§ Mr. Tony Worthington (Clydebank and Milngavie)Let us start with a little-known fact. We meet here today on the first anniversary of the Second Reading of the Abolition of Domestic Rates Etc. (Scotland) Act 1987. This is a fact of which few of us are aware and I am glad to enlighten the House with that piece of information.
Once legislation is put on the statute book, even after being as bitterly contested as the poll tax legislation, people usually settle down and accept it and it becomes part of the landscape. That is not happening in this case. As more and more people realise the significance of that Act, opposition to it mounts and mounts. It is now reaching much higher levels in Scotland and will go on to take over England and Wales as well.
For example, the Saturday before last, along with other members of the Labour party in Clydebank, I conducted the collection of a petition. I was amazed — it is a common experience of my hon. Friends as well—at the passion with which people were coming up to sign it. We found that we had collected 2,500 signatures within four hours with no pressure or harassment. Word got round that here was the opportunity to protest against the poll tax legislation. What is strange to me is how those 2,500 signatures and the thousands of signatures collected by my hon. Friends across Scotland count for nothing compared with what was alleged to be a tidal wave of revolt against revaluation.
Day by day, as the implications of this complex legislation emerge, its idiocies are becoming clear. In Scotland, with 3.9 million names on the poll tax register, there will be 800,000 changes to the register each year. On average in Scotland, between 12.5 per cent. and 15 per cent. of the people move within one year. In areas such as that of my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton), between 20 per cent. and 30 per cent. of the population change addresses within a year.
The measured tones of a document from the Chartered Institute of Public Finance and Accountancy show how bitterly resisted the poll tax roll will be. CIPFA stated, that canvassers will be required to be well trained, not only in community charge law, but also in interview techniques. They may well face resentment and, conceivably, hostility, and will need to be trained to cope with that.
We know that this legislation will be unpopular because most of the world has never had poll tax legislation, but where it has existed—for example, in Cape Breton—the poll tax has just been discontinued because it has been realised and accepted that only 30 per cent. of the theoretical take was collected by the tax authorities.
Once again, I give the Minister the opportunity to tell us what a prudent authority would allow for non-collection. The measured people of CIPFA talk in terms of only an 80 per cent. collection of the poll tax. As time goes by, that may well come to be seen as an optimistic figure. For the Government to introduce a piece of legislation in which they have made no calculation about what percentage will be collectable is the hallmark of irresponsibility.
Other idiocies are emerging. As the theme of the debate is the implementation of the poll tax, I should welcome guidance from the Minister as to his interpretation. I hope that we shall receive a reply on each of these matters.
316 I refer now to the exemption for the profoundly mentally handicapped. We welcome that concession, but would also welcome the Minister's interpretation of it. The CIPFA document contains a contradiction. It states that those who attend social work adult training centres need not necessarily be exempt from the poll tax because some of them, in theory, could go out to work. However, the document later states that it would be for the individual or his representative to prove severe mental handicap. It is envisaged that a simple declaration by a general practitioner will normally suffice.
The mind boggles at what may happen in GPs' surgeries. Knowing what happens now in terms of people who want to advance themselves on housing lists by trying to prove that their health is currently damaged by, for example, their nerves, we may have the unseemly spectacle, if the CIPFA advice is to be taken, of doctors being dragged in for the sad purpose of certifying, by a declaration, that someone is sufficiently mentally handicapped that they cannot understand the implications of the vote or the poll tax.
As this complex legislation reveals itself, we are also realising that the Government have thrust an enormous extra cost burden on local government. Strangely, the Government have little interest in improving the basic quality of the services that are offered by local government, but are quite happy to introduce a system of tax collection that involves enormous numbers of extra staff. If, for example, the district councils in my region of Strathclyde co-operated in acting as agents for the poll tax, they would need to take on only an extra 500 staff. However, if the districts decided that they would not co-operate, as is within their rights, with the collection of the poll tax and say that the levying authority is the region and that the region can get on with it, the regional council would have to take on an extra 1,000 staff to implement the poll tax. How can we afford this but not the many good services that would be of value?
If the Minister and the Government think that Opposition Members exaggerate the difficulties of the poll tax—I dare say they do—why have we waited so long for the Scottish Office to put out the necessary regulations and guidelines so that local authorities can get on with the job? Again, the CIPFA document stated that it was possible to bring legislation into operation on time, given some prerequisites, pre-eminent among which was the fact that the Government play their part in issuing the necessary guidelines. Where are the details of the rebate scheme? When will they emerge? I suspect that they are still a long way from unfolding.
The sheer complexities of going from a benefit system that is generally family-based, through the Department of Health and Social Security, to a benefit or rebate system under the poll tax, that is individually based, must cause the Minister more sleepless nights than Adjournment debates.
It is clear that the measure was sold in terms of accountability. That is at the heart of the Government's problems. It was said to make local authorities more accountable than they were under the previous system. A survey was published today in the Glasgow Herald and in The Scotsman showing that, if the poll tax had been introduced, 54 out of the 56 Scottish councils would have had an increase double that which would occur under the 317 rating system. Under the proposed poll tax system, the Government will control 80 per cent. of local authority expenditure.
It is eminently clear to everybody that the Government's actions are four times more important than those of local authorities in terms of setting local authorities' costs. The document that was produced today showed that the survey was conducted on the assumption that the Goverment will allow for 3 per cent. inflation. That is a common trick of the Government. They postulate that inflation will be 1 per cent., or 2 per cent. less than even they know it will be. That is an extra turn of the screw for local government. The effect is that, for every 1 per cent. that the Government under-fund for inflation, the poll tax will go up by 4 per cent. We have the hideous situation in which, once again, the Goverment will seek to blame local government for their actions.
The CIPFA report shows that, if the community charge had taken place in England and Wales for 1987–88, there is not one authority in England in which the change in spending would have equalled the change in the community charge. Hon. Members should think about that matter. Many local authorities in England may meet Government guidelines and behave in the way the Government want and regard as accountable, but not one is getting what the Government said they would get under the community charge — that is, an increase in the community charge that matches their actions.
