SCOTTISH NON-DOMESTIC RATES: INTERIM PROVISIONS

HC Deb 06 November 1989 vol 159 cc738-91

Lords amendment: No. 256, in page 118, line 29, after "value" insert or, where a rateable value has been prescribed or determined in respect of the lands and heritages under section 128 of the Local Government Finance Act 1988. according to that rateable value

The Secretary of State for the Environment (Mr. Chris Patten)

I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker

With this, we may discuss Lords amendments Nos. 257 to 264, 328, 329, 330 and amendments (a) to (f) thereto, 331 to 371, 372 and amendments (a) to (d) thereto, 373 to 399, 400 and Government amendment (a) thereto and 401 to 424.

Mr. Douglas:

On a point of order, Madam Deputy Speaker. It is not our responsibility to challenge the grouping of amendments, but some of these relate expressly to Scotland. Am I right in understanding that a Scottish Office Minister may move those amendments separately, if he should manage to catch your eye? Will those amendments that relate to Scotland be moved by a Scottish Office Minister?

Madam Deputy Speaker

If a Minister seeks to catch my eye, I will call that Minister.

Mr. Douglas

Further to the point of order, Madam Deputy Speaker. I am sorry. but will the Secretary of State make it clear that he is not grouping these amendments to move them collectively and that the amendments relating to Scotland will be moved by a Scottish Office Minister?

Mr. Patten

Further to the point of order, Madam Deputy Speaker. We intend to give my hon. Friend the Under-Secretary of State for Scotland the opportunity to speak during the debate, if that is agreeable to the House. I think that a Scottish spokesman from the Opposition Front Bench will also intervene—in fact I know now that that will happen. I am sure that the hon. Member for Dunfermline, West (Mr. Douglas) and other hon. Members who represent Scottish constituencies will want to have a say. l hope that is acceptable to the House.

Mr. Blunkett

On a point of order, Madam Deputy Speaker. I should like it to be made clear that we are taking this whole group of amendments together, and that they can be moved and debated as one.

Madam Deputy Speaker

I can clear the air on that I am sure. We are dealing with the group of amendments beginning with No. 256, which is the lead amendment and which the Secretary of State is currently moving.

Mr. Douglas

On a point or order, Madam Deputy Speaker. May I correct my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett)? My understanding is that the amendments will not be moved and debated as one, but that the amendments relating to Scotland will be moved separately. Can I be clear about that?

Mr. Patten

I understand that it has been agreed, in the normal fashion, that I should move that this House agrees with Lords amendment No. 256 and that we should then discuss with it a group of amendments including some that affect Scotland. Because some of the amendments affect Scotland, there will be interventions from appropriate spokesmen on both sides of the House. At the end of the debate, with the leave of the House, I shall wind up for the Government and someone—I am not quite sure who—will wind up for the Opposition. I hope that that will take proper account of the legitimate Scottish interest in the business before us.

Madam Deputy Speaker

I call Mr. Secretary Patten on Lords amendment 256.

Mr. Patten

The amendments that we are now considering deal with issues that relate to the introduction of a new system of local government finance for next year. They are grouped together for discussion because I am sure that the House will wish to spend substantial time discussing the main issue that arises from them—the introduction of the transitional relief scheme.

There are bound to be areas and individuals who gain or lose from any substantial change to the system of local government finance or a comparable revenue raising system. As I understand it, that is the problem which is causing the Labour party further to sophisticate its two-tax policy for local government finance.

Under the existing system of domestic rates, many people have been unfairly treated. One thinks straightaway of single pensioner households, widows, single-parent families, and all those on the lowest incomes. They will almost all be better off as a result of the new system.

I shall spend a few minutes explaining to the House how we intend to ensure a smooth transition to the new system for those areas and groups of people who will, to some extent, be worse off. We propose two measures to help such areas. The area safety net was specifically introduced for that purpose. It provides that average ratepayers will lose no more than 50p a week on a comparison with their rate bill this year, increased by the GDP deflator of 4 per cent. We have now decided that the safety net will be abolished after the first year, but in the succeeding three years protection for those areas will be paid for by the Exchequer. The cost will amount to more than £600 million during that period. In addition, we are providing nearly £100 million next year to help areas with particularly low rateable values. That relief will be phased out over the same period as the general relief for areas.

7.30 pm

It is important to remember that individuals in those areas received subsidy from other areas regardless of their own level of income. That has never been a fair way of distributing grant and it is right to abolish it. The Government have always recognised, however, that it was important to cushion the effects on those areas that would lose out as a result. That is the effect of our proposals.

Protection for those areas will not ensure that all those individuals who need help receive it. That is why we are ensuring that the new system of rebates for the community charge will be more generous than that provided for under the old domestic rating system. The rate at which rebates will be withdrawn will be 15p for every pound of extra income instead of 20p for every pound under the rates. The cost of rebates in Britain next year, including uprating of income support to help pay community charge bills, will be of the order of £2.5 billion and more than one in four adults are expected to benefit as a result. By any standards that represents a generous level of help for those in need.

It would not be right to build permanently into the system yet more protection, but I recognise that many individuals whose earnings are above the rebate level could face substantial increases in bills unless they are given special protection. That is why we are introducing the transitional relief scheme.

The first question to be answered is how one decides who should receive help. I do not believe that it would be right to include all first-time payers. The whole point of the introduction of the new system is that almost everyone should make a contribution towards the cost of local government. Arguably those who have not yet contributed should have been contributing all along. local government. Arguably those who have not yet contributed should have been contributing all along.

It would also be wrong to protect individuals from the consequences of overspending by their local councils. The remedy for that lies in the ballot box. I recognise, however, that a move from a system based on rateable values to one based on adults means that some people living in low rateable value properties may find themselves worse off. It is those people that the new relief scheme is intended to help. We also thought it right to go somewhat further than that. We believe that disabled people and pensioners who are not paying rates deserve special help. We have therefore decided that first-time payers who are pensioners or are disabled will also qualify for the scheme. If they are already ratepayers, of course, they will receive help in the normal way. In total, the transitional relief scheme should help about 6 million

The second question to answer is how one defines the floor and the ceiling for protection. In one sense it is unfair to use this year's rate bill as the floor. We all know that were the rating system to continue almost everyone's rate bill would have been higher. In that sense they all would have been losers. None the less, we thought it right to be generous in providing help for the new system, so we are defining the floor for protection as this year's rate bill.

Mr. Soley

It is an open secret that the Secretary of State did not like the poll tax and I suspect that that was because he knew that it was unfair in the way in which it hit people. The point about rates is equally unfair because he knows that, over the years, the Government have cut £28 billion from the rate support grant. If the Secretary of State intends to argue that this year's rate bill should be the floor, surely, by his own previous arguments, he should accept that the way in which to give relief should be based on need by assessment rather than through the blanket approach that he has now adopted. That approach will leave many people worse off.

Mr. Patten

There are two important ways in which to deal with need. The first is through the rebate system and that is why I am pleased that the rebate system for the community charge is more generous than that for domestic rating. The second method is to look at the particular problems that arise because of a change from a system based upon rateable values to one based upon adults. That does throw up particular difficulties in low rateable value properties, as I have already explained. The interim relief scheme is designed to assist in solving such problems.

I think it improbable in the new model Labour party, which is substantially committed to the standards of fiscal rectitude trooped by the right hon. and learned Member for Monklands, East (Mr. Smith), that it would decide that the only way in which to be fair to local authorities would be to add £28 billion to what they are spending and consider that that was the right starting point. I have read—I dare say I am one of the few people who have done so— Meet the Challenge: Make the Change and I have seen what it says about the importance of bearing down on overspending. I find it difficult to understand why those views about overspending never seem to apply to local authorities, but to the Ministry of Defence alone. During the time that I hope to spend in my job I look forward to learning more about the Labour party's views on controlling local expenditure.

Mr. Soley

Let me help the Secretary of State get out of his misery. He knows that the Labour party's alternative has not only been warmly welcomed by all—[Interruption.] Oh yes, that is right. It has been warmly welcomed by specialist local government groups, especially those concerned with finance. Our proposal operates in almost every other advanced democracy and it is recognised that it not only gives more flexibility to local authorities in the way in which they raise their expenditure, but deals with the issue of fairness. The Secretary of State cannot bring himself to face that issue. When he took on the job he knew that the Government's proposals were unfair, but he still took that job on and he is still doing his lady's bidding.

Mr. Patten

I believe that the community charge is incomparably fairer than the domestic rating system. If any Secretary of State stood at this Dispatch Box and tried to argue, with a straight face, that we should base the way in which local revenue is raised on notional rental values 16 years out of date—[Interruption.] That is what the domestic rating system amounts to. I am describing the present system.

If the hon. Member for Hammersmith (Mr. Soley) believes that the policy left behind by the hon. Member for Copeland (Dr. Cunningham) is still the policy of the Labour party he should have a word with the hon. Member for Dagenham (Mr. Gould). I am not absolutely convinced that the hon. Member for Dagenham, who is extremely bright and sensible, has quite the same idea. It was the constituency Labour party from Dagenham that tabled a motion at the Labour party conference to say that the Labour party's proposals were electorally and administratively unacceptable. I predict that the Labour party will be back with a new Mandelson-proof scheme as an alternative to domestic rates in a few months' time. We will then be delighted to provide exemplifications on that alternative as well. I believe that there are some Opposition Members who secretly wish that their party had never abandoned its commitment to the domestic rating system.

Mr. Douglas

indicated assent.

Mr. Patten

I note that there is one on the Opposition Benches. We are exposing one or two fractures in the carapace of the Opposition's position.

I shall move on in this spirit of convivial agreement. At least most of us are agreed—with one exception, and I am prepared to listen to more views—that none of us believes that we should continue with the domestic rating system. [Interruption.] I am not sure if one or two hon. Members disagree.

Mr. Douglas

I shall make my own speech.

Mr. Patten

We do not have unanimity, but we are approaching it. The alternatives on offer will be closely examined by the electorate at the next general election. I am sure that the Labour party will want to bring forward its proposals as soon as possible so that they can be subject to political debate and examination by the constituency Labour party in Dagenham and elsewhere.

We were talking about the definition of the floor for protection and I said that we were taking that as this year's rate bill. However, it would be wrong to provide protection for any level of spending which the local authority cared to incur next year. That would simply give the green light to excessive spending locally. Having listened to what has been said, I am sure that the shadow Chancellor of the Exchequer would not wish us to do so. Therefore, we are providing help to match the level of local authority spending that we have assumed for next year. That level is 11 per cent. more than the level that we assumed for this year. In no sense can that be regarded as unreasonable or ungenerous.

Obviously, there are problems in devising a scheme to smooth the transition from a system based on households to one based on individuals. In particular, there are difficulties related to houses in multiple occupation. We are talking to the local authority associations about these problems, and we have to draw a line somewhere. Inevitably, there are arguments about who should and who should not be covered by the scheme. I am confident that they can be resolved and I shall do all that I can to ensure that they are. I wish to say immediately that, regardless of the political differences between us, I hope that we can enjoy an effective working relationship with the local authority associations, because that is in the interests of good government in this country.

Mr. Matthew Taylor

The Secretary of State seems to accept that there are serious concerns about the problems of perming any two out of an HMO. I hope that he will accept—I am sure that he will come in for a lot of criticism if he does not—that that proposal cannot be made to work. There is no way that two individuals can be permed out of a house of multiple occupation. The real world does not work like that.

Mr. Patten

I do not accept that principle. The hon. Gentleman and others should not exaggerate the scale of the problem. It stands to reason that most of the houses in which there are likely to be a large number of residents will be high rateable value houses and are unlikely to be those that are covered by the scheme. Nevertheless, there are practical problems which will probably affect 2.5 per cent. of the total expenditure of the scheme. We want to resolve those problems. I hope that we can find some way of agreeing their resolution with the local authority associations; if not, we shall have to agree to disagree.

I am aware that it is pretty late in the day to be introducing a new system of relief. It will cause difficulties for the local authorities implementing it. However, sensible local authorities welcome this extra protection for their community charge payers. I also understand that computer houses believe that these changes do not present insuperable difficulties.[Interruption.] The hon. Member for Glasgow, Cathcart (Mr. Maxton) giggles. I do not know which computer firms he has consulted. We have discussed this——

Mr. Maxton

rose——

Mr. Patten

If the hon. Gentleman will let me finish I shall let him intervene.

We have discussed this matter with a number of computer firms. There are problems with bolting additional requirements on to the existing system, but we understand that computer houses believe that these changes can be made in a way that will enable us to bill at the appropriate time next year.

7.45 pm

Mr. Maxton

I wonder whether the Secretary of State has spoken to the directors of finance and the directors of computer services, particularly those in large local authorities in Scotland, where an attempt is being made to bolt this system on to an existing scheme which has been up and running for seven months. Those computers, which are already dismally failing to cope with the present position, are being asked to cope with this additional matter. I wish that the Secretary of State would talk to people in Scotland about what is happening instead of relying on software experts in private companies.

Mr. Patten

I am sure that the hon. Gentleman would take it amiss if I had had discussions with computer houses in Scotland about the Scottish system. Were that the case, the hon. Gentleman and the hon. Member for Dunfermline, West (Mr. Douglas) would quite properly take exception. I was talking about discussions that we have had with computer houses in England. I am sure that the Parliamentary Under-Secretary of State for Scotland—my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton)—and the hon. Member for Cathcart will be able to describe the discussions which are taking place in Scotland.

Mr. Douglas

Does not the Secretary of State accept that he should not necessarily be discussing the matter with computer houses, but consulting with his right hon. and learned Friend the Secretary of State for Scotland, who would tell him of the difficulties of trying to rejig a system and rewrite programs? In Fife people are working night and day, and trying to rejig the system at considerable cost. What additional cost has the Secretary of State for Scotland said will be incurred in trying to rejig the system?

Mr. Patten

When we proposed this scheme, we discussed it with my right hon. and learned Friend the Secretary of State for Scotland, with whom we are always happy to have discussions. I repeat that I think that the hon. Member for Cathcart and others would take it amiss were I to try to speak for the Scottish Office or my right hon. and learned Friend, who is well capable of speaking for himself. Therefore, I shall leave discussion of the administrative problems in Scotland to my Scottish colleagues.[Interruption.] It is all very well for the hon. Member for Cathcart to laugh, but he knows perfectly well that if I were to try to say too much about Scotland, hon. Members would regard it as an appalling piece of lese majestê.

Mr. Bill Walker (Tayside, North)

I am sure that my right hon. Friend is aware, since my right hon. and learned Friend the Secretary of State for Scotland would have advised him, that the Scottish regions do not all operate the same system, equipment, or software. Consequently, the difficulties experienced in whichever region one considers depend on which system it operates and how effective it is.

Mr. Patten

I am sure that my hon. Friend has explained, to the universal satisfaction of the Opposition, the position in Scotland. I wish that I were as well informed about the position in Scotland as is my hon. Friend. Even if I were, I would not have dared to speak for Scotland during this debate.

As the hon. Member for Dunfermline, West implied, the relief scheme will involve additional costs for local authorities. I assure the House that we shall meet all reasonable costs associated with its introduction. I should make it absolutely clear that I want to ensure that the scheme is a success. I have argued that point strongly in my discussions with local authority associations. We shall do everything we can to ensure that it is a success.

The principle of providing transitional protection is undoubtedly right. When domestic revaluations were carried out in 1963 and 1973, transitional relief was made available. As I have explained, the scheme will not undermine accountability because it will not provide help over and above the level of spending assumed by the Government for next year. In those circumstances, it is reasonable to recognise the need to concentrate on those likely to be most affected, and to do so without building into the system permanent protection that would undermine the accountability that is so central to the community charge.

