HC Deb 04 March 1987 vol 111 cc877-913

'In the financial year 1989–90 no domestic rate shall be levied in one district authority to be specified by the Secretary of State and :

  1. (a) the community charge shall be levied only in that authority,
  2. (b) an independent commission shall be appointed consisting of representatives from Convention of Scottish Local Authorities, Scottish Office, Scottish Trades Union Congress, Valuation Assessors, Law Society to survey the operation of the Community Charge.
  3. (c) the Commission shall report to the Secretary of State at the end of that year and he shall be bound to consider its findings before introducing the community charge in any other local authority if the Secretary of State decides to proceed with full implementation, it shall be completed by 31st March 1992.'.—[Mr. Dewar].

Brought up, and read the First time.

Mr. Donald Dewar (Glasgow, Garscadden)

I beg to move, That the clause be read a Second time.

Mr. Speaker

With this it may be convenient to take the following amendments to the new clause: Amendment (a), in line 3, after 'authority', insert 'the said authority having volunteered itself to the Secretary of State or, in the absence of such a volunteer, the authority shall be determined by the Secretary of State.'.

Amendment (b), in line 6, after 'Law Society', insert 'the Chartered Institute of Public Finance and Accountancy and the Institute of Local Government.'.

Mr. Dewar

I assure Conservative Members that we, too, are interested in what the Government will announce with regard to sports clubs. We assume that it will he something positive. I hope that we are not disappointed. The pre-publicity, the briefings and the desire of Conservative Members to be in on the act presumably means that they are in the know. We await developments with interest. I expect that they are telephoning their local newspapers.

New clause 1 is a simple idea and extremely sensible. The two proposed amendments are unexceptionable. Indeed, they are helpful, and if they are acceptable to the Government, I would not object to their being made.

Although the essence of the clause is simple, there will inevitably be drafting difficulties with it and the Government will have to take it away and possibly reintroduce it in another place. We have no objection to withdrawing it if the Minister says that the principle finds favour with him.

We are simply suggesting that it would be common sense and that there would be a great deal of merit in the Government accepting that such a complicated, controversial and difficult reform should be tried in a selected area of Scotland I shall leave aside for the moment our view that the Government's proposal is essentially unjust. We have suggested a district council area, but if the Government suggested one of the smaller regions, we would not want to be difficult.

There should be an area in which we can monitor the practicalities and workability of the scheme which has been so heavily criticised. The assessment could help the House and the Government to reach a decision on whether the scheme should be introduced across the country.

We suggest that the monitoring should be assisted by an independent commission, the composition of which is suggested in the new clause. That may be the subject of some comment by the Minister, who is not noted for his charity when it comes to passing judgment on the efforts of the Convention of Scottish Local Authorities, the Scottish Trades Union Congress or other organisations which represent genuine parts of Scottish opinion.

Of course we would be prepared to be helpful about that—ours is just a simple, straightforward suggestion that monitoring should be part of the programme. At the end of it, the Secretary of State and the Government will be able to make up their mind. I hope that the views of the commission and the experiences of the test area during the experiment would be highly persuasive on the final decision. I hope that I have advanced that argument clearly and fairly.

I should set out one or two of the reasons why we believe that the clause should find favour with the House. I should concede that I would not normally be in favour of the legislative equivalent of sale by sample. I accept that Governments normally legislate and normally produce plans, and if they find favour, and carry a majority with them, as Government plans have a habit of doing, they are implemented. If there is a debate it is in a public form and ultimately there may be repeal or modification in later years in the light of experience.

I am making a sensible suggestion, about a measure that is unusual. Because the poll tax scheme is so radical and so fundamental—many Labour Members would say that it was fundamentally wrong. We are suggesting this approach.

Everyone who has watched or taken part in this debate is aware that the poll tax proposals have been attacked, root and branch, by almost everybody which has experience in the field, whether it be a local authority body per se or some other outside organisation which has an interest in community politics or representation within Scotland.

One or two groups have supported the reorganisation. I say that with no particular malice because it is fair comment. They have a clear financial interest in reorganisation and think that their membership will specifically benefit and that they will be among the minority who will win out of the reorganisation. Apart from those groups there has been almost no support for the scheme that is being proposed.

What is particularly important is that, apart from the reservations in principle which have been seen on every side, there is a genuine question mark of a sort that I have seldom seen before about the very practicality of the scheme. There are many people, officials and others, who will say, and are on record as saying, that the scheme will not work, that it will bring great chaos and confusion in its wake and that it has been totally misconceived by those who have drawn it up.

In those circumstances, we are in the rather special position where we can ask the House to pause and consider whether something of the kind that we are suggesting would not be sensible. The Government may object and say "Well, after all, there is an election coming up." It may be that this whole debate will be academic because, clearly, there is every possibility that this Government will lose office and will be swept away at the coming election. [Interruption.] I shall not make a great point of that. I am merely saying that that is a possibility. None of us know what will happen. We have our own feelings. [Interruption.] The Secretary of State knows that. Given his position in Scottish politics he should perhaps take a rather lower profile in this matter.

I must make it clear that everything that I say is said on the basis that the Government somehow manage to implement the scheme. That is the only basis on which we can sensibly debate the propositions. At this point I wish to make it clear—I would be failing in my duty if I did not—that that is not an assumption that I expect and it is certainly not an assumption that I accept. If we are to suspend reality and assume that the scheme will be pressed ahead, the first point that I would make—it would have widespread support on both sides of the House—is that the people of Scotland, the electorate, the unfortunate people who will have to pay the new poll tax have a right to know exactly how it will work. That is not the position at the moment. They have been presented with a series of slogans and a series of arguments by assertion. The credit that the Government are looking for is the bonus for having acted, but they are extremely anxious to avoid the discord that I think will come when people begin to realise exactly how the scheme will operate in practice.

Mr. Barry Henderson (Fife, North-East)

Does the hon. Gentleman feel that that is something of a condemnation of the Labour Members who served on the Committee, that after about 1,200 columns of Hansard they have not asked the right questions to elicit exactly how this scheme will operate?

Mr. Dewar

I recognise that in the portion of Fife that is represented by the hon. Gentleman no doubt all the electorate read Hansard, and particularly Committee Hansard. They may well have been reading the hon. Gentleman's speeches, which says something about the reasons for his rather poor prospects electorally.

Mr. John Maxton (Glasgow, Cathcart)

He did not make any speeches.

Mr. Dewar

I am assured that the hon. Gentleman made no speeches. I cannot help that. In the past we have had at times a rather bad-tempered debate on this Bill. The hon. Member for Fife, North-East (Mr. Henderson) is being a little silly. People do not follow these debates in detail. There is no great knowledge of exactly how the various practical difficulties will be overcome. That is a simple point which I should have thought was not particularly contentious.

4 pm

Another general argument concerns constitutional matters. The Secretary of State would be well advised to think about, if not building a basis of agreement on the scheme, at least reassuring people that every effort is being made to remove, whenever possible, its practical difficulties and obnoxious features. The right hon. and learned Gentleman is well aware that he represents a small minority of opinion in Scotland. He is fond of quoting Radical Scotland, and he did so on the timetable motion. I read the interview which he gave to Radical Scotland the other day and was glad to find that his ambition is becoming more realistic. He says that his aim —presumably, it is optimistic—is to attract about 30 per cent. of the Scottish vote to the Conservative party, and no more than that. I do not think that there is any real prospect of achieving that, but I have made that point because it shows the right hon. and learned Gentleman's recognition of the fact that the Rifkind factor has not had quite the exciting impact on Scottish politics that the Conservative party hoped when he was catapulted into his present job.

Mr. Donald Stewart (Western Isles)

Will the hon. Gentleman take note of the excellent point made by the Secretary of State when he said that the issue was between Unionists of all parties and the Scottish Nationalists?

Mr. Dewar

I like a little excitement in my politics. If it is to be a contest between the Nationalists and the Conservative party, I am afraid that it is going to be a pushover. I should not like to accept that as a genuine contest or to ally myself with the unlikely people who have been invited to take part.

There is a problem in Scotland for the Government. They should show a little restraint. There should be recognition of the Government's essential weaknesses. The Government should welcome any machinery which the new clause proposes that would allow time for the Government to pause, consider, test and, if necessary, modify the Bill in the light of public opinion in Scotland. The Government will not be able by that process to remove the essential error of the legislation. They will not be able to produce consent, but they might achieve slightly less grudging acceptance. If they do not do that, there is a danger that they will be seen to be imposing an unwanted system on the Scottish people, and it may become an issue in a way that no Government would welcome. I hope that the Secretary of State will carefully consider that constitutional and practical argument.

Mr. Michael Forsyth (Stirling)

On the hon. Gentleman's point about acquiring consent, does he believe that he would give consent to the Labour party's proposals to introduce regular revaluations based on capital values and to impose rating on agricultural land and buildings in Scotland after the row that we had about the last revaluation?

Mr. Dewar

I must confess that I would be rather more confident about introducing my proposals knowing that I had the support of about 50 per cent. of the Scottish electorate in a four-party system than I would be about the measures of a group of Ministers who control a separate legislative system within the United Kingdom but who cannot claim to have any broad-based support in Scotland. That is a different base from which to operate and it colours the argument of the hon. Member for Stirling (Mr. Forsyth).

This is not an occasion when we should rehearse at great length the arguments about the scheme's virtues. Conservative Members will be uncomfortably aware that the scheme appeared from nowhere. Its parentage is largely unknown, despite our energetic attempts, rather unfairly, to lump them on the slim shoulders of the hon. Member for Stirling. The scheme must have more respectable antecedents than that. It is clear that the scheme is totally counter to the 1981 Green Paper, "Alternatives to Domestic Rates", which argued persuasively against a poll tax. It is incompatible with the Government's White Paper in the autumn of 1983 which, as everyone remembers, discovered that the rating system was "fundamentally sound." After that, there was a sudden retreat and expediency and opportunism overwhelmed the type of measured logic and investigation which had led to the earlier conclusion.

The results are extremely unfortunate. Taking one district authority in Scotland and experimenting to see how the scheme works in practice would help to overcome many of the difficulties which we expect, and it would be of enormous help to public opinion in deciding on the competing claims for the fairness or otherwise of the scheme. We have alleged —I say "alleged" because it has been challenged and, therefore, I cannot say that it is fact, although it is well based on local government research—and we certainly hold, to use a more neutral term, that there will be a substantial shift between those areas within a local government unit which are already high amenity areas and advantaged and those which are not and are disadvantaged. There have been many examples of that based on calculations on what will happen in Newlands, Cathcart and various parts of Edinburgh such as the Edinburgh, Pentlands and Edinburgh, South constituencies.

We have been met with a pained expression from the Government, who say that we have not fully taken the rebate system into account. It is difficult to take it into account because the details have not been announced, but I understand their point. People in Scotland may well be confused about who has the better argument. I do not think that they will have any doubt if they look at the evidence. But the best way of establishing what will happen is to try the scheme, and that is where we come to the proposals in the new clause which would do a great deal to underline the incompatibilities and the confusion in the Government's argument.

The Government are in an odd position. If we say that there is to be a shift against the battered inner cities and against the peripheral housing schemes, Ministers say, "It will not happen because of the rebate factor." The Government are so keen on the scheme because they hold that the rates system is "corrupt", and they have used exactly that term. Ministers say that the rates system is maintained by corrupt politicians who are interested only in giving an unfair advantage to certain groups such as the people who live in Pilton, Drumchapel or the battered inner cities. They say that it is a corrupt system giving a corrupt advantage and that the payload is votes for the Labour party. It has been said as crudely as that, even by the Secretary of State for Scotland.

