§ The Secretary of State for Scotland (Mr. Ian Lang)
With permission, Mr. Speaker, I wish to make a statement on the Government's community charge review as it affects Scotland.
These are our preliminary conclusions on local government finance, functions and structure, on which we will now have further and detailed consultation.
A vitally important part of our conclusions is the step change in central Government funding for local authorities announced by my right hon. Friend the Chancellor of the Exchequer in his Budget statement on Tuesday. That is a major shift in the balance between central and local funding of local authority expenditure, and it recognises that the burden of local authority services has borne too heavily on the local tax base, not least because of the failure of local authorities to keep their spending at levels which it is reasonable to ask local taxpayers to support. For example, in the first year of the community charge, Scottish local authorities increased their budgets in real terms by 5 per cent. and, for the coming year, they have increased charge levels by an average of 30 per cent., despite a generous grant settlement. The Government have now tackled that aspect of the problem head on, by reducing local tax bills substantially.
We have nevertheless considered how best the reduced tax bill should be met, in a way which is fair, which is easy to administer, which spreads the burden as widely as possible, and which enables councils to remain accountable to their electors. As my right hon. Friend the Secretary of State for the Environment has announced, we now propose to replace the community charge with a new local tax which will have elements based both on the value of the house and on the number of persons living there. We will be issuing a consultation paper on the new tax soon.
The details of the new tax and the options for the personal and property elements, and the relationship between them, will be set out in the consultation paper. For Scotland, that will take account of distinctive Scottish circumstances. I can reassure the House, however, that the new tax will not suffer from the defects of the old domestic rating system. Most obviously, it will take account of the number of people in the household. People will also, rightly, expect us to ensure that disproportionate tax burdens are not placed on a small minority of households and that there are no large fluctuations following periodic revaluations. There will also need to be effective transitional arrangements when the new tax is introduced, which we plan to be in 1993–94 if possible, in Scotland as in England.
We will also ensure—if need be through rigorous capping of local authorities' expenditure plans—that the now reduced burden which local taxpayers will face is not increased once again to unacceptable levels by local authorities' spending decisions.
There is no change to the Government's policy on non-domestic rates, where we retain our aim of harmonising rates in Scotland with those in the rest of Great Britain.
It does not, however, make sense to look at the financing of local government in isolation from the functions which it discharges, and the burden thereby 462 placed on the local tax base. I shall be giving further consideration to the allocation of functions as between central and local government, and consulting on possible changes.
I have, however, already reached a view on the position of Scottish further education colleges, which have a vital role in meeting the skill requirement of industry and commerce. We wish to strengthen their ability to perform that role. Many local authorities have run further education colleges with commitment and skill, but we are entering a new era, both in local government and in vocational education and training. Following recent legislation, colleges now have increased management powers exercised by college councils, with a stronger employer representation; but I should like to see them have the appropriate degree of freedom to respond more fully to the demands of students and the labour market. I believe that, alongside the establishment of local enterprise companies in Scotland from 1 April, this would help to promote the development of a modern, skilled work force.
The Government propose, therefore, to introduce legislation at the earliest opportunity to take all further education colleges in Scotland out of local authority management. I intend to vest the colleges, which I propose should be free-standing corporate bodies, with the land, buildings and equipment which they currently use. From 1 April 1993, the colleges will be funded by the Government. I intend to give staff the right of transfer of employment to the Government-funded colleges. Over £200 million is spent by local authorities on further education in Scotland. These resources will become central spending, with the corresponding reduction in grant to local authorities.
My right hon. and learned Friend the Secretary of State for Education and Science has already highlighted the importance, prior to 1 April 1993, of ensuring that the work of the colleges, their staff and students continues undisturbed. Therefore, I also propose to seek Parliament's approval to a number of measures similar to those already announced by my right hon. and learned Friend to have effect from midnight tonight in the forthcoming legislation in order to achieve this. I am placing further details of these measures in the Official Report.
My Department will be writing to all education authorities to explain how these measures will be applied. Details of our proposals will be published in due course.
It naturally flows from the consideration of funding and functions of local authorities, that we need to consider also the best structure for local government in Scotland. The present two-tier system has some advantages, but it also has some clear disadvantages. It blurs lines of accountability and it can lead to duplication, conflict and delay. It is often perceived as unnecessarily bureaucratic and remote from local needs.
The traditional role of local government is changing from provider to enabler. The structure must keep abreast of that change. I believe that we should now prepare to move to single-tier local authorities throughout Scotland. This will strengthen local accountability, and I believe that it will deliver local services more effectively. This is an important step to take and I envisage widespread consultation before proceeding to final decisions. I therefore propose to publish a consultative paper, setting out options for a new single-tier structure and seeking 463 views on possible functional changes and on options for improving the management and efficiency of local government in Scotland.
Since we announced our decision to review local government finance last December it has become clear that there is widespread demand for further change. The proposals that I have put forward today are, in the Government's view, a coherent and inter-related response affecting the funding, functions and structure of local government. They offer a basis for informed consultation and then durable change which, I hope, will command widespread support. I commend them to the House.