I want to say a little more about the problem of underpayment. The Government are not facing their responsibilities in this respect. The CIPFA report says that about 80 per cent. payment of poll tax is expected. The consequence is that the rest of the population has to pay to make up for those who do not pay, with all the resentment that that will cause.
Local authorities face a major problem now with widespread under-payment of rates. I shall quote some Strathclyde figures for 1985–86. At the final notice stage, 131,000 people were behind with their rates, owing £80 million. At the summary warrant stage, there were 49,000 ratepayers owing £35.5 million. At the sheriff officer stage, there were 24,000 ratepayers owing £16.74 million. Many of those debtors will remain because they are business ratepayers, particularly the bigger debtors among them. The local authorities will have to take on a massive extra load of work and greater responsibility and they will be obliged to use the sheriff officers and the warrant sales system to pursue minute amounts of debt.
In Scotland, with about 400,000 people receiving supplementary benefit, those paying 20 per cent. of demands might have a bill for £50. Is it seriously suggested that local authorities should pursue debts of that size with all the associated administrative costs? If local authorities do not collect those debts, any irate poll tax payer might take them to court for not diligently pursuing debts. If authorities do not collect those debts, however, a plague of non-payment will spread the length and breadth of Scotland, as community charge demands are treated like parking tickets. That problem has to be faced.
My penultimate question for the Minister is why the idea of the uniform business rate in Scotland has collapsed. I notice that in the White Paper "Paying for Local Government" published by the Department of the Environment—it would be illegal if it was published by local authorities as it breaks the law applying to them—poll tax is being sold to the English public in terms that 318 the non-domestic rate paid by businesses and institutions will be set by the Government at the same level across England. I seem to remember the same sort of statement in Green Papers published by the Scottish Office. The uniform business rate was a central plank in the scheme to free business from the burden of wicked local government constantly putting up the rates, and was designed to prevent the penalising of business for being in a high rates area. It was to set business free so that it could thrive in a high-rates area. What has happened to all that? Where has that idea gone? Why did the Scottish Office forget about it? Is it perhaps because it worked out what that would mean? According to figures worked out by the surveyors James Barr, in 1985–86 Strathclyde business would have benefited by £59 million. That extra money would have liberated them to create jobs, in the language of the Government.
On the other hand, Dumfries and Galloway, which may be closer to the Minister's heart, would have suffered to the tune of £5 million if the uniform business rate had been introduced. I wonder why the uniform business rate has collapsed; it was one of the two or three major justifications for the legislation. When will it be introduced in Scotland, as it apparently is still intended to be in England and Wales?
I hope that the Scottish Office will belatedly realise that the Labour party is being given a massive asset in Scotland, as it was in the general election, and, increasingly, as it is in England and Wales. At least for the sake of your self-preservation, I say to the Minister: "Realise the error of your ways".
§ Mr. Deputy Speaker (Mr. Harold Walker)Order. I remind hon. Members that the House should be addressed through the Chair.
§ Mr. Alistair Darling (Edinburgh, Central)My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) put well the case against a community charge or poll tax.
I want to make two points, but before I do so I want to express the concern felt by most local authorities about the sheer cost that they are incurring this year in trying to implement the legislation. In Lothian region alone, more than £1 million has had to be spent on buying capital equipment and on other staff costs. I hope that the Minister will urge his right hon. and learned Friend the Secretary of State to think again about the fact that that additional cost is attracting penalty—in Lothian's case —at the rate of £1.30 for every pound spent. It seems unfair that the region should be penalised for something that it had no wish to impose in the first place. I understand that the Secretary of State has turned his face against abolishing these penalties. Nevertheless, I urge the Government to think again about them.
The difficulties of the poll tax can be illustrated in a number of ways, but in Edinburgh and Glasgow one specific class of property or residence that will suffer greatly under the poll tax legislation is that lived in by those who are unfortunate enough to live in houses in multiple occupation. Such houses are basically bed-andbreakfast establishments that have grown up as a result of the Government's social security regulations, which are generous to landlords. Large numbers of people congregate in those houses and pay rent to people who 319 often live on the fringes of society, perhaps having drifted out of some undesirable activities. Such people are a cause of concern in both cities and have come to public attention because of some of the goings on in their establishments.
In Edinburgh, about £9 million of public money is paid to these landlords every year by way of rent. No one knows how many people live in their houses. One of the problems that the responsible officer in the local authority will meet is that of finding out how many people live in them. Until he knows that, he will not know how much poll tax should be paid. He has a choice: he can go along and knock on the front door, greet the first tenant he meets and ask him how many people live there. In my experience, and that of the district and regional councils, even the people living in such establishments sometimes have no idea of how many people live there. Alternatively, the region might take the view that in such a property the collective community charge ought to be levied. The difficulty here is that in order to fix the collective community charge, one still has to know how many people are living in the property.
Experience has shown that landlords are reluctant to say how many people are living in a property, because that might expose them to difficulties regarding fire and health regulations. It might also provide a useful indicator to the Inland Revenue about how much tax a landlord should be paying. Questions might be asked by the DHSS about exactly how much money is being paid out in respect of a property.
These properties are characteristed by the fact that the owners are very secretive. That is one of the problems that the collecting authority will encounter when it tries to excise the community charge from the residents living there. However, there is more to it than that. It applies not only to houses in multiple occupation, but to all rented property. As soon as the community charge is introduced there should be some provision to enable landlords to reduce the rent by the amount paid in rates. There is no guarantee that that will happen. Earlier in the Session I asked a question about this and was assured by the Minister that rents would be reduced. I wrote to him asking how he could be so sure, and I am still waiting for an answer. Perhaps when the Minister replies to this short debate he will be able to tell me how he can force landlords to reduce the rent by the amount payable in respect of rates. There is no guarantee that that will happen, and many tenants have no idea how much of their rent is allocated to rates.
There is also the problem of rebates. One of the problems about houses in multiple occupation is that the residents tend not to live in them for very long —perhaps for a few weeks or months at most. Rebates can take a long time to be processed by the district councils. What will happen when they are processed? How can we be sure that they will go back to the tenant? That problem will arise in future, because when a tenant is living in such an establishment he will be liable for his pro rata share of the community poll tax. If that tenant moves away, how can we be sure that the rebate will he paid to the tenant by the landlord and that the landlord will not try to take from the tenant a full year's community charge as opposed to the amount incurred for the short period during which the tenant will remain in the premises?