If that is the position, surely it is impossible at the same time to argue that there is not going to be a shift. The whole point of bringing in this scheme is to create a shift. Ministers should not be saying that my constituents in the battered peripheral housing schemes or the constituents of the hon. Member for Glasgow, Springburn (Mr. Martin) in an older city area will not be adversely affected. The logic of their position is to say, "Those people will be adversely affected, but so they should be, because we want to help the hard-pressed inhabitants of Eastwood or of Bearsden. We are going to bring about that shift and defend it." The essential dishonesty in the Government's opinion is that they pretend that the shift will not take place. They talk essentially with a double meaning. If there were a reasonably balanced area in which the test could be carried out, we would have the proof of the pudding, people would be able to judge and I believe that they would find on our side of the argument. I hope that they would have a substantial influence on how other people see the extension of the experiment. An important point of principle is involved. Enormous practical matters would be ironed out if there were the dry run or the test to which I have referred.

The practical points are so numerous that it is difficult to know which to pick out. For example, we would have some experience in organising the register and we would know whether it was practical or impractical, as we fear. There is no argument about the fact that, in a year, there is a turnover of about 25 per cent. of people on the electoral register. The complications of running a rolling register, keeping track of people who move from house to house—for example, 18-year-olds perhaps moving from different flats with friends or different members of their families — and apportioning their poll tax will be a nightmare.

We know that almost everyone in local government is suspicious of the cost implications of the £17 million to £22 million in a full year of operation, of the £9 million that it will cost to compile the register, and knows how impractical it will be to have feet pounding the streets to make sure that the register is accurate and up to date.

In the memorandum attached to the original copy of the Bill there is no firm assessment of staffing consequences. We know that enforcement procedures will be a nightmare. There are still major queries from the legal world about how one can catch up with someone who hops across a local government boundary perhaps, best of all, for the most innocent of purposes. There are queries about how, when one catches up with him to gain entry, if he has not paid his proportion of poll tax in his area, one can identify the goods that one impounds, how to organise the sale of such goods, and how to cope with what many experts in the legal field and in the sheriff's office believe will be about a four or five times increase in the number of actions that will be taken. Those points throw a shadow on the practicality of the scheme. If we had a test, we could iron out the problems. Even if, in our view, it were an unjustified experiment — a piece of regressive social engineering — at least it might be possible to get a scheme that will work if it is introduced on a wider scale.

I hope that my points will commend themselves to the House and even to Ministers. We shall canvass some points later in the two-day debate in the final Commons stage of the Bill. I am anxious that we should give the unfortunate people who are threatened by the scheme, in terms of having to operate it, every chance to get the right answers. We should not stampede them into confusion and chaos. The simple, academic difficulties that we are discussing, will, if the Government have their way, become practical difficulties that will snag, foul up, trip up and disorganise what, at the moment, is a local revenue-raising scheme which, in practical terms, has many advantages.

There is concern—the Minister must recognise this—right across the spectrum of opinion, and certainly across informed opinion in Scotland. In today's mail, Opposition Members received institutional concern from COSLA. I know that the Minister considers COSLA to be a hostile and, in some way, almost sinister organisation, but it reflects the way in which the people of Scotland vote, and that is why the hon. Member for Stirling does not like it. Also, the Association of Metropolitan Authorities in England, and the Association of County Councils in England wrote to Opposition Members today. As I understand it, those associations are not under Conservative control. We received—the hon. Member for Tayside, North (Mr. Walker) will recognise this—a letter from a lady in Perthshire, reflecting the proper concerns of the Methodist church in Scotland. I mention her only because her letter was in today's mail, but her case could be mirrored. Other examples of social concern have been found in the mailbag almost every day since the debate started.

The new clause is a practical contribution to the debate. We are trying to mitigate or avoid a disaster that we believe will certainly occur. There is virtue in test runs. They may be on a rather different scale. Again, by coincidence, in today's mail there was a Scottish Office news release referring to the next census—a complicated operation, it was said, but it is simplicity itself compared with the remodelling that we are looking at in local government finance.

As the Minister will be aware, we shall run a voluntary census test, taking Ross and Cromarty, Angus and the city of Dundee, or parts of them, as the test bed, to try to work out the gremlins and get rid of the faults and difficulties, so that when the all-Scotland experience occurs and when the sweep across the country is required, we shall be in a better position. It is exactly the same sensible principle, and I hope that the Government will not dismiss it and consider it to be some sort of attempt to wreck the scheme. It is a way of saying that we do not like it. It will give public opinion a practical chance, before we are irreversibly committed, to test the various claims that are made, but, most important of all, it is an effort to make sure that, when we move towards some form of reform, if the Government have their way, at least it will be a practical scheme that will not disgrace or embarrass us all.

The Secretary of State for Scotland (Mr. Malcolm Rifkind)

I carefully listened to the hon. Member for Glasgow, Garscadden (Mr. Dewar). I make it abundantly clear that I would be the last person to believe that COSLA is a sinister organisation, unless one were to wish to use the word sinister in its original Latin sense, in which case it might indeed be a fairly appropriate description.

With regard to the general theme of the hon. Gentleman's contribution to the debate, at one stage he got into rather dangerous waters. He implied that the Government's attitude towards rate reform in Scotland should be influenced by the degree of political support that the Government, or indeed any political party, has in Scotland at present. I can understand that argument coming from the right hon. Member for Western Isles (Mr. Stewart). He started from a clear, simple position that is consistent with the argument of the mandate that we often hear from Opposition Members. The right hon. Gentleman would be the last person to feel comfortable using that argument.

4.15 pm

It is indeed the case that, since 1951, only one Conservative Government has had a majority of hon. Members from Scotland. It also happens to be the case that, since 1951, only one Labour Government has had a majority of hon. Members from England. I am not conscious of the hon. Member for Garscadden or other Opposition Members ever having suggested that the opportunity or the right — indeed, the propriety—of a United Kingdom Government to vote on English domestic issues, despite not holding a majority of seats in England, should in any way, either in the past or in the future, be restrained.

Mr. Dewar

I did not and would not challenge the right of the United Kingdom Government, but propriety is another matter. As the right hon. and learned Gentleman is well aware, Opposition Members are strongly committed to a system that would have a directly elected assembly in Edinburgh, which would be responsible for internal legislative matters that affect Scotland, and which are presently under his remit as Secretary of State. Given the overwhelming consensus in Scotland for such reform, it would be highly inappropriate for the Government to barge on and totally ignore Scottish opinion and put in a scheme that few of us want in that part of the world.

Mr. Rifkind

As the hon. Gentleman has raised that matter, he must realise that he is exposed to the hollowness of his position. The proposals that he put forward on the wider issues would result in an even graver aggravation of the point that I have just made. In future he and I, if we were still hon. Members, would vote on English domestic issues in a way that might not represent the views of the majority of hon. Members from south of the border. The hon. Gentleman raised the matter in his opening comments. It is acceptable and understandable for the right hon. Member for Western Isles and his political colleagues to use arguments about the relative political strengths of parties in Scotland, but if no Labour Government bar one has had a majority in England since 1951 — that corresponds to the position of the Conservative party in Scotland — the hon. Gentleman must apply his new, curious constitutional principle throughout the spectrum of government or cease to use such arguments.

Sir Russell Johnston (Inverness, Nairn and Lochaber)

The Secretary of State is self-critical, which certainly is most refreshing. Equally, his criticism of the hon. Member for Glasgow, Garscadden (Mr. Dewar) is much to be welcomed by my party. Does he agree that he is talking about electoral reform?

Mr. Rifkind

As 85 per cent. of the people of Scotland vote for the unionist parties and realise that the outcome of a general election is a United Kingdom Government, and as at any one moment there can be only one United Kingdom Government, clearly it is that party which commands the majority in this House that will be the body that is responsible for legislation.

Mr. Henderson

Will my right hon. and learned Friend give way?

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. Both Front Benches have referred to the issue that is now before the House, but I think that we might now drop it and get on with consideration of the clause.

Mr. Henderson

Is not the logic of what the hon. Member for Glasgow, Garscadden (Mr. Dewar) says that a Labour Government—

Mr. Deputy Speaker

Order. I thought that I had made it clear to the House that we must not pursue this matter. Let us get on with the clause.

Mr. Rifkind

Another suggestion by the hon. Member for Garscadden was that public opinion in Scotland is hostile to the Bill, and he produced evidence in support of that allegation. He will know that the majority of people in Scotland, if the polls are anything to go by, are hostile to the domestic rating system. Despite that, the Labour party has felt perfectly free to make proposals in the last few days that would involve the continuation of that system.

Mr. Dewar

What polls?

Mr. Rifkind

Numerous polls have suggested that the majority of people in Scotland believe that the domestic rating system is unfair and would prefer an alternative system. People have put up various alternatives, including members of the Liberal and the Scottish Nationalist parties. However, the hon. Member for Garscadden will be aware that his party is the only one that is still thirled to the domestic rating system in Scotland. He will also be aware that his party received only one third of Scottish votes at the last general election. He must take that fact into account, too, if he wishes to adopt such an approach.

Mr. Robert Maclennan (Caithness and Sutherland)

As to the evidence about the popularity or otherwise of the Government's poll tax proposals, is the right hon. and learned Gentleman not aware of the opinion poll that was conducted by Systems Three in November that made it clear that 86 per cent. of the Scottish people believe that local taxation should be based upon ability to pay? If, therefore, a poll tax that was unrelated to ability to pay was levied on every taxpayer, regardless of income, it would be plainly and overwhelmingly unpopular in Scotland.

Mr. Rifkind

The hon. Gentleman is distorting the outcome of that opinion poll. He is well aware that a significant proportion of the Scottish adult population will probably be entitled to rebates under the Government's proposals. Therefore, ability to pay will be taken into account in the case of the unemployed and those on very low incomes. We are entitled to say, on precisely that basis, that these considerations have been understood and that we have responded to them.

The hon. Member for Garscadden said that the effects of the Government's proposals would lead to a major shift from one section of the community to another. He chose very selective examples. For example, he could have said that the Government's proposals would lead to a major shift in favour of widows.

Mr. Dewar


Mr. Rifkind

They most certainly will. They will also lead to a shift in favour of single parents and of mothers who are left alone to bring up children by themselves.

Mr. Maxton

Will the right hon. and learned Gentleman give way?

Mr. Rifkind

No. Perhaps the hon. Gentleman will contain himself for a moment.

Compared with the domestic rating system, some 80 per cent. of widows or widowers will benefit considerably from the community charge proposals. The same applies — perhaps to an even greater extent—to an adult, usually a mother who is left to bring up her children alone because her husband has died but who is bearing the same rates burden as the family of working adults who live next door.

The proposals also demonstrate a shift away from the arbitrary consideration of whether an adult is the occupier of rateable property and towards the consideration that all adults who benefit from local services should make a contribution towards the cost of those services.

Neither today nor on any previous occasion has the hon. Gentleman or any of his hon. Friends sought to justify the basic iniquity of the present system under which 20 per cent. of the adult population of Scotland, who are neither ratepayers nor the spouses of ratepayers, make not a penny contribution towards the revenue that is raised by local authorities. It is particularly reprehensible that, even though the Labour party has now come forward with what it chooses to call a new deal for the ratepayer, it still does not meet that basic injustice.

Mr. Dewar

Why did the Government of which the right hon. and learned Gentleman was a member come to the positive conclusion in August 1983 that the rating system was fundamentally sound?

Mr. Rifkind

We do not now take that view. We have given further consideration to the matter and we have identified an alternative that we believe to be infinitely preferable The hon. Gentleman has considered this matter for the last year and a half and now he produces alternative proposals that do not meet by a single iota the basic injustice of the existing system. Under his alternative proposals, the widow would still pay the same as the family of working adults living next door. Furthermore, 20 per cent. of adults who are not ratepayers would not make a penny contribution to the community, despite the fact that they are in work and despite the level of their income, whereas others who might be on smaller incomes would continue to pay a heavy and an increasing rates burden.

