§ Mr. Richard Caborn (Sheffield, Central)
It is nice to see you in the Chair, Madam Deputy Speaker. I hope that you will continue to show the fairness that we saw when you were a Committee Chairman, that you will allow Back Benchers to intervene from time to time and that you will control Front Benchers. I thank you also for allowing a three-hour debate on the important subject of local government finance. The number of applications for this debate clearly shows the interest and concern of many hon. Members.
§ Mr. Caborn
I have no doubt that they will come in from the Tea Room and other places in the Palace in the not-too-distant future.
The concern about this subject can be broken down into three main aspects. The first is the difficulty faced by many local authorities in meeting their daily commitments on behalf of the communities they represent, especially in the main conurbations where many of the problems of housing, social services, education and deprivation are evident and, some would say, reaching crisis proportions. Local government and public representatives have to meet and cope with those problems in difficult financial circumstances.
The second matter concerns the introduction of the new community charge, which was clearly outlined in the Gracious Speech only a few days ago. No doubt many hon. Members will try to catch your eye, Madam Deputy Speaker, to speak in more detail on that than I have time to do.
The third aspect is the way in which, over the past eight years, the Government have manipulated the financial arrangements, along with other local government legislation, in a manner which is best described in the words of the Financial Times:the Government have no coherent strategy or philosophy for the future of Local Government in Britain.At worst, it can be called deliberate financial strangulation and drip-feeding of poison into local government, led by the Government Front Bench, aided and abetted by the gutter press, especially the tabloids. They have attacked local government with unfounded allegations, although facts never stood in the way of a good story in the tabloids. Unfortunately, the worst venom has been reserved for our local authorities. The present financial constraints do not even allow many local authorities to carry out their minimum obligations. About 42 Bills passed in the last few Sessions tried to strangle local authorities.
That attitude forced even the Audit Commission to concludethe position of Local Government in many of the areas has become impossible.Many people inside and outside the House are asking: is the problem just hatred of local government, as fostered by the Prime Minister and the Secretary of State for the Environment, or is it that the impossibility to which the Audit Commission referred is deliberately designed to limit the role of local government and place that limited role to the Government's advantage or to create the conditions for local government's abolition?
Tragically, over the past eight years, democratic trade union rights have been removed and a tier of local 778 government abolished. We must question the conditions imposed by the Government, particularly on local authority finance. Are the Government trying eventually to abolish or greatly curtail local authority control? Are they trying to build the centralised administration that many of us fear? The Gracious Speech implied that education could become far more centralised. I suggest that the Government are taking us towards that type of administration. That was underlined clearly in an article in the Sunday Telegraph on 5 July:Meanwhile, Mrs. Thatcher has ordered ministers to take the offensive over the controversial community charge and over the inner city programme. The aim will be to lay the blame for squalid housing and urban deprivation at the door of the Left-wing councils which, ministers say, care more about extremist politics than people.That is not the idea that is even now emanating from the Palace. The Palace is trying to bring communities together. However, it is clear that, to the Prime Minister, confrontation with local government is the order of the day. During the election campaign. the Prime Minister declared that she intended her third term to see the removal of Socialism from the face of the United Kingdom. Her vindictive approach to local government could be seen in that context. She wants to limit the role of local authorities because she knows of the strong role that Socialism maintains in our major inner-city areas in the north. She sees local authorities as a legitimate target.
It is true that the Government are now putting forward proposals to assist the inner-city areas. If they are not trying completely to resurrect the industrial base, at least the Government are attempting to rebuild the inner cities and provide safety valves to alleviate what could be a major problem in the future. However, all the proposals are bypassing democratically elected local councils and disregarding the views of people who have spent years in the localities, who have been put where they are by the ballot box and who know the feelings of the people they represent. Unfortunately, the Government want to try to bypass the democratic process.
The Government's cynical approach to local government has not gone down particularly well with Conservative Back Benchers. That was highlighted by the statement of the previous Leader of the House, who was quoted in an exclusive interview in the Sunday Telegraph on 5 July as saying that the Prime Minister now acted more like Stalin. I think she could probably teach the Soviet Union a lot about centralism.
Last Friday, the hon. Member for Harrow, East (Mr. Dykes) said, in reply to the remarks of one of his hon. Friends who was rather enthusiastic about the removal of Socialism from the face of the United Kingdom:We cannot say that our mission in history is to eliminate Socialism; that is a function of the will of the people.He said that people would only reach the same conclusion as the Conservative party ifwe produce attractive policies that appeal to the whole electorate. Our national share of the vote did not increase last time; it fell slightly. The workings of the electoral system gave us another big majority in the House, but we know that people do not agree with our policies. We must persuade them. We cannot simply bash them on the head and insist that they accept our policies."—[Official Report, 10 July 1987; Vol. 119, c. 654.]Unfortunately, we are getting used to the style of government that bashes people on the head. However, many Conservative Back Benchers are even now 779 challenging that type of Government, and the dogma of the Government Front Bench, particularly towards local government, is becoming unacceptable to them.
What is the case against the Government's financial manipulation during the past eight years? We have a whole new jargon written into local government vocabulary, which includes financial targets, rate capping, precepts and the rest. Ironically, the constraints implicit in that vocabulary have not applied to central Government. Between 1980–1981 and 1985–1986, central Government expenditure increased by 51 per cent., while local authority spend over the same period increased by 32 per cent. That clearly shows that the criteria apply to local government but not to central Government.
Since the Government took power in 1979, we have seen two major developments in local government finance. As I said, there has been an increase of some 32 per cent. overall since 1980–81, but capital expenditure has gone down by a staggering 44 per cent. in real terms. Current expenditure is expected to remain virtually static in real terms over the rest of the planned period to the 1990s, but capital expenditure is expected to continue to fall over the same period. Current expenditure is rising by an average of 2 per cent. to 3 per cent. per annum in real terms and net capital spending is Calling by 6 per cent. to 7 per cent. per year in real terms.
A closer look at the details of local authority current expenditure in England shows that the Government have succeeded in changing the distribution of that spend. Spending on social security, housing benefits and law and order are now taking a significantly larger share of spending than in 1979–80. Education, the local environment, transport and housing consume a much smaller proportion of the total than in 1979–80.
The cut in capital expenditure goes to the heart of the problems of our inner cities. If it is not defused, the time bomb planted in our inner cities over the past eight years could reverberate well beyond those areas. It is rather ironic that, while we have been called upon to improve our infrastructure—in transport, energy and education—central Government have been cutting the very means that would make it possible.
I shall take Sheffield as an example to illustrate what I have said. In 1981–82 the housing capital account had an allocation of £19.2 million; in 1987–88 the allocation is £17.3 million—a reduction of over 10 per cent. That is before allowances have been made for inflation. The increase in the retail price index over that period was 36.6 per cent. For education, capital expenditure was £3.2 million in 1981–82, which has now been reduced to £2.6 million. That comes after a report at the end of a two-year study conducted by Her Majesty's inspectors, which came out in favour of Sheffield education authority's services, expenditure and curriculum, and gave a glowing report. We had favourable press releases and comment even from the Department of Education and Science. But although the report said that we managed our financial affairs to the benefit of the pupils and the service in general, there has been a 20 per cent. cut during that period—again before allowing for inflation.
