HC Deb 23 May 1990 vol 173 cc267-8
1. Mr. David Martin

To ask the Secretary of State for the Environment what recent representations he has received encouraging him to replace the community charge with a tax on property values.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo)

As far as I am aware, no one has made a representation to me in favour of a roof tax based on capital or site values.

Mr. Martin

I welcome my honourable—soon to be right honourable—Friend to the Dispatch Box at his first Environment Question Time. If he manages to extricate himself from his present job with the same high distinction with which he served in the previous two he will deserve the title of the Houdini of the present Government.

Any reversion to domestic property values would mean a return to all the anomalies and unfairnesses that we knew under the rating system, and that would bear down heavily on the elderly, who stay for many years in houses that gain in value around them but whose incomes often do not rise in relation to that value. Would not such a return act as a wealth tax and would not there be a great cry after a while, exactly as there was before we abolished domestic rating?

Mr. Portillo

My hon. Friend's opening remarks were very kind. He is exactly right: the trouble with the rating system, as all parties recognise—at least they did at one time—was that property is no proxy for the means that a person has, and any taxation system based on property will be unfair for that reason. One must assume, in the absence of any details, that Labour's new plans would be as unfair as, if not more unfair than, the rates.

Mr. Orme

Does not the Minister recognise that the change from rating to a poll tax has meant that Salford needs to employ 300 extra people to collect the poll tax and to spend about £110,000 on an extension to house them? How does he justify that?

Mr. Portillo

The cost of collecting the community charge is about double the cost of collecting the rates, and the number of people paying the community charge is about double the number who were paying the rates. The correlation is exact; the cost per head of collecting the community charge is the same as it was under the rates. This is a fairer and broader-based tax, and that is a price worth paying.

Mr. Knapman

Will my hon. Friend try to provide just a little more detail about the roof tax? I must declare an interest, in that I have been fortunate enough to buy an old mill and a few acres in my constituency, but it is not in very good order—10 years ago the roof fell in. Should I repair it or leave it as it is?

Mr. Portillo

I wish that I could help my hon. Friend. He must, I am afraid, address his appeal to the Opposition. It is for them to supply the details of the new roof tax and, in particular, to explain who will pay it. We understand from the hon. Member for Dagenham (Mr. Gould) that who pays it will be based on maximum choice, and we now have interesting evidence from the hon. Member for Livingston (Mr. Cook), who says that whether one pays the community charge is a matter for the individual. Presumably that begins to elucidate what maximum choice in payment is about.

Mr. Gould

I welcome the hon. Gentleman to his new task and to the bed of nails that is the poll tax. I accept that, given the work that we understand he is doing on changes to the poll tax, he cannot yet tell us what his alternative will eventually be, but can he at least give us a clue about the features of the poll tax that he finds objectionable and intends to change? Is it the unfairness; or is it the administrative and cost complexity to which he referred; or is it the fundamental principle of a head tax which, as he knows, is shunned in every country with the single exception of Papua New Guinea? Will the changes that he proposes require legislation and, if so, when does he propose to introduce it?

Mr. Portillo

I thank the hon. Gentleman for his kind welcome to me in my new job. If it were a bed of nails the hon. Gentleman would have cushioned the impact considerably by providing me with the opportunity to attack the Labour party, which criticises us without providing any alternative or any details of its policies.

The Labour party is about to make announcements about policy. The Government have no plans to make new announcements on policy this week, and we will look with great interest at what the hon. Gentleman produces tomorrow. My policy since I took on the job from my distinguished predecessor has been to listen carefully to my hon. Friends to discover what anomalies there may be in the present operation of the tax.

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