The other Government amendments relate to technical and other improvements to the legislation setting up the new local government finance system. In particular, they refer to the transition to the business rate—I hope that one or two of my hon. Friends will speak on that matter—to certain new exemptions from the community charge and to alterations to the arrangements for the standard charge. There are also some minor amendments relating to Scotland, but with the agreement of Scottish Members I shall leave them to my hon. Friend the Under-Secretary of State for Scotland who will reply to the debate. I look forward to hearing from the hon. Member for Cathcart, from, I hope, a vertical rather than a horizontal position.

I have made my main points about the transitional relief scheme in my answers to the various interventions. The Government have put forward their alternative to domestic rates and, with some honourable exceptions, almost everyone in the House is in agreement. Our proposals for the community charge are more equitable and more sensible than domestic rating. We look forward——

Mr. Tony Banks

rose——

Mr. Patten

I was about to perorate.

Mr. Banks

Before the Secretary of State perorates, which is a painful experience for us all, will he say something about the publicity campaign? There is nothing in the Department of the Environment paper about that, but there has been some speculation in the newspapers. How much is likely to be spent on the publicity campaign for the transitional relief scheme and the poll tax generally? Is he prepared to consult local authority associations to ensure that that publicity will be based on information rather than on Tory propaganda?

Mr. Patten

The information about the publicity campaign was given in a parliamentary answer, not leaked through a newspaper. As the hon. Gentleman knows, if one really wants to keep a secret, one should announce it in the House. However, on this occasion the information was, surprisingly, picked up by the newspapers. I saw some exemplifications—a word that I have learnt in this job—in yesterday's newspapers of what the advertising might look like. They were rather interesting commentaries on local government finance and on some of the attitudes of the Labour party. They are not the sort of advertisements that would be likely to pass the scrupulous attention of my hon. Friends and others.

It is possible both in local government and in central Government to have good and effective advertising that does not cross over any of the political parameters. We shall try to ensure that take-up of rebates for community charge payers and the take-up of the interim relief scheme are as substantial as possible. I am well aware of the interest of hon. Members on both sides of the House in the quality of that advertising. I assure them that I am also aware of the political parameters that were discussed during our previous debates.

Mr. McAllion

The Secretary of State said that the Government wanted to ensure the maximum take-up of rebates. In that case, when it became clear in Scotland that by keeping the original date thousands of people would lose out on rebates, why did Scottish Ministers refuse to extend the deadline? As a result, many thousands of pensioners were denied the right to rebates.

Mr. Patten

Almost two months were given—[Interruption.] It was 56 days, which by my reckoning is virtually two months. I am sure that my hon. Friend the Under-Secretary will deal more substantially with that point in his reply. The Opposition cannot have it both ways. Sometimes we are criticised for not encouraging take-up of rebates, and at other times we are criticised for suggesting advertising and are accused of doing something politically mischievous. I hope that all those eligible for rebates will take up those rebates. That is not a desperately partisan observation. I hope that all those who are entitled to benefit from the interim relief scheme will take up that benefit. That will involve public advertising, but I am sure that we can produce advertising that will satisfy hon. Members on both sides of the House who legitimately want to help those in need.

Mr. Matthew Taylor

I support the Secretary of State's suggestion that people need all the help that they can get to pay the poll tax. If anything can be done to achieve that, so much the better. Previously I have been involved with a number of organisations trying to increase take-up of benefits in other areas. People are often unaware that they can claim benefits. I hope that, while promoting his campaign, the right hon. Gentleman will try to get his colleagues in other Departments to run similar benefit take-up campaigns.

Mr. Patten

I am sure that my right hon. Friend the Secretary of State for Social Security would take exactly the same view as I do on the take-up of benefits. At least the House appears to be moving towards agreement that, without overstepping the proper political parameters, we should advertise the rebates and the transitional interim relief so that people can get the assistance that Parliament has voted for them. We want to introduce the community charge as smoothly and as successfully as possible, and the interim relief scheme is an important element in that process. When we first announced it, the Opposition denounced it as an electoral bribe. Judging by the amendments that they have now tabled, it appears that either they do not think that it is large enough or they think that we should be spending the money in other ways.

It is a sensible and effective way of targeting help on those who need it while the community charge is being introduced, and I unreservedly commend it to the House.

Mr. Blunkett

I was remiss earlier in not welcoming the right hon. Gentleman to his new position. I hope that he has greater fortune than his predecessors—although, perhaps. promotion out of chaos might be catching. Other than the previous Secretary of State who has gone to Rip Van Winkle land in the Department of Trade and Industry, every other change in the Department of the Environment team has meant promotion.

As my hon. Friend the Member for Hammersmith (Mr. Soley) said earlier, by anybody's description the Bill is in chaos with more than 600 amendments having been tabled. One of the Department's former team has moved to the Ministry of Agriculture, Fisheries and Food while another has moved to pastures new in the Department of Health. Those who have been promoted have left behind them—if my canine friend will forgive me for saying so—an absolute dog's dinner. It must be a message for the hon. Gentleman—if he makes a big mess, he could end up a contender for the premiership. I advise him to think on rapidly. Any pretence that the poll tax is acceptable or workable has disappeared. The proposals announced on 11 October and put before the House tonight reflect an admission of defeat, in respect not only of the safety net but of the poll tax. It is not the device to soften the tax but the tax itself that lies at the heart of the Government's problems.

8 pm

The Secretary of State's words tonight cannot hide what is clearly a shabby bribe—an attempt to hold on to marginal Conservative seats by using public money to cushion the impact on the electorate of a tax that it does not want. There can be no other explanation. Again and again, we have appealed to the Government to alter the implementation of the tax. Even Conservative Back Benchers pleaded for banding of the tax to help those who are worst off, but that plea too was rejected. It was only in the wake of the Labour party campaign explaining to the public what the poll tax will really mean that Government Back Benchers began worrying about its repercussions on their seats.

As my hon. Friend the Member for Newham, North-West (Mr. Banks) remarked earlier, the Government are so worried about the effect of the poll tax in the run up to the 1990 local elections and to the next general election that they propose spending £1 million of public money in an attempt to convince everyone how good their proposals really are. I wonder whether the publicity campaign in Wales will be slightly different from that used for England. The campaign used in Scotland will certainly need to be different, because what was unacceptable to the Scots and lost the Conservatives seats there will have to be made acceptable to the English. Perhaps the Secretary of State for Wales will present his proposals more clearly. Since the leaflet drop earlier this year, the hon. Gentleman has gained a reputation for demonstrating the unanimity of the Cabinet, by devising his own means of avoiding the pitfalls of the Department of the Environment. He is probably known in the Cabinet as "Do-it-yourself Peter", because he has his own ways of ensuring that the administrative chaos facing England is modified for Wales.

Nothing that the Government say will hide the truth from the electorate. No matter how much money they spend, their proposals to tinker with the poll tax will be exposed for what they are. The resultant confusion will lead not only to greater bewilderment but frustration and anger among people who think that they are entitled to relief but discover that they are not—and among those who believed that their poll tax bills would be lower but realise that they were misled.

Local authorities throughout the country point out that the administrative chaos will be something to see. The problems of 1982, with the transfer of unified housing benefit out of the social security system, were bad enough, but the bolt-on arrangements for the computer systems will lead to considerable difficulties. Some have already been evident. During the registration procedure, 15,000 forms were lost in transit between Wickham and the Philippines. Sastec, which was given the task of transferring the registration data to magnetic tape, sent work, under competitive tendering arrangements, to the Philippines. That material was lost in transit on the return journey. Perhaps other local authorities will, in the interests of achieving the lowest possible labour and other costs, send their registration data around the world in implementing transitional arrangements. If that is done, the chaos will be even greater than envisaged.

The continuing expense and delay has been criticised again and again by not only Labour authorities but the leaders of the Conservative-controlled Association of District Councils. Councillor Thomason feels that it will be necessary to delay the dispatch of poll tax bills until May or June next year, and I understand that the Secretary of State has told the ADC that such might be necessary. Some of us remember when councillors were surcharged and disqualified for failing to implement rates bills by 1 April.

Mr. Chris Patten

For the record, and as the hon. Gentleman raised this point, it should be possible for local authorities to send out bills at the appropriate time next year. There should be no need for delay.

Mr. Blunkett

The Secretary of State must be an optimist for bringing forward such proposals in the first place. I hope that he is right, but if the bills are not out by 1 April the poorest will suffer. They will find it hardest to catch up if the system for making payments on a weekly or fortnightly basis is not immediately implemented.

When things go wrong, the Government will blame the local authorities. When the predicted chaos comes about, the Secretary of State will suggest that such was never the Government's intention and that it is not their fault.

The public will not believe them. It will be understood that by introducing complicated and difficult arrangements at a late stage, the Government and not local authorities must take the blame for the consequent difficulties.

Mr. Patten

I have no doubt that introducing the scheme late in the day will place additional burdens on local authorities, who are already hard pressed, in making an important but difficult change to the community charge. I do not doubt either that many local authority officers are working flat out to introduce the community charge as proposed and that they have shown considerable commitment and professionalism in the work that they have already done. It would be neither sensible nor helpful if I or anyone else were to make the kind of charges against local authorities that the hon. Member for Sheffield, Brightside (Mr. Blunkett) suggested we might be inclined to make. I want to work with local authorities to implement the interim relief scheme as successfully as possible. Despite the difficulties, we should, by working with local authorities, be able to achieve that objective. However, I do not for one moment underestimate the difficulties.

Mr. Blunkett

My belief is that local authority officials will do everything possible to implement the interim proposals and to cope with the administrative difficulties that confront them. I am anxious to ensure that no one remains under any misconception about the problems facing those officers and the difficulties that they will create for the public. I am anxious to stress also that if blame is to be allocated, it is not placed at the doorstep of the individuals who are nearest to members of the public, who are confused and suffering.

The Government will determine the level of poll tax through aggregate external funding and the arrangements announced by the Secretary of State for standard assessments and specific grants. The Government have constantly got wrong their estimates of the poll tax, so it is important to spell out again that it will not be a notional or imaginary figure. Three years ago, the Government suggested that, at average levels of spending, the poll tax would be £162 per person. The figure has since risen to £278.

That notional figure does not take into account balances that cannot be repeated by being used more than once, or the fact that no authority can achieve 100 per cent. take-up—in Scotland it is estimated that there has been a 7 per cent. drop. Nor does it take into account the real rate of inflation: the 3.8 per cent. figure is only half the true rate. Even if it were to take those factors into account, however, the notional figure would be about £345.

The importance of the Government figures is that the Government have chosen to use them in the implementation of transitional relief: people will be entitled to such relief only if the figure approximates to what the Government think the local authority should be spending. The notional figures, which are obviously either below or above that level depending on the Government's assessment, will determine whether they are so entitled.

Apart from collective poll tax and standard poll tax—with the exemptions which apparently are now available to Members of Parliament—along with the rating system that will continue to holiday lettings and the non-domestic rate applying to commercial premises, there are now seven different personal poll tax levels. There is the Government's standard spending assessment—the mythical target or ready reckoner of £278 which will have to go on poll tax bills. There is the notional poll tax or settlement figure for spending at Government-approved levels, exemplified in the papers that have been produced today. There is safety-netted poll tax; transitional poll tax for ratepayers; transitional poll tax and special help for non-ratepayers; rebated poll tax; and, finally, the real level of poll tax that will be levied by authorities working in and having to cope with the real world. They will set a level of poll tax that will retain the existing level of service for the people in their areas: that is the level about which people will be concerned, and on which they will make a judgment.

Since 11 October, the myth has been peddled that no poll tax bill be more than £3 above the existing rate bill. Because of the notional figure—because of the way in which the Government are intent on blaming the local authorities—literally hundreds of thousands, if not millions, of people who think that they are entitled to relief will find that they are not.

It is no good saying that that is because local authorities are overspenders. Conservative Members can say that if they wish, but if they do they must then condemn their own authorities. More than 90 per cent. of local authorities in England spend more than the amounts in the Government's guidelines—the new target figures that have been reintroduced. Of the authorities that spend more than 10 per cent. more than the guideline figures, 56 are Conservative and 36 Labour.

Mr. Chris Patten

May I help the hon. Gentleman? I am not sure from what he is saying whether he has misunderstood the interim relief scheme. He seems to be suggesting that, if a local authority spends more than is consistent with total standard spending nationally, the scheme will not be available to those living in that area.

Mr. Blunkett

I did not say that at all, and I would not want to imply it. What I am suggesting is that people who believe that they are entitled to relief will then find that they are not, because if spending is higher than the notional level predicted by the Government they will not be able to claim the difference between their rate bills and their poll tax bills. Many people expecting lower bills next year will be disillusioned when the bills fall through their letter boxes.

8.15 pm

I will not be diverted from my argument, however. I was saying that, of the authorities that spend more than 10 per cent. more than the assessed level, 56 are in Conservative hands, while only 36 are in Labour hands. Of the top 20 per cent. of so-called overspenders, seven are Conservative and only three Labour. The highest overspender—in terms of the assessment—is an authority that spends 210 per cent. more than the Government's guideline requires. That authority happens to be Mole Valley, the constituency of the chairman of the Conservative party.

I do not think that Conservative Members should be too quick to tell people, in the months ahead, that their local authority has disbarred them from help that they were promised. The offer of such help was illusory so it is no wonder the former Minister of State, the right hon. Member for Suffolk, Coastal (Mr. Gummer), has moved to pastures new: Suffolk, Coastal spends 36 per cent. more than the guideline, and it will take more than irradiation to make the poll tax palatable in the right hon. Gentleman's area.

Even if the authorities conform to the Government's guidelines, however, few ratepayers will find themselves eligible for the new transitional help—those who are currently ratepayers, that is, as opposed to those receiving special help. The reason is simple: entitlement to it is dependent on a very low rateable value.

The Secretary of State said that our hearts should go out to pensioners. Mine does: it goes out to pensioners in areas such as Pendle, where a rate bill would have to be as low as £12.74 a year—not a week—to entitle them to relief. In Hyndburn, it would have to be as low as £19.92 for a single pensioner; in Barrow-in-Furness, it would have to be £41.57. In the same areas, a couple would have to have a rate bill as low as £181.48, £195.84 and £239.14 respectively.

There will be major problems in regard to pensioners and the disabled—categories who are to be offered special help—who are not ratepayers, and who are therefore clearly living with a primary ratepayer. Apart from the administrative problems, clumsiness and costliness involved in trying to sort out who is eligible and who is not, it will be difficult to identify the primary ratepayer. Although it would be easy enough to look at the list to find out who paid the bill, in many households the primary ratepayer—the person whose name appears on the list—is not necessarily the person who pays the bill.

As we have tried to point out, other members of the household effectively pay rates, in that they contribute to household expenses. Thus many people entitled to special help because of age or disability will be better off than the primary ratepayer, who will find that he is entitled to no help. People living in the same household, on the same income, will be paying different amounts of poll tax, and one householder may be entitled to help while his poorer next-door neighbour is not. People will ask each other why their poll tax bills are different. That was exactly the accusation made against the rating system by Conservative Members when they introduced the poll tax: that a pensioner could be living alone in a house next door to people who were earning and better off but could end up paying the same bill. That is exactly what will happen under the transitional arrangements. A primary ratepayer who is a pensioner living alone next door to someone who is entitled to special help will find that he or she is a great deal worse off. I can see neither the fairness nor the justice of that. That is why we reject the scheme.

The cost will be enormous. That money ought to be spent on helping to cushion the effects of the poll tax. I do not know what the word "reasonable" will mean when it comes to the administrative costs that the Government have agreed to bear. They have said that they will meet all reasonable costs. The last time those words were used, the Association of District Councils suggested that the cost of implementing the poll tax would be £200 million short of what was required. That expense will have to be met by poll tax payers and by cuts in services. There will be confusion and concern about that.

