HC Deb 04 March 1987 vol 111 cc859-62
5. Mr. Heathcoat-Amory

asked the Secretary of State for the Environment what recent representations he has received about the likely collection costs of the proposed community charge for England and Wales.

The Minister for Local Government (Dr. Rhodes Boyson)

We have received a number of representations about the operation of the community charge, including the cost of collection.

Mr. Heathcoat-Amory

Does my hon. Friend agree that domestic rates are a fair way of financing genuinely local services if other items of expenditure such as education are taken out and funded by central taxation? Therefore, will my hon. Friend be cautious before he introduces a community charge, with its rebates, exemptions and collection difficulties?

Dr. Boyson

I have heard what my hon. Friend has said, but there is an overwhelming feeling about rates being unfair to many residents. The great advantage of the community charge is that everybody who is voting is paying something towards the cost, whereas in Lambeth and Liverpool, where there are nonsensical councils, only one voter in five pays anything.

Mr. Park

Will the Minister now answer the question? What are the likely collection costs of the community charge?

Dr. Boyson

We referred to that question in the Green Paper. It is likely that the cost will be double the cost of the collection of rates. However, when people realise that local authorities are spending their money, I believe that local authorities will be much more careful about how they spend that money. There is no doubt that this is one of the best financial bargains for this country.

Mr. Squire

Does my hon. Friend not accept that some very reputable organisations have suggested that the nature of the charge is such that many people who may be assessed will none the less avoid payment, particularly in the inner city areas where they will stay in one place for a mere two or three months? Is my hon. Friend satisfied that it will be possible to recover the community charge as easily as rates?

Dr. Boyson

I welcome my hon. Friend's question so that I can take further the educational course of Opposition Members on the community charge. It is not an annual charge; it is a monthly charge. Most people do not move every month. Some people do not move every year. The head of each household has to list the people who are living in the house and the local authority then has to collect the community charge. I have no doubt that this can be done.

Mr. Campbell-Savours

Is the Minister aware that the introduction of the community charge in England, particularly in west Cumbria, will massively increase the amount of money that is paid for what, in effect, is only a substitute for rates? Is he aware that if one compares the figures with those for Scotland, the substitute rate payments by people in Maryport, Workington and other towns of west Cumbria will double and in many cases will triple? Is that what the Government call fairness in local taxation?

Dr. Boyson

I do not quite follow all the hon. Gentleman's comments, or where his figures come from. If a local authority is spending £2 million a year and raises a proportion of that sum from the rates, it will raise a quarter of its expenditure from the community charge, and that will be the equivalent of the rate income. If the local authority is more careful about its expenditure, the amount that is levied will be less. By spreading this cost more widely many people, including the old-age pensioner and the one-parent family — about whom we have "bleeding hearts" stories from Opposition Members all the time—will be better off than they are under the present system. [Interruption.] They will be considerably better off. They will pay only one charge. If they are living in a house with two or three bedrooms, they will be paying two or three times more than that. Those are the mathematics of it.

Mr. Marland

As my hon. Friend is aware, Gloucestershire county council is now under alliance control. Is he aware that for the second year running it has voted for substantial rate increases? Will he introduce the community charge as soon as possible to stop the alliance squandering other people's money?

Dr. Boyson

I believe that the expenditure increase in Gloucestershire over two years is about 41 per cent. That council is under alliance control. Therefore I welcome my hon. Friend's question. We presume that when there is a wider spread of the community charge, fewer people in Gloucestershire will be under alliance control.

Mr. Straw

Is the Minister aware that the Opposition are very grateful to him for his admission, for the first time, that the cost of collecting this bureaucratic poll tax will be double the cost of collecting rates in the long term? Will he confirm the estimate of the Chartered Institute of Public Finance and Accountancy that, in the interim, the cost of collection will be four times the cost of rates? Will he also confirm that his own consultative document on the poll tax says that there will be Orwellian checks on residents before they can use local services? Why did the Minister seek just now to mislead the House as to the burden on one-parent families and old-age pensioners? Is he not aware that at the moment old-age pensioners and one-parent families pay nothing towards the rates but that under this poll tax proposal they will pay a substantial amount?

Dr. Boyson

It is very difficult to catch up with all the questions that have been asked. There has been no attempt to mislead. The Green Paper gave the figures. The position is the same as in Scotland: it will be about twice the present cost. The basis of the community charge is to ensure that those who are using the services are paying something towards the cost of those services. That will end the nonsense from the hard Left in so many councils in London.

Mr. Rathbone

Whatever the advantages in budgetary terms or in terms of local government finance, would not my hon. Friend accept that there are strong electoral disadvantages in bringing into taxation people who are as yet not in taxation by spreading that sort of tax across the whole population in the way that the Government plan?

Dr. Boyson

I do not go along with my hon Friend's view. I am working through my mind exactly what he is saying. My own view, and the view of the Government of which I am part, is quite clear. One of the problems around the country now is that a smaller and smaller proportion of those who vote are voting to spend other people's money. In places such as Manchester and Liverpool only two out of every nine are paying. The other seven are voting to spend the money of those two. That is why there is nonsense expenditure and nonsense in the councils there.