Local Government Finance (Hansard, 12 December 1990)

§ 1. Mr. Buckley
To ask the Secretary of State for the Environment if he will review the poll tax-capping rules announced on 31 October; and if he will make a statement.

§ The Minister for Local Government and Inner Cities (Mr. Michael Portillo)
As I told the House last week, my right hon. Friend sticks firmly by the intentions announced by my right hon. Friend the Member for Bath (Mr. Patten).

§ Mr. Buckley
I welcome the point made by the Minister. When considering a review of poll tax-capping, will he consider poll tax-capping high-spending Conservative councils which are levying a rate well beyond that levied by some Labour councils that have already been capped? Will he also consider the consequences of poll tax-capping on the police and fire services? I understand that if the capping system is upheld the number of police personnel in West Yorkshire will be reduced by 500 by 1992. Does the Minister appreciate—[HON. MEMBERS: "Too long."] It may be too long, Mr. Speaker, but you will appreciate its importance.
Given the increase in crime, it would be detrimental to preventing further increases if police personnel were cut in West Yorkshire.

§ Mr. Portillo
West Yorkshire police authority made representations and had a meeting with the Parliamentary Under-Secretary, my hon. Friend the Member for Salisbury (Mr. Key).
Of course we shall apply the criteria for capping equally to authorities of different political persuasions.
As for why charges can be higher in one place than in another, yet capping applies to some authorities and not to others, I remind the hon. Gentleman that the charge payers in his authority benefit from a payment of £111 934 from the safety net and payers in next-door Barnsley benefit from a payment of £150 from the safety net. That makes a big difference.

§ Mr. Butler
If the size of the charge is partly responsible for its unpopularity, why not set a low maximum cap of, say, £200, with a more generous settlement from the centre, so that we penalise councils that try banditry on their citizens and let more efficient authorities deliver even lower charges?

§ Mr. Portillo
I am grateful to my hon. Friend for what his question implied: his support for the policy of capping authorities and ensuring that the benefits are passed on to community charge payers. The detail of his proposal takes us wider than Question 1—possibly into the territory of Question 2 with which my right hon. Friend will deal shortly.

§ 2. Mr. Steinberg
To ask the Secretary of State for the Environment how many suggestions he has received for alternatives to the community charge; and if he will make a statement.

§ The Secretary of State for the Environment (Mr. Michael Heseltine)
With permission, Mr. Speaker, I shall answer this question and Questions 3, 6, 10, 11, 12, 14 and 15 together.

§ 3. Mr. Ian Bruce
To ask the Secretary of State for the Environment if he will make a statement on the review of the community charge.

§ 6. Mr. Matthew Taylor
To ask the Secretary of State for the Environment if he has any plans to amend further the community charge.

§ 10. Mr. Nellist
To ask the Secretary of State for the Environment what is the progress of his latest review of the poll tax; and if he will make a statement.

§ 11. Mr. Bill Michie
To ask the Secretary of State for the Environment how many representations he has received from hon. Members to make changes to the community charge; and if he will make a statement.

§ 12. Mr. Harry Barnes
To ask the Secretary of State for the Environment what proposals he has for changes to the community charge; and if he will make a statement.

§ 14. Mr. Haynes
To ask the Secretary of State for the Environment what are the number of suggestions made to him for alternatives to the community charge; and if he will make a statement.

§ 15. Mr. McAllion
To ask the Secretary of State for the Environment if he will make a statement on the review of the poll tax.

Several Hon. Members
On a point of order, Mr. Speaker.

§ Mr. Speaker
Order. I call the Opposition Front-Bench spokesman.

§ Mr. Gould
On a point of order, Mr. Speaker. If the Secretary of State groups all these questions together, he distorts the pattern of interests represented on the Order Paper. That will mean that we have a much shorter time in which to deal with these questions than we would if proper supplementaries were asked in respect of each question. I ask you, Mr. Speaker—[Interruption.]

§ Mr. Speaker
Order. How can I possibly hear when this shindig is going on?

§ Mr. Gould
I ask you, Mr. Speaker, to prevail on the Secretary of State to group these questions in a more sensible manner—perhaps three or four in a group—so that we can properly debate each question on the Order Paper.

§ Mr. Speaker
It is not for me to group questions; it is a matter for the Secretary of State. If he wants to group them in a certain way, that is up to him.