The poll tax will have a great impact on community care. We have already referred to the fact that the poll tax will hit families hard. We are worried about the transitional help that is to be made available. I hope that the Secretary of State will deal with the point—I do not believe that it divides us politically—that if 28 February is used as the cut-off date we shall disfranchise people who move house and deal a blow to people who move from one type of property to another—for example, from a hostel or a nurses' home. They will not be entitled to any help because they are not primary ratepayers; they are secondary ratepayers.

We shall also disfranchise those who are discharged from hospitals and hostels for the mentally ill and the mentally handicapped for rehabilitation in the community. All hon. Members would be horrified to find after 1. April that people who were being rehabilitated and reintegrated into the community were to he disqualified from special help because 28 February was the cut-off date. I ask the Secretary of State to examine that point again. He may not have much sympathy for those who live in houses of multiple occupation, who are not primary ratepayers and who will not get help. He may also not be worried about those who move from one household to another. However, I believe that every hon. Member will be concerned about the impact of the cut-off date on community care policies.

We welcome the additional exemptions to cover those who suffer from senile dementia, but I hope that the Secretary of State will put it on record that all sufferers from senile dementia, not just those suffering from Alzheimer's disease, will be exempted.

Mr. Chris Patten

Yes.

Mr. Blunkett

I welcome that commitment unreservedly. I believe that it is a wise and sensible move. I wish that it had been made a long time ago. My Scottish colleagues will have a word or two to say about it and other issues—that steps could have been taken to help the people of Scotland but were not.

Those who cease to be exempt under any category will find that they are not entitled to relief. Given the present position—and we would not dream of starting from here—a rebate system would make much more sense than the transitional relief proposal. It would be fair, understandable and workable. Furthermore, it would be administratively simple and it could easily he implemented by 1 April. It would help those who are just outside rebate entitlement.

People are often hit by the means test which disqualifies them from obtaining any help. By changing the taper from 15p to 10p, we could bring within the rebate scheme as many as 2 million people, 500,000 of whom would be pensioners. We should help those who need help most. We should do what most people believe to be fair—help those in need. We should base help on ability to pay and we should target that help. There are excellent precedents for doing that, with which Conservative Members would agree. I rarely agree with the new Secretary of State for Trade and Industry but I have to say, although it comes hard to put it on record, that I agree with what he said in the House on 18 Aprl 1988. He said that the Government had made their rebate system more generous, and that they had targeted it very much better. He said: I can think of no scheme more closely attuned to ability to pay. "—[Official Report, 18 April 1988; Vol. 131, c. 591.] That cannot be faulted. A rebate scheme—improved and extended by the £300 million that the then Secretary of State did not have—would help millions of people who, without that help, will be unable to meet their poll tax bills. That is why, in an effort to be constructive—not to carp and to be critical—we have tabled amendment (f) to Lords amendment No. 330.

It is important to examine again the operation of safety nets. As a result of phasing out the relief and safety net system, people such as pensioners, through no fault of their own or of the local authority, will be hit hard during the move from the first year to the second year. How can it be fair for a pensioner in, say, Guildford to make a gain of 28 per cent. in the second year of poll tax whereas a pensioner in Lewisham will lose by 69 per cent.? That is both unfair and unjust and it will be thought to be so when the scheme is implemented.

The non-domestic rate is another major bone of contention. Many of us in the north and the midlands are very concerned, not about the fact that people in the south will receive help during the transitional period but because the hard-pressed industrial and manufacturing sectors will have to bear the cost of the transition rather than the country as a whole. We believe that the transitional costs for the non-domestic sector should be met by the Government, just as they have agreed to meet the costs of personal poll tax payers during the transitional period. The 400,000 businesses that ought to gain from the revaluation changes should be allowed to enjoy the boost that they would give to economic and employment prospects, at a time when the single European market will be posing a major threat to jobs and manufacturing industry in those areas.

Mr. David Nicholson (Taunton)

The hon. Gentleman says glibly that the Government should meet those costs. Will he explain why the presonal taxpayer should meet the costs of bringing relief faster to businesses in areas that will benefit from the changes that this Government are introducing? The Labour Government never did that.

Mr. Blunkett

It is quite wrong that the unemployed, the low paid and deprived people in the north, the midlands and Wales should be made to pay for the phasing-in process. Why should industry be put at a disadvantage? Why should the relief not be made available to both personal poll tax payers and businesses? Why are the Government not prepared over a five-year period to find £2 billion to make that a reality? It would be a substantial help to those industries in the manufacturing sector. Our balance of trade might be improved if their opportunities were increased and the funds they had available for investment were increased by a reduction in rates. They shouted hard enough at me when I was the leader of a major city council. I want industries now to put the same pressure on the Government to make sure that they receive the gains to which we all agree they are entitled.

8.30 pm

At the end of the day it does not matter what we do to the transitional arrangements for personal poll tax or the national business rate, tinkering about at the edges with safety nets which allow big fish through but catch the small fish as we attempt to protect people from the worst unfairnesses of the tax. The truth is that we cannot get rid of the anomalies, the disadvantages and the dangers unless we get rid of the tax. It is no good kidding ourselves that people will be helped and assuring them that they will not feel the pain of the poll tax. In the end the tinkering will fail and people will realise what the poll tax means to them and to their families.

In one sense the answer is a little like the answer to the problems surrounding Sir Alan Walters and the former Chancellor. Tory Back Benchers have been saying, "Get rid of this tax or it will get rid of us." Our answer is the same as it was for the former Chancellor and the Prime Minister's adviser. When one goes, both will go. When the poll tax goes, it will go because we get rid of the Back Benchers who trooped throught the Lobbies and voted it in. The answer for the electorate is clear. If they want to get rid of the poll tax, they should get rid of the Government who imposed it.

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton)

It may assist the House if I refer to the Scottish amendments which were alluded to earlier, although I shall also refer to the comments of the hon. Member for Sheffield, Brightside (Mr. Blunkett).

Lords amendment No. 260 relates to the standard community charge. The Government are responding to the concerns that have been expressed in Scotland over some of the effects of the present standard community charge arrangements. I should make it quite clear at the start that many of the grievances that have been brought to our attention can be attributed directly to the decisions by local authorities. Under the present arrangements, they have had the discretion to set their standard community charge at between one and two times the personal charge. It is therefore regrettable that, with the exception of the Shetlands and the Western Isles, all Scottish local authorities set their charges at the maximum this year.

Mr. Maxton

When the Minister and the Secretary of State were establishing the level of revenue support grant to local authorities in Scotland, what multiple did they consider the local authorities would use?

Lord James Douglas-Hamilton

Obviously the maximum which local authorities might set has to be taken into account, but we have taken that into account and we shall consider possible changes with regard to this year.

We accordingly decided that we had to alleviate the problem caused by high charges. The new proposals are designed to focus specifically on areas of hardship, leaving intact the basic principle of a flat-rate charge. They give the Secretary of State power to prescribe certain classes of property for which he will set the maximum multiplier. While we are still considering the extent to which that power should be used, we do not expect to make widespread use of it. Local authorities are very well placed to identify problem areas, and for that reason we are providing them with the power to prescribe their own classes, for which they will be able to set their own multipliers. That power will be limited by regulations, but our intention is only to restrict its use so that it does not become a means of reintroducing a form of tax based on the physical characteristics of a property.

The new powers will allow levying authorities to set different multipliers for classes in different districts in their areas—a power requested by the Convention of Scottish Local Authorities with which we had a useful exchange of views. Finally, authorities are being given powers to set their multipliers at nought, a half, one and a half or two. That is in line with the powers available to authorities in England and Wales.

I should like to refer specifically to amendment No. 260 which allows the Secretary of State to prescribe certain classes of property for which he will lay down a maximum standard charge multiplier. It will also allow local authorities to determine their own classes for which they will be able to set their own multipliers. I am glad that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) is in his place as he raised this matter in the summer, along with his colleagues who represent rural constituencies.

Although we have not reached a final decision on which classes should be prescribed, premises which attract a standard charge because the person who was living there has to live elsewhere either to be looked after because of age or infirmity or as a carer looking after someone else who is old and infirm will attract a multiplier of nought. Empty manses will attract a multiplier of nought, homes of prisoners will attract a multiplier of nought, and homes of full-time students who live elsewhere during term time will attract a multiplier of nought for the duration of the course. Properties which attract a standard charge because of the occupant's death will attract a multiplier of nought for six months after the death. Properties used as trial flats for housing associations will attract a multiplier of nought. That will leave scope for authorities to determine other classes. For example, they may wish to determine a class comprising properties which attract the standard charge because their owners are obliged to live elsewhere under the terms of their employment. It will be for each regional or islands authority to determine within certain prescribed limitations what additional classes will be appropriate for the circumstances of their area and what the multiplier should be for those classes.

A particular query concerns prisoners. We are proposing to use the new standard charge provisions to prescribe a class of property comprising the homes of prisoners for which a maximum standard charge multiplier of nought will be prescribed so that people in prison will not have to pay the standard charge on their former home, although they might have to continue paying in respect of a second home.

The hon. Member for Dundee, East (Mr. McAllion) raised the matter of rebates. The take-up has been approximately in line with expectations, with more than 1 million people, or almost one in three adults, not having to pay the full community charge. He also mentioned the feasibility of implementing the scheme in Scotland. Discussions with local authorities so far have not revealed insuperable difficulties in introducing the community charge transitional relief scheme, even in the context of a scheme which will allow retrospection for the current year. My right hon. and learned Friend the Secretary of State for Scotland has undertaken to reimburse local authorities for reasonable administrative costs incurred in introducing and operating the scheme. Discussions with COSLA are certainly continuing and we hope to be able to announce in the near future the details of a fair and workable scheme.

Mr. Douglas

What is on the table? What figure do the Government have in mind as a reasonable cost? What sums are they putting on the table in response to COSLA?

Lord James Douglas-Hamilton

Obviously the exact amount that it will cost for the local authorities to carry it out is a matter for negotiation between the local authorities and the Scottish Office. But the actual costs of the scheme will be between £20 million and £30 million for this year and the next two years. I look forward to hearing the hon. Gentleman's speech later.

As for the transitional relief scheme, the hon. Member for Brightside was not fighting the principle of relief, but wanted to apply it differently. The Government recognise that the transition from domestic rates to the community charge led to significant increases in bills for some people. The proposed amendments will enable the scheme to be introduced which will provide transitional relief for former ratepayers, pensioners and the disabled whose community charge bills are significantly higher than their former rate bills.

The first amendment provides a regulation-making power which allows the Secretary of State for Scotland to provide that, where prescribed conditions are fulfilled, a person's liability to pay a personal community charge may be reduced by an amount in accordance with prescribed rules. The clause has been drafted widely so as not to prejudice the formulation of the scheme most appropriate to Scotland. It will allow comparison to be made between people's rates bills and their community charge bills, and will allow for special arrangements to be made for pensioners and disabled people. It has been drafted specifically to allow the scheme to be made retrospective in Scotland and thus be applied in respect of the financial year 1989–90. Discussions are continuing on the practicality of doing that.

We intend to use the powers to prescribe a scheme under which former ratepayers and their partners will, in the first year, lose no more than £3 a week, or £156 a year, as a result of the change from rates to the community charge, provided local authorities spend in line with the Government's assumptions. As the relief will be limited to the additional costs borne by two chargepayers, we intend to make special provision for pensioners and disabled people who would not be eligible for relief as former ratepayers or partners of former ratepayers. They will be able to apply for relief to ensure that they pay no more than £3 a week in community charge, with the same proviso. We have been discussing the precise details of the scheme with local authorities and full details will be announced as quickly as possible.

Mr. Malcolm Bruce (Gordon)

The Minister is giving the House important information that, although not ideal, will be welcomed. Will he make it clear whether he is speaking of individuals or households? Four adults paying £100 in rates may have to pay over £1,000. Will the household receive the cumulative amount or only the individual?

Lord James Douglas-Hamilton

The point about multi-person households has already been raised. No final decision has been reached about the treatment of such households in Scotland. The hon. Member should remember that the scheme is intended to be targeted at former ratepayers. The change in their liability is not intended to provide universal relief. However, the rebate scheme will continue to link directly the community charge with the ability to pay. In most cases, the rateable value of households with three or more adults is too high to qualify its residents for relief.

The second amendment on transitional relief allows for the payment of a grant to local authorities in respect of the relief scheme. The grant may cover the revenue forgone by authorities as a result of community charges having been reduced by the relief scheme and the administrative costs to the authorities of administering and setting up the scheme. We have met with COSLA, and discussions are continuing to ensure that a fair and workable scheme is developed as quickly as possible. I hold the strong conviction that there is the will to make the scheme work and to get the funds to those concerned as quickly as possible.[Interruption.]

The hon. Member for Dunfermline, West (Mr. Douglas) laughs, but about 500,000 people may benefit from such funds in Scotland. It is therefore important that it is done as quickly as possible.

The hon. Member for Brightside mentioned people who suffer from Alzheimer's disease. I am grateful to the hon. Member for Glasgow, Garscadden (Mr. Dewar), who wrote on 12 October to say that he was very relieved that we have been able to make a concession. Hon. Members will be aware of the Government's decision to extend the exemption from the community charge for people who are severely mentally impaired to include people who are impaired as a result of a degenerative brain disorder or mental illness. The changes necessary to implement the proposals will be made by regulations under existing legislation.

Mr. Douglas

Given the importance of this issue, will the hon. Gentleman say what the Government are doing to overcome some of the difficulties that occurred when previous exemptions for the severely mentally impaired were made? Will he give an undertaking that if the Scottish Society for the Mentally Handicapped produces a leaflet to publicise the exemption, the Scottish Office will assist with its financing? What publicity does the Minister envisage to bring to the attention of the public the exemptions that will be made?

Lord James Douglas-Hamilton

The hon. Member raises a different point, about which I shall write to him. I met the chairman of the Alzheimer's Disease Society, who welcomed the steps that we are taking and asked for them to be back-dated. I am glad that we have been able to respond to that request.

Under the new definition, we are extending the definition of "severely mentally impaired", because the only people included under the current definition are people who are severely mentally impaired as a result of a brain injury or a congenital handicap. In future, others who are impaired because of a degenerative brain disorder or because of a mental illness will be included. It took some time to widen the definition of "severely mentally impaired" and to adopt a formula that would be effective and would stand the test of time. To qualify, a person must be severely mentally impaired and meet one of the qualifying conditions, such as entitlement to constant attendance allowance or severe disabled allowance. COSLA has welcomed these changes most warmly, and I hope that it has been of some assistance to report them to the House.

8.45 pm

Mr. Maxton

I do not intend to enter into the argument about whether the domesic rating system was good or not, but, whatever its faults, it was an awful lot better than the scheme that the Government came up with to replace it.

The Secretary of State attacked the domestic rating system, and whenever anyone does I put on the record a quotation that says: The Government recognises that rates are far from being an ideal or popular tax. But they do have advantages. They are highly perceptible to ratepayers and they promote accountability. They are well understood, cheap to collect and very difficult to evade. They act as an incentive to the most efficient use of property. No property tax can be directly related to the ability to pay; but rate rebates, now incorporated in housing benefit, together with Supplementary Benefit, have been designed to reduce hardship. The Government have concluded and announced to Parliament that rates should remain for the foreseeable future the main source of local revenue for local government. That quotation is from the Government's 1983 White Paper on local government financing. I hasten to add that that was after the 1983 election.

Mr. Bill Walker

The hon. Gentleman will realise, as does every Scot, that despite what was said in 1983, the revaluation between 1983 and 1987 produced the most appalling problems for many people in Scotland. No Government, of whatever colour or complexion, could have allowed that to continue.

Mr. Maxton

Past revaluations did not cause any outcry, but there were two reasons why there was an outcry about the last revaluation. First, the Government were cutting rate support grant and, therefore, placing an increased burden on domestic rates, and, secondly, the Government gave instructions that the burden was to be switched from business rates to domestic rates. The hon. Member for Tayside, North (Mr. Walker) has never understood that fact, but there are many things that the hon. Gentleman fails to understands.

