Local Government Finance (Hansard, 6 March 1991)

§ 3. Mr. Douglas
To ask the Secretary of State for Scotland if he will make a statement on the recent meetings he has had with political parties in relation to the reform of local government finance.

§ The Secretary of State for Scotland (Mr. Ian Lang)
I had a meeting on 12 February with representatives of the Scottish National party at which my right hon. Friend the Secretary of State for the Environment was present. I will meet representatives of the Scottish Liberal Democrats later today. Proposals made at those meetings will be taken into account in the current review of community charge matters.

§ Mr. Douglas
Is not it now becoming increasingly clear, as a result of those meetings and others, that local government finance in Scotland is in a state of crisis and that the indebtedness that has resulted from the past two years of the poll tax is well in excess of £500 million? Is the Secretary of State so sanguine as to think that he can persist with the concept of the poll tax in Scotland, or will he face up to his responsibilities and recognise that, if he does not rule it out, the electorate will rule him out?

§ Mr. Lang
The term "crisis" is hardly appropriate to a system in which 98 per cent. registration has been achieved and in which 95 per cent. collection is anticipated for the first year of the charge. Nine out of the 12 levying authorities have already collected 95 per cent. Their task would be eased considerably if Scottish National party Members would adopt a more responsible approach to the funding of local government. It is disgraceful that those who seek to make laws in this place should seek to break them when it comes to funding local authorities.

§ Sir Hector Monro
Does my right hon. Friend agree that the additional support for capital allocation projects that he announced yesterday and which was welcomed by the Convention of Scottish Local Authorities will be extremely beneficial and will allow many local authorities to get ahead with valuable projects in the coming financial year?

§ Mr. Lang
My hon. Friend is right. I was particularly glad to be able to allocate more than £500 million in capital allocations to local authorities with particular emphasis on the improvement of school buildings, on general services, including the provision of factories where they are needed, and on the improvement of water services and sewerage, in respect of which we plan to increase funding by almost two thirds during a three-year period.

§ Mr. Malcolm Bruce
Will the Secretary of State acknowledge the growing problem caused by people who have hitherto paid the poll tax but who say that they intend to deduct from next year's poll tax the amount that is attributable to non-payment? In those circumstances, and bearing it in mind that my party has encouraged its members to pay, will he further acknowledge that the sooner the Government announce the abolition of the poll tax, the easier it will be to remove the problem of non-collection?

§ Mr. Lang
The hon. Gentleman is right to say that it is grossly unfair that those who have paid their community charge should be expected to pay an SNP surcharge to cover non-payment by others. I urge everybody to make a 268 full contribution to local government and not to break the law. We are reviewing the community charge and considering possible methods of funding local government and I look forward to my meeting with the Liberal Democrats later this afternoon to carry those discussions further.

§ Mr. Norman Hogg
Will the Secretary of State join me in congratulating both the right hon. Member for Henley (Mr. Heseltine) and my right hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) on coming to the conclusion that a property tax is a better idea than a poll tax? Is not it the case that the property tax is electorally attractive, as was demonstrated in last year's regional elections when the Labour party won a considerable victory, and that if we introduce such a tax it will leave the Minister of State looking something of a lulu?

§ Mr. Lang
I do not know how it will make the hon. Gentleman look when I remind him that, according to the opinion polls, the Labour party's roof tax proposal was more unpopular than the community charge has ever been and that fewer than 20 per cent. of the Labour party's own supporters supported it.

§ Mr. John Marshall
Does my right hon. Friend agree that the lesson of councils such as Eastwood is that Conservative councils provide efficient services with a relatively low community charge? Is not it a great pity that not more councils in Scotland are controlled by the Conservative party so that the poll tax could be lower?

§ Mr. Lang
My hon. Friend is right, for that is the lesson to be learnt from the outrageously high tax that is imposed in places such as Edinburgh, where the community charge is £584. The lesson for Edinburgh's residents is to vote for a Conservative administration in next year's district council elections, which will produce better government and a lower community charge.

§ Mr. Dewar
Did the Secretary of State have time this week to study the admirable article by the right hon. Member for Blaby (Mr. Lawson), who was until recently Chancellor of the Exchequer, in which he argued that the poll tax is a tax so fundamentally flawed that no amount of tinkering or refinement, of amendment or reform, can make it acceptable. Abolition is the only course."? He went on to argue trenchantly for a radically reformed rating system as the answer to local government finance. Does not the Secretary of State accept that there is a growing body of support—which includes the right hon. Member for Henley (Mr. Heseltine), the Secretary of State for the Environment—for a property-based system and that the Secretary of State's intemperate attacks on that proposal are making him look silly? Is not it time that the right hon. Gentleman started to eat his words and to admit that he has got it wrong?

§ Mr. Lang
I remember when the words of my right hon. Friend the Member for Blaby (Mr. Lawson) were used almost verbatim to criticise the domestic rating system, which led us to introduce the community charge when my right hon. Friend was Chancellor of the Exchequer, and therefore a senior member of the Government. The hon. Member for Glasgow, Garscadden (Mr. Dewar) invites me to speculate on the outcome of the review. I will say only that we are considering carefully all the options and will present our solutions in due course.