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Opposition Day

Volume 171: debated on Wednesday 25 April 1990

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11Th Allotted Day

Local Government Finance

I have selected the amendment in the name of the Prime Minister. In view of the large number of hon. Members who wish to participate in the debate, I propose to put a limit of 10 minutes on speeches between 6 pm and 8 pm and I would ask those who speak before and after that time broadly to bear that limit in mind.

3.50 pm

I beg to move,

That this House condemns the unfair and excessive burden which the poll tax has imposed on many millions of people, regrets the further burdens placed on some local authorities and the communities they serve as a consequence of charge-capping and deplores the partisan way in which it has been applied; expresses concern at the heavy burden imposed on many enterprises, and particularly on small businesses, by the uniform business rate; and calls upon the Government as a matter of urgency to review the operation of the poll tax and the uniform business rate and bring forward a fairer system of local government finance so that individuals and their families, businesses and local authorities can all be relieved from the burdens they impose.
In common, I imagine, with most hon. Members, I have received thousands of letters about various aspects of the poll tax. Many of their writers have objected to the principle of the poll tax, some of them perhaps unconsciously echoing the criticism rather surprisingly made by Adam Smith, who is sometimes put forward as guru of the right. Many other letters have complained about the tax's unfair impact and others have asked about—indeed, complained about—the unworkability and the difficulty of administering the poll tax and the expense that has been involved in setting up the systems—in employing new staff, buying new software programmes and so on.

Other letters have expressed concern about the impact of the poll tax on the exercise of civil rights, because many people have noticed the increasing body of academic and other research that shows the worrying trend towards a substantial falling off in the numbers of those on the electoral register, and they are very worried that that is the consequence of the poll tax having inhibited people who fear that by exercising their right to vote they will somehow be caught for the purposes of paying the tax.

Still other writers—all these points are familiar, I am sure, to hon. Members on both sides of the House—have expressed concern about the pressure that the poll tax has put on family life: about their obligation to maintain an adult child or an elderly relative for whom there is suddenly a new responsibility.

Moreover—I believe that my experience is unlikely to be unique in this respect—the overriding question that has increasingly been asked by the great majority of those who have written is about why the poll tax bill is so high—[Interruption.]

I shall give way in a moment.

Conservative Members who were making a fuss a moment ago will know, if they are honest with themselves and the House, that such inquiries have come with just as great bewilderment—and, I dare say, greater outrage and anger—from people living in Conservative-controlled authorities as from those living in Labour or otherwise politically controlled authorities. They want to know why the bills that they were promised by the Daily Express in 1986 would be only £50 a head, which they were promised by the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) about a year ago would be about £178 a head, and which they were promised by the present Secretary of State would be only about £278 a head, have averaged £90 more than that most recent forecast and now average about £360.

The answer that they understand and accept, because it is the true answer, is that the bills are so much higher than forecast right across the country because the Government got their sums wrong. It is not just the Labour party which makes that point. It is made by independent bodies of all types such as the Chartered Institute of Public Finance and Accountancy and others. It is made by Tory-controlled local associations such as the Association of District Councils and the Association of County Councils. They say that the Government made a series of mistakes. First, they chose to assume that local government expenditure for the financial year just completed was £1·6 billion less than it actually was. They did that primarily by choosing to overlook the fact that many local authorities had to dip into their reserves to maintain their spending even at that level.

The bodies that I have mentioned noticed that the Government made no allowance in their calculations for the additional costs of collecting the poll tax or community charge. The Parliamentary Under-Secretary estimated those costs at £400 million, but most people believe that that is a substantial underestimate. The Government also chose to overlook the fact that local authorities have had to accept a range of new obligations and duties, many of them imposed by the Government. No allowance was made for those new obligations.

The Government made the ludicrous assumption that every authority would collect 100 per cent. of the poll tax that was due to it. I do not think that one borough or district treasurer in the country has budgeted on that basis, because everybody understands that the incidence of collection for the poll tax will be lower than it was for the rates. Therefore, the best or perhaps the most optimistic estimate for the collection rate is about 95 per cent. It might even be more prudent to budget for a 90 per cent. collection rate.

The most remarkable mistake was that the Government solemnly assured local authorities that the rate of inflation on the basis of which those authorities should prepare their budgets for the coming financial year, now the current financial year, was initially to be ·8 per cent. It has now been slightly revised upwards, but it is still nowhere near the true rate of inflation, which, as we all understand and deplore, is running at twice the Government's initial estimate.

The cumulative effect of that catalogue of mistakes has led the Secretary of State himself unconsciously to admit that a gap has arisen between the real level of local government spending and the level that the Government assumed in a fit of super-optimism would be the case. He complains about that gap and has assumed that it is about £3 billion.

I am advancing a continuous argument and I shall give way to the hon. Gentleman when I have finished it.

The Secretary of State has said that he has put a figure of over £3 billion on that gap. The bad news for poll tax payers is that, because of the way in which local government finance is now structured, every pound of that gap, every penny of the deficit, now falls on the hapless poll tax payer. Every £1 by which the Government's estimate has fallen short of what is required by local government, means that an extra £4 will have to be found from the poll tax.

There is a charitable explanation for that sad catalogue of errors. It is that the Government are simply incompetent. On the day when a £2·2 billion trade deficit has been announced, that explanation has a certain persuasiveness. However, I do not think that this was simply a catalogue of errors. I think that the Government deliberately set about creating this shortfall for reasons which I shall shortly elaborate.

If, as the hon. Gentleman suggests, the Government got all this arithmetic so disastrously wrong, how did the Labour-controlled authority of Barking and Dagenham, which includes his constituency, manage to set its charge at just £2 over the Government's suggested figure? Is he saying that the Government were too generous with their grant for his council or is it uniquely efficient?

I am glad that the hon. Gentleman is making the case that the Government's errors were not uniform and comprehensive, but they nearly were. The experience of my borough gives the lie to the oft-repeated claim that the poll tax in Labour councils is always higher than in Tory councils.

Let me return to the thread of my argument. I had carried the House with me to the point where we had explored this catalogue of errors and I had suggested that simple incompetence was hardly an adequate explanation. I believe that the Government deliberately set out to create that shortfall because they wanted to build into the poll tax the unfairness, the high bills and the oppressive burdens that are now manifest. Why should they want to do that? [Interruption.] I know that Conservative Members do not want to listen, but they should hear the argument because it may help them to understand why they and their constituents are in such difficulties.

The real explanation is to be found in a close textual analysis of the claims that have so often been made for the poll tax. Let us reflect on the theory that underlies it and has so often been advanced as the major case for bringing it about. It was that local government was irresponsible, spent far too much and did so because it was not accountable to those who received the services. It was argued that, because everybody would pay it, the poll tax would improve the accountablility of local government.

It was only a small step from that to conclude that one way to make that accountability really bite and have an impact was to ensure that when people found that they had to pay the bills, those bills were substantial and hurt. The theory was that outraged poll tax payers would turn in anger and point the finger of accusation at their local authority and demand that the bills be reduced and services cut. The theory went further, because it was assumed, against the evidence that we now have, that that charge, that action and that demand would be made most intensively against Labour local authorities.

That was the theory, and the game was given away by the previous Secretary of State, the right hon. Member for Cirencester and Tewkesbury, who argued, when criticised about the unfairness of the poll tax, that it was criticised only by those who had been taught to believe that the rich should pay for the services provided to others. There we have the nub of the argument.

The problem with all that is that the accountability that was meant to do the Government's dirty work for them, which would enable them to walk away from local authority finances, saying that it was nothing to do with them, and which was meant to allow them to sit back while irate poll tax payers undermined and weakened local authorities, has backfired in the Government's face. The reason for that is that Conservative Members have been joined by Conservative councillors and activists all refusing to play the part written for them by Conservative central office. They refuse to accept that the fault lies with local authorities.

If the hon. Gentleman's analysis is to be believed, how does he explain that in Scotland, in the second year of the community charge, 20 councils have kept their spending at last year's levels or below and the remainder are within the rate of inflation? Can he also explain why, today in Scotland, the Labour party has announced its proposals for its alternative to the community charge, which the hon. Gentleman has not yet endorsed? That does not surprise me, because it was not able to specify the different categories of homes and how they would be affected.

I shall gladly deal with Scotland later in my speech, when I shall invite the House to contemplate the rather mysterious meeting that was arranged between Strathclyde regional council and the right hon. Member for Ayr (Mr. Younger), whose specific purpose it was to consider amendments to the community charge. That was something of which the Secretary of State seemed to be unaware, and it shows how widespread is the anxiety within the Tory party about the poll tax as it has worked out.

The theory of accountability went wrong because many millions of people throughout the country were able to watch on their television screens Conservative councillors in West Oxfordshire resigning the Tory whip. They saw Conservative social clubs in Morecambe disaffiliating from the Tory party. They saw Conservative voters, Members and activists marching and protesting about the poll tax. So they knew that the Government's efforts to use accountability as a weapon against local authorities in general, and Labour local authorities in particular, would not hold water.

It is because of that growing realisation that we have had a succession of measures introduced almost day by day—for example, safety nets, transitional reliefs, changes to rebate schemes and new exemptions. These measures have been introduced by a Government who finally understand—I pay tribute to many Conservative Members for helping the Government to come to this realisation—that accountability has backfired in their face. The poll tax payer now holds the Government responsible for accountability.

I shall give way to the hon. Member for Birmingham, Northfield (Mr. King) because I feel that I have an inkling of what he wants to ask.

I am grateful to the hon. Gentleman for giving way. He is as generous as ever. I listened with keen attention to his remarks about the community seeking accountability from local authorities. According to him, that will not work. I draw the hon. Gentleman's attention to an article that appeared on the front page of the Birmingham Evening Mail last Friday. It was headed "Pasting for City Council". The council has been conducting MORI opinion polls over the last few years to ascertain the views of the local community on how well it has been performing. It seems that

"some 73 per cent. of Brummies blame the Council for wasting too much money on non-essentials, foreign trips and parties. And 57 per cent. believe the council is remote, out of touch and impersonal."
That is a Labour council. What advice will the hon. Gentleman give electors in Birmingham on 3 May? They would be presented with a lower community charge by both the Conservative and the Liberal parties and they are faced with a £406 charge from the Labour party.

On 3 May, accountability will have its day. That is the accountability which the Secretary of State was unwilling to trust when he chose to charge cap 21 authorities with less than a month to pass before the voters had the opportunity to express their judgment.

If we are to exchange press comment on the performance of local authorities and local communities, I wonder whether the hon. Member for Northfield read the report in yesterday's Evening Standard under the headline "Poll Tax Disowned by Tories". The article refers to the campaigning of the Tory group in Bromley, a borough with a considerable history in the annals of Tory politicking. In its leaflets and electioneering material the Tory group states:
"The community charge was introduced by central Government, not by Bromley councillors. Whatever your views on the current performance of central government, the forthcoming elections are about local government."

No, I shall not give way. I have another press clipping about the state of public opinion.

I refer to the poll which was published in The Independent today. I mention that only in passing, but it shows the 26-point lead that the Labour party has over the Conservative party. The most significant feature of the poll is that 55 per cent. of that large and growing band of people who are described as Tory defectors gave the poll tax as their reason for ceasing to support the Tories. When asked what they thought of the various options, only one in seven of the dwindling band of Tory supporters said that the poll tax was their preferred method of financing local government.

I intend to pursue the theme of accountability because so much was made of it putting the case for the poll tax. Yet as I have just mentioned, when all else had failed, when all the subterfuges and diversions and little escape routes had been tried and had failed to assuage concern, at last the Secretary of State felt obliged to concede that accountability had gone out of the window; that it was no longer the name of the game. On 3 April, just a month from the opportunity that millions of voters would have to express their views in the ballot box on the size of their poll tax bills, the Government had to intervene to sweep away accountability and to introduce charge capping—

I shall not give way, as I want to make the point that the Secretary of State had to introduce charge capping for local authorities.

Heaven knows how much midnight oil was burnt and how many hours of effort were put in by civil servants to produce the mathematical miracle of 20, rising to 21, local authorities that excluded every Tory authority. The amazing aspect is that the Secretary of State managed to produce a list that included local authorities whose poll tax bills were actually below the Government's assumed charge for those authorities. He managed to produce a list that included authorities that were contributors under the safety net. However, the list excluded some authorities that would appear on any list based on those with the highest poll tax bills. The right hon. Gentleman managed to produce a list that excluded Tory authorities that would have been included on any list of authorities that had most sharply increased their spending over last year. He even managed to produce a list that excluded Kensington and Chelsea.

I shall let the House into a secret. We did quite a bit of work chopping and changing the various criteria that the right hon. Gentleman might use—yet we found it virtually impossible to come up with a combination that would exclude Kensington and Chelsea. However, the Secretary of State has found a way to do that. The conclusion reached by the hundreds of people in Tory authorities who have written to us is that that list was a political fix. It was a political exercise—a concession to the fact that accountability could no longer be relied upon. All that was left to the Government was to try to shift the blame for the fiasco on their hands.

Is the hon. Gentleman aware that in order to cap Kensington and Chelsea I would have had to cap 58 local authorities? Is it the Labour party's position that I should have capped 58 local authorities?

I do the Secretary of State the honour of assuming that he knows his way around his own criteria a little better than he has just suggested. The fact is that under almost all combinations of criteria, Kensington and Chelsea figures high on the list. Indeed, on the combination of criteria that most people assumed that the right hon. Gentleman would use, Kensington and Chelsea came 21st. That is why many people assumed that he would produce a list of just 20, which he did.

Even the Secretary of State understood that, had he produced a list based on criteria that produced 20 local authorities excluding every Conservative authority, hut with that same set of criteria producing a Tory 21st local authority, it would be extremely embarrassing to draw the line just before that Tory authority appeared on the list.

Charge capping is a political exercise which is unlikely to succeed. I set aside the question of judicial review. I am delighted that a High Court judge has agreed that t here is a case to answer, and I shall be interested to see how that legal argument pans out. Even as a political exercise, capping is unlikely to succeed because it necessarily destroys the only case that was ever really made for poll tax—that it would increase accountability.

I suspect that many Conservative Members are uncomfortably aware that capping has immeasurably increased the anger of poll tax payers in Tory local authorities. They are the people who write in to complain, "How dare the Secretary of State draw up a list that excludes my Tory-controlled borough, which has imposed a whacking great poll tax bill on me?"

Contrary to the Secretary of State's efforts and expectations, charge capping has made the Government even more directly responsible for poll tax bills. Every aspect of local government finance—central Government grant, uniform business rate, and now the poll tax itself—comes under central Government control. In effect, charge-capped bills are those which have been issued by the Government under their own authority, and the remainder are, by implication, bills which the Government say can go ahead. Every poll tax bill that has arrived and is about to arrive bears only one set of fingerprints—the fingerprints of a guilty Government.

As the hon. Member for Dangenham (Mr. Gould) worries about the poor and needy, who have great difficulty paying the community charge, what advice does he offer the Labour-controlled local authority serving Weymouth and Portland? Putting aside the cost of the community charge, that authority has, according to the old system, imposed an increase in money collected from all sources of 50 per cent. How would Labour deal with that situation? That authority is not being capped because its budget has risen only from £4 million to £6·5 million, but clearly that increase is costing my constituents a lot of money.

The invented figure of a 35 per cent. rates increase that the Secretary of State has used sometimes is just as much vitiated as the poll tax calculation by the mistakes that I enumerated earlier, in terms of providing central Government grant. That is the major explanation. The hon. Member for Dorset, South (Mr. Bruce) ought to advise his constituents to pursue the matter with the Government, because they are responsible for the gap and for the supposed rates increase.

So much for accountability as a feature of the poll tax. Turning to the uniform business rate, we immediately encounter a paradox. The uniform business rate is in many respects the stablemate of the poll tax, yet whereas we were told that the poll tax had the major virtue of increasing accountability, somehow and mysteriously there is no mention of accountability in relation to the uniform business rate. Not only does it entirely overlook accountability but it totally denies it. It provides instead for a centrally-fixed national rate which breaks the link between local authorities and their local business communities.

The reason why the Secretary of State's business community is so worried about the uniform rate is that it offers no opportunity to respond to revaluation—which we welcome—by giving local authorities the power to fix their business rate according to local conditions. Conservative Members know as well as anyone how poorly the uniform rate is regarded. I would take a bet that every one of them has received representations from local business men to that effect.

The ability to meet the needs of local business communities has been taken from local government and is now entirely in the hands of central Government. That is why, when the Secretary of State encounters opposition from his business community through the organisation called Business Against Rate and Rent Increases in Bath—the most high profile of the growing number of protests up and down the country—and when he promises to see them but is reported as saying that he will do so only as a constituency Member of Parliament, he was profoundly wrong. The business community was right to ask to see him as the Secretary of State for the Environment, because he and the Government have introduced the uniform business rate, and have imposed it on business men up and down the country. There is no point in speaking to the local constituency Member of Parliament, because the uniform business rate is central Government policy.

