Commons Sitting of 16 December 1991

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  SOCIAL SECURITY

    Mortgage Guarantees
    Mr. Madden: To ask the Secretary of State for Social Security what he is doing to make mortgage guarantees by his Department acceptable to building societies and financial institutions.
    The Secretary of State for Social Security (Mr. Tony Newton): The income support arrangements in respect of mortgage interest depend on individual circumstances and do not therefore constitute a generalised guarantee. From next month, changes are being made in the operation of the arrangements with the aim of making them more effective in preventing the build-up of arrears where income support is in payment.
    Mr. Madden: Will the Secretary of State instruct his officials to see whether they can help constituents living in Hanover square in Bradford, who sold their homes for £1 to the British Heritage Housing Trust and are now angry that they cannot afford to buy their homes back at prices up to £51,000? The building societies are unwilling to accept guarantees given by the Department a nd by Bradford council because the former owners are pensioners, unemployed people and people en low
    2
    incomes. Will he ensure that urgent action is taken to enable my constituents to buy back their homes and does he understand that any scheme that he introduces which relies on cosmetics and sticking plaster will not be adequate compensation for those many people who are fearful of losing their homes for ever?
    Mr. Newton: I understand that there has been correspondence between the hon. Gentleman and Bradford West office about a particular case which must be one of those to which he adverted in his supplementary question. It has been fully explained to the hon. Gentleman that it is not possible to give advance assurances about particular payments when the payment of income support depends on an adjudication officer's decision at the time the claim is made. I think that that is fairly well understood. Normally the arrangements work well in terms of the general letter which is given to building societies.
    Mr. Ward: Does my right hon. Friend agree that if there is to be any change to help with the repossession problem, it would be humane if it were made before Christmas? Does he further agree that it would help if housing benefit were paid directly to the lender and that that would make matters much easier for his Department in dealing with other benefits?
    Mr. Newton: My hon. Friend may be aware that, in addition to the measure on which I commented in my original answer, there have been discussions with representatives of the Council of Mortgage Lenders and some of my right hon. Friends to see whether further action can sensibly be taken to help with the repossession problem. Those discussions have been constructive and are continuing.
    Mr. Frank Field: Will the Secretary of State recall for the House for how many years Opposition Members have been asking him to make mortgage payments direct to building societies? How many hundreds of thousands of people might now not be homeless if he had followed that advice? Why is it that sense enters the Government's head only when an election approaches?
    Mr. Newton: That is an uncharacteristically overheated question from an hon. Member who, rightly, has a reputation for the balanced way in which he puts things. He well knows that arrangements have been in place for a long time enabling direct payments to be put into force when arrears occur. Those arrangements have undoubtedly prevented many repossessions. At the moment we are seeking to improve the working of those arrangements and that has been widely acknowledged and welcomed by the building societies.
    Mr. Andrew MacKay: When my right hon. Friend next meets the banks and building societies and rightly discusses with them the possibility of increasing direct payments of income support in respect of interest payments, will he emphasise that the most serious threat to the housing market and to the liquidity of the banks and building societies would be too many forced sales at prices that are too low? That in turn would lead to even more repossessions and he should tell the banks and building societies to be far more responsible about foreclosing on people's property.
    Mr. Newton: The Council of Mortgage Lenders as a body, and its members, would recognise the points that my hon. Friend makes. It is on that basis that the constructive discussions to which I referred are taking place between many of the lenders and Government representatives.
    Mr. Kirkwood: Will the Secretary of State acknowledge that there has been widespread concern for some time about the scale of repossessions? Did he say in answer to a supplementary question that only an improvement to the existing mechanism is being considered? Would I be right in thinking that that would exclude new and more fundamental ways of trying to deal with a problem that is spiralling wildly out of control?
    Mr. Newton: The hon. Gentleman has drawn the wrong conclusion about an earlier answer, which I think was clear. We announced some time ago improved arrangements, as I believe them to be—we are already putting them in place and they will take effect from the end of the month—to make direct payments of income support where arrears occur. Another matter that is under discussion with the Council of Mortgage Lenders is whether a further extension of automatic direct payments could contribute to dealing with the problem.
    Mr. Higgins: In any future discussions, will my right hon. Friend include building societies, banks and insurance companies, as in many instances a mortgage may be backed by an insurance policy instead of the mortgage being arranged on a repayment basis?
    Mr. Newton: Yes, the talks embrace representatives of those concerned with that part of the business.
    Mr. Meacher: Will the Secretary of State note that the Prime Minister, when a Minister in the Department of Health and Social Security, set in train the tidal wave of repossessions when he pushed a regulation through the House, five years ago to this very day, which disqualified a newly unemployed person from receiving half his DSS mortgage interest repayments for the first 16 weeks? Does the right hon. Gentleman acknowledge that on that occasion the Prime Minister said:
    "There is no reason"—
    that is, for eviction—
    4
    "and it will not happen."—[Official Report, 16 December 1986; Vol. 107, c. 1129.]
    Will the right hon. Gentleman at least apologise to the 100,000 families who have been evicted this year, especially as the Prime Minister's folly was in direct defiance of the building societies' advice at the time? Will he admit that the Prime Minister's action has caused untold misery? Will he repeal immediately the iniquitous Major disqualification rule?
    Mr. Newton: Not for the first time, the hon. Gentleman totally misrepresents the position. The arrangements to which he referred were put in place after discussions with the Building Societies Association, during which it made it clear that a mortgagor would not repossess on the basis that the hon. Gentleman has suggested, as well as on the basis that where interest was rolled up in cases in which more than 16 weeks were involved, the Department would meet the additional interest charged on the extra payments arising. Those were balanced arrangements and in my view they have worked well. In reasonably expressing concern about repossessions, the hon. Gentleman should at least do so on a fair and straightforward basis.

    Child Benefit
    Mr. Gerald Bowden: To ask the Secretary of State for Social Security how many families will gain from the three upratings of child benefit that will occur in the 12 months to April 1992.
    The Parliamentary Under-Secretary of State for Social Security (Mr. Michael Jack): The answer is 6·8 million families.
    Mr. Bowden: Will my hon. Friend confirm that 40 per cent. of people who gained from the upratings would not receive a single penny—perhaps I should say a single ecu—if they lived in socialist France?
    Mr. Jack: I am delighted to confirm to my hon. Friend that the structure of our child benefit scheme ensures that the first child receives benefit, unlike the position under the scheme in France. He may be interested to know that several European countries have extra conditions on entitlement—[HON. MEMBERS: "Reading."] Perhaps it is, but at least it gets the facts out and that is something certainly lacking on the Opposition Benches.
    Germany, Greece, Italy and Spain have means tests. In Belgium, Italy and Portugal, there are links to insurance status. I hope that those facts impress the House.
    Mr. Allen: To the issue of mortgages and pensioners, we now add child benefit—another part of the Government's real social charter. Is not the Minister thoroughly ashamed of his record on child benefit? The Government are trying to make good what they put wrong during the previous 10 years, but second and subsequent children still receive £2·05 a week less in real terms than they would have received if the Government had maintained child benefit at 1987 levels. Millions of pounds have been taken from mothers and children. Is not the Minister thoroughly ashamed of himself?
    Mr. Jack: I say very quietly to the hon. Gentleman that we need no lessons on that subject, given the record of the previous Labour Government, who reduced benefits to families by 7 per cent. in real terms whereas we have increased them by 29 per cent. During the period when

    5
    child benefit was not uprated, we did not stop helping families; we gave £600 million in real terms to low-income families. In the 12 months to April 1992, child benefit will increase three times and other benefits will be uprated. That is a record of which we can be proud.
    Mr. Squire: My hon. Friend deserves congratulations on the Government's child benefit record over the past couple of years. Does he agree that the policy of family support extends to family credit? Will he contrast the 300,000 people who are receiving family credit with the impact of a minimum wage policy, which would have a devastating effect on many families and, of course, on single people?
    Mr. Jack: My hon. Friend adverts to an interesting statistical coincidence. Well in excess of 2 million successful claims have been made for family credit whereas, according to some estimates, a minimum wage would put 2 million people out of work.

    Cumbernauld Office
    Mr. Norman Hogg: To ask the Secretary of State for Social Security if he will make a statement on the reorganisation of his Department at its Cumbernauld office; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe): With the formation of the Benefits Agency, local offices were combined to create more effective management units. In the case of Cumbernauld, the former local offices at Glasgow Springburn and Cumbernauld were brought together.
    Mr. Hogg: Is the Under-Secretary of State aware of the great concern among the public and the caring agencies about the decision to move senior management from Cumbernauld to Springburn? Is she aware of the widespread belief that Cumbernauld as a community has lost out on important benefits such as community care grants and budgeting loans? Will the hon. Lady therefore again consider reorganisation in the office in my constituency and whether it would be more appropriate for senior management to be located in Cumbernauld, to look after the needs of the community of Cumbernauld and Kilsyth properly?
    Miss Widdecombe: The people of Cumbernauld have no reason to fear that they are getting less of a service than they were getting before. None of the core facilities or the facilities directed towards the general public have been moved to Springburn; the finance and personnel section is the only one to have moved.
    Community care grants and provision under the social fund are worked out on a district basis. Nevertheless, the particular needs of client groups are taken into account when working them out. Recently, there has been a substantial increase.

    Occupational Pensions
    Mr. Evennett: To ask the Secretary of State for Social Security what proportion of pensioners have an occupational pension (a) now and (b) in 1979.
    Mr. Newton: The latest figures available show that, in 1988, 51 per cent. of pensioners received income from occupational pensions compared with 41 per cent. in 1979.
    Mr. Evennett: I thank my right hon. Friend for that reply. Does he agree that such schemes give pensioners greater financial independence, but low inflation and low taxation are needed if they are to be totally effective and pensioners can get that only from a Conservative Government?
    Mr. Newton: I very much agree with my hon. Friend and the history of what happened under the previous Labour Government bears that out.
    Mr. Winnick: Will the Secretary of State consider those pensioners who do not have occupational pensions or whose pensions are so low that their overall incomes are low? Bearing in mind the bitterly cold days last week, would not it be wise to trigger the cold weather payments? Why should so many pensioners be so desperately poor that they dare not keep their homes heated adequately because, understandably, they are frightened that they will be unable to pay their quarterly bills? Will the right hon. Gentleman today authorise cold weather payments, which, after all, amount to only £6 a week?
    Mr. Newton: There are two points. First, as the hon. Gentleman knows, over the past three years we have directed about an extra one third of a billion pounds—including money that is to be paid additionally next April—to less well-off pensioners on income support for precisely the reasons that the hon. Gentleman outlined. Secondly, he will be aware that we have a much-improved scheme of cold weather payments in place this winter. Payments have already been triggered in a substantial number of areas and, thanks to the arrangements that we have made for automatic payment which were not in place last year, the first payments should be going out this week.
    Mrs. Roe: While welcoming the good news about the increased proportion of pensioners with occupational pensions, may I ask my right hon. Friend to confirm that during the past 12 years the Government have fully met their pledge to protect state pensions from inflation and that during the past two years state pensions have risen by 15 per cent.?
    Mr. Newton: My hon. Friend is right in both respects. Alongside that, on the firm base of the state retirement pension, we have directed additional help to less well-off pensioners in the way that I described.
    Mr. Meacher: Why is it that after three years of pension fund scandals stretching from Hanson to Maxwell, with dozens in between, the right hon. Gentleman still has not made any legislative proposals for reform of the pension fund law? Why is it that after three years he will still not legislate for an independent chairman, for 50 per cent. employee representation, for full and up-to-date disclosure of all relevant financial information, for prohibiting stock lending and for a proper statutory framework for trust law? Will he take on board the fact that if he continues to dither and procrastinate as he is now, the next pension fund crisis will be on his head?
    Mr. Newton: Far from not legislating, we have passed a substantial amount of legislation on a number of occasions including, most recently, the Social Security Act 1990, under which early next month I shall introduce the further regulations on self-investment to which many references have been made. The self-investment regulations—we have had to take great care over the transitional

    7
    provisions to avoid damaging firms and pension funds—are a good example of the need to act with proper consideration rather than to rush about with half-baked suggestions, as the hon. Gentleman so often does.
    Mr. Arbuthnot: Will my right hon. Friend confirm that in the past few years there has been a rapidly increasing number of pensioners, but that the value of occupational pension schemes and the real income from them has also increased rapidly?
    Mr. Newton: Yes, they have and that is substantially because of the way in which the Government have restrained inflation much more effectively than did the previous Labour Government.

    Social Fund
    Mr. Pike: To ask the Secretary of State for Social Security whether he proposes to make any early changes in the operation of the social fund and in the availability of funds to local offices.
    The Minister for Social Security and Disabled People (Mr. Nicholas Scott): Since April we have made available additional funds of over £43 million to district office budgets for loans and grants. From today social fund officers will be using the completely revised guide which has been introduced in all district offices.
    Mr. Pike: Does not the Minister recognise that, even with these additional funds, if the fund is the final back-up of a system for people in the most urgent need of one-off payments, there is still too much budget limitation at local offices, which have to pay more attention to the availability of funds than to the need of the person applying? Does he recognise that the repayment of a loan is still too much of a limiting factor in granting loans, which should be granted anyway to the people in most urgent need?
    Mr. Scott: The hon. Gentleman will have heard me say before that we are dealing at the margins of the social security system with those in exceptional circumstances who have exceptional needs. I believe that the social fund, managing a controlled budget with discretion at local level, is the right way to proceed, but, of course, we are looking forward to the reports from the social policy research unit at York and others in the not-too-distant future when there will be an opportunity to review the whole system.
    Mr. Hind: I thank my right hon. Friend for listening carefully to the representations that I and many Conservative Members have made about the increase in the social fund, especially for the people in Skelmersdale of whom he took note when I made representations to him.
    Will my right hon. Friend confirm that among his priorities are people who find themselves homeless and without furniture or other items? Under the social fund and the additional money that he has made available, will they be given a high priority in the deliberations of local officers?
    Mr. Scott: As I think my hon. Friend knows, my right hon. Friend the Secretary of State has power to make directions and to issue guidance on the social fund.
    8
    Guidance is also given at local level. It is for the individual social fund officers to use their discretion on whether payments are made.
    Mr. Bradley: The Minister is incredibly complacent about the operation of the social fund, on which many thousands of people rely to make ends meet. Is he aware of the abysmally low success rate in many cities? Is he further aware that when a grant is applied for jointly with a loan, there are massive variations among district offices in those cities? In Manchester, for example, the success rate in Wythenshawe is 5·7 per cent., in Chorlton it is 8·7 per cent. and in Rusholme it is 13·6 per cent., despite all three offices having spent their full allowance, including the additional money from February and September this year? Will he urgently consider the amount of money in the social fund to ensure that people are treated equally under this abysmal system whenever they go to social fund offices throughout the year and regardless of which office they apply to?
    Mr. Scott: I reject any concept of its being an abysmal system. In August this year, we provided substantial extra resources for the social fund because we recognised the pressures in offices. All offices received an increase of at least 10 per cent. and those under most pressure received up to 40 per cent. in additional resources. I challenge the hon. Gentleman's presumption about discretion. If there is discretion at local level, there will be variation between different offices when judgments are made by social fund officers. The combination of a fixed budget and the use of discretion is an appropriate way in which to meet exceptional needs.

    Income Support
    Mr. Tredinnick: To ask the Secretary of State for Social Security what representations he has received about the increase in the value of income support for a single pensioner aged over 80 years from next April.
    Miss Widdecombe: There has been a widespread welcome for the uprating announcement by my right hon. Friend the Secretary of State which provides for an additional £60 million above normal uprating for pensioners who are over 80 or disabled. That and the 7 per cent. uprating for income-related benefits, nearly 3 per cent. more than the retail prices index, underline our resolve to protect and raise the living standards of the less well-off people of our nation.
    Mr. Tredinnick: I am grateful to my hon. Friend for her reply. Is she aware that because of the ravages of inflation, the average pension of 400 roubles in Moscow is now only enough to buy 1 kg of sausages? Does she agree that that is a dramatic contrast with the increase of one third in the real value of benefits since the previous Labour Government left office?
    Miss Widdecombe: Perhaps an even more pertinent contrast, which my hon. Friend may like to consider, is the startling one between the fate of pensioners under the previous Labour Government and the well-being of pensioners under this Government. It is true that pensioners' average total incomes have grown by 34 per cent., whereas for the whole period of the previous Labour Government, they increased by only 3 per cent. The ravages of inflation under the Labour Government, if not

    9
    of Moscow proportions, are a solemn warning about what would happen to pensioners in the unlikely event of Labour taking power again.
    Mr. Hardy: How many sausages can a British pensioner over the age of 80 buy, while keeping his or her house warm?
    Miss Widdecombe: The retirement pension is regularly uprated in line with prices to enable pensioners to buy necessities. The rise in income-related benefits in line with the Rossi index, which was 3 per cent. more than the retail prices index, gives even greater buying capacity to pensioners who rely on state benefits.

    Residential Homes
    Sir Anthony Meyer: To ask the Secretary of State for Social Security how many people have benefited from real increases in the income support limits for those in residential care and nursing homes over the last three years.
    Miss Widdecombe: Over the past three years, there have been four increases in the income support limits for people in residential care and nursing homes—in April 1989, April 1990, August 1990 and April 1991. Further increases, well above inflation in most cases, are proposed from April 1992.
    Some 265,000 income support recipients are expected to benefit from the increases.
    Sir Anthony Meyer: Those increases are most welcome, but can my hon. Friend assure me that elderly people no longer requiring medical treatment will not be discharged from NHS hospitals, where they pay nothing, into residential accommodation, where, despite those welcome increases, they will be required to contribute out of their savings until those savings are pretty well exhausted?
    Miss Widdecombe: I can confirm that it is a requirement that, if the national health service believes that continuing health care is appropriate, it is obliged to provide such care, either in NHS premises or, if necessary, by contract with the private sector. It is not the case that savings have to dwindle to nothing: ordinary income support limits apply.
    Mr. Frank Field: Does the Minister accept that, although many home owners provided a fine service, many others know that they have the Government over a barrel and push for excessive increases? Is she not rather ashamed—as a member of a Government who pride themselves on targeting—to come to the Dispatch Box and read to her hon. Friend a whole list of universal increases? When will the Government pay attention to the Select Committee on Social Security and go for targeted increases, thus saving taxpayers a great deal of money and ensuring that, at the end of the day, no one is evicted from private residential or nursing care facilities?
    Miss Widdecombe: My concept of universal benefits and that of the hon. Gentleman differ somewhat. The increases are wholly geared to those on income support. For universal benefits, we must look to the slightly cracked proposals of the Labour party, including its proposals for the old-age pension and how it would not target benefits.

    Pensioners (Central Heating)
    Mr. Carrington: To ask the Secretary of State for Social Security what proportion of pensioner households have central heating; and what was the comparable figure in 1979.
    Mr. Scott: The latest figures available show that, in 1989, 70 per cent. of pensioner households had central heating, compared with 43 per cent. in 1979.
    Mr. Carrington: That dramatic increase is warmly to be welcomed, particularly in view of the very cold weather that we have been having. Does my right hon. Friend agree that that very satisfactory increase reflects the Government's success in ensuring that pensioners have benefited enormously from this country's rising standard of living over the past 12 years?
    Mr. Scott: The figures that I gave in response to my hon. Friend's question about central heating are replicated by those for other consumer durables over the same period, and reflect a considerable increase in pensioner living standards under this considerable increase in pensioner living standards under this Government—an increase of some 34 per cent. from 1979 to 1988.
    Mr. Lofthouse: But surely the problem is how many pensioners can afford to use their central heating. Given his answer to my hon. Friend the Member for Walsall, North (Mr. Winnick) a few moments ago, can the right hon. Gentleman say in how many areas cold weather payments have been triggered? Is it just a few?
    Mr. Scott: I cannot give the figures. Severe weather payments have been triggered in a number of areas during this period of exceptionally cold weather. In a sense, I am disappointed that the Meteorological Office was unable to trigger in advance on this occasion. The Met Office tells me that it wanted to study the matter with care, as this was the first such period of cold weather since the new system was introduced. It will be studying the pattern that has occurred this time, and hopes to be able to make improvements in future.
    Hon. Members: How many?
    Mr. Speaker: Order.
    Mr. Scott rose——
    Mr. Speaker: Order.
    Mr. Scott: I am sorry, Mr. Speaker.
    Mr. Speaker: I did not want the right hon. Gentleman to answer a question that had been asked, from a sedentary position, but perhaps he intended to add to his reply to the supplementary asked by the hon. Member for Pontefract and Castleford (Mr. Lofthouse).
    Mr. Scott: Since I have been asked, the answer is 25.
    Mr. Anthony Coombs: Given the huge increase in occupational pensions, and the fact that 75 per cent. of newly retired people now have savings, can my right hon. Friend confirm that, over the past 10 years, pensioners' average income has increased to no less than five times what it was under the Labour Government, when income from savings fell by 16 per cent.? Can he also——
    Mr. Speaker: Order. Not at this stage. One question, please.
    Mr. Scott: The increase in pensioner incomes in each year of this Government's period of office has been greater than the increase over the whole period of the last Labour Government.
    Mrs. Margaret Ewing: In the context of ensuring that pensioners can heat their houses, what meetings has the Minister had with other Departments following his meeting with me and the Cold Weather Credit Campaign earlier this year?
    Mr. Scott: Obviously we are concerned with the campaigns of the Department of Energy and the Department of Health. We have regular meetings to ensure that the impact of cold weather on the old and vulnerable is as small as possible and that they, their neighbours and friends, and organisations that help them are as well advised as possible about meeting the needs of vulnerable groups.
    Mr. Favell rose——
    Mr. Andrew F. Bennett rose——
    Mr. Speaker: I think that I should call the hon. Member for Stockport (Mr. Favell) in terms of balance.
    Mr. Favell: The new proposals for discovering whether elderly people require residential or nursing care will be most welcome. Has my right hon. Friend discovered that people who choose to stay in their own homes, and particularly privately owned homes bearing in mind maintenance and other costs, often live a less attractive life than people in many residential homes?
    Mr. Scott: I believe that it is a matter of balance. Many people can enjoy a high standard of living in comfort in surroundings to which they have been accustomed throughout their lives, with the necessary support. Other people may well need help in residential and nursing homes, and we have substantially increased the amount of support that they can receive.

    Family Credit
    Mr. Andrew F. Bennett: To ask the Secretary of State for Social Security how long it now takes to process claims for family credit on average.
    Mr. Jack: In November the average clearance time was 17·5 working days. The family credit unit has now beaten its clearance time target of 18 working days in each of the last four months.
    Mr. Andrew F. Bennett: Does the Minister accept that some people have to wait a long time before their family credit is paid? Often that occurs because employers are reluctant to supply information and that causes real hardship. People in my constituency have difficulties in paying their mortgages because the payment of their family credit is slow. Will the Minister make it clear that it is the duty of all employers to furnish information as quickly as possible? Would it not be better if payments could be made within seven working days rather than the time that it takes now?
    Mr. Jack: I looked very carefully at the recent correspondence concerning constituents which the hon.
    12
    Gentleman has referred to us in relation to that subject. I am pleased to say that we can offer hope for improvement on two counts. The first relates to people who are normally employed. Next April, we will introduce a new administrative formula that will significantly improve processing time and cut down errors. The formula has been referred to the Social Security Advisory Committee, which does not want to consult on it, but would like us to implement it as soon as possible.
    Secondly, we have asked the social policy research unit at York university to carry out research in respect of the self-employed. That work is going well and I hope that we will have the conclusions by the middle of next year.
    On both counts, we will ensure that the job is done speedily. However, it is up to employers to speed up their response. The new arrangements that I have outlined will provide employers with a form to give information to employees applying for family credit, and that should speed up the process.

    Pensioners
    Sir Michael Neubert: To ask the Secretary of State for Social Security what is the estimated proportion of pensioners who own their own homes.
    Mr. Newton: In 1988, 49 per cent. of pensioners owned their own homes.
    Sir Michael Neubert: Is that not encouraging evidence of the extent to which pensioners are sharing in the advance towards greater independence and higher living standards? Is there not an extra benefit for those fortunate enough to own their own homes in that a state pension related to the retail prices index, which includes housing costs, contains a concealed bonus for them?
    Mr. Newton: My hon. Friend is certainly right to believe that it is an advantage and evidence of the success of our policies that a growing number of pensioners have the extra independence that owning their own homes can bring. That trend is also reflected in the ownership of many other things, including telephones, central heating and cars, for which the increase between 1979 and 1988 has been quite dramatic.

    Invalidity Benefit
    Dr. Godman: To ask the Secretary of State for Social Security how many referrals concerning claimants in receipt of invalidity benefit were sent to the regional medical officer from his Department's local offices in (a) 1990, (b) so far in 1991 and (c) what percentage of the total number of such claimants these referrals represent.
    Mr. Scott: It is not possible easily to identify invalidity benefit from other incapacity benefit referrals. However, in total, 824,000 referrals were made in 1990, representing 29 per cent. of claims live at any point during the period. Up to September this year, there were 694,000 referrals, representing 25 per cent.
    Dr. Godman: How do the referrals figure in terms of national averages for the two offices in Greenock and Port Glasgow? Why is such a hard line taken towards people who, in the eyes of GPs and consultants, are manifestly unfit for any kind of work? One constituent of mine has been referred to the regional medical officer 15 times since

    13
    1985. That is harassment of the worst kind. It is a case for the Parliamentary ombudsman. It is malpractice, and that hard line should be thrown overboard.
    Mr. Scott: Of course, if the hon. Gentleman would like me to give him figures for his own constituency offices, I will do so in writing. If he wants to raise any individual cases, he knows very well that I will do that. His talk of harassment and a hard-nosed approach hardly squares with the figures. The case load for invalidity benefit from 1978–79 to 1991–92 has increased from 600,000 to 1·35 million. Obviously, it is right that we should be careful about expenditure on that scale, but I take note of what the hon. Gentleman has said, and I will give him such information as he requests.

  CHURCH COMMISSIONERS

    Investment Policy
    Mr. John Marshall: To ask the right hon. Member for Selby, representing the Church Commissioners, if he will make a statement about the Commissioners' investment policy.
    Mr. Michael Alison (Second Church Estates Commissioner, Representing the Church Commissioners): The Church Commissioners' long-standing investment policy is the effective and prudent management of the assets entrusted to them, to achieve the best total return for the furtherance of their primary object, which is the financial support of serving and retired clergy.
    Mr. Marshall: May I congratulate my right hon. Friend upon the success of the Commissioners' investment policy, which has enabled them significantly to increase stipends? Does he agree, however, that it would be more effective for the Church if stipends were related to performance rather than minimum stipends?
    Mr. Alison: My hon. Friend will appreciate that performance-related pay in the cure of souls is a difficult concept. Nevertheless, the Church of England is actively engaged in a programme of appraisal of clergy performance, with which are linked proposals for consideration of the terms and conditions of service of clergymen, including the continuation of the parsonage freehold.

    Redundant Churches Fund
    Dr. Goodson-Wickes: To ask the right hon. Member for Selby, representing the Church Commissioners, how much has been granted to the redundant churches fund in each of the last two years.
    Mr. Alison: The redundant churches fund received £1·7 million from the Department of the Environment and £760,000 from the Church Commissioners in 1990, and £1·8 million and £774,000 respectively in 1991.
    Dr. Goodson-Wickes: My right hon. Friend will, I am sure, endorse the importance of fostering sacred and secular links. He may be aware that the custom of displaying royal arms in churches has fallen into abeyance since Queen Victoria's time. Will he make representations
    14
    within the budget to which he referred to urge the Commissioners to restore that agreeable practice in the 40th year of this monarch's reign?
    Mr. Alison: It is true that, from 1660 onwards, it became compulsory to display the royal arms in every church as a reminder to clergy and the congregation that the monarch was the head of the Church. If that practice has declined somewhat, it has been because nobody had any doubt that the Queen was the head of the Church. However, should Mr. Delors and the European Commission cast envious eyes at the Church of England from Brussels, it may be necessary to encourage the reintroduction of the painting of the royal coats of arms on parish churches in England.
    Mr. Frank Field: How often in the past two years have the Commissioners ignored the advice of the redundant churches fund, and how many historic buildings have been lost thereby?
    Mr. Alison: I think that only one historic building has fallen prey to the failure of the Commissioners and the Advisory Board for Redundant Churches to meet, consult and agree. The work and co-operation of those bodies is very vigorously, sensitively and carefully carried out to ensure that redundant churches of note are not demolished.
    Mr. Cormack: Does my right hon. Friend agree that fewer churches would be declared redundant if they were less expensive to maintain? In that context, will he assure me that the Church Commissioners are continuing to press the Treasury for relief from VAT for repairs to listed buildings?
    Mr. Alison: I assure my hon. Friend that that is the case.

    Theft
    Mr. Tony Banks: To ask the right hon. Member for Selby, representing the Church Commissioners, what has been the amount lost through theft in respect of Church Commissioners' property over the last three years; and if he will make a statement.
    Mr. Alison: The majority of the Commissioners' property—commercial, residential and agricultural—is leased to tenants who would naturally insure against theft themselves. The Commissioners therefore do not have details of individual cases, and cannot estimate the amount lost overall.
    Mr. Banks: I hope that the Commissioners are concerned about the prevalence of theft from churches for which they are ultimately responsible. The number of artefacts that is now leaving the churches rivals the number at the time of the dissolution of the monasteries. In my day, it was just the lead from the roofs that went missing, but it is now anything that can be put into the back of a lorry. Is the right hon. Gentleman aware of an excellent book that has been written and published by the Staffordshire police, who are so very good at smuggling guns into Brixton gaol, which tells churches how they can be made more secure to stop things being taken from the buildings? Will the right hon. Gentleman ensure that all churches have access to that excellent publication?
    Mr. Alison: Yes, and I shall certainly take careful note of the hon. Gentleman's point. However, the Church Commissioners are not directly responsible for parish churches. The hon. Gentleman talked about smuggling arms into prison. Although the Church Commissioners are more concerned to ensure that bibles are, if necessary, smuggled into prison, we shall certainly be on the lookout for guns being smuggled into churches.
    Mr. Lawrence: Does my right hon. Friend think that my National Lottery Bill might be the answer to many of the Church Commissioners' prayers, as one of its objects would be to benefit our heritage, the proudest part of which must be some of our churches? Does he agree that making money available to the Commissioners for that end would play a substantial part in helping to secure those parts of the Church that are of extreme value—the things that are now being stolen?
    Mr. Alison: I should emphasise to my hon. and learned Friend that praying is never a gamble and that the income to be derived from gambling is a great deal more volatile than that which is likely to be derived from praying. We shall stick to the safe old ways.
    Mr. Carrington: Is my right hon. Friend aware that there is considerable concern about theft from redundant churches, which are so frequently not protected against people breaking into and vandalising them? Will my right hon. Friend now make representations to the redundant churches fund, so that sufficient money can be made available properly to secure those churches until an alternative use is found for them?
    Mr. Alison: Yes, I take note of my hon. Friend's point, which should be a practical preoccupation for diocesan authorities. As my hon. Friend will know, demolition is sometimes an option when a church is declared redundant, but, generally speaking, the use of that redundant church for alternative beneficial social purposes is quickly arranged.
    Sir Nicholas Fairbairn: As somebody who is very interested in and responsible for redundant churches in Scotland, may I ask my right hon. Friend whether, since it is Christmas, he thinks that it would be charitable of the Labour party, so that the the redundant churches can be repaired, to return the £26 million that were given to it by Mr. Robert Maxwell?
    Mr. Speaker: That is a bit wide of the question. I am not certain that the Church Commissioners are responsible for churches in Scotland, but let us hear the answer.
    Mr. Alison: I am particularly glad to have a reminder of the Christmas spirit from so distinguished a Scottish colleague. That can only mean one thing in this context, but fortunately the Church Commissioners are not responsible for church buildings in Scotland.

    Ordination of Women
    Mr. Harry Greenway: To ask the right hon. Member for Selby, representing the Church Commissioners, what financial estimates the Church Commissioners are making in respect of the effect on their expenditure of the introduction of the ordination of women; and if he will make a statement.
    Mr. Alison: In the event of the draft legislation being enacted, the cost to the Church Commissioners would depend on how many clergy resigned who were eligible for financial assistance. The cumulative cost to the Commissioners' income per 100 men has been estimated at £4·5 million spread over up to 20 years, although that could be offset by savings to the Church of England of over £2 million over that period as a result of the departure of clergymen. Those clergy would also have access to the Church's retirement housing scheme.
    Mr. Greenway: Does my right hon. Friend and those whom he represents accept that those people—I am not one of them—who oppose the ordination of women have a right to their conscience? Will the Church Commissioners make continued provision for them and for their churches, even if they form part of a schismatic movement, as they have every right in conscience to do?
    Mr. Alison: I can confirm that it is the deliberate intention of the General Synod of the Church of England to make certain that, if the House endorses the ordination of women—should it come before us, which it may not—clergymen who depart on conscientious grounds will be provided for. The Church of England is determined on grounds of principle and general sensitivity in human relationships to make good provision for those who feel that they are bound to resign their livings.
    Several Hon. Members rose——
    Mr. Speaker: Dr. Godman, but the question is about the Church of England.
    Dr. Godman: May I respectfully suggest to the right hon. Gentleman that, if he and the Church Commissioners are worried about the intended and unintended consequences of the ordination of women, they could seek wise advice from the Moderator of the Church of Scotland? We in Scotland have some fine women ministers, who carry out their duties in an honourable and decent manner.
    Mr. Alison: The hon. Gentleman refers to "women ministers", but, alas, the very word "minister" illustrates the controversy. A minister is not necessarily a priest, and it is the ordination of the priesthood that causes the difficulty.

  HOUSE OF COMMONS

    House Sittings
    Mr. Skinner: To ask the Lord President of the Council if he has any plans to present further evidence to the Select Committee on Sittings of the House; and if he will make a statement.
    The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): The House will be aware that I have already submitted a written memorandum and given oral evidence—in a personal capacity—to the Select Committee. I have indicated that I would be willing to have a further meeting with the Committee if it wished me to do so. I am sure that the whole House looks forward, as I do, with great interest to the forthcoming recommendations of that Committee.
    Mr. Skinner: Will the Leader of the House confirm that one of his recommendations is a four-day week for Tory MPs? Will he bear in mind the fact that he has a cheek to recommend that on behalf of his colleagues, when more than 200 Tory Back-Benchers have 500 moonlighting jobs between them? If they are too busy to do a five-day week, how come they can take on all these extra jobs? Nineteen ex-Cabinet Ministers have 59 directorships between them. The right hon. Gentleman should recommend, one Member of Parliament, one job only.
    Mr. MacGregor: I have not recommended to the Select Committee that we should have a four-day week. It is a travesty of the suggestions being put to the Select Committee to represent them in that way. As I have told the hon. Gentleman before, some Members of Parliament from constituencies way beyond London feel that it is important that they should be able to go to their constituencies on Fridays. They have important activities to undertake there. It is nonsense to suggest that it is a four-day week. For most Members of Parliament, it is at least a six-day week.
    Mr. Butler: Will my right hon. Friend reassure the House that he will seek to implement any changes in this Parliament rather than the next?
    Mr. MacGregor: That depends, first, on when the Select Committee reports, and, secondly, what it says and whether its proposals commend themselves to the House. I understand that the Select Committee hopes to report well before Easter. If it does so, that will reflect considerable credit on the Committee. It has a heavy job to undertake and it has received a great deal of evidence. I hope that it can meet that timetable so that Parliament can meet its recommendations.
    Mr. Campbell-Savours: When my hon. Friend the Member for Bolsover refers to a four-day week, he simply misunderstands what is going on. I spent seven hours journeying to London today. It will take me another six or seven hours this weekend. Many of us spend 12 or 15 hours a week travelling to and from our constituencies. My hon. Friend completely misrepresents the position when he puts it to the House of Commons and the British public that Members of Parliament are getting off with a shorter week.
    Mr. MacGregor: On this occasion, I find myself 100 per cent—[interruption.] It is interesting to see a dispute on the Labour Benches. On this occasion, I find myself 100 per cent. in agreement with the hon. Member for Workington (Mr. Campbell-Savours) and in total disagreement, not for the first time, with the hon. Member for Bolsover (Mr. Skinner).

    Visitors' Facilities
    Mr. Thurnham: To ask the Lord President of the Council what facilities are available for visitors to the House of Commons; and if he will make a statement.
    Mr. MacGregor: Visitors in Members' parties are able to tour the line of route at times when it is open and they and other visitors are admitted to the galleries when the House is sitting and to Committees sitting in public.
    Mr. Thurnham: Does my right hon. Friend agree that we should make visitors a little more welcome when they arrive at Victoria Tower. especially after a long journey?
    18
    There are no toilets and there is nowhere to sit down, which is especially a problem when there are many people milling about at peak times.
    Mr. MacGregor: We endeavour to do so in every way possible, but my hon. Friend will be aware that the main constraint is accommodation in this place.
    Ms. Gordon: What progress has been made for wheelchair access to the Jubilee Room and the Grand Committee Room?
    Mr. MacGregor: As I have said on a previous occasion, approval has been given for the installation of a chairlift up to the Grand Committee Room.
    Mr. Favell: What can my right hon. Friend do to encourage Members who represent constituencies in London and nearby to invite their visitors to come here early in the morning? My constituents from Stockport have to get up at 5 or 6 in the morning to get here for midday. They are then faced with an enormous crush because everyone arrives at the same time.
    Mr. MacGregor: This will largely depend on the willingness of Members to co-operate. I appreciate my hon. Friend's suggestion, because my constituents often face the same difficulties. I will consider what can be done, but I suspect that it is up to individual Members.
    Mr. Flynn: Is it not a continuing disgrace that visiting parties of the disabled, pensioners and children are denied the simple hospitality of a cup of tea or a place to rest while the political and business cronies of hon. Members are royally entertained in this Palace at subsidised expense? Why does the Leader of the House deny the publication of information that he gave me two years ago on the political complexion of those hon. Members who entertain most? Why is that information now a state secret?
    Mr. MacGregor: On the second point, because it is not relevant. Bookings are undertaken by individual hon. Members in their parliamentary capacity; it has nothing to do with political representation.
    On the first point, the Catering Sub-Committee is due to consider the results of a feasibility study to determine whether reasonable catering facilities can be provided fairly close to the Palace.

