Community Charge (Hansard, 27 March 1991)

§ 13. Mr. McKelvey
To ask the Secretary of State for the Environment if he will introduce legislation to abolish the community charge; and if he will make a statement.

§ Mr. Portillo
Yesterday we debated legislation to reduce by £140 the community charge in 1991£92.
We shall introduce at the earliest opportunity legislation to replace the community charge by a new local tax with two essential elements: the number of adults in a household and the value of the property.

§ Mr. McKelvey
If the basis of the poll tax element of the head-home hybrid is to be a three-person family, how will a two-person family claim a rebate and how will the additional money be collected from a four, five or six-person family?

§ Mr. Portillo
I do not know from where the hon. Gentleman got the assumption with which he started his question.

§ Mr. David Shaw
Is my hon. Friend aware that one aspect of the community charge that all sensible people like is the fact that it promotes accountability and comparability between authorities? Will my hon. Friend give an undertaking that any replacement for the community charge will have a wide base of people paying it so that we continue to have sensible accountability and central comparability and so that we can show the inefficient Labour councils for what they are—disasters compared with the efficient Conservative councils?

§ Mr. Portillo
It is certainly true that the present system has shown that to be the case. My hon. Friend knows perfectly well that the local tax that we are proposing contains two elements: the number of adults and the value of the property.

§ Mr. Clelland
Does the Minister agree that one good reason for abolishing the poll tax is the answer that the Secretary of State gave to my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) yesterday when he said that the way in which other local electors could achieve the zero rate of poll tax now achieved in Wandsworth would be to vote Conservative? Is not that, by implication, saying to the voters of Wandsworth that the only way to retain a zero rate of poll tax or a 100 per cent. Government grant is by continuing to vote Tory? Is not that a warning to the electors of Wandsworth that they must continue to vote Tory or be bribed to vote otherwise? Is not that a most vile and corrupt expression from a Government Minister and should not he resign, along with his partners in crime?

§ Mr. Portillo
As was explained to the House yesterday, Wandsworth gets less grant than do a number of Labour authorities. Unfortunately, several of those Labour authorities set very high community charges. Wandsworth manages with its grant alone under the new reduction and therefore does not need to set a community charge.

§ Mr. Cormack
Will my hon. Friend ensure that under the new tax, which I welcome warmly, people will not be penalised for making internal improvements to their properties?

§ Mr. Portillo
My hon. Friend will have to wait for the publication of the consultation document. He will have seen that my right hon. Friend the Secretary of State has already said that he is concerned to ensure that people are not penalised because of the area in which they live, which might disproportionately affect the value of their property.

§ Mr. Douglas
Will the Minister consider a bargain? Since Scotland went first in the experiment last time, can England go first next time? Scotland will experiment with a local income tax, which would be much more administratively feasible.

§ Mr. Portillo
My right hon. Friends the Secretaries of State for the Environment, for Wales and for Scotland intend that the legislation should have effect in all three places at the same time.

§ 15. Mr. Nellist
To ask the Secretary of State for the Environment what latest representations he has received about his review of the poll tax; and if he will make a statement.

§ Mr. Portillo
Many people have welcomed our decision to reduce headline community charges by £140 in 1991–92 and to introduce a new local tax.

§ Mr. Nellist
Is the Minister aware of representations made yesterday by a group of parents from Warwickshire—a Tory shire for almost an entire century—against the capping and underfunding of that Tory authority by a Tory Government? In the words of the hon. Member for Nuneaton (Mr. Stevens), the authority risks serious reductions in education provision for under-fives, the closing of homes for the elderly and the closing of facilities for people with learning difficulties. How are the people in that Tory shire to deal with the Government's financial strictures? Who is to blame for this crisis and how will it be put right?

§ Mr. Portillo
The criteria for capping will be applied equally to authorities of whatever colour. One thing that will affect the level of services in any place is the number of people who have been willing to pay the community charge, and the hon. Gentleman is on weak ground on that point.

§ Mr. Gill
Will my hon. Friend accept that true economy and proper accountability in local government will be achieved only where local authorities are made responsible for raising £l locally for every 100p that they spend? If that means transferring major functions away from local authorities, so be it.

§ Mr. Portillo
I understand my hon. Friend's point. which is a powerful one. However, it is difficult to imagine that we could ever get away from a system that took account of the different needs of different areas as we make our grants to those areas. It is difficult to escape from a grant mechanism that takes account of needs.