Does the hon. Gentleman accept that the UBR in my constituency and that of my right hon. Friend the Secretary of State would, on former values, have involved a lower rate bill than the rates exacted by Somerset and Avon county councils? Does he agree that the rise in the business rates bill in my constituency and that of my right hon. Friend was caused by the revaluation, which was delayed for 17 years? What is the Labour party's position on revaluation? Would it cancel it, or would it postpone it, or would it go for an entirely different system of business taxation for which there is no consensus among industrial and business organisations?

As some of the more attentive hon. Members may recall—I am sure that the Secretary of State does, because he referred to it this afternoon—I have had no hesitation in supporting and endorsing the revaluation. Where the Labour party parts company with the Government is that they have built on and exacerbated the revaluation with a national rate which takes no account of local conditions. The hon. Member for Taunton (Mr. Nicholson) is wrong. If the business rate could be set by local authorities, it could be made to offset the impact of revaluation.

I am afraid that the hon. Gentleman misunderstands the point. In my constituency and in many others the uniform business rate is 10 per cent. lower than the local non-domestic rate, so how does that square with his argument?

I shall leave it to the Secretary of State to make his case to his recalcitrant business communities. That is his problem.

May I also bring to the right hon. Gentleman's attention the real problems that local business men face. As the Institute for Fiscal Studies has pointed out, a large proportion of businesses will face an increase in their business rates. That increase will be particularly felt in the south-east, among small businesses, in retailing and in small high-tech businesses. Those businesses are offered—

No, let me continue for the moment. Those businesses are offered, as protection against the increases, a transitional scheme which, true to form and typically of the whole poll tax fiasco, is less generous than it seems.

The principle is that most ordinary and large businesses will be no more than 20 per cent. worse off in each of the next five years. The truth is that that 20 per cent. increase per year—said to be the upper limit for any increase—is a cumulative increase which takes no account of inflation. In reality, even with a 6 per cent. inflation rate, that transitional relief will be exhausted after three years.

Any business that changes its premises, moves to new premises, leaves premises empty, refurbishes, makes additions or makes any alteration to premises will lose the transitional relief immediately. That is why one will find a range of shop fronts boarded up in high streets in so many of our towns and cities; they will be unlettable. Anyone who took on those premises would immediately cop the full increase in uniform business rate, and that is what is proving so damaging to so many business communities.

I hope that the Secretary of State will tell us what explanation he gives his own business community on the subject and that he will bring us up to date on the Government's proposals for mitigating the worst effects of the poll tax. Decisions are needed soon. We cannot afford delay for much longer if local authorities are to be able to gear up for whatever changes the Government have in store. We need to know which of the options that have been floated in recent months the Government intend to settle on.

Are we to have—I shall give way to the Secretary of State on this point, although I suspect that he wishes to deal with it in his speech—the removal from local government expenditure of major items of expenditure, such as education or teachers' salaries? I think not, because the Prime Minister has made it clear that she is opposed to it. Are we, then, to have the restoration of central Government grant to make good—

No, I do not intend to give way for the moment. I should be grateful if, for a change, the hon. Gentleman would listen.

Are we to have the restoration of that £3 billion deficit in central Government grant? I think not—although it must be an attractive option—because it would put the Government in desperate straits in terms of their finances. How would they find that £3 billion—and probably more—to make good the gap without disappointing their followers' expectations that they might be able to offer yet more mysterious and insubstantial tax cuts in the run-up to the general election? How would the Secretary of State guarantee that an increase in grant would result in lower poll tax bills? Is not it likely that local authorities, which have been bled dry and have had to cut their services in the most painful and damaging fashion, would use any additional grant to restore their services, thus leaving poll tax bills unchanged? Are we, therefore, to have, as I think has also been floated, a universal form of charge capping? Is that what is in store? That would be the final admission that accountability is off the agenda.

Perhaps there is to be the banding of incomes—sometimes called the Mates option. The Secretary of State knows well, because he voted it down, that that is full of practical problems and that it would create all sorts of poverty trap implications. Furthermore, it denies the original purpose of the poll tax.

No, I do not intend to give way again. I am about to end my speech.

Always, of course, lurking in the wings is the right hon. Member for Henley (Mr. Heseltine). Earlier this afternoon we heard from my right hon. Friend the Member for Chesterfield (Mr. Benn) that the right hon. Member for Henley had carefully distanced himself from any responsibility for introducing this iniquitous tax. The point is that we do not yet know from the Government, although local authorities desperately need to know, what is their solution to the problem. They are aware of the problems. There is an excellent amendment on the Order Paper in the name of the right hon. Member for Shropshire, North (Mr. Biffen). If the rules of order permitted it, Mr. Speaker, I would say immediately that we accept it and that we invite the right hon. Gentleman to join us in the Lobby. We also know, as hon. Members heard from my quotation of the case of—

Order. I distinctly heard the hon. Member for Dagenham (Mr. Gould) say that he did not intend to give way again.

Order. The hon. Member for Dagenham has given way generously. Interventions take up a lot of time. Many hon. Members, possibly including the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), wish to participate in the debate.

On a point of order, Mr. Speaker. I seek your advice on the motion that stands in the name of the hon. Member for Dagenham (Mr. Gould). It refers to a fairer system of local government finance. We have heard nothing about that during his speech. Does the hon. Gentleman intend to speak to his own motion?

I do not know, but what I do know is that if he is interrupted again we may never get there.

In order to show how generous I am, and out of my regard for the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), I shall give way to him as a last gesture.

Will my hon. Friend—[HON. MEMBERS: "Oh."] That was said on purpose. In this House one can have friends across party lines. I agree with the Opposition that the policy put forward by my own right hon. and hon. Friends is somewhat less than satisfactory. That is at its kindest. I believe that the way in which the community charge will fall is unsatisfactory and unjust and that the way in which the uniform business rate will affect small businesses in particular is neither fair nor just.

Does the hon. Gentleman accept, however, that we are talking about vast billions of pounds that have to be found for local government expenditure? Although I think that my right hon. Friends are wrong, because the community charge does not take into account ability to pay, that money will have to be found, whatever the Opposition say. How are they going to find such sums? What sort of policy will they put forward, because, in the end, the money will have to come from somewhere?

I am glad to carry the hon. Gentleman with me to some degree at least, in that he joins us in the criticisms which the vast majority of people make of the Government's proposals. [HON. MEMBERS: "Answer the question."] I am coming to the answer which hon. Members will find extremely useful.

The Government well understand—at least, they have no excuse for not understanding—that the time has come for them to recognise the fiasco that they have created. I have referred to the efforts that Tory local authorities and councillors are making to distance themselves from central Government. I have also referred to the poll in The Independent,which shows how much the poll tax is damaging Tory prospects in the local government elections. I have referred to the amendment tabled in the names of the right hon. Member for Shropshire, North and some of his hon. Friends as just the tip of an iceberg which demonstrates how much concern and anxiety exists on Conservative Benches. I have also drawn attention to the meeting—we look forward to hearing an explanation of that meeting—which mysteriously has been organised between senior officials of Strathclyde regional council and the right hon. Member for Ayr. All those factors demonstrate how much difficulty the Government are in.

For the sake of all those who want to live in a fairy-tale land where people do not understand what our Labour replacement for the poll tax will be, let me read from the report in The Independent. When people were asked what alternatives to the poll tax they favoured, Labour's system of taking income and property values into account was the most popular—[Interruption.]Unlike those Conservative Members who are or pretend to be ignorant, 43 per cent.—[ Interruption.] I repeat for those who did not catch that figure that 43 per cent. not only understood and were familiar with Labour's alternative, but actually found it preferable to any other proposition. The next most popular alternative was a return to the rates, which was favoured by 17 per cent. A local income tax, which is favoured by the Liberal Democrats, was preferred by only 16 per cent. and surprisingly, only one in seven of that dwindling band of Tory voters—those who intend to vote Tory in the local elections—favoured the poll tax

Let me quote from The Independent. [Interruption.]

I am grateful to the hon. Member for Salisbury (Mr. Key): I think that he will enjoy this. The article states:

"Even among the fairly small sample of intending Conservative voters, Labour's approach is preferred to any other".
We have now reached a point at which even the Government must understand—

No, I will not.

Even the Government must understand that the game is up. Even they must now understand that the time for political posturing is over; that what is now required is a recognition that the Government—

On a point of order, Mr. Deputy Speaker. We have just been told that 43 per cent. of people understand the new Labour tax proposals. If that is the case, will the hon. Gentleman please explain them to the House?

If the hon. Gentleman had had enough wit and attention to listen to what I said, he would have clearly understood the Labour alternative.

On a point of order, Mr. Deputy Speaker. You may not be aware that we have been trying to hear the debate for some time. So that we can understand what the hon. Gentleman is talking about, could a copy of the Labour party's policy document be placed in the Library?

If the hon. Gentleman wishes to listen to the debate, perhaps he and his colleagues should restrain themselves. I, too, am anxious to hear what the hon. Member for Dagenham (Mr. Gould) has to say.


I wish to help the hon. Member for Poole (Mr. Ward). First, I shall send him a text of the major speech that I delivered in Cardiff in February; secondly, I shall send him a copy of the statement on which we based a press conference in the Mid-Staffordshire by-election on our alternative proposal; thirdly, I shall send him a copy of the briefing that we have sent to hundreds of thousands of people, which no doubt goes some way to explain why 43 per cent. of people prefer our alternative.

On a point of order, Mr. Deputy Speaker. Is not it customary for Opposition Front-Bench spokesmen on matters of some importance to tell the House their policy, rather than hiding behind—

Order. I hope that the debate will not be interrupted by a series of bogus points of order. Equally, I hope that the hon. Member for Dagenham will be given the opportunity to express himself to the House.

I am in a generous mood. I made an offer to the hon. Member for Poole, who intervened on an earlier bogus point of order. I shall also make a bargain with the Secretary of State: I shall send him copies of the same documents as soon as he sends us a copy of his statement on the Tory alternatives to the poll tax. That is the question to which people faced with horrific bills desperately need an answer. That is not in the interests of the Tory party, although we well understand why the Tories are running scared; people who are terrified out of their wits need to know the answers. We need to hear those answers from the Secretary of State now.

On a point of order, Mr. Deputy Speaker. Is not this a United Kingdom debate on local government finance, on a motion on the Order Paper tabled in the names of Opposition Members? Earlier today, a statement was made in Scotland to which I referred in an intervention in the speech of the hon. Member for Dagenham (Mr. Gould)—you were not here, Mr. Deputy Speaker. Is it in order for a local government debate of such magnitude, especially as it affects Scotland—

Order. The Chair will judge whether contributions to the debate are in order at the time that they are made and in the light of the wording of the motion. I hope that we can now get on.

4.39 pm

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:

`believes that almost every adult should make some contribution towards the cost of local services from which they benefit, with relief for the less well off; welcomes the embodiment of those principles in the community charge; notes that the scale and pattern of payments is related to ability to pay with 10 million people receiving rebates at a cost of £2·5 billion; welcomes the willingness of the Government to listen to constructive suggestions for improving the new system with a view to prompt implementation of any necessary changes; further notes that living under Labour costs people more; and deplores the fact that the Labour Party have not had the courage or honesty to come forward with their own proposals before the local elections on 3rd May.'

The Secretary of State will know that I am extremely grateful to him for giving way. The Government amendment accuses the Labour party of not producing the goods in respect of the roof tax. Is he aware that the reason why the hon. Member for Dagenham (Mr. Gould) was afraid to give way to me—[HON. MEMBERS: "Oh!"] Oh, yes. It is usual for an hon. Member to give way across the Chamber, not just to hon. Members on his side. He was afraid to give way to me because the Labour party in Scotland today produced figures for the roof tax. The average figure that it gave per household is £420, whereas two years ago under the rating system the average per household was £498. Will the Secretary of State, on my behalf, ask the hon. Member for Dagenham how it is possible to reach a figure of £420 per household, unless the Labour party is prepared to cut services massively in Scotland?

I will answer the hon. Gentleman's question straight away. I am sorry that, doubtless because of an oversight, the hon. Member for Dagenham (Mr. Gould) was unable to do so.

The only question people were not asked in the hon. Gentleman's moving peroration was whether they believe that there are fairies at the bottom of the garden. Had they been, doubtless the fairies could have produced the statistical information to which the hon. Member for Glasgow, Govan (Mr. Sillars) drew attention.

I am sure that hon. Members have looked forward to this debate. It is no secret that, on balance, the Opposition have opposed the community charge. However, they have been a little reluctant to give their alternative. They have had 12 Opposition days this year but have not chosen to use one to discuss the community charge. We assumed when the Labour party tabled the motion—the Leader of the Opposition graced us with his presence for a few moments, although he had some difficulty staying awake—that the Mandelson veto had been lifted and that we would hear its alternative to domestic rates and the community charge. Given hon. Members' high expectations, the speech of the hon. Member for Dagenham was a disappointment. My hon. Friends were only too eager to hear what he had to say and they will read his speech with interest to discover what the 43 per cent. believe in.

Once again, the hon. Member for Dagenham came to the Dispatch Box empty-handed. I should like to deal later with some of the points he made, but may I start with the position today? We have introduced the community charge on the basis of the revenue support grant settlement announced last July which allowed for an 8·5 per cent. increase in aggregate external finance for local government. We distributed that grant under the new formula, the standard spending assessment. Since last autumn, my hon. Friend the Minister for Local Government and Inner Cities—I pay tribute to his work over the past few months—and I have introduced the transitional relief scheme and have announced that contributions to the safety net will end after the first year instead of continuing for four years. In his Budget statement, my right hon. Friend the Chancellor of the Exchequer announced the doubling of the ceiling on capital disregards.

Whatever our political disagreements, and although there are exceptions to which my hon. Friend the Minister referred earlier, by and large, the administrative arrangements for this extremely complicated new way of raising—[Interruption.] The administrative arrangements in local government have worked pretty well. I congratulate the majority of local authorities on issuing bills in early April, net of transitional relief and benefit, despite the late introduction of the transitional relief scheme. All the local authority officials who worked so hard to secure that outcome are to be congratulated.

This is one of the biggest changes that has been made to our social and economic life for decades. I can say, with perhaps more personal authority and witness than any other hon. Member that it has not been an entirely hazard-free enterprise, but nor would have been a revaluation of domestic rates or the introduction of whatever the Labour party would put in place of domestic rates and the community charge. If it were easy, straightforward and popular, it is conceivable that the Labour party would have announced its proposals.

Does the Secretary of State accept that, in year two of the poll tax, the parliamentary banter seems out of place? May I say, with all sincerity, that for constituency Members of Parliament year two is sheer misery? If it has worked out so well, why is Lothian authority being asked to provide self-defence courses—I banter not and I do not exaggerate—for employees who must administer the tax? It is far from a laughing, yah-boo matter.

I wish that I had waited a moment or two before giving way to the hon. Gentleman, because there is something to which I wish to refer now and a little later. It is not surprising that, as we have introduced this substantial change, we have encountered several problems, anomalies and difficulties, such as the treatment of holiday caravans, which was referred to in a parliamentary statement by my hon. Friend the Minister for Local Government and Inner Cities, as well as the larger difficulties to which I referred delicately a moment or two ago.

We have made it clear that we intend to look at fresh evidence on the standard spending assessments, whether it be from local authority associations or individual authorities before the grant distribution next year. Several other issues have been brought to my attention by my hon. Friends. A range of constructive criticisms has been made by them and by others. It perhaps will not surprise the most distinguished of my right hon. and hon. Friends that not all the criticisms and proposals that we have received have been mutually compatible, but I dare say that that is in the nature of the argument.

We shall review all those issues in the next few weeks. Of course, it is important that, by the time we make the rate support grant settlement statement for next year, in a few months' time, we should have resolved all those matters and be able to say whether we need to make any modifications and, if so, what they should be. The basic principle remains the same: almost everyone should make some contribution to the cost of the services from which all people benefit.

I assure the Secretary of State that Labour Members are listening carefully to his comments, because the nature of the language that he uses shows that he offers substantial change. The right hon. Gentleman concedes fairly, as he has done before, that the standard spending assessments are somewhat less than perfect. Can we therefore conclude that he may be disposed not to contest the application for judicial review by those charge-capped authorities?

That was an ingenious way of asking a question—suggesting that I had made a statement that I had not made. Distinguished lawyer though the hon. Gentleman is, he would have been surprised had I given him such an answer, which he would have been able to send to his and others' learned Friends elsewhere. I said that we were prepared to consider fresh evidence on the SSAs, whether from individual authorities or from local authority associations. I have already made that clear in the House and I make it clear again. I do not think that it can be said that we are groaning under the weight of fresh evidence from local authority associations or local authorities, but we are prepared to listen to what people say.

Does the Secretary of State accept that it would have been highly desirable for those south Yorkshire authorities such as Rotherham which have real difficulties and relatively low spending assessments to have their position examined before he made his poll tax-capping announcement? Does the right hon. Gentleman realise that it is unreasonable and unacceptable—I made this clear in an early-day motion tabled this week—that an authority such as Rotherham should receive as a standard spending grant a sum 459 per cent. lower than that for the city of Westminster, which is much more affluent?

