§ Mr. Patrick Cormack (Staffordshire, South)
I beg to move amendment No. 40, in page 1, line 15, after 'over', insert'but has not attained his 80th birthday'.
§ Mr. Speaker
With this we shall take the following amendments: No. 41, in page 1, line 15, at end insert'provided he is not in receipt of any form of income support'.No. 140, in page 2, line 6, leave out subsection (3).
No. 103, in page 76, line 7, in schedule 1, at end insert'or is detained on remand'.No. 207, in page 76, line 7, at end insert'or held on remand'.No. 202, in page 76, line 26, after 'mentally', insert 'and physically'.
No. 125, in page 76, leave out lines 30 to 38.
No. 203, in page 76, line 30, after 'mentally', insert 'and physically'.
No. 126, in page 76, line 31, leave out 'certified as' and insert 'deemed to be'.
No. 204, in page 76, line 31, after 'mentally', insert 'and physically'.
No. 127, in page 76, line 33, leave out from 'from' to 'involves' in line 34.
No. 208, in page 76, line 35, at end insert'or acquires a disability resulting in severe impairment of intelligence and social functioning through accident or disease.'No. 128, in page 76, line 41, at end insert'or is a full-time school pupil'.No. 129, in page 77, line 3, leave out from 'education' to end of line 5.
No. 130, in page 77, line 5, at end insert'or is undergoing a course of training leading to qualification as a nurse'.No. 131, in page 77, line 19, at end insert'and(c) he is not liable to pay income tax.'.No. 132, in page 78, line 20, at beginning insert '(1)'.
No. 1, in page 78, line 26, at end insert—
§ 'Members of Religious Communities
§ (1)A person is an exempt individual on a particular day if he lives as a member of a religious community.
§ (2)The Secretary of State shall by order define what constitutes a religious community at any particular time.'
No. 133, in page 78, line 26, at end insert—
(2) For this purpose a designated dwelling shall be taken to include a nunnery or monastery or other dwelling used by members of a religious order whose members have taken vows of poverty and in such circumstances there shall be no liability for collective community charge.'
§ No. 222, in page 78, line 26, at end insert—
§ 'Homeless People
§ A person is an exempt individual on a particular day if at any time on the day his sole or main residence is not a permanent structure.'689
§ Mr. Speaker
Is it connected with this Bill? I am not taking any further points of order arising out of the former matter.
§ Mr. Douglas
I accept that, Mr. Speaker. That is why I have been hesitant in raising the point.
The House is rightly conscious of the privilege, propriety and constitutionality of the proceedings. yesterday, however, a distinct vote in the House showed a definite shift in opinion relating to the poll tax legislation. We have been made aware, through public pressure and the media, that Lord Jenkins of Hillhead is to seek leave in another place to move a motion asking the Government to take some time to reflect on what has happened here and in the country before the Second Reading debate proceeds in the other place.
On the Order Paper for this evening and tomorrow evening are two orders relating to the poll tax legislation for Scotland. As Scotland is being made a guinea pig for this legislation before it has the whole-hearted approval of the rest of the nation, would it not be wise for the Government to desist from proceeding with any further orders to do with the Scottish legislation before this matter has been the subject of at least some deliberation in another place?
§ Mr. Speaker
That is certainly not a matter for me. In this Chamber there are opportunities to amend legislation, and the House made its decision last night.
§ Mr. Cormack
I want to recall one of the former hon. Members of this House whom I admired most—the noble Lord Broxbourne, who sat next to me for many years as Sir Derek Walker-Smith. He was one of the principal opponents of entry to the Common Market. He deployed his case with vigour and clarity, and always with complete courtesy and firmness. Although I did not find myself in the Lobby with him during those debates in the early 1970s, my respect for him grew with each speech that he made, because he debated as a true parliamentarian. When, at the end of the day, the House decided, against his profound convictions, that we should go into the European Community, he said that it was then his duty to try to ensure that what he had prophesied did not come to pass and that the thing worked.
Sir Derek was one of the first and leading members of the delegated group to the European Assembly. I believe that he chaired the Legal Committee in that assembly, and he played a most constructive part in helping to mould it and direct its deliberations. It is in that spirit that I hope to approach the amendments this afternoon.
I have never voted for the community charge or poll tax. I did not vote for it in the Scottish legislation in the last Parliament; I have not cast a single vote in its favour, nor do I intend to do so—
§ Mr. Ian Gow (Eastbourne)
My hon. Friend paid a well justified tribute to our noble and learned Friend Lord Broxbourne, but so eloquent was that tribute that I must ask whether my noble Friend has died. If not, what was the purpose of the eulogy?
§ Mr. Cormack
If my hon. Friend had listened a little more carefully, he would have heard me imply that I believed that the manner in which the noble Lord 690 approached that subject was a model and a lesson for us all. My hon. Friend the Member for Eastbourne (Mr. Gow) had such a profound conscientious objection to one aspect of Government policy that he gave up an extremely promising career in the Government to sit on the Back Benches and criticise and vote against that aspect of policy. So he, of all people, should respect those of us who cannot go along with the Government on this policy.
The task of those of us who oppose the poll tax is now to try to take the sting out of it, to make it fairer and to remove the aspects of it that cause most concern. That there is concern no one can deny. The vote last night eloquently underlined that. No Conservative Member does not know colleagues who agonised about how they should vote and who told us—I do not criticise them for it—as we went into the Lobby at the end of the debate last night that they were with us in spirit but did not quite feel they could accompany us into the Lobby. That happens in the House from time to time. .l hazard a guess that if there was such a thing as a secret ballot here, the result last night would have been rather different.
We now have a clear commitment by the Government to introduce the poll tax and an equally clear recognition by my right hon. and hon. Friends on the Treasury Bench that some of us believe the tax is still unfair. The two amendments in my name have far more simple and less far-reaching aims than the amendment we debated yesterday.
§ Mr. David Winnick (Walsall, North)
I have just arrived in the Chamber, but I understand that the hon. Gentleman said that if there had been a secret, rather than a recorded vote, the new clause would probably have been carried last night. I certainly think that the Government would have been defeated on a free vote, but does he agree that, if there were a free vote in the Cabinet, it is likely that there would not be a majority for the poll tax even there?
§ Mr. Cormack
I have never been in the Cabinet and my stand on this and other issues is unlikely to make my accession to that august body any more probable.
The amendments have two simple aims, and I believe that they would make this tax fairer in the eyes of the public. The first is designed to remove people over the age of 80 from liability for the tax, and the Government have already recognised the justice of my general ambition in the second. It would take out of the tax altogether those who are in receipt of what is now called income support and what was until recently known at supplementary benefit.
I shall deal first with the over-80s. One of the pledges in our manifesto when I was elected in 1970—it was quickly implemented, I hasten to add—and which caused most emotional support in the country was that to give pensions to people over 80 who did not receive them of right because they had not contributed. Successive Governments since the war, Labour and Conservative, had held out on the contributory principle, but between 1968 and 1969 the Conservative Party, much to its credit, decided to commit itself to giving pensions to the over-80s.
In a particularly eloquent speech in October 1969 the then hon. Member for Finchley—now my right hon. Friend the Prime Minister—said:there comes a time when a principle has to be abandoned if the reality of the situation is such that some people are suffering hardship."—[Official Report, 31 October 1969; Vol. 790, c. 591.]691 That is as classic an enunciation of the non-doctrinaire, pragmatic, Conservative approach to social services as I have ever heard. It is a policy that still guides my right hon. Friend and her colleagues, and they could remind themselves of it now with profit.
People who are over 80 form a group that includes a large percentage of elderly relatives—mothers, fathers, uncles and grandparents—whom younger people have taken into their homes and are looking after. They are providing that loving family place that all hon. Members ought to regard with genuine respect and admiration, because it is a true family unit. Such old people will have to pay the community charge, the poll tax, if amendments such as this one are not accepted.
In order to help and encourage younger people who play this sustaining and often costly role, there is real merit in what I am suggesting. I know that my hon. and learned Friend the Minister who piloted the Bill with great eloquence and skill through the Committee will argue that many of these old people will be helped. That is true, and it is right that it should be so, but they will not be totally helped. They will all still have to pay something, and not a few of them will have to pay the whole whack, because they will not qualify for help.