When the Government got the scheme off the ground in Scotland, the Secretary of State for Scotland said, "It is almost perfect; we are almost there. The scheme will last, and it is a good scheme." A quarter of the English Bill was taken up with changes to the Scottish Act. Now, these amendments are being shoved into an English Bill that again refers to the Scottish system. The Government realise that the poll tax in Scotland is a shambles. It is not working and is an administrative mess. The computer cannot cope with the 4,000 daily changes as a result of people moving. Rebate applications made on 1 April have still received no response. People have not received the rebates to which they are entitled and the 25 per cent. in Scotland to which the Secretary of State referred has not materialised. He said that the bills would be sent out with ease. Perhaps he should speak to Bill Aitken, one of the four Conservative councillors on Glasgow district council. He has written letter after letter to Strathclyde regional council asking it to send him a bill for his poll tax. He may be daft but he wants to pay it. However, it has not sent him a bill and there are many other examples of bills that had not been sent out even by the end of October.

Some people are receiving final demand notices for the poll tax when they have not received the original bill. The system is a shambles. The unfairness of it is shown in the enormous number of people who cannot afford to pay and who have not paid even though it is now November. Therefore, the Government have been forced to rethink their attitude to the way in which the poll tax will operate in Scotland. The transitional payment recognises that the poll tax is basically an unfair tax. By introducing it, the Government have admitted that.

I shall give a short history lesson because some hon. Members may not be aware that in 1986, when the Government introduced the Abolition of Domestic Rates etc. (Scotland) Bill, there was a transitional arrangement within it. Under the Bill the rating system would be phased out at the same time as the poll tax was phased in. Rightly, the local authorities said that that administrative scheme was a nightmare and that they did not believe it could work. They said that the new scheme was difficult enough but to have to run the two side by side would be absurd. So the Government accepted the amendments that I and others tabled and on Report they withdrew the transitional arrangement.

Having talked about the abolition of the original transitional scheme, the local authorities wrote to all members of the House of Lords. In a letter dated 24 April 1987 they said: This suggests the need for some form of special transitional arrangement to limit the increased payment being sought in the first year; while such a broad-brush approach should provide rather rough justice, there is a precedent for it in the arrangements which were introduced in response to the special difficulties of those rate bills which rose…in 1985. The Government rejected that. It was two and a half years ago that the transitional arrangement was first suggested to the Government as a means of ensuring that payments would not be massive for those who could least afford them. It has taken the Government two and a half years to accept that it might work. The Secretary of State described COSLA as the vehicle for Labour party policy in Scotland, but it was COSLA which first suggested that scheme. Now the Government are suggesting to COSLA that it should implement it. However, it is too late. It will cause enormous administrative problems and will not be anything like as generous as the Government think.

I accept the Government's commitment that any outstanding payments will be backdated to 1 April 1989 and that anybody entitled to them will receive them. However, they will probably not receive them until after 1 April 1990. The local authorities have made it clear to the Minister that, with all their other administrative shambles, they will find it impossible to cope with this scheme as well. We will have the absurdity of final demand notices being sent out to people who after 1 April next year will have a large part of that poll tax repaid to them.

In some of the regions dominated by the absent Scottish National party—Grampian——

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Dominated?

Mr. Maxton

Some of its members are still part of the administration. That area will use warrant sales. People will have the poll tax taken off them by the sale of their property. I have never heard anything so absurd as people having their property sold around them in order to pay a bill that will be repaid to them six months later. It is nonsense and the Government know it. They should have introduced the scheme long ago.

As has been pointed out, the Secretary of State and his Ministers plucked the notional poll tax figures out of the air during the months prior to the scheme's implementation in Scotland. No one in Scotland, from finance officers or elected local government personnel, has ever managed to work out exactly how they came up with the figures, but those are the figures upon which the transitional payment will be based. Let us suppose that one receives £156 more relief than under last year's rates. In Aberdeen the notional poll tax figure is £201 but the actual figure is £301, so one must immediately add on £100. The people will not receive anything like the generous benefit that Ministers are claiming. We welcome any relief but it ought to have been introduced two and a half years ago when it was first suggested, as it would now be in operation.

Mr. Bill Walker

rose——

Mr. Maxton

If the hon. Gentleman thinks that I am sitting down, he is in for a slightly rude shock as I have one or two other things to say.

On the standard poll tax, we welcome the changes that take out of the system elderly people who are forced to live with relatives because they are no longer capable of looking after themselves for short or long periods. They may have been pushed into having to pay a standard community charge on their house that could have been a multiple of two and upon which no rebates were allowable. We also welcome the other changes. However, they fail to recognise the basic unfairness of the tax.

In my constituency an old age pensioner couple wrote to me saying that some years ago they had been left a holiday flat in Millport on the island of Cumbrae. It has no toilet or bathroom and they have to share a toilet with the rest of the flats. In 1988–89 they paid £56 in rates. This year they are paying £540 in poll tax. They cannot afford to keep the flat on. Even if the local authority had used a multiple of one rather than two, that couple still would have had an increase in their local government bill from £56 to £270—a massive increase, although not as large as if they had paid the poll tax.

The nonsense of the poll tax is shown by the fact that the Duke of Argyll who has a home in London can designate Inveraray castle as a holiday home and will pay the same rates as a poor person with a holiday flat in Millport or Dunoon. The same unfairness applies to the standard poll tax as to the personal poll tax. It does not take account of people's ability to pay. The Government's obsession with the poll tax has forced them to introduce a standard community charge rather than leaving second properties in the rating system, which would have made much more sense than the present proposal.

The Government have exempted those suffering from Alzheimer's disease and other degenerative disorders. It is about time that happened and we are grateful to the Government for doing that. I am sorry that the Minister of State—the hon. Member for Galloway and Upper Nithsdale (Mr. Lang)—is not present. On six occasions in one Scottish Question Time in February the hon. Gentleman said that it was impossible to bring these people into the system. Perhaps the generosity of the new Secretary of State for the Environment or a change in advice—I notice that there is now a new chief medical officer—have led to the exemption.

9 pm

Lord James Douglas-Hamilton

Does the hon. Gentleman accept that my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang) was extremely keen to achieve this change, but he believed that it had to be an effective change that would stand the test of time? We believe that we have achieved such a change.

Mr. Douglas

The Minister said that it could not be done.

Mr. Maxton

My hon. Friend is right. On six separate occasions in one Question Time the Minister said that it could not be done. Of course we are grateful to him and are delighted at the news. I hope that the Secretary of State will spell out the numbers involved. There seems to be a discrepancy between the press release that the Secretary of State issued in Scotland and the number of people whom we estimate suffer from Alzheimer's disease and other mental disorders.

We welcome these concessions, but there are no concessions that will get rid of the basic unfairness of the poll tax and the resulting bureaucratic nightmare in Scotland. There is only one way that we can do that—by getting rid of the poll tax completely and returning to another system. That cannot happen under the present Government. They will not give way. They are obsessed with the poll tax. My hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) was right when he said that the only way to get rid of the poll tax was to get rid of the Government. That will happen at the next general election, and we all look forward to it.

Mr. Malcolm Thornton (Crosby)

My right hon. Friend the Secretary of State touched briefly on amendment No. 372 and amendments (a), (b) and (c) thereto, which I tabled. I hope that the brevity of my remarks will not detract from their importance. Amendments (a) and (b) are intended to extend the transitional protection to businesses paying rates before 1 April 1990 even if they move premises after that date. The Government rightly support initiative, enterprise and expansion, but this proposal is a deterrent to all three.

Denying transitional protection to businesses that move will slow the natural progress of successful smaller businesses that are seeking to move to larger premises. In turn, this will leave fewer smaller units available for new businesses wishing to start up. It is important to stress that point. I should like my hon. Friend the Under-Secretary of State to pass on my thanks to my hon. Friend the Minister of State, who has written to me today on this subject. I hope that attention will be drawn to this in the wind-up to the debate. I urge my hon. Friend to reflect on that point. The Government state that they want to support small businesses, which are going through a difficult period. The extension of transitional protection to those who wish to move will be an important safeguard for small businesses during this period.

Mr. William Cash (Stafford)

I am the vice-chairman of the Conservative Back-Bench smaller businesses committee. My hon. Friend may know that we produced a pamphlet last year on this very subject and we feel that in the prevailing economic circumstances, with high interest rates and so on, there is a strong case for my hon. Friend's point to be taken into consideration. I support him in his view.

Mr. Thornton

High interest rates are the type of difficulties to which I referred and are likely to be with us for some little time to come. It is important that the Government take that on board.

Amendment (c) deals with the permitted increase. The Government say that it should be 15 per cent. plus inflation. That means an increase of up to 23 per cent. in real terms, which is a massive increase for any small business to face. My amendment would limit it to 10 per cent., and would have a salutary effect.

Many people in small businesses can give examples which demonstrate clearly that an increase of 23 per cent. would force them out of business. One such example was given to me by a man who owns a butcher's shop in Stanmore in Middlesex. He paid rates of £2,305.18 in 1988–89. He currently expects a rent review after which, if the property next door is to be used as a guide, he will pay £1,666. His bill, plus the uniform business rate poundage of 36p, will amount to £4,199.76. That is an increase of £1,894.58 or 82 per cent. He has been in business for a long time and has already moved premises, so he will probably go out of business. He will be forced to move and, in moving, will lose any benefits from the transitional protection provisions. That is a double blow.

The Government rightly recognise that small businesses are central to the growth of our economy. They have introduced many small measures during their time in office to assist small businesses in many different ways. I, and the many small business men who have made representations to me and my hon. Friends, feel that the Government could take the small step suggested in my amendment. As my hon. Friend the Member for Stafford (Mr. Cash) said, small businesses will face a particularly difficult time in the coming year or so. I urge my right hon. Friend the Secretary of State and his colleagues to accept this relatively minor amendment and give small businesses the extra help and protection that are vital for their continuing health and growth.

Mr. Matthew Taylor

Many good changes were made in the House of Lords, not least some of those that we are discussing now. However, I have listened to the debate with the slight feeling that all this could have been avoided had Ministers listened to some of the points made in Committee on the Local Government Finance Act 1988. Committee members, including myself, raised then the difficulties that the Government are only now starting to tackle. It might have been possible to avoid people in Scotland having to pay the poll tax without these changes having been implemented, and many people who look forward to paying the poll tax in the new year would not have the worries they have even now had the Government listened to the advice given earlier.

Only now, in a series of amendments—and the Secretary of State himself accepts that it is unfortunate to bring in such changes at the tail end of the Bill—are we starting to receive some response. I hope that in part it is a result of the new Secretary of State assuming office. I say that not only because I wish him well in his new job, but because I hope that it marks a change of direction. It may be politically in the Opposition's interest for him to continue along the path of the previous Secretary of State, but for those whom we seek to protect and represent it is better that there should be a fundamental change away from that. If this debate has been sparked off partly as a result of such a change, it is to be welcomed.

Yet, as we have already debated, people's expectations about the introduction of transitional relief will not be met in practice. When I have travelled around my own area and other parts of the country, people—and especially the elderly—say to me that they do not believe that they can afford even the extra £3 a week which they have been told is the maximum extra they will have to pay. I can understand why they are so concerned in view of the low level of pension and benefits that many people receive. However, those people are operating under a delusion. Many will be paying more than an extra £3 a week and they do not understand that it is a notional figure based wholly on the Government's set of figures of what local authorities should be spending, not on what is happening in their own area. Their worries are based not on what will happen to them, but on the best that may happen to them. In reality, people will have to pay more than that in district after district. Whatever the background arguments—and we could debate indefinitely the politics of why those figures are higher—those people will find it impossible to pay the extra sums without hardship, and some of them may not pay at all.

Mr. David Nicholson

Does the hon. Gentleman accept that many of those who will benefit from transitional protection are living in low-valued properties at present? If we had kept domestic rates, there would have been a revaluation and they would have had to pay more anyway. The Government's concession takes account of that as well.

Mr. Taylor

The process of revaluation is not as straightforward as that. I am no defender of rates, and I am proud to say that I represent the only party that has argued consistently for a local income tax.

9.15 pm

People are being sold the poll tax and are planning for it on the basis of the misapprehension that the Government have guaranteed increases of no more than £3 a week. That will not happen; the figure is purely notional, and it will not do. In fact, more than 90 per cent. of districts are spending over the Government's target, so the figure is not even a half truth. It is not even a quarter truth.

Moreover, in houses in multiple occupation, only two people will be eligible for relief. That is ridiculous. Earlier, when I told the Secretary of State that he could not defend that ridiculous state of affairs I thought that he would at least admit that the principle was wrong, whether or not he had found a solution. I listened with interest, but the right hon. Gentleman would not even say that. It seems to me obvious that no one can go to a group of people sharing a house and say to them, "We have to pick a couple of you. Which two of you want relief and who wants to pay more?" It does not work like that. People will not be receptive to that idea.

The hon. Member for Crosby (Mr. Thornton) raised some important points concerning the effect on small businesses of the changes in non-domestic rating. In areas that have enjoyed low rates in the past, many small businesses are set to suffer badly, especially in deprived parts of the country with low wages. In Cornwall, for example, local authorities have gone out of their way to keep rates down, and businesses will face large increases. The Government have provided transitional arrangements to allow for 20 per cent. or 15 per cent. increases plus inflation. If Conservative Members are honest, they will admit that such increases will be extremely difficult for small businesses to meet. They will find the burden insufferable. Many small shopkeepers have no alternative source of income from which to find the extra money at a time when living standards are becoming increasingly tight, when mortgage interest rates are increasing and when small businesses have precious little opportunity to expand.

What makes all that harder to bear is that small businesses know that the extra money will go not to improve local services but to maintain a higher level of service elsewhere. Elsewhere the rates will be cut but the services will continue to be provided. They know that their fiercest competitors—the national retailers with a shop on every street corner—will be able to spread the burden. It will be nothing like as difficult for them as for the small businesses which do not have the option to move from their village or town.

Acceptance of the proposal to ensure a maximum increase of 10 per cent. in one year is the very minimum that people should expect from a Government who claim to understand the difficulties of small businesses. If that is not forthcoming, small business people will draw their own conclusions on the basis of their bank balance and the experience of their national competitors who will benefit from the changes in the years to come.

The changes that the Government are introducing almost monthly in both the poll tax and non-domestic rating arrangements are extremely complicated and far-reaching. It is almost as if the Government tear up the proposals and start again every time they look at the figures. I do not believe that when Ministers first started to debate the changes they understood the difficulties that the proposals would cause for the Government, for the local authorities which would have to implement them, and for the people who would have to pay the charge.

Your best course of action would be to rethink the proposals and admit that the poll tax arrangements do not work as you originally expected them to. However, I accept that you are unlikely to accept that until the ballot box announces its verdict in future.

The Government should recognise the complications that they are causing for the local authorities which must implement this proposal. Even those authorities that are most willing and most supportive of what you are trying to do—and there are some authorities like that—are finding it virtually impossible to keep up with the pace of change that the Government are trying to impose on them in an attempt to meet some of the difficulties that they have finally recognised. At the very least, you would be wise to delay the implementation of the poll tax in England for a year to allow the changes to be properly absorbed and to allow the poll tax to be introduced, if not fairly, at least in an administratively clean way.

Mr. Bill Walker

It is not surprising that we have just heard a Mickey Mouse-type speech. The hon. Member for Truro (Mr. Taylor) was actually addressing you, Mr. Speaker, when he thought that he was addressing the Government Front Bench. He therefore expected the Chair to make the changes that he really believed should be made by the Government. That is not surprising because the hon. Gentleman's speech was of a Mickey Mouse character and that is why it contained Mickey Mouse information.