    Working Hours
    Mr. John Marshall: To ask the Lord President of the Council what recent representations he has received about the hours of working of the House.
    Mr. MacGregor: I have received a few letters both from hon. Members and members of the public regarding the review of sittings of the House. It is not surprising that there are not many to me, because the representations at this stage are being made to the Select Committee.
    Mr. Marshall: At the risk of being accused of making a sexist comment, may I assure my right hon. Friend that any success he has in this will be warmly welcomed by the wives of Westminster? May I also suggest, however, that one of the consequences of altering the hours at which the House sits will be that it will be more difficult for children to come round in the morning?
    Mr. MacGregor: My hon. Friend could have avoided being sexist by referrring to the "spouses" of Members. That would have been a more accurate description, because husbands also encounter difficulties in this respect. I was keen to set up the Committee chaired by my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) and keen to give it the evidence I did, not just to improve the position of families but for a wide variety of other reasons. If we can conduct more of our business at more civilised hours, it would help a little. The issue of children visiting the House will be one of those taken into account and considered by the Select Committee.
    Mr. Hardy: Has the Leader of the House seen the early-day motion that I tabled last week? It has been signed by a significant number of Members, who seek to see the time of Question Time on Monday changed because of the inadequacies of public transport due to inadequate investment, crime, terrorism or bad weather, which may get worse in the next few months. Will the right hon. Gentleman consider that proposed change sympathetically, so that hon. Members can get down here to ask the questions that may appear on the Order Paper in their names?
    Mr. MacGregor: I am sure that the hon. Gentleman will put his point to the Select Committee, to which it falls to make recommendations on that matter.
    Mr. Waller: Will my right hon. Friend bear in mind the fact that there would be strong opposition on both sides of the House to any disproportionate loss of private Members' time? Will he consider the fact that ten-minute Bills, which I think he has proposed abolishing, are especially valued by many hon. Members? They are an opportunity to raise issues when many hon. Members are present, and their loss would not be acceptable.
    Mr. MacGregor: My hon. Friend is right to talk about disproportionate loss. If we seek to change the hours, which may involve reducing the number of hours that we
    20
    sit, we must consider a proportionate change across the board. It was in that context that I made my recommendations. I was suggesting moving the time at which private Members can have business raised in the House to a more high-profile period of the day. I also wanted my recommendations to be balanced. However, it will be for the Select Committee to make recommendations to the House, for the Government to consider them and to make proposals to the House and, ultimately, for the House to decide.

    European Standing Committees
    Dr. Godman: To ask the Lord President of the Council, pursuant to his answer of 25 November, Official Report, column 415, what recent representations he has received about the modus operandi of European Standing Committees A and B; and if he will make a statement.
    Mr. MacGregor: I have recently seen copies of several Members' submissions to the Procedure Committee's first stage review of the operation of the revised scrutiny arrangements. I look forward to receiving the Procedure Committee's report soon and shall consider carefully any recommendations it might contain about the operation of the new European Standing Committees.
    Dr. Godman: Following Maastricht, is it likely that the modus operandi of those Committees will change? Will there be an increase or decline in the work load? Several of the permanent members of those Committees feel that changes must be made in terms of both of the permancy of the chairmanship and of the need to provide specialist advisers to those permanent members.
    Mr. MacGregor: It is too early to say whether there will be an effect following Maastricht. The Committee is considering both the specific points that the hon. Gentleman made, and I expressed my own views on them to the Committee in my oral evidence.

Mortgage Repossessions
3.31 pm
Mr. Bryan Gould: On a point of order, Mr. Speaker. You may recall the brief reference by the Secretary of State for Social Security earlier this afternoon to today's meeting between Ministers and the Council of Mortgage Lenders on the subject of mortgage repossessions. The issue is clearly of grave concern to hundreds of thousands of families who risk losing their homes, and to local authorities that will have to shoulder the burden of the homelessness that might ensue. It is also of grave concern to owner-occupiers who must fear the catastrophic impact on property values if so many houses are repossessed. Yet there has been no formal statement from Ministers. They may have nothing to offer, but that has not stopped them holding press conferences or making public statements.
Have you, Mr. Speaker, had any intimation from Ministers that they intend to make a statement, today or in the very near future, that would at least enable the House to question Ministers about that meeting and to show that, even if Ministers have no solution to offer, the Opposition have?
Mr. Speaker: I agree that it is an important matter. That is why I allowed a long run on question 1 today—[Interruption.] It was longer than I would normally allow. I made inquiries about the press conference and I am assured that it had nothing to do with this matter. The hon. Gentleman's point will no doubt have been heard by Ministers responsible.

Orders of the Day

  Local Government Finance Bill
  [1ST ALLOTTED DAY]
  As amended (in the Standing Committee), considered.

  Local Government Finance Bill
    New Clause

      TRANSITORY EXEMPTION FOR SCHOOL LEAVERS
      '.—(1) After paragraph 5 of Schedule 1 to the 1988 Act (personal community charge: exemption) there shall be inserted the following paragraph—
      "School leavers.
      5A. A person is an exempt individual on a particular day if—

      (a) he is aged under 20 on the day,

      (b) the day falls within the period of 6 months beginning with 1 May 1992,

      (c) immediately before that date he was undertaking a qualifying course of education, and

      (d) the course was not undertaken in consequence of an office or employment held by him."

      (2) After sub-paragraph (1) of paragraph 6A of Schedule 1A to the 1987 Act (personal community charge: exemption) there shall be inserted the following sub-paragraph—
      "(1A) If such a person as is mentioned in sub-paragraph (1) above ceases to undertake such a course of education on or after 30th April 1992, he shall continue to be exempt until the start of the earlier of the following days—

      (a) 1st November 1992,

      (b) his twentieth birthday.".'.—[Mr. Portillo.]

      Brought up, and read the First time.
      3.33 pm
      The Minister for Local Government and Inner Cities (Mr. Michael Portillo): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to take the following: New clause 17—Abolition of 20 per cent. community charge contribution and extension of community charge rebates to students from April 1992—
      '.—(1) In subsection (3) of section 131 of the Social Security Contributions and Benefits Act 1992 (community charge benefits) in paragraph (a) the words "and is not there shown as undertaking a full-time course of education on the day" shall be deleted;
      (2) In subsection (5) of that section after "concerned" there shall be inserted:—
      "up to 100 per cent. of his liability for personal community charge contributions";
      (3) Sections 1 and 2 above shall have effect from April 1992.'.
      Government amendments Nos. 127 and 128.
      Mr. Portillo: Although the Bill is principally about the council tax, the new clause relates to the community charge and what is known as the student gap. At present, exemptions from the personal community charge exist for 18-year-old school pupils in respect of whom child benefit is paid, and 18 and 19-year-olds who are on qualifying courses of further education. But about half of the 200,000

      23
      people who fall into either of those categories go on to full-time education and become entitled to student relief of the community charge.
      At present, however, there is a student gap, which may last for a few weeks or a few months, separating the exemptions from the day on which a person enrols on a full-time course of education. Although it is possible for such a person to claim community charge benefit during that time, thus reducing his or her liability by up to 80 per cent., we accept that the administrative burden imposed on both the individual and the charging authorities is unnecessarily heavy. We therefore propose to relieve local authorities and school leavers of that burden by exempting, until 31 October 1992, 18 and 19-year-olds who are undertaking a qualifying course of education on 1 May 1992.
      Mr. Bryan Gould: I suspect that new clause 33 is the forerunner of numerous similar Government-inspired changes to a Bill which the Government assured us, when they dragooned it though its Committee stage, was in pristine and perfect condition and would need no amendment. This is, I suspect, the beginning of a process that will lead to much the same outcome as was brought about by the hundreds of Government amendments—sometimes running into four figures—that have been tabled to similar Bills. If such an outcome does indeed result, it will show just how damaging the guillotine and the resulting truncation of Committee debate have been.
      We none the less welcome this particular representative of the genus. If all the others deal with small issues in a way that improves the Bill, we shall have less ground for complaint. The new clause is undoubtedly good news for the group of students who will benefit from the closing of what the Minister described as the student gap—I believe that the Government's estimate is 200,000. This is, of course, part of the slow, gradual, painful process whereby Ministers are forsaking, step by step, all the policies and principles that underpinned the poll tax. One by one, the arguments that were said to justify it are being abandoned.
      New clause 33 does not go far enough. Typically, the Government have had the courage to concede by implication that they have lost confidence in what they legislated for so confidently just a short time ago. What they lack is the courage and confidence to pursue their conclusions to their logical outcome. As a consequence, students are still not entitled to rebates, and the 20 per cent. contribution rule remains, along with all the damage that it does—especially to local authorities that are struggling to collect the poll tax.
      Our new clause 17 would extend to students the right to claim community charge and, in due course, council tax rebates. Students are undoubtedly a section of the population who have suffered substantial hardship as a result of Government-inspired measures. I have a student daughter myself, and I know from her accounts—and from her constant recourse to the parental purse—that life is indeed very difficult for students. Their grant has been frozen in real terms at much below the level at which they could expect to survive on it; they have been denied entitlement to income support, housing benefits and rebates; there are no jobs with which they can supplement
      24
      their incomes during vacations; and those who find themselves desperately hard up discover, when they turn to the hardship fund, that it has already been exhausted.
      For all those reasons, I think that students are particularly deserving of help. The Government's proposal is welcome, but it only scratches the surface of the problem. Our new clause 17 would establish their entitlement to rebates, which would benefit them greatly.
      We expect to have an important debate tomorrow afternoon on the 20 per cent. contribution rule, which the Government insist on retaining until 1 April 1993; but our new clause 17 would also have the effect of abolishing, as from 1 April 1992, this 20 per cent. contribution rule. If it were abolished, that would have the blessing, as far as I am aware, of every local authority association, the Institute of Revenues, Ratings and Valuation, and the Child Poverty Action Group, the very strong blessing of the citizens advice bureaux—and the enormously authorititative support of the Audit Commission, which, in its report, had this to say on the subject:
      "Local authorities say that large numbers of income support recipients are in arrears with community charge payments for 1990/91. These chargepayers make up a very small amount of the total value of outstanding community charge. Pursuing these defaulters for such small amounts is not a good use of scarce recovery resources when there are much larger debts outstanding. The Government have already accepted that there will be no minimum contribution to the council tax. Abolition of the minimum 20 per cent. community charge contribution for income support recipients would ease the administrative burden on local authorities very considerably."
      I do not intend to rehearse at length—the opportunity for that will come tomorrow—the powerful arguments, financial and practical, which would support the abolition of this rule at the earliest possible date. Today I shall content myself with quoting what I hope by now is a familiar argument for the Minister, advanced by the Audit Commission. It is that the attempt to collect the 20 per cent. contribution from those on income support costs 15 for every £6 net revenue raised. Even on grounds of simple housekeeping and accounting, that ought to conclude the argument.
      It is not even as though the Government have adhered to their own reasons for refusing to act on this in the past. They have conceded, by abolishing the 20 per cent. contribution rule for the council tax, that there is no ground in principle for maintaining it. We all recall that in the heyday of the poll tax the one principle that Ministers and Conservative Members were most reluctant to abandon was that everyone should pay something. That principle has now been abandoned; the Government no longer advance or maintain that position. They abandoned the principle for the council tax, so no argument in principle remains.
      The Government then resorted to the argument of practicality. They said that it was impossible to abandon the 20 per cent. contribution rule because income support rules had been constructed on the basis that a 20 per cent. contribution had to be paid. They said therefore that if the rule was changed there would have to be a consequential change for the social security rules. That argument no longer applies because no consequential change is now required. The Government have abandoned any pretence that income support payments include an element that would cover the 20 per cent. contribution, so they can do

      25
      away with the 20 per cent. contribution rule at the earliest practical opportunity, with no difficult practical consequences for income support.
      We are left with a slightly opaque, not to say metaphysical, argument from the Minister of State. He maintained that the rule was an essential concomitant of the poll tax because it was a personal tax, yet we a:re told that in respect of the council tax, which is also, at least as to 50 per cent., a personal tax, there is no difficulty in doing away with the 20 per cent. contribution rule. If it can be abandoned in the case of the personal element of the council tax, it is hard to see why it cannot be abandoned immediately for the poll tax. If it were abandoned, the burden on local authorities of trying to collect what the Prime Minister described as a virtually uncollectable tax would be substantially lightened, and that would be of great benefit.
      Ministers are fond of criticising local government because many local authorities are less than 100 per cent. successful in collecting the poll tax. If they were serious about helping local government with that difficulty, they would abolish the 20 per cent. contribution rule. That is what our new clause 17 would do. I commend it to Ministers, but, bearing in mind our debates in Committee, I confess that I do not do so with any great hope that they will see sense for once and will accept this sensible recommendation.
      3.45 pm
      Dame Elaine Kellett-Bowman: I welcome the Secretary of State's intention to fill in the student gap, but I am bound to say that I can see no logical reason for attempting to collect the 20 per cent. from students now that the Government have conceded in the new council tax that students will not pay it. My council and students would very much like the 20 per cent. contribution to be abolished for the final year of the tax.
      Mr. Dick Douglas: I am a bit bemused about the definition of a student and should like to have it clarified for England, Wales and Scotland. The Government have moved away from their view that everybody should pay the poll tax and are making some amends. However, the plight of students is well known to every hon. Member and it is absurd, especially in Scotland, that local authorities are trying to collect the 20 per cent. from students for 1989–90.
      Earlier in the debate a Scottish Office Minister was present, but he has departed. Do the Government have figures for Scotland about the number of students involved and the cost to local authorities of trying to collect this tax? The Government have abandoned in the so-called council tax not only the rule that everybody has to pay but a key element of the poll tax—accountability. There is no strict relationship between local authority finances arid the accountability of councils to the electorate who may or may not be paying.
      Although the Government proposal is welcome, it flies in the face of all logic. They are redressing a gap but not accepting the other enormous gap of students in Scotland being asked to pay 20 per cent. of the poll tax from 1989 onwards. Local authorities are chasing up and down the land trying to collect taxes from people who may have moved three, four or five times. That is nonsense. The cost is exorbitant and the Government should take this opportunity to tell that to local authorities, especially in
      26
      relation to students, although there are other categories to which we may refer in other clauses and amendments. The Government are getting into an absurd position and they should recognise that.
      Mr. John Bowis: I do not question the fact that in some parts of the country students are finding it difficult to make ends meet. Like the hon. Member for Dagenham (Mr. Gould), I also declare the reverse of a pecuniary interest because we are paying out to our student sons and daughters. Some students have been placed in difficulties by local authorities that have set a community charge that is so far beyond the reach of people that even the 20 per cent. required from students makes life difficult. Students in my borough of Wandsworth and in other, mostly Conservative, boroughs whose community charge was below target have no problem, because an element of the student grant meets 20 per cent. of the reasonable charge. The difficulties arise in Labour boroughs where authorities have rashly and ineffectually overspent.
      I welcome new clause 33, which deals with the student gap. It takes up the issues that I raised with Ministers in Committee. They said that they would consider the problems that I drew to their attention and would produce a solution on Report. I think that the hon. Member for Dagenham could have been a little warmer in his support of the Government's proposal. As the hon. Gentleman said, the new clause deals with a comparatively small problem in terms of the number of students who are affected by it, but to them it is a real problem.
      We know that until the end of December the family of the school leaver is still eligible for child benefit. There would, therefore, be exemption until then. However, after the end of September there is no longer that eligibility. It would be nonsensical if a young person who was waiting to go to college was required to pay. It is surely to be welcomed that students will not find themselves in that position. I use this opportunity to say that local education authorities throughout the country have, in the context of the debate, reached only the end of October. All too often, student grant decisions are being taken at such a slow pace that even at that stage a student's place in higher education may not have been confirmed. There is a message to local education authorities to be quick about getting student grants to students.
      That must be in addition to the helpful remedy that my hon. Friend the Minister of State has adopted to eradicate the anomaly that was built into the system.
      Mr. David Bellotti: The proposed changes are welcome. They will offer a little help in moving towards meeting what can be described only as a considerable task.
      Students have had a hard time in recent years. New clause 17, which would abolish the 20 per cent. requirement, receives our warm support. It would provide enormous help. Surely the Government could accept it on the ground of cost. The Audit Commission and the Society of Local Authority Chief Executives have told the Government that the cost of collection of the 20 per cent. requirement is two and a half times the sum that is collected. If the Government wish to act in addition to their desire to help people, there is the argument that removal of the 20 per cent. obligation would be extremely cost effective.

      27
      There are good reasons to help students, whose grants have decreased in value in real terms. The pressure on parental contributions is making life extremely difficult during the recession. This is at a time when the Government are trying to encourage more young people to go into education. The requirement that we are discussing is running counter to other Government policies that are designed to help young people to move into further education. The Government are well aware of the few in the 16 to 19-year-old range who are in education in this country compared with the numbers in other European countries and in other countries throughout the world. That comparison relates to both further education and training.
      We welcome the improvements that are to be made, but there is much more that could be done. Students are always willing to make a contribution if they have sufficient money to do so. At present, they just do not have enough money. One of the reasons why they receive moneys late through local education authorities—I take up the comments of the hon. Member for Battersea (Mr. Bowis)—is that LEAs do not have staff available to them to process the many applications that are made in July and August because of the Government's power to cap local authorities. Even in Conservative-controlled authorities that have always been held up as being cost effective, and certainly not profligate, it is difficult to bring in extra staff for two months of the year to process grant applications. There are many more applications than there were, because there are, in many instances, no real jobs for young people. As a result, they are being forced into education, but, at the same time, they are not receiving the grants that they deserve.
      By supporting new clause 17, we would be supporting also several parts of the Government's policy. I hope that the Government will find it possible at this stage to make concessions and to help the students.
      Mr. William McKelvey: I wish to make a plea on behalf of Scottish students who, after all, had the poll tax imposed on them one year before it came south of the border. There are bound to be many more students in Scotland than elsewhere who will be pursued for arrears, and that point has been made adequately. It is ludicrous to pursue people for their debts when the cost of collection is two and half times the amount of the debts. Given the poverty in which those students find themselves, will the Minister consider having an amnesty for those students? The 20 per cent. payment will be seen by people, particularly students in Scotland, as a sign of the Secretary of State pursuing political dogma over economic sense.
      Mr. Portillo: The hon. Member for Dagenham (Mr. Gould) got off to a pretty poor start when he talked about the Government coming forward with hundreds of amendments. We have tabled one new clause, which covers ground not covered by amendments in Committee, and five sets of amendments, all of them arising from the Committee proceedings. The hon. Gentleman is really expressing his profound disappointment that the Bill was so well drafted that it was not necessary to have rafts of amendments. So flimsy was the Labour party's attack on our proposals in Committee that we did not discover any
      28
      chinks or openings in our policies. The spirit of Committee means that, when one finds measures that can be improved, one proposes amendments, but the Labour party did not unearth aspects of which we were unaware. The Committee gave us two or three matters to think about, and we are happy to introduce measures to deal with them.
      It was clearly anomalous that students should leave school expecting to receive an 80 per cent. discount on their personal community charge when they become students in higher education but in the brief intervening period be subject to a full community charge, less any income support to which they are entitled. It is right that we should end that anomaly.
      I am surprised that the hon. Member for Dagenham, who has a student daughter, is keen to take students back into the benefits system. Our taking students out of the benefit system is a major step forward. To have available to people who have withdrawn voluntarily from the labour market to pursue their studies the benefits which have been provided by Parliament to those without resources or income because of circumstances beyond their control is to give entirely the wrong message to students. The fact that we have amended income support and housing benefit to take students out of that benefit system has been a great step forward.
      Mr. Gould: The Minister has clearly demonstrated why he proved so impervious to the powerful arguments which we put to him on so many issues in Committee—he is totally out of touch with the real world.
      Mr. Portillo: Many parents believe that it would be, and was, wrong to have their student sons and daughters brought into the benefit system. That system was not intended for students. The fact that students are not provided for in that way is a great improvement.
      Mr. John Battle: Surely the Minister accepts that the student grant was geared to take students through the long summer vacation, when they got no money. The Government removed their access to benefit, leaving them with a 16-week period during the summer without benefit. How is that gap bridged?
      Mr. Portillo: The financing of students should be by a combination of grant, loan and moneys which they may be able to earn and not by bringing them into income support or housing benefit, which would be absolutely wrong.
      The hon. Member for Dagenham made a point in which he was erroneously joined by the hon. Members for Kilmarnock and Loudoun (Mr. McKelvey) and for Eastbourne (Mr. Bellotti). He quoted the Audit Commission's figure which purports to show that collecting from students and the other 20 per cent. payers costs more than is collected from them. As I explained in Committee, that is a wholly erroneous figure. The £6 that the commission quoted purports to be the difference between what is made available through income support to those who pay 20 per cent. and what they were paying back in addition in community charge. That is a completely false comparison. What matters is that, as the Government have made moneys available to those on income support so that they can pay their 20 per cent. contribution to the community charge, those moneys should be collected. The amount at stake is £440 million and the average cost of collection now stands at £12·50. If

      29
      the Opposition want to make a comparison, the fact is that the average 20 per cent. payment is about £50 and the average cost of collection is about £1250, so £37·50 stands to be collected over and above the collection fee.
      Mr. Bellotti rose——
      4 pm
      Mr. Portillo: The comparison quoted by the hon. Member for Eastbourne (Mr. Bellotti) and others is false, because, taking account of the fact that the Government are paying large sums in benefit to help people to make the 20 per cent. payments, it implies that that would have to be withdrawn. That would involve a heavy cost which the Government are not prepared to undertake. I think that the British public also believe firmly that, as money has been voted from taxpayers to income support recipients so that they can meet their 20 per cent. contribution, that money should be used for the purpose for which it was intended, especially since the headline figure of the community charge was reduced by £140. That means that the average now being made available as an addition to income support more than covers the average 20 per cent. being sought.
      I shall quote some figures which show that the additions now stand at £1·31 a week for single people and £2·62 a week for couples, but as the estimated net average community charge level for Great Britain this year is £2·10, that would imply that the average 20 per cent. contribution was 80p a week for single people and £1·60 a week for a couple. Therefore, the amounts that we are providing in income support are much higher than the average that those people are being asked to pay.
      Mr. Bellotti: The figures that the Minister has just given and the ones that he gave in Committee are not in dispute. However, does he know of any other tax under which the Government would put money into a system and give it to people while expecting to get it back, then not get it back and pay extra money in order not to get it back? That is the situation in this case. Have the Government any similar ideas for such taxation schemes, because if one took that scenario further, the country would be bankrupt in a very short time?
      Mr. Portillo: I am sure that the hon. Gentleman does not intend to give any encouragement to the people who are not paying, but there is no question of an amnesty, as suggested by the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey). Moneys have been made available to people on benefit in order that they may pay their contribution to the community charge and we have every right—as do the taxpayers—to expect that those moneys are paid to local authorities for the purpose for which they were intended. Therefore, there will be no amnesty and local authorities will continue to enforce the payment of the 20 per cent. contributions.
      Mr. Douglas rose——
      Mr. Portillo: I shall give way to the hon. Gentleman, but I was about to answer the point that he made. He wanted to know what was the definition of a student. New clause 33 and the two amendments would close the student gap, so we are talking about 18-year-olds who are at school and whose parents receive child benefit for them and 18 and 19-year-olds, whose parents do not receive child benefit, who are on a qualifying course. Such a course
      30
      could be described as further education as opposed to higher education. The regulations state that the person must be on a relevant course and that the relevant hours of that course must exceed 12 hours in a week. A relevant course is one that lasts for more than three months, is not higher education, not a correspondence course and must usually be followed during the day, not at night school. We are trying to ensure that those who are at school or at college—doing A-levels, for example—and who then cease to be in that position but who are going on to higher education do not have to pay community charge in the short gap between leaving one part of their education and moving to the other.
      Despite the Opposition's rather testy and ungenerous reception, I am sure that the provision will be welcome. I endorse what my hon. Friend the Member for Battersea (Mr. Bowis) said. It will be of great help to all if local education authorities are able to make quick determinations. I commend the new clause and the associated amendments to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Cr j 8–4lause 1

      COMMUNITY CHARGE IN SCOTLAND
      '(1) Before 9th July 1992 the Secretary of State shall cause to be published a report, to be called the Community Charge Report, on the effects of the Abolition of Domestic Rates etc. (Scotland) Act 1987.
      (2) The Community Charge Report shall assess the effects of the Act on—

      (a) the cost, economy, efficiency and effectiveness of financial administration in local government;

      (b) the public acceptability of local taxation;

      (c) the levels of services provided by local authorities;

      (d) the state of local democracy;

      (e) the incidence of local taxation.

      (3) Before publishing the Community Charge Report the Secretary of State shall consult the Convention of Scottish Local Authorities, representatives of consumers and such bodies with an interest in the impact of taxes on persons with low incomes as appear to him to be concerned.'.—[Mr.Dewar.]
      Brought up, and read the First time.
      Mr. Donald Dewar: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to take the following:
      New clause 5—Scottish annual report—
      '( )—(1) The Secretary of State shall prepare an annual report to Parliament on the workings of the council tax.
      (2) In preparing his report under subsection 1 above, the Secretary of State shall have particular regard to effect of the tax on:

      (a) people who live on their own;

      (b) people who occupy property provided solely through their employment; and

      (c) people who rent their property.'.

      New clause 7—Cost of the council tax in Scotland—
      '.—(1) The Secretary of State shall within six months of the introduction of the Council tax, publish a report detailing the cost of introducing the tax.
      (2) The report prepared under subsection 1 shall contain the costs accrued by local authorities, whether met out of central funds or not and the cost of valuing the properties.'.
      New clause 8—Effects of the Community Charge—
      '.—(1) Before 9th July 1992 the Secretary of State shall cause to be published a report, to be called the Community Charge Report, on the effects of the Local Government Finance Act 1988 (the Act).
      (2) The Report shall assess the effects of the Act on—

      (a) the cost, economy, efficiency and effectiveness of financial administration in local government;

      (b) the public acceptability of local taxation;

      (c) the levels of services provided by local authorities;

      (d) the state of local democracy;

      (e) the incidence of local taxation.

      (3) Before publishing the Report the Secretary of State shall consult the local authority associations, representatives of consumers and such bodies with an interest in the impact of taxes on persons with low incomes as appear to him to be concerned.'.
      New clause 10—Discounts—
      '.—Sections 11 and 12 below shall not come into effect until such time as the Secretary of State has produced a report on:

      (a) the incidence of discounts,

      (b) the cost of administering discounts,

      (c) the use of council tax benefit as a means of reducing council tax liability for those on low incomes, and

      (d) the steps which billing authorities are to take for the purposes of ascertaining whether the chargeable amount of council tax is subject to any discount.'.

      New clause 12—Annual report—
      '(1) The Secretary of State shall prepare an annual report to Parliament on the workings of the Council tax.
      (2) In preparing his Report under subsection 1 above, the Secretary of State shall have particular regard to effect of the tax on:

      (a) people who live on their own;

      (b) people who occupy property provided solely through their employment; and

      (c) people who rent their property.'.

      New clause 13—Cost of the council tax—
      '(1) The Secretary of State shall within six months of the introduction of the council tax, publish a report detailing the cost of introducing the tax.
      (2) The Report prepared under subsection 1 shall contain the costs accrued by local authorities, whether met out of central funds or not and the cost of valuing the properties.'.
      New clause 27—Non-payment (inquiry)—
      '.—(1) The Secretary of State shall publish a report detailing the level of non-payment of the community charge for 1989–90, 1990–91 and 1991–92.
      (2) Any report under subsection (1) above shall include details of the amounts outstanding from charge-payers liable to the 20 per cent. contribution.'.
      Amendment No. 15, in clause 117, in page 78, line 29, at end insert—
      '(1A) Section 11 shall not come into force until the Secretary of State has produced the report required by section (Discounts) above.'.
      Mr. Dewar: The new clause raises a matter of considerable substance which will delay the House for a significant time. I understand that Ministers are not too keen to remember that once proud flagship, the poll tax. I do not intend to spend time rubbing salt in wounds, although I recognise the temptation and have been encouraged by my hon. Friends to do that. We want to look forward, although I cannot help remembering the speeches made in 1987 on the subject of the poll tax and the extent to which the predictions made then, not only by the Opposition but by many others, have turned out to be justified.
      I remember the derision which met the Tory Reform group when it said that the popularity of the poll tax was
      32
      dropping as fast as a stone over a cliff. I remember with some amusement the Minister of State, Scottish Office saying that the opposition by the Tory Reform group to the poll tax legislation was the first and most pressing reason why that tax should be supported. It has always struck me as an intellectually interesting but not very substantial point.
      The clock has moved on and, understandably, Ministers now want to walk by on the other side. I warn them that I see no great advantage in concentrating on the new form of the rating system which they are now introducing. The more people look at the small print, the less they will be convinced.
      New clause 1 seeks to place on the Government the duty of producing a report that will deal with the record of the poll tax and the current situation which it has created, both for those who have to pay it and for local government which has to maintain services on it. It would point to the lessons which should have been learnt by central Government but which we fear may not have been.
      It is important to stress that there is a genuine reason for a report, and that is our apprehension that as a result of the very tight timetable which has been ruthlessly enforced on the debate many of the details of the new system will not be properly considered. There is a real fear that many of the disadvantages which linger administratively with the poll tax and which still plague us may be imported into the new system. The report and examination proposed in the new clause would do something to guard against that danger. That point is given added weight by the fact that Ministers are always anxious to deny that the new system is a form of rating system based on capital valuation, which it evidently is.
      I do not have the advantage—I use the word tentatively—of having much experience of the style of the Minister for Local Government and Inner Cities. I am not familiar with it, but I have already noticed that it is deadpan and perhaps funereal. The hon. Gentleman argued that it was a great step forward for the student community to leave it virtually without any means of support for large parts of the year—particularly during the long vacation. I found that a very individual approach to the problem and would venture gently to suggest that it will not command universal support among students in my constituency or, I suspect, any other constituency.
      My own view is that the present system may appear tolerable to students and their parents if those parents are in a position to make a substantial parental contribution without financial embarrassment; but I must tell the Minister—and this goes to the heart of some of his arguments—that, in all my years in Parliament. I cannot remember a time when students have been more bitter and more genuinely distressed by their economic situation than they are at present. I use the word "bitter" having given the matter considerable thought. There has been a series of demonstrations and I have had a series of approaches from individual students—particularly the heads of one-parent families going late into higher education—who feel that they have been betrayed and who, frankly, would be appalled by the way in which the Minister has just dealt with the subject.
      The preparation of the report that we seek would enable us to examine the impact of the poll tax on a whole series of aspects of local authority finance and life, which is set out in the new clause. The report would consider the economy and efficiency of local government finance. It is

      33
      a cliché hardly challenged these days that local government, at least, has had to live through a nightmare in which confusion has shaded into chaos as the poll tax has continued on its most unfortunate course. It has cost two or even three times as much to collect as the rates, and we have had a network of incomprehensible adjustments, transitional allowances and reduction schemes, all moving into each other to produce a system which I certainly—and I make no bones about this—have the greatest difficulty in understanding and in explaining to people who come to me with questions that are beyond the reasonable compass of people not professionally involved in dealing with such systems.
      It is also important that we consider the justice—or, rather, injustice—of what has happened and try to learn lessons from that. I do not want to repeat the familiar arguments about a flat-rate tax unrelated to ability to pay. To be fair, the Secretary of State has accepted for some years that the poll tax was essentially unjust and indefensible and said so at quite an early stage. It appears that the Government now accept that and, presumably—although I do not say this with very much confidence—the right hon. Gentleman has managed to persuade the Under-Secretary of State for Wales, the Under-Secretary of State for Scotland and the phalanx of no-turning back Members who surround him in his departmental fastness of that fact. I hope that the right hon. Gentleman has been able to convince his colleagues that the poll tax 'was an inhumane system which is rightly being abandoned on that ground if no other.
      It is important that the lessons to which I referred are learnt, and that would, I hope, be one of the consequences of the report for which the new clause would provide. There are others, and I shall briefly sketch them in. First, there is the impact on local government services, which has undoubtedly been considerable. Secondly, there are the problems of non-payment. Thirdly, there is the reduction to dangerous levels of the percentage of revenue controlled by local government itself—now down to 12 or 13 per cent. in Scotland and even lower, I think, in Wales.
      Although that phenomenon has been politically convenient for the Government, it has been condemned by local authorities and professionals across the whole range because, in the longer term, it will undoubtedly undermine and weaken local democracy in a way that, whatever our political persuasion, we may come to regret. It has preserved and built into the system a gearing factor which I find repugnant and which undoubtedly puts local authorities in a consistently difficult position, not least in dealing with burdens and statutory duties placed upon them by central government.
      Another aspect with which I hope the report will deal is the damaging undermining of confidence in local government as a system, and in local government finance in particular. I take that point very seriously from a non-partisan point of view. Many of my Conservative friends share that view. That undermining is partly the result of the past 10 years of Government policy—the "pay as you use" approach to local government services, the privatisation and competitive tendering. It was also, however, partly the result of the non-payment campaign run by other people in other parts of the political spectrum. The proposition that local government taxation is a voluntary imposition which people may take or leave
      34
      as they wish has insidiously gained currency. That view may cause acute problems for any local government system in future.
      4.15 pm
      Those are all areas of genuine importance about which real points can be made and where an impartial survey that would bring together the facts would be a considerable service for debate and the future planning of local government financial systems. There is a tendency for Conservative Members not to face up to what has happened, but to talk in vague and general terms about a lack of consensus and support for the poll tax. Well, that is a self-evident truth. The reasons for that lack of support and the imperative of trying to avoid the mistakes which created that situation are matters of pressing concern that fully justify the proposition in new clause 1.
      I want to refer now to my particular interest, and that, of course, is the situation north of the border. There is no doubt that Scottish local government is in crisis. The poll tax has been a disaster, the full extent of which is only now becoming evident. The shortfall in income for the first two years of the tax is about £350 million. My regional authority of Strathclyde has lost £190 million between 1989–90 and 1990–91. The figure for Lothian is £76·5 million, and for Tayside it is £21·9 million. The position in 1991–92 is as bad if not worse. After five months of this financial year, £584·7 million was unpaid, representing more than 70 per cent. of the expected income for this financial year.
      I recognise that Ministers accuse councils of not doing enough to collect the tax. That is an easy way for them to escape their responsibilities and to avoid facing up to what has been happening. As the Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart), will know, there have been advertising campaigns in the press and on television. Non-payment has been condemned by local authorities in the strongest terms. No fewer than 3 million summary warrants have been taken in the courts. There have been 100,000 arrestments and 550,000 voluntary agreements to cover payments of arrears. No one is proud of the fact that we have been driven to that. No one is proud of the present position. The figures are evidence of the misery and confusion created by the Government's blunders.
      Ministers bear the first and greatest burden of guilt, but others must take their share of the blame. Nationalists who have argued for non-payment must also answer a heavy charge. The non-payment campaign was never more than political opportunism dressed up as principle. Among the nationalists there must be some at least who have been unwilling travellers on a dishonourable road. I remember the nationalists' former leader, Gordon Wilson, advising against a rash and selfish adventure, but he could not hold the line against the heady populism advocated by those who ultimately replaced him. The party joined forces with Militant Tendency openly and, on that issue, without reservation.
      It was extraordinary to find the hon. Member for Glasgow, Govan (Mr. Sillars) publicly defending the Anti-Poll Tax Federation—an organisation that advocates and practises the tactics of violence. He was defending a demonstration during which cars were damaged, 29 people were arrested, and a police station was besieged. Many nationalists must be uncomfortable about the company that they keep on that question.

