HC Deb 12 November 1991 vol 198 cc917-1004


Order read for resuming adjourned debate on Question, That the Bill be now read a Second time—[11 November.]

Question again proposed.

Mr. Speaker

I must announce to the House that I have not selected either of the amendments on the Order Paper, but they may be referred to during the debate.

4.25 pm
The Secretary of State for Scotland (Mr. Ian Lang)

At the height of the first day's debate on the Second Reading of the Local Government Finance Bill, there were six Labour Back-Bench Members present. There are now about 24, but that count is falling fast. I am sure that the House will start to fill rapidly as I address it at the start of the second day of debate on the Bill. After all, the Scottish clauses comprise a substantial proportion of its contents. The House will be aware that, for the most part, these are closely equivalent to the clauses which relate to the introduction and operation of the council tax in England and Wales which my right hon. Friend the Secretary of State for the Environment described yesterday. It is important that we have this opportunity to concentrate on the Bill as it affects Scotland.

We have already done some of the groundwork for the new tax. It was necessary, if we were to meet the target of I April 1993 for introduction of the tax, to ensure that the first step towards the levying of the tax—the valuation of properties—was begun as soon as possible. Therefore, we enacted, before the summer recess, the Local Government Finance and Valuation Act 1991. That enabled a considerable amount of groundwork for the valuation exercise to be undertaken over the summer. In Scotland, the assessors, in discussions with the Inland Revenue valuation office in Scotland, have been preparing for the actual task of valuation, which will get under way shortly. Therefore, we are very much on course for the introduction of the new tax in 1993.

Clauses 84 to 92 carry over and develop the arrangements for valuation set out in the 1991 Act and provide for changes to be made in lists to take account, for example, of new properties and appeals against taxation. The hon. Member for Glasgow, Garscadden (Mr. Dewar) described our valuation arrangements for Scotland as a recipe for disaster. I am sure that he did not intend to insult thereby the professionals involved—the assessors—who will be responsible for the valuation and the Commissioners of Inland Revenue, who are responsible for ensuring consistency in the way in which the valuation is undertaken throughout the country. I am glad to reassure him that all is on course and going smoothly.

Our decision to give the assessors that responsibility reflects the views put to us during the consultation which persuaded us that they were best placed to undertake the work and to do the job well within the timetable allowed. Our decision to give the Commissioners of Inland Revenue responsibility for overseeing the work reflected our understanding of the demand in Scotland for consistency in the way in which taxes operate throughout Great Britain. The arrangements are working well and I have every confidence that the job will be completed satisfactorily on time.

Clauses 70 to 73 provide for the introduction of the council tax set separately by the regional, islands and district councils in respect of dwellings in their areas. Clause 74 provides for the valuation bands into which dwellings are to be placed and which have already been described in the Domestic Property (Valuation) (Scotland) Regulations 1991. It also provides for the range of tax payable for the bands.

I think that it would be helpful now if I described in some detail what the effect of the banding arrangements will be, as there has been considerable misunderstanding of the provisions. The hon. Member for Garscadden said last week that he finds it incomprehensible that many properties may stay in the same band in perpetuity. But why should they not? A dwelling in Scotland that is placed in band D will have been assigned that band because its value at 1 April 1991 is over £45,000 but does not exceed £58,000. That value is around the Scottish average. Of course, the Bill includes provisions to allow the assigned band to be changed if the value of the property changes sufficiently to take it into another band. If the band is higher, however, the change can be made only on change of ownership of the dwelling. If there is no such change, the banding decision will remain unchanged.

The banding system irons out much of the effect of relative changes in property values within an area which, under the rating system, brought regular pressure for revaluation. The need for general revaluations is therefore much reduced. If, however, such a revaluation were required, say, 20 years hence, the same house in band D would probably remain a band D house, provided that its relative position within the range of property values had not changed so much as to take it outwith the new parameters for that band.

Clause 74 places an upper limit on the amount of tax that any person can be liable to pay. This aspect of the arrangements—inevitably, I suppose—has produced the standard response that the rich are being protected. That neatly ignores the imperfect correlation between people's circumstances and the value of their home. It demonstrates only the Labour party's vindictive desire to extract the maximum revenue from high-value properties regardless of the circumstances of their occupants, or any relationship between the tax burden and the services that are provided.

Sir Nicholas Fairbairn (Perth and Kinross)

Will my right hon. Friend explain to a simple fellow like me why it is considered sensible to return to a system of socialist taxation based on the capital value of an asset that produces no income and that is unrelated to the services for which the occupant is paying and to the income of the occupant, this asset being normally called a home?

Mr. Lang

My hon. Friend gives an admirable description of the so-called fair rates proposals of the Labour party, to which we do not intend to return.

Clause 75 defines liability to pay as an individual liability that is dependent on the relationship that persons have with dwellings. This liability would fall in the first instance on the resident owner, then the resident tenant and so on.

Clause 79 provides for discount where there is only one or no resident in the property. These arrangements will be fair and simple to administer.

During our debate on the Gracious Speech last Wednesday, we heard a different story from Opposition Members and especially from the hon. Member for Garscadden. The hon. Gentleman is determined, as ever, to see administrative nightmares where none exists. His contacts in local government have told him, presumably before even seeing the Bill, that discounts will be difficult to administer, and uncritically he believes them.

When it comes to the hon. Gentleman's examples of why the system will be difficult to administer, what do we find? There is a complete misunderstanding on his part of how the discount proposals will work in practice. As the mouthpiece of the Convention of Scottish Local Authorities, he asks whether authorities are supposed to send out bills for 100 per cent. of the liability to everyone and leave discounts to be claimed by householders. The answer is to be found in paragraph 4 to schedule 2. Local authorities are required to take reasonable steps to ascertain entitlement to discount, but in the absence of firm information they can send out an undiscounted bill. In other words, as a matter of sensible administrative practice, authorities should make efforts to ascertain discount households before sending out bills. [HON. MEMBERS: "How?"] By referring to existing information.

Mr. Allen McKay (Barnsley, West and Penistone)

Can the Secretary of State tell me how local authorities will do what he describes?

Mr. Lang

They can make reasonable efforts by examining existing information or by carrying out a canvass. There are local authority housing tenancy lists. Authorities will be able to examine electoral rolls. They could even study community charge registers. They are most definitely not required to know the composition of every household in their areas before billing. There is no question, therefore, of a register being required.

We come now to what might be called COSLA's auntie problem. The hon. Member for Garscadden quoted COSLA as being concerned about what would happen if someone's aunt came to stay for a couple of months. Again, the answer is in the Bill—in clause 79 for Scotland. Discounts are calculated according to who is resident in a dwelling, and "resident" means having one's sole or main residence there—a concept not unfamiliar to Labour Members.

In the case described in our earlier debate by the hon. Gentleman, the local authority would make its decision to withdraw or not to withdraw discount on the basis of whether it thought that the dwelling in question was the auntie's sole or main residence. In fact, if she were there for two months, it would be unlikely that it would regard her as a resident. However, there will be a right of appeal against any decision.

Clauses 81 and 83 make provision for the appeal arrangements that will apply in Scotland. As the House will be aware, appeals under the community charge are, for the most part, made initially to the community charge registration officer and thereafter to the sheriff under summary procedure. That system has, by and large, worked well. However, we are aware of the concerns that have been expressed about the system as compared with the arrangements in England and Wales, where appeals are made to valuation and community charge tribunals. We have taken note of those concerns in formulating the arrangements for the council tax. Appeal on questions of valuation liability and levying of the tax will therefore lie with valuation appeal committees, with further appeal on points of law to the Court of Session.

Clause 94 and schedule 7 make provision for capping. They re-enact the arrangements already provided in the Local Government Finance and Valuation Act 1991, which is to be repealed and replaced by the Bill and do not, therefore, make any changes to the present arrangements. The House will be aware that I announced last month the principles that I am minded to adopt next year in considering whether planned expenditure is excessive or has increased excessively.

At this point, it might be appropriate to spend a few moments on a specifically Scottish aspect of the Bill.

Mr. David Nicholson (Taunton)

Before my right hon. Friend passes on to a specifically Scottish aspect, I wish to raise a general point. I am glad that my right hon. Friend the Secretary of State for the Environment and my hon. Friend the Minister are on the Front Bench. I agree with my right hon. Friend that the intervention of my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) aptly summed up the Labour party's position.

My right hon. Friend will be aware that most Conservative Members accept that, while some taxes may fall on income and others on spending, there is scope for a modest tax to fall on what we might describe as the amenity of property. One lesson that we learnt from the transition from domestic rates to the community charge was the injustice of the former rates system to the single-person household. My right hon. Friend is probably aware that there is considerable pressure from single-person households for an increase in the 25 per cent. discount. Will he and our right hon. and hon. Friends, over the next few weeks, consider whether there is scope for increasing that discount to something more related to the ability to pay of the single person?

Mr. Lang

My hon. Friend made a point that obviously concerns him, and he did so lucidly. I and my right hon. Friend are grateful for his support for the underlying principle of the Bill. I am sure that he will wish to develop that issue in Committee, if he is fortunate enough to be a member.

We gave close consideration to the appropriate discount level and I am sure that my hon. Friend will agree that there is a certain symmetry and element of justice readily apparent in the concept of a 25 per cent. discount for a one-person residence and a 50 per cent. discount for a house that has no resident occupant.

Mr. Frank Haynes (Ashfield)

What will the Scottish electorate think when they discover what the millionaire Secretary of State for the Environment, who is sitting on the right hon. Gentleman's left, has to pay? Will they think that he is getting a massive discount, as he will have to pay only a small amount? No doubt the Scottish electorate will think that he drafted the Bill to suit himself.

Mr. Lang

If my right hon. Friend were fortunate enough to be resident in Scotland, he would find that about 89 per cent. of the cost of local government services was funded by central taxation. If my right hon. Friend is fortunate enough to be in the circumstances described by the hon. Gentleman, he is making a far larger contribution as an individual to income tax and other central Government taxation than would otherwise be the case.

As to the Scottish electorate, I reassure the hon. Gentleman that they were at the forefront in seeking the abolition of domestic rates and they will be at the forefront in resisting their reintroduction by the Opposition.

I want now to discuss an important aspect of the Bill which affects Scotland—the council water charge set out in schedule 11.

Mrs. Ray Michie (Argyll and Bute)

Can the Secretary of State tell us something about the effect of the council tax on the agricultural community? I have already had queries about what will happen. Many farmers and tenant farmers live in big old rambling houses. Crofters lost their 50 per cent. derating with the introduction of the poll tax and, given the present state of agriculture, there is considerable concern about what will happen under the council tax.

Mr. Lang

The hon. Lady will know that the market value of such houses will reflect the present state of agriculture and the demand for such houses. Therefore, they are likely to be put in a lower band and so attract a relatively lower tax than under the community charge. If they are tied houses of the sort that the hon. Lady described, that would be reflected in the market value. Therefore, no particular difficulty arises.

Let me press on to the important subject of the council water charge which is set out in schedule 11. Hon. Members will be aware that at the same time as we consulted about our council tax proposals, we issued a consultation paper in Scotland about water and sewerage charges. Among other things, that paper proposed that sewerage charges should be separated out from the new council tax in the same way as water charges are at present separately levied.

However, it became apparent during the consultation that separate charges would have borne most heavily on those about whom the hon. Lady is concerned—people in rural areas. It would also have meant higher administrative costs which would have had to have been borne by charge payers. Therefore, we have decided that it would not be appropriate to introduce separate charges for sewerage and the provisions in the Bill for water and sewerage charges in Scotland will essentially maintain the existing system whereby regional and island councils set the appropriate levels.

Mr. Donald Dewar (Glasgow, Garscadden)

indicated assent.

Mr. Lang

I am grateful for the hon. Gentleman's support.

Mr. Malcolm Bruce (Gordon)

Many will welcome that sensible proposal, but can the right hon. Gentleman underline it with a categorical assurance that the Government have no intention of privatising water in Scotland either this side of an election or afterwards?

Mr. Lang

I can reassure the hon. Gentleman that, to use the time-honoured phrase, we have no present plans to undertake such an exercise.

Water will continue to be charged via either the council tax, linked to property value bands, or the non-domestic water rate, linked to the rateable value of premises, or by direct metered charges. Sewerage will continue to be charged via the council tax or the non-domestic sewerage rate. All the discounts that will apply to the council tax itself will also apply to the water and sewerage charges.

No fundamental changes are, therefore, proposed in the Bill, but we have taken the opportunity to make two improvements in the way in which the charges are levied. One is that the Bill will extend to all consumers in Scotland the option of being able to pay for water by metered charges if they wish, having the amount that they use recorded and being charged direct. That is a useful extension of consumer choice. It offers an option to Scottish consumers which is available in England and Wales and which I am sure will be welcomed.

Some small businesses may also benefit from that option since the Bill abolished the minimum threshold of rateable value which a business previously had to meet to be eligible for a metered supply. We have also taken the opportunity in the Bill to provide for water to be supplied free of charge for fire training purposes and for other emergency purposes as well as fire fighting.

Mr. Dewar

There will be a widespread welcome for the Secretary of State's announcement about sewerage, if only because up to now, if I remember rightly, the water charge has not been included in the rebate scheme. Are there any plans to bring it within the rebate scheme?

Mr. Lang

I have no announcement to make about that at present, but, as the hon. Gentleman will have heard, I made it clear that the discounts would apply to water and sewerage.

The claim has been repeatedly made by Opposition Members, and most recently by the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), who is not in his place today, that we are starving local government of resources. That is simply not true and I shall outline the facts. Starting with financial support, Government grants to Scottish authorities—rate support grant or revenue support grant and specific grants—have increased in real terms from £2,562 million in 1979–80 to £2,809 million in 1991–92. Therefore, far from Government support having been reduced during the period that the Government have been in office, there has been an increase in real terms of 9.6 per cent.

Then there is the alleged deterioration in local authority services; again, the facts are different. In education, since 1979 the percentage of pupils staying on until the fifth year has increased from 35 per cent. to 54 per cent. and the percentage staying on until the sixth year from 14 per cent. to 25 per cent. The percentage entering higher education has increased from 16.8 per cent. in 1978–79 to 24 per cent. and is still rising fast. Expenditure per pupil has increased in real terms by 49 per cent.—[Interruption.]

Mr. Sam Galbraith (Strathkelvin and Bearsden)

The Secretary of State is yawning at his own speech it is so boring.

Mr. Lang

The hon. Gentleman is supposed to be in the medical profession, so he will know that that was not a yawn; I was choking.

The number of field social workers has also increased from 2,985 to 4,700, an increase of 47 per cent. There has been a 26 per cent. increase in all social work staff and a 13 per cent. increase in home care staff. The number of places in local authority day care centres is up by 152 per cent. for the elderly, 59 per cent. for the mentally handicapped and 49 per cent. for the physically handicapped.

Mrs. Margaret Ewing (Moray)

The Secretary of State has just referred to the number of social workers. What decision has he reached about funding social workers involved in the Orkney inquiry?

Mr. Lang

It would not be appropriate to answer such a question in a debate on the Local Government Finance Bill. Any answer will be given in the appropriate way at the appropriate time.

Mr. Harry Ewing (Falkirk, East)

I am grateful to the Secretary of State. He has been most generous in giving way. All the increases that he has just quoted—in the number of pupils staying on to the fifth and sixth years and in the number of social workers—are down to the fact that all the regional authorities in Scotland are controlled by the Labour party and they see as their spending priorities the need to create educational opportunities for young people and to provide home helps for old people. Now the Secretary of State is telling them that he will cut their budgets next year to stop them increasing the number of educational opportunities and social workers. The Secretary of State cannot have it both ways.

Mr. Lang

The hon. Gentleman is seeking to disguise the fact that under the Government in which he served the quality of service under the headings that I have just listed was vastly inferior to the quality of service provided under this Government.

Local authority expenditure during the 12 years since we took office has risen by 26 per cent. in real terms. It is an astonishing 30 per cent. higher in Scotland than in England and Wales, a fact for which COSLA has been unable to give any credible explanation.

To help sustain that substantial expansion of local government expenditure, the Government have shifted the burden so that central Government now bear up to 89 per cent. in Scotland with only 11 per cent. borne at local level. But now we are told that the Labour party plans to increase the local contribution to no less than 20 per cent.

Mr. Bryan Gould (Dagenham)

Before the Secretary of State repeats that totally misleading canard, will he kindly check with his right hon. Friend the Secretary of State the percentage that he quoted? I think that 22 per cent. was the claim that the right hon. Gentleman made on behalf of his Government in exactly the same week that, in response to a question, I used the figure of 20 per cent. At that point, the Secretary of State and I were operating on a particular definition of local government spending. The fact that the Prime Minister then chose to use a totally different definition of local government spending seems to have eluded the Secretary of State and many of his right hon. and hon. Friends. Will they kindly sort out which statistical base they are using, because otherwise they simply confirm that the Government are, literally, at sixes and sevens?

Mr. Lang

It is interesting to note that the discussion centres simply on the amount by which Labour intends to increase the burden on local government spending.

The hon. Gentleman must be aware that the basis in Scotland differs from that in England and Wales: 11 per cent. of council expenditure in Scotland comes from local tax-raising, whereas in England and Wales the figures is 14 per cent. If the hon. Member for Garscadden can reassure me categorically that the next Labour Government will not increase the local contribution to 20 per cent., I shall be interested to learn to what level they will increase it.

If, before Labour even increased the actual spending level, a £300 local tax bill were increased by that proportion in Scotland, the charge would rise to nearly £600. Labour may claim that it proposes to reduce direct taxation through income tax or VAT—although, given Labour's record in that regard, we should be very sceptical about any such claim. The doubled figure that Labour would bring about, however, would appear before capping was lifted and before Labour transferred to local authorities a raft of new responsibilities.

Labour's policy document "Power to Act" contains a nightmare list of proposals for the extension of local authority power to training and economic development and intervention in local enterprise companies, health boards, community housing associations, transport, consumer protection, the environment, equal opportunities, crime prevention and community safety. The cost of such an explosion of power—with local councillors intervening in every sphere of activity—is not, of course, given; but to lay that burden across the weak framework of a revived domestic rating system would be to court disaster.

I seek elucidation on, in particular, Labour's proposals for capping. The purpose of capping is to protect local residents from extravagant local authorities: to protect, for example, the residents of Edinburgh, who were faced with a disgraceful and irresponsible proposal to levy a £584 poll tax until the Government stepped in. Capping, however, is also a measure of public expenditure control. Local authority expenditure accounts for a massive proportion of total public expenditure in Scotland. Next year's Scottish Office budget totals some £12.5 billion and local authority spending not only accounts for over half total public expenditure—54 per cent. this year—but has risen from 45.5 per cent. of the total since we came to office. Local government expenditure consumes millions of pounds that could be devoted to other cherished projects relating to health, roads or the environment.

Every year, a subsidy must be transferred from the Scottish block grant to meet current local authority spending levels and to try to protect local taxpayers. Labour has committed itself unequivocally to abolishing capping. I invite the hon. Member for Garscadden to confirm today that that is still his party's intention. What estimate has the hon. Gentleman made of the impact of that decision on public expenditure by a future Labour Government? Will it increase public expenditure in Scotland alone by £1 billion, £1.5 billion or more? Will the proportion of Scottish Office expenditure accounted for by local authorities rise from 54 per cent. to 64 per cent., or 74 per cent.? Perhaps it would not; we know that Labour is also committed to vast public expenditure increases, totalling some £35 billion, across the whole range of Government policy.

The right hon. and learned Member for Monklands, East (Mr. Smith) must, however, preserve at least a figleaf of fiscal responsibility. What clearance did the hon. Member for Garscadden obtain from his right hon. and learned Friend to unleash such a surge of expenditure right across the board? To what level will local authority expenditure be allowed to rise before Labour reneges on its commitment to abolish capping?

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

On a point of order, Mr. Deputy Speaker. With my hon. Friend the Member for Cumbernauld and Kilsyth (Mr. Hogg), I have been perusing the Bill in an attempt to find the part that covers what the Secretary of State is now discussing. There is no such clause. Will you please ask the right hon. Gentleman to return to the content of the Bill?

Mr. Deputy Speaker (Sir Paul Dean)

I have heard nothing from the Secretary of State which is out of order.

Mr. Lang

Capping is central to our proposals; it is central to the protection of residents from the extravagance of local authorities; and it is one of the central issues of disagreement between the Government and the Labour party. I want answers to my questions and I expect to hear them later from the hon. Member for Garscadden.

Several Hon. Members


Mr. Lang

Labour Members do not like what I am saying, because it goes right to the heart of the matter.

What other programmes will be cut to fund the insatiable extravagance of local authorities, while enabling them to meet public expenditure targets? Will Labour cut health expenditure, as a Labour Government did between 1974 and 1979? Will it cut expenditure on roads, as it did in that period? Or will it make cuts across the board, as it did then? Who will pay? Will it be the local resident, the national taxpayer or both—with the IMF thrown in as well? Under Labour, when will the party be over?

Mr. Andrew Welsh (Angus, East)

It seems that the right hon. Gentleman, as Secretary of State for Scotland, does not want extra billions to be spent on Scottish services, so that people can return to work and the country can start moving again. If he is worried about the cost, why does not he turn to the oil revenues—which could fund the full amount—rather than slating local government, which is doing a good job on the minimum that he chooses to give it?

Mr. Lang

Certainly I want Scotland to be on the move economically—as, indeed, it has been under the present Government. The only sense in which the hon. Gentleman wants to move Scotland is that he wants to move it outside the United Kingdom. He wants to erect tax and customs barriers and to shut Scotland off from the rest of the United Kingdom and Europe.

I have another question to ask the Labour party: what will be the effect of its proposals on business ratepayers? We all know that Scottish business rates are higher than those in the rest of the United Kingdom. I acknowledge that that is partly because Scotland's rating base is slightly smaller and partly because of the dominance of council housing. The central and underlying reason, however, is the huge extravagance of Scottish local authorities over the years. As I mentioned earlier, local government expenditure in Scotland is no less than 30 per cent. higher than it is in both England and Wales.

Businesses have no vote. Business rates are a direct on-cost. Year after year, under Labour councils, they have risen by more than the rate of inflation. They are perceived as arbitrary, unfair and oppressive and economically they are very damaging.

We have set out to introduce fairness and equity to business rates. We have been harmonising valuation practice and ironing out the anomalies. We have committed ourselves to introducing a uniform business rate over five years or so to achieve a level rate across the United Kingdom.

Mr. Robert Hughes (Aberdeen, North)

Why is the Secretary of State now reading a speech that he clearly had not seen before he came to the Dispatch Box? [Interruption.] I cannot help it if the right hon. Gentleman cannot read his civil servants' handwriting.

In the earlier part of his speech, the Secretary of State gave Scottish local government credit for the increase in the number of pupils staying on at school and in social work expenditure—for the improvement in all services that are provided directly by elected local government representatives. In the later part, he has rubbished the lot. The right hon. Gentleman really should be able to do better than that.

Mr. Lang

This may be poor stuff, but it is mine own.

The point that I was making—it may have been lost on the hon. Gentleman—was that, because of our prudent management of the economy, the Government have been able to expand services and increase in real terms the funding of local authorities. They have allowed the economy to develop, prosper and have left people better off. In contrast to that, Labour's irresponsible approach—its proposed abandoning of all the controls that have made our achievements possible—would place burdens on our people that would cause immeasurable damage.

The cost of business rates has been reduced by some £270 million as a result of the steps that we have taken to bring them down to a level that would be comparable across the United Kingdom. Last year, they rose by 1.5 per cent., the rate of inflation being over 10 per cent. We have brought about a gradual convergence and I hope that we shall be able to do more this year.

Labour would undo all that. Labour would dismantle all the progress that we have made and all the justice that we have introduced; it would tear away the protection that we have brought in—especially for small businesses—and let business rates rip. I assume that the party would not take such action lightly: presumably it has thought it through and considered the consequences. I have another question for the hon. Member for Garscadden.

Mr. James Wallace (Orkney and Shetland)

Will the right hon. Gentleman give way?

Mr. Lang

No, not at the moment. This is an important point. The hon. Gentleman will want to hear the answer, as it will affect businesses in Orkney and Shetland just as it will affect businesses in Dumfries and Galloway. By how much does the hon. Member for Garscadden expect business rates to rise in the first two years after he has taken off the controls that we introduced on business rates? How many jobs will be lost as a result? How many businesses will close? Scottish business deserves and awaits answers to those questions. Those whose jobs would go deserve answers to those questions. I expect the hon. Gentleman to answer that question in his speech.

The Labour party wants to embark on a three-point programme to punish local government.

Mr. Wallace

Will the right hon. Gentleman now give way?

Mr. Lang


Mr. Wallace

The 1986 Green Paper foreshadowed special arrangements for business rates in Orkney and Shetland, because of the anomaly created by the oil terminals. What progress is being made to implement the social arrangements promised by the Government?

Mr. Lang

As the hon. Gentleman knows, since he and I have had many exchanges on this subject across the Floor of the House, Orkney and Shetland almost always have special arrangements. These matters are continually up for review and reconsideration, but his representations will, as always, be borne in mind.

The Labour party has a three-point programme for punishing local government. Simultaneously the Opposition want to return to the worst injustices of the domestic rating system. They want to remove all safeguards to protect local taxpayers through capping. They want to expose the business community and its employees to the horrors of runaway council spending. It is an extortion racket that would make the mafia look like a children's charity.

If the Labour party really wants to get rid of the poll tax, it should help the Bill through. If not, the inescapable conclusion will be that it wants to stop the Government abolishing the poll tax for its own dark reasons.

What we are proposing is a tax based upon property and upon the people who live in it. It is a tax that will recognise that taxes are paid by people, not by buildings. It is a tax that will take account of the needs of single-person households, many of which contain pensioners, students, student nurses, apprentices and trainees, and of the needs of the young, the old, those on low incomes and those who live in high-priced areas. It is a tax which will be administratively simple, which will require no register to determine liability and which will provide a firm basis for local government finance. In other words, it is a fair tax, a sensible tax, a workable tax and a tax which I commend to the House.

5.1 pm

Mr. Donald Dewar (Glasgow, Garscadden)

That was an entertaining performance, by the standards of the Secretary of State for Scotland. It contained one or two memorable lines. I was interested in the concept of the Secretary of State not yawning but choking over his script. I imagine that that is something he gets used to. I was also intrigued by the concept that somewhere in the International Monetary Fund there are a number of gentlemen who are very worried in case Stirling district council is not capped in 1996.

Before dealing with the Bill, may I say a few words about the way in which the Bill is to pass through the House and the parliamentary timetable. What is proposed—and what will no doubt happen, because of the power of the Whips—is an attack on Parliament itself. This is a complicated and controversial Bill that will be forced through its Committee stage in three weeks. The Committee will meet almost literally day and night. There will be no possibility of proper consideration. There will be no detailed scrutiny of very important matters that will have an impact on everyone. It is a straitjacket that makes a total mockery of the parliamentary process.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Will the hon. Gentleman confirm that it will be impossible within this three-week period, if the House votes for the three weeks, for there to be any proper consultations with interested parties and any sort of repetition, by means of which the ordinary person in the pub may understand what is to be visited upon him, and that it will be a complete abortion and distortion of the way in which Parliament ought to consider a complicated piece of legislation?

Mr. Dewar

I have a great deal of sympathy for what the hon. Gentleman says. I was about to refer to the constant approaches to me by professionals. I am referring not to politicians but to officials and assessors who are extremely worried about the practicality of many of the Bill's provisions. Poor souls—they approach me because they say that it will be possible, of course, to obtain the answers in Committee and to tease them out there. That will not be so. I do not want to enrage the Secretary of State, if that is not a contradiction in terms, by asking him about COSLA's views. For those on the Conservative Benches who are not familiar with the Scottish scene, that is the Convention of Scottish Local Authorities. Local authorities of every political colour are members of COSLA. Its recent circular deals with the need for a statutory canvass which it says many people believe to be essential. The circular continues: No doubt these are issues which will be debated more fully within the Committee stages of the Bill". COSLA appeals to its members to send in detailed suggestions for improvements and amendments.