Details of the measures are as follows:The Government propose to introduce legislation this autumn by means of which, from April 1993, all further education colleges in Scotland, under the management of an education authority offering full-time education will be taken out of local authority control and will be funded by the Government. My Department will be writing to all education authorities to explain how these measures will be applied. Details will be published in due course.Institutions in the new sector will be free-standing corporate bodies, and will be vested with the land, buildings and equipment which are currently used by them. It is important that, prior to April 1993, the work of the colleges, their staff and students continues undisturbed. I intend, therefore, to seek Parliament's approval to legislation which requires the specific consent of the Secretary of State for all disposals by local education authorities of land or interests in land, including buildings used or held or obtained for or in connection with the purposes of the colleges. This will also apply to disposals or removal of equipment.The disposals of land or interests in land requiring the consent of the Secretary of State will include outright sale, feuing, granting or otherwise disposing of any leasehold or other interest in land, direct sale and leaseback, and any arrangement designed to raise capital on the security of the land. It will also include any disposal which is made in return for the supply of goods or services. In referring to disposals I include entering into any binding obligation to make a disposal of the kind in question.I am also concerned that, in the interim period before the establishment of the new sector, local authorities should not enter into contracts which bind the colleges beyond 1 April 1993 when they begin to manage their own affairs. Such contracts should be entered into only with the specific consent of the college councils of the colleges affected. Contracts for a consideration having a value in excess of £50,000 will in addition require the consent of the Secretary of State. The forthcoming legislation will seek Parliament's approval to a measure having this purpose.I shall also seek Parliament's approval for appropriate sanctions where property or equipment has been disposed of or removed or contracts entered into without obtaining consent in advance. In the case of the disposal of land or interests in land without the consent of the Secretary of State, there will be a power of compulsory purchase with a right of recovery from the local authority of any compensation payable. In the case of contracts, including contracts for disposal, entered into without the consent of the college council concerned or, where applicable, the consent of the Secretary of State, there will be a right of repudiation, and such repudiation will be deemed to be a repudiation by the relevant local authority, so that any liability in damages will remain with the relevant local authority.I shall seek the approval of Parliament for these measures to have effect from midnight tonight. This statement does not affect enforceable obligations entered into before midnight tonight.
§ Mr. Donald Dewar (Glasgow, Garscadden)
Given the right hon. Gentleman's known and oft-expressed views, this must be the greatest humiliation for a Scottish Secretary since the office was established. The Government are in disordered retreat. The poll tax, in their own words, is admitted as a monumental disaster. It has oppressed the 464 poor, divided the nation and created havoc. I am aware that many have been looking for apologies tonight, but I think that we in Scotland have a special case. The right hon. Gentleman should start with an apology to Scots for introducing the poll tax to Scotland a year before anywhere else, for defending the indefensible and for fighting to retain a poll tax element that Scotland does not want. The belated recognition that a property-based system—a rating system, in fact—makes sense means that the Secretary of State will have to spend the next two years denying everything that he has said in the past two years. Today's announcement is a massive vote of no confidence in his judgment.
We have been told that the poll tax is dead, but it is clear that a Tory vote at the next election means that people will be paying poll tax for at least another two years, and that even after April 1993 the one certain thing about the new measures is that there will still be a poll tax element in them. Does the Secretary of State accept that almost every Scot will see this as a desperate last throw by those in the Government who believe in getting the worst of every world?
The proposed package will mean delay, confusion and expense. It will mean chaos and misery because the system will simply be unable to cope with the Government's dithering and indecision. We know that the cost of shredding and reissuing bills in Scotland as a result of this week's Budget announcement will amount to £8 million. What will be the final price of this ill-thought-out, inconsistent dog's breakfast of a scheme? If so much had not been wasted by the Government, how many more teachers and home helps could be serving the community now?
The statement refers to a single bill for each household with two essential elements. Will the Secretary of State clarify one central point? Does this mean that there is a property tax and, added to it, a distinct charge based on the number of adults in the household? Or is it a case of the number of adults varying the property tax? To put it another way, is it two taxes added together in one bill, or a property tax varied by the number of adults in the house—a form of rebate on the property tax? If it is a distinct, separate tax based on the number of people in the house, will it be a flat rate charge? The Secretary of State must surely be able to answer those fundamental questions. If not, it will be demonstrated that he has no idea what he is proposing in practical terms.
Can the Secretary of State guarantee that the new system will not involve the administrative apparatus of the poll tax in any form? Will the poll tax register go for good? If the householder alone is liable for the single bill, is that not an admission—I hope that the Secretary of State will explain this—that the wrong-headed theory of accountability used to justify the poll tax has been totally abandoned?
Can the Secretary of State give a guarantee that the oppressive 20 per cent. rule will be abolished? Does he accept that it would be intolerable if that were to scar any new system?
The Secretary of State referred in his statement to periodic revaluations. That sounds a bit like a rating system to me. Can he say a little more about when we shall know the basis of that revaluation and what options are in the frame?
On structural reform, can the Secretary of State say when the consultative document will be issued? In his 465 desperation to solve his problems, I warn him against attempting to do so by destroying local democracy. Does he, for instance, believe it right that after the switch in expenditure announced by the Chancellor local government in Scotland will control only about 13 per cent. of its expenditure? Will he perhaps comment on what that is likely to do for the gearing effect which has caused such problems under the poll tax?
