HC Deb 25 March 1991 vol 188 cc725-37

Queen's Recommendation having been signified—

10.55 pm
The Minister for Local Government and Inner Cities (Mr. Michael Portillo)

I beg to move, That, for the purposes of any Act resulting from the Community Charges (General Reduction) Bill, it is expedient to authorise—

  1. (a) the payment out of money provided by Parliament of any sums required for the payment by the Secretary of State of grants for the year beginning on 1 April 1991 to charging authorities, within the meaning of the Local Government Finance Act 1988, and local authorites, within the meaning of the Abolition of Domestic Rates Etc. (Scotland) Act 1987; and
  2. (b) the payment into the Consolidated Fund of any sums received by the Secretary of State in consequence of the provisions of the Act.
I thought that it might be for the convenience of the House if I made some comments this evening by way of background to the money resolution and to try especially to set out the facts of the administrative implications of the changes that are being made in the face of stories that are being put about of the consequences for local authorities.

I well appreciate that introducing the legislation at this stage in the cycle for local authorities produces disruption and administrative costs. It—[Hon. Members:"Chaos".] Oppositions Members claim that it causes chaos, but the result is far short of that. It is only right to acknowledge, however, that it creates a certain amount of disruption.

The House will want to know why it is necessary to introduce changes at this time of the year, which is not the most convenient time in the cycle for local authorities and their administration. I think that the answer might be obvious. The Government have undertaken a major change in the balance between the amounts of taxation that are raised locally and the amounts that are raised centrally—a switch of about £4.3 billion from taxes raised from local taxpayers to taxes that will be raised in future from the payers of value added tax. We can make that sort of switch and put those extra resources into local government only in the context of a Budget strategy. Therefore, the only time that a Government can announce such a change is at the time of the Budget, when all the implications can be seen and the amount of money paid to local government can be seen alongside the implications for taxation. That is both expenditure and the method by which it will be paid for.

I must pay tribute to local authorities. The majority of them have proceeded well with their billing process. It should be remembered that, for most local authorities, community charges were set in only the first half of March. Local authorities had got well ahead with their billing. They had sent out bills to community charge payers, or had got them to the post office at least. It is true that the proposed legislation will cause them disruption and the necessity for work to be repeated, but there is evidence that it is possible to complete the computer run fairly quickly once the figures have been fed into computers. It was only a matter of days between the setting of budgets, the setting of community charges and the issuing of the first series of bills.

Mr. A. J. Beith (Berwick-upon-Tweed)

The matter must have been under consideration for some time, at least some weeks. As that was the time when local authorities were going to send out bills and were encouraged to get on with the job, surely it would have been possible for Ministers to say that, in the light of the review that was taking place, further changes in the final announcement could not be ruled out and authorities might be wise to defer sending out bills? If that had been done, there would have been a colossal saving in money and paper.

Mr. Portillo

I understand what the hon. Gentleman says, and it may be a good debating point, but I am surprised that it comes from him. As the Liberal Democrats' Treasury spokesman, he will understand better than anybody that the Government were in no position to hint at changes in community charge levels or in quantities of grant, except in the context of the Budget. The important thing was to explain simultaneously the money that was to be provided and the means by which it was to be paid for.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

What advice is the Minister for Local Government and Inner Cities giving to local authorities where the cost of collection per head will be more than the money raised in the poll tax?

Mr. Portillo

In a very few instances, the amount to be collected might be less than the cost—

Mr. Foulkes

In Westminster.

Mr. Portillo

An hon. Member has yelled out, "Westminster." For reasons that I shall explain shortly, I do not believe that Westminster is in that category. As I shall explain later, in my view the collection costs will be a great deal lower than some of the views that have been publicly expressed. Therefore, the number of authorities in which the amount to be collected is less than the cost of collection is very few. It is open to local authorities which find themselves in that extraordinary position to set a lower budget and a lower community charge if that would enable them to expunge the community charge altogether, and so not have to collect anything. Perhaps that argument will become clearer as I proceed with my speech.

There have been some wild stories about the effects of the reduction in charges on local authority administration. As a result of the general reduction in the charges there will be some delay in sending out fresh bills. However, we know that many authorities are keen to issue bills as quickly as possible and it would be wrong to assume that there will be a long delay.