§ Mr. Heseltine
If it is not a matter for you, Mr. Speaker, I find it difficult to reply to a point of order. However, I shall follow the thrust of what you said and tell the House that the questions are substantially the same and, therefore, my answers are unlikely to be different. In the space of the half hour or so that separates the questions I would be saying the same thing at the end of the half hour as at the beginning.

Several Hon. Members
On a point of order, Mr. Speaker.

§ Mr. Speaker
Order. This takes up a great deal of time. There is some help when questions are grouped because it enables us to get further down the Order Paper and gives more hon. Members a chance. It is a matter for the Secretary of State. It is not for me to say, of course, but he might perhaps consider grouping Questions 3, 6 and 10 and taking the others separately.

§ Mr. Heseltine
May I add one further point? There is another group of questions further down the Order Paper, all of which again repeat the point that is addressed in Question 2. I should like to answer the substance of the question by saying that I have started a careful and fundamental review of the community charge.

§ Mr. Steinberg
I am sorry that my question has caused so much disarray. I did not realise that it was so controversial. I should be grateful to the Secretary of State if he would inform the House whether he agrees with his right hon. Friend the hon. Member for Blaby (Mr. Lawson) who suggests that the poll tax should be scrapped and replaced by a property tax, which is what the Labour party has been saying for the past three years.

§ Mr. Heseltine
My right hon. Friend the Member for Blaby (Mr. Lawson) has made a most interesting and constructive suggestion for the review that I am carrying out. I am sure that the hon. Gentleman will recognise that at no stage during all the discussions on these matters have Conservative Members been able to provide 57 different suggestions about how to deal with this matter, which is the number provided by the Labour party.

§ Mr. Ian Bruce
If my right hon. Friend has had a chance to read the Labour party document on fair rates, he will know that it is not a fully worked-out scheme but a wishy-washy set of wishes which does not take us any further forward. Will he assure his hon. Friends that in his review he will make sure—as the Labour party does not make sure—that whatever system is devised bears down on local government profligacy and ensures additional Government funding for local authorities, which the Labour party does not call for in its review?

§ Mr. Heseltine
The whole House will feel that my hon. Friend has been characteristically generous in the way in which he describes the Labour party policy document. We have made it clear that in our review we rule nothing out and rule nothing in. The review will look at all the issues, including those raised by my hon. Friend.

§ Mr. Matthew Taylor
In previous looks at alternatives to the poll tax, and specifically at local income tax, the Department has used its own version of what a local income tax might be and has never looked in detail at our proposals. It has certainly never published any response to them. Will the Secretary of State now ask his officials to look at our scheme of local income tax and let us know their conclusions? We should be happy to talk to the Secretary of State about that.

§ Mr. Heseltine
I appreciate the constructive approach of the Liberal Democrats. They obviously have sufficient confidence in their ideas to be prepared to discuss them with me, which is not exactly what one would say about the parliamentary Labour party, although I should add, in fairness, that the Labour party, as represented by the Association of Metropolitan Authorities, has the courage to talk to me about its ideas. In that, it is at marked odds with the Labour party in the House. On the substance of the hon. Gentleman's question, I can tell him that I have received a letter on this matter and I have asked officials to give me advice on it. I am aware of the point made by the Liberal Democrats and I shall try to meet it.

§ Mr. Nellist
Is the Secretary of State aware that I spent yesterday afternoon in Lincoln prison with Bryan Wright, a 20-year-old unemployed man, who last Friday became the Government's first poll tax prisoner? When the Secretary of State conducts the review will he consider that if Bryan had been born in Glasgow and not in Grantham he would not be in prison, because Scottish law abolished prison for debt 25 months ago? When Bryan is released on or, as is hoped, before Christmas eve, his spirits will be as high then as they were yesterday and, therefore, the vital element of fear which prison is supposed to engender among the 344,000 people who his Department told me on Monday have had liability orders served against them will diminish. Finally, will the right hon. Gentleman confirm that, even if he is not prepared to talk about outright abolition, he will instruct——

§ Mr. Speaker
Order. This is not a debate. This is Question Time and questions should be about reform of the poll tax not about one of the hon. Gentleman's constituents who is in gaol.

§ Mr. Nellist
Will the Secretary of State instruct local authorities, during the period of his review, not to take any court action that could send anyone to prison for something that is not a crime and may not even be an offence any longer?