The hon. Gentleman is content with that and he is prepared to defend it because he believes that it is entirely acceptable.

Today we have the privilege of a new clause being put before the House that the House is asked to consider. I agree with one point that the hon. Member for Garscadden made when he introduced it. He described it as a very simple clause. I happily identify with that description. It is a very simple, absurd, proposition that I cannot believe the hon. Gentleman or anybody else expects us to take seriously. When asked for his view on the subject, the president of the Convention of Scottish Local Authorities said : Despite some technicalities, it is a suggestion worthy of further consideration". That is a polite way of saying that Councillor Fagan, the president of COSLA, thinks that it is as much of a nonsense as most of us do.

The way in which the hon. Gentleman would like this experiment to operate would have some curious consequences. We are told that an independent commission would be appointed to scrutinise the effects of the community charge in one particular local authority and to report within a year, and that the Secretary of State would be bound to consider its findings before introducing the community charge elsewhere. We are entitled to ask to what extent we could be satisfied about the independence of the commission that the hon. Gentleman and his colleagues are proposing.

Mr. Dewar

The responsibility would be on COSLA.

Mr. Rifkind

No, it is not just COSLA. A number of organisations are mentioned here. As the hon. Gentleman mentioned COSLA, he may take the view that COSLA would start off with a completely open mind on the subject. He might believe that COSLA is not parti pris and that it would be prepared to look at this question entirely objectively. I have no doubt that Councillor Fagan would say that he would be prepared to put aside all past ideas, prejudices and political affiliation and examine the matter with the total independence that one would expect from a boundaries commission. [Interruption.] No, not like I do. I fully accept that my political views are relevant to the proposals that I put forward, but in the new clause we are dealing with an independent commission, not a political commission.

Therefore, we are entitled to ask whether the Convention of Scottish Local Authorities has operated as an independent, non-political organisation in the last few years. But other organisations are included — for example, the Scottish Trades Union Congress. The Scottish TUC has a legitimate role to play in Scottish public life, and I have never suggested otherwise, but I find it difficult to understand exactly why it should be picked from all the organisations in Scottish public life because it is thought to be a body that is particularly appropriate to express an independent view on the desirability of the community charge.

I can assume only that it would be expected, at least for the time being, to forget that it is affiliated to the Labour party. That would clearly be of no relevance. We are asked to believe that the fact that most members of the STUC are affiliated to the Labour party would have no effect on its independent assessment of the merits of the proposals. It was wicked of me to suggest otherwise. I fully appreciate that.

4.30 pm

What is interesting is not just the organisations included on the body but the ones not included. One might have thought that the Federation of Scottish Ratepayers, for example, would not have been an entirely irrelevant body to assess the effects of a new system of local government finance. After all, it represents the people who pay under the present system. However, it is suggested that it should have no role on such an independent commission at a time when COSLA and the STUC are to be involved.

The hon. Member for Garscadden put that forward—

Mr. Bruce Millan (Glasgow, Govan)

The right hon. and learned Gentleman is wasting time.

Mr. Rifkind

Wasting time is a good description of this new clause.

Mr. Millan

Stop wasting time with this ridiculous filibuster.

Mr. Rifkind

What an extraordinary proposition. His hon. Friend the Member for Garscadden tabled a new clause and spoke to it. I am speaking to it now and unless the right hon. Member for Glasgow, Govan (Mr. Millan) agrees that it is an absurd new clause and is not put forward as a serious contribution to the debate, I suggest that he rises or remains silent.

Mr. Deputy Speaker

If the right hon. Member for Glasgow, Govan (Mr. Millan) wants to intervene, he should do so in the proper way.

Mr. Henderson

In his brief opening remarks, following the 25-minute speech of the hon. Member for Garscadden, does my right hon. and learned Friend feel that it would be more understandable if one of the independent bodies put on the commission proposed by the Opposition was the Scottish Co-operative Society, which has obviously found great difficulty in paying its rates to Fife regional council?

Mr. Rifkind

It may be that that would be another sort of independent advice and would be able to make a useful contribution. I am quite happy to accept the advice of the right hon. Member for Govan. He is right to say that this new clause does not require a lengthy response. One simply has to refer to considerations such as those I have raised to demonstrate that it is not put forward as a serious proposal but as an opportunity for some interesting comments by the hon. Member for Garscadden.

Over the past few months, the Government have illustrated not only the advantages of our proposals for the community charge, but have met many of the comments that have been made with regard to some of the serious points raised by outside bodies in respect of administrative details. The hon. Member for Garscadden commented substantially on what he thought to be the administrative problems. I should say to him, for example, that we have received recently a letter from the Rating and Valuation Association. The honorary secretary of the association said that he had been asked by the President of the Scottish Branch of the Association to express to you how welcome to our practitioner members involved in the rating system your recent announcement that there will be no transitional period … Clearly, this will ease the implementation making the specification of computer systems, administration etc. that much simpler. The announcement came at quite an appropriate moment … the National President … was able to convey the news which was very warmly welcomed to a number of practitioners who were attending a seminar that day.

Mr. Maxton

Read the whole thing.

Mr. Rifkind

The hon. Gentleman can read the whole thing. He will see that there is no suggestion that what remains is totally unworkable or impossible or any of the other things suggested by the hon. Gentleman.

We have responded to many of the detailed points made by non-political organisations that have no political axe to grind and pointed out ways in which the administration of the Bill could be improved. The hon. Member for Garscadden knows that our announcement last week was warmly welcomed throughout Scotland as representing a major improvement with regard to the administration of the Bill.

Mr. Dick Douglas (Dunfermline, West)


Mr. Rifkind

Therefore, the hon. Member for Garscadden should acknowledge that the Government are prepared to listen to genuine suggestions for the improved administration of our proposals, but not to those that are essentially politically motivated.

Mr. Maclennan

This Government, above all, ought to put forward their proposals for the reform of local taxation with a degree of modesty flowing from the experience that Parliament and the country have had of the errors they have made in the past, which have resulted in taxation being levied without proper authority and retrospective legislation having to be introduced to set it right.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) has moved an important clause which should have the support of the House, as it would enable the practicality of the Government's proposal for the implementation of a poll tax in Scotland to be tested. I do not understand why the Secretary of State has set his face against the idea of having a test of the scheme because, in a sense, the whole Bill is a test. Scotland is the test bed of a scheme being tried out for the whole of the United Kingdom. If the Secretary of State for the Environment is prepared to treat Scotland as a test bed for the United Kingdom, I see no reason why the Secretary of State for Scotland should not treat a single local authority area, no doubt one chosen with its agreement, as a suitable test bed for the Scottish scheme.

The Secretary of State has been cavalier in his treatment of the constitutional issues raised by the hon. Member for Garscadden. It is not a matter of whether he and his party enjoy majority support in Scotland. However, it is well known that it has not had that support for some time and that it will not have it for some time. The important issue is that when major changes are made to constitutional relationships and institutions within this country, if they are to last, they should enjoy broad-based support drawn from political parties across the spectrum. In the past, there have been special arrangements when an issue of constitutional importance was at stake to ensure that such broad-based support existed. There were special arrangements for a referendum in the case of our adhesion to the European Community and there were special arrangements for consulting Scottish opinion after the implementation of the Scotland Act 1978 to set up a Scottish Assembly.

This is a constitutional measure of major importance, altering, as it does, the relationship between local authorities in Scotland and central Government and drawing from local authority independence of spending power, reducing their control over local taxation to a mere 13 per cent. and removing local accountability. It is not simply a redistributive or regressive measure bearing hardly upon those least able to pay in the community, but a measure designed to draw control over local government decision making into central Government. As such, it ought to be seen to enjoy broad support, or not be implemented.

In Committee, alliance amendments were tabled to ensure that it would not be implemented until after a second general election had taken place to show that there was a settled view in Scotland in favour of thechange proposed by the Government. As the Secretary of State knows, the alliance does not favour this change, although it is firmly of the view that the rating system no longer enjoys the sort of support that ought to lead to its being retained.

Mr. Michael Forsyth

Will the hon. Gentleman give way?

Mr. Maclennan

This is a short debate and has been guillotined by a decision of the Government. Therefore, I will not give way to interventions by the hon. Gentleman.

The Government have never faced up to the fact that they have performed a volte-face. As recently as 1983, they were commending the system of local taxation which they are now seeking to toss aside after 200 years. That system, for all its anomalies, faults and inequities, to which attention has been drawn by the alliance parties, has enjoyed support over a long period and the Government have no right to bring forward for implementation a set of proposals which enjoy so little support and which have been subjected to the criticisms that have been made by all those who will be responsible for its implementation. There have been criticisms of its practicality, of the difficulty of drawing up registers of those who will be liable to pay the poll tax and of the enforcement procedures, made by all those connected with the legal profession, such as sheriff officers and the like.

There have been doubts about the power contained in the schedule, which merely permits local authorities to enforce the taxation but does not require them to do so. There have been doubts about whether local authorities can therefore opt out of the taxation and, by their decision, exempt those less-favoured members of the community. Those are some of the reasons why it is right that the new clause should be adopted by the House. It would be right to make an objective appraisal of how the system can be made to work in practice before implementing it.

The two amendments tabled by the alliance parties are designed to increase the authority of the report that would be produced by the commission on its operations by introducing into the commission further elements of expertise. The Chartered Institute of Public Finance and Accountancy has done extremely good work in analysing local taxation and the institute of local government studies attached to the university of Birmingham has made special studies of Scottish finance which suit that body to be considered among those bodies appropriate to view and analyse the impact of the tax scheme in practice.

Amendment (a) is designed to ensure that the implementation of the test is not forced upon an unwilling authority—if there is an authority in Scotland willing to take on the job. I am glad that the hon. Member for Garscadden welcomes and accepts the two modest amendments proposed by the alliance parties to give greater weight to the experiment that he has suggested.

The Secretary of State must appreciate that, because of the electoral unpopularity of his party due to the row that broke out in Scotland over revaluation, the people of Scotland will take very unkindly to having foisted upon them a system of taxation of local government that is intended to last for many years. They will not take kindly to a device that is intended to get him out of a temporary difficulty, to help him over a difficult party conference, which has the potential for causing great damage to the authority of local government in Scotland.

The right hon. Member for Glasgow, Govan (Mr. Millan) was right. The Secretary of State's predecessor was responsible for taking a decision which we might have thought would have been a reason for the present Secretary of State distancing himself from such a patently dotty scheme as that which is being put before the electorate. However, the Secretary of State must take into account the fact that the Scottish people are not so foolish as to accept the idea that they should buy this policy now and pay later.

The Scottish people want to know how the scheme will work out in practice and how it will affect the burdens on the poor and the capacity of local government to deliver the services which Parliament has entrusted it to provide. They want to know how it will affect the relationship between central and local government and they want to understand whether, as appears to be the case, the scheme is simply a means of further reducing the discretion of local authorities over public spending. They want to know whether it is designed to draw into the centre all decision-making power over local spending. That is what the Bill is about and the Under-Secretary of State for Scotland who was in charge of the Bill in Committee made it quite plain that that is what the Bill is all about. That is why the new clause should be accepted and I hope that the House will accept it.

Mr. Allan Stewart

I want to comment on one or two of the points raised by the hon. Member for Glasgow, Garscadden (Mr. Dewar) who introduced the new clause. Before I do that, in response to the comments made by the hon. Member for Caithness and Sutherland (Mr. Maclennan), who said that this was a constitutional issue, I hope that he will follow through his arguments in relation to the presentation of SDP and Liberal party policy on this issue. No doubt we will receive very detailed proposals from the hon. Gentleman that local income tax will be preceded by a referendum and an experimental year in Caithness and Sutherland.