Community services have also borne the brunt of the cuts, especially in the inner cities. There is an average of 30 per cent. unemployment in Sheffield, Central and of about 50 per cent. in the inner city. But our community services budget has been cut by about 40 per cent., again before taking inflation into consideration. Some may 780 argue that revenue expenditure has increased. In 1981–82, 51 per cent. of Sheffield city council's expenditure was financed through central Government grants—specific or supplementary grants and the block grant. For 1987–88, the proportion has fallen to 48 per cent. The city council's expenditure increased in cash terms by 36 per cent. between 1981–82 and 1987–88, because the city council took over responsibility for the metropolitan county council services in 1986–87. That expenditure increased to 52 per cent., and the ratepayers are having to foot the bill for the reduction in the percentage that used to come from central Government.
The Secretary of State's ignorance was shown on 1 July, when he attacked my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett). He said:There can never be enough public money to do everything through municipal ownership, nationalisation and services provided by highly unionised public sector services, It is inherently inefficient, and, worse, the necessary level of rates drives businesses and business men alike away."—[Official Report, 1 July 1987; Vol. 118, c. 534.]I do not know where the Secretary of State got his brief from, or whether he occasionally goes off his brief, but we should consider the spend on the private sector in Sheffield in 1984–85. Sheffield's total budget for that year was £262 million. Of that, slightly less than £100 million—38 per cent.—was spent in the private sector or on agencies outside the control of the local authority. The false picture has been painted that all the revenue that goes to a local authority is designated within that authority. That is totally untrue. The private sector, especially builders and architects, have said that the cuts experienced during the past eight years and the strangulation of local government have had a major impact not only on the viability of their businesses but on their survival. The Secretary of State should know better than to make such statements.
The Government, aided and abetted by the gutter press, in their attempt to limit the role of local authorities, have painted a picture of irresponsible councillors of all parties. They have said that local government does not serve the community, but then they come up with the poll tax. On 29 June this year, the Secretary of State said that the rates bill for the average household in Sheffield will increase from £371 to £496—an increase of 33.7 per cent. The Minister will know that that is only half the story. Much of the increase will fall on those who can least afford it. If the Bills introducing the poll tax go through the House—they may be opposed by some senior Conservative Members—they will represent another blow to those who can least afford it.
If the Government continue to attack under-resourced local government, they will be in breach of the consensus that has been accepted for many years: that local people who are democratically elected should have a say in how the money is spent. Crude though it may be, we have used the rating system for the redistribution of wealth generally. More than that, we have used it to develop the infrastructure of the more deprived areas so that we can attract industry. That consensus has now clearly been broken. Many Conservative Members and outside agencies, in documents such as "Faith in the City", have said——
§ Mr. Caborn.
I will give way in a moment.
781 It has been pointed out in documents drawn up by many institutions outside the House that we are building that time bomb. Unless the Government start taking note of what people in various localities are saying, not only will they break that consensus but there will be major problems for the inner cities.
§ Mr. Favell
Will the hon. Gentleman say a word about the unified business rate and how that will affect Sheffield? Will it not reduce the charge to businesses substantially and is not unemployment the major problem facing Sheffield? Would not a reduction in overheads of businesses be welcome to Sheffield?
§ Mr. Caborn
Obviously a reduction in charges would be of some assistance to any business. It depends how one accepts responsibility within a community. When the Government destroyed the cheap fares policy that was supposed to be a massive burden on ratepayers, the removal of that redistribution of wealth fell heavily upon industry. Where the net reduction in the family budget was about £10, people put in for wage increases to combat it.
If the hon. Member for Stockport (Mr. Favell) speaks to business men in the centre of Sheffield who have lost a tremendous amount of business because people cannot afford to travel there, he will find that business activity has reduced considerably. If he talks to industrialists about high interest rates, the high value of the pound and energy costs over the eight years of the Government, he will find that rates pale into insignificance in terms of a vibrant manufacturing base in the city of Sheffield. Any industrialist will tell him that they will always moan about the rates, but that the real cause of the decimation of the industrial base is clearly the economic policy that has been pursued by the Government, which has strangled that manufacturing base with high interest rates, an overvalued pound and energy costs.
I hope that the Government will take on board what has been said not just by Opposition Members but by Conservative Members—that if they do not start treating local government in a manner more befitting the type of civilised society in which we live, they will reap the consequences.
§ 9.7 pm
§ Mr. Michael Fallon (Darlington)
The House is indebted to the hon. Member for Sheffield, Central (Mr. Caborn) for giving us such an early opportunity to debate local government finance. I suspect that it will not be the last opportunity and that we shall debate the subject again and again over the next few months. If we continue to do so in the atmosphere of calm authority that you, Madam Deputy Speaker, bring to our proceedings, we shall all he very grateful.
No new tax or charge will be popular. It is no surprise, therefore, that the Opposition have latched on to the proposed local government finance reforms as a key part of their political attack on the Government. Nor is it any surprise that some of my hon. Friends have expressed, and may express during this debate, occasional reservations about some of the details of the reforms that have been proposed. Many criticisms have been made and will be made about the community charge. Almost all of the criticisms that I have heard so far can be answered.
782 First, it has been suggested that the new community charge is not to be based on the ability to pay. Of course, rates were not based on the ability to pay and many of those who will benefit under the community charge—single people, pensioners and single-parent families—were unable, in many cases, to pay a high rates burden but will be able to afford the lower sum that the community charge represents and will be grateful for the reduction.
Secondly, it is suggested that the community charge will benefit the better off. That seems a rather curious argument. The community charge applies to working couples on good salaries and it may well be that in certain areas—we could call this the Dulwich argument—their community charge, if two of them are earning, will be less than their existing rate demand or less than that of others who are not in such fortunate circumstances, who are not earning as much, but who happen to be living in the same borough. However, it is a false argument. The community charge will account for only 25 per cent. of local government finance. Another 25 per cent. will come from the business rate, but, more importantly, the remaining 50 per cent. will continue to come from central Government. Those who keep saying that the community charge will help the better off have not taken that on board. That is a crucial point. Those who pay higher rates of income tax will be making their contribution to that 50 per cent. of local government finance. In fact, they will be paying twice as much towards local government in their income tax as they will through the community charge.
The Dulwich argument is not simply false but is rather curious coming from the Opposition. They are saying that some people who are better off will be paying a little more towards their public services. Where have we heard that before? We heard that from the Labour party throughout the election campaign. The Labour party was appealing to the sense of community and sense of obligation among those who were better equipped to pay. I find it rather odd that the Labour Members should now style themselves as the defenders of the prosperous bourgeoisie, and are concerned that its pockets should not be pinched further by the community charge when they were suggesting just a month and a half ago that those same people would be quite happy to pay a little more. Indeed, some of the people who are now complaining about the community charge are the very people who told us two months ago, perhaps on the doorstep, that they did not need the tax cuts that the Chancellor provided in his March Budget. They said that they did not need the extra £100 or £200 a year, but they are now squealing across the suburbs and the home counties at the prospect of paying an extra £50 in a year through the community charge.