I do not think that the Government have addressed problems of that sort, and sometimes I wonder whether 320 they have even concerned themselves about houses in multiple occupation. Certainly, when requests have been made about other aspects of houses in multiple occupation, the Government have been found sadly wanting. There is a small number of people involved and a comparatively small number of establishments. However, they illustrate the problems that will face regional councils within the next 18 months. They will have to employ large staffs simply to keep account of the number of people living in these premises and of the movement of people.
In my constituency there is a turnover of 20 per cent. in residents during each year. That is because the constituency is predominantly one of small houses, and people live in them for a couple of years and then move to bigger houses when they decide to start families. Elderly people die and their places are taken by new residents. It will be a mammoth task to keep account of who is living in the properties and, therefore, who should be expected to pay the community charge.
The sordid business of debt collection is likely to become a growth industry as many people struggle to meet their obligations to pay the poll tax—especially at the present time. As my hon. Friend the Member for Clydebank and Milngavie said, one of the problems faced by councils is that they are waiting for over 90 regulations, none of which has been laid in its final form. That presents formidable difficulties for assessors all over Scotland. One of the regulations that I would like to see soon is the one that will deal exactly with the system of rebate that we can expect to operate as soon as the Act is in force.
As a result of the social security changes tabled by the Secretary of State for Social Services recently, in the Lothian region alone about 35,000 people will lose out. Under the community charge legislation everybody must pay 20 per cent. It appears that many people, even those claiming what will then be the maximum rebate, will have to pay more than that.
I fear that neither the Government nor, sadly, a large number of people in Scotland realise that whereas many people receive 100 per cent. rebate in respect of rates, they will now have to pay something. I spoke to a man who thought his wife would not have to pay because she did not work. In fact, everybody will have to pay something, and for that reason the rebate scheme must be introduced quickly. The Government must give this matter urgent attention because it is causing great anxiety to those who will receive the rebates and those who will be expected to operate them.
The regulations are important because, to compile the register for the poll tax, the assessors will have to send forth a large number of canvassers to knock on every door throughout Scotland to find out who lives there. This should act as a warning to hon. Members who represent constituencies in England and Wales, for the Government have consistently said that this legislation will not infringe civil liberties or impinge on people's privacy.
The canvassers, at any rate as the regulations in draft form indicate, will be required to find the names of everybody—not just those who are 18 and over or even 16 and over — living in the house. I understand that, despite Government assertions to the contrary, assessors are using the electoral register as the basis of their register for the poll tax. That is understandable. It is the only register containing the names of people living in houses throughout the country. In other words, they are using the 321 register that gives people the right to vote to compile a register that will require them to pay for that very privilege.
There is already evidence that the number of people registering is diminishing this year. It is perhaps too early to tell—we have only the draft register—but the figures represent a disturbing trend. Nor should Conservative Members assume that those coming off are Labour voters. My information is that this reduction is occurring across the board, meaning that there is no party political advantage to be gained from what is happening.
People will take away from themselves the right to vote because they will not be able, or will be unwilling, to pay. That could have serious repercussions. If people are pushed away from the register, they will be excluded from the democratic process, and that is bound to have worrying consequences in the future.
§ Mr. Henry McLeish (Fife, Central)Is my hon. Friend aware that figures published in Fife yesterday suggest that whereas the registrar was looking forward to an increase of nearly 1,000 on the new draft register, there has been a reduction of 2,260 on the electoral register? This reinforces his argument that the poll tax is linked in the public perception with the electoral register. That could do untold damage and lessen the link between the accountability factor and the payment of the poll tax.
§ Mr. DarlingI was aware that the Fife register showed a reduction. I believe Fife is typical of other Scottish regions. Everyone assumed that the assessors were bound to use the electoral register as the basis for the poll tax register. It was common sense that they would, and only a few Ministers persisted in saying that that would not happen.
I want to stress another point that is a cause for concern. Ever since the poll tax was mooted, there has been a dispute between local authorities and the Government over exactly how much the poll tax would be in each region in Scotland. That same argument is now raging in England and Wales. The Government have upped their figures on two or three occasions since the first figures were published. In Lothian region the Government figure is £260 and the regional council estimates, according to current expenditure and grant levels, that the poll tax will be £350 per head.
The Government do not dispute the figures given by the regional councils which, after all, will have to set the poll tax. However, they assume that local authority expenditure will be reduced. That is a dangerous assumption, not because the local authorities have anything against reducing public expenditure and do not believe in spending public money for the sake of it, but because the need within regions and districts will not go away. If the Government believe that it would somehow be acceptable to reduce the poll tax at the expense of reducing services in schools or reducing funds for shoring up bus services, they are sadly mistaken. Those problems will not go away, and they cannot simply be pushed under the carpet.
As has been said before, and doubtless will be said again, I believe that while there has been a great deal of unhappiness in Scotland and throughout the United Kingdom about the advent of the poll tax, unlike any other piece of legislation that I can remember, the anger is mounting. It is not diminishing. It will not go away.
322 This legislation offends against a sense of public decency and fairness. That is one reason why the Government suffered such a rebuff at the polls in Scotland in June. Although I do not care whether the Government are rebuffed in England and Wales, people living there have good reason to be fearful about the legislation. For once, the Scottish legislation points to the fearful consequences of legislation that was born of panic and prejudice. It has brought no good to anyone in Scotland.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)I want to begin by commending the hon. Member for Clydebank and Milngavie (Mr. Worthington) not just on the way in which he introduced the debate, but on having the perspicacity to choose the subject. This is an appropriate time in the political calender, if not the time of day, to discuss this very important subject. I also congratulate him on concentrating on the implications and implementation of the poll tax plans. It is not too late to mount a full-scale and continuing attack on the Government's poll tax plans. The House is well served by this debate.
