§ Mr. Michael J. Martin (Glasgow, Springburn)
I am grateful for the opportunity to debate the poll tax once again. I deliberately call the tax a poll tax, in spite of the Government calling it a community charge, because that is how it is known north of the border. The more it is debated in England and Wales, the more well known it is as a poll tax. In fact, the Prime Minister gave it that description not so long ago.
I clearly recall the debate on Second Reading on 9 December 1986 when there was no shortage of Tory Members who supported the poll tax. In fact, Michael Ancram delivered the winding-up speech. He steered the legislation through Committee. He was supported by Michael Hirst, who represented Strathkelvin and Bearsden, Alex Fletcher from Edinburgh, Central, Barry Henderson. Gerald Malone, John MacKay, Albert McQuarrie, Alexander Pollock, John Corrie, and Peter Fraser. All those former Members welcomed the tax. They said that it was the greatest thing since sliced bread and that the people of Scotland would queue up to vote for the Government. Two reasons why those people no longer represent constituencies are the destruction of our industrial base in traditional industries in Scotland and the high level of unemployment, particularly among the young, that is hitting the people of Scotland. Another reason must be the poll tax. In places such as Edinburgh and Strathkelvin and Bearsden, people realised just what the Tories were going to foist on them. The guinea pig was to be not the whole of the United Kingdom, but Scotland. Voters were queueing up to vote for Labour candidates.
Even some present Conservative Members did not do too well. They all sang the praises of the hon. Member for Stirling (Mr. Forsyth), who is not here to defend the poll tax for which he campaigned before other Tories in Scotland even thought about it. He did not do too well either. At the 1983 election, he had a 5,000 majority, but that fell to 900 at the last election. The Secretary of State for Defence, the right hon. Member for Ayr (Mr. Younger), did not do too well. A few more votes for Labour and he would have been out. The only thing that saved him was the fact that, for many years, he has played the role of the perfect gentleman. Certainly, the poll tax did not help him. Even the Secretary of State for Scotland did not do too well. The arrogance that the Government displayed throughout Second Reading and in Committee was such that the people of Scotland considered that the legislation was the final blow to them. It was a final attack on their standards of living. I am surprised by that.
The reason why I am here at this time of the morning is to put on record that we are now getting English Conservative Members of Parliament saying that there will be a revolt of Tory Back Benchers against the poll tax. I note that the Whip is nodding his head and saying that that is not true, but the former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath) and a former Cabinet Minister are on record as saying that they do not like the poll tax. In fact, the right hon. Member for Henley (Mr. Heseltine) stated that on two occasions within Cabinet and argued against such a tax. Even the hon. Member for Ealing, Acton (Sir G. Young) got into the act.
864 I am glad to see that there are converts to the argument that the Opposition have been putting forward, but it is a pity that some of the former Members I mentioned went through the Division Lobby in support of the Scottish Tories to impose the tax in Scotland. Their credibility and standing in the community would have been far better had they been prepared to say at that time that they were not interested in seeing the tax imposed in any part of the United Kingdom.
It is shameful that the Tories who are against the tax should say, "Why don't we let it be tried in Scotland?". I take exception to the community that I represent and the people of Scotland being used as guinea pigs. If the Government are putting forward the argument that the tax is much better than rates, it should be implemented throughout the United Kingdom at the same time
The hardship it will cause is such that people in local government, who arc not elected to take part in our political arguments here, are now coming out and saying that this will cause hardship in Scotland, and in England and Wales, if it is implemented in England and Wales.
The director of finance for the Glasgow district council, Mr. William English, who is respected in local government circles throughout the country, has said about the rating crisis in Glasgow that if the poll tax were introduced tomorrow it would mean that every person over the age of 18 would have to find £292. Many households in my constituency contain at least five adults and they would each have to pay £292, which means that one household would be required to pay £1,460 a year, not including any rates rises imposed. That would impose a great deal of hardship on many families.
This will apply in housing estates, where the people are among the poorest, but I know that the Minister will say that housing estates are the responsibility of the authority. I do not want him marking any part of my constituency, because the part of Glasgow in which I was brought up as a boy was mentioned as a deprived area so often that the place got a bad name. I have no intention of giving any place a bad name. I mean no disrespect to the people of Possilpark in my constituency, but the area was built in the period between the wars. The people were taken out of the worst slums in Glasgow. They were so poor that the old Glasgow corporation had to give them furniture. They did not have beds, tables or chairs. Those problems of generations ago still exist in Possilpark. When I was in that area during the election, I found that, although there was a good community spirit, the people were the first to admit that there were many problems. The poorest people in Scotland reside in that community, yet the Minister is expecting some families to pay £1,460 in poll tax. That is neither right nor fair. There are not many hon. Members in the Chamber this morning. However, I hope that when hon. Members read Hansard they will recognise that hardship will be imposed on many families.
The Minister will no doubt say that the Government will take care of low-income families and that provision will be made for those on supplementary benefit. However, we have not heard the full story of what will happen to those on low incomes—those in the catering, retail and garment industries, where the Government have abolished the wages councils that protected the workers. Some people are working in sweated conditions and are being exploited day by day. More and more the story is coming out that people are hired one day and sacked the next. They are on very low incomes; some are lucky to earn 865 £70 a week gross. The Government keep repeating the magical figure of 20 per cent. as being all that they will have to pay. The Government are distorting the picture because it is a minimum of 20 per cent. Some people on low incomes will be required to pay up to 95 per cent. of the poll tax because of the sliding scale. I want to put on record that the 20 per cent. that the Government keep mentioning is not the full picture.