The third criticism that I do not understand is that the community charge will not help the north. It is true that in some areas of the north, particularly in Yorkshire and the north-west that happen to have that fatal combination of historically low rateable values and high spending Labour councils, the individual may be paying more through the community charge than he pays at present in rates. However, that ignores the other central reform in our proposals, the reform of the non-domestic rate and the introduction of the national non-domestic rate. Of course, that would lead to substantial reductions in the business rates burden. I can speak only from the point of view of my own region. It is already estimated that business rates will fall by about 40 per cent. in places such as Newcastle, Middlesbrough and other towns in the north-east.
783 It is also calculated that the total benefit to the north—even as the Opposition style their geographic north—will be about £700 million a year. That is a considerable sum. It is three times what the Government are spending on their regional aid budget at the moment, and it should not be ignored by anybody who believes in the urgent necessity of regenerating the economy of the north.
Fourthly, it was suggested by the hon. Member for Sheffield, Central, who introduced the debate and has already fled from the Chamber, that somehow the reform is centralist and that it will undermine local democracy. That is one of the weaker arguments to be mounted against the community charge. I suspect that, as time goes on and we debate the proposal, we shall hear less of such an argument. The strongest argument for the community charge is that it will strengthen local accountability because it will directly improve the responsibility of local government.
Of course, if council rates continue to be high until the introduction of the community charge, and if councils continue to be high spenders and ignore central Government advice on spending targets, as they have done for four or five years, the community charge may be high. Councils may find that electors will pay even more than they pay at the moment. But it will not be for the Government or for my right hon. Friend the Secretary of State to make the decision. The decision to enforce a higher community charge will be for local councils. They will have to account for it in due time. Indeed, if they consistently impose a community charge that is higher than the national average, it will be transparent to their local electors in a way in which present rate levels, caught up in the complexity of grant-related expenditure—GRE and all the other synonyms of local government finance which have baffled the House for the past four or five years—are not. For high spending local authorities, the logic of the community charge is absolute, and for them there will be no hiding place. Fifthly, I cannot accept the criticism that the community charge may be unfair. No system of local government could be more unfair than our present rating system. No account is taken of ability to pay, of the extent to which people use local services, or of the need to involve a much larger number of people in local democracy. No account is taken of the need to redress a situation in which 35 million people use local services but 20 million people do not pay rates. We must remove the absurdity in some central urban areas such as in Manchester, where only one in four adults pay any rates. That is not only absurd in principle but pretty tough on the man who pays rates.
I have already said that I believe that almost all criticisms of the community charge that I have heard can be answered. Indeed, I have no doubt that those criticisms will be answered admirably and efficiently by my hon. Friend the Minister when he replies.
However, I have heard one criticism from outside the House to which I believe my hon. Friend should address himself if he has time. The criticism is that this sensible reform of local government finance is not, at the moment, being linked to any reform of local government structure. My hon. Friend should bear in mind the consequences of the reform that he will be promoting. Once we have a local government that is locally responsible and truly accountable to its electors, I believe that it will make no sense to continue with the two-tier structure of local government. We should reconsider, as recommended years 784 ago by Redcliffe-Maud, single-tier, all-purpose authorities responding to local demand in a much more effective way than at present.
Such is my single note of reservation. I hope that my hon. Friend can satisfy my question. There will be many more debates on this subject. I hope that when criticisms are made of the community charge they will be better founded in fact and based on a better grasp of what the Government are seeking to do.
§ Mr. Menzies Campbell (Fife, North-East)
I hope that it will not be thought presumptious or unduly prococious of the part of a maiden speaker to offer you, Madam Deputy Speaker, my congratulations on your new appointment. May I express the wish of those on the Liberal Benches that you enjoy your appointment and occupy the Chair for a long time to come.
I am grateful for the opportunity afforded to me to make a maiden speech in this House. I do so attended with all the apprehensions to which maiden speakers are traditionally subject. In the spirit of that tradition, I wish to begin by referring to my predecessor, Barry Henderson.
Barry Henderson served the constituency of Fife, North-East sincerely and conscientiously during the time he was its Member of Parliament. To me he was a courteous opponent, and he was gracious and generous in defeat. However, none of those qualities, admirable in themselves, was sufficient protection against the condemnation by the electors of Fife, North-East of the party of which he was such a loyal supporter. Some of the condemnation was especially reserved for the community charge, or the poll tax as it is colloquially described north of the border.
I trust that we on the Liberal Benches may be forgiven some small self-indulgence from the realisation that the constituency that returned Mr. Asquith for so many years has once more returned a Liberal Member of Parliament.
The House will be aware that within my constituency lies Scotland's oldest university, founded in 1411. That university has a long noble tradition of scholarship in the arts and sciences, in teaching and research. The maintenance of that tradition is becoming increasingly difficult in the present climate. Research, in particular, is an issue of considerable controversy within that university. It is universally recognised within the academic community that research for its intrinsic merit is an essential feature of a vigorous and healthy university. It must surely be accepted that scholarship should not lightly be sacrificed to commercialism. However, that is an inevitable consequence of Government policies towards universities.
Since 1980, St. Andrew's university has suffered a cut of 21 per cent. in real terms in University Grants Committee funding. It has survived only by the skilful management of its investments and by a robust programme of recruiting foreign students who pay full fees. Obviously, that programme has been acompanied by a reduction in opportunity for students from the United Kingdom. Indeed, it may not be long before that institution is staring deficit in the face. One may think that that is hardly conducive to the role that is required of it during the last part of the 20th century.
This debate is concerned with local government finance. Anyone who listens to those who are involved in local government on a day-to-day basis will readily accept 785 that many of the difficulties that local government faces arise from the continuing reduction in central Government's support for local government. In Fife, North-East, for example, if the housing support grant stood today at the same level as in 1979, the rents for council houses would be £6 per week less. Until that reduction in central Government support is halted, the pressure on local authorities will continue to be acute and damaging. To suggest, as appears to have been suggested in the House a few moments ago, that the community charge will bring a solution to the many problems of local government financing seems to ignore the fact that the community charge, of itself, will create its own difficulties.
Of course, it is accepted that rates are universally discredited, although from time to time one feels that, as a means of raising local taxation, rates still enjoy some support from Labour Members. The replacement of one regressive tax by another is no solution. The community charge, or the poll tax, must be regressive and unfair; otherwise there would not be any need for rebates. If it were essentially a fair charge, there would not be any necessity to make allowances for those whose personal circumstances were such as to make them unable to pay. A tax that will benefit mostly those who earn over £350 per week is self-evidently unfair.
We argue, as we have argued for a long time, that the only fair system of raising local taxation is by a local income tax based on the ability to pay. If ability to pay is recognised as the proper measure for raising taxation on a national, United Kingdom-wide basis, why is it denied that the same basis should be applied to local taxation?
If the Government were to undertake to restore the level of central Government support to what it was in 1979 and to introduce a local income tax along the lines that we have argued, real progress could be made in the financing of local government. I look for that, but so far I have been disappointed.