No. I believe that the grant distribution formula that we used was right. Whatever the hon. Gentleman thinks about the SSA formula, the proposed Rotherham budget was 15·4 per cent. above the resealed grant-related expenditure assessment—the previous distribution formula. It would not be fair to argue that somehow everything had gone wrong because of a new SSA rather than the GRE. I repeat that we believe that the formula was right, but we are prepared to consider fresh evidence on it.

I am sure that my right hon. Friend agrees that next week the electors in London and elsewhere should know on what basis they should compare local authorities. Will my right hon. Friend confirm that they should compare on the basis of community charge payments? My right hon. Friend will recall that, at the launch of the Labour party's local government campaign, the hon. Member for Dagenham (Mr. Gould) said that it would be at least two years after a Labour Government being returned—an unlikely prospect—before they would come forward with an alternative to the community charge. Does not that mean that people going to the polls next week will know that the community charge will be in place for at least four years and that they must judge that Conservative councils cost less?

Conservative councils certainly cost less. My hon. Friend did not refer to the figures, but the standard spending assessments in London, for example, show that Labour authorities are spending £216 and Conservative boroughs £3 a head above their SSAs—a difference of £213. That is a substantial reason for everyone in London voting Conservative next Thursday.

The right hon. Gentleman said that the SSAs would be reviewed. Is he prepared to move the 30 April deadline for the authorities that are poll-capped and select a new date? He will be aware of the difficulty that people have had in trying to arrange a meeting with him to discuss this subject.

I cannot move that deadline, but I am prepared—as I must be in relation to my statutory obligations and requirements—to consider carefully an alternative budget, should one be put forward by a local authority. If I reject that budget, I must explain to the House of Commons why I have done so and get its support.

Perhaps I could give way first to the hon. Member for Rother Valley (Mr. Barron). [HON. MEMBERS: "Give way."] All right—I give way to the hon. Member for Sheffield, Brightside (Mr. Blunkett).

I am sure that my hon. Friend the Member for Rother Valley (Mr. Barron) will forgive me. In 1985, the Secretary of State for the Environment was faced with the same dilemma, in terms of local authorities having to present their cases quickly for redetermination and asking for additional time to be granted. It was felt at that time that the Secretary of State had the discretion to allow that. I ask the present Secretary of State to reconsider his answer with a view to allowing those authorities some limited additional time to consider their position.

I am not prepared to reconsider the position. As I said, if local authorities contest the caps or budgets that I have proposed, they have a statutory right to propose alternatives, and I then have to consider those alternatives and explain to the House why I either reject them or accept them. That is the right way to proceed and the way in which I intend to proceed.

One last point and then perhaps I can make a little progress. The hon. Member for Rother Valley has been trying to intervene.

My constituency is in Rotherham metropolitan borough. For the first time under this Government it has been capped, and all its public expenditure will come in future from central Government. How will the accountability test apply next Thursday in the Rother Valley constituency, which has to suffer a share of the £7·9 million in cuts, yet four of the seven wards are not fielding Tory candidates?

I do not mean to make my point in a polemical or rhetorical way, but I have great difficulty understanding the hon. Gentleman's argument.

The Secretary of State echoed the words used in 1986 by the Conservative spokesman, now the Conservative party chairman, who said that people who believed that the poll tax was set too high had the right to go to the ballot box and to get rid of the councillors who set it. There are no Conservative candidates in 11 Rotherham seats. The Conservatives are denying their people a chance to vote and going against the accountability which was laid down in the legislation on Second Reading and which was supported by many Conservative Members.

It is true that the best way of capping overspending and excessive charges in the long term is by voting Conservative. I very much hope that people throughout the country will take advantage of that where they can.

For even greater clarity, will my right hon. Friend expand on a point that he made a couple of minutes ago? I think that he said that in London the average Labour authority was spending £216 above SSA and the average Conservative borough a mere £3 above SSA. Does that mean that if the average Londoner votes Labour it will cost him or her £4 a week? If so, the House should know.

Yes, if they are lucky it will cost them that much extra a week. It will be perhaps £8 extra a week for a married couple. In several boroughs, some of which I have visited in the past few weeks, people would have considered themselves lucky if it had cost them only £4 a week extra.

I wish to ask the Secretary of State a question on his statement about the spending assessments, which was fair enough. He is probably aware that my authority has been capped to the tune of £10 million.

I heard the word "good". Does the hon. Gentleman believe that the decimation of the education system is good? I will tell him why he wishes the authority to be capped. It is because he knows nothing about it. When he says "good", he should realise what he is saving. What I am saying is serious.

Does the Secretary of State realise that in the short space of time that the £10 million of savings will have to be found the sum will become £13 million? Will he take that into consideration? We are now into the next financial year and by the time that savings or cuts can be made, we shall be part way through the year. The £10 million will become £13 million. Will he take that into consideration and the fact that we must put right the effects of Government policy?

We have taken that fact into consideration in setting our cap. We also notice that the cap still leaves a budget for Barnsley which is 17·7 per cent. or £118 per adult over the SSA.

The hon. Member for Barnsley, West and Penistone (Mr. McKay) tried to put the fear of God up his constituents about the possibility of savings in the education department of his local authority. Is my right hon. Friend aware that it has just come to my knowledge that in Stockport it costs £400,000 a year to provide the wage packets?

Facts such as those and ways in which we could secure far greater value for money will emerge increasingly frequently as the discussion about the community charge and the best ways of funding local government finance becomes more intense.

Before giving way on several occasions, I said that we were prepared to consider in the next few months what changes and modifications may be required next year. We must also be clear about the background to the current arguments and to any changes. Last year, local authorities increased their spending by 9 per cent. over the previous year. That represented an increase in expenditure of £2·7 billion. This year, local authorities intend to increase their spending by 15 per cent. That represents an increase in cash terms of £4·6 billion. There is no easy, cost-free way in which the consequences of spending at such levels can be dealt with. We must recognise that it simply is not the case that town halls and county halls live outside the normal economic rules of the world.

No, not for the moment.

In the rest of my speech I wish to deal with four issues. First, who pays the community charge? Secondly, how much do people have to pay? Thirdly, I wish to make a few remarks about the uniform business rate and revaluation. Fourthly, I shall come back to the issue with which the hon. Member for Dagenham flirted in his speech—how we should raise revenue for local government.

Who pays the community charge? I said earlier that our community charge is based on a simple principle—that almost everyone should make some contribution to the cost of local government services. The key words are "some contribution". The reliefs and benefits available make sure that not everyone pays the same.

I was interested in the campaign of the Labour-controlled Association of London Authorities, which placed several advertisements in the newspapers about benefits and reliefs and generally about the community charge, although it did not call it that. I draw the attention of the House to two points. First, the advertisement said that a small percentage of people in London
"may well be entitled to transitional relief … A few might find themselves entitled to a rebate of up to 80 per cent."
The advertisement referred to "a small percentage" and a "few". The House should know the latest figures that we have on benefit entitlement and relief. Over 10 million people in Great Britain are entitled to community charge benefit and reliefs. The cost in the coming year of those benefits will be £2·9 billion. About half those who are entitled to benefit will receive the maximum. I do not know whether that is regarded as "a small percentage" or as "a few".

The cost of the benefits and reliefs is 20 per cent. more in real terms this year than the cost of rate rebates and community charge benefit in Scotland last year.

I am coming to that. The improvements in the taper have ensured that another 650,000 people are entitled to benefit at a cost of £125 million. In England alone, we reckon that about 7·5 million people will benefit from transitional relief. The cost for the whole of England, Wales and Scotland will be £387 million. The total cost of benefits and reliefs in the coming year will be £3·3 billion. That is what the Labour Association of London Local Authorities called "a small percentage" and "a few".

The advertisement said that a small percentage
"may well be entitled to transitional relief'
in London. I have looked at the figures for Barking and Dagenham, a borough with which the hon. Member for Dagenham is familiar. More than one in four charge payers will receive transitional relief there. I make a serious point to the House. It is disreputable, when the Labour party is allegedly keen on maximising take-up, to give people the impression that benefits and reliefs are less generous than they are and thus encourage them not to apply for benefit. That is intolerable and it is the only way in which one can read that advertisement.

I assure the Secretary of State that some of us have tried hard to tell our constituents what they are entitled to. So far the Secretary of State has been unable to answer by way of parliamentary question why residents of sheltered housing schemes appear to be entitled to neither transitional relief nor special transitional relief. My attempts to obtain an answer on that point have been met with holding answers from Ministers who themselves do not seem to know why those pensioners, many of whom deserve relief, receive neither type of relief.

They are entitled to benefit and rebates, as the hon. Gentleman knows. In the cases to which I believe the hon. Gentleman refers, they were not previously paying domestic rates. Issues such as that and multiple occupation of large houses will have to be considered in the review in the next few weeks and months. I repeat to the hon. Gentleman that they are entitled to benefit.

As the hon. Member for Dagenham perceptively mentioned a few moments ago, the cost of benefits and reliefs is largely a reflection of the level of the charge, and the level of the charge is a reflection of the level of local authority expenditure, as the hon. Gentleman mentioned at the beginning of his speech.

Even if we accept every argument put by local authorities and accept, passingly, that local authorities are pluperfect, nothing conceivably justifies a 15 per cent. increase in expenditure this year. We know perfectly well that local authority after local authority has jacked up its expenditure and blamed the consequences on the introduction of the community charge.

As my right hon. Friend knows, I asked the hon. Member for Dagenham (Mr. Gould) what Labour would do about keeping down high budgets. Budgets have nothing to do with the way in which the money is collected. In Weymouth and Portland borough council, the chairman of the policy resources committee happily told me that there was nothing that the Secretary of State could do about community charge overspending because the authority's budget was so low. Is there anything that can be done, even at this late stage, to ensure that we can do something to bring relief to the constituents in authorities whose budgets have gone up nearly 50 per cent. and are spending one and a half times what they spent last year? Transitional relief does not benefit my constituents because the local authority has overspent.

Under existing legislation, I cannot cap authorities with budgets of less than £15 million, but I shall certainly bear in mind my hon. Friend's point because I know how much concern it causes.

My hon. Friend raised the matter of Labour spending. I cannot understand why the Opposition are so reluctant to accept that it is Labour that has blazed the trail in overspending this year. I thought that the Labour party prided itself on being the big spender. I thought that that vestigial remnant of Croslandite social democracy was one of the foundation stones of the political beliefs of the hon. Member for Dagenham.

If we consider the history, or this year's record of Labour local authorities, the facts speak for themselves. If we consider the relationship to grant-related expenditure assessments during the past five or six years, we see that Conservative authorities across the country, on average, spend within their GREA and Labour authorities spend, on average, 12 per cent. above. Exactly the same pattern emerges this year from the standing spending assessments.

I have considered why and I shall come to that later.

In every class of authority—shire, shire district, metropolitan district and London borough—Labour authorities are spending a great deal more than Conservative authorities. Labour authorities consistently spend more than Conservative ones and it is not surprising that Labour authorities have been capped. During the past six or seven years, we have capped 70 authorities, only one of which was Conservative. This year we have capped 21 authorities, all of which are Labour or Labour-hung controlled; none of them is Conservative. The reason for that is the pattern of overspending by Labour authorities.

The Labour party is not, as I understand it, against capping in principle. The hon. Member for Dagenham now says that it is, but on the "Today" programme the hon. Gentleman said—if he said it there, it must be true:
"In extremis there must always be that reserve power to cap."
It seems that he agrees with capping in extremis, but not in Derbyshire, where the authority has spent 25 per cent.—or £157 a head—over SSA. He agrees with it in extremis, but not in Basildon, where the authority has spent 194 per cent.—or £154 a head—over SSA. We should all like to know what the hon. Gentleman means by "in extremis".

It is perfectly obvious that Labour, whether in town halls or central Government, is unfamiliar with extremis. Some of us, as we trudge wearily through middle age, are old enough to remember the days when we had a Labour Government, and they were capped by the international bankers. Therefore, it is not surprising that 21 of the 21 authorities capped this year are Labour or hung Labour.

I turn now to the uniform business rate and revaluation, on which the hon. Member for Dagenham—[HON. MEMBERS: "Give way to him."] I shall do so soon, I promise. I want to turn to the uniform business rate and revaluation.

Will my right hon. Friend please give way instantly to the shadow Secretary of State so that he can define to the House the meaning of the phrase "in extremis"?

I am happy to give way to the hon. Member for Dagenham if he would like to make that definition—[Interruption.] I think that the hon. Gentleman has taken an early bath.

The hon. Gentleman referred to the uniform business rate and revaluation, which is important—I do not say that just because it is important in Bath. He knows that, while there have been arguments about some of its details during the past months and years, the principle of the uniform business rate has been largely accepted, indeed endorsed, by chambers of commerce and other organisations representing business. That was largely because they saw it as a way of sheltering business from the consequences of excessive spending by local authorities in the wake of the decision to end business votes in 1969. Undoubtedly, in the medium and long term, business and industry, and therefore job creation and investment, are likely to be the main beneficiaries of the changes that we have made in local government finance.

There are problems, not only in the south and constituencies like mine, but elsewhere in the country. Yesterday, I was in York, where people face difficulties. But those difficulties have nothing to do with the uniform business rate; they are the result of revaluation.

I am afraid that the hon. Member for Dagenham does not understand. In my constituency, Bath—the same will be true elsewhere—the uniform business rate is 10 per cent. below the non-domestic rate previously set. If small businesses in my constituency were still paying rates on the old basis, they would be paying more this year because of Avon's overspending than they are paying with the revaluation. They will pay 15 per cent. plus inflation. Therefore, the uniform business rate—

I shall give way to the hon. Gentleman if he wants. If he cannot explain "in extremis" at least he can ask me a question.

I assume that "in extremis" is a phrase known to the right hon. Gentleman, even though it may not be known to his hon. Friends.

The uniform business rate, like any other rating system, depends, first, on the property's valuation and, secondly, on poundage. If the valuation goes up, provided that the local authority has the power to fix the poundage, it can reduce the poundage.

Would the hon. Gentleman like to list those Labour authorities that have recently reduced the poundage? It will not take him long.

The Secretary of State's memory may not go back very far, but I have at least taken the trouble to check the figures. If the Secretary of State would care to look at the figures for the last time there was a revaluation he would find that in most local authorities up and down the country, when valuations went up substantialty—roughly doubled—in most cases, the poundage was roughly halved.

There are many examples, of which my constituency is one, where the uniform business rate is lower than the non-domestic poundage. So businesses in my constituency are being protected from excessive spending by Avon; and since the business rate has been increasing year after year by 1·3 per cent. more than the rate of inflation, pegging the business rate to—at most—the rate of inflation each year will give a substantial bonus to businesses. I am perfectly happy to give way continually to the hon. Member for Dagenham if he will tell me which Labour local authorities have reduced their business rate poundage. The truth of the matter—

My right hon. Friend is approaching the uniform business rate in a constructive way, but will he bear in mind the fact that, on Third Reading, his predecessor promised that links between local enterprise and local government, which are important to some of us in my part of the world, would be preserved and strengthened—not broken—despite the nationalisation of the business rate? How does he see the Government redeeming that promise?

Secondly, my right hon. Friend will be aware that, when a new business is acquired under the new conditions, the acquirer does not get any of the benefits of the graduation or transition to the uniform business rate. Is he applying his mind to that problem, because it is a serious deterrent to the acquisition, growth and trading of new businesses?

On the first point, the consultations that have taken place in the past will continue. I believe that they are extremely important, as is the relationship between local councils and local business communities.

Secondly, because it is a tax on property, the relief applies, as my right hon. Friend will know, to the property rather than to the business, whether the business is new or not. Following my right hon. Friend's logic, we should, I suppose, have to apply the transitional relief to new buildings and new property. I undertake to look at this issue again, but I foresee that it would be very difficult to get round the principles that I have mentioned—I think that they are principles of some substance.

The Secretary of State's comment on the second point advanced by my right hon. Friend the Member for Guildford (Mr. Howell) is welcome, as this is most important to Conservative Members. Will he confirm that business and industry are paying no more in real terms in the coming year to local government than they paid last year? Will he also confirm that their contribution will be capped, in terms of inflation, from now on?

That is exactly what I hoped I had said earlier, but I am delighted that my hon. Friend has afforded me the opportunity to make myself clearer than I evidently was a few moments ago. I think that the principles that we have applied to transitional relief are sound and substantial. The point made by my right hon. Friend the Member for Guildford would be difficult to accommodate within those principles; nevertheless, I am prepared to consider it, but I cannot promise to do so with a mind as open as he might like it to be on this occasion.

One point about transitional relief is of considerable importance to local businesses, particularly small businesses. A number of them have argued that at the end of the transitional period of five years they are likely to face a steep increase in their bills. We are prepared to extend the transitional period if, after the next revaluation, small businesses face a steep increase on top of the 15 per cent. tranches of increase that will have occurred in the intervening period.

As the right hon. Gentleman is dealing with anomalies associated with the UBR, what does he feel about the fact that about 150,000 voluntary sports clubs are being valued in the same way as businesses? Many of them—small cricket, rugby and sailing clubs—have been facing enormous rises that will force them to close. Does he accept that the way forward is to provide mandatory rate relief for all voluntary sports clubs facing the uniform business rate?

I do not believe that most sports clubs are facing the problems to which the hon. Lady referred.

