Poll Tax (Hansard, 4 December 1991)

§ 5. Mr. Madden
To ask the Secretary of State for the Environment if he has any plans to abolish the poll tax 20 per cent. contribution rule for 1992–93; and if he will make a statement.

§ The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)
I do not propose to make any change in the existing basis of liability or the benefit arrangements for the remaining period of the community charge.

§ Mr. Madden
Will the Minister now accept that the 20 per cent. contribution is perhaps the cruellest feature of the poll tax fiasco, placing a significant burden on those with the lowest incomes, including many pensioners, in places such as Bradford? It costs local authorities more to collect than it raises in revenue. Is not the Minister deeply ashamed that he intends to carry on with that cruel and stupid tax instead of scrapping it, as he should have done a long time ago?

§ Mr. Key
There is nothing cruel or stupid about providing a benefit system which more than compensates for the 20 per cent. that those people are asked to pay. As for it costing more to collect, the average 20 per cent. charge is about £50, whereas the average cost of collection is about £12.

§ Mr. Janman
Was not extra money given to those on income support specifically to pay the 20 per cent. contribution? Does my hon. Friend agree that the Government are being amazingly generous with taxpayers' money from 1993 onwards, when although the minimum 20 per cent. contribution will have been abolished, those on income support will still receive that extra money, which they started to receive two years ago?

§ Mr. Key
My hon. Friend is absolutely right. I wonder what advice Opposition Members give to their constituents who are liable to pay that 20 per cent. when they discover that they are not paying more than the 20 per cent. that they receive from the rest of the taxpayers.

§ Mr. Blunkett
Will the Under-Secretary of State read the Audit Commission's evidence about the cost of collecting the 20 per cent. contribution, the havoc that it is causing in terms of non-collection rates and the administrative difficulties that it is causing in magistrates courts? Does he agree that the announcement last Thursday by the Secretary of State for Social Security is nothing short of a scandal? It suggested that when the 20 per cent. is abolished the taper will be changed so that, instead of people over social security levels losing 15p in the £1, they will lose 20p, thereby penalising people who are struggling to lift themselves out of poverty, provide pensions for themselves and do what the Conservative party always preaches—stand on their own two feet. Is not it a scandal that, in so doing, their feet will be kicked out from under them?

§ Mr. Key
Before my right hon. Friend the Secretary of State made his announcement, Opposition Members accused us of creating a situation where there would be no taper, but a cut-off and said how cruel that would be. Now that there is a taper, they complain just as loudly. I pay tribute to my right hon. Friend the Secretary of State for 249 Social Security for providing a generous new benefit system for the council tax, from which there will be no clawback of the uprated benefit.