§ Mr. Heseltine
I had not known that the hon. Gentleman spent yesterday afternoon in prison. I only hope that he does not know something that I do not know and that this does not anticipate events of which I can have no knowledge. What the hon. Gentleman chooses to do with his spare time has nothing to do with reform of the community charge.

§ Mr. Nellist
Don't be so bloody stupid. That was a serious question about the review of the poll tax.

§ Mr. Speaker
Order. The hon. Gentleman knows that many things are said across the Floor of the Chamber with which hon. Gentlemen disagree, but he must not use words like that. That is not the way we carry on. [HON. MEMBERS: "Withdraw."] The word was not unparliamentary. It was just offensive, like quite a lot of other things that are said here.

§ Mr. Michie
As the Secretary of State has not answered my question about the number of representations that have been made, because he lumped together several questions as being on the same subject—although they are not—I have to assume that he has had some representations about the poll tax from hon. Gentlemen. In view of that, will he make it public that the poll tax has been a shambles and has affected hundreds of thousands of our electors and that no amount of fiddling or meddling with it will make it anything better than a bureaucratic disaster? Therefore, will he make it public that a mistake has been made and that it is time that the Government axed the lot?

§ Mr. Heseltine
If the Labour party had listened to what I had to say last week, rather than shouting so much that nobody else could listen, it would have understood that I am conducting a fundamental review arid, even at this late stage, I hope that the Labour party will contribute to that review.

§ Mr. Harry Barnes
When conducting a review, those who suggest the review should present some ideas. I should like an answer to the question that I tabled, which is: what proposals he has for change to the community charge". For instance, will the right hon. Gentleman take into account the lessons of the history of the poll tax in this country? In 1367, when it was first introduced, it was at a flat rate that the poor did not pay. In 1369, a new banded system was introduced. On that occasion, the rich did not pay. In 1371, they went back to a flat rate which no one——

§ Mr. Speaker
Order. We do not want a history lesson.

§ Mr. Heseltine
Before the hon. Gentleman places too much reliance on his interpretation of history, he should understand that we have a certain pride in having one of the oldest and most sophisticated parliamentary democracies, based on universal suffrage. His claim to be above and beyond the law is incompatible with that tradition.

§ Mr. Haynes
Is the Secretary of State aware that I do not come from or represent Henley? I come from a constituency where they know what work is and they know how they are being dealt with by this wicked Government. Will he do something in his review about the poor beggars having to pay 20 per cent. who cannot afford it and who—unlike him—have to go without a hot meal on the table? When he makes his review, will he get rid of this rubbish and put in its place a system that is fair to all?

§ Mr. Heseltine
I can only say that if the hon. Gentleman wants to represent the good citizens of Henley, he must stand and I shall dismiss him as I dismissed the Labour candidate at the last election.

§ Mr. McAllion
Is the Secretary of State aware that all-party consensus on local government finance can be achieved only on the basis of two fundamental principles? The first is that any tax must be related to the ability to pay 938 and the second is that the poll tax must be abolished. The right hon. Gentleman must try to understand that, until he concedes those two principles in advance, all his talk of consensus will be exposed for exactly what it is—a cynical and calculating attempt to ensnare the minority parties and save the Tories' necks at the next election. It will not work.

§ Mr. Heseltine
I should be more impressed by that suggestion had not the hon. Member for Dagenham (Mr. Gould), in answer to a question from my hon. Friend the Member for Christchurch (Mr. Adley), anticipated, about five minutes before I proposed it, that such a constructive dialogue could take place.

§ Mr. Terry Fields
On a point of order, Mr. Speaker. A number of questions have been grouped together. Could not Question 18 also have been included, given that it deals with exactly the same subject?

§ Mr. Speaker
With any luck, we shall reach Question 18.

§ Mr. Pawsey
Is my right hon. Friend aware that the review that he has announced will be widely welcomed by the British people? Is he aware, however, that levels of community charge depend on levels of Government funding, which in turn depend on the formula surrounding standard spending assessments? Is he further aware that Warwickshire has been substantially disadvantaged over a number of years by the way in which the SSA system works? Will he undertake to examine the formula used for Warwickshire and provide assistance to that county?

§ Mr. Heseltine
I know that my hon. Friend has had a dialogue with the Minister responsible and, of course, we shall bear in mind all the points that he has put to us. It is worth adding that, following the announcement of our review, we have managed to secure a substantial victory in a local county by-election in Warwickshire.