I also noted with some interest that the list of hon. Members who tabled the SDP and Liberal amendment is headed by the right hon. Member for Plymouth, Devonport (Dr. Owen). The people of Scotland will be interested to know that on detailed matters of local government finance the right hon. Gentleman takes clear precedence over the right hon. Member for Tweeddale, Etterick and Lauderdale (Mr. Steel), the leader of the Liberal party. I also noticed that the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) has not added his name in support of the amendment, presumably because he is too busy in Oxford.

4.45 pm

I want to consider some of the points raised by the hon. Member for Garscadden in relation to Eastwood. The hon. Gentleman did not pay sufficient heed to the key argument in favour of going ahead with the community charge as quickly and as clearly as possible. He has not paid sufficient heed to the accountability argument. That argument was absolutely established in Committee and was accepted by the Opposition without any doubt. The hon. Member for Glasgow, Cathcart (Mr. Maxton) said in column 274: Yes, all tax systems are more accountable if more people pay taxes." — [Official Report, First Scottish Standing Committee, 15 January 1987; c. 274.] He repeated that point later. The key argument for the community charge as against domestic rates is the need to ensure that local government in Scotland is more accountable as quickly as possible. That argument has been highlighted by the recent proposed rate rises, especially in Strathclyde and Lothian.

I believe that the Strathclyde proposals are particularly iniquitous. The proposal is for a 20 per cent. increase in rates, despite the very low rate of inflation and despite the fact that the Government's grant to Strathclyde has been increased by 9 per cent. The rise is proposed even though Fife regional council is imposing a rate increase as low as 6.5 per cent.—although I know that my hon. Friend the Member for Fife, North-East (Mr. Henderson) rightly concludes that that is too high.

The accountability argument is highlighted by the way in which Strathclyde has admitted that the unjustified rate increase will cost jobs. Indeed, I understand that at the statutory consultation meeting with non-domestic ratepayers, the leader of Strathclyde council justified the increase by saying that the council was there to implement Socialism.

Mr. Maxton

Would the hon. Gentleman say that Bill Anderson of the National Federation of the Self-Employed and Small Businesses was a member of the Labour party and a Socialist? Mr. Anderson happens to have congratulated Strathclyde region on the way in which it undertook its consultation with him and other businesses.

Mr. Stewart

Mr. Bill Anderson is, of course, a Liberal. There is no doubt about that and it is not surprising that he has had the wool pulled over his eyes by Strathclyde region.

The hon. Member for Garscadden referred to my constituents and the redistribution towards them. In answer to that, I want to quote from a letter that I received this morning from the Mearns community council. The chairman and the council rightly point out : the inhabitants of Mearns are pretty representative of the ordinary hard working Scot in their range of both political affiliations and activities and they have the same problems as everyone else in obtaining jobs, educating children and generally making ends meet. They object to the wholly unjustified rates increase by Strathclyde and the diversion by Strathclyde region of facilities which could go to my constituency into other parts of Strathclyde.

The hon. Member for Garscadden paid no attention to the fact that three quarters of all households will either be better off or will lose less than £1 a week under these proposals, and that single pensioner households and one-parent families will do well.

There is an overriding need to ensure better accountability for local government in Scotland at the earliest opportunity. There is no case for delaying the Bill, and I am delighted that my right hon. and learned Friend the Secretary of State has said that he will not accept the new clause.

Mr. Douglas

I did not take part in the Second Reading debate because I was on other House of Commons business, and I was not a member of the Committee, but I have an unfortunate habit of taking the Secretary of State at his word. On 9 December, he said: I beg to move, That the Bill he now read a Second time. That was a truthful sentence, but the next sentence was riddled with what I would not call lies, but certainly great exaggerations. He said: The Bill is a radical and reforming measure which will abolish a discredited and unpopular local tax."—[Official Report, 9 December 1986; Vol. 107, c. 200.] Of course, it does not abolish the rates as a whole.

Mr. Rifkind

It abolishes domestic rates.

Mr. Douglas

The Secretary of State should contain himself. He knows that the Bill does not completely abolish a discredited and unpopular tax. It tries to abolish domestic rates.

The Secretary of State's argument throughout the debate has centred on accountability. If he is so sure of his ground, it would be a modest concession to embark upon the experiment or sample period that is proposed in the new clause. But he is never sure of his ground. He puts up Aunt Sallys about opposition to his views and then, with his usual verbal skill, knocks them down.

Why do we have a crisis with the rates? It is not because the rates are an unaccountable tax. It is because they are an unpopular tax, as are nearly all taxes. But they are the most politically accountable tax because people can see the imposition of the tax in total. If we want to move from a system of taxation that is directly politically accountable towards a system that provides reasonable flexibility in accountability, we should move from direct to indirect taxation. I do not argue that the poll tax will be unaccountable. Of course, because it is a regressive tax and because of how it is paid, it will be reasonably politically accountable. But that does not mean that it will be fair.

Mr. Allan Stewart

Does the hon. Gentleman agree that he is arguing that rates should be perceptible, not that they should be accountable?

Mr. Douglas

That is a distinction without a difference. People see rates, so they are politically accountable.

The Secretary of State gives the impression that only Tory Members of Parliament come face to face, in surgeries or elsewhere, with local electors and local opinion. That is not true. District and regional councillors also have direct contact with local electors and must be accountable to them for the provision of services. If they transgress, are profligate in the provision of services or misuse their resources, they will pay the penalty at the next election. According to the Secretary of State, the Conservatives object to the fact that some people benefit from services in a local authority area but do not pay for them. But many people who live in Edinburgh benefit from services in Fife. It is preposterous to say that some people notionally benefit from services but do not pay, and that we should try to alter boundaries to overcome that difficulty.

If the Secretary of State is as sure of his ground as he suggested, there would be no harm and much good in embarking cautiously on a period of experiment, using one region or district to analyse the effects of the change—[Interruption.] The hon. Member for Stirling (Mr. Forsyth) does not like anything relating to taxation that does not bear the imprimatur of the market. I understand his position, but I have heard him say that, although every system of taxation is wrong, he wants the benefits of public expenditure for his constituency. I have never heard him say that the roads in his constituency should be financed by tolls. That is a clear case of people who do not pay benefiting from a system.

We all know the difficulties involved in central Government raising taxation. People do not like paying tax, but they like the benefits that flow from public expenditure. We must try to devise a system of taxation that will accommodate people's ability to pay. Throughout the argument, the Secretary of State has said that rates are an unfair tax, but he has not assessed the impact of taxation as a whole. If we had the opportunity to examine the new system in a district or region, we could reasonably analytically—we could not be 100 per cent. exact—see where the burden of taxation fell and where it was passed on. We could see whether the poll tax placed the burden of taxation on the individuals in a household or whether it was passed on.

One difficulty of rating commercial premises is that the small business man cannot always pass on taxation. It is complete nonsense to suggest that industrial concerns pay rates. Their customers pay the rates indirectly. The problem for a small business man, which will largely remain under the proposed system, is that he cannot pass on the burden because of the competition for customers. The Bill accepts that that will be unavoidable.

I plead with the Secretary of State to get away from the attitude of a famous football player, who was so good that he thought that if he was chocolate he would eat himself.

Mr. John Home Robertson (East Lothian)

He was not at Rangers.

Mr. Douglas

Yes, he was, and still is at Rangers.

The Secretary of State seems to think that everything that he has thought of is good and that anybody who opposes it, whether the Scottish Trades Union Council, COSLA, or anybody else, is wrong, because the Secretary of State has had a conversion from what he thought in 1983 to what he thinks in 1987. That is understandable, because we all change our minds and can be persuaded. However, it is only he, and some of his supporters, who have been persuaded. The people of Scotland have not been persuaded. If one is to persuade them that this is an acceptable reform and that it is so radical and of such magnitude that great benefits will flow from it, we should at least have a little pause and experiment to see whether it works administratively in terms of the burden of taxation as a whole. Therefore, we should accept the new clause of the hon. Member for Garscadden.

5 pm

Sir Hector Monro

The burden of the speech by the hon. Member for Dunfermline, West (Mr. Douglas) is "Delay and delay because I want to keep the present iniquitous system." That is certainly not what the majority want. I am delighted that my right hon. Friend is bringing the system into operation in 1989. That gives local authorities two years to prepare, and they should manage to do that quite easily.

I wish to comment on the strange new doctrine of the hon. Member for Caithness and Sutherland (Mr. Maclennan) that any controversial legislation should be followed by a referendum. Every Labour Government—sometimes supported by the Liberal party—since 1950 have maintained their majority because of the Scottish Labour Members, so we would have had a referendum in England on almost every Bill. His idea that a referendum should follow legislation could not possibly be sustained.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) spent much of his speech telling the country how the new clause would affect Scotland. However, he was most unfair—as one would naturally expect—because he left out all the important aspects that the people of Scotland want to know about. They want to know that there will be no further revaluation of domestic properties and that they can improve and add garages, porches and other assets to their houses without having the rating valuation of their property increased.

The business community will be very pleased to know that their rates cannot be increased by more than the rate of inflation, or by a formula that is tied to inflation. I shall comment later on the dramatic increases that they faced under Labour administrations in the current year. The Government are providing valuable assistance to students by raising their grants, and the collection of the community charge on properties with non-permanent residents will be particularly helpful. We shall also update the rolling register. There will be the right of appeal on any infringements. Three quarters of all householders will either be better off or will pay only about £1 a week extra. Single pensioners will do especially well, and 85 per cent. of them will gain. About 80 per cent. of single adult householders—especially one-parent families—will also gain.

Mr. James Wallace (Orkney and Shetland)


Mr. Deputy Speaker

Before the hon. Member for Orkney and Shetland (Mr. Wallace) intervenes, if the hon. Member for Dumfries (Sir H. Monro) gives way, I remind the hon. Member for Dumfries that he should relate what he is saying to the new clause, which deals with an experiment in a particular district.

Sir Hector Monro

Yes. I am following the hon. Member for Garscadden who pointed out how the legislation would be detrimental throughout Scotland. I say that throughout Scotland it will be advantageous. Therefore, there is certainly no need to carry out any experiments in any region.

Mr. Wallace

I am interested to know when the hon. Gentleman's conversion to the poll tax took place. I seem to remember that as a true and loyal supporter of his party he backed the conclusion of the 1983 White Paper that the present rating system was fine. Perhaps he would date his conversion. Does it stem from the statement by Sir James Goold who, prior to last year's Green Paper, told all Conservative Members to back it, whatever it contained?

Sir Hector Monro

What a pathetic intervention. I am only surprised that the hon. Gentleman did not delve into local income tax or something ineffective, or planning on agricultural land, which seem to be so important to the Liberal party.

There is the important issue of accountability which, whether applicable to a particular district or the whole of Scotland, has been brought out so well by my right hon. Friend. In the same way, the importance of this to Scotland and the reason why we do not want to have any attachment to a district experiment is that the Labour party intends to rate agricultural land and buildings, which are presently exempt—[Interruption.] One reason why we do not want experiments is that we do not want to see some of those Labour party proposals brought into effect.

We want to get on with the legislation and introduce it in its entirety in 1989 because it would be so much more fair to the vast majority of people in Scotland, especially when one considers the position of the business ratepayers in Scotland at present, and also that of domestic ratepayers. We see swingeing increases in Socialist-dominated authorities of anything between 10 and 34 per cent. That will directly damage jobs, especially in Strathclyde and Lothian. I do not see people living in those areas wanting experiments to retain the existing situation, especially those that at present come under a Labour-controlled authority.

One only has to look in the Sunday Post—I am sure that all Opposition Members read it religiously every Sunday—to see that a continuation, by experiment, of the ideas of the Labour party as contained in the new clause would have a damaging effect and lead to an enormous loss of jobs by an incredible increase in rates in the Labour-controlled areas of Scotland. It is especially worrying to see that that has happened when certain district councils will be able to reduce their rate levy this year, provide the same services and even improve their sport and recreational facilities.