As I have often mentioned in the House, my area used to have a booming railway industry. It was once the finest railway engineering construction site in the country, and it was famous throughout the world for its expertise. Many people were pensioned off from that industry, and I know that you, Mr. Deputy Speaker, are familiar with such pensioners. They were labourers in the workshops and did not earn big money, but they got a bit of a pension. That was compulsory. They retired with two pensions, and they live with dignity and respect because of that extra income. Under the poll tax, they will not pay the minimum of 20 per cent. That bit of extra pension will be taken into consideration and some of them will be required to pay more than the 20 per cent. that the Government quote. There will be difficulties in communities throughout the land. I hope that the Minister will consider these matters seriously, as they were not properly debated in Committee. It will be the downfall of the Tories in Scotland.
The effect on local government is devastating. The Government say that high-spending local authorities will have the most to complain about and that those that are prudent and behave themselves have nothing to fear from the poll tax. That is nonsense. As I have said, Mr. William English, who is highly regarded as Glasgow's director of finance, has put the facts and figures to CoSLA, to various local authorities throughout the country and to Ministers, and, as I understand it, his figures have not been contradicted. I should explain that Mr. English is extremely worried.
The Secretary of State for Scotland, in his first speech in the House after the general election, congratulated Glasgow on the good work that it was doing. In his position of Secretary of State he took credit for what had taken place. He cannot say that irresponsible local authorities have the most to worry about and then congratulate Glasgow when he knows that Glasgow is complaining about the tax. However, he has congratulated the city on its housing initiatives, its garden festival and other projects. The right hon. and learned Gentleman talks about irresponsible authorities, but he is on record as saying that Glasgow is not irresponsible.
The bureaucracy in my native city of Glasgow will be a nightmare. The rates system, with all its faults, was a property tax that was relatively simple to collect. A tax was imposed on every building or house. Glasgow officials now have to start worrying about second homes, for example, because they will attract a different tax from that levied on first homes. If hon. Members are fortunate enough to have accommodation in London and a second home in Glasgow, difficulties will be created for local government officials. There are not many hon. Members in that position, but the issue of first and second homes will worry officials.
In Glasgow, 560,000 people will be required to pay the poll tax. Only half that number are paying rates. The population in a city such as Glasgow is constantly on the 866 move, and that is also the situation in Dundee. In Aberdeen, with the oil industry, the movement must cause an even greater headache for local government officials. The poll tax will be easily avoidable, and there will be those who are on the move who will avoid it. There will be those who forget to register and others who move and forget to register at their new home, for example. There will be those who avoid the tax deliberately and others who overlook registration. It is calculated that in our major cities about 20 per cent. of the tax will not be collected as a result of unemployment and associated difficulties.
About 80 per cent. of local government expenditure will come under the control of central Government. The rate support grant, which is one of the main sources of income for local authorities, and all other grants will be controlled by the Government. That will mean that the remaining 20 per cent. will be the only area in which local authorities will be entitled to implement a rise.
Critics of the Labour party will say that local authorities should have thought about increases, but time and again the Secretary of State has said that he will make allowances for inflation. However, this year, with the manual workers' pay increase and the teachers' pay award, we are aware that the allowances made by the Secretary of State have resulted in a shortfall in local government finance. Once the poll tax has been introduced, the increased demands on local government finance will be put on the domestic rate. The local authorities will not be allowed to put the increase—an increase caused through no fault of the authorities—on to the non-domestic rate. The poll tax will place an unfair burden on local authorities.
I envisage that families will be split up because of the poll tax. Those who want to stay together—most do—will face intolerable pressure. That pressure will result from the fact that, as a result of the poll tax, each boy or girl over the age of 18 will be expected to fork out about £300. There will be terrible pressure on parents to ask their sons or daughters to leave home.
The poll tax will bring back the days of the depression. I have no memory of those days, but my parents have bitter memories. I clearly recall my mother and father telling me stories about old communities where, because people's means-test money was being cut, young boys and girls were asked of leave home so that some extra money from the parish could be allowed into the house.
Because families will face a charge of £300 per person, young boys and girls will be asked to move out. Some responsible young people, who will say that they do not want their parents to be burdened with their problems, will leave home. That already occurs because of unemployment, and the Government are putting more pressure on the poorer families.
In Committee we heard talk of summary warrants. Such warrants will be discussed again and again as more and more people do not and cannot pay up. Because of the problems in our society we have witnessed the welcome sight of lawyers moving their offices from the city centres to the main streets of housing estates. However, in Glasgow and other cities we have seen the establishment of offices for people who are messengers-at-arms and sheriff officers. I have no desire to see sheriff officers moving into premises in a housing estate. However, the poll tax will encourage that development.
867 I can also envisage that some local authorities, which support the Government at the moment, will offer rewards to neighbours to tell on those neighbours whose sons and daughters are staying at home and who are, therefore, not paying enough poll tax. At the moment we have detector vans going round to find out whether people are watching television without a licence. Will we see detector vans going round our cities and rural areas finding out if there are more people living in a house than there are paying the poll tax?
The Minister should go hack to his boss, the Secretary of State, and tell him that the people of Scotland have rejected the policies of the Tory party, including the poll tax, and that this legislation should be taken away, forgotten about and buried, along with the Tory candidates who lost their seats at the recent election.