      35
      Labour, too, was under pressure over non-payment, but a responsible party does not advocate irresponsibility. There were a number of good reasons for not advocating non-payment. It has carried weight with Labour, but apparently not with the nationalists. Politicians who hope to make law cannot pick and choose which laws to obey. It is a luxury which they cannot afford and which sets a dangerous precedent. Predictably—I speak with some feeling about my experience in my own constituency—many people living in modest circumstances were tempted by non-payment. They now face the problems of debt and debt collection. The nationalists, the authors of that misfortune, can offer no help. How can the hon. Member for Banff and Buchan (Mr. Salmond) or any of his colleagues look in the eye of a pensioner who is threatened by a sheriff officer? All that the nationalists can do—they certainly do it—is to complain about the inevitable consequences of their own actions, blaming everyone but themselves.
      Non-payment was bound to affect local government services—it was designed to do so. Marginal reductions in funding hit many of the most vulnerable in the community. The SNP, in its search for party advantage, has made a significant contribution to that disaster. This year, Strathclyde region has been forced to cut £34 million from its budget. When a library closes or education services suffer, people are entitled to ask, "Is this the price that we are now paying for the SNP non-payment campaign?" Its actions have pushed up bills for everyone else. In Lothian this year the poll tax was £48 higher than it would have been if it had not been for non-payment. The SNP must take direct responsibility for that increase. The addition is, in a real sense, the Sillars surcharge or the Salmond tax.
      We are entitled to hear the SNP's current position. It ended the non-payment campaign, but not because it was satisfied with the Government's alternative to the poll tax—it did not even wait to see the details. The one decisive factor was the growing unpopularity of non-payment itself. SNP Members are not satisfied with the proposals in the current Bill—after all, they opposed it on Second Reading but they are not sufficiently dissatisfied to risk continuing non-payment or indeed to seek a place on the Committee considering the Bill. Nationalist Members apparently take the view that those whom they represent do not need a voice on a wide range of issues debated in the House. That is a deliberate decision, but it is not one on which their constituents have been consulted.
      A year ago—I remember it very well—the nationalist candidate in the Paisley, South by-election, a member of the party's national executive committee and, indeed, a member of the new-fangled shadow Cabinet, was asked what he would do if the sheriff officers were at his door. The answer that he gave was clear and practical in personal terms—he would reach for his chequebook and end the embarrassment. Every hon. Member knows that that solution is not open to many of my constituents or to many of those who listen to the nationalist soft-sell on non-payment. There was no pretence in the housing schemes, and in the battered inner cities non-payment was only for those with a chequebook and who could take the strain. Thousands and thousands of ordinary Scots are now paying the price for that.
      It is no surprise that the Convention of Scottish Local Authorities reports that 70 per cent. of those in debt were originally entitled to a poll tax rebate at some level.
      36
      Rebates of course—I regret this—can be backdated for only 56 days. Many who would have been entitled to rebates now face huge bills which they have no hope of meeting. I advise the hon. Member for Eastwood that the Government should act now to abolish the 20 per cent. rule—there is no excuse for not doing so—and allow those in debt to claim the rebates which should have been available to them all along. The Government must bear the main responsibility for all the pain and suffering, but the SNP is also guilty. The role that it has played has been irresponsible and contemptible.
      Throughout this debate, and throughout all the years of argument and discussion, the Government have sought to avoid the clear implications of what they were doing and have been guided by blinkered ideology. A report of the kind for which we argue in the new clause would highlight lessons to be learnt and perhaps bring some good from the fiasco that the poll tax has been. I hope that it would concentrate Ministers' minds on the need to give practical help to those who have suffered. It might also reinforce the view, which badly needs buttressing, that local democracy must be a foundation for freedom in this country. Providing an independent voice so that local communities can run their own affairs is an important part of our democratic structure. All those things have been damaged by the poll tax experience and they must now all be rebuilt.
      I said earlier—I do not retreat from this view—that the right hon. Member for Henley (Mr. Heseltine) was one of the early converts to the obvious. He was one of the first Conservative Members to be converted. I can still remember the speech that he made on 16 December 1987 because I was struck forcibly by it. He said that the poll tax
      "will build on a platform of crude regression which seeks to make equal in the eyes of the tax collector the rich and the poor, the slum dweller and the landed aristocrat, the elderly pensioners living on their limited savings and the most successful of today's entrepreneurs."—[Official Report, 16 December 1987: Vol. 124, c. 114.]
      The right hon. Gentleman meant that and, to be fair to him, he acted upon it when he had the opportunity. The tragedy is that, although the right hon. Gentleman has had to capitulate on the principle in many ways and has forced many of his hon. Friends to do so rather less willingly, he has got many of the practical details wrong. Many of the practicalities will lead us back into trouble. The report that we seek would throw light on that possibility.
      We must also remember that many of those who surround the Minister—many Conservative Members—have learned nothing and wish to learn nothing from the poll tax experience. I note that only a year ago, on 5 December 1990, the Secretary of State for Scotland said:
      "we must not lose sight of the strength of the underlying principles that are already embodied in the community charge."
      In a particularly spirited passage, the right hon. Gentleman continued——
      Dr. Norman A. Godman: The Scottish people need to be reminded again and again that the right hon. Member for Henley (Mr. Heseltine) willingly and eagerly voted for the Scottish poll tax Bill.
      Mr. Dewar: Indeed, he did. We had an exchange on that point in a recent debate when, by chance, the right hon. Gentleman was present. That just shows that the laws of chance work in wondrous ways. Although I do not want to make much of it, I explained to the House then that there was a good defence and an alibi and that the right

      37
      hon. Gentleman offered us the explanation that he had asked the Secretary of State for Scotland about it and had done what he was told. That might be close to a Nuremberg defence, but it is at least something that can be advanced for the right hon. Gentleman.
      The Secretary of State for Scotland showed absolutely no doubt about the rightness of what he was doing when he defended the poll tax. I was particularly touched by the right hon. Gentleman's thought in that debate a year ago when he continued:
      "Is it sophisticated"—
      that was supposed to be dramatic irony—
      "to have a method of payment for local services based solely on the bricks and mortar in which one happens to live?"—[Official Report, 5 December 1990; Vol. 182, c. 397–400.]
      The right hon. Gentleman then went on to describe at some length something that sounded very much like the council tax that he will now no doubt defend. On that occasion——
      Mr. McKelvey: The Secretary of State would embrace it.
      Mr. Dewar: My hon. Friend is probably right because I will say this for the Secretary of State for Scotland: he is not a man to see the fine tuning in any argument; something is always absolutely black or absolutely white for him.
      Many strata of opinion remain in the Government and in the Conservative party. The Government may well be swept away to the Opposition Benches shortly and I very much hope that that will be the case. However, I advise whoever is in government that there is genuine virtue in looking dispassionately, professionally and with an expert view at the record of the poll tax, and especially at the administrative details, to try to ensure that we do not import into the new system the seeds of self-destruction that Ministers so foolhardily built in to the flawed and totally unjust poll tax a few short years ago. I believe that what we have suggested is worth doing. This is a good new clause. It would set in train what might be a useful antidote to some of the dangers about which we are so well aware and for which many of our constituents are still paying the price.
      4.30 pm
      Mrs. Ray Michie: It will surprise several hon. Members that: early on in the debate we are able to talk a little about Scotland. While I am grateful for the new clause, which I support, I wonder whether it will help the disappointment at the endeavours of the hon. Member for Glasgow, Cathcart (Mr. Maxton) to stop an amendment tabled in Committee by the Liberal Democrats to abolish the poll tax in Scotland a year early. Of course, it was guillotined.
      It is right that we should examine the impact of the poll tax in Scotland as well as the rest of Britain, for no consideration was ever given to what its impact would be in Scotland. In the Scottish context, it is particularly ironic that the poll tax should be replaced by a property tax, because it was the unfairness and hardship caused by the rates in Scotland which led to the hurried and disastrous introduction of the poll tax.
      As we have heard so often, the Conservatives had no mandate to introduce the poll tax in Scotland. They were warned of the consequences at the time, but they paid no heed. Indeed, they failed to listen to the Scottish people in
      38
      the 1987 general election, when the disintegration of the Conservative party in Scotland started. They failed to pay any attention to the results of introducing that tax. Of course, we see the consequences for the Conservatives now.
      It must not be forgotten that the hardship caused by the poll tax, the difficulties in collecting it and the overwhelming public opposition to it—the factors cited as the reasons for abolishing the tax—not only existed for a year longer than in England and Wales but were ignored when only Scotland suffered. The crisis in local government caused by the poll tax is more acute in Scotland because of that extra year of cost and chaos.
      The Prime Minister has led in giving the general impression that the poll tax has been abolished. Non-payment is already at critical levels, as we heard from the hon. Member for Glasgow, Garscadden (Mr. Dewar). Next year, non-payment will increase as people think that the bills do not apply to them. That is the case at present. Hundreds of thousands of people think that the poll tax has been abolished, so they think that the bills which come in are simply the result of a mistake by the computer.
      The high level of non-payment is the reason why we are committed to abolishing the poll tax a year early in Scotland and, for one year only, putting the cost on national income tax. It would be a practical means of ensuring that local government services are provided, that the excessive waste and cost of collecting the poll tax is avoided and that the hardship of the 20 per cent. charge is ended. It would also be a symbolic gesture. It would mean that the Government acknowledged at last that they were mistaken in forcing the tax on to the Scots.
      Of course, the lack of a Scottish Parliament with tax-raising powers means that English and Welsh taxpayers would have to contribute to the abolition of the poll tax in Scotland. That is regrettable but unavoidable, but, as it was English Members of Parliament who voted for the tax in Scotland, it has a certain justice. Unless the poll tax is abolished in Scotland, the cost to local authorities will be insupportable.
      I make a particular plea to the Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart), about the position in the Western Isles. I do so following an invitation from the hon. Member for Western Isles (Mr. Macdonald) to meet council members of Western Isles council who came to the House to brief Members of Parliament.
      I welcome the fact that the Scottish Office has said that it will meet those councillors, but unless Ministers are prepared to help the people, it could be the end of the Western Isles and the people in them. They have struggled for hundreds of years and suffered a great deal. They should not be called upon to suffer further. After all, the Government have a responsibility and they must share culpability for what happened, because the council was not warned about the collapse of Bank of Credit and Commerce International.
      The Government cannot leave that council to sink. This country owes the Western Isles and its people a great deal. I hope that the Minister will give them the greatest consideration and say, "Yes, we will help you, the people of the Western Isles."
      The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): I am listening closely to what the hon. Lady is saying. I hope that she will recognise

      39
      that the Secretary of State has authorised the Western Isles to borrow £24 million this financial year to meet its requirements. I am sure that she will also acknowledge that the community charge paid by those on the Western Isles is between £26 and £28 per annum. That charge is a fraction of the average paid by other community charge payers in Scotland.
      Mrs. Michie: I am aware that the Secretary of State has allowed the council borrowing powers, but it requires £3·5 million to service its borrowing requirement.
      The poll tax on the Western Isles may be high or low, but the fact is that jobs will be lost, schools will be closed and we will witness a further emigration of people from the region. That will mean an end to that people's culture, Ianguage and way of life, as they will be unable to survive in the Outer Hebrides.
      Taxpayers in Scotland, England and Wales should be told the cost of introducing another local tax. The administrative costs of valuing properties, introducing new software and establishing new billing methods will fall on the taxpayer—local and national. In the interests of accountable government, the electorate must know the true cost of collecting the new tax and correcting the Government's mistakes. That is the purpose of new clauses 7 and 13.
      New clauses 5 and 12, in common with new clause 1, intend to force the Government to report to Parliament
      "on the workings of the council tax".
      The Government must not be allowed to ignore the consequences of their actions as they sought to do with the poll tax. I assure the Government that the new council tax will throw up many anomalies and unfairnesses. They must be noted and corrected. If the will is there, the Government will acknowledge and correct their mistakes.
      We welcome the discount system for single people. Tomorrow, my party hopes to persuade the Government to increase it to 40 per cent. Whether we succeed or fail will not alter the fact that the impact of the council tax on single people must be carefully monitored by reports to Parliament.
      Mr. John Maxton: The local tax system proposed by the hon. Lady is based upon an ability to pay. I find it rather surprising that she now says that she accepts the discount system, which covers everyone, whatever his income. The hon. Lady is now proposing a 40 per cent. discount, which would mean that the better-off would get even more.
      Mrs. Michie: That is not what I am saying. I do not like the council tax; nor do I like the Labour party fair tax or whatever it is called. We would like the introduction of a local income tax, based on the ability to pay.
      In Scotland, a higher proportion of people rent rather than own their homes. Therefore, they obtain no benefit from the capital benefit of the property in which they live, unlike homeowners.
      The council tax, especially in areas such as Edinburgh, will penalise renters. People who rent privately lost when the poll tax was abolished becaue many private landlords did not pass on their savings to their tenants. Now they will lose again because their bills will depend on the landlords' circumstances, not theirs. How that will be conducted should be reported to Parliament.
      40
      The council tax will also cause many problems to people in tied housing or similar property provided for and through employment. Many examples of occupations that cause concern should be reported on. An obvious example is Church property. It has often been in Church hands since the days when the status and income of Churchmen were higher than they are today. Manses, especially in Scotland, used to be given a 50 per cent. derating, but that no longer seems to be the case.
      I am particularly concerned about farm workers in owner-occupied or tenanted farm houses. They must often live in large, old and rambling farm houses. We all know the crisis that agriculture is in at present. Farm properties provide no income, and the principle that the value of a house can be calculated by its size and potential price on the property market must not be extended to agriculture. Farm houses have been traditionally low rated and, on Second Reading, the Secretary of State for Scotland said that they would be placed in a lower band because of the present state of agriculture and the lack of demand for such houses. At least he recognises the problem, and I hope that the Minister who replies will say that agricultural houses will be placed in a lower band.
      Others in tied housing, such as schoolteachers, school caretakers and policemen, will also be adversely affected. The Under-Secretary of State for Scotland, the hon. Member for Eastwood, will recall that, in 1989–90, the rates portion of the rent allowance for police officers was abolished without compensation. That meant a reduction in earnings of between £45 and £57 a month, and it affected more than 2,000 police officers in Scotland. Rural areas like my constituency of Argyll and Bute were even more affected, because 80 per cent. of police accommodation there is of necessity tied housing.
      The rent allowance that included the rates portion was long regarded as part of a police officer's take-home pay. The Government refused to implement the award of the police arbitration tribunal, which included that rates element. The allowance used to be linked to property, and I hope that it will be restored and police tied houses will also be put in a special band.
      Those problems will have to be carefully monitored if we are to avoid the chaos of past years. The reports are for the future. They are designed to ensure that the Government accept their responsibility for the cost and workings of the council tax and that they do not seek to blame any failure of the tax on local authorities. The priority for Scotland is the immediate abolition of the poll tax to rescue the people and Scottish local government from a complete shambles and near-disaster.
      4.45 pm
      Mrs. Maria Fyfe: It is interesting to note that no Tory Members now rise to defend the poll tax, despite the fact that it was introduced in Scotland against the will of the people.
      Mr. Maxton: They are coming in now.
      Mrs. Fyfe: If they speak in the debate, it is unlikely to be in defence of the poll tax. However, the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) may be in a state of mind to do so, but that remains to be seen.
      The new clause is worth while because accountability is good for the soul. It occurs to me, however, that for that

      41
      to work one must have a soul. When the poll tax was pushed through against the democratic will of the Scottish people, it was obvious that the last thing that the Government cared about was the needs of other people. They had no consideration for those who were too poor to pay it, and compassion was distinctly lacking on the Conservative Benches. They were determined to push that medicine down everyone's throats and it was not surprising that people spat it out so vehemently.
      Today, no one is left to defend the poll tax, except perhaps one or two isolated individuals who may speak in favour of it—who knows? However, there was a time when the Tory Benches were packed with hon. Members who knew better than the people of Scotland what was best for the rest of us.
      If the report were drawn up, it would be a useful task. It would remind us of certain facts regarding the introduction of the poll tax. For example, when the poll tax was being drafted, the Government were warned by the Chartered Institute of Public Finance and Accountancy and the Rating and Valuation Association, as well as local government accountants and town clerks throughout the land, that it would be utterly chaotic. CIPFA published a chart for the benefit of its members on how the poll tax would operate. It was not being contentious or using it for publicity purposes but wanted to aid its colleagues in local government who had to contend with operating the tax. The report caused much amusement to those of us who served on the Standing Committee that considered the Bill for England and Wales. We thought that, if that was supposed to be simplicity, heaven knows what complexity would be like. But the Government went ahead and ignored all the warnings. Likewise, they ignored public opinion, which was expressed vehemently at the time of the general election and which has been repeated at every possible opportunity since.
      There is an amazing contradiction between the Government's attitude to last week's discussions at Maastricht and their attitude to democracy within the United Kingdom. The Prime Minister poses as the defender of Britain's right to do as it pleases and not have nasty foreigners telling us what to do, but within the United Kingdom the Conservative party was willing and determined to impose a poll tax on the people of the United Kingdom, whether they wanted it or not. I shall be interested to hear whether they can straighten out that contradiction.
      The poll tax has had an enormous impact on services and jobs. Strathclyde region alone expects to lose some 750 jobs if lost moneys cannot be restored quickly. That will have an enormous impact on Strathclyde region, not only for those 750 jobs but for the community at large through the loss to the local economy. I do not know how the Government can regard that with equanimity. They know about the unemployment in the west of Scotland, particularly in Glasgow. They are faced with a serious loss of jobs on top of all the job losses in the past, yet they are determined not to respond in an obvious and sensible way. If they extend the measures under the council tax to the poll tax and allow those who will pay 20 per cent. to pay nothing, that would at once resolve the problem of lack of Government money. It would still not resolve the problem entirely, however, because the main problem is a sheer lack of Government support for local government.
      The Government have always claimed that the poll tax was about enhancing local democracy. It has been
      42
      noticeable how many people, especially young people, have removed themselves from the electoral register. Because they simply could not afford to pay the poll tax, they have deprived themselves of the right to vote. The Government know that thousands of people have done that and that the electoral roll has gone down considerably in many areas, especially in impoverished urban areas.
      The Government are assiduously trying to build up the electoral register by seeking Tory voters in every country in the world, but they are not prepared to encourage people to come back and become entitled to vote here. It is necessary for the victims of Government decisions who are living here to assert their democratic rights, or for others to assert those rights.
      The Minister has told us that he considers the Bill to he without serious defects of any kind. The Government had introduced a few paltry amendments of their own, but had accepted no amendments from Labour—because, apparently, we had said nothing that they did not know already. That remark will stick in all our minds. Once again, the Government are saying that they know exactly what they are doing: they know what they are doing to students, student nurses and people suffering from Alzheimer's disease whose partners do not pay poll tax and who are billed in their stead, regardless of their own mental condition.
      People will be dumbfounded to learn of the big change in the legislation—the duke will no longer pay the same as the dustman. He will now pay three times as much. All over the country, people will be saying, "That is a big democratic advance." There will be enormous anger over the continuing injustice of the Government"s notion of how local administration should be financed, and a good deal of disquiet about the fact that all single individuals will receive discounts, regardless of their personal circumstances.
      That is nonsensical, and it contradicts the Government's own stated policies. They have consistently refused social security benefits to the very needy, on the ground that they are targeting the neediest. Is it "targeting the neediest" to hand out discounts to people who are already extremely well off? The Government's entire policy is a shambles, and they will soon be slung out because of it. We shall ensure that the country knows what they are doing. It is they who will have to pay, and they will do so, whether it is in February, March, April, May, June or July.
      Mr. Dick Douglas: It is difficult not to think that the hon. Member for Glasgow, Garscadden (Mr. Dewar) did not want a new clause to enable the issues that he mentioned to be investigated, but, rather, wanted a new clause to "involve" the complicity of the Scottish National party in opposing the poll tax by persuading certain people not to pay at a certain time. I worry about the state of the law when a lawyer starts using the technique of "guilt by association".
      Mr. Dewar: I did not.
      Mr. Douglas: I shall make every effort not to misquote the hon. Gentleman. None the less, he gave the House the clear impression that he was associating the Scottish National party with Militant Tendency in regard to violence. The hon. Gentleman nods his assent. If that is not a McCarthyite technique, I do not know what is.
      Mr. John M. Taylor: That is a very serious accusation.
      Mr. Douglas: It is. People have been expelled from the Labour party because of such association. It is serious to accuse someone of a McCarthyite smear.
      I am pleased to be speaking after the hon. Member for Glasgow, Maryhill (Mrs. Fyfe). I note that the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) is also in his place. Not so long ago we all sat together in Glasgow, in a committee of 100: I shall not refer to the other hon. Members who were with us, as they are not present today. We suggested then that we should protect those who could not afford to pay, and who would be confronted by all the rigours of the law so beloved of the hon. Member for Garscadden.
      Mrs. Fyfe: I clearly remember a time when the hon. Member for Glasgow, Govan (Mr. Sillars)—who, I am sorry to say, is not here today—was so anti-Trot that he threw people out of the party that he had drawn together in the mid-1970s, whether they were Trots or not. Now he finds himself associating with them. That is very strange.
      Mr. Douglas: I do not know who the hon. Lady means. The hon. Member for Glasgow, Govan (Mr. Sillars) is not here, however, and I am courteous not to refer to any hon. Member who is not present and whom I have not given notice of my intention to do so. Hon. Members generally try not to do that, as far as is humanly possible. Nevertheless, I can tell the hon. Member for Maryhill that I am quite willing to answer for my part in the episode that I mentioned—with a degree of pride, but not vaingloriously.
      The hon. Lady does not deny that, along with other hon. Members who are present today, she advocated non-payment.
      Dr. Godman: I thought that the hon. Gentleman pointed at me then.
      Mr. Douglas: No, indeed. I hope that the hon. Gentleman, for whom I have considerable respect, does not think that any of my remarks concern him.
      Other matters would require investigation in a report. The hon. Members for Maryhill and for Argyll and Bute (Mrs. Michie) mentioned a mandate, but the hon. Member for Garscadden did not refer to the fact that the Tories have no mandate in Scotland. That is because he is a Unionist. He is quite capable of standing up and blaming everyone except himself for the imposition of the poll tax.
      I remember, in January 1988, pleading with the hon. Gentleman to tell the Leader of the Opposition that we should show some guts, and that, when the Leader of the Opposition went to Edinburgh, he should not suggest that we go cap in hand to pay the poll tax. The hon. Member for Garscadden cannot gainsay that—and that is not guilt by association. The hon. Gentleman should stop acting like a big wean, and behave like a man.
      Although he did not mention it in his speech, the hon. Member for Garscadden takes some responsibility for a matter that should be examined in any report: the imposition of poinding and warrant sales. He and the hon. Member for Glasgow, Cathcart (Mr. Maxton) thought nothing of parading through Glasgow behind banners proclaiming, "No warrant sales here". Examination would reveal that Labour authorities had used the threat of
      44
      poinding to coerce the people referred to by the hon. Member for Maryhill who cannot pay and thus have no choice. What has the Labour party done to defend them?
      The hon. Member for Garscadden has used the Nuremberg defence—"I had to obey the law". It was like a pantomime to see the hon. Member for Garscadden running past Knightswood Cross with his pamphlet, "Garscadden News No. I", saying, "Rejoice, rejoice" and telling people that, in effect, Labour had killed the poll tax.
      Mr. Brian Wilson: Will the hon. Gentleman give way?
      Mr. Douglas: The hon. Gentleman took part in the "don't register" campaign and ran about trying to persuade people not to register. Then he caved in. However, I am talking about the hon. Member for Garscadden, who, as I say, was running around distributing "Garscadden News No. 1"—we await issue No. 2.
      Mr. Dewar: At least I am not running away from the constituents who elected me.
      Mr. Douglas: Neither am I, and I never have. I am sorry that the hon. Member for Coventry, South-East (Mr. Nellist) is not here today. I would not be a member of a party from which the Leader of the Opposition could expel me. It is a measure of the gutlessness of the Labour party that someone like the hon. Member for Coventry, South-East can get thrown out of it for taking a stand rooted deep in the traditions of the Labour party.
      5 pm
      The hon. Member for Cunninghame, North (Mr. Wilson) wanted me to give way to him earlier. I have attacked his posture on non-registration. New clause 27 is after something not dissimilar from what the hon. Member for Garscadden wants: an examination of non-payment and why people cannot pay. Strathclyde has done a survey showing that 70 per cent. of those who did not pay could not pay. These people do not need persuading; their economic circumstances rule out their ability to pay. That is why most people did not pay.
      Mr. Wilson: The hon. Gentleman raised the issue of a mandate. Having been elected under one party label by his constituents, having reneged on that party label, having then stood under his new party label in a local government election and having been defeated, and having declared his intention to stand under another party label in a different constituency, does the hon. Gentleman think that he should perhaps return to the people of Dunfermline for a mandate?
      Mr. Douglas: The hon. Gentleman is not correct. I never stood with another party label in a local government election in my time in the Scottish National party. I have fought many elections and I know that a losing candidate gets the blame. I have taken the blame when I have lost, but, oddly enough, when one wins, it is the party that has gained the victory, never the individual.
      We got the poll tax because people were thirled to the party banner. This is not a House of free-standing men and women; they are dragooned through the Lobbies by the Whips. The hon. Member for Garscadden would have to take the same medicine if he came to power because he

      45
      believes that he is entitled to govern here if he gets a mandate in the United Kingdom, regardless of what happens in Scotland.
      The United Kingdom mandate is spurious. How can the Labour party say that it has a mandate for the United Kingdom when it does not even put up candidates in Northern Ireland? People who, like me, opposed the poll tax rightly argued that the Government never had a mandate in Scotland. I challenge the hon. Member for Garscadden to face me in debate on this issue. He will be asking the electorate to give him and the Labour party their votes to pursue particular policies. Thereafter there will be little discussion and the hon. Gentleman will not be arguing about the sovereignty of the Scottish people from then on.
      The hon. Member for Garscadden had the temerity to sign the claim of right in the Scottish convention. It concerns the exercise of the rights of the Scottish people. I shall give way to him on this if he has the guts to stand up. It seems that he does not like what I am saying much—perhaps my language is a little too industrial for him—but I would be willing to engage in this sort of argument with him in Garscadden.
      Mr. Wilson: What about Dunfermline?
      Mr. Douglas: Yes, there too. [Interruption.] Why is not the Labour party asking for a by-election in Coventry? I have fought more elections than some Labour Front Benchers have had hot breakfasts and I have already said that losing candidates always take the responsibility.
      Mr. Wilson: What about the Co-op?
      Mr. Douglas: I did not hear that, but if the hon. Gentleman will get off his backside he can repeat it.
      Mr. Wilson: The Co-op has been a good meal ticket for the hon. Gentleman and it is odd that at this stage in his career he should depart from anything and everybody who put him where he is today—and three times throw away a Labour seat. That is a matter between him and his conscience; but if he has any conscience left, why does he continue to draw his salary under the label of a party he was not elected to serve as a member of?
      Mr. Douglas: That is not really worth answering. Any obligations that I have to the Co-operative movement have been honourably discharged, and there are hon. Members here who know that. I have more than repaid my obligations to the Co-op. In any case, that is not part of this discussion.
      If we are to have a report, let it examine every aspect, including ability to pay. The council tax does not take that into consideration; nor do Labour's proposals. My party makes it plain that a tax related to ability to pay must be related to income. The tax in Scotland will raise about £800 million and cost about £80 million to collect—£l for every £10. There will be no relationship to ability to pay and there will be a register of sorts, although it will not be called that. The tax will involve a costly benefit system for the 100 per cent. discount scheme and there will be searching tests for those who are eligible for 25 per cent. and 50 per cent. discounts.
      My party has produced figures to show how a local income tax could be put in place in Scotland. I do not have the figures for every region or district with me, but in general terms the proportion of revenue raised by local
      46
      government is about 14 per cent. in Scotland—to be raised from the equivalent of non-domestic rates either under the poll tax or the council tax. If that is the average over the length and breadth of Scotland, it is reasonable to assume that for some local authorities it will be under 5 per cent. That means that this paraphernalia is necessary to collect £1 in £20. There has been no indication from Labour that it will abandon the Government subvention on that. Labour has not said whether it would try to collect more or less than the Government are trying to collect through local revenues in the non-business sector.
      Why has Scotland had to impose so much administration at such great cost? It is because the Government will not face the fact that Scotland could have a local income tax that would be easily and cheaply administered and would avoid all the bureaucracy and cost. I am not arguing the case for England and Wales. Part of our new clause relates to the 20 per cent. rule which the Government have partly abandoned. I plead with them to abandon it completely from I April 1992 and to make it retrospective in Scotland.
      About 3 million warrants are out and another of our amendments, which I hope will be reached tomorrow, deals with poinding and warrant sales. Such methods for the recovery of small amounts are acts of terror. The hon. Member for Garscadden or the hon. Member for Cathcart should make it clear when winding up that Labour is utterly opposed to Scottish local authorities using this barbaric device. They should dissociate themselves wholly and entirely from it.
      Mr. Maxton: I understand that the hon. Gentleman's party chose not to seek membership of the Committee that examined the Bill. It certainly asked us to boycott the Committe. In Committee, I moved an amendment to take the warrant sales procedure out of the Bill. I was supported by the hon. Member for Argyll and Bute (Mrs. Michie) and by my hon. Friends. If the hon. Gentleman had sought a seat on that Committee, I think that he would have got one and would have been able to vote against warrant sales.
      Mr. Douglas: It is not the same thing. I apologise if I have not made myself clear. I have asked the hon. Gentleman to make it plain that Labour is opposed to the imposition of warrant sales.
      Dr. Godman: In the short time that I have been in the House, many of my hon. Friends have established an honourable record for seeking to introduce a more humane form of debt collection. I refer in particular to my hon. Friends the Members for Kilmarnock and Loudoun (Mr. McKelvey), for Falkirk, East (Mr. Ewing) and for Falkirk, West (Mr. Canavan). Some of us seek a more humane form of debt collection.
      Mr. Douglas: I accept that. It is no accident that two of the hon. Members that the hon. Member for Greenock and Port Glasgow (Dr. Godman) mentioned were, in the early days, among the leading proponents of a non-payment campaign—I apologise, I have got that wrong. Certainly the hon. Member for Kilmarnock and Loudoun, who is in his place, will accept what I have said in relation to him.
      The SNP and Members from other parties introduced a Bill to abolish warrant sales. If the poll tax is dead and, like the hon. Member for Garscadden we should be saying,

      47
      "Rejoice, rejoice, rejoice", the hon. Member for,Garscadden or the hon. Member for Cathcart should use their position as Front-Bench spokesmen to make it clear that Labour is opposed to the use of poinding and the threat of warrant sales to impose a tax that is dead. If they cannot do that, they should not use their Front-Bench offices slanderously to attack other parties and accuse them of supporting organisations that seem to promote violence. I do not think that it is worth while asking the hon. Member for Garscadden for an apology, but he should, as a lawyer, reflect clearly and cautiously on what he has said.
      Mr. Maxton: Has the hon. Gentleman ever shared a platform at a rally with Tommy Sheridan and members of Militant Tendency?
      Mr. Douglas: Wait a minute, this is really getting in. The answer is, yes, of course. I have shared platforms with many individuals, but I have made my position clear on those platforms. That is exactly what I said at the beginning of my speech. This is a clear case of trying to get guilt by association. The hon. Member for Maryhill has shared a platform with Tommy Sheridan.
      5.15 pm
      Mrs. Fyfe: I want to put it on the record that I have never done any such thing.
      Mr. Douglas: I withdraw any hint or any tendency that I may have had to smear anybody. My memory may be failing me, but I have clear memories of the hon. Member for Maryhill being at rallies at which Mr. Sheridan was at least present. I have clear memories of the hon. Member for Glasgow, Provan (Mr. Wray), who is in his place, being at similar rallies. I have no hesitation in saying——
      Mrs. Fyfe: On a point of order, Mr. Deputy Speaker. I really must put this on the record because of its effect on my credibility. I have gone out of my way to tell people that I refuse to share a platform with that particular gentleman and that if other people cared to do so, that was their affair. I always said that I would not, I think for fairly obvious reasons.
      Mr. Douglas rose——
      Mr. Deputy Speaker: Order. The debate is very wide already. It would be much better to concentrate on the new clauses.
      Mr. Douglas: I withdraw any implication and apologise to the hon. Member for Maryhill. That is the least that I can do. [Interruption.] The hon. Member for Provan is in his place and he can interject if he wishes to do so.
      We would welcome any report that examines the process of the poll tax since its imposition in Scotland in 1989, and any report that directed itself especially to the plight of those who could not pay, substantial numbers of whom found themselves in conflict with the law because of their poverty. I have no hesitation in saying that the Scottish National party and I, before I was a member of that party, in standing beside those who could not pay made a major contribution to the downfall of the poll tax in Britain. I would not suggest for a minute that we were entirely responsible for its demise, but we made a
      48
      significant contribution by showing that people could take a local initiative and say, "Enough is enough." If the people of Scotland had taken the advice of the hon. Member for Garscadden and that of the Leader of the Opposition and paid up and obeyed the law and supinely touched the forelock, the poll tax would have had a credibility that no one in the House thought that it ought to have had. That is a credit to the people of Scotland who opposed the tax from its inception by overwhelmingly voting against it, especially in the election of 1987.
      Sir Nicholas Fairbairn: As someone who has spent his life as a conciliator—someone who hates disputes and who cannot bear to see the children falling out—I feel that I should intervene with some quiet words that will enable the prodigal sons of Garscadden—the hon. Member for Glasgow, Garscadden (Mr. Dewar)—and Garscadden elect to come together in harmony and peace. I am a humble lawyer who has done his best to settle cases rather than fight them to ensure that it was understood that dispute was not a proper way to resolve disputes.
      The hon. Member for Dunfermline, West (Mr. Douglas) left the Labour party on a policy of leaving also his country. He has deserted and left those who elected him. I remind him that guilt by association is a doctrine that is central to the law of Scotland. If he imagines that he will stand for the Scottish National party, having deserted Great Britain, Dunfermline, the Labour party and the platforms on which whoever the fellow that he mentioned stood, and on which the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) never stood, I remind him that the doctrine of concert is alive in Scotland and is central to its Scottish specialty and authority. If he is to direct accusations at the hon. Member for Garscadden, who is a distinguished laywer, when he is intent on departing in the direction of the SNP, he might learn one minor principle of the law of Scotland. He should bear it in mind before he starts accusing others of guilt by association.
      The marvellous fall-out that we have seen this afternoon is a typical example of Scotland in Europe. We love each other so much that we cannot bear not to express our hatred. We have been given a useful example of the nationalists' position.
      The hon. Member for Dunfermline, West talked about the warfare of those who would not pay what is called the poll tax—in other words, the community charge. It has always seemed to me sensible that people should pay a standard charge as a licence fee to enjoy local authority services. After all, no one objects to a standard licence fee for a car, whether he has an Austin Seven of 1935 vintage and drives two miles a year, or an even older car of the sort that my hon. Friend the Member for Dumfries (Sir H. Monro) drives because he bought them when he was 18, or a Rolls-Royce in which he travels round and round the world every day and night. Equally, no one objects that we all pay the same television fee, whether the individual watches it or never watches it, whether the screen is a mile wide or an inch wide.
      I have always said that it would have been much more sensible to introduce a tax to which there was added a licence fee for a television to join the licence fee and insurance for a motor car. Such a tax would amount to about £250 a year.
      I have never heard anyone argue that those who cannot afford to pay their poll tax cannot afford to pay their

      49
      television licence fee or for their car licensing. If we assume that they are honest, I have not heard it argued that such people cannot afford to insure their motor cars. Let us be very careful about the "Can't pay, won't pay" approach. Before the hon. Member for Dunfermline, West deserted his electorate, how many people did I speak to in Murray's bar who, when swallowing another beer or another whisky, were asking, "Are you going on the 'Can't pay, won't pay'?" The veracity and philosophy of the hon. Member are extremely suspect, as are those of the members of his party who say that they are standing for what are called the people of Scotland.
      The people of Scotland? Let us talk about the people in Scotland. We know that 80 per cent. of the people of Scotland live in England and that 80 per cent. of the people in Scotland are not Scots, including most of the leaders of the SNP, who are second generation Irish. I am unimpressed by the wonderful plea that is put forward. My family has been in Scotland for only 1,000 years or more, and I can trace it back. I am not particularly impressed when those who desert their constituents, their parties and their principles argue to me and others about what should happen to the people of Scotland when they are talking about those who happen to live in Scotland.
      I fought the 1974, 1979 and 1983 elections in the knowledge that the Labour party had said that it would bring in a tax of this sort. All of my colleagues fought those elections on the basis that we believed that such a tax would be wrong. I am in the greatest difficulty in understanding why suddenly a tax of this sort should become utterly right.
      Let us not forget the argument of the hon. Member for Nowhere—I suppose that that is the right way to describe him now, but I talk about the hon. Member for Dunfermline, West—on ability to pay. The tax that we are discussing will be levied on someone who, perhaps, married in 1920 and is now widowed. The house in which she lives was bought for £500, for example, and it is now worth £200,000. On the basis of a later clause, which I shall try to remove from the Bill, a snooper, on his own say-so, will be allowed to enter properties and look round them without a warrant. Surely that is an extraordinary proposition.
      If we are to argue about inability to pay, I hope that the hon. Member for Nowhere will support my amendments in the light of the unfortunate widow, who for no reason of hers——
      Mr. Douglas: I think that hon. Members on both sides of the House will use their eyes and will note that if anyone is in suspended animation, it is the hon. and learned Gentleman.
      Sir Nicholas Fairbairn: I am sorry. I did not understand the intervention, partly because it included such long words. Perhaps the hon. Gentleman will explain it to me afterwards in a moment of suspension and animation.
      The system will be based on an assumed income from a capital asset over whose value the original buyer has no control and which he cannot sell, any more than a tortoise can sell his shell, because it is his home. The business of "can't pay" is important.
      Complications are introduced when we consider a person who is a district nurse for three hours a day, two days a week. A man may have to return to his temporary residence because of the presumption that, for the
      50
      purposes of the Bill, a "day" remains the same day as when it started. I did not know that we needed a Bill to say that a day is presumed to be the same day as when it started—I always took the view that that was a decent assumption. I assume that even Scotland in Europe will take that line. It may, however, be contrary to the common law of Liechtenstein.
      The amendments all complicate what is an already absurdly complicated Bill. I remember when I was a child. I loathed rice pudding and, when given too much of it, I would say, "That is not fair." Nanny would say, "Life is not fair, laddie." The system would be fair if we charged everyone on the basis that we charge for a pint of beer, a loaf of bread or a television licence—whether the Duke of Plaza Toro or the Member for Nowhere. I wish that we would do that, and I am sorry that the Bill is doing the opposite.
      5.30 pm
      Dr. Godman: We have just listened to the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn), who is something of an institution in Scotland. It is not for me to criticise him, because I seek his support on other matters, particularly to preserve a famous historic building which is tottering. I do not say that the hon. and learned Gentleman totters; he has kindly agreed to support my campaign to preserve that fine building.
      I shall not join the attacks on the hon. Member for Dunfermline, West (Mr. Douglas)—or the hon. Member for Nowhere, as he was described by the hon. and learned Member for Perth and Kinross. To be fair to the hon. Gentleman, when I faced the crisis of the collapse of the Scott Lithgow shipyard, he gave me much help.
      I wish to ask the Under-Secretary about the position of Scottish and English merchant seamen. Under the poll tax, Scottish merchant seamen have been discriminated against compared with their English colleagues. The evidence demonstrates that English merchant seamen have been able to argue more easily before tribunals the case for removing them from poll tax registers than have their Scottish counterparts. Even when Scottish and English merchant seamen have served on the same ship, Scottish seamen have had to pay the poll tax, whereas English seamen have been given discounts. Will that discrimination continue with the council tax?
      My sympathy lies with Scottish merchant seamen who have been discriminated against, but I also have much sympathy for the people on abysmally low incomes who cannot afford to pay the poll tax and who face the indignity of warrant sales. As has been said, poinding is an humiliating experience. The Debtors (Scotland) Act 1987 reduced the harshness of warrant sales, but they are still a squalid form of debt collection. My hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) served on the Standing Committee on the Bill which lessened the hardship caused, but poinding remains a humiliating experience.
      People close to me have gone through poinding and tell me that it is distressing when sheriff officers come into their homes. Even with the Debtors (Scotland) Act, it is a miserable affair for those in Scotland who are pursued for debt. Many of my constituents on low incomes listened too eagerly, perhaps naively and certainly unwisely, to the non-payment campaigners and now find themselves in deep trouble because they followed those sleekit