I am surprised, if not astonished, that we did riot hear more complaints from English Conservative Members during the introduction of the Scottish proposals. The conclusion that I arrived at was that the Conservatives in Scotland were subject to an unthinking deference to the personal whim of the Prime Minister, who, we are all aware, insisted that domestic rates should be abolished, irrespective of the consequences, simply to honour a pledge that she made in 1974. 1 had high hopes that when the matter was brought south of the border into the English domain, English Conservatives would have more stomach for the fight and put up more stout objections to the obvious flaws in the English Bill. However, that looks as though it will not happen and I am very worried about it.
The Government can be accused of callous indifference to the many sustained objections to the poll tax that have been raised in Scotland and England from all quarters while the Scottish legislation was before Parliament and during the progress of the English legislation. The changes have shown a total disregard for the serious and far-reaching implications that the poll tax will inevitably leave in its wake.
I confine my remarks to three areas, the most significant of which is the essentially unfair nature of the tax. A flat-rate contribution paid by all, irrespective of income, is indefensibly inequitable, and we should never forget that. Although the arguments against that aspect of the charge have been made previously, we should not allow anyone to forget that that is the principal objection to the charge.
As the hon. Member for Edinburgh, Central (Mr. Darling) said, the proposed changes in the social security system, which mean that everybody will pay at least 20 per cent. of the poll tax bill, taken together with the proposed cuts in the housing benefit that will be implemented next spring, will undoubtedly mean a reduced standard of living for the poorest in the community, who will be offered Government loans from the social fund to make ends meet. That is scandalous. I subscribe to the view of the hon. Member for Edinburgh, Central that the sooner the 323 poll tax rebate regulations are laid and we can measure the extent of that poverty, the better it will be for everyone, inside and outside the House.
Increased poverty is a certain and unavoidable implication of the poll tax in Scotland. The figures issued recently by the Scottish Office, based on current estimates, show that almost 997,000 households will lose financially from the poll tax. I think the estimate is official. I know from my constituency postbag that the implications of the poll tax have not yet fully dawned on the people in my constituency. In Berwickshire, according to the most recent figures published by the Government, the poll tax charge is estimated to be £170 per head, with an additional water charge of £24 per head, and the maximum estimated rebate of £136 per head, leaving £58 per head per annum to be found. Similar figures are given for Roxburghshire; a poll tax charge of £176 per head, an additional water charge of £24 per head, and the maximum estimated rebate of £141, leaving a minimum poll tax payment of almost £60 per head. The figures have not yet sunk in on the Borders region, and I do not know whether that is the case in other parts of the country.
§ Mr. John Maxton (Glasgow, Cathcart)Is the hon. Gentleman aware that there will be no rebate at all, as far as we are aware, on the water charge?
§ Mr. KirkwoodThe hon. Gentleman has taken the words straight from my mouth, because I was about to add that that is the case. Whatever else is true, in the Borders region that fact is not yet appreciated. When it is fully appreciated, the Government may find the proposals even more unpopular than they appear to be now.
The estimates ignore several additional important factors; for example, the gearing effect which was discussed earlier. Assuming the increase in commercial rates is limited to the increase in the retail prices index, a greater burden will inevitably fall on domestic poll tax payers, and that is causing concern. In addition, the estimates ignore the effect of substantial numbers of legal non-payers, or partial payers. Students will pay only 20 per cent., and no grant from central Government will make up for the loss, which will have to be borne by local authorities. The position of Lothian region, which has 26,000 full-time students, the equivalent of 20,800 legal non-payers who will have to be carried by the local authority — has not been taken into account in the estimates.
Residents of nursing homes and hospitals and the severely mentally handicapped are technically exempt. Local authorities will have to carry the shortfall for those people and for 18-year-olds who are still at school. That does not even take account of those who may evade the tax. If such evasion is taken into account, it could mean that, after taking proper account of the additional factors that the Government have not recognised, the community charge will be 5 per cent. higher than expected.
The potential loss to local authorities should be made clear. The Government should make a realistic estimate of what the local authorities will face in regard to the percentage of poll tax payers who will evade payment with the result that its collection will be unsuccessful.
The second major factor that has been ignored by the Government is the implementation cost. That cost has been rehearsed at some length in the two earlier 324 contributions. The Borders regional council has estimated that it will cost 50 per cent. more to administer the poll tax than the domestic rate. The Minister is aware that the Borders regional council is neither profligate nor particularly politically antagonistic to the Government. That council is not guilty of any political bias or anything else. However, it has estimated that 22 additional staff will be required, and that represents an increase in expenditure of £430,000 a year. A further cost of £300,000 will be incurred as a result of upgrading existing computer systems. Therefore, it is particularly galling to consider the costs of the propaganda campaign upon which the Government have presently embarked. That campaign makes it even more difficult to reconcile local authority costs incurred as a result of the implementation of the poll tax.
The third implication, about which I am particularly interested, is the whole question of freedom of information and personal privacy. The poll tax presents the potential for the serious erosion of civil liberties. This matter has also been rehearsed by the two earlier contributions. The system that will be used to adminster and enforce the community charge will inevitably lead to greater Government control over individuals and their civil rights.
Poll tax arrears may have to be pursued by reference to bus pass applications, the personal files of local authority housing departments or the files of housing associations. I know that in the past mention has been made of the protection of social work files. When the Minister replies, I hope that he will say something about that. I do not think that the Data Protection Act 1983, so far as it goes, affords adequate protection of safeguards against the transfer of personal information from one local government department to another. The right hon. Member for Glasgow Govan (Mr. Millan) has rightly made strong representations to the Government about this issue.
Local authority officials may well come under quite unacceptable pressure and be obliged to resort to unacceptable practices, such as the cross-examination of former neighbours in their attempts to enforce payment of outstanding poll tax arrears.
Will the Minister say something about tied cottages? In Scottish rural areas there is a great deal of uncertainty whether special provisions will apply to farm workers living in tied accommodation. Have the Government had any second thoughts about the appeals system that applies in Scotland as opposed to the appeals system that has been suggested for England? Perhaps I have missed the announcement on that matter. I should be grateful if the Minister would say something about it tonight.
I am very worried about the position of hostels for the homeless and for battered wives. As those hostels will be in the same category as houses in multiple occupation, I join the hon. Member for Edinburgh, Central in expressing concern about that.