On the point on which I was recently interrupted, we would expect the average cost of re-billing to be in the range of £1.50 to £2 per charge payer. That is consistent with the experience of the more efficient of the charge-capped authorities this year. There will, of course, be a range around that figure, with authorities in higher-cost districts towards the upper end of the range. However, the suggestions that appeared in the press last week that re-billing could cost up to £40 per charge payer are implausible. The Audit Commission's estimate of the annual administration costs of the community charge demonstrate that. The Commission has estimated the average annual cost to be £14 per charge payer, but that includes not only billing—with which we are dealing now —but collection and enforcement. The total amount is estimated to be £14, so it seems implausible that billing alone could be £40.

Mr. Foulkes

Surely the Minister recognises that the local authority has to take account of the cost of re-billing, collection and enforcement to decide whether it is worth spending even £14 to raise what may, in some cases, be a similar or lower amount? What advice will the Government give to a local authority such as Shetlands council—and there may be others in that position? It is an important matter, and the Minister must give us some answer today.

Mr. Portillo

I do not think that it is for me to advise local authorities what to do, but I shall give the hon. Gentleman the options and the considerations. Although I have no responsibility for Scotland, I believe that I am right in saying that, in Shetland, the outstanding amount is less than £1. Shetland council has two possible courses of action. It could reset its community charge lower than it has—it is within the law to set a lower charge. It could set it at such a level that the £140 reduction being made available by the Bill that we are to debate tomorrow wholly expunged the liability of all charge payers, so that there would be nothing to collect and the cost would be saved. Alternatively—this would be a matter between the council and the local authorities' auditor, the council might argue that it was uneconomic to collect the tiny charge. In that matter, it would have to take account of the auditor's view on whether he could sanction such action. Examples of that will be very few.

Mr. Jeff Rooker (Birmingham, Perry Barr)

As I had five minutes to waste, I read the Bill at the weekend. As I understand clause 2, a local authority is prevented from setting a budget that takes the £140 into account. How can it set another budget that is lower in accordance with the law when the only reason why it could set it is the £140?

Mr. Portillo

We shall discuss clause 2 tomorrow. [Interruption.] However, that is not my understanding of clause 2. Clause 2 prevents a local authority from setting a budget that takes account of the fact that it will get £140 back. There is nothing to prevent local authorities from setting a lower community charge.

Mr. John Maxton (Glasgow, Cathcart)

I take the Minister's point that a local authority could write off an amount and not collect it if it was below a certain level. If the 20 per cent. minimum payment goes below the level which makes it collectable, could a local authority then say that it will not collect the 20 per cent. minimum payment?

Mr. Portillo

The local authority would have to convince its auditor on that point. [Interruption.] There has always been provision that local authorities may in some circumstances find themselves chasing debts that they believe are uneconomic to chase, but they would have to convince their auditors on that point, and that is quite a tough hurdle to clear.

Mr. Alistair Darling (Edinburgh, Central)

The Minister keeps telling us that councillors should take advice from their auditors. Is he aware that auditors' advice tends to be available perhaps well after the financial year in question has been completed? Such councillors may find themselves surcharged because they failed to collect money that was due to the local authority because the auditors subsequently decided that they were wrong in refusing to collect. Surely the Government, having brought about this mess, should at least be prepared to tell councillors what they are supposed to do and not leave them to expose themselves financially simply because, once again, the Government do not have a clue what sort of mess they have created.

Mr. Portillo

If the hon. Gentleman reads my remarks, he will see that I have given local authorities a number of indications of what they can do. The hon. Gentleman is right to say that local authorities must act, first, in accordance with the law and, secondly, with reference to what their auditors may say.

Mr. Bob Cryer (Bradford, South)

Will the Minister give way?

Mr. Portillo

I shall give way for the last time, because I wish to make progress.

Mr. Cryer

Does not that exchange demonstrate the foolishness, rashness and lack of preparation by the Government in taking the money resolution before the debate on the Bill? Such action in respect of any Bill is unprecedented. We normally have the agreement of the usual channels for such an arrangement. This procedure is absurd. The Minister must accept that it is extremely awkward for the House to consider the money resolution devoid of the usual debate about the provisions of the Bill.

Mr. Portillo

I did not sense that the House felt in the least bit inhibited about debating this matter. It seemed to be entering into the debate in a well-informed manner. I do not think that there is any difficulty in the House reading the Bill. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) gave a reason for his reading the Bill, but other hon. Members have read it for other reasons.