§ Mrs. Maria Fyfe (Glasgow, Maryhill)
The most remarkable aspect of the poll tax was that the Tories thought that it would be a vote winner in Scotland. They told 2 million voters that if the Tories won the election, they would have to pay a tax that they had never paid before, and then they were astonished when those people voted Labour. I ask the two Conservative Members who are present to reflect carefully on that, not only to save their colleagues' skins on a future polling day but to consider how far out of touch the Conservative party must have been with Scottish public opinion. They went on to force the legislation through despite all the warnings from opinion polls in Scotland, from the Scottish media and the advice of all the professional bodies that are involved in rating valuation and local government accountancy.
It was with some hitter amusement that earlier tonight I sat here and listened to Conservative Members raise all sorts of questions about the poll tax as it would apply to England and Wales. Clearly, they did not think too strenously about those points before they voted last May to apply them to Scotland. Nevertheless, if they are having second thoughts now, I hope sincerely that they will be big enough to recognise that if it is wrong for England and Wales it is wrong for Scotland also.
However, I fear that those Conservative Members who are conscience-striken are struck merely by the size of the Tory defeat in Scotland. They will be outweighed by the number who do not understand local government finance but who are prepared to toe the line, and by those who understand very well that the entire idea is not about fairness but is, in reality, about enforcing lower council spending, cutting jobs and services and making Labour councils take stick from their electorate for implementing Tory policies.
Conservative Members have argued that the rating system is unfair. Nobody ever said that it was more than rough justice, but the price of one's dwelling is a rough and ready guide to one's wealth. If fairness were truly the problem, why did the Government come up with a scheme that is so monstrously unfair? If simplicity were the aim, why devise a scheme that the local government accountants have described as an administrative nightmare? If this is a supposedly simple alternative to rates, there are difficulties that Conservative Members representing seats in England and Wales may not yet have considered. People who move in and out of institutions will end up paying their own community charge and a contribution to the institution's collective charge. What 868 about the separated spouse who finds his or herself "jointly and severally" responsible for the ex-partner's bill? What happened to the idea of every individual being liable for his or her own tax?
I wonder whether the Minister has considered the impracticability of enforcing the responsibilities of the designated responsible person on a household because, as my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) mentioned earlier, people who are accustomed to the present system of an annually updated voters' roll will not—if they think about it at all—realise that the new register is a rolling one. Such a person will perhaps not notify the council, but the council will discover that that person is there and he will be presented with a bill for the full backdated amount, plus interest, plus £50 penalty or a penalty of 30 per cent. of the debt if that is more than £50. People with no intention of evading, and who arc no more disorganised than the average Member of Parliament, will end up with substantial debts.
Can the House imagine a local authority pursuing all the small debts that will arise? I shall outline briefly some of the possible cases. They may include claimants and pensioners who have not paid the few pounds that they owe under the 20 per cent. rule, people who are homeless or who move from place to place frequently, young people with no independent income of their own, or carers who will be forced to take responsibility for their dependants' financial affairs.
Chasing up such people will cost a disproportionate amount of money and create public criticism of the council, not of the Government, who created the mess in the first place. It is a highly ingenious scheme and I give full marks to the Machiavellian who thought it up. Either the council will chase up those debts and receive public odium for its pains, or it will do without and either increase the poll tax of those who do pay, or of course, be forced to cut services and jobs when it was elected to protect them.
Another possibility is that all this administrative chaos will be avoided by having a comprehensive national register with computers keeping tracks of everyone's whereabouts. If hon. Members think that that is farfetched, the Institute of Cost and Management Accountants has already warned of the need for a supplementary national register if the poll tax is to work. Where do we end up next'? with identity cards for one and all.
Conservative Members have claimed that individual poll taxes will be high only if allegedly profligate Labour-controlled councils impose too high a level of spending, but the facts contradict them. Glasgow district council, of which I was until recently a member and on which I spent four years as deputy convenor of finance, held its rates steady for three years and this year declared a small reduction. The average rate bill is £514 and notice that I said "bill", not "rateable value". The former seemed to confuse Conservative Members on a previous occasion. The city accountants calculate that the poll tax will be £292 per head, so a two adult household will pay more than before and where there is a third adult a further £292 will be payable.
The national business rate has not yet been mentioned. If the plight of carers, young people without an independent income, the mentally handicapped and the homeless does not make an impact on Conservative 869 Members, perhaps the pleas of small businessmen will. The standard business rate will penalise businesses in the lower-rated, mainly rural areas. According to the National Federation of Self-Employed and Small Businesses, it would mean 50 per cent. increases in local tax bills. That would remove one of the few incentives that many rural councils can offer to businesses to encourage them into their patch. There will be a loss of business to those trades, fewer jobs and rural local economies will be further run down.
Many English and Welsh Conservative Members will have voted for the Act in Scotland in ignorance of its impact on our country. They must be presumed to have acted in ignorance of its electoral impact on Scotland. Last week a Government spokesman said that the poll tax had not made the Tories any more unpopular than they already were from the revaluation exercise. Indeed, he though the detected a minimal increase in support by the time the election came round. He should chew on the poll figures for himself and not rely on being bottle fed by a civil servant's not too well researched brief.
I ask Tory Members whether they want all these problems in England and Wales too. Does not the scale of their Scottish defeat create just a niggle of doubt about their own safety? Would they have believed it if anyone had told them before the election that the right hon. Member for Ayr (Mr. Younger), the Secretary of State for Defence, would have his majority reduced to less than 200? Will they not accept that if they persist in treating Scotland as a laboratory for their experiments before trying out proposals in England they can hardly claim with any credibility that they believe in the concept of a United Kingdom?