Within that three-week period it will be very difficult to separate the Scottish provisions from the English provisions. There are differences—differences of starting base and differences of tradition. This is a very serious departure from the standards that we expect from a Government when dealing with the House of Commons.

In a letter to me on 30 October the Secretary of State said that, whatever else, he was sure that the Scottish interests will be dealt with appropriately. If the Secretary of State thinks that this is dealing with Scottish interests appropriately, he is not living in the same world as I am. It will be met with deep cynicism and deeper dismay in Scotland.

Mr. Budgen

Is there not a serious risk that the problem of peope refusing to pay may become worse if they feel that the proper authority of Parliament has not been given to the Bill by means of proper discussion and argument?

Mr. Dewar

All I can say to the hon. Gentleman is that I very much hope that that is not the case. As he knows, my colleagues and I have turned our face against non-payment from the very beginning of this argument. We are opposed to such a policy. I would not want to see anything that encouraged that problem, either under the present system or any successor system.

May I put a point to the Secretary of State in very muted terms, because I do not wish to overstate it? It is extraordinary that one of the last Conservative politicians in Scotland should argue that Westminster is the right forum properly to look at Scottish legislation, to dissect it and to make sure that it reaches the statute book in a way that is a credit to the legislative process. It is extraordinary that the Secretary of State for Scotland should be responsible for and should be backing the kind of timetable motion that has been put before the House. It is an abuse of the parliamentary process that goes beyond the ordinary. It is a cop-out by the Secretary of State for Scotland, who gives the impression of having given up by allowing such a thing to happen.

As for the Second Reading debate, the right hon. Member for Henley (Mr. Heseltine) gave a spirited performance yesterday. I use the word performance advisedly. He is a little bit faded these days, compared with the bright years of his youth, but undoubtedly it was a triumph of technique. He knows that when one is in difficulty one does not talk about the Bill that one is defending. One attacks, because that is the best form of defence. I suppose it is something that he learnt in the old days in the combined cadet force at some public school. He certainly did that during the exchanges.

It was interesting to listen to the arguments put forward by a string of distressed loyalists, who got little in the way of a response from the Secretary of State for the Environment. Their only consolation will be that the Hendon Times, the Brent Bugle and other local papers will record that they asked the questions, but they will not be able to record any of the answers to the worries that clearly exist among their Back Benchers, particularly in the south-east of England. That gives added force to the points that are being put forward from our side about the way in which the Bill is being railroaded through the House.

In particular, I noticed that the hon. Member for Gravesham (Mr. Arnold) asked a question about the revenue support grant in the south-east of England. He was told by the Secretary of State that it was an important point and that he would deal with it specifically in his speech. I read the speech with great care this morning. There was not even an attempt to provide an answer. That is typical of the way in which the debate was conducted yesterday and has been conducted again today by the Secretary of State for Scotland.

The Secretary of State for Scotland made some interesting remarks about how we deal with sewage charges in Scotland and I believe that he was right, but I fear that the main reason that they were paraded was because it took up a few minutes without him having to deal with the fundamentals of the Bill. He went on to give a litany of hatred about local government and its responsibilities.

I do not want to spend a great deal of time on this subject, but it must occur to the Secretary of State that if he creates such an abrasive atmosphere, if on the one hand he says that local government has done well and he claims the credit while on the other hand blaming it for everything that goes wrong, he is undoubtedly creating a situation in which there will be continuing difficulties. With a better atmosphere, one could get more reasonable results for most parties. One of the tragedies has been the constant confrontation. I do not think that that area of policy has been conducted with any form of common sense in recent years.

For the Secretary of State to lecture us about the non-domestic rate—the business rate—and say that fear of that is driving companies out of business takes one's breath away. When I talk to business men, when I look at the records of insolvencies, liquidations and business failures, people talk to me about Government economic policy and the recession and not about some sort of hypothetical concern that lives large only in the mind of the right hon. Gentleman.

As regards the Bill, a number of our past arguments are clearly highly relevant to the debate. I said earlier that the Secretary of State was not noted for his phrases but, to be fair, he introduces them occasionally. He was the first person that I have heard talking about the dampening effect of banding and it may well be his modest monument. However, I object strongly to that phenomenon. I do so because I know that it is a form of protection racket, although I know that that is a phrase that Tories have found offensive, but it makes the point. To be fair, Conservative Members have not tried to hide that fact. They have said that they want to protect those in the upper range of the property market. They accept that there is a link between income and the housing that most people live in and they want to protect people who are likely to have substantial incomes. They want artificially to protect them by squeezing the range of banding—it is unashamed and unabashed.

The answer is that modest home owners such as first-time buyers will inevitably pay more than they otherwise would have done. The other day I described—I shall not do so again to save embarrassment, although it is the Conservatives' and not mine—all the tears that were shed for those at the bottom of the home ownership market, especially council tenants who bought their property who we were told would be victimised as the Labour party would take vengeance by taxing them on the full value of their houses when they had bought at a considerable discount. If that is not hypocrisy and if it was genuinely meant, there must be some troubled consciences on these Benches when Conservative Members consider what they are introducing.

It is not merely a question of the elimination of the discount in the local taxation system; there is also the weighting to which I referred which will clearly be a considerable problem for those people. I do not believe that there is misunderstanding of the system or that there is such lamentable ignorance on the Conservative Benches that they did not understand the argument when they made it so vociferously only a year or 18 months ago. When the Government defend what they once condemned we are looking at plain hypocrisy.

The right hon. Member for Henley lectures us about the politics of envy. I think what he means by that is that he does not want a system that is too progressive. It occurred to me that I should argue that that would be an odd thing to suggest because if one applied it to income tax one would have a regressive and unfortunate situation. However, when I consider what the Government have been doing to the tax system in the past year or two, it could be an argument that appealed to them. I have to repeat that it is not merely a matter of trying to protect or victimise. It ought to be a question of the fair distribution of the burden. The present rigging—if that is not too cruel a word—or, if we want to be more mealy-mouthed, the present adjustment of the banding system, ensures that there will not be a fair distribution. That also has another effect which has given rise to great discontent in areas such as Hendon. I see that one of the Members representing Hendon, the hon. Member for Hendon, South (Mr. Marshall) is here. The problem with banding, even with an eight-band system in place, is that in some areas virtually all the properties fall into one or two bands. As a result, one is suspiciously near to a flat-rate tax system of the type that we are supposed to be abandoning.

My second serious point is the question of the complexity of the new tax and I shall put that in general terms. I listened carefully to the Secretary of State but I was not convinced. I noticed in the Financial Times this morning the suggestion that the right hon. Member for Henley does not know anything himself but knows a man who knows. I was quite impressed until I discovered that that man turned out to be the Minister of State, the hon. Member for Enfield, Southgate (Mr. Portillo). That was a strange accolade for a man who only a few months ago thought that the poll tax was a vote winner. In any event, he may have some grasp of some of the technical details, but I am not convinced that the Secretary of State for Scotland has the same grasp. When I listened to him musing about when a register becomes a list, I could only conclude that he wants to duck out of the controversy and leave it all to local authorities.

The Secretary of State knows that if one talks to people who will be involved, it is nonsense to say that everything is on course and is going smoothly. I shall give one example. In the middle of September, as the Secretary of State knows, a draft circular on the Local Government Finance and Valuation Act 1991 was issued. It dealt with the financing of the new valuation process. In mid September local authorities replied, raising a number of important issues. Unless the midday post brought something unexpectedly, since then there has not been a cheep out of the Scottish Office. We have not got the circular. There is a great deal of confusion and hiatus because understandably local authorities want to know about funding arrangements, practical details and want answers to their questions about the use of private sector surveyors and they have not had any answers. They are not being obtuse or refusing to act. They have waited week after week for the circular but it has not appeared and the timetable is slipping by. If that is things going smoothly, the Secretary of State is talking a different language from the ordinary people of Scotland.

That is a painful contrast with the way in which preparations for the passage of the Bill are being bulldozed through with no respect for the niceties of the parliamentary process.

Everyone knows that Opposition Members are concerned about the discount because we do not believe that it is a properly targeted concession. Many people argue that a statutory canvass is essential. I notice that the Secretary of State disagrees and says that it is very much a matter for local authorities to take what he describes as "reasonable steps". However, given that it is all on a daily basis and that it might not be an auntie but perhaps a youngster who moves from address to address—that happens frequently in my constituency and perhaps even in the Secretary of State's constituency—all the problems with identifying the number of folk in the house, which sank the administrative basis of the poll tax, will to a large extent arise again under this system. It is no good saying that it will be up to the local authority to take reasonable steps and then going home to Bovril or Horlicks and thinking that the problem has been solved.

I shall cite one example and I invite the Secretary of State to stop me if I am wrong. It is likely that I am because, although I have taken good advice, no one is sure that they know exactly how the system will work, but let me try. Let us consider students. That is fair because there has been a recent announcement and it will be fresh in the Secretary of State's mind. He will be able to keep the House right and that may also save time in Committee, which is important given the lack of time that will be available.

As I understand it, if a student lives in a hall of residence, he will be exempt. I am sure that the Secretary of State will nod his assent.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

indicated assent.

Mr. Dewar

The Under-Secretary, the hon. Member for Eastwood (Mr. Stewart), who is slightly more animated, is doing so. I distinctly saw his sideburns move in the wind. The advice that I am given is that if a student is not in a hall of residence but is in a flat where he is the liable person, either because he is the owner or tenant, and no one else lives there, he will not be exempt. Am I right?

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


Mr. Dewar

We are making progress. The Minister is shaking his head.

Mr. Foulkes

The Scottish Minister of State is nodding.

Mr. Dewar

It is very complicated indeed to read the signs. It will be by guess and by God, and certainly not by good advice.

In Scotland the impression, as explained to me by several experts, is that the liable person, if he is a student owner or tenant, will get a 50 per cent. reduction—25 per cent. because he is a single person and 25 per cent. based on his status. If he is the liable person but he is married, even if he is married to another student, he will get only a 25 per cent. reduction. If he is at home with one parent, he will get a 25 per cent. reduction. If he is at home with both parents, the full charge will be payable by that household. If there is a group of students in a flat, the position is not at all clear, unless they will be exempt under clause 4 in England or clause 72 in Scotland. It is a matter for interesting speculation what happens if one student fails his examinations so that one failed non-student is staying in the flat.

We in Scotland are proud that our failure rate is below the national average, but we did not realise that it would be a financial necessity to coach our colleagues through to avoid this chaos. I accept that I may have got that example wrong, but I hope that the Minister understands that I do not make these suggestions lightly. I have tried to canvass the best opinion that I can find, and that is the best advice that I can get.

Mr. Portillo

The reason why the hon. Gentleman is not entirely clear is that much of that will be covered by regulation. My right hon. Friend the Secretary of State and I have made these points clear in press conferences and the Secretary of State for Wales made it clear in his reply last night. Since the hon. Gentleman is obviously unclear about this, I undertake to make it clear in my reply this evening.

Mr. Dewar

That is a handsome offer and—I will not say that it ensures my presence, as I would have been here out of curiosity in any event—I shall certainly be present.

The point that I am making, perhaps rather over-lengthily, is that there are great areas of confusion, which are compounded by the fact that the system operates on a daily rate. I understand what the right hon. Gentleman says about a person having to have a principal residence or dwelling and that if somebody comes casually to visit that will not count. Nevertheless, there are great problems. I can think of categories of people, for example, Members of Parliament, and of interesting little tricks of the trade that may arise there. [HON. MEMBERS: "Oh."] Yes, that may well be. The position is not clear.

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

I am interested. Perhaps the hon. Gentleman will explain what he means by "tricks of the trade" by Members of Parliament.

Mr. Dewar

I certainly hope that no right hon. or hon. Gentleman would in any way seek to escape his liability. I have no doubt that sometimes people do. I can think of privatisation issues where rules have been bent. Those are exceptional cases. All I am suggesting is that there are great complexities and doubts.

I will give the right hon. Gentleman another example—the oil rig worker. As we know, under the poll tax there has been endless litigation and no satisfactory outcome. Such a worker may be away from home for over half a year, when the days are aggregated. That raises the question of how his liability can possibly be calculated on a daily rate.

Mr. Heseltine

Have we not seen the clearest example of scaremongering, invention and allegations without foundation? When challenged about the "tricks of the trade", the hon. Gentleman has nothing to say because his comment was wholly without foundation.

Mr. Dewar

The right hon. Gentleman has gone red in the face and he is making himself look ridiculous. I repeat that in a large number of areas there will be complexities and difficulties of interpretation which will lead to great confusion and a good deal of unhappiness.

Mr. Heseltine

That is a climb-down.

Mr. Dewar

It is not a climb-down at all. The right hon. Gentleman is, to say the least, seizing at any straw, if he is reduced to using that as an argument.

The other day the Secretary of State for the Environment put up a pathetic display about the 20 per cent. rule. When challenged to say why it could not be abolished in April next year, he said it was simply because income support levels had been set and it was impossible to change them. The reason is beyond me. We all know that every hon. Member is agreed that the 20 per cent. rule is indefensible. We have had it from the Audit Commission that its collection results in a net loss to the Exchequer. I cannot see that the technicality behind which the right hon. Gentleman shelters is any defence for the clear breach of principle in allowing an inhumanity and a financial nonsense to continue in a system where it has no place. It should go in April 1992. If the right hon. Gentleman had the courage of his own arguments, it would go then. To suggest otherwise is contemptible.

My view—I have to put it as bluntly as this—is that the Bill is a disorganised hypocrisy and few of its authors believe in it. Some at least would admit that in private. The Scottish Office team, largely still intact, attacked the so-called roof tax—a property-based system with capital valuations and a single person in the household liability—as an abomination. The team made it clear that it was a wholly unacceptable concept and said of the family home that it would be the family millstone, yet the team has ended up in exactly the same area.

Mr. Lang

When will the hon. Gentleman get round to answering the questions that I put to him during my speech?

Mr. Dewar

I know that the right hon. Gentleman does not like this, but I am talking about the proposals in the Bill before us and I intend to continue to do so. I am extremely interested in the arguments used in this debate in the past 24 hours or so.

Mr. Heseltine

Another "trick of the trade".

Mr. Dewar

It may well be.

Mr. Foulkes

Does my hon. Friend recall that the right hon. Member for Ayr (Mr. Younger) had himself registered at a fictitious address in the town of Ayr to deceive the electorate that his principal home was in Ayr and not, as we all know, in Stirling? Is that properly described as a "trick of the trade"?

Mr. Dewar

I have no idea, but that is an interesting anecdote.

On 11 November the Secretary of State for the Environment was challenged by the hon. Member for Norfolk, North (Mr. Howell), who said that the Government should just add a further 2.5 per cent. to value added tax. The right hon. Gentleman said that the Government were determined to make progress, but that they did not believe that progress would be made by the imposition of a further 2.5 per cent. to VAT. He said: the inevitable conclusion on my hon. Friend's proposals … is that every authority's spending is fixed precisely. Authorities have no capacity to raise additional revenue, and, to the most minute detail, central Government fix their expenditure. That would not be the right way to progress. I am grateful for that information, but I do not believe that that principle is operating in local government now. I do not believe that that is the general thrust of the policies advocated by the right hon. Gentleman and his colleagues.

The Secretary of State also argued that the council tax would maintain accountability. He said: Thirty-eight million of the 42 million adults in Great Britain—that is, more than 90 per cent.—will be directly taken into account by the council tax."—[Official Report, 11 November 1991; Vol. 198, c. 786–789.] I regard that as sophistry. I remember trying to argue that under the old rating system, and the successor that we were proposing, everyone in a household made a contribution towards its running and should be taken into account and counted as being part of the taxation system. I was vilified by Scottish Office Ministers for holding such a view—vilified is a word that I can take seriously. I was told that only one person was legally liable and therefore only a small percentage of the electorate was covered by the taxation system. I was told that that was totally unacceptable.

Now the right hon. Member for Henley has the brass neck to repeat that argument and attach it to a system to which, in terms of the arguments that he and his colleagues used for so long, it does not apply. I thought that that was the most outrageous claim from the right hon. Gentleman in recent weeks until I remembered some of his other remarks. He said that the Scots had complained when they got a separate poll tax bill and asked why they should complain now that they do not. That was a remarkable statement. The right hon. Gentleman also said that the only thing standing in the way of the abolition of the poll tax was the Labour party. Such comments will merely lead the right hon. Member and his colleagues into disrepute.

Mr. Malcolm Bruce

Surely it is remarkable that, when the Secretary of State for the Environment was asked why he did not oppose the poll tax in Scotland when he did so in England, he replied that he thought the Scots had wanted it. Is that not a sign of how out of touch Ministers are with the people of Scotland?

Mr. Dewar

That is unfair to the right hon. Gentleman as I believe he is being misquoted. What he said was even more alarming. He said that he had asked the Secretary of State for Scotland if the Scots wanted it, and then he believed him.

Mr. John Butcher (Coventry, South-West)

It is the duty of the Opposition to oppose and the hon. Gentleman is doing so with great vigour. I pay tribute to the Scottish Labour party for spearheading the Opposition's view on the community charge and local government reform. If the hon. Gentleman's speech is to have any intellectual and moral integrity on behalf of the Scottish Labour party, he should, in all conscience, answer the specific questions put to him by my right hon. Friend. The hon. Gentleman, more than any other hon. Member, has a duty to state his party's proposals and their effects on the Scottish people.

Mr. Dewar

If the hon. Gentleman believes that the relationship with local government should depend for ever on the ever pressing presence of capping power, he takes a gloomy and miserable view of the future of that relationship.

The Secretaries of State for Scotland and for the Environment have a great influence on spending in local government because they control the revenue support grant and the ability of additional expenditure to attract that grant. There are a number of ways in which they can, should and will influence responsibly, but the idea that one must spend one's time in a constant war over capping is mistaken.

In recent weeks the right hon. Member for Chingford (Mr. Tebbit) has made his stand against a single currency in Europe. He said that if we had such a machinery it would leave the Chancellor of the Exchequer as nothing more than the treasurer of a rate-capped local authority. That tells us something interesting about the disunity on the European issue, but in the context of the Bill it is also interesting. The right hon. Member for Chingford is not noted for his lack of imagination or his inability to think of vindictive comparisons. Obviously he could think of nothing more wounding to say about the Chancellor than that he should be compared to the treasurer of a rate-capped local authority. The Government should not seek to rely upon such capping powers. We do not want such a machinery and we would not rely upon it.

Mr. Lang

The hon. Gentleman will recall that his former colleague, Lord Ross of Marnock, said that a Secretary of State should have necessary reserve powers to restrict grants where an authority fails to maintain standards or spends excessively. The hon. Gentleman's predecessor thought that such capping powers were necessary, as did Bruce Millan, now a commissioner of the European Community. Will the hon. Gentleman now answer the questions that I put to him?

Mr. Dewar

I have already answered—we do not believe that such powers will be necessary.

The Secretary of State was a decade out when he spoke about this recently. We put section 5 of the Local Government (Scotland) Act 1966 on the statute book because it was thought to be necessary at the time. I was not party to that decision. However, no Secretary of State ever found it necessary to use it and we would not wish to see those powers restored. We would not contemplate using those powers and therefore the comparison is wrong.

Mr. Bill Walker (Tayside, North)

Can the hon. Gentleman tell us why real deductions in local government expenditure took place in Scotland under the Government of 1978 as a result of the decision taken—quite properly in my view—by central Government to control expenditure? The reductions were not small, but massive.

Mr. Dewar

I am extremely grateful to the hon. Gentleman, who so often rides gallantly to the rescue of his enemies. That is exactly the point I was seeking to make earlier. The decision in 1978 was an unpleasant one, but it was thought necessary at the time. The reductions were made by cutting the rate grant support from central Government. That machinery is always open to a Government. At that time the Government rightly chose not to use the capping powers that existed.

Mr. Harry Ewing

I apologise to my hon. Friend for intervening and I know that he has been generous in giving way. The Secretary of State referred to the late Lord Ross but it is important to clarify that the Secretary of State is not talking about capping powers—those powers were described as indicative costs. At no time did any Labour Secretary of State, either Lord Ross or Bruce Millan, allow a local authority to set its budget and then cut that budget in the knowledge that cuts would then be made to public services. Unfortunately, the Secretary of State has deliberately misrepresented the late Lord Ross.

Mr. Dewar

I appreciate that my hon. Friend speaks from his experience in the Scottish Office.

Ministers are fond of complaining bitterly about the draconian way in which Labour Governments have controlled local authority spending in the past. It seems rather odd therefore that they should now complain that we would not use the capping machinery. We regard such machinery as redundant.

I have given way a great deal and I do not want to prevent other hon. Members from contributing to the debate. In conclusion, I believe that the story of the past two or three years has been an unhappy and disreputable one. Those who have followed the debate in the past few weeks will know that I have read the press releases that were put out in the past by hon. Members who are now part of the Scottish Office team. My fax machine used to go mad every Sunday when yet another letter to cheer me up was sent by the then chairman of the Scottish Conservative party. Hon. Members will remember when the Minister of State at the Scottish Office had that dignity.

I re-read one such letter from the hon. Gentleman this morning and it was full of words such as "deceitful" and "disreputable". The hon. Gentleman predicted that a property-based tax on a capital valuation, taking everything else as it was at that time, would produce a tax of between £30 and £40 per £1,000 of the value of a house.

I accept that the £140 sweetener must be taken into account, but the figures are so dramatically wrong, even taking account of that, that I can think only that they were put about with malice as scare stories. Such malice would, no doubt, be engaging at a fringe meeting of Young Conservatives, but it is alarming coming from a Minister of the Crown.

When I read the Minister's remarks, the words "disreputable" and "deceitful", which he used cheerfully about Labour Members, struck me as a useful vocabulary when considering his efforts. I find intellectually contemptible the way in which Conservative Members have stood on their heads when adducing such arguments.

We then had strong advice from the right hon. Member for Henley to read the Municipal Journal. When I examined the issue of that publication for 8 November, I noticed a splendidly robust quotation from Mr. Roger Humber, director of the Housebuilders' Federation, who said: Mr. Heseltine is talking absolute nonsense. Mr. Humber will find that the right hon. Gentleman has a habit of doing that, certainly when dealing with local government taxation and house building statistics.

From Conservative Members and Ministers we have had bluff and bluster. They are attacking proposals from the Labour party which are sensible and coherent. In Scotland we have a valuation base that was put together in 1985 and is still hardly out of date, even if the system had run on. It is intact and would be a practical starting point. We propose to build on it, to move from that practical starting point to a reformed, improved and modernised rating system. That would be infinitely preferable to a scheme which was spawned by political disaster, and cobbled together in considerable panic.

The Secretary of State said that his system was fair. We question that. He also said that it was welcomed. As he said, no tax is likely to be popular. It is interesting to note that in the MORI poll of 1 November it was discovered that fewer than one in five favoured the so-called council tax. That poll was better for my hon. Friends than for Conservative Members, and that is true of most polls these days. At least we reached the 25 per cent. mark. The Liberals achieved only 11 per cent. with their proposals. I take some consolation from that.

We have a Government who dislike and distrust local democracy, and the reason is obvious. It is because, as the Secretary of State has constantly said, local authorities tend to be controlled by the Labour party. That does not happen by magical chemistry or conspiracy. It happens because people vote for and elect Labour candidates.

There is something shabby in a Government making great play of the fact that they lose elections at the local level. The result is that we are plunged into a situation in which, despite the quotation from the Secretary of State for the Environment to which I referred—about the need to prevent local government being controlled in every detail by central Government—in Scotland, only 11 per cent. of revenue is in local government control. The Secretary of State has only one argument and policy, and that is ever more brutal capping. That is not an argument for local democracy. Rather, it is an argument against the Government and their attitudes.

I fear that the Bill will do no service for Parliament. Nor will it be of service to the people of the United Kingdom and particularly to the people of Scotland. In Scotland it will buttress and reinforce the conviction that the Government are running out of energy and ideas and, best of all, running out of time. They should go.

5.43 pm
Sir Richard Luce (Shoreham)

I enjoyed the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar) because it was entertaining. Although he spent much time criticising the council tax, only towards the end of his remarks did he touch on the alternative proposed by the Labour party and he did that without enthusiasm. Indeed, he failed throughout to answer the challenging questions put to him by the Secretary of State for Scotland. I can only conclude that the hon. Gentleman is not convinced that the Labour party has better proposals for dealing with local government taxation.

In 21 years in this place, I have not before found it possible to speak with enthusiasm about any local government taxation system. At least on this occasion I can give a modest welcome to the council tax. It is certainly a marked improvement on the community charge and it is infinitely better than Labour's proposals for a return to the rating system, remembering the intense pain that that caused to many people through the 1960s and into the 1970s. The fact that the Labour party is not proposing to introduce a formula which would allow for restraint in public expenditure by local government means that its ideas could prove disastrous.

Mr. Harry Barnes (Derbyshire, North-East)

The right hon. Gentleman says that the council tax is an improvement on the community charge. In which way is it an improvement?

Sir Richard Luce

I was talking not about the Labour party proposals, but about the council tax—

Mr. Barnes

Answer my question.

Sir Richard Luce

If the hon. Gentleman will listen, he will see why the council tax is an improvement on anything that we have had in post-war years. It is a vast improvement on the rating system as proposed by the Labour party.

The four factors that must be looked for in a local taxation system are a measure of fairness, some reflection of ability to pay, an adequate measure of accountability and the maximum of administrative simplicity. No one can have any illusions about any form of local government taxation being perfect. It is almost an area in which one cannot win. There is bound to be an element of rough justice. But the Government's council tax proposal achieves a judicious balance of those elements. It may not be perfect, but it is better than any of the alternatives.

Mr. John Maxton (Glasgow, Cathcart)

I assume that the alternatives about which the right hon. Gentleman is speaking include the poll tax. If my memory serves me right, he was a Minister when both poll tax measures went through the House. If he felt that that system was so wrong, why did he remain in that Government?

Sir Richard Luce

The hon. Gentleman has got me wrong. On all the taxation system that we have had since the war, including the rating system and then the community charge—he is right to say that I supported the latter—the council tax represents an improvement. That is all that I am saying.

I hope that, when replying to the debate, the Minister of State will deal with some points that I have to make about the standard spending assessment. But first I have some general comments on the Bill, in particular on accountability. It is important to bear in mind the fact that the Government are allowing local taxation to be increased to the extent of 15 per cent. of total resources. Some would argue that if it is to be at that low level, relatively speaking, we should do away completely with an element of local taxation and fund it all from central Government.

I believe that it would be a profound mistake to do that. For a Government who believe in decentralisation, it would be a damaging policy. I should have preferred a larger element of local funding to central grants and other forms of revenue. Indeed, had not Labour-controlled authorities in the past driven small businesses out of the inner cities and acted in a thoroughly irresponsible way, creating unemployment in those areas, I should have preferred more flexibility in the business rate system. However, experience does not encourage that.

I am glad that the single bill which people will receive under the council tax will contain two elements—property and personal. Constituencies such as mine have large retired populations and I am concerned about the effect of the Bill on widows and single people. They were heavily hit under the old rating system and the position of most of them was eased considerably under the community charge system. I watch with considerable anxiety to see whether they will lose out under the new council tax. I should be grateful if my hon. Friend the Minister will reassure me on that matter when he winds up.