The Bill, by requiring the payment of grants and reductions in charges, will bring about a major change in the amounts that central and local taxpayers pay towards the cost of local government services which we have concluded is right if local taxation is to be at a level that is sustainable in the longer term. The Chancellor made it clear in his Budget speech that our intention is to produce an average community charge in Great Britain of less than £175. We have now been able to make a detailed assessment of the complex interactions between our proposals for lower community charges and the existing community charge reduction scheme and community charge benefit arrangements.

In reducing headline community charges by £140, we plan to reduce the gross revenue from the community charge by £5.6 billion. We also expect to make savings of £1.3 billion on community charge benefit and the community charge reduction scheme taken together.

The net cost of £4.3 billion is to be financed from separate taxation. Consistent with that £4.3 billion net reduction in the local tax burden that my right hon. Friend the Chancellor set out in the Budget, it is now clear that we can extend the community charge reduction scheme to bring in more people and to increase the amount of relief. Specifically, we propose to give the full rate of relief to all adults in a household and to provide that, where people have moved to a new property this year, they will be able to qualify for a relief based on the new property and to reduce the threshold amount that charge payers are expected to meet from their own resources from £2 a week to £1 a week. Similar changes will be made in the Scottish scheme, although different arrangements will apply in Wales, but those do not require any adjustment. The Bill's explanatory and financial memorandum needs to be read in the light of the remarks that I have just made.

Mr. Simon Hughes (Southwark and Bermondsey)

It was not clear last week what percentage of community charge payers will receive £140 back. The clear implication is that many people's community charge bills will be reduced by much smaller amounts. Does the Minister have the percentage or a breakdown of the number of people who pay some community charge so that we can know exactly who will receive the full £140 reduction and how many will receive less than that—for example, because they already receive rebates and are therefore entitled to a much smaller amount?

Mr. Portillo

In the region of 8 million people are likely to benefit from the community charge reduction scheme. If I have any corrections to make to that, I will provide the House with a different figure tomorrow.

Mr. Rooker

On a point of order, Madam Deputy Speaker. I regret having to raise this point of order, but it relates to what the Minister has just said. Just now—at 11.10 pm—the Minister made a major announcement. He said that what he has said tonight must be read in conjunction with the Bill's explanatory and financial memorandum. We are going to debate the Bill tomorrow, but without the benefit of Hansard. What arrangements can be made to ensure that the Minister's comments are actually available when we begin that debate tomorrow? That is important because the Minister said that his remarks must be read in conjunction with the Bill's explanatory and financial memorandum.

Madam Deputy Speaker (Miss Betty Boothroyd)

The Minister is responsible for his own comments and I am sure that he will have heard the hon. Gentleman.

Mr. Portillo

I should be delighted to make a copy of my remarks available in the Library.

However, in response to the hon. Member for Southwark and Bermondsey (Mr. Hughes), about 8 million people will benefit under the community charge reduction scheme. The Government set out to reduce the community charge of certain people to a small threshold above what they had been paying before in rates. it makes no difference to those people whether that reduction is made by virtue of the community charge reduction scheme or by virtue of the £140 reduction that applies generally so long as the final result is what the Government intend—that they should be paying only a very small amount above what they were paying in rates. The announcement that I have just made reduces the threshold from £2 to £1.

I commend the money resolution to the House.

Mr. Alan Williams (Swansea, West)

On a point of order, Madam Deputy Speaker. The Minister said that he is willing to place a copy of his remarks in the Library. However, that means that they will be available only to one or two people. [HON. MEMBERS: "What about photocopiers?"] If 650 people turn up to take photocopies there will be a problem tomorrow——

Madam Deputy Speaker

Order. Those points are matters for debate. They can be made in questions to the Minister during this debate, of which rather less than three-quarters of an hour remain. They are matters for debate, not for the Chair.

11.13 pm
Mr. David Blunkett (Sheffield, Brightside)

We must pursue further the issues that the Minister has just raised. It is an extraordinary precedent for a statement to be made during a debate on a money resolution. I am sure that it must be unprecedented in the experience of hon. Members who have been here longer than I have. Moreover, as has already been emphasised, because it is past 10 pm we shall not have the report of the Minister's words in Hansard in time to debate these matters further tomorrow. We therefore seek an assurance that the necessary information will be made available in the Vote Office in a manner and form which makes it easily available to every hon. Member. I will give way to the Minister now if he will give us that assurance.