The timetable and the necessary regulations are urgently required. I hope that the Government will get on and publish those regulations so that we can learn what they really have in mind regarding the implementation of this pernicious piece of legislation.
§ Mr. Thomas Graham (Renfrew, West and Inverclyde)My concern about the poll tax relates not only to its 325 unfairness, its attack on democracy and its erosion of civil liberties. What concerns me is its impracticality, and how it affects the low-paid, the unemployed and young people.
My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) has given an excellent technical analysis of the poll tax. Its imposition will inevitably mean a bureaucracy of registration and collection which will discriminate against the less able in our community. Such problems are not new, however. It may he timely and seasonal to remind the House of that earlier registration exercise which so hurt the poor and most vulnerable. Let me read an extract from the Gospel according to St. Luke:
At that time the Emperor Augustus ordered a census to be taken throughout the Roman empire. Everyone then went to register himself, each to his own town. Joseph and Mary went from the town of Nazareth in Galilee to the town of Bethlehem. He went to register with Mary — she was pregnant and when the time came for her to have her baby she wrapped him in swaddling clothes and laid him in a manger—for there was no room for them to stay at the inn.It is the people of today — the low-paid, the unemployed and young people—whom the imposition of the poll tax will leave with no room at the Tory inn —about whom I am concerned. The unemployed, the elderly, the young and the low-paid cannot afford further taxation on their already meagre finances. The poll tax will lead to family break-ups: many young people will have to leave their homes because of their inability to find the money. We in Scotland are about to see the creation of a new breed of nomad. Our young people will move from place to place looking for somewhere to sleep. Eventually, cardboard cities—known in other countries as shanty towns—will spring up in our communities.This unfair and unjust poll tax must be stopped in its tracks now.
§ Mr. Frank Doran (Aberdeen, South)In Scotland, the poll tax legislation will be implemented on 1 April 1989, and on the best professional advice — as has already been mentioned by some of my colleagues — local authorities were told that the secondary legislation which is necessary for the full implementation was required by September 1987. The Government have still not published the regulations. Indeed, rumours are emanating from St. Andrew's house — I shall not call them leaks, for obvious reasons — that the Government have not published the regulations because they cannot work out what to put into them, so hastily prepared and ill thought out is the measure. Meanwhile, the local authorities must make necessary preparations with only the skeleton of the Act, without the meat of the detailed regulations.
This is a bad tax. It is regressive, and takes no account of the ability to pay. At its heart is the desire of the present Government to weaken our structure of local government and local democracy. The philosophy that argues that accountability does not exist in the present arrangements, and that those previously exempted from paying rates were somehow careless about how they cast their votes, is insulting and patronising. But that, of course, is nothing new for this Government.
However, I want to escape from the flawed philosophy behind the measure and consider its practical application. In the first place, there is the cost of implementing the poll tax in Scotland. The Government have blindly assured us 326 that there should be little or no extra cost to local authorities. If there are substantial extra costs, in the Government's view they can only be further examples of local government profligacy.
Let me look at the authority that I know best, Grampian regional council — not, I regret to say a Labour-controlled council. In a recent report to the council, the chief executive stated that the cost of implementing the poll tax in the Grampian area would be a staggering £2—456 million, which is additional revenue expenditure and includes loan charges on capital equipment. Before Grampian regional council provides one single service or meets one statutory responsibility or pays one other single overhead, it will require to levy a poll tax of £6.46 for every adult in the region, a charge just to pay for levying the tax in the first place.
Secondly, there is the cost of the poll tax to the individual taxpayer. The Government, through the Scottish Office, have issued figures for anticipated rates of poll tax, as we heard discussed earlier. These apply to each region and district in Scotland. In Aberdeen city, the Government estimate is for a rate of £200 per adult per annum. The Government figures ignore two very important aspects. I have already mentioned the cost of implementing the tax; the other is the very real difficulty that will be experienced in the collection of the tax. I will go into this in some detail, because I think that it is important, particularly for my own area.
The director of finance for Grampian region has estimated, in line with other directors of finance throughout Scotland, that his region will be extremely lucky to achieve a register which is 90 per cent. accurate. There are already signs that, in order to avoid the poll tax, individuals will avoid registration. In my own constituency I have just received the latest draft electoral register: the number of electors registered to vote in Aberdeen, South has dropped from approximately 63,000 on the current register to approximately 58,000 on the new draft register. I have suddenly lost 5,000 voters. I would like to think that this drop is the result of greater accuracy in the returns, but I have severe doubts.
Then there is the problem of collecting the tax. Again in the view of Grampian region's director of finance, the region will be extremely lucky to collect 90 per cent. of the poll tax from those who do get on to the register. In round figures, only 80 per cent. of poll tax due will be collected in my area—and we must remember that that is at best. Other areas in Scotland will be no different. Someone will have to pay for the shortfall, and it will be the responsible members of the community who register and pay. Taking account of the shortfall in collection, the annual rate of poll tax in my area will be not the £200 estimated by the Government, but at least £250 per adult per annum.
Let me turn to the less advantaged— the poor, the sick and the pensioners. In 1988, for the first time, these categories of people will receive a bill for 20 per cent. of their rates. In 1989, they will receive a bill for the poll tax. The Government have sought to assure us that this group will not lose; they will, we are told, receive an extra payment as part of their income support. There is a great deal of dishonesty here on the part of the Government. in the first place, there will be no rebate on the community water charge; that is a substantial change from the present position. Presumably the Government, in separating out 327 the water charge, envisage the day when the service will be privatised and water will be paid for just like every other utility.
However, despite this fundamental change, the Government have adhered rigidly to the position that the poor will pay only 20 per cent. of their poll tax. That is, at best, misleading and, at worst, outright and cruel deceit. For my constituents, who have hitherto enjoyed a full 100 per cent. rebate, the figure that they will have to pay will be not 20 per cent. but nearer 31 per cent., and on the levels of income that we are considering that is a very substantial increase.
On the Government figure of £200 per adult, £27 represents the water charge. My constituents who are eligible for the full 80 per cent. rebate will pay a total of £61.60 per annum. For a pensioner couple, that means £123–20 per annum. On the Government's figures, they had been led to believe that they would have to find £40 each, which was bad enough; a more accurate figure than that given by the Government, taking into account collection difficulties, would be £77 a year per adult — £154 a year for a pensioner couple in my constituency. That is a staggering £3 a week.