Will the Secretary of State note that the Labour party is prepared to look at one-tier, all-purpose authorities but as part of a planned drive to strengthen democratic control by introducing a Scottish Parliament? What we will not support is any reform programme which amounts to sending in the broker's men to dismantle local democracy. The end product must be a system which allows local communities to run their own affairs through accountable local representatives. The Secretary of State will get no support from Labour Members for moves which are designed further to centralise power in the Scottish Office.
On Tuesday the Prime Minister promised all the answers, but what we have is a reflection of the Government's confusion. There is a total lack of detail and of clarity. The Prime Minister told us last November that he had not a clue what to do about the poll tax. Today's announcements suggest that nothing has changed.
§ Mr. Lang
I think that I can take the questions of the hon. Member for Glasgow, Garscadden (Mr. Dewar) as a qualified welcome for some of the proposals embodied in my statment.
The hon. Gentleman complained about the community charge being introduced a year earlier in Scotland than in England, but he forgets that we also abolished the domestic rates in Scotland a year earlier than in England. We are, of course, determined to allow no opportunity for the Labour party to reintroduce either its rates policy or its roof tax policy.
The hon. Gentleman asked about the waste embodied in the change-over. Perhaps he should look at the spending budgets of local authorities this year, those who are planning a 10 per cent. increase when inflation is likely to fall to about 5 per cent.
The hon. Gentleman also asked about the relationship between property and the personal element. We are consulting about that. I hope that the Labour party will overcome the natural shyness that has surrounded its proposals for funding local government and will offer to consult with us on that.
Further consideration is required on the 20 per cent. rule of the existing community charge. We shall look at that further in our own time.
We shall also be consulting on the basis of valuation and revaluation. Our purpose will be to ensure that under the new local tax local residents will not be open to the high charges that they faced under domestic rates and the community charge. The imposition of excessive burdens on individuals and small parts of the community will not be possible.
The hon. Gentleman asked when the consultation papers will be issued. The local tax paper will be issued soon after Easter and our consultation paper on the structure will be issued some time after that.
The hon. Gentleman asked about the effect of gearing on the contribution by local residents. Clearly, it is 466 important to take account of the interests of local residents. If local authorities have been unwilling to respond sensibly to their accountability to local residents under the community charge system, we shall have to take account of the need for accountability to the United Kingdom taxpayer who is now funding a substantial proportion of local government spending.
I welcome the hon. Gentleman's support for one-tier local authorities throughout Scotland, but it is absurd to reduce bureaucracy and tiers of government by abolishing one tier, only to reintroduce them in the form of a Scottish Assembly with tax-raising powers. That does not make sense. The hon. Gentleman should consider the package as a whole. For the first time, we are looking at the funding, function and structure of local government all at once. I believe that our answers will commend themselves to the people of Scotland.
§ Mr. Bill Walker (Tayside, North)
Is my right hon. Friend aware that I am delighted at the Government's acceptance of some of the proposals contained in my paper? In particular, I commend the transfer to value added tax of a proportion of the community charge. The £140 reduction will be very welcome to the people in my constituency and throughout Scotland. I also welcome the proposals on education as the beginning of moves towards other measures proposed in my paper.
I welcome one-tier local authorities, which was also a proposal in my paper. I believe that it is essential that the authorities are close to the people. That is why I believe that they should be based on the districts. That is important. I welcome the opportunity for consultation because I believe that, thus far, the Government have shown that consultation means just that. If it did not, they would not have accepted so many of the measures contained in my paper.
We should now concentrate our energies and efforts on exposing the fraudulent individuals who have not paid their community charge and who are unfit to sit on local councils or in Parliament because they will not accept the law of the land.
§ Mr. Lang
I am delighted at my hon. Friend's delight. He is living testimony to the value of consultation. It is a pity that the Labour party does not have sufficient confidence in its proposals to enter into consultation with us.
My hon. Friend welcomed the increase in central Government funding which has enabled community charges to be reduced so substantially for next year. I am sure that he will welcome the fact that in Tayside region the community charge level will be down to £245 in Angus and £253 in Perth and Kinross. In Dundee city, however, under strong Labour control, the charge remains £295.
I note my hon. Friend's preference for districts as the basis for single-tier local authorities. That may be the best solution in some parts of Scotland. It may be individual districts or combinations of districts. However, that may not be appropriate throughout Scotland. In other areas it may be that the regions will form a better basis. The consultation process will give us an opportunity to hear views from all over Scotland on this important matter.
§ Mr. Malcolm Bruce (Gordon)
Is it not a disgrace that Scotland, having suffered the injustice of this wicked tax being imposed upon it first, had to wait so long for a statement—the last statement today? Will the Secretary of 467 State accept that for the past two years he and his Government have been digging a hole for themselves into which, on Tuesday, the Chancellor threw £4.25 billion of taxpayers' money? Today the Secretary of State and the Government are digging again. They have replaced the most unpopular tax with two unpopular taxes—a combination of the rates and the poll tax. How will it be more efficient and simple to collect if it requires both a valuation of property and a head count? Will it not be more expensive to collect than either the rates or the poll tax?
We welcome the fact that the Government have taken on board almost all the recommendations that the Liberal Democrats put to them on the structure of local government. We believe that there should be single-tier local authorities and that they should be drawn up on the basis of the wishes of the local community and not imposed centrally or uniformly.