Mr. Portillo

Naturally, I shall be delighted to provide the information to the House in the way that seems best. I thought that placing it in the Library would be adequate, but I shall be happy to put it in the Vote Office.

Mr. Blunkett

That is helpful.

As we have pressed for changes that do not disqualify people from a variety of forms of relief and exemption, we welcome the lifting of the deadline date so that people who move house will be entitled to this particular form of relief. I did not hear the Minister say—I shall be interested to examine his words more closely—whether the change applies to other forms of relief and exemption which currently disqualify people from eligibility because they happen to have moved house since the due date. Those matters, along with the implications of the Minister's announcement, will be subject to debate in the House tomorrow. I have no intention in the remaining 25 minutes of delaying the House unduly on those matters today.

We are here today to examine the amount that it will cost the nation to implement the Bill if it is passed. The estimates that the Minister ridiculed earlier are serious ones made by professionals in the field. The Times today, in an article entitled "Lamont delay 'cost taxpayers £200 million'", said: Norman Lamont, the Chancellor, could have saved taxpayers more than £200 million if he had announced the Cabinet's plan to reduce poll tax bills by £140 a fortnight ago, a local government expert said". Ian Denholm, director of local government services at McConnell Douglas Information Systems, which supplies computer systems to 50 local authorities, said: This could have been done at virtually no cost to anyone, If we had been told about the change a fortnight ago, we could have altered the figures before the bills were printed. Tons of stationery and hours of system time will have to be devoted to getting the new bills out. That is only a fraction of the cost of the changes that the Secretary of State for the Environment and the Chancellor announced last week. It emerges from talking to treasurers and finance officers that the costs involve the immediate recalculation of entitlement to rebate, particularly for private tenants whose bills and eligibility must be recalculated immediately if they are not to find themselves subject to eviction by a landlord demanding immediate payment of bills and, therefore, recalculation of entitlement.

Those changes, plus the wider rebate changes which will affect literally millions of people, will be touched on tomorrow. In this debate on a money resolution dealing with large sums, we want to put it on record that we are appalled that the Government are willing to do this with public money when they were not willing to spend the money on decent education, the care of the elderly and the provision of facilities for children. In other words, the Government are willing to spend large sums on manipulating the system to save their skins, but not to ensure the well-being and quality of service of everyone around us.

The Government, having introduced the community charge reduction scheme in an effort to save the Ribble Valley by-election, are now willing to spend £4.25 billion, plus the £200 milion to implement the new changes, to save their skins in the local elections. It will not work any better on 2 May than it did in the by-election. The result will be the same— a profound and immediate rejection of the way incompetence and indifference have led to our money being used to bribe us and persuade us that the poll tax was not so bad, that the changes are not so bad, and that the Government are worth re-electing. The British people know better.

11.19 pm
Mr. Bob Cryer (Bradford, South)

It is strange to me, as a regular contributor to money resolution debates, that all of a sudden their importance has been exaggerated. We are debating this resolution because of the complete chaos that the Government have been thrown into by external circumstances, the major one being the deep unpopularity of a vicious tax—the poll tax. The Government have been busy trying to extricate themselves from the mess that they have got the nation into and, frankly, they have been unable to accomplish that. Among other things, the money resolution provides for payments of £60 million to local authorities for the administrative chaos. My hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) suggested that the cost could be as much as £200 million.If that is so, the Government will be coming back to the House with a further money resolution to secure that money.

It has been argued today that previous notification to local authorities would have made the position clear. That enormous sum could have gone some little way to rectifying the huge national health service waiting lists or to provide a better standard of education. However, the Government have argued that they cannot leak what is expected to be announced in the Budget. But they determine the date of the Budget and, had they so chosen, they could have brought forward the Budget statement so as to make the announcement in time for the local authorities to make better provision——

Mrs. Elizabeth Peacock (Batley and Spen)

The hon. Gentleman must be aware that many Labour-controlled local authorities have already wasted huge sums sending people five, six or as many as 10 community charge bills over the past year. I cannot see that sending an extra one now will make a huge difference to their budgets, given all the money that they have wasted in the past year.