As my right hon. Friend the Secretary of State said, in two-tier authorities it is important that bills should contain two elements to make it clear to members of the public what element relates to the county, for example, and what element relates to the district. Hitherto, one misfortune of the systems has been that people are not sure who is responsible for certain expenditure.

I have corresponded endlessly with my hon. Friend the Minister and his predecessors on the standard spending assessment. He will no doubt be saying, "Thank God he is leaving Parliament at the next election". Nevertheless, the issue will remain because, under the new council tax system, it is essential that local authorities and the public have absolute confidence in the fairness of the method of or criteria for calculating the standard spending assessment. It becomes even more acute because the Government—rightly—decided to extend the potential to cap authorities spending less than £15 million. The standard spending assessment system must be based on local authorities having as much confidence as possible. In my area, the two district councils of Arun and Adur—one of which is Conservative and the other Liberal—are profoundly concerned about that issue.

I realise that, whatever system we have, it will be complex. The previous system was even more complex and the Government have done much to simplify it. The present system has six major service blocks, ranging from education to highways and maintenance. The "other services" block contains issues such as environmental health. Also taken into account are population factors, commuters, visitors, density and sparsity of population and the social index, which are all designed to reflect the physical, demographic and social characteristics of each area, so it is bound to be fairly complex. I accept the argument that some complexity cannot be avoided and that there will be an element of rough justice, but the experience in my constituency demonstrates that rough justice can go too far. The disparities in the per capita grant received in my district compared with the neighbouring districts of Worthing and Hove have been such in the past two or three years that much injustice has been caused. Anyone who glances at those areas—it is no disparagement of the neighbouring authorities—will see that the social conditions in my area are acute compared with those in neighbouring areas, yet the per capita grant that my area receives from central Government is much lower. Something is wrong with that and the formula is too crude.

Will my hon. Friend undertake, over a reasonable period and before the council tax is introduced, to carry out an independent review of how that works, taking into account the views of a cross-section of authorities? That review should be published and an adjustment to the standard spending assessment should be considered. In the meantime, there are some arguments for suggesting that the smaller the authority, the rougher the justice and the cruder the formula. Therefore, there is an argument for the higher authorities—in my case the county council—to have an element of discretion in dispersing funds so that they can iron out the worst anomalies and disparities between the various district councils. I hope that when my hon. Friend winds up he will comment on that and consider my proposals, which are intended to be helpful, as positively as he can. I give my encouraging support to the Bill.

5.55 pm
Mr. Jimmy Wray (Glasgow, Provan)

It must be made clear that the Labour party is not to blame for the poll tax which the Government introduced. The nation should he told about the chaos, poverty and hardship that the Government have created in deprived areas throughout the country. I am not too worried about the new council tax because I doubt whether it will see the light of day. Will the nation vote the Government back in? They will be voted out and it will be a long time before we have a Conservative Government in Britain again.

Let us consider democracy in local government and the three Secretaries of State for the Environment who have had a go at local government taxation. The right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), the right hon. Member for Bath (Mr. Patten) and now the right hon. Member for Henley (Mr. Heseltine) have all been unsuccessful and got it wrong. Who would have thought that, as we enter the 21st century, 7.5 million people would have been served with warrants? Yesterday, the Secretary of State for Scotland made a statement condemning local councils for overspending. The poll tax collection rate throughout Britain varies from 33 per cent. to 93 per cent. Non-collection is not confined to Strathclyde and Glasgow but applies also to the shires, which collected only 82 per cent. and inner London, which collected only 66 per cent. Scotland is owed some £437 million in unpaid poll tax.

Local authorities should be given some money to get them out of the mess. Although the Secretary of State for Scotland condemned district and regional authorities such as Lambeth, Hackney and Strathclyde, no one could say that they have not tried to collect that money. Strathclyde regional council even decided to hold an auction because the ruthless Government have allowed it to deteriorate. It is nearing bankruptcy and has had to make 720 employees redundant, which is a sorry state of affairs.

Mr. William McKelvey (Kilmarnock and Loudoun)

There are difficulties in collecting the charge. Strathclyde authority undertakes the task diligently, but still faces problems. I received a letter this morning from the social security office stating that it cannot take anything off the income support of one woman who is being pursued for arrears because she is too poor. However, the Government refuse to abandon their policy of making everyone pay 20 per cent. although they know that it costs twice as much to try to collect it as the amount that they actually collect. They penalise poor people such as my constituent.

Mr. Wray

I sympathise with my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) but surely he has been a Membeer long enough to know that the Government do not care. Conservative Members are not interested in the poor, but are interested only in their own shares and in the rich. During the Government's term of office they have cut £600 million from the Strathclyde budget for services, so that council has to increase its bills this year by 32 per cent. The Government are guilty of mismanagement, gross neglect and maladministration, and should be turned out tomorrow because they are not fit to govern.

It annoys me when I hear the criticisms that come from the Secretary of State for the Environment. He talked about what my hon. Friend the Member for Dagenham (Mr. Gould) said. I shall quote a couple of paragraphs to see if anyone knows who said them: Once implemented and through transition, 1 believe the new system will prove enduring and a vast improvement on the status quo. It was said at the annual conference of the Association of District Councils on 1 July 1988. [HON. MEMBERS: "Who was it?"] Maybe hon. Members will know who it was when they hear the next part. Three years later the same person said: I'll tell you about the poll tax. We were bounced into it quickly because there was such a fuss about rates in Scotland and we were bounced without thinking because of the political fuss. That was said by the Prime Minister. It was easy to see that he was running for his job then.

Why do we have to wait until 1993 before the poll tax is abolished? We know what the position is. In Strathclyde alone, 1.25 million warrants have been issued; many others have been issued in various constituencies. The position is so bad that the sheriff officers are afraid to go into homes. The saddest story I heard was of a sheriff officer going to a door to collect items that were to be sold at auction. He said that the woman in the house had only a table and television, and had spent the night before polishing the table so that it would bring in a wee bit extra to clear her debt. Is that the sort of Government we have? Yes, they do not care.

Why will not the Government abolish the 20 per cent. rule? Why are they allowing the ratepayers and taxpayers of this country to go on throwing money down the drain? It costs the Government 19 per cent. of what they collect if they collect 6 per cent. of the charges. Why do not the Government abolish the whole damn lot and give the people a free run for Christmas? They should do so if they have any compassion.

Mr. George Howarth (Knowsley, North)

They are stony-hearted.

Mr. Wray

Yes, they are stony-hearted.

I have taken a long look at local government finance. The Government collect only about 14 per cent. of the charge and the rest comes from central Government—is it worth collecting it? Some £4.25 billion has been thrown away on trying to get the people out of the mess into which the Government have placed them and £5,795 million has been poured in to try to save the Government from embarrassment. But the people of Scotland and Britain will never forget the sad 13 years in which people have been brought to their knees. The most deprived regions are still suffering from cuts in social services, the police force and education. The Government are hoping to carry on and according to the Secretary of State for the Environment the people will have to put up with the tax until 1993.

The Government have made a mistake with the new tax from the very start. They have valued the average house at £80,000. They were told months ago when they first set out valuations that they were wrong by between 16 and 26 per cent. Some of the houses that were valued at £80,000 were worth 26 per cent. less and others 16 per cent. less. The Government were warned about their assessments by the Local Government Information Unit and by building societies. When they try to collect the money, with all the various bands involved, they will need the St. Francis pipe band to get out of the mess. They are worried about the people in the top bands and they are ensuring that those in the highest band cannot be made to pay more than three times the amount charged to those in the lowest band. The Government are protecting very wealthy people.

What nonsense it is for the Government to say that they will give a 25 per cent. discount for everyone in every household—25 per cent. for a pensioner in the poorest slum district and 25 per cent. for a millionaire living in a penthouse. If they consider that to be fair they have got it wrong again.

The Government do not want to get rid of capping and have retained it in the Bill. The only reason that they have not capped local authorities as much as they would have liked is because of the word "unreasonable" contained in the legislation to implement the poll tax. However, the new Bill does not contain the word "unreasonable". If that word had not been included in the poll tax legislation, the Government would have capped about 31 local authorities in Scotland for overspending by a small percentage. It is a sad day when the Government put the jackboot into local authorities because of their expenditure—democracy and accountability have gone out of the window. The new system is a costly business for local authorities because big changes have to be made, computers are brought into education departments and offices which means extra cost. Local authorities also have to consider gearing. When a local council increases a bill by £1, it means a 6 or 7 per cent. increase for the charge payer, which is bad news for them.

The poll tax meant a bonanza for private landlords—the Rachmans in Britain. About one week before the Act came into force to abolish rates those landlords were running about trying to get their tenants to sign to agree a rent increase, and they will do the same thing with this legislation. How will the Government deal with multiple occupations? They will tell the Rachman landlords to collect the money. They might get half the money—the other half will go in the landlord's pocket. There will be no registers. When the properties are valued they will be looked at from the outside so there could be 30 or 40 people inside. I know one place in Alliston street in which there are 20 or 30 people in one room sleeping in hammocks. If valuers do not go inside the properties, how will they be able to value them? In some streets all the buildings look alike although they may contain three, four or even six apartments, and it is unfair to place them all in one band.

The Government say that they will use the services of estate agents. Two or three of them have been out to value my place and have given me three different valuations—none of them right.

Mr. McKelvey

I advise my hon. Friend not to tell us what the valuations were.

Mr. Wray

I certainly will not; I am afraid to.

Even some Conservative Members have been grumbling about the bands and asking for another two or three at the top of the ladder because of the jump from £160,000 to £320,000. But some houses in this city are worth £2.5 million. What band should they come under? I hope that a new Government will come to power so that the council tax cannot be implemented. [Interruption.] I am running out of material.

Mr. John Battle (Leeds, West)

But my hon. Friend is using it well.

Mr. McKelvey

Before my hon. Friend stood up to speak he told me that it was a scandal that so little time is being allowed for a Bill of this magnitude. It is all the more astonishing that Scottish Conservative Members should not have learnt the lessons from the implementation of the poll tax which they—backed by the legions of Tory Back Benchers who are not here today—thrust on the people of Scotland. They should at least have learnt not to push through legislation like this in so short a time, thereby denying the opportunity to discuss it thoroughly.

Mr. Wray

It is difficult for any Government to justify the type of legislation that has been passed here over the past three years.

The average council tax in England will be £400, in Scotland £270 and in Wales £163—or so we are told. But I think that the figures are wrong. The Government should realise that the time has come to fund local authorities centrally. Democracy has been thrown out of the window by this Government and we shall return to democracy only with the return of a Labour Government pledged to bring in a fair tax system based on ability to pay. Our document takes incomes into consideration; the council tax does not.

I will be glad when a Labour Government are returned to power and we implement the fairer system known as fair rates.

6.13 pm
Miss Emma Nicholson (Torridge and Devon, West)

My right hon. Friend the Secretary of State said yesterday that, despite the Opposition's fears and unyielding opposition to the proposed council tax, they managed to muster only 20 Members for the debate. I see that that number has fallen still further today—[Interruption.] Despite the laughter, only 14 or 15 Opposition Members are able to be here at this early hour for what will be a lengthy debate. What is more, I see that the Liberal Democrats cannot be bothered to be present at all, such confidence do they have in their proposals and their amendment. [HON. MEMBERS: "Where are the Tories?"] I shall not respond to blandishments inviting me to criticise my hon. Friends for not fielding more people. After all, we support the Government. We have no need to summon up armies to support our logic. It is the Opposition who need to oppose our proposals, and that they have significantly failed to do, to judge not only by numbers but by the lack of content in their speeches.

I welcome the council tax, and I find it difficult to understand the reasoning behind the Opposition's staunch refusal to see its virtues. I am forced to conclude that their opposition is comparable to their opposition to the £140 reduction in the community charge, against which many Opposition Members voted. Their opposition derives from a mulish obstinacy which directly harms the electorate; it does not rest on logic or reasoning, and it is not worth listening to.

The council tax, by contrast, responds to the electorate's wish to maintain a tie between local government revenue-raising and housing, thus identifying a centuries-old notion of ability to pay. I suggest that that notion of ability to pay still applies. Most people who live in large houses are more able to pay than those who live in small ones. Whether or not that is an accurate assumption, it became clear in the lengthy debate on the community charge that the electorate wanted us to retain that tie.

Mr. Maxton

It is interesting to hear the hon. Lady stress the centuries-old tradition of the link between property and ability to pay. That being so, why did she support the poll tax, which did not meet that criterion for a local tax?

Miss Nicholson

I do not blame the hon. Gentleman for not listening to some of my statements on the community charge, but I pointed out at the time——

Mr. John McAllion (Dundee, East)

Yes, but how did the hon. Lady vote?

Miss Nicholson

I pointed out at the time and in the way I voted—and I say again now—that it is the country's perception that a house provides a notion of ability to pay, even if it is not a truly accurate assumption. We all know, for instance, that under this Conservative Government wealth has been created more readily, so people have had more money to spend, and they do not spend it just on where they live. Their sense of self-worth is not based solely on their dwelling place. They also buy video recorders, tape recorders, televisions by the armful, cars and all sorts of other things. People's wealth is visible in a variety of ways. But, as I said, the electorate at large still believes strongly that the house in which someone lives reflects at least in part his or her ability to pay.

This tax is a light touch on local wallets, since it raises only 25 per cent. of local authority revenue, the remainder being raised from and distributed by central Government taxation systems. I give credit to the Government for this considerable and generally welcome innovation. That leaves the United Kingdom with the second lowest rate of value added tax in the whole of Europe. That is due to our large 25 per cent. of zero-rated items. We are managing an extraordinarily intelligent mechanism to raise more money while still having the second lowest VAT average in the Community. I congratulate the Government on that splendid achievement.

The council tax recognises the duty and the desire of the responsible citizen to contribute to local services. Opposition Members may smile. Some irresponsible Opposition Members did not wish to make a contribution. Several of them had such a desire to duck their contributions that they were found guilty in court. The desire to contribute to services is a badge of civic dignity, and the Bill will help to build a responsible society.

The council tax will exempt or grant a quarter discount to students, student nurses and YTS trainees and will thus build a caring society. It recognises the crucial importance of food production, thus contributing to the building of a practical society. It is thoroughly sensible—and what more could one ask of a mechanism for raising local government revenue?

The Opposition do not wish to be sensible, but that is nothing new. That gives me an opportunity to look at their uneasy and uncomfortable proposals which smack of their obsession with the continuance of the command economy. Perhaps I should say command extravagance and incompetence and, ultimately, the stagnation by command that socialist systems produce. The Opposition propose large-scale meddling in private matters, and that lies at the heart of Labour's obsession with a fair rates system. Their system would not work without an army of snoopers. [Interruption.] There is an overlarge army of Scottish Opposition Members. If I had my way, there would be a fair system of Scottish representation. There would be fewer Scottish Members, and none of them would be Labour. [Interruption.] The Opposition cannot down a good Conservative.

Labour's fair rates system smacks of that party's usual incompetence and, even more sadly, of their naive and unrealistic belief in the perfection of man-made systems. What does Labour propose? First, in the most incorrigible, sad and old-fashioned belief, it is determined to return to the rating system based on 1973 values, a truly crazy idea. Secondly, Labour proposes a new system of valuation, a second earthquake after its reversion to the early 1970s, and that system will be based on a rolling revaluation of 22 million properties based on four values, the first of which is maintenance and repair costs. Someone will have to call to see whether I have managed to replace my back door with one that has glass panes instead of wooden panels. It is important that maintenance and repair costs are taken into the rolling revaluation on the critical first valuation. How does Labour propose to work out rebuilding costs, the second of its four values? The other two are rental values and insurance values. One can see the chaos and confusion that such a dreaded system would create.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) said that people would pay more than they needed to pay, but that is possible only if one of two events occurs. First, it can happen because of extravagance on the part of those who spend taxpayers' money such as, dare I say it, the councils in Lambeth and Camden where 40 per cent. of the electorate leave every year. Those people vote with their feet and get out. The second cause for people to pay more than they need to pay would be the introduction of a cumbersome mechanism for identifying and collecting tax revenue. The fair rates system smacks of both those matters.

I suggest that Labour's proposals are not even supported by its Front-Bench spokesmen. We do not need to go far to find all too revealing quotes. On 5 October, on "Any Questions", Mrs. Margaret Beckett said——

Mr. Deputy Speaker (Mr. Harold Walker)

Order. We usually refer to hon. Members by constituency.

Miss Nicholson

She said that there was "no question" but that they would replace the council tax with their rates system. On 17 October another Opposition spokesman said that Labour would "amend the council tax" and scrap the 1973 rates stepping stone. A third Opposition spokesman said that Labour would … repeal it in almost all circumstances", but might pick up the council tax valuation register.

I think that I am correct in saying that over the past four years Labour has adopted 70 different positions on local government finance. That puts the author of the "Kama Sutra" in the shade. Labour has suggested capital value rates and a twin tax—which sounds like Dracula and his brother—of local income tax and roof tax. It has suggested a floor tax which gives me, and I suggest the electorate, cold feet. I shall tell the Serjeant at Arms about that because we need more floor space in the building for our secretaries.

Labour has been twisting and turning and has offered a variety of local income taxes that puts even Heinz to shame. It has adopted a number of positions that I have already referred to in perhaps an unseemly manner. I could not support those proposals even if I were the daughter of a coal miner. I am the daughter of an MP who actively assisted coal miners and I am remarkably glad to support the Government's sensible and sane proposals.

As I have said, the Liberal Democrats have so little confidence in their proposals that they seem to have left the SDP to carry their banner, which I am sure that that party could do with far greater competence than the Liberal Democrats. The local income tax would be difficult and complex to create and to continue, tasking the Inland Revenue, as it would, as the agent of collection. It offers the horrific uniformity of a rate throughout the year that will be the same for everyone. Thus far does the Liberal Democrat imagination take one, and, lo and behold, it proposes a variety of adjustments at the year end. Is that really local initiative? The Liberal Democrats would tax wealth creation and there would be a little bureaucrat in every town hall. A high local income tax would create debtors, destroy jobs, and drive out wealth creators.

The Inland Revenue operates on the basis of where people are employed and not on where they live. Those of us who have been employed all our lives in real businesses know that. Therefore, the hugely complex computerised Inland Revenue system would have to be recreated. A new collection point would have to be added to the existing system. This new machinery would be created for a fictitious local additional accountability that would give more authority to local councils. There would be a creation of new power bases for no new benefits to the electorate.

Both Opposition parties offer systems that do not help individuals or families—the people whom we, the Conservatives, are pledged to serve. Instead, they offer more bureaucrats.

Mr. David Nicholson

My hon. Friend has made an effective attack on the proposals of both the Labour and Liberal parties, but she has not mentioned one of the greatest weaknesses in those proposals, which is that both parties have consistently voted against the Government's attempts to curb excessive local government spending through the capping mechanism. The Labour party—I should not be surprised if the Liberal Democrats thought this way too, but I have not explored their policy on this—is committed to abolishing the capping mechanism. Would that not leave council tax payers open to the burden of extravagance in local government?

Miss Nicholson

I wholly agree with my west country colleague. We see things sanely and sensibly there.

Both Opposition parties are pledged only to help bureaucracy. In the case of the Liberal Democrats, that is their favourite repository of power—the local council officials. As a result of the Labour party proposals, new armies of snoopers would arise. If Labour Members fail to see the truth of that, then they are even more foolish than I thought. Only the Conservative proposals will raise the necessary sums of money for appropriate local government expenditure with a light touch and with fundamental fairness and sureness. I support the Government.

6.32 pm
Mr. John Cartwright (Woolwich)

The kindest thing that I can say about the speech of the hon. Member for Torridge and Devon, West (Miss Nicholson) is that she obviously believes that attack is the best form of defence, although I notice that she did not go into a great deal of detail in defending the Bill.

It may seem a strange charge to level against this Government that they are imbued with the philosophies of Leon Trotsky, but when it comes to local government, this Administration seem to believe in the Trotskyite theory of permanent revolution. We used to have a local government Bill every two or three years, but now we have two or three local government Bills a year. No sooner do we get one system in place and local authority officials beginning to understand it than it is torn up and something new is put in its place.

We should spare a thought for the officials in finance departments in town and county halls who are trying to sort out the last remnants of the rating system while fighting a losing battle to cope with the problems of the poll tax. On top of all that, they are being asked to prepare for a completely different system which is apparently being worked out as we go along on some sort of do-it-yourself basis. Any hon. Member with recent experience of trying to help constituents with poll tax rebate problems knows that the system is creaking badly and is under considerable strain. It is at least possible that it will be unable to meet the timetable that the Government have laid down for this change. If it does, I expect that the resulting quality of service will be pretty poor.

The great tragedy is that the lessons of the poll tax fiasco have not been learnt. Once again, we shall drive complex legislation through the House at breakneck speed, with all the risk of major flaws not being discovered until it is too late. Perhaps there is a more fundamental lesson to be learnt. Once again, Ministers are trying to persuade a bewildered public that they have stumbled on a magic solution to the age-old problem of local government finance. We have seen them waxing lyrical about the Bill. Two Secretaries of State, on two successive days, have been ecstatic about the Bill, but we saw the same fervour and enthusiasm marshalled, a couple of years ago, behind the poll tax. How are we to believe that, this time, they have got it right? The more enthusiastic Ministers become, the more disillusioned the punters will be when the reality of the situation finally comes home.

I may sound cynical, but all my experience at the sharp end of local government, leading a London borough council, in the local authority association and as an original member of the Layfield committee, leads me to believe that there is no ideal solution to the problem of paying for local council services. We can think up no system—fair rates, council tax, poll tax or local income tax—that would be regarded as fair by everybody and that would have no snags, drawbacks, anomalies or defects.

Every time that we change the system, there are gainers and losers. We should by now have learnt that the gainers take their gains and, saying nothing, scuttle away to enjoy them, while the losers complain long and loud. That is an old political truth which I suspect the Government will once again discover when the full impact of the council tax hits their traditional supporters in London and the south-east.

If there is no perfect system, we are looking for the least worst solution, the one with the fewest drawbacks and injustices. I make no apology for saying that, ever since Layfield reported, I have been convinced that the best solution and the one with the fewest injustices is a local income tax. All those Conservative Members who painted spine-chilling pictures of the adverse impact of local income tax should explain why the system works in Europe and, beyond Europe, in North America. Are we so incompetent that we cannot make it work at least as well as it works in other nations?

The injustice of a property-based tax is evident. The value of a home is only a rough guide to the affluence of the person who lives in it and in many cases is no guide at all. We can all think of circumstances in which the value of somebody's home has gone up through no effort of his own. The area becomes fashionable, property values go up and suddenly he is sitting on an asset that does not reflect his income. For example, although the London borough of Hackney is not widely recognised as a centre of gracious living, 70 per cent. of the households there are in bands D, E and F, but in Rotherham, 84 per cent. of households are in bands A, B and C. That shows the impact of London property values on the tax.

Many of the people in higher-banded properties in Hackney, Greenwich, Southwark and other London boroughs will be council tenants who have no choice about where they live. They have to go where they are put and accept the property that they are offered. If that property has a high theoretical market value, they will have to pay a high council tax. The only answer that Ministers give to this problem is the celebrated dampener. It protects, to some extent, those in upper bands, but only at the price of imposing larger burdens on those in the lower bands.

I was interested to read the Conservative party's research department document on the Bill, dated 26 April this year. It said about the impact of the council tax: There will be no return to the very big bills that characterised the rates. With considerable courage, it went on to say: Indeed, the Government believes that only those who can afford to are likely to have to pay more in council tax than in Community Charge. Armed with that brave statement, I looked at the impact of the council tax on my constituents in the London borough of Greenwich. The Government have helpfully provided us with figures showing how the council tax can be worked out on the basis of this year's council spending. It makes frightening reading for my constituents. In the London borough of Greenwich, the average home is in band E.

Couples with a property in that average band would this year have been paying £213 more than they are paying in poll tax. Only 2 per cent. of households in Greenwich would pay less than the sum that they pay in poll tax. Single people would be even worse off. Those in average property in band E would be paying double what they are now paying in poll tax. That is £547 compared with £242. No single person in Greenwich would pay less than they are paying now. For many of my consituents, the switch from poll tax to council tax will be turning a crisis into a disaster.

It is not only Greenwich that has high-value property, but I have no doubt that Ministers will say that the outturn lies entirely with the borough's spending. That is true because Greenwich is spending 14.1 per cent. in excess of its standard spending assessment and grants will continue to be based on the SSA. It has been said already that the system is riddled with anomalies.

Does any local authority accept that its SSA accurately reflects its need to spend? I have never accepted that civil servants in the Department of the Environment in Marsham street, however sophisticated their computer programmes may be, can decide better than those on the spot what a local authority needs to spend.

I shall give one example of anomalies in the SSA system. The child populations of the London boroughs of Greenwich, Lewisham and Wandsworth are almost identical, yet the social service SSA per child is set at £271, £437 and £514 respectively. How can anyone accept that the methodology and the system are fair and reasonable when there is that sort of variation?

That leads me to capping. I speak about it with some authority because the London borough of Greenwich—I represent one of the constituencies within its area, and that is where I live—must be in the "Guinness Book of Records". It has succeeded in getting itself capped every year since capping began. It is the only local authority in the length and breadth of the land that can claim such a record. We know something about capping in Greenwich. I accept that the system limits total spending, but it does so at a pretty high level. It does not, however, protect local people from the impact of spending curbs.

The local authority has not been encouraged by capping to make itself so efficient that it can deliver good-quality services at a lower price within the spending limit. Indeed, the reverse has happened. Sensitive services have been cut to some of the most needy groups to enable the borough to make the political point of blaming the Government. That was entirely predictable. Unplanned cuts have been made at the last minute wherever they could be made quickly. As a result, day centres for the handicapped have been closed, the home bathing service has been scrapped and home help services have been cut. Basic services, including the provision of public toilets, have been brought to an end. Grass in parks has not been cut.

Throughout, the council has said, "It's not our fault, guy. It is not us. This is the result of poll tax capping. It is that rotten Government who have made us do all these terrible things." That is the basic problem with capping. It undermines the accountability of local authorities. It gives a poor local authority a perfect excuse to shift the blame off its shoulders and place it on someone else's. In a borough such as Greenwich the result is the worst of all possible worlds—high bills and a poor quality of service.

Mr. John Marshall (Hendon, South)

Does the hon. Gentleman believe that it is significant that Greenwich, which has a Labour council, seems unable to elect any Labour Members? Does that suggest to him that the Labour-controlled council of Greenwich may be the borough's greatest asset?

Mr. Cartwright

That thought often strikes me when I return home after an evening's canvassing. I think that I should sink to my knees and offer a prayer of gratitude to the London borough of Greenwich. Whenever I think I am in trouble, another inspired piece of lunacy comes forward which guarantees that I find more support, especially on council estates. Nevertheless, it is monstrous that we should have a capping system. It produces high taxation and a poor quality of service.

The Bill's epitaph may be "Another Chance Missed". When the Secretary of State for the Environment began this round of local government changes, I thought that at last someone had understood the fundamental error that had found its way into every previous attempt at reform for the past 30 years. The right hon. Gentleman seemed to want to try to find changes that would stick and that would bring some much-needed stability to local government. Once again, however, complex legislation is being driven through the House without any search for consensus and with all the risk that such a speedy process involves.

Once again, it seems that Ministers are convinced that they have found a magic solution to an age-old problem. Once again, we are changing local government finance in isolation from its functions and structures. I do not believe that the proposed tax will turn out to be any better or any more popular than the poll tax. I do not believe that it will work. We have been round the course many times before and I suspect that it will not be long before we have to go round it yet again.

6.46 pm
Mr. Bill Walker (Tayside, North)

I welcome the opportunity to talk about the Bill. As the House will be aware, one part of it refers exclusively to Scotland. Unlike many others, I have no complaints. I think that we have been presented with a sensible way in which to legislate. Where there is commonality throughout the United Kingdom, Scottish sections should be included in English Bills where that is possible. That removes much of the girning and grieving that is often the result of the timing of legislation rather than its content.