Will he acknowledge that the removal of further education colleges from local authorities is not justified in terms of administration? Which local authorities have failed to provide the necessary investment and support to the further education authorities upon which he is justifying this move?
§ Mr. Lang
I am not suggesting that any local authorities have failed to do that. I said that most local authorities had run their further education colleges with skill and commitment. However, we are making new arrangements and attaching new importance to vocational education and training and, given the changed role of further education colleges and the new college councils that we are setting up with a strong private sector component, it is appropriate to give them independence and fund them directly from the Scottish Office. That allows local authorities to concentrate more fully on providing services or enabling the services to he provided. That is their more important obligation.
I welcome the support of the hon. Member for Gordon (Mr. Bruce) for some of the elements of the statement. Again, it is testimony to the value of consultation. I valued the meeting that I had with the Liberal Democrats. I did not agree with them about a local income tax because it would be difficult to administer. Also, a burden of 8p or 9p in the pound on the basic rate of income tax would not be an acceptable burden in Scotland. However, I value the hon. Gentleman's support for the other measures.
The hon. Gentleman suggested that we threw £4.25 billion of taxpayers' money at the problem. He forgets that that money is being raised from the taxpayer in the form of extra VAT. It is being raised in a way that is more widely spread and more certain of collection than has been the case with the community charge.
The new local tax will not be two taxes. It will be one tax bill with two components, the details of which have yet to be established. Again, I would welcome continuing consultation with the Liberal Democrats to establish how best that can be achieved.
§ Mr. Robert Hughes (Aberdeen, North)
Never in the course of human history has such abject failure been admitted with so little humility. The Secretary of State has demonstrated that he has learnt nothing from the poll tax disaster. Is he not simply producing the poll tax by another 468 name? The new system will have all the difficulties, penalties and failures that we have had to suffer for the past few years.
The right hon. Gentleman said that he is prepared to consult on relationships in local government. Is he aware that we in Scotland are concerned with only one consultation—a consultation with the electorate at a general election—when the Secretary of State, like the right hon. Member for Finchley (Mrs. Thatcher) and the poll tax, will be swept into the dustbin of history?
§ Mr. Lang
I am happy to defend some of the underlying principles of the poll tax, which achieved a valuable improvement in accountability and in the spread of the burden of local government. Of course there have been disadvantages. The changes to the register were far more substantial than we had expected, even on the basis of the most professional advice. The failure of some local authorities adequately to collect the charge added to our problems, as did the high spending levels of some local authorities.
We must ensure that the gains and the underlying principles of the community charge, which were broadly accepted, are not lost sight of. Those principles are being carried forward in the new arrangements—we are creating a broader tax base and greater accountability, and we have achieved a greater recognition by local residents that local services must be paid for. The cost of local services has risen substantially and we must find the fairest and most durable way of paying for them. In that context, it is sensible to consider function and structure as well as funding. That is what we are doing. We should welcome consultation with the Opposition on the details of our proposals.
§ Mrs. Maria Fyfe (Glasgow, Maryhill)
Can the Secretary of State tell us whether, under his proposals, joint and several liability will be ended? Can he say whether Scottish poll tax payers will get more than the £140 reduction in their bills because we have faced those bills for a year longer? If any of the changes are justified, surely more money must be forthcoming for Scottish poll tax payers.
Is not it a disgrace that further education should be swept up in the general debate? It is an issue of such major importance that it should be dealt with in a debate of its own. What are Scottish further education students who wish to learn crafts and pursue other such studies and their potential or real employers supposed to do if they are dissatisfied with the level of funding for or provision of courses, or with any other aspects? They could take their complaints to the local authority, but they will now have to take them to a Government who, by their actions over the past 12 years, have shown that they never listen and never understand.
§ Mr. Lang
I entirely agree about the importance of further education. If I were to make a separate statement about that, the House would be sitting all night. I am sure that the House will understand the desirability of making a statement on further education alongside other local government reforms as they are related. The Government attach great importance to further education, which is why we are making changes. In the new funding arrangements for further education colleges, there will be a basic budget 469 and another incentive budget related to the number of students that they attract. That will be of great value to further education.
The hon. Lady asked about joint and several liability. That will remain for the remaining period of the community charge. Any new arrangements will apply in the context of the new local tax.
Retrospection of the increased contribution from central Government relates to the level of community charge payments being asked of local residents in the coming year. It is our purpose that the money should go straight to them and not run the risk of being diverted into local government to end up in higher spending. Does the hon. Lady believe that the increase in VAT should also be retrospective?
§ Mrs. Irene Adams (Paisley, North)
Does the Minister agree that it is an affront to democracy that he should come to the House and say that he has half an hour to tell us about changes in local government finance and functions to a measure which spent about 140 hours in Committee and had to be guillotined? Should he not have made separate statements on education and on finance? Will he now make a statement on the 20 per cent. rule? Does he agree fundamentally with the 20 per cent. rule, or does he intend to change it? Does he intend to collect the 20 per cent. on the property element of the new tax or on the individual element of the tax? Will he now make a statement?
§ Mr. Lang
The hon. Lady's questions will be answered in the consultation process. We have our views on what might be the best solution, but we believe in consultation. I wish that the Labour party would join in.
The hon. Lady will have heard the answer that I gave a few moments ago about a separate statement.