The hon. Member for Glasgow, Cathcart (Mr. Maxton) has left the Chamber and I can well understand why. He referred to a Government White Paper from 1983. The hon. Member and his colleagues always fail to draw attention to the fact that housing benefit was rightly referred to in that White Paper because it runs into hundreds of millions of pounds in Scotland. When they refer to the alleged reduction in public or taxpayers' support for local government, the Opposition somehow forget the massive amounts going to the housing coffers as public support money.

Mr. McAllion

I was interested to hear the hon. Gentleman say that housing benefit makes up for any losses incurred through the poll tax. When the Government introduced their latest changes in housing benefit in Scotland, why were 2,500 people taken out of housing benefit?

Mr. Walker

I never have any difficulty supporting the reasons why I vote or do not vote for things. I hope that the hon. Member for Dundee, East (Mr. McAllion) will be able to look back and say, "When it was required, I at least voted the way that my conscience dictated."

We welcome the transitional relief arrangements in Scotland. Contrary to the noises from the Opposition Benches, many Conservative Members have been lobbying from the outset for such measures.

Mr. James Wallace (Orkney and Shetland)

Not very successfully.

Mr. Walker

Oh, yes, indeed. If the hon. Gentleman and his colleagues believe that they can ever persuade Governments to change their minds, they are wrong.

Mr. Wallace

The standard community charge amendments which were tabled by the Government in the other place and which are for approval this evening are substantially the same as those that I moved on Report. If the hon. Member for Tayside, North (Mr. Walker) has been lobbying for the changes in the transitional arrangements since the poll tax was first introduced in Scotland, why has he been so singularly unsuccessful until his English colleagues started bleating?

Mr. Walker

The hon. Gentleman should know that I am the last chap that he should take on when talking about a unitary Parliament. I support the unitary Parliament. Through my hon. Friends in English constituencies, it is right and proper that I should bring pressure to bear on the Government in whatever way that I want to bring it. I have no hesitation in saying that I do that all the time because I believe that the unitary Parliament is a protection that we all enjoy. It is important that we can look at different aspects of our legislative system and enjoy the benefits. That is what the hon. Member for Orkney and Shetland (Mr. Wallace) and his colleagues are prepared to throw away with their nonsensical ideas about breaking up this unitary Parliament and have small Mickey Mouse assemblies in different parts of the country which will take Mickey Mouse decisions of a kind that we have just heard described by the hon. Member for Truro.

It is important to Scots that we are to backdate these changes. One wonders what Scottish National party-controlled Angus district council will do. It has been nasty to people who are not paying the community charge, although it is party policy not to pay it. The council has been nasty to individuals who are entitled to rebates but who, because of difficulties, are paying only a certain amount. Those with rebates will now be able to pay, and the Scottish National party will again find itself facing two or three directions at once.

I welcome the changes to the standard community charge. In a large rural constituency such as mine, many people will be able to enjoy the benefits that are brought about by the multipliers. Contrary to some of the noises from the Opposition, these changes will be welcomed, and I am delighted that the Government have responded quickly to hon. Members' requests.

Mr. Douglas

I do not agree with the remarks of the hon. Member for Tayside, North (Mr. Walker). One of the changes announced by the Government proves that non-payment works. Scottish hon. Members pressed amendments in respect of Alzheimer's disease, and we were told by the Government that they could not be accepted. We pressed for transitional arrangements, but we were told that they could not be made, and the Scots proceeded to pay—some of them did—on 1 April 1989. All the "concessions" have been achieved by English Back-Bench Members who are frightened for their seats, and they have not yet paid a penny. Non-payment works.

The Secretay of State alluded to registration in Scotland. In one authority it is 106 per cent. The Secretary of State should not be taken in by that percentage. Enormous registration anomalies always take place. The threatened non-registration penalty was severe. If one did not register, one was fined, and the fine could be repeated. One of my constituents received five forms. He did not register, but he is on the register. I have never registered, Mrs. Douglas has never registered, and my daughter has never registered, but we are all on the register. Poll tax registration officers are very efficient.

In Fife, there is a zealous poll tax registration officer named Mr. Thompson. He has registered people who have not completed registration forms. If the Secretary of State does not discuss these matters with anybody else in Scotland, through the good offices of the Secretary of State for Scotland he should speak to the poll tax registration officer in Fife. He described the tax as crazy. In a report to Fife regional council, he said that the tax will collapse because of its internal contradictions. It will be the duty of all hon. Members to pursue those internal contradictions. That is why I may not be too gracious this evening. I welcome these changes. The more changes there are, the more absurd the tax becomes.

Let us consider the changes in relation to Alzheimer's disease and to the severely mentally impaired. How can it be fair to take people from homes where, at present, they are exempt from making a payment and bring them into the community without wanting to establish the same basis for exemption? Those concerned will have to go through the humiliation of declaring an individual to be severely mentally impaired. We must ask what the Government are trying to do in this task. The Government are bringing many people into the tax bracket who were not in it before by taking people out of homes, where they were not paying the tax, and bringing them into the community. In my view, it is an obnoxious and nauseating——

9.30 pm.

Mr. Chris Patten

I was interested in what the hon. Gentleman was saying because as a constituency Member of Parliament, I have been involved—I am sure that this is true of the hon. Gentleman also—for a number of years with local organisations working with those suffering from senile dementia. I have taken up cases of people suffering from senile dementia who have been paying rates year in and year out. yet although that issue was around for decade after decade, I do not remember it creating much concern anywhere in the House, including among Opposition Members. The change that we are making regarding those suffering from senile dementia—I use that phrase deliberately rather than saying "Alzheimer's disease"—is extremely important.

Mr. Douglas

I accept that the Secretary of State is a humane man, but, with great respect to him, I do not think that he is grasping the nature of the point that I am trying to make. I am not excusing the fact that people might have paid rates and that that might have placed a burden on a particular individual; I am simply trying to illustrate to the Secretary of State that to avail themselves of this exemption, a husband, wife or parent will have to declare that their spouse or offspring is severely mentally impaired. Perhaps the Secretary of State cannot grasp the significance of that, but, as a parent, I can.

Mr. David Hunt

That is a matter for a general practitioner.

Mr. Douglas

The Minister mentions doctors, but there are several gateways to this. Not only does a doctor have to be consulted, but the individual concerned has to be in receipt of certain benefits. Naturally, I welcome the extension, but, as I have argued before, if we are to extend the provisions, why not take the fact that an individual is in receipt of benefit as being the relevant factor, instead of the relatives having to go through the procedure of declaring somebody severely mentally impaired? Moreover, why do we not illustrate that fact on the public record by removing that person from the register?

If the Secretary of State cannot accept that, so be it, but I have another illustration for him. If the individual concerned were to remain in a nursing home, he or she would be exempt from the charge and would not have to pay the poll tax. However, if that person is brought into the community, the procedure that I have described must be gone through. I rest my case there.

My basic argument is that the more the legislation is changed, the more absurd it will become. The Government are now moving away from their basic contention in relation to the standard community charge, which was that the poll tax should be a charge for services rendered, because the changes that they are making in the standard community charge make it a tax on property——

Mr. John Home Robertson (East Lothian)

Not enough.

Mr. Douglas

My hon. Friend says, "Not enough", and I shall return to that point because I want to face the argument about the Labour party's policy changes. I do not know what they are and—thankfully or otherwise—I am not responsible for them.

Dame Elaine Kellett-Bowman

Who is?

Mr. Douglas

The hon. Lady asks, "Who is?". I would argue forcibly that if we are to have a multi-based system of taxation, we should not exempt property. Although that is what the Government are trying to do, they have partially failed. All the arguments that they have advanced about old widows living in big houses and paying rates on those big houses, while inhabitants of a local authority house where three or four adults are working may find themselves absolved from paying rates, fall down on examination. That individual is heir to a gain which could be liquidated but the person in the local authority house is not.

In certain areas, there has been a transfer of title from one section of the community to another because of poll tax. Property values in Edinburgh have soared because the burden on the house has been reduced. Can anyone in their senses suggest that that is fair?

In my constituency, the Tories in the village of Saline argued that they ought to have the rates burden reduced because the village was remote. They achieved that. Now people in Saline, where property values are high, pay the same poll tax as my folk in Steelend, who cannot get proper roads.

The argument that it is a charge for services rendered—like the television licence—falls down. Generally, one hopes that television reception is the same throughout Britain. Sometimes we hope not, in view of some of the programmes we see.

Mr. Bill Walker

It is nonsense to say that television reception is the same throughout Britain. Anyone who represents a rural Highland constituency knows that because parts of the constituency do not receive some programmes. The hon. Gentleman mentioned an old lady living in a large house, but it could have been a rented house.

Mr. Douglas

It may have been a rented house. Most of the examples given of unfairness relate to property, and many relate to properties whose value had been enhanced and now have been further enhanced by the poll tax.

I shall not argue about television reception. If it is not the same, the hon. Gentleman will no doubt kick up like billy—and say that we deserve the same if we are paying the same licence fee.

My folk in Dunfermline and north-east Fife want the same services throughout the Fife region but there are differences in poll tax levels. Services in Auchtermuchty, where I live, are not as good as they are in St. Andrews. How will that anomaly be cleared up by the poll tax? Instead of starting from a level base, we are starting with a system that has numerous anomalies, which is illustrated by the attempts at safety nets and transitional arrangements.

I hope that there will be a Labour Government and that my colleagues will be in it but I must tell them that, after the promises the Labour party has made, if they come to power on Thursday, by the following Monday there will be very few payers of the poll tax in Scotland. Anyone who doubts that should look at the situation now. The number of non-payers may be between 500,000 and 700,000. Many of us will go to Hampden next week. I hope that there will be 60,000 people there. We former Govanites are extremely flexible when it comes to football matters. If there are 60,000 people in the bowl there, four times that number will certainly not be paying poll tax. If that is not a mass movement, I do not know what is. My hon. Friends have been looking for a mass movement to lead. It is there in Scotland and it is not necessarily being led.

The Secretary of State and the Under-Secretary of State ignore that movement at their peril. Dislike of the tax in Scotland is enormous. We are supposedly paying that tax, but we see the concessions that the English have already got by non-payment and, therefore, the feelings of dislike towards that tax will increase. That feeling is felt across the political spectrum and is not confined to Labour party supporters.

The tax is disliked because it is unfair, unjust and undemocratic. I was not at the Labour party conference, but I read a report in The Times which recounted how my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) said that our fundamental disagreement with the tax was that it was immoral. It is immoral to use the state apparatus to take from those who do not have and give to those who do. It is immoral to take from a couple aged 92 and 89 who live in my constituency. Because that couple have £6,000 in the bank, they must pay the full whack—the same as the Earl of Elgin. That is immoral. If the Government do not understand that, it is clear that, having sown the wind, they will reap the whirlwind at the next general election.

Lord James Douglas-Hamilton

Is the hon. Gentleman aware that, last year, the hon. Member for Glasgow, Cathcart (Mr. Maxton) was reported in the Glasgow Herald as saying that all responsible politicians have now rejected the case for a mass campaign of non-payment? What is the hon. Gentleman's message to his own Front Bench?

Mr. Douglas

I do not believe that my hon. Friends would welcome any great message from me on this occasion. I have made my position clear. I do not want to break the law, but if someone asked me the most effective way in which to stop the tax I would cite the English example and tell them not to pay it. Ministers may murmur as much as they like, but if Conservative Back Benchers had meekly taken the Government at their word and accepted that the tax was perfect and wonderful, the concessions given tonight would never have been achieved. We tried to get those concessions, but because we did not have the political arm-twisting necessary——

Mr. Bill Walker

Nonsense.

Mr. Douglas

Those concessions have been achieved because the hon. Member for Pendle (Mr. Lee) and a former Minister at the Northern Ireland Office—both of whom are absent now—strongly suggested to the Secretary of State that if such concessions were not given they would lose their seats at the next election. They did not say that they would not administer that tax or that they would not necessarily pay it, but, because of their representations, concessions have been made in England and Wales before a penny piece of the poll tax has been paid. I wish those hon. Members well in their campaign.

I must tell the Under-Secretary of State for Scotland, however, that there ain't enough sheriff officers in Scotland to collect from the non-payers. No one should try to get a warrant sale in Dunfermline, West—don't anybody try that. They will need a lot more than the police force of Fife to carry out that procedure. There will be massive opposition to the poll tax because its fundamental flaw is its immorality.

Mr. David Nicholson

I listened to the hon. Member for Dunfermline, West (Mr. Douglas) with care and with particular enjoyment when he pronounced so loudly that "non-payment works." As my right hon. Friend the Secretary of State suggested, he should convey that sentiment to the Leader of the Opposition, perhaps through the medium of the hon. Member for Dagenham (Mr. Gould), who seems to have his own unauthorised programme on a variety of matters.

I welcome the transitional proposals that have been announced by my right hon. Friend. During the past few months the feedback that I have received from my constituents—no doubt my hon. Friends have had a similar experience, has not, surprisingly, been opposition to what is the most significant change to the domestic local government finance system—the extension of liability to pay to the third or fourth working adult in a family. Most people accept that that is a just change and it is the counterpart to the example of the widow who lives in a fairly large house and who pays a large rate bill. The complaint has partly been about people on low incomes, but I shall refer to that when I talk about rebates.

The main problem which I have encountered—I think that my hon. Friends have encountered similar ones—is the result of the out-of-date system of values in relation to local government finance which we have in this country. The rateable system is 16 years out of date, which means that anomalies have occurred in all sorts of constituencies. People on relatively modest incomes in one sort of property pay up to £700 in rates a year in my constituency. People on similarly modest incomes, who live in different sorts of property, find that because of the vagaries of valuation they pay only £170 or £180 on rates, without rebates.

9.45 pm

It was necessary for my right hon. Friend the Secretary of State and his colleagues to respond to this difficulty. Certainly, those of us who have lived in London know that revaluations took place on an ad hoc basis. My house was revalued some years ago. When we started living in it, it was a building site and when we left it three years ago it was still a building site, but its rateable value had doubled because someone from the Inland Revenue decided that we should pay higher rates.

I tabled a question to my hon. Friend the Minister for Local Government and Inner Cities and he replied: Since the last general revaluation…rateable values…have been altered most commonly because of a change in the physical state of the property or in its environment. I estimate that some 3,200,000 alterations have been made to the rateable values of domestic property in England since 1982."—[Official Report, 3 Nov. 1989; Vol. 159, c.275.] A certain amount of ad hoc revaluation has taken place all over the country, and so it was right for us to take the measures which we have.

As I said in an intervention in the speech of the hon. Member for Truro (Mr. Taylor), those who complain about the change in their bills as a result of a move from rates on low value properties to the community charge must bear in mind that if domestic rates had been kept—particularly for those living in terraced houses in urban areas where there is strong pressure for occupation or cottages in tourist-favoured areas such as I have in my constituency—their rates would have increased under the old system.

I wish to welcome my right hon. Friend the Secretary of State's concessions on the disabled. I am sure that he will confirm that the Alzheimer's disease concession will be extended to those with senile dementia. There has been some concern about that, and my right hon. Friend made a telling intervention in an earlier speech.

The hon. Member for Newham, North-West (Mr. Banks) made an important point about advertising. It is right that my hon. Friends and Ministers in other Departments should get right the advertising of this changeover. The television advertising of the water authorities has not entirely been a standard to follow. I hope that we shall learn from that. The hon. Member for Newham, North-West made the point that it is important that those entitled to rebates should apply for them. The rebate system is more generous than Opposition Members concede and many of our constituents are aware.

I tabled a question to my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard)—the Parliamentary Under-Secretary of State for Social Security. It was answered on 1 November. She revealed that next year, on a community charge of £250, a pensioner couple aged 60 to 74 who were not working would obtain the minimum rebate up to an income of £123 a week—which is quite a way up the income scale for pensioners. She said that a couple with two children under 11, who were working, would, on a community charge of £250, obtain a minimum rebate on an income of up to £147–£148 a week. She said that for a community charge of £300, the income for the pensioner couple would be £134 a week and the income for the couple with two children would be £158. Those are useful figures.