When examining local government financing we must consider the history of local government if we are to understand why we are where we are now. Earlier in the proceedings I intervened in the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar) to remind him of the problems that were caused by the Labour Government. I did not do so accidentally. Anyone who remembers the trust that used to exist between local government and central Government will realise that that trust began to vanish rapidly during the administration of the Labour Government and especially during the winter of discontent.

It is not surprising that that trust disappeared. During the period to which I have referred, local authorities were upset because that Government had, properly, in an attempt to control the economy, decided to reduce local government funding and, therefore, local government expenditure. A new set of problems was created and the trust that had previously existed, which all Governments had enjoyed, began to vanish. Against that background, the incoming Conservative Government of 1979 found that Conservative-controlled authorities had followed substantially the edicts and wishes of central Government and had restrained their expenditure, while many Labour-controlled authorities had become profligate to offset the impact of the reduction in support from central Government. The Labour authorities had decided to enable that to happen by increasing the rating burden.

When examining local government spending in 1979 it is essential to understand that central Government had to control the national economy. That was especially important during 1977 to 1979, when the country was rapidly going bankrupt and it was necessary, at the behest of the International Monetary Fund, to introduce measures that had a substantial impact on local government funding and expenditure. That was certainly so in Scotland, the area about which I shall speak.

When the Conservative Government came into office in 1979, there was a Conservative district council in Perth and Kinross and a Labour district council in Dundee. The Dundee council proceeded to spend in every way that it could and, accordingly, pushed up the rates. As a result, the Government had to introduce measures to control local government expenditure. The blunt instrument of cutting central Government grants meant that the pain had to be shared, but the view was taken that the measure should be implemented. Therefore, Perth and Kinross had to share some of the pain with Dundee. At the time, that appeared to be unjust and unfair and my view has not altered. It is sad that that lack of trust between central and local government has resulted in the councillors no longer running the councils. The truth is that the chief executives and the executives run the councils. In Scotland, the councils are substantially being run by NALGO.

We must find ways and means to achieve a balance between expenditure and accountability. I am not 100 per cent. enthusiastic about every dot and comma in the Bill, but I have been assured that I will have an opportunity in Committee to speak about the matters that concern me.

Mr. Ernie Ross (Dundee, West)

Will the hon. Gentleman give way?

Mr. Walker

I am happy to give way to the hon. Gentleman, with whom I collaborate regularly.

Mr. Ross

The hon. Gentleman said that he disagreed with Dundee council's decision to make up for the spending spree of the former Tory-controlled council, which was an attempt to bribe the electorate by spending all the reserves, with the intention of ensuring that the services provided would be reflected in the rates charged. He lauded the actions of the Angus and Perth district councils which did not follow that line. Would he tell the House who has run Dundee, Angus and Perth district councils since then?

Mr. Walker

During the period to which I referred, Dundee council was controlled by the Labour party. I stuck to specific areas and times. The hon. Gentleman is right that Angus district council is currently controlled by the SNP. He and I agree that it is most unsuitable to run anything, especially as it has no respect for the rule of law. Yet again, the SNP is not represented in the Chamber, which is usual when we are debating important Scottish legislation. Indeed, the SNP is even more part time than the Liberal Democrats, who I accused of being part time only the other day.

Although the hon. Gentleman and I rarely agree on political philosophy and thought, I respect his views. He is one of the few people whose views I do respect, because he holds them honourably and he does not trim them for personal advantage. Dundee is fortunate to have a man of his integrity representing it.

Mr. Maxton

I am glad that the hon. Gentleman referred to people not trimming their views. I hope that he will face the fact that he was one of the most loyal and ardent supporters of the poll tax. We should be grateful to know why he is now supporting at least the principle of a property tax. We should like to know how he intends to vote tonight. Quite clearly, this Bill should be called the "Abolition of the Poll Tax Bill". As he was such an ardent supporter of the poll tax, I wonder whether tonight he will vote "Aye" or "No" for this Bill.

Mr. Walker

I thank the hon. Gentleman for giving me the opportunity to put my views on record. He should have at least done me the credit of reading my paper, in which I made proposals for the structure and financing of local government. That is what fundamentally influences my attitude tonight. The Government took on board substantially what was contained in my—paper[Interruption.] I do not claim that that was by design; it could have been by accident—[Hon. Members: "Answer the question."] I am answering the question. My attitude to the Bill is conditioned by the proposals and objectives that I put forward.

I want to retain the community charge, but at much lower levels. I want to resolve the problems that resulted from the rebates. My paper dealt with those issues, but that is one aspect that the Government did not take on board. However, because they took on board substantial parts of my paper and because I am an honourable man, I feel that the least that I can say is that, although there are some matters with which I am unhappy, I support what they are attempting to do.

Mr. Harry Ewing

The hon. Gentleman has let the Minister off the hook. It is a mighty relief to the Minister to think that the country believes that the Bill is the brainchild of the hon. Gentleman—if that is a correct description of the hon. Gentleman. The Minister has been getting the blame for it for the last six months.

Mr. Walker

It is easy to see that the hon. Gentleman has the "about to retire" feeling. He has lost his edge and his sharpness. There was a time when the shafts of his interventions would have hurt. His shafts tonight were wide of the mark. I do not lay claim to inventing the Bill. I am explaining why it would be churlish of me not to recognise that the Government have accepted my proposals for resolving the problems of the community charge.

The point that I was making is fundamental. In the absence of trust, and where councillors are not really in control of a local authority, much of what they do is restricted by the wishes of organised labour. If the Government of the day, regardless of political complexion, are to control the national economy, they must have levers to control local government expenditure. That was why I intervened on the hon. Member for Garscadden. It was the blunt instruments used by the previous Labour Government that led to the winter of discontent. Labouv employees and Labour councillors lost faith and confidence in their Government and the trust that had previously existed was broken—[Interruption.] Labour Members do not like it because it is true. Central and local government used to work in tandem and harmony, but that disappeared.

It is because of that history that the House again faces the problem of what to do about the funding and financing of local government. The fact that the local element of the tax which will be met by the community is 11 per cent. of expenditure means that the tax can be contained at levels that everyone can accept. That is important. The problem with the community charge was substantially the level of that charge on individuals. That is why I and others suggested ideas to deal with the problem.

Some people in Scotland, including myself, feel that any tax related directly to property is not based on a sound principle. However, if we can keep the tax at a low enough percentage of the whole, it will go some way to resolving the problem. That is the message that I want to leave with my right hon. and hon. Friends on the Front Bench.

Sir Nicholas Fairbairn

Will my hon. Friend give way?

Mr. Walker

I shall give way in a minute to my hon. and learned Friend, whose views I hold very dear. [Interruption.] The Opposition find it funny, but I would never dream of looking into anything to do with Scottish legal matters without first consulting my hon. and learned Friend. There is no question in my mind but that if one wants the best advice that is the place to go.

The important thing to recognise is that any tax will be acceptable as long as it is kept at acceptable levels.

Sir Nicholas Fairbairn

I am most obliged to my hon. Friend for his compliment. However, let me advise him that if he ever comes to me for advice he must realise that he is coming to a simple fellow who sees his problem simply.

Mr. Maxton

And charges high fees.

Sir Nicholas Fairbairn

And never receives them.

Let me ask my hon. Friend a simple question. To steal only 11 per cent. of an old woman's possessions is no justification for stealing. How can my hon. Friend justify us going back to a tax on a capital asset called a home which does not bear an income and which bears no relationship to the services that it receives or does not receive, or to the income of the occupants, however many or however few? How can he justify going back to the wrongness of that simple concept?

Mr. Walker

I thank my hon. and learned Friend for putting his finger on the flaw in any property tax. I do not argue with him on the principle. However, I hope that I have made my position clear. As a member of the Standing Committee I shall have the opportunity—I hope that other hon. Members who will be commenting on the Bill tonight will volunteer to serve on the Committee—to address that aspect of the Bill. I promise my hon. and learned Friend that I shall not be silent and he will know from my track record that I am not likely to be.

Dr. John Reid (Motherwell, North)

In the spirit of collaboration which is pervading the evening, I congratulate the hon. Gentleman on having disclaimed the authorship of the tax which earlier I thought he was claiming. That could have been the worst mistake of his political career. Let me ask him an equally simple question to the one asked by the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn). The hon. Gentleman has said that a vital feature of the tax is its reasonable level. I should have thought that any tax passed at a reasonable level relative to the ability to pay would have been acceptable. But since the hon. Gentleman has decided to distinguish between the two, can he answer this question? Given the same level of reasonableness of the council tax that he is espousing tonight and the poll tax to which he was previously committed, which would he have preferred? If it is the poll tax, and he assumes that the same amount of money could have brought the poll tax to a reasonable level, why is he not voting against the council tax tonight?

Mr. Walker

Obviously I failed earlier when I explained that, because I am a sensible and reasonable chap and because the Government have substantially taken on hoard what was contained in my local government paper, which includes the structure of local government and other matters, not just finance, and which I believe was important, although I personally would have preferred to retain the community charge, which was never a poll tax—I made that clear to anyone who wished to discuss the matter with me—it perhaps should have been but it was not, it was a community charge—[Interruption.] It is not funny. It had nothing to do with the poll tax.

Local government in Scotland has seen a 9.6 per cent. increase in real terms in grants received from central Government over and above inflation since 1979, so all the nonsense that we hear about cuts must be properly addressed. Local government, at the behest of NALGO, is saying that it will not be able to cope in the year ahead because central Government are cutting its support too much. The facts do not stand up to that. There has been a 9.6 per cent.increase over and above the rate of inflation. During debates on the Bill the Government must make clear the additional support that has come from central taxation in real terms so that we can destroy the myth that somehow there have been cuts. The only real cuts that ever occurred in Government expenditure occurred under the previous Labour Government.

7.5 pm

Mr. John Battle (Leeds, West)

In the last twelve and a half years the British people have become used to the Government's approach of attempting to govern by image management. They are getting used to the Government introducing instant paper initiatives which, with regard to housing, health and local government, are sometimes not even worthy of the back of the envelope on which they are written. There is an illusion of substance, but often their proposals never address the real issues.

No member of the Government has a greater reputation for that strategy than the Secretary of State for the Environment. In his previous incarnation in that job in the early 1980s, he earned his spurs by throwing acronyms at inner cities, publishing Government press releases on urban programme monitoring initiatives, urban development grant schemes and city action areas, all of which fizzled out once the headlines had faded away. It was all done for local effect to create impressions of competence. Now, after twelve and a half years of that carry-on, the British people see through what is put before them.

We were told earlier this year that the Government had turned round completely and abolished the poll tax. During the local council elections I can even recall Conservative candidates putting out leaflets telling people that they would not be getting another bill at the beginning of this financial year. There was even the view that, because the delay to those bills had been deliberately engineered by the Government by changing the rules so often, people would not get those bills until the election was over and so would believe that the poll tax had gone. Sadly, some did, only to discover a few weeks later another poll tax bill.

Mr. Simon Burns (Chelmsford)

Before polling day in May this year, the Chelmsford local authority was most anxious that those bills should be on the doorstep and, as a result of the £140 reduction in the community charge, we saw for the first time in eight years the Conservative party taking control of Chelmsford borough council and driving out what is now the opposition party.

Mr. Battle

II is interesting that the hon. Gentleman refers to the £140 reduction being received by the people of Chelmsford. Elsewhere in the country people did not receive that rebate. It was a case of buying votes in some areas to protect Conservative seats but making sure that other areas went down. On television and in the media the Government created the pretence that they had abolished the poll tax there and then. But the people were not conned by that argument because the British people are not stupid. They were not prepared to forget who introduced the poll tax in the first place. The chaos caused by administrative changes that were imposed on local authorities only weeks before the end of the financial year meant that only a few could send out their bills on time.

The Government promised that everyone would receive a £140 reduction in their poll tax bills. The problem is that the Government often do not associate local government with social security provision. Because of the reduction in transitional payments, those receiving social security benefit—particularly pensioners—did not receive the full £140 refund. That is the reality; but the Conservatives were prepared to propagate the myth.

Mr. John Marshall

The hon. Gentleman has given the impression that some councils were not able to reduce the charge by £140. Does he acknowledge that all headline community charges were reduced by that amount?

Mr. Battle

It is all headlines for the present Government. There is headline inflation, and now there is a headline community charge. What the £140 headline meant in practice was that many people in receipt of benefit would not actually receive the money. That was an election con. It was a hollow promise, especially for those who bore the harshest consequences of the poll tax burden.

The Government have also blindly refused to tackle the basic injustice that has been inflicted on those who cannot pay. They still insist that everyone contribute a minimum of 20 per cent.; they do not relate the charge to people's ability to pay. The 20 per cent. must be paid regardless of income—or, more precisely, regardless of the lack of income.

I remember the political abuse that accompanied the introduction of the poll tax. Conservative Members tried to create the impression that some people were simply refusing to pay, describing those who receive 100 per cent. rebates as scroungers. The Prime Minister said at the Dispatch Box that the purpose of the tax was to ensure that everyone paid something, regardless of whether they had any money with which to pay. I am glad to see that, in this Bill, the Government have finally conceded the fundamental injustice of the 20 per cent. rule in principle, and have accepted the idea of 100 per cent. rebates.

If the 20 per cent. rule is indeed unjust, however, why can it not be dispensed with now? That would take the pressure from the housing benefit crisis that most authorities are experiencing because of the link between housing benefit assessments and the 20 per cent. minimum. Such a provision should surely be contained in clause 1 of the Bill. It would lift repression and injustice from some of the poorest members of the community, who are currently paying the price of the poll tax experiment.

A Sunday Times article, headed How we've been landed with a new gentry", analysed the new squirearchy, and featured a picture of the Secretary of State for the Environment at home wearing plus-fours. The article told us: So much does Heseltine play the patrician that he is paying this year's poll tax for his 20 staff. Why does the Secretary of State feel that it is his duty to relieve his staff of that burden, when it was he who imposed it on them in the first place? The Government are prepared to give—inch by inch—only when put under pressure by Labour and the country.

Not only are the poor paying the price of the poll tax; it is an inefficient policy to maintain the 20 per cent. rule. It costs local authorities more to collect the minimum charge than they receive by collecting it. According to the Audit Commission, for every £15 that authorities spend in collecting the 20 per cent., they receive only £6 in return. The waste and inefficiency that the Government ascribe to local authorities is occurring at the centre, and is quite deliberate.

The Audit Commission predicts that, by the end of 1992, the introduction of the poll tax will have cost the country £19 billion. This afternoon, the Secretary of State for Scotland spoke of local authorities' "insatiable extravagance"; but, with the £19 billion that has been spent on a wasteful experiment, we could have tackled all the public and private housing problems in my city of Leeds. We could have dealt with all the derelict land in the inner city, regenerated the local economy, rebuilt and replaced all the older schools in the city, provided an adequate number of home helps for the elderly and ill, introduced measures to make sense of community care, built sheltered housing and day-care facilities, set up an integrated transport policy and provided nursery education for every child under five—and we could still have had money left over. That £19 billion could have been devoted to the real, practical, down-to-earth problems that face local authorities. But, instead of financing much-needed action, the money was spent on the introduction of an instrument to repress local government and reduce its ability to meet local needs.

Clause 54 of the Bill retains the draconian capping powers that were applied to the poll tax. Despite what was said by the hon. Member for Tayside, North (Mr. Walker), who is no longer in the Chamber, the Government are continuing to reduce the amount available to local authorities. They have reversed the previous arrangement under which 60 per cent. of local government resources were contributed centrally. Now, central Government give local authorities only 40 per cent. of what they need, and 60 per cent. must be raised locally. Authorities must squeeze another 20 per cent. out of the poll tax system without capping, simply to stand still. Local budget settlements have yet to be set against the council tax measure; the evidence demonstrates that, so far, standard spending assessments do not measure up to the real needs of the community.

Will the council tax be any fairer than the poll tax? The top band covers property worth £240,000 or more—my constituency does not contain many of those, of course. Although such properties must be worth at least eight times as much as those in the lowest band, their occupants will pay only three times as much as the occupants of properties in the lowest band. I see no redistributed justice there. This is just another hotch-potch provision—another pretence that the Government are introducing a measure of equality.

What will be the local impact of the council tax? Leeds city council cannot forecast that, nor can the Government, because there is so little detail in the Bill. The Department of the Environment knows the number and valuation of the properties in Leeds, but the figures are bound to be affected by the number of single people in the area, the number of people who will receive the 25 per cent. discount and the categories—students, for instance—who will be disregarded. If the local authority cannot anticipate the position, it will be unable to work out its income under the new tax, or the natural impact on local people. How can the Department of the Environment know who lives alone in Leeds, or who is eligible for a discount, unless the local authority can give it the information? Yet the local authority does not have that information.

When the poll tax was introduced, we discovered that registers were costly and difficult to maintain. Between April 1990—when the tax was introduced in Leeds—and September this year, 534,000 amendments have been made to the register. We do not want to go through that nonsense again, but the Bill does not make clear what the position will be.

According to the crude figures that the Government have announced, a single person living in a property in Leeds that costs more than £68,000—band C—will have to pay more than he or she pays now in poll tax. So much for helping single elderly persons living on their own. Many of my constituents will end up subsidising and helping the rich elsewhere.

The Government claim that they are consulting people all the time. When the Secretary of State visited Leeds in February, the local authority advised him not to mix a property tax and a head tax; it would be a nightmare scenario that would cause administrative chaos. If the Bill goes through in its present form, it will be impossible to implement that proposal. That is why we should not allow the Bill to proceed. However, it seems that, sadly, the Secretary of State overrules any consultations that there may have been, in just the same way as he is prepared to overrule genuine consultation here.

Water metering is being introduced compulsorily by water authorities, such as Yorkshire Water. They now insist that all properties built after April 1990 should be metered. The argument is that they cannot refer to rateable values, which were abolished when the poll tax was introduced. The Government propose to return to rateable values, so that argument no longer holds good. Can the Minister assure me that residents in new houses will have a choice and will be able to say to the water authority that they do not want their water supply to be metered? The newly-privatised water authorities forced them to have meters, regardless of their circumstances.

It is still unclear how students in private accommodation—few students in Leeds are in halls of residence—will be treated, or how student nurses—there are many in Leeds, which has a large teaching hospital—will be treated. Schedule I defines the word "student." When it comes to nurses, it all depends on whether they are on Project 2000 courses and receive a bursary or whether they are on conventional nursing courses and receive a training allowance. The incomes of the two groups of student nurses may be similar, but the Project 2000 students will have to pay 20 per cent. of the tax while the other student nurses pay the full 100 per cent. Although those nurses may be working together making the same beds and caring for the same patients, when they come off duty one nurse will pay the full council tax while the other will pay only 20 per cent.

As for joint and several liability, will that not live on after the death of the poll tax? Women had to pay their husbands' bills, and vice versa. Under the new council tax and what is quaintly called in clause 6 the "hierarchy of liability", the hierarchy will consist of two tenants who, if they are at the same level in that hierarchy, could become responsible for each other's council tax jointly and severally. A tenant could be held responsible for an absentee landlord, in exactly the same way as couples living together are held to be responsible for each other's liabilities. That is unfair and unjust. It will also require checks to be made, leading to the return of the iniquitous snooping system in order to decide who is liable to pay.

On close examination, it is evident that the Bill is a hotch-potch. It is a shoddy Bill. It was interesting to hear Conservative Members claim that they are against the poll tax now and that the best thing to have happened since the invention of sliced bread is the council tax. If the Bill is so good, why do the Government have no confidence in it? Why are they not confident enough to discuss it? Why do they have to bludgeon it through Committee? Why are they going to guillotine it in Committee without allowing proper time for discussion?

When the Prime Minister became the newly elected leader of the Conservative party, he said in the Daily Mail that the party had been bounced without thinking into the poll tax. In this debate, we are in danger of repeating the poll tax tragedy, this time as a farce. The Bill is not worth discussing further and should be rejected by the House. In the meantime, the reality of the dreadful poll tax will, sadly, have to drag on for the people of this country until there is a change of Government.

7.24 pm
Mr. John Marshall (Hendon, South)

I knew the new hon. Member for Hemsworth (Mr. Enright) as a Member of the European Parliament, where he was hard-working, conscientious and a man of principle. I welcome his election to the House. He provides one of the vagaries of political life, in that in 1984 he was deselected as a European candidate because he believed in the European Community, whereas he was imposed as the Labour party's candidate a few weeks ago——

Mr. Harry Ewing

On a point of order, Mr. Deputy Speaker. Is it in order that a new Member of Parliament who has not yet made his maiden speech should be attacked in this way by the hon. Member for Hendon, South (Mr. Marshall)? A Member who has not yet made his maiden speech should not even be mentioned, far less attacked in the way that the hon. Gentleman is cynically going about it.

Mr. Deputy Speaker

It is not unusual for a new Member to be welcomed, despite the fact that he may not yet have contributed to our proceedings.

Mr. Marshall

Thank you, Mr. Deputy Speaker, for those words of wisdom. If to tax and to please, no more than to love and be wise, is not given to man, may I congratulate my right hon. Friend the Secretary of State for the Environment on seeking to do the impossible. When I tell people that I spent 10 years in the European Parliament, they tell me that I was a hedonist. When I tell them that I spent 17 years in local government, they tell me that I was a masochist. I suspect that I was a masochist twice over.

There is no doubt that the old rating system was based on the nebulous concept of a fair market rent. There has been no free market in residential property since the early years of this century. It was decreed that the old rating system should seek to produce a value based on a free market in property, but the House destroyed that free market in property during the first world war. That is why valuation, under the old rating system, was a most inexact science. That is why it had to be abolished.

Capital values at least have the benefit of being related to a market, although I am sure that many owners will seek to convince their bank managers that their property should be in band H while they seek to convince the rating authorities that their property should really be in band F.

During my 17 years in local government I served as the chairman of the finance committee in Ealing. We were able to boast of having set the lowest rates in west London and of providing sufficiently good services to attract the Leader of the Opposition to Conservative-controlled Ealing from Liberal-controlled Richmond. As a man who spent 17 years in local government I have a sense of shame that yet again there has to be another attempt to reform local government finance, due to the incompetence, extravagance and doctrinaire opposition to competitive tendering of Labour councils.

If Labour councils had listened to the advice of the Audit Commission, if historically they had collected rents, rates and the community charge, we should not he faced with our present difficulties over local government finance. Labour councils, throughout the length and breadth of the country, have delighted in presenting high bills to ratepayers and charge payers and in providing poor services. They are renowned for planning delays, empty council homes and poor education results. All too often Labour councillors dream of monuments to municipal munificence—which, incidentally, bear the name of the councillor who had that dream.

I congratulate the Government on accepting the case for regional banding as between Scotland, Wales and England. My hon. Friend the Minister of State represents an outer London borough and he would be surprised if I did not at least briefly mention the position in the London borough of Barnet. Under the Government's proposals, taxpayers in Barnet will pay a lower tax than they paid under the discredited rating system which the Government abolished and they will pay less than they would under the Labour party's proposals.

I ask my right hon. and hon. Friends on the Treasury Bench to study closely the problems that affect house owners in the south-east and in London. There are great regional variations in house prices, illustrated by the fact that in the London borough of Barnet 1 per cent. of properties will be in bands A and B, 6 per cent. in the three lowest bands and 46 per cent. in the top two bands.

Some people in the Labour party believe that high house prices mean high living standards and affluence. However, the net monthly mortgage repayment in London is £539; it is £478 in the south-east, £263 in Yorkshire and Humberside and £255 in the Northern region. Monthly mortgage payments in London and the south are twice those in Yorkshire, Humberside and the north.

I hope that if my right hon. and hon. Friends cannot accept the case for regional banding for London and the south, they will reconsider the problems that the revenue support grant can produce for London. I am one of those who believe that the revenue support grant makes the Schleswig-Holstein question a model of clarity. There is an undoubted risk that the high bandings that apply in London and the south-east could lead to an outflow of grant. That is terribly important because under the council tax 85 per cent. of local expenditure will be met centrally. As my hon. Friend the Member for Harrow, West (Mr. Hughes) pointed out yesterday, it is important that we get the grant for London and the south-east correct. I hope that my hon. Friend the Minister will be able to give some commitment to that this evening. We look forward to a generous settlement in a few weeks' time when he might deal with the London Regional Transport anomaly which is afflicting us as Members representing outer London.

It is important to remember that there is a tight timetable for the introduction of the new tax. The difficulties associated with the introduction of the community charge were not caused by the time taken for the Bill to pass through the House, but by the fact that a large number of regulations relating to the charge were passed close to its introduction.

Will my hon. Friend the Minister give us some assurance that regulations relating to the council tax will be in place by the end of this year? Local authorities will need a substantial amount of time to ensure that their information technology is correct and is in place to deal with the council tax. It was not in place to deal with the community charge.

Mr. Battle

If that is to be the case, both systems will have to run parallel, which will be an extra burden on local authorities. So far the Government have not even given a commitment to reimburse the full cost of that.

Mr. Marshall

Of course, there will be the process of introducing the council tax as there would be if we listened to the Labour party and introduced its tax. The trouble with the Labour system is that it would spend many more years trying to introduce it before it could get rid of the poll tax.

I welcome the fact that the Government are committed to capping a large number of local authorities as part of the introduction of the council tax. Every change in local government finance, whether by revaluation or the introduction of the community charge, has been accompanied by a large element of extravagance by many local authorities.

Mr. Allen McKay

There are about 400 local authorities. How many is the hon. Gentleman talking about?

Mr. Marshall

It would be fair to say that a substantial number would be included. In my estimation, the number of extravagant local authorities——

Mr. McKay

How many?

Mr. Marshall

I am answering the question.

Mr. McKay

The hon. Gentleman does not know the answer.

Mr. Marshall

The number of extravagant local authorities would be more than 100.

There are many benefits of compulsory competitive tendering in London, but many local authorities resisted it. The Minister told me the other week that compulsory competitive tendering can produce savings of 8 per cent. in street cleaning in London. Why did not local authorities do that a long time ago? All the authorities that refused to indulge were extravagant. They were putting the jobs of members of the National Union of Public Employees before the good of charge payers and of the local authority. Those authorities that indulged in competitive tendering and got the jobs done more quickly were able to expand the level of services and reduce the cost to the charge payer.

Mr. William O'Brien (Normanton)

What about the quality of service?

Mr. Marshall

One need not assume that the quality of service is lower——

Mr. O'Brien

What happened?

Mr. Marshall

I am telling the hon. Gentleman what happened. Yesterday my hon. Friend the Under-Secretary of State for the Environment presented an award to the best street cleaner in London. He came from an authority which put the service out to compulsory competitive tender some time ago. The best street cleaner in London does not work in a direct labour department in Hackney, Lambeth or Lewisham. He was working for Westminster council, an authority which went out to tender some time ago. Whose streets are cleaner—Westminster's or Camden's? The answer is Westminster's.

Compulsory competitive tendering provides better services at lower cost to the charge payer in London. Therefore, many local authorities which, as a matter of principle, refused to go out to competitive tender were extravagant high-cost local authorities, unconcerned about the good of their citizens and of the charge payer.

Mr. McKay

My authority went out to tender to test prices long before the House thought about it.

Mr. Marshall

I must congratulate that authority on doing what so many other Labour authorities refused to do. All too often Labour councils were reluctant to go out to competitive tender.

I once sat on a Labour-controlled council which went out to tender and would not accept the lowest tender because it did not come from a direct labour department.

Mr. Phillip Oppenheim (Amber Valley)

What does my hon. Friend think of the actions of Derbyshire county council, which refused one low-cost tender because it came in the wrong coloured envelope and ended up accepting a higher tender from its own work force at an enormous extra cost to charge payers?