Last week we discussed the £6,000 cut-off limit that many of us thought was far too low in the context of 1988 and when measured against our exhortations to prudence and thrift. yesterday, in his speech in reply to my hon. Friend the Member for Hampshire, East (Mr. Mates), my right hon. Friend the Secretary of State for the Environment made a clear, unequivocal and total acknowledgment of the fact that such concessions as are available to the elderly in the Bill will be linked to the system, and that the £6,000 limit will apply.
Many people over the age of 80 therefore will not qualify for help and although I do not think that there can be many families who consider these matters in mercenary terms that will be a real financial deterrent to some people. It may make them say that the cost of conversion of a room and all the other things that go with it make it impossible for them to take in a mother or a granny or whoever it might be. If such an old person who is no longer able to look after himself or herself has to go into some form of care, then within a measurable period, if not immediately, the cost to public funds will be infinitely greater than any concession that might be made by my right hon. Friend. We should look at these things in that light.
§ Mr. Ralph Howell (Norfolk, North)
I sympathise with my hon. Friend's proposition, but surely he realises that not all people over the age of 80 are in need of help. The people that he is concerned with are the over-80s who are not very affluent, but some old people over the age of 80 are not in that category. May I commend to my hon. Friend my new clause 5? It would transfer the raising of funds for local authorities to a VAT supplement. That would mean that people over 80 who had little income would pay a very small community charge, but people who were richer would pay considerably more.
§ Mr. Cormack
I am sure that my hon. Friend and I are aiming to achieve similar ends. However, I am speaking not to new clause 5 but to amendment No. 40. That 692 amendment has one overriding and commendable virtue, if I may say so without immodesty. It is that it is simple, easy to understand and totally clear. My hon. Friend was right when he said that some people over the age of 80 are affluent and will not need the sort of support that I am suggesting. We are back to the child benefit argument. Most of those people will be paying high income tax on unearned income.
In order to benefit those in genuine need who will not be affected by the concessions that have already been made, we should allow the so-called affluent over-80s to have a tax holiday—that is what it amounts to—for a small amount of tax. Those who have worked hard and saved, and who have made a real contribution to our economy, deserve a tax holiday at the end of their lives. In a spirit of general benevolence, there would be nothing to criticise in a Government who decided to award those people such a modest bonus.
§ Mr. Tony Marlow (Northampton, North)
My hon. Friend is a very compassionate man and we all want to show compassion. Has my hon. Friend worked out roughly how much this will cost? How many people are there over the age of 80? It is 1 million or so, is it not—and at £200 each that is £200 million. My hon. Friend has pointed out the problem of elderly people taken in by and staying with their families. Would it not be more satisfactory if one were spending this sort of money to target expenditure particularly to those over 80 who are staying with their families rather than to over-80s in total? After all, some ex-Members of Parliament on index-linked pensions may not require this munificence.
§ Mr. Cormack
If when he replies to this debate my hon. and learned Friend the Minister, in a spirit of conciliation, says that he will ensure that all those living with their families will be exempt, then I shall consider very carefully whether it might be better to accept that rather than the whole of that for which I am asking.I am a reasonable and moderate person and I like to encourage my right hon. Friends on the Treasury Bench to behave in a similar manner.
It would not be in the interests of the House for me to accede to other interventions because I know that other hon. Members are anxious to speak. I should like to make one last point on this group of elderly people. It is one about which we should all remind ourselves from time to time—that inflation, at whatever level, always benefits to some degree the earners but never the savers or those who no longer have any earning capacity.
I should now like to come to the second of my two amendments, No. 41. It deals with people who are in receipt of income support or, as it was so recently called, supplementary benefit. I readily acknowledge that the Government have gone to considerable trouble to try to ensure that those for whom the poll tax will be a real imposition will be cushioned from the blow. One does not have to be a great student of these matters, nor does one have to read every line of the Committee Hansard, to realise that the system that has been devised with skill and care, as I frankly acknowledge, is exceptionally complicated and very difficult to understand.
Even the extra and welcome concession made on Thursday last is so complicated that I was stopped several times at the weekend and asked precisely what it meant. I 693 was not asked that question by people of low intelligence. [Interruption.] There is merit in simplicity; unlike one of my hon. Friends who is muttering, not all my constituents are fellows of All Souls. He would obviously grace its common room and high table, but not many of my constituents would be able to emulate him. Perhaps my hon. and learned Friend the Minister would reflect for a moment on the point that I sought to make in an intervention during yesterday's debate. I said that, if anyone had suggested a uniform domestic rate and that, without any regard for the location, size, character or condition of the property, the rich man in his castle and the poor man at his gate should all pay the same, he would have been laughed out of court.
However, we are now being confronted, not on a property basis, but on a personal basis, with precisely that recommendation. It is for that simple reason, and because I believe that the proposal flies in the face of a long and honourable tenet of Tory social policy, that I cannot go along with the Bill, as I hope I have always made plain.
However, if we consider the most needy in our community, we see that most, if not all, of them are either qualified for or receive income support. Instead of making them quake at the thought of forms and devising a most elaborate system to try to bring their contribution down to about 20 per cent.—even if we help some of them with that—it would be a simple and proper gesture to remove those people from liability for tax. That gesture would be entirely in accord with the principle enunciated by my right hon. Friend the Prime Minister when she made her plea for pensions for the over-80s.
In the past nine years, this country has prospered greatly. It has done so—I do not expect Opposition Members to agree with me—largely as a result of the courageous and determined leadership of the Government. But we are in danger of creating a society in which those least able to fend for themselves are not accorded the same recognition and regard as those who, by their efforts and ability, prosper and progress. I am all for incentives and encouraging people, and I am against punitive taxation, but hon. Members, especially on this side of the House, have a particular duty to consider those people.
Our social services have been created by those in all parties. The invaluable contribution of the Christian Socialists in the last century and earlier this century should never be forgotten; nor should we forget the contribution of Lord Beveridge and those others in the Liberal party who played their part. However, neither should we forget the contribution of those hon. Members who sat on this side of the House and were proud to be members of the Conservative party, as I am today.
§ Mr. Cormack
Every generation has different priorities. Every generation of government has different tasks to accomplish. This generation of government has had peculiarly difficult tasks to accomplish.
§ Mr. Cormack
I ask the hon. Gentleman to contain himself a little.
I implore my hon. and learned Friend the Minister to consider a little further this group of people, who are the most needy in our society and among whom are numbered 694 the elderly, the handicapped, the infirm and single parents struggling to bring up families. They have many domestic problems with which many of us would find it difficult to cope.
When the Minister has considered that, I hope that he will agree that instead of an elaborate system of concessions and rebates, which make people feel that they are receiving state-administered charity which they have to go through so many processes to obtain, those people deserve extra help. Some of them will be permanently deserving, but for others it will be a helping hand to put them back on the road to earning a living. We should remove them from that tax liability.
I do not believe that the acceptance of either amendment or both would make perfect what I still consider to be a bad tax, but it would help enormously. It would be popular in the country, but, far more important, it would be right and would show that there had been a clear and unequivocal recognition of those deserving groups.
Of course anomalies would remain. The flat rate would remain. Someone living in a small house would still pay as much as someone living in a large house. But, in a spirit of true compromise, we would have grasped one particular nettle.
I hope that my hon. and learned Friend will recognise that there is justice, reason and real purpose in what I am seeking to advocate. I sincerely hope that, at the end of the debate, there will be need not for a Division, but rather for thanks and acclamation.
§ Mr. Tam Dalyell (Linlithgow)
I shall be brief, as I wish to ask only two questions. First, in response to the hon. Member for Staffordshire, South (Mr. Cormack ), who presented his amendment very movingly, I must point out that we in Scotland are rather nearer the situation than people in England. Decisions are being made in homes in my constituency and in every other Scottish constituency as to whether granny or mother-in-law and others can remain any longer. Most people, come the poll tax, will decide that they do not take the decision on the basis of the poll tax. It is no good overegging and exaggerating a case because that damages it.
However, another situation may arise if the decision is whether mother-in-law, granny or auntie should come to live with a young or middle-aged couple. The fact that the poll tax will have to be paid then enters into the equation and into the decision as to whether to take in the person.
