HC Deb 08 May 1991 vol 190 cc707-9
2. Mr. Teddy Taylor

To ask the Secretary of State for the Environment what will be the consequences of the distribution of Government grant of the council tax proposals; and if there will be any significant alteration in so far as it relates to Southend-on-Sea.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)

Grant will be distributed so as to enable authorities to finance spending at a standard level, by levying standard taxable amounts determined by the Secretary of State. Authorities will be compensated for differences in their expenditure needs and for any variations in their taxable capacity. No major changes are proposed to the current system of standard spending assessments.

Mr. Taylor

Is my hon. Friend aware that there was public rejoicing in Southend-on-Sea this year, after years of battling to get rid of the terrible safety net, which forced the people of Southend-on-Sea to subsidise other councils? Is he further aware that my right hon. Friend the Member for Southend, West (Mr. Channon) and I and all the people of Southend-on-Sea would be very unhappy if that wretched safety net were reintroduced? Is there any truth in the unique revelation appearing in The Scotsman that Jacques Delors could stop local government reforms by virtue of his latest directive?

Mr. Key

I am grateful to my hon. Friend for the opportunity to congratulate the electors of Southend-on-Sea on their sensible decision in last Thursday's council elections. Transitional help will continue to be available for households, and we have no proposals to reintroduce area protection grant. My hon. Friend may have been referring to the transfer of undertakings directives, which place a new employer into the shoes of the old employer in respect of dismissals and other aspects of an employee's terms and conditions of employment. If that is the case, those directives apply both to the private and public sector and would have no special effect on local authorities.

Mr. Channon

Is my hon. Friend aware that the proposed council tax arrangements set out in recent consultative documents would mean that, in future, nine out of 10 households in Southend-on-Sea are likely to pay even less than they do now? It is already a low figure because Southend-on-Sea is a prudent local authority. Does my hon. Friend share my belief that that is why the Conservatives enjoyed such excellent results in the local elections and why the Liberals were routed?

Mr. Key

I well recall my happy visit to Southend-on-Sea not long ago. My right hon. Friend is right to point out that, had the council tax been up and running this year, a couple living in a house of average value in Southend-on-Sea would have paid £276, as opposed to a community charge of £416.

Mr. Dalyell


Mr. Speaker

Order. I will call the hon. Member, but I remind him that we are discussing Southend-on-Sea, not Linlithgow-on-Sea.

Mr. Dalyell

Up the road from Southend-on-Sea is Heveningham hall. Does the Minister know who owns it? As it is the subject of a grant—the word "grant" appears in the original question—can the Minister assure the House that it is not owned by the Iraqi Government?

Mr. Key

The hon. Gentleman will know that there has been substantial correspondence on that issue. I shall look into the question and write to the hon. Gentleman.

3. Mr. Burns

To ask the Secretary of State for the Environment what representations he has received about the proposed council tax.

The Secretary of State for the Environment (Mr. Michael Heseltine)

The Government's council tax proposal has been widely welcomed by hon. Members and by those involved in local government. I look forward to receiving detailed responses to the consultation exercise now under way.

Mr. Burns

Will my right hon. Friend forgive me if I gently chide him for that reply? The reason is that my right hon. Friend seems not to have included in the representations that he received the thousands of voters in Chelmsford who voted against the Liberal Democrats and voted a Conservative council into Chelmsford, overturning the Liberal Democrat council because they support and like the council tax that my right hon. Friend proposes.

Mr. Heseltine

Having given my hon. Friend's question due consideration, I certainly forgive him.

Mr. McCartney

Would the Secretary of State like to make a further visit to Wigan to explain to electors why the rate of council tax to be levied there is double the rate that will be levied in the Conservative borough of Trafford? In Wigan we will have the highest rate levy of all 10 districts in Greater Manchester. When people in boroughs such as Wigan will have to pay twice as much in council tax as those in a borough such as Trafford, does not that show that something is seriously wrong with the calculations?

Mr. Heseltine

I do not think that I need to go to Wigan to explain the consequences of having a Labour authority in Wigan and a Conservative one in Trafford.

Mr. Norris

There is no doubt that in my constituency of high-valued properties, the overwhelming majority of constituents will most certainly pay far less under the new council tax than they were paying under the old rating system and that the tax is warmly welcomed in that regard. I suggest that there is one point on which I would invite my right hon. Friend to keep his options open—the question of an additional band at the bottom of the scale, at around £20,000, to take account in my constituency of those who live in mobile homes and other low-cost accommodation, who are often the least fortunate. I suggest that there should be an additional band at the top of the scale at about £250,000, because at present those who live in areas such as mine on the fringes of London frequently find that a value of £160,000 on their property does not mean that they are especially rich.

Mr. Heseltine

Of course, I understand my hon. Friend's point. It has been made by other people. One must consider the banding arrangements in the context of the sums of money that separate one band from another. It is the Government's view that, having considered the various permutations, the seven-band arrangement with which we have come forward is appropriate.

Mr. Gould

As the Minister for Local Government and Inner Cities could not answer the question about the six missing bands, perhaps the Secretary of State could try to clear up another matter of confusion. What will be the basis of valuation? Will it be capital valuation, without any conditions—as the Secretary of State said—or will other factors be taken into account, as the Minister of State said on Radio 4, or does confusion continue to reign?

Mr. Heseltine

The only confusion is in the mind of the hon. Gentleman because every time that we answer the question he asks it all over again. The fact is that we have come forward with seven bands. We made it absolutely clear, both in advance of our announcement and subsequently, that we considered a number of other options, but we came to the view that the seven-band option was the most appropriate. That remains the position. As for the broad issue of the valuation process, we also explained that. Whereas the Opposition are in favour of capital values, rental values and building and repair costs as a basis for valuation—whatever that may mean—we believe in capital values, and we are consulting on that basis.

Mr. Gould

So the Minister of State is wrong.

Mr. Heseltine

My hon. Friend the Minister is not wrong. If people wish to suggest to us specific areas where capital values need modification, we shall consider them. Local government may well produce examples that need specific examination. As we are designing a tax for local authorities to administer and collect, the appropriate way forward is by consultation and not by imposition.