HC Deb 04 February 1981 vol 998 cc271-2
1. Mr. Knox

asked the Secretary of State for the Environment when he expects to complete the review of the domestic rating system.

The Secretary of State for the Environment (Mr. Michael Heseltine)

We are currently examining all potential alternatives to the domestic rating system. There are, of course, major issues involved, and it is not yet possible to indicate when we shall be able to make a further statement.

Mr. Knox

Will my right hon. Friend confirm that it is the Government's view that the domestic rating system is unjust? Is he satisfied that the current review is proceeding sufficiently quickly?

Mr. Heseltine

My hon. Friend will be pleased to hear that we are sure that the domestic rating system has great injustices within it. It is because we share his view that we gave the additional commitments to introduce changes. As for the speed at which those changes take place, we made it clear that, in view of the changed circumstances between 1974 and 1979, a different rate of priority would have to be applied while we pursued the public expenditure programmes we are now seeing through.

Mr. Marks

Does the Secretary of State agree that if the Conservatives promise to abolish the domestic rate, that promise will be just as worthless as the promises on VAT, prescription charges and unemployment?

Mr. Heseltine

I think that the hon. Member will be aware that the promises we make on this side of the House we keep.

Mr. David Hunt

Does my right hon. Friend agree that the system is now so filled with anomalies that abolition is the only real answer? Does he agree that another local tax would merely be another administrative tier, that no time would ever be the best time and, taking everything into account, should he not proceed now with replacing the existing system?

Mr. Heseltine

I agree with my hon. Friend's criticisms, but one must be sure that the criticisms we have and agree about the present system are not replaced by an equally deeply held set of criticisms about whatever we put in its place. It is in the second part of the judgment that there is need for caution and proper consultation.

Mr. Oakes

While the Secretary of State is looking at the review of this system and at injustices, will he look at the injustice of his rate support grant and explain to the House, particularly to his right hon. and hon. Friends, why those authorities which have followed his precepts and tried to be prudent and those which have tried to sell council houses have come out worse? If he intends to devise an alternative system to rates will it be similar to the ideas of his right hon. and learned Friend the Chancellor who agreed that reduced direct taxation was at the expense of doubling VAT?

Mr. Heseltine

I think the right hon. Member will be aware of the anomalies that were created in the distribution of taxpayers' support as a result of the totally arbitrary allocations made by his right hon. Friend the former Secretary of State for the Environment. The real concern about the domestic rating system and the levels of domestic rates is the wholly unsustained levels of expenditure that he and the Labour Party are prepared to argue for in local government.