§ Mr. Tony Baldry (Banbury)
It gives me great pleasure to follow the maiden speech of the hon. and learned Member for Fife, North-East (Mr. Campbell), who spoke with great clarity and coherence and who, I am sure, will make many more speeches in the House. I understand that he is an advocate, and I welcome him to the small band of lawyers in the House. As his hon. and learned Friend the Member for Montgomery (Mr. Carlile), who is seated on his left, and who is a leading member of the all-party group of barristers, will inform him, we are a much-misunderstood, misrepresented and maligned group of individuals.
I welcome the hon. Gentleman also as a representative of, among other institutions, St. Andrew's university. Some of my hon. Friends have, for a number of years, been trying to contain the influence of St. Andrew's university on the thinking of the Conservative party, but with not as much success as some of us would have liked. Therefore, for many reasons, we welcome the hon. and learned Gentleman into the House and look forward to hearing from him on future occasions.
I should like to make several straightforward points about the rating system and local government finance. First—this is an important point—no one will lament the passing of the present domestic rating system. It is an 786 anachronistic system, which owes much to the old concept of the window tax and which is riddled with anomalies and unfairness. An elderly widow who is a pensioner may well, for example, be liable to pay exactly the same rates as her neighbours, where perhaps both husband and wife go out to work. That cannot be a fair system.
The present rating system gives every incentive to local councils, such as Oxfordshire, to be profligate and to write cheques on other people's bank accounts because on average only half of those who can vote must foot the bill for any extra spending. The present rating system gives no real incentive to local councils to be prudent as they have little accountability to those whose money they spend, often with gay abandon. Therefore, the arguments against the present rating system are many.
Secondly, if any hon. Member has any lingering support for the present rating system rather than opting for something new, such lingering support should evaporate when one considers the prospect of revaluation. The point which has not been taken on board by nearly enough people is that we could not carry on with the existing system without a revaluation, since the last was in 1973 and revaluation is part and parcel of the existing system.
In Scotland, only five years after the previous revaluation, the rateable value of an ordinary house increased from £171 to £726 and the rateable value of a modest flat increased from £405 to an incredible £1,289. Imagine what revaluation in England and Wales after 14 years would do. Inevitably, it would lead to serious disruption for many present ratepayers. Therefore, I do not believe that the present system has any friends or supporters either on the Opposition Benches or on these Benches.
Time and again during the general election campaign that was made clear on the doorsteps by many people who asked that at last the Conservatives should redeem their pledge to reform the rating system. Clearly the electors understood what the Conservatives were proposing in our manifesto which stated that we wouldlegislate in the first session of the new Parliament … to replace rates with a fairer Community Charge.Thirdly, the community charge has several clear advantages. It is straightforward; nearly every adult over 18 will be liable to pay an equal share; and there will be protection for weaker, poorer members of the community. Furthermore, the community charge will ensure both that those who spend the money will again be accountable to those who provide much of the money that is spent and that business, commerce and industry will no longer be prey to the unreasonable demands of unreasonable councils. It is an inherently fairer system as 69 per cent. of single pensioners and 83 per cent. of one-parent families will be better off.
Naturally, some critics will try to dream up as many obstacles and difficulties as possible, and I have no doubt that the difficulties they will seek to raise during the passage of the legislation will be legion, but the burden of proof is undoubtedly on them. If they do not believe that the present rating system is sustainable and they are opposed to the community charge, the burden of proof is clearly on them to come up with an alternative which combines fairness and accountablility by councillors to those who provide the money they spend.
So far, during the debate on the Gracious Speech and in press comments on the reform of the rating system, we 787 have not seen a shadow of a scintilla of any suggestion from any opponents to the community charge of any alternatives that they could devise. They will not be able to argue with any conviction that the community charge will weaken local democracy; it does exactly the reverse, because it strengthens local democracy by making those elected directly responsible to those who pay. After at least 15 years of debate and argument over the present iniquitous rating system, the Government have at last come up with a real viable alternative.
Fourthly, it is important that this point should be understood clearly by everyone—under the community charge, people living in counties such as Oxfordshire will pay more than they need to under the new system only if the county council refuses to cut spending. My right hon. Friend the Secretary of State for the Environment recently released figures that reflect what the position would have been if a community charge had been introduced this year instead of rates. The figures show that households in Oxfordshire with more than two people would end up paying more under the community charge system than under the rates system, but only—this point has been made time and time again—because of overspending and profligate spending by the county council. If the county council cut spending, the same household with the identical figures would pay £27 a year less under the new community charge than under the rates system.
We must get the message home to people that the figures clearly show that it is important that high-spending authorities such as Oxfordshire should start to identify sensible economies. It is also important that those of us who live in counties such as Oxfordshire should insist that such economies are made. There will be a real incentive for all of us living in Oxfordshire to insist that such counties begin to behave prudently and sensibly and stop writing cheques on other people's bank accounts. Nearly every adult in Oxfordshire will have a vested, direct and identifiable interest in ensuring that the county is prudent.
There are four simple points. First, the present rating system is discredited. Secondly, the community charge will be much fairer. Thirdly, the burden of proof is on those who oppose the community charge to come forward with another system, and we have seen none of that to date. Finally, under the community charge many people have the potential to be better off, but only if local authorities try to contain their spending and do not continue to pursue profligate spending policies, spending money on other people's bank accounts.
§ Mr. Harry Barnes (Derbyshire, North-East)
I thank you, Mr. Speaker, for allowing me to speak in this important debate. The debate affects all of my constituents who will be interested to learn the views of Conservative Members who have said that rich people tend not to live in large houses and poor people tend not to live in small houses. That means that under the present system they believe that things are inequitable.
I want to pay tribute to Ray Ellis, the former Member for Derbyshire, North-East. Ray would have been interested to be involved in this debate. He was a former councillor in south Yorkshire, and that county council has since been abolished. He served in this House for eight years and during that period he faced strong Government 788 opposition. When I took over from Ray Ellis, I had hoped to be in an easier position, but I face the same level of strength on the Government Benches.
The Government must realise that the election result has not given them a mandate to ride roughshod over people's feelings. Strong feelings were expressed across both sides of the political divide during the election campaign and on no point were feelings running stronger than on the poll tax.
Ray Ellis was the fifth miner to represent Derbyshire, North-East, an area which has suffered boundary changes. The first miner was a Lib-Lab, elected in 1907, who joined the Labour party in 1910. For 68 years of the intervening 80 years the constituency was served by five mining Members from Derbyshire. Among them was Tom Swain, who was well known in the House and was a fighter on behalf of his constituents in more ways than one. I have broken that tradition in that I am not a miner, but I take over the commitment to fight on behalf of mining in my constituency.
Some mining is still left in north-east Derbyshire. There are three pits, one of which is at High Moor, where Ray Ellis was for a number of years an extremely effective union branch secretary with a sound reputation for negotiating on behalf of his members. The other two pits are at Renishaw Park and Ireland. Ireland is on the boundary of north-east Derbyshire and Chesterfield and is currently the subject of closure plans by the NCB.