Mr. Tony Banks

I am grateful to the hon. Gentleman for picking up my earlier point. The Opposition have no argument with advertising that points out what rebates are available. We do not like the poll tax, but we want people to have all the rebates that are available. We do not want an advertising campaign that tries to sell this immoral tax as something that is as good as sliced bread and in the interests of the people. The Government must stick to telling people what benefits are available. If they try to sell the political concept of the poll tax, that would be objectionable.

Mr. Nicholson

I am sure that my right hon. Friend and his colleagues are aware of the rules and conventions that apply to Government advertising.

I welcome the speech of my hon. Friend the Member for Crosby (Mr. Thornton), who dealt with business rates. There is a problem for small businesses that will be encountered throughout the southern constituencies, but I must emphasise that it is not caused by the uniform business rate. Again, we come back to the issue of revaluation. In Somerset, had the uniform business rate been introduced on present rateable values, it would he 4p or 5p lower than the current rate set by the party of the hon. Member for Truro—the Liberals, the SLD or whatever it calls itself. The rateable value is 16 years out of date. There will be difficulties, and I hope that my right hon. Friend will carefully consider what was said by my hon. Friend the Member for Crosby.

Nevertheless, in the long term there will be advantages for business and industry throughout the country. They will operate on up-to-date values and, most important, on a single national rate. The current system is quite ridiculous—as the hon. Member for Sheffield, Brightside (Mr. Blunkett) must know—with businesses taking off, relocating and reinvesting so that they can avoid the very high rates in Sheffield, Liverpool, Manchester, and parts of the midlands.

There is strong justice and fairness in the reform of the business rates that acts as a convoy for the introduction of the community charge, which itself is more controversial. However, as my right hon. Friend knows, I have consistently supported the Government in their proposals for the community charge.

Mr. Pike

We are discussing important amendments. I felt sorry for the Secretary of State when he opened the debate, because he has been saddled with a difficult job. It is rare for me to feel sorry for a Conservative Minister, but the right hon. Gentleman has been left with a Bill that he did not begin and that has been changed several times during its passage, especially during its stages in another place. The right hon. Gentleman not only has to defend all that; he has also to defend the poll tax, even though it was introduced by his predecessor. He is like a man trying to walk with his shoe laces tied together. The simple fact is that, although the transitional arrangements are an improvement, they cannot overcome the basic fault of the poll tax, which is the failure to base it on fairness and on the ability to pay.

Some of the amendments relate to matters that we tried to impress upon the Government during the many hours that we spent in Committee a year ago, but the then Secretary of State was not prepared to concede any of them. I was surprised to hear the hon. Member for Taunton (Mr. Nicholson) and the Secretary of State both refer to revaluation. The Goverment have a cheek to refer to the fact that there has not been a revaluation for 16 years, because their first action when they were elected in 1979 was to cancel the proposed revaluation in England.

Mr. Chris Patten

Will the hon. Gentleman tell the House who cancelled the revaluation that was due after 1963?

Mr. Pike

It goes back further even than 1963. The Government have been in office for 10 years. They know of the problems that arose in Scotland, and their cancellation of revaluation in England led to the problem that now confronts us, with valuations that are 16 years out of date. It is incredible that the Government want to keep turning the clock back. They will soon start talking about the actions of a Labour Government in 1929. The Government's cancellation of revaluation in their first week of office in 1979 created the current problems.

The Secretary of State asked whether any right hon. or hon. Member wholly agrees with the present rating system. I admit that it creates problems and anomalies, but it is no use replacing a flawed system with one that is even worse.

Many different issues are covered by the amendments before us, and I appreciate your difficulty, Mr. Speaker, in selecting amendments for debate. As to the likely business rate that was announced this afternoon, we shall not really know what it will be until revaluation. When business rates are finally revealed, they are likely to be met by uproar in many parts of the country. Also, although the Government promise that there will be consultations between local authorities and businesses, they will come to regret the fact that a locally fixed rate is to be replaced by one that is determined by central Government. That will serve to sever many of the valuable links and relationships between local authorities and the businesses in their areas.

Exempt categories were debated at length in Committee and on Report, but the right hon. Gentleman's predecessor was unwilling to move further on them. We welcome the additional exemption categories and hope that the Secretary of State will continue to exhibit more thoughtfulness and concern than did his predecessor—and will, as time goes on, and as he becomes even more aware of the difficulties created by the poll tax, increase their number.

I acknowledge also the right hon. Gentleman's statement that those receiving benefit will, by the nature of the taper, have only 15p in the pound deducted rather than the present figure of 20p. We welcome that improvement, but I still believe that it is only half the story. People have yet to be told how much they will receive, and how much they will have left. There is an element of "kidology" involved, and people should not leap with joy until they know the full story.

Protection for property of a lower rateable value is of concern not only to Burnley but to north-east Lancashire as a whole. The Secretary of State surely recognises that property there has the lowest rateable values of the whole of England. Pendle is the lowest rated and Burnley the third lowest, with an average rateable value of only £103.

Mr. Winnick

Is my hon. Friend up to date with the latest information? Interviewed on the BBC's Nine o'clock News, the hon. Member for Pendle (Mr. Lee) made it clear that the poll tax would cause tremendous difficulties, and would be of acute disadvantage to his constituentts.

Mr. Pike

I thank my hon. Friend for that information. I did not know that the hon. Gentleman had been on television, although he asked a question about the issue earlier this afternoon. That is one reason why he left ministerial office: he recognises that the poll tax will lose him his seat. His constituency is adjacent to mine, and he will be faced with considerable problems next year——

It being Ten o'clock, the debate stood adjourned.

Ordered, That, at this day's sitting, the Lords amendments to the Local Government and Housing Bill may he proceeded with, though opposed, until any hour.—[Mr. Lightbown.]

Lords amendments again considered.

Question again proposed, That this House doth agree with the Lords in the said amendment.

Mr. Pike

The hon. Member for Pendle (Mr. Lee) is clearly very concerned about the issue of rateable value, and rightly so. It is a pity that a year ago he kept trooping through the Lobbies and voting for the measure.

Hon. Members have mentioned the fact that only two people in a property will receive protection, and the problem of determining which two it should be. The Minister must tell us how that will be dealt with, as it will cause considerable friction. I am sure that you, Mr. Speaker, will be interested to hear his response.

The amendments that the Government will push through tonight will not solve the problem of the poll tax legislation. The very fact that the arrangements are transitional makes that certain—and, as the Secretary of State has said himself, the Government cannot legislate for permanent protection. Of course they cannot; if they did, they would be admitting that the legislation that they forced through last year was nonsense. The fact that they are having to do the same thing now shows the folly of their policy. As the temporary arrangements are phased out, people will find themselves faced with the full unfairness and inequity of the legislation.

The real reason for the Lords amendments—the reason why we are debating them today and why they were forced through the other House—is not that the Government wish to be fairer, but that they want to gerrymander and, if possible, help some Conservative Back Benchers to save their seats in a couple of years, before the poll tax is fully payable. The Government have not really made a generous concession; they are trying to con the people. They will fail, however, and the poll tax legislation will be repealed as soon as the Labour party takes office.

Mr. Malcolm Bruce

I wish to respond briefly to the points raised by the Under-Secretary of State for Scotland. We welcome the concessions that have been introduced, especially those relating to the standard charge. The Government amendment is very similar to new clause 1, moved on 14 June by my hon. Friend the Member for Orkney and Shetland (Mr. Wallace). On that occasion the Minister of State, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), said that the new clause was based on a misconception that there are significant differences between the positions north and south of the border and that the English and Welsh arrangements are more flexible. That is not so as I shall seek to explain."—[Official Report, 14 June 1989; Vol. 154, c. 1021.] That debate revolved around the fact that we believed that it was so, and that changes were needed. At that time the Government said that the new clause was not necessary and resisted it. We welcome the fact that our arguments have now prevailed, and that the Government have recognised their strength, producing an amendment that gives much wider powers to both the local authorities and the Secretary of State than are contained in the guidelines given to us by the Parliamentary Under-Secretary. I am grateful for the Minister's guidelines, but they raise a few questions that I hope he will address in his reply.

He distinguished between categories that would be zero rated as of right and categories that would be zero rated at the local authority's discretion. Into which categories are student nurses and doctors who work in hospitals likely to fall? Student nurses are incensed at not having been treated as students on the ground that they receive an allowance, although it is very low. Therefore, they will be forced to pay the full charge out of their very low allowance. That will represent a real cut in the allowance. Student nurses have understandably become cynical over the years. Every time that an allowance is reviewed they usually find that the cost of, say, meals has increased by more than the allowance and that the real value of the allowance is eroded year by year. Student nurses will be significantly worse off under the proposals. I think that the Minister implied that local authorities will have discretions, but the Government ought to make the position clear.

The same applies to hospital doctors. They have made representations to me and, I am sure, to other hon. Members about the implication, which they resent, that they may have to pay the poll tax on their home and also on their residence in hospital if they are resident there for more than half the time. Therefore, they would have to pay the poll tax twice. That would be an injustice and would amount to double taxation, to which they should not be subjected. I think that the Minister also implied that that would he left to the discretion of local authorities. If local authorities decided to exercise their discretion, the cost would have to be met by all the other poll tax payers. Local authorities would therefore be under pressure to resist discretionary reductions of that kind. As the cost of the National Health Service is met by the Government, they ought to agree to fund that concession.

The Minister did not refer to second homes and holiday homes, about which there has been much correspondence and many representations from both sides of the House. His omission leads me to think that the Government will not address the issue. If Barratts or any other large organisation runs a time share operation, it does not pay poll tax on its property; it is assessed at the commercial rate. However, an individual with a modest holiday home —perhaps a cottage with a couple of bedrooms that is very low rated—has to pay the standard charge. Similarly, a farmer who wishes to supplement his farm income may let a few cottages on his farm to tourists. He will be squeezed out of a profitable business by having to absorb the standard charge.

Will the Minister clarify whether local authorities will be able to exercise discretion? That would be an improvement. If they can, will that fact be taken into account when calculating revenue support grant? I hope that I am right in assuming that local authorities will have that discretion. I see that the Minister is nodding, and I am grateful to him. If it is a modest property, it is reasonable that local authorities should be able to set a ceiling so that the standard charge does not have to be paid twice. The letting of a few cottages may be an important supplement to a farmer's business. The same discretion ought to apply to him.

My hon. Friend the Member for Truro (Mr. Taylor) has already referred to the fact that the £3 a week rebate is certainly an improvement, although very late in the day, and that it is based on the Government's assessment of what the poll tax in any given authority ought to be rather than on the actual outturn. If that is the case, it is a cheat because the Government know perfectly well that those targets were unrealistic and that virtually no authority, including those controlled by the Conservative party, has been able to achieve them. The rebate should be based on the average poll tax rate rather than on Government targets which were never realistic.

The Minister made no reference to the safety net in Scotland. As a Member for a constituency in Grampian region, I feel very strongly that Grampian region poll tax payers have had to pay between £46 and £54 per head, according to where they live, towards the cost of the safety net for Glasgow and Strathclyde. I fully accept that the needs of Glasgow and Strathclyde justify that degree of safety netting, but I do not accept that the burden should fall on Grampian region poll tax payers rather than on the general taxpayer.

Lord James Douglas-Hamilton

I can give the hon. Gentleman some reassurance on that point. The safety net, in its present form, will be phased out over three years. That means that those authorities which contributed to the self-financing safety net this year will receive their revenue support grant entitlement in full for 1990–91. Areas such as Glasgow which have benefited from the safety net will receive protection for a further three years, with the cost being met by the Exchequer.

Mr. Bruce

I thank the Minister for that helpful information. I still have slight reservations as to whether we will get the full amount back, but I accept the Minister's assurance in good faith.

I do not wish to be sour as we have had some effect and my colleagues and I who have campaigned consistently and promoted amendments have been vindicated. The hon. Member for Tayside, North (Mr. Walker) does democracy a great disservice when he says that Opposition Members are wasting their time as the Government never accept suggestions from them. I do not believe that is the case. However, politics being what it is, Conservative Members respond only when they see their majorities being whittled away. But they have responded, and most of the Government's concessions today are those that we pressed for a year ago. I do not believe that the Government will recover any ground in Scotland because people in Scotland know that the Government care not a docken for the plight of the Scots who have to face the imposition of the poll tax and that the Government were prepared to act only when the English majority was threatened. I am quite sure that Scottish voters will not return to the fold with any gratitude.

Mr. Harry Cohen (Leyton)

I shall speak on my amendment opposing Lords amendments Nos. 332, 347 and 421. However, before doing so I should like to use some of the leeway that you, Mr. Speaker, have allowed hon. Members who did not get in on the statement on the poll tax by saying that we would be able to catch your eye and raise those points in tonight's debate.

Mr. Speaker

Order. I said, with ingenuity.

Mr. Cohen

I am using the best of my ingenuity.

The figures provided by the Secretary of State for the Environment in his statement this afternoon show a lot of sleight of hand. He was not comparing like with like. Table 2 was supposed to be comparing the rates with the community charge, but the rates figure included the local spending discretion—the amount that the local authority was spending on local needs. That figure was not in strict compliance with the Government's targets, but the community charge or poll tax level is strictly in compliance with Government policy. The Government's level of spending for local authorities is absurdly unreal and would mean massive cutbacks in my authority of Waltham Forest, for example. The Government have allowed only 4 per cent. for inflation, which is ludicrous. Under the safety net, Waltham Forest is having to pay £46 per person, thereby subsidising Tory-controlled Wandsworth.

All summer, Conservative Members bleated that the purpose of the safety net was to subsidise overspenders. Let us hear no talk of Waltham Forest being an overspender, because we are being penalised by having to pay into the safety net. The figures announced in the statement show that needs in inner-London boroughs are still not being properly recognised. There is still gross unfairness, because some boroughs are paying half the amount that their neighbouring boroughs are paying, purely at the flick of the Minister's pen.

10.15 pm

I oppose Lords amendments Nos. 332, 347 and 421, which relate to privacy. The disclosure of information is the thin end of the wedge, yet under those amendments, which the Government slipped through in the other place, disclosure will be allowed. This is the first case in which the Government have allowed data unconnected with the poll tax to be disclosed. Why should poll tax data be used for purposes other than the poll tax? The Minister should explain why, under this gaping hole in the legislation, virtually unrestricted access to information will be allowed.

Lords amendment Nos. 332 and 347 to schedule 5, which relate to the poll tax in England and Wales, and Lords amendment No. 421 to schedule 6, which applies to the poll tax in Scotland, should be rejected because they do not guarantee that anonymity will be preserved. The use of the words "registration officer" in the amendment means that when the registration officer discloses information the recipient will be able to gain access to other lists in the possession of the registration officer and obtain personal information about an individual. The poll tax officer could disclose that three people live at 55 Acacia avenue. Two of those people could be exempted from payment because they are in prison or because they have Alzheimer's disease. The poll tax officer cannot supply the names of those people, but the recipient can check the electoral registers, telephone lists and other public lists to discover the names of the people listed. He can even use the Local Government Finance Act 1988, which introduced the poll tax, and check the entry in the extract of the poll tax register for 55 Acacia avenue to discover who lives there. Anonymous information goes to the wall. The fact that someone's name does not appear on the register can also be useful intelligence. The position under Lords amendment No. 421 is even worse, because the poll tax register can be photocopied as well as inspected.

The Lords amendments should be rejected because there is no guarantee that the Secretary of State will not use his powers to obtain anonymous information from other sources available to him, such as social security records. He can reconstitute personal information relating directly to people. He may misuse that information. He may withhold the social security benefit to which a person is entitled in order to punish him for being behind in his poll tax payments. There is no limitation on the availability and subsequent use—or perhaps misuse—of this sensitive information. The Government do not seem to care about protecting this sensitive information which can easily be handed over and get into the wrong hands.