Perhaps the Minister will tell us whether there has been any assessment at the Department of the Environment in respect of the number of extra people who will now have to be paid for, as the hon. Member for Staffordshire, South suggested, in old people's homes, which is far more expensive to the state, and does not take into account the loss in terms of loving care. Have any calculations been made as to the effect of those measures on the number of people who will have to be accepted into publicly financed homes and, if not, why not?
Secondly, I should like to ask the Minister a question, following the written question that I put to the Secretary of State for Scotland yesterday as tohow many extra posts will be created in the Scottish courts administration in 1988, 1989, 1990 as a result of the community charge legislation".695 The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) replied:The explanatory and financial memorandum to the Abolition of Domestic Rates Etc. (Scotland) Bill estimated that up to 40 additional staff will be required. This estimate remains unchanged and additional staff will be deployed to the courts as and when required."—[Official Report, 18 April 1988; Vol. 131, c. 324.]We have to face up to it that in the categories mentioned by the hon. Gentleman, as in every other category, there will be many borderline situations and there will be matters that can be resolved only in the courts. The Scottish courts are making preparations for this. What estimate has the Department of the Environment made of the extra number of courts and administrators that will be needed as a result of this legislation? Those are my two brief questions.
§ Mr. Edward Leigh (Gainsborough and Horncastle)
I hope that my hon. Friend the Member for Staffordshire, South (Mr. Cormack) will forgive me if I comment briefly on his eloquent speech. We all sympathise with his caring attitude to those in need, particularly the elderly, but I am afraid that I cannot go along with what he had to say. First, he repeatedly referred to the community charge as a poll tax. It is not that, because already enshrined in the Bill are a number or exemptions and rebates. My argument with my hon. Friend is fundamental. I do not believe that we as a society should force members of our society with slender means into a kind of sub-culture where they are given money by society and not asked to make any contributions. That is not fair to them.
§ Mr. Cormack
Is my hon. Friend suggesting that those who are in receipt, sometimes as a result of great misfortune or tragedy, of income support have not made a contribution to society? Some of them have made notable contributions. The logic of his argument is that they should get nothing.
§ Mr. Leigh
No, that is not the logic of my argument. My hon. Friend has not heard the rest of my argument. If somebody is short of funds, rather than saying, "We shall put you on one side, we do not expect you to pay anything and we do not think you are part of society." is it not fairer to say, "We ask you to pay a modest contribution towards your community charge, say 20 per cent., and we will give you money, if necessary, to pay that contribution"? We shall not be pushing those people out of society and we shall recognise that they are part of society and involve them in the decision-making process. That is what the Bill does. It is dangerous to say to whole sections of the community, "Thou shalt not pay." I would rather deal with people in need through the rebate system.
We all sympathise with what my hon. Friend said about those aged over 80. They have made an immense contribution over the years, and what he said will, I am sure, be popular in the country. However, we as a legislature also have a duty to consider the country's needs. Is it a good idea to argue that someone who is over 80, however wealthy, should make no contribution towards the cost of local government?
§ Mr. Cormack
Does my hon. Friend not believe in the old adage, "No taxation without representation"?
§ Mr. Leigh
Of course I believe in it. That is why I want to involve all members in our society, whatever their age or the extent of their personal finances, in the decision-making and taxation processes. Therefore, I cannot accept any exemption, whether it is that in amendment No. 40 or that in amendment No. 41, which drives away whole sections of the community from the principle of paying taxes.
My hon. Friend said that he might be prepared to withdraw his amendments if my hon. and learned Friend the Minister for Local Government gave a commitment that those aged over 80 who stay with their families should not pay. Unfortunately, a commitment has already been given that those living in residential homes shall not pay.
§ Mr. Leigh
I do not think it is unfortunate, and I shall explain why. In Committee, I was not the only person who said this. My hon. Friend the Member for Bournemouth, West (Mr. Butterfill) said the same thing. It was brave of him to do so, because in his constituency there are many people living in residential homes who vote for him. He argued that we were giving those living in residential homes an unfair advantage, and so argued against the amendment.
One cannot solve a political problem simply by exempting one section of the community or rebating another section. We have to abide by what we believe in, and we believe that, generally speaking, everybody should be made to make some contribution to local government because everybody uses the services of local government. One of the major faults of the present rating system is that many people are not being asked to make any contribution and that is why the voting turn-out in local government elections is so small.
My hon. Friend the Member for Staffordshire, South is trying to drive a spear into the heart of the Bill by setting up new exemptions which will defeat the fundamental purpose of the Bill. For that reason I cannot support his amendments.
§ Mr. Terry Davis (Birmingham, Hodge Hill)
There is more in common between the hon. Members for Staffordshire, South (Mr. Cormack) and for Gainsborough and Horncastle (Mr. Leigh) than the latter has just suggested. He is at least being logical. He wants to scrap the exemption for people living in residential homes, whether those homes are private or run by the local council, and I give him credit for that logic. The hon. Member for Staffordshire, South, my hon. Friend the Member for Linlithgow (Mr. Dalyell) and I also wish to be logical. We wish to extend the exemption, so we have something in common, although we differ about the point to which it brings us.
However, there is no logic about the Government's position, because they wish to exempt those people living in residential homes, whatever their income or wealth, simply by virtue of the fact that they live in residential homes. The hon. Member for Staffordshire, South, my hon. Friend the Member for Linlithgow and I agree with the Government on that, but we wish to extend it to those who live with families in the community. That is because we recognise that the way in which the Government have framed the Bill has led to there being a fiscal disincentive to remaining in the community. The Government's policy 697 in a different sector is to encourage care in the community. It is nonsense to say that one wishes to encourage care in the community when one then imposes a tax that will be paid only by those who live with their families in the community.
In practice, I suspect that in most cases the tax will be paid not by the elderly person living in the community but by the son or daughter of the family. In many cases, the elderly person will not be told and will not have to bother about it. In the same way, the family at present pays the rates for the dwelling in which the elderly person lives with the rest of the family. It is not true to say that these elderly people are not taxed, because they are. Everybody who lives in a house is taxed through the rating system. The hon. Member for Gainsborough and Horncastle is nodding, so he accepts my logic. The only difference between us is where this argument takes us.
I am disappointed that the hon. Gentleman has not followed his logic through by tabling an amendment to scrap the exemption for people who live in residential homes, which is what we want to do. The hon. Member for Bournemouth, West (Mr. Butterfill), who is not with us—I am sure he has an excellent reason for that—expressed reservations about this in Committee. However, he, too, has failed to take the opportunity to amend the Bill to put into effect his logic and that of the hon. Member for Gainsborough and Horncastle.
We are debating an amendment that has been tabled by the hon. Member for Staffordshire, South, and I wish to support that amendment. However, there is a difference between us. There is some merit in the point put to him in an intervention—that not all people over 80 need help. The answer to that is that not all people in residential homes need help. The hon. Member for Staffordshire, South should take another point into account. There is a weakness in his argument because it is not only people over 80 who need help. Many other people need help, and many pensioners between the ages of 60–65 and 80 will find themselves in similar and distressing circumstances. By introducing the threshold of over 80, he is discriminating between the two groups of pensioners.
§ Mr. Cormack
I am trying to get something out of the Government, but the hon. Gentleman will readily acknowledge, just as I acknowledge the arbitrary nature of any age limit, that amendment No. 41 would catch many of those people, and would help them. I have not entirely neglected his point in tabling my amendments.
§ Mr. Davis
I regard amendment No. 40 as the most important because it exempts completely those above the age of 80. However, coming to the hon. Gentleman's defence, there is a precedent for his amendment. The age allowance within our taxation system provides an extra personal allowance for those over the age of retirement, and it is increased for those over the age of 80. The hon. Gentleman could have produced that as a precedent if he had made a longer speech. Therefore, I follow his logic. I would support the hon. Gentleman's amendment this evening if he decided to press it to a Division.
To cure the anomaly relating to elderly people I would settle for exemption at 80; I would settle for half a loaf if I could not get the whole. This anomaly might be amended by future Governments. I have no doubt that there will he great pressure and many campaigns, especially from pensioners' organisations, to reduce the age at which 698 exemption from poll tax comes into effect. We may well find that hon. Members on the Labour side of the House will be supporting such campaigns.