On the question of the time available to consider such matters, I emphasise that we shall publish a consultative document on the important features of my statement. There will be ample opportunity for further consultation, debate and consideration of all aspects of these important proposals.
§ Mr. Gordon McMaster (Paisley, South)
Does the Minister realise that, following his humiliating U-turn, he is left without a shred of credibility? Will he try to redeem himself by ensuring that the people of Scotland, who, after all, have paid the evil poll tax for a year longer than people in any other part of the country, are properly compensated? Will he fight in the review and in all the consultations to ensure that the 20 per cent. rule is abolished so that pensioners and the poorest people in our community will be taken out of the poll tax immediately? Will he dither and daily over reform of local government structure as he has over the poll tax, or will he learn that he who Heseltines is lost?
§ Mr. Lang
We got rid of domestic rates in Scotland a year earlier than in the rest of the United Kingdom. It is our purpose that by maintaining a Conservative Government we shall never have to return to domestic rates. The 20 per cent. rule and other matters relating to the continuance of the community charge are still under consideration.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
On the poll tax element of what we now know as the Bill Walker tax, can the Secretary of State tell us how he intends to deal with student nurses and students in general and with service men? What arrangements will he make for adults who move house during the course of a year and how will he deal with a household that takes in an elderly adult relative to care for? How will adults be registered? Will there continue to be a poll tax type register or will the electoral register or Inland Revenue information be used? Those are all important questions. If he cannot answer them—as he and his colleagues have been unable to answer many previous detailed questions—we can come to only one conclusion: the two-tax system has been introduced in panic in exactly the same way as the poll tax was introduced after the revolt of the Troon ratepayers—the Secretary of State was one of them—following revaluation. This tax would suffer the same fate as the poll tax if it were introduced. Thankfully, it will not be introduced because as soon as the electorate knows the truth it will ensure that the measure has no chance of seeing the light of day.
§ Mr. Lang
One minute we are accused of dithering, the next we are accused of panic. The truth is that we are proceeding in an orderly way on a range of important and interrelated issues. We have thought through our preliminary findings, narrowed the options and presented our views to the House at this interim stage. We have also invited the Opposition and others to join in the consultation process. It is clear that the hon. Gentleman has a number of views on specific aspects, which we must resolve. I hope that he will take part in the consultation—the quality of the outcome would be that much better for it.
§ Mr. Ernie Ross (Dundee, West)
Today we have watched a Secretary of State who, as a Whitehall policeman knows, has recently been wandering around aimlessly looking for something to get hold of. He does not even have the support of his Back Benchers—the situation is worse even than for the earlier statement on Wales. The Secretary of State for Scotland has only one Back Bencher to support him, and that only because the hon. Gentleman concerned thinks that he wrote the paper. It is a shambles. We have to listen to this aimless Secretary of State telling us how Bill Walker saved the people of Scotland when 10,000 civil servants in the Scottish Office are supposed to be doing that. We might feel like joining in the consultation process if the Secretary of State would answer some of our questions. Unless and until he does, he cannot expect us to do other than put his proposals to the test at a general election.
§ Mr. Lang
I shall welcome putting them to the test in a general election. I have no doubt that our single new tax will be preferred to Labour's roof tax and rates.
On the question of support, I notice that only about a third of the Scottish Labour party is here today. My hon. Friends are out and about in Scotland proclaiming the virtues of the new arrangements.
§ Mr. Adam Ingram (East Kilbride)
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) asked one question that the Secretary of State did not answer. Will the Secretary of State confirm that a vote for the Tory party at the next election will mean a vote for another two 471 years of the poll tax in its present form'? On what basis will the new charge be levied? What services will it cover and which authority will be responsible for administering it? Is it not the case that the poll tax is not dead but alive and well in the new Tory two-tax?
§ Mr. Lang
No, that is not true. We propose a single tax with a property element and a personal element. The benefit of that is to achieve a tax which is durable and stable, and which keeps a broad base, such as we have achieved under the community charge.
The hon. Gentleman asked me about voting for the Conservative party and thus keeping the community charge that much longer. The Labour party could not wind up the existing community charge arrangements any quicker than we can. The hon. Gentleman asked which authority would be responsible for levying the tax. That will depend on the outcome of our consultations on the structure of local government, and I hope that the hon. Gentleman will give us his views on that.
§ Mr. Alex Salmond (Banff and Buchan)
It might add to the general amusement of the House if the Secretary of State would detail for our benefit the exact moment when he was dragged to the conclusion that the poll tax ought to be abolished. The Secretary of State refuses to give an apology to the people of Scotland. Will not he acknowledge that there will be a tremendous groundswell of opinion that there should be compensation for the additional year in which Scotland had to suffer under the poll tax burden?
Is the remark in the statement by the Secretary of State for the Environment that most people should be asked for a contribution an acknowledgement from the Government, at last, that the sick, the poor and the unemployed—those with no capacity to earn—should not be dragooned into making contributions for local services? Does the Secretary of State agree that in those circumstances, with a tax in which no one—not even he—believes, it would be wholly unacceptable for poindings, warrant sales and benefit arrestments for the poll tax to continue for people who have no capacity to earn? Does the Secretary of State accept that if Scotland had followed the advice of the Labour Front Bench, and stumped up and paid up, he would not be suffering such humiliation at the Dispatch Box today?