The NCB has also produced a hit-list of further pits in the area, such as Markham, Bolsover, and Warsop. Renishaw Park also appears on that list. Such closures would seriously affect the future employment prospects of people in my constituency.
In the three constituencies of Bolsover, Derbyshire. North-East and Chesterfield, mining is still the leading employer, partly because of the growth in unemployment within the area. Even so, the mining industry has been contracting, although jobs have been contracting at a faster rate. It can therefore be seen that mining still has a prominence in the constituency, and it is my intention to argue on its behalf and for the maintenance of the pits in those areas, particularly as they all have workable coal reserves.
I shall also defend the mining industry because of my own background. My father, relatives and my wife's father were miners. During the past 21 years I have taught both Derbyshire and Yorkshire miners, although they have probably taught me much more. In fact, three Members of this House attended classes that I have taught, and they, too, are now teaching me much more than I ever taught them.
I probably learnt more about miners' interests during the academic year 1984–85. During that time I taught two classes of Yorkshire miners, who attended rigorously despite the fact that it was the most terrifying period that they had ever gone through. Indeed, one of those miners was later killed when he returned to his pit.
My election to this House indicates that many changes are taking place in north-east Derbyshire. It is no longer an area pockmarked with pits, as it was at one time. It now contains a commuter element which centres on Sheffield and Chesterfield, of which I was a part as a teacher. Derbyshire, North-East is a socially and politically divided constituency, although not on traditional north-south lines. There is a classic east-west divide, with a strong Labour feeling in the east and a strong Conservative 789 feeling in the west. Both views should be taken account of by the Government, because to some extent it is a replica of what we now find generally throughout the country. A wise Government do not ride roughshod over differing attitudes and opinions, but seek to reconcile such conflicting interests and attitudes.
The Government's poll tax is a striking example of the problem that now exists, because in north-east Derbyshire the east-enders of the constituency will be expected to subsidise the west-enders, and that will cause uproar.
The Government are seemingly intent on creating scenarios that repeat those that we have seen in the past in Derbyshire, North-East. The eastern part of my constituency includes Clay Cross; in the western part are commuter areas such as Dronfield and Wingerworth. Clay Cross fought the Housing Finance Act 1972 for reasons similar to those that people have put forward against the poll tax. The Housing Finance Act provided for people's rents to be increased to pay for subsidies for their neighbours, and to reduce the rate burden and generally to transfer funds to the Exchequer. The poorer people were expected to subsidise the richer. But that was mild in comparison to measures instigated by the Government since and in the poll tax that is now on the cards, including reduction in rate support grant, controls being operated centrally, and the destruction of the ability and right of people to provide and act for themselves and to control things democratically. Clay Cross and the other areas in Derbyshire, North-East are unlikely to be willing to sit back gently and allow that to occur.
Financial problems in the community affect such areas as Dronfield, which, like many western areas, also has its working-class wards. In one of those wards there is a problem that requires Government finance and assistance. There is a fire raging underground near an industrial estate at Callywhite lane in Dronfield. We are seeking a delegation from the district council, the town council, firms, trade unionists and others to seek Government assistance. According to a magistrate's decision last week, the council is expected to find £300,000 to put out the fire. In terms of grant penalties, that would be £342,000—the product of a 4p rate, in areas that can ill afford it. Clearly, there is a case here for help from central Government.
The Department of the Environment has at last agreed to meet the delegation, but only after I put before the House early-day motion No. 46, signed by several other hon. Members; after an oral and a written question were put forward; and after I had tried to raise the matter on the Adjournment. Now, because we are approaching the summer recess—which I voted against—that delegation may not be met until September. That is not adequate for my constituents. Serious dangers need to be dealt with, and North-East Derbyshire district council is beginning to require assistance, particularly financial assistance.
There is an embankment of 40 to 45 ft. with a stream at the bottom. At the top of the embankment, on car park land behind firms, the temperature is 40 deg C. on the ground. At the top of the embankment the soil temperature is 60 deg. At the bottom of the embankment it is 87 degrees. Three feet below the bottom of the embankment the temperature is 630 deg C. in various hot spots. The fire cannot be put out with water; water oxidises the soil. The fire is gathering momentum; because it is growing in area it is threatening other firms and gas 790 supplies in the area. At stake in the immediate future are 300 jobs. If the district council puts up the rates and requires firms under the Public Health Act 1936 to provide the money, a number of those firms will go bankrupt. They will not be assisted by the poll tax, nor by the provision that is made for businesses; they will go by the board, and 300 jobs will have gone in an area of high unemployment. Even worse than that is the fact that the stream at the bottom of the embankment is within 100 yd of a BMX track. Children are not prevented from going to the stream; all that is provided is a warning notice. That must be acted on.
I return to Clay Cross. That struggle showed that to engage in hard battles against Government measures is not unpopular. In a recent by-election, a formerly debarred Clay Cross councillor was elected to the North-East Derbyshire district council with 85 per cent. of the votes. The Government believe that such a high vote is impossible, but that is the percentage that has to be gained to establish a closed shop.
The Clay Cross councillors did not intend to defy the law. They believed that under the Housing Finance Act 1972 a commissioner could be sent in to take over housing. It was only after they had been through the courts that it was decided that under the Local Government Act 1933 a surcharge should be levied on the councillors. Many of my constituents, particularly those in the mining community, are aware of the fact that, although the action that was taken then appeared to be quite clear and open, the law can apply differing interpretations. Many sacked miners in north-east Derbyshire, including many of those who helped me in my election campaign, believe that to be so.
The Government should not unduly burden people. Instead, they should seek to reconcile conflicting interests. I shall quote from a letter that has been written to me by somebody who lives in north-east Derbyshire. It is not a put-up job. The letter comes from a 10-year-old girl in Unstone Green, which is a deprived area. In her letter Claire Staines writes:Dear Mr. Barnes, I am just writing to say how glad I am that you won your election. Can you ask Mrs. Thatcher to let us have more books and equipment for our school, and when is she going to find a job for my Dad?What is being done through local government financial legislation to ensure that books are placed in Claire Staines' school and to ensure that her father is given the opportunity, because the community is prosperous, to work again? I do not think that anything is being done.
§ Mr. Tony Favell (Stockport)
It gives me great pleasure to follow the maiden speech of the hon. Member for Derbyshire, North-East (Mr. Barnes). I know his constituency well, and I spent many hours of my courtship there with my wife. I was a native of Sheffield, and one of the nicest areas to go to was north-east Derbyshire.
Occasionally I travel to Bolsover, where I am president of the Conservative Association, and where I like to keep an eye on the activities of the hon. Member for Bolsover (Mr. Skinner). It is a very pleasant area——
§ Mr. Favell
That is true. The hon. Member for Bolsover tells me that none of his predecessors lived in my house, but I have my doubts.
791 I am glad to be speaking this evening because the subject for debate was chosen by the hon. Member for Sheffield, Central (Mr. Caborn). I have connections with that area because I have been a ratepayer in that constituency for the past 20 years, and during that time I have seen the city steadily decline.
The hon. Gentleman said that there were problems with Sheffield's industrial base. Those problems have been largely self-inflicted by the Socialist council that has ruled the city for more than 40 years.
