Community Charge (Hansard, 6 May 1987)

§ Mr. Sheerman
asked the Secretary of State for the Environment what representations he has received as w the minimum level of community charge to be paid by those on low incomes.

§ The Minister for Local Government (Dr. Rhodes Boyson)
My right hon. Friend has received, and continues to receive, a substantial number of representations on this issue.

§ Mr. Sheerman
What will the Minister do to reassure my constitutents in Huddersfield who, if there are three people in a household, are faced with a 138 per cent. increase in their rate bill and a 218 per cent. rate increase if there are four adults in the household? What will the Minister say to those who are not only on low, but middle-range, incomes, who are faced with such a ruinous increase in their rate bill that they will end up either in the poor house or the work house under this Government?

§ Dr. Boyson
I remind the hon. Gentleman that there are no work houses under this Government. However, there is a considerable amount of income support and help for the low paid in our society. If we concentrate on that, we have already said that the mentally handicapped and those in old peoples homes will be exempt, the severely physically disabled will receive 100 per cent. rebates and that there will be generous rebates for those on low incomes. Indeed, 80 per cent. of old-age pensioners will be better off than they are now as single pensioners. [HON. MEMBERS: "No".] Opposition Members may not like to know that they will be better off under a Conservative Government, but the public know it. It is also important to recognise that it would be unfair to impose financial burdens on those on low incomes. It is equally 715 unreasonable for people to vote in the length and breadth of this country without realising the financial penalties of the policies for which they are voting.

§ Mr. Patrick Thompson
Does my hon. Friend agree that when the community charge is introduced there will be a very much greater incentive for Labour-controlled councils, such as Norwich city council, to keep rate increases down to a low level, and that that would benefit my constituents, business and industry in Norwich?

§ Dr. Boyson
I could not agree more with my hon. Friend. Undoubtedly, the opposition to the community charge from the Labour Benches stems from the fact that they know that it will bring reality home to authority after authority. If spending in Huddersfield and many other authorities was reduced to the grant-related expenditure level, authorities could reduce considerably the burden on ratepayers.

§ Mr. Blair
Now that even the Prime Minister yesterday admitted that this was a poll tax, and when the Secretary of State takes home about £30 a week extra as a result of the change, what have the Government to say to the millions of families already below the bread line who will be tipped further into misery by this change?

§ Dr. Boyson
Reference has been made to the question of a poll tax. [HON. MEMBERS: "Poll tax."] Exactly. I have the reference here and I am glad that Opposition Members also read Hansard. If hon. Members would read Hansard and go to the dictionary, they will understand the definition of a poll tax — [Interruption.] If the hon. Member would listen, I will advance his education even further. A poll tax means a tax per head. However, it has nothing to do with the voting register. If hon. Members go back to the dictionary—[Interruption].

§ Mr. Speaker
Order. The question relates to a community tax.

§ Dr. Boyson
A poll tax is a tax per head. In this case, we are making exemptions, to which I have already referred. According to "Chambers" and other dictionaries, no reference is made—and no reference was made by my right hon. Friend the Prime Minister yesterday—to the question of linking the definition of a poll tax to the voting register.

§ Mr. Favell
Is it not true that the only places where the electors have anything to fear is where there are high-spending councils, and that if people are daft enough to elect a bunch of twerps, such as those who represent Manchester, they have only themselves to blame?

§ Mr. Speaker
Order. I think that "twerp" is an inelegant parliamentary expression.

§ Dr. Boyson
I agree entirely with my hon. Friend. Indeed, the community tax—or rather the community charge—brings home to voters the cost of what they are voting for. In Manchester, the business ratepayers alone would save £30 million or £40 million. Manchester might then be again the prosperous city that it once was under private enterprise.

§ Mr. Favell
On a point of order, Mr. Speaker.

§ Mr. Speaker
If it is about that word, the hon. Gentleman may say something about it.

§ Mr. Favell
Mr. Speaker, "twerp" is a good old-fashioned northern word, which was used in a sensible parliamentary way. What is unacceptable about it?

§ Mr. Speaker
It means something rather different in London.