I have seen the reaction of pensioners in my area. I have talked to them about the poll tax. They were afraid of what £40 a year would mean to them. I do not know how they will react to the possibility that the true figure is likely to be £77 a year each.
Of course, the Government will tell us that the whole of the extra cost will be met by increases in the new income support. That is just not true. Firstly, the Government figures are based on only 20 per cent. of poll tax being paid, not the 31 per cent. which my constituents will pay. Secondly, even the combined effect of an increase below the rate of inflation and the application of an average amount, to take account of the poll tax payment, means a substantial reduction in the weekly pension benefit or income support.
This is a mean vindictive Government. The poor, weak and vulnerable will pay for the benefits that those who are better off will receive from the poll tax. It is clear that there is a section of society about which the Government care very deeply — those in employment or those with a substantial income who can afford private education and health care and the inflated house prices of the south-east. However, there is a section about whom the Government care little or nothing—the poor, the sick, the weak, the vulnerable, the pensioners and the low-paid, such as nurses and other health workers.
In the election in June the advantaged and disadvantaged united in Scotland in opposition to the Conservative party. One of the principal catalysts was the poll tax legislation. This arrogant, complacent and dogmatic Government have a sair lesson coming to them when they try to implement the legislation in England.
§ Mr. John Maxton (Glasgow, Cathcart)I thank my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) for introducing the debate and, as the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said, for having the wisdom to choose this subject. I thank my hon. Friends and the hon. Member for Roxburgh and Berwickshire for their contributions.
328 We have heard—with new points having been made in the debate—yet again about the problems facing the Government and the opposition that is building up about the gross unfairness of this tax, its undemocratic nature and the its unworkability. It is on its unworkability and difficulties that local authorities face that I shall concentrate my remarks. I shall concentrate on the Chartered Institute of Public Finance and Accountancy report, to which some of my hon. Friends and the hon. Member for Roxburgh and Berwickshire have referred.
The report came out in the summer and was greeted by the Government as the bible that local authorities would have to use to implement the poll tax. We were mocked by Ministers and the Secretary of State when, on Second Reading and in Committee, we criticised the unworkability of the poll tax. The Government said, "The experts have told us that the poll tax is workable; you were wrong all along."
The report was drawn up not by elected Members but by officials and experts who have tried to understand the poll tax system.
It is extremely difficult to obtain, unless one has £4,000 to throw around. My office has asked the Scottish Office time and time again whether I, as Front Bench spokesman on local government finance, could have a copy of it, and the answer has been a consistent no. The only way that one can read it is to go to the Library, but one is not allowed to remove it.
On page 2 the report says:
The system of community charge is capable of an operable implementation by April 1989, given: rapid response to the issues identified in this report; adequate additional financial resources being made available to authorities by increased section 94 consents, realistic adjustment to current expenditure guidelines and rate support grants.In other words, it is clear that it must be done quickly.The report continues:
A rapid response is important in: framing certain areas of regulation as identified in the report, most notably those defining liability for the community charge and the format for the register; a response by the end of September 1987 has been promised by the Scottish Office on these areas.A further reason why it is important is in:defining the specification of and interface with the community charge rebate system.Where are we in this? The timetable in the CIPFA report says that if the community charge is to be implemented on 1 April 1989, the collection of information for the register should already have started and that the canvassing and distribution of forms must start on 1 April 1988; that is, in three and a half months' time.Some of us have been deluded into thinking that there were three separate stages to the operation: first, the register system for which one would have to devise a computer programme so that one could feed in all the information from the register once it had been drawn up; secondly, a collection system, and one would have to have a computer for that; and thirdly, a rebate system, which would also require a computer programme. However, if one examines the report from CIPFA, one sees that that is not the case—far from it. If the tax is to be collected properly and efficiently, one has to have three different computer programmes all interfaced to each other or one or two computer programmes covering all three parts of the poll tax. One cannot have one computer programme for the register, one for the collection and one for the rebate system. That will not work. They have to be 329 brought together. That means that the whole system has to he devised and the programmes written and drawn up long before 1 April 1988.
I accept that draft regulations have been issued to the Convention of Scottish Local Authorities — and, I assume, to other local authorities—for consultation on the format of the register and the type of form that will be issued. However, although there have been some meetings, the written response from COSLA has still not been given. The final regulations on the format of the register, which are to be laid before the House, have not been published.
Some draft regulations have been issued on the collection system but, again, we have had no written response from COSLA, which is the major organisation concerned, and no regulations have been published. The only regulation published so far has been that bringing the law into force. The Government promise that there will be a response in September, but CIPFA says that the regulations have to be laid in August if the system is to work on 1 April 1989.
We have heard nothing about the rebate system. We cannot have the other two systems unless the local authorities — it probably will not be local authorities, because they will probably have to hire private companies --can feed into their computer programmes the whole rebate system. Unless they do that, the whole system will collapse and the tax will not be collectable on 1 April 1989. We have not heard one word from one Minister, either English or Scottish, on how the rebate system will operate. For example on 1 April 1988 when the new social security regulations come into force the level of benefit to be paid will be based on the family. However, the poll tax is an individual tax. Therefore, a social security system based on the family will be married to a tax based upon the individual. I do not know how that will work. The Minister has a responsibility to tell us.
Another small example is the position of students. They will have to pay only 20 per cent. The hon. Member for Roxburgh and Berwickshire raised an important point when he asked who makes up the rest. Will there be a grant from the Government to cover it? We do not know. What about a student who has a wife? He is jointly and severally liable and, as a student, he automatically has to pay only 20 per cent. However, is his wife elegible for rebate? Nobody knows how the rebate system will operate and, until we do, the rest of the system cannot be brought into force.
The regulations should have been laid in August. CIPFA makes it quite clear that the system of community charge is capable of implementation by 1 April 1989 only given a rapid response to the issues raised in its report. There has not been such a response. It is impossible to get the system set up in three and a half months. The Government have first to lay the regulations. We are as opposed to the tax as ever we were—more so because our people's opposition to it is growing all the time. We shall not let the regulations through without praying against them and debating them.
