Community Charge Administration: Costs (Hansard, 2 May 1989)

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh)
My Lords, our estimate of the cost of collecting and administering the community charge in 1990–391 in England, based on the Price Waterhouse report, is between £356 million if all authorities work as efficiently as the most efficient in their category, and £404 million if authorities maintain their current 6 efficiency. Those estimates were at November 1987 prices. The cost of collecting rates in 1989–90 is estimated to be about £200 million.

§ Lord Stallard
My Lords, I thank the Minister for that reply. However, is he aware that according to the local authority survey that was carried out, that is a gross underestimate and that the survey shows up a number of major criticisms of the Price Waterhouse study? Is he aware that the Price Waterhouse study was based on 25 out of 350 local authorities and that it assumed no evasion of payment and no increase in the numbers paying by instalments and further assumed that work would simply double? Is the Minister aware that, at present, only one form per household goes out, whereas, under the poll tax, three, four or even five separate forms may go to each household depending on how many adults are in the house? Is he aware that the study made no allowance for publicity or training and no allowance for the fact that local authorities estimate that the number of staff will increase from 13,000 to 30,000, an increase in bureaucracy of 130 per cent.?

§ Lord Hesketh
My Lords, the estimates were based on an objective study by an independent firm of consultants. It will come as no surprise to noble Lords to know that the local authorities may take a different view, but we believe that we should support the view of the objective study.

§ Lord Taylor of Gryfe
My Lords, although the Minister gave us an assurance that the study was an objective study, does he agree with the noble Lord who asked the Question that it is an inadequate study in so far as a very small sample was taken? If he bases his estimate of costs on the Scottish experience, it should be twice the figure that is estimated by Price Waterhouse. Finally, is there anything sinister in the fact that the notices for the poll tax in England will be issued after the local authority elections when local authority officials requested that that should have been done in April?

§ Lord Hesketh
My Lords, I am sure that the noble Lord, Lord Taylor, will understand that we do not share his view of what the cost of the community charge will be. However, I can put his mind at rest and say that there is absolutely nothing sinister, as he felt there might be, in the timing.

§ Lord McIntosh of Haringey
My Lords, the Minister has signally failed to answer any of the questions about the statistics put by my noble friend Lord Stallard. Even if we were to accept his figures—that of £200 million for the cost of rates is in fact not the official figure, the CIPFA figure being £187 million—are they not an admission that the cost of collection of the poll tax will be twice as much as the cost of collection of rates?

§ Lord Hesketh
My Lords, certainly the original figures that I mentioned confirm that the cost of collection of the community charge will be twice as much, as the noble Lord said. With regard to the points put by his noble friend Lord Stallard to which 7 he referred, the noble Lord made a number of assertions with which I disagreed. Assertions are slightly different from quesions. That is a degree of difference which is a difference in itself.

§ Lord Carter
My Lords, is the noble Lord aware that the crucial statistic is the cost per pound of tax collected? Can he say what is the cost of collection per pound of rates and the cost of collection per pound of poll tax?

§ Lord Hesketh
My Lords, I believe that I have answered that question already by saying that it will be twice the cost. I remind your Lordships' House that of course there will be twice the number of people paying, so it is not entirely illogical that the cost should double.

§ Lord Stallard
My Lords, does the noble Lord accept that my questions—not assumptions—were based on a local government survey which covered over half the local authorities compared with a study of 25 out of 350 authorities? Therefore my assumptions must be more firmly based than are his. Is he aware that in Birmingham, the authority has already taken on 350 extra staff—more bureaucrats, whose number the Government were pledged to reduce? The authority plans to send out 400,000 forms. Does he accept that more forms will have to be sent out per household compared with the one form that was sent out for the rates? The number will be multiplied in the case of the poll tax. Those are not assumptions; those are facts. Does he not accept them?

§ Lord Hesketh
My Lords, it is a fact with which I did not disagree when I said that there would be twice as many chargepayers. I also noted that it is entirely logical that there will be twice as many forms to send out. We have always accepted that the system would be more expensive. However, we happen to believe that it is fairer, and therefore it is a price worth paying.