There are other anomalies in the exemptions described in clause 2 and schedule I, as they have come from the Standing Committee, particularly in relation to prisoners. The Government wish to exempt those who have been convicted and serving sentences in prison, but those on remand awaiting trial will not be exempt from the poll tax.
Many hon. Members know that people wait for months for their trials. Some of my constituents have waited for as long as a year. if such people are in prison, after being remanded in custody awaiting trial, they are still liable to poll tax. However, if they are found guilty, as many people are after having been remanded in custody, they will be exempt from poll tax during their future sentence and for the period that they have served on remand already. However, if they are found innocent, as many of them are, and released from prison, not only have they been deprived of their liberty during the period of remand but they have to pay the poll tax because they are not exempt. That is a ridiculous anomaly. Many Members on both sides of the Standing Committee recognised that as a silly anomaly. Therefore, I commend to the House amendment No. 103, tabled by my hon. Friend the Member for Copeland (Dr. Cunningham), as it would exempt everyone who is on remand in custody. That would mean that people deprived of their liberty will be treated in exactly the same way.
I also commend to the House amendment No. 125, which would exempt those who are physically disabled and put them on the same basis as the mentally disabled. The Bill at present exempts people who are severely mentally disabled. Many of us in Standing Committee would have liked to widen the exem ption to include the mentally disabled as well as the severely mentally disabled, but we lost that amendment in Committee. There is an important point to make about whether people who are mentally disabled and people who are physically disabled should be treated in the same way. I certainly support the amendment No. 125 tabled by my hon. Friends, which would remove that discrimination between mental and physical disability. If amendment No. 125 is accepted by the House, those who are mentally or physically severely disabled will be put on the same footing and will be exempt from poll tax.
Therefore, I commend all three amendments to the House.
§ Mr. William O'Brien (Normanton)
This group of amendments is extensive. In view of the guillotine that has been applied to it, I shall not detain the House long, as I am sure there are other important amendments to discuss.
Amendment No. 140 and other amendments tabled by my hon. Friend require attention. We ask the Minister to consider the amendments seriously and carefully as they involve much interest and principle. We consider that amendment No. 140 cannot operate because of the number of people without a main residence, as we saw with the intervention of Mother Teresa in "cardboard city". It is difficult to understand how such people will be registered for the poll tax and who will collect it from them. We consider that clause 2(3) should be left out of the Bill, as it will not work.
699 Likewise, amendment No. 222 refers to homeless people. There is much concern about the numbers of homeless. A person should be exempt from paying poll tax on any particular day if at any time on that day his sole or main residence is not a permanent structure. If these two amendments, referring to the collection of a charge from people who are not resident in accommodation that is a main structure, are not accepted, the Minister should explain how the poll tax will apply to the homeless and those without any main residence.
My hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) touched briefly on amendments Nos. 125 to 127, which refer to the severely mentally handicapped and the question of certified people who would be exempt. This does not go far enough. The Bill in its present form provides for exemption from the community charge only for individuals who are suffering fromarrested or incomplete development of mind.In other words, the congenitally mentally handicapped. We consider that lines 30 to 38 in schedule 1 ought to be deleted, because numerous people suffer similar levels of mental disability through accident or disease. They are just as much disabled as those who have developed this condition of mind.
It is inequitable that someone who attains mental maturity only to lose it through an accident or disease cannot be exempt from paying a community charge while someone with a similar disability who has never achieved full development of mind receives exemption. This unequal approach to the exemption of the severely mentally handicapped should be changed. We hope that the Minister will make a statement to the effect that some consideration will be shown for people who have developed this condition through accident or disease.
Perhaps this is an example of the Government trying to restrict the concession that they have promised. We understand that promises have been made about certain concessions. If provision is not made for the numerous people who suffer mental disability through accident or disease, the Government will be seen as trying to restrict the promised concessions.
In relation to amendment No. 126, we suggest leaving out the word "certified" and inserting "deemed to be". Again, "certified" has an unacceptable inference, particularly in relation to the mentally handicapped. Its use is also contrary to accepted social service practice. To require such formalisation of the status of an individual is anti-social. The word "certified" should be taken out of this part of the Bill. The phrase "deemed to be" is more acceptable in our opinion and may allow a more flexible approach to be adopted by medical practitioners. In other words, we are of the view—and I am sure that hon.Members on the Government Benches will accept it—that consideration should be given to erasing anti-social references, such as "certified", from the Bill. We offer an alternative that we consider is more acceptable to the medical profession and those who have to deal with the mentally disabled.
Amendments Nos. 128 to 132 relate to people in full-time education, such as pupils in schools and students, including student nurses. We are still waiting for a definition of "student". There has been some question about what constitutes a person in full-time educat ion. Should people who go on Manpower Services Commission 700 courses after leaving school or who are engaged in community work be treated as being in full-time education, or even as students? Exemption should also be considered for people on vocational or professional training. A similar situation applies to people undergoing apprenticeships or clerkships or studying for articles in various services.
I hope that the Minister will give serious consideration to the exemption of people in full—time education and students. If students are to be exempt, a large group of the population, which is committed to vocational training, should also enjoy a similar exemption. Therefore, we would ask the Minister to take into consideration the differences between the principles being applied to the various people in full-time education who can be classed as students.
We understand that the exemption from payment of people who are continuing full-time education depends on whether child benefit is payable. Will a 19-year-old person who is continuing in full-time education but for whom no child benefit is payable also be exempt? I hope that the Minister will consider that carefully and give us some explanation or agree with the point made in the amendment.
My hon. Friend the Member for Hodge Hill referred to amendment No. 103, which deals with people detained on remand. Such people do not receive services, cannot work and are not entitled to any benefit while in detention or custody, which, as has been pointed out, could continue for some considerable time. A similar situation applies to people detained for immigration reasons or awaiting deportation. Such people have no income, yet their liability to poll tax increases each day that they are detained. A person held on remand and convicted would have the time spent on remand taken into consideration when he was sentenced. We hope that the Minister will clarify such anomalies.
A question also arises with regard to the benefit payable to the partner or spouse of a person held on remand, particularly in the light of the recent changes in benefits which leave a lot to be desired. We should like the Minister to clarify how a spouse or partner will fare while a person is on remand or in custody.
In Committee, hon. Members on both sides referred to the position of people in holy orders. The Government gave undertakings to alleviate the impact of the community charge on nuns and monks. There is still no evidence that the Government intend to move on that matter. Nuns and monks are still not included in the list of exemptions. What do the Government intend to do about that?
As time is fugit and several hon. Members want to speak on other amendments, I simply ask the Minister to reply to the points that I have made on behalf of my hon. Friends, and, if possible, to give assurances that the people to whom I have referred will receive the exemption accorded to other categories referred to in the Bill.
§ Mr. John Hannam (Exeter)
I shall be brief because of the constraints on time. I want to say a few words in support of amendments Nos. 202, 203 and 204 which stand in my name. As has been pointed out, their essence is covered by the Opposition's amendment No. 125 and partly by amendment No. 41 in the name of my hon. Friend the Member for Staffordshire, South (Mr. Cormack).
701 I fully take on board the point made by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) that we must be careful not to extend exemptions or tax reliefs so far across the board that they undermine the essence of the original system. I see the danger of that, but this debate is dealing with categories of exemptions and I would wish to see the severely physically disabled included in the category of the severely mentally handicapped for exemption from the community charge.
I am sure that no hon. Member is unaware of the problems that the severely physically disabled face in everyday living. Their severe handicaps generally mean that a greater burden is placed upon them in seeking to live the everyday lives that we all want to see them have, and upon those who care for them. They face greater financial burdens than we have ever been able to provide for in our social security system. Even now, after the introduction of the new incomes support system, we have only a temporary bridging arrangement for the severely disabled through the trust fund being set up by the Disablement Income Group, and that is for the already most severely handicapped, not for those who will become severely disabled or handicapped after the introduction of the new scheme. Therefore, the future problems for the severely disabled are unknown and extremely worrying. Such people are unsure of their future position.
We have always hoped that by now we would have achieved a substantial general disablement costs allowance which would at least provide for all the extra costs incurred by disabled people—medical treatment, clothing, transport and care in the home. All those essential requirements are costly and place additional burdens on those who try to overcome their disabilities. We have not reached that stage and I am anxious that the community charge should not be another burden which would be counter-productive to our aim to encourage disabled people to stay in the community at home rather than in institutionalised care.