I have spoken about the UBR, but not yet about the revaluation, on which I have an important point to make. It is significant that we have established once again, on the record, that the Opposition wholly support revaluation. I am delighted to hear that, and I think that it is also supported by the Liberal Democrats. So there is support throughout the House for revaluation. I hope that the Labour party will express that support when campaigning in the south of England, and that the Liberals will do likewise when campaigning in seats such as mine. I am sure that they express their enthusiasm for revaluation when campaigning in, say, the north and the west midlands. I was in the west midlands last week—in Derby, Walsall and Wolverhampton—where, at the end of the transitional period, they will have gained a 40 per cent. reduction in local business rates. That result of the revaluation shows a proper regard for the changes that have taken place in our regional economies and in the national economy over the past two decades.

We have taken a locally predicated supply and demand economy and translated it into a national tax, and we now have unevenness on that basis. The sum of £610 million—on the unabated figures—is to be transferred from London to other areas. The Secretary of State may think that wholly reasonable; I do not know the circumstances of Bath, but my right hon. Friend is asking local traders and suppliers to find £610 million over the abated period. That has consequences for their profits and losses. The company that I know personally faces a valuation rise from £10,500 to £356,000, giving rise to a tax payable of £110,000 after we have ended abatement.

This is destructive of business and small business. What proposals does my right hon. Friend have to ameliorate or reform the system?

If my hon. Friend is as honest a man as I am sure he is, I assume that he makes exactly the same remarks in his constituency, because it is benefiting from the revaluation. We are talking about a rebalancing of resources and tax over five years, and it is conceivable that, if the period is extended, these sums will not have to be found over the five-year period—it is important to remember that.

With respect to my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), I have found it instructive to look at business rates as a proportion of the rents being paid by local businesses, and to look at rates as a proportion of turnover. Typically, they constitute 1.5 per cent. to 2 per cent. of turnover in most of the cases that have been drawn to my attention.

Does my right hon. Friend agree that, in effect, an important regional and industrial policy is involved in these changes? In essence, places such as Amersham and Henley are surrendering resources that are going to places such as Stockton. The money is going from the softish industries such as financial services and retailing to manufacturing industries. Since these changes will also reduce the north-south divide, they will have the overwhelming support of one or two of my right hon. Friends who represent some of the seats that will lose the resources to others in the north.

I cannot comment on the particular examples that my right hon. Friend drew entirely at random, but it is one of the great anomalies of life that, just as those who are most enthusiastic for investment in infrastructure—in principle—are most resistant to it in practice, so very often those who are theoretically enthusiastic about shifting resources to the regions and the north and manufacturing raise one or two doubts when such a shift actually starts to happen.

I look forward to the hon. Member for Dagenham intervening several times in the next part of my speech. At the end of my speech I want to deal with the ways in which we should fund local government spending. Until this year we have funded it on the basis of a tax on property. That is notionally determined and long out of date, and everybody recognises the grave difficulties that would have arisen in revaluation. We saw some of those difficulties in Scotland.

The hon. Member for Dagenham does not agree, but every political party agrees that we could not have continued with the rates. The question arises about what we put in their place. We have put forward the blindingly obvious and are implementing our proposals. To its credit, the Liberal party has put forward proposals for a local income tax. I do not agree with those proposals because at a stroke they would wipe out the income tax cuts that we have made over the past 11 years. According to the author of those proposals, every couple with a joint income of £12,000 or more would pay more under the Liberal proposals than under the community charge. Of course, they would mean that we would have to face the prospect of a man such as Mr. Bookbinder being Chancellor. At least the Liberals have had the honesty to put forward their proposals.

My right hon. Friend is correct about the honesty of the Liberal party. The hon. Member for Dagenham (Mr. Gould) mentioned a MORI opinion poll. Does my right hon. Friend know whether any of the people questioned in that poll live in the constituency of Dagenham'? If they do, were they aware when giving their opinions on the various alternatives to the old rating system that Labour's roof tax will be £872 on a property worth £80,000? Such properties are certainly not uncommon in Dagenham. According to the speech of the hon. Member for Dagenham there would be a local income tax on top of that.

I am a man of almost inordinate charity and I know how the opinion poll was taken. It was a telephone poll and, by accident—it is a contingent factor of history—all those who were telephoned had been sent in advance a copy of the statement that the hon. Gentleman promised to us. I am sure that they were all well informed about Labour policy. Labour's approach to this issue has been a humiliating story. Its behaviour has lacked principle and has been governed throughout by the cheapest expediency. It is a long story and I will not trouble the House or frighten the horses by going through it.

I am sorry that the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who was the previous Opposition spokesman on local government, is not in his place. Speaking two and a half years ago on 24 September 1987 to the Association of Metropolitan Authorities he said:
"I am saying to NEC policy makers 'Hang on a minute. What is our policy on local government?' Putting it at its boldest we have not got a policy. That is the actual truth."
Unlike his hon. Friends, I do not think that the hon. Gentleman cared for the Trappist approach to policy-making. We have been hanging on, not for a minute, but for two and a half years and, putting it at its boldest, that is still the actual truth.

The hon. Member for Dagenham went through an encyclopaedia of excuses about why Labour does not have a policy and overturns policy after policy. In November last year, nearly six months ago, he explained the position. He said:
"Labour is looking at a range of options, some of which will be single taxes and some of which will not."
Last night we had pendulum voting which some of us found rather confusing. The hon. Gentleman obviously has a pendulum approach to policy-making. He said:
"Nothing is set in concrete."
Concrete has nothing to do with it. I listened to the hon. Gentleman's speech in today's debate and from that it seems that nothing is set in raspberry jelly.

What does the Labour party favour? Is it a roof tax, a floor tax or perhaps a window tax? The party cannot say and it will not say. If it is to be a tax on property values, how will it be calculated? How will areas such as the south be affected or streets where values have changed? How will council tenants and people who have taken advantage of the right to buy be affected? Again Labour will not say and cannot say.

My right hon. Friend does the Labour party less than justice. In the House we cannot get one squeak from the Opposition Front-Bench spokesman on local government and its financing. However, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) sneaked to the north-east of England and let the cat out of the bag. He said that Labour would reorganise local government and bring in regional government and give it the unfettered right to raise taxes.

I am sure that if we ask the hon. Member for Dagenham about that he will send us a copy of the press release. Labour cannot and will not say whether the tax is to be imposed on individuals or on households. Apparently not everyone will pay. Fewer people will pay, so I guess that those who pay will pay more. Apparently most will pay less, but there is still a certain amount of explaining to do.

I see that the hon. Member for Mid-Staffordshire (Mrs. Heal) has entered the Chamber. What does she have to say?

I am sure that we will have a contribution later in the debate.

It is difficult for us to do better than Labour in describing Labour's position. In February, the hon. Member for Glasgow, Garscadden (Mr. Dewar), when he was half-launching half the Labour party's plan for Scotland, said that it would have been cynical to withhold the plans until after the regional elections in May. It would have been cynical in Scotland, but apparently it is not cynical in England. More to the point, the right hon. Member for Sparkbrook spoke two years ago at the outset of the Labour party's local government election campaign. The nominal deputy leader of the Labour party said:
"If we are to have a Labour Government we must start straight away to begin … to tell the people not simply what we oppose but what we would put in the place of Tory legislation. I take as my example the poll tax. Our local government campaign must not be and will not be a series of attacks on the Government. Simply to oppose is the sort of vacuous opposition which the people of this country despise. We must and we will offer our alternative."
We know that Labour believes that local authorities should spend more, except in extremis—whatever that may mean. We know that the Labour party thinks that that spending should not be met by ratepayers, because it does not believe in rates. We know that it does not believe that it should be paid by charge payers because it does not believe in the community charge. We know that, whatever the level of spending, those who will have to meet it will, in almost all cases, be better off. One of two questions have to be answered. The hon. Member for Garscadden called it cynical and the right hon. Member for, Sparkbrook called it vacuous and despicable.

I cannot improve on those judgments, and I do not for one moment believe that the House will take a different view when it votes tonight.

5.40 pm

We are all aware of the hardship that the poll tax will create and is creating. Across the country, local papers have been deluged with letters from people, some young and many old, who fear that they will not be able to cope with the added burden of the poll tax bill. The anguish that comes across from these letters is hard to ignore. In one such letter, an elderly gentleman claimed that, after 50 years of being a responsible, law-abiding citizen, and after fighting a war to defend his freedom and that of his fellow countrymen, he would, for the first time in his life, break the law, A pensioner in Canterbury—a council tenant hit by the double jeopardy of a 55 per cent. rent rise and the poll tax bill—found that she was not entitled to the same rebate as she had had for her rates, and is now left with £15 a week to cope with food, clothes and other necessities. Such is the effect of this most unfair poll tax.

I do not condone the breaking of the law, and all our candidates are saying that, but I understand the depths of despair that people feel. The tax not only makes people break the law but disfranchises many people. I mean not just those people who deliberately leave their names off the electoral role—estimated at 15,000 in Strathclyde alone—but those who are so disillusioned that they will not cast their vote in the coming local elections, or any other elections.

I met a gentleman on his doorstep last week. He told me that he was 82 years old and had voted in nearly every election since before the war, and always voted Conservative, but would never do so again because he would never vote again. I found this very sad. I stayed talking to him for 10 minutes, and I found that the poll tax was the final blow in a long round of hard knocks. I managed to convince him that there is a fair alternative—a local income tax—and that there is a party that puts people first and whose ideology is not centred on politics. He agreed to give it one more go, and I arranged a lift to the polling station for him. I do not know for whom he will vote, but at least he will vote, and that was the aim of my argument.

The point of the story is that it is similar to the experience of many other hon. Members. I am doing it not to plug local income tax—I shall do that later—but to highlight the disillusionment that the poll tax has brought, and the effect that that will have on the elections. There is already a worrying trend of low turnouts in elections, particularly local government elections. That has worrying implications for democracy and gives the lie to the Government's claim that the poll tax will lead to more accountability. Perhaps Professor Peter Townsend's words express it better than mine. He said:
"The poll tax is as much a blow to democracy as it is an unforgivable charge on the poor. It will encourage people to pick up their belongings and fly by night."
On top of that, non-registration for the poll tax will lead to distortion in local finance and will add to the burden of the law-abiding resident.

The law-abiding resident is already being penalised in some areas, and has no chance of holding local government responsible. I am referring to the safety net, as a result of which a resident of one area pays for a proportion of the services in another. I am not disputing that some form of safety net is required, but it should be a special grant from central Government, paid for out of general taxation rather than out of the pockets of those least able to pay.

There is something illogical and disgraceful about a system that insists that somebody living in rented accommodation in, say, Camden and just making ends meet, should pay £75 towards making the poll tax burden of somebody living comfortably in, say, Wandsworth, a lot lighter. There is something even more illogical and ridiculous about a system that can catch Greenwich, which, if it had to spend in line with its standard spending assessment, would have its community charge set at minus £7 a head. The Government's extraordinary judgment about the needs of local people is a major cause of some of these anomalies.

I am never too sure whether the devastating effects of the Government's programmes on our citizens are the result of complete incompetence and ignorance of what happens in the real world, or are merely a case of a bull in a china shop, intent only on reaching its objective, regardless of cost.

Will the hon. Gentleman take into consideration the joint and severe liability? A family with a 20-year-old daughter on a low income will qualify for the 80 per cent. rebate, but a housewife with no income does not qualify. Will the hon. Gentleman dwell on that anomaly, which has been brought about by the actions of the Secretary of State?

I shall dwell on that for a moment, but the dwelling will be from the point of view of what happens on the doorstep. More often than not, the housewife comes in answer to one's knock and she usually says that she is penalised. Not many of the men say that, because they believe that they should be paying for something. The Prime Minister has always said that she sticks up for the housewife, but she is not doing so in this case.

It is well documented what nonsense the standard spending assessments are. No account has been taken of economic deprivation in the service block headed "all other services", which covers items of expenditure from recreation to school crossing patrols. According to the Association of Metropolitan Authorities, quoted in a Local Government Information Unit document published in April 1990:
"The incorporation of an economic deprivation indicator would increase the standard spending assessments for 33 of the 36 metropolitan districts by as much as £64 per poll tax payer in Knowsley and £55 in Newcastle."
In Oxfordshire, the education SSA would allow expenditure below the amount necessary to maintain the current year's spend, which would involve a cut equivalent to getting rid of 128 primary teachers and 162 further education teachers. No account is taken of the additional amounts required to implement the Government's education reforms.

Police authorities, including the Merseyside police authority, are finding that the assessed level of capital expenditure, net of grant, falls far short of the supplementary credit approvals. The new system of finance, combined with the recent announcement of the credit approvals for 1990–91, is causing great concern because of the implications for policing.

As a former spokesman on health for my party, I am concerned about the implications for community care. I only hope that the recommendations on cost by the various working groups on this matter will be fully supported and funded by the Government. Perhaps the Minister will clarify this. Whether the funds should be earmarked to prevent moneys from being used for other services and to keep the level of tax low will have to be decided before the scheme takes effect.

I am worried, too, about the new finance system and that it may prove to be an excuse for the non-existence or the poor quality of a particular service. A recent response by an officer of Epping Forest district council to an inquiry by a local resident illustrates why I am concerned. The resident inquired why his road was never cleaned and he was informed that to provide such a service would mean adding £7 to his poll tax bill. He was somewhat surprised as he thought that he was paying for road cleaning. He was not too pleased with the officer's response because he knew that the council had added £20 to his poll tax bill to cover the interest charges on the cost of new council offices, which had soared from £4 million to £15 million. It is a monstrosity of a building. I might add that it does not even have a letter box.

Will community care services be safe in the hands of councils such as Epping Forest? For the first time, Essex county council has introduced charges for home helps, which provide a vital lifeline for care in the community.

Standard spending assessments do not have any link with the type, level or quality of services that are provided. The new finance system is flawed with dramatic consequences. Areas of deprivation are seeing vital resources transferred to more affluent areas. The true effect of the transfer is hard to see as the safety net serves to hide the effects as well as to soften them. Even with the safety net in operation—this is according to figures published by the Local Government Information Unit—the north-west is set to lose £86 million in 1990–91. Once the safety net has been pulled away, that loss will increase to £113 million. The losses will result in a higher poll tax or a reduced level of service. Either way, local communities and local people will suffer.

Many of the anomalies are the result of changes to the business rating system. The uniform business rate is as much of a disaster as the poll tax. Some areas are losing vast amounts of income as central Government distribute funds according to the population of poll tax payers and not according to the businesses in the area. The UBR removes yet another source of local determination from local government to central Government. Local business will have no links with the local community and, as a result, it will feel less responsible towards it and local residents.

Parish councils, which have benefited from a business precept in the past, often as a recompense for noise, smells and general mayhem, will be the losers this time round. Many parish councils will no longer be able to run community and recreation services. Their parent councils will wield more power.

Rate bills spell ruin for many small businesses. On top of high interest and mortgage rates, their rate bills will be devastating. It is a sad reflection on the Government that their policies will kill the very enterprises that they claim they wish to see prosper. It is not only in Bath that shopkeepers and the managers of other businesses are up in arms. That is the position in many other areas, including Canterbury, where some shopkeepers and others are facing increases of 200 to 300 per cent. The future is bleak for them. As their margins become tighter, they will find it increasingly difficult to wind up and sell their businesses. Mortgage rates, interest rates and the UBR without transitional relief, which a new owner would not be entitled to, make the prospect of selling a business extremely poor.

There are spin-offs from the UBR that will fall on the consumer. London Transport is already saying in press statements that the extra £34 million that it will have to find in the next financial year will have to be funded through even higher fares.

Liberal Democrats have a five-point plan to ease the burden of the UBR as well as an alternative policy which we would introduce along with our alternative local income tax system. One of the five points is that transitional relief should be applied to all businesses that existed in April 1990, regardless of whether they move premises subsequently. We should like to see the Government introduce a land value tax with some possible exemptions for agricultural land, for example. A land value tax which was set locally would preserve the essential link between business and the community and would enhance local accountability.

Local income tax enhances local autonomy. The rate is determined locally and is collected by the Inland Revenue. Employers would deduct a standard rate of local tax with an end-of-year adjustment by way of a refund or bill through the Inland Revenue. In practice, 70 to 80 per cent. of local income tax payers would receive rebates through the Inland Revenue. The system is fair because, unlike the poll tax, or the Labour party's roof tax, it is based on the ability to pay. It is easy to administer and cheaper to collect than the poll tax.

The Labour party's roof tax is unfair, as a tax on property bears no relation to an individual's ability to pay. The elderly widow would pay the same as the family of four or five. The Labour party would tax home improvements. The roof tax is also a tax on energy conservation measures. The two-tax system that appears to be on the books for England and Wales is likely to be a nightmare. In Sefton, for example, the official figures of the Department of the Environment show that for a property valued at £50,000 the bill would be £523. That would rise to £744 for a property valued at £80,000.

The Labour party should have courage and should announce in principle what form its tax will take before we embark on the local elections. If local government is to be accountable, the electorate should at least have the right to know for what it is voting. With the Liberal Democrat system of local income tax, local autonomy will be increased by allowing the local authority to raise more funds through local taxes, with a corresponding drop in central funds and a cut in national income tax. That would be in stark contrast to the steady drop in Government funding and increases in central Government control.