The Government should support the contention of my hon. Friend the Member for Springburn and be prepared to withdraw the Act and start again on local government financing in a way which takes account of the needs and views of the people who elected us and who also elected local authorities to govern locally, not merely to act as administrative outposts of the regime in power at Westminster today.
§ Mrs. Margaret Ewing (Moray)
There can be little doubt that the concept of imposing a poll tax in Scotland proved to be one of the most unpopular acts of the previous Government, and the results of that were seen at the general election. As a candidate during the campaign I was aware that the poll tax, as it has become known, was a major issue at public meetings, on doorsteps and at every workplace that I visited. The public as a whole has responded angrily to the concept put forward by the Government.
In a parliamentary reply only last Wednesday the Minister indicated that the Secretary of State had received 966 individual responses and 240 responses from organisations about the proposals. The Minister declined to break those figures down to who was in favour and who was against, but it is widely known that the vast majority of the responses were hostile. Certainly those responses recorded in the press showed that many of the major organisations in Scotland from COSLA to the Association of Assessors were very dubious about the Government's plans.
870 Opposition to the proposal did not come simply from the supporters of Opposition parties in the general election campaign. Many Conservative supporters expressed concern, doubts and antagonism over the proposals. It is insulting for the Government to assume that all Tory voters cast their votes on the issue of greed. Many Tory voters were conscience stricken and horrified by the implications of the tax as it was proposed. The poll tax flies against the whole idea of a tax based on the ability to pay.
During the election campaign in the constituency of Moray—a seat previously held by a member of the Committee on the poll tax Bill—we analysed three different areas in the main town of Elgin to assess the implications of the poll tax. We considered three different areas—a leafy suburb with large detached villas. a section dominated by terraced houses in th centre of town representing the kind of house which is often the first home of a married couple, and finally we considered a section of the council estates. We found that those in council houses would suffer most under the new arrangements, the people in terraced houses would suffer next and very few in the leafy suburbs would benefit. The analysis was based on the electoral register and on those registered within the community to vote and therefore eligible to pay tax. It seemed that virtually everyone would suffer, but the penalty would fall most severely on those least able to pay—those who lived on council estates. That analysis is true of all sections in Scotland. This regressive tax is alien to the whole concept and psyche of the Scottish people. The Minister should take it away and rethink it.
Will the Minister tell us how he intends to respond to the Church of Scotland and to other churches about their concern over the poll tax? In a written answer last week it was revealed that 32 churches had written to the Minister. They asked what had happened to the original promise given during the debate in the last Parliament and in the Green Paper "Paying for Local Government," to preserve the benefit of the existing rate relief for charities in the form of a discount from collective community charges. They view with dismay the failure of the Government to honour the undertaking in the Abolition of Domestic Rates etc. (Scotland) Act 1987. The churches have been active on this issue and they wrote to the Minister. In his reply, he said that the present reliefs available to churches in respect of non-domestic rates will continue. Will the Minister spell out explicitly what that means? He has not given a straight answer to the request to know whether the initial promise in the Green Paper has been observed by the Government.
I want the Minister to comment briefly on the non-domestic rates and their implications for Scotland. At present, rates are still based on rateable values. The Government admitted in the Green Paper "Paying for Local Government" that business rates in Scotland were paid at a generally higher level than elsewhere. No concession has been made in the interim, although the Government accepted and conceded the argument when the sports clubs stated that they were placed in an unenviable position because they were expected to pay at a higher level. Has the Minister considered the possibility of granting some interim relief to the many small businesses in Scotland which are now in a perilous position?
There has been no effective response from the Government to the pleas of small businesses that the uniform rate envisaged in the Abolition of Domestic Rates 871 Etc. (Scotland) Act will be a disadvantage to the rural communities. In Moray, many businesses are concerned that they will be unable to sustain the uniform rate applicable throughout the length and breadth of the country because those businesses do not have access to the larger markets experienced by their counterparts in larger cities. That would be a gross disadvantage to rural communities, and it would lead yet again to rural clearances and the rundown of the rural economy.
As the daughter of a ploughman, I also wonder what thought has been given to how farm workers are expected to pay the community charge. Can we expect farmers to give each farm worker an additional £250 for every member of his family living in the tied cottage who is eligible for rates? It would be nice to think that they would, but I suspect that farm workers will be expected to find the money out of their wages, which are still appallingly low in comparison with those of most other workers.
What will happen to the crofting communities of Scotland, which have previously received 50 per cent. exemption from paying rates? What concession will be made to them? Are we to expect yet another highland clearance?
Those are all major points on which the Minister must come clean if he is intent on pursuing the folly of ensuring that the poll tax is imposed in Scotland.
The Scottish National party has always argued that the funding of local government should come through a local income tax. That would ensure that taxation was related to people's ability to pay. It seems ludicrous to me that the Government did not even consider a feasibility study on how local income tax could be implemented. Some European nations operate such a system. Are we so different that we cannot implement it?
The Labour party—at least, according to the hon. Member for Glasgow, Cathcart (Mr. Maxton)—is determined to standon the plank of retaining rates."—[Official Report, 25 June 1987; Vol. 118, c. 124.]I believe that most people understand the anomalies that were abhorrent in the previous system. In my view, the poll tax is a much worse system. Surely we want to eradicate the anomalies of the previous system and bring forward a much more positive and radical approach to the funding of local government.