All in all, I hope that my right hon. Friend will resist the new clause and highlight again the importance of getting on with a fair and just new system of rating valuation. That is what we all want and I hope that that will take place as soon as possible.

Mr. Michael Forsyth

Stirling is a university town. I might be tempted to give the new clause some consideration if I believed for a minute that Stirling might be the area where the experiment would be held. However, I have to say that, thanks to the amendment that has been accepted by the Labour party and that which was proposed by the so-called alliance, that would depend on the local authority deciding to be such a pilot scheme area. Knowing how it has soaked business and domestic rate payers—to their considerable cost—I hardly think it likely that Stirling district council, or any other Labour-controlled district council in Scotland, would suddenly cut itself off from the supply of money without accountability, which it has had for so long, and which lies behind the Labour party's last desperate attempts to keep the rating system in at least one part of Scotland.

Mr. Wallace


Mr. Forsyth

I may give way to the hon. Gentleman later, if he will allow me to make my point.

Stirling is a university town. However, the last book shop in Stirling closed the other day because of the rates. The toy shop to which I used to take my children also closed the other day—again because of the rates. The hon. Member for Glasgow, Garscadden (Mr. Dewar) who has moved the new clause is suggesting that there should be one area in Scotland where there is an experiment. His hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) told the Committee that rates and the success of businesses were not connected. He told the Committee that rates did not have an effect on businesses. I find it staggering to have lectures from the Labour party on what the people of Scotland think and what is happening in Scotland when it believes that rates do not have an effect on businesses.

I can only speak for Stirling, and thank goodness for that.

Mr. Maxton

Not for long.

Mr. Forsyth

While the Labour party presents people who are responsible for high rates, which destroy not only businesses, but families who must sell their homes because they cannot pay their rates, the hon. Gentleman may well have to wait a long time for the new dawn that he sees.

The fact that the Labour party has tabled this new clause tells me that it has already accepted that it will lose the general election. If it thought that it would win, the new clause would not be necessary. It can see the writing on the wall, so the hon. Gentleman must not be so confident.

Mr. Wallace

Does the fact that the hon. Gentleman is bemoaning the inclusion of a "volunteer" local authority not imply that he has little confidence of the Conservatives winning control of Stirling district council? Obviously, if they won in 1988, they would have plenty of time to volunteer before 1989–90.

Mr. Forsyth

I have every confidence that if we have a community charge, where everyone who casts a vote in these elections knows that he will have to pay something towards services, the present administration of Stirling district council will be thrown out of office. That is why I passionately support the introduction of this Bill and why I am opposed to there being an experiment. The experiment would certainly not include Stirling because the Labour administration in Stirling knows that if it were made accountable, it would be out on its neck.

We should consider the new clause on its merits, but reject the idea of an experiment. I find one aspect interesting. Whichever area of Scotland is lucky enough to be the experimental area for the introduction of a community charge, what will happen there? First, business men will fall over themselves to set up in business in that area because they can plan ahead, knowing that they will not face a substantial rate increase. They will not face the 16 per cent. rate increase that Central region will impose.

Mr. Maxton

Will the hon. Gentleman give way?

Mr. Forsyth

If the hon. Gentleman will let me finish my point, I shall gladly give way.

The businesses will know that they can escape the Central region rate increase of 16.6 per cent. That has been reduced from a 20 per cent. increase, proposed at a time when its rate support grant has been increased by 10 per cent. They can escape the rate increases in Strathclyde and rate increases of 30 per cent. or more in Lothian.

Mr. Maxton

I wish the hon. Gentleman would read the new clause, which makes no reference to non-domestic rates. It relates to the abolition of domestic rates in one district and the introduction of a community charge. I do not quite understand how the hon. Gentleman can, therefore, make points about businesses in relation to the new clause.

Mr. Forsyth

The hon. Gentleman's whole problem is that he does not quite understand. If he looks at the Labour party's amendments, he will find that his party has tabled an amendment later to get rid of clause 4 which deals with non-domestic rates because it wishes to remove that protection entirely. He must not anticipate the decisions of the House.

If we have an experimental area, businesses will rush into it, secure in the knowledge that they can plan ahead and will not be faced with severe, sudden, unexpected rate increases which have destroyed, not only businesses throughout Scotland, but jobs. Young couples seeking housing will know that they can buy a house in that area and not be subjected to sudden, unexpected costs on top of their mortgage payments, for which they have not budgeted.

Distortions would be created which would ultimately be reflected in house and business prices. Presumably, the distortions would be reversed suddenly if the experiment were extended to cover the whole of Scotland. That would undoubtedly cause great hardship and difficulty to those who live in the area and on its boundaries. Therefore, the proposition is not practicable, but it would certainly display the advantage of a community charge.

5.15 pm

I am surprised at the alliance amendment to the new clause. I expected the alliance to suggest having an experimental area for local income tax. Even at this late stage—

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

It would not have been in order.

Mr. Forsyth

The alliance had an opportunity on Second Reading to do that when, during a half hour speech, the hon. Member for Caithness and Sutherland (Mr. Maclennan) told us that he was just going to deal with local income tax, but never got there. We had to listen to the hon. Gentleman for goodness knows how many hours in Committee and he was asked goodness knows how many times to outline the alliance's local income tax scheme, but he never got there.

Sir Alex Fletcher (Edinburgh, Central)

The hon. Gentleman refused.

Mr. Forsyth

Indeed, as my hon. Friend reminds me, the hon. Gentleman refused. Today the House has been treated to another speech from the hon. Gentleman in which he criticised the Government for not explaining in detail what their policy involves and for not having a consensus of support for their policy in Scotland which is necessary to bring forward any proposition. The hon. Gentleman and his party have used the slogan "local income tax" without defining it and giving the people of Scotland the opportunity to see what sort of system they propose.

Sir Alex Fletcher

I think the hon. Member for Caithness and Sutherland (Mr. Maclennan) wants my hon. Friend to give way to him.

Mr. Forsyth

I shall give way to the hon. Gentleman if he will tell us how his local income tax system will work. No, I thought not.

Sir Alex Fletcher

Wait for it.

Mr. Forsyth

I shall gladly give way to the hon. Gentleman.

Mr. Maclennan

The alliance will be delighted that the decision about the form of taxation for local government is to be left to the Scottish people to decide at the election. Our system will be related to the ability to pay; it will enhance local accountability and will be a local income tax.

Mr. Forsyth

That sounds rather like the Labour party's recent policy document in which it committed itself to ending war. The hon. Gentleman defined the characteristics of the system but was unable to say how it would work or what the system would be. How the Scottish people are expected to vote on a system which remains somewhere in the air and in the planning system of the alliance, I know not.

Mr. Henderson

Does my hon. Friend agree that the hon. Member for Caithness and Sutherland (Mr. Maclennan) sounded more like the alliance candidate who, when asked what time it was, said "What time would you like it to be, dear fellow?"

Mr. Forsyth

My hon. Friend must not tempt me to stray. It is hard to be nasty to Liberals. A Liberal has been defined as someone who is so nice that he finds it difficult to—

Sir Russell Johnston

Will the hon. Gentleman give way?

Sir Alex Fletcher

Here is a nice Liberal.

Sir Russell Johnston

The answer to the question of the hon. Member for Fife, North-East (Mr. Henderson) is that it is time the hon. Gentleman sat down.

Mr. Deputy Speaker

It is also time that we returned to the new clause.

Mr. Forsyth

I shall not go further down that road, Mr. Deputy Speaker.

The fact that the Labour party has tabled the new clause is significant, not only because it concedes the fact that the Labour party does not expect to win the general election, but because it is a change in the Labour party's position hitherto. At first, the community charge was completely unfair and unworkable. Having lost that argument in Committee, Labour Members are now asking to see how it works in practice and wondering how they can criticise it. It is odd that we have not heard much from the Labour party about how its rating system, with its proposed capital values and the rating of agricultural land and buildings, will work in practice. It is not clear from the clause whether the Labour party proposes that we should have this experiment in one area and in the rest of Scotland implement other Labour policies. If that happened, it would be interesting to see the effects. The rating of agricultural land and buildings would destroy jobs in the rural areas on a catastrophic scale.

The effect of introducing capital values for assessing rateable values would penalise the pensioners whom the Labour party has dismissed. Labour would bar them from benefiting under the community charge because pensioners are not significant in terms of total population. For the same reason Labour has dismissed the single-parent families who would benefit.

Those who suffer from capital valuation are the elderly living in homes which they have had for years and which have suddenly acquired an increased value. First-time buyers would also suffer. They would find that not only were they saddled with high mortgage payments but with high rate payments, which would be reflected in the value of the house they were trying to buy. Ironically, the people who would benefit from capital values are those who are earning good salaries and whose children have left the household. Those people would be better off, and they are not the sort of people that the Labour party usually champions.

The reason the Opposition favour capital values and rates is because it is a corrupt system from which they benefit. That is at the root of it all. They want capital values because they believe in a wealth tax and it suits the spite and envy that is central to their philosophy to implement such a system. The hon. Member for Glasgow, Cathcart (Mr. Maxton) is nodding. The hon. Gentleman may take pleasure in opinion polls. I remind him that during the revaluation crisis the BBC held a television phone-in. He may remember that. There was a row about the programme. The three systems were explained, but obviously the hon. Gentleman did not watch the programme. The systems were: local income tax, the rating system and the poll tax, as it was described. The people of Scotland phoned in to such an extent that they blew up the switchboard at Newton Stewart. I think it was about 60 per cent., but certainly the vast majority of people favoured the poll tax and the least popular system was the rating system which the hon. Gentleman espouses.

We should reject this new clause, just as the people of Scotland will reject the Labour party when they are given the opportunity and when accountability is brought back to local government.

Mr. Jim Craigen (Glasgow, Maryhill)

I do not know why the hon. Member for Stirling (Mr. Forsyth) is so truculent about the proposition for an experiment in one local authority area in Scotland. His party wants to hold an experiment in 65 local authority areas. Therefore, why is he so excited about the prospect of one area which may want to volunteer for this new tax? I am sorry to hear that the last book shop in Stirling has closed, but I am puzzled about how this legislation will preserve book shops in Scotland, because it does not alter the revaluation system in the non-domestic sector. It does not guarantee that rates will not go up, whether they are in the form of a poll tax or under the present property system.

The hon. Member for Eastwood (Mr. Stewart) talked about accountability. Accountability to whom? Will local authorities end up being more accountable to Government rather than to the people whom they are elected to serve? Under the Government's proposals more of the local authority income will be determined not by the poll tax ratepayers but by Ministers. They will decide matters relating to the uniform business rate, and will determine the revenue support grant. At the end of the day the poll tax or community charge—call it what we will—will raise less money proportionately for the local authorities.

The real problem is not that local authorities will be made more accountable, for I am in favour of accountability, but that over the last six or seven years the Government have shown that they want to be less accountable for the cost of providing local authority services. That is why rates in many areas have gone up so significantly. It is a result of the continual retrenchment by the Government in paying their share of local authority services. Do not let us kid ourselves. The facts are all in Hansard in the parliamentary questions.

The hon. Member for Stirling talked about first-time buyers. It is important that they should be encouraged, but he did not dwell long on the transformation that will take place in the housing market if this poll tax is introduced. In time it will be easier for people who already have houses to move up-market. Oh for the castles; Fordell Castle. It will be much better to live there than in a wee gate house. The poll tax will have an impact on first-time buyers, too, and will make it more difficult for some of them to get into the housing market, because property values will be distorted.

One of the problems about the community charge or the poll tax is that we are dealing with it now only in theory. We are merely discussing it and people have not yet had a demand notice through the letter box, often telling them that they may have to pay a lot more. The hon. Member for Dumfries (Sir H. Monro) said that three quarters of the people would be better off even though they are £1 a week worse off. When I heard the hon. Gentleman say that I said to my hon. Friend the Member for Cunninghame, South (Mr. Lambie), "What primary school did he go to?"