Mr. Marshall

Am I allowed to use swear words in the House? I suspect not. All that I can say is that the actions of Councillor Bookbinder are so incredible as to defy belief. My hon. Friend the Member for Amber Valley (Mr. Oppenheim) is a lucky man. Councillor Bookbinder was his opponent at the last election, if I am not mistaken, and I am sure that he at least doubled my hon. Friend's majority.

Mr. Oppenheim

He trebled it.

Mr. Marshall

The level of arrears of community charge is a side issue connected to the introduction of the new tax. I hope that my hon. Friend the Minister will be able to tell the House that there will be no amnesty for poll tax dodgers and that however high and mighty—be they Members of the House, Labour councillors or whoever—no one will receive an amnesty for refusing to pay the community charge. As for old-age pensioners, one such Member of the House was slow to pay her community charge bill to the London borough of Barnet, but then a friend paid it for her.

Some of my hon. Friends and the hon. Member for Glasgow, Provan (Mr. Wray) have suggested that central Government should pay more of the cost of local authority expenditure than the Bill provides for. Although superficially attractive, that would present a huge constitutional problem. If central Government are to pay even more of the cost, there must be greater control over the activities of every local authority. It would be a question, not of capping a minority, but of central Government determining how much should be spent by each local authority and how it should be spent. I do not want central Government to say how many teachers should be at a school in Barnet or how much should be spent on books in Barnet. I much prefer the system of devolved power to individual schools either by their becoming grant-maintained schools or through the local management of schools. If 100 per cent. of local authority expenditure were financed centrally, it would be disastrous for the future of local government and for the linkage of powers between central Government and local authorities.

Later this evening we shall debate a guillotine motion on the Bill, which will provide a chance for a constructive, positive Committee stage. My right hon. Friend the Secretary of State has always shown himself to be a listening Minister. Earlier in the debate we were told how he listened to my hon. Friend the Member for Tayside, North (Mr. Walker), who is no longer here. I hope that in Committee he will listen to the pleas of Members representing Greater London and the south of England because they are dear to my heart and may to some extent be dear to his.

7.41 pm
Mr. Harry Ewing (Falkirk, East)

I have listened with great interest, if some difficulty, to the hon. Member for Hendon, South (Mr. Marshall). First he supported the legislation and then we heard his special pleading for his constituency. That is precisely what is wrong with the legislation. There are so many anomalies that of the 650 Members who make up this House of Commons, including Mr. Speaker himself, each one of us could present the Government with a list of the anomalies in the Bill the length of our arm.

We are discussing a Bill that will never be implemented. There are two reasons for that. The principal reason is that the Government will he defeated in four or five months' time and be replaced by a Labour Government who will take the Bill off the statute book as soon as they come to power. Even if that does not happen—I am realistic enough to know the vagaries of elections—the legislation will not be implemented in the form in which the House is discussing it tonight. That is my forecast, although I will not be here to see it unfold. The evidence on which I base it is that, within three weeks of the White Paper being introduced in the middle of this year, there were 15 announcements of changes to the proposals now in the legislation. Even since the legislation has been published, it has been made clear that the Government will introduce amendments in Committee—that against the background of the guillotine timetable under which the Committee will operate.

To my colleagues on this side of the House I say that I shall not object too much to the guillotine for one simple reason: I hope that they will take it as a model for the in-coming Labour Government. I hope that they will use the guillotine procedure when they deal with the damaging legislation on the health service, the poll tax and many other matters that Conservative Governments have passed through this House during the past 13 years.

As I shall leave the House at the general election, one of the saddest features of this debate is that the Bill is one more attack on local councillors. In more than 20 years here I have seen many pieces of major legislation which were designed to attack the standing of local councillors. I do not care whether they are Conservative, Labour, Liberal Democratic, independent or, in Scotland, Scottish National councillors. All those who stand for election submit themselves on a sincere platform and with a will to serve the electors from whom they ask for support.

When the hon. Member for Hendon, South attacks Labour councils as he did so vehemently, it is almost as if they were not elected. People voted for them. He must have fresh in his memory the fact that in May this year, not many months ago, the Conservative party lost 500 seats in England and Wales in the local government elections. Despite all the criticisms that he has levelled at Labour-controlled local authorities, it is an inescapable fact that in England, Wales and Scotland Labour-controlled authorities are there by virtue of the democratic decision of the people. That is how it should be but, of course, that is not what the Government want.

If I may, I shall for a minute trace the history of attacks on local government, the constant reorganisation of local government and the uncertainties created for councillors in my time here. In 1972 local government reorganisation in England and Wales set up the Greater London council and the metropolitan borough councils, and brought changes to all local government. It was quickly followed in 1973 by the reorganisation of local government in Scotland. At that time there were also two major housing acts: the Housing Finance Act 1972 for England and Wales and the Housing (Financial Provisions) (Scotland) Act 1972—the Rent Acts as they were referred to. Later legislation abolished major elements of the local government structure that had been set up under the 1972 Act. The metropolitan borough councils were abolished, not because they were not doing a job but because they were Labour. The authorities were abolished to silence them.

I think that it was the hon. Member for Tayside, North (Mr. Walker)—I apologise if I am misrepresenting him—who said that councillors no longer run councils and that councils are run by officials. The simple explanation for that is that when local government was reorganised we reduced by 50 per cent. the number of elected members. In other words, we reduced the democratic element by 50 per cent. It was as plain as a pikestaff, as sure as night follows day, that the bureaucratic element would double. When people complain that local government is being run by bureaucrats, it is simply because there is not enough democratic input.

I do not know what form the reorganisation of local government or local government finance will take in the years to come. However, I do not waver from my belief that the democratic input in local government must increase not only in Scotland—I say that in the presence of the Secretary of State and the Parliamentary Under-Secretary, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton)—but throughout England and Wales. If the House moves further down the road of bureaucracy, all it will do is store up trouble for itself.

We are now faced with another piece of major legislation that represents another attack on local government and yet another major reorganisation of its structure—the seventh we have had in the past 20 years. How on earth can any organisation be efficient when it is continually subjected to the type of reorganisation that the House has inflicted upon local government in the past 20 years? There has been no cohesion or consistency of approach.

By and large, councillors do everyday jobs and devote some of their leisure time to try to make conditions better for the people in their locality. It is unacceptable to expect such councillors to adjust to the changes that are imposed upon them by the House in such a draconian way and with such monotonous consistency.

The council tax Bill has its origins in the demise of the former Prime Minister and the loss of 500 seats in the local government elections. It was cobbled together in a hurry, as is obvious from reading it. The hon. Member for Hendon, South has already demonstrated, and far more ably than I could, the deficiencies and anomalies in the Bill.

If any local authority had squandered the amount of money that Ministers are guilty of squandering on the poll tax in the past four years there can be absolutely no doubt that councillors would have been surcharged under local government legislation. How can one try to explain to a councillor how on earth inefficient Ministers can get away with squandering millions of pounds of taxpayers' money? However, if that same councillor is "seen" to squander between £40,000 and £50,000, the Secretary of State for Scotland or the Secretary of State for the Environment would be on his neck like a ton of bricks. The councillor would be surcharged for seemingly squandering that money. However, the real guilty people are Ministers who have squandered billions of pounds of taxpayers' money, but they have got off scot-free.

Those same Ministers then come to the House and with brass neck defend the introduction of a council tax with the same conviction with which they condemned the principle of a property tax when the poll tax was introduced. Recently the Secretary of State for Scotland and the Minister of State went around Scotland attacking the concept of a property-based tax. The Minister said that we would never return to a property-based tax. In fact, the Minister is on record as saying that just three years ago, but the backbone of the Bill is a return to a property-based tax.

I believe that the rating system of England and the revaluations that should have taken place, but never did, were the basis of the problems in England. However, I bow to the superior knowledge of English colleagues in all parts of the House when it comes to the English system.

In Scotland, however, at the time of the 1983 revaluation three factors combined, the effects of which no local taxation system could have withstood—not even the Liberals' proposal for a local income tax. The first factor was the reduction of 12 per cent. in the rate support grant from the Government to Scottish local authorities. The then Secretary of State for Scotland, the right hon. Member for Ayr (Mr. Younger), directed the assessors to switch the burden from industry to the commercial and domestic ratepayers. That was followed by a dramatic increase in the property values valued by the assessors. No system of local government taxation could have withstood those three factors and their combined effect.

What did the Government do? To try to repair the damage that they had done they switched the burden to the commercial and domestic ratepayer. The Government told the assessors to make that switch and they then introduced a system whereby any ratepayer, commercial or domestic, whose rates had increased by a factor of three could get rating relief. A small number of people qualified for such relief, but the Government wondered at the outburst that followed. As a result of that we got the ill-thought-out and ill-fated poll tax.

I am a devotee of the rating system—I speak for myself when I say that—and at the time of the introduction of the poll tax I do not believe that a sufficiently vigorous defence of the rating system was made. Those of us who supported the rating system failed miserably to argue for its retention and development.

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

I am listening with great interest to the hon. Gentleman as I respect the fact that he has been a Member of the House for 20 years and a member of a Government for five years with special responsibility for devolution. The hon. Gentleman understands the working of Government and the inter-relationship with local government.

What is the hon. Gentleman's opinion of the current attempts to reorganise local government? I share his frustration at the fact that for many years local government has been considered from a financial point of view only. Local government finance has been reorganised many times, but now the Government are considering that together with local government structure and its functions. The Government are also considering the internal management of local government—how and who makes the decisions. Does the hon. Gentleman agree that such an approach is likely to be more constructive?

Mr. Ewing

To be honest, I would have to study the hon. Gentleman's question before I answered. To study local government finance and local government structure at the same time is not a new concept. The Layfield commission sat at the same time as the Wheatley commission in Scotland—one studied local government finance, the other studied local government structure. Whichever Government are in power—I hope and pray that it will be a Labour Government next time—they must tread carefully when it comes to the reorganisation of local government to ensure that we do not throw the baby out with the bathwater. There is a lot to be said in favour of local government, but because other hon. Members wish to take part in the debate, I will not be led down that path.

I have made it clear that I am a supporter, indeed a devotee, of the rating system. I would be willing to debate that issue in public with any hon. Member and to explain the advantages of the rating system. It had the one major advantage of being collectable; 90 per cent of people paid their rates bills. Nobody could claim that for the poll tax, and the council tax will, I fear, have the same fate. To keep the value of properties up to date, it would have been simple to update valuations each year in line with inflation.

Do the Government wish to be responsible for central economic management, including managing the finances of local authorities? If so, that is bound to lead them to the 100 per cent. financing of local government services. The Government must make up their mind on this issue. Do they wish to decide the level of services that local communities should have? If so, will they use their capping powers to achieve that end?

The Labour Government of which I was a member never used capping powers. We had a system of indicative costs in Scotland. If the Government intend to be responsible for the level of services of local government, they must be prepared to take the responsibility for funding those services. Or perhaps they will do what I would prefer, and that is to allow councils to decide the level of services that their communities should have. If low rating levels are satisfactory to an electorate, that will be expressed through the ballot box. If higher rating levels resulting from the provision of better services are acceptable to the electors, that too will be expressed through the ballot box.

I cannot understand why the Government want to become so involved in the management of the affairs of local authorities. In the last 13 years they have made a big enough mess of the nation's economy. Why do they now wish to get so involved in local authority expenditure? The Bill should go no further and I advise the House to reject it absolutely.

8.2 pm

Mr. Phillip Oppenheim (Amber Valley)

I welcome the Bill. In effect, the council tax will be a modernised and updated version of the rates. One of the biggest problems with the rates was that the system of assessing rates on the basis of notional rentable values created enormous difficulties. Not only was virtually every house rated differently, but problems were caused when people went in for relatively minor improvements to their properties and suffered disproportionate rates increases as a result. Capital value hands will not solve the problem entirely, but the system will address the issue to a significant degree.

All hon. Members must have received complaints, and been told on the doorstep, about the way in which the single person living alone in exactly the same house as that of his or her neighbour paid about the same rates, even though the neighbour may have had a large family with a number of people living in the house. The council tax will, to a significant degree, deal with that injustice which was inherent in the old rating system. I also welcome the protection enshrined in the Bill for students and student nurses, with rebates for those on low incomes, rebates for people in training and a rebate of 25 per cent. for single person households.

Most Opposition Members believe that the rebate for single person households is unfair. I appreciate that the basis of their argument is that the council tax is son of poll tax and that some account is taken of the number of people in households. If they believe it unfair to give a discount, even a small one of 25 per cent., to people living alone, I hope that when he winds up the debate for the Opposition the hon. Member for Sheffield, Brightside (Mr. Blunkett) will make it clear that the Labour party is committed to abolishing the single person household discount. I will gladly give way to the hon. Gentleman if he will give a clear commitment to that effect. Does he intend to intervene now?

Mr. David Blunkett (Sheffield, Brightside)

I will make my own speech in my own time.

Mr. Oppenheim

Characteristically, the hon. Gentleman backs off from giving a firm commitment. I do not blame him. After all, a commitment to abolish that discount would be fiercely unpopular in the country, not simply among those who live alone but among those who live in homes containing several people and who recognise the fundamental injustice of people living alone having to pay exactly the same rate as themselves. The country will have noted the failure of the hon. Gentleman to answer my question.

It was commonly said of the community charge that it would have worked if only the bills had been lower. I accept that had the Government limited increases in local authority spending in year one of the community charge, the bills would have been significantly lower, not least due to the gearing of the system, and that may have made the charge more acceptable.

Hon. Members in all parts of the House must face the fact that, whatever system is introduced, if councils, whatever their complexion, spend unwisely—I accept that some Conservative-controlled councils are equally guilty—bills will become high and possibly unacceptably high. In my area, the rates for many years, including the poll tax, ended up being far too high because of the profligate spending of the county council. I shall not dwell on that subject. We accept that priorities in public spending at national and local level are difficult issues because choices must be made and it is difficult to make them. Even so, some priorities appear strange. When a county council has, since 1981, increased its overall staff by 8,000, the largest increase in England and Wales, yet is the only county with fewer policemen in the Derbyshire police force, that is strange.

It is a strange set of priorities for a council to spend millions of pounds pegging school meals to 1981 prices in a way that does not benefit even the children of the least-well-off—because they get free school meals anyway—yet is in the process of sacking hundreds of teachers. It is strange for a council which pleads for more capital for school buildings and repairs to spend £5 million of its capital allocation on the redundancy costs of sacking teachers.

A council has a strange set of priorities when it says that it cannot afford Home Office offers of more policemen, yet can find plenty of jobs for the cronies and friends of the leader of the council, such as the former Labour councillor who got the plush job, at £40,000 a year, of being in charge of the so-called Derbyshire enterprise board, or such as the chairman of Derbyshire Labour party, one David Skinner, who got a well-paid job supposedly escorting Japanese business men around Derbyshire, despite the fact that he had been sacked for corruption by the council in the 1970s from his job as a road ganger. The former Labour Member, Reg Race, was given a highly paid job as a chief executive of Derbyshire county council, despite the fact that most people believed that he was unsuitable for that task. In defence of Mr. Race, I should say that, when he realised the policies that the council was following, he had the honour to resign his post. Unfortunately, he did not have enough honour to refuse the golden handshake which the council offered him to buy his silence about what he had learnt during his brief tenure as chief executive.

Should a Labour Government come to power, would they cap such excesses? The hon. Member for Dagenham (Mr. Gould) has criticised the Government for capping local authorities, yet he said on the "Today" programme that a future Labour Government would cap local authorities "in extremis". What did "in extremis" mean? Would they cap Lambeth, Derbyshire or Haringey, or are they not in extremis enough? It should not be forgotten that the Labour party supported Liverpool council against the Government in the mid-1980s. Yet history has shown what a discredited bunch those Liverpool councillors were. Would they have been in extremis enough to be capped by a Labour Government?

I condemn the Opposition's attempts to slay the Bill. Indeed, I do not know how they have the face to do so when, after 12 years in opposition and almost as many changes to their policies on local government finance, they have simply come up with a system that deals with none of the fundamental problems inherent in the old rating system. The individual household valuations which they propose would be extremely complex, and they have already said that they would take no account of single person households. Those are two of the most basic problems of the old rating system which they want enshrined in their so-called fair rates. Above all, they have not said how their valuations would be carried out under their so-called fair rates scheme. How do they have the cheek to oppose the Government's proposals when they have no real alternative? They should be ashamed of themselves.

The confusion goes further, because the Opposition do not even know what they would do if they came to power. On 5 October, the shadow Chief Secretary, the hon. Member for Derby, South (Mrs. Beckett), said that Labour, should it come to power, would replace the council tax with fair rates. However, 12 days later, the hon. Member for Brightside said that it would not abolish the council tax but would simply amend it. On 27 October, the hon. Member for Dagenham said that the Labour party would repeal the council tax. Clearly the Opposition Front Bench do not even know what the Labour party would do if it came to power. It is confused, is talking at cross purposes and has no real proposals to put before the House.

I welcome the Bill. It offers a relatively simple system that ensures that a high proportion of people will pay but, at the same time, takes account of people's ability to pay. I recognise that no tax will ever be popular. But I do not see how the Opposition can, in all honesty, oppose the Bill when they have called for the abolition of the poll tax and cannot even say what the basis of the valuations that they propose would be. For a party that has been in opposition for 12 years, that is a disgrace. Above all, it shows that it deserves to remain in opposition.

8.15 pm
Mr. Harry Barnes (Derbyshire, North-East)

There is something odd about this debate. Those hon. Members who served on the poll tax Committee and were therefore involved in the last great discussions on local government finance have been represented among Opposition Members but not by Conservatives. Conservative Members who were on the Standing Committee that dealt with the poll tax have deserted the Floor of the House rather than bring their expertise to bear. We had a third day's discussion of this subject during the debate on the Queen's Speech. The hon. Member for Spelthorne (Mr. Wilshire), who was on that Committee, turned up on that occasion but he talked about the reorganisation of local government rather than local government finance. So why is there this great peculiarity? Why are the Conservative Members who have tussled with the arguments and listened to the alternatives not around?

When a Bill of the magnitude of the Local Government Finance Bill is presented to us, those who speak in its favour should say how it overcomes some of the manifest defects that need to be altered. In that general context, we need to understand what they are saying about this Bill. That is never done by Conservative Members, with the exception of the hon. Member for Aldridge-Brownhills (Mr. Shepherd), who talked yesterday about some of the things that were wrong with the poll tax. People outside will be very cynical about the Government's position if Conservative Back-Benchers refuse to say what they think is wrong with the current situation and why fresh legislation needs to be introduced.

The Opposition know why fresh legislation needs to be introduced. We have constantly said what is wrong with the poll tax. We have expressed our opposition in the House, in debates on the subject, on the guillotine motion that was debated on that measure, in Committee, in Committee debates on statutory instruments, some of which emerged only recently, and in meetings and campaigns. We have strutted the country and argued about what is wrong with the poll tax. I have been to the constituencies of two of the Conservative Members present—the hon. Members for Amber Valley (Mr. Oppenheim) and for Portsmouth, South (Mr. Martin)—to tell people what is wrong with the poll tax. The hon. Member for Amber Valley has already spoken, but it would be nice if the hon. Member for Portsmouth, South would say what he believes is wrong with the measure and needs to be overcome.

Plenty was wrong with the poll tax. It was the worst taxation system that was ever introduced into a democratic society at any time. It was quite unbelievable. Its unfairness was astonishing and led to all sorts of interferences with civil liberties and rights, with knock-on consequences. The Government had engaged in a vast centralising activity, so that the Department of the Environment took over masses of power and local government was run even more centrally than through other measures which the Government had introduced. Conservative Members, who are supposed to believe in great freedoms—freedoms of the market place and decentralisation—could not see that point. If they saw it, they chose to ignore it in their contributions.

Compared with the poll tax legislation, the Bill makes significant changes, which the Government should tell us about. For instance, although there is a minor distinction between the bottom and the top bands—those on the top pay only three times as much as those on the bottom—it is an important principle. The House debated that principle in the so-called Mates amendment. Under the provision suggested by the hon. Member for East Hampshire (Mr. Mates), people on salaries below taxation levels were to pay half the poll tax and some were to pay the full poll tax, while those on a surtax level were to pay one and a half times the normal poll tax. The difference between the highest and lowest amounts to be paid was a multiple of three. For many Opposition Members that provision did not seem to make a great difference, but it was important to Conservative Members because it involved a change of principle that could later be extended. If some people were to pay three times the amount paid by others, that principle should have been discussed. In the same way, the property-based aspect of the legislation is significant and should be debated, but we have not heard much about that.

The present Bill also differs from the poll tax legislation in that the exemption list has been improved. Under the poll tax provision, those serving in overseas forces and residing in this country and foreign diplomats are excluded from paying the tax. As far as I understand it, under the new Bill they are not excluded from paying the tax. If I am right, why do we not hear Conservative Members arguing in favour of that change?

The case is being argued in a most cynical fashion. The argument has not been in terms of the principle of local government finance, but merely on the grounds that political difficulties arose in relation to implementing the poll tax and urgent action had to be taken, especially in the light of the election of the new leader of the Conservative party, the promises being made and the general position of the party at the time. Therefore, this measure was introduced and attempts are being made to push it forward as quickly as possible.

We should keep producing within their constituencies the voting records of Conservative Members to show where they stood on the poll tax. Conservative Members who have spoken in the debate have tried to show that they were minor rebels and to imply that some sort of mass rebellion took place. When was that rebellion and when did we eagerly await votes in the House to see which side had won? The voting results were not close, but showed solid majorities.

The Committee that debated the poll tax legislation included three Conservative Members who were liable to rebel at any time, but never rebelled in unison because that might have caused a drawn vote and could have resulted in the legislation being returned to the Floor of the House. The hon. Member for Ealing, Acton (Sir G. Young) has since repaired his breach with the Conservative party. The mildest of the rebels was the hon. Member for Harrow, East (Mr. Dykes) and the late Sir Brandon Rhys Williams was probably one of the major rebels. He wanted to have a low poll tax instead of a high one, but was not particularly arguing against the principle.

Where did the Secretary of State for the Environment stand on all those issues? What of his famous rebellion that was supposed to take place in the House? He made three speeches and two interventions on the subject during the 1987–88 Session proposing differing views. When we debated subsequent measures such as statutory instruments he was not present. During the 1988–89 Session and the 1989–90 Session he made no contributions when we discussed measures associated with the poll tax. Where was the rebellion? As the parliamentary record shows, the Secretary of State was not present very often. He was out canvassing for the leadership of the Conservative party and did not take part in many of the votes.

The measure includes some other oddities. Why does clause 117 (5) state that the legislation does not extend to Northern Ireland? The poll tax was never introduced in Northern Ireland, but the argument being used in favour of the new tax is that it is superior and will be the answer to all sorts of problems relating to local government finance. If so, is it the intention to introduce legislation relating to Northern Ireland? We are normally given some sign that that is to happen. It is possible to introduce wide measures via Orders in Council whether by negative or positive procedure. It seems that Northern Ireland will not be touched by the legislation because it still has a reasonable and viable system of raising local government finance which the mass of the people pay. The rating system still applies in Northern Ireland, where they have never suffered the nonsense of the poll tax.

Why does the legislation contain no mention of the changes that need to be made in standard spending assessments? With the exception of an authority in Dorset, my constituency receives the lowest grant per poll tax payer and has the lowest standard spending assessment. Anyone who knows anything about the district will realise that it suffers from social deprivation and requires funds. How can a formula be worked out which does not allow decent standard spending assessments and decent grants for such districts? I have previously explained to the House the fiddles involved and why the conditions of the standard spending assessments hit North-East Derbyshire harder than any other authority, although others are sorely hit. If we are reviewing the whole of local government finance, we should include debates on that subject. It was not just the principle of the poll tax that hit the authorities; the nonsense of standard spending assessments helped to push up the poll tax in many districts because money was not made available to local authorities.

The most important element missing from the legislation involves what is to be done to overcome the harm to electoral registration that was and continues to be caused by the poll tax. A survey carried out by the Office of Population Censuses and Surveys revealed that 1 million people are missing from the register. The problem began in Scotland when the poll tax was introduced there and moved to England and Wales. It did not occur in Northern Ireland because it never had the poll tax. What action is being taken to restore 1 million people to the electoral register? What will the council tax do about that? Why are we not spending as much to encourage electoral registration as is being spent overseas to encourage expatriates to register and vote in this country?

The hon. Member for Tayside, North (Mr. Walker) said that the poll tax was not a poll tax because it had nothing to do with the electoral register. It had everything to do with it. We have a little time before the next election in which to put matters right if it is fought on next February's register. In the meantime, what legislation will we pass and what expenditure will we sanction to overcome this greatest of evils? Hon. Members should be more worried about the electoral register problem than about any of the other erosions of our civil liberties. The problem arose because of the unfairness of the poll tax. People dived for cover and kept themselves off the register—an understandable mistake by people facing bills which they could ill afford.

I conclude with an historical analogy and a warning to the Government. It concerns the introduction of the first poll tax, which was promulgated not in 1371, but was introduced in 1367 as a flat rate measure which great masses of the poor did not pay. That is fantastically similar to the modern poll tax. Two years later, in 1369, a further measure was introduced—the poll tax mark II—bearing some similarity to this poll tax mark II. It was to be banded according to differing levels of wealth. On that occasion it was the rich who did not pay and who thus breached the legislation.

So in 1371 the country returned to the principle of a flat rate payment and that was when the peasants' revolt broke out. Thank goodness, in this repeat performance we will not have a mark II or mark III version of the poll tax. The legislation for the mark II version may be passed, but because of the coming election it will bite the dust along with the poll tax. Labour's proposed measure will be enacted instead. If it is not, and if Labour does not win the election, the farce that took place in the 14th century may be repeated.

8.32 pm
Mr. John Bowis (Battersea)

I shall refrain from returning to the 14th century.

This evening we have heard two confessions of paternity. The hon. Member for Falkirk, East (Mr. Ewing) claimed to be the father of the Labour party's return to the rates. My hon. Friend the Member for Tayside, North (Mr. Walker) suggested that he had some involvement in the conception of the council tax. I shall not compete with him for that paternity because I suspect, along with the hon. Member for Woolwich (Mr. Cartwright), that paternity in matters of taxation is to be avoided if at all possible.

There may be some surprise that I, who represent Battersea in the London borough of Wandsworth, should welcome the transfer of local government finance from the community charge to the council tax. In Wandsworth we showed how the community charge could and did work. I am not ashamed of the principles behind the community charge. They were the right answer to the hon. Member for Derbyshire, North-East (Mr. Barnes). But there were good reasons why those principles could not be followed in practice.

The proof of the pudding was in the electoral results in Wandsworth. In my constitutency last year the number of Conservative councillors there increased from six to 18, an increase repeated throughout Westminster, Ealing, Hillingdon and places such as Derby and West Lancashire. That showed that when people perceived that their vote could make a difference to the community charge, they used it in the Conservative cause.

The electors in boroughs such as Lambeth, however, did not perceive that a vote could change control of the council, so they said "Ouch" to the Government, in effect. In Wandsworth the community charge has not even been an issue—[Interruption.] The hon. Member for Sheffield, Brightside (Mr. Blunkett) will pay our zero rates this year, so no doubt he will support me. There is no point in our romping to victory in Wandsworth, with the help of the secret vote of the hon. Gentleman, if our party is not as successful elsewhere.

Mr. Tom Clarke (Monklands, West)

The hon. Gentleman seems to feel that his party met with great success in Wandsworth. Would he be willing to agree to the same financial contribution by central Government being provided to my district of Monklands so that we can see whether his enthusiasm will be shared there?