§ Dr. Cunningham
Why does the Minister continue with useless subterfuge when even the Prime Minister confessed yesterday that what the Government intend to introduce is a poll tax? Why does he seek to mislead people when he knows that his own Green Paper makes it clear that many people who pay no rates now will pay under the new system? For example, of the 7.5 million low-income families receiving housing benefit, 3 million pay no rates now, but will have to pay the new tax. Many of those people, including national insurance pensioners, widows and unemployed people, will have to pay the same level of tax as stockbrokers, moneybrokers and millionaires. Pensioners and unemployed people will be taxed at the same level as the latter group, and everybody will pay a minimum of 20 per cent. Is that what this Government regard as fair and just?—[HON. MEMBERS: "Yes."' Say that louder. If that is the Conservative view, we intend to make sure that the people of Britain know all about it.

§ Dr. Boyson
In setting income support levels, we shall take into account the impact of those levels on the most vulnerable groups, especially those who will pay for the first time. However, let us consider the other side of that. How many people earning £10,000, £15,000 or £20,000 a year, in houses the length and breadth of this country, pay nothing because they are not the householder? Is that justice? Similarly, is it justice that the Labour party talks about capital values, which would double the charge being paid by some people because capital values in London rose by 25 per cent. last year? That would be the threat to people living in Ealing, Brent, Waltham Forest and in other areas. What would people living in those areas do if faced by the capital values that are proffered by the Opposition?

§ Mr. McLoughlin
Will my hon. Friend point out that it is the present rating system—to which many people do not contribute—that is unfair and that the way in which old-age pensioners are clobbered by the present system is totally unfair? Will he assure us that a Conservative Government would reform the present rating system, unlike the Opposition, who continue to support high-rating councils throughout the country?

§ Dr. Boyson
I agree entirely with my hon. Friend and I think that most people in the country would agree with him, especially those living in high-spending Labour, alliance and double-alliance counties? The basis of what we are doing is at the least courageous, for a start. We are tackling the question of rates, about which people have grumbled in every party for 50 or 60 years. All that people are offered by the Opposition are capital values and a doubling of rates in many areas of the country, which people cannot afford to pay.

§ 9. Mr. Soley
asked the Secretary of State for the Environment what representations he has received about the level of the community charge and uniform business rate in London.

§ 10. Mr. Tony Banks
asked the Secretary of State for the Environment what representations he has received about the likely level of the community charge in inner London boroughs.

§ Mr. Ridley
Since we published illustrative figures on 1 April we have received a small number of representations about the likely impact of our proposals on authorities in London.

§ Mr. Soley
As the Government have already caused many local authorities of all political complexions to make difficult choices between draconian cuts in basic services and increasing rates, how on earth does the Secretary of State justify a poll tax which, in areas such as Hammersmith and Fulham, will lead to the average family rate increasing from £365 in 1986–87 to no less than £432 per adult in the same year? What justification is there for such a regressive, heavy poll tax in local areas?

§ Mr. Ridley
I shall give the hon. Gentleman a good justification. Hammersmith and Fulham is overspending by £16 and the Inner London education authority is overspending by £246 per adult per year respectively on their GRE. That massive overspending must be paid for by the people and I suggest that it is not unreasonable that it should be paid for by the people who vote those idiots into office.

Several Hon. Members
Idiots?

§ Mr. Speaker
Order. It is in the same category as twerp.

§ Mr. Tony Banks
The Secretary of State's discourtesy towards elected councillors is well known in this House and outside. Does he know that at present the average rate in the London borough of Newham is £517 a year and that if the poll tax is introduced it will mean that a two-adult household must pay £648 a year, a three-adult household £1,026 a year and a four-adult household £1,368 a year? That news will not do much damage to the Conservatives in Newham, because they do not stand a chance there, but how can the Secretary of State defend a system which imposes such charges on the second most deprived local authority area in the country while benefiting Mr. and Mrs. Thatcher in Dulwich to the tune of £37 a week in savings? This is an up the pole tax.