The figures in the Green Paper show that a majority of people will be worse off under this system. The hon. Member for Dumfries tells us that even though some people will he £1 a week worse off they will really be better off. That is part of the Government's twisted logic over this whole business. I do not know why the Secretary of State is getting so excited about the prospect of one local authority in Scotland wanting to attempt this scheme which the Secretary of State now thinks is so marvellous. Three years ago he had a different tune because he was only an Under-Secretary then.

I purposely did not sit on the Committee, even though that meant that I missed the entertainment of seeing the hon. Member for Edinburgh, South (Mr. Ancram) stand on his head. I was not prepared to spend hours listening to Ministers reading out speeches when three years ago when we dealt with the Rating and Valuation (Amendment) (Scotland) Bill they said it could not be done. All this has changed because the civil servants in the Box have changed, and the speeches are different.

This scheme is as nonsensical now as it was when it was rejected in the Green Paper published by the Government three years' ago. As I said, I do not know why the Secretary of State is getting all worked up about the new clause. If it is such a good thing, he should not be worried about trying it out in one area.

Mr. Henderson

I am glad to follow the hon. Member for Glasgow, Maryhill (Mr. Craigen). If he had been a member of the Committee, he would have been struck by the extent to which this measure stood up to parliamentary scrutiny. My right hon. and learned Friend introduced the Bill to the House in an encouraging way. Those of us who recognise the difficulties of producing a substantial and radical measure to change the basis of local authority finance for years ahead clearly understood that it would run risks in standing up to parliamentary scrutiny. It is easier to defend even the indefensible status quo, such as the Labour party is doing with rating, than it is to put forward a radical new proposal.

The first and most striking aspect of the Bill is the way that in Committee it stood up not only to parliamentary scrutiny but was shown to contain proposals that the Government had thought through much more clearly than the Opposition were able to do. The muddle in which the Opposition find themselves is clearly illustrated by the fact that the hon. Member for Glasgow, Cathcart (Mr. Maxton) has explained to the House that the new clause is not what it purports to be, but that it suggests an experiment in the Government's proposals. In answer to a question from one of my hon. Friends I thought that I understood the hon. Gentleman to say that it was only a partial experiment. That illustrates the muddle and confusion among the Opposition parties during the Committee proceedings.

I congratulate my hon. Friend the Parliamentary Under-Secretary on the way in which he has consistently shown that the proposals have been thoroughly well thought out—

Mr. Ernie Ross (Dundee, West)

Why are there so many amendments?

5.30 pm
Mr. Henderson

I do not believe that any experiment, total or partial, should be undertaken before the scheme is carried out.

I am grateful to my right hon. and hon. Friends on the Front Bench for changing the implementation programme of the Bill. That change has met one of the objections causing some anxiety to local authorities.

Mr. Maxton

As the hon. Gentleman has made attacks on the Opposition and has claimed that we are confused, can he explain why, if I remember rightly, when we made the proposal in Committee he voted against it?

Mr. Henderson

Which proposal is the hon. Gentleman talking about?

Mr. Maxton

To do away with the phasing out.

Mr. Henderson

I am sorry, but the hon. Gentleman has once again illustrated my argument. I suggest he studies the Committee proceedings, for he will discover that he is, yet again, wrong.

When Fife regional council discovered that COSLA was feeding information only to the Labour party in Committee it briefed me on a number of matters of concern to it. One thing that was especially emphasised by the council was the phasing in of the programme. It felt that there would be some difficulty in running the two systems side by side and getting the systems ready for the start of the operation.

Mr. Michael Forsyth

Does my hon. Friend agree that it is a complete misrepresentation to suggest that we were opposed to introducing the system more rapidly? On the contrary, many of us spoke in favour of rapid implementation. Certainly one of our worries was that the amendment drafted by COSLA might not be technically effective.

Mr. Henderson

As I would expect, my hon. Friend's recollections are much more precise than those of the hon. Member for Cathcart.

I believe that the change in the implementation programme will assist local authorities in their planning and preparation for the changes that will take place. At the same time, it will enable the benefits to reach domestic ratepayers in Scotland as quickly as practicable. I believe that the change will be welcomed by Fife regional council and Labour local authorities.

I welcome the fact that, during the interim phase, the rate increases that can be dumped on non-domestic ratepayers will be limited to the rise in the retail price index. Recently I tabled a parliamentary question to my right hon. and learned Friend to establish the cost of rate increases on health boards. The answer gave some extraordinary figures. Over the past 10 years, the amount of payment made by Scottish health boards, in lieu of rates on hospital premises, has risen from £8,393,000 in 1976–77 to £38.5 million in 1985–86. That is the type of burden that has been placed on vital health services in 10 years as a result of excessive rate increases by local authorities. I welcome the fact that there will be some limitation on the type of excessive increases that may be imposed on vital services for the community. There will also be a limitation on local authorities.

I am astonished that the hon. Member for Caithness and Sutherland (Mr. Maclennan), who has been so coy in putting forward proposals for a local income tax, has not suggested in his amendment to the Labour party's new clause that there should be a local income tax experiment. The alliance says that it wishes to get rid of domestic rates, unlike the Labour party, and it has suggested how that might be done. I would have thought it reasonable for the alliance to put forward a proposal on how to try out local income tax, but no such proposal has been made. Certainly no proposal has been made for testing local income tax in the areas that the alliance represents. When my hon. Friend replies perhaps he will give us some idea of the cost to different category taxpayers of a local income tax in the areas represented by the alliance.

Mr. Maclennan

Whereas the poll tax is a tax that has not been tried in any other modern country and was probably operated only in the most primitive societies—

Mr. Michael Forsyth

What about Japan?

Mr. Maclennan

It is not operated in Japan. The hon. Gentleman is well aware that Japan has a system of rebated taxation and that is similar to a local income tax. Local income tax is a system of local taxation that operates in many countries and there is no need for experimentation.

Mr. Henderson

In that case I am even more surprised that the hon. Gentleman has been unable to explain that system either to the Committee or to the House this afternoon.

I encourage my right hon. and hon. Friends to proceed as speedily as possible with the proposals. In time I believe that they will prove of benefit to all Scottish people.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram)

I shall reply briefly to the debate.

My hon. Friend the Member for Fife, North-East (Mr. Henderson) was accused by the hon. Member for Glasgow, Cathcart (Mr. Maxton) of having voted against the amendment to leave out 1992–93 and insert 1989–90". The amendment was described by the hon. Member for East Lothian (Mr. Home Robertson) as a probing amendment. The final part of that debate ends with the words: Mr. Maxton: I beg to ask leave to withdraw the amendment." — [Official Report, First Scottish Standing Committee, 15 January 1987; c. 280, 284.] I do not believe that my hon. Friend the Member for Fife, North-East was far out in what he said about the Opposition's confusion.

Some hon. Members have been shouting about all the amendments down on the Notice Paper. I believe that such amendments are a sign that the Bill has been well scrutinised in Committee. As a result of the Committee proceedings, we have come forward with amendments to the Bill that are designed to improve it, in line with discussions in Committee. I am rather surprised to discover that Opposition Members feel that that is the wrong way to proceed. It gives a strange view of the Opposition's interpretation of what a Committee stage is all about.

With regard to the general points raised in the debate, I have some difficulty with the speech of the hon. Member for Caithness and Sutherland (Mr. Maclennan) because, effectively, he said nothing. On this occasion, he did not even say it very well. In his intervention on my hon. Friend the Member for Stirling (Mr. Forsyth) he gave us a great insight into the policies of the alliance regarding local government finance. He confirmed that the alliance was in favour of a local income tax. He then said that he did not wish to give further details because the alliance wanted the Scottish people to decide what type of local taxation they wanted. However, he went on to say that, once the Scottish people had decided, they would get a local income tax system whether they liked it or not. I rather suspect that the reason why the hon. Gentleman takes refuge in such comments is that he knows as well as I that, if he studies how local income tax works in practice, he will see that those to whom his party is aiming its propaganda would pay far more under that system than they would under a community charge system. Now is not the occasion to deal with those figures, but perhaps, during the course of the two days' debate, we will have the opportunity to consider them.

My hon. Friend the Member for Eastwood (Mr. Stewart) rightly referred to the present and proposed level of rate increase. One of the best justifications for introducing the community charge as soon as possible is that increases of the type that we are now witnessing would become less likely were there greater accountability.

It is legitimate to ask, in looking at the proposed rate increases that we are seeing reported in the papers, of 30 per cent. or 19 per cent., whether local authorities would have proposed such increases if they had known that, instead of just a minority of the electorate being required to pay for these decisions, the totality of their electorate would have to pay. My judgment is that if that were the case, we would not see such increases. That underlines the need to introduce the new system as soon as possible.

Equally, in the situation that the Bill will create, where over a period the existing system begins to disappear whereby the non-domestics pay £2 for every £1 paid by the domestics, it is legitimate to ask whether local authorities would be prepared to put the total burden of their excess expenditure over assessed need on to the totality of their electorate. Again, I very much doubt whether they would.

If ever there has been a justification for what is taking place in the Bill, it is the type of rate increases that we are seeing and that are being announced in certain areas of Scotland. It is all very well for Labour Members to say that this is all to do with the rate support grant. This year, there has been a generous rate support settlement. If the argument that Opposition Members have adduced time after time during rate support grant debates have been correct, we would have expected low rate increases across Scotland, if any increase at all.

Mr. Maxton

We have had them.

Mr. Ancram

The hon. Gentleman should visit Lothian, Edinburgh and Stirling to see whether that is the view of the ratepayers.

My hon. Friend the Member for Eastwood is right to point to these increases as justification for not having any unnecessary delay in the implementation of the community charge. I listened with some care to the argument put forward by the hon. Member for Dunfermline, West (Mr. Douglas). At one stage, he said that rates were a politically accountable tax. That is a fascinating statement.

Mr. Douglas

The Minister just said that.

Mr. Ancram

If the hon. Gentleman reads my speech, he will see that I referred to the accountability that will be created by a community charge, and made the point that, when only a minority have to bear the burden of local authority expenditure decisions, there is no accountability.

In a system such as the present rate system, where only 29 per cent. of the electorate pay full rates and only another 10 per cent. of the electorate make any contribution to rates, can Opposition Members suggest that that is an accountable system?

Mr. Home Robertson

We have a problem here. The Minister thinks that if he can get away with telling half the truth often enough, someone will believe it. I refer to a written answer that he gave me, in which he said: Of the 4 million people eligible to vote in the 1986 regional and islands council elections, 49 per cent. were domestic ratepayers and 30 per cent. were spouses of domestic ratepayers."—[Official Report, 27 January 1987; Vol. 109, c. 180.] That comes to 79 per cent. Is that a minority?

Mr. Ancram

The hon. Gentleman said that 49 per cent. were ratepayers. He is right. I spoke of 39 per cent., which is the percentage that pays rates. Another 10 per cent. pay but are fully rebated and pay no rates. Is a system accountable in which just over one third of the electorate have to pay for spending decisions of authorities?

I ask the hon. Member for Dunfermline, West again whether a system which demands £2 from the non-domestic ratepayer with no vote for every £1 from the domestic ratepayer who at least has a vote can be described as accountable. I find that hard to believe. It explains the Labour party's views of accountability in democracy, which we had so much difficulty in trying to understand in Committee.

Mr. Douglas

I would not, and I should have thought that the Minister would not, rest an argument for accountability only, or even in some cases mainly, on voting patterns. An important element of accountability is what discussions about the system take place in the media and elsewhere. One of the reasons why we have had these changes is that the media and other organs of public opinion have raised this important issue in politically accountable terms. Perhaps the Minister does not like a free press.