      51
      hypocrites. Those campaigners cannot help them now. In that regard, my constituents are lost and will have to face the intrusion into their homes of sheriff officers. Where do we find the non-payment campaigners? They are not opening their cheque books to help constituents who supported their campaign.
      The poll tax and the attendant problems caused for ordinary people feature largely at my surgeries, and I believe that the same happens at the surgeries of most of my hon. Friends and other Scottish Members of Parliament. Constituents raise the subject of the poll tax much more than their problems with the Department of Social Security, and that is important, given that about one third of the people I represent are in direct or indirect receipt of social security payments—a dreadful statistic.
      To a considerable extent, the Government's handling of the poll tax in Scotland—which was introduced with the enthusiastic support of the present Secretary of State—has brought about the demise of the Conservative party in Scotland. We are facing the likelihood of a major constitutional crisis in Scotland, chiefly because of the Conservative party's insensitive and uncaring governance of the nation. Scottish Conservative representation in the House of Commons is down to single figures; following the next election, it will be even lower, no matter what happens to the overall position of the two major parties in the next election.
      Even during the Prime Minister's so-called honeymoon period, I have been convinced that the number of Conservative seats will fall below 326. I genuinely believe that the Government will lose the next election. They certainly deserve to do so in Scotland because of their actions. Although the hon. and learned Member for Perth and Kinross and the hon. Member for Tayside, North (Mr. Walker) have just survived, they too may become Members for Nowhere after the next election.
      Sir Nicholas Fairbairn rose——
      Dr. Godman: Does the hon. and learned Gentleman want to intervene? It appears not—perhaps he is in a state of suspended animation.
      Sir Nicholas Fairbairn rose——
      Dr. Godman: The hon. and learned Gentleman can now wait for a minute or two.
      The new clause calls for an assessment of the levels of services provided by local authorities, and that is very important. In my constituency, services have been reduced—reluctantly—by Strathclyde regional council, and those reductions harm the most fragile and vulnerable groups in our communities. I refer mainly to the elderly and others who will suffer because the provision of the home help service is being reduced instead of increased. What will happen to those who are discharged into the community from psychiatric units and from long-stay mental hospitals when an authority such as Strathclyde, which has a fine social work department, cannot provide the help that such people need? The reductions in services have largely been caused by the failure—an honourable failure—of Strathclyde regional council to collect the poll tax.
      Sir Nicholas Fairbairn: I am sorry that the hon. Gentleman was confused by my reluctance to allow him to give way to me. I thought that he was confused, but that is another matter.
      I am one of the most vulnerable in society, but I did not have central water, I had no dustbin collection or sewage provision, no one mends my roads, I do not use the local library and I have no children to educate, so I get nothing. However, thanks to the Government, now I at least have sewage collection, rubbish collection and central water. As one of the more vulnerable members of society, I am very grateful.
      Dr. Godman: I am not sure that the hon. and learned Gentleman is one of the most vulnerable in our society, but I suspect that he is one of the most confused in his part of Scotland. His reference to his vulnerability plainly reveals his confused thinking at the moment, but it is not always so confused. The hon. and learned Gentleman has a fine forensic approach to these issues, and I look forward to hearing his speeches later.
      The level of services provided by local authorities is a very worrying issue in my constituency because Strathclyde regional council is now so badly placed with regard to finance because of its inability to collect the poll tax from people who sometimes can pay but will not pay, but, much more often, simply cannot pay.
      I genuinely believe that we are facing a political and constitutional crisis in Scotland, which has been brought about by the insensitive and uncaring Government. If their representatives in this House are reduced to, at best, two or three, that is merely what the Government and their representatives deserve.
      Sir Hector Monro: I did not want to intervene in the socialist split between the Liberal Democrats, the Scottish National party and the Labour party, all of which are confused about how to proceed with the collection of a form of local government tax. The people of Scotland will begin to wonder where the Opposition stand when they hear speeches such as those that we have heard today.
      We tend to forget that the reason why we are introducing a simplified form of rate collection is that the old rating system was unpopular not only in Scotland, but throughout the United Kingdom. The reason why it was so unpopular is exactly the same reason why the community charge and now the council tax are unpopular—local authorities spend far too much money. Only when we get on top of that issue and make local authorities understand that they are meant to be good housekeepers and not to spend money rashly and unrealistically will we get local government expenditure down to the equivalent levels of 10, 20 or 30 years ago when all elected councillors—many of whom were independent—made a point of thinking about those whom they represented. Their first priority was to keep expenditure down and to provide the best services possible within their budgets.
      Budgets are now set at extortionate levels and when, naturally enough, the Government or the local population say, "Steady", local authorities say that there must be dramatic cuts. However, the cuts are in the budget, not in expenditure, and that is what we have difficulty in bringing home to the people of Scotland. All over Scotland we see in local and national newspapers talk of cuts in this and cuts in that, but the cuts are in proposed budget

      53
      expenditure, not in real expenditure which has, of course, increased year in, year out as has the revenue support grant under the present Government.—[HON. MEMBERS: "No."] Yes, it has.
      5.45 pm
      It is time that the people of Scotland realised that it is-elected councillors suggesting budgets that are quite unacceptable which is the cause of the trouble in Scotland today, especially when we bear in mind the substantial progress made with the uniform business rate which, in the long run, will be of tremendous benefit to businesses and in which there can be only an increase related to inflation, as opposed to the substantial increases of a few years ago.
      The Minister rightly introduced capping for some local authorities, but I hope that he will bear in mind the low base from which some authorities began in recent years. One can perhaps understand the capping of authorities that are spending £400, £500 or £600 while others are spending £150 but are capped because they started from a fraction of a base level of the higher spending authorities. For small rural district councils it has been difficult even to maintain expenditure at inflation levels, let alone to try to keep within the capping level of about 4·5 per cent.
      I hope that when the Minister replies he will take the chance to highlight some of the singularly unpopular proposals from the socialist parties, such as the rating of farm buildings, local income tax and other suggestions which are quite unacceptable in Scotland. The new clause asks for another layer of bureaucracy and for officials to spend months preparing reports and papers when they should be preparing their work for the introduction of the new council tax. Time is not on our side in terms of preparation for April 1993. Any diversion of effort by local authority officials to provide the information required by the Opposition—much of which they could probably research in the Library in an hour if they tried—is quite unnecessary. For those reasons, and because the Opposition have made such a miserable case, I hope that the Minister will reject the new clause.
      Mr. William McKelvey: I will try not to stray too far from the new clause, although you, Mr. Deputy Speaker" have said that this is a wide debate. The main point of the new clause is that we want the Government to carry out a proper survey of the effects of the community charge and to study the
      "cost, economy, efficiency and effectiveness of financial administration in local government".
      The Convention of Scottish Local Authorities has already told Ministers that local administration throughout Scotland is in a desperate position. If Ministers do not address the problem of non-collection of the poll tax, the poll tax for next year and the following year will rise astronomically. Resistance to the payment of the poll tax will probably rise accordingly. The Government must address the problem of the total debt, which is about £357 million of unpaid tax for the previous two years.
      Local authorities must be given back some power so that they can decide the practicalities of collecting certain debts and whether the cost involved in trying to collect them is worth while. Despite the figures that the Minister gave, I am convinced, as are many local government finance officers, that it is costing more in some cases to attempt to collect the back payments than it is to forget about them.
      54
      I am not saying that we should simply have an amnesty. The Government would find an amnesty for all those who have not paid unacceptable and I understand the reasons for that. However unfair a tax is and however it discriminates against the poor, we must realise that it is a tax under the law. In any campaign, there is a problem if those with ability to pay pull others into the campaign, especially those who are too poor to pay.
      The hon. Member for Dunfermline, West (Mr. Douglas) said that I, among others, was involved in a campaign of non-payment. That is correct. I stand here without shame to say that I believed then that those who could afford to pay but who would not pay bore the responsibility at least to put up some resistance to a tax that had heen imposed on us. However, I qualify that comment and the local paper can be produced to show that I did not invite those who would be in difficulties over the payment of the tax to become involved. I did not see it as a form of elitism to say that I put forward the argument that people like me should resist payment for the moment. I stated publicly that I fully understood that I would have to pay not only the tax, but eventually the surcharge. I did not want those who could not afford to pay the tax to be put into the embarrassing situation of having debt collected, not only for the tax that they had not paid, but for the 10 per cent. surcharge. I ultimately paid what I owed and the 10 per cent., although I did so reluctantly because it was a lousy tax. Time has shown us that it is a bad tax.
      Conservative Members who waxed eloquent about the virtues of the poll tax are disappearing like snow off a dyke. However, they did not disappear when it came to marching through the Lobby, probably asking each other, "What is this tax all about?" The answer was, "It is going to Scotland, old boy, so just go through as the Whips have told you." No one gave any real consideration to that abomination or to the difficulties that it would cause for the poor people in Scotland.
      The Opposition and some Conservative Members doubted the wisdom of the tax. Those to whom I am not allowed to refer—they sit in the jury box over there—told the Government that the tax was ill thought out, that it would be difficult to collect and that it would create difficulties for the Government. However, Scottish Ministers embraced the tax eagerly because they saw it as the best thing for Scotland since sliced bread. Even now, some of them argue that the poll tax was fair and good, and they say that they do not understand why its collection went so wrong.
      The Government cannot blame those who are not paying for the downfall of the tax because that would defeat the dogma attached to it. I believe that those in Scotland who did not pay played some part in the demise of the tax. When Conservative Members who had trotted so gleefully through the Lobby discovered what the effect of the tax would be on England and on their constituencies, they studied it and understood that any tax that is written down on the back of a fag packet cannot he acceptable to the people.
      Mr. Robert Hughes: I hope that my hon. Friend will not be annoyed if I give a marginally different point of view. It is passing into mythology that the Tories introduced the poll tax in Scotland to punish the Scots. The opposite is the case. The former Prime Minister introduced the poll tax because she honestly thought that

      55
      it would be the saviour of Scottish seats in the 1987 election. It was meant to be beneficial to the Scots. That shows how bad the Government's judgment was and why, when the difficulties were discovered, the English said that they did not want to touch the poll tax with a bargepole.
      Mr. McKelvey: My hon. Friend is right. To be fair, the former Prime Minister, the present Prime Minister, Ministers and Conservative Members failed to understand the background of Scotland's history and heritage. They failed to understand that Scots will simply not accept a tax being forced on them—I believe unconstitutionally. We are a Union and I can see no reason why there should be a different form of tax in one part of the Union from that in the others. Ministers would not accept that view and what has become of the community charge is almost history.
      The matter will not be allowed to rest. The poll tax has not been abolished, although many people in Scotland imagine that it has. The collection of the poll tax and the pursuit of people who are too poor to pay still goes ahead. I have never accepted the collection of debt by warrant sales, especially for domestic debt. Many of us fought hard and long to abolish poinding altogether. It may be acceptable for a council that is done by a big business man, because the only way in which it can get back its money may be to get its hands on his business. What is obnoxious to me and to many other Labour Members is a form of debt collection that aims to humiliate the person from whom the debt is being collected. Such a form of debt collection is inhuman and should be resisted. As soon as possible, especially for Scotland, we should consider closely the matter of poinding and we should dispose of it as a means of collecting domestic debt. It is a disgrace and should never be pursued.
      I do not agree with members of councils, whether SNP or Labour-led, which with relish set officers on to the collection of the poll tax. They are misled. However, once the debt is handed over to the sheriff officers for collection, they will use warrant sales to collect the debt. They will then be resisted, as has been shown.
      Mr. Douglas: Surely the hon. Gentleman is not suggesting that such a course of events is acceptable? There is some control over the sheriff officers and the messengers at arms. It is not a perfect control, because they are not properly controlled through the court system, but there is control. The creditor has a responsibility to acknowledge that the debt that is being pursued will not be gathered under the poinding schedule. We are in a queer trait, indeed, if local authorities—Labour controlled or otherwise—do not say, "This is nonsense. Halt the process there."
      6 pm
      Mr. McKelvey: Local authorities cannot take that decision. Once the matter is in the hands of the sheriff officer, the officer determines how the debt is collected. Local councils can say to sheriff officers, "We do not want you to pursue the matter through warrant sales," but the sheriff officers are contracted to do a job and can say, "If we can collect the debt only by means of a warrant sale, that is what we will do." The authorities cannot control the means by which sheriff officers collect the debt as long as
      56
      it is collected legally. I do not like the practice—we must fight against it and change it—but, unfortunately, for the time being at least, sheriff officers have the legal right to use poinding.
      We must examine that difficulty ourselves. It is no good shoving the blame on to a local authority and saying that debt collection should not be pursued through warrant sales because, ultimately, they are forced to undertake poindings. Such proceedings ought to be resisted locally and they are resisted locally.
      What about those who have the ability to pay but who are still not paying? They are responsible for a large part of the £537 million worth of debt that directly affects local authorities' ability to provide services. When we realised that there was a threat of that happening, I and many others to whom I spoke who had previously resisted payment said, "There is one thing that we will not do: we will not jeopardise services or jobs in our community by our campaign of resistance and non-payment." When we realised that that threat existed, we withdrew.
      The Scottish National party, on the other hand, pursued the issue and encouraged people not to pay, saying that it was leading a campaign of universal non-payment. When members of the SNP realised that the difficulties in which local authorities were placed would reflect badly on them, they washed their hands of the matter.
      As I said at the time, I have some local experience of resistance to paying rent, which I gleaned during rent campaigns. I vividly recall carrying a banner saying, "We will not pay the increase in rent in the Dundee district." At the other end of the banner was someone who I knew had paid his rent. I asked, "Why did you pay your rent, Jimmy?" He replied, "It was not me, Willy, it was my wife." The domestic pressure on many households is such that some womenfolk who knew that, ultimately, they would be left to pay the rent said, "It is all right having a non-payment campaign but when it fails, as it will fail"—and it did fail—"who will pay the rent? Who will be lumbered with the debt?"
      Hundreds of people in Scotland who were either too poor to pay or who were duped into taking part in the non-payment campaign as a way of destroying the tax now find themselves having to pay not only the debt but the surcharge. That is grossly unfair.
      I have two constituency cases about which I shall happily tell the Minister—indeed, I have probably written to him about them already. The first concerns an old lady in a private nursing home who does not even receive her pocket money because it is taken from her as part of her rent. She has no visible means of support, except that she is being looked after by that private nursing home. Yet that old lady is still being pursued by sheriff officers for non-payment of the 20 per cent. that she should have paid last year. Does it make economic sense, and is it humane, to pursue elderly and frail people to collect the 20 per cent? What is it costing? I do not believe that the cost of pursuing those too poor to pay is less than the sums in respect of which they are being pursued.
      My second constituency case concerns someone in receipt of benefit from the Department of Social Security. The sheriff officers have asked the DSS to stop part of the payment and pay his poll tax. The Department has replied that, because that person is paying so much in loan repayments, he is now under subsistence level and cannot pay the poll tax.

      57
      Why must we pursue poor people such as those for non-payment of the 20 per cent? Would it not be better to return to local authorities the discretion that they enjoy in other areas and say to them, "By all means, pursue those who can pay and will not pay. Home in on them. But, in cases of genuine poverty and difficulty, involving the elderly, the frail and the poor, you can write off the debt as uncollectable."
      The trouble is that political dogma is being allowed to overrule economic sense, and that that dogma says that everyone must pay the tax. That was the basis on which the tax was introduced: everyone had to be accountable. It is arrant nonsense to say that pensions and benefits have been uprated to allow for the payment of the poll tax; people simply do not believe it. Is it not nonsense to say to someone, will give you £1·50 so that you can pay the £1·50 that I propose to tax you"? Why could not the sum have been paid directly? Because that would have defeated the object and negated the dogma, which said, "We want you not merely to pay the tax but to know why you are paying it."
      Mr. Barry Porter: I have some sympathy with the second part of the hon. Gentleman's argument, which concerns the pursuit of those who cannot pay. Equally, I sympathise with the argument that people who can pay ought to pay. But I have been trying to follow his argument that every tax should be related to people's ability to pay it. Is the hon. Gentleman arguing, on behalf of the Labour party, that VAT and Customs and Excise duties should be abolished and replaced by a tax related to income, wealth or something of that nature? I have worked out on the back of a cigarette packet—and this bears no relation to my ability to pay, which is nil at the moment—that, if we followed that argument, we should have a standard rate of income tax of between 45p and 50p in the pound. That would be nonsense. We have indirect taxation—as we should have indirect taxation—and there should be taxes on spending as well as on income.
      Mr. McKelvey: I am sure that the hon. Member for Wirral, South (Mr. Porter) would not disagree that, in collecting taxes, we must take into account people's ability to pay. Whisky is extremely heavily taxed. The Government get a heavy whack for every bottle consumed. It is one thing for a person to decide whether he wants to consume a bottle of whisky. It is quite another when every person is taxed simply because he happens to be a body. The head tax was done away with centuries ago and should not be acceptable. If the hon. Gentleman is saying that he continues to find the poll tax acceptable and would still vote for it, he is at least being honest enough to say so, but other Conservative Members have put their heads down and said, "We never believed that it was a decent tax in the first place."
      The matter has yet to be resolved. The Government are in difficulties because local authorities have enormous debts. In England, those debts are only now beginning to accumulate, but in Scotland they are all too familiar. We must give local government some respite and enable it to deal with this growing and extremely difficult problem. It is no good arguing that, year after year, the Government have dished out money to local authorities. Nobody will believe that that is the case. Housing revenue, for example, has virtually disappeared and, in Scotland, the result has been that we have thousands more homeless people than
      58
      we have ever had. Many young people were turfed out of their houses by their parents, who said, "We are not going to pay your poll tax for you. You are not earning, so out you go." Some 24 per cent. of homeless people wandering the streets of London come from Scottish backgrounds and Scottish homes—a fact which we find totally unacceptable.
      I found it obnoxious to listen to the Secretary of State for the Environment yesterday referring to the wonderful uplift that has been given to London. I accept that it is nice to see the House of Commons in its new coat. However, perhaps we should have spent the money that we have spent on this building providing clothes for those hapless souls who sleep in cardboard boxes. Perhaps we should have some form of taxation so that we can clothe all our people adequately.
      There is no point in trying to defend this immoral tax. Elderly people in Scotland, England and Wales will die in their thousands because they do not have the money to heat their homes. We should not rely on the instant cold weather payments that are triggered after seven days of below freezing temperatures. Had local authorities not been in so much debt as a result of the non-collected poll tax, they might have been able to concentrate on services and ensure that homes are adequately insulated. If they were adequately insulated, the cold weather might not have such drastic effects and cause the deaths of elderly and frail people.
      Ministers are reluctant to feel ashamed about the application of the poll tax. They must consider the fact that the tax was applied in Scotland one year in advance and that was against the constitution. We should consider the plight of Scottish authorities and try to solve their problems, because those problems will be mirrored in English authorities in the next few years. The problem will not go away. It is growing and we should consider all the effects as outlined in the new clause.
      Mr. Bowis: We were all moved when my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) told us about his life under socialism in Scotland, with no hot and cold running water, having to deal with his own sewage—or whatever it was that he did—begging for a crust of bread at the door of his little rural cottage and being forced by his nanny to eat his rice pudding. He was trying to pour some oil on the Opposition's troubled waters in Scotland. In so doing, his learned advice came down slightly in favour of the hon. Member for Glasgow, Garscadden (Mr. Dewar) rather than the hon. Member for Dunfermline, West (Mr. Douglas). I want to redress that balance slightly, because I believe that the hon. Member for Garscadden has an honourable record in terms of his policy on the issue. I believe that he is wrong, but he is sincere and consistent.
      The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett): I think that my hon. Friend is referring to the hon. Member for Dunfermline, West (Mr. Douglas), who is the prospective Scottish National party candiate for Glasgow, Garscadden. I can understand his confusion.
      Mr. Bowis: My hon. Friend is right.
      In his erstwhile guise, the hon. Member for Dunfermline, West and I debated the community charge at Cambridge university in the days when we all believed that the community charge was the greatest thing since neeps

      59
      and tatties. I must tell Opposition Members, including the hon. Member for Glasgow, Maryhill (Mrs. Fyfe), who raised the matter earlier, that many of us believe that the community charge is a good system. My borough of Wandsworth has shown that the system could have worked.
      Wandsworth has a zero charge this year, and we have just announced a zero charge for the coming year. Before Opposition Members point it out, that is on the basis of Government grant that is one third less than in neighbouring inner-London Labour boroughs which are charging £400, £500 or £600. The hon. Member for Dunfermline, West is right to question the sincerity of some Labour party representatives who have challenged him today.
      6.15 pm
      I am with the hon. Member for Dunfermline, West when he stands up for the people who cannot pay. However, he should recall that we have a rebate system designed to look after those who cannot pay. That system works only if we have a system of local government in which responsible local authorities set responsible levels of community charge. That has always been the case. If local authorities do not set such levels of community charge, the benefit and rebate system is inadequate to look after the people about whom the hon. Member for Dunfermline, West is concerned.
      The hon. Member for Dunfermline, West also referred to other members of the public who refused to pay the tax when they were capable of paying it. Among those people were Labour Members, Labour councillors and Labour party officials who campaigned around the country for non-payment. They could pay, but they would not.
      The hon. Member for Garscadden referred to the guilt by association of the hon. Member for Dunfermline, West in respect of his meetings with Militant representatives. However, if I can believe my own ears, it seems, from the expulsions from the Labour party as a result of Militant connections, that everyone in the Labour party who has appeared on a platform with Militant representatives is at risk.
      Guilt by association works two ways. It may work with regard to the hon. Member for Dunfermline, West being on a platform with a Militant spokesman. However, it also works with the Labour party failing to discipline its own members who campaigned against payment of the tax. It is their surcharge that people throughout England, Scotland and Wales are having to pay.
      Mrs. Ray Michie: As the hon. Gentleman knows, my party has never been in favour of a "can pay, won't pay" campaign. However, he should be careful about whom he is accusing of not paying when they could pay. There are Conservative councillors who have not paid, but who could pay.
      Mr. Bowis: I was referring to hon. Members. I know of no Conservative Member who has not paid. If there is one, the hon. Lady should name him or her now. If Conservative councillors have refused to pay, I condemn them as utterly as I condemn the Labour councillors who have not paid.
      As the hon. Member for Argyll and Bute (Mrs. Michie) has raised her party's head above the parapet, she should
      60
      be careful about the cost that she is seeking to impose on the people of this country. Her leader estimated during the Ribble Valley by-election that the average local income tax would be £600.
      Mr. Tom Clarke: I hope that the hon. Member for Battersea (Mr. Bowis) will not be offended when I say that life in Bargeddie and Bellshill must be very different from life in Battersea. I can find no support for the Government's proposals, although I can see much logic in new clause I and much support for the principles that it enshrines.
      New clause 1(2)(c) refers to
      "the levels of services provided by local authorities".
      Given that we have a very confused system of local government finance, with central Government's contribution, a much smaller amount raised from local revenue and enormous difficulties because of the previous form of taxation that the Government attempted to introduce and the new one that they introduce in this Bill, local authorities far too often, in department after department, instead of dealing with the big issues of education, leisure and recreation and the quality of life in their districts, have to devote a great deal of time to collection problems and cannot give priority to essential services.
      I greatly regret the unacceptable problems that have been imposed on social work departments in Scotland, especially when poverty is on the increase, when the national health service is under attack, and when local authorities are expected to deal with community care problems to which they simply do not have the resources to enable them to respond. To its credit, in recent weeks, the Glasgow Evening Times has been exposing the scandal of mentally ill and mentally handicapped people being sent to prison. Every social work department in Scotland wants to address those problems but they cannot do so because resources are not available.
      I welcome new clause 1, with its reference to genuine consultation not only with COSLA but with organisations such as citizens advice bureaux. If we have genuine consultation, such scandals and the failure to respond to people's needs will be addressed. Local authorities can see poverty before their very eyes. With genuine consultation, they will be able to cope. If we involve the consumer in the widest possible sense and restore the democratic role of local government in Scotland to its rightful place, we will do a great service to democracy. For that reason, I am delighted to support new clause 1.
      The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett): This has been an interesting debate, but it has had little to do with the council tax.
      Mr. Maxton: Why is not the Under-Secretary of State for Scotland replying?
      Mr. Bennett: I am replying to the debate because this is a United Kingdom Parliament and, as the new clauses are about England, Scotland and Wales, a Welsh Office Minister is perfectly entitled to reply.
      It has been an interesting debate, but there has been little talk by Opposition Members about the council tax. The debate has been about the community charge. It has been a negative debate on the part of the Opposition. They have looked backward rather than forward. I have no hesitation in advising the House to reject the amendment and the new clauses.

      61
      The hon. Member for Glasgow, Garscadden (Mr. Dewar) spent most of his time having a debate with the Scottish National party about who was responsible for what in Scotland in terms of advising people not to pay the community charge. I shall refer to that matter in a minute. I shall deal with the two or three points of substance that arose in respect of the parts of the Bill that we are discussing.
      The hon. Member for Argyll and Bute (Mrs. Michie) argued that, in Scotland, England and Wales next year, the Liberal party would like to see the abolition of all local taxation and the imposition of a national income lax for one year only. I find that very strange, because Liberal Democrat Members spent the whole time in Committee arguing that local councils should raise more of their own resources from local taxpayers rather than from national taxpayers. Seeing that there might be a little bit of an electoral advantage with a general election coming, the Liberal party is prepared to stand principle upon its head and argue the exactly opposite case on the Floor of the House.
      The hon. Member for Argyll and Bute spoke also about the cost of implementation of the new council tax. The Government have accepted the estimates made by the CSL Group Ltd. My right hon. Friend the Secretary of State for Wales provided an extra £6 million over the total for aggregate external finance for 1992–93, which was announced in July, to meet the estimated revenue costs of local authorities of bringing in the new council tax. The same has been done in England, where my right hon. Friend the Member for Henley (Mr. Heseltine), the Secretary of State for the Environment, has put aside £86 million. My right hon. Friend the Secretary of State for Scotland has provided a further £10 million to enhance allocations in 1992–93. I do not think that the hon. Member for Argyll and Bute can argue that local authorities have not received generous extra financial support in the coming financial year for their implementation of the council tax.
      The hon. Lady spoke also about the local income tax. We had a long debate in Standing Committee on that point. My hon. Friend the Member for Enfield, Southgate (Mr. Portillo) will speak on that matter in a later debate when we discuss Liberal amendments on the local income tax.
      The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) spoke about Labour's amendments. She said that the Labour party had not had an opportunity in Standing Committee to debate its point of view in full. It is worth pointing out just what happened in Standing Committee. On clause 6, for instance, we had seven and a half hours of debate. The hon. Member for Makerfield (Mr. McCartney) admitted that he spoke only because the Labour Whip asked him to speak in order to prolong the debate. We had another seven and a half hours of debate on clause 11. On clause 22, we had a two-hour debate, in which the hon. Member for Normanton (Mr. O'Brien) spoke at great length. On clause 32, we had three and three quarter hours of debate, and on clause 53 we had a four-hour debate.
      In Committee, Labour Members did not allocate time between the amendments that they wanted to debate. They time-wasted and they spoke at great length. If Labour Members have any cause for complaint, they should look at their own behaviour in Standing Committee. The hon. Member for Leyton (Mr. Cohen) spent 12 minutes saying
      62
      good morning to the Committee and telling us that it was his wife's birthday and that he had not been able to buy her a present. That was the level of debate time and again. We all felt sinking hearts when the hon. Member for Dagenham (Mr. Gould) said, "I shall speak briefly," because we knew that that meant that a 40-minute speech was on its way.
      I do not believe for a minute that the hon. Member for Maryhill can complain that the Labour party did not get its views across in Committee. Labour Members had nearly 90 hours to do so. If they failed to get their points across, it was because of their own disorganisation.
      The hon. Member for Dunfermline, West (Mr. Douglas), who I understand is to stand at the next election as the SNP candidate for Glasgow, Garscadden, spoke at great length, but not one of his words was on the SNP amendment to new clause 27. It seemed strange that the hon. Gentleman did not have the confidence in his own amendment to speak to it at all.
      My hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) spoke in conciliatory and dulcet tones—unlike mine tonight—about this complicated legislation. Any local government finance legislation is bound to be complicated. Someone once said—I think that it was Palmerston—on the Schleswig-Holstein question, that there were three people who understood Schleswig-Holstein: one was dead, one had gone mad, and he had forgotten. That is very true of local government finance as well. Although we have had to bring in a complicated piece of legislation, when we look at the rebate system, the discounts and the banding that we have put forward, it will be seen to be fair legislation which attempts to help all those who will be faced with local council tax.
      Mr. Maxton: I wonder into which of those three categories the Minister puts himself in terms of the council tax. Is he dead, has he forgotten, or has he gone mad?
      Mr. Bennett: That is a very witty intervention.
      The hon. Member for Greenock and Port Glasgow (Dr. Godman) spoke at great length on the community charge, but he did not address the council tax. My hon. Friend the Member for Dumfries (Sir H. Monro) spoke about the Labour party wasting Scottish local authorities' time in asking them to work out alternatives to the legislation. I agree that it would be better if local authorities ignored the Labour party's political posturing on the matter and got on with the job in hand, which is to prepare for the implementation of the council tax on 1 April 1993.
      Dr. Godman: Will the Minister give way?
      Mr. Bennett: I am sorry, I cannot give way. I have sat here since four minutes past four, waiting to reply. There is agreement between the Front Benches that there will be short replies.
      My hon. Friend the Member for Battersea (Mr. Bowis) and the hon. Member for Monklands, West (Mr. Clarke) made some interesting points. However, I wish to conclude my remarks by referring to the speech of the hon. Member for Garscadden.
      The hon. Member for Garscadden became involved in a family squabble with the hon. Member for Dunfermline, West. It was a real family squabble between two sorts of pink socialists, arguing about who was right over the community charge. I listened with great care to the hon. Member for Garscadden expressing his great moral

      63
      outrage about the SNP, waiting to hear him condemn those Labour Members who had said that they would not pay the community charge, but I heard not a word of condemnation from the hon. Gentleman about his colleagues.
      6.30 pm
      The hon. Members for Maryhill and for Kilmarnock and Loudoun (Mr. McKelvey) did not say, when they launched their Committee of 100 campaign in Scotland, that they would not pay the community charge themselves. Although they have spoken today about local government finance, they did not admit that they encouraged people not to pay the community charge. I wonder why there is so much hand-wringing among Opposition Members about that matter——
      Mr. George Howarth: This is terrible.
      Mr. Bennett: What is terrible is the fact that Labour Members, who want to be law makers and to pass legislation in this House, break the law themselves. We should place that important fact on the record. I am appalled that Labour Members have said today that their constituents are suffering when they argued in public that people should not pay the community charge——
      Mr. McKelvey: That is not true.
      Mr. Bennett: If the hon. Gentleman believes that that is not true, I would welcome an intervention from him.
      Mr. McKelvey: I thought that I had already explained the position, but perhaps the Minister was not present. I can show clearly and publicly—it is on the front page of my local newspaper—that I said that I was taking a political stance, but I did not suggest that others did what I did because I knew that I would have to pay the surcharge and that others might not be able to do so. I regret the fact that those who brought people into the non-payment campaign are now simply washing their hands of the other people who are lumbered with the debt.
      Mr. Bennett: If the hon. Gentleman thinks that he is taking a moral stance by saying that he will not pay his tax when other people will have to pay a surcharge to make up for the income that was lost because he would not pay, I can only say that that is a strange form of morality.
      It is clear from our debate during the past two and a half hours that Labour Members do not want to discuss the council tax. They would rather go back to discussing the community charge. We are committed to abolishing the community charge and shall do so. The Bill will be passed. I ask the House to reject the new clause.
      Mr. Gould: We have had a good and useful debate, but it was clearly not much enjoyed by Conservative Members. There are a number of signs of that. First, the Secretary of State for the Environment graced us with his presence for 10 minutes during the speech of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). The right hon. Gentleman then reached the limits of his patience, thus doubling the amount of time that he spent in Standing Committee. However, it was on the basis of that 10 minutes' observation that he apparently found it possible to criticise the Labour party for filibustering. His remarks
      64
      on that subject were as ill-founded and unconvincing as those of the Under-Secretary of State for Wales a moment ago.
      The second sign that the Conservative party has not relished the debate was the presence on the Treasury Bench of that Under-Secretary. I mean no disrespect to him—that is, no more disrespect than is normally his due—when I say that the fact that he was asked to reply to the debate was intended by the Government to signify that they did not much like the debate or attach much importance to it. That view is confirmed by the fact that not a single Conservative Back-Bencher was present at the beginning of the debate.
      I am not surprised that Conservative Members wanted to slink away from the debate. They have guilty consciences—not just about the disastrous consequences of the poll tax, but also about their shameful record during that whole episode, when they allowed themselves to be dragooned through the Division Lobbies in support of the legislation and then, when the whistle was blown and they were told that they had to reverse direction, they all slunk off in that reverse direction.
      The new clause and the report that it seeks to introduce are not only important but essential. We seek first to establish what went wrong, because what went wrong did enormous damage to local government, to individual and family budgets, to respect for the law and to civil rights. The poll tax was undoubtedly the worst mistake made by any Government in modern times.
      The second purpose of the report is to establish who was responsible for making that mistake. Of course, Conservative Members now want to distance themselves from the whole catastrophe and to say that it was all the fault of their former leader, the right hon. Member for Finchley (Mrs. Thatcher), but half the present Cabinet were deeply implicated in the introduction of the poll tax. The Chairman of the Tory party, the current Secretary of State for Health, the current Home Secretary and even the Prime Minister himself were the guilty men. No wonder they do not want to be brought to the dock and made to face the charges.
      Thirdly, and perhaps most constructively, we need a report to learn the lessons and to ensure that the mistakes are not repeated. The first of those lessons is that the poll tax was unacceptable because it was unfair. We no longer have to say that, because the Government's own excuse for abandoning the poll tax is that people could not be persuaded that it was fair. However, the same principle of unfairness is enshrined in the new council tax. The best-off will not pay their fair share. The scale of liability is to be compressed or dampened, so others will have to pick up the bill.
      Another lesson is that the poll tax turned out to be too complicated and too costly, although its great virtue was supposed, to be its simplicity. It was hugely complicated and expensive because it took enormous time and resources to trace all the people who moved. During the year, about 40 per cent. of those on one register moved off it and on to another when they changed address. In some parts of London, 60 per cent. of the register had to be changed during the year. The council tax is similarly complex. It will have all the problems of the poll tax, coupled with the new problem of being a totally untried property tax.
      Another lesson is that the poll tax was utterly uncollectable. Again, it is not only the Opposition who say

      65
      that. The Prime Minister himself has described the poll tax as "virtually uncollectable". That is why local authorities have had to issue 7·5 million summonses. No one should point the finger at individual local authorities as though all that was their fault, because it is a problem that faces the whole of local government. Local government is £1·5 billion short of the amount that it would have collected if the poll tax had been as collectable as the rates. The same mistakes are being repeated with the council tax.
      As I have said, another problem with the poll tax was the damage that it did to civil rights. About 1 million votes have gone missing. We must assume that 1 million people decided to trade in their vote to escape paying the poll tax. However, we are told yet again that local authorities will be encouraged to turn to the electoral register to establish liability for the new tax. What an incentive, yet again, for people to trade in their vote to escape their tax liability. That is not the right thing to do, and nobody would advise people to do it, but the Government have not learnt the lesson: that that is what people did under the poll tax and that that is what they will do under the council tax also.
      The poll tax was a nightmare for local government. It was supposed to improve accountability. Indeed, in its dying days, accountability was said to be its one remaining saving grace. But we now have universal capping, which is again being enshrined in the council tax legislation. That is another lesson that has not been learnt, and a mistake that will be repeated.
      Finally, and perhaps in the long term the most harmful, there is the damage that the poll tax has done to the acceptability of the concept of one's legal obligation to pay local government taxation. Bad lessons have been learnt by so many people who have found it possible not to pay the poll tax. If we are not careful, those lessons will be carried over to the new council tax and to all other tax-paying obligations.
      This has certainly been an uncomfortable debate for the Conservative party, and that discomfort has been more than justified. If they had any sense of shame, the Government would have shown it this evening and expressed remorse. Indeed, if the Conservative party in Parliament had been local councillors in local government, they would have been surcharged, bankrupted and driven from office. We cannot bankrupt them or surcharge them, but we shall drive them from office, and that is what the British people will want.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 218, Noes 350.

      Division No. 26]

      [6.39 pm

      AYES

      Adams, Mrs Irene (Paisley, N.)