I do not think that I need to elaborate any further today on the needs of disabled people. They are well known to all Members of the House. But it is important to remember that until the early 1970s the disabled were a basically forgotten sector of the community, living out of sight and unassisted through our systems of social provision. It has been only in the last 10 or 15 years that major efforts have been made to help them come out from behind those closed doors into everyday life, to work where possible, to join in recreational activities, to have social contacts and, above all, to live at home rather than in institutionalised care. I desperately want this progress to continue and I hope that the Minister will give sympathetic consideration to including the severely disabled in the community charge exemption category for the severely mentally handicapped.
§ The Minister for Local Government (Mr. Michael Howard)
All the amendments in this large group seek to exempt groups of individuals from the personal community charge. Before turning to the individual amendments, it may be helpful if I say a word or two about the Government's general policy on the subject and explain why wholesale exemptions of the kind proposed are unacceptable.
One of our principal aims in abolishing domestic rates and introducing the community charge is to restore local 702 accountability. Local accountability must be restored and the only way to do it is to spread much more widely the burden of paying for community services. The community charge will achieve that aim by giving almost every member of the electorate a direct stake in how local authorities spend their money.
Of course, we accept that there are some groups of people whose circumstances are special and who should be exempted from the community charge. For the most part they are people such as the severely mentally handicapped, for whom the process of local accountability cannot satisfactorily operate. But it is quite clear, as was pointed out by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), that widespread exemptions are counterproductive because they reduce the number of people who pay and therefore erode local accountability. For this reason, it is imperative that the number of exemptions is kept to a minimum.
That is not to say, of course, that help should not be made available to those who would have difficulty in paying the full community charge. We are firmly committed to giving such help, but the right way to give it is through rebates, not through exemptions. The distinction lies in the fact that even those in receipt of the maximum rebate will make a small direct contribution towards the services that they receive, and the result will be that local accountability is preserved.
Having stressed the importance of preserving local accountability, and therefore having explained our reluctance to accept further exemptions, I turn to the amendments in this group. I begin with the amendments to which reference was made by my hon. Friend the Member for Staffordshire, South (Mr. Cormack). My hon. Friend began his speech with a happy reference to Lord Broxbourne. I was delighted to hear that, because before I entered the House I was privileged to be in a professional association with Lord Broxbourne. Indeed, I thought at one stage that the reason for my hon. Friend's reference to Lord Broxbourne was not that mentioned by my hon. Friend the Member for Eastbourne (Mr. Gow) but the fact that our noble Friend is within two years of the age at which he will qualify for the exemption from the community charge that was pressed upon the House by my hon. Friend the Member for Staffordshire, South. That was clearly a powerful additional point in support of his argument.
Nevertheless, although I understand why my hon. Friend should have tabled such an amendment, and despite the fact that it was reinforced by that additional powerful consideration, I cannot, I fear, accede to his request. I hope, however, that I can reassure him that it is unnecessary.
It is, of course, important that those on low incomes, and particularly the over-80s on low incomes, should receive assistance in paying the community charge. Our proposals give that assistance, both through rebates and through the increase in income support to reflect the minimum 20 per cent. contribution. In fact, as my hon. Friend will know, pensioners, and the over-80s in particular, are more generously treated under the income support and rebate systems than younger people, and quite properly so, because their needs are greater. A single person aged 80 or over receives a special premium of £13.05 a week in the current financial year on top of the basic income support payment, and a couple with one partner, or both partners, aged 80 or over, receive a 703 premium of £18.60 a week. These extra payments mean that for the over-80s the full 80 per cent. rebate will be available at significantly higher levels of income, and the rebate taper will extend further up the income scale than for others.
I think that it is clear that we have paid special attention to the needs of the over-80s. I firmly believe that the correct way to recognise those needs is through the combination of rebate and extra income support rather than through total exemption. Our preferred approach targets help more precisely to those who need it and ensures that local accountability is preserved.
§ Mr. Cormack
Could I just make two very brief points? First, I hope that the forms will be readily comprehensible. Secondly, and rather more seriously, would my hon. and learned Friend confirm that if even a married couple have savings of more than £6,000 they will not have the benefits to which he has referred?
§ Mr. Howard
My hon. Friend need not belittle the importance of the first point, because it is a very serious one. I very much hope that the forms that will be available will be simple and comprehensible to those whom they are designed to help. On his second point, confirmation was given during the debate yesterday, at which I know my hon. Friend was present, that that is indeed the position.
It was argued, although in a modest way, by the hon. Member for Linlithgow (Mr. Dalyell), among others, that the exemption for old people in homes creates an anomaly and a disincentive to care in the community. This is an argument to which I responded in Committee, and I am glad to explain once again why we do not believe that it will pose a problem.
The first point to bear in mind is that those in residential care in nursing homes receive special treatment at present. Most receive rate relief, which is not available to old people living in their own homes. When the Abolition of Domestic Rates (Scotland) Act 1987 was considered in Parliament there was strong pressure for continuing that special treatment. In response, the Government agreed that those being cared for in such institutions should be exempted from liability to pay the personal community charge. If there is a disincentive effect, therefore, it is one that operates at present.
I do not believe that there will be such an effect. Arguably, if an elderly person with a low income had to pay the full community charge in his home and pay nothing in an institution, that might influence the decision whether to stay within the community. But that is not the choice that most elderly, infirm or disabled people will face. Those on low incomes who remain resident in the community will be eligible for rebates. A single pensioner or a pensioner couple, for example, with no income other than the state retirement pension would qualify for an 80 per cent. rebate, plus an increase in income support payment to reflect the 20 per cent. contribution. That means that, in an area with the average community charge, there would be no financial incentive whatever.
§ Mr. Howard
If the hon. Gentleman will wait until I have finished my explanation, I will give way to him.
704 In an area with the average community charge there would be no financial incentive whatever, one way or the other. In a high-spending area there might be a relatively small advantage in removing to an institution, but in a low-spending area there would be a slight advantage the other way. But it is most unlikely, as the hon. Member for Linlithgow, I think, acknowledged, that this tiny financial advantage would influence the choice between care within the community and care in an institution.
The hon. Gentleman sought to suggest that there might be a deterrent to those who were considering welcoming into their homes an aunt or uncle, or a relative of that kind. I believe that that point, too, was misconceived because, as he will be aware, the 20 per cent. community charge for someone on income support would be personal to that individual and would not fall on other members of the family in the way that the hon. Gentleman was suggesting.
In the case of the better-off over-80s also a community charge liability is most unlikely to play any part in this decision. A pensioner with a small occupational pension, for example, would be most unlikely to gain in any way as a result of moving into a residential care home since he or she would have to contribute virtually all his or her income towards the cost of the care and accommodation in the home. Any gain from being exempt from the community charge would be dwarfed by the overall financial consequences of the decision to move into the home. For all those reasons, I do not think that there would be any significant effect whatever on this decision.
§ Mr. Wilson
Will the Minister accept that he misrepresents the position in two ways? First, he misrepresents it by suggesting that a typical elderly person living with a family would be eligible for the maximum rebate. Will he confirm that someone who had an elderly person living in the family home and fairly modest personal assets would be liable for the full community charge, and that therefore there would be a considerable incentive for someone at present paying domestic rates to get that elderly person into residential accommodation?
Secondly, does the Minister accept that it is again a misrepresentation to imply that there is no difference between the present position, in that there will be no rates to pay in residential accommodation, and the new position? If a couple and an elderly relative are living together in a family home, they are not put at a disadvantage, compared with residential accommodation, but the poll tax, when they will have three charges to pay rather than one, will create a disincentive. The Churches and everybody who is concerned with the care of the elderly has acknowledged that the Bill contains a strong incentive to get elderly people out of the family home and into residential accommodation. That is part of the reason why the poll tax is an anti-family tax.
§ Mr. Howard
The hon. Gentleman is wrong on both counts. If there is concern, it is based on a misunderstanding. He is wrong about his first question. If a pensioner had assets, when he or she moved into a residential home his assets would be required to be applied towards discharging the costs of the care and accommodation that he received in that home. There would not, therefore, be any incentive of the kind to which the hon. Gentleman referred.