§ Mr. Campbell-Savours
Does the Minister intend to apologise to the House for bothching the figures that he gave during the debate on the poll tax the other day? Before the Budget statement last week, when the £4¼ billion was announced, were there discussions within his Department on the position of local authorities sending out bills that were subsequently to become invalid? Were there discussions and was the Department aware of what was happening?

§ Mr. Portillo
Of course, and if the hon. Gentleman had read my speech, he would have seen that I explained why those decisions had to be announced in the Budget. When I gave the figure I said that if it was wrong, I would come to the House the next day with the right figure, and that I did.

§ 16. Mrs. Maureen Hicks
To ask the Secretary of State for the Environment what assessment has been made of the number of people who will benefit from the community charge reduction scheme compared to those who benefited from transitional relief.

§ Mr. Key
The effect of our recent announcement is that all charge payers will benefit from a general reduction in their bills of £140. In addition, about 16 million charge payers in England will also benefit from further help from the community charge reduction scheme. This is about 9 million more than under transitional relief.

§ Mrs. Hicks
Is my hon. Friend aware that as a result of the generous announcement made last week, not one of my constituents will have to pay a penny over £275? In addition, several thousand already stand to benefit from the community charge reduction scheme. Is not it important, so that people can budget, that they should know as soon as possible how much they will pay? Can my hon. Friend give me a general idea of when they can expect to receive their bills?

§ Mr. Key
We have decided that the balance of funding of local authority services between central Government and local government should be changed. That must be welcome. The exact figures for any individual authority cannot be announced until we know what claims the authorities put into the Department of the Environment for the scheme.

§ Mr. Tony Banks
For the record, will the Minister make it absolutely clear that the reduction will not be £140 for all poll tax payers? Those people on income support, who pay 20 per cent., will receive only £28 and after they have spent £1,100 on VAT-charged goods and services, they will be paying for that £28. For the record, too, will the Minister tell us when the poll tax flagship turned into a Tory millstone?

§ Mr. Key
It must be remembered that the people saving £28 are asked to pay only 20 per cent. in the first place. As my right hon. Friend the Secretary of State announced, our intention is that people should not find this tax too heavy a burden.

§ Dr. Hampson
Does my hon. Friend agree that most people want a certain degree of stability and security for the future? The old rating system took no account of the anomaly of the single-person household, as distinct from a household accommodating several wage earners. Will my hon. Friend take this opportunity to make it absolutely clear that, with the further change, we shall not need to retain anything like a poll tax register?

§ Mr. Key
The first point that must be made absolutely clear is that we are going into consultation. My hon. Friend will have to wait a couple of weeks to discover exactly what is in our mind.

§ Mr. Blunkett
May we explore a little further the statement made on Monday by the Minister for Local Government and Inner Cities in the debate on the money resolution relating to the Community Charges (General Reduction) Bill? On that occasion, the Minister announced that 8 million people would benefit from the community charge reduction scheme. Less than 24 hours later, he was contradicted by the Secretary of State, who said that he was pleased to take the House a stage further 954 by telling us that, as a result of the arrangements that the Government were making, 16 million, rather than 8 million, people would benefit. Was not he aware that, in January, it had been announced that 18 million people would benefit? Did not he know that the scheme that was approved overnight actually reduces the benefit that is available through the community charge reduction scheme, reduces the benefit that is available through the rebate scheme and transfers money from the poor to the rich through the VAT increase? People with second homes will receive £428, whereas those on supplementary benefit will get only £28. It is a disgrace that the rich get more and the poor get less.

§ Mr. Key
The only disgrace is that the hon. Gentleman does not seem to understand the arithmetic. The important point is that, whereas under the old scheme 8 million people were helped, the outturn figure is now 16 million. I should have thought that the hon. Gentleman would be delighted with that. The net extra grant to local authorities will amount to about £4.3 billion and we plan to make savings of £1.3 billion on community charge benefit and other reliefs. That has allowed us to make a number of improvements. It is increasingly strange that, in recent days, the hon. Member for Sheffield, Brightside (Mr. Blunkett) has been more interested in preserving the status quo and protecting the vested interest lobbies of local government than in helping the people of this country.

§ Mr. Sayeed
Now that the abolitionists are clearly in the ascendant, will the Government turn their attention to abolition of the county council in Avon, which is the most unnatural and unloved of counties? Is my hon. Friend aware that Avon county council, on which the socialists are the largest party, has consistently increased its community charge at a rate much higher than the rate of inflation?

§ Mr. Key
I was in Bristol quite recently and I sympathise with my hon. Friend. This will be a matter for the local government commission that my right hon. Friend hopes to set up.