Despite all the talk about the poll tax making local government accountable to local people, it still represents only about 25 to 30 per cent. of local government income. The rest is controlled by central Government. Even the poll tax is subject to central control, as the recent capping fiasco has shown.

If the Minister wishes, I shall send him a copy of the Liberal Democrats alternative policy together with our charter for small businesses and a copy of our publication entitled "Local Income Tax—The Best Way". I shall probably send him an invoice at the same time. The catch phrase that appears in many Conservative leaflets—I have seen them locally in my ward, my town and in surrounding districts—is "in touch". The result of the local elections will prove that the local Conservative parties and their friends in central Government are very much out of touch. Perhaps the poll tax will prove to be the Government's Waterloo.

Order. I remind the House that at 6 o'clock we shall commence 10-minute speeches.

5.58 pm

The last time that I heard the hon. Member for Dagenham (Mr. Gould) speak in the Chamber was on Second Reading of the Environmental Protection Bill. During the consideration of that Bill in Committee it was said that it was the weakest performance of any Front-Bench spokesman from either side of the House for many years. At any rate, that was the position until today, when the hon. Gentleman capped his own performance. It was an extraordinary admission that the Labour party is not prepared to come clean on its proposals for local government.

When Mr. Speaker welcomes guests to this place he stresses that Parliament is about the clash of opinions, about resolving issues by debate. It is not possible to resolve by debate if only one side is putting forward its point of view and no constructive alternative is being presented by the party that seeks to be the alternative Government. That is disgraceful behaviour towards the House and an abdication of democratic responsibility and of everything for which we stand.

No one can pretend that the introduction of the community charge is easy or could ever have been conceived to be easy. It is the greatest upheaval in local government finance for a century. However, it is intended to achieve two important objectives—fairness and accountability. On fairness, the hon. Member for Southport (Mr. Fearn) drew a parallel between a widow and a family of four living next door and earning a living. That point was best put by one of my constituents, Mr. Richard Clark, who said in a letter that if he went into a pub and ordered a pint of beer, he would expect to pay £1·20. If a family of four ordered a round, what should they pay? The answer is obvious.

The system is not aimed only at trying to correct that sort of unfairness; it is intended also to correct the unfairnesses of the rateable value system. In my local the other day, we were talking about the rates that people used to pay. Obviously, people now compare what they paid in rates with what they are paying in community charge. One of my friends, who is also my dustman, lives in a one-bedroom council flat. He was paying £500 in rates. Another of my friends is a self-employed roofer, and he and his wife live in a three-bedroomed semi-detached in the same town. They paid £400 in rates. Another of my friends is a wealthy socialist who lives in a four-bedroom period house in the old part of Tring. He paid £300 in rates.

Of course, if there had been a revaluation many of those problems would have been sorted out—but over the 10 or 15 years until the next revaluation, until the next time that a Government had the courage to pick up that baton, those unfairnesses would have crept back into the system—especially in areas where properties are being improved, thereby making these areas better and better. Unfairness was inherent in the way that rateable values were calculated.

Another fact that we all forget is that the old grant distribution formula was inherently unfair because it took the rateable value of an area as its proxy for the wealth of that area. In the county of Hertfordshire, part of which I represent, average rateable values were 25 per cent. above the national average, yet incomes were only 10 per cent. above the national average. The net effect was that, even if local authorities had spent at the targets laid down by central Government, the amount of grant received would have been minuscule compared with many other local authorities. In its last year of the rating system, Hertfordshire county council received no grant from central Government.

Dacorum borough council, my district authority, received £1 million. Under the new system, it gets £16 million. That is extremely welcome. Were it not for the safety net, it would have received even more than that. Any system that is designed to recognise the needs of areas and also their resources to raise funds for their own purposes must be complicated. The trouble with the old system was that it relied entirely on rateable values on the resources side, and addressing that problem has caused many of the difficulties in moving to the community charge.

The second important point is accountability. It was wrong that, under the old system, as little as one quarter of the number of eligible electors paid rates. There could not possibly be proper accountability. However, there are other barriers to accountability, some of which need addressing. How can there be proper accountability when charges are levied by three different tiers of local government—by county councils, borough councils and parish or town councils?

I accept that it is difficult to reform the local government structure at the same time as reforming finance, but not all tiers have elections this year. In the shire areas, the county councils are not holding elections. They have used the opportunity to increase their precepts while the poor mugs who have to face election are struggling to keep their precepts under control. There cannot be proper accountability while there is a multi-tier system. We must move towards a single-tier system. Redcliffe-Maud was absolutely right, and we should have grasped that fact way back in the early-1970s.

If there are elections only every four years, accountability cannot be made to bite when everyone is paying the community charge. If there are elections for the whole of councils, as there are in London, there is a better case for accountability—at least one year in four. This year there will not be proper accountability for the principal councils in the shire areas.

Another problem is that people simply do not know what they are paying for. How many times have we heard people say, "What is the local authority doing about the hospital?" People aften think that the only service they receive for their community charge is having their bins emptied—or not emptied, depending on where they live. They do not realise that 70 per cent. of the money goes on education—teachers' salaries and overheads.

We have a difficult task in trying to educate people. Despite all the good measures taken by past Secretaries of State through the leaflets that accompanied rates' bills, and which now accompany community charge bills, it is an unfortunate fact that people do not read them. They throw them away and so are unaware of the facts. Therefore, those who claim that the simple answer to the problem of the community charge is presentation should remember what happened to previous pious intentions.

Another point about accountability is the safety net. I know that some authorities have had more than their fair share of grant in the past, just as my authority has had less than its fair share. It is difficult to move that money at one time. That has made it all too easy for people to suggest that the community charge is above the levels suggested by the Government because of the safety net, not because of overspending by local authorities.

The hon. Member for Dagenham said that many of the letters that he had received objected to the principle of the community charge. That is certainly not my experience in Hertfordshire, West. Like other hon. Members, I have received a great deal of mail, but the vast majority of letters have begun, "I accept the community charge in principle, but I object to the amount that I am being asked to pay."

Of course, the amount of community charge depends entirely on the policies of local authorities. It is not true simply to say that that is a product of what is happening this year; it is also a product of what has happened in past years. Hertfordshire had a Liberal-Labour majority between 1985 and 1989. During that time, the council increased its spending by £40 million more than the rate of inflation. It increased the number of staff from 33,000 to 38,000. Of course, those people cannot be sacked overnight. The problem cannot be brought under control instantly.

That is compounded by another factor: what happened to the reserves? In the run-up to the 1989 county council elections, the Labour party raided the balances to levy an artificially low rate. That artificially low rate is now being compared with what is an artificially high community charge, which is having to bear the burden not only of normal balances but of restoring the balances. When saying, "Labour councils bad; Conservative councils good," it is easy to forget that the reason that many of the Conservative councils that have not done as well when setting their community charges this year find themselves in that position is because there were opposition majorities on those county councils in the four years between 1985–89.

We are now up against the 10-minute rule. I wish to deal with two or three matters about which we must do something. No introduction of a new tax is without its problems. My right hon. Friend the Secretary of State has been open in saying that he will consider suggestions and advice during the next few months. I welcome that. One matter—it is not a high-cost problem, but it has caused a great feeling of injustice for a few people—is the discretion given to local authorities in what they can levy on empty homes. I mean not only second homes, but homes that are empty for one reason or another.

A distinction should be drawn between ordinary cases and the person, perhaps of limited means, who has inherited a house and cannot obtain a rebate on his second property—not all local authorities are very considerate about such cases—or the individual who has to live in another part of the country by virtue of his employment. A Territorial Army caretaker took the Government's advice and come south to my constituency for a job, so he has to pay the community charge in Hertfordshire and in Yorkshire. That cannot be right. Owning a second house is not necessarily a measure of one's personal wealth or affluence. It can be a matter of necessity or an accident of history.

My right hon. Friend the Secretary of State has a much more difficult task when it comes to the standard spending assessment. Many years ago, my right hon. Friend the Member for Henley (Mr. Heseltine) suggested simplifying SSAs—or grant-related expenditure assessments, as they were then—but found that local authorities wanted to complicate matters still further by adding more and more factors to be taken into account. Local authorities have themselves to blame to some extent for the SSA system.

I advise my right hon. Friend the Secretary of State not to go for wholesale changes. Any problem he may solve that way will throw up other problems elsewhere.

Order. The hon. Gentleman will have to write to the Secretary of State instead. I call Mr. Eric Illsley.

On a point of order, Mr. Speaker. Is there any chance of you waiving the sub judice rule to allow the Government to make a statement, if they apply to do so, on the charge against Dr. Christopher Cowley in relation to the alleged Iraqi weapon? It is a matter of urgency, and possibly the Government ought to make a statement tonight.

The hon. Member for Linlithgow (Mr. Dalyell) has me at a total disadvantage. I shall look into that matter. Mr. Illsley.

6.11 pm

In view of the limited time available to me, I shall confine my remarks to the problems confronting Barnsley local authority, which is one of the 21 that have unfortunately been charge-capped. The Secretary of State has given as a reason the fact that the standard spending assessment levied by the Government has been exceeded by 17 per cent. That is hardly surprising, given the very low level of SSA applied to Barnsley under the Government's formula.

In the past, the grant-related expenditure assessment had precisely the same effect. A former Minister, the right hon. Member for Suffolk, Coastal (Mr. Gummer), on a visit to members of Barnsley's local authority, said that Barnsley and Greenwich would always come at the bottom of the list because of peculiar factors affecting them, Tonight I want to inform the Government of the reasons for Barnsley's low SSA.

In the past, under GREA the resource element always came to the aid of the authority, enabling it to meet expenditure levels. The maximum amount of demand on the collection fund that will now be made by Barnsley, according to the figure levied by the Government, will be £132 million, compared with the previous level of £142 million—yet the Government have given no indication of how they arrived at a figure £10 million lower. We are still no wiser as to why £10 million has been lopped off the local authority's spending ability.

Barnsley metropolitan borough council will have to accept that degree of capping, request a redetermination of its budget, or look to the Government to take more into consideration the special factors that I shall outline and revalue Barnsley's SSA. After all, as I said during Question Time today, the SSA is the basis of charge capping.

Earlier, the Secretary of State said that if Barnsley chooses to be a high-spending authority, it will have to suffer the consequences. The truth is that, in common with a cluster of authorities identified by the Audit Commission, Barnsley has a very low standard spending assessment, ranking 35 out of the 36 metropolitan districts. It even came low on the list of grant-related expenditure assessments. Manchester has an SSA of £1,170 per adult, Liverpool £1,068, and Birmingham £1,060. Why are their figures much higher than Barnsley's SSA of £669 per adult for providing the same level of service?

The timing of the capping announcement places an extra burden on authorities in trying to identify savings, having already started the financial year. If savings can be made—I am not saying that they can—there is little time to implement them. If an authority has to consider redundancies, it will need to give 90 days' notice, and then the financial year will be nearly half gone. Barnsley will have to identify savings of £10 million six months into its budget.

Another problem is that Barnsley has already sent out its community charge bills. Charge payers will have to be re-billed, and I am told that no indication can be given then of any sum that the individual might have paid already. A community charge payer who settled his bill in full the day that he received it will be re-billed for the new amount, but the second bill will give no indication of the sum that he has already paid. Previously, local authorities were allowed time before the implementation of capping to identify possible savings and to put their affairs in order.

Barnsley has always fared badly, even though its spending under all headings is below the national average. Its spending per head of the population for 1989–90 as identified by the Audit Commission was £525 per head, compared with the average metropolitan district figure of £509. However, its spending on education was £286 per head, compared with the metropolitan average of £320, and on social services £66 per head compared with £85. As to staffing per 1,000 population, Barnsley has 9·7 teachers compared with 11·42 for the average metropolitan district, and 21·53 staff of all kinds compared with the average of 24·54 per 1,000 population. How can the Secretary of State accuse Barnsley of being a high-spending authority when the Audit Commission's own figures show that its expenditure is below average in almost every category?

This year, Barnsley's expenditure would have increased from £115·5 million to £134·6 million. Inflation accounts for £11 million, including £3·5 million resulting from the Government's teacher pay awards. Barnsley's share of the joint authorities' funding following abolition of South Yorkshire county council will increase from 14 per cent. to 17 per cent.—another £4 million. There is a further £8·2 million additional spending. I shall not list all the categories, but some have been imposed by the Government. They include accelerated debt repayments, capital grants that can no longer be credited to revenue, and the cost of implementing the poll tax itself.

Over the next 12 months, Barnsley will also have other special needs. Spending on education accounts for about 70 per cent. of Barnsley's total budget, so the likelihood is that any savings that must be made as a result of capping will come from education. That is at a time when the authority is desperately trying to improve its educational attainment. A new tertiary college due to come on stream in September could lose £1 million of funding, which will set it back from the outset and place students at a disadvantage. The savings that would have to be identified, were the charge capping implemented across the board, are some £4·95 million.

I refer the Minister to an article in The Guardian on 17 April which identified some of the problems in Barnsley. We were a little annoyed by the article because the picture shows a school which was earmarked for closure in 1986. The authority is trying to identify the real problems but The Guardian identified a school that was due to close as a result of rationalisation and not as a result of poll-tax capping.

The article goes into some detail about Barnsley's education spending problems. Local management of schools will be coming up this year, as will the extra cost of implementing the national curriculum. Each secondary pupil in Barnsley costs £1,470 as compared with the figure in Barnet of £1,600. Barnsley has the highest primary and secondary pupil-teacher ratios out of the 10 cluster authorities identified by the Audit Commission. We spend £42·80 on books and equipment for secondary pupils. Only three metropolitan districts spend less than that, and the average is £55. The average ratio of computers to pupils is 1:50, but Barnsley has 1:70. We have no modern language assistants employed by the authority. My hon. Friend the Member for Rotherham (Mr. Crowther) will confirm that that district employs 26. Educational achievement for post-16-year-olds is the lowest in the country, yet we are cutting money from Barnsley's budget.

I shall quickly run through the other problems. Barnsley still has 14 per cent. unemployment; we have tried to identify an industrial partnership with a major industrialist, but that has now been shelved because capping has meant that we do not have the money—

6.21 pm

I hope that the hon. Member for Barnsley, Central (Mr. Illsley) will forgive me if I do not take up his points about Barnsley because it was a detailed speech on his constituency about which I obviously know nothing.

It is quite clear to me why the Labour party has chosen this subject today. It is a crude attempt to convert the unpopularity of the poll tax into votes on 3 May without giving any details of its own schemes. It is this week's Hong Kong. I have spent much time recently on the doorsteps of Ealing, and my constituents are not so naive as to fall for that. They realise that if they all went out on 3 May to vote Labour, the poll tax would still be there on 4 May and, what is far worse, they would have lumbered themselves with an administration which, however funded, would spend more than a Conservative administration and over four years it would cost each of them at least £150 more, and the money would be spent on projects with which they disagreed. I am optimistic that in my constituency the Conservative party is poised to do well on 3 May.

The debate provides an opportunity for Conservative Members to analyse the difficulties posed by the poll tax·to ask why the matrons of Maidenhead have been marching·and to try to identify a way through.

There are three reasons why the poll tax is unpopular. First, it was introduced, as my hon. Friend the Member for Hertfordshire, West (Mr. Jones) has just pointed out, at a far higher level than its authors envisaged or people were led to expect. Secondly, any structural change, well meant or not so well meant, brings turbulence and a reaction against it. Thirdly, the tax is seen to be unfair because it is unrelated to the ability to pay. The impact of the first two problems will probably erode with time. The third reason is timeless and potentially lethal.

The Government are in a state of terminal schizophrenia about the question of ability to pay. On the one hand, they say that the community charge is linked to the ability to pay, and, on the other hand, they have set their face against linking the charge more directly to incomes, which are the best measurement of ability to pay.

At present, the community charge is no more linked to the ability to pay than local authority rents. I have never heard a Minister say that local authority rents are linked to the ability to pay. Indeed, they have claimed the opposite—that we are moving towards a system of market rents. Housing benefit takes the strain for those who cannot afford them. The existence of housing benefit for a minority does not mean that rents are linked to ability to pay; it means exactly the opposite. The same is true of the community charge. It is a flat-rate, local tax on being over 18. It is wholly unrelated to the ability to pay.

Community charge rebate is related to ability to pay, but to argue that, because rebates are available to those in one part of the income spectrum, the tax as a whole is related to ability to pay is nonsense.

Nor do I buy the argument that, because central Government pay half the cost of local government through the revenue support grant, and because that is funded through progressive taxation, it is legitimate to raise the rest through a flat-rate tax. On the contrary, because central Government fund their services through progressive taxation, it is even more illogical to ask local government to fund its services from a regressive flat-rate tax. It makes no sense to abolish the rates because the widow is paying the same as the four wage earners next door, and then to justify the new system by saying that those wage earners pay more for local services than the widow because they pay more in tax than she does.

The shift in the burden of taxation away from the better-off and on to the shoulders of the less-well-off is the fundamental objection to the poll tax. No arguments about rebates or revenue support grant meet that criticism head on. Until we meet it head on, we shall always be on the defensive.