Mr. Ancram

I am grateful to the media for pointing out some of the excesses taking place in local government. I am sure that that is good for the democratic process. No system of democracy is accountable under which those who are deciding what should be spent and raised can ignore the effect that it will have on those who will pay because they are a minority.

5.45 pm
Mr. Maclennan

Will the Minister address himself to the point which he at no time answered in Committee? By his own figures, local authorities in Scotland, if the Bill goes through, will have control over only 13 per cent.—a marginal amount — of the expenditure of local authorities. How can the Minister say that that is enhancing local authority accountability?

Mr. Ancram

I have been fascinated by this argument, which the hon. Gentleman put forward in Committee. He knows as well as I do that the only area of direct contact between an elector — a local taxpayer — and a local authority where accountability can be created is within the 13 per cent. He suggests that there is greater accountability in raising taxes from non-domestic ratepayers who have no vote. In any argument on democracy, that would be a hard line to pursue.

My hon. Friend the Member for Dumfries (Sir H. Monro) was right to say that the new clause is a delaying tactic and that the people in Scotland now want to know when the new system is coming in. They believe that it is a good system and that we need to get on with its introduction. That is what we shall be discussing when we come to the first set of amendments on the first few clauses. I welcome the support that my hon. Friend has given.

I am grateful to my hon. Friends the Members for Stirling and for Fife, North-East for referring to the effect that rates have on jobs. It is often forgotten in these debates, when we are talking about the individual local taxpayer, that rates have a severe economic effect, and we shall be seeing that economic effect in certain parts of Scotland over the next few months. It is part of the debate and a justification for introducing the new system which we shall do as soon as possible.

Like my right hon. and learned Friend the Secretary of State, I believe that the new clause is simply unworkable. If the hon. Member for Cathcart considered what would be created by his new clause, for which he made great claims, he might agree that it would be unworkable. First, it cannot simply be left to industry. The system proposed under the Bill would necessitate close involvement by the appropriate regional council because the regions are the levying authorities for the community charge. The region would have the complex task of levying and collecting the community charge in one district, while having to collect rates in the others. Given the arguments put forward by the hon. Member for Cathcart about the difficulty of running two systems in tandem, I should have thought that that was a serious objection to the new clause.

It is also difficult to see how this would make it possible for anything worth while to emerge from the pilot scheme. The results would be seriously distorted, depending on the areas in which it took place in Scotland and what was happening next door. Nor is it clear on what basis the region would be able to decide the level of the community charge that it wished to set for the district in question, and the hon. Member for Glasgow, Garscadden (Mr. Dewar) did not address himself to that point. Moreover, it would be impossible for the pilot scheme as proposed to test adequately the new grant arrangements in the Bill or the new basis for paying for water and sewerage. It may have been a hook on which to hang a debate, but as a proposal that could be put into action, it is unworkable.

The new clause is based on the principle of experimentation. I am surprised that this has suddenly become an element of Opposition thinking. If they introduced a new tax, would they do so on an experimental basis in one area?

Mr. Maxton

Wealth tax.

Mr. Ancram

If a future Labour Government were to introduce a wealth tax, would they do it only in the Berwickshire district to see whether they could catch the hon. Member for East Lothian (Mr. Home Robertson)? It is nonsense to suggest that a general tax can be introduced on an experimental basis in one area, and I am sure that all right hon. and hon. Members understand that.

The new clause is about procrastination and delay. Opposition Members have not been able, on Second Reading, in Committee or in this debate, to get to grips with anything that they can say is wrong with the Bill. That is why they seek to delay it and why I ask my hon. Friends to resist the new clause.

Mr. Maxton

In the last two minutes of the Minister's speech, we at long last heard something about the new clause. Every other Conservative Member ranged widely over the whole Bill, and, to some extent, they were right to do so. The experiment would show how the Bill would work and would give us a chance to reinforce the many arguments that we advanced in Committee. It would demonstrate the absolute failure of the Government to justify what they are doing on any grounds. Instead, they have resorted to telling half-truths and mistruths—I am not allowed to use stronger language in the Chamber—to get their case across.

I shall start with the issue of accountability and the 29 per cent. of people who pay rates.

Mr. Ancram

Full rates.

Mr. Maxton

The Minister now says full rates. I shall deal with the matter bit by bit.

My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) referred to an answer from the Minister which stated that 49 per cent. of people were liable to pay rates and that another 30 per cent. were the spouses of those who pay rates. That makes 79 per cent — [Interruption.] The Minister claims that 49 per cent. is a minority. However, clause 10 (6) states: Persons married to each other shall be jointly and severally liable for the personal community charges for which they are liable. In other words, if my wife is not employed, I have to pay her community charge. What is the difference between that and saying that my wife bears some responsibility for paying my rates? The two arguments are the same.

The fact is that 79 per cent. of people are liable to pay rates now. Certainly there are rebates — some people receive a total rebate—but how will the Government bring about that accountability? How will they make large numbers of widows, single parents and so on accountable? How will they increase the number of people to be made accountable, to use their phrase? Of course, they will do so by ensuring that everyone in the country over the age of 18, whatever his income and however poor he is, will pay at least 20 per cent.

The Minister has never told us how many people would pay the poll tax in full if non-working wives, whose husbands pay it for them, and those who now receive full and partial rebates were excluded. I do not believe that that would amount to a majority of people who would be eligible to pay the poll tax. The Minister has consistently fudged that issue and told half-truths, mistruths and untruths about it. If I were in another debating chamber with different rules, that is not the language that I would use to describe what the Minister has been doing.

Mr. Michael Forsyth

I am trying to follow the hon. Gentleman's argument. He seems to be complaining that husbands and wives are jointly and severally liable to pay the community charge, but he moved the amendment in Committee that provided for precisely that.

Mr. Maxton

The hon. Gentleman is being his usual pathetic self. He cannot follow an argument and is incapable of seeing the logic in anything that anyone says. He always twists the logic to fit his distorted views.

I made no attempt to suggest that joint and several liability was wrong. I said that the same rules apply under the present rating system as will apply under the new system. That is right now and will be right then, but that does not detract from my argument. The hon. Gentleman should listen for a change, instead of having his mind full of his normal stupid undemocratic prejudices.

The proposals are not entirely the brainchild of the hon. Gentleman—that is a misuse of the term brain—but they are to some extend his child. The reason why the hon. Member for Stirling has consistently put forward this idea is that he does not believe in democracy. He does not believe in the democratic process working in Scotland. The local authority in his constituency is Labour controlled. He loathes Stirling district council and Central regional council and he will do anything to take them out of the control of the Labour party, including introducing this unfair tax.

In putting forward this idea, the Conservative party is showing its arrogance. Although the Government do not have a majority in Scotland, they have brought forward the proposals as if they had the support of the Scottish people. I see that the Secretary of State is smiling. Unlike other hon. Members I have consistently supported devolution, and I am not prepared to sell my principles for high office. That is exactly what the Secretary of State did; he resigned from a post of junior spokesman over devolution, but when real power came along he was into the Scottish Office before his feet could touch the ground. He would do anything for high office.

Mr. Henderson


Mr. Maxton

I shall not give way because this is a short debate.

Mr. Henderson

On a point of order, Mr. Deputy Speaker. The hon. Gentleman has suggested that Conservative Members are undemocratic, but it was a Labour Member who used undemocratic means to stop the Committee going about its business, even though he was not a member of it.

Mr. Deputy Speaker

Matters of this kind are not for me.

Mr. Maxton

Thank you, Mr. Deputy Speaker.

The fact is that the Conservative party has not had a majority in Scotland since 1964, but it has ruled without one since 1979. As my hon. Friend the Member for Garscadden said, we are not even using the mandate argument. We are simply asking the Government to take that into account when they use Scotland as a test bed for the rest of the country. That is why we are suggesting that there should be an experiment in only one part of Scotland. The Government have no support there and will have even less after the next general election. In that regard, the silliest speech that I have heard in a long time was made by the Secretary of State last weekend.

We have heard a great deal about how this is a fairer tax. Whether or not that is so will emerge from the experiment. The only way in which the Government can possibly claim that widows, single parents on supplementary benefit—either now or in the future—or single old-age pensioners will benefit is by comparing what will happen in 1989 with what happens in 1988. A widow living on supplementary benefit or a widow's pension, or an old-age pensioner or a young single unemployed person, or a single parent will all be worse off.

At present, none of them pays rates, because they are all fully rebated. It is the Government's miserable scheme under the Social Security Act to make them pay that 20 per cent. that allows the Government to claim that those people will be better off. That is the only way that the Government can do it. But those people will not be better off, and the people of Scotland had better be aware of that. They should ask themselves, "Will I, as a single, old-age pensioner living alone in a council house in Castlemilk, be better off in 1989 than I am in 1987?" The answer, of course, will be, "No. At present I pay nothing; in 1989 I shall be paying £1 a week in poll tax."

Only yesterday, I received a letter from a constituent living in Clarkston road. It was very well written; the writer obviously has an income and pays rates. She lives in a room with a kitchen and an outside toilet, and at present she is a single householder—probably an elderly lady, although she does not say so. She currently pays £106 in rates, but under the community charge she will pay £276. She receives no rebate on the rates, and we must assume that she will not receive any on the community charge either. Fewer people are likely to be rebated on the community charge than at present, because that is the effect of the Social Security Act.

One of the constant cries — we have heard it again from the Secretary of State—has been that it is unfair that a widow living alone in a big house left to her by her husband, whose family has gone away, has to pay the same rates as a family of five working adults living down the road. Let me give an example. I asked the regional council to give me some figures for the rateable values in Quadrant road in my constituency. It is a good area, with nice houses and high rateable values. In that short road I found two people living alone in big houses and two other houses with five people in each. It was interesting to discover that last year a widow living in one of those houses paid £1,520 in rates — an enormous burden for a single person—while five people living in a house just down the road paid almost exactly the same amount. The sums were marginally different because the rateable values differed slightly.

What would happen if a poll tax were introduced in that area? We would assume that the widow paying £1,520 a year would be considerably better off: she would pay only £276, and therefore save £24 a week. If the Government's argument is right, that saving should be paid for by the five working people in the other house. However, if we multiply £276 by five, that totals only £1,380, so that household will also be saving money. Those five working people will be better off under the poll tax.

Who then will be paying that £24 a week? Other widows in Castlemilk will be paying it; the poor will be paying not the rich. The poll tax is not about helping single people, but about helping people who are already well off with good salaries and wages.

An experiment would be very worth while. It would allow us to see exactly how the system would work, and would illustrate the unfairness of someone in Castlemilk paying exactly the same as someone living in Newlands. It would show the nonsense of the administrative arrangements, and we could see whether registration would work.

I feel that there may be flaws in the system. If the Minister had felt able to say, "We agree with the notion of an experiment, in principle" — incidentally, the Secretary of State did not even mention that in his speech—we should be prepared to withdraw the new clause. We consider it essential that such an experiment should take place in one area so that we can show what nonsense the system will be.

Question put, That the clause be read a Second time:—

The House divided: Ayes 185, Noes 246.