      Benton, Joseph

      Allen, Graham

      Bermingham, Gerald

      Alton, David

      Blair, Tony

      Anderson, Donald

      Blunkett, David

      Archer, Rt Hon Peter

      Boateng, Paul

      Armstrong, Hilary

      Bradley, Keith

      Ashdown, Rt Hon Paddy

      Bray, Dr Jeremy

      Ashton, Joe

      Brown, Gordon (D'mline E)

      Banks, Tony (Newham NW)

      Brown, Nicholas (Newcastle E)

      Barnes, Harry (Derbyshire NE)

      Brown, Ron (Edinburgh Leith)

      Barnes, Mrs Rosie (Greenwich)

      Bruce, Malcolm (Gordon)

      Barron, Kevin

      Caborn, Richard

      Battle, John

      Callaghan, Jim

      Beckett, Margaret

      Campbell, Menzies (Fife NE)

      Beith, A. J.

      Campbell, Ron (Blyth Valley)

      Bellotti, David

      Campbell-Savours, D. N.

      Benn, Rt Hon Tony

      Canavan, Dennis

      Bennett, A. F. (D'nt'n & R'dish)

      Carlile, Alex (Mont'g)

      66

      Cartwright, John

      Jones, Barry (Alyn & Deeside)

      Clark, Dr David (S Shields)

      Jones, Ieuan (Ynys Môn)

      Clarke, Tom (Monklands W)

      Jones, Martyn (Clwyd S W)

      Clelland, David

      Kaufman, Rt Hon Gerald

      Clwyd, Mrs Ann

      Kennedy, Charles

      Cohen, Harry

      Kilfoyle, Peter

      Cook, Frank (Stockton N)

      Kinnock, Rt Hon Neil

      Cook, Robin (Livingston)

      Kirkwood, Archy

      Corbett, Robin

      Kumar, Dr. Ashok

      Corbyn, Jeremy

      Lambie, David

      Cousins, Jim

      Lamond, James

      Cox, Tom

      Leighton, Ron

      Crowther, Stan

      Lestor, Joan (Eccles)

      Cryer, Bob

      Lewis, Terry

      Cummings, John

      Litherland, Robert

      Cunliffe, Lawrence

      Lloyd, Tony (Stretford)

      Dalyell, Tam

      Lofthouse, Geoffrey

      Darling, Alistair

      McAllion, John

      Davies, Rt Hon Denzil (Llanelli)

      McAvoy, Thomas

      Davies, Ron (Caerphilly)

      Macdonald, Calum A.

      Davis, Terry (B'ham Hodge H'l)

      McFall, John

      Dewar, Donald

      McKay, Allen (Barnsley West)

      Dixon, Don

      McKelvey, William

      Dobson, Frank

      McLeish, Henry

      Doran, Frank

      Maclennan, Robert

      Douglas, Dick

      McMaster, Gordon

      Duffy, Sir A. E. P.

      McWilliam, John

      Dunnachie, Jimmy

      Madden, Max

      Dunwoody, Hon Mrs Gwyneth

      Mahon, Mrs Alice

      Eadie, Alexander

      Marek, Dr John

      Edwards, Huw

      Marshall, David (Shettleston)

      Enright, Derek

      Marshall, Jim (Leicester S)

      Evans, John (St Helens N)

      Martlew, Eric

      Ewing, Harry (Falkirk E)

      Maxton, John

      Ewing, Mrs Margaret (Moray)

      Meacher, Michael

      Fatchett, Derek

      Meale, Alan

      Fearn, Ronald

      Michael, Alun

      Field, Frank (Birkenhead)

      Michie, Bill (Sheffield Heeley)

      Fisher, Mark

      Michie, Mrs Ray (Arg'l & Bute)

      Flannery, Martin

      Moonie, Dr Lewis

      Flynn, Paul

      Morgan, Rhodri

      Foster, Derek

      Morris, Rt Hon A. (W'shawe)

      Fraser, John

      Morris, Rt Hon J. (Aberavon)

      Fyfe, Maria

      Mowlam, Marjorie

      Galbraith, Sam

      Mullin, Chris

      Galloway, George

      Murphy, Paul

      Garrett, John (Norwich South)

      Oakes, Rt Hon Gordon

      George, Bruce

      O'Brien, William

      Gilbert, Rt Hon Dr John

      O'Hara, Edward

      Godman, Dr Norman A.

      Orme, Rt Hon Stanley

      Golding, Mrs Llin

      Owen, Rt Hon Dr David

      Gordon, Mildred

      Parry, Robert

      Gould, Bryan

      Patchett, Terry

      Graham, Thomas

      Pendry, Tom

      Griffiths, Nigel (Edinburgh S)

      Pike, Peter L.

      Griffiths, Win (Bridgend)

      Powell, Ray (Ogmore)

      Grocott, Bruce

      Prescott, John

      Hardy, Peter

      Primarolo, Dawn

      Harman, Ms Harriet

      Quin, Ms Joyce

      Hattersley, Rt Hon Roy

      Radice, Giles

      Haynes, Frank

      Randall, Stuart

      Heal, Mrs Sylvia

      Redmond, Martin

      Henderson, Doug

      Reid, Dr John

      Hinchliffe, David

      Richardson, Jo

      Hoey, Kate (Vauxhall)

      Robertson, George

      Hogg, N. (C'nauld & Kilsyth)

      Robinson, Geoffrey

      Home Robertson, John

      Rogers, Allan

      Hood, Jimmy

      Rooney, Terence

      Howarth, George (Knowsley N)

      Ross, Ernie (Dundee W)

      Howells, Geraint

      Rowlands, Ted

      Howells, Dr. Kim (Pontypridd)

      Ruddock, Joan

      Hoyle, Doug

      Salmond, Alex

      Hughes, John (Coventry NE)

      Sedgemore, Brian

      Hughes, Robert (Aberdeen N)

      Sheerman, Barry

      Hughes, Roy (Newport E)

      Sheldon, Rt Hon Robert

      Hughes, Simon (Southwark)

      Shore, Rt Hon Peter

      Illsley, Eric

      Short, Clare

      Ingram, Adam

      Skinner, Dennis

      Janner, Greville

      Smith, Andrew (Oxford E)

      Johnston, Sir Russell

      Smith, C. (Isl'ton & F'bury)

      67

      Soley, Clive

      Watson, Mike (Glasgow, C)

      Spearing, Nigel

      Welsh, Andrew (Angus E)

      Steinberg, Gerry

      Welsh, Michael (Doncaster N)

      Stephen, Nicol

      Williams, Rt Hon Alan

      Strang, Gavin

      Williams, Alan W. (Carm'then)

      Straw, Jack

      Wilson, Brian

      Taylor, Mrs Ann (Dewsbury)

      Winnick, David

      Taylor, Matthew (Truro)

      Worthington, Tony

      Thomas, Dr Dafydd Elis

      Wray, Jimmy

      Thompson, Jack (Wansbeck)

      Turner, Dennis

      Tellers for the Ayes:

      Wallace, James

      Mr. Ken Eastham and Mr. Robert N. Wareing.

      Warden, Gareth (Gower)

      NOES

      Adley, Robert

      Cran, James

      Aitken, Jonathan

      Currie, Mrs Edwina

      Alexander, Richard

      Curry, David

      Alison, Rt Hon Michael

      Davies, Q. (Stamf'd & Spald'g)

      Allason, Rupert

      Davis, David (Boothferry)

      Amery, Rt Hon Julian

      Day, Stephen

      Amess, David

      Devlin, Tim

      Amos, Alan

      Dickens, Geoffrey

      Arbuthnot, James

      Dicks, Terry

      Arnold, Jacques (Gravesham)

      Dorrell, Stephen

      Arnold, Sir Thomas

      Douglas-Hamilton, Lord James

      Ashby, David

      Dover, Den

      Aspinwall, Jack

      Dunn, Bob

      Atkins, Robert

      Durant, Sir Anthony

      Baker, Rt Hon K. (Mole Valley)

      Dykes, Hugh

      Baker, Nicholas (Dorset N)

      Emery, Sir Peter

      Baldry, Tony

      Evans, David (Welwyn Hatf'd)

      Banks, Robert (Harrogate)

      Evennett, David

      Batiste, Spencer

      Fairbairn, Sir Nicholas

      Beaumont-Dark, Anthony

      Fallon, Michael

      Bendall, Vivian

      Farr, Sir John

      Bennett, Nicholas (Pembroke)

      Favell, Tony

      Benyon, W.

      Fenner, Dame Peggy

      Biffen, Rt Hon John

      Field, Barry (Isle of Wight)

      Blackburn, Dr John G.

      Finsberg, Sir Geoffrey

      Blaker, Rt Hon Sir Peter

      Fishburn, John Dudley

      Body, Sir Richard

      Fookes, Dame Janet

      Bonsor, Sir Nicholas

      Forth, Eric

      Boscawen, Hon Robert

      Fox, Sir Marcus

      Boswell, Tim

      Franks, Cecil

      Bottomley, Peter

      Freeman, Roger

      Bottomley, Mrs Virginia

      French, Douglas

      Bowden, A. (Brighton K'pto'n)

      Fry, Peter

      Bowden, Gerald (Dulwich)

      Gale, Roger

      Bowis, John

      Gardiner, Sir George

      Boyson, Rt Hon Dr Sir Rhodes

      Gill, Christopher

      Brandon-Bravo, Martin

      Gilmour, Rt Hon Sir Ian

      Brazier, Julian

      Glyn, Dr Sir Alan

      Bright, Graham

      Goodhart, Sir Philip

      Brown, Michael (Brigg & Cl't's)

      Goodlad, Alastair

      Bruce, Ian (Dorset South)

      Goodson-Wickes, Dr Charles

      Buck, Sir Antony

      Gorman, Mrs Teresa

      Budgen, Nicholas

      Gorst, John

      Burns, Simon

      Grant, Sir Anthony (CambsSW)

      Burt, Alistair

      Greenway, Harry (Ealing N)

      Butler, Chris

      Greenway, John (Ryedale)

      Butterfill, John

      Gregory, Conal

      Carlisle, John, (Luton N)

      Griffiths, Sir Eldon (Bury St E')

      Carlisle, Kenneth (Lincoln)

      Griffiths, Peter (Portsmouth N)

      Carrington, Matthew

      Grist, Ian

      Cash, William

      Ground, Patrick

      Chalker, Rt Hon Mrs Lynda

      Grylls, Michael

      Channon, Rt Hon Paul

      Gummer, Rt Hon John Selwyn

      Chapman, Sydney

      Hague, William

      Chope, Christopher

      Hamilton, Rt Hon Archie

      Churchill, Mr

      Hamilton, Neil (Tatton)

      Clark, Rt Hon Alan (Plymouth)

      Hampson, Dr Keith

      Clark, Dr Michael (Rochford)

      Hanley, Jeremy

      Clark, Rt Hon Sir William

      Hannam, John

      Clarke, Rt Hon K. (Rushcliffe)

      Hargreaves, A. (B'ham H'll Gr')

      Colvin, Michael

      Hargreaves, Ken (Hyndburn)

      Coombs, Anthony (Wyre F'rest)

      Harris, David

      Coombs, Simon (Swindon)

      Haselhurst, Alan

      Cope, Rt Hon Sir John

      Hayes, Jerry

      Couchman, James

      Hayhoe, Rt Hon Sir Barney

      68

      Hayward, Robert

      Moynihan, Hon Colin

      Heathcoat-Amory, David

      Mudd, David

      Heseltine, Rt Hon Michael

      Neale, Sir Gerrard

      Hicks, Mrs Maureen (Wolv' NE)

      Needham, Richard

      Hicks, Robert (Cornwall SE)

      Nelson, Anthony

      Higgins, Rt Hon Terence L.

      Neubert, Sir Michael

      Hill, James

      Newton, Rt Hon Tony

      Hind, Kenneth

      Nicholls, Patrick

      Hordern, Sir Peter

      Nicholson, Emma (Devon West)

      Howard, Rt Hon Michael

      Norris, Steve

      Howarth, Alan (Strat'd-on-A)

      Onslow, Rt Hon Cranley

      Howarth, G. (Cannock & B'wd)

      Oppenheim, Phillip

      Howe, Rt Hon Sir Geoffrey

      Page, Richard

      Howell, Rt Hon David (G'dford)

      Paice, James

      Hughes, Robert G. (Harrow W)

      Patnick, Irvine

      Hunt, Rt Hon David

      Patten, Rt Hon Chris (Bath)

      Hunt, Sir John (Ravensbourne)

      Patten, Rt Hon John

      Hunter, Andrew

      Pattie, Rt Hon Sir Geoffrey

      Irvine, Michael

      Pawsey, James

      Irving, Sir Charles

      Peacock, Mrs Elizabeth

      Jack, Michael

      Porter, Barry (Wirral S)

      Janman, Tim

      Porter, David (Waveney)

      Jessel, Toby

      Portillo, Michael

      Johnson Smith, Sir Geoffrey

      Powell, William (Corby)

      Jones, Gwilym (Cardiff N)

      Price, Sir David

      Jones, Robert B (Herts W)

      Raison, Rt Hon Sir Timothy

      Jopling, Rt Hon Michael

      Rathbone, Tim

      Kellett-Bowman, Dame Elaine

      Renton, Rt Hon Tim

      Key, Robert

      Rhodes James, Sir Robert

      King, Roger (B'ham N'thfield)

      Ridsdale, Sir Julian

      King, Rt Hon Tom (Bridgwater)

      Rifkind, Rt Hon Malcolm

      Kirkhope, Timothy

      Roberts, Rt Hon Sir Wyn

      Knapman, Roger

      Roe, Mrs Marion

      Knight, Greg (Derby North)

      Ross, William (Londonderry E)

      Knight, Dame Jill (Edgbaston)

      Rossi, Sir Hugh

      Knowles, Michael

      Rost, Peter

      Knox, David

      Rowe, Andrew

      Lamont, Rt Hon Norman

      Rumbold, Rt Hon Mrs Angela

      Latham, Michael

      Ryder, Rt Hon Richard

      Lawrence, Ivan

      Sackville, Hon Tom

      Lee, John (Pendle)

      Sayeed, Jonathan

      Leigh, Edward (Gainsbor'gh)

      Scott, Rt Hon Nicholas

      Lennox-Boyd, Hon Mark

      Shaw, David (Dover)

      Lester, Jim (Broxtowe)

      Shelton, Sir William

      Lloyd, Sir Ian (Havant)

      Shephard, Mrs G. (Norfolk SW)

      Lloyd, Peter (Fareham)

      Shepherd, Colin (Hereford)

      Lord, Michael

      Shersby, Michael

      Luce, Rt Hon Sir Richard

      Sims, Roger

      Lyell, Rt Hon Sir Nicholas

      Skeet, Sir Trevor

      Macfarlane, Sir Neil

      Smith, Sir Dudley (Warwick)

      MacKay, Andrew (E Berkshire)

      Smith, Tim (Beaconsfield)

      Maclean, David

      Soames, Hon Nicholas

      McLoughlin, Patrick

      Speed, Keith

      McNair-Wilson, Sir Michael

      Speller, Tony

      McNair-Wilson, Sir Patrick

      Spicer, Sir Jim (Dorset W)

      Madel, David

      Squire, Robin

      Malins, Humfrey

      Stanbrook, Ivor

      Mans, Keith

      Stern, Michael

      Marlow, Tony

      Stevens, Lewis

      Marshall, John (Hendon S)

      Stewart, Allan (Eastwood)

      Marshall, Sir Michael (Arundel)

      Stewart, Andy (Sherwood)

      Martin, David (Portsmouth S)

      Stewart, Rt Hon Sir Ian

      Mates, Michael

      Stokes, Sir John

      Maude, Hon Francis

      Sumberg, David

      Maxwell-Hyslop, Robin

      Summerson, Hugo

      Mayhew, Rt Hon Sir Patrick

      Taylor, Ian (Esher)

      Mellor, Rt Hon David

      Taylor, Sir Teddy

      Meyer, Sir Anthony

      Temple-Morris, Peter

      Mills, Iain

      Thompson, D. (Calder Valley)

      Miscampbell, Norman

      Thompson, Patrick (Norwich N)

      Mitchell, Andrew (Gedling)

      Thorne, Neil

      Mitchell, Sir David

      Thornton, Malcolm

      Moate, Roger

      Thurnham, Peter

      Monro, Sir Hector

      Townend, John (Bridlington)

      Montgomery, Sir Fergus

      Townsend, Cyril D. (B'heath)

      Moore, Rt Hon John

      Tracey, Richard

      Morris, M (N'hampton S)

      Tredinnick, David

      Morrison, Sir Charles

      Trippier, David

      Morrison, Rt Hon Sir Peter

      Trotter, Neville

      Moss, Malcolm

      Twinn, Dr Ian

      69

      Vaughan, Sir Gerard

      Wiggin, Jerry

      Viggers, Peter

      Wilkinson, John

      Waldegrave, Rt Hon William

      Wilshire, David

      Walden, George

      Winterton, Mrs Ann

      Walker, Bill (T'side North)

      Winterton, Nicholas

      Waller, Gary

      Wolfson, Mark

      Walters, Sir Dennis

      Wood, Timothy

      Ward, John

      Woodcock, Dr. Mike

      Wardle, Charles (Bexhill)

      Yeo, Tim

      Watts, John

      Young, Sir George (Acton)

      Wells, Bowen

      Wheeler, Sir John

      Tellers for the Noes:

      Whitney, Ray

      Mr. David Lightbown and Mr. John M. Taylor.

      Widdecombe, Ann

      Question accordingly negatived.

    New Clause 2

      ABILITY TO PAY
      '.—(1) It shall be the duty of the Secretary of State to ensure that the council tax relates to the ability to pay of those liable to the tax.
      (2) As a result of the duty established under subsection I, the Secretary of State shall undertake a study of the circumstances in which people occupy and acquire their dwellings and how this relates to the level of the liability under the council tax.
      (3) Pursuant to the study undertaken as a result of subsection 2, the Secretary of State shall take whatever measures are necessary including introducing new or regional valuation bands or ensuring that the tax is directly related to persons' income.'.—[Mr. Wallace.]
      Brought up, and read the First time.
      Mr. James Wallace: I lbeg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to discuss new clause 4—Ability to pay (Scotland)—
      '. (1) It shall be the duty of the Secretary of State to ensure that the council tax relates to the ability to pay of those liable to the tax.
      (2) As a result of the duty established under subsection 1, the Secretary of State shall undertake a study of the circumstances in which people occupy and acquire their dwellings and how this relates to the level of their liability under the council tax.
      (3) Pursuant to the study undertaken as a result of subsection 2, the Secretary of State shall take whatever measures are necessary including introducing new or regional valuation bands or ensuring that the tax is directly related to persons' income.'.
      Mr. Wallace: New clause 2 goes to the crux of the council tax. The test that one should apply to that tax will be crucial and—[Interruption.]
      Mr. Deputy Speaker: Order. There is too much sedentary noise.
      Mr. Wallace: I am glad to note that this new clause is attracting so much attention from those on the Government Front Bench.
      The test of whether the amount charged to an individual is related to that person's ability to pay should be applied to any tax. I cannot honestly say that paying taxes is something that one would put down as a recreation in "Who's Who" or something that one did with a spring in one's step. However, in a civilised, democratic society it is recognised that paying taxes is one of the responsibilities
      70
      that one must bear as a citizen. That obligation is bearable and tolerable only if the tax which one is asked to pay at central or local government level is seen to be fair.
      There was never any question of fairness in the community charge—the poll tax. It was never suggested that that tax should relate to one's ability to pay. At the outset, when the poll tax started on its parliamentary procedure in 1986—when we legislated for Scotland—a virtue was made of the fact that almost everyone would pay the same, bar those who would qualify for a rebate, and even they had to pay 20 per cent. of the poll tax.
      The fact that everyone had to pay was justified on the ground of promoting accountability. However, by the time the poll tax reached its dying embers, even the pretence that it made local authorities more accountable was dispensed with, especially as just a small proportion of the revenue was raised by the local authorities themselves. In the Shetland part of my constituency, the poll tax for this year is 93p. It is difficult to be accountable to the electorate for 93p.
      The poll tax was unfair in principle, and it was perceived as such. Those who benefited from that tax were also unhappy, because they thought they should make a fair contribution. Ultimately, those factors have led to the demise of the poll tax. However, we do not believe that the council tax offers much more fairness, if fairness is measured by how that tax relates to a person's ability to pay. We believe that property taxes, by their very nature, tend to be unfair.
      Although, at first sight, there may be a rough and ready correlation between the size of a property and a person's ability to pay, there can be no direct correlation between the size and cost of a property and the income of those who occupy it.
      Mr. Robin Squire: The academic understanding—it is not a party political figure—is that there is an 80 per cent. correlation between the size of a property and a person's ability to pay. That correlation was also accepted under the old rating system. The hon. Gentleman is right to suggest that, in some cases, there may not be such a correlation, but he is overstating his case.
      Mr. Wallace: I note what the hon. Gentleman says, but I did say that it was a rough and ready correlation. I shall cite examples of people in different circumstances who would find that the value of the property they own, or perhaps rent, does not necessarily relate to their income.
      Some people may inherit a property. Given the expansion in home ownership in the 1980s, and even allowing for the tragic repossessions of the early 1990s, I suspect that that will be an increasing phenomenon. Some of those properties may not be particularly large, but they may be of great value in certain areas. Such a property may be a family's only means of acquiring affordable property in their home area.
      People may buy or rent a property and live in it for most of their lives. If that property is situated in an area where the value of property rises sharply, as happened in the south-east and in the north-east of Scotland, a family may find themselves in a high capital value property that does not match their income.
      It must also be remembered that some people rent their homes, often in high capital value, inner-city areas of London or Edinburgh. The very fact that they have rented

      71
      may show that they cannot afford to buy, but their council tax will be dictated by the capital value of the landlord's property. When the poll tax was introduced, many people whose rents had incorporated an element of their rates suddenly found that they then had to pay the poll tax in addition. Much injustice arose because of that, and I wonder what will happen as a result of this further change in local taxation.
      My hon. Friend the Member for Argyll and Bute (Mrs. Michie) has often mentioned, both in Committee and in the Chamber, people in tied housing. Those in agricultural areas in particular may occupy valuable properties despite the fact that their incomes are relatively low. Manses and vicarages in many areas can be of considerable value, yet the clergy are not, by any stretch of the imagination, among the better-paid members of our community.
      7 pm
      When Mr. Speaker retires at the next general election, I wonder how many of those who may wish to take his job will be reluctant to take the Chair—I do not mean the traditional symbolic reluctance—knowing that they will occupy the most expensive tied house in the country. Mr. Speaker's income is not too bad, however, and that may be an extreme example.
      Last week, I received a telephone call from a constituent whose husband is in employment but not earning a significant wage. The lady concerned is confined to her house, is in receipt of a disability allowance and is currently applying for a mobility allowance. Under the present system, because of her husband's income, she does not qualify for a rebate. Even with a poil tax of £2, she pointed out that the system was basically unfair.
      I accept that, to the Government's credit, an amendment has been made so that houses that have been converted for disabled people will be put in a lower band, but if they are already in the lowest band, those concerned will receive precious little, if any, relief. Because of their disabilities, those people will be unable to earn a worthwhile income, yet they will not qualify for the same discount as people living alone.
      Property prices fluctuate, and people living side by side in properties that are almost identical from the outside may have very different incomes. The hon. Member for Sheffield, Brightside (Mr. Blunkett) hit the nail on the head in 1990, when he said:
      "What isn't right is the disparity between someone living alone living next to three or four earners".
      That applies particularly to people who live in London and the south-east. A widow in a family home acquired 40 years ago may live next door to a two-income couple. The houses will be valued at the same amount by the local estate agent but the widow could almost certainly not afford that house on the open market and, when she and her husband were just starting out in the housing market, they could not have afforded to buy it as their first option.
      In many areas, property is priced out of reach of traditional occupiers. They may have to work or stay in the area for family reasons, but the council tax may price them out of their family homes. What may be true in London and the south-east is equally true in areas such as Edinburgh, Aberdeen and Cambridge.
      Mr. Malcolm Bruce: Does not my hon. Friend's comment reinforce the fact that, in the current
      72
      crisis, people may be forced out of their homes in a market that will not bear extra property? They will not be able to sell the property at any price, so they risk losing their home and being unable to pay the tax.
      Mr. Wallace: My hon. Friend strikes a note that is all too true in so many cases. People are caught no matter which way they try to go.
      We shall have an opportunity to explore the matter further in the next debate on valuation bands, and tomorrow we shall have an opportunity to discuss changes in discounts. However, any changes can improve fairness only at the margins. It is also likely that any such changes, while improving fairness, will nevertheless increase the administrative costs of the tax. Our new clause will oblige the Secretary of State regularly to face up to the issue of ability to pay and, ultimately, to work toward a system in which the tax is directly related to a person's income.
      Mr. Max Madden: I am having some difficulty in following the argument. If the hon. Gentleman is arguing for a local income tax, which is perfectly fair, he should have tabled a new clause on that. [Interruption.] The hon. Gentleman and his hon. Friends may have tried to do that in Committee, but they could have tabled a new clause for discussion now. This new clause says that there will be a property tax called the council tax and that the income of the person or persons living within a property will somehow be taken into account. The Government and the Labour party considered that option, but it becomes so complicated that it is impossible to operate. Is the hon. Gentleman arguing for a local income tax or a property tax based on income?
      Mr. Wallace: If the hon. Member for Glasgow, Cathcart (Mr. Maxton) had read the list of new clauses and amendments——
      Mr. Maxton: I have.
      Mr. Wallace: The hon. Gentleman says that he has, but he obviously has not. Had he done so, he would have seen that amendments Nos. 1 and 2 tabled by me and my hon. Friends argue for a local income tax. The amendments were not selected—I do not wish to criticise Mr. Speaker—but it is important to put the record straight. The new clause seeks to push the council tax in the direction of a local income tax. The hon. Member for Cathcart suggests that a property-based tax, specifically the council tax—there is not much difference between Government and Labour proposals—is incapable of being transformed into a fair tax that relates to people's ability to pay. People will judge the Labour party's proposals and the council tax on the basis of that admission.
      Mr. Robert G. Hughes: The hon. Gentleman seeks to argue that, whatever is done to help people's ability to pay under a council tax, it would not be as fair as a local income tax. Indeed, he sought to table an amendment on that basis. Was the amendment on local income tax based on——
      Mr. Deputy Speaker: Order. The hon. Gentleman cannot discuss an amendment which is not before the House and which Mr. Speaker deliberately did not select. Let us return to the new clause before us.
      Mr. Wallace: I am sure that the hon. Member for Harrow, West (Mr. Hughes) is sufficiently ingenious to put his question under another guise, and I await his doing so with interest.
      We want the Government to write into the Bill measures that will oblige them to move towards a tax that
      "is directly related to persons' income."
      That would be tantamount to a system of local income tax. I make no apology for that. It was the policy of the Liberal party and the SDP before the Liberal Democrats were established. The Liberal party has espoused such a policy since its submission to the Layfield inquiry in 1976. As a first step, we would require the Inland Revenue to produce a computer tape of one fifth of all taxpayers in each Inland Revenue area. The Secretary of State may be able to do that in a worthwhile fashion if he were trying to follow the duties imposed on him by the new clause.
      Information relating to postal codes and the taxable income of a sample of taxpayers could be recorded and sent to local authorities. That would get rid of one red herring—the idea that town hall snoopers would be able to find out everyone's income. The system would be anonymous. Each February and March, shortly before the local elections, authorities would be required to set local income tax rates to meet their commitments.
      Mr. Robert G. Hughes: Will the hon. Gentleman give way?
      Mr. Wallace: I think that the hon. Gentleman should be allowed to have another go.
      Mr. Hughes: My question relates specifically to what the hon. Gentleman has just said. Is it based on the work done for his party by Philip Truscott, or on the significantly understated figures that his party has been trying to use in an attempt to portray its policies in a rosier light?
      Mr. Wallace: I expected a Conservative Member to ask that question. As hon. Members will have read in The Times, Mr. Truscott has initiated actions against my party, which are now the subject of legal proceedings in the High Court and which will be vigorously defended. It would not be proper for me to say more about the matter, which relates to copyright.
      What I can tell the hon. Gentleman is that the press release that accompanied the publication of our figures set out fully and unequivocally the premises on which they were calculated. The figures for Wales, which were issued separately, were somewhat different from those calculated by Mr. Truscott—for the very good reason that we would wish to use the same proportion of revenue generated by local taxation as the Government. Mr. Truscott did not do that, as was spelled out in the press release.
      We believe that the additional amount of some £300 million could be more than covered by the savings that would result from the change from poll tax to local income tax. The Labour party's estimate is £1·8 million. The Conservatives were wildly wrong when they said, before the introduction of the poll tax, that it would amount to £200 per person: people have found that out to their cost. I will not accept any criticism of our estimates from Conservative Members; that is sheer humbug.
      Each payer of local income tax would be sent details of what he would be required to pay over the coming year. Once authorities had set their rates, the average would be calculated, the standard rate would be deducted and, at the
      74
      end of the year, an adjustment would be made. If a local authority had spent responsibly and was able to provide a rebate, that would be brought home to taxpayers. If it had overspent and would require more money, that too would be brought home to them. As we all know, the end of the tax year falls in April, a few weeks before the local elections. Surely the system that we suggest would drive home to voters the accountability of their elected councillors.
      Mr. Bowis: Does the hon. Gentleman accept that 85 per cent. of the cost of local government comes from central taxation, which is based on ability to pay? There is a 25 per cent. discount for single-person households to allow for the lower incomes received by such households, and a sliding scale of rebate—from zero to 100 per cent.—for those on low incomes. Surely the only people who could benefit from the hon. Gentleman's proposals are those who could afford an accountant to help them to dodge the system.
      Mr. Wallace: I do not accept that. We shall debate the discount system tomorrow; the amendment that we have tabled would increase the amount from 25 per cent. We shall also debate the banding system. Although that will help to make the council tax fairer, we do not believe that it will entirely relate what is paid to the ability to pay.
      Let us make no bones about it: the poll tax had its winners and losers, but on a very unfair basis. The local income tax is bound to have its losers—not least as a result of the poll tax that preceded it—but it is underpinned by fairness. It relates what is paid to the ability to pay. As I have said, no one likes paying tax, but a semblance of fairness makes it much more acceptable.
      An equalisation system would have to be built in, so that low-income areas would not be faced with vast bills while wealthy areas received small ones. In previous debates, I have sometimes thought that Conservative Members were trying to apply equalisation grants arranged under the poll tax system to a local income tax system, without making any of the necessary adjustments. Every system of local government finance—be it council tax, the tax proposed by Labour, the poll tax, the old rating system or our proposed local income tax—has the appropriate equalisation arrangements built into it.
      7.15 pm
      Mr. Martin M. Brando-Bravo: Let us assume that the Liberal Democrats can come up with a good equalisation scheme. Where will that leave the accountability that we all seek to preserve, to ensure that local democracy can function properly? If 85 per cent. comes from central funds, local government will be blown out of the water.
      Mr. Wallace: Every system involves an equalisation scheme. I do not recall its being suggested, when the poll tax was introduced, that such a scheme would undermine a system that the Government hoped would lead to greater accountability.
      Mr. Maxton: I think that we should clear up the question of the 85 per cent. from central funds. It is true that 85 per cent. is controlled by central Government, but that is a very different matter. Non-domestic rates are paid locally, although control and distribution takes place at the centre.
      Mr. Wallace: That is an important point. We also want to allow local authorities more control over local business rates. We have made no secret of that. As my hon. Friend the Member for Eastbourne (Mr. Bellotti) said in Committee, we want the balance to shift: we want national taxation levels to fall as local authorities become more responsible for raising revenue in their areas. The equalisation grant would then become proportionately smaller, which would lead to far more local accountability.
      Conservative Members may ask what we would do about capping. We believe that the most effective local income tax cap would be a fair voting system. It is the electorate who cap authorities in a democratic society. Even according to the figures that the Government recently published for Scotland, local income tax rates would be relatively low. Because the Government have been afraid to grasp that, the poll tax lingers on. When the new system is introduced, local authorities will be rigorously capped simply because the Government will not introduce a fair voting system.
      We believe that the only criterion for a tax should be whether it is related to ability to pay. The rates failed on that ground, and were therefore abolished; the poll tax never even pretended to be fair, and it had to go as well. Unless the new clause is accepted, the council tax will fail for the same reason.
      Mr. Douglas: Generally, I support new clause 2, but I want particularly to refer to new clause 4, which deals with Scotland.
      I do not want to offend the hon. Member for Orkney and Shetland (Mr. Wallace), but the Scottish National party has no problems about copyright in its proposals for a local income tax—they are all our own work—[Interruption.] The hon. Member for Sheffield, Brightside (Mr. Blunkett) seems to find this funny.
      Mr. David Blunkett: You have to laugh.
      Mr. Douglas: Life must be hard on the Labour Front Bench these days——
      Mr. Maxton: My hon. Friend might be a Minister soon.
      Mr. Douglas: The hon. Gentleman should not count his chickens.
      My fellow party members and I met Scottish Office Ministers and the Secretary of State for the Environment to talk about local taxation, which must not only approximate to the sum to be collected: it must be exactly equivalent to what should be raised either from the poll tax or from the council tax. I hope that I have the agreement of the House at least to that.
      In Scottish terms, we are talking of about £800 million. Adam Smith, whose views should hold some sway over the Conservative party, held that taxes should be related to ability to pay. Hon. Members think not in terms of random samples of the public but about themselves—how do they pay their taxes? I know no one who pays taxes out of capital, with the possible exception of the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn). He might have to sell some of his capital assets to pay his taxes, but most people would not. The touchstone of ability to pay is that people pay tax out of income.
      We understand that in Scotland it would cost about 4p in the pound to collect £800 million—[Interruption.] If the hon. Member for Glasgow, Cathcart (Mr. Maxton) keeps
      76
      shaking his head so hard in disagreement. he will fall off the Bench, but if he wants to intervene I should be happy to allow him to do so.
      Mr. Maxton: To judge from questions that I have asked the Government, even with the £140 reduction, the highest figure for Scotland would be about 7·5p.
      Mr. Douglas: Perhaps there is something to be said for standard tests in arithmetic. I have done my best to calculate, based on the £800 million figure. We calculate what can be raised for 1 p and multiply that by three or four to arrive at the relevant total. The hon. Member for Cathcart accepts the Government's figures, apparently having none of his own. I do not claim absolute accuracy for mine, but I am willing to allow an independent authority to examine them. No matter how we raise the money, we are aiming at the same global sum. The arguments are about how to raise it while relating the tax to ability to pay and keeping it cheap to collect.
      I have already said that the tax will raise £800 million, and it will cost £80 million to collect. Of course it will not be possible to collect 100 per cent. of that money, but the collection costs will stay the same. If that is not crazy, I do not know what is.
      I do not seek to disparage the Liberal Democrats' proposals, but we suggest that once a year, on 1 January, people should declare their residence so that local authorities could relate that to their tax-collecting base. National insurance numbers could also be given at the same time. Local authorities could then plug the information directly into Centre One, Scotland's computer system. That would involve no additional overheads, and no need to go into benefits or to examine discounts. This may be an underestimate, but I believe that it could be done in about three months——
      Mr. Maxton indicated dissent.
      Mr. Douglas: The hon. Gentleman is at it again; it must be Christmas. Perhaps it will take four months, or even six.
      Conservative Members may ask about accountability. Nationally speaking, the standard rate of tax governs accountability. The Government have made great play of reducing that standard rate and if they form another Government it is likely that they will try to bring the rate down to 20 per cent. Indeed, if we reach the next Budget, there will be great pressure on the Chancellor to reduce the standard rate by 1p—a great signal of accountability.
      Mr. Barry Porter: The element of choice.
      Mr. Douglas: Perhaps; at any rate, it is a sign of national accountability. If, say, an authority in Fife wanted to raise the local income tax from 3p in the pound, the national average, to 6p or 7p, what a signal for accountability that would be! The Government should recognise this. The only reason why we cannot have a local income tax is that the Government, aided and abetted by the Treasury, are afraid to give up direct control of fiscal policy. They are all Keynesians now.
      Mr. Bowis: I realise that the hon. Gentleman does not speak for the Liberal party, but he is supporting a Liberal new clause. One of the main arguments advanced on ability to pay was the return to the rate equalisation system. Rate equalisation means that those in high rateable value areas subsidise those in low rateable value areas. Someone, irrespective of income, who lives in a