Another reason why the charge is unpopular is its high incidence in relation to the forecast made when the legislation was going through. One solution advocated by some of my hon. Friends is to spray the problem with money. The sum which gets us to the starting block is £3 billion. That seems to me to be an un-Conservative and somewhat defeatist solution.

I put to one side the question whether the country can afford an extra £3 billion at the moment. Even if we could, it would be £3 billion of dead money, and we would have nothing to show for it—no new schools, hospitals or railway lines, no better benefits for the disabled and no more homes for the homeless and all the other projects that every hon. Member could find to spend money on. It would simply be a £3 billion funeral bill for the poll tax, not only next year but every year because we will never be able to get the money back without jacking up the tax to a level deemed to be unacceptable.

Such a solution does not solve the underlying problem, because we are still left with a system of funding local government in which we have manifested our total lack of confidence because it is unable to bear the burden of funding local services. A similar solution to transfer education or the police to the central taxpayer is an intellectually more honest argument, but it suffers from all the same drawbacks as the £3 billion I have mentioned and from further disadvantages.

I happen to believe in a plural, decentralised society, with decisions taken locally where possible and with local accountability. Local democracy is an integral part of our total democracy, subservient to Parliament but complementary to it. The more we centralise decisions, the more we move to a bureaucratic monochrome, unresponsive society—

No, I am sorry; I have not time.

That move seems to have nothing to do with Conservative philosophy.

Instead of saying that, because we have such a deeply unattractive means of funding local government, we must do more centrally, we should ask how we can fund local government so that we do not have to centralise any more so that we can continue to decentralise and push responsibility downwards.

What are we to do to put the funding of local government on a sound footing? Any solution must solve the political imperative that faces our party. The poll tax casts a shadow over our prospects at the next election. We have devised a system about which the gainers feel guilty and the losers feel livid.

The gloomy prospects are alleviated by two factors. The first is the turbulence factor caused by introducing a new tax. Much of the unpopularity of the tax is simply due to the change. Any new Government would have to deal with that turbulence in exactly the same way that we have to deal with it. In two years' time, the Labour party threatens to throw another large stone into that pond. It will find it has to answer many of the questions that we are having to answer now about gainers, losers and costs. The second factor is that the solution adopted at present by Opposition Members seems to me even nuttier than the poll tax.

I come to my own solution, which is totally unoriginal. I put it forward in an article in The Guardian in 1987 and the House voted on a derivative of it more than two years ago, when it was defeated by 25 votes. Many of my colleagues who voted against it then now wish that they had not. It starts from the present position, builds on the only strength of the poll tax over the rates—the broadening of the base of local finance—and addresses its fatal weakness by moving away from a flat rate to a banded rate linked to ability to pay.

It does so without using PAYE, which would weaken the visibility of the tax, and without the town halls knowing all the details of our incomes, which would be obtrusive and expensive. It would do away with the bureaucracy of the community charge register, and it would not hound the poorest in society for a tax that they could not afford. It would involve town halls precepting individuals not on the rateable value of their properties but on their taxable incomes the previous year, allocated to one of a number of bands notified to the town hall by the Inland Revenue. That system is made infinitely more attractive by this year's move to the independent taxation of women.

Parliament can set all the parameters: the number of bands, whether there should be a maximum level, and so on. The details are for discussion. Other countries have exactly such a system. None of them has a poll tax. Such a solution would neutralise at a stroke the political disadvantage of the poll tax. The Opposition would find it difficult to denounce such a scheme and virtually impossible to threaten to repeal it.

With such eloquence as I can command, I urge the Government, in their forthcoming review, to examine the merits of such a scheme, which has a number of advantages.

6.30 pm

I do not intend to follow the line taken by the hon. Member for Ealing, Acton (Sir G. Young), although he has criticised the unfair way in which the Government have introduced the poll tax. I want to refer to the speech made by the Secretary of State for the Environment. During the final 15 minutes of his speech he attacked the Opposition for not being prepared at this stage to declare exactly what is their alternative to the poll tax. I wish that we were able to do that. However, we must ensure that we provide a workable alternative to the poll tax that is cheap to collect and that is fair. We do not have civil servants to help us, so it is right that we should take time to produce a workable alternative.

After the Government had been in office for eight years, they decided to introduce the poll tax. They believed that it provided the solution to local government finance. However, they are now faced with all the problems that surround it. The Opposition have made it clear that they will ensure that the poorest people, who have to pay 20 per cent. of the poll tax, will receive a 100 per cent. rebate. That is a fundamental principle that will be enshrined in our proposals.

The Secretary of State referred to the higher-spending local authorities. That issue has been debated on many occasions. In the main, Labour-controlled local authorities are in areas of deprivation where the need to spend money is greatest. If we believe in democracy, we must allow democratically elected local authorities to determine what services ought to be provided. That is what local government is about. I shall always fight for that principle, but the Opposition are 100 per cent. committed to obtaining value for money when it comes to the provision of local authority services.

People have written to me saying that it is hypocritical of the Government to talk about accountability in connection with the poll tax when they are extending the right to vote to people who may have left the country up to 20 years ago. They make no contribution to this country in terms of taxes paid and in most cases have absolutely no intention of returning to live here.

In answer to a question I put earlier, the Secretary of State told me that the Government intend to make no change to the present system—that nearly all people must make a contribution to the provision of local services. According to a written answer that I obtained last week from the Secretary of State, the Government are not prepared to say what action they are prepared to take to deal with the problem of the poll tax failing to take account of ability to pay. If the Government had taken note of what the Opposition said in Standing Committee and on the Floor of the House when the Local Government Finance Bill was debated two years ago, that problem would not have arisen.

Thousands of people in my constituency and millions of people throughout the country cannot afford to pay the poll tax. I refer to those who are in receipt of too much benefit or whose earnings are at a level which means that they do not qualify for a rebate. The treasurer of Burnley borough council put it to me that, even if he wanted to waive collection from certain people on the ground of poverty, he would not be allowed to do so without going to the courts. He asked me why that power has not been granted to borough treasurers. He believes that they ought to be able to decide to waive the collection of poll tax where it would be foolish to try to collect it.

The Government have increased the savings limit to £16,000 before people are disqualified from receiving a rebate. I said at the time that the Government announced the change that they would have done far more for many more people if they had raised the lower limit of savings from £3,000 to £4,000, £5,000 or £6,000. As for special help for people who will be paying £156 more in poll tax than they paid last year in rates, the Government say that in Burnley the poll tax should be £166. A single person living alone, therefore, would have had to pay only £10 in rates last year to qualify for special help. Burnley was a low-rated area, but that is totally unrealistic.

I have met representatives of the chamber of trade in my constituency. They are concerned about many aspects of the uniform business rate. I intend to refer to one of those aspects: small shopkeepers who live over their shops. There has been a considerable increase in their rateable value. Despite the transitional protection, they will have to find more to cover that increase. In addition, they have to pay the poll tax. The average family in Burnley is £6 a week worse off under the poll tax, so people have less to spend in the corner shops. The elderly and the poorer members of the community depend on the corner shop. The Government pretend that they are the friend of the small shopkeeper and the small business, but in many instances small shopkeepers are not one-time or two-time losers; they are three-time losers on account of the way in which the uniform business rate operates.

The chamber of commerce has voiced its concern about many aspects of the uniform business rate and the poll tax. One point that has been made forcefully to me by chamber of commerce representatives is that, if employers are forced to deduct money from the wages of their employees because they have not paid the poll tax, it will cause an industrial relations problem that employers do not want to have to deal with; they do not want to have to enforce, on behalf of the Government, this unfair legislation.

Finally, I want to look at Lancashire in a little more detail. On more than one occasion Lancashire county council informed the Secretary of State that it will receive £138 million less in Government grant this financial year than the amount it received in the last financial year.

Lancashire county council wrote to the Department of the Environment on 6 February stating:
"the Government has adopted a new spending formula which expects Lancashire to spend less in real terms in 1990–91 than it would have done under the existing GREA formula".
On 22 November 1989, Burnley borough council wrote to me, stating:
"a Standard Spending Assessment based on two factors cannot reflect the true spending needs of this or any other District Council."
It stresses that the standard spending assessment fails to take into account grants or contributions from county councils.

The Government have a long way to go to solve the problems of the poll tax. They have failed to show that they are prepared to make any positive response. The electorate will show their view next Thursday and will repeat it whenever the next general election is called.

6.40 pm

In common with my right hon. and hon. Friends and Opposition Members, let me make two suggestions to my hon. Friend the Minister for Local Government and Inner Cities, whom, I am glad to see in his place. First, he should not listen to the admonishments from the Opposition about the uniform business rate, which is a thoroughly decent measure. For far too long businesses have been driven out of such places as Liverpool, Manchester, Stockton and some parts of south London which are run by loony left councils and the people living there have suffered. It is thoroughly decent for the Government to ensure that businesses have the confidence to invest in those areas.

Secondly, if the standard spending assessments are to be refined—there is some force behind that argument—will my right hon. Friend consider the possibility of legislating to the effect that, if a council wishes to exceed its standard spending assessment, it should first have a local referendum so that people are consulted about whether they wish their council to spend on all the services which are continually suggested by Opposition parties?

No. I have only 10 minutes.

One would think from listening to Opposition Members, and one or two of my hon. Friends, that the community charge has no friends. It has a friend here. I am not alone in that.

My hon. Friend agrees with me.

I have a marginal constituency, and I realise that appealing to one or two people who have to pay a bit more puts my seat in jeopardy. I am prepared to do that because I believe that the community charge is good for the country and for my constituency.

The community charge has other friends. First, there are widows—everyone has forgotten about widows—who have been driven out of their homes because in next-door houses three or four big wage earners are paying the same rates as they pay. My mother was driven out of her two-bedroomed bungalow in Sheffield, which she had received from my father's estate, because she simply could not afford to pay the rates. That is disgraceful. Deserted wives and those separated from their husbands are in exactly the same position. They might not be parading in Trafalgar square, but they are friends of the measure. There are also those who feel that everyone should contribute to local services. Local services involve giving as well as taking.

The Opposition have spotted a rich vein in young people aged 19 or 20 who are making no contribution to local services which they enjoy as much as anyone else. Students get local authority grants. Why should they not pay 20 per cent. towards their community charge? I see absolutely nothing wrong with that.

In recent years, young people have had a wonderful run. One has only to look at the pubs, the discotheques and the shops. The gear on sale is all for young people. It is not too early for them to learn that local services involve give as well as take.

Many people are friends of the community charge because they feel that everyone should contribute to local services. Many people, including many Conservative Members, feel that at long last local councils should be accountable to the people whom they serve. The hon. Member for Dagenham (Mr. Gould) said that he did not think it was possible and attacked us for trying to make local authorities accountable. One thing that his long speech made clear is that, if ever the Labour party got into power, it would not make local authorities accountable to the people whom they are meant to serve.

Local authorities do not serve the poor, the rich or any one section of the community; they are meant to serve everyone. In my surgery, the complaints about local authority services come not from the rich but from council house tenants who cannot get repairs done. They cannot get local authority staff to answer the telephone civilly, answer a letter or come round when they have problems. They come from council house tenants who wish to buy their homes and cannot even get a reply to their letters. They come from council house tenants who are living on estates where the council does not even bother to repair the pavements or collect the litter. They are not friends of the council. They want the council to be accountable. They are not in favour of the loony left councils in Liverpool and Manchester who buy votes from minority oddball groups.

The man in the street wants value for money from the council. He does not want the extra 1,000 employees whom Stockport council has taken on in the past three years. He does not want it to cost £400,000 merely to provide the wages of employees in the education department. He wants value for money. He wants services to be contracted out to people who can provide decent services. In Stockport recently, refuse collection was contracted out, saving £1·3 million a year. Why was that not done years ago if the local authority was worried about what it costs to maintain all the people who are meant to be working for the council?

During the 1980s, local authorities were exempt from what was going on elsewhere in the economy. Every shop, office, factory, hotel or business has had to provide more with fewer people, but at the town halls the party has gone on.

Anthony Crosland spoke in Manchester in May 1975. He appealed to the patriotism of local authorities. He said, "The party's over." The party was not over then, it has not been over since, and it never will be until the town halls are made accountable. I appeal to the few faint hearts among Conservative Members to recognise that town halls must be accountable. That is what the people want. I am completely behind the community charge and, come the next election, we will see that the majority of people in Britain are, too.

6.48 pm

The speech of the hon. Member for Stockport (Mr. Favell) was breathtaking in its simplicity. I hope that the hon. Gentleman will forgive me if I do not follow him down the byways that he travelled.

While you were here, Mr. Speaker, and perhaps even more after you left, there was an extraordinary amount of laughter from Conservative Members. At first I thought that they had lunched rather well, but then I saw friends of mine on the Conservative Benches who scarcely lunch at all so I realised that it could not be that. For a group of sailors sitting atop a flagship which is simultaneously burning and holed below the water line, I found it an extraordinary performance. Given the current opinion polls, I thought that it was demob happiness, but then I concluded that it was nervous laughter as the Conservative party faces the prospect of judgment by the electorate next Thursday.

Amid all the public school hilarity, there was no sense of the tremendous forces at work in response to the poll tax. The only Conservative Member to speak with any sense so far—the hon. Member for Ealing, Acton (Sir G. Young)—talked about the forces that have moved the matrons of Maidenhead on to the streets. Others mentioned the forces that have moved the burghers of Bath to call a general strike of tradespeople and shopkeepers in protest at what Conservative Members found so funny this afternoon.

Perhaps it was sense of dread as they watched the Labour by-election victories in such places as Cornwall and Devon, where Labour has not won seats for several generations that made Conservative Members laugh; perhaps it was the amendment in the name of the right hon. Member for Shropshire, North (Mr. Biffen) which was concentrating their minds and making them so nervous; perhaps it was the resonance that the scarcely covert campaign of the right hon. Member for Henley (Mr. Heseltine) is finding in Tory ranks around the country that made them nervous. If they are not nervous, and the laughter was genuinely careless, Conservative Members are behaving like turkeys voting for an early Christmas.

The essence of the first two hours of this debate was summed up by my hon. Friend the Member for Linlithgow (Mr. Dalyell) in a sentence. He said that there was a sense of complacency, and that Parliament was addressing a subject which apparently dealt only with England. There was no appreciation of the fact that this is year two of the poll tax for the people of Scotland; there was no sense of Conservative Members' having grasped the popular revolt and uprising that is occurring in Scotland—statistics that I shall give in a minute—in opposition to the poll tax; nor did the House seem to understand the deep sense of offence felt in Scotland at the unseemly scramble by Conservative Members to patch up this or that amendment to try to make the scheme more palatable.

For the 12 months in which the poll tax was being rammed down the throats of the people of Scotland, Conservative Members did not want to know: that includes the right hon. Member for Henley, who voted for the poll tax to be imposed in Scotland but has latterly found some sense of opposition to it. There was no sense of the pain felt by hundreds of thousands of people in Scotland.

I do not think that Conservative Members are aware that, in Glasgow alone, 107,000 people have been issued with summary warrants because they are so far in arrears with their poll tax. Some people—like me—are refusing to pay out of a sense of solidarity with the far greater number who cannot pay their poll tax bills—107,000 in the city of Glasgow.

The hon. Gentleman says "Labour charges." Even he would not regard Glasgow district council or Strathclyde regional council as loony left.

I do not have time.

Some 400,000 people in Strathclyde region—nearly a quarter of the population—have been issued with summary warrants because they are so far in arrears with their poll tax payments; some 200,000 people in the Lothians—many in the Scottish capital, Edinburgh—have been issued with summary warrants. Strathclyde regional council has a financial shortfall of £100 million.

The worst is yet to come. The benefit arrestments have begun to arrive at the Department of Social Security offices in Scotland. Any day now, clerks in those offices will be asked to axe the poll tax out of the social security benefits of people whom the Government regard as on the brink of absolute poverty—at subsistence level. They will have part of their benefit seized to pay the poll tax. Is that what Conservative Members find so funny? Some 15,000 people in Strathclyde region have left the electoral register in the past 12 months because they cannot pay the poll tax; children are leaving the parental home because their mums and dads cannot pay the poll tax. Conservative Members find it all so funny.

In an interview with the Scottish Daily Express—what else?—the Prime Minister said that people such as me who are refusing to pay the poll tax for reasons of solidarity are anarchists and shirkers. That is rich coming from a woman who is seeking to abolish the state more completely than any anarchist could. If she has ever done a real job, it was a long time ago.

I have worked hard all my life with my hands, and not as a bookie's runner. I am not an anarchist or a shirker. I am not even especially left wing. I am not in the Campaign group or the Tribune group. However, I am standing alongside the hundreds of thousands in Scotland who cannot pay the poll tax that Conservative Members find so funny.

I started my speech with a watery metaphor, and I shall finish with one: the Tory flagship is beginning to take on one hell of a resemblance to the Titanic, and Ministers are doing little more than rearranging the deckchairs.