There is no guarantee that anonymous information will not be copied on to the data bases of the police, immigration service, security service, credit reference agencies and other organisations with long lists of addresses. Again, big brother rides under the poll tax rules.

The Lords amendments are deficient in that there is no attempt to stop the recipient of the information attempting to reconstitute it to identify individuals. There is no attempt to stop any linking of anonymous information to the personalised information that a recipient already has. The reason that the Government advanced in the Lords for favouring these measures is bogus. They said that the information could be used for planning purposes. Local authorities can already use section 6 of the Census Act 1980 and call upon the staff of the Office of Population, Censuses and Surveys to use the census data for planning purposes. The Minister can also call upon OPSC staff for statistics. Using the Census Act has several advantages over using poll tax data for planning—information is kept anonymous because it is protected by OPCS staff who are alert to the privacy issues involved in handling it. By contrast, local authorities seem to have been hauled up before the data protection authorities on a number of privacy issues involving the poll tax register. Under the Lords amendments, there is virtually no privacy restraint on local authorities.

The Lords amendments could lead to the back-door selling of poll tax data in the same way as information on the electoral register is sold. As with the electoral register, the so-called Government of choice do not give the individual the opportunity to object to disclosure of information about himself. The poll tax rides a coach and horses through personal privacy. It is a bailiff's and snooper's joy and a computer voyeur's delight. The Lords amendments are yet another example of individual privacy being sacrificed to expedite the implementation of this repressive, inefficient and unpopular poll tax.

Mr. McAllion

Amendment No. 261 deals with the rate at which the standard community charge can now be levied. In dealing with it, the Under-Secretary of State listed a series of properties that would as of right be zero rated. He mentioned empty mansions, and the homes of prisoners, full-time students at university and college and those who had died. He went on to describe a second category, whereby a local authority would have discretion to designate properties that should be zero rated and included those properties where the owners' employment required them to be away from home for a long period.

I should like to ask the Minister about another category of properties—local authority houses where the tenant is a long-term hospital patient but wishes to retain the tenancy and keep the house furnished while he is in hospital. In February this year, the Scottish Office wrote to the Tayside poll tax registration officer, saying that in these cases the liability to pay the standard charge would fall on the local authority as owner of the property since council houses are let on short, renewable leases. How will such a property be affected by the changes that the Minister has described tonight? Will he or his right hon. Friend the Secretary of State give us a specific explanation? Will local authorities be allowed to zero-rate at their discretion local authority houses whose tenants are long-term patients in hospital, but who wish to keep their houses furnished and to keep the tenancy during that period?

The transitional proposals are supposed to protect groups of people who are affected by the poll tax. It is alleged protection because, as the Minister said, the limit of £3 will be applied only when the local authority imposes a poll tax that is in line with the Government's assumptions. In the case of my own district council of Dundee, the Government assumed that the poll tax should be £274 in the current year. In reality, the council was forced to levy £324—£50 or 18 per cent. above the Government's assumption. Will the Minister say that when the transitional arrangements are in place in Dundee everyone will be entitled to the limit of no more than £3 irrespective of the level of poll tax levied by the district council—even though that figure is higher than the Government's assumptions about the poll tax for Dundee?

We are expected to believe that we are dealing with a genuine, if sudden, conversion by the Government or with a sudden concern for those who are worst off. I use the word "sudden" advisedly. In Scotland, we have been dealing with the poll tax for a long time—longer than any other part of this allegedly unitary British state. We have a long track record on the poll tax and I have been in correspondence with Ministers for some time on the poll tax rebate schemes in particular.

About 18 months ago, I wrote to the Minister of State, who was then responsible for the rebate scheme. His reply gave me a series of assurances about the rebate scheme. He wrote: we have taken full account of the need to ensure that payment of the community charge is not an unacceptable burden for those with low incomes". He went further and said that the Government had taken full account of those on low incomes, whether or not they were in employment. The Minister had unlimited confidence in the virtue of the rebate scheme for people in Scotland such as the unemployed, the disabled, the handicapped, the low paid, single parents and pensioners.

Six months later, I received another letter from the same Minister on the same subject. His confidence in the rebate scheme in Scotland was still completely undiminished. He wrote: Overall, I do not accept that the community charge will represent a significant shift of the tax burden from the rich to the poor. He told me that the winning and losing households would be roughly equal and that for half of all those affected, the difference would he less than £1 a week. He also told me that there would be substantial benefits for those who were least well off. He singled out two groups and said that 90 per cent. of single pensioners and 85 per cent. of single adult households would be better off.

Yet in the debate tonight both the Secretary of State and the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), have referred repeatedly to single pensioners as a group who will especially benefit from the transitional arrangements. It is passing strange that, according to the Minister who had previous responsibility for the poll tax, there was no need for any transitional protection because they would all be better off, yet we are now told that they will be better off as a result of the transitional arrangements which have been introduced a year after the Minister made that claim.

The last sentence of the letter sent to me a year ago sums up the Government's confidence in their rebate scheme. The Minister wrote: In all cases— and I emphasise the word "all"— the rebate scheme will ensure that nobody is called upon to pay an unreasonable amount. That letter was sent in October 1988. Why is it that a full year later we need a whole poll tax package of further concessions? Are the Government saying that the Minister was lying to me a year ago when he said that the rebate scheme then available would ensure that nobody would be called on to pay an unreasonable amount?— [Interruption.] I never alleged anything of the kind. I am merely asking whether that is what the Government say now. At that time, the Minister told me that the rebate scheme would ensure that nobody would be called upon to pay an unreasonable amount——

Mr. Bill Walker

On a point of order, Mr. Speaker. I think that the hon. Gentleman was heard clearly by those of us on the Conservative Benches to have said that the Minister was lying.

Mr. Speaker

I certainly did not hear that.

Mr. McAllion

I said no such thing, Mr. Speaker.

Hon. Members

Oh!

Mr. Speaker

Order. If the hon. Gentleman did allege that, I am sure that he would wish to withdraw, but I did not hear him say it.

Mr. McAllion

I would certainly have wished to withdraw, but I never said anything of the kind. I was merely trying to explain to Conservative Members that Ministers are now telling the House the exact opposite of what Scottish Ministers were telling me a year ago. The House deserves some explanation of that discrepancy. If no one was being asked to pay an unreasonable amount a year ago, why do we now need a package of concessions and transitional protection for those who are, indeed, expected to pay an unreasonable amount? That is a serious matter

10.30 pm

I have talked about what happened 18 months and a year ago. Six months ago we received from the Department of Social Security a so-called short paper dealing with poll tax rebates. We were told that from 1990 onwards the arrangements in England and Wales would be virtually identical to those in Scotland. Tonight we have been told that from now on the arrangements in Scotland will be virtually the same as those in England and Wales. In six months the Government have turned the whole thing round. They now tell us that what was happening in Scotland six months ago was unsatisfactory and that the arrangements will have to be changed to bring them into line with those for England and Wales.

The Department of Social Security paper contained a nice table showing a poll tax figure of £300, by which the Government sought to illustrate their point. As it turned out, that was a very convenient figure from the Government's point of view. With poll tax at £300, those on income support—which has been increased by £1.15 for a single person under 25, £1.30 for single people over 25 and £2.30 for couples—will be no worse or better off. It was, therefore, convenient for the Government to use the £300 figure in the tables illustrating the Department's paper.

In the real world, however, authorities are not levying poll taxes of £300. They are levying poll taxes well in excess of £300. In my constituency, for example, the figure is £324. Conservative Members may say that that will mean that those on income support will be only marginally worse off. How can they justify a system that makes those on income support marginally worse off and Scottish Office Ministers £1,100 a year better off? No system that does that can be justified.

Mr. Bill Walker

Does not the hon. Gentleman agree that had we retained a Conservative administration at Tayside the community charge would have been about £120 a year less?

Mr. McAllion

At the last budget meeting, the Conservative opposition on Tayside regional council suggested a reduction of 0.75 per cent. in expenditure. That would make very little difference to the poll tax; the poll tax might even be bigger as a result of that opposition's activities.

I am trying to drag home to the House the fact that for 18 months I was repeatedly told by Scottish Ministers that there was no cause for concern—that everything was fine and that the rebate scheme was marvellous. Suddenly after the Tory party conference in Blackpool everything changed. All bets are off. Everything must change in Scotland and Scotland must be brought into line with England and Wales. Have the Government suddenly come to their senses? No; Conservative Back Benchers representing marginal seats have suddenly come to their senses.[Interruption.] There are very few Scottish Tory Back Benchers, and it is most unlikely that the hon. Member for Tayside, North (Mr. Walker) has come to his senses.

In December 1988 Alzheimer's Scotland wrote a letter to every hon. Member in Scotland and I am sure that the hon. Member for Tayside, North received a copy. It wrote: It seems, however, that people with degenerative brain disorders such as dementia will not qualify. In the latter stages of dementia, a sufferer may lose the power of speech, may appear to understand almost nothing, may fail to recognise close family members and may be doubly incontinent. It is both illogical and unfair to attempt to differentiate between such people and others with conditions causing a similar degree of mental impairment. The director of Alzheimer's Scotland wrote to me: Alzheimer's Scotland have drawn the attention of the Secretary of State for Scotland to this … state of affairs. The Minister of State, Scottish Office wrote to me in February 1989: This is clearly a difficult question, but I can assure you it is one to which the Government gave considerable thought before deciding that people with dementia should not be exempt from paying the community charge. That is what the Minister of State, Scottish Office, called excessive keenness on the Government's part. After considerable thought, they decided that they were not going to exempt sufferers from Alzheimer's disease and other degenerative brain disorders. Only as a result of pressure from public opinion in Scotland and from Government Back Benchers did the Government make any concessions.

The Government are running scared now, but not because they have lost the argument. They lost the argument a long time ago. Now for the first time they can see the implications of losing the argument in the House and in England and Wales, where they will lose many marginal seats. The Government are papering over the cracks in an unjust and unworkable system of local government finance. No one wants it, especially not in Scotland where we have experienced it.

I have decided that I will not willingly pay the poll tax and it will have to be taken from me. I have received threatening letters from my local regional council stating that I had better pay up in 14 days or else. However, other people in my street have not yet even received their poll tax payment books. That is the kind of administrative chaos facing regional councils. If the system will not work in Scotland it will not work elsewhere. The poll tax has degenerated into unsustainable chaos and the legislation will have to be repealed.

We have heard that the cost of the poll tax is enormous. Nearly £1 million was spent on propaganda in Scotland trying to sell the poll tax to the Scottish people. Does the Secretary of State for the Environment believe that that money was well spent? Was it cost effective? After spending £1 million on propaganda, 80 per cent. of the Scottish people rejected the propaganda and the poll tax with it. Perhaps the local government auditors should have a close look at the Government Departments that are wasting money in that way. Already millions have been wasted on computers and in administrative costs. Other huge costs will be incurred in rejigging the scheme to bring it into line with the transitional arrangements.

The Minister wrote to me and told me that he believed that all the costs were worth paying because the system increased accountability in Scottish local government. It is a sheer nerve for a Tory Minister responsible for Scotland to say that he wanted to see increased accountability in local government in Scotland. When are we going to have increased accountability in central Government in Scotland? Only 20 per cent. of the Scottish people voted for the Government who are now imposing their will on Scotland. We cannot hold the Government accountable and we are denied the right to hold them accountable, but we are told that accountability is good for us in local government in Scotland.

The Minister also justified the costs and disruption that the poll tax would bring about with the idea that it was a fairer method of collecting local government finance. If a poll tax of £350 is levied in a local authority, someone on £62.47 a week will be expected to pay the full poll tax. He will pay £6.73 in poll tax—10.8 per cent. of his income. Someone in the same area earning £300 a week will also pay £6.73 a week in poll tax, but that is 2.5 per cent. of his income. How can it be fairer for the poor to pay four times as much as the rich in their contributions to local government finance? The whole tax is immoral. It is only a matter of time, not until the poll tax is repealed, but until the Government are defeated. Then the poll tax will be repealed.

Mr. Tony Banks

I congratulate the Secretary of State on inserting a Treasury tag into the Government's bulky document. It makes it very convenient to hang it on a nail. I assure him that I will put every single page to good use.

An annex to the document relates to special grants which will be paid to inner London local authorities. I do not resent that—many local authorities are getting fresh grants. However, why is the London borough of Newham not qualified to receive special grants? I am sure that the Secretary of State understands that, although the London borough of Newham is an outer London borough, it has the same problems as inner London boroughs. If its two next-door boroughs of Tower Hamlets and Hackney are to receive special grants, I should like to know precisely why Newham is not to receive them and what they are all about.

It is grotesquely unfair that the poll tax payers of Newham will contribute to the safety net, whereas outer London Tory boroughs such as Bexley will get a safety net contribution. Why should the poll tax payers of Newham subsidise leafy Tory boroughs such as Bexley? I hope that the Secretary of State will tell me something that will make some sense to the people of Newham when they consider what was announced this afternoon.

Mr. Winnick

The Government have enough advisers.

Mr. Banks

I notice that the Box is now so crowded that they must double-park. It comes ill for the Government to start talking about special advisers and chairs' assistants in local authorities. They must carry a great weight of responsibility and they thoroughly deserve all the assistance they can possibly get.

The Secretary of State spoke about publicity for rebates and transitional relief. I saw the Minister, who is undoubtedly one of the most acceptable faces of extremism that we have seen on the Government Front Bench, nodding his head in grave agreement with my points. I want the Secretary of State himself to make a statement. I understand that the major poll tax advertising campaign will also involve television, and I trust that emphasis will be placed on rebates and transitional relief.

Opposition Members will support anything that points out how people can avoid the more iniquitous aspects of this invidious tax. If there are rebates and benefits, they must know what they are and how they can get them as speedily as possible. If that is what the advertising campaign is to be about, we will not object. We have seen enough of the Government's information campaigns to know that they usually amount to nothing more than crude Tory Government propaganda.

The Secretary of State did not respond to me earlier, so I ask him again. If he is genuine in saying that the advertising campaign will be about rebates and benefits that poll tax payers can receive, will he consult local authority associations on the terms of the advertising campaign to make sure that we are all in broad agreement before we start? If not, I suspect that there will be much disagreement and a lot of mud will be flung around.

Mr. Winnick

Does it not prove that the Prime Minister has a sense of humour, if only an odd one, that she appointed a Secretary of State who was known to be opposed to the poll tax and who, as a Tory Back-Bench Member, made several wet speeches, and gave him the job of justifying this totally unfair tax?

Mr. Banks

I do not recognise the Prime Minister as having a sense of humour——

Mr. Winnick

A perverse one.

Mr. Banks

I was about to say that it must be a perverse one. Indeed, when the Prime Minister develops a sense of humour, I will cross the House to join Conservative Members, but I do not think that there is much danger of that happening in the foreseeable future—or, indeed, in the unforeseeable future.

I ask the Secretary of State yet again, since his Minister of State has made it plain that the campaign on the poll tax will be about rebates and transitional reliefs, whether he will give the undertaking that I have requested and seek early discussions with the local authority associations on the terms of the advertising campaign that is to be inflicted on us in the winter.

10.45 pm

Mrs. Margaret Ewing (Moray)

I intend to be brief. I begin by apologising to the Minister of State, Scottish Office and to his Opposition counterpart for not being present for their opening speeches. They, more than most, will appreciate the difficulties of trying to be in several places at one time and they know that I listen with great interest to their words on numerous occasions.

You will have noticed, Mr. Deputy Speaker, that many of the hon. Members who have participated in the discussion on these amendments represent Scottish constituencies. If at times Opposition Members sound less than gracious when concessions are made by the Government, it is perhaps because, having consistently voted and worked against the community charge in Scotland, all of us are well aware of the implications of the implementation of that legislation in Scotland and of all its drawbacks.