Finally, let me say to the Minister that the people of Scotland object very strongly to the idea that they should be used as guinea pigs in this exercise. Over the past two weeks, I have been appalled to read many reports from senior members of the Conservative party, both inside and outside the House, arguing that the poll tax should not be implemented south of the border until there has been an opportunity to examine how it has operated in Scotland. That is surely an arrogant attitude to take towards the people of Scotland. The Act of Union of 1707 stated that they would be taxed equally with their neighbours south of the border, but we now have unequal taxation, which brings into disrepute the Act of Union to which the Minister so loyally adheres.
More appropriately, if the Government had any concern for the well-being of the community of Scotland, they would take away this ridiculous legislation and bring forward the local income tax concept of other European nations. They would ensure that the people of Scotland 872 were given a system that enabled them to pay for the local government that they wish, without penalising the poorest sections of society.
§ Mr. John Maxton (Glasgow, Cathcart)
Let me first thank my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) for raising this important issue, and congratulate my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) and the hon. Member for Moray (Mrs. Ewing) on their contributions. I also congratulate the Minister first on his promotion, and secondly—perhaps more important—on being one of the few Scottish Tories to survive the general election. He must be proud of the fact that his position was not as seriously eroded as were those of most of his Scottish colleagues.
When we debate the abolition of domestic rates in Scotland we have to examine the failure of the Scottish Conservative party. My hon. Friends have already said that this was the Act that was to save the Tory party in Scotland and bring about its revival. It was the major plank of the Tories' election campaign. Except for his election address, the only leaflet that was distributed by my Conservative opponent in Cathcart dealt with the poll tax. That was true of most Scottish constituencies. Leaflets drew attention to the benefits of the poll tax and the horrors of the rating system.
Despite the claim that everybody would benefit from the poll tax, the people of Scotland firmly rejected it. My hon. Friend the Member for Springburn read out the roll of dishonour. He referred to those who had lost their seats. It was right that he should do so. However, my hon. Friend did not mention that seven of the 10 or 11 Tories who were members of the Standing Committee that dealt with the Bill lost their seats. Mr. Michael Ancram, the lead Minister, the man who staked his political career on the poll tax, lost his seat. The Whip, Mr. Malone, who guided the Bill through its Committee stage, also lost his seat. Now there is a "Scottish" Whip who does not even represent a Scottish constituency. Mr. Michael Hirst, one of the most vociferous supporters of the poll tax, lost his seat. Strathkelvin and Bearsden has the highest average domestic rate bill in the United Kingdom. If any area in Scotland stood to benefit from the poll tax, it was Bearsden, but Mr. Hirst lost his seat.
When this Government put the poll tax up front in their election campaign, the Scottish people told them what to do with it. It is an insult to democracy and to the people of Scotland to allow the poll tax to continue. When she answered a question that I put to her last Thursday, the Prime Minister asked me whether I was proud to be a Member of the United Kingdom Parliament. The implication was that the United Kingdom Parliament passed the Bill and that therefore everything was all right, was it not? I am not proud to be a Member of a United Kingdom Parliament when the Government so obviously ignore the democratic wishes of a major nation that forms part of the United Kingdom. "The United Kingdom" means three or four kingdoms that are united. Scotland is one of those kingdoms.
If the Government had had any morality or any sense of democracy they would have said in the Queen's Speech that they intended to introduce a limited Bill to repeal the Abolition of Domestic Rates Etc. (Scotland) Act 1987. If they do not do so, they will face enormous problems— 873 for example, over the register. I do not intend to rehearse all the arguments about the fairness or unfairness of the rating system. I disagree with the hon. Member for Moray about local income tax. Most countries have some form of property tax. That is what rates are. The point that rates are grossly unfair does not stand up to close scrutiny. The Government have completely misinterpreted the figures for the number of people who pay. They can get down to their figure of 21 per cent. of people who do not pay rates only by using the people who received rebates, partial rebates or by using those instances where husbands or wives are the ratepayers. The number of people in Scotland who are liable to pay rates, if husbands and wives are included, is about 79 per cent. of the population. Only 21 per cent. of the population is not liable to pay anything towards the rates, assuming that a young adult who is living with his parents makes no contribution towards the rate bill, which in many cases is unfair on the young person.
The present system of rates is not an unfair tax, but the poll tax will shift the rates burden from those who are better off to those who are poor. The Government say that it is unfair for a widow who is living in a big house to pay the same as a family of five people. I have calculated some figures relating to my constituency. In Corrour road there are two adjacent properties. In one lives a widow who is paying £1,500 in rates. The Government would say that that is an unfair burden, but I know that she is a wealthy widow who has been left very well off and that she can afford to pay that amount. Next door is a family of five adults. They are also paying £1,500 in rates. If one calculates the sums involved, the widow will be over £20 a week better off under the poll tax. She will pay only some £290 instead of £1,500. But what about the family of five adults next door? They will be paying some £1,300 a year, which is less than they are paying now. The well-off large family will still be better-off. The widow will be much better-off, the family will be marginally better-off, but they will both be better-off.
Who will pay for the family and the widow to be better-off? It will be people such as another widow who lives in my constituency in Castlemilk. That widow will be worse off because whereas at the moment she pays nothing because she receives a full rates rebate she will now have to pay a minimum of 20 per cent. That 20 per cent. will have to make up for the wealthy widow being £20 a week better-off.
