HC Deb 29 June 1988 vol 136 cc347-9
4. Mr. Wilson

To ask the Secretary of State for Scotland what assumptions on the likely evasion rate for the poll tax local authorities will be allowed to make when setting a budget.

The Minister of State, Scottish Office (Mr. Ian Lang)

It will be for local authorities in setting their budgets to take into account, among other things, the estimated levels of collection of personal community charge. But it seems that the hon. Gentleman's "Stop it" campaign has not stopped it.

Mr. Wilson

I am a relative novice in these matters, but that must be the crassest reply delivered by a Scottish Office Minister since I came here. The Minister is proposing to replace a scheme that results in less than 1 per cent. non-collection with a new system which, on the assessment of every independent analysis, is likely to result in at least 10 to 15 per cent. non-collection. Is no guidance to be given to local authorities on what they can do to take account of that? If not, may we have an assurance that local authorities will not be hectored by the Minister if they take reasonable account of that reality?

Mr. Lang

There is no question of hectoring local authorities. The hon. Gentleman's figures are speculative. The basis of the estimates that we have given so far—I emphasise that they are not forecasts—is the product of rate poundages and local authorities' total domestic rateable value divided by the Registrar General's estimates of the number of adults in each local authority area. On that basis, we estimate that a 7 per cent. cushion is built into the figures, because the actual rate income is less than the total that we have been using.

Sir Hector Monro

Does my hon. Friend agree that the policies of the Labour party and the Scottish National party on the community charge are as confused as their policies on defence? Does he further agree that the very high registration figures, running up to 95 per cent. and more, show that the Scottish people will pay their community charge as laid down in law?

Mr. Lang

My hon. Friend is right. According to the published figures, the registration process seems to be going well and the attempts of Opposition parties to frustrate the future collection of resources for local authorities seem not to have succeeded. I agree about the confusion of the Labour party's policies. So far as I am aware, it has not yet repudiated the policy set out by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), which is to keep domestic rates, to add volatility by basing them on capital values and to have a local income tax. I suppose that that is something for something—or something.

Mr. Salmond

Does the Minister consider that overseas service men who have been exempted from poll tax should be included in the evasion rate? How does he explain to people in Scotland that overseas military personnel will be exempt from the poll tax, while tourists coming to Scotland will have to pay the standard charge? Is the Minister saying that the military contributes more than the tourist industry to the Scottish economy?

Mr. Lang

The arrangements that we are contemplating for overseas service men in Scotland are broadly comparable to the existing system under rates, whereby they make a contribution to the resources of local authorities.

Mr. Favell

Will my hon. Friend confirm that the bill for Scottish community charge evasion will fall on Scotland and not on the rest of the United Kingdom, and that if the Scottish Labour party succeeds in its campaign to persuade the Scots to fiddle, they will be fiddling their fellow Scotsmen and not the rest of the United Kingdom?

Mr. Lang

My hon. Friend is right. The only effects of the success of the irresponsible campaign advocated by Opposition Members would be a poorer quality of local services, and the loss of jobs in local authorities.

Mr. Douglas

Notwithstanding the reasons for evasion, will the Minister consider the issue of exemptions? What progress has he made in giving guidance to local authorities about exemption for the severely mentally handicapped? In addition, what discussions have taken place with the Armed Forces Pay Review Body to compensate service men who will now have to pay poll tax, but previously were compensated under the rates system?

Mr. Lang

The arrangements that we are proposing for service men are broadly comparable with those under the present rating system whereby if they have a sole or main residence they will be liable to community charge in place of domestic rates, and if they are living in barracks they will make a contribution through a general fund, handled by the Ministry of Defence, which broadly replaces the present system.

In regard to the severely mentally handicapped, as the hon. Gentleman knows, the Local Government Finance Bill is at present before another place and an amendment in that respect will be debated shortly.

Mr. Nicholas Bennett

Will my hon. Friend point out to Opposition Members, including the hon. Member for Dunfermline, West (Mr. Douglas), who told a selection conference that he would not advise his constituents to pay the community charge, that in a democracy all people have to obey the law, and that we disagree with many laws passed by the Labour Government but we obey them?

Mr. Lang

My hon. Friend is right. The level of the community charge will be set by local authorities. The more people who are registered in each local authority area, the lower the charge will have to be.

Mr. Maxton

Will the Minister first take the opportunity to repudiate what the hon. Member for Stockport (Mr. Favell) said about Opposition Members asking anyone to fiddle? Secondly, does he accept the CIPFA report, requested by him and the Secretary of State, that there would be 15 per cent. evasion or non-payment of the poll tax? If he accepts that, will he give a guarantee today that next April the Secretary of State will not use his powers to reduce local authority poll taxes if they are set on the basis of that 15 per cent. evasion rate?

Mr. Lang

I do not accept the figure that the hon. Gentleman has advanced. It is purely speculative. As for the Opposition policy on non-payment, I accept that the hon. Member for Glasgow, Cathcart (Mr. Maxton) in an article in the Glasgow Herald, said All responsible politicians have now rejected the case for a mass campaign of non-payment". Unfortunately, he seems unable to carry all his hon. Friends with him.

Mr. Wilson

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.