I advise Conservative Members who represent English constituencies that if they think that their mailbags are heavy or that their constituency clinics are particularly busy, they have seen nothing yet. As the community charge comes closer in England and Wales, those Conservative Members will find out what we are finding out in Scotland, which is that the vast majority of people are opposed to this tax on grounds of principle. They will face many difficulties in trying to persuade their constituents that the legislation should go through. If all the Opposition Members representing Scottish seats were to bring into the Chamber and to read chapter and verse all the letters relating to the individual cases with which they have had to deal over the past 18 months, they could keep the House sitting for many a long hour, well beyond the normal rules and regulations. I give that as a clear warning because many individuals in other parts of the country will now experience the difficulties that we have experienced.

However, having said that, I welcome the flexibility that is now—belatedly—to be offered to the Scottish regional councils when deciding on the standard community charge. It is only right to mention that one of the strongest campaigners on this issue has been the right hon. Member for Kincardine and Deeside (Mr. Buchanan-Smith), whom we all wish well and hope that he will soon be recovered and back with us. Along with others of us in Grampian region, the right hon. Gentleman raised the point that people were being described as having "holiday homes" and were being subjected to a standard community charge of £522 for a little property, sometimes merely a wooden shack with no running water or electricity, for which in previous years they had paid perhaps £20, £30, or £40 in rates.

The fact that such people were being asked to pay the standard charge was against the interests of the tourist trade in our area, which is important in keeping small village shops open. That shop is often also the post office, where the pensioners collect their pensions, and it plays a significant role. We are talking not about people who live in mansions and have lots of money, but about individuals with a tiny cottage in which they can spend weekends or a fortnight in the summer, having a family holiday. This point has caused a great deal of upset. I therefore hope that the Secretary of State will tell us the implications of what has happened in the financial year 1989‐90 for these people who have already been asked to pay such substantial charges for their small properties.

I wonder whether the Secretary of State wishes to comment also on what he has built into his calculations in respect of the bureaucracy of the charge. Regional councils in Scotland have suggested to me that, whereas the collection of rates constituted 2 per cent. of their income, a more accurate figure for the collection of the community charge is 8 or 9 per cent. That is a substantial increase. There are still warrants to be issued and people to be pursued who, like me, have had 14-day and seven-day warnings. There are still others who have not paid for whatever reason. We still do not know the financial implications of that. There must be some calculation of the bureaucratic implications of collecting the charge.

I welcome the concession about the sole or main residence for the purpose of employment. The Minister from the Scottish Office will remember the individual cases that I have sent him. Are there any implications for people who work abroad and use local services for only a few weeks of the year? A constituent who lives in Lossiemouth works in Dubai. Because of the nature of his work, he spends 12 weeks abroad and is then at home for three. In any financial year, therefore, he spends a minimum of nine weeks and a maximum of 10 weeks in the community, yet he is expected to pay the full charge.

I am disappointed that there is no reference here to what happens if people die. I do not want to repeat the problems experienced by fishermen's widows who were issued with community charge requests for £3 or £4 for the two or three days of a month when their husbands were alive. I thought that was appalling. Some regional authorities have decided that £5 is the minimum bill for which they will send out a claim, but I should like a clear ruling from the Government that no community charge payment will be required retrospectively for the month in which a community charge payer dies. Such requests demonstrated one of the most despicable attitudes in the implementation of the charge, and the heartbreak that it caused to widows and widowers in my constituency was horrendous.

I welcome the concession regarding Alzheimer's disease, but it has been a hard long struggle, and we are still not 100 per cent. sure what the implications are for others who suffer similar conditions, such as senile dementia, which the Secretary of State mentioned.

The Department of Social Security has announced that there is to be a substantial review of how payments and allowances are made to disabled people. The community charge must be considered clearly and sincerely in that review, because if we are to have emphasis on community care, the implications of the community charge are substantial for families who want to give independence to relatives with some form of disabling disease. The Department of the Environment and the Department of Social Security must take that on board.

We have experienced many other problems during the past year. If we in Scotland sometimes sound a little grudging about the concessions that are made, it is because we feel that we have been used as guinea pigs for this legislation. We have had the bureaucracy, the problems of constituents having eight pages to fill in to claim a rebate and local authorities saying that rebate forms have not reached them.

The few concessions that have been made do not in any way measure up to the anger, resentment and bitterness that many people feel about this charge in principle—not just because of the administrative chaos.

Those who seek to represent people must search their consciences. I believe that fundamental principles are at stake because of the community charge. I have searched my conscience and I know that I have not found it easy to become a non-payer. I do not find it particularly easy to break the civil laws of my country. Until those who seek to lead and to represent are prepared to take on leadership responsibilities, however, one cannot argue for changes in the law.

I believe that the non-payment campaign has helped to cause the small amendments to be made. I believe that non-payment can still help to defeat the poll tax. Its replacement with a local income tax would mean the introduction of a fairer tax which takes account of ability to pay. The community charge is destined to failure because it is based on a simple flaw.

Mr. Kirkwood

I do not wish to detain the House for long, but the group of amendments that we are considering are complicated and make changes in Scottish law which is entirely different from the English legal system. I accept that there can only be one wind-up speech, but obviously the English Minister will reply. That means that some of the legitimate points that have been raised by Members representing Scotland will not be answered.

Lord James Douglas-Hamilton

I shall certainly write to all Members if all the relevant issues are not dealt with. Many of the points raised by the hon. Member for Moray (Mrs. Ewing) were dealt with in my speech, but she was not present at the time.

Mr. Kirkwood

The Minister would be less than his usual courteous self if he did not write to hon. Members, but, with respect, that is not the point. If we are having debates, they should truly be debates.

Earlier today English Members heard a ministerial statement on local government finance, which meant that hon. Members representing English constituences had the opportunity to raise constituency issues. Instead of writing to Scots Members the Minister should consider the alternative of making a statement of his own at some date as that would enable us to ask specific questions. Will the orders that flow from the legislation that we are enacting be negative, or affirmative orders? If they are negative, hon. Members must pray against them. If they are affirmative, hon. Members are guaranteed a debate albeit limited to one and a half hours. We now have the broad framework of the legislation. but the orders are important as they provide the important detail.

The statements that the Secretary of State has made in the debate have been helpful and I believe that they represent a move in the right direction. We must see the fine print, however, before we can make final judgments. But it is important that the orders that introduce the legislative details are affirmative so that we can discuss them here as of right.

Today, on such issues as exemptions for Alzheimer's disease and discretion over the standard community charge, Ministers have adopted a different tone from previous discussions. They now say that things can be done that could not be done a year ago when the Scottish legislation went through. If such changes can be made suddenly, why is it not possible to consider introducing a system of local government that relates people's local government taxation to their ability to pay. That is the fundamental flaw in the poll tax legislation.

The Secretary of State made great play about retaining local government accountability in the amendments. The best way to achieve such accountability is by adopting the political solution of a system of proportional representation. That makes the electorate the judge and jury on levels of tax rather than Ministers sitting in Whitehall.

I am concerned about levels of business rates. My constituency has a low-rated rural base and I cannot see how local small businesses or high street shops will be better off in the long run as a result of the uniform business rate, whether it is based on a unified Scottish or United Kingdom rate. I have never had a convincing answer to that. I have not had one tonight, and it is something to which the Government must address themselves. I understand that transitional protection is built in, and I welcome that. However, in the longer term, small businesses and shopkeepers in high streets in constituencies such as mine will inevitably suffer.

I welcome the fact that the transitional protection will be retrospective. I also understand that substantial moves are being made to encourage people to apply for community charge rebates. If, in the course of the advertising campaign, people in Scotland are found to be eligible for rebate on their poll tax, will the rebate be paid in retrospect as well? Will the rebate system as well as the transitional protection be retrospective in Scotland? That is an important question, and one to which I hope the Minister will address himself.

11 pm

I wish to ask about what will happen when local authorities take advantage of the new discretion to zero rate people's individual standard community charge. When people's contracts of employment require them to live outside their home, and a local authority allows their income to be zero rated, will central Government make good the losses to the local authority's revenue support grant? That is an important point.

Will the Government look carefully at a problem which has arisen in my constituency where, because of a computer programme failure, 18-year-olds have been missed off the register and have only just started receiving their original bills in the past few weeks? My local authority, which has the legal power summarily to insist that the full amount be paid forthwith, has given them to the end of the financial year to pay these arrears. That doubles the weekly and monthly charge which they are required to pay. Will the Government look at the possibility of extending the period available to extinguish arrears in such cases, where the fault for the arrears did not lie with the community charge payer, but was due to a local authority administrative hiccup? Such people deserve more time in which to pay the amount owed.

The concession which has been made on senile dementia is welcome, but the Secretary of State will not be able to allow the exemption to rest there. The category of exemption will have to be expanded to cope adequately with the present position in Scotland. Apart from anything else, the legislation drives a coach and horses through the Government's policy of trying to promote care in the community if individuals can be charged outside institutions within which they are exempt.

The Government have a long way to go. The changes announced tonight are warmly welcomed. as far as they go, but they do not go nearly far enough.

Mr. Wallace

I endorse the comments of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and wish to mention the unsatisfactory nature of trying to mix a Scottish debate with an English and Welsh debate. As the Secretary of State explained on a point of order, it was agreed between the usual channels, and no doubt Opposition Front Bench spokesmen work in a mysterious way to put the Scottish Office on the hop by allowing it to get away with a reply from the Secretary of State for the Environment, who is not responsible for the Scottish operation of the poll tax, despite his great talents in many other respects.

I also wish to congratulate the Government on bringing forward an amendment dealing with the standard community charge which is, in many respects, similar to that which I moved on Report. I well recall the occasion, not least because of the absence and silence of the other two Opposition parties in Scotland. The Government have done a complete U-turn from the position which they then held.

I also wish to congratulate and thank the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) for implementing an undertaking which he gave on that occasion in relation to another new clause which I tabled about evidence on appeals arising out of the poll tax. That is dealt with in Lords amendment No. 419, and I acknowledge that it will improve matters.

Although the rebate scheme has been presented as a generous measure—and it is far better than nothing—it will still leave many people considerably worse off. In my constituency, because the poll tax does not amount to £150 per annum, or £3 per week, per person, no one will derive any benefit. It is clear from letters from my constituents that many of them find themselves worse off under the poll tax, but this rebate scheme will not bring them any benefits.

It is important to put it on record that, although the amendments will bring some relief to some people, it by no means makes the poll tax a good tax; it makes it only a little less rotten.

Mr. Chris Patten

With the leave of the House, Mr. Deputy Speaker, I should like to reply, albeit briefly, to a number of the points that have been raised. I shall not detain the House for an inordinate length of time.

I thank the hon. Member for Sheffield, Brightside (Mr. Blunkett) for his warm and charming welcome to my hon. Friend the Member for Wells (Mr. Heathcoat-Amory), who has joined my Department. I thought that at one point the hon. Gentleman was about to suggest that there was nothing in life that anyone could want more than a berth in Marsham street. My hon. Friend is a welcome member of the team.

The hon. Gentleman and I must have felt at times as though we were intervening in a Scottish debate, but it was helpful to have such a wealth of experience brought to bear on a number of the Government's proposals for smoothing the introduction of the community charge.

I want to take up three points that the hon. Gentleman raised. First, he referred to community care, and especially to those leaving care homes and going into the community after 31 March next year. Those in the position he described will have all the protection already built into the community charge system. If they have low incomes they will be entitled to rebates. It is important to recognise that the transitional relief is in addition to the existing protection, so it is misleading to suggest that those who do not qualify for relief are being deprived of protection.

The hon. Gentleman made a number of points about senile dementia. The Scottish amendments deal with that and apply new definitions retrospectively. We have also announced that we shall change the provisions that exempt from the community charge those who are severely mentally impaired. As was made clear, that will allow the exemption to cover people whose mental impairment arises from degenerative conditions such as Alzheimer's disease or mental illness. The change in the definition in England will be made by order and no new primary legislation will be necessary. It will be done by adding attendance allowance and constant attendance allowance to the list of qualifying benefits and removing the requirement that the impairment must have arisen from a congenital or childhood condition or injury to the brain. Any person who is in receipt of a qualifying allowance and has a certificate from his doctor confirming that his intelligence and social functioning are severely impaired will be entitled to the exemption.

As there has been some misunderstanding on that point, I must make it clear that we will not be specifying by name the conditions that will qualify people for exemption. I think that that was the point which most concerned the hon. Gentleman. That aspect is important, given recent press reports on the difficulties of diagnosing Alzheimer's disease. Anyone suffering from any disorder that is severe enough to warrant the award of the attendance allowance or any of the existing qualifying benefits will be exempted if his doctor certifies that his impairment is a mental one.

The hon. Member for Brightside pressed his amendment and suggested that rather than spending the money that we have made available for the interim relief scheme we should be spending it on rebates, thereby making the existing system of rebates more generous. The hon. Gentleman will know that next year in Britain as a whole about £2 billion will be paid out in rebates, plus another £500 million in income support to help pay community charge bills.

There are two principal problems with the Opposition's amendment. First, it would be wrong to provide yet more permanent help through rebates. That would undermine the accountability which is so central to the working of the new system. Secondly, I doubt whether the Opposition would wish that those on average earnings should lose more than £3 a week next year and receive no help. No conceivable increase in rebates would help that group. It is right, therefore, to target help directly at those who stand to lose the most, and to provide such help on a transitional basis only. Most of the help is likely to go to those on relatively modest incomes.

My hon. Friend the Member for Crosby (Mr. Thornton) made a powerful speech in supporting small businesses and the transitional problems that some of them will face. I know that he is extremely knowledgeable on the subject and has been a good friend to small businesses. He referred to the transitional arrangements for phasing in the uniform business rate, revaluation and the impact on small businesses. We have taken the view that protection against increases in bills should apply to existing occupiers only. New occupiers of both new and existing property should not, in our view, qualify for protection in the same way, because when taking on a new property they will know what their new rate liability will be. I understand my hon. Friend's concern, but it must be remembered that the protection for losers under the new system is to he paid for by the gainers, who will have to wait for their full gains. The amendment would postpone further the point at which businesses that are expecting reductions, predominantly in the north and the midlands —this was referred to by my hon. Friend the Member for Taunton (Mr. Nicholson)—will be able to enjoy them.

We must strike a balance between the need to protect losers and the need to complete the transitional process as quickly as possible to secure the benefits of the new system. We think that we have struck the right balance, but I listened carefully to what my hon. Friend the Member for Crosby had to say. I would be pleased to talk to him further to ascertain whether there is anything else that we can do to meet the problem to which he pointed.

The hon. Member for Newham, North-West (Mr. Banks) referred to the usefulness of some of the documentation that we have provided for the House today. I should tell him that the type does come off some of the documents. The hon. Gentleman asked why Newham does not qualify for the ILEA special grant. The reason is that Newham is not in ILEA.

Mr. Tony Banks

The special grant is available to other local authorities outside London that have nothing to do with ILEA. Will the right hon. Gentleman explain that?

Mr. Patten

The hon. Gentleman drew special attention to the ILEA grant. I think that he is referring beyond that to support for additional education needs. If the hon. Gentleman and I are unable to agree tonight, I shall write to him. The grant that is dealt with on the specific page to which he referred is the ILEA one.

The hon. Member for Newham, North-West talked about advertising and the campaign that he read about in the newspapers. I want to confirm what was said earlier in the debate, what we intimated by winks and nods and what we intimated orally. We intend through advertising to try to encourage the maximum take-up of rebates and the maximum take-up of interim relief. That is the purpose of the advertising.

Mr. Blunkett

I should like to press the Secretary of State on that point, because it is important to the House. Do the Government intend to use television advertising? If so, do they intend to refer to their transitional scheme, or to rebates that the right hon. Gentleman has just mentioned'?