§ Mr. CohenTo ask the Secretary of State for the Environment whether he will tabulate in relation to the London borough of Waltham Forest how much revenue would be raised from the individuals resident in the borough assuming(a) a system of capital value rates plus local income tax paid in proportions of 80–20, (b) the existing system of rates and (c) the community charge; and how much Government grant would be given in each case.
§ Mr. GummerThe amount raised in any area with a system of capital value rates plus local income tax would depend on the tax rates set. It is possible to calculate tax rates which would apply in each area from a comparison of grant-related expenditure and actual spending. The implication of these tax rates for specimen individuals, with defined incomes and property values, can then be assessed. I have published figures on this basis which are consistent with the illustrative 1989–90 community charge and with current levels of domestic rates.
I cannot estimate how much would be raised from the residents in any one local authority area if a system of 688W capital value rates combined with local income tax were in force. This is because data are not available for each local authority area for either the capital value of domestic properties or the taxable income of residents.
Based on the illustrative 1989–90 community charge levels placed in the Library on 19 July, the amount raised from the full community charge in Waltham Forest could have been up to £56 million. But part of this amount would have been met by the Exchequer through community charge benefit payments. The figure comparable with the present system of domestic rates is £51 million.
In 1989–90 illustrative community charges assume a standard spending grant of £78 million for Waltham Forest residents. In 1989–90 rate support grant payable to Waltham Forest amounted to £83 million. In addition, Waltham Forest residents presently benefit from grant paid to the Receiver for the Metropolitan police district and the London Fire and Civil Defence Authority.
With both the current system and the community charge the Government also provide additional amounts to the poorest in each area in the form of rebates to reduce their payments to the local authority. Specific grants are also paid to fund certain areas of local authority spending and other Government grants are paid from a variety of programmes.