The hon. Gentleman mentioned the steel industry. When the Minister replies to the debate, he might comment on the fact that there is no major steel producer in Sheffield. Most of the steel producing in south Yorkshire is carried out in Rotherham. That is due to the fact that the rates in Rotherham are lower than those in Sheffield. Four years ago a manager of British Steel in Sheffield was complaining that it was costing him £1,000 per employee in rates per annum. It is no wonder that he has chosen to move to Rotherham rather than stay in Sheffield.
§ Mr. Allen McKay (Barnsley, West and Penistone)
What the hon. Gentleman is saying is untrue. If he looks at the history of the steelworks and of Sheffield he will discover that the older parts of the steelworks disappeared. He will discover that due to the recession, not because of a lack of demand for steel, they disappeared. The Steel Peach and Tozer steelworks have always been in Rotherham. They did not move from Sheffield to Rotherham.
§ Mr. Favell
I am suggesting not that Steel Peach and Tozer has moved from Sheffield to Rotherham, but that it is still open, whereas all the major steel producing plants in Sheffield are shut.
§ Mr. Favell
The fact remains that there is no major steel producer in the city of steel, Sheffield. That is largely due to the fact that rates are higher in Sheffield than in Rotherham.
Why have industrial cities such as Sheffield been destroying their industrial and commercial base'? It is because. as my hon. Friend the Member for Darlington (Mr. Fallon) said, only 18 million out of 35 million adults in this country pay rates. Of the 18 million who are liable to pay rates, only 12 million pay full rates. In places such as Sheffield, Manchester, Liverpool, Newcastle and Leicester the figure is lower because of housing benefit.
Rate rebates were introduced not that long ago because certain councils were spending more money than ratepayers could afford. It was a modest provision to start with, but now 40 per cent. of people receive rebates. That is obviously nonsense. They receive rebates because the cities and towns in which they live spend more money than the people can afford to pay for. The wonderful point about the community charge is that it will mean that the people receiving the services will largely be able to afford to pay for them. This returns democracy to the towns and the cities, and not before time.
If we continue with the present system, there is no doubt that it will destroy our industrial cities. The simple 792 reason is that there are no votes in saving money. At the moment the votes are in spending money. Only a quarter of the people in Manchester, Liverpool, Sheffield, Newcastle—all our great industrial cities—pay rates. It is not in the interests of people for whom they vote to save money. The interest is only in spending money.
Three or four years ago I discussed the matter with Birmingham Members—it is interesting to see my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) here—and they said, "My goodness, the Conservative party will do well in Birmingham." I said, "No, it will not, because there are no votes in saving money." The Conservative group on Birmingham council was a low-spending group, but it was voted out because there were no votes in saving money, as the group found to its cost.
Not so long ago, before the introduction of rate rebates, Socialist councils tried to hold rates down, simply because the lads as well as those who indulged in commerce and industry had to pay rates. That no longer happens. In my view, having spent my whole working life in a northern industrial city, this long-awaited, long-sought reform will be their salvation. It is a sledgehammer, but we need one to crack the nuts. It is not before time. It is welcome and I heartily endorse it. I cannot wait to vote for it.
§ 10.1 pm
§ Mr. Tam Dalyell (Linlithgow)
I congratulate my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes), who made his maiden speech today, on his felicitous references to our late friend and colleague Tom Swain and his successor Ray Ellis. I shall always remember Tom Swain with affection. He was a picturesque colleague and brave in what he said. Indeed, every hon. Member will remember how Tom Swain reacted when some kind of missile—he could not know what it was—was thrown down from the Strangers Gallery.
I pay tribute also to my Scottish colleague the hon. and learned Member for Fife, North-East (Mr. Campbell), who has been a personal friend of my family for many years. I should like to follow what he said about the poll tax.
My contribution is precise. It refers to an interview given on "The World This Weekend" on the Sunday before last by the director of finance for the Lothian region, David Chynowith, to Gordon Clough. Clough said:there's one group of people for whom the community charge will be a universal headache, the local authority finance directors who'll have to put the will of Parliament into practice. They'll have to reorganise their systems to assess and collect a tax, levied not on houses, which stay put, but on people, who don't. In Scotland, of course, they've already started work preparing for that day two years hence, when the rates overnight turn into the community charge.Earlier today, in a remarkable speech, my hon. Friend the Member for Cunninghame, North (Mr. Wilson) made a point with characteristic embellishment. Michael Ancram lost his seat. The Secretary of State for Defence nearly lost his. Another Scottish Minister lost his. The basic reason was the immediacy of the poll tax. My hon. Friend the Member for Cunninghame, North said in his sparkling speech that there should be a piper's lament for the election results for Michael Ancram and the other Conservatives, including John MacKay. I pay tribute to 793 John MacKay. He was a decent Minister in our personal dealings with him. The Scottish election result was as much about the poll tax as it was about anything.
David Chynowith is the director of finance for Lothian region. He is also the chairman of an ad hoc committee of Scottish finance directors who are grappling with gestation problems. He said that he had been recalling what some of the problems were:Well, the main difficulties at the moment are trying to analyse the various systems which we'll need to set up before 1989 … we've only got until April 1989 to get everything up and running and the first major job of course is that the assessor has to set up the community charge register and once he's done that, we've then got to sort out the means of collection from the very many more people that we'll have to collect for as compared to the domestic rate charge.He was asked:What about the business of setting up a community charge register … That isn't exactly the same as it is the electoral register.Chynowith replied:No, indeed it isn't and it's a running register as compared with the electoral register which is set on one day in the year. It has to be kept up-to-date continuously and must at all times record all the people who are aged over 18 and who are staying in this area.Is the director of finance for Lothian region and the chairman of the ad hoc committee in Scotland right or wrong to say that the register has to be kept up to date continuously each month? Is that so, or is it not?
Clough then said:Well, that's to say it's got to be updated pretty well monthly has it, because you have to collect in 12 monthly instalments?Chynowith replied:That's correct. It has to be updated continuously, yes and so each month it must be correct for each of the residents in the area.Will the Minister tell me whether that is right or wrong? He can get the information from his officials in the Box, because the Box had better have thought about these things. Is it true that the register has to be updated every month? Let it be put on the record that I give the Minister an opportunity to reply. The fact is that, like so many of the other things that I have seen in the last quarter of a century, the poll tax is ill thought out.
§ Mr. Dalyell
The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), whom I hold in the highest regard, has repeatedly asked these questions both publicly and privately—he does not say anything in private that he would not say in public. It is no good dismissing him. After all, he has run one of the major committees in Birmingham, so he just might know something about this. I give way to the hon. Gentleman.
§ Mr. Beaumont-Dark
I intend to make my small contribution when the hon. Member for Linlithgow (Mr. Dalyell) has finished.
§ Mr. Dalyell
Let me then warn the House that I think that it is correct that if the register is to work—we are not talking about equity here—there has to be an updating every month. If the Minister does not deny that, either he does not know the answer or I am right. It must be one or t'other.
