HC Deb 12 November 1968 vol 773 cc195-6
17. Mr. Ridsdale

asked the Minister of Housing and Local Government what study he has made of the practice in other countries which operate a sales tax for raising revenue for local government purposes, in addition to taxing property; and if he will make a statement.

Mr. Skeffington

Overseas practice had been taken into account when the Government concluded that fundamental changes in local finance were not practicable within the existing local government structure. There will be a further review in the light of what emerges from the work of the Royal Commission on Local Government.

Mr. Ridsdale

Did the study reveal that in Southern Ireland the 2½ per cent. sales tax is equivalent to 2s. 6d. Income Tax? Is not this one way of getting the heavy hand of Whitehall out of local government?

Mr. Skeffington

These matters were fully considered in the review. I should inform the hon. Gentleman that this is a national sales tax, not a local sales tax. It involves the registration of all the retail outlets, which would require a very large staff. Though it might reduce rates, it would certainly put up prices. These are not reasons why the system should not be considered, but it is not necessarily a fool-proof answer.

31. Mr. Ridsdale

asked the Minister of Housing and Local Government whether he will introduce legislation to allow councils to raise revenue from other sources in addition to the rates.

Mr. Skeffington

This is a matter best considered in the context of decisions about reform of the local government structure in the light of the Report of the Royal Commission.

Mr. Ridsdale

Is the Minister aware that the limitation of the general grant will put an intolerable burden on the owner-occupier living on a small fixed income? Will he do something to see that alternative sources are made available as soon as possible.

Mr. Skeffington

Pending any reform that will follow the Royal Commission's report to the Government in local gov ernment matters, the Government themselves have passed substantial legislation which gives this relief. Domestic relief to ratepayers amounted to £23 million in 1967–68, and £47 million this year, in addition to our rate rebate scheme.