HC Deb 27 February 1991 vol 186 cc971-3
12. Mr. Dykes

To ask the Secretary of State for the Environment if he will make a statement on the latest developments in connection with his review programme for the reconstruction of the community charge system.

Mr. Heseltine

The review is continuing to look at a range of possibilities for local government finance, structure and functions. As part of the process, I have recently held a meeting with the local authority associations and visited a number of individual authorities and I and my ministerial colleagues have met various of the Opposition parties to hear their views.

Mr. Dykes

Why have all the best ideas come from Conservative-controlled local authorities and either no ideas or the worst ideas have come from Labour-controlled local authorities?

Mr. Heseltine

My hon. Friend has been in the House for long enough to know that that is a normal event which we are used to. In fairness to the Liberal party, the Welsh nationalists and the Scottish nationalists, they have clearly thought through their proposals for local government finance and have discussed the subject with us; we have had frank, full and valuable conversations. The gap has arisen characteristically, among Labour Front-Bench spokesmen, who apparently have proposals but have so little confidence in them that they are not prepared to discuss them.

Mrs. Margaret Ewing

What significance does the Secretary of State attach to the idea that all taxation should relate to ability to pay? Have the Government yet ruled in the possibility of local income tax, which could certainly be implemented in Scotland in the next financial year?

Mr. Heseltine

I have made it clear that we are looking comprehensively at all options. Although much of the argumentation behind the options is familiar and I fully appreciate the position of the Scottish National party, I shall not go further today than to say that all the options have been or are being considered by the Government, who have ruled nothing out.

Mr. Ralph Howell

In view of the commitment made by my right hon. Friend and the Prime Minister that nothing will be ruled out when considering changes to, or the repeal of, the community charge, will my right hon. Friend confirm that it is still practical and possible to repeal the community charge and replace it with 7 per cent. VAT before 1 April 1991, thus saving us from another 12 months of agony?

Mr. Heseltine

I have made it clear that nothing is ruled in and nothing is ruled out. With regard to the timing that my hon. Friend suggests, some things are ruled a bit more in than others.

Mr. Nellist

Will the review consider the powers of poll tax officers, such as is illustrated by the case of a 58-year-old lady to whom I spoke in Coventry last night? She has always paid her 20 per cent. poll tax by direct debit from a bank. After two lots of open-heart surgery, she moved last December from income support to invalidity benefit and received a £3 a week rise to £55 a week. She found that the poll tax office in Coventry had the power to phone the Midland bank and instruct it to pay £98 to the poll tax office out of her meagre savings. That is the first time that I have heard of poll tax officers having the power to instruct clearing banks to make such payments. Will the Secretary of State's review rule out such powers?

Mr. Heseltine

I cannot respond in the House to the circumstances of individual cases put by the hon. Gentleman, because I cannot reply in the detail that he expects. If the hon. Gentleman will write to me, I shall carefully consider the principles involved. The hon. Gentleman does everything that he can to avoid paying the community charge. What sort of example does that set for people whom he expects to pay it?

Mrs. Gorman

Will my right hon. Friend take my word for it that people in my constituency, which is yoked to two of the worst Labour councils in the south-east, Basildon and Thurrock, are sceptical about a change in the method of collection? They think that whatever we do under the same council structure the amount will still be too high. My constituents want the review to have an opportunity to reduce the role of local councils and put more work out to tender so that we do not need to collect as much money.

Mr. Heseltine

My hon. Friend makes an important contribution. I strongly support her view that the more choice and competition we can introduce to the provision of services, the better value for money we are likely to get.

Mr. Blunkett

I notice that the hon. Member for Harrow, East (Mr. Dykes) questions the Secretary of State on the reconstruction, not the removal of the poll tax. The Secretary of State is now engaged in deliberations. Does he agree with the Audit Commission that people on nil or very low income should be exempted from paying, because of the cost of collection and the unfairness, or with his colleague the Minister for Local Government and Inner Cities, who earlier this month said: Labour is in great peril if it gives up the principle that everybody should make a contribution to the cost of local government, because that principle is widely accepted."—[Official Report, 19 February 1991; Vol. 186, c. 198.] The two things are contradictory. If the Secretary of State is intent on introducing a floor tax, does not he accept that the only way to fulfil the wishes of the Minister of State is to maintain both a floor tax and the poll tax?

Mr. Heseltine

The hon. Gentleman can rest assured that my hon. Friend the Minister of State makes a vital contribution to the review, as does the Audit Commission.

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