705 The hon. Gentleman is also wrong about his second point, for the reason that I gave earlier: that it is the pensioner and the pensioner alone who would be liable for any liability there may be to the community charge, be it 20 per cent. or greater. That liability would not fall on other members of the family.
§ Mr. Wilson
Does the Minister not accept that he is using theory to justify legislation but that the reality is very different? If the Minister believes that an elderly person within the family unit makes that payment as an individual and does not realise that it forms part of the household calculations, he is living in a different world from that in which I and most elderly people live.
§ Mr. Howard
I am glad that on this occasion I gave way to the hon. Gentleman. His question highlights one of the ways in which the Government's proposals are being fundamentally misrepresented. When those misrepresentations are corrected, as I have sought to do in the last few minutes, the answer from the Opposition is not that the Government's position is inaccurate but that it is a matter of theory. That is absurd. The answers that I gave the hon. Gentleman were not in any sense based on theory; they were based on the precise provisions of this legislation. It is only by departing from and misrepresenting the Government's legislative provisions that the Opposition have been able to engender the concern and the anxiety on which they rely in opposing the proposals.
§ Mr. Terry Davis
Will the Minister confirm that if an elderly person now goes to live with another member of his family there is no increase in rates or in any other form of taxation but that if in future an elderly person goes to live with another member of his family there will be an increase in tax because that elderly person will be liable to the poll tax? If, however, that elderly person went into residential accommodation that was provided either by his council or privately he would not be liable to the poll tax.
§ Mr. Howard
The answer is that there will be no increase for those who are already resident in that property. That is the relevant point, if we are considering deterrence.
§ Mr. Howard
I must answer the two questions that were put to me by the hon. Member for Linlithgow. It follows from the fact, as I have demonstrated, that there is no incentive of the kind to which he referred that no estimate has been made of the additional number of people who will move into residential homes. We do not think that that will arise. The hon. Gentleman also asked specifically about the effect on the courts. In England and Wales, disputes as to whether a person should be registered for the personal community charge will be matters for the tribunals—the local valuation courts, reconstituted under the relevant schedule to the Bill as valuation and community charge tribunals. In the explanatory and financial memorandum to the Bill we estimate that tribunals might need an additional 160 staff. They will be needed to deal with the effects of the non-domestic revaluation as well as matters concerning the community charge.
As for the second of the exemptions that my hon. Friend the Member for Staffordshire, South wants, he seeks an exemption from the personal community charge 706 for those in receipt of income support. Again we think that an exemption of that kind would be unnecessary and counter-productive. It would undermine local accountability. Comprehensive assistance will be available to all those in receipt of income support.
Without exception, all those in receipt of income support will be entitled to a reduction of 80 per cent. of their full community charge liability. They will therefore have to pay only 20 per cent. of the charge set by their local authority. What is more, income support levels will be increased to help recipients pay their 20 per cent. contribution. That increase will be based on the national average community charge. In areas such as that which my hon. Friend represents, where the community charge is lower than the national average, income support recipients will be slightly better off under the Government's proposals than they would be under the full exemption. That is a point upon which my hon. Friend will have to reflect.
The hon. Members for Birmingham, Hodge Hill (Mr. Davis) and for Normanton (Mr. O'Brien) referred to the position of prisoners held on remand. There was a vigorous Committee debate on this subject. Since then we have been reflecting on the arguments that were put to us and on the arguments that have been presented this afternoon. The case is not so clear-cut as has sometimes been suggested by the Opposition, but I accept that in some quarters there is considerable disquiet on the point. I shall therefore consider the points that have been made in the debate and will consult my colleagues and then report back to the House on the possibility of extending the exemption to cover prisoners on remand.
Amendments Nos. 125 to 137, 202 to 204 and 208 are all concerned with the mentally or physically handicapped. Again these matters were exhaustively debated in Committee. We accept that those who are severely mentally handicapped and for whom accountability, the touchstone of this Bill, cannot operate should be exempt. There is a question as to how the phrase "severely mentally handicapped" should be defined for this purpose. As drafted, the Bill limits the definition to those who aresuffering from a state of arrested or incomplete development of mind.Strong concern was voiced in Committee that this definition was too narrow and that it did not cover those who become severely mentally handicapped in adulthood.
In view of the concern that was expressed in Committee, I said that I would reconsider the definition in consultation with my colleagues in the Department of Health and Social Security and the Scottish Office. Discussions are continuing between the Departments concerned. It is a difficult issue and we need to make sure that we get it absolutely right. I am afraid, therefore, that I am not in a position to announce the Government's decision on that matter today, but I shall do so as soon as possible.
§ Mr. O'Brien
In addition to the DHSS representatives, does the Minister intend to consult the organisations that are looking after the mentally and physically handicapped?
§ Mr. Howard
The proper way forward is for the Government to produce their formula. When we come before Parliament with that formula, I am sure that those organisations will make their views known, and that at that stage they will be taken fully into account.
707 Amendment No. 126 also deals with a point that I agreed in Committee to consider. We envisage that one of the requirements that would have to be met before exemption could be claimed is a doctor's certificate. In Committee, however, hostility was expressed to the wording of paragraph 4(1)(c), which refers not specifically to a certificate but to someone beingcertified as severely mentally handicapped.I said that we would look again at the wording of that phrase. We shall certainly do so. But it seems sensible first to see what the definition of "severely mentally handicapped" should be and what the criteria might be for claiming the exemption and then to look at the form of words used.
Amendment No. 125 is rather wider in scope and I am afraid that I cannot extend to that amendment my offer of consideration that I made on the other two points. Amendment 125 seeks to exempt all those who are receiving severe disablement allowance. Because that allowance is paid to the physically handicapped, as well as those who are mentally handicapped, the amendment would change the whole purpose of the exemption. Amendments 202, 203 and 204 would also have the effect of exempting the physically handicapped, and must also—as I hope to persuade the House, despite the very persuasive advocacy to the contrary of my hon. Friend the Member for Exeter (Mr. Hannam)—be rejected.
As I explained in Committee, we do not believe it would be right to exempt the physically handicapped from the community charge. The community charge is specifically intended to extend to all adults. The exemptions are tightly drawn, and are—as I have already explained—based on the criterion of accountability. It would be untrue and, indeed, demeaning to those affected to claim that, because someone was physically handicapped, he or she could not play a full part in the widening of accountability which the community charge will bring.
§ Mr. Wilson
How can the Minister defend what he is doing to the physically handicapped on the ground that it would demean them not to be able to pay a charge which many of them are not in a position to earn? Why in this section of the debate has he started talking about "the disabled" as a generic term rather than with the distinction—however odious it is to some of us—which has been drawn in terms of the mentally handicapped? It is surely possible within the legislation for the most severely physically handicapped people in our society not to be subjected to this charge. How can the Minister suggest that he is doing these people a favour by making them pay?
§ Mr. Howard
I do not think that extending exemptions, which are related to the touchstone of accountability, would be the right thing to do for many of the disabled who are able to play a full part in local and national politics. It is no good the hon. Gentleman protesting in the way in which he does. He knows perfectly well that people who are disabled in this way are in receipt of special help, and their means will be taken into account in assessing their ability to pay the community charge and their entitlement to rebate. They will have their particular circumstances fully taken into account in that way, which is a more effective way than full exemption.
708 The hon. Member for Normanton referred to those amendments which seek to provide an exemption for members of religious communities. The hon. Gentleman may not have seen it, but we have already announced in a written answer given by my right hon. Friend the Secretary of State to my hon. Friend the Member for Banbury (Mr. Baldry) on 31 March that we intend to provide for just such an exemption.
The amendment, which we intend to bring forward in another place, will exempt from the community charge members of religious communities, the principal occupation of which is prayer, contemplation, the relief of suffering, education, or such other activities as may be prescribed. The exemption will extend only to those members of religious communities who have no income or capital of their own. A similar amendment will be brought forward to take account of religious communities in Scotland.
The hon. Member for Normanton also referred to people who were in receipt of occupational training. He suggested that they should be regarded as being in a similar category—if I have understood him correctly—to those people who were still at school. I do not think that that would be a sensible course to take, because of the obvious differences between the two categories.