The widow in Castlemilk will conscientiously keep herself on the register, but it will be extremely difficult for local authorities to compile that register. During the election I knocked on a door in Hillpark in my constituency and the lady who answered the door said that she was voting for me. I looked at the register and asked whether her son was voting for me and she said, "Yes." I said, "What about Mr. and Mrs. Parker who live here?" She said, "No, they do not live here, they were the previous tenants and they moved to England three years ago." Yet they were still on the electoral register.
§ Mr. Maxton
That may happen, but who will track them down?
Despite all the denials in Committee, there is no question but that the major source of information for the 874 poll tax register will be the electoral register. The person who compiles the poll tax register will have to choose between employing large numbers of people or obtaining the information from the electoral register. Finance officers in the Lothian region say that a minimum of 50 people will be needed in that one region to go around continuously seeking information, doing a lot of prying into people's personal affairs and knocking on door after door.
The person compiling the register would have to search for the other couple who lived in the Hillpark house to ascertain whether they were living there. Will officials have the power to say, "You say that they moved to England three years ago, but we want proof. We want to come into your house. We want you to show us that they are not now living here." That is an intrusion into people's privacy and it is nonsense that authorities should he forced to spend time compiling the register.
My hon. Friend the Member for East Lothian (Mr. Home Robertson) has asked Ministers a question about the register. They have admitted that the electoral register is faulty in many regards. It may be between 5 and 10 per cent. out when it is compiled. Once it has been running for six months, it may be up to 15 per cent. out. How will the poll tax register be compiled? It will not be feasible. If the electoral register becomes the major source of information, as inevitably it will, people will take themselves off it to try to evade payment of the tax.
The register will present a major problem. Some people will not pay the tax because there is a register. Others will not pay it because they will evade it. They will say, "We will not pay," or "We cannot afford to pay." In the past. I have given the example of the 80-year-old widow in the middle of February who lives alone in her damp house in a part of Glasgow and who will be given the choice—I agree that it will be her choice—as to whether she pays her electricity bill and keeps her house heated, or turns on the fires, knowing that she will not be able to pay the bill. or pays the poll tax. That is the choice that she may well have to face. To the Minister and, I admit, to me, it is only a few pounds and it does not mean very much, but, to a widow living alone on her old-age pension and perhaps supplementary benefit, it is a large sum. I wonder whether the Minister, when he hears of someone dying of hypothermia following the poll tax, will have the same sang-froid about this nasty business.
Young people will try to evade the poll tax. Other people will be forced to pay it. There will be the ludicrous sight of local authorities using the full rigours and whole panoply of the law, including warrant sales, to try to get back £50, £60 or perhaps even £20 or £25. The tax will be collected monthly and the authorities will say that they must ensure that it is collected within six months. The law officers will be chasing people for these paltry sums. In some cases, it will cost more to collect the debt than it is worth. Local authorities will eventually tell the Government, "It is just not on. We will not do it. We are not prepared to see young people harried from address to address to get the money. We are not prepared to put officers into an old-age pensioner's house to take away the television set to pay her poll tax. If you want to do that, you can, but we will not."
We are creating a nightmare to which Conservative Members seem to have woken up. They now realise that the proposed system is unfair, unworkable and undemocratic. The right hon. Member for Old Bexley and 875 Sidcup (Mr. Heath), the right hon. Member for Henley (Mr. Heseltine) and the hon. Member for Ealing, Acton (Sir G. Young), who was one of the leaders of the campaign and advocated the experiment in Scotland, have all come out against the poll tax, although most of them supported its introduction in Scotland. They realise that what happened to the Tory party in Scotland as a result of making the poll tax a major part of their campaign may well happen to them in the next general election. They realise that they may be wiped out just as the Scottish Tory party was.
Perhaps the Secretary of State for the Environment was right when he said on radio that but for the poll tax the Scottish Tories would have done considerably worse. Perhaps the Minister is delighted that the poll tax was introduced because he would have lost his seat without it. Although I would like to believe that that theory is correct, I believe that the poll tax lost the Conservatives votes in Scotland and that English Tory Back Benchers are afraid that the same will happen to them.
If there was any democratic justice, if the Government had any regard for Scotland and the wishes of the Scottish people, if they had any desire to have the wishes of the people of Scotland properly represented, they would withdraw the tax immediately. Whether they continue with their plan in England and Wales is up to them, but they have no mandate to continue with such an iniquitous tax in Scotland, and they should withdraw it.
§ The Minister of State, Scottish Office (Mr. Ian Lang)
I congratulate the hon. Member for Glasgow, Springburn (Mr. Martin) on his success in the ballot and on his choice of subject for debate, although not on the timing of his success.
I was not sure whether the hon. Gentleman's theme would be whether or how the Abolition of Domestic Rates Etc. (Scotland) Act 1987 should be implemented, so I shall try to cover both. I should like to thank the hon. Member for Glasgow, Cathcart (Mr. Maxton) for congratulating me on my promotion—and, I think, by implication, survival. We have debated this matter across the Committee Chamber at about this hour more than once, so this is familiar territory although I disagree with his assessment of why so many of my colleagues lost their seats at the last election.
The real issue which underlies the debate and which has not been touched on much is the fact that the present domestic rating system is discredited and that the Abolition of Domestic Rates Etc. (Scotland) Act 1987 contains the only workable package on offer for doing anything about it.
§ Mr. Maxton
I wonder how the Minister can claim that the rating system is discredited in Scotland when the only party that stood fair and square for it and made that clear was the Labour party, which gained nine seats.
