrison, Rt Hon Sir Peter Townsend, Cyril D. (B'heath)
Moss, Malcolm Tracey, Richard
Moynihan, Hon Colin Trippier, David
Mudd, David Trotter, Neville
Neale, Sir Gerrard Twinn, Dr Ian
Needham, Richard Vaughan, Sir Gerard
Nelson, Anthony Viggers, Peter
Neubert, Sir Michael Wakeham, Rt Hon John
Newton, Rt Hon Tony Waldegrave, Rt Hon William
Nicholls, Patrick Walden, George
Nicholson, David (Taunton) Walker, Bill (T'side North)
Nicholson, Emma (Devon West) Waller, Gary
Norris, Steve Walters, Sir Dennis
Onslow, Rt Hon Cranley Ward, John
Oppenheim, Phillip Wardle, Charles (Bexhill)
Page, Richard Warren, Kenneth
Paice, James Watts, John
Patnick, Irvine Wells, Bowen
Patten, Rt Hon Chris (Bath) Wheeler, Sir John
Pattie, Rt Hon Sir Geoffrey Whitney, Ray
Pawsey, James Widdecombe, Ann
Peacock, Mrs Elizabeth Wiggin, Jerry
Porter, Barry (Wirral S) Wilkinson, John
Porter, David (Waveney) Wilshire, David
Portillo, Michael Winterton, Mrs Ann
Powell, William (Corby) Wolfson, Mark
Raison, Rt Hon Sir Timothy Wood, Timothy
Redwood, John Yeo, Tim
Renton, Rt Hon Tim Young, Sir George (Acton)
Rhodes James, Sir Robert
Ridsdale, Sir Julian Tellers for the Noes:
Rifkind, Rt Hon Malcolm Mr. David Lightbown and
Roberts, Rt Hon Sir Wyn Mr. John M. Taylor.

Question accordingly navigated

Mr. Dave Nellist (Coventry, South-East)

On a point of order, Madam Deputy Speaker. I apologise for rising at this point. I wonder if you can help me. I am in a new and slightly strange position of not being privy to all the discussions which take place in the Labour party regarding its attitude on matters relating to the important Bill which is before the House on Report. As you will know, Mr. Speaker makes a provisional selection of amendments, which he puts before the House in a certain order. Some are selected, some are not. An order of those selected for debate is given. Clearly the debate is not open-ended. We are guillotined and there is no opportunity to debate all the topics that hon. Members would wish to debate.

I have tabled some amendments, which have been selected in a group comprising amendments Nos. 57, 122, 85, 68, 69, 107, 124 and 108, which seem to be the only amendments to deal with enforcement procedures such as the use of bailiffs, poindings and imprisonment. Given that the selection is provisional, do you, as the current occupant of the Chair, have any opportunity to rearrange Mr. Speaker's provisional selection of amendments to ensure that between now and 8 o'clock we shall at least have a few minutes to debate enforcement procedures and my desire to oppose the current poll tax enforcement procedures being put lock, stock and barrel into the Bill?

Madam Deputy Speaker

I understand the hon. Member's dilemma, but the selection was made yesterday and there is no way in which it can now be changed.

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