Mr. Cryer

I am merely going by the money resolution. The Government are providing £60 million in the Bill, authorised by the money resolution, for those local authorities which have been forced into administrative expenditure which is rendered null and void as a result of the Government's decision. The Government have not included any reference in the legislation to the maladministration of Labour-controlled authorities because that would be palpably untrue. This is not the fault of the local authorities—it is the fault of the Government for not providing better planned arrangements for replacing the poll tax. That is the top and bottom of it.

To make some petty point about all the vices being in Labour-controlled authorities is to say something that is patently untrue. Local authorities of all political complexions have suffered as a result of the Government's incompetence. There is no question about it, and that is the message that has gone out from this place because, contrary to the improvement that the £4.5 billion was designed to bring about, it is clear that the opinion polls have shifted against the Government in recognition of the ham-fisted way in which the Government have handled the matter.

Mr. Tony Marlow (Northampton, North)

I am grateful to the hon. Gentleman. Could he make this clear to the House: is he in favour or is he against the reduction of community charge bills by £140? If he is in favour of it, how would he have set about it?

Mr. Cryer

I can assure the hon. Gentleman that if I were in government, I would certainly handle things more efficiently than the present set of incumbents. The hon. Gentleman started from rock bottom in referring to his own group of people. It is an easy debating device to ask Back Benchers how they would handle things. We are here today to debate a money resolution tabled by the Government, and we are being subject to a compulsory debate tomorrow and to a guillotine in the Government's confused and lacklustre attempt to rescue themselves from the poll tax. The vast majority of the people who are subject to this oppressive tax welcome any sort of relief, but they do not simply accept the relief as a God-given gift or a gift from the Conservative Government—they recognise that the Government are seeking to extricate themselves from an unpopular tax to which in every conceivable way the people of this nation have expressed strong and continuing opposition.

If the hon. Member for Northampton, North (Mr. Marlow) wishes me to suggest how the Government could have produced a better and saner system, I will. They could have maintained the,,,rate support grant that was operating in 1978–79 under Labour instead of robbing local authorities of billions of pounds of rate support grant. In an answer not to me or to any Labour Member, but to a Conservative Member, it was revealed that, if the Government did that, the average poll tax would be not the £250 that the £4.5 billion in the money resolution and to be debated tomorrow will produce, but £150—that is, £100 less. That shows how local authorities have suffered from the withdrawal of rate support grant and poll tax support grant over the 10 or 11 years during which the Government have been in operation.

I find the Government's double standards very annoying. If Labour, or indeed, Conservative-controlled local authorities—the Government prefer to pick on Labour authorities, but they might be forced to pick on Conservative ones— had misapplied money in the way the Government have done, the Government would be pursuing the Audit Commission, surcharging the authorities and hounding people out of office. It reveals a regrettable and lamentable set of double standards that the Government can produce this money resolution free of any consequences whatever.

The money resolution in its present form is of some help to the House. We have to have a money resolution. But the topsy-turvy way in which the Government have gone about it is a demonstration of the chaos that they are in. Ordinarily, money resolutions follow the debate. The only precedent for taking the money resolution first was when the Prevention of Terrorism Bill was first introduced. On that occasion, the money resolution was taken first with the consent of both sides of the House. This time there has been no such agreement. The Minister has demonstrated that his statement is necessary for the debate tomorrow, and he has agreed, at our request, to provide information to be available in the Vote Office tomorrow.

My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) raised a question about clause 2 of the Bill. We are not debating that matter. It is outside the terms of the money resolution, but it is clearly linked directly with the Minister's response. If the debate comes before the money resolution, the money resolution can be applied directly to the terms of the Bill. The money resolution is within the terms of the Bill. On several occasions when money resolutions were debated in the House, it was discovered that the money resolution did not cover the terms required by the legislative proposals. Ministers had to accept that they would have to come back with a different money resolution, but that will not be possible on this occasion because we are taking the money resolution first.

An entirely topsy-turvy way to proceed has been introduced by a Government who are bereft of political ideology and are in absolute chaos. We and, most importantly, people outside are having to suffer. The sooner we get rid of the present Ministers in a general election, the better it will be for the nation.