§ Mr. Lang
The hon. Gentleman points out that the Labour party received fewer votes than it received not just in 1979 but I think in every election before that since the war. I do not agree with the hon. Member for Cathcart as to the effect of the issue on the electoral result, but I am interested that he confirms the continuing commitment of 876 the Labour party to the rates system. That is a sad reflection on the lack of constructive thought in the Labour party on this important and fundamental issue.
I make no apology for reminding the House what is wrong with domestic rates. I shall do so briefly, because our proposals were debated at great length and in great detail last Session. We spent something like 125 hours in Committee alone.
First of all, domestic rates are unfair. The bulk of local authority services relate to people rather than property and payment for them through a property tax is therefore unrelated to the use that individuals make of those services. A good deal of time in our earlier debates was spent comparing the hypothetical single person with the hypothetical family of four adults in an identical house next door who pay the same amount in rates. The message which came across very clearly was that our opponents do not care about the predicament of single people in that position. They are also unfair because they are paid by too few people. Just under 50 per cent. of the population are ratepayers and, as the hon. Gentleman said only 29 per cent. pay full rates, while the balance have partial or full rebates. This means, quite simply, that the burden of local authority expenditure is unfairly placed on too few shoulders.
Secondly, domestic rates are illogical. They depend on a system of valuation which takes very careful account of the factors that may affect the rent that a particular property might command. But this has reached the absurd position where, for example, someone will pay more for local services—having their bin emptied and things such as that—if he has a double garage where the cars sit side by side compared with one where the cars have to he parked end on. This sort of thing simply has no relation to the question of paying for local government services.
Thirdly, the rating system inevitably means the turmoil of revaluation. We saw the effects of that in Scotland in 1985 when revaluation faced many Scottish householders with what were seen as quite arbitrary and unpredictable impositions. Over 100,000 householders faced increases of more than one third in their rate bills between 1984–85 and 1985–86.
It seems that our opponents have no answer to those problems. So far as one can discern what Labour party policy would be—and neither 125 hours in Committee nor the Scottish manifesto gave many clues in that area—it would involve the retention of rates on the basis of capital values. That would do nothing to remedy the unfairness or illogicality that I mentioned. The alliance, if we can still call it that, would like local income tax, as would the Scottish national party, as the hon. Member for Moray (Mrs. Ewing) mentioned, but it has never come forward with properly worked out proposals of its own. Again, after 125 hours of Committee, we still eagerly await the full details of its proposals.
The hon. Member for Springburn emphasised the circumstances of poor families and the pressures on young people to leave home, but the young will be eligible for rebates assessed on their own circumstances and not on a family or household basis.
During the course of the ADRES Bill through Parliament it was repeatedly made clear that the provision of a rebate scheme was an essential part of the community charge proposals, and provision is made for such a scheme in the Act. I confirm that a rebate scheme remains a key element of the Government's proposals.
§ Mr. Michael J. Martin
Will the Minister at this stage, before the poll tax is implemented, send out circulars or make them available in housing estates and libraries to explain what rebates those young people will receive?
§ Mr. Lang
It will be our intention to publicise widely the way in which the scheme operates when it is introduced and ahead of its introduction. Therefore, I feel certain that that point will be met as matters proceed from now on.
The Government remain committed to the essential philosophy of having a minimum contribution that will go some way to restoring a sense of local accountability, which is lacking at present. Equally, it is recognised that the minimum contribution means that many people will, for the first time, be making a contribution towards their rates. Thus, when the rates for income support are set in the autumn of this year—this meets the point raised by the hon. Member for Cathcart with his example of the widow and her heating difficulties they will include the average amount that we expect householders who are income support claimants to have to meet as their minimum contribution to domestic rates. That means that claimants will be compensated for the average minimum payment that they will have to make but, at the same time, preserve the vital principle of local accountability.
Our intention with regard to rebates, therefore, gives the lie to the repeated claims that the community charge is unfair and takes no account of the ability to pay. It is remarkable that, after lengthy debate of the community charge proposals during the Bill's passage through Parliament, that point still has not got through.
The hon. Member for Moray mentioned ministers of religion. The personal community charge is a personal liability which does not depend on residence at a particular address or directly or indirectly on the nature of a person's employment. The Government do not, therefore, propose to replicate in the new system of community charges any equivalent of the tax concessions that are at present available in respect of payments made by employers towards the rate liabilities of employees who, like ministers of religion, are required to occupy particular domestic property as a condition of their employment. It is in a personal capacity that they will have liability and it is in a personal capacity that they, like others, will be eligible for rebates depending on their circumstances.
§ Mr. Maxton
The Minister said that the Government are not going to take account of people's professions. Surely it is true that the Government are going to take some account of those who are in the armed services and who, having been stationed in England or Wales, move to Scotland. Surely the Government are going to ensure that they get some extra payment in order to pay the poll tax. I understand that the idea is that they should be paid an overseas allowance for being stationed in Scotland.
§ Mr. Lang
The hon. Gentleman is raising a different issue altogether. I was replying to the point raised by the hon. Member for Moray concerning ministers of religion.
The hon. Member for Moray raised some other specific cases on which I shall comment briefly. She mentioned crofters, whose circumstances were discussed extensively at all stages of the Bill. The circumstances of crofters are very diverse and there is no case for singling them out for special treatment under the new system of personal local taxation. Rebates will be available for those who need them. The hon. Lady also discussed farm workers; that 878 will be a matter to be settled between employer and employee. It is not something on which the Government should attempt to give a hard and fast line. Payments made as part of contracts of employment will be a legitimate business expense; that was made plain during the passage of the Bill.