6.57 pm

Is it not a fact that people on social security receive rebates of up to 80 per cent., and that social security was upped to take account of the national average of the 20 per cent. level? I attended this debate because I wanted to know Labour's policy, but its position remains gloriously unclear. The right hon. Member for Islwyn (Mr. Kinnock) does not yet have a policy—a consistent record; the hon. Member for Glasgow, Garscadden (Mr. Dewar) has a policy, already known as the roof tax, the details of which are still confidential; and the hon. Member for Cunninghame, North (Mr. Wilson) has the figures, which he believes should be shown to the local voters of Scotland before their regional elections on Thursday week.

Perhaps wisely, those hon. Members did not want to let the Scottish people into the details of the secret before their votes were in the ballot box. I say "wisely" because this morning they announced some figures that did not add up. Apparently, however, they intend to use Scotland as a test-bed for the roof tax before extending it to England and Wales.

I was curious to know what impact the roof tax would have on my constituents in Gravesham. Given the current precepts from Gravesham borough council and Kent county council, the roof tax would be as follows: on a house valued at £30,000—there are few, if any, in Gravesham—it would be £234; on one valued at £80,000 it would be £625, which is more than double the current community charge; and on one valued at £120,000—there are many in my south-eastern constituency—the tax would be no less than £936, and so upwards.

Both the Labour and Liberal parties have enthused about a local income tax. On the same basis as precepts, Gravesham people would pay a local income tax of 5·1 in the pound from the first £1 of their income. That is based on the spending of careful Conservative authorities. If Gravesham council were Labour-controlled, the bills would he far higher; for example, local people are paying a community charge of £293, whereas people in Labour-controlled Thurrock, just across the Thames, are suffering a charge of no less than £414.

Opposition Members claim that there is no significant difference in the precept between Labour and Conservative authorities. The hon. Member for Dagenham (Mr. Gould) told us that in the debate on community charge capping on 3 April. He went further in a Labour party press release on 18 April, when he said:
"The average poll tax in Conservative and Labour councils hardly differs."
Really? There is a marked difference in the community charges of Conservative and Labour areas.

Statistics compiled by the Library show that the average community charge of districts that have Conservative unitary authorities—London or metropolitan boroughs—or are under Conservative shire county and district councils, of which there are 95, is £333. In Labour-controlled areas, of which, sadly, there are 73, local people suffer an average community charge of £384. Although £51 may not be a lot for the hon. Member for Dagenham, it certainly is for most people, particularly when the services of Labour councils are usually no better and are frequently worse than those from Conservative councils.

In the three similar Liberal-controlled districts, the average community charge is £360, an effective surcharge of £27 for the rarity value of Liberal control.

Those figures mask the reality. We forget too easily the impact of the safety net, whereby, perhaps because of the misguided generosity of the Government, by and large, residents of prudent Conservative authorities are obliged to subsidise the residents of wasteful Labour authorities. If those surcharges and handouts are stripped out. the arithmetological inexactitude of the hon. Member for Dagenham almost becomes a case for reference to the Advertising Standards Authority.

Totally Conservative areas are charging an average of £305, compared with the rip-off in totally Labour areas of £412—a differential of no less than £107 per head for the privilege of voting Labour. Totally Liberal areas are charging £392—a Liberal addition of £87 compared with Conservative areas. Those raw figures show the result of the "party that can". They certainly can. They can take local people's money in grand style.

I have some further examples of rip-offs. Were it not for the generosity of the Government's safety net, people in the London borough of Greenwich would be paying £620. The rest of us are subsidising Greenwich residents by no less than £212 per head, just because they have a traditionally wasteful Labour council. Lambeth's real rip-off is £575, not the £548 that it tried to levy on local people. Southwark would have had to charge £550 were it not for our subsidy of £160, and Hammersmith and Fulham would have had to charge £535 but for our subsidy of £111. One could go on and on. The only consistent link between those councils is their tradition of Labour dominance.

Opposition Members like to claim that Conservative authorities have high charges. Many of those charges are levied after the addition of hefty contributions to the safety net. A full £75 is paid by every man and woman in districts such as Westminster, Kensington and Chelsea, Wokingham, South Buckinghamshire and Chiltern. In Gravesham district, people are being levied £15. The consistent thread between those contributing authorities is that they are Conservative-controlled, but scant thanks for that money is forthcoming from the Labour party.

We are debating the largest ever reform of local government finance and taxation. There are bound to be teething troubles and inequities when introducing such a vast reform, as there are in this case. I welcome the undertaking given by my right hon. Friend the Secretary of State to consider those anomalies, and refer him to some that should be considered. They include the fairness of a full levy on non-working wives and mothers. Should we be imposing a equal levy on such people, who are not earning but who are contributing to the future of the nation by bringing up our children?

Should there be unequal treatment of the old and infirm in retirement homes and of those who remain in their own homes, frequently cared for by relatives with the support of community care?

Are there not injustices in vacant homes incurring standard community charge, occasioned by death and probate or by working away from home, and in the transition between lets of accommodation rented out by landlords, frequently widows, with only one additional property?

We must address such anomalies, and we have this year to get them right. We should not be panicked by the scaremongering of the Labour party, which is exploiting people's natural fears and understandable dislike of tax. Local government is inevitably expensive and we should not hide that from our constituents, but nor should we hide the record of the parties on value for the money taken.

The Labour party may be enjoying itself at the moment, but the British people are not fools and they will look at the facts. When they see the facts of the Labour party's proposals, when it has the courage to divulge them, the grins will be wiped from Labour Members' faces.

7.5 pm

The Labour party made it abundantly clear when the poll tax legislation was being considered by the House that it did not want the poll tax at any price and that it did not want to gain political advantage from it. That point was made repeatedly, is on the record and still stands today.

I apologise to the Front-Bench spokesmen for missing most of their speeches, but that was because of my attendance at the Public Accounts Committee.

There is not a single problem raised about the implementation of the poll tax by hon. Members and people outside the House about which a warning has not been given. Warnings were given when the House was considering the legislation in 1987 and 1988. The Government published warnings in their 1981 Green Paper, "Alternatives To Domestic Rates". Everything that could go wrong with the poll tax is listed in chapter 7 of that Command Paper, yet the Government still proceeded with it. They cannot say that they were not warned, and because of that we make no apology for reaping the political reward of opposing this unfair, immoral and undemocratic tax.

The tax cannot be administered—that was made clear by the Government in the Green Paper and in the White Paper that followed in 1983—as a person tax. Last Friday morning, I visited Birmingham's poll tax office. People with queries were queuing outside it, but inside were professional local government officers doing their best to administer the law, and a pile of envelopes in cardboard boxes at least the size of the Table of the House. That was the returned mail for the Wednesday after Easter of poll tax bills not received by citizens of Birmingham. There must have been tens of thousands of envelopes. It will not be possible to keep track of people on a daily basis, but every one of those envelopes must be chased up. It will be almost impossible to administer the tax in that way, as we said at the time.

It is disappointing that I cannot find Tories in Birmingham to defend the tax. I have four meetings planned in my constituency between tomorrow and Monday night, not all of which will be party-political platforms. Tories have been invited to send representatives to each of those meetings, but no one can be found to defend the poll tax. That has happened consistently this year.

The poll tax will cause massive dislocation of family incomes, as I have said repeatedly on the House, as those on less than average earnings pay more so that those on above average earnings can pay less. My constituency is the largest in Birmingham; three quarters of it is outer suburbs and a quarter inner city, but all areas are losers. They will pay £10 million more in poll tax than they would have paid in rates, even if the rates had increased by 12 per cent.

The people of Perry Barr do not have a spare £10 million. They will go without food and fuel to pay their poll tax bills, and as a result their mental and physical health will deteriorate. I have seen the haunted look in people's eyes when it has suddenly dawned on them how much they will have to pay now that the bills have dropped through their letter boxes. Panic is setting in among ordinary people on ordinary incomes, living in ordinary streets in ordinary dwellings, who cannot afford to pay these extra amounts which are way above the rate demands.

This is a legal tax, but the legislation was passed undemocratically in the House by the use of guillotine. I checked out the Tory Members who rammed this tax through the House. The people who backed the Tory Members who forced through the final vote on the amendment of the hon. Member for Hampshire, East (Mr. Mates) on 18 April 1988 when the Government's majority was the lowest, at 25, comprised 21 per cent. of the electorate and 29 per cent. of those who voted in a general election. There is no doubt about it: it is an undemocratic tax.

There must be criteria for fair taxation. No Labour Member would argue that we should not have taxes—I would disown someone who did. Taxes are part of the community kitty. We cannot all have our own private facilities, but the criteria must be clear. Taxes must be practical—the poll tax is not. Taxes must be fair and must make those who take local expenditure decisions properly accountable—the poll tax has nothing to do with local accountability. The costs of administration and collection must be kept within acceptable limits—the poll tax is running at three times, not twice, the level of the rates. That is not acceptable.

Taxes must encourage proper financial control. I accept that a tax must be suitable for all tiers of local government. It must stand the test of time. Any tax that cannot stand the test of time will be unworkable and unworked, because those who have the duty to work it know that it will not last, inevitably leaving problems in its wake. Those are the Tory Government's criteria, which were laid down in their 1981 Green Paper. The poll tax does not meet one of them.

I do not want my party to compete with the Government, saying, "Our system will have more people on rebates than yours." I should like a system in which no one is on rebates. No one gets rebates on income tax, because a person does not pay it unless his or her income justifies the payment. The more income one has, the more tax one pays.

The speech of the hon. Member for Ealing, Acton (Sir G. Young) will be telling. I suspect that the Government will move somehow to adopt a banded system. That is their only escape route. They will not go back to a property tax and they will not want a fully local income tax. Our view is that property should carry taxation—the occupation of property should carry taxation—and whether that money is used for local government or national Government expenditure does not matter. I do not believe that, without the tax, property prices would be forced up, but that is not a good thing anyway.

I shall defend one, two or three taxes for local government, provided they meet the criterion of fairness. No one likes paying taxes, but people will object less to paying fair taxes than to paying unfair taxes. It does not matter whether the taxes are a mixture of property tax and income tax or whether we go the whole way and have a banded system or a fully fledged income tax. Property should carry a tax, and probably not on its value—a tax on the size of the floor area that it occupies, or even on site value. That is my public position, and I make it clear to my colleagues.

Such a system can be achieved in several ways. There is nothing unique about it, because virtually every means that one can imagine operates administratively perfectly in most other countries that use these systems. We have become hung up on this issue. We should discuss how to finance local government and, from my party's point of view, how to replace the poll tax, which must go.

I freely admit that I would prefer a mixture of taxes based on property and on income. Both can be seen to be fair and practical. Neither need cost a fortune to collect. Above all, they would not produce a massive impost and dislocation of family incomes. They would not drive people further into poverty and ill-health, as the poll tax will do, and that is why I vehemently oppose it.

7.15 pm

Not for the first time, I find myself very much in agreement with much of what the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said. As he probably knows, I have never supported this tax. I did not vote for it when it was introduced in Scotland. I have never voted for it and have voted against it on crucial occasions.

The problem with this tax is that, to quote a recent metaphor, it fails the cricket test. This tax is fundamentally unfair and people in this country like fair play. It is not cricket. The system must be significantly amended if it is to become acceptable to people: to the elderly couple who come to my surgery and ask, "Mr. Cormack, do I give up my holiday or my car?"; to the young husband who says, "We had planned for my wife to stay at home and bring up the child, giving up her job, but now she does not think that she can afford to do so"; to the teacher who is moving into my constituency and who, because the property market is sluggish, is paying poll tax on two properties, one of which is empty; and to the vicar with a small cottage in the country which happens to be in a Labour-controlled local authority area—Labour Members may not like this point—who will have to pay a double charge, as the standard charge on a property which he will seldom occupy and which is the only property that he owns. That is unfair.

It is unfair also that a shopkeeper who is trying to provide a service in a rural community faces the problem of mixed hereditament and has to pay poll tax and the business rate. Encapsulating the unfairness of the tax is the most unfair example of all—two people in my constituency living within about 500 yd of each other, one in a mobile home and the other in a house worth £500,000, each having to pay the same. That is not fair and never could be. It is regressive taxation of the worst kind.

That is why I have consistently opposed the poll tax. I have done so not because I believe that the adult wage-earner should not make a contribution—he or she should. On three occasions I introduced a rating reform Bill which would have made every adult wage-earner pay a contribution. I had the great distinction of having among my supporters at least twice my right hon. Friend the Member for Shropshire, North (Mr. Biffen), who is in the Chamber, and on one occasion my right hon. Friend the Secretary of State for Trade and Industry. If we had moved along those lines, I do not think that anyone with a sense of fair play could conceivably have objected. But we have done something that flies in the face of our party's principles and beliefs, which have evolved over centuries. We must do something about it.

I am a realist. I fully accept that we shall not be able to abolish the charge or repeal the legislation and that we must make the system work. There are two ways in which we can do that. I urge my hon. Friend the Minister for Local Government and Inner Cities to address himself to them. My right hon. Friend the Secretary of State made a magnificent speech, but he did not address himself sufficiently to the seriousness of the situation. I am not flannelling when I say that I have a high regard for my hon. Friend the Minister and my right hon. Friend the Secretary of State. They are Ministers who can listen. It is imperative for them and for this country's future that they do.

It is important that we look at the admirable solution suggested by my hon. Friend the Member for Ealing, Acton (Sir G. Young), who has been a consistent and doughty opponent of the charge, and who talked about banding. If that were brought in, there would be a reflection of the ability to pay, and the fundamental "it's not cricket" response of so many of our constituents would be dealt with.

The other solution is one that I have advocated on many occasions with the eloquent support of my right hon. Friend the Member for Shropshire, North. It is to transfer the burden of education, or at least of teachers' salaries, to the Exchequer. I am aware that that is not a simple solution and that the money must be found from somewhere, but the Chancellor of the Exchequer has many more opportunities of raising money than the one tax that we are discussing.

If the community charge is to remain a flat rate tax, like the car tax or the televison licence—I do not suggest that they are analagous and no one should think I do—it must be at a low level which is not a burdensome and cruel imposition on people. If education, were taken out, or just teachers' salaries, leaving administration to local authorities and thus a degree of local authority control, the tax could be reduced significantly. It is impossible to do proper calculations, but I have received figures from the Library today showing that a reduction of about £150 would probably be fairly common. That is based on the Government's own basic figure of £370. My right hon. Friend the Secretary of State has all the resources at his command and could probably tell us just what a significant reduction there would be.

One of the solutions that I have mentioned must be adopted. It is no good tinkering at the edges or, as my hon. Friend the Member for Acton said, throwing money at the problem. If the Government throw in another £3 billion next year, it will be £3 billion the year after and £3 billion the year after that. That will not tackle the root problem. It will merely mask accountability which, after all, was one of the fundamental reasons why the Government introduced it in the first place.

We should also bear it in mind that education is increasingly a national service. We have a national curriculum and more schools are beginning to consider opting out of local authority control. Also, teachers' salaries are set at national level. Local authorities cannot decide that they will not pay a certain salary. And with declining school rolls in the immediate future, education is the one major service from which fewer people will directly benefit in any given local authority area.

For all the reasons that I have given, this solution should be carefully considered. I know that it is not a simple or perfect solution. Like the Irishman, I should not have started from here. I should not have brought in this wretched tax in the first place. However, we are landed with it and we must make it workable and fair. If we do not—I direct my remarks particularly to my right hon. and hon. Friends on the Treasury Bench—all the fine achievements of the Government over the past 11 years, and there have been many, will be in jeopardy. The tax will join ship money, the stamp duty and all the other taxes which so incensed people that they turned on those who brought them in. I do not wish to see the Government, whom I support and am proud to support, brought down by a fiscal nonsensical introduction which, if it is not significantly amended, will always be associated with this Government and will tarnish their reputation in history.

7.23 pm

First, I record my disapproval of the time spent by the Front-Bench teams today. They took one hour 50 minutes for their opening speeches, which deprived Back Benchers of debating time. I speak from authority as someone with eight years' experience as a senior Whip defending the interests of Back Benchers against Privy Councillors, prima donnas and alleged Front-Bench seniority. It is distasteful that the Front Benchers became so involved that they practically doubled the time usually taken for the opening speeches.

Time and again during the past three years, before setting any rate, my local authority of Wigan has presented to Government officials a team of Members of Parliament and local government officers. We have done so religiously for three consecutive years. The Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope) was present on those occasions. We clearly and methodically presented our financial slate to the Minister and his civil servants. We proved that Wigan borough council was a wise and prudent spender of its people's moneys.

We were then described as a wreckless, irrational spender trying to prove a distorted political point. I ask the House to consider that I have a majority of 17,000 and the other three Members of Parliament within that area have majorities of 21,000, 16,500 and roughly 17,000. Can anyone seriously believe that we would want to make a political point in dealing with ordinary people's money and accountability to them? That is sheer nonsense. I reiterate that that label cannot be justified and I hope to show the House why.

All the figures had been submitted to the Department, first in writing and then orally. This year, the team that came to see the Minister included the leader of the Conservative group on Wigan council, and the Liberal leader. The group was a cross-section of the political parties on the council. We all agree unanimously on the submissions that we made. What happened to us? We were charge-capped to the extent of £10 million, and 1,000 local government jobs were put at risk. That was the prize for playing by the Queensberry rules and submitting the figures in advance.