Clough continues: 794So how is the assessor setting about this? Is he having to send out questionnaires to every household to say, who is going to be living in your house on April 5th 1989, who's over 18?I wish that the Minister had heard my hon. Friend in his maiden speech talking about aunties under the bed, because in the Dulwich question that he put so brilliantly my hon. Friend said exactly what would happen. My hon. Friend the Member for Glasgow, Provan (Mr. Wray) has gone on record time and again as saying that he now has 43,000 constituents but, by the time the poll tax is in operation, he will have only 10,000 because they will not register. How are people going to get them to register?
The director of finance answered:He will have to canvass every property in the area. It won't just be a postal canvas of course because there is not a complete response to any postal canvass one does and it will be necessary for him to employ staff to actually go around and knock on doors and stand on door steps, I'm afraid.Clough said:What happens if someone who is initially registered on April 5th, let's say, decides to go away and live somewhere else … so he presumably doesn't … or he, she doesn't have to go on paying the community charge to Lothian but will presumably have to pay it somewhere else. Whose duty is it to tell whom about that?I suspect that the answer is a ministerial lemon, because the Minister does not know.
§ Mr. Dalyell
My hon. Friend says that that is not untypical, but my hon. Friend and I know a good deal more about this than the Minister does, because with us it has been far more immediate. This is how the Secretary of State for Defence, who without any question is a good constituency Member, nearly lost the seat that has been held by the Tory party since the first Reform Bill. That requires some explanation. Edinburgh, South has been held by the Tory party since the first Reform Bill. I confess that the university of Edinburgh came into it and that other factors were at work there, but Ministers must ask themselves what will happen to their colleagues in 1991. I have a great deal of experience in the House, and I know that as soon as we start lifting up stones, creepy crawly things come out. It is wise for Governments to understand what those creepy crawly things are.
Chynowith says:Well, it's the responsibility of every individual to notify the authority they're leaving and also the authority that they're going to. So every single person over the age of 18 will have that duty and responsibility to ensure that the community charge register is kept up-to-date.Will every family Cunninghame, North do that? I do not think that I can promise to deliver it in Linlithgow.
Clough says:It wouldn't be, I think, having too gloomy a view of human nature to suggest that some people might get lost on the Way?What happens if someone's son is lost in the Sahara? Does he pay? That is the Dulwich factor again. I do not wish to embellish the Dulwich question, because it is the property of my hon. Friend the Member for Cunninghame, North. I remember my hon. Friend the Member for Garscadden telling me that the West Lothian question was like the Schleswig-Holstein question. The Schleswig-Holstein question became very interesting and that is what may happen with the Dulwich question.
§ Mr. Ralph Howell (Norfolk, North)
I am interested in the hon. Gentleman's comments about creepy crawlies 795 that might come from under stones. Is it not true that, at the election, the creepy crawlies did not come out from under the stones and, therefore, the Labour party lost the election?
§ Mr. Dalyell
That is what I am trying to say. This is something that worries me greatly. One sees how blue the map is—with the exception of Oxford, East—south of a line that starts about 25 miles south of Derby. In Norfolk and East Anglia, there is only one red dot, for Norwich. I mourn greatly the loss of Ken Weetch in Ipswich. The hon. Member for Norfolk, North (Mr. Howell) can say that the Conservatives won the election in his area, but has it not occurred to him that, even with the huge Conservative majority of 102, there is not a single Conservative Member on the Greater Glasgow conurbation? Does that not create problems?
§ Mr. Dalyell
The hon. Gentleman shakes his head. Thoughtful Conservatives might ask why it happened. What I am saying—not on the hustings—is that this has much to do with the fact that Scotland was being used as a guinea pig for the poll tax. That is a partial explanation for the remarkable discrepancies. If hon. Members were wise, they would challenge their Ministers on how this scheme would work. I do not think that the Minister has much of a clue, because he has not yet put his mind to it.
Chynowith says:I'm absolutely certain that they will because clearly if people move regularly, they may take the view that they'll wait for the local authority to catch up with them.Where are all the local authority personnel going to come from for this? An enormous amount of staff are involved.
I will read into the record the question to which I received an answer today:Mr. Dalyell asked the Secretary of State for the Environment how many civil servants in all departments are currently involved in preparation for the implementation of the poll tax?Mr. Michael Howard: 21 staff in the Department of the Environment, 10 in the Scottish Office and three in the Welsh Office are engaged full-time on all aspects of the reform of local government finance. A further 21 staff in the Department of the Environment and 36 staff in other central departments are involved, as part of their other duties, in contributing to this work.Those 21 staff in the Department of the Environment had better be asked to bend their minds to the kind of question that the director of finance—the technical man, who is a careful accountant—is being asked.
Clough said:OK. So you've got to draw up a community charge register which is going to need extra staff. How many people are you going to have to take on, do you think, to do that?Chynowith said:Well I understand the assessor is estimating in Lothian that he'll need between 60 and 70 extra staff.If 60 or 70 extra staff will be needed in Lothian, 120 to 140 staff will be needed in Strathclyde. How many one will need in the Western Isles I do not know. The physical cost of employing extra staff is very real. What kind of money will they be paid? Clough saidThere is going to be … a difficulty isn't there, even in collecting the names because if people know that in admitting that there's going to be an 18 year old living in the house, they're going to have to pay whatever it might be … a great temptation not to register.I ask the Minister to save time by reading carefully the maiden speech of my hon. Friend the Member for 796 Cunninghame, North, because he put it more graphically than I could. He said that people will be disappearing under the bed. That may be a flight of poetic language.
§ Mr. Nicholas Bennett (Pembroke)
The hon. Gentleman has advanced three arguments. The first is that it will be hard work for the finance officers. They would say that. I have never had any sympathy with local government officers who complain about changes in legislation because it means that they have to do more work, if it happens to be a better system. Secondly, he cast aspersions on the Scottish people by suggesting that there would be only 10,000 people left in one of his hon. Friend's constituencies. That suggests a very high rate of dishonesty among the Scottish people, which I am sure is not true. The third suggestion was that he was concerned about the Government losing seats. I am grateful to him for his concern about our electoral future, but when will he gel. to the main issue—equity? Is the community charge fair, because it increases the charge so that everybody who uses services pays towards their cost?
§ Mr. Dalyell
I am not casting any aspersions on the Scottish people. I am simply a little worldly wise. I know how people behave when asked to pay more money than they probably can pay in circumstances where the electoral register is not perfect. The hon. Member for Warwick and Leamington (Sir D. Smith) said how imperfect the electoral register was in his area. It means forming another register. The hon. Member for Pembroke (Mr. Bennett) dismissed the directors of finance, but when dealing with them and with actuaries I have learnt to be careful. One has to take them seriously. The man I am quoting is a careful accountant.
Chynowith added:Yes, I think there will be a temptation and especially for those people who … are itinerant, whose perhaps jobs change regularly or perhaps they're on the move … through their job and … I think that there will certainly be a great temptation on people not … to register.Does the Minister accept that there will he this temptation?