§ Mr. Ridley
Newham receives a high GRE of £906 per adult and it is spending £167 per adult on top of that. The community charge will be high in Newham because expenditure is high. Furthermore, the Labour party in its publication "Local Government Reform in England and Wales" states that it wants a system of capital rateable values with variations in income, not variations in rateable value —[Interruption.] I am entitled to tell the House what the effects of the Opposition's policy are. The effect of variations in income on the assessment of rates is that rates will increase massively in the north of England and will decrease in the south-east. That is their proposal and it is about time the country knew it.

§ Sir George Young
If Labour Members are genuinely concerned about the problems of Londoners on average or below average incomes, should they not spend more time talking about local government expenditure, which is at the heart of the problem? Can my right hon. Friend tell the House that he will keep rate-capping provisions in operation after the community charge has been introduced to give protection to people in Ealing?

§ Mr. Ridley
As the Green Paper showed, we intend to retain some form of limitation on the charges that authorities may impose. My hon. Friend is entirely right that the reason for the high levels of community charge in London is massive spending. The overspending of ILEA above GRE is £246 per adult. Somebody must pay for that and the House will not disagree with the suggestion that the people in inner London should.

§ Mr. Greenway
Will my right hon. Friend further consider Ealing and appreciate that the pressure for the community charge arises because of the sheer abuse of the rate system by the Ealing Labour council, which has imposed a 65 per cent. increase in rates on domestic ratepayers and a 57.3 per cent. rate increase on industry? That means a rate increase of at least £5 per household. Pensioners come to my surgery crying because they cannot pay it, but the Labour party does not care. Will my right hon. Friend assure the House that the vicious Ea ling Labour council will be rate-capped as soon as possible to save my constituents from the bread line?

§ Mr. Ridley
I cannot say anything about the future of rate limitation or how it might affect Ealing, but I entirely share my hon. Friend's view that the ruthless and cynical imposition of massive spending and massive rate increases on innocent citizens is one of the most disgraceful and distasteful features of the Labour party.

§ Mr. Dubs
Will the Secretary of State confirm that in Tory-controlled Wandsworth, the Prime Minister's favoured local authority, the community charge will result, per head, in a 115 per cent. increase compared to the present system, and that that is the biggest increase of any local authority in England or Wales? How does he justify that?

§ Mr. Ridley
I justify it very simply. It is because there is a £246 per adult overspend by the Inner London education authority, of which Wandsworth is part. The Wandsworth rate, and the community charge that follows from it, is extremely low because of the good management of that council, but it is ruined by the surcharge for ILEA.

§ Mr. Squire
Given the passage last night in another place of the remaining stages of the Scottish equivalent legislation, will my right hon. Friend bear in mind the possible advantages of deferring legislation in England and Wales until any minor difficulties are ironed out in Scotland?

§ Mr. Ridley
We are likely to defer the English and Welsh Bills until the start of the next Session of Parliament, as my hon. Friend knows. That will allow plenty of time to look at any difficulties. It is important to return to the point that the Labour party is proposing a system that would have the effect of putting up the charges that people pay in the north of England through the rating system, and bringing down what will be paid in the south-east. Some of my hon. Friends will be glad to hear that information.

§ Mr. Straw
The Secretary of State is in the mire on the poll tax and I hope he realises that. Is he aware that his excuse for the 115 per cent. increase in Wandsworth—because of ILEA spending — simply does not wash because, so capricious is the poll tax system that it will lead to a reduction in average rate bills in Conservative Westminster, which is also in the ILEA area? Do the adjectives "ruthless" and "cynical" also apply to the 57 per 719 cent. increase in the business rate that businesses in Wandsworth will have to pay, the 31 per cent. increase that businesses in Westminster will have to pay, the 32 per cent. increase that businesses in Ealing will have to pay, and the 82 per cent. increase that businesses in Kensington and Chelsea will have to pay? When the Secretary of State used the word "idiots", was he referring to those hundreds of thousands of electors who rejected the policies of the Conservative Government and Conservative councillors at the polls last May and elected Labour councillors? Was not the Tory Reform Group correct when it described the poll tax proposals as neither Conservative in concept nor sensible in application?

§ Mr. Ridley
The hon. Gentleman might be glad to know that I have announced today proposals which will allow the minority of businesses that might face significant increases in rate bills five years to adjust to the new rate levies and that, where increases in the valuation are greatest, we shall postpone some of the increase in value to the next revaluation period.