      77
      higher value property has to pay more for the property because of the higher bands, and now it is proposed that he pay a surcharge for rate equalisation. How would that help ability to pay?
      Mr. Douglas: The hon. Gentleman is trying to make me defend an argument that I am not using. In Scotland, we would look for some refinement of the grant-aided expenditure reviews carried out as between local authorities and the Scottish Office. It is not perfect but it is used by the Government in Scotland as a level playing field for services. They are prostituting that by using it for capping purposes. The Minister does not understand that and that is why a Scottish Office Minister should be present. The Government are taking the techniques that have been honourably agreed between local authorities and the Scottish Office for grant-aided expenditure purposes and are using them to create a level playing field so that all authorities provide equal standards of service.
      7.30 pm
      We do not suggest a one-off immediate reform of what is in place. If Labour comes to office and the hon. Member for Cathcart is a Minister—God help Scotland if he is—what will happen in June or July 1992? Labour intends to return to the rating system. How people will greet that! It will take two to three years for Labour to introduce its fair rating system with safeguards for those who cannot pay. That is a noble concept, but why should we have to go through all the paraphernalia of bureaucracy? Thal is not needed in Scotland, and it is certainly not needed to collect the equivalent of 93p in the pound for Shetland.
      The Scottish average is 14 per cent. and other regions such as Lothian would have to collect more than that. Smaller regions—and the island councils examplify this—have a higher average, and if they want to collect an equivalent amount of revenue they could levy a much lower rate of income tax. I know that I am not carrying the whole House with me on this argument, but I am sure that the Minister understands it. I do not want to wrong-foot any civil servant, but we have offered to have discussions with the Scottish Office at civil service level and put our experts with theirs to clarify the amount that a Ip local tax would raise in Scotland. The hon. Member for Cathcart was right to say that there are differences over figures.
      There are no Labour Back Benchers in the House, but I am not trying to score political points from that. Unless local authorities are to be asked to collect a much higher proportion—20 to 25 per cent.—from the domestic sector, we are going through a farcical procedure. The Conservative proposal for a local community tax or the Labour proposal for so-called fair rates would impose considerable burdens. Time does not permit me to go into the ramifications of the unfairness of the Government's proposals which strain at trying to allow for ability to pay in their discount system of 25 or 50 per cent. That has no real relationship to ability to pay, but tries to give that impression. Many issues will be raised in the coming election, but there is an overwhelming case for discussing the suitability for Scotland of a local income tax related to ability to pay. Such a tax would be fair and cost effective and would make all local authorities, irrespective of their size, accountable.
      Mr. John Wilkinson (Ruislip-Northwood): I rise with some trepidation in a debate on local government. I cannot pretend to be an aficionado of local government
      78
      finance and perhaps it is a little significant that there are almost more officials in the officials' Box than there are Members in the Chamber. It is an arcane and difficult subject and we have to deal with it in an incredibly short time. Therefore, I shall merely seek to state what the position could be for my constituents in north-west London when they pay their council tax bills in the spring of 1993.
      The new clauses tabled by the Liberal Democrats are typically vague. They speak of matching the system to an ability to pay, but exactly how that is to be achieved is in no sense spelled out. Although the Liberal Democrats prefer a local income tax, I doubt whether my constituents would. They are taxed enough already.
      When considering the ability to pay, the Government have assumed that the people of London and the south-east are rich and can easily afford to pay the levels of council tax that will be set. I wish to disabuse them of that simplistic notion. They should bear it in mind that unemployment has risen in the south-east and in London relatively faster than in any other part of the country. The available statistics show a very real squeeze on living standards for my constituents in outer London.
      On Second Reading, several of my plain-speaking hon. Friends dealt with those matters. Most notable were my right hon. Friend the Member for Brent, North (Sir R. Boyson) and my hon. Friend the Member for Hendon, South (Mr. Marshall), who is in his place. In an interesting letter to my hon. Friend the Member for Hendon, South, the Minister for Local Government and Inner Cities wrote abut council tax, London and national banding. Those are issues of great importance when considering ability to pay. The letter is dated 11 December and with my hon. Friend's agreement I shall quote from it. It states:
      "In the Second Reading debate, you drew particular attention to the size of mortgage repayments in London. It is true that on average, people in London are borrowing three-quarters as much again to purchase houses as people in the North, … This fact, however, should be looked at in the context of the relative incomes of purchasers."
      That is fine if they are still in employment. The letter continues:
      "House buyers in London are borrowing an average of 2·36 times their gross income, while those in the Northern region borrow 2·08 times their income. Borrowing as a multiple of income is only 13 per cent. higher in London than the North, in contrast with the almost 75 per cent. differential in size of mortgage."
      It must be remembered, however, that the figures are being taken for London as a whole. They include low-value property in places such as Stepney and Bethnal Green and Bow, and in many others. In outer London, however, property values are immeasurably higher. The treasurer of the borough in my constituency has calculated that two thirds of households will be paying more under the new system because they will move into band E or above—in other words, properties with a value of over £88,000.
      In my constituency, we were extremely glad to have the poll tax. It was a system which brought great accountability. It undoubtedly helped to enable the Conservative party to regain control of the borough council in the spring of 1990. My party won four seats from the Liberal party and one from Labour, and thereby achieved a clean sweep of all the wards in the constituency. There was no evidence in my neck of the woods—Ruislip-Northwood—that the poll tax was unpopular. There were some anomalies and some things to be put

      79
      right, but the tax itself were not unpopular. It certainly matched the ability of people to pay in a way that the new system does not.
      The figures in the massive family expenditure survey produced by the Central Statistical Office, which was published on 6 December, show that the fares and travel costs of a London family are £12·18 a week, compared with £6·19 for the midlands and £4 for the north. For places in outer London, such as Ruislip-Northwood, travelling or commuting costs are infinitely higher than the average figure.
      The figures incorporate housing costs in London. Most of my constituents are owner-occupiers, and the London outgoings of £61·28 are nearly twice those of the people of Northern Ireland, on £33 a week. They are significantly higher than the national average of £48·02. Only 18 per cent. of Londoners have finished paying their mortgage compared with nearly a third of householders in Wales. In Scotland, the figure is 15 per cent. When the part of the United Kingdom that I represent is compared with Wales, which has a preferential banding, again it is worse off.
      I do not commend the Liberal new clauses, and I certainly could not vote for them. I wish, however, clearly to put it on the record that much as I wish my right hon. Friend the Secretary of State and his ministerial team well—I hope that the new council tax does away with many of the unfairnesses, injustices and anomalies of the old poll tax—I do not believe that for Ruislip-Northwood it will match ability to pay as well as the old poll tax did. I speak only for my constituency, of course.
      7.45 pm
      Mr. Barry Porter: As I so often do, I start by saying that I had no intention of speaking in this debate. I cannot compete with my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) on the percentages and anomalies that he presented to us.
      I know that the old rating system was unfair. I remember that when I first bought a house in 1965 the rates were about £1 a week. They were jolly unfair, but I did not care because the weekly outgoing was not very much. This debate is essentially about how much is to be paid at the end of the day, not about anomalies and unfairnesses. Arguments that are based on whether we should have rates, income tax or the new council tax are irrelevant, because the relevant consideration is how much an individual pays at the end of the day, and that must depend on what the local authority spends.
      I remember a Labour finance chairman of the local authority of which I was a member who was not dissimilar to you, Mr. Deputy Speaker, in appearance, attitude and politics. He would have had a fit if he had had to put tuppence on the old rate. In fact, he did not have to do so. I can recall that if at that time the Government of the day, whether Tory, Labour or, in odd dreams, even Liberal, had suggested some restriction on local expenditure, we would have accepted that. We have gone wrong in the past few years because local authorities have not accepted that advice. They have not accepted that there should be a limit to local authority expenditure, with the result that capping has had to be introduced. It would have to be introduced again if we had an Administration of a different colour, which is highly unlikely. It is the refusal of local authorities
      80
      to accept that there should be restrictions on local authorities that is the problem, not methods, fairness or amounts.
      It has been said already that people in Wandsworth did not concern themselves over much with the community charge because it did not cost them anything. I lived happily in Westminster and I did not care much about the charge because it cost me very little. People in the Wirral cared a great deal because their authority spent a great deal on many things that many of us considered to be entirely unnecessary. The people in the Wirral paid about £500 and I paid about £30. That is a jolly good thing!
      The new council charge is an attempt to be fair, and I think that it will probably work. It is only a variation of what the Labour party is saying about rates. I think that my right hon. Friend the Secretary of State is entirely right to have a system of banding. I hope that he will be able to ensure that correct valuations are made in the appropriate time, and I am told that he will be able to do so. I believe him, as I have always believed him. In the end, however, everything will depend on what local authorities spend, and on what, and whether they are prepared to be reasonable. If authorities are prepared to be reasonable, the people will be reasonable with them.
      I suggest that the House should reject this silly new clause.
      Mr. Maxton: I shall not take up the remarks of the hon. Member for Wirral, South (Mr. Porter). I have known him for a considerable time, having been at university with him, but I was surprised to hear you, Mr. Deputy Speaker, call him as Barrington.
      I cannot ask my right hon. and hon. Friends to vote for the new clause——
      Mrs. Ray Michie: That is a surprise!
      Mr. Maxton: It may be a surprise, but I cannot invite my right hon. and hon. Friends to support the new clause because of what it contains. It suggests that there should be a council tax—in other words, a property tax—with, presumably, discounts, a banding system and, somehow, an ability-to-pay mechanism. Such a system would create an administrative nightmare that would go beyond the poll tax and, to be honest, the council tax. Therefore, I cannot ask my hon. Friends to support the new clause.
      Liberal Members suggest that the new clause is a first step to local income tax. I cannot, therefore, ask my right hon. and hon. Friends to support that.
      Mr. Bellotti: It appears that the hon. Gentleman is supported by only one other member of his party. I am wondering whether any more Labour Members will appear in the Chamber.
      Mr. Maxton: Only one of the hon. Gentleman's hon. Friends was present during the previous debate for most of the time. I do not see why my right hon. and hon. Friends should enter the Chamber to listen to Liberal debates any more than Liberal Members should come to listen to Labour debates.
      I am not prepared to ask my right hon. and hon. Friends to support local income tax. I shall briefly explain my reasons for taking that approach. First, the Scottish National party and the Liberal party have suggested that such a system is practicable. There may come a time when it is practicable to introduce local income tax, but we have not yet reached it. If we are to have local income tax, the

      81
      Inland Revenue—both the SNP and the Liberals have admitted that it will have to collect the tax—will have to know in which local authority every taxpayer resides. That means that whether the tax is collected each week or month through salary or over one year on one basis throughout Scotland, and then allocating moneys to local authorities, a local authority will need to know where individual taxpayers live. The simple fact is that the Inland Revenue does not know where every individual lives because that is not part of its tax records.
      Mr. Douglas: I was going to use a harsh word and say that the hon. Gentleman displays his ignorance, but let me put it more euphemistically. He displays his total lack of knowledge of what the Inland Revenue knows. It knows where taxpayers live and has their national insurance numbers. I admit that there is a difficulty in relating that information closely to local authority areas.
      I explained the Scottish National party's proposals, and I am sorry for taking up time now. Under our proposals, one would be asked to disclose where one lived, which would be for the whole year, and one's national insurance number, and that information could be fed to the Inland Revenue in Scotland.
      Mr. Deputy Speaker: Order—briefly.
      Mr. Douglas: You are right, Mr. Deputy Speaker. If that point defeats the hon. Member for Glasgow, Cathcart (Mr. Maxton), there is not much that I can do.
      Mr. Maxton: It does not defeat me. The Inland Revenue does not know where people live; that information is not part of its computer system. As the Inland Revenue computerises, that will be part of its information, and the system could be changed, but it will take a considerable period to reach that stage. The simple, harsh reality that the people who propose a local income tax are not prepared to accept is that, at this time, such a system is not practical. They do not want any form of council tax or fair rates, so they would have to have 100 per cent. Government funding. That is what the Scottish National party suggested for Scotland for 12 months, with all that that means for control over local government expenditure, leaving financing entirely to central Government. My party is not prepared to accept that.
      In principle, I see nothing wrong with taxing the use of property. The proposal is for a tax not on property but on the use of a property. Other services are taxed, and there is no reason why property should be exempt. The hon. Member for Orkney and Shetland (Mr. Wallace) said that the only taxation principle is one based on ability to pay. I disagree. That is one criterion by which one judges a tax, but by no means the only one.
      One criterion by which one judges a tax is its spread across people. One has to find a variety of ways of raising money, locally and centrally, and there is no reason why property should not be included in the basket of taxes that pay for services locally and nationally. That is one of the great weaknesses of the poll tax. There are tax benefits on the ownership and use of property but no tax on that ownership and use—we give mortgage tax relief, we do not have capital gains tax on the sale of properties, and we do not tax use. In principle, that is wrong.
      A tax should be visible to the people paying it and to the body to which it is paid, whether it is a central Government or a local government tax. Local income tax
      82
      would be collected not by a local authority but by the Inland Revenue. It would become part of the overall tax bill. The Liberal Democrats suggest a hare-brained scheme whereby everybody pays the same poundage on a local income tax and the money is redistributed. The hon. Member for Orkney and Shetland said that the poll tax in part of his constituency was 93p in the pound. Presumably, that means that the Liberal Democrats would have a local income tax of 0·00001 per cent., or something of that nature. But people will not be pleased if they have to pay it all to get back a lump sum.
      Mr. Wallace: There will be interest.
      Mr. Maxton: That is interesting: there will be interest; that is fine. What about my constituents in Glasgow who pay, say, 4p in the pound but find that they will have to pay 7p or 8p in the pound and make up that difference by writing a cheque for a lump sum payment? Will they have to pay interest on that as well, to make up for the other interest?
      The Liberal Democrats' scheme is hare brained and will not work. A local income tax collected in that way would not provide accountability. More particularly, if it were collected as one would hope—so that each local authority had its own rate and the money were collected on a monthly basis with the money owed to the Inland Revenue, which would be a fair way of doing it—it would not have visibility.
      The hon. Member for Wirral, South had a small exchange with the hon. Member for Dunfermline, West (Mr. Douglas), whom I shall not call the Member for Nowhere, as the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) described him. We were told that the Treasury objected to control over any level of income tax being taken from it—far from it. In my view, a local income tax gives considerably greater power to the Inland Revenue and central Government, in two ways. First, an authority that collects the tax can say, "We will not collect that amount for you." Secondly, the figures which we have on the rate of local income tax do not take account of rebates.
      At present, everyone is liable to pay the poll tax. Under the council tax, everyone will be liable to pay the council tax. Under our fair rates system, everyone who is an owner or occupier will be obliged to pay and will be rebated—under the law, central Government will refund money to those people. Under a local income tax, those who are not liable to tax pay nothing, so the rebate system does not operate. The tax burden is placed on those who pay. If it is not, there is a reliance on central Government making up the difference, paying more to local authorities and, therefore, giving more power to them.
      The simple fact is that a local income tax system is unworkable. It gives central Government greater power over local authorities. In principle, it is not visible and it is not workable. I therefore ask my right hon. and hon. Friends not to support it.
      Mr. Portillo: Much though it pains me, I agreed with much of the critique of the hon. Member for Glasgow, Cathcart (Mr. Maxton) on local income tax. But I shall begin with the speech of the hon. Member for Orkney and Shetland (Mr. Wallace), who quickly passed over the ability to pay and how it related to council tax. I remind him that, under the council tax, we propose that rebates of

      83
      up to 100 per cent. should be available for those on low incomes—so, of course, we take account of the ability of the poorest in society to pay.
      We propose a tax that will need to raise only 15 per cent. of local authority spending in England, 12 per cent. in Scotland and 8 per cent. in Wales. The balance of those items has to come from national taxation. The national taxation which provides those funds is based largely on the ability to pay. on profitability and on other factors. I remind the hon. Member for Orkney and Shetland that we are limiting the incidence of the tax so that those in the highest-value properties will never have to pay more than three times as much as those in the lowest-value properties in any one area and that we are taking account of the number of people in each household—something of which I know that, within the limits of the scheme, he approves.
      Happy was my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) who started his speech by saying that he was not an aficionado of local government finance—a very fortunate position in which to find himself. My hon. Friend and some of his colleagues were afraid that we would return to the sorts of bills that our constituents faced under the rating system. That would be intolerable. We recognise that the rating system had to go because of its manifest unfairness and because some people faced enormous bills because they happened to live in high-value properties and did not have the income to go with it.
      That is why the council tax sets out on a different basis. First, it sets out to collect less money than the rates did from local taxpayers. Secondly, it has a limitation in that those in the most valuable properties shall never pay more than three times as much as those in the least valuable properties. The hon. Member for Orkney and Shetland mentioned Mr. Speaker and the Speaker's house. How wise we are, therefore, to have the top band at £320,000 and how wise we are in general to set the bands in such a way that we shall not ask people to pay disproportionately higher bills. I repeat that if people are on low incomes they will come within the rebate system which is payable up to 100 per cent.
      If I may say so, my hon. Friend the Member for Ruislip-Northwood was slightly confused about what he called the preferential bands in Wales. The existence of different bands in Wales means that people there reach the top band of payment earlier than people in England; or, to put it another way, there are fewer people in the lower bands in Wales, so I am not sure that those who have to pay will see the scheme in the same light as my hon. Friend.
      8 pm
      Mr. Wilkinson: Before my hon. Friend moves on, may I say that what exercises us is not so much the differentiation between the highest and the lowest but the fact that nearly all our constituents are in the top three or four bands. That is the problem. In my constituency, the humblest council house—if one can use that expression—would be valued at, at least, £88,000 which would put it into band E.
      Mr. Portillo: I understand my hon. Friend's point, although what he said during his speech proved why the solution to that problem—if it is a problem—is not to introduce a regional banding system. He said that there
      84
      was a tremendous variety of prices in London, which is true. There is also a tremendous variety within each region and if one substituted a regional banding system, one would be saying that there should be lower rates of tax in the areas with the highest property values, which might well also be the areas of highest incomes and of the greatest wealth, and that there should be higher rates of tax in the lower property value areas. That would be very difficult for my hon. Friend or for anyone else to explain.
      My objections to a local income tax are largely the same as those of the hon. Member for Cathcart. I believe that there would be immense disquiet if we were, in effect, to appoint a Chancellor of the Exchequer in every town hall. The control of the level of income tax and of fiscal policy should rest with central Government, not local government.
      The hon. Gentleman was right to say that we should have a variety and a spread of taxes. In general, the taxation system should lie so thinly and be so well spread that it does not distort economic activity more than is absolutely necessary. That means that we must have different types of taxes, each at as low a level as it is possible to achieve. Therefore, I do not accept that all taxes should be based on income. Value added tax, for example, is based not on income but on what people spend. Some taxes will be based on income, some on profit, some on property and some on what one spends. Such a variety of taxation is appropriate and is found in most countries.
      The naivety with which the Liberal Democrats and the Scottish National party tabled the new clause is pretty alarming. Hon. Members on the Standing Committee witnessed an hilarious debate lasting two hours in which the hon. Member for Eastbourne (Mr. Bellotti) attempted to explain how a local income tax would work. On the question of equalisation—with which we have also dealt today—even he said with what I thought was stunning naivety:
      "The equalisation process is not something that we see central Government undertaking. It would be undertaken by local authorities in concert."
      The idea that local authorities would decide between themselves who would subsidise other local authorities is breathtaking. The hon. Member for Eastbourne went on:
      "We have published details—they are publicly available—of the actual rates that would have been in place in every constituency this year had a local income tax been introduced."—[Official Report, Standing Committee A, 19 November 1991; c. 89–91.]
      However, Mr. Philip Truscott—the researcher from Surrey university who has been alluded to already in this debate—said that the party had significantly understated the likely level of local income tax bills and that he wanted the party to withdraw the figures. He said that if the system were introduced, bills would have to be significantly higher than those suggested by the Liberal Democrats.
      The Opposition have significantly understated the bureaucracy that would be required. The hon. Member for Dunfermline, West (Mr. Douglas) again mentioned the Inland Revenue. I repeat that at present the Inland Revenue does not hold the home addresses of the vast majority of taxpayers. That database would have to be increased and that would involve substantial bureaucracy. As I understand it, the Liberal Democrats are asking employers to keep track of where employees live day by day and, by contrast, the hon. Gentleman is proposing

      85
      that there should be an annual register for local income tax. Under his proposal we do not get away even from the need for a register of every taxpayer.
      Mr. Douglas: Is the Minister saying that Centre One in Scotland does not know the names and addresses and national insurance number of income tax payers? I want this on the record. Is he suggesting that his present proposals do not require a register or a list?
      Mr. Portillo: Certainly, the council tax does not require a register, and I reiterate that the Inland Revenue holds only a limited number of home addresses and to extend that database would take some years.
      Mr. Maxton rose——
      Mr. Portillo: I sense that the House wants to come to a conclusion.
      The reason why the Liberal Democrats hanker after a local income tax—they have put it on record before and have done so again this evening—is that they wish to increase the proportion of taxation that is raised locally. The only way in which they can see that happening is to introduce a local income tax and to hand over tremendous power to Chancellors of the Exchequer in town halls. We do not propose to increase the proportion of taxation which is raised locally because we believe that the proportion that is currently raised locally—it is now about 15 per cent. in England, 12 per cent. in Scotland and 8 per cent. in Wales—is appropriate. For that reason, the council tax is the appropriate instrument for raising the sum of money that needs to be raised from local tax payers.
      Mr. Wallace: I know that the House wishes to move on, so I shall reply briefly to what the hon. Member for Glasgow, Cathcart (Mr. Maxton) said, in concert with the Minister. It is not always a reliable rule of thumb, but we can usually assume that we are right when the two Front Benches agree and we are faced with a genuine alliance of British politics between Tweedledum and Tweedledee.
      The attempt of the hon. Member for Cathcart to argue against a local income tax was uninformed when he suggested that the Inland Revenue could not compile a list. Any senior Inland Revenue official would say that if the political will was there, it could be done and that it could be done efficiently and quickly, certainly within six months to a year. The hon. Gentleman then suggested that the Inland Revenue would perhaps not carry out the task. I do not know whether he was suggesting that there was incipient anarchy or whether he had merely lost his place in his notes. He also suggested that it was not visible, but then proceeded to complain about its high visibility in terms of either a rebate or a requirement to pay.
      To put to rest the Minister's concerns, I can tell him that many countries operate an end-of-the-year tax return system with a form to be filled in. That would also be the case for any system of tax benefits or tax credits that we wished to implement. Indeed, it might be very much in people's interests to fill in that form, because it could remove much of the burden on small businesses.
      I dealt in an intervention with the Minister's point about the figures mentioned by Mr. Philip Truscott and I am sorry that the Minister could not depart sufficiently from his speech to take that correction into account. Even according to Government figures, the rate of local income tax in my constituency would be 0·1 per cent. in Orkney
      86
      and nothing at all in Shetland. Therefore, the figures are even less according to the Government than according to Mr. Truscott. Members of both Front Benches—especially the Government Front Bench—appear to be afraid of the genuine exercise of local democracy. Given a proper and fair proportional system of voting in local authority elections, there is no need to fear the will of the people. In a democracy, local control over a vast number of areas is desirable. It is worth remembering to trust the people. The Government are never really prepared to do that.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 21, Noes

      Division No. 27]

      [8.09 pm

      AYES

      Alton, David

      Kirkwood, Archy

      Ashdown, Rt Hon Paddy

      Maclennan, Robert

      Beith, A. J.

      Michie, Mrs Ray (Arg'l & Bute)

      Bruce, Malcolm (Gordon)

      Salmond, Alex

      Campbell, Menzies (Fife NE)

      Stephen, Nicol

      Carr, Michael

      Taylor, Matthew (Truro)

      Cartwright, John

      Wallace, James

      Douglas, Dick

      Welsh, Andrew (Angus E)

      Ewing, Mrs Margaret (Moray)

      Fearn, Ronald

      Tellers for the Ayes:

      Hughes, Simon (Southwark)

      Mr. Alex Carlile and Mr. David Bellotti.

      Johnston, Sir Russell

      Kennedy, Charles

      NOES

      Aitken, Jonathan

      Chapman, Sydney

      Alexander, Richard

      Chope, Christopher

      Alison, Rt Hon Michael

      Churchill, Mr

      Allason, Rupert

      Clark, Rt Hon Alan (Plymouth)

      Amess, David

      Clark, Dr Michael (Rochtord)

      Amos, Alan

      Clark, Rt Hon Sir William

      Arbuthnot, James

      Colvin, Michael

      Arnold, Jacques (Gravesham)

      Coombs, Anthony (Wyre F'rest)

      Arnold, Sir Thomas

      Coombs, Simon (Swindon)

      Ashby, David

      Cope, Rt Hon Sir John

      Aspinwall, Jack

      Cormack, Patrick

      Atkins, Robert

      Couchman, James

      Baldry, Tony

      Cran. James

      Banks, Robert (Harrogate)

      Currie, Mrs Edwina

      Batiste, Spencer

      Curry, David

      Beaumont-Dark, Anthony

      Davies, Q. (Stamf'd & Spald'g)

      Bellingham, Henry

      Davis, David (Boothferry)

      Bendall, Vivian

      Day, Stephen

      Bennett, Nicholas (Pembroke)

      Devlin, Tim

      Benyon, W.

      Dickens, Geoffrey

      Bevan, David Gilroy

      Dicks, Terry

      Biffen, Rt Hon John

      Dorrell, Stephen

      Blackburn, Dr John G.

      Douglas-Hamilton, Lord James

      Blaker, Rt Hon Sir Peter

      Dover, Den

      Body, Sir Richard

      Dunn, Bob

      Bonsor, Sir Nicholas

      Durant, Sir Anthony

      Boscawen, Hon Robert

      Dykes, Hugh

      Boswell, Tim

      Eggar, Tim

      Bowden, A. (Brighton K'pto'n)

      Emery, Sir Peter

      Bowden, Gerald (Dulwich)

      Evans, David (Welwyn Hatf'd)

      Bowis, John

      Evennett, David

      Boyson, Rt Hon Dr Sir Rhodes

      Fallon, Michael

      Brandon-Bravo, Martin

      Favell, Tony

      Brazier, Julian

      Fenner, Dame Peggy

      Bright, Graham

      Field, Barry (Isle of Wight)

      Brown, Michael (Brigg & Cl't's)

      Finsberg, Sir Geoffrey

      Bruce, Ian (Dorset South)

      Fishburn, John Dudley

      Burns, Simon

      Fookes, Dame Janet

      Burt, Alistair

      Forman, Nigel

      Butler, Chris

      Forsyth, Michael (Stirling)

      Butterfill, John

      Forsythe, Clifford (Antrim S)

      Carlisle, John, (Luton N)

      Forth, Eric

      Carlisle, Kenneth (Lincoln)

      Franks, Cecil

      Carrington, Matthew

      Freeman, Roger

      Chalker, Rt Hon Mrs Lynda

      French, Douglas

      Channon, Rt Hon Paul

      Fry, Peter

      87

      Gale, Roger

      Macfarlane, Sir Neil

      Gardiner, Sir George

      MacGregor, Rt Hon John

      Gill, Christopher

      MacKay, Andrew (E Berkshire)

      Glyn, Dr Sir Alan

      Maclean, David

      Goodhart, Sir Philip

      McLoughlin, Patrick

      Goodlad, Alastair

      McNair-Wilson, Sir Michael

      Goodson-Wickes, Dr Charles

      McNair-Wilson, Sir Patrick

      Gorman, Mrs Teresa

      Madel, David

      Gorst, John

      Malins, Humfrey

      Grant, Sir Anthony (CambsSW)

      Mans, Keith

      Greenway, Harry (Ealing N)

      Maples, John

      Greenway, John (Ryedale)

      Marlow, Tony

      Gregory, Conal

      Marshall, John (Hendon S)

      Griffiths, Sir Eldon (Bury St E')

      Marshall, Sir Michael (Arundel)

      Griffiths, Peter (Portsmouth N)

      Martin, David (Portsmouth S)

      Grist, Ian

      Maude, Hon Francis

      Ground, Patrick

      Mawhinney, Dr Brian

      Grylls, Michael

      Maxwell-Hyslop, Robin

      Gummer, Rt Hon John Selwyn

      Mayhew, Rt Hon Sir Patrick

      Hague, William

      Mellor, Rt Hon David

      Hamilton, Rt Hon Archie

      Meyer, Sir Anthony

      Hamilton, Neil (Tatton)

      Mills, Iain

      Hampson, Dr Keith

      Miscampbell, Norman

      Hanley, Jeremy

      Mitchell, Andrew (Gedling)

      Hannam, John

      Mitchell, Sir David

      Hargreaves, A. (B'ham H'll Gr')

      Moate, Roger

      Hargreaves, Ken (Hyndburn)

      Molyneaux, Rt Hon James

      Harris, David

      Monro, Sir Hector

      Haselhurst, Alan

      Montgomery, Sir Fergus

      Hawkins, Christopher

      Moore, Rt Hon John

      Hayes, Jerry

      Morris, M (N'hampton S)

      Hayhoe, Rt Hon Sir Barney

      Morrison, Sir Charles

      Hayward, Robert

      Morrison, Rt Hon Sir Peter

      Heathcoat-Amory, David

      Moss, Malcolm

      Heseltine, Rt Hon Michael

      Moynihan, Hon Colin

      Hicks, Mrs Maureen (Wolv' NE)

      Neale, Sir Gerrard

      Higgins, Rt Hon Terence L.

      Needham, Richard

      Hill, James

      Nelson, Anthony

      Hind, Kenneth

      Neubert, Sir Michael

      Hogg, Hon Douglas (Gr'th'm)

      Newton, Rt Hon Tony

      Hordern, Sir Peter

      Nicholls, Patrick

      Howarth, Alan (Strat'd-on-A)

      Nicholson, David (Taunton)

      Howarth, G. (Cannock & B'wd)

      Nicholson, Emma (Devon West)

      Hughes, Robert G. (Harrow W)

      Norris, Steve

      Hunt, Rt Hon David

      Onslow, Rt Hon Cranley

      Hunt, Sir John (Ravensbourne)

      Oppenheim, Phillip

      Hunter, Andrew

      Page, Richard

      Irvine, Michael

      Paice, James

      Irving, Sir Charles

      Patnick, Irvine

      Jackson, Robert

      Patten, Rt Hon Chris (Bath)

      Janman, Tim

      Pawsey, James

      Jessel, Toby

      Peacock, Mrs Elizabeth

      Johnson Smith, Sir Geoffrey

      Porter, Barry (Wirral S)

      Jones, Gwilym (Cardiff N)

      Porter, David (Waveney)

      Jones, Robert B (Herts W)

      Portillo, Michael

      Jopling, Rt Hon Michael

      Powell, William (Corby)

      Kellett-Bowman, Dame Elaine

      Price, Sir David

      Key, Robert

      Raison, Rt Hon Sir Timothy

      Kilfedder, James

      Rathbone, Tim

      King, Roger (B'ham N'thfleld)

      Renton, Rt Hon Tim

      Kirkhope, Timothy

      Rhodes James, Sir Robert

      Knapman, Roger

      Ridsdale, Sir Julian

      Knight, Greg (Derby North)

      Roberts, Rt Hon Sir Wyn

      Knight, Dame Jill (Edgbaston)

      Roe, Mrs Marion

      Knowles, Michael

      Rossi, Sir Hugh

      Knox, David

      Rost, Peter

      Lamont, Rt Hon Norman

      Rowe, Andrew

      Lang, Rt Hon Ian

      Rumbold, Rt Hon Mrs Angela

      Latham, Michael

      Ryder, Rt Hon Richard

      Lawrence, Ivan

      Sackville, Hon Tom

      Lee, John (Pendle)

      Sainsbury, Hon Tim

      Leigh, Edward (Gainsbor'gh)

      Sayeed, Jonathan

      Lennox-Boyd, Hon Mark

      Scott, Rt Hon Nicholas

      Lester, Jim (Broxtowe)

      Shaw, David (Dover)

      Lilley, Rt Hon Peter

      Shaw, Sir Giles (Pudsey)

      Lloyd, Sir Ian (Havant)

      Shephard, Mrs G. (Norfolk SW)

      Lloyd, Peter (Fareham)

      Shepherd, Colin (Hereford)

      Lord, Michael

      Shersby, Michael

      Luce, Rt Hon Sir Richard

      Skeet, Sir Trevor

      Lyell, Rt Hon Sir Nicholas

      Skinner, Dennis

      88

      Smith, Sir Dudley (Warwick)

      Trippier, David

      Smith, Tim (Beaconsfield)

      Trotter, Neville

      Smyth, Rev Martin (Belfast S)

      Twinn, Dr Ian

      Speed, Keith

      Vaughan, Sir Gerard

      Speller, Tony

      Viggers, Peter

      Spicer, Sir Jim (Dorset W)

      Waldegrave, Rt Hon William

      Squire, Robin

      Walden, George

      Stanbrook, Ivor

      Walker, Bill (T'side North)

      Stanley, Rt Hon Sir John

      Waller, Gary

      Steen, Anthony

      Ward, John

      Stern, Michael

      Wardle, Charles (Bexhill)

      Stevens, Lewis

      Warren, Kenneth

      Stewart, Allan (Eastwood)

      Watts, John

      Stewart, Andy (Sherwood)

      Wells, Bowen

      Stewart, Rt Hon Sir Ian

      Wheeler, Sir John

      Stokes, Sir John

      Whitney, Ray

      Sumberg, David

      Widdecombe, Ann

      Taylor, Ian (Esher)

      Wilkinson, John

      Taylor, Sir Teddy

      Wilshire, David

      Temple-Morris, Peter

      Winterton, Mrs Ann

      Thompson, D. (Calder Valley)

      Winterton, Nicholas

      Thompson, Patrick (Norwich N)

      Wood, Timothy

      Thorne, Neil

      Woodcock, Dr. Mike

      Thornton, Malcolm

      Yeo, Tim

      Thurnham, Peter

      Younger, Rt Hon George

      Townend, John (Bridlington)

      Townsend, Cyril D. (B'heath)

      Tellers for the Noes:

      Tracey, Richard

      Mr. David Lightbown and Mr. John M. Taylor.

      Tredinnick, David

      Question accordingly negatived.

    New Clause 9

      VALUATION BANDS
      '.—(1) Before specifying substituted valuation bands pursuant to section 5, and before making a local government finance report under section 78A of the Local Government Finance Act 1988, the Secretary of State shall consider the effects in each region of England and in Wales of the amounts of council tax liability brought about by:

      (a) valuation bands in England;

      (b) valuation bands in Wales; and

      (c) the distribution of revenue support grant.

      (2) In this section "region" shall have the meaning of the standard economic region, except that Greater London and the rest of the South East shall be treated as separate regions.'.—[Mr. Blunkett.]
      Brought up, and read the First time.
      Mr. Blunkett: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take the following: new clause 15—Discontinuation of valuation bands—
      '.—(1) The Secretary of State may by order discontinue the system of valuation bands established under this Act.
      (2) For the system of valuation bands there may by order be substituted lists which show for each dwelling its valuation.
      (3) The liability to council tax in respect of each dwelling shall be in direct proportion to the dwelling's value.
      (4) No order under this section shall be made unless a draft of the order has been laid before and approved by resolution of the House of Commons.'.
      Amendment No. 111, in clause 5, page 3, line 23, after 'England' insert 'apart from Greater London'.
      Amendment No. 86, in page 3, line 24, leave out from 'following' to line 40 and insert—

      TABLES—

      Greater London

      Range of values

      Valuation band

      Values not exceeding £52,000

      A

      Values exceeding £52,000 but not exceeding £68,000

      B

      Values exceeding £68,000 but not exceeding £88,000

      C

      Values exceeding £88,000 but not exceeding £120,000

      D

      Values exceeding £120,000 but not exceeding £160,000

      E

      Values exceeding £160,000 but not exceeding £210,000

      F

      Values exceeding £210,000 but not exceeding £420,000

      G

      Values exceeding £420,000

      H

      Amendment No. 3, in clause 5, page 3, leave out lines 39 to 40 and insert '240,000

      Range of values

      Valuation band

      Values exceeding £240,000 but not exceeding £320,000

      H

      Values exceeding £320,000 but not exceeding £480,000

      I

      Values exceeding £480,000 but not exceeding £640,000

      J

      Values exceeding £640,000 but not exceeding £800,000

      K

      Values exceeding £800,000

      L'.

      Amendment No. 112, page 3, line 40, at end insert—
      '—(3) The valuation bands for dwellings in Greater London are set out in the following Table—

      Range of values

      Valuation band

      Values not exceeding £52,000

      A

      Values exceeding £52,000, but not exceeding £68,000

      B

      Values exceeding £68,000, but not exceeding £88,000

      C

      Values exceeding £88,000, but not exceeding £120,000

      D

      Values exceeding £120,000, but not exceeding £160,000

      E

      Values exceeding £160,000, but not exceeding £210,000

      F

      Values exceeding £210,000, but not exceeding £420,000

      G

      Values exceeding £420,000

      H'.

      Amendment No. 16, page 4, line 1, leave out subsection (3) and insert—
      '(3) The valuation bands for dwellings in Wales shall be as specified in the following Table—

      Range of values

      Valuation band

      Values not exceeding £15,000

      A

      Values exceeding £15,000 but not exceeding £30,000

      B

      Values exceeding £30,000—£37,000

      C

      Values exceeding £37,000—£45,000

      D

      Values exceeding £45,000—£55,000

      E

      Values exceeding £55,000—£70,000

      F

      Values exceeding £70,000—£90,000

      G

      Values exceeding £90,000—£120,000

      H

      Values exceeding £120,000—£150,000

      I

      Values exceeding £150,000—£180,000

      J

      Values exceeding £180,000—£210,000

      K

      Values exceeding £210,000—£240,000

      L

      Values exceeding £240,000—£300,000

      M

      Values exceeding £300,000

      N.'.

      Amendment No. 4, in page 4, leave out lines 17 and 18 and insert '£150,000

      Range of values

      Valuation band

      Values exceeding £150,000 but not exceeding £200,000

      G

      Values exceeding £200,000 but not exceeding £275,000

      H

      Values exceeding £275,000 but not exceeding £350,000

      I

      Values exceeding £350,000 but not exceeding £425,000

      J

      Values exceeding £425,000 but not exceeding £500,000

      K

      Values exceeding £500,000

      L'.

      Amendment No. 5, in page 4, line 24, at endinsert—
      '(4A) The Secretary of State shall establish an additional band to those set out in subsection 2 above that shall be for dwellings provided and occupied solely in respect of a person's employment.'.
      Amendment No. 32, in page 4, line 24, at end insert—
      '(4A) The Secretary of State may by Order, as regards financial years beginning on or after such date as is specified in the Order, make provision in respect of the Council of the Isles of Scilly—

      (a) substituting another proportion for that which is for the time being effective for the purposes of subsection (1) above;

      (b) substituting other valuation bands for those which are for the time being effective for the purposes of subsection (2) above.'.

      Amendment No. 33, in page 4, line 25, after '(4)', insert 'or (4a)'.
      Amendment No. 93, in clause 74, page 49, leave out lines 5 to 8 and insert—
      'shall be based upon the value given to that dwelling in the valuation roll.'.
      Amendment No. 94, in page 49, line 11, at beginning insert
      'Values not exceeding £15,000 AA'.
      Amendment No. 10, in page 49, line 11, leave out 'Values not exceeding £27,000' and insert

      'Values not exceeding £20,000

      AA

      Values exceeding £20,000 but not exceeding £27,000'.