Those people who are still at school but are over the age of 19 are in a very similar position—usually they are retaking A-levels or something of that kind—to other full-time students who, instead of staying at school, go to college to retake their examinations. They will almost certainly be eligible for the maximum rebate. They play a full part in the democratic process and we think that is a sensible way of dealing with them. Those who remain at school, and are under the age of 19, will be exempt in accordance with the provisions which are already in the legislation.
Finally, I come to amendments Nos. 140 and 222, which would delete the provision that a person can be subject to the personal community charge whether or not he lives in a building, and add a provision that a person is exempt if his sole or main residence is not a permanent structure.
These amendments would be unfair and discriminatory in their operation. They might, for example, result in an exemption for people who have their sole or main residence in mobile homes. Such a result would be intolerable. Most local authority services relate to people—not to property. That is one reason why we have decided to introduce a personal charge in place of a property tax. That is why I urge the house to reject that amendment also.
§ Mr. Simon Hughes (Southwark and Bermondsey)
This is a bit like the afternoon after the night before. The voices are calmer, the sense of tension is less and we hope that perhaps the Minister feels less under attack and a little more generous. He has told us a couple of things about the proposals, which he said in Committee he would accept, and on which he would announce his decisions today. He has now told us that these decisions have been deferred, although they will be made. We are grateful for that, but we need to push on the substance behind the amendments which we have been debating. The issue, although it has been approached in a different way from last night, is again: who should pay and who should not? Exemptions are about who should not. The Government are still 709 holding their position—with certain exemptions which they admit—that everyone should pay a flat rate. They say that that is necessary for accountability, and that that is the principle that they believe to be right.
The Government have already accepted 10 categories of exemption. They are contained in schedule 1. Some of these amendments, which the Minister has not yet accepted—including some which stand in my name and the names of my hon. Friends—are tabled to clear up anomalies that arise from these definitions. There is an anomaly, for example, relating to prisoners. My belief is that, if there is a fair system, one would not continually need to add further categories of exemption. I agree largely with the hon. Member for Gainsborough and Horncastle (Mr. Leigh) that the way to deal with how people should be taxed should not always be to look for categories which one thinks it is either politic or in another way expedient to exempt. That manifests the unfairness of the proposal as a whole. Therefore, I do not argue for general political or expedient exemptions for large categories and, indeed, I have not tabled any amendments to do that. I have sought to tidy up some of the anomalies in the exemptions which have been put forward by the Government. I do not otherwise create great groups of people who should be exempt from the system.
I say to the Minister—and it is interesting that this was the area on which most time was spent—that although, with his colleagues, he was resisting the banded community charge, it would perhaps help his colleagues, and his party generally, to look at the system that I and my colleagues propose—local income tax. The Minister may have seen in the papers yesterday that we have produced our response to his figures, which were produced a couple of months ago. In that response, we explain how local income tax should work. I have brought this response to the House for the Minister's consideration. Perhaps I can leave it with him. I am serious about asking the Minister to look at that response, and I am sure that he will. I shall not go into a great explanation, but the key point is that many of the assumptions in the Government's proposals are their own and would not apply under a properly worked out system.
I will now illustrate relatively briefly the important points about exemptions, as opposed to people who will pay. Often in this House the best one can do is to choose examples which are relatively parochial to oneself. I shall compare some of the exemptions that are not to be granted with some of the figures that people will pay. I shall take my own borough because, as the Minister knows, it is relevant.
On the Government's figures, the average poll tax will be £570 per person, which is the sixth highest projected poll tax in the country. That is based on current expenditure. Using that figure as the starting point, one can then look at how the tax will affect certain categories of people in a borough such as Southwark. I do not need to continue in great length, but it is a borough with great social problems and discrepancies in wealth and income. Southwark contains people in all the categories that we are discussing today.
I want to put to the Minister, in more graphic form, concern that has been expressed about the way in which the exemptions and the full rates would work as presently 710 proposed. I refer to an unsolicited letter that was written to me by somebody in Rotherhithe. The letter, dated 11 February, states:As one of your constituents, I am writing to ask you just how my family and I will stand in the event of the poll tax being passed. I am a widow with two daughters, who are both over 18 and working, and one son who will be leaving school this year.I have read that the poll tax could be as much as £500 per person in Southwark. That would make £1,500 from this household.That is an underestimate because, as I have stated, the poll tax would be more than £500. The letter continues:Could you confirm that these figures are correct, and what, if anything, can be done to stop the Bill being passedThe answer to that second question is now more apparent. The letter then states:To say that I am concerned is an understatement.That is the sort of concern that people have about the way in which the system, as currently proposed, will work. The result will be the sort of figures that I shall give for both the actual poll tax and the exemptions. My hon. Friends and I would argue that one could propose a local income tax rate of 6.8 per cent. On that basis, allowing for the rebate that the Government have conceded, a student nurse would pay a poll tax of £511. I should point out that there are many student nurses in Southwark at Guy's hospital. I repeat that that is allowing for the rebates. However, under the alternative system that we propose, that student nurse could pay £164. Under the Government's proposals, a one-earner couple would pay £1,140 in poll tax; we say that that need be only £362.
I now give three examples of hon. Members who live in Southwark and who are appropriate examples. On the basis of my parliamentary salary of £22,548, I would pay £570 in poll tax. My local income tax would be £1,368. The hon. Member for Dagenham (Mr. Gould), who has just moved into my constituency and lives in a property that is about four times the value of mine, would pay, with his wife, a poll tax of £1,140. I am told that his local income tax would be £1,275. The Prime Minister, who has a salary of £51,068—she does not take the additional amount; only the Cabinet salary—would, with her husband, pay £1,140 in poll tax, just like the hon. Member for Dagenham and his wife, whereas under any fair system of income tax the Prime Minister and her husband would pay about £3,215—more than the hon. Member for Dagenham, myself, the student nurse or the one-earner couple. I do not think that anybody would object to that or criticise it as being unfair.
We should compare that with the position of the people whom we seek to exempt. A debate will follow shortly on our first proposal relating to student nurses. I know that the Minister is making some concessions on that. I take the view not that all student nurses should be exempt, but that all those in training should be treated in the same way.I know that there is a later amendment, tabled by the hon. Member for Copeland (Dr. Cunningham) and his hon. Friends, and I shall support it. Such exemptions should apply across the board. There is an anomaly at the moment because some people studying some subjects will be exempt or will qualify for the 80 per cent. rebate, but others will not.
§ Mr. Hughes
Perhaps we can come to the hon. Gentleman's point in the next but one debate, which is specifically about that matter.
§ Mr. Hughes
I should like to deal with the other exemptions.
There is still an anomaly about people who have been severely disabled in accidents. The Minister said that he would think about that, but he did undertake to have done so by today. I ask the Minister to consider my amendment seriously, because it seems completely unfair that somebody whose disability is not congenital but derives from an accident, such as a motor or industrial accident, should be treated differently from other disabled people. If people are to be exempt because they have a disability and cannot profit from or contribute to the process of democracy in the same way as anyone else, I ask that all such people be given the same treatment.
The hon. Member for Birmingham, Hodge Hill (Mr. Davis) made a point about remand prisoners. There is a strong argument for saying that somebody who is in prison does not benefit from local authority services in any way because he or she benefits from other services. However, if that person is then let off as a remand prisoner, it is ludicrous that he or she should have to pay the poll tax when a person who is convicted at the same time would not have to pay.
The Minister has suggested that people in religious orders, in the categories that he defined, will be exempt. There is an amendment in my name to that effect, and I am grateful to the Minister for what he said. That seems entirely consistent with the argument that if one does not have any money, one should not have to pay. We are referring to people who, by their vows and profession, do not have the money to pay.
The last category, which the Minister has so far resisted, is that of homeless people. My colleagues and I take the view that if someone does not have the ability to pay, he or she should not be within the system. I accept that there may be a drafting problem with that, but the Government's proposal would include people—not those in mobile homes, but others, examples of whom were given in Committee—who are homeless and who sleep in the underground subway at the Elephant and Castle or by the dustbins of the Tooley street hostel, which is on the other side of the river from the City, and people who do not have a place of residence. They cannot be expected to pay the poll tax, although they are at present. It is currently proposed that inspectors should be sent to collect the poll tax from people sleeping in doorways, who, even if they were found and identified, would hardly be likely to have anything in their pocket to contribute in the first place.