11.28 pm
Mr. Tony Marlow (Northampton, North)

Situation normal, Madam Deputy Speaker. The Opposition have said for years that they do not like the community charge, or poll tax, as they call it. One of the reasons, they said, was because it was too high. The Government, after a great deal of consultation, come forward with a proposal to reduce the community charge by £140 per head. It is a reasonable, straightforward and honourable solution. Ask the Opposition whether they are in favour of that reduction and they do not know. They have not reached a decision.

Mr. Foulkes

Will the hon. Gentleman give way?

Mr. Marlow

No. There is no time, so I shall be brief.

Ask the Opposition how, if they were to reduce the community charge, they would set about doing it, and one hears that it is not their responsibility; they do not know; they do not have a clue. That is the story of the Opposition for the past 11 years, and that is why they will stay in opposition for the next 11 years.

11.30 pm
Mr. A. J. Beith (Berwick-upon-Tweed)

Not-withstanding the comments of the hon. Member for Northampton, North (Mr. Marlow), what a right old mess we have here. The Government have had to bring forward a money resolution designed to extract from my constituents, as taxpayers, money that can be paid to Berwick-upon-Tweed borough council and Alnwick district council to relieve those same constituents, as charge payers, from the administrative costs of the Government's own mistake. There is no Government money; it is our constituents' money, and a great deal more of it has been spent than needed to be.

Mr. Foulkes

Will the hon. Gentleman give way?

Mr. Beith

No. I wish to develop my argument and I have little time in which to do it.

There is always more joy in heaven over the sinner that repenteth than over the ninety and nine. We must all rejoice that there is recognition on the Conservative Benches that the poll tax was, to put it mildly, a mistake, that something has to be done about it and that even more had better be done about it in the coming year than had previously been planned. There were signs of repentance some time ago. It has not come altogether suddenly. Yet while all these plans were being hatched and prepared, local authorities were encouraged to get on with the job of collecting the charge. Had they been dilatory in doing so, none would have been quicker than the Minister for Local Government and Inner Cities to say to them, "It is vital to get the bills out and to get the money in." Many sensible local authorities did, indeed, get on with the job, and many of them had their bills out and on the doorsteps before the old community charge year was over and the new one began.

It would not have been unreasonable to say to those authorities—to all authorities—that the Government's review of the poll tax was continuing and might even lead to further changes for the coming year. That could have been done in the context not of the Budget discussions but of the review that the Secretary of State for the Environment was carrying out. If that had been done, we should not have had post offices piled high with mailbags of community charge bills and local authority offices piled high with bills already printed. At least in the latter case, the postage had been saved; in the former, the authorities had actually paid the postage and the expense involved was vast.

Although I have no truck with some of the foolishly high-spending authorities to which the hon. Member for Bradford, South (Mr. Cryer) referred, I am sure that if any local authority, in any other circumstance, had engaged in wasted expenditure such as this, Ministers would have been fulminating at the Dispatch Box at their carelessness, chaos and inefficiency. In this instance, all the inefficiency is down to the Government.

Mr. Simon Hughes

My hon. Friend will know that, by the end of the current financial year, the administrative cost of the poll tax will have been £250,000 per day. Does my hon. Friend imagine that we shall be able to discover from the Government at the end of this debate, or at the beginning of tomorrow's, the cost of administering the system next year and—more important—the additional cost to local government which is not met by the Government's giving the money back? In London, for example, the Government have given the authorities some grant, but they have not begun to meet the cost that they imposed on community charge payers and local authorities. The Government are not paying back even the money of which they have robbed our local authorities.

Mr. Beith

Ever optimistic, my hon. Friend hopes for many more figures from the Government than he will get. I have serious doubts whether the figures provided for in the money resolution will be sufficient to reimburse local authorities even for the cost of the chaos that has been caused by the lateness of the announcement. It will certainly not meet many of the other very high costs of the poll tax and it would not meet the very high costs of the Government's alternative plans of other alternative property taxes that have been suggested, which would be expensive to collect. We shall go into some of those issues—if we are given any time at all—when we debate the guillotine motion tomorrow. The issue that concerns us tonight, however, is whether it was really necessary for so much money to be wasted and therefore reimbursed.

We argued that local income tax could have been decided upon early enough to be implemented in time for the coming year. Even if we had proceeded on the track that the Government have chosen—we would never havedone so—I still maintain that the Government could have alerted local authorities to the continuing significance of the review for the coming year's bills. That would have saved a lot of money in the process.