Mr. Bowis

I will not contrast like with unlike, but I can compare like with like in the form of Wandsworth and next door Lambeth, a similar London borough. The grant per head of population from central Government to Lambeth council was £1,500 compared with £1,000 to Wandsworth, in the year when Wandsworth's community charge was £148 and Lambeth's £548. I hope that the hon. Gentleman will learn and inwardly digest those figures and then ask his colleagues in the Labour party why they could not produce the same high-quality services at the lowest cost as those for which Wandsworth—unlike its socialist neighbours—has been known in London.

There are reasons for this change. There have been some anomalies, and this Bill tackles some of them, not least those involving students, student nurses, apprentices and people on youth training schemes. Perhaps, too, we underestimated the involvement of spouses in joint decisions on households and family spending—they were probably more conscious of the costs of local government than we thought.

Some Opposition Members question our failure to abolish the 20 per cent. minimum, but the reason for that is that it is incorporated in income support levels. People on income support in Wandsworth are not particularly anxious that the system should be changed, because if an element for the community charge is incorporated in income support but a person pays zero community charge, he is inevitably quids in. A person living in a high-spending Labour authority begins to suffer, however——

Mr. Ieuan Wyn Jones (Ynys Mon)

Does the hon. Gentleman acknowledge that the majority of people being hauled before the courts for non-payment of the poll tax are the very people who should have paid the 20 per cent. contribution? Would it not make economic sense if the Government acknowledged that and abolished it immediately?

Mr. Bowis

The people being hauled before the courts in Labour council areas are being so hauled because those councils did not keep the community charge low enough for them to afford to pay it. The overspending by Labour councils has been a prime reason for this change. We know that in the year that the community charge was introduced Labour local authorities' spending plans increased by 30 per cent. That is why the system was painful and why we had to find a better way to raise money. Conservatives care not only about the quality of local services but about the cost to the local charge payer because that is as important to the vulnerable as the quality of service.

The Opposition seek to return to the discredited rates system and the hon. Member for Falkirk, East can claim the credit for that. It would be a return to a system in which each property has to be valued and where home improvements are deterred. Its rolling revaluation would be based on a valuation that is 20 years out of date. Labour would insist that 20 per cent. of local government's costs be raised by local taxation. Overnight, that would increase every household bill by 50 per cent.

The Leader of the Opposition is often quoted as having condemned the rating system. I shall quote not the right hon. Gentleman but his right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). Writing in The Daily Telegraph, and probably hoping that his hon. Friends would not see it, the right hon. Member for Gorton said: The rates are irrational, inefficient and highly resented. The rating system makes no sense whatsoever. The right thing to do is to abolish it once and for all. I am not surprised that the right hon. Gentleman was banished to foreign affairs.

Much of the debate has centred on whether it is right to cap. It is argued that capping is wrong if accountability suffers, but capping is necessary because of the unwillingness of Labour authorities to be reasonable in their spending. Wandsworth has shown that targets can be met or even bettered. That is why Wandsworth's community charge started at £148, dropped to £136 and was reduced to zero as a result of the Chancellor's £140 grant last year. Wandsworth now provides much better services than before.

I had to look at services in Lambeth during the Vauxhall by-election and I saw dereliction and despair and people who are desperate for home ownership, which has been denied them. By comparison, the neighbouring council in Wandsworth has made efficiency savings that have enabled it to improve the quality of service. Tendering has produced savings of 33 per cent. and even when work remains in-house, tendering results in savings of 25 per cent. Staffing ratios have been cut to 2.1 per 1,000 compared with the inner London average of 3.7 per 1,000. A saving of 50 per cent. has been made in refuse collection. One tonne of refuse is collected per man per day in Southwark compared with 4 tonnes per man per day in Wandsworth.

Library costs have been reduced by 45 per cent. but there has been a 30 per cent. increase in book lending. In the first 12 years of Conservative control in Wandsworth there have been £50 million worth of efficiency savings, and the 123 services provided by that council cost each resident £136 before the change in the last Budget. The results in Labour authorities are quite different. In Hillingdon the Labour council was ousted last year and the new Conservative council dropped the community charge from £435 to £370. In Merton the reverse was the case because on the day after Labour took control it announced that it would double the community charge.

I shall give some more examples of how cost savings do not mean lowering the quality of service. Wandsworth recently took over education from the discredited Inner London Education Authority and is already providing free nursery education for every child. It is spending £71.03 per 1,000 of population on higher and further education compared with the inner London average of £51.50. The inner London average on special needs is £38 but Wandworth is spending £49. The inner London average at the chalk face, the money that goes to schools, is £144 per 1,000 of population but the figure for Wandsworth is £146. Bureaucracy in inner London costs £124 per 1,000 of population whereas Wandsworth spends £50.

That is why we need to consider capping. Overspending does not have to occur because good quality services can be provided at reasonable cost. That is what capping is all about and it is why I welcome the element in the Bill which provides for that and deplore the Opposition's commitment to abolish it.

We must look at income as well as spending. Wandsworth has rent arrears of £4 million. In Lambeth the amount is £35 million and in Southwark it is £60 million. In Wandsworth there are 90,000 housing benefit claims per year and 1 per cent. await assessment, not for weeks, which is the average in inner London, or for months, which is the average in Lambeth, but for two days. Labour high spending is not to improve services as the Opposition would suggest. Labour Liverpool spent £250,000 on councillors' media rooms and the Labour council in Dudley spent £21,000 teaching teachers how to clap. Labour Hackney spent £70 million on new offices and Labour Lewisham sent advisers to the Caribbean for two months to learn about youth and leisure.

London is fed up with Labour's level of service. People support the concept of capping and we support the Government's new proposals for the council tax because, ultimately, it will be fair. According to the Department's figures, in Wandsworth the A to G bands will produce a range of community charge on the same basis as this year—8 per cent. spending below target—of £90 in band A and £224 in band G for a two-person household. That shows that the charge will be manageable, even in an area such as Wandsworth which has shown that the community charge can work. It will be manageable as long as the grant settlement continues to take account of the borough's needs.

I welcome the Bill's provisions for dealing with non-payment. It is not a question of can't pay, but can pay won't pay, and that is deeply resented by law-abiding citizens. In March last year my right hon. Friend the Member for Mole Valley (Mr. Baker) wrote to the Leader of the Opposition saying that the Anti-poll Tax Federation was Militant-inspired. The hon. Member for Copeland (Dr. Cunningham) replied that that was a hysterical smear. He was right. Not only was Militant involved, but Mr. Steve Nally, the organiser, was also a member of the Labour party. About 30 members of the party and many Labour councillors have campaigned for non-payment. Such antics should be penalised when it comes to serving on a council and dealing with other people's money.

I deplore the statement by the hon. Member for Livingston (Mr. Cook) who, writing in Marxism Today, said: I do not describe not paying the tax as civil disobedience. Decent people do consider that to be civil disobedience and unacceptable. That is why I believe that when the people of this country have an opportunity to vote, they will vote against the party that stands for non-payment and for high spending, inefficient, low-quality councils. They will vote for the party producing better quality, lower-cost councils under the council tax system.

8.49 pm
Mr. John Home Robertson (East Lothian)

The hon. Member for Battersea (Mr. Bowis) spoke of the "can't pay, won't pay" campaign. In previous debates on the poll tax, I have pointed out that I and almost all hon. Members fall into the category of those who can pay, and should pay, more. What is so morally wrong about the poll tax is that those who are better off pay considerably less, with the consequence that people on the lowest incomes pay more. The people have found that out and that is why the poll tax is so unpopular.

One of the most interesting changes that I have seen in any Parliament—I have been around for far too long—is that which has occurred in this Parliament. Back-Benchers who for years have been loyally supporting their Government are now performing in a different role. They seem to think that they are already in opposition, because they spend all their time attacking the Labour party. Conservative Members supporting the Bill have been signally absent in this debate, probably for a good reason.

As I said, I have been here for some time and I vividly remember the Second Reading debate and the Committee sittings not only on the Bill introducing the poll tax for England but on what became the Abolition of Domestic Rates Etc. (Scotland) Act 1987. We are all familiar with extravagant claims by Ministers in winding-up speeches in Second Reading debates. I have here a quote from a Mr. Michael Ancram, who once represented a Scottish constituency and who has most recently been seen in Devizes, seeking, for the third time, selection in a constituency. He will soon qualify for the golden carpetbag.

On 9 December 1986, in winding-up the Second Reading debate on that Bill, Mr. Ancram said: The Bill is no short-term stop gap. Talking about poll tax, he continued: It is no hurried or temporary expedient. It is a well considered and well worked out reform which sets up a new and viable system for financing local government for generations to come. It creates a new balance, a new fairness and a strengthening of local democracy and accountability which will stand the test of time."—[Official Report, 9 December 1986; Vol. 107, c. 275.] He did not stand the test of time and nor did a number of his colleagues. [HON. MEMBERS: "Name them."] I served on the Committee and I remember them vividly. I have the Division list which followed that resounding speech from Mr. Ancram. Those who voted for Second Reading included John Corrie, Alexander Fletcher, Peter Fraser, Barry Henderson, Michael Hirst, Anna McCurley, John MacKay and Alexander Pollock, and Gerry Malone was a teller. They all lost their seats, as did the unfortunate person who chaired the Committee, Sir Albert McQuarrie.

Mr. Tom Clarke

My memory on these matters is not terribly good. Is the Mr. Gerry Malone mentioned by my hon. Friend the same Mr. Gerry Malone who, as a delegate to the Tory party conference, demanded the poll tax for England "now"?

Mr. Home Robertson

That may be so and he may be sorry about that because he will be standing in Winchester at the next election.

What is even more interesting about the list is those who did not vote for Second Reading. The hon. Member for Tayside, North (Mr. Walker) did not vote for it, although he has told us that he supports the poll tax. A significant person who voted for Second Reading was the right hon. Member for Henley (Mr. Heseltine). Some of these people should show a little contrition.

Mr. Foulkes

As my hon. Friend is going through this list of people, can he tell us whether the hon. Member for Dunfermline, West (Mr. Douglas)—Honolulu Dick as he is known—was there?

Mr. Home Robertson

That is erroneous. He was not in Honolulu; he was in Houston on private business. My hon. Friend must not go down that road.

In fairness to the Secretary of State for Scotland, who opened today's debate, he has been remarkably consistent in his attitude to the poll tax. He was supporting it through thick and thin, against all the evidence, until fairly recently. He described it as a great success story, while at the same time describing the council tax as a roof tax, something that he reviled only a few months ago.

As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said earlier, the vultures are coming home to roost for the Tory party in Scotland. However, the Tories must not be allowed to forget the misery and chaos of the poll tax, the distress that it has caused to so many of our constituents, of the disruption of local government that it has caused. Above all, they must not be allowed to forget the discredit that the poll tax has brought on the House of Commons and on Parliament. There is something fundamentally wrong with a Parliament that can allow such legislation to be inflicted on our people. Frequently, we hear Tories say that they voted for the Scottish Bill because it seemed a good idea at the time, or because they knew that the Tory party in Scotland was in difficulties and felt that it should be supported. That is the line taken by the right hon. Member for Henley. They did it, although they are now trying to wash their hands of it. They are responsible for the poll tax that has brought such discredit.

Even if the Bill is passed, the poll tax will be with us this year and next year. The poorest people will still have to pay 20 per cent. of that poll tax. To add insult to further injury, the people whom I represent in the Lothian region—this is true of other regions—are heavily penalised by the shamelessly discriminatory system of distributing revenue support grant in Scotland. I know that the same applies in England and Wales.

The quicker and far less risky way out of the poll tax—the way proposed by the Labour party—is a return to the rates. We know that that system can be made to work acceptably and efficiently. I would not leave it at that. Having returned to the rates, we should embark on a wide-ranging independent inquiry into local government finance, including local income tax and any other system. If a consensus were to develop that there was an alternative that should be pursued, we should get on with it.

The Government have learnt nothing. The last local government Act introduced the poll tax. It was a panic reaction to what the Government perceived as a problem arising from the revaluation in Scotland. They legislated from the hip and shot themselves in the foot and they are doing it again. This will be another disaster that will reflect badly on them. If we do not vote against the Bill, it will reflect badly on Parliament.

8.57 pm
Mr. David Martin (Portsmouth, South)

No new tax can be considered in isolation from what has gone before. The original Elizabethan rating system, as everyone knows, outgrew its useful shelf time some time during the 19th century. Instead of tackling increasing inadequacies at their roots, Governments from the end of the 19th century until almost the end of this century grafted on to the system changes of monumental and often Byzantine complexity. The one sacred principle until modern times seemed to be the retention of the notional rental system with periodic revaluations—a system which few understood either in its origins or in its modern version.

Government grants, both general and specific, funded out of central taxation took an increasing share of the burden of the rating system as the tasks of local government grew in quantity and depth. The way in which the various grants were calculated and distributed and the way in which they related to the original property element of the rating system meant that local government finance needed the ingenuity of an Abbé Sieyès for detailed explanations of their niceties and of precisely how they worked. Council treasurers began to be looked on almost as those who in ancient times understood the Eleusinian mysteries. At last the problems were faced radically and head on with the creation of the community charge.

Few people quarrelled with the principle that everyone should pay something. Even now, I find that people's minds have not changed on that. The crucial questions were how much and what was the bottom line in each individual case. If the headline amount of any tax is too much and the rebate or allowance system too miserly or unfairly based, the system will be unsustainable. Fortunately, these objections are met fairly and squarely in the proposals set out in the Bill.

The council tax, with its banding arrangements, does not take an unreasonable amount even at the top of the scale, while the discounts and exemptions are based on reason as well. I thoroughly approve of the transitional arrangements and the capping powers that are designed particularly to stop councils shielding greatly increased expenditure in the first year of the new tax, as happened in the change from rates to the community charge. That was the single most damning feature of the charge on its introduction in Portsmouth and elsewhere. It was expected that the final bill would be under £200 a head and it turned out to be £308.50. Overspending meant that the rebate system was not properly triggered and from then on, if only because of the amounts, the principle underlying the community charge became impossible to defend.

I spoke to a typical pensioner couple with a small occupational pension. Their rebated rates bill had been under £200 and between the two of them they were paying £617 under the community charge without a rebate being triggered. When told of that, I recalled Emperor Tiberius's answer to a governor who had written to him to recommend an increase in the burden of taxation. Tiberius replied that a good shepherd sheared his flock; he did not skin it. The Bill has many features which makes the shearing—it must never be a pleasant operation for the sheep, I imagine—at least defensible.

The Labour party roundly criticises the Bill's provisions, yet Labour Members propose nothing better than a return to the old rating system, without any effective capping on unreasonable expenditure. During the afternoon and evening we have heard examples relating to the likes of Lambeth, Haringey, Hackney, Brent and Derbyshire. Such examples, when added to all the others, would result in a nightmare for London and many other unfortunate areas. However, under the Labour party—I think that it was Anthony Crosland who tried to stop this happening in the 1970s—it would be back in full swing.

I turn briefly to an argument that has been advanced by some of my colleagues, including my hon. Friend the Member for Hendon, South (Mr. Marshall), for regional banding to be introduced for valuations in London and the south-east. Attractive though such an idea seems at first—who does not want his constituents to pay less, even if it is at the expense of others—the more the practicalities are investigated, the less it appeals. It would be extremely difficult, if not impossible, to define a fair boundary of any such region and outside that region there would be many with similarly valued properties who would clamour to receive the same treatment. This would be a fertile area of endless dispute. It would soon be reflected in the ballot boxes, let alone in further legislative changes in the House.

Nor must we fashion a large and significant part of the proposed tax system, as we did with the community charge, around admittedly genuine worries about single, elderly people—they are usually widows—who often remain in highly valued family homes and who will not love us for reintroducing a property tax. The 25 per cent. rebate for a single person is extremely welcome, but who would not wish for more on behalf of his or her constituents?

Even though some will blame us for bringing back a more expensive tax compared with their experience with the community charge, I ask them to compare what they will pay under the council tax with their old rate bills, the rates being a system to which the Labour party has promised to return. I remind the House and those outside that under a Labour Government, bearing in mind all the spending plans of the Opposition, it would not be long before all the valuable contents of many people's homes—for example, the cherished walnut table bought for 30 bob in 1937 that is now valued at over £2,000—would fall to be taxed. Not far from any Labour Government is the desire, after a while when they need the money, for a wealth tax.

Finally, I welcome the sensible arrangements in the Bill for students, which were caricatured ridiculously by the hon. Member for Glasgow, Garscadden (Mr. Dewar). I welcome also the recognition of other suitable candidates for special consideration, including student nurses. I ask my hon. Friend the Minister of State to take on board the fact that the relevant provisions will require detailed regulations. In the hope that councils can make progress in setting up the necessary arrangements, including the relevant software, I look forward to the rapid introduction of regulations. It is important that councils know where they stand so that they can pass on the relevant information to our constituents. I know that Labour Members are anxious that that should happen, as are Conservative Members. When the Bill becomes an Act and when Opposition Members find themselves on people's doorsteps, they will face the same questions—this always happens to them—time and time again. These are as follows: "What are you going to do? How are you going to pay for it?" When that happens, the virtues of what we propose will be extremely clear.

9.5 pm

Mr. David Lambie (Cunninghame, South)

I wish to make only one or two points in the short time available to me. I am disappointed with the attendance in the Chamber today, as I was with yesterday's attendance. This Bill is the flagship of the Government's legislative programme, and Labour Members are opposing it hook, line and sinker.

Mr. John Marshall

All six of them.

Mr. Lambie

It is a six-line Whip.

The general public and those who watch our proceedings on television must wonder whether we are really fighting. We should have had a general election last Thursday, rather than three by-elections. We have only to look around the Chamber to know that this Parliament is finished; it is dead. A general election last Thursday would have settled once and for all the political policies that the country will follow for the next few years.

The hon. Member for Tayside, North (Mr. Walker) said that he was glad that there was only one Bill covering England, Wales and Scotland. That will not go down well in Scotland. Scotland has its own system of local government that is quite different from that in England and Wales. We have district councils and regional councils. We have a different system of valuation. In Scotland, it is carried out by assessors who are employed by the regional councils. In England and Wales, it is carried out by a branch of the Inland Revenue.

I do not understand why we should be dealing with local government finance in Scotland in a Bill that covers the United Kingdom. The only reason is that after the by-election in Kincardine and Deeside only nine Conservative Members representing Scottish constituencies are left in the House, and the majority of those sit on the Government Front Bench. There would be no Scottish Tory Members to man a Standing Committee on a separate Scottish Bill. That is a disgrace both to this Parliament and to the Tory party in Scotland. If the Government cannot man a Committee, they should draft in English Members. The Scottish people would then realise that it is the Labour party, not the Conservative party, that represents Scotland.

Scotland was the first area to have poll tax imposed on it. Why? I made many speeches during the passage of that legislation. I blame both local councillors in Scotland and Scottish Members of Parliament, from both sides of the House, who were stupid enough to allow revaluation in Scotland to continue after the English stopped it in 1973. The Inland Revenue said that it did not have enough workers to carry out the revaluation in England and Wales, so from that date there were no revaluations of property.

In Scotland, Members of Parliament from both sides of the House and local government employees and councillors stupidly said that they would continue with the revaluation, and so we had five-year revaluations until 1985. The way that the assessors in Scotland attacked the valuation of domestic property led to a revolt among Scottish Conservative voters living in the big houses of Scotland. As the Member of Parliament for my former constituency, I represented the town of Troon, a very Tory town that had more millionaires per head of population than any other area in the United Kingdom.

That was the area that was attacked by the Tory Government in their valuations and that is why we had the revolt. That is why the people of Scotland rose up against the rating system. It was not because the rating system was bad, but because of the way in which the rating system was being carried out, attacking certain areas of domestic property, and, because the English had not carried out a revaluation since 1973, Scotland got out of line. Unfairly, the Scottish domestic ratepayer was badly hit and, in the area near to the constituency of the then Secretary of State for Scotland, the right hon. Member for Ayr (Mr. Younger), the majority were Conservative voters. We had to change and the poll tax was introduced in Scotland a year before it was introduced in England and Wales. Stupidly, the English followed us and made the same mistake.

At present local taxation accounts for only 14 per cent. of local government expenditure in England and Wales and only 11 per cent. in Scotland. This is a point that I have made often in the House and on which I think that I have the support of the Adam Smith Institute which I hope will also be supported by many Conservative Members. Instead of local taxation in Scotland accounting for only 11 per cent. of total local government expenditure, why do not the Government pay 100 per cent.? Why do not we set an example in Scotland, as we did for the poll tax? Why do not the Government abolish local rates in Scotland and pay a 100 per cent. grant to the Scottish local authorities, basing local accountability on the principle that local councillors will determine how that money should be spent?

If we did that, we would do away with all these debates about local taxation, whether we should have the rating system or another system such as the poll tax or the council tax, and we would have a system which, at the end of the day, would give the local people the opportunity to determine priorities. This is one case where, again, I make the point that I am proud to stand here and support the policies of the Adam Smith Institute which every Tory Member should also support, but unfortunately they are afraid to do so because they are facing a general election, knowing that they will be out of power within six months.

9.12 pm
Mr. David Blunkett (Sheffield, Brightside)

During the past two days we have heard a vast number of contributions and I pay tribute to the common sense and foresight of Labour Members who have not only pointed out the inequalities of the system that is still in being but the pitfalls that we see ahead of us.

To begin with, I pay tribute to an intervention made by the hon. Member for Wolverhampton, South-West (Mr. Budgen) who, earlier today, rightly pointed out that in a democracy Parliament should be expected to debate a measure such as this in a sane and sensible fashion.

The guillotine motion after 10 o'clock tonight will attempt to preclude sensible contributions, attempt to preclude people from dealing with the difficulties and technicalities in the Bill, and pose a real problem for those of us who believe that local government is not a political football to be kicked about at whim, but an essential part of our democracy for the provision of essential services. The hon. Gentleman was brave to say what he did.

The hon. Gentleman was far more brave than the hon. Member for Torridge and Devon, West (Miss Nicholson) who has adopted the role of reading out central office briefs in the House to apologise for the Conservative party. She invented a new phrase tonight about the council tax being a light touch on people's wallets. I believe that Dickens used that phrase in "Oliver Twist". It will have a similar connotation when people discover what drops through their letter boxes if they are foolish enough to vote Conservative at the next general election.

We have also heard some honest interventions, however, The hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) staggered to his feet to tell us that he did not believe a word of what Ministers were saying. He did not believe in the new property tax; he believed that it would constitute theft from the old ladies living down the road, who would consequently vote against the Tories.

The right hon. Member for Shoreham (Sir R. Luce) thinks that we should change the standard spending assessments. The hon. Member for Gravesham (Mr. Arnold) said the same yesterday, but Ministers were unable to enlighten him about the method that might be used. The previous Secretary of State—the right hon. Member for Bath (Mr. Patten), now chairman of the Conservative party—had promised two years ago that he would have a look at SSAs; that promise, however, came to nothing, as has every other Government promise relating to local administration.

Yesterday, we heard 10 interventions from the Tory Benches on the Secretary of State's speech. They came from the right hon. Member for Brent, North (Sir R. Boyson); from the hon. Member for Hendon, South (Mr. Marshall); from the hon. Member for Lancaster (Dame E. Kellett-Bowman), who wanted to retain the poll tax—I do not think that anyone has told her yet that the Conservatives propose to do away with it. The hon. Member for Rochford (Dr. Clark) had some worries. The hon. Member for Norfolk, North (Mr. Howell) said that VAT should he increased: I suspect that he was giving away a secret Tory agenda.

We heard from the hon. Member for Leeds, North-West (I)r. Hampson), and from the hon. Member for Warrington, South (Mr. Butler). The hon. Member for Honiton (Sir P. Emery) spoke of abolishing the poll tax by April 1992. We could not agree more with that; we proposed it on 13 December last year, when the Government were introducing the Community Charges (Substitute Settings) Bill. A bigger waste of time has never been seen, for that legislation will be overturned by this Bill. We offered the Government time, saying, "Let us not waste each other's time: let us abolish the poll tax now, and get rid of it by April 1992." Would the Government agree? Of course not; at that stage, they were still clanging to the poll tax.

The hon. Member for Birmingham, Hall Green (Mr. Hargreaves) also intervened in the Secretary of State's speech yesterday, expressing anxiety about the new tax. The hon. Member for Amber Valley (Mr. Oppenheim) mentioned Derbyshire county council; I remind the hon. Gentleman that Labour took Amber Valley in the local elections in May.

Hon. Members seem to think that the council tax is the best thing since sliced bread, but we know that the sliced bread is extremely stale. This is the same sort of tripe that Conservative Members came out with when they were defending the poll tax; the poll tax was indefensible, and the council tax is going the same way.

As my hon. Friend the Member for East Lothian (Mr. Home Robertson) rightly pointed out, surely it is time for a little contrition. Surely it is time for the present Home Secretary—who started all this in Cabinet, along with the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley)—to apologise. The present Secretary of State for Employment saw the poll tax legislation through its Committee stage; perhaps he too will apologise. Perhaps the current Minister of Agriculture, Fisheries and Food, and the current Secretary of State for Wales—both of whom were responsible for the implementation of that legislation—will do the same. All those Ministers were promoted as a result of their work in that regard.

The present Minister for Local Government and Inner Cities was still defending the poll tax at the time of the fated Ribble Valley by-election, only a few months ago. I shall not go into details about his speeches; that was done at great length on 12 June, and people can read the speeches at their leisure. The Minister declared, however, that any form of property tax would constitute a betrayal of what was then seen as the Thatcherite mantle, of middle England—Conservative England—and of those who had scrimped and saved to secure their homes. But times change. People stand on their heads and wiggle their feet in the air. Some cannot tell whether people are standing on their heads or their feet, because the same kind of rubbish comes out. That is why we should be receiving apologies tonight from Conservative Members. Some bare their souls on their feet and some bare their souls in the bars.

Behind the scenes, many who sit on the Conservative Benches are betraying their concern even before the Bill has received its Second Reading. They are as worried as we are about the implications for the people of this country. Those Conservative Members and the electorate know that we are not to blame for the mess that we are in. The Conservatives introduced the poll tax and made a mess of implementing it. The British people will hold them to account at the election.

Local government faces nothing short of a catastrophe. Debt stands at unprecedented levels. The debt in England alone amounts to £1.5 billion. Two thirds of the Scottish population have warrants out against them. We expect 7.5 million orders to be issued against people in England. The law is in disrepute. Collection of the tax is in a shambles. Conservative Members, however, have the cheek to suggest that that is the fault of local government, not theirs.

My hon. Friend the Member for Leyton (Mr. Cohen) yesterday asked the Under-Secretary of State for the Environment, the hon. Member for Salisbury (Mr. Key), whether he would consider the abolition of the minimum 20 per cent. contribution. That is to be found at column 860 of Hansard. My hon. Friend said that it should be abolished this year, or at least in 1992–93. The hon. Member for Salisbury got to his feet and made the most amazing pronouncement in the two-day debate. It was one word. He asked "Why?" Why? Because it costs two and a half times as much to collect as the money that is received.

The Audit Commission pointed out that 4 million people would be lifted out of the penury of having to pay it and that it would be possible to concentrate on those who can genuinely afford to pay but who do not. The administrative burden would be lifted from local government; it would then be able to concentrate on the job in hand. The Minister, however, does not give a damn about what is happening to people on the lowest incomes; he does not even understand what is happening to local government.

It is no wonder that Ministers do not understand the problems local government faces in having to prepare for the final year of poll tax, in having to work out how to collect the current year's poll tax, in having to prepase the software for collection of the council tax. Local government is on the verge of collapse, but who gives a damn on the Conservative Benches about that and what it means for local government services? Instead of contrition, instead of apology, constant and unmitigated attacks are made on Labour councils that are struggling, in the most difficult areas of the country, to provide services.