§ Mr. Lang
I do not believe that compensation would be appropriate in Scotland because we got rid of domestic rates a year earlier any more than I believe that compensation is due to the English because they had to keep domestic rates a year longer. The hon. Gentleman raised the matter of recovery processes. He seems to live in a curious make-believe world which does not recognise that local government has to be paid for. He should contemplate the severe difficulties in which he and his hon. Friends in the Scottish National party have placed many people who followed his advice. It is wholly irresponsible for Members of Parliament who come to this place and make laws to urge people in Scotland to break them, and they have no right to speak with authority in this debate.
§ Dr. Jeremy Bray (Motherwell, South)
Is the Secretary of State aware that everyone in Scotland, and especially in Lanarkshire, will be glad to see an end to the poll tax? However, it is an especially tragic time in Scotland for the Government to have the whole structure of local 472 government and of local government finance fall to bits in their incompetent hands. Does the Secretary of State realise that we have already lost 3,000 jobs in steel in Scotland this year and that there will probably be another 5,000 consequential job losses? At this time we need a smoothly functioning structure for local government, industrial development and local finance, but all we have is a shambles.
We have a new enterprise company which has had its training allowance cut at a time when it should he providing 8,000 new jobs. We have a steel readaptation benefit scheme so incompetently administered from Sheffield that it is incapable of handling the redundancies that have already occurred. Vital effort is needed from Bell college and Motherwell college in the retraining of thousands of workers, yet the future of those colleges is being thrown into total uncertainty by the crazy collapse of Government policy. May not some priority, some finance and some competent administration be given to the crisis that we face in Lanarkshire?
§ Mr. Lang
The hon. Gentleman does himself no service and underrates the enormous commitment of many bodies and organisations in Lanarkshire, both public and private, to come together and work for the economic regeneration of that county. My hon. Friend the Parliamentary Under-Secretary of State for Scotland—the Minister for Industry and Local Government—supervises a working group on which regional and district councils, the East Kilbride development corporation, the local enterprise company and other bodies are represented. All have come together and all have substantial resources, commitment and finance at their disposal to bring to bear on the problem. No one can say that the Government are neglecting Lanarkshire when we are bringing so much attention to bear on its problems. What we propose now will release the further education colleges to expand, to develop and to improve the quality of training for the future.
§ Mr. Norman Hogg (Cumbernauld and Kilsyth)
Does the Secretary of State recall that the hon. Member for Eastwood (Mr. Stewart), who is the Under-Secretary of State, and the hon. Member for Stirling (Mr. Forsyth), who is the Minister of State, vigorously campaigned against any proposal for a property tax'? How do they reconcile their position with supporting the new double tax, which is both a tax on property and a poll tax? Is there not a more serious charge than the humiliation of the Secretary of State to be laid at the Government's door today? It is that there is a lack of integrity in the Government. The two Ministers should resign.
§ Mr. Lang
I have not the slightest doubt that my hon. Friends, who, like myself, would not have been happy with any return to domestic rates, recognise the virtues of the new local tax. It should be seen not only in the context of the tax itself, with its two components of personal and property tax, and with the provision that we intend to ensure that local authorities can never again ride roughshod over local residents and raise the burdens on them to unacceptable levels, but against the background of the substantial step change in the funding of local government from local government to central Government, with a far more substantial contribution coming from the United Kingdom taxpayer. That keeps 473 down the overall level. Once that has been achieved, the rest of the debate can be conducted in a far more sensible and balanced context.
§ Mr. Thomas McAvoy (Glasgow, Rutherglen)
My hon. Friends have made enough points about the poll tax and we have seen the Secretary of State struggle to answer those points. On the structure of local government in Scotland, does the Secretary of State recall that his party, when in government, took away the local council of Cambuslang and Rutherglen in my constituency? The Secretary of State has mentioned that he will take a flexible approach to the proposed restructuring and that he will concentrate on one tier. He has also said that he favours those one-tier authorities reflecting boundaries with which the communities within them can identify. Will he give me an assurance that if I can show that the people of Cambuslang and Rutherglen have an overwhelming demand for the restoration of a council of their own, and bearing in mind his remarks about local community identification, he will consider and introduce proposals for such a council?
§ Mr. Lang
I see another candidate coming up. The hon. Member for Glasgow, Rutherglen (Mr. McAvoy) is at least prepared to enter into consultation and to advance the case for what he believes to be the right local government solution in his area. I welcome his participation in the consultation and I guarantee to give full weight to his views.
§ Mr. McAllion
Why has Scotland, having been the first to get the poll tax, been the last to be told in the House about the fate of that tax? Faced with a choice between outraging the right wing of the Tory party by abolishing the poll tax and outraging the Scottish people by not abolishing it, the Secretary of State has managed to incur the anger of both by opting for his own two-tax solution—a roof tax for the house and a poll tax for those who live in it? Is that not the end product of monumental Government panic and does it not underline the fact that when the Government finally find the courage to face the only motion of confidence that matters-a general election—they will face certain, overwhelming and deserved defeat?
§ Mr. Lang
We are the last to tell the House about the proposals for ending the community charge because I am junior to the other Cabinet Ministers—[Interruption.] If the Labour party helps, as I believe that it will, in the return of a Conservative Government, in a few years I shall be a bit higher up the pecking order and the hon. Gentleman will not have to wait so long.
