The Council Tax (Hansard, 30 April 1991)

§ Baroness Blatch
My Lords, "rebates" are designed to help those on low incomes. In addition we propose that there should be discounts which are designed to help all single-adult households.

§ Lord Hatch of Lusby
My Lords, is the noble Baroness aware that in December 1987 the present Secretary of State for the Environment, Mr. Heseltine, stated—he was then a Back-Bencher so I cannot quote him verbatim—that he had rejected the concept of the single person rebate on the ground that it significantly helped the better off section of our community? If that was true in 1987, what has changed since?

§ Baroness Blatch
My Lords, it is not for me at the Dispatch Box to defend what was said in 1987. I do not know the source, the context or anything about the specific quotation. What I do know is that the present review is about looking forward and not about looking backwards.

§ Lord Skelmersdale
My Lords, is it not a fact that, contrary to popular belief, as concerns local authority services one person can live more cheaply than two?

§ Baroness Blatch
My Lords, in some ways that is true, but not in all ways. When a light is on in a room it is just as expensive to have it on for one person as for more than one person. Some costs are certainly cheaper and some costs simply do not change.

§ Lord Renton
My Lords, is it not also a fact that widows, widowers, bachelors and spinsters are to be found among all income groups, while one-parent families tend to be mainly among the lower income groups? Therefore it would not seem that the Question of the noble Lord, Lord Hatch, is well founded.

§ Baroness Blatch
My Lords, my noble friend makes an important point. The noble Lord, Lord Hatch, used the word "rebate" when in fact he meant discount. Single occupancy households constitute about one-third of all households. Of those two-thirds are occupied by people over 60. Of those people over 60, many of them will qualify for rebates. Under the new system the rebates will go up to 100 per cent. of the cost.

§ Lord Stallard
My Lords, is it not a fact that, because this new Whitehall tax is not properly linked to ability to pay, Londoners will pay twice as much as people in the rest of Britain? More Londoners will pay the top rates. In inner London alone 63 per cent. of properties are valued at more than £88, 000. The figure in Camden is 76.1 per cent. Many of those properties are council tenancies. Is this discrepancy intentional, or is it due to yet more faulty and botched planning?

§ Baroness Blatch
My Lords, there is a considerable ability to pay element about the new council tax. First, there is a differentiation between people who live in low cost homes and those who live in high cost homes. Secondly, there is a rebate system which goes to 100 per cent. rebates to recognise the incomes of individuals when having to pay the tax. Thirdly, when one is comparing an affluent part of the country with a less affluent part—for example, if one is comparing the South and South-East with parts of the North-West and North-East—there is no question whatever that there is a differential in salaries, wages and so on. People on low incomes will be recognised in the new system. If the noble Lord spent some time looking at the illustrative figures he would find, for example, that, simply because of overspending by an individual local authority, someone in an A band house, which is the lowest end of the band, could be spending more than someone living in a higher band house in another authority.

§ Lord Tordoff
My Lords, does the noble Baroness accept that there is in fact no direct correlation between the tax which is to be charged and people' s ability to pay?

§ Baroness Blatch
My Lords, the noble Lord is suggesting that one should take the income of every single individual and apply the cost in that way, as I understand is the policy of his party. Perhaps I may point out, that a very large number of people do not pay tax, so there would have to be another system for finding cut people' s income. With regard to those who do pay tax, and taking into account the overspending of local authorities today—the noble Lord has been critical, 3f capping—the amount of taxation that would fall on families on middle incomes and above would be excessive in the extreme.

§ Viscount Mountgarret
My Lords, does my noble friend not agree that the announcement of this new tax has given rise to an enormous number of questions which as yet it has been totally impossible to answer? A great deal of thought must go into this matter. Does my noble friend not further agree that the whole nation might be best served if perhaps we could be 618 aware of the possible inequalities or difficulties? Generally speaking, we should try to give the tax a bit of a fair wind and, at any rate, try to come out with something that meets the needs of all concerned. We should try not to jump the gun in the early stages.

§ Baroness Blatch
My Lords, I am not entirely as pessimistic as my noble friend. I believe that many of the difficulties can be met. This tax is fairer, simpler and easier to collect. There is a rebate system for people on low incomes. There is a discount for people in single occupancy and for students and student nurses. The more people learn about this system, the more they will appreciate it in comparison with the alternatives.

§ Lord Strabolgi
My Lords, I wish to ask the noble Baroness about the number of bands. The other day it was to be seven bands and then the number rose to nine. One hears now that it is to be seven again, as the Government fumble about. What is the latest figure and what will it be next week?

§ Baroness Blatch
My Lords, first, the noble Lord is comparing speculation with what the Government have said so far. The Government's preferred option is for a seven-band system. The newspapers have speculated about nine bands. Secondly, this is a consultative stage. It would be wrong and quite inappropriate for me to pre-empt the outcome of what is really the consultation period.

§ Lord McIntosh of Haringey
My Lords, the Minister is quite right in saying that there are single person households in all income bands. Is it not the case that the 25 per cent. discount will give more back to those who are better off and living in more expensive housing? Is it not the case that there is a conflict therefore between the single person occupancy provision and the rebates, which, as she rightly says, go directly to those most in need.

§ Baroness Blatch
My Lords, I cannot agree with the noble Lord. If one looks at the illustrative tables and takes into account what local authorities are spending, what he says simply does not add up. It is very touching that noble Lords opposite are so concerned about rich people. Those who are rich are already paying more in direct taxation. Indeed, 86 per cent. of what local authorities spend comes from business, commerce and central government.

§ Lord Molloy
My Lords, can the noble Baroness say whether there will be an appeal against the rateable value—

§ The Lord Privy Seal (Lord Waddington)
My Lords, I am sorry to interrupt the noble Lord, but we are just coming up to 30 minutes.