§ Mr. Michael BrownTo ask the Secretary of State for the Environment when local authorities are to be compensated in respect of the statutory reduction of community charges; and if he will make a statement.
§ Mr. PortilloA new grant is to be paid to local authorities to reimburse them for the loss of community charge income arising from the provisions of the Community Charges (General Reduction) Act 1991. Payment of this grant will be made in 10 monthly instalments of 9 per cent. commencing in April on the basis of an estimate of the income forgone by each authority.
184WFinal grant entitlement will be calculated after the end of the financial year 1991–92. Parliamentary approval of this new service will be sought in a supplementary estimate for the relevant vote, class VIII, vote 14. Pending that approval, urgent expenditure (estimated at £435 million for the grant payments to be made in April) will be met by a repayable advance from the contingencies fund.
§ Mr. HardyTo ask the Secretary of State for the Environment what is his estimate of(a) the total costs of administration of the community charge in England in 1990–91 and (b) the costs of the administration of the rates in 1989–90.
§ Mr. Key[holding answer 16 April 1991]: Local authorities budgeted to spend £440 million on the administration of the community charge in 1990–91. This compares with £200 million for the collection of both domestic and non-domestic rates.
§ Mr. Frank FieldTo ask the Secretary of State for the Environment what is his estimate of the average reduction in 1991–92 in community charges resulting from the provisions of the Community Charges (General Reduction) Bill for all those entitled to a reduction under the community charge reduction scheme prior to the enactment of the Bill.
§ Mr. Key[holding answer 15 April 1991]: Following the Community Charges (General Reduction) Act and the improvements to the community charge reduction scheme, the average reduction in net charge payable after community charge benefit in England, for those who were previously within the scope of the community charge reduction scheme as already planned for 1991–92, is estimated at £86. For those with no entitlement to community charge benefit the average reduction is estimated at £113.
§ Mr. Frank FieldTo ask the Secretary of State for the Environment how many community charge payers he estimates will benefit, net of rebates and the community charge reduction scheme, from the provisions of the Community Charges (General Reduction) Bill by(a) £140, (b) £120 to £140, (c) £100 to £120, (d) £80 to £100 and (e) less than £80; and in each case, how many are (i) pensioners and (ii) income support recipients.
§ Mr. Key[holding answer 15 April 1991]: The Community Charges (General Reduction) Act 1991 provides for headline community charges everywhere to be reduced by £140, or to zero where the charge set is less than that figure. About 20 million chargepayers in England will additionally receive help from the community charge reduction scheme and/or through community charge benefit.
Both the community charge reduction scheme and community charge benefit help people meet their headline community charges and reduce the amount falling to be paid. The community charge reduction scheme limits increases between 1989–90 rates and community charge liabilities in 1991–92. Community charge benefit helps those with low incomes. It follows that when the headline charge is reduced, the amount of help a person needs to meet the headline charge is also reduced.
For example, a person on income support would only have to pay 20 per cent. of the community charge as reduced by £140 and any entitlement under the community 185W charge reduction scheme, CCRS. If their original charge was £400, and if there were no entitlement to CCRS, the charge after benefit would have been £80; after the £140 reduction the headline charge is £260 and the charge payable is £52. The 35 per cent. reduction in net charge is the same as the percentage reduction in headline charge.
The information requested is given in the table below:
Reduction in payment per year Charge payers (millions) Pensioners (millions) (a) £140 plus 14.2 1.9 (b) £120 to £139.99 1.7 0.2 (c) £100 to £119.99 2.2 0.3 (d) £80 to £99.99 2.9 0.5 (e) less than £80 14.6 5.0 All 4 million individuals in England on income support are entitled to maximum community charge benefit and hence fall in category (e) in the above table.
§ Mr. Frank FieldTo ask the Secretary of State for the Environment what he estimates the average community charge will be in England in 1991–92(a) before the effects of the Community Charges (General Reduction) Bill and (b) after the reduction provided for in the Bill, in both cases giving figures (i) gross of the community charge reduction scheme and rebates, (ii) net of the community charge reduction scheme but gross of rebates and (iii) net of the community charge reduction scheme and rebates.
§ Mr. Key[holding answer 15 April 1991]: The information requested is as follows:
£ (a) Before Community Charges (General Reduction) Act (i) Average charge (gross) 392 (ii) Average charge less community charge reduction scheme 340 (iii) Average charge less community charge reduction scheme and community charge benefit 285 (b) After Community Charges (General Reduction) Act and revision to community charge reduction scheme (i) Average charge (gross) 252 (ii) Average charge less community charge reduction scheme 220 (iii) Average charge less community charge reduction scheme and community charge benefit 187 Taking account of the allowance in income support for the 20 per cent. minimum contribution, the estimated average charge in England is reduced to less than £175. Charges have been calculated without allowing for reduction in charges due to capping.