The hon. Gentleman talks about our new proposals creating anger. My feeling is that they have been broadly welcomed by a broad spectrum of people. The only anger and despondency that I see is in the faces of Opposition Members who know that they have little chance of winning an election for a long time.
§ Mr. William McKelvey (Kilmarnock and Loudoun)
One would think that, after more than 11 years as a Member of Parliament, nothing would surprise me but I am astonished—nay, flabbergasted—that the Secretary of State for Scotland can come to the Dispatch Box, having done not a U-turn but several acrobatic somersaults, to make, without humility or embarrassment, a statement about the supposed removal of the poll tax in Scotland. It is a disgrace that he has the unmitigated gall to come to the House and not make more than an apology to the people of Scotland. We told him and his colleagues when they introduced the poll tax—and his English colleagues marched through the Lobby without even understanding or caring to understand what the poll tax meant, and then inflicted it on the people of Scotland—that it was obnoxious and unwanted. The Government refused to consult on the matter and entirely ignored the results of what little consultation they carried out.
I hope that I have got this right. The Secretary of State said that he wanted to change from a two-tier system of local authorities to a one-tier system because the two-tier systemblurs lines of accountability, and it can lead to duplication, conflict and delay. It is often perceived as unnecessarily bureaucratic and remote from local needs.He then told us that he intended to change from a one-tier tax to a two-tier tax. Do not the same words apply? If the Secretary of State was consistent——
§ Mr. McKelvey
I am trying to be brief, Mr. Speaker. You know that brevity is my hallmark.
I must comment on the Secretary of State's performance. Had he been an Olympic acrobat performing for Scotland, he would have picked up the gold, the silver and the bronze for the alacrity that he showed in turning somersaults. Will he not be honest with the people of Scotland and say that he does not believe that the poll tax should go? Should not he and his ministerial colleagues resign and make way for the real author of the document?
§ Mr. Calum MacDonald (Western Isles)
One of the few commitments that the Government have been willing to make this afternoon is that, under the new two-tax system, the poll tax register will go. The Secretary of State for the Environment said that repeatedly, and I take it that the Secretary of State for Scotland agrees with him. Having made that commitment, the Government must have some idea of an alternative means of tracing the number of adults in a household. Will the Secretary of State give us some idea—I do not expect details—of how the Government will keep track of the number of adults in a household if they do not have a register?
§ Mr. George Galloway (Glasgow, Hillhead)
The Dalai Lama obviously got it wrong in thinking that he was the 475 reincarnation of the Buddha as the Dalai Walker from Tayside, North is clearly the fount of all wisdom on this earth. Now that the poll tax law has been seen to be an ass, can the Secretary of State find it within himself to congratulate the people of Scotland, who showed more wisdom than the politicians? Some of them argued that the only way to get rid of the poll tax was to have a general election, and that nothing could be done until there was a general election. Those Scots who marched, petitioned and protested, and some of whom withheld their tax in an act of civil disobedience, are the people who have destroyed the poll tax mark 1, as has been announced this evening.
We have heard about the tax mark 2. It is a tax on heads but not a poll tax, and a tax on roofs but not a property tax. It is a tax that dare not—at least this evening, and until there has been a lot of consultation—speak its name. When shall we know the real truth about what is to replace the poll tax mark 1? Will we know before the local elections in England and Wales in May? Will we know before a general election in June, or is that another trick to be pulled on the Scottish electorate?
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
While I have long been an advocate of single-tier local authorities in Scotland, with the retention of the islands councils, and a local tax, I am deeply distrustful of the Secretary of State's words. The one word that he has used more than any other is "consultation". He should tell that to our fishermen, those employed in the national health service, and the representatives of my local authority who have been most badly treated over the implementation of the RENAVAL programme, which is designed to help the unemployed in areas such as mine which are characterised by scandalously high unemployment.
I remind the Minister that consultation is defined in the Oxford and Chambers dictionaries as, inter alia, deliberation, taking counsel together and consulting with others. I do not believe that these Ministers will take counsel in a sensible, humane and fair-minded way with the representatives of local authorities. Is there to be a supervisory body, based in Edinburgh, over the new system of further education? Will that supervisory body be filled, as with many other quangos, by Conservative party supporters and members?
§ Mr. Lang
I see no need for the kind of body that the hon. Gentleman is suggesting. We are giving each further education college, under its college council, the independence to run its own affairs. Labour Members may find that concept hard to accept, but it is the best way to generate the best kind of motivation in the minds and attitudes of those who run colleges, and to get the best results for local industry.
As for consultation with local authorities, I shall be meeting the Convention of Scottish Local Authorities tomorrow. That will be, I hope, the first of a number of opportunities to consult. Consultation is an important part of this exercise and I hope that the hon. Gentleman will be as willing to enter into it as he is for me to do so.
§ Mr. James Wallace (Orkney and Shetland)
It is clear from what the Secretary of State has said in reply to a number of questions that the detail of his proposals is still to be fleshed out. He also said in reply to one question that he will confidently put this tax before the electorate as part of the Conservative platform at the next general election. How much detail does he expect to be fleshed out by the time that happens?