Dame Elaine Kellett-Bowman (Lancaster)

What about rents?

Mr. Blunkett

Does the hon. Lady wish to intervene? I see that she does, so I shall certainly give way to her.

Dame Elaine Kellett-Bowman

It is not only a question of many Labour-controlled councils not bothering to collect the community charge. Many of them do not even bother to collect rents. Not even the hon. Member for Sheffield, Brightside (Mr. Blunkett) can defend their policy not to collect rents.

Mr. Allen McKay

The hon. Lady does not know what she is talking about.

Dame Elaine Kellett-Bowman


Madam Deputy Speaker (Miss Betty Boothroyd)

Order. Come along now—the hon. Lady has had her say.

Mr. Blunkett

My hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) could not have put it better. The hon. Lady's response admirably sums up, in one word, what the council tax is all about—absolute and unmitigated rubbish.

Councils throughout the country are doing their utmost, including court cases that the police will not assist with and that the Home Office will not instruct the police to assist with, to collect the poll tax and, of course, any outstanding rates bills.

We have a system of local government finance which has concentrated its attention on the poll tax payer, bringing in gearing which has resulted in enormous increases in bills, without any material increase in spending or improvements in services. We have witnessed the abolition of the local domestic business rate, the introduction of the non-domestic business rate and the way in which that has concentrated the power of decision-making still further in the hands of Ministers. It is a shambles, which has resulted in local government being undermined and the role of the local community being seen as a threat rather than as a partner trying to rebuild broken economies, help the unemployed and do something about essential services.

Every time that Labour local authorities spend more money on education or social services Ministers claim credit for the increase in spending. Every time that it comes to capping regulations, those same authorities are blamed and pilloried for the spending for which Ministers have happily claimed the credit.

Instead we need a sensible system with decent values, not a tax which assaults families. The present proposal, in all its glory, with the present valuation and discount system is an attack on the family.

I do not know whether Conservative Members have given any thought to what the present discount system is likely to do—it is more likely to accelerate the disintegration of the family than to bring people together. It is the Norah Batty syndrome, if I may be sexist, where far from losing a million people off the register as happened during the last census because of the poll tax, in the next census men will be sent to the shed at the bottom of the garden to keep out of the way. We will have a nation of single widows, with men escaping from the tax and their spouses claiming the 25 per cent. discount.

In the past two days we have heard a lot about students. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) rightly pointed out some of the anomalies that the Minister says he will reply to, such as the marrried student with two children who will receive a 25 per cent. discount but who will be exempt from the tax if he leaves his wife and family and moves in with his student friends down the road. That is the nonsense. Students in halls of residence will allegedly be exempt from the tax. However, many halls of residence will have to pay business rate because many of them undertake business activities in the recesses. Those who know anything about the way in which universities and polytechnics work know that they are businesses and not merely halls of residence. Are we presuming that those students will not be expected to pay anything in the charge that they pay for staying in the halls of residence? If not, will halls of residence pay a business rate only during the recesses? Will it be assessed on a daily basis as the amount of council tax will be? Those are the types of question that need answers before we know what sort of chaos we are going to face with the council tax.

Mr. Oppenheim

As the hon. Gentleman is clearly so hostile to the concept of a single person household discount, will he state clearly and unequivocally whether any future Labour Government would abolish it?

Mr. Blunkett

Our fair rates proposals make the situation unequivocally clear. We say that we will protect single retired people, we will ensure that the rebate system is improved not only to help those people, but to target help on all those who need it and we will ensure that what people pay is based on their ability to pay and not on their status. We are not in the business of giving handouts to the Duke of Westminster because he happens to move out of the present matrimonial home and into a single person's flat. We are not in the business of expecting other people who can ill afford it to pick up the cost of a single person's discount for the rich. We are not in the business of putting on the backs of the poor the cost of the 50 per cent. discount that second homes will be accorded. That, too, is in the Bill.

Every time the Government bring in something to protect the rich, the burden is passed to the rest of us. The poor will pay for the protection accorded to the better-off. That is what the proposed valuation and banding are all about. That is why we are so opposed to the system that charges the richest person in Westminster only £273 a year but the poorest person in Wigan £339 a year. That is why we are opposed to the poorest person in Westminster paying only £3 a week less in council tax than the richest, including some Tory Members.

The banding system and property valuations are devised deliberately to protect the rich at the expense of the rest. That is why we know that people will not only feel that it is unfair and understand that it is unfair, but will at the general election bring home to roost the chickens that many Tory Members will be voting on at 10 pm tonight.

The same applies to much else that languishes in this tax as an alternative to the ill-fated poll tax. Not for Tory Members the speed, simplicty and certainty of the broad-based tax that we should have. Not for them the buoyancy, cost-effectiveness, fairness and progressiveness that "Fair Rates" offers to the British people. Not for them the comprehensibility or even the logic spelt out by the Prime Minister shortly after his election as leader of the Conservative party when he rightly said that there was something wrong with a tax that resulted in 50 per cent. of the population having to receive a rebate or discount on the amount that they paid. Yet that is exactly what the council tax will involve.

With the intricacies, unfairness and technicalities, it is no wonder that the Secretary of State for the Environment has declined to serve in Committee. No wonder he will not join us three days a week from now until Christmas. Instead, he will have a fortnightly visit to Brian Walden on Walden's weekly interview. [Interruption.] My hon. Friend the Member for Dagenham (Mr. Gould) corrects me: it is rather that Brian Walden will visit the Secretary of State for lunch and take the cameras with him. No wonder the Secretary of State has been given a roving brief across Europe. He fails to understand even the one that he has.

Mr. Oppenheim

Get on with it.

Mr. Blunkett

A Tory Member shouts, "Get on with it". That is not surprising because it is difficult to protect the Secretary of State from his own inadequacies. As my hon. Friend the Member for, Garscadden said earlier this afternoon, the Secretary of State has to rely on his Minister—the AA man, as he was described in the Financial Times. Although the Secretary of State knows nothing about the Bill, he knows the man who does, and that man does a good job.

In the 40 minutes that we shall have to debate each clause it will be difficult to point out to Tory Members the Bill's inadequacies. It will take us until clause 100 before the poll tax is abolished. It will take more than the three weeks to reveal the confusion that abounds, but we shall do our best.

We know that if, in the introduction of the council tax, the Government inflict on the British people what they did with the poll tax—the £10 billion that it has cost us, the increase in VAT to manipulate it and the innumerable changes to make it more acceptable—local government and the British people will face the same sort of inadequacies and misery.

We have heard Conservative Members talk about the necessity of capping. We were told that capping would be necessary until the poll tax was introduced as that would bring accountability. We were then told that only a handful of high-spending authorities would be capped. Then we were told that when the poll tax really bit, capping would not be necessary. Now we are told that universal capping is necessary because the Secretary of State and his colleagues are frightened of trusting local people to make local decisions under the new banded system. No wonder they are frightened, because the way in which the council tax will be implemented will confuse people to the point where they will be unclear about who is paying what and who is making the decisions.

The gearing procedure will result in a 1 per cent. increase in spending, incurring an average increase of between 7 and 8 per cent. in the local tax. The proposed national business rate will ensure that the narrowness of the domestic base under the council tax will inflict misery on local people. That is why our "Fair Rates" proposals offer a different solution.

The 20 per cent. contribution will be abolished, the rebate system will be improved and single retired people will be protected. All that will ensure that the tax is fair and progressive. It will also ensure that it has a broad base and that the business rate is decentralised. We will introduce rebates for small businesses to protect those who are setting up in business or struggling to stay in business.

The Labour party believes in fairness and justice. In the weeks ahead it is therefore beholden upon us to get across the message that, once again, the Government have got it wrong. We are witnessing the third change in three years, a change that will produce further misery and confusion.

My colleagues and I do not believe that the British people will be fooled a second time—one can take a horse to water but one cannot make it drink. The general election will be the opportunity for which we have waited. That opportunity has been delayed too long. That general election will be fought not simply on fair rates, but on a fair Government. The people of Britain will understand clearly that to achieve that they must vote Labour.

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

We have reached the end of the third full day's debate on the council tax. We had one day on the Queen's Speech, and now we have had two full days on Second Reading. I am bound to say that I do not believe that this debate has reached the level of fizz that one might have associated with a Bill that was to be fought doggedly tooth and nail by the Opposition.

At the climax to the debate a few minutes ago the hon. Member for Cunninghame, South (Mr. Lambie) was addressing a single Labour Back Bencher. During much of the debate we have had no representation from the Liberals or the Scottish Nationalists. Indeed, when the wind-up began this evening there were no Liberals or Scottish Nationalists present.

It has been an exhausting three days for the Labour Whips as they trawled the corridors of the Palace to try to find people who they could wheel in to speak in this debate. None the less, fortunately there have been fine contributions to the debate from the Conservative Benches. We have had such contributions from my hon. Friends the Members for Torridge and Devon, West (Miss Nicholson) and for Tayside, North (Mr. Walker). My hon. Friend the Member for Hendon, South (Mr. Marshall) included in his speech one of the pithiest denunciations of the rates that I have ever heard. We also heard fine contributions from my hon. Friends the Members for Amber Valley (Mr. Oppenheim) and for Battersea (Mr. Bowis), who has a quarry of good stories from the London borough of Wandsworth.

My hon. Friend the Member for Portsmouth, South (Mr. Martin) provided us with a model of how much can be put into a brief speech. My right hon. Friend the Member for Shoreham (Sir R. Luce) asked me to consider the standard spending assessments. I assure him that we look at them every year, but he is aware, as he said during his speech, that there are two different objectives: one is to make the assessments as simple as possible; the other is to make them as fair as possible. The two objectives do not necessarily lie in the same direction.

The Opposition raised the canard that some sort of register is required under the council tax. We have denied that categorically. It can only be obtuseness or a refusal to believe that can still lead the Opposition to make that claim.

The basis of the council tax is, first, a property element. In that respect it is like the rates. We want to give discounts to single people—the Labour party does not—and single people will have every incentive to make themselves known. It is not like a council tax register with people not wishing to make themselves known. Single people have every reason to come forward and declare that they are entitled to a discount. But if they do not come forward, there is no penalty. There is no statutory requirement to hold a register of such people. There is all the difference in the world between finding out who the single people are and having a statutory register as we have under the community charge.

There is no difference in principle between what we propose for finding out about single people and what is proposed in the so-called Bill put forward by the hon. Member for Sheffield, Brightside (Mr. Blunkett), in which he would need to identify pensioners, pensioner couples and people on low incomes. There is no difference, either, between what we have under the community charge and under the rates in respect of identifying people who are entitled to help through social security benefit, if they are on low incomes.

There has been a misunderstanding of the Government's plans from the point of view of social security benefits. Just as with the rates, when people in receipt of social security benefit had living with them someone who was not in receipt of benefit, there was a system known as non-dependent deductions—the hon. Member for Brightside will be well aware of that system—so, too, under the council tax it will be possible for the claimant—the person liable to the tax—simply to let us know, through a single declaration, about the other people in the household who may not be eligible for income support and who may be eligible to make a contribution to the council tax bill.

There has been some confusion—I do not know why there should have been because it was made clear last night by the Secretary of State for Wales—about the position of students. There are two issues. First, students should not be counted as adults when we are deciding whether the single person discount should be given to a household. Students, including all student nurses, YTS trainees and apprentices, will be invisible. In other words, they will not count as though they were adults in a household. They will not stop a single person who is not in one of those categories from being able to qualify for the single person household discount.

The second issue is that, if a household is composed entirely of students, it should be exempt. It is easy to do with halls of residence, but it is also easy to do where students are living in digs or even when they are the owners of properties. Where they are all students, they will be exempt and no payment will have to be made. In this case we include student nurses on Project 2000 because they are, like other college students, not eligible for social security benefit. In this second category we do not include other student nurses, YTS trainees and apprentices because all those people are entitled to social security benefits.

If their incomes are low—if, for example, a student nurse has a low income—there will be no difficulty; she will be able to claim social security benefit, so there is no reason why she should be entitled to the exemption available to other students. I hope that that puts the matter beyond doubt, and I believe that my hon. Friends will greatly welcome that important development in the new council tax.

The Government have chosen to have regional banding for Scotland, Wales and England. The council tax is composed 50 per cent. of a property tax. I sometimes think that some of my hon. Friends who would like to see the tax in some way equalised between one place and another are hankering after a tax which this tax is not. With a tax based on property, it follows as night follows day that the amount people pay will vary according to where they live and the properties in which they live. Those who would like the tax to be the same for everyone, no matter where they live and no matter what property they live in, will be disappointed by the council tax because, frankly, it is not that sort of tax.

Being a property tax—there is not now any contention between the two main parties about that—we can either tax the kind of house and say, for example, that all three-bedroom properties shall be taxed the same, in which case my hon. Friends should be aware that we would soon have tremendous anomalies as the same tax is placed on a Mayfair flat as is put on a flat in a mining village, or we can have regional banding, and then there must be boundaries between regions.

There are no natural boundaries between property price regions, so let us assume that one would use the standard regions—the south-east, the east midlands, the west midlands and so on. There would then be extraordinary anomalies. For instance, taking a semidetached house worth £60,000 in Milton Keynes and a semi-detached house also worth £60,000 in Northampton, the household in Northampton would pay £88 more in tax simply because it happened to be across the regional boundary. Hon. Members should try to explain that to people in Northampton and Milton Keynes.

Alternatively, people in an average house in Southampton would pay £89 less than people in Salisbury. I doubt whether my hon. Friend the Member for Salisbury (Mr. Key) would be amused by that. People living in a semi-detached house in Cambridge would pay £89 more than people in a similar house in Oxford simply because they were in East Anglia rather than the south-east, even though the semi-detached house in Oxford had cost much more.

Therefore, the only basis on which we could have a property tax and valuation would be on a national banding system because that would be understandable and objective. I agree that such a tax system based on the capital value of houses, on a national banding system, would be unfair unless we had taken care to provide for compressed rates of taxation. We do not say that if a house is worth eight times as much as another the tax bill should be eight times as much. That has been the position of Labour speaker after Labour speaker, but we could not tolerate such an unfair system. For people living in the same area, those in the most expensive properties should pay not more than three times as much—the maximum variation—as those in the least expensive properties.

However, that is only part of the answer. The other part is what has already been done—the massive and permanent shift in funding from local to central taxation. In future, 15 per cent. of local spending will be raised in local taxation only in England and 11 per cent. of spending will be raised in local tax only in Scotland. My hon. Friends may fear that in some parts of the country we shall return to the oppressive and unfair bills which people received under the rates system. That is certainly not the Government's intention, and the Bill does not provide for that.

For example, in Barnet, the borough of my hon. Friend the Member for Hendon, South, the rates bill on a four-bedroomed detached house used to be £986. We now propose a council tax that would have produced a bill this year of £617. Last year, two of my hon. Friend's constituents in such a house paid £676 in community charge, so this year's council tax would have been cheaper for them—[Interruption.] My right hon. Friend the Member for Brent, North (Sir R. Boyson) takes the prize, because the rates bill in Brent on a four-bedroomed house was £1,826. The council tax bill would have been £706, making the bill £1,120 less under the council tax. We heard yesterday from my hon. Friend the Member for Harrow, West (Mr. Hughes). A four-bedroomed house in Harrow, West was charged £1,137 in rates. The council tax would have been £588, a reduction for his constituents of £549. My hon. Friend the Member for Rochford (Dr. Clark), whose rates bill on a four-bedroomed house was £1,280, would have received a council tax bill of £510—a reduction of £770.

Mr. Gould

The Minister is giving extremely persuasive and interesting figures. Given the huge disparities which are of such enormous benefit to those at the top of the scale, who will pick up the bill? Who will bear responsibility for paying every penny of savings gained by top people?

Mr. Portillo

I have already explained that the most important change that we have made is to shift the balance between what is paid centrally and what is paid locally, so I can answer the hon. Gentleman's question. If he fears that in some houses lurk people on high incomes, those people will pay vast sums in income tax, VAT and corporation tax to provide the grants for local government.

Mr. Gould

Will the Minister give way?

Mr. Portillo

This is my speech, not the hon. Gentleman's, and I warn him that if I give way now it will be for the last time.

Mr. Gould

In what the Minister has just said, I detect exactly the same argument that he and many others used to justify the flat rate principle of the poll tax. Is he not conceding and making clear something that was always true: the 2.5 per cent. VAT required from everyone who buys anything, which is paid to local government taxpayers, is entirely for the benefit of those who are most wealthy and best able to meet the bills?

Mr. Portillo

As the hon. Gentleman knows, the people who spend most on VAT are those who spend most on goods that attract VAT; they are not the poorest in society. Children's clothes, food, transport and fuel are all zero-rated under the VAT system. Is the hon. Gentleman saying that, if he were in power, he would repeal the increase in VAT? He spent much time today and yesterday denying that he would increase from 14 to 20 per cent. the proportion paid by local taxpayers. He now appears to be saing that he would repeal the increase in VAT. If he is not saying that he would repeal the increase in VAT, he is simply speaking out of both sides of his mouth at the same time.

Mr. Gould

Will the Minister give way?

Mr. Portillo


Mr. Gould


Mr. Speaker

Order. I think that I heard the Minister of State say that he would not give way.

Mr. Portillo

We have just heard from the hon. Gentleman that all our proposals for discounts for single people and alleviation of the top rates of the tax are anathema to the Labour party, which wants to return to the full rigours of the rates. Under Labour, people in a house worth £200,000 must pay five times as much as people living in a £40,000 house, regardless of regional disparities or anything else.

Wherever the Labour party detects that there might be someone who could pay more under the rates, it wants every last penny out of that person. That is what we mean when we say that the Labour party is advocating an envy tax. We have just heard the hon. Member for Dagenham (Mr. Gould) dismiss the argument that people pay more income tax and VAT if they are on high incomes.

What about the discounts? We have heard many Labour arguments against them. The Labour party fears that somewhere there might be a single person who is also a millionaire who could benefit from a single person's discount, so it is absolutely against the proposal. Under a Labour Government, there would be no relief to widows, single mothers or young people starting out in life who live on their own. According to the hon. Member for Brightside, under Labour's proposals there is to be a discount for single retired people, even if they are billionaires.

There have been 70 changes of Labour party policy. I do not include in that 70 the number of occasions when the hon. Members for Brightside and for Dagenham have said contradictory things. I have always assumed that Brightside had it right and Dagenham was merely contributing a series of Gouldisms to the discussion.

Among the many popular items in this Bill is the provision that councillors who will not pay their community charge or their council tax will not in future be entitled to vote on setting a budget for their local authorities——

Mr. Blunkett

Come on.

Mr. Portillo

The hon. Gentleman says that because there is a lingering interest among Labour Members in people who have avoided the community charge. We heard it yesterday from the hon. Member for Dagenham, who referred to the community charge register as a threat to civil rights. He talked of the hundreds of thousands who traded away their votes so as not to register for the community charge. The Labour party cloaks under expressions such as "attack on civil rights" the fact that such people have not registered for the tax and have been indulging in tax avoidance, a practice for which the Labour party still shows some sympathy.

The Government are accused of changing their mind over local authority finance. I am accused of that; I am even accused of changing my hairstyle because of my attitude to local authority finance. Certainly I defended the community charge, which gave Labour councils in many areas the fright of their lives. I am asked whether I am sorry. I am sorry that we did not manage to pin the overspending of Labour authorities on those authorities and that we did not have a chance to repeat across the country the electoral triumphs that we enjoyed in Trafford, Southend, Brent, Hillingdon, Ealing, Wandsworth and Westminster.

So I am happy to say that the Government have changed their mind on local authority finance, but the world still goes round and the Conservative party is still a Conservative party. Has the Labour party ever changed its mind? Has it changed its mind on unilateral nuclear disarmament, or on the Common Market, or on nationalisation, or on trade unions, or on the free market? [HON. MEMBERS: "Yes."] Has the Labour party changed its mind on capitalism, or on the Soviet Union? Is there anything on which the Labour party has not changed its mind? [HON. MEMBERS: "Yes: the poll tax."]

One principle has been rescued form the wreckage of socialism—the principle that local authorities should not be capped and should be allowed to spend and spend as though there were no tomorrow. For the Labour party, there is no tomorrow.

Is there one honest man left in the Labour party? Perhaps it is the right hon. Member for Blaenau Gwent (Mr. Foot), who fought an election on an honest programme and was defeated. Then there is the hon. Member for Coventry, South-East (Mr. Nellist), who is willing to go to prison for his views. Perhaps it is the hon. Member for Bolsover (Mr. Skinner), who is willing to continue to enunciate the principle that there is no such thing as a free lunch. And what is the uniting feature of all these people? I have discovered a dress code among Labour party members. If an hon. Member's jacket and trousers do not match and his clothing in general does not reach the heights of elegance, we know that he is an honest man. The dark suits of the Labour Front-Bench spokesmen betray those who have turned their coats.

The council tax is based on a new distribution of local and central finance. It consists of a property element and a personal element. It is fair and will be accepted as fair by the people. We shall take it through the House, despite the Labour party's opposition.

Question put, That the Bill be now read a Second time:—

The House proceeded to a Division——

10.2 pm

Mr. Bob Dunn (Dartford)

(seated and covered): On a point of order, Mr. Speaker. I understand that there is a bomb scare, and that hon. Members are finding it difficult to get access to the Lobbies. Will you advise us as to what can be done?

Mr. Speaker

I am aware that there is some difficulty in getting into the building. I am having the matter looked into, and I shall make a statement about it in a few minutes.


Mr. Peter L. Pike (Burnley)

( seated and covered): On a point of order, Mr. Speaker. The time has elapsed when the doors should be locked. We all know that there is some disturbance outside—you have already said that you will make a statement on that—but it is unusual for the doors not to be locked by this stage in a Division.

Mr. Speaker

There is a slight problem. There is some difficulty in Members getting to the House because a street has been closed. I propose to allow a further 10 minutes before the doors are locked.

The House having divided: Ayes 334, Noes 245.

Division No. 4] [10 pm
Adley, Robert Davies, Q. (Stamf'd & Spald'g)
Aitken, Jonathan Davis, David (Boothferry)
Alexander, Richard Day, Stephen
Alison, Rt Hon Michael Dickens, Geoffrey
Allason, Rupert Dicks, Terry
Amery, Rt Hon Julian Dorrell, Stephen
Amess, David Douglas-Hamilton, Lord James
Amos, Alan Dover, Den
Arbuthnot, James Dunn, Bob
Arnold, Sir Thomas Durant, Sir Anthony
Ashby, David Dykes, Hugh
Aspinwall, Jack Eggar, Tim
Atkins, Robert Emery, Sir Peter
Atkinson, David Evans, David (Welwyn Hatf'd)
Baker, Rt Hon K. (Mole Valley) Evennett, David
Baker, Nicholas (Dorset N) Fallon, Michael
Baldry, Tony Farr, Sir John
Banks, Robert (Harrogate) Favell, Tony
Batiste, Spencer Fenner, Dame Peggy
Beaumont-Dark, Anthony Finsberg, Sir Geoffrey
Bellingham, Henry Fishburn, John Dudley
Bendall, Vivian Fookes, Dame Janet
Bennett, Nicholas (Pembroke) Forsyth, Michael (Stirling)
Benyon, W. Forth, Eric
Bevan, David Gilroy Fowler, Rt Hon Sir Norman
Biffen, Rt Hon John Fox, Sir Marcus
Blackburn, Dr John G. Franks, Cecil
Blaker, Rt Hon Sir Peter Freeman, Roger
Body, Sir Richard French, Douglas
Bonsor, Sir Nicholas Fry, Peter
Boscawen, Hon Robert Gale, Roger
Boswell, Tim Gardiner, Sir George
Bottomley, Peter Gill, Christopher
Bottomley, Mrs Virginia Gilmour, Rt Hon Sir Ian
Bowden, Gerald (Dulwich) Glyn, Dr Sir Alan
Bowis, John Goodhart, Sir Philip
Braine, Rt Hon Sir Bernard Goodlad, Alastair
Brandon-Bravo, Martin Goodson-Wickes, Dr Charles
Brazier, Julian Gorman, Mrs Teresa
Bright, Graham Gorst, John
Brooke, Rt Hon Peter Grant, Sir Anthony (CambsSW)
Brown, Michael (Brigg & Cl't's) Greenway, Harry (Ealing N)
Bruce, Ian (Dorset South) Greenway, John (Ryedale)
Buck, Sir Antony Gregory, Conal
Budgen, Nicholas Griffiths, Sir Eldon (Bury St E')
Burns, Simon Griffiths, Peter (Portsmouth N)
Burt, Alistair Grist, Ian
Butcher, John Ground, Patrick
Butterfill, John Grylls, Michael
Carlisle, John, (Luton N) Gummer, Rt Hon John Selwyn
Carlisle, Kenneth (Lincoln) Hague, William
Carrington, Matthew Hamilton, Rt Hon Archie
Cash, William Hamilton, Neil (Tatton)
Chalker, Rt Hon Mrs Lynda Hampson, Dr Keith
Channon, Rt Hon Paul Hanley, Jeremy
Chapman, Sydney Hannam, John
Chope, Christopher Hargreaves, A. (B'ham H'll Gr')
Churchill, Mr Hargreaves, Ken (Hyndburn)
Clark, Rt Hon Alan (Plymouth) Harris, David
Clark, Dr Michael (Rochford) Haselhurst, Alan
Clark, Rt Hon Sir William Hawkins, Christopher
Clarke, Rt Hon K. (Rushcliffe) Hayes, Jerry
Colvin, Michael Hayhoe, Rt Hon Sir Barney
Coombs, Anthony (Wyre F'rest) Hayward, Robert
Coombs, Simon (Swindon) Heath, Rt Hon Edward
Cope, Rt Hon Sir John Heathcoat-Amory, David
Cormack, Patrick Heseltine, Rt Hon Michael
Couchman, James Hicks, Mrs Maureen (Wolv' NE)
Cran, James Hicks, Robert (Cornwall SE)
Currie, Mrs Edwina Higgins, Rt Hon Terence L.
Curry, David Hill, James
Hind, Kenneth Moss, Malcolm
Hogg, Hon Douglas (Gr'th'm) Moynihan, Hon Colin
Hordern, Sir Peter Mudd, David
Howard, Rt Hon Michael Neale, Sir Gerrard
Howarth, Alan (Strat'd-on-A) Nelson, Anthony
Howarth, G. (Cannock & B'wd) Neubert, Sir Michael
Howe, Rt Hon Sir Geoffrey Newton, Rt Hon Tony
Hughes, Robert G. (Harrow W) Nicholls, Patrick
Hunt, Rt Hon David Nicholson, David (Taunton)
Hunt, Sir John (Ravensbourne) Nicholson, Emma (Devon West)
Irvine, Michael Norris, Steve
Jack, Michael Onslow, Rt Hon Cranley
Jackson, Robert Oppenheim, Phillip
Janman, Tim Page, Richard
Jessel, Toby Paice, James
Johnson Smith, Sir Geoffrey Parkinson, Rt Hon Cecil
Jones, Gwilym (Cardiff N) Patnick, Irvine
Kellett-Bowman, Dame Elaine Patten, Rt Hon Chris (Bath)
Key, Robert Patten, Rt Hon John
Kilfedder, James Pattie, Rt Hon Sir Geoffrey
King, Roger (B'ham N'thfield) Pawsey, James
King, Rt Hon Tom (Bridgwater) Peacock, Mrs Elizabeth
Kirkhope, Timothy Porter, Barry (Wirral S)
Knapman, Roger Porter, David (Waveney)
Knight, Greg (Derby North) Portillo, Michael
Knight, Dame Jill (Edgbaston) Powell, William (Corby)
Knowles, Michael Price, Sir David
Knox, David Raffan, Keith
Lamont, Rt Hon Norman Raison, Rt Hon Sir Timothy
Lang, Rt Hon Ian Redwood, John
Latham, Michael Renton, Rt Hon Tim
Lawrence, Ivan Rhodes James, Sir Robert
Lawson, Rt Hon Nigel Ridsdale, Sir Julian
Lee, John (Pendle) Rifkind, Rt Hon Malcolm
Leigh, Edward (Gainsbor'gh) Roberts, Rt Hon Sir Wyn
Lennox-Boyd, Hon Mark Roe, Mrs Marion
Lester, Jim (Broxtowe) Rossi, Sir Hugh
Lilley, Rt Hon Peter Rost, Peter
Lloyd, Sir Ian (Havant) Rowe, Andrew
Lloyd, Peter (Fareham) Rumbold, Rt Hon Mrs Angela
Lord, Michael Ryder, Rt Hon Richard
Luce, Rt Hon Sir Richard Sackville, Hon Tom
Lyell, Rt Hon Sir Nicholas Sainsbury, Hon Tim
McCrindle, Sir Robert Sayeed, Jonathan
Macfarlane, Sir Neil Scott, Rt Hon Nicholas
MacGregor, Rt Hon John Shaw, David (Dover)
MacKay, Andrew (E Berkshire) Shaw, Sir Giles (Pudsey)
Maclean, David Shaw, Sir Michael (Scarb')
McLoughlin, Patrick Shelton, Sir William
McNair-Wilson, Sir Michael Shephard, Mrs G. (Norfolk SW)
McNair-Wilson, Sir Patrick Shepherd, Colin (Hereford)
Madel, David Shersby, Michael
Major, Rt Hon John Sims, Roger
Malins, Humfrey Smith, Tim (Beaconsfield)
Mans, Keith Soames, Hon Nicholas
Maples, John Speed, Keith
Marland, Paul Speller, Tony
Marlow, Tony Spicer, Sir Jim (Dorset W)
Marshall, John (Hendon S) Squire, Robin
Marshall, Sir Michael (Arundel) Stanbrook, Ivor
Martin, David (Portsmouth S) Stanley, Rt Hon Sir John
Mates, Michael Steen, Anthony
Maude, Hon Francis Stern, Michael
Mawhinney, Dr Brian Stevens, Lewis
Maxwell-Hyslop, Robin Stewart, Allan (Eastwood)
Mayhew, Rt Hon Sir Patrick Stewart, Andy (Sherwood)
Mellor, Rt Hon David Stewart, Rt Hon Sir Ian
Meyer, Sir Anthony Stokes, Sir John
Miller, Sir Hal Sumberg, David
Mills, Iain Summerson, Hugo
Miscampbell, Norman Tapsell, Sir Peter
Mitchell, Andrew (Gedling) Taylor, Ian (Esher)
Mitchell, Sir David Taylor, Sir Teddy
Moate, Roger Tebbit, Rt Hon Norman
Monro, Sir Hector Temple-Morris, Peter
Montgomery, Sir Fergus Thompson, D. (Calder Valley)
Moore, Rt Hon John Thompson, Patrick (Norwich N)
Morris, M (N'hampton S) Thorne, Neil
Morrison, Sir Charles Thurnham, Peter
Morrison, Rt Hon Sir Peter Townend, John (Bridlington)
Townsend, Cyril D. (B'heath) Wheeler, Sir John
Tredinnick, David Whitney, Ray
Trippier, David Widdecombe, Ann
Trotter, Neville Wiggin, Jerry
Twinn, Dr Ian Wilkinson, John
Vaughan, Sir Gerard Wilshire, David
Viggers, Peter Winterton, Mrs Ann
Wakeham, Rt Hon John Winterton, Nicholas
Waldegrave, Rt Hon William Wolfson, Mark
Walden, George Wood, Timothy
Walker, Bill (T'side North) Woodcock, Dr. Mike
Walker, Rt Hon P. (W'cester) Yeo, Tim
Waller, Gary Young, Sir George (Acton)
Walters, Sir Dennis Younger, Rt Hon George
Ward, John
Wardle, Charles (Bexhill) Tellers for the Ayes:
Warren, Kenneth Mr. David Lightbown and
Watts, John

Mr. John M. Taylor.