      Amendment No. 95, in page 49, line 22, at end insert—

      'Values exceeding £212,000 but not exceeding £260,000

      I

      Values exceeding £260,000 but not exceeding £320,000

      J

      Values exceeding £320,000 but not exceeding £400,000

      K

      Values exceeding £400,000 but not exceeding £500,000

      L

      Values exceeding £500,000

      M.'.

      Amendment No. 11, in page 49, leave out lines 23 and 24 and insert '£180,000

      'Values exceeding £180,000 but not exceeding £250,000

      H

      Values exceeding £250,000 but not exceeding £400,000

      I

      Values exceeding £400,000 but not exceeding £500,000

      J

      Values exceeding £500,000

      K'.

      Amendment No. 96, in page 49, line 23, leave out £212,000'and insert'£150,000'.
      Amendment No. 97, in page 49, line 24, leave out '£212,000' and insert
      '£150,000 but not exceeding £212,000'.
      Amendment No. 12, in page 49, line 30, at end insert—
      '(3A) The Secretary of State shall establish an additional band to those set out in subsection 2 above that shall be for dwellings provided and occupied solely in respect of a person's employment.'.
      Mr. Blunkett: I had intended to appeal tonight to the massed ranks of Conservative Members representing seats
      92
      in London and the south-east, who I thought would be here to protect their constituents' interests and to press for a change in the banding structure, Unfortunately, however, there are fewer than a dozen of them here.
      Hon. Members: What about yours?
      Mr. Deputy Speaker: Order.
      Mr. Robert G. Hughes: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Sheffield, Brightside (Mr. Blunkett) to make comments and tell stories about Conservative Members when there is only one—Scottish—Labour Back Bencher present—and certainly none of those whose constituencies will be affected?
      Mrs. Fyfe: Further to the point of order, Mr. Deputy Speaker. I should point out that there are two Scottish Back Benchers present—the hon. Member for Argyll and Bute (Mrs. Michie) and myself.
      Mr. Blunkett: When all the jollity is over, the fact remains that the Labour party is committed to a fair system of taxation that would ensure the protection of those in high-price areas who happen to be on low incomes, and that, come 10 o'clock, Conservative Members will vote for a system that does not do that. That is why I had intended to appeal to Conservative Members representing constituencies in London and the south-east who it might be thought would have wanted to debate the issue.
      Mr. John Marshall: I note with interest the hon. Gentleman's concern for the charge payers of Barnet. Does he accept that, under Labour's local government reform proposals, my constituents would end up paying more than they would under the proposed council tax? Is that the sort of concern that the hon. Gentleman shows for my constituents?
      Mr. Blunkett: I should certainly be concerned if, under the proposed banding system, 46 per cent. of my constituents fell into the top band whereas only 6 per cent. fell into the bottom three bands, which is the case in the hon. Gentleman's constituency. Such a situation is designed to make people in the area rightly feel that, having rid themselves of the poll tax, under which everyone was taxed the same amount, they are now to have a system under which nearly everyone is taxed the same amount. On those grounds, I should expect the hon. Gentleman vigorously to promote, and vote for, amendment No. 112.
      The Government's proposed system of valuation bands is likely to lead to greater unfairness, unworkability and unsustainability than the system that the Government are removing—and that is saying something. The proposed valuation system will lead to confusion and administrative difficulty. It is a Mickey-Mouse valuation system which taxes families whilst protecting individuals living alone, and which is based on the false premise that if one can make something cheap and make it look simple, it will be better. We do not believe that that is the case. We believe in fairness and equity and we want people to understand clearly the basis on which they are taxed. That is the principle that should be applied to any form of property tax, and it requires that people should have the right to

      93
      immediate access to information about the valuation of their property rather than having to appeal to find out the amount that they are to be charged.
      We believe that a valuation system whereby an average of £1·58 is paid out for the valuation of a property—with some people finding that the valuation of their property is costing less than the price of a KitKat—is a system open to considerable ridicule. We also believe that a system that does not take into account the circumstances of a property is likely to lead to the kind of upheaval that we witnessed under the poll tax.
      The fact that there are so few hon. Members in the Chamber tonight indicates that Conservative Members have learnt few lessons. They showed the same indifference to the difficulties and dangers and to the warnings that we gave when the poll tax was introduced. I exempt those representatives of the media who are present tonight when I say that the media—particularly the broadcast media—show the same indifference to the council tax as they did to the poll tax. That does not mean that, in its anomalies, difficulties and silliness, the council tax is not as dangerous as the poll tax; it clearly is. That is why we are intent on developing the debate tonight and on exposing some of those anomalies.
      If individual valuations do not take place and if properties are not treated fairly, we are bound to get the kind of anomalies that we exposed in Committee. Houses in the same street will be valued in the same way because they happen to be the same type of property, even though their environment and circumstances are completely different. One might expect a family living in a property located next to a discotheque to pay less in tax, because the value of occupation is less, than one living in a property of the same type in the same street overlooking the local park. With valuers undertaking valuations from their desks or by driving down the street, there is no way in which the valuation process can be undertaken fairly.
      There is no fairness in a system that fails to take into account the substantial differences that exist within properties—in terms of value of occupation or, for example, improvements, such as rear extensions. Such factors are very important in ensuring that people pay according to their means—in so far as that is possible with any property tax. The cost of the dwelling and the value of occupation of the dwelling relate to ability to pay, which is a firm and fair basis for levying a local tax.
      Under the Government's proposals—and the Minister of State boasted about this on the radio this morning—valuers will not have access to the properties.
      Under the valuation process that has just begun, valuers will be prevented from entering properties to undertake the valuation. They are discouraged from getting close to the property. Indeed, it is welcome if they do not actually see the property. If there is any doubt about whether there is an unfairness in looking only at the front of a property as the valuer passes in his car, the Minister told us in Standing Committee that valuers will be able to take aerial photographs. The Minister this morning claimed that he did not say that, but he did say it. He did not say, as he claimed this morning, that valuers will be able to use old mythical aerial photographs of houses which may no longer exist or may have been altered since the photograph was taken.
      The Minister said that, if there was any doubt, the old rating valuation list would be used. That is a real giveaway because that is what we proposed to ensure that we could
      94
      have got rid of the poll tax by April 1992. However, the Government rejected that and refused to accept our interim solution while a thorough individual revaluation of property took place.
      8.30 pm
      In parliamentary language, there has been a degree of duplicity. The valuers are not supposed to take a detailed look at the property. However, they are supposed to use old photographs or information on the rating list. Presumably, if that information is not available, they will take to a hot air balloon. They will not get much of a hot air balloon for an average of £1·58 a property, although there might be plenty of hot air from the Conservative Benches. If the council tax is ever implemented, the balloon will go up.
      The more we delve into the proposal, the less credible and more questionable it appears. Over the past few days, Ministers have boasted that they have saved £100 million because they had intended to spend £120 million on the valuation process. It will cost only £21 million because the guidelines were such that valuers were told that they had to undertake the process as cheaply, simply and as quickly as possible using as little information as possible. That is why we are not spending money that should be spent to save some people from being taxed unfairly.
      People will find that their properties will he placed in bands, but they will not be aware of the subtle differences in the valuation process. In areas such as London and the south-east, those differences might mean that a person with a property valued at £161,000 instead of £159,000 could be in the top valuation band together with someone with a house valued at £319,000. One cannot imagine a less fair system. In order to get the information to challenge that valuation and be put back into band G, and therefore save considerable sums of money, someone would have to appeal. However, that person will not be allowed to appeal until January 1993.
      The Government's proposal for the banding valuation process is likely to lead to a disastrous situation in which thousands of appeals will be made within three months of the system being brought into operation. There will be great disgruntlement and disagreement. Local authorities will be seeing the back of the poll tax and experiencing collection problems. They will also be trying to implement the new tax and having to deal with people who are aggrieved and concerned about the bands in which they have been placed.
      In addition, there is the inherent unfairness of the compression of the bands and the way in which in many areas—and I have already referred to London and the south-east—people will find that there are not really eight bands but only two, three or four bands for their area. In some areas nearly all properties fall into three rather than eight bands. Together with the discount system to which my hon. Friend the Member for Dagenham (Mr. Gould) will refer tomorrow, people will face a property poll tax, not a new system. The hon. Member for Hendon, South (Mr. Marshall) referred to Barnet, which is a classic example of an area in which nearly half the properties fall within the top band.
      Mr. Portillo: I know that the hon. Gentleman would not want to mislead the people of Barnet. Will he confirm that, as he does not believe in compression, someone in a £200,000 property in Barnet would be asked under

      95
      Labour's system to pay five times as much as someone in a £40,000 house? Under our system, we believe that it should be limited to two and a half times because we recognise that some people in higher valued properties may not have the income to allow them to pay those high rates of tax.
      Mr. Blunkett: That shows that the Minister is allowing his antagonism to the old rating system to—and I am one of the people who can say this in the Chamber—blind himself to the reality of a normal individual valuation process.
      A valuation process should be linked to the amount that people will be expected to pay to the valuation placed on their property, not in bands or ratios to each other, but in relation to the worth of occupying that property. The spread of properties across a high-value district in England would ensure that people paid what was fair in terms of the differences between the prices of the properties. Some of us agree that there is a need for the relationship between districts and regions to be brought into line with each other.
      Mr. John Marshall: My hon. Friend the Minister is right.
      Mr. Blunkett: As the hon. Member for Hendon, South is suggesting that the Minister is right, someone in Barnet in a £200,000 house would not pay five times as much as someone in a £40,000 house under our proposed valuation process. The Minister knows that that is the case.
      Mr. Marshall: In answer to my hon. Friend the Minister, the hon. Member for Sheffield, Brightside (Mr. Blunkett) said that the ratio would not be five times as much. He has obviously calculated the figure. What is it?
      Mr. Blunkett: It is a graduated rateable value. One cannot simply pluck figures out of the air. Our system involves carrying out a proper valuation of properties that would ascertain the resources base in the area. That base determines the pence in the pound that can be levied under a property tax system. That is fairly basic local government finance. It is not clever or something which must be invented at the Dispatch Box—we all know about it—and had the old rating system been updated, modernised and made fairer we would not be debating this nonsense now because we would never have had the poll tax. My colleagues and I know that not before too long we will be able to implement a much fairer system.
      I have been diverted from the compression of bands and the property poll tax that goes with it. That involves the unfairness inherent in pushing together people with very different incomes and types of property into sequence with each other so that they end up paying much the same. Westminster is a good example of that because the maximum that anyone can pay is three times the amount of the lowest band.
      The figures that have been predicted in Westminster are very low. People in properties worth £1 million will pay only £273 while people in the lowest band with properties under £40,000–I imagine that that would be a rabbit-hutch in Westminster, if people were lucky enough to have one—would pay £91 a year. If the person in the £1 million house happened to be living alone, he or she would receive a 25 per cent. discount. That person would not pay
      96
      much more than £2 a week extra in comparison with someone on the lowest income scraping to make ends meet. Nobody can truly defend a system that is as unfair as that, nor can a system be defended which ends up with regional disparities which have been recognised in the case of Scotland and Wales but not in the case of English regions.
      Although in London only 1 per cent. of households find themselves in band A—the bottom band—16 per cent. of Londoners find themselves in the lowest income bracket. Of course, in the north, the reverse is true—46 per cent. find themselves in band A. That is grossly unfair on people who live in a high property price area such as London. That is why some of us expected that hon. Members who represent London and south-eastern constituencies would have taken much more interest in what is going on tonight.
      The compression of bands is unacceptable and unfair. The 3:1 ratio to protect the rich at the expense of the rest of us is unacceptable and unfair. The process of valuation itself is cheap and nasty, and unacceptable and unfair. The whole predication of a tax which fails to recognise the ability to pay as a key principle, and fails to understand the importance of individual valuation for ensuring that people know, understand and accept the basis on which they are to be taxed locally is flawed and unacceptable. We need to return to a system that allows for sensitivity and for an equal share of the local tax burden to be carried by those who can afford it.
      At the beginning of the year, we understood that the Government appreciated the need—if they were to have a banding process, which we do not agree with—to have a wide spread of bands. On 22 February—I make no apology for repeating this, because it clearly has not got through to the media or to Conservative Members—the Government issued rating circular No. 53. They gave valuers five working days to come up with the spread of properties if 14 bands were to be used—14 bands which ensured that there were six bands at the top, that is, six additional bands to the seven bands that they told the public they were going to use—which would increase the spread to £500,000-plus, instead of the £160,000 that they were then proposing to use. They had an additional band at the bottom to protect the very poorest. In Committee, we dealt with the issue of people in many parts of the country who have very low-rated property, those who live in very small terraced houses, or those who live in caravans.
      That system at least had the merit of some sort of fairness, but, unfortunately, fairness smacked of socialism. The idea of 14 bands was rejected, presumably on the same principles as the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) rejected progressivity when debating the poll tax. It is no wonder that the Minister for Local Government and Inner Cities, who adheres to the principles of the poll tax, was keen to get rid of the 14 bands. The 14 bands went, even though they brought greater fairness and would have protected in some measure the people in the areas that I have described, as well as some people in some northern constituencies where the banding system again clusters in an unacceptable way.
      Band A residents in Wigan will be paying £339 a year, which is more than the top band in Westminster. [Interruption.] I hear a sedentary intervention, the text of which, unfortunately for me, I missed. It was from the hon. Member for Lancaster (Dame E. Kellett-Bowman). I think that she mentioned 15p cemeteries as an example of

      97
      a valuation system done on the cheap. That is certainly less than the price of a KitKat and less than the price of a Mars bar, I should have thought. But that is par for the course. "If it is public, value it and sell it cheap," has been the attitude of Conservative Members on every occasion when they have privatised everything that had been built up over the years.
      So there we have people in Wigan—or, as the Minister reminds me, there we have it. That is a favourite phrase. We had it noted and published in The Daily Telegraph—one of the few points from the Committee that reached The Daily Telegraph, or, with the honourable exception of The Scotsman and the Financial Times, many other newspapers.
      8.45 pm
      The system is clearly at fault in the way that I have described. I mentioned circular No. 53. It would be remiss of me not to mention what happened after that. We then had rating circular No. 58, which was issued towards the end of April and which, having rejected 14 bands, did an exercise on nine bands. Nine bands were at least an improvement on seven bands, but, when we revealed that a nine-band system was being valued, the Secretary of State immediately denied it. In fact, Downing street took the trouble to deny that it existed. It was then found that it did exist, so it was admitted that it was actually happening, but, because it was an embarrassment, it was withdrawn.
      Fourteen bands embarrassed the Government because they were fair, we had nine bands because we were only a week from the local elections, and they were embarrassed that they had told an untruth and been found out, and we then went back to seven bands. Seven bands were immovable, in the words of the Secretary of State. If only memories were as long as the banding system that the Government had originally proposed, we would not be in quite this state. Seven bands were immovable. The Government then invented eight bands. However, during Question Time one Wednesday afternoon, the Secretary of State admitted that it was only a psychological measure and would not make that much difference anyway.
      So there we have it—again. Fourteen, nine, seven and—eight—we have been through it all, but we have not had any acknowledgement that the banding system itself is at fault and simply will not work and that the whole system is a mess. It does not matter how many hon. Members are present, the reality will be outside the House. The reality would be—if they ever had the chance—for the Government to implement the system. The reality will be that local government finance, instead of being a bore on the sidelines and much less exciting than some other things that go on, such as Esther Rantzen's quarter of a million or the important issues that pass for news, will be recognised as a critical issue that will affect people and British politics in the same way as the poll tax did.
      Local finance is a minefield, and all of us must tread carefully through it, but some of us have ensured that we have a map and that we shall use it. We advise very strongly that Conservative Members think carefully before they vote for their proposals and reject our new clause.
      Mr. David Harris: I am delighted that you are in the Chair, Mr. Deputy Speaker, because I want to address my remarks to a part of the country which you know well—the Isles of Scilly. If I may say so—and I thank
      98
      you for it—you are one of our regular holidaymakers to the islands. I have tabled amendment No. 32, which is an attempt to recognise a unique feature of the island—second homes—and the possible effect that they will have on the council tax and the amount borne by the Isles of Scilly. There are 933 domestic properties on the islands, 300 of which—nearly one third are second homes. In addition, 183 homes receive the one-person discount. That means that no fewer than 450 of the 933 homes—almost half—will be left to pay the standard rate. That means an extra burden on those who pay the standard rate.
      However, the position is even worse than that. As a result of the prevalence of second homes on the islands, there is a completely artificial market in property prices. I am told that the cheapest property that one could buy is a one-bedroom flat costing £100,000. The difficulty posed by those high property prices is compounded by the fact that the islands have a low level of income. That presents particular problems for the islanders and makes the island unique for council tax purposes.
      I have argued that case with my hon. Friend the Minister of State. I took it up with him in correspondence as soon as I was approached by the Council of the Isles of Scilly. My hon. Friend responded in a long letter on 18 October in which he looked sympathetically at the matter, clearly recognising the problems facing the islands. However, he said that, rather than deal with the problem through legislation, he thought that the right way to tackle it was through the grants system. The concluding paragraph of his letter states:
      "The Department is, as you know, always willing to consider the individual circumstances of different areas; and the Island's Standard Spending Assessment does contain a number of adjustments to reflect factors where we recognise that special provision is needed. I do not believe, however, that we would be justified in making special provisions in the council tax legislation for the Scilly Isles."
      With respect to my hon. Friend, I must disagree with him on that point.
      I heartily acknowledge that the Government have been generous—that is the right word—to the islands in making special grant provisions to take account of their unique position. That is reflected to some extent in the present community charge rates for the islands. The community charge is £105 whereas the charge for the neighbouring district councils on the Cornish mainland are £225 for Penwith and £247 for Kerrier. On the whole, therefore, the islanders have done very well in terms of grant, and extremely well with European grants.
      However, the difficulty with grants is that there is no guarantee that they will be maintained in the future. If there were a different Administration, heaven forbid—I do not think that this will happen, but let us suppose that it did—that Administration might not be so sympathetic to the islands or recognise the problems that are faced by island communities. A new Administration's approach to grants might be somewhat different from that of this Administration. It is important, therefore, that the islands' position is recognised in the legislation.
      Despite the assurances that my hon. Friend the Minister of State has already given me, I hope that he will look sympathetically at the amendments that I have tabled. I accept that the new clause that I tabled and the amendment that has not been selected are probably defective, but I look to my hon. Friend to recognise the problems of the islands and for assurances that he will

      99
      return to the issue in another place and will not rule out at this stage the possibility of including some special provision for the islands in the Bill.
      It is worth pointing out that the islands have a remarkable record on community charge collection. I think that I am right in saying that about 99 per cent. of the money has been collected. That is an extremely good record and shows that the islanders are law-abiding people. Although there was a problem because some people thought it unfair that the outer islands should pay exactly the same as the main inhabited island, St. Mary's, people nevertheless paid their community charge in remarkable numbers.
      For that reason, as well as for all the others that I have outlined, I hope that the Government will look again at this issue. Perhaps at the very least one of the Ministers would like to come to the Isles of Scilly——
      The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key) indicated assent.
      Mr. Harris: I see that my hon. Friend the Under-Secretary of State is volunteering. As he told me earlier that his late father was a former Bishop of Truro, who probably confirmed half the population of the islands, my hon. Friend might well be the appropriate Minister for such a visit.
      I ask my colleagues on the Treasury Bench to acknowledge that, in this respect as in so many others, the Isles of Scilly are a unique case and should be dealt with accordingly in the Bill.
      Mr. Bellotti: Banding is at the heart of the Government's attempts in the council tax proposals to modernise what is really a property-based tax. In all attempts, they have failed. It is interesting that the Government have introduced different bands for Scotland and Wales. In Committee, we invited the Minister to explain why different bands were thought necessary for Scotland and Wales. Unfortunately, very little was forthcoming on that subject, but the answer that one would have expected to that question would have given the reasons why banding should be regionally varied throughout England. They are exactly the same reasons. The Government have failed in their attempt to make the property tax fair, because they have failed to examine the case for some form of regional banding for England.
      As has already been stated, the number of bands is not sufficient to meet individual cases in some regions. In London and the south-east, for example, many local authority property values enable the local authorities to use only the top two or three bands. It would be extremely helpful in such cases if the bands could be extended to a higher level. In other regions, property values are extremely low and the reverse applies. In those areas, it would be extremely helpful to have more bands at the lower end so that those with a property that should be valued at a price below the lowest band would pay less.
      I thought that the arguments that were advanced in Committee were fairly persuasive, but the Government did not change their proposals. They failed to make any response on the issue of regional banding. We encouraged Conservative Back Benchers in Committee to speak up, but it seemed that the hon. Members who had been chosen or who had volunteered to serve in Standing Committee
      100
      were singularly unable to do so. I hope that, during the debate tonight, some Conservative Back-Bench Members will comment on that. Indeed, one Conservative Member put a similar point in the previous debate on behalf of his local authority.
      The consequence of not creating more bands, with people in properties in the bottom bands paying less and people in properties in the bands at the top end paying more, is that the council tax hinges on the average-priced property. It hits the very people who may be less able to pay. The gearing of the tax means that a millionaire in an extremely expensive property will pay only three times what a person in the same local authority area will pay who occupies perhaps a one-bedroomed flat of low value.
      One must ask whether a millionaire has the ability to pay more than three times the bill of two people in a household on a fairly low income but who nevertheless pay some tax. The answer must surely be that the millionaire could well afford to pay more than three times what a standard couple on a fairly low income pay. That demonstrates why we need more property bands.
      Mr. Ian Taylor: The hon. Gentleman and I both have constituencies in the south-east. Does he think that all people with properties worth more than £320,000 are millionaires? Do not those few people who earn a great deal of money pay a disproportionately larger amount through the tax system? Only a small amount will be collected through the council tax.
      9 pm
      Mr. Bellotti: We gave the hon. Gentleman the opportunity in a Division earlier this evening to show that people who live in high-priced property do not necessarily have such high incomes. He did not support that principle then. I agree with him if his point is that property can be expensive but that the person who occupies it might not have a high income on which to pay tax.
      I and my hon. Friends have tabled amendment No. 86, which sets out a different approach to regional banding in England. We have not yet heard an answer to our proposals. As the hon. Member for Esher (Mr. Taylor) said a moment ago, London and the south-east would be hit hard by the Government's proposals in the Bill.
      In Committee we heard from one of the Ministers the argument that regional banding in England might create difficulties between one region and another. I failed to understand the logic of that argument, and it was probably the only argument we heard. Such difficulties will exist around the boundary between England and Wales, where there will be a tremendous variation between properties which are just a couple of miles apart. As a result of the Government's proposal to have a different banding system in Wales, people on the Welsh side of the border will pay a low council tax, and people on the English side will pay a high council tax.
      Mr. Alan Beith: Is my hon. Friend aware that many of my constituents will be able to look out of their window and see properties within a short distance on the other side of the river or just up the road in Scotland which are on a different and more favourable banding system?
      Mr. Bellotti: I am grateful for another example from a different part of the country of large variations between

      101
      properties. I suspect that there are many such examples. I hope that other hon. Members will shortly contribute their experiences and understanding.
      Mr. Bowis: The hon. Gentleman will not know my constituency, because it is a long time since Liberals were seen there, but he might know some of the outer ring of London constituencies. If he would go on a journey through the royal borough of Kingston upon Thames, down the road through Surbiton towards Thames Ditton, he would find a road where there are houses next door to each other of the same size, occupied by the same sort of people on the same sort of income. Under his scheme, one would be in the London region and the other would be in the south-east region. The hon. Gentleman proposes a different band for those two houses. Can he explain the justice in that?
      Mr. Bellotti: That is exactly the same as the problem that will arise under the Government proposals on the boundaries between England and Wales and between England and Scotland. Once one starts on the road of a property-based tax, one always hits such problems.
      We are attempting to make an unfair system marginally fairer at every opportunity. There is no doubt that our amendment would more than marginally help a large number of people. Indeed, it would be seen to be fairer. I am sure that as people come to understand how the council tax will affect them, they will be annoyed when, as my hon. Friend the Member for Berwick-on-Tweed (Mr. Beith) said, they look out of their window and see a household at a huge advantage to them. The dilemma is real. There is no doubt that more bands would mean a fairer system. The Government should accept that when they set out their proposals for Scotland and Wales.
      Amendments Nos. 5 and 12 are designed to help those who occupy tied or similar property through their work. If we assigned such people to a separate band, it would bring them the relief they need. That band could apply to ministers of religion, who often occupy by virtue of their job houses which they would be unable to afford to purchase on their own disposable income. A school caretaker may enjoy the benefit of a large house in the corner of his school grounds. Given the value of such a property and the relative size of a caretaker's income, it is clear that he would be unable to purchase such a house out of choice. That argument could apply to a number of other people—for example, police officers. A separate band for such people would bring enormous benefit.
      The banding proposals have been supported by many people outside the House and by some hon. Members of all parties. I hope that the Government will appreciate that the council tax, which they believe to be fair, could be made much fairer if they conceded the regional banding proposals. I look forward to hearing the reasons for the Government's eventual decision on the proposals.
      Mr. Robert G. Hughes: The hon. Member for Eastbourne (Mr. Bellotti) was right to say that the idea of regional banding has attracted support from hon. Members of different parties. However, when one studies the detail of what is proposed, the scheme starts to fall to pieces. The speech by the hon. Member for Sheffield, Brightside (Mr. Blunkett) on behalf of the Labour party was very similar to someone jumping on a bandwagon and discovering that it had cracked wheels.
      102
      The idea of a regional hand for London and the south-east, or for London alone, is misconceived. I do not believe that it would work, because it would change the nature of the proposed tax, which is a property tax with a personal element. It is important to keep in mind precisely what we seek to establish.
      Mr. Ian Taylor: What my hon. Friend says causes me some concern, in addition to my hesitation about the merits of regional banding. I hope that my hon. Friend would not propose that there should be any regional banding to favour London. As my hon. Friend the Member for Battersea (Mr. Bowis) has pointed out, my constituency abuts on London, and such a proposal would cause great dismay to my constituents, who already believe that London has too good a deal.
      Mr. Hughes: I am not sure that I can agree with the last sentiment that my hon. Friend expressed. We have been offered a pot-pourri of amendments—some favour London, some favour London and the south-east and others suggest carving up the country into all sorts of different regions.
      Mr. Wilkinson: My hon. Friend and I are, in political terms, territorially contiguous. Does he at least recognise that there is a particular difficulty for outer London and the south-east where property values are high and where disposable incomes may not be commensurately great? Is it not the case that all the constructive criticism of the Bill has, by and large, come from right hon. and hon. Friends who represent outer London and the south-east? It is no accident that that is so.
      Mr. Hughes: It is no accident that that is so, but my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), who is a respected neighbour, is wrong.
      Mr. James Couchman: Will my hon. Friend give way?
      Mr. Hughes: I wish to make some progress, because there are many points that I wish to raise. If we are to have a property tax, it must be logical, and the logic is clear.
      Mr. Couchman: I had not intended to intrude on my hon. Friend's speech, but does he consider that a schoolteacher, whose salary is fixed through national wage agreements by the independent pay review body for teachers and who lives in my hon. Friend's or my constituency in the south-east, is better able to afford the council tax on a higher band than a teacher who lives in Darlington or elsewhere in the north?
      Mr. Hughes: I do not share my hon. Friend's contention that one should support national wage bargaining. I support bargaining for London. My hon. Friend's point is interesting, but the argument for it does not lead one to support any of the amendments that have been selected. Regional banding could not be agreed to simply on the basis of national wage bargaining. That suggestion would distort a property tax with a personal element, because the aim of the amendment is that people living in an £80,000 house in the north should pay more than those living in an £80,000 home in the south.
      I do not understand the fairness of that. People should pay according to the value of their property, and it is therefore reasonable that there should be one national

      103
      band. If there were significant differences between regions, there might be an argument, but we all know that that simply is not the case. There is no typical region.
      There were two Yorkshire Members present when I began my speech, and there are now three. The number is growing by the minute. Property values in Yorkshire alter according to the part of the county. A single regional band could not be applied to Yorkshire, with council tax prices set against a regional band for, say, London and the south-east. A few weeks ago, several of us went to Langbaurgh, for obvious reasons. Those of us who visited the lovely market town of Guisborough know that the values of property there are very similar to those in my constituency of Harrow. How could Yorkshire be placed in a different regional banding structure from the one that applies in my constituency?
      Mr. Paul Murphy: Does the hon. Gentleman agree that the Government have agreed on a separate system for Wales and Scotland and that, within Wales and Scotland, there are considerable disparities in property prices? How, then, can Yorkshire be any different?
      Mr. Hughes: I am part Welsh and part Scot, and I had understood that the argument was that Wales and Scotland are nations and therefore entitled to a different national system.
      Mr. Ian Taylor: They have a different system of finance.
      Mr. Hughes: As my hon. Friend rightly interjects, they have a different finance system. An argument must be made for that—it is not a reason to mess up the rest of the country.
      Mrs. Fyfe: As the hon. Gentleman agrees that Scotland is a different nation, why does he not accept that it should have its own system if it prefers, and allow it to have a fair rates system?
      Mr. Hughes: If the hon. Lady is simply trying to cause arguments within my family, she will not succeed. I am sure that she knows what I mean.
      Although only a few miles separate Richmond from Leeds and Beverley from Hull, prices differ enormously. Prices in north Yorkshire in general are very similar to those in outer London, but those in Leeds and Hull are not. Regional banding would distort the system, and produce many illogicalities and unfairnesses.
      9.15 pm
      I can make some revealing comparisons between my constituency and the neighbouring borough. Conservative Members may be in danger of creating an issue where none exists. My postbag, and trips around the constituency, suggest to me that—in general—people are relieved that the community charge is going, and consider the council tax fair, reasonable and decent.
      The last rates bill received in Harrow, in 1989–90, by a couple living in a 1960s-built, three-bedroomed semi averaged £549. This year's community charge bill for two people is £506: according to the indicative figures, this year's council tax bill will be £441. I do not consider that a ground for complaint.
      The last rates bill for a similar house in Brent, the neighbouring borough, was £1,550. This year's two
      104
      community charges come to £656, while this year's council tax bill will amount to £517. Again, I see no room for complaint.
      Mr. Blunkett: We had all this jiggery-pokery in Committee. I do not want the comparative figures to be distorted. The hon. Gentleman has not taken into account the £280 that a couple will have received this year because of the so-called flat-rate £140 poll tax reduction. Surely any comparison between past and present must take into account the £4.25 billion that was added to value-added tax.
      Mr. Hughes: I am grateful to the hon. Gentleman, for two reasons. I always wondered what made the big difference between the last rates bill for Brent and the present arrangements; now I understand that it was the £140 reduction. Personally, I had thought that it was the bunch of madmen from the Labour party who ran the borough in the old days.
      The hon Gentleman has described my figures as jiggery-pokery. That is all very well, but why does he not come clean and give us Labour's figures? I have challenged the prospective Labour candidate in Harrow, West to do so, but he has not bothered to reply.
      Mr. Maxton: The next Labour Member for Harrow, West.
      Mr. Hughes: That will come as a terrible shock to him.
      Labour will not come clean with its figures, so it is bound to describe ours as jiggery-pokery. Labour is simply trying to hide the awfulness that lurks behind its so-called fair rates system
      All the concern felt in local authorities in London and the south-east—which I well understand—really relates to grant. Two so-called alternative schemes have been suggested. [Interruption.] I am sorry that hon. Members whose constituencies are some distance from London are not interested in London's problems; they can continue to talk among themselves.
      Mr. Derek Enright: Will the hon. Gentleman give way?
      Mr. Hughes: The hon. Gentleman's constituency is not near London, but yes.
      Mr. Enright: It most certainly is not. If the hon. Gentleman, from a London constituency, would pay some attention to the problems that we face in Hemsworth, such as those with RECHAR, which is helping to keep rates in his area down, he would be doing us a service.
      Mr. Hughes: I referred to Yorkshire six minutes ago—it has taken the hon. Gentleman that long to work up a head of steam. The problem of RECHAR is that his political friends are stopping the money coming to this country. I refer to Bruce Millan, for instance.
      It has been suggested that a London equalisation scheme could be brought back. It could not be; it was predicated on the business rate. The London discount scheme would just be regional banding in another guise. We need to look at needs multipliers and area cost adjustments, particularly for outer London—they are not very generous this year. We want them improved for the coming year and certainly by the first year of the council tax.