Local authorities will have to take on staff to study the regulations. They will have to buy computers and employ experts to write programs. Staff will have to be well trained to get the information that the new register requires. I accept that the electoral register will be an important source of information, but we believe that people are already taking their names off the register to avoid poll tax.
330 The new register requires much more information, however. The date of birth must be included, for example. There must be a recognised responsible person in the household. I dare say that there are some households where there are none, but what will happen with houses in multiple occupation or blocks of flats? Who will be the responsible person there? Will there be more than one?
Information about students must be recorded. Students must say where they are at college, give their address when at college, and state their course of study. The Under-Secretary of State for Health and Social Security may look aghast, but many people will find the form difficult to fill in. I found it difficult to follow the directions.
Hundreds of people will have to be employed to collect the necessary information. If some local authorities think that it will be possible to employ the same middle-aged, middle-class ladies to compile the electoral register, they have another thought coming with regard to areas such as Castlemilk. If I was collecting information for the poll tax register, I would not want to go near some areas of Glasgow unless I had at least four policemen or Securicor men with me. There is no question about it: such people will be in dire trouble.
All this has to be done by 1 April 1988. That is when information for the register must have been collected. It will take six months to collect the information and compile the first draft register, so we are talking about October or November. Then people will have the right of appeal to remove or add names prior to it becoming the final register for the collection of the first tax on 1 April 1989.
A local authority cannot decide what level of poll tax it will collect until it knows how many people are on the register, because it will need that information to work it out. CIPFA says that the level of tax and how and when it will be collected will have to be decided by 31 January 1989.
The Minister may dispute it, but that is even now impossible. The Government are already too late. It cannot be done. If they try to push on with the implementation of this tax on 1 April 1989, it will be an administrative nightmare. Local authorities will be in a shambles. People will be missing from the registers and people will not be in place to collect the tax. There will be no rebate system, so some will pay nothing, and those who should be getting rebates will be paying the tax in full.
I ask the Minister to promise the House two things. First—
§ Mr. William McKelvey (Kilmarnock and Loudoun)Scrap it.
§ Mr. MaxtonI should like him to do that, and in the end he may have to.
I hope that the Minister will say that it is not now possible to collect the tax by 1 April 1989 and that the Government will suspend the operation for one year and implement the tax throughout the United Kingdom on 1 April 1990. I accept that the same shambles may apply in England, but let us accept that they will have learnt from the Scottish experience.
If the Minister is not prepared to delay for a year, can he at least ask the same experts who drew up the CIPFA report to go to local authorities, investigate what is happening and give him another report on whether it is feasible to implement the tax on 1 April 1989? If not, will 331 he then give the commitment that he will back off? I hope that the Minister is capable, in the time that he has left, of answering the questions that I and others have raised.
§ The Minister of State, Scottish Office (Mr. Ian Lang)I shall do my best to answer the questions that have been raised, but the timetable that I have been set is tight.
This has been an interesting and useful debate. Some of the points raised are worth developing and I shall try to cover them in the few minutes that I have to do so. Opposition Members talk about anxiety about the community charge, but they are the cause of much of that anxiety. Despite the scares, alarms and assertions that the new system cannot be implemented by 1 April 1989, I can assure the House that we remain on course to secure our objective of introducing the community charge in Scotland from that date and abolishing at that time the discredited domestic rating system.
At no time during the passage of the Act did we make any secret of the fact that the timetable that we were setting ourselves would be a tight one. Nor do I make a secret of the fact that much remains to be done. But recently, in the House and outside, we have been hearing — notably from politicians, but not from local authority administrators—and we have heard again tonight, that the timetable simply cannot be met. Their assertions are ill-founded and irresponsible. It is our firm view that the necessary preparatory work will be completed in time to enable the community charge to be brought in on 1 April 1989 as provided for in the Act.
It might be helpful if I make a few general remarks about what implementation involves. It involves three main processes. Again, it might be helpful to the House — and I am sure that it will be helpful to the hon. Member for Glasgow, Cathcart (Mr. Maxton) — if I were to describe these processes and explain how much we have done on each of them since the Bill was enacted.
First, the commencement order for the Act was made on 18 August, some four months ago. It brought the main provisions of the Act into force on 14 September. The main effects of the order were that, from that date, regional and islands assessors also became community charges registration officers, and that regional and islands councils came under a duty to provide them with sufficient staff, accommodation and other resources to enable them to carry out their functions. Local authorities are also required to prepare the systems for billing and collecting the community charges. It is a matter of fact that every regional and islands council in Scotland is now getting on with the job.
Secondly, there are the various sets of regulations to be made under the various powers of prescription in the Act. This point was raised by the hon. Members for Clydebank and Milngavie (Mr. Worthington) and for Edinburgh, Central (Mr. Darling), as well as by the hon. Member for Cathcart. A number of the powers are fall-back powers in the sense that they need not be exercised unless change becomes necessary in the light of experience. However, regulations in a number of key areas are necessary to set out certain details of the new system. There are, for example, the regulations on domestic subjects. These regulations will define the properties, in addition to dwelling houses, that are to come out of rating with effect 332 from 1 April 1989. Examples of such properties are private garages which at the moment are valued and rated as separate subjects, and residential accommodation such as nurses' homes. The regulations will also provide the basis for exemption from the community charge for the residents of residential care homes, nursing homes and hostels. A draft of the regulations has been the subject of consultation with the Convention of Scottish Local Authorities and other interested bodies. As a result, we are considering a number of changes to the draft, reflecting the fact that the consultation process has been genuine.
§ Mr. Maxtonrose—
§ Mr. LangIf the hon. Gentleman will forgive me, I would rather get through all the points that I wish to answer. I shall give way to him, but that will mean failing to answer some of the other points.
§ Mr. MaxtonHow long has that consultation period been? I saw those draft regulations in September.
§ Mr. LangThe consultation period has allowed sufficient time for all the appropriate bodies to consult and to let us have their views on the draft regulations. As a result, we are considering a number of changes to the draft, reflecting the fact that the consultation process has been genuine.
