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Local Government Reform

Volume 124: debated on Wednesday 16 December 1987

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To ask the Secretary of State for the Environment what is the average cash figure paid by the highest paid 10 per cent. of households under the present system towards the cost of local services; what this figure is as a percentage of the average incomes; what is the average cash figure paid by the lowest paid 10 per cent. of households under the present figure towards the cost of local services; and what this figure is as a percentage of their average income.

[holding answer 15 December 1987]:On average the 10 per cent. of households with the lowest net incomes are estimated to be liable to rates of about £240 (91½per cent. of net income) before rebates. The 10 per cent. of households with the highest net incomes are similarly estimated to be liable for rates of £480 (2¼per cent. of net income). On the basis of the rebate system which will be in operation from 1 April 1988 these figures fall to average cash payments of £90 (3½per cent. of net income) and £475 (2¼of net income) respectively.With full implementation of community charges at present spending levels, the equivalent figures net of rebates would be £70 (2¾per cent. of net income) for the 10 per cent. of households with the lowest net incomes and £435 (2 per cent. of net income) for the 10 per cent. of households with the highest net incomes.These figures relate only to the locally raised contribution to local services. The 10 per cent. of households with the highest incomes overall will contribute 16 times more to the cost of local services than the 10 per cent. of households with the lowest incomes once the contribution from national taxes is taken into account.