Scotland: Community Charge (Hansard, 25 February 1988)

§ Lord Taylor of Gryfe
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Scottish Office (Lord Sanderson of Bowden)
My Lords, my right honourable friend the Secretary of State has given local authorities additional capital expenditure consent of £6 million in the current year in respect of preparations for the implementation of the community charge, and proposes to allocate a further £15 million next year. The rate support grant settlement for 1988–89 includes a total of £12 million in respect of current expenditure on preparations for implementation. We expect that, when the community charge is in operation, additional administrative expenditure will be in the range of £17 million to £22 million per annum.

§ Lord Taylor of Gryfe
My Lords, I should like to thank the Minister for that interesting reply. Despite the very substantial figures that he has quoted, is he aware that the Convention of Scottish Local Authorities has indicated that the amounts allocated, particularly on the current expenditure budget, represent only half of the amount that will be required? In that event, will the Government meet the shortfall? Further, will he confirm that the amount expended on the collection of rates under the present system will be doubled under the new arrangements? Does he consider that that represents a sensible allocation of resources for local authority expenditure at a time when social services and other essential services are being severely limited?

§ Lord Sanderson of Bowden
My Lords, perhaps I may deal first of all with the point raised by the noble Lord in relation to CoSLA. So far as concerns capital expenditure, consent of £21 million compares with local authorities' initial bids of £20 million and will be ample to allow local authorities to make satisfactory preparations for the new system. As regards current expenditure, as I have already indicated, £12 million 1293 is for the current year, and so far as concerns 1989–90 that will be taken into account when the revenue support grant is fixed for that year.
My answer to the next question the noble Lord put to me is that we estimate the present administrative cost of the domestic rating system to be around £20 million; so the cost of the new system will be roughly double that figure. That is consistent with the fact that there will be twice as many community charge payers as there are domestic ratepayers. That has given the new system the added element of accountability, which we debated in this House during the passage of the Bill.
To put the matter in another context, local authority expenditure in Scotland amounts to £4.2 billion. Forty million pounds, which is estimated to be the current cost of running this system, is 1 per cent. of that sum; or the increase is one-half of 1 per cent.

§ Lord Carmichael of Kelvingrove
My Lords, I am sure many people will be surprised that the Minister is so confident that there will be a great deal more money raised by the poll tax. He must be aware of the number of people who have refused to register on the electoral roll because they are afraid of being included for the poll tax.
Will he confirm that the capital allocation that he mentioned will consist of new money and not be money taken from some other capital works that could have been undertaken? Will he also confirm that the revenue expenditure, which is any revenue expenditure wholly in count for community charge purposes, will be allowed by the Government as falling within the government guidelines and will not he liable to councils having a clawback because due to the increased charge they have exceeded the limits of the original allowance?
Finally, are the Government learning anything from the passage of the Bill in another place with regard to the remainder of the United Kingdom? Will there be changes in the Scottish legislation because of what is happening in another place? Even at this late date will the Government not give a thought at least to postoning the application of the Scottish Bill until the provisions apply to the whole of the United Kingdom?

§ Lord Sanderson of Bowden
My Lords, so far as I can recall, there are four questions there. First, are we going to change our mind and hold back the implementation next year? The answer to that is no. Secondly, I gave an assurance to the House on 30th June last year. If there were changes in the English and Welsh Bill which made it necessary to have a look to see whether we should change our own, I gave this assurance: If refinements arc made to the proposals we will of course consider whether any parallel changes need to be made to the Abolition of Domestic Rates Etc. (Scotland) Act".—[Official Report, 30/6/87: col. 1191 On capital allocation, we indicated that we would look at that. We now have the figure of £20 million. We feel that is a realistic figure for the capital allocation.

§ Lord Carmichael of Kelvingrove
My Lords, new money?

§ Lord Sanderson of Bowden
My Lords, yes, new money. With regard to any extra that will be required, noble Lords will know that my right honourable friend has announced capital expenditure this week of £395 million; and it is of course up to local authorities to decide how to spend that money.
Finally, the noble Lord asked a question about the problem of the revenue for the ongoing implementation of this Act. Total administrative costs will be taken into account in future revenue support grant settlements. We do not envisage that any form of specific grant will be appropriate.

§ Lord Wilson of Langside
My Lords, is the Minister aware that in Scotland the hostility to this measure—miscalled the Abolition of Domestic Rates Etc. (Scotland) Act—is even greater than that felt by a number of respected former Cabinet Ministers of the Conservative Government? Are the Government aware that as the English counterpart to the Scottish Act—to which my noble friend's question refers—makes progress in another place, this adds evidence to the view advanced from these Benches that the Government's approach to the business of the reform of local government finance was completely misconceived?

§ Lord Sanderson of Bowden
My Lords, I recall the very strong views expressed by the noble and learned Lord, Lord Wilson of Langside, when the Bill was passing through this House. It comes as no surprise to me that he should ask a question of this kind. However, at that same time, it was very clear from Members on the Benches on which he sits that the present rating system was a totally unacceptable way of carrying on. That is why change was made.

§ Lord Taylor of Gryfe
My Lords, will the Minister confirm this? Did he state that the cost of collecting rates at the present time is £20 million per annum? Under the new arrangements that will he £40 million per annum. That was justified on the basis that they would be collected from more people. Will he confirm that he is collecting the same amount of money? It is the costs of raising that amount of money that are significant, not the number of people who will have to pay rates.
I asked him—I know that he is a sensitive and civilised person—whether he regarded this as a sensible allocation of public resources. Local authorities are limited in provision of social services and other services, but they are now being asked to double the cost of the collection of rates, while accepting the burden of £12 million for the new register.

§ Lord Sanderson of Bowden
My Lords, we debated this at great length. We talked a great deal about accountability when the Bill was passing through this House. That is what the new system is about. The noble Lord says that the same amount of money will be collected. We shall have to wait and see whether that is the case. However, being the good 1295 businessman that he is, I believe that he will not consider that 1 per cent. out of the total expenditure on local government in Scotland is an undue amount to ask for the administrative costs of raising the tax.

§ Lord Mackie of Benshie
My Lords, perhaps I may congratulate the Minister on making this appalling tax appear almost credible.