§ Mr. Butcher
Does my right hon. Friend agree that the time has come for free state school education to be a directly funded by the state via the grant-maintained schools formula? As a believer in supply-side economics, does he agree that the additional revenue for that should come not out of income tax but from VAT?

§ Mr. Heseltine
I assure my hon. Friend that his suggestions today, and any further suggestions that he wishes to put to us, will be carefully taken into account in our review.

§ Mr. Tracey
Will my right hon. Friend keep constantly in mind in his review the principle that seems to be widely accepted that every adult over the age of 18 should pay some share of the cost of local government? That seems to be one of the best guarantees of true accountability in local councils.

§ Mr. Heseltine
I understand the importance that many of my right hon. and hon. Friends attach to that principle. We have made it clear that in our review we shall look into all these matters. That is implicit in our initial stance and in the comprehensive nature of the review.

§ Mr. Cormack
Will my right hon. Friend ensure that the fundamental criterion for any new or amended system is ability to pay?

§ Mr. Heseltine
My hon. Friend will understand that that is one of the arguments that will have to stand alongside the point put to me by my hon. Friend the Member for Surbiton (Mr. Tracey). All those issues will be on the table.

§ Mr. Speaker
I call Mr. Adley. [HON. MEMBERS: "Not another one."] Order. If hon. Members look at the Order Paper, they will see that I am being absolutely even-handed.

§ Mr. Adley
Does my right hon. Friend agree that, as a matter of principle, the more that is spent on raising local taxes and administering them, the less there is to spend at the sharp end? As many erstwhile functions of local government, such as education, the police and the fire service, are heavily overladen with national implications, will my right hon. Friend, during his review, present to the House the actual costs of increases in VAT, income tax or whatever if all the costs of local government were to be funded out of national taxation?

§ Mr. Heseltine
I am considering how best I can involve the House at large in our review. Certainly, we shall have to have in front of us the calculations to which my hon. Friend referred.

§ Mr. Marlow
My right hon. Friend made a sensible and generous offer to the Opposition parties to join in discussions with him about the nature, organisation and financing of local government. To date, the Labour party appears to have had some difficulty in responding to his offer. Does he have any helpful suggestions for ways in which the Labour party could involve itself in such an important debate and discussion?

§ Mr. Heseltine
I am most grateful to my hon. Friend. The Labour party's position is not as depressing as its behaviour in the House suggests. Senior figures in the Labour party in local government have already welcomed and accepted my offer.

§ Mr. Gould
What has just happened is an abuse of the House. It should be a matter of regret to the whole House that the Secretary of State should have distorted the pattern of questions on the Order Paper and cut short a debate on a subject which is clearly of great interest to all hon. Members and to many millions of people outside the House.
Is not the reason why the right hon. Gentleman took that step perfectly clear? Is not the truth about his review almost as depressing for his hon. Friends as it is for millions of poll taxpayers in general? It is that the poll tax, in all its essentials, will still be with us for at least two years and that, even after his review has been concluded, the poll tax may still survive.
Why will not the right hon. Gentleman admit now what he appeared to be so keen to imply during the Tory leadership contest—that the poll tax is unfair and unworkable and that, as a necessary precondition to any sensible reform, it must be abolished?

§ Mr. Heseltine
The hon. Gentleman is fully aware that, when I sought last week to explain our views at great length, his party tried to shout down my speech. That was the most flagrant abuse of the House that I can remember for a significant period. Labour Members did that because they are not prepared to enter into the sort of constructive 940 dialogue that I offered. In that respect, it is not that the country is concerned; it is that the Labour party is isolated.

§ Mr. Speaker
I call Mr. Strang.

§ Mr. Campbell-Savours
On a point of order, Mr. Speaker.

§ Mr. Speaker
Order. If the hon. Gentleman looks at the Order Paper, he will realise that he is disadvantaging a number of his hon. Friends.

§ Mr. Campbell-Savours
Usually, Mr. Speaker, you call two supplementary questions for each question tabled by a Back Bencher. If the Opposition Front-Bench were included, 24 supplementary questions would have been asked on Question 2. In fact, there were seven supplementaries, so we are owed 17. Can we please have them on this important matter?

§ Mr. Speaker
Order. The hon. Gentleman's arithmetic may be at fault. I am trying to reach the questions tabled by his hon. Friends the Members for Liverpool, Broadgreen (Mr. Fields) and for Wentworth (Mr. Hardy) and other hon. Members who have questions on the Order Paper. We shall not achieve that at this rate.