Community Charge Benefits (General) Amendment Regulations 1990 (Hansard, 29 March 1990)

§ Baroness Turner of Camden

My Lords, I thank the Minister for his explanation of the regulations. However, he will not be surprised to learn that there is little connected with this monstrous system of taxation that can be welcomed by this side of the House. Yesterday we had a debate in which some of the legitimate criticisms were voiced from all sides. I do not wish to cover that ground again today. Although the Government have been compelled by public agitation and concern to make the concessions in the regulations they do not appear to benefit as many people as was indicated.

As the Minister said, there are provisions under which savings above £ 3, 000 are counted as income. He has explained that every £ 250 of savings over £ 3, 000 counts as £ 1 of income and that is used to reduce the amount of benefit that people will receive. I understand that savings of £ 10, 000 will count as being equal to a weekly income of £ 28 and will be added to whatever other income people receive. As a result, many will receive only limited help and will lose eligibility completely before they reach the new 1036 £16,000 figure. Therefore, it is not as great a concession as it at first appears.

Moreover, millions of people will be much worse off when paying the community charge than they would have been had the present rating system continued. I wish to quote a typical example. In addition to his state pension a pensioner has a small occupational pension. At the time of retirement he or she has commuted part of that pension, as is possible under most occupational schemes, and has received a small lump sum which has been put aside. That may well be more than £ 16, 000 which he or she has saved for a time when it may be needed; for example, one of the partners may become ill and require residential care. As we all know, that can be expensive and I welcome the report in today's newspapers indicating that the Government intend to do something about that. However, that is another debate. It is probable that the other partner in such a couple will not be in receipt of anything other than a state pension. They are people in modest circumstances; the lower middle-class, thrifty people who often vote for the government opposite. Their modest home will probably not have a high rateable value. Under the community charge provisions, as a result of the Government's doctrine of joint and several liability, both partners must each pay a flat rate charge irrespective of the fact that only one has any real income. The head of the household will be responsible for the payment of both partners.

I mention that with feeling because it is happening in my area. I am personally affected, although millions of people will be worse affected. The community charge in my area— that is Camden— has been assessed at £ 534 a head, whereas rates on my relatively modest flat were only £ 700. The only way in which one could be better off under those circumstances would be if one lived alone. I wonder whether the Government are out to encourage divorce and single occupancy.

Nor is it possible to blame the local council; it did not invent the notion of joint and several liability— the Government did. Even with my supposedly high spending council, an increase in rates from £ 700 to almost £ 1, 100 in one step was unlikely to take place. Nor is the charge likely to remain even at that figure. The Government have placed extra responsibilities on councils for care in the community and education and they must be paid for. Therefore, we can expect no amelioration. Moreover, we are paying more in our area— an extra £ 75 into the Government's safety net— in order to subsidise other councils such as Wandsworth where the poll tax bills are being reduced.

The community charge remains a most unfair system of taxation. The Government need not delude themselves by thinking that people are blaming the so-called high spending councils for the charges; clearly they understand that they are due to the system now being introduced for which the Government are responsible. There may be some gainers under the new system but in the main they are the better-off— those living in property with a high rateable value rather than those living in a low rateable value property who, if it is occupied by more than one person, must inevitably pay more.

1037 I prophesy that the Government will have to come back with more concessions, creating even greater confusion, as the full meaning of the community charge becomes apparent. I have not heard a single complaint about the local council in my area, even though it has a reputation for being high spending. Indeed, it is now viewed with more sympathy because it must cope with even more under constantly escalating Government pressure, although it does not have the resources to do so. The charges for those services are being shifted from the better off to those in more modest circumstances.

Of course I welcome any concessions but the system is wrong and unfair. Such modest concessions as we have had appear to benefit the very poor— if you are homeless you will not have to pay at all— but ordinary people in modest circumstances are being hit hard both by the community charge and by the level of interest rates. I prophesy that there must be more concessions.

Before I began to look at various papers in connection with these regulations I received material from the Disability Alliance pointing out that, although severely mentally handicapped people are exempt, those suffering from severe physical handicap are not. Clearly that is unfair and it is one of the issues which must be re-examined. We are heading towards a period when there will be even more concessions as various interest groups begin to press their cases. The whole scheme is ill-judged and misconceived. I prophesy that it will lead to great trouble for the Government. We do not oppose the regulations because they give limited relief to certain groups, but the scheme simply will not do.

§ Lord Henley

My Lords, like the noble Baroness, Lady Turner, I do not intend to be drawn on the general subject of the community charge. We have had ample time to discuss and debate it in this House. But having said what she did, the noble Baroness immediately proceeded to do the opposite and hardly touched on the orders. However, I am glad that she ended by giving a welcome to them.

The noble Baroness said that there would be fewer gainers than we claim. That is not the case. There are estimated to be something in the region of 25, 000 individuals, of whom 15, 000 are pensioners who will gain from the higher limit if their capital is between £ 14, 000 and £ 16,000.

The noble Baroness also mentioned the disabled. Disabled people who are receiving an incapacity benefit and the long-term sick qualify for a disability premium which is included in the applicable amount in addition to the personal allowance. Therefore, disabled people will continue to receive community charge benefit at a higher level of income than those who are not disabled and whose circumstances are otherwise the same.

In income related benefits it is normal to take all sources of income into account. However, an exception is made for particular types of income for disabled people like the attendance and mobility allowances which are disregarded totally. That disregard recognises the importance of that source of income for disabled people.

1038 Lastly, on the general subject of the treatment of capital in income related benefits, it has always been the case ever since 1948 that there has been some form of tariff income, first in supplementary benefit and now in income support and community charge benefit. The increase to £ 16, 000 will provide very welcome relief to a large number of people.