I shall now turn to the process of implementation. My right hon. and learned Friend the Secretary of State has already made clear our intention to proceed with the implementation of the Act. The first step will be to make a commencement order under section 35. No parliamentary procedure is involved in this process. I envisage that a draft of the commencement order will shortly be the subject of consultation with the Convention of Scottish Local Authorities and, while I cannot yet give a firm date, I envisage that commencement will take effect before the end of August.
Bringing the Act into force will mean, for example, that assessors will then have the functions of community charges registration officers, whose functions are to prepare, maintain and keep up to date the register. We envisage that preparatory work will be carried out over the coming months, with the process of convassing beginning in spring or early summer of 1988. The detailed rules for the operation of the new system will be set out in a number of regulations to be made by my right hon. and learned Friend over the next few months. It may be helpful if I sketch out the main framework of these. We expect there to be about half a dozen main sets of regulations, of which the most significant are as follows.
First, there will he a set of regulations dealing with the definitions of domestic subjects, which are, of course, those on which no rates will be payable in future. The basic definition in the Act covers properties that are valued as houses at present, and the purpose of the regulations will be to include certain other premises, at present non-domesic, where people live. These will mainly comprise various forms of institutional accommodation such as halls of residence and nurses' homes. It was made clear during the passage of the Bill that residential care homes, nursing homes and hostels providing care on a similar basis would not be made domestic subjects, so that they would remain liable to rating and their residents would be exempt from the community charge.
The domestic subjects regulations will also have to deal with fairly complicated matters such as the definition of domestic garages to ensure fairness of treatment for those which are valued with dwellinghouses and those which are not. Again, the hon. Gentleman may recall echoes of that during our debates in Committee.
A second important set of regulations will be those relating to registration procedures. In sections 13 to 20 of the Act, there are a number of powers of prescription relating to the form and content of the register, the start of the canvass and the content of canvass forms, the notification to individuals of the contents of their register entry and the time limits within which they may appeal in various circumstances.
Thirdly, there will need to be regulations making definitions affecting the liability of certain groups. The most obvious example is students, who, by virtue of section 8 of the Act, will pay only a reduced percentage of the community charge. It has been made clear that this will be 20 per cent., in line with the minimum contribution which will be paid by those who are entitled to the 879 maximum rebate. Other definitions will be required under section 30 to provide for the exemption of prisoners in custody and long-stay hospital patients.
A further set of regulations will be needed to lay out the timetable for setting community charges and non-domestic rates to replace the present rate-setting timetable. This will have to take account of the need for the system to be able to handle the issue of a greater number of bills, so the timetable for setting rates and community charges will probably be earlier than it is at present. The collection of community charges will also require regulations—for example, to set out the information which is to be shown on community charge bills.
There is a considerable list of regulations, but work is well advanced on the preparation of the necessary material as a basis for formal consultation in the fairly near future. To help the process of implementation, we have made arrangements for a study to be carried out to prepare a specification of computer system user requirements. We intend that this should be made available to local authorities next month, and wer are confident that it will be helpful to them in providing a basis on which to design their own systems.
§ Mr. Maxton
The House would be grateful if the Minister, in dealing with the regulations that he will have to put before the House, would give some idea of the time scale on which the regulations are likely to be placed before the House and also what parliamentary procedures they will he placed under. Will it be a positive or negative procedure in terms of statutory instruments? Obviously, Opposition Members are extremely concerned about that. We assume that each will be placed as a separate statutory instrument that can be prayed against or debated.
§ Mr. Lang
I have stated the number of regulations that will be required and which will embody a number of different provisions, as I have described them. As to the timetable, it will be in this Session of Parliament. I do not anticipate that any instrument will be laid before the 880 House before we adjourn for the summer recess. My understanding and recollection is that they will he laid under the negative procedure.
I hope that this somewhat detailed explanation of the next step towards implementing the Act has been helpful to the House, particularly in demonstrating the extent to which progress is being made on the development of the detailed rules.
In recent days, much has been made of the proposition that the Government's proposals for England and Wales may be changed as they go through the House. Although it would be quite wrong of me to anticipate what may be done here or in another place. I am confident that the fundamentals of the reform already enacted for Scotland will in due course apply to England and Wales. Scotland is not a guinea pig, as the hon. Member for Moray said. Rather, Scotland is the trail blazer. Scotland is having the advantage of the provisions because the need for them in Scotland was made much greater during the course of the past year or so.
§ Mr. Lang
I would rather not give way. The hon. Gentleman was not involved in the debate.
But I can make it clear that, if refinements are made to the proposals, we will of course consider whether any parallel changes need to be made in Scotland. None of this is, however, in any sense a justification for delaying the timetable of implementation so clearly set out in the Abolition of Domestic Rates Etc. (Scotland) Act and so clearly approved by Parliament.
The debate has been valuable in enabling me to place the Government's position clearly on the record; first, to reaffirm our determination to abolish domestic rates and to demonstrate the fairness of our proposals, in contrast to the hopeless inadequacy of the position of the Opposition; and secondly, to make it clear that we will he proceeding with the implementation of the 1987 Act on the basis that we have always envisaged, so that the benefits of these changes can be enjoyed by the people of Scotland without further delay.