§ Mr. Hughes
No, I shall not give way. I should like to proceed quickly, because I know that other hon. Members wish to contribute.
So far as the other amendments are concerned, it follows consistently that my attitude and that of my colleagues is that we should not exempt all those over 80. Some people over 80 have an adequate ability to pay. However, I support the amendment of the hon. Member for Staffordshire, South (Mr. Cormack) that those in receipt of income support should be exempt because, by 712 definition, they do not have enough income from any source to enable them to do without support from the state. The Minister knows—he has suggested this today, but I want to repeat it so that he understands it as a practicality—that in my borough, which will probably be the sixth highest poll tax-paying borough in the country, we shall have a higher than average rate. The 80 per cent. rebate will cover those on income support who are at the bottom of the income scale and there will be assistance on the basis of the average across the country, but that will leave a shortfall. The Minister knows that that means that everybody in a borough such as mine will have to pay a poll tax bill, however small their income and however much it has been accepted in the past that they will have support from the state because they cannot afford to pay more.
Full-time school pupils should be exempt because they are not in the category of adult contributor to and beneficiaries from the community. Those who do not pay income tax should not pay the poll tax because they come in an income level below those from whom we think that society should take. The principle seems clear. I hope that at the end of the debate, and at the end of the series of debates on exemptions, we can re-establish the principle that exemptions should be not just for those who cannot contribute to the process, but for those who cannot afford to pay for the process in which, for the time being, they are beneficiaries.
I ask the Minister to look specificially at the two remaining amendments which have not yet received his confirmation and approbation—the amendments relating to remand prisoners and those who become disabled later in life but who are not disabled from birth.
We still look to the Government to accede to the view that we should still change the Bill, but it should still be made into a legislative framework for raising money for local services on the basis of ability to pay.
I conclude with two sentences from a letter from another constituent who knows what the Government are proposing. The letter states:Dear Mr. HughesI would like to express my concern about the proposed poll tax … The Government ie Mrs. Thatcher seems to bulldoze her every whim on the British public!My constituents understand. I hope that the Minister will understand that he needs to respond in good time, not just for the sake of people in Southwark, but possibly for many Conservative Members who are listening to the debate.
§ Mr. Ralph Howell
While I commend my hon. Friend the Member for Staffordshire, South (Mr. Cormack) on the motives behind his amendment and fully understand what he is trying to do to help those who are over 80 who have not got great resources, I am unable to support him. No category like that should be excluded because it includes all sorts of people, like the late Sir Charles Clore and Paul Getty, who would not have needed help.
My principal reason for intervening is to try to persuade Ministers to think again about the whole concept of the unfairness of the community charge and to commend to them amendment No. 5 which I tabled. Then they would be able to sleep peacefully in their beds—
§ Mr. Deputy Speaker (Sir Paul Dean)
Order. I think that the hon. Gentleman is about to deal with an amendment which has not been selected because it is out 713 of order. I am sure that with his ingenuity he will be able to bring his remarks within the scope of the amendments which have been selected for debate.
§ Mr. Howell
Yes, Mr. Deputy Speaker. I was trying to say that rather than go down the route which my hon. Friend the Member for Staffordshire, South has suggested, there is a way in which we could solve the problem without these strange demarcation lines and exemptions.
I do not believe that there should be exemptions. That is why I suggest to my hon. Friends on the Front Bench a system which would solve the problem. I hope that I am in order if I discuss a proposition for a supplement on VAT. It might be called a local government tax. I understand that we would need about 6 per cent. extra on VAT, making it 21 per cent., to raise the amount of money which the Government wish to collect from the community charge—a system which will work unfairly in the opinion of hon. Members on both sides of the House. Under the system which I propose there would be no need for exemptions, extra staff, registration or prosecutions because there would be no fraud. The system would be painless. It would mean that we could abolish the unsatisfactory rating system which we have and also avoid the even more unsatisfactory system which is proposed by the Government.
§ Mr. David Winnick (Walsall, North)
What the Minister has said is not likely to satisfy the hon. Member for Staffordshire, South (Mr. Cormack). I would describe the Minister's speech as a cogent form of Ridleyspeak. It is always more interesting to listen to the Minister than to the Secretary of State; nevertheless, the Minister made it clear that there is to be no concession. If there had been a free vote on the principle of the poll tax, no doubt the hon. Member for Gainsborough and Horncastle (Mr. Leigh) would have supported the Government, but he would have been in a minority. If he wishes to take my remarks as a compliment, he may do so.
If the amendment relating to the over-80s were accepted, there would be anomalies. Some people over 80 have substantial means, but the large majority have not. The position is made much worse because anyone who happens to have accumulated over £6,000 is denied assistance. That is almost impossible to believe. Since the war, and probably before the war too, successive Governments have urged people to save. Yet what happens? If, having reached retirement age, they have accumulated the tremendous sum of just over £6,000, which may include redundancy money and which may have meant many sacrifices, they are denied housing benefit, and they will be denied assistance with the poll tax. That is why it is unacceptable.
I am totally opposed to the poll tax. That will come as no surprise to the Minister and his colleagues. However, I will support any amendment such as that moved by the hon. Member for Staffordshire, South, which would make the poll tax that bit less offensive, obnoxious and less likely to cause hardship to people in need.
The hon. Member for Staffordshire, South should be careful. According to some of the newspapers on Sunday, the amendment in the name of the hon. Member for Hampshire, East (Mr. Mates), which was debated yesterday, was described as a sinister plot for power 714 initiated by the right hon. Member for Henley (M r. Heseltine). It could not, I think, have been a coincidence.
The Observer story said:Poll tax rift is plot for power.That was one newspaper. When I got to The Sunday Times, it had virtually the same story. It stated:Ministers alleged yesterday that the rebels were motivated by hostility to the Government and that Michael Heseltine was the prime influence behind the uprising.I can only conclude that No. 10 had been very active over the weekend, that Mr. Bernard Ingham was doing overtime, that there was a co-ordinated attempt to smear anyone on the Government side who was critical of the poll tax and that the obvious way of undermining the potential revolt was to describe it as a sinister plot by the right hon. Member for Henley to get into No. 10. It did not work yesterday. The Government had their smallest majority in this Parliament, and they cannot be happy about what happened.
There is tremendous fear among people, not least the elderly, about what the poll tax will mean. Much of that fear is justified. The whole concept of a tax without account being taken of people's ability to pay is novel and wrong. As I have said, I am only too willing to support any amendment which will help to ensure protection for people who will be penalised by the poll tax.
What an odd position it is. Before the Government came to office, it would have been unthinkable that any Government would introduce a tax which would require a pensioner to pay the same as a multi-millionaire, with the pensioner not being allowed any assistance if he had savings of over £6,000.
§ Mr. Winnick
This is a form of taxation. The hon. Member for Pembroke (Mr. Bennett) makes the weakest possible case. If he believes that the poll tax is right and proper, surely the next step for him is to suggest that everyone should pay the same rate of income tax. The hon. Member for Pembroke could not persuade many of his colleagues to support the Government last night. If there were a free vote, clearly he would be in a minority on his side.
I hope that the hon. Member for Staffordshire, South will put his amendment to the vote. If he does, I will support it. It is a step in the right direction. Anything which would protect people from this obnoxious tax should be supported.
§ Mr. Cormack
With the leave of the House, I can assure the hon. Member for Walsall, North (Mr. Winnick) that neither the Patronage Secretary nor any of his colleagues has been anything other than courteous to me. Not one has sought to dissuade me from my long-held personal convictions expressed over a long period on this issue.
We have had an interesting debate and I know that it is the wish of the House to proceed to debates on other subjects of importance. I understand that the Opposition would prefer not to take up time by dividing on this; I understand that, because the guillotine places great constraints on us. It would be dishonest of me to seek leave to withdraw the amendment, because my hon. and learned Friend the Minister, who gave a typically courteous reply, did not meet any of the points that I advanced.
The spectre of £6,000 will haunt the Government until something is done about it. As on many previous 715 occasions, I am content to say that our help is in the Lords and to allow the amendment to be negatived, but I am not content to seek leave to withdraw it.
§ Amendment negatived