I cannot imagine the scale of the invective that the Government would have deployed against anyone else who had made as expensive a mistake as this.

11.34 pm
Mr. Max Madden (Bradford, North)

As we have the massed intellectual ranks of the Ministers of the Department of the Environment present, I ask one simple question to which I should be grateful to receive a simple answer during proceedings tomorrow.

The Minister for Local Government and Inner Cities has already been asked by the hon. Member for Southwark and Bermondsey (Mr. Hughes) to give us precise information as to what share of the £140 reduction those in receipt of rebates and transitional relief will receive.

I cite a specific case involving a constituent, Mr. X, who is 77 and lives in a small bedsit. He is in receipt of a pension which, because he worked on for a couple of years after retirement, is slightly higher than the state pension. He receives £57 a week. Mr. X has been a claimant of housing benefit and rates poll tax rebate for several years without a break. Earlier this month, however, he received a final notice demanding that he pay the full £276 or face a court action. That demand caused Mr. X a great deal of worry, which could have serious consequences in view of his poor state of health.

The demand was followed by a bill which took into account the rebate. However, Mr. X is still being asked to pay £102 by April. He is aware that, if he does not pay, he may be sent to prison. Mr. X cannot afford to pay and it is felt that it is not his fault that the authority did not bill him until this late stage of the financial year. The authority has been asked to use its powers to remit the charge on the grounds of poverty.

Will the Minister reflect on that case? It is not unique to Bradford. Many hon. Members could relate similar cases. It would not be much good asking the Bradford district auditor whether Mr. X can be relieved of the payment so that he can stop worrying about the likelihood of being sent to prison if he cannot pay £102.

I should appreciate a reply on behalf of Mr. X tomorrow. I am sure that many hon. Members would like to know whether those on rebates and in receipt of transitional relief will receive the full £140 benefit.

Mr. Cryer

On a point of order, Madam Deputy Speaker. May I receive your assurance that money resolution No. 5 is not a supplementary resolution for the Community Charges (General Reduction) Bill? You will see that that motion relates to the Criminal Procedure (Insanity and Unfitness to Plead) Bill. In view of the Government's situation, I thought that it might be a supplementary resolution.

Madam Deputy Speaker

The hon. Gentleman offers us a little light relief, but we should press on.

11.37 pm
Mr. Allen McKay (Barnsley, West and Penistone)

I have a brief question on local authorities and the cash flow problem, which could be answered tomorrow. Because of the delay caused by the Government, between the time the money should come to the local authorities and the time it is now due—particularly if there are problems with the software—local authority treasuries will have to borrow at an exorbitant rate of interest. Will they be compensated for those interest rate charges?

11.38 pm
Mr. John Maxton (Glasgow, Cathcart)

It is estimated that £500 million of the money in question will go to Scotland. It would take £30 million to abolish the 20 per cent. minimum payment to all those eligible for it in Scotland. Will the Minister allow or instruct local authorities to spend that £30 million—it would still allow quite a substantial reduction in bills to other poll tax payers—to get rid of the single biggest burden on poll tax payers, which also causes local authorities the most administrative problems?

11.39 pm
Mr. Simon Hughes (Southwark and Bermondsey)

I have another question for the Minister which follows his earlier answer. The Government said that they would give everyone back £140. What percentage of the adult electorate will get back the full £140?

11.40 pm
Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

Earlier in the debate, the hon. Member for Northampton, North (Mr. Marlow) was getting himself into an unnecessary lather. He asked a question that was irrelevant. The Labour party would not have introduced the community charge in the first place. It was introduced in a fit of panic by the right hon. Member for Ayr (Mr. Younger), when he was Secretary of State for Scotland, following the revolt of the Troon ratepayers. We have made it clear——

It being three quarters of an hour after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted business).

Question agreed to.

Resolved, That, for the purposes of any Act resulting from the Community Charges (General Reduction) Bill, it is expedient to authorise—

  1. (a) the payment out of money provided by Parliament of any sums required for the payment by the Secretary of State of grants for the year beginning on 1 April 1991 to charging authorities, within the meaning of the Local Government Finance Act 1988, and local authorities, within the meaning of the Abolition of Domestic Rates Etc. (Scotland) Act 1987; and
  2. (b) the payment into the Consolidated Fund of any sums received by the Secretary of State in consequence of the provisions of the Act.