Division No. 107] [6.05 pm
Abse, Leo Bray, Dr Jeremy
Alton, David Brown, Gordon (D'f'mline E)
Anderson, Donald Brown, Hugh D. (Provan)
Archer, Rt Hon Peter Brown, N. (N'c'tle-u-Tyne E)
Ashdown, Paddy Brown, R. (N'c'tle-u-Tyne N)
Ashley, Rt Hon Jack Bruce, Malcolm
Ashton, Joe Buchan, Norman
Atkinson, N. (Tottenham) Callaghan, Jim (Heyw'd & M)
Bagier, Gordon A. T. Campbell-Savours, Dale
Banks, Tony (Newham NW) Carlile, Alexander (Montg'y)
Barnes, Mrs Rosemary Carter-Jones, Lewis
Barron, Kevin Cartwright, John
Beckett, Mrs Margaret Clark, Dr David (S Shields)
Beith, A. J. Clay, Robert
Bell, Stuart Clelland, David Gordon
Benn, Rt Hon Tony Clwyd, Mrs Ann
Bennett, A. (Dent'n & Red'sh) Cohen, Harry
Bidwell, Sydney Coleman, Donald
Blair, Anthony Conlan, Bernard
Boothroyd, Miss Betty Cook, Frank (Stockton North)
Boyes, Roland Cook, Robin F. (Livingston)
Corbyn, Jeremy Maxton, John
Cox, Thomas (Tooting) Maynard, Miss Joan
Craigen, J. M. Meacher, Michael
Cunningham, Dr John Meadowcroft, Michael
Davies, Rt Hon Denzil (L'lli) Mikardo, Ian
Davis, Terry (B'ham, H'ge H'l) Millan, Rt Hon Bruce
Deakins, Eric Miller, Dr M. S. (E Kilbride)
Dewar, Donald Mitchell, Austin (G't Grimsby)
Dixon, Donald Morris, Rt Hon A. (W'shawe)
Dormand, Jack Morris, Rt Hon J. (Aberavon)
Douglas, Dick Nellist, David
Duffy, A. E. P. Oakes, Rt Hon Gordon
Eadie, Alex O'Brien, William
Eastham, Ken O'Neill, Martin
Evans, John (St. Helens N) Orme, Rt Hon Stanley
Fatchett, Derek Owen, Rt Hon Dr David
Faulds, Andrew Park, George
Field, Frank (Birkenhead) Parry, Robert
Fields, T. (L'pool Broad Gn) Patchett, Terry
Fisher, Mark Pavitt, Laurie
Flannery, Martin Pike, Peter
Foot, Rt Hon Michael Prescott, John
Forrester, John Radice, Giles
Foster, Derek Randall, Stuart
Foulkes, George Raynsford, Nick
Fraser, J. (Norwood) Redmond, Martin
Freud, Clement Rees, Rt Hon M. (Leeds S)
George, Bruce Richardson, Ms Jo
Gilbert, Rt Hon Dr John Roberts, Ernest (Hackney N)
Godman, Dr Norman Robertson, George
Golding, Mrs Llin Rooker, J. W.
Gould, Bryan Ross, Ernest (Dundee W)
Gourlay, Harry Ross, Stephen (Isle of Wight)
Hamilton, James (M'well N) Rowlands, Ted
Hamilton, W. W. (Fife Central) Sheerman, Barry
Hancock, Michael Sheldon, Rt Hon R.
Hardy, Peter Shields, Mrs Elizabeth
Harrison, Rt Hon Walter Shore, Rt Hon Peter
Hart, Rt Hon Dame Judith Short, Ms Clare (Ladywood)
Hattersley, Rt Hon Roy Silkin, Rt Hon J.
Haynes, Frank Skinner, Dennis
Healey, Rt Hon Denis Smith, C.(Isl'ton S & F'bury)
Heffer, Eric S. Smith, Rt Hon J. (M'ds E)
Hogg, N. (C'nauld & Kilsyth) Snape, Peter
Holland, Stuart (Vauxhall) Soley, Clive
Home Robertson, John Spearing, Nigel
Howarth, George (Knowsley, N) Steel, Rt Hon David
Howell, Rt Hon D. (S'heath) Stewart, Rt Hon D. (W Isles)
Howells, Geraint Stott, Roger
Hughes, Roy (Newport East) Strang, Gavin
Janner, Hon Greville Thomas, Dafydd (Merioneth)
Jenkins, Rt Hon Roy (Hillh'd) Thomas, Dr R. (Carmarthen)
Johnston, Sir Russell Thompson, J. (Wansbeck)
Jones, Barry (Alyn & Deeside) Thorne, Stan (Preston)
Kaufman, Rt Hon Gerald Tinn, James
Kennedy, Charles Torney, Tom
Kinnock, Rt Hon Neil Wainwright, R.
Kirkwood, Archy Wallace, James
Lambie, David Warden, Gareth (Gower)
Lamond, James Wareing, Robert
Leighton, Ronald Weetch, Ken
Lewis, Ron (Carlisle) Welsh, Michael
Lewis, Terence (Worsley) White, James
Litherland, Robert Wigley, Dafydd
Livsey, Richard Williams, Rt Hon A.
Lofthouse, Geoffrey Wilson, Gordon
Loyden, Edward Winnick, David
McKay, Allen (Penistone) Woodall, Alec
Maclennan, Robert Young, David (Bolton SE)
McWilliam, John
Madden, Max Tellers for the Ayes:
Marek, Dr John Mr. Ray Powell and
Martin, Michael Mr. Lawrence Cunliffe.
Mason, Rt Hon Roy
Adley, Robert Atkins, Rt Hon Sir H.
Alison, Rt Hon Michael Atkins, Robert (South Ribble)
Ancram, Michael Baker, Nicholas (Dorset N)
Ashby, David Baldry, Tony
Beaumont-Dark, Anthony Hind, Kenneth
Best, Keith Hogg, Hon Douglas (Gr'th'm)
Bevan, David Gilroy Holt, Richard
Biggs-Davison, Sir John Hordern, Sir Peter
Blaker, Rt Hon Sir Peter Howard, Michael
Bonsor, Sir Nicholas Howarth, Gerald (Cannock)
Boscawen, Hon Robert Howell, Ralph (Norfolk, N)
Bottomley, Mrs Virginia Hubbard-Miles, Peter
Braine, Rt Hon Sir Bernard Irving, Charles
Brittan, Rt Hon Leon Jackson, Robert
Brown, M. (Brigg & Cl'thpes) Jenkin, Rt Hon Patrick
Browne, John Jessel, Toby
Bruinvels, Peter Johnson Smith, Sir Geoffrey
Buchanan-Smith, Rt Hon A. Jones, Gwilym (Cardiff N)
Buck, Sir Antony Jones, Robert (Herts W)
Budgen, Nick Kershaw, Sir Anthony
Carlisle, John (Luton N) Key, Robert
Carlisle, Rt Hon M. (W'ton S) King, Roger (B'ham N'field)
Carttiss, Michael Knight, Greg (Derby N)
Churchill, W. S. Knight, Dame Jill (Edgbaston)
Clark, Sir W. (Croydon S) Knowles, Michael
Clarke, Rt Hon K. (Rushcliffe) Knox, David
Colvin, Michael Lamont, Rt Hon Norman
Conway, Derek Lang, Ian
Coombs, Simon Latham, Michael
Cope, John Lawler, Geoffrey
Couchman, James Lawrence, Ivan
Cranborne, Viscount Lee, John (Pendle)
Critchley, Julian Leigh, Edward (Gainsbor'gh)
Crouch, David Lennox-Boyd, Hon Mark
Currie, Mrs Edwina Lewis, Sir Kenneth (Stamf'd)
Dicks, Terry Lightbown, David
Dorrell, Stephen Lloyd, Sir Ian (Havant)
Douglas-Hamilton, Lord J. Lloyd, Peter (Fareham)
Dykes, Hugh Lord, Michael
Evennett, David McCrindle, Robert
Eyre, Sir Reginald McCurley, Mrs Anna
Farr, Sir John MacGregor, Rt Hon John
Favell, Anthony MacKay, Andrew (Berkshire)
Fletcher, Sir Alexander MacKay, John (Argyll & Bute)
Fookes, Miss Janet Maclean, David John
Forman, Nigel McLoughlin, Patrick
Forsyth, Michael (Stirling) McNair-Wilson, M. (N'bury)
Forth, Eric McNair-Wilson, P. (New F'st)
Fox, Sir Marcus Madel, David
Fraser, Peter (Angus East) Major, John
Freeman, Roger Malins, Humfrey
Fry, Peter Malone, Gerald
Gale, Roger Maples, John
Galley, Roy Marland, Paul
Gardiner, George (Reigate) Marlow, Antony
Gardner, Sir Edward (Fylde) Marshall, Michael (Arundel)
Garel-Jones, Tristan Mates, Michael
Glyn, Dr Alan Mather, Sir Carol
Goodlad, Alastair Maude, Hon Francis
Gorst, John Merchant, Piers
Gow, Ian Meyer, Sir Anthony
Gower, Sir Raymond Mills, Iain (Meriden)
Grant, Sir Anthony Mills, Sir Peter (West Devon)
Greenway, Harry Moate, Roger
Gregory, Conal Monro, Sir Hector
Griffiths, Peter (Portsm'th N) Morris, M. (N'hampton S)
Ground, Patrick Moynihan, Hon C.
Grylls, Michael Murphy, Christopher
Gummer, Rt Hon John S Neale, Gerrard
Hamilton, Hon A. (Epsom) Nelson, Anthony
Hanley, Jeremy Nicholls, Patrick
Hannam, John Norris, Steven
Hargreaves, Kenneth Onslow, Cranley
Harvey, Robert Osborn, Sir John
Hawkins, C. (High Peak) Ottaway, Richard
Hawkins, Sir Paul (N'folk SW) Page, Sir John (Harrow W)
Hawksley, Warren Page, Richard (Herts SW)
Hayhoe, Rt Hon Sir Barney Patten, J. (Oxf W & Abgdn)
Hayward, Robert Pawsey, James
Heddle, John Peacock, Mrs Elizabeth
Henderson, Barry Percival, Rt Hon Sir Ian
Hickmet, Richard Pollock, Alexander
Higgins, Rt Hon Terence L. Portillo, Michael
Hill, James Powley, John
Price, Sir David Taylor, Teddy (S'end E)
Proctor, K. Harvey Temple-Morris, Peter
Raison, Rt Hon Timothy Terlezki, Stefan
Rathbone, Tim Thomas, Rt Hon Peter
Renton, Tim Thompson, Donald (Calder V)
Rhodes James, Robert Thompson, Patrick (N'ich N)
Rhys Williams, Sir Brandon Thorne, Neil (Ilford S)
Ridley, Rt Hon Nicholas Thornton, Malcolm
Ridsdale, Sir Julian Thurnham, Peter
Rifkind, Rt Hon Malcolm Townend, John (Bridlington)
Roberts, Wyn (Conwy) Townsend, Cyril D. (B'heath)
Robinson, Mark (N'port W) Trippier, David
Roe, Mrs Marion Trotter, Neville
Rost, Peter Twinn, Dr Ian
Rowe, Andrew van Straubenzee, Sir W.
Rumbold, Mrs Angela Vaughan, Sir Gerard
Ryder, Richard Waddington, Rt Hon David
Sackville, Hon Thomas Waldegrave, Hon William
Sainsbury, Hon Timothy Walden, George
Scott, Nicholas Walker, Bill (T'side N)
Shaw, Sir Michael (Scarb') Waller, Gary
Shelton, William (Streatham) Walters, Dennis
Shepherd, Colin (Hereford) Ward, John
Shersby, Michael Wardle, C. (Bexhill)
Silvester, Fred Watts, John
Sims, Roger Wells, Bowen (Hertford)
Skeet, Sir Trevor Wells, Sir John (Maidstone)
Smith, Tim (Beaconsfield) Wheeler, John
Soames, Hon Nicholas Whitfield, John
Speed, Keith Whitney, Raymond
Spencer, Derek Wiggin, Jerry
Spicer, Jim (Dorset W) Wilkinson, John
Spicer, Michael (S Worcs) Winterton, Mrs Ann
Stanbrook, Ivor Winterton, Nicholas
Steen, Anthony Wood, Timothy
Stevens, Lewis (Nuneaton) Yeo, Tim
Stewart, Allan (Eastwood) Young, Sir George (Acton)
Stewart, Andrew (Sherwood)
Stewart, Ian (Hertf'dshire N) Tellers for the Noes:
Sumberg, David Mr. Michael Neubert and
Tapsell, Sir Peter Mr. Tony Durant.

Question accordingly negatived.

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