As I understand it, the Secretary of State is proposing free-standing colleges, which will have their own buildings, equipment and land. How does he propose to deal with further education in Orkney, where the further education facility is fully integrated with the Kirkwall grammar school?
§ Mr. Lang
Orkney has a habit of being a special case. Apart from anything else, it managed to collect 105 per cent. of its budgeted revenue under the community charge in the first year of operation—a wonderful example to other local authorities in Scotland.
As to the particular circumstances of the Orkney further education college, which shares its premises with a secondary school, that is a special situation to which we shall have to apply special arrangements. I shall keep the hon. Gentleman posted on developments there as early as I can. As to how much detail we shall be able to spell out in a general election, the hon. Gentleman is tempting me to answer a question that is not within my power to answer, but he must watch this space.
§ Mr. Patrick Cormack (Staffordshire, South)
I thank you, Mr. Speaker, for calling an English Member of a United Kingdom Parliament, and one who always opposed the poll tax and did not support its introduction in Scotland when the Bill to set up the system was introduced in the last Parliament. I congratulate my right hon. Friend on his part in the demise of that unfortunate fiscal enormity. I hope that the consultations, although widespread, will not be too long and drawn out. Can my right hon. Friend give us some idea of when he hopes to complete them?
§ Mr. Lang
The timetable may differ slightly north and south of the border. We shall consult on the tax itself in tandem with my right hon. Friends the Secretaries of State for the Environment and for Wales. It is clear that south of the border a rather longer timetable is contemplated for consultation on the structure of local government. The problem is rather more complex than that which we face in Scotland. Our consultation process may be somewhat shorter in Scotland, but I do not intend that it should be too short because local government is an important issue on which we are anxious to gain as wide a view as possible.
§ Mr. Harry Barnes (Derbyshire, North-East)
The severely mentally handicapped do not pay under the current poll tax arrangements. Under the new provisions, will they have to pay the poll tax element, the property element and the 2.5 per cent. increase in VAT?
§ Mr. Lang
The tax is a single tax in which the components of property and the personal element are combined. Whether the severely mentally handicapped will be expected to pay is clearly a matter on which consultation will be necessary. However, the hon. Gentleman will be well aware of the sympathetic approach that we adopted in our handling of the community charge.
§ Mr. Tony Worthington (Clydebank and Milngavie)
The statement has shown how inappropriate the House is for dealing with such matters. We have attempted to deal with the three important topics—abolition of the poll tax, the structure of local government, and further education in Scotland—in a short period.
I have some specific questions for the Secretary of State, first about further education. The proposed measures have nothing to do with further education. They have arisen out of the poll tax panic and the need to move more services to centralised control. I cannot understand why the Secretary of State cannot see that he is centralising rather than localising control. Will he confirm that all the important decisions on further education will be made by him in the Scottish Office? That is particularly distressing because the Government's recent record on training is entirely one of cuts. Only local government has managed to safeguard training by not making the cuts that the Scottish Office has made with the establishment of the new local enterprise companies.
Exactly what will happen when decisions are made? Will there be no consultative body or funding council for further education in Scotland, as there is in England? Will decisions simply be the diktat of the Secretary of State?
In the English statement it was announced that a joint White Paper would emerge from the Department of Education and Science and the Department of Employment on the 16 to 19 age group. May I have a specific answer on that? What will be the relationship of Scotland to that White Paper? Will we have a link with it? It is disturbing that the statement and the few words that we have had on further education refer only to further education for the 16 to 19 group. But FE colleges are of enormous importance to their local communities, not only for vocational education. Will the Secretary of State give an assurance that the wider role of colleges in adult and continuing education will be respected?
Throughout his statement, why did the Secretary of State extol the virtues of consultation but fail to mention consultation with FE colleges? Why has he gone headlong into introducing regulations at midnight tonight, with no consultation with FE colleges?
478 Lastly, may I ask the Secretary of State—[Interruption.] These are my final questions. I now come to the poll tax. Will the Secretary of State devote some time—as long as he wishes—to explaining the difference between the rates and his proposed property tax? Will he also confirm that he said that there would be some sort of separate register for levying the poll tax and a valuation roll to assess the property tax?
§ Mr. Lang
No, that is not what I said. To answer the hon. Gentleman's other points first, far from a poll tax panic on this side, I discern panic on the Opposition Benches. The hon. Gentleman asked me several questions about further education and local control. He asked whether I would take all the decisions. I assure him that on this side of the House we believe in devolving decision making wherever possible. That is why we set up the new college councils and brought the private sector into them. That is why we are proceeding to give them the independence that so many of them want—he asked about consultation—so that they can better run their affairs.
I shall consider the precise funding mechanism that I shall use, but the central institutions in Scotland are perfectly adequately funded so it may not be necessary to establish a Scottish funding council. The hon. Gentleman asked whether there would be a link between me and the other Departments involved in producing the White Paper. I shall certainly be fully associated with that White Paper.
The hon. Gentleman asked what was the difference between the rates and the property tax. Rates are the policy with which Opposition Members are concerned. Property is but one component of the new local tax that we support. That component and the single tax are but one part of the broad package which at long last addresses simultaneously the funding, function and structure of local government in Scotland. I believe that it will deliver a solution which gives us improved local government in Scotland and will be widely welcomed by the Scottish people.