Most of the changes that we were asked to make are of a fairly technical nature. However, one more substantive point in representations from the Scottish Federation of Housing Associations Ltd. is that the communal parts of sheltered housing complexes should come out of rating along with the sheltered housing units themselves. We can see that to do so would be consistent with the general framework of the regulations and their objectives. I expect that the regulations will be made shortly, and I hope that they can be laid before Christmas.
A second group of regulations, which are well advanced in their preparation, are those relating to the timetable for setting the community charge and non-domestic rates. These are clearly essential to the process of system design by local authorities. The regulations have also been the subject of consultation with COSLA and other bodies representative of practitioners in the field. A number of useful comments have been received, and, again, the regulations will be made shortly.
A third and very important set of regulations will deal with registration for the community charge, to which Opposition Members have referred. The regulations will, for example, prescribe the information which is to appear on the canvass forms to be used by the community charges registration officer, the form of the register itself, and the form of the notice to be issued to persons who appear on the register. This is a complex area, and the drafts of the regulations have, again, been out to consultation.
Other matters on which we are actively engaged in preparing regulations are exemption from liability to the standard and collective community charges, the collection arrangements for community charges — particularly as regards the format of bills—and the definition of key terms used in the Abolition of Domestic Rates Etc. (Scotland) Act 1987, such as the term "student".
We are therefore well advanced in the process of making the various regulations required. We have been consulting widely, and will continue to do so in the coming months. The consultation process has been entirely 333 genuine, in the sense that we have been willing to take on board the many constructive comments that we have received. We are well beyond the point of having only the basic framework of the new system. The details are fast taking shape, so that those involved — particularly in local authorities—can get on with the job of preparing for the introduction of the community charge on 1 April 1989.
Several hon. Members asked when the rebate regulations will appear. We envisage that consultations with local authorities will begin early next year on that matter. The system will be closely modelled on the new scheme of housing benefit, on which local authorities are already working. Therefore, there is no question of damaging delay or uncertainty.
I should perhaps say a few words about the prescription of the registration canvass form, which will be part of the registration regulations. As I have explained, they have already gone out to consultation, and there has been a wide response. We are considering the detailed points that have been made. The hon. Member for Edinburgh, Central raised a point concerning the suggestion that the canvass form covers everyone, not just those aged over 18. That point was made by many respondents in the consultation process. It will be taken into account when the final version is drawn up. In considering the detailed points that were made, we paid particular attention to the comments that were made about the canvass form, because community charges registration officers will need to have that matter defined fairly soon so that they can get ahead with having supplies of the form printed. My officials are working closely with community charges registration officers to achieve that. They are, of course, taking account of the comments that were made about the need for the form to be as clear and straightforward as possible. I intend that when this phase of consultation is completed in the few days, we will have a final draft of the form which will be suitable for inclusion in the regulations when they are made, and I intend to make it available to registration officers to assist them in their preparations.
The third requirement is for local authorities to set up appropriate systems so that the community charge can come into operaton from 1 April 1989. We have given local authorities a valuable resource in the form of the study that the Department commissioned from CIPFA. It analysed the requirements for implementation, demonstrated that the system was workable, and how it could be designed to optimum effect. Copies of the report have for some time now been with local authorities to assist their forward planning.
In answer to the hon. Member, the CIPFA report did not say that the regulations had to be made in August. It said that we would respond by September, which we did, with consultation drafts. I refer the hon. Gentleman to paragraph 1.31 on page 2 of volume 1, the management summary of the report, to clarify that point.
The hon. Member for Edinburgh, Central raised the matter of resources. Following the commencement of the Act, all regional and islands councils, without exception, have formally agreed to proceed with its implemention. To do this, they will need to incur some capital expenditure, mainly on computer equipment and accommodation. As the House will know, the Convention of Scottish Local 334 Authorities co-ordinated a bid, which was put to my right hon. and learned Friend at his meeting with it at the end of October, seeking additional allocations of £5.5 million in the current year. I am glad to say that my right hon. and learned Friend was able to announce at his meeting with the convention last Friday that he will allocate an sum of £6 million in the current year. The convention has also shown further capital expenditure requirements next year, amounting to a total figure over the two years approaching £20 million. There will be additional resources in the general services capital block for next year, which, together with this year's extra £6 million, will be more than sufficient to cover the requirement that has been demonstrated to us. Of course, it must not be forgotten that local authorities have, in total, substantial capital allocations and considerable flexibility within them to make adjustments at the margin. That means that if the estimates that we have been given should change, local authorities will have room to make the necessary adjustments in their overall programmes.
The hon. Member for Clydebank and Milngavie raised the matter of accountability.
§ Mr Darlingrose—
§ Mr. LangI shall not give way.
I shall try to reply to some of the points that the hon. Member for Clydebank and Milngavie raised. The hon. Gentleman suggested that the reports in yesterday's newspapers that rate increases this year would have been much higher if they were expressed in terms of community charges seemed somehow to undermine the principle of accountability. Far from doing that, it shows the need for increased accountability. The community charge system will have a gearing effect, as the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said, but it is precisely the discipline imposed by that gearing effect that will bring sense and discipline to local authorities and recognition of the need to respond to the interests of residents in their areas.
The hon. Gentleman also raised the matter of the uniform business rate and suggested that the policy had somehow been dropped or had collapsed. I refer him to the Green Paper that came out before the legislation was brought forward. I shall quote a small section from paragraph 8—31. He will realise that the situation has not changed at all. It states:
The Government sees advantages in moving in time to a common non-domestic poundage in all areas and it may be desirable to harmonise valuation procedures to provide for a common standard. Where significant differences persist between Scottish and English valuation practice affecting certain types of property, further statutory changes may have to be considered to ensure fairness of valuations throughout the country. Until such moves took effect the Government would propose to retain industrial de-rating, and to control non-domestic rate poundage increases by linking these to some general index of price movements".That policy is stated in the White Paper and has been implemented in the Abolition of Domestic Rates etc. (Scotland) Act 1987 so there has been no change in that respect.The hon. Member for Cathcart also raised the issue of collection and enforcement. There is no evidence that the collection and enforcement system envisaged for the community charge will create major difficulties.