Rating Reform (Hansard, 20 January 1988)

§ 11. Mr. McAllion
To ask the Secretary of State for the Environment if he will estimate the average poll tax bill in England and Wales that is likely to be faced by a young single person with an annual income of £2,500 compared with the figure for someone earning £25,000 per year.

§ Mr. Howard
If the community charge had been fully in force in 1987–88, the average charge in England and 964 Wales would have been £219. A young single person with an income of £2,500 per annum would be likely to receive a rebate.

§ Mr. McAllion
The Minister should know that the cuts which the Government are implementing make rebate schemes of very limited benefit. The Low Pay Unit has estimated that single people under the age of 25 will lose their entitlement to rebate when their annual income exceeds the princely sum of £2,380. Given that the Minister told the Daily Telegraph in July 1986 that, under the current system of local government finance, someone earning £25,000 per year would be paying 20 times as much as someone on £2,500 a year towards the cost of local services, how can he describe it as fairer that these two groups should now pay exactly the same, when it means that those earning £25,000 per year will pay much less and those earning £2,500 per year will pay more?

§ Mr. Howard
The hon. Gentleman has misunderstood what I said in the article to which he referred. It is the case that the highest 10 per cent. of households by income will continue to contribute about 16 times as much as the lowest 10 per cent. of households by income to the cost of local authority services when the community charge is in force.

§ Mr. Squire
Has my hon. and learned Friend noted that the number of people who are unhappy with the community charge has apparently risen to nearly 70 per cent.? Is he satisfied with that level, or does he have any proposals to bring forward that will have some effect in reducing the community charge's current unpopularity?

§ Mr. Howard
I certainly saw the poll to which my hon. Friend referred. The conclusion was based on a clear misunderstanding of the effect of the proposals. Only 23 per cent. of those who responded to the poll thought that their households would be better off as a result of our proposals. In fact, 53 per cent. of households will be better off. If that fact had been more widely understood, the results of the poll would have been rather different.

§ Mr. Allen McKay
As the legislation reads, it appears that a person with a dual residence or a static caravan will pay two poll taxes. In that case, does it mean that the Prime Minister will pay one charge for a residence in Dulwich, one for the tied cottage at 10 Downing street, and another for her holiday home at Chequers?

§ Mr. Howard
We have made it perfectly clear that people with second or third homes will pay standard community charges in respect of such homes to a maximum of twice the community charge for the local authority in the areas in which such homes are situated.

§ Mr. Riddick
Will my hon. and learned Friend take this opportunity to give us some more details concerning the rebate scheme that will be available for people on modest incomes and for pensioners? Does he not believe that a £6,000 savings limit will hit those pensioners who have actually been prudent enough to save during their working lives? Will he reassure me that people in my constituency—for example, pensioners and those on modest incomes —will be properly protected under the proposals?

§ Mr. Howard
I cannot give my hon. Friend details of the rebates. We are talking about a scheme that will not be enforced until April 1990. He will not expect final decisions about such rebates to have been made at this 965 stage. I can tell my hon. Friend that 80 per cent. of single pensioners will pay less under the community charge than they pay in rates.

§ Mr. Rooker
Will the Minister therefore confirm that one in five single pensioners will pay more under the poll tax system than they pay under the rates system? Will he confirm what he said in answer to the original question asked by my hon. Friend the Member for Dundee, East (Mr. McAllion)? The Secretary of State said that a person who is earning £25,000 a year will pay 20 times as much to a local authority as a man on £2,500 a year. That is exactly the same figure as the Minister used in the Daily Telegraph article.
For the avoidance of doubt, will the Minister confirm that a young,single person on £2,500 a year, who, because of fear of physical violence, happens to seek refuge, will be required to pay the poll tax, but, because of such fear, will be able to have his name excluded from the poll tax register? However, the person who earns, say £25,000 a year and is the head of the security services will not even pay the poll tax.

§ Mr. Howard
The hon. Gentleman's point is based on a misunderstanding. Those who, for security reasons, will be exempt from payment of the community charge will be obliged to make a contribution in lieu to the armed forces. That payment will be allocated in due course to the local authority concerned. It is not the case that they will not have to pay.
The answer to the first part of the hon. Gentleman's question is simple. I should have thought that a change that benefits four out of five single pensioners would be widely welcomed by those who have the interests of pensioners at heart.