Abbott, Ms Diane Davies, Rt Hon Denzil (Llanelli)
Adams, Mrs Irene (Paisley, N.) Davies, Ron (Caerphilly)
Allen, Graham Davis, Terry (B'ham Hodge H'I)
Alton, David Dewar, Donald
Anderson, Donald Dixon, Don
Archer, Rt Hon Peter Dobson, Frank
Armstrong, Hilary Doran, Frank
Ashdown, Rt Hon Paddy Douglas, Dick
Ashley, Rt Hon Jack Duffy, Sir A. E. P.
Ashton, Joe Dunnachie, Jimmy
Banks, Tony (Newham NW) Dunwoody, Hon Mrs Gwyneth
Barnes, Harry (Derbyshire NE) Eadie, Alexander
Barnes, Mrs Rosie (Greenwich) Eastham, Ken
Barron, Kevin Edwards, Huw
Battle, John Evans, John (St Helens N)
Beckett, Margaret Ewing, Harry (Falkirk E)
Beith, A. J. Ewing, Mrs Margaret (Moray)
Bell, Stuart Fatchett, Derek
Bellotti, David Faulds, Andrew
Benn, Rt Hon Tony Fearn, Ronald
Bennett, A. F. (D'nf'n & R'dish) Field, Frank (Birkenhead)
Benton, Joseph Fields, Terry (L'pool B G'n)
Bermingham, Gerald Fisher, Mark
Bidwell, Sydney Flannery, Martin
Blair, Tony Flynn, Paul
Blunkett, David Foot, Rt Hon Michael
Boateng, Paul Foster, Derek
Boyes, Roland Foulkes, George
Bradley, Keith Fraser, John
Bray, Dr Jeremy Fyfe, Maria
Brown, Gordon (D'mline E) Galbraith, Sam
Brown, Nicholas (Newcastle E) Garrett, John (Norwich South)
Brown, Ron (Edinburgh Leith) Garrett, Ted (Wallsend)
Bruce, Malcolm (Gordon) George, Bruce
Caborn, Richard Gilbert, Rt Hon Dr John
Callaghan, Jim Godman, Dr Norman A.
Campbell, Menzies (Fife NE) Gordon, Mildred
Campbell, Ron (Blyth Valley) Gould, Bryan
Campbell-Savours, D. N. Graham, Thomas
Carlile, Alex (Mont'g) Grant, Bernie (Tottenham)
Carr, Michael Griffiths, Nigel (Edinburgh S)
Cartwright, John Griffiths, Win (Bridgend)
Clark, Dr David (S Shields) Grocott, Bruce
Clarke, Tom (Monklands W) Hain, Peter
Clay, Bob Hardy, Peter
Clelland, David Harman, Ms Harriet
Cohen, Harry Hattersley, Rt Hon Roy
Cook, Frank (Stockton N) Heal, Mrs Sylvia
Cook, Robin (Livingston) Healey, Rt Hon Denis
Corbett, Robin Henderson, Doug
Corbyn, Jeremy Hinchliffe, David
Cousins, Jim Hoey, Kate (Vauxhall)
Cox, Tom Hogg, N. (C'nauld & Kilsyth)
Crowther, Stan Home Robertson, John
Cryer, Bob Hood, Jimmy
Cummings, John Howarth, George (Knowsley N)
Cunliffe, Lawrence Howell, Rt Hon D. (S'heath)
Cunningham, Dr John Howells, Geraint
Dalyell, Tam Howells, Dr. Kim (Pontypridd)
Darling, Alistair Hughes, John (Coventry NE)
Hughes, Robert (Aberdeen N) Parry, Robert
Hughes, Simon (Southwark) Patchett, Terry
Illsley, Eric Pendry, Tom
Ingram, Adam Pike, Peter L.
Janner, Greville Powell, Ray (Ogmore)
Jones, Barry (Alyn & Deeside) Prescott, John
Jones, Ieuan (Ynys Môn) Primarolo, Dawn
Jones, Martyn (Clwyd S W) Quin, Ms Joyce
Kennedy, Charles Radice, Giles
Kilfoyle, Peter Randall, Stuart
Kinnock, Rt Hon Neil Redmond, Martin
Kirkwood, Archy Rees, Rt Hon Merlyn
Kumar Ashok Reid, Dr John
Lambie, David Richardson, Jo
Lamond, James Robertson, George
Leighton, Ron Robinson, Geoffrey
Lestor, Joan (Eccles) Rogers, Allan
Lewis, Terry Rooker, Jeff
Litherland, Robert Rooney, Terence
Livingstone, Ken Ross, Ernie (Dundee W)
Livsey, Richard Ruddock, Joan
Lloyd, Tony (Stretford) Salmond, Alex
Lofthouse, Geoffrey Sedgemore, Brian
Loyden, Eddie Sheerman, Barry
McAllion, John Sheldon, Rt Hon Robert
McAvoy, Thomas Short, Clare
McCartney, Ian Skinner, Dennis
Macdonald, Calum A. Smith, Andrew (Oxford E)
McFall, John Smith, C. (Isl'ton & F'bury)
McKay, Allen (Barnsley West) Smith, Rt Hon J. (Monk'ds E)
McKelvey, William Smith, J. P. (Vale of Glam)
McLeish, Henry Snape, Peter
Maclennan, Robert Soley, Clive
McMaster, Gordon Spearing, Nigel
McNamara, Kevin Steel, Rt Hon Sir David
McWilliam, John Steinberg, Gerry
Madden, Max Stephen, Nicol
Mahon, Mrs Alice Stott, Roger
Marek, Dr John Strang, Gavin
Marshall, David (Shettleston) Straw, Jack
Marshall, Jim (Leicester S) Taylor, Mrs Ann (Dewsbury)
Martin, Michael J. (Springburn) Taylor, Matthew (Truro)
Martlew, Eric Thomas, Dr Dafydd Elis
Maxton, John Thompson, Jack (Wansbeck)
Meacher, Michael Turner, Dennis
Meale, Alan Vaz, Keith
Michael, Alun Wallace, James
Michie. Bill (Sheffield Heeley) Walley, Joan
Michie, Mrs Ray (Arg'l & Bute) Warden, Gareth (Gower)
Mitchell, Austin (G't Grimsby) Wareing, Robert N.
Moonie, Dr Lewis Watson, Mike (Glasgow, C)
Morgan, Rhodri Welsh, Andrew (Angus E)
Morley, Elliot Williams, Rt Hon Alan
Morris, Rt Hon A. (W'shawe) Williams, Alan W. (Carm'then)
Morris, Rt Hon J. (Aberavon) Wilson, Brian
Mowlam, Marjorie Winnick, David
Mullin, Chris Wise, Mrs Audrey
Murphy, Paul Worthington, Tony
Nellist, Dave Wray, Jimmy
Oakes, Rt Hon Gordon Young, David (Bolton SE)
O'Brien, William
O'Hara, Edward Tellers for the Noes:
O'Neill, Martin Mr. Frank Haynes and
Orme, Rt Hon Stanley Mrs. Llin Golding.

Question accordingly agreed to.

Bill read a Second time.

Motion made, and Question put forthwith, pursuant to Standing Order No. 61 (Committal of Bills), That the Bill be committed to a Committee of the whole House.—[Mrs. Margaret Ewing.]

The House divided: Ayes 241, Noes 322.

Division No. 5] [10.24 pm
Abbott, Ms Diane Anderson, Donald
Adams, Mrs Irene (Paisley, N.) Archer, Rt Hon Peter
Allen, Graham Armstrong, Hilary
Alton, David Ashdown, Rt Hon Paddy
Ashton, Joe Fraser, John
Banks, Tony (Newham NW) Fyfe, Maria
Barnes, Harry (Derbyshire NE) Galbraith, Sam
Barnes, Mrs Rosie (Greenwich) Garrett, Ted (Wallsend)
Barron, Kevin George, Bruce
Battle, John Gilbert, Rt Hon Dr John
Beckett, Margaret Godman, Dr Norman A.
Beith, A. J. Golding, Mrs Llin
Bell, Stuart Gordon, Mildred
Bellotti, David Gould, Bryan
Benn, Rt Hon Tony Graham, Thomas
Bennett, A. F. (D'nt'n & R'dish) Grant, Bernie (Tottenham)
Benton, Joseph Griffiths, Nigel (Edinburgh S)
Bermingham, Gerald Griffiths, Win (Bridgend)
Bidwell, Sydney Grocott, Bruce
Blair, Tony Hain, Peter
Blunkett, David Hardy, Peter
Boateng, Paul Harman, Ms Harriet
Boyes, Roland Hattersley, Rt Hon Roy
Bradley, Keith Haynes, Frank
Bray, Dr Jeremy Heal, Mrs Sylvia
Brown, Gordon (D'mline E) Healey, Rt Hon Denis
Brown, Nicholas (Newcastle E) Henderson, Doug
Brown, Ron (Edinburgh Leith) Hinchliffe, David
Bruce, Malcolm (Gordon) Hoey, Kate (Vauxhall)
Caborn, Richard Hogg, N. (C'nauld & Kilsyth)
Callaghan. Jim Home Robertson, John
Campbell, Menzies (Fife NE) Hood, Jimmy
Campbell, Ron (Blyth Valley) Howell, Rt Hon D. (S'heath)
Campbell-Savours, D. N. Howells, Geraint
Carlile, Alex (Mont'g) Howells, Dr. Kim (Pontypridd)
Carr, Michael Hoyle, Doug
Cartwright, John Hughes, John (Coventry NE)
Clark, Dr David (S Shields) Hughes, Robert (Aberdeen N)
Clarke, Tom (Monklands W) Hughes, Simon (Southwark)
Clay, Bob Illsley, Eric
Clelland, David Ingram, Adam
Cohen, Harry Janner, Greville
Cook, Frank (Stockton N) Jones, Barry (Alyn & Deeside)
Cook, Robin (Livingston) Jones, Martyn (Clwyd S W)
Corbett, Robin Kennedy, Charles
Corbyn, Jeremy Kilfoyle, Peter
Cousins, Jim Kinnock, Rt Hon Neil
Cox, Tom Kirkwood, Archy
Crowther, Stan Kumar, A.
Cryer, Bob Lambie, David
Cummings, John Lamond, James
Cunliffe, Lawrence Leighton, Ron
Cunningham, Dr John Lestor, Joan (Eccles)
Dalyell, Tam Lewis, Terry
Darling, Alistair Litherland, Robert
Davies, Rt Hon Denzil (Llanelli) Livingstone, Ken
Davies, Ron (Caerphilly) Livsey, Richard
Davis, Terry (B'ham Hodge H'I) Lloyd, Tony (Stretford)
Dewar, Donald Lofthouse, Geoffrey
Dixon, Don Loyden, Eddie
Dobson, Frank McAllion, John
Doran, Frank McAvoy, Thomas
Douglas, Dick McCartney, Ian
Duffy, Sir A. E. P. Macdonald, Calum A.
Dunnachie, Jimmy McFall, John
Dunwoody, Hon Mrs Gwyneth McKay, Allen (Barnsley West)
Eadie, Alexander McKelvey, William
Eastham, Ken McLeish, Henry
Edwards, Huw Maclennan, Robert
Enright, D. A. McMaster, Gordon
Evans, John (St Helens N) McNamara, Kevin
Ewing, Harry (Falkirk E) McWilliam, John
Ewing, Mrs Margaret (Moray) Madden, Max
Fatchett, Derek Mahon, Mrs Alice
Faulds, Andrew Marek, Dr John
Fearn, Ronald Marshall, David (Shettleston)
Field, Frank (Birkenhead) Marshall, Jim (Leicester S)
Fields, Terry (L'pool B G'n) Martin, Michael J. (Springburn)
Fisher, Mark Martlew, Eric
Flannery, Martin Maxton, John
Flynn, Paul Meacher, Michael
Foot, Rt Hon Michael Meale, Alan
Foster, Derek Michael, Alun
Foulkes, George Michie, Bill (Sheffield Heeley)
Michie, Mrs Ray (Arg'I & Bute) Short, Clare
Mitchell, Austin (G't Grimsby) Skinner, Dennis
Moonie, Dr Lewis Smith, Andrew (Oxford E)
Morgan, Rhodri Smith, C. (Isl'ton & F'bury)
Morley, Elliot Smith, Rt Hon J. (Monk'ds E)
Morris, Rt Hon A. (W'shawe) Smith, J. P. (Vale of Glam)
Morris, Rt Hon J. (Aberavon) Snape, Peter
Mowlam, Marjorie Soley, Clive
Mullin, Chris Spearing, Nigel
Murphy, Paul Steel, Rt Hon Sir David
Nellist, Dave Steinberg, Gerry
Oakes, Rt Hon Gordon Stephen, N. R.
O'Brien, William Stott, Roger
O'Hara, Edward Strang, Gavin
O'Neill, Martin Straw, Jack
Orme, Rt Hon Stanley Taylor, Mrs Ann (Dewsbury)
Parry, Robert Taylor, Matthew (Truro)
Patchett, Terry Thomas, Dr Dafydd Elis
Pendry, Tom Thompson, Jack (Wansbeck)
Pike, Peter L. Turner, Dennis
Prescott, John Vaz, Keith
Primarolo, Dawn Wallace, James
Quin, Ms Joyce Walley, Joan
Radice, Giles Wardell, Gareth (Gower)
Randall, Stuart Wareing, Robert N.
Redmond, Martin Watson, Mike (Glasgow, C)
Reid, Dr John Williams, Rt Hon Alan
Richardson, Jo Williams, Alan W. (Carm'then)
Robertson, George Wilson, Brian
Robinson, Geoffrey Winnick, David
Rogers, Allan Wise, Mrs Audrey
Rooker, Jeff Worthington, Tony
Rooney, Terence Wray, Jimmy
Ross, Ernie (Dundee W) Young, David (Bolton SE)
Ruddock, Joan
Salmond, Alex Tellers for the Ayes:
Sedgemore, Brian Mr. Andrew Welsh and
Sheerman, Barry Mr. Ieuan Wyn Jones.
Sheldon, Rt Hon Robert
Adley, Robert Bruce, Ian (Dorset South)
Aitken, Jonathan Buck, Sir Antony
Alexander, Richard Burns, Simon
Alison, Rt Hon Michael Burt, Alistair
Allason, Rupert Butcher, John
Amess, David Butterfill, John
Amos, Alan Carlisle, John, (Luton N)
Arbuthnot, James Carlisle, Kenneth (Lincoln)
Arnold, Sir Thomas Carrington, Matthew
Ashby, David Cash, William
Aspinwall, Jack Chalker, Rt Hon Mrs Lynda
Atkins, Robert Channon, Rt Hon Paul
Atkinson, David Chapman, Sydney
Baker, Rt Hon K. (Mole Valley) Chope, Christopher
Baker, Nicholas (Dorset N) Churchill, Mr
Baldry, Tony Clark, Rt Hon Alan (Plymouth)
Banks, Robert (Harrogate) Clark, Rt Hon Sir William
Batiste, Spencer Clarke, Rt Hon K. (Rushcliffe)
Beaumont-Dark, Anthony Colvin, Michael
Bellingham, Henry Coombs, Anthony (Wyre F'rest)
Bendall, Vivian Coombs, Simon (Swindon)
Bennett, Nicholas (Pembroke) Cope, Rt Hon Sir John
Benyon, W. Cormack, Patrick
Bevan, David Gilroy Couchman, James
Biffen, Rt Hon John Cran, James
Blackburn, Dr John G. Currie, Mrs Edwina
Blaker, Rt Hon Sir Peter Curry, David
Body, Sir Richard Davies, Q. (Stamf'd & Spald'g)
Bonsor, Sir Nicholas Davis, David (Boothferry)
Boscawen, Hon Robert Day, Stephen
Boswell, Tim Dickens, Geoffrey
Bowden, Gerald (Dulwich) Dicks, Terry
Bowis, John Douglas-Hamilton, Lord James
Boyson, Rt Hon Dr Sir Rhodes Dover, Den
Braine, Rt Hon Sir Bernard Dunn, Bob
Brandon-Bravo, Martin Durant, Sir Anthony
Brazier, Julian Dykes, Hugh
Bright, Graham Eggar, Tim
Brown, Michael (Brigg & Cl't's) Emery, Sir Peter
Evans, David (Welwyn Hatf'd) Knight, Greg (Derby North)
Evennett, David Knight, Dame Jill (Edgbaston)
Fallon, Michael Knowles, Michael
Farr, Sir John Knox, David
Favell, Tony Lang, Rt Hon Ian
Fenner, Dame Peggy Latham, Michael
Finsberg, Sir Geoffrey Lawrence, Ivan
Fishburn, John Dudley Lawson, Rt Hon Nigel
Fookes, Dame Janet Lee, John (Pendle)
Forsyth, Michael (Stirling) Leigh, Edward (Gainsbor'gh)
Forth, Eric Lennox-Boyd, Hon Mark
Fowler, Rt Hon Sir Norman Lester, Jim (Broxtowe)
Fox, Sir Marcus Lilley, Rt Hon Peter
Franks, Cecil Lloyd, Sir Ian (Havant)
Freeman, Roger Lloyd, Peter (Fareham)
French, Douglas Lord, Michael
Fry, Peter Luce, Rt Hon Sir Richard
Gale, Roger Lyell, Rt Hon Sir Nicholas
Gardiner, Sir George Macfarlane, Sir Neil
Gill, Christopher MacGregor, Rt Hon John
Gilmour, Rt Hon Sir Ian MacKay, Andrew (E Berkshire)
Glyn, Dr Sir Alan Maclean, David
Goodhart, Sir Philip McLoughlin, Patrick
Goodlad, Alastair McNair-Wilson, Sir Michael
Goodson-Wickes, Dr Charles McNair-Wilson, Sir Patrick
Gorman, Mrs Teresa Madel, David
Gorst, John Major, Rt Hon John
Grant, Sir Anthony (CambsSW) Malins, Humfrey
Greenway, Harry (Ealing N) Mans, Keith
Greenway, John (Ryedale) Maples, John
Gregory, Conal Marlow, Tony
Griffiths, Sir Eldon (Bury St E') Marshall, John (Hendon S)
Griffiths, Peter (Portsmouth N) Marshall, Sir Michael (Arundel)
Grist, Ian Martin, David (Portsmouth S)
Grylls, Michael Mates, Michael
Gummer, Rt Hon John Selwyn Maude, Hon Francis
Hague, William Mawhinney, Dr Brian
Hamilton, Rt Hon Archie Maxwell-Hyslop, Robin
Hamilton, Neil (Tatton) Mayhew, Rt Hon Sir Patrick
Hampson, Dr Keith Meyer, Sir Anthony
Hanley, Jeremy Miller, Sir Hal
Hannam, John Mills, Iain
Hargreaves, A. (B'ham H'll Gr') Miscampbell, Norman
Hargreaves, Ken (Hyndburn) Mitchell, Andrew (Gedling)
Harris, David Mitchell, Sir David
Haselhurst, Alan Moate, Roger
Hawkins, Christopher Monro, Sir Hector
Hayes, Jerry Montgomery, Sir Fergus
Hayhoe, Rt Hon Sir Barney Moore, Rt Hon John
Hayward, Robert Morris, M (N'hampton S)
Heathcoat-Amory, David Morrison, Sir Charles
Heseltine, Rt Hon Michael Morrison, Rt Hon Sir Peter
Hicks, Mrs Maureen (Wolv' NE) Moss, Malcolm
Hicks, Robert (Cornwall SE) Moynihan, Hon Colin
Higgins, Rt Hon Terence L. Neale, Sir Gerrard
Hill, James Nelson, Anthony
Hind, Kenneth Neubert, Sir Michael
Hogg, Hon Douglas (Gr'th'm) Newton, Rt Hon Tony
Hordern, Sir Peter Nicholls, Patrick
Howard, Rt Hon Michael Nicholson, David (Taunton)
Howarth, Alan (Strat'd-on-A) Nicholson, Emma (Devon West)
Howarth, G. (Cannock & B'wd) Norris, Steve
Howe, Rt Hon Sir Geoffrey Onslow, Rt Hon Cranley
Hughes, Robert G. (Harrow W) Oppenheim, Phillip
Hunt, Rt Hon David Page, Richard
Hunt, Sir John (Ravensbourne) Paice, James
Irvine, Michael Parkinson, Rt Hon Cecil
Jack, Michael Patnick, Irvine
Jackson, Robert Patten, Rt Hon Chris (Bath)
Janman, Tim Patten, Rt Hon John
Jessel, Toby Pattie, Rt Hon Sir Geoffrey
Johnson Smith, Sir Geoffrey Pawsey, James
Jones, Gwilym (Cardiff N) Peacock, Mrs Elizabeth
Kellett-Bowman, Dame Elaine Porter, Barry (Wirral S)
Key, Robert Porter, David (Waveney)
Kilfedder, James Portillo, Michael
King, Roger (B'ham N'thfield) Powell, William (Corby)
King, Rt Hon Tom (Bridgwater) Price, Sir David
Kirkhope, Timothy Raffan, Keith
Knapman, Roger Raison, Rt Hon Sir Timothy
Redwood, John Tebbit, Rt Hon Norman
Renton, Rt Hon Tim Temple-Morris, Peter
Rhodes James, Sir Robert Thompson, D. (Calder Valley)
Ridsdale, Sir Julian Thompson, Patrick (Norwich N)
Rifkind, Rt Hon Malcolm Thorne, Neil
Roberts, Rt Hon Sir Wyn Thurnham, Peter
Roe, Mrs Marion Townend, John (Bridlington)
Rossi, Sir Hugh Townsend, Cyril D. (B'heath)
Rost, Peter Tracey, Richard
Rowe, Andrew Tredinnick, David
Rumbold, Rt Hon Mrs Angela Trippier, David
Ryder, Rt Hon Richard Trotter, Neville
Sackville, Hon Tom Twinn, Dr Ian
Sainsbury, Hon Tim Vaughan, Sir Gerard
Sayeed, Jonathan Viggers, Peter
Scott, Rt Hon Nicholas Wakeham, Rt Hon John
Shaw, David (Dover) Waldegrave, Rt Hon William
Shaw, Sir Giles (Pudsey) Walden, George
Shaw, Sir Michael (Scarb') Walker, Bill (T'side North)
Shelton, Sir William Waller, Gary
Shephard, Mrs G. (Norfolk SW) Walters, Sir Dennis
Shepherd, Colin (Hereford) Ward, John
Shersby, Michael Wardle, Charles (Bexhill)
Sims, Roger Warren, Kenneth
Smith, Tim (Beaconsfield) Watts, John
Soames, Hon Nicholas Wheeler, Sir John
Speed, Keith Whitney, Ray
Speller, Tony Widdecombe, Ann
Spicer, Sir Jim (Dorset W) Wiggin, Jerry
Squire, Robin Wilkinson, John
Stanbrook, Ivor Wilshire, David
Stanley, Rt Hon Sir John Winterton, Mrs Ann
Steen, Anthony Winterton, Nicholas
Stern, Michael Wolfson, Mark
Stevens, Lewis Wood, Timothy
Stewart, Allan (Eastwood) Woodcock, Dr. Mike
Stewart, Andy (Sherwood) Yeo, Tim
Stewart, Rt Hon Sir Ian Young, Sir George (Acton)
Stokes, Sir John Younger, Rt Hon George
Sumberg, David
Summerson, Hugo Tellers for the Noes:
Tapsell, Sir Peter Mr. David Lightbown, and Mr. John M. Taylor.
Taylor, Ian (Esher)
Taylor, Sir Teddy

Question accordingly negatived.

Bill committed to a Standing Committee.

  1. BUSINESS OF THE HOUSE 400 words
  2. c1002
    1. cc1003-4