Local Government Finance (Hansard, 25 April 1990)

§ 1. Mr. Terry Fields
To ask the Secretary of State for the Environment what proposals he is considering to amend the community charge regulations.

§ The Secretary of State for the Environment (Mr. Chris Patten)
The operation of the community charge is of course being monitored. I have no proposals, at present, for changes to the regulations.

§ Mr. Fields
In the light of that reply, does the Minister accept that his policies on the poll tax and uniform business rate will increase dramatically the already record levels of bankruptcy among small business people, and have resulted in 200 shops and small businesses in the Minister's own constituency closing down? The policies were dramatically exposed in The Guardian by Mr. Francis Ching, who said that the poll tax was robbing the poor left, right and centre. It is an absolute scandal, and for the Minister to come to the House with such a reply is a disgrace.

§ Mr. Patten
With respect, the hon. Gentleman might await my reply. He had the courtesy to refer to my constituency, where two issues come together—first, the uniform business rate and secondly, revaluation. It is common to all parties that we support revaluation. That was made clear in January by the hon. Member for Dagenham (Mr. Gould). We proposed a transitional scheme, about which I hope to have the opportunity to say more later. In my constituency, small businesses are considerably helped by the uniform business rate, which protects them from the higher rate increases that result from Avon's spending decisions. If the Opposition are now in favour of the uniform business rate, as well as revaluation, they will have a story to tell in my constituency and other places in the south.

§ Mr. Hill
My right hon. Friend may or may not propose to amend the regulations, but in the meantime the administration of the exemptions at local government level is what worries many of my colleagues. People are waiting weeks and weeks to receive the decision from their local authorities. In my case, Southampton city council is Labour controlled and has the poorest administration. People are waiting weeks in fear and trembling that they will not receive the exemptions.

§ Mr. Patten
I am concerned about what my hon. Friend says. To be fair to local authorities as a whole, in most the arrangements have gone pretty well and, as I was proposing to say later, most bills have gone out net of both transitional relief and benefit, which is commendable for the local authority staff involved. Where local authorities have done less well, there is cause for concern. That should be recognised by local authorities and we should compare what some have done with what the majority have managed to achieve.

§ Mr. McCrindle
May we take it from what my right hon. Friend said in his original answer that, in addition to reviewing any operational defects of the community charge, he will look at how the uniform business rate is operating in all parts of the country? Does he agree that although we concede that revaluation was long overdue, there is evidence that, in conjunction with rising rents in some areas, the difficulties being experienced by small businesses are considerable? Surely, it can be no part of the introduction of the uniform rate for small businesses to go the wall.

§ Mr. Patten
My hon. Friend makes a fair point about the interaction of rent levels and revaluation. In my constituency, even with revaluation, rates will represent only about 20 per cent. of the rental levels faced by small businesses. We must consider the transitional arrangements that the House has agreed for small businesses. I have made it clear time and again that if it proves necessary to extend the transitional period to ensure that small businesses avoid steep rises in their rates towards the end of that period, we shall be prepared to do so.

§ Mr. Pike
In a written answer to me last week, the Under-Secretary of State said that there was no intention of changing the basic principle underlying the community charge, which is that almost all adults should pay a contribution towards providing local services. As he emphasised that there was no change in that basic principle, what changes do the Government intend to make to remove the unfairness of the present system?

§ Mr. Patten
I wholly endorse what my hon. Friend the Under-Secretary of State said. I shall be saying one or two things about the operation of the community charge later this afternoon and I suggest that the hon. Gentleman stays to hear the speeches.

§ Dame Elaine Kellett-Bowman
While my right hon. Friend is conducting his review of the community charge, will he seriously consider disaggregating married couples, which has already been done for national taxation? Figures researched by the Library suggest that that would cost between £1 billion and £1.5 billion, but instead of angling the extra money to profligate councils, such as Lancashire county council, that would give the money directly to those, such as married and retired couples and young mothers, who actually need the help.

§ Mr. Patten
I note what my hon. Friend has said. She and other hon. Members have mentioned that issue in the past. It produces a quite different set of anomalies, but we shall certainly consider it in the next few weeks.

§ Mr. Gould
Are not the Secretary of State and his right hon. Friends engaged in a desperate search for a way out of the mess that they have created? Will he confirm, for example, that a meeting was recently arranged between 315 senior officials of Strathclyde regional council and someone described mysteriously as an influential Conservative Member of Parliament? Will he further confirm—in case he does not know the answer, I shall tell him it—that that influential Conservative Member of Parliament was none other than his right hon. Friend the Member for Ayr (Mr. Younger), who, just a few months ago, was the Prime Minister's campaign manager in the leadership election contest?

§ Mr. Patten
I am afraid that although my responsibilities run all too wide, they do not cover either the diary of my right hon. Friend the Member for Ayr (Mr. Younger) or the activities of Strathclyde regional council. But as I imagine that the hon. Gentleman will be able to give us more information about this spectacular cross-border conspiracy later this afternoon, I look forward to hearing about it. We are also all agog to hear more about the Labour party's proposals.