Clough said:So are you then going to have to employ constantly people who will have right of entry to households to count the number of beds that have been slept in and whether they've got big shoes alongside them?Chynowith replied:We hope very much that we do not have to do that sort of thing. I don't think that the local authorities will relish that at all … it's not the sort of thing which we like to be doing.CLOUGH: What about the problems of collection once you get that far?CHYNOWITH: Yes, well, collection is going to be most difficult because we are going to be dealing with people who at the moment don't pay any form of domestic rates.We now come to the question of equity. How does one justify, on the basis of equity, the fact that those who live in largish houses will be paying the same as those who are crowded into unsatisfactory houses?
§ Mr. Nicholas Bennett
Surely, we are talking about the charge for local authority services. Houses do not borrow books, go swimming or use the roads. It is the individuals within the houses that use the services. We are talking about a charge on the individual for the use of those local authority services.
§ Mr. Dalyell
If that is going to be the argument, we can go back to Wat Tyler. I take the hon. Gentleman at face value and say that, if that is his view of life, there will be great trouble in the country.
§ Mr. Brian Wilson (Cunninghame, North)
Is my hon. Friend aware that the easy platitudes that we have heard from the hon. Member for Pembroke (Mr. Bennett) are exactly the same sort of things we were hearing a couple of years ago in Scotland from people who looked at the superficialities of the matter and found it attractive but who increasingly found that there was an awful lot more to it than met the eye? Is my hon. Friend aware that the Government accept that the collection cost of the new tax in Scotland will be £21 million a year? That is how much it will cost to carry out the extraordinary shoe-measuring exercise and the rest that has been described. On a pro rata basis one would be talking about £210 million a year for the whole of the United Kingdom.
Is my hon. Friend aware that the evasion rate that the Government now accept as likely is somewhere in the region of 15 per cent., but more sceptical people, such as myself, think it will be in the region of 20 per cent? Therefore, in spite of the silly snipes about the dishonesty of the Scottish people, it is not a victimless crime, if crime it is, because inexorably it means that the more people evade, the higher the tax is for those who remain. The figures that are being quoted as a per capita tax in England and Wales are bogusly low because they do not take account of the evasion factor of at least 20 per cent.
§ Mr. Dalyell
It was very much to the point. The House will learn to listen to my hon. Friend as I have for the past 10 years. He talks a great deal of sense and does not open his mouth without knowing what he is talking about.
My hon. Friend asked a question as to the origins of all this. I will explain the origins. The Prime Minister, like Henry Plantagenet in a fit of frustration, said, "Who will rid me of the rates?" There are junior Ministers who, like the knights who went to do away with St. Thomas a Becket at his own altar in Canterbury wanting to please the monarch, said, "We will get rid of the rates." One gets back to a sort of patronage system where there are junior Ministers—Michael Ancram was one—who were only too pleased to oblige. All I can say is that there are certain dangers in obliging monarchs who ask too much or ask that which is impossible, and Michael Ancram paid the price.
The Prime Minister made an unwise promise. She decided that the evidence to the Layfield committee on local income tax was overwhelming. She found that there was a refusal from the right hon. Member for Henley (Mr. Heseltine), who had more political nous and would not do it. The former Member of Parliament for Wanstead and Woodford, Mr. Patrick Jenkin, would not do it, but the present Secretary of State for the Environment, for reasons that fit in with his character, undertook to do it and then shuffled it off on other people.
If the Minister is dealing with the poll tax, he has been handed a poisoned chalice.
Chynowith said:They're fully rebated and they will be coming due to pay at least part of the community charge because everybody has to pay 20 per cent. at least and that in itself is a major headache because we're going to be trying to collect relatively small amounts of money—perhaps something of the order of £10 or less a month and a lot of these people just will not have the wherewithal to pay it.798 That brings us to the viability of the cost of collection. What is the Government's answer to the sheer cost of trying to get 20 per cent. or relatively small sums of money from itinerant people? The matter is mind-boggling.
Clough said:But the people on supplementary benefit as I understand it can help in paying even that 20 per cent. cut pay by going to the office and getting the money and then sending it on to you.The director of finance replied:Yes indeed. As I understand it, there will be provision under the supplementary benefit regulations for a payment to be made to individuals which would cover the 20 per cent. but it's not at all clear how that is going to be done and we … obviously the regulations have still to be made.Clough said:You're having to put into … operation a very complicated bit of legislation. As you work on it are you finding that there are areas which you have to deal with which aren't actually spelt out in the Act?Ministers had better note the reply:Yes indeed. We think at the moment there is something around 90 different issues which will have to be settled by some form of statutory instrument and they will have to laid fairly soon because of course we've got to develop the systems that will make this thing work.There are 90 different issues—90 statutory instruments. Has anybody told Mr. Speaker or the Government business managers about that? I have it from my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) that we are to spend hours on each one. We shall not let anything go through. Ninety times 90 is 8,100 minutes of parliamentary time.
§ Mr. Dalyell
Promises may have been made, but somehow we have experience of the matter. I am the man who, for 47 days—some of my colleagues did not approve—kept the House going in 1978–79 on devolution. We know how it can be done. Some hon. Members can talk even longer than I can. The Government business managers should take the matter on board. They should bear in mind the remarks of my hon. Friends the Members for Garscadden and for Glasgow, Cathcart (Mr. Maxton).
§ Mr. Dalyell
Yes, there will be missed trains. If we are to talk about the Scottish people, they will expect us to miss our trains because of this matter. The Government can set the business down for Thursday nights. The night sleeper will be less frequented, because we shall be here.
Clough went on:That does suggest—and I'm not asking you to make a political comment but it does suggest—that the Act wasn't properly thought through.Chynowith replied:Well, I wouldn't say that. No, I think in fact in drawing up the Act, the civil servants who drew it up were well aware that there were a lot of gaps in it and they have made provision for statutory instruments to be made subsequent to the passing of the Act. But clearly, it was rushed through and there were a lot of last amendments to it … clearly it was an Act which was difficult to draft and is going to be even more difficult to implement.Let not the Government say that they have not been warned.
I wish to raise one other local authority issue. In my constituency there has been a proposition that the village of Torphichen should have the first AIDS hospice or 799 hostel in Europe. For 25 years I have always taken the view that it is not up to Members of Parliament to second-guess or try to overturn local authority decisions even though they may be decisions of local authorities that, as in my case, are not Labour-dominated. Local authorities have their place and must be treated with respect by hon. Members. Therefore, I do not wish to bother or concern the House with the direct issues of Torphichen.
I wish to ask the Minister—I do not expect an answer tonight, as that would be unreasonable—to what extent the Government are thinking about AIDS hospices and hostels? Such a development was one of the recommendations of the report of the Select Committee on Social Services. What is the Government's view— 800 possibly this should be passed onto the Scottish Office, but other Government Departments should reflect upon it—about placing AIDS hospices or hostels in small rural communities? I believe that a hospice is somewhere that the terminally ill can die with dignity and a hostel is where patients go with some hope of recovery. That recovery involves integration with the local community.
It is a delicate issue, and I leave it at that. Any reader of the Scottish press or viewer of television—not only national television; the French and the West German television companies are also interested—will be aware of its importance. It is something of a test case. I ask Ministers to reflect on the issues involved.