      105
      We must always remember what people will have to pay. Judged by that, the council tax will be seen as a fair system.
      Mr. Harry Cohen: The hon. Member for Harrow, West (Mr. Hughes) has been arguing against a regional band for London, thereby costing his constituents about £66 a year, based on average house prices in London.
      I had to cut short my attendance at the Hairdressing Council dinner to speak in this debate—[HON. MEMBERS: "A fringe benefit?"] I can only say that the parting was such sweet sorrow.
      I am in favour of a regional band for London, based on average house prices. The application of the Government's national bands will mean a loss of grant for London of about £300 million a year, which works out in terms of people's bills at about £60 per adult per year and £100 in some constituencies. Such a loss of grant for local authorities will mean either a higher council tax in London or more cuts in services. The assumption behind the Government's imposition on London of a national band is that Londoners can afford to pay more, which is not true. That assumption does not take into account Londoners' real disposable income. They have high mortgage costs, high rents, high transport costs and high bills of many varieties. House prices are about 45 per cent. higher than the national average, and that should be taken into account.
      Londoners will be disadvantaged by the national band. It has been estimated that about 15·7 per cent. of them will be in the top two bands, compared with only 5·6 per cent. elsewhere. In the top three bands the contrast is even more stark: an estimated 55·1 per cent. are in this category in London and only 23£1 per cent. elsewhere. That means that Londoners will face higher council tax bills. The relationship between the council tax and people's ability to pay it was always shaky, and the imposition of a national band on London will make it even weaker. The very idea is absurd.
      The end result will be that Londoners and London local authorities will pay millions more each year. That will hit Conservative and Labour areas in London. If the Government go ahead with the legislation, Conservative Members in London and the south-east will find that it will be difficult to reverse after the general election no matter which party is in power. Now is the time to put the case for a special banding system for London. London's case is being ignored by the Government. Its special factors should be recognised and it should have a regional banding system more reflective of its house prices.
      Mr. Wilkinson: We have been privileged in the debate to hear some widely contrasting contributions. It is clear that the timetable is quite inadequate to deal with such important matters. I did not support the timetable motion and believe that my decision was right. It is quite preposterous that in 35 minutes we shall reach the end of this debate on banding, a matter of considerable interest to my constituents and, I suspect, to many other constituents in London and the south-east.
      The speech by the hon. Member for Leyton (Mr. Cohen) was trenchant and honest, as one would expect from the hon. Gentleman. It was also clear and to the point, the simple point being that property values are so high in London and the south-east that in all equity there
      106
      must be some special weighting to account for them. They are by no means compensated for by a disproportionately high level of real disposable income.
      People in outer London have high commuting costs. Many of them have inordinately high mortgages around their necks and they are finding it extremely difficult to service them in this unusually long period of high interest rates. Instead of taking a Gadarene rush at this important matter of the reform of local government finance, the Government should have taken more time. They could have published a White Paper or set up a commission of inquiry. They should have taken account of all representations and consulted adequately. That would have enabled us to announce in our manifesto that when we were returned to office at the election we would take the most sensible course of action.
      I am not expert enough to say which of the banding systems best fits the bill. Valuations should be individually conducted and a proper length of time should he taken over each one. If that were done, there would be far fewer appeals. There should be a weighting system to account for variations in house prices in different parts of the country and within different districts of the same region. The Department of the Environment purports to have knowledge enough at its fingertips to enable a standard spending assessment to be made that takes account of all sorts of individual circumstances in each local authority area. It is not beyond the wit of man to introduce a weighting system to deal with local variations.
      In all logic we have already sold the pass by having separate bands for Scotland and Wales, and I am most worried about the current matter. Not only do we have inadequate time to deal with important issues, but there is a real risk that unless the other place does its job properly the measures will reach the statute book fundamentally flawed in terms of banding and the special problem of high property values in London and the south-east.
      Unless my right hon. and hon. Friends on the Treasury Bench can produce a new formula to deal with this problem, I shall have to support the new clauses and I shall vote against the Government. I shall consider my position tomorrow on Third Reading in the light of what transpires when the House divides this evening.
      9.30 pm
      Mrs. Fyfe: There are some who think that there is no fun to be found in local government finance, but they can be proved wrong by this debate. I was at one stage tempted to forgo my chance to contribute to it because of the fascinating speeches of Members representing inner and outer London constituencies as they struggled to find some fairness, justice or logic in the banding system.
      There are to be different banding systems for Scotland, Wales and England to take account of the fact that they are separate nations. That is all well and good, but if separate nationhood is to be recognised when it comes to banding, the wishes of the separate nations should be heeded when it comes to the taxation that they want. The proposed tax will take no account of regional variations. It is clear that London is out of kilter with much of the rest of England, if not the whole of it.
      No hon. Member can pretend to be ignorant of London prices. After all, we all have to live in London in some form of property. My very ordinary London flat costs about half as much again as my flat in Glasgow, which is an

      107
      infinitely superior building in which to live in every respect. Everybody knows that London prices are out of line with prices in the rest of the country.
      The same could be said for many a flat in many English provincial cities. I am making a comparison not between Scotland and London but between London and most of the rest of the country. As I have said, London prices are out of line with those that prevail elsewhere. The answer does not lie in saying that London has some advantages that other parts of the country do not enjoy. Surely we should treat the entire country fairly when introducing a local taxation system. That fairness would ensure the awarding of Government grant on the basis of genuine calculated need and not on political prejudice against some local authorities while favouring others. If the Government were concerned to arrive at a proper system, they would accept that fairness was the answer.
      In Committee, the Government rejected our fair rates proposals. Our response was, "What about having more bands to take account of the difficulties that arise because of the differences in property prices in London compared with other parts of the country?" That approach was also rejected, because it was getting too close to a rating system, but it would have had some logic, a factor that is entirely outwith the system with which we are now confronted.
      In Committee, we asked how properties could be properly valued in the haphazard way that the Government proposed. We were told that properties would be valued a street at a time in England and Wales by estate agents. The Minister of State told us that aerial photography was the answer. He was talking about photographs that happen to be in the file, as it were. He did not propose that new photographs should be taken. I am not sure whether a distinction can be made between the two. The Minister seems to think that one can and that it is important, and I hope that he will explain his position this evening. Perhaps the explanation is that he does not want to have to face the electorate if it thinks that there is a spy in the sky taking photographs of people's properties. He knows that the public are likely to be more tolerant of existing photographs than the taking of new ones and the involvement of estate agents, for example.
      It is clear that aerial photographs would be useful if they showed, for example, that a property had been extended at the back, but we have still to hear how such photographs would tell anyone how a property had been divided internally. There has been no explanation. As we pointed out, behind the frontage of a street of typical Victorian terraces, there may be properties of widely differing sizes, yet estate agencies may value them alike because they look alike.
      My hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) said that there may be environmental differences even within the same street—one house may be opposite a gas works and another opposite a park. The Minister smiled then, but will he reply to that point? Any member of the public might say to him, "If you had to choose between two properties in one street which were described in an estate agent's window, one of which faced the gas works and the other the park, and both were the same price, which would you choose?" He would not have to think long. It is obvious that what we are saying is common sense which everyone understands.
      108
      There are bound to be many appeals. The Government have denied that and said that that is not likely, given the number of bands and the wide differences between them. People who have worked for years in assessors' departments know better than that. They expect a large number of appeals to be made.
      The banding system in Scotland is not adequate to meet property needs. Band H covers properties of £212,000 and upwards. Anyone can glance at the posh Sunday newspapers in Scotland and see the flattering photographs of the properties which get the biggest advertisements. Many are valued at about £150,000. Few people with properties in band H will pay three times as much as people with properties in the lowest band. This system is a tiny improvement on the poll tax. As the Secretary of State pointed out, the poll tax is unjust because a duke pays as much as a dustman. Now, that duke is to pay three times as much, but I do not think that many people will be impressed by that footling improvement.
      Mr. Ian Taylor: Not having sat through the hours that the Committee spent upstairs, I am slightly timorous about raising this subject on the Floor of the House but, having listened to speeches by some members of the Committee, I am glad that I did not sit through those hours.
      When the council tax was proposed, many of my constituents and I were worried about the impact on the south-east. Yet the more I examine the subject, the more I feel that it would be a mistake to introduce a regional banding system and that it would certainly not address my constituents' concerns. I am delighted that my right hon. Friend the Secretary of State is on the Treasury Bench, because I was one of those who pressed him in the early days to introduce a higher band. I am pleased that that has happened, and feel that, to a great extent, that has met some of my constituents' concerns. The hon. Member for Sheffield, Brightside (Mr. Blunkett) said that people in the top band were "compressed"—I am happy with that word—in relation to lower bands. The limitation on the multiple which they will pay is sensible.
      The point that I made in an intervention is equally important. Through the income and direct tax system, the people who earn the most will contribute more to the funding of local government than they have in the past. The amount raised locally through the council tax will be a relatively low percentage, and will certainly be lower than the percentage paid under the rates. That is important in an area such as mine.
      We have had a continual problem in constituencies in the south-east in persuading my hon. Friend the Minister how to treat higher regional costs in relation to standard spending assessments. He has always been willing to meet delegations, but the problems will continue, despite the introduction of the new tax. Nevertheless, I am satisfied with the way in which the county of Surrey has come out in the calculations for the forthcoming year, and I am sure that that will continue under the council tax. I am delighted that in areas such as mine the system of rebates for those on low incomes will continue.
      It is important to bear in mind that the differences between various parts of the country are often not as great as those within a particular constituency and we should consider that issue in our deliberations on the council tax. The ability to treat local variations is very important, especially in the current process of valuations, and I hope

      109
      that the amenity and other values of various local residences will be taken into account. Again, that is more in the interests of my constituents than the imposition of a regional system.
      A regional banding system would contain enormous anomalies. I represent a constituency outside London and I am glad that no part of it was under the old Greater London council. If the royal borough of Kingston will take its dirty hands off houses in Long Ditton which it is now trying to claim under the Boundary Commission, no part of my constituency will ever be within boundaries of the old or any new GLC.
      As the Minister rightly said in a statement on 20 November, there is no doubt that
      "in Kingston-Upon-Thames a couple in a four bedroomed house would pay £88 less than their equivalents in next door Elmbridge",
      part of which is in my constituency. That would be the effect of the proposals put forward by the hon. Member for Eastbourne (Mr. Bellotti) on behalf of the Liberal Democrats. Such a difference is not acceptable. They are not the issues that we should discuss when considering the way in which the council tax will be implemented.
      It is important that a house worth, say, £200,000 should have the same bill throughout the country for a given level of services. I am not interested in the situation in Wales or Scotland as they have their own systems of delegated government and their own systems of finance. [Interruption.] I would not presume to speak on behalf of any Members of Parliament from Scotland. Therefore, I am not sure that I would wish them to presume to speak on my behalf.
      As a Member of Parliament for a constituency in the south-east, I believe that the main problems that I identified in the council tax and the way in which it would be implemented have been met by my colleagues on the Front Bench. The problems were of immense concern to my constituents. I have gradually been able to convince them that the issues that I have raised this evening—such as the new band of £320,000—were the correct ones to be resolved.
      When the council tax comes to be implemented, I beg my colleagues on the Front Bench to remember that we do not want any last-minute changes, such as extra help for London. Many of my constituents believe that Londoners get a good deal in many ways, as I said in an intervention on my hon. Friend the Member for Harrow, West (Mr. Hughes). That may not necessarily be appreciated by hon. Members whose constituencies are in London, but it is certainly appreciated by hon. Members whose constituencies border on London.
      The key issue for any Government is to ensure that local councils do not overspend and the key issue for any local Member of Parliament is to ensure that the efficiency with which councils deliver services is of the highest quality. I believe that we can achieve that through Conservative councils across the south-east and I oppose the system of regional banding.
      Mr. Portillo: My hon. Friend the Member for Hendon, South (Mr. Marshall) has failed to catch your eye, Mr. Deputy Speaker, but let it stand on the record that he has pursued privately with Ministers the interests of his constituents most assiduously.
      My hon. Friend the Member for St. Ives (Mr. Harris) has pursued his constituents' interests by urging Ministers to visit the Isles of Scilly, which I had the pleasure of doing
      110
      recently. He believes that the problems of the Isles of Scilly, which have high property prices due to people coming in from outside, are unique. I am not sure that they are unique, but we are aware of them.
      I can tell my hon. Friend that, where a number of properties are owned by people from outside the islands and if those properties are second homes, the fact that only half of the tax will be payable by those taxpayers will be taken into account in the assessment of the tax base of the authority. That will, of course, be reflected in the amount of grant that the Isles of Scilly can receive. I hope that that will be some consolation to him.
      I say to the hon. Member for Eastbourne (Mr. Bellotti) that ministers of religion and the Churches in general have made representations. Some of the Churches have suggested that they should be able to pay the council taxes of ministers of religion en bloc and then divide that by equal amounts among the ministers of religion so that people would not pay more for living in an especially large vicarage. We shall be interested in pursuing that point with them.
      The hon. Member for Berwick-upon-Tweed (Mr. Beith), who is meant to be the finance spokesman for his party, showed a 100 per cent. misunderstanding of the system when he said that his constituents would look across to Scotland and see there a more favourable banding system. The system in Scotland is less favourable in that people will reach the higher band at a lower value of property, because there are more people in the lowest bands. The important point is that the amount that is contributed from local government finance in Scotland is less, and the amount contributed from local taxation in Wales is less again. Different bandings in those different places are therefore appropriate.
      9.45 pm
      A £50,000 house in Scotland would be in band D, but it would be in band B in England. However, the house in Scotland would pay £270, and the one in England would pay £311 because of the difference in the amount that is raised locally.
      My hon. Friends the Members for Harrow, West (Mr. Hughes) and for Esher (Mr. Taylor) were right to point out the difficulties of a regional banding system. How right they were to point out that it is not only in the south-east that there are expensive properties, and that there are often variations within regions which are as striking and as dramatic as the variations between them.
      If we gave discounts in London, that would be unfair. It would mean that in every band there would be lower bills for a standard level of service. It would mean, for example, that in the lowest band, in London, there would be lower bills for a standard level of service than there were anywhere else. It would mean that we would sweep to one side the fact that the variations within London are as dramatic as the variations between London and other places.
      Within one borough, between Mayfair and Paddington, for example, the difference in property prices is enormous. From the east of London to the west, the difference is enormous. I ask, for example, my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) whether it would be fair to give all Londoners a discount on that basis and for the people of London, uniquely, to pay less for their services in the lowest band while no one else had that benefit.
      Mr. Wilkinson: Will my hon. Friend give way?
      Mr. Portillo: No.
      I argued in a letter to my hon. Friends that there are higher disposable incomes in London. My hon. Friend the Member for Ruislip-Northwood, who spoke in a previous debate, was kind enough to put part of that letter on the record.
      There used to be a rateable value discount in London, and I know that some of my hon. Friends hanker to go back to that. In the proposed council tax, we have put in place the idea that the amounts of tax that are paid should be compressed. We propose that only three times as much should be payable by those who live in the most valuable properties as by those in the least valuable properties in any area. The effect of the compression of ratios is expecially helpful to all the places, whether London or the Isles of Scilly, where property prices are unusually high.
      I sometimes think that my hon. Friends have not fully recognised the effect of that compression of the tax rates, although clearly my hon. Friend the Member for Harrow. West, when he began to compare the council tax bills that are in prospect with the very much higher rates bills that used to be paid by his constituents and, even more, by the constituents of my right hon. Friend the Member for Brent, North (Sir R. Boyson), he was firmly on to the point that the council tax achieves what is necessary—that is, higher bills for people who live in higher-valued properties, but not bills that are disproportionate or excessive, such as we had under the rating system and such as those to which the Labour party wishes us to return.
      Mr. Allen McKay rose——
      Mr. Portillo: I am afraid that we are under a time limit.
      The hon. Member for Sheffield, Brightside (Mr. Blunkett) was less than straightforward with us this evening. He told us that he was committed to a system of fairness. As far as I am aware, the Labour party is not committed to a system of regional banding. The Labour party is certainly committed to the principle of unlimited tax bills in respect of the more expensive properties, and longs for a return to the sort of envy tax that we had under the rating system, whereby people in more expensive properties—whether they are widows or people living on their own and irrespective of whether or not they have high incomes—are made to pay in relation to the value of their properties.
      Not only does the Labour party propose an unlimited tax; it proposes an additional tier of government at regional level, and says that that regional tier of government should be able to raise income tax. God help us if we ever have the Labour party imposing regional income tax and unlimited bills on higher valued properties and—what is more—if we have no capping on local authorities, so that any authority is free to set whatever level of taxation it chooses.
      The hon Member for Brightside was very cross about the valuation exercise that we propose to conduct. He was cross that we intended to save £100 million on the valuation process because he loves public spending; anything that is good value for money is a disappointment to him. Just as he loves public spending, so he hates the private sector. Therefore, the idea that valuers should be
      112
      chosen from the private sector to conduct the valuation and so save the taxpayer money is anathema to him, and has excited him more than somewhat.
      The hon. Gentleman caricatured the valuation process as broad-brush. It will not be broad-brush. It will take account of local factors and of the difference between properties that overlook the park and properties next to the disco. By using private sector valuers who have local knowledge, we shall make it possible for such factors to be taken into account, to achieve value for money and to conduct the process quickly. That means that, for the Conservatives, the introduction of a new system of taxation in 1993 is a reality, whereas for the Labour party it is cloud cuckoo land, and Labour Members know that perfectly well.
      The hon. Member for Brightside was less than straightforward with the people of Barnet. I can tell him that they will not be consoled by his promise that they would not all be in the same band if they knew the truth, which is that he would sting them for vast sums of the sort that were dragged out of people under the rating system—the sums which brought the rates system down and which at one stage led his party and himself to denounce the rating system as unfair. We stuck to the belief that that system was unfair whereas the Opposition have jettisoned it.
      Let there be no doubt about it: the system that the Labour party proposes is massively unfair. The hon. Member for Brightside can only say that, for a property worth five times as much, the Bill would not be five times as high, just as he told us before that the number of Labour Members advocating non-payment was not 30. He cannot tell us how many times it was, and he cannot tell us how many times greater the bill would be in Barnet. He is the "not 30, not five" shadow spokesman. He cannot produce more precise figures than that.
      The tax that we propose is partly a property tax and partly a personal tax, and we believe that the property element should be a tax on the enjoyment of property, which can only be related to the actual value of property. We propose a fair system, with discounts to single people, students and student nurses and rebates for people on low incomes. We propose a comprehensible system and one that recognises that, while there should be a relationship to the value of the property, there should also be a compressing of the tax bands so that we ask more of people in higher-valued properties, but do not subject them to the excessive bills to which the Labour party would have us return. For all those reasons, I ask my hon. Friends to reject the new clause.
      Mr. Murphy: Not so long ago, the Minister spoke with equal passion about the merits of the poll tax. Even he has now accepted that the poll tax in Britain and Wales was an abject and complete failure because it was unfair and was unrelated to people's ability to pay. Worse still, from the Government's point of view, it was perceived by the majority of the people as being unfair and that, essentially, was its downfall.
      Earlier this evening, the hon. Member for Harrow, West (Mr. Hughes) said that the question of valuation bands was not an issue. What is an issue, of course, is the unfairness of any local government tax. The tax that the Government introduced three years ago was above all unfair and unrelated to people's ability to pay. With its banding and valuation lists, the council tax is equally

      113
      unfair. I am afraid that the credibility of local government will be put at risk because of the constant changes in local government finances that have occurred over the past few months and years.
      The eight bands that the Government have proposed for Wales are disproportionate. The highest band pays only three times more than the lowest band—although one property may be worth £240,000 compared with £30,000. We are proposing a 14-band system for Wales that reflects the ability to pay and is more closely linked to people's income. More importantly, it also follows the changeability of the housing market in England and Wales. The only fair answer to the question of valuation is that each property should be individually valued. That is the fairest way.
      In Britain, all the professional bodies, including the Chartered Institute of Public Finance and Accountancy, the Royal Institute of Chartered Surveyors arid the Institute of Rating and Valuation, have all said that the valuation and banding system proposed by the Minister for Local Government and Inner Cities is wrong. All the local authorities in Wales have said that the bands are unfair and unjust. That view was echoed by the Assembly of Welsh Counties and the Council of Welsh Districts. They specifically wanted a band lower than the £30,000 band and more bands between £90,000 and £120,000 and above £240,000.
      What logic and fairness is there in the present system which doubles from £120,000 to £240,000 in respect of the commencement point of the top band in Wales while only increasing the range of payment by one fifth between the bottom and the top bands? There is nothing logical or fair in that ludicrous system.
      The councils in Wales asked the Government to undertake a study of the relationship between capital values in Wales and household gross and disposable incomes. That study could easily have been carried out with the assistance—if they had agreed—of the Building Societies Association, the Inland Revenue and the valuation office. They could have compared purchase prices, incomes, deposits and capital values. However, the Government decided to ignore the wishes and fears of the local authorities in Wales and elsewhere.
      The Welsh Office refused to carry out the studies purely for electoral and dogmatic reasons. The Government still maintain the view that they held when the poll tax was introduced. The council tax is no different. Under both taxes, the rich will get richer and the poor will get poorer.
      There are no practical problems with the introduction of 14 bands in Wales. There would be no increase in the workload of local authorities and there would be no delay in introducing a new system. The system would be fairer and there would be fewer appeals.
      The poll tax failed essentially because of its unfairness. It also failed because of the cost to people of this country. In Wales alone, £100 million was squandered on the poll tax to set it up, to maintain it, and to sweeten it. That was a disgraceful squandering and waste of public money. The Government might as well have dumped £100 million in the Bristol channel for what good it did to the people of Wales. The Prime Minister said that the poll tax was bad because of its uncollectability. The same can be said of the council tax.
      As the Government prefer to listen to their party managers rather than to local authorities, they are failing
      114
      to listen with regard to the council tax. As a consequence, they will fail to win the general election. I urge the House to support new clause 9 and the consequent amendments.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 233, Noes 329.
      Question accordingly negatived.
      It being after Ten o'clock, further consideration of the Bill stood adjourned.
      Bill, as amended in the Standing Committee, to be further considered tomorrow.

    STATUTORY INSTRUMENTS, &c.
    Motion made, and Question put forthwith pursuant to Standing Order No.101(5) (Standing Committees on Statutory Instruments, &c.).
    STATUTORY INSTRUMENTS, &c.

      BROADCASTING
      That the draft Broadcasting (Programme Contractors' Additional Payments) Order 1991, which was laid before this House on 21st November, be approved.—[Mr. Chapman.]
      Question agreed to.
      Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

      HOUSING (SCOTLAND)
      That the Clackmannan District Council (Vesting of Central Regional Council Land) (Scotland) Order 1991, dated 19th November 1991, a copy of which was laid before this House on 28th November, be approved.—[Mr. Chapman.]
      Question agreed to.
      Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

      EDUCATION
      That the draft Education Support Grants (Amendment) Regulations 1991, which were laid before this House on 12th November, be approved.—[Mr. Chapman.]
      Question agreed to.
      Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

      LEGAL PROFESSION
      That the draft Registered Foreign Lawyers Order 1991, which was laid before this House on 18th November, he approved.—[Mr. Chapman.]
      Question agreed to.

    PETITIONS

      Pensioners
      10.14 pm
      Mrs. Alice Mahon: I wish to present the following petition:
      The Humble Petition of members of Senior Citizens Clubs and residents of Aged Persons dwellings in Halifax and Sowerby Bridge in West Yorkshire showeth that they support Age Concern's Campaign for a better deal for Pensioners which asks for the Christmas Allowance to be increased to £50 and for free bus passes and TV licences for all old age pensioners.
      It is time to listen to the elderly of this country. With all the talk about citizenship, I hope that we can at least listen to our elderly citizens.
      Wherefore your Petitioners pray that your Honourable House takes notice of this Campaign and urges the Government to take action as soon as possible.
      And your Petitioners, as in duty bound, will ever pray, etc.
      To lie upon the Table.

      Cambuslang and Rutherglen
      Mr. Thomas McAvoy: In 1975 the royal borough of Rutherglen and the district council of Cambuslang lost their local independence when they were incorporated into the city of Glasgow district council. We have not adapted to that change and in the past couple of months we have had public meetings in the constituency which have been attended by more than 3,000 people. The petition before the House was signed, in the space of three weeks, by more than 12,000 people. Therefore, there is an obvious demand in our area for a more localised council which is not part of the giant set-up of Glasgow district council.
      Wherefore your Petitioners pray that your Honourable House will urge the Secretary of State for Scotland to bring forward proposals for the establishment of a Local Council covering the communities of Cambuslang and Rutherglen.
      And your Petitioners, as in duty bound, will ever pray, etc.
      To lie upon the Table.

  Poultry Industry
  Motion made, and Question proposed, That this House do now adjourn—[Mr. Chapman.]
  10.16 pm
  Mr. Andrew Welsh: The reason for this debate is to seek action for a major sector of agriculture.
  Poultry is the most popular meat in Britain, selling one and a half times more than beef and as much as pork and lamb combined. Last year, the poultry sector had a combined production value of £1,766 million. It employs about 50,000 people, mostly based in rural areas. It uses 30 per cent. of the total United Kingdom feed wheat harvest and therefore directly affects other sectors of agriculture.
  The poultry industry receives no direct subsidies or income support under the common agricultural policy. It is highly competitive within Europe, but, unfortunately, it is now suffering job losses and is threatened by cut-price imports from the third world. Of the poultrymeat now available in the United Kingdom, 18 per cent. is imported at a price that is between 5p and 6p in the pound below that obtained through British production.
  The problem is being exacerbated by European legislation on poultrymeat inspection charges, which has been implemented in five out of the 12 European Community countries. The United Kingdom is alone in failing to provide financial assistance to reduce the charges to its industry.
  Local authorities have been burdened with the responsibility for the regulations, for the collection of the charges for the inspections as well as for all aspects of food health. I submit that that system is not good for the local authorities or for the poultry industry. It has meant that the United Kingdom's cost burden on production is 4p per pound compared with our French competitors. I am told that the Food Safety Act 1990 has added another 1/2p in the pound to United Kingdom costs compared to those of the French industry.
  Government policy has created significant on-costs to the poultry industry, thereby widening the trade gap, encouraging lower priced imports and inhibiting the export competitiveness of British companies. Any loss in home production will be immediately replaced by imports, and 18 per cent. of United Kingdom poultry consumed already comes mainly from France, Denmark and Holland. There are ominous signs of import penetration of meat from eastern Europe, Brazil and Thailand at dramatically lower production costs.
  Mr. Alex Salmond: Has my hon. Friend seen the letter from Mr. Stephen, the group director of Grampian Country Foods Ltd., one of the fastest growing and most enterprising poultry companies? Mr. Stephen argues that the imports from Thailand and Brazil are entering at about 60 per cent. of the production costs in the United Kingdom because those countries have been able to take advantage of access to exports of subsidised European Community grain.
  Mr. Welsh: My hon. Friend makes a good point. Those enterprising companies are now faced with unfair competition. They believe that, given a level playing field, they have the quality to take on any competitors and win.
  No information is available about the British Government's action to ensure that imported food products conform to United Kingdom safety standards.

  121
  Because of the extra burdens placed on the United Kingdom industry, as imports grow the Government's problem in maintaining safety standards will increase. The Government have rightly laid down those standards for our industry, but they are not on a level playing field.
  The Government's present policy gives us the worst of both worlds, especially in the context of a net £6 billion trade deficit in food and drink products. On the Government's insistence, the poultry industry has taken on board all aspects of food quality, hygiene and safety as required under the Food Safety Act 1990, as well as poultry inspection costs. They did so while recognising that those huge on-costs would rapidly lead to an uncompetitive position. Such a position has existed for the past 12 months, and unless a level playing field is created to allow that non-subsidised, professional part of the food sector more freedom to compete, there will be major redundancies and reduced job opportunities, and rural communities will be destroyed. The net result will be an inevitable increase in imported poultry.
  Is it the Government's desired policy to oversee the demise of the poultry industry? If not, will the Parliamentary Secretary explain what the Government intend to do about it? Animal welfare standards must be encouraged Communitywide. Severe welfare standards or those that are not replicated raise United Kingdom costs of production and lead to lost export markets, while home market competitors use methods and practices that have rightly been banned here.
  My sympathies rest with the animal welfare organisations, which also have a duty to ensure that reforms here do not handicap our industry, or encourage or reward bad practice elsewhere. What progress are the Government making with other Governments? Will they ensure that Europewide improvements are instituted at a pace that will not handicap our industry while it adjusts to improved animal welfare standards? Will the Parliamentary Secretary assure me that there will be a level playing field?
  The egg sector, too, is important, with an annual production valued at some £500 million. The egg sector has been particularly damaged by outside interference. The Poland, Czechoslovakia and Hungary association agreements have caused poultry levy reductions of up to 60 per cent. over a three-year period. Linked with large amounts of American inward investment, that will put enormous pressure on the United Kingdom poultry industry, which must result in severe cost-cutting exercises. It must mean redundancies, and knock-on losses for cereal producers—quite apart from the obvious problems that loom in regard to the GATT negotiations.
  Do the Government wish some 20 per cent. of all the eggs that are sold in this country to come from Poland or Hungary in three years' time? How will such imports be dealt with under the salmonella and welfare regulations? What tests will they undergo, and what security will British consumers be given?
  Despite higher feed costs, in most years the United Kingdom industry can compete effectively with its European competitors. It usually supplies 98 per cent. of the home market—or did, until that outburst from the hon. Member for Derbyshire, South (Mrs. Currie), about which the less said the better: in 1990, the figure fell to 93 per cent., and the industry is only now managing to fight the imports.
  I question the basis of the Government's present policy. Let me refer the Minister to the evidence submitted by the
  122
  public health laboratory service to the Select Committee on Agriculture on 11 January 1989. Paragraph 17.3 refers specifically to the eradication of salmonella pullorum as the basis for similar flock destruction to eliminate salmonella enteritidis—PT4. Sir Donald Acheson, the Department of Health's chief medical officer, said that the solution lay less in end use in kitchen and cooking processes than in
  "control of the infection at source".
  If we combine those statements, it seems that the policy of flock slaughter is the Government's answer. As a result, an enormous burden of testing and inspection has been placed on the industry. The Minister's own departmental evidence to the Committee stated that salmonella enteritidis was ubiquitous. According to paragraph 18,
  "Salmonella organisms are present in many areas of the environment and are persistent. There is no technically sound method which is certain to eliminate them from laying houses. Even after very thorough cleansing and disinfection, salmonella may recur. Because of this, a policy of slaughtering flocks with the aim of eradicating salmonella would not have a realistic prospect of success. There would be a serious risk that even after an infected flock had been slaughtered out and the premises disinfected, subsequent flocks in the same building could become infected from the environment."
  That evidence, given to the Minister by his own Department, was ignored in the policy that the Government subsequently produced.
  That MAFF/Department of Health view, so clearly stated on 11 January 1989, leaves us wondering what has changed since then—apart from the fact that more than £4 million has been paid out in slaughter compensation for more than 2·5 million birds that have been slaughtered. The Minister ignored the advice of his own Department, and that led to a slaughter policy that is wrongly founded and bound to fail.
  Why did the PHLS use the example of a host-specific organism such as pullorum as the model to eradicate enteritidis, which is well documented as a non-host-specific and ubiquitous organism? Given that it is a specific phage type, on what evidence of phage-typing was it established that type 4 was specific to poultry? It is well documented that the phage type does not appear to affect the host specificity of other salmonella strains.
  For example, pullorum has several phage types, all specific to poultry. Typhi has many types specific to humans. There is no evidence that enteritidis phage type 4 is confined to poultry in the same way that pullorum is. It is perfectly logical to conclude that type 4 is widespread not only in other avian species but in other animals and in the general environment. If salmonella E affects humans, why does it not also affect poultry? After all, we are discussing living organisms with their own defence mechanisms.
  While more cases than hitherto of salmonella E in humans have been traced to foods containing eggs, usually uncooked or partly cooked, the great majority of these cases have involved food prepared outside the home and frequently associated with poor hygiene and/or handling practices.
  The incidence of naturally infected eggs is low. A 1989 survey of 300 flocks in Canada led Agriculture Canada to conclude that less than one egg in a million would be thus infected. The natural defences possessed by the egg militate strongly against widespread infection or multiplication of the organism in the intact egg. The risk to consumers of being infected with salmonella E as a result

  123
  of eating eggs at home is almost zero. That was never the impression produced by the massive public fuss following the statement by the hon. Member for Derbyshire, South.
  The risk is somewhat increased outside the home, but it remains extremely low compared with many other risks to which consumers expose themselves daily. Given the scientific knowledge available, the eradication of any salmonella species, especially one as ubiquitous as this, is not feasible in the short term. Even if it were posssible, there is no assurance that such a reduction among laying hens would be reflected in lower numbers of outbreaks in the human population.
  Having disturbed the balance of natural immunity, the Swedes, who attempted such a programme, now apparently find that the level of salmonella in their population is higher than ever, and much higher than this country's.
  The eradication policy was based on a generalisation and a previous example that was invalid—it did not compare like with like.
  Will the Government abandon their slaughter and inspection policy and look again at a proper scientific investigation into these forms of salmonella? Now that the fuss has died down, in the calm and quiet that prevails, will they look again at the problem with a proper scientific investigation to find out the truth? It is crucial to get to the truth of the matter, because the egg industry may have been cruelly and unfairly misused on insufficient and hurried evidence.
  I have tried to highlight the dangers of an uneven playing field for this important industry. I have questioned the Government's policy on salmonella and eggs. I have questioned its damaging effect on poultrymeat and especially the effects of inspection charges. Both factors have been exacerbated by the fact that the Food Safety Act applies only to the United Kingdom.
  These aspects add major costs throughout the industry. That will lead to loss of market share and to imports that are not subject to similar impositions and safety provisions. The Government created this problem; what do they intend to do to provide solutions? The industry and I look forward to the Minister's detailed answers.
  10.33 pm
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Curry): The hon. Member for Angus, East (Mr. Welsh) has made a series of points about the poultry industry. I shall arrange for my hon. Friend the Member for Penrith and The Border (Mr. Maclean) to answer the points to do with public health if I cannot cover them this evening, and I shall attempt to deal with the points relating specifically to the industry.
  During the salmonella crisis, consumer confidence completely collapsed. There followed a catastrophic decline in sales. The Government were not able to work out a response at their leisure. We had a crisis that had to be dealt with and that is why the Government took immediate and far-reaching action. Failure to do so would have meant that the industry would have died in the water. It is significant that there has been a great recovery in confidence in the industry because of the measures that we
  124
  have taken. It is a credit to the industry that it co-operated in the implementation of those measures and that so many producers recognised the need for urgency.
  I recall the Select Committee to which the hon. Gentleman refers because I was a member of it. The evidence to the Committee and the Committee's report endorsed in broad measure the steps that were taken by the Government to deal with the crisis.
  Mrs. Margaret Ewing: Why did not the Government feel confident enough to respond immediately to the crisis? Given all the information that was available to the Government, they should surely have been able to obviate the whole problem, which arose because of careless remarks by a junior Minister.
  Mr. Curry: The Government cannot respond at 10 minutes' notice to a collapse that spread across the industry and affected consumer confidence throughout the country. Most of the reproaches against the Government are that we responded too quickly with measures that were too far reaching. Most of the pressures from the industry were directed at trying to unwind some of the measures. As I shall shortly explain, in so far as the Government think it prudent to do so, we have pursued that policy.
  The hon. Member for Angus, East has raised some important issues. I accept the dilemma about animal welfare. We have a choice. We can say that we will do nothing until there is a Community-wide agreement. The result of that is that measures, which I am sure every hon. Member considers to be important, would not be taken. For example, if we had said that we would not outlaw veal crates until they were outlawed throughout the Community, they would still not be outlawed. If we had not taken measures on the tethering system for pigs until a ban was agreed in the Community, pigs would still be tethered.
  There comes a point at which we must ask whether these issues matter sufficiently to us to ask our industry to see to them, knowing that measures will not be taken elsewhere however hard we try to bring them about. The answer to whether we do our utmost to ensure that Community harmonisation produces the standards that we observe in the United Kingdom is yes. However, the hon. Gentleman knows that I cannot guarantee the outcome because matters are decided by majority vote. An animal welfare issue arose at a recent Council meeting and for the first time the United Kingdom voted against the package because the measures did not go far enough. I am unable to guarantee that we can deliver in such circumstances, but the dilemma is real, as the hon. Gentleman realises.
  Mr. Michael Lord: I am listening carefully to my hon. Friend. Does he accept that, while we are educating the rest of Europe, our producers will be going bankrupt?
  Mr. Curry: Much depends on the circumstances. I do not accept that our producers necessarily go bankrupt. In some areas of activity our producers have a good marketing campaign as a result of our measures. I know from talking to supermarket groups that pork from animals reared in what I might call pig-friendly conditions is taking a growing share of the market. I appreciate that one can argue about the definition of free-range because the term is covered by a series of Community definitions,

  125
  but free-range chickens are selling in increasing numbers. One should not always regard such matters in a negative way, because there is often a marketing advantage.
  The hon. Member for Angus, East is a reasonable man. How do we deal with eastern Europe? It will not go away. The most logical way to help people there is to accept what they can produce. But we must strike a balance between what we can accept from that area and the impact of those imports on our industry. The hon. Gentleman represents a Scottish constituency and knows the difficulties that arose on Tayside in the soft fruit industry. In that example an association agreement has put down some firm signposts for a trade for which we had to rely on recent safeguard action by the Commission. None of us can ignore these dilemmas.
  I shall try to deal with the salmonella issue. The Government are keeping under review the whole package of measures to control the problem of salmonella in eggs and poultry. We have introduced some changes which have sought to ease the burden on producers without compromising the protection of public health. In particular, we have recently agreed, with the support of the Department of Health, to allow eggs from infected flocks to go for pasteurisation in approved plants under strictly controlled conditions. While we are satisfied that the pasteurisation process, properly carried out, is effective in producing a safe product, it must be for the producer and the industry in this country to consider the use that they wish to make of such arrangements. We are exploring the possibility of exporting eggs from infected flocks for pasteurisation abroad.
  It is important that the industry has its own decisions to take. The hon. Gentleman will know, for example, that we have banned the use of specified bovine offals in feed. The fact is, however, that the United Kingdom Agricultural Supply Trade Association, the feed compounders and the retail trade have introduced what is effectively a voluntary ban on the use of offals. That is not something that the Government impose. It is something that the trade has decided that the consumer would be reassured with and, therefore, it does not have a statutory backing. The trade decides at the end of the day that it needs to be able to reassure the consumer.
  Subject to the possibility of greater interest in pasteurisation in future, I have to say that at present we see no viable alternative to slaughter for infected breeding and laying flocks. It has yet to be established that antibiotic or other treatment can be effective in restoring an infected flock to a state in which it can safely be allowed to return to production. As the hon. Gentleman will appreciate, the use of antibiotics brings its own problems of residues, for example. We are considering, with the Department of Health, what further work could realistically be done in this area.
  For the longer term, research work is in hand on the possible development of a vaccine to protect poultry flocks against salmonella infection throughout their laying period. Much work remains to be done before we can expect adequately to evaluate the practical feasibility of such an approach.
  The hon. Gentleman referred to the actions of other member states. Several states have taken measures in recent years to tackle the problem of salmonella—especially salmonella enteritidis—in poultry flocks. There are similarities and differences with our own approach. In France, for example, which has been cited frequently,
  126
  controls have been operated through a voluntary scheme, which has been taken up by the vast majority of producers. Originally confined to breeders and hatcheries, the scheme has recently been extended to all levels of the laying flock. The individual producer undertakes to abide by specific codes of practice and to submit his flocks to regular tests. Should there be evidence of salmonella pullorum or salmonella enteritidis, he has to accept slaughter of the flocks concerned. In return, the state undertakes to contribute to the costs of the tests and to pay compensation.
  In the Netherlands——
  Mr. Andrew Welsh: There is a massive feeling in the industry that if salmonella enteritidis is ubiquitous, a host of inspectors will find it and slaughter. That is the point that I was trying to get across to the Minister. The fundamental premise on which the Government's policy is based is wrong. Pullorum was more specific. Enteritidis is ubiquitous. There is a strong feeling in the industry that if there is an extension to the whole of the Common Market, a host of inspectors will find and slaughter. I ask the Government fundamentally to examine the policy and to ensure that it is based on a proper scientific evidential basis.
  Mr. Curry: Our scientific advice is that we are pursuing the right policy. As I have been explaining, our colleagues on the continent appear to be pursuing the same course. France has a slaughter policy, as have the Dutch.
  Perhaps it will be helpful if I outline the proposals that are coming from the Commission, which in due course will be European-wide. The Commission has published a draft regulation for the control of salmonella and certain other zoonoses throughout the European Community. It has been drafted largely in response to pressure from the United Kingdom for salmonella controls to be introduced on a Community-wide basis. That is precisely because we recognise the validity of the demands that there should be a level playing field.
  There are, however, three important differences from the United Kingdom measures, and in some respects the Commission would go further than us. First, the proposals provide for the control of salmonella in commercial laying flocks, as in the United Kingdom at present, but not coming into operation until July 1994. Secondly, the proposal requires the testing of broilers and breeding flocks for salmonella and heat treatment of infected flocks whereas the United Kingdom's testing and slaughter measures apply only at parent and grandparent broiler breeder levels. Thirdly, the proposal requires the testing of poultry compound feeding stuffs for salmonella, which is not the case in the United Kingdom, where certain high-risk feed ingredients are required to be tested, with codes of practice operating for the control of salmonella in feeding stuffs and raw materials.
  Under the proposal, flocks which are found to be infected will be subject to movement restrictions and their eggs may be used only in the manufacture of pasteurised egg products.
  Mr. Kenneth Hind: Surely the one action that could be taken immediately is to alter the basis of meat inspection from local government to national Government. That happens throughout the European Community, including Northern Ireland. That measure

  127
  would remove the 4p in the pound disadvantage that the British producer faces compared with producers in the rest of the EC.
  Mr. Curry: As my hon. Friend knows, we conducted a review of the meat inspection system. That review has concluded and we are considering its proposals. I hope that, when we can make those proposals public, they will be well received by the industry. There is much work to do. The disparity in the charges of local authorities is of concern.
  The Commission's proposals are now out for consultation with the industry and other interested bodies. We shall take careful account of what they say when we begin to negotiate in Brussels. An agreement on an EC-wide arrangement is an important priority for the United Kingdom. We hope that the Portuguese presidency
  128
  will aim for discussions early next year, but I assure the House that it is amongst the top priorities for our presidency. In the meantime, for reasons which I explained, we do not consider that there is a viable alternative to the slaughter policy.
  We cannot compromise on matters affecting food safety. I recognise the problems that the industry faces. We are in constant touch with it. We listen hard to its concerns and do our best to respond to them, in terms of the way in which we manage activities and in response to the wider European issue. The argument for the level playing field is powerful, and we shall do our best to achieve it, provided it is borne in mind that in matters of overwhelming importance the United Kingdom must retain the discretion to act in the interests of public safety and the industry.
  Question put and agreed to.
  Adjourned accordingly at fourteen minutes to Eleven o'clock.