Councils are penalised for being open, frank and democratic and putting their facts before the Government. I hope to show why I claim that there has been discrimination and victimisation against a Labour-controlled authority which attempted to come clean and play by the Queensberry rules.

With the exception of education, Wigan spends 5 per cent. less on all its services than any other council in the Greater Manchester area or any metropolitan district. The borough had the 29th lowest of 36 standard spending assessments for metropolitan districts. The Greater Manchester region, of which we are part, had an average 6·1 per cent. increase in its SSA, compared to the GRE figure for 1989–90. The average metropolitan district increase is 7·3 per cent. What is Wigan's? It is 0·06 per cent. We are penalised and put at the bottom of the relegation zone as we have been for some years, no matter which formula we worked under. Our SSA is £113 per head, again below the Greater Manchester average, and £118 below the average for all metropolitan districts.

What do we have to do to prove to the Minister that we are good housekeepers? Accountability has always been built into the system. Let us compare Wigan with Wandsworth, Westminster or Windsor which had a budget overshoot of £159 without being charge-capped. Wigan is permitted to spend £806 per head against Westminster's £1,486 per head. There is no comparison. Whether or not people like the north-south argument, we shall consistently perpetuate that imbalance and it will be a sore between all parties, which will be angry at the imbalances and unequal treatment meted out in the north and this part of the south. I make that comment, not as a political point, but to show that there must be concern and anxiety that such imbalances exist.

I said that, in 1987, 1988, 1989 and 1990, we came to the Minister. An independent view can be seen in The Economist, which claimed that Wigan was Britain's most efficient council. It states:
"Almost 5 per cent. of the London boroughs' council dwellings were empty in April 1986, three times the Wigan figure".
It also said that housing management costs in London worked out at £250 per dwelling, against £70 for Wigan, and tenants in London paid less than 22 per cent. of total housing costs, against Wigan's 36 per cent. It continued:
"The share of costs met from rates more than doubled to 12 per cent., three times the Wigan level."
Those were the figures for the London boroughs. I shall come to a famous borough later. I see that the hon. Member for Itchen is smiling. That famous borough was subsidised by about 17 per cent., and Wigan got nothing. The Economist's independent survey showed that. Wigan is not the only example. The Londoners relied on central Government grants for 80 per cent. of their spending. Wigan is quite a proficient council with professional standards, but we got only 50 per cent., compared with the 80 per cent. received by the borough that I mentioned.

We talk in compassionate terms about children's homes, which are a serious issue. In Wigan, children's homes cost less than £10,000 per child in care, whereas in London boroughs they cost £13,000. On minor roads, £8,500 per kilometre is spent in London, and in Wigan only £3,750.

Which was the rogue borough? It was Tory Wandsworth. The Economist said:
"And which, you may wonder, is this wastrel borough? Or, if your politics are different, this truly socialist one? In fact, the borough concerned is neither. It is the radical-Tory Wandsworth, the model of an efficient, market-orientated"
classic example of pure local government administration and accountability. If that is the case, I have a super Wigan, as against that sort of authority. The Under-Secretary won his spurs as leader of Wandsworth council.

Last week, most hon. Members received a booklet about the community charge issued by the Department of the Environment which deals with the community charge and rents. It is well-designed and clear and distinctive. This weekend, when I went back to my constituency, I was met with a delegation of tenants of rented property. They said, "Could we put it to you that we expect our rents to be dropped accordingly? The rate was £7 per week.

Order. I regret that I shall have to call the hon. Gentleman to order. His 10 minutes are up.

I have had to rush my speech, when I had the common courtesy earlier not to intervene in the speeches of other right hon. and hon. Members.

7.33 pm

I shall not follow the example of the hon. Member for Leigh (Mr. Cunliffe) and I shall not challenge any ruling that you give me, Madam Deputy Speaker. I intend to speak about Scotland. I hope that the hon. Member for Glasgow, Hillhead (Mr. Galloway) was not suggesting that Conservative Members knew nothing about work. I am sure that he will agree that that is not so.

There is a good reason why we should consider Scotland. In the first year of operation of the community charge in Scotland, the added increase in local authority expenditure was more than double the inflation rate. That followed substantial increases in local government grant settlements. I expect that sounds vaguely familiar to hon. Members from England. The community charge is in its second year in Scotland, and this year is the year of regional elections in Scotland, and 20 councils have spending plans which are the same, or below, those of last year, and the remainder have estimates at about, or just below, the inflation rate. That shows that at least the local accountability element is working. Therefore, a major aspect of the community charge in Scotland can be said to be working.

On Monday 19 March, the Scottish Grand Committee met in Edinburgh. The matter for debate that day was local government finance—the community charge, or poll tax as it has come to be known. That was the first day that the Scottish Grand Committee was televised, and not one individual came to demonstrate about a matter that, according to some of the interventions that we have heard, has been inciting people to lawlessness. Even more interesting, that was the first and only occasion on which there had not been a demonstration when the Grand Committee was meeting in the old high school building in Edinburgh. At every previous sitting of the Committee in Edinburgh there had been demonstrations outside, but there were no demonstrations against the poll tax.

That is concrete evidence that the people of Scotland have substantially accepted, as much as people ever accept the payment of tax, that the community charge is the best means of paying for the top-up figure of local government expenditure. The bulk of such expenditure is paid by central taxation and non-domestic ratepayers. We are talking about a top-up figure, not total expenditure.

It seems that, certainly in Tayside, the regional assessors—those responsible in Scotland for the non-domestic rates—have produced valuations in my constituency that lack consistency and fail to make sense. There is nothing new about that; we had the problem before, which led us to the community charge. That problem, combined with the rates and the rate valuation, made it impossible for the Government of the day to continue with that.

In an answer given to me today, I note that in Angus the combined rate poundage of district and region in 1989–90 is 72·2p, and in 1990–91 it should be—note the reduction—53·6p. In Perthshire, the respective figures are 72·7p and 54p. Therefore, provided the valuations are sensible, the cash paid for non-domestic rates in 1990–91 should not be penal. I shall wait and see because I know from experience that the valuations are, once again, likely to have gone bananas.

What of the alternatives? Today the hon. Member for Dagenham (Mr. Gould) failed to answer the question that I put to him, deliberately avoiding it and saying that he would discuss Scotland later. He did that because Labour's proposals for Scotland—the roof tax—have been clearly outlined. The hon. Member for Cunninghame, North (Mr. Wilson) keeps telling us that we will get the details long before 3 May, but we got part of the details today. Not only did the hon. Member for Dagenham not tell us about Labour's proposals for England and Wales; he failed to endorse the statement made by Labour in Scotland today, which is not surprising. He had probably been advised about the shambles in Scotland, where the only figure given was for a typical couple in an average house—it would have been £487 last year. Any inspection of this figure will show that, allowing for inflation, let alone anything else, it is complete nonsense relative to last year's rates. So much was made clear at the meeting.

As reported on the tapes, when questioned about other properties, the Labour party in Scotland could give no answers because it has not thought through or worked through the proposals. So the Leader of the Opposition tells the world that there is little support for a tax based on property values, while the shadow Secretary of State for the Environment fails to explain or endorse the statements made in Scotland. All this means that Labour is determined to use Scotland as a guinea pig. Add to that Labour's plans for the rural economy in Scotland and its hidden agenda, which includes rates on farmland, on woodland and on farm buildings, and the compulsory purchase of estates and holiday homes, and it becomes clear how exciting the prospects for Scotland are. Property values will plunge and firms will be run at a loss to avoid payment of non-domestic rates. And there is more to come.

I turn now to local income tax, which is the SNP's and Liberal Democrats' recipe for the top-up figure. I note that not a single representative of those parties is present in the Chamber. I have an admission to make: for two years I tried to make a local income tax work and I could not make it work in Scotland at that time because I did not live and work in the same place. For example, I live in Blairgowrie, I work in London and my tax office is in Cardiff. Not all tax offices are computerised so that they can swap information.

This was only one of the problems. Sparsity of population in Scotland was another. The latest figures published in column 1023 of the Official Report on 19 April clearly show what that means. A single person on Scottish average earnings would be required to pay in local income tax £812 in Angus and £828 in Perthshire. He would be required to pay £900 in Dundee. If such a tax were ever introduced, it would clear the highlands of Scotland in a way never achieved during the clearances.

I know that there are flaws and weaknesses in the Government's proposals, but I have spent most of my life in Parliament dealing with anomalies in the rates. It would be astonishing if we brought in a local government tax that did not contain anomalies. One of our jobs is to ensure that they are removed, and I have every confidence that Treasury Ministers will do just that.

7.44 pm

I was a little disturbed when the debate began with the noisy and hysterical reaction from Conservative Members, which seemed to strike a panicky note. I think that my hon. Friend the Member for Dagenham (Mr. Gould) made an excellent speech in the face of all that unruly panic. He rightly referred to the undemocratic nature of the poll tax and to the considerable falling off in the numbers of those on the register—15,000 in Strathclyde alone.

The poll tax is not only unfair, it is anti-democratic and it lacks any democratic legitimacy. It is nonsense to say that the British people voted for it. The Tory manifesto for the last election, the most detailed in post-war history at about 25,000 words, contained 82 on the poll tax. The Government smuggled it past the electorate and then, as my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) said, they rammed it through the House.

My local authority, Calderdale, was 34th from the bottom of the league, with a very low poll tax of £297—yet it is to be poll tax-capped. Over the past 10 years, Calderdale has struggled to maintain and improve essential services while the Government have taken away more and more of its grant. Now we are told that we are profligate and not fit to set a budget. That is highly insulting to the hard-working, decent councillors who give up many hours of unpaid time because they are dedicated to the people of Halifax and Calderdale.

Why was our standard spending assessment set at 5 per cent. above inflation when the average for metropolitan authorities was 11 per cent.? It is sheer irresponsibility to poll tax-cap an authority such as ours and the Minister must know that his actions will force Calderdale to make millions of pounds' worth of cuts in services, which will hurt our area. We cannot make such cuts without seriously damaging services. We cannot get away with fringe cuts—there is no fat to cut. We are a small, moderate district authority, built up from a very low rate base, and our spending goes on real services. I defy the Minister to come and show me where there is waste.

The voluntary sector in Calderdale is worried. The citizens advice bureaux and many bodies like them which receive grants are extremely anxious. Of course, their grants have increased over the years because they have had to expand their services, given the great problems that the Government have created. The massive growth in poverty over which the Government have presided, the housing crisis, the huge build-up of personal debt and he cuts in benefit and in the NHS have inevitably led to a growth in the budget of a caring local authority. One voluntary sector body that comes to mind about which I feel strongly is the Crossroads scheme, an excellent scheme in Calderdale. Many letters in the local press have supported it, yet it is worried about cuts in its grant that might result from capping. Crossroads is a cheap but valuable service that relieves carers who look after frail people in the community. Both it and the home help service are worried, as are people who work in old people's homes.

The Secretary of State visited Halifax yesterday. As I said when raising an earlier point of order, he crept in like a thief in the night without telling anybody that he was going there. The first I knew of his visit was when I saw a letter on the notice board saying that he was to visit Halifax yesterday. That was discourteous, which was why I challenged him about it.

The right hon. Gentleman told the press yesterday that he was protecting the people of Calderdale by capping the poll tax. He visited the richest area in Halifax, Savile park. He went there to support local Tories who were launching their local government election campaign. Those local Tories said that people in Halifax were not concerned about the poll tax and that dog dirt was more of a problem. So on the day when my council was in court applying for judicial review to protect valuable services such as Crossroads, the Minister was making dog dirt his priority. I am concerned about dogs fouling the pavements, but such action on the part of the Secretary of State is beyond the pale.

In his cheap, knockabout speech, the Minister did not tell the House about the teachers who lobbied him yesterday and who told him that if he went ahead with his cuts they would put education back 15 years in Halifax. We still do not have a comprehensive education system in Halifax and to set the clock back another 15 years is unthinkable.

The Secretary of State recently accepted a system for local financial management of schools. He said that it was a good system, but is he now about to tell teachers and administrators to cut their budgets? How will he justify that? Will he tell us how many teachers and ancillary workers will be lost from the schools in which £5·6 million of cuts have to be made? The National Association of Head Teachers is considering challenging the Government in court, and no hon. Member can tell me that that association represents the loony left.

Calderdale is a large geographical area with a small population and our services are expensive to provide. That is common sense. We kept our poll tax down and, as I said, we were 34th from the bottom of the list. The poll tax is nothing more than an act of violence perpetrated by the rich and powerful against those who have very little. I do not enjoy seeing pensioners crying in my surgery and saying that they have to take sleeping pills at night because they are anxious and do not know how they will find an extra £3 or £4 a week. To someone on a low income, such a sum can be a devastating blow to a budget.

Like my hon. Friend the Member for Glasgow, Hillhead (Mr. Galloway) I am taking a non-payment stand. I see from The Guardian last week that three Anglican bishops, a Roman Catholic bishop and five non-conformist leaders think that it is a good act of conscience on behalf of the poor. I support my people who cannot pay and I throw down a challenge to the Minister and to Conservative Members. They have been vocal in asking about our plans. What do they intend to do about the people who cannot pay? At what level of poverty are they prepared to come in and help such people? I know what I shall do.

The rich can always avoid taxes that they do not like, and I am quite sure that many hon. Members have lawyers and accountants to help them to avoid such taxes. The poor do not have that option, and in the face of a Government who simply refuse to listen I am proud to take a non-payment stand. With poll tax capping, the Secretary of State has acted in the best traditions of Mussolini. He is a town-hall Mussolini. It grieves me to say it, but I would not be disappointed if he ended up meeting the same fate.

7.52 pm

The community charge has my wholehearted support. The principle is accepted on the doorsteps in Lancashire, but we have to look carefully at the rules and regulations that apply to the charge. The first answer at Question Time today gave the impression that we are not considering any changes to the regulations. I hope that the Minister for Local Government and Inner Cities is following the debate and that he will look carefully at the rules and regulations before setting the rate of community charge for next year and the rules that apply to it. The main benefits of this debate are that it highlights the unfairnesses in the new tax and that we can make constructive proposals about what could or should be done.

We changed the taxation system this year so that women are taxed separately. I fully support that move. Therefore, why is it necessary to make husband and wife jointly and severally liable for the community charge? That does not make sense. Some people have said that it is related to housing benefit or social security payments, but when introducing a major tax such as this we should treat it as an individual charge and honour that treatment in all its terms. An unemployed wife who is taxed separately from her husband who may be earning £15,000 or £20,000 should receive the full 80 per cent. rebate. We sold this tax to voters as an individual charge on a person for the services from which he benefits, and we must honour that all the way through.

Second homes have been mentioned. I am delighted that the Government have given local authorities the flexibility to make a zero standard charge, a half charge, a full charge, a charge of one and a half times or twice the charge. A case similar to that which applies to one of my constituents has been mentioned. A teacher living away from my constituency and teaching down south pays the community charge there and has been levied twice the charge—£730—up north on a home that she is in for only a few weeks in the year. That makes no sense.

What system should apply if the husband and wife are to be treated separately and have a second home that they perhaps own? Can the woman opt to count one of them as hers, while the husband counts the other as his main home, in which case they would pay a single charge in each home? At it is, they pay two full charges for a main home and two charges—if the local authority chooses to levy the standard charge—for the second home. Under a separate charge system they could immediately have their community charge bill halved. That is open to abuse, but I raise it as a point of principle and I hope that the Government have thought it through.

The Government have said that the rebate system is generous. I admit that an 80 per cent. rebate is more generous than that which my hon. Friend the Member for Ealing, Acton (Sir G. Young) might employ. He might have people paying half the charge, the full charge or twice the charge, depending upon their highest rate of income tax. I am delighted that students will get the full 80 per cent. rebate. However, we must consider the low rates of income that enable one to qualify for that rebate. We must change the rules. A single person of 18, 20, 25 or 30 or more may earn perhaps £50 or £60 a week. That is not a high wage in today's economy, even in the north-west. I strongly recommend loosening the rules and regulations. There should be much more of a taper in the system.

The uniform business rate has been mentioned and the north-west will benefit most from that, which I welcome. Many businesses, and especially retailers, are small traders and there are many small country post offices. I have many such businesses in my constituency. They are paying, admittedly after revaluation, five or six times their original bill. The very large do-it-yourself stores such as B and Q pay a charge based on the depth of the store, while the small business or shop has only a small depth of property. District valuers should be asked to be more lenient to small businesses. We should treat the matter on a totally new basis. We could change the community charge, perhaps relating the residential charge to the uniform business rate on mixed premises. We should be able to examine the whole thing and see what is fair and reasonable in today's world.

Some 15 to 20 years ago, when the last revaluation took place, there were no large sheds housing do-it-yourself shops such as B and Q. Such shops give a very good service and excellent value for money, but the present system is to their benefit and to the disadvantage of the small business man who provides a local service in rural areas. I want to encourage such businesses, because without them rural communities will die.

What are we to do about local government finance? I have said that the community charge is fair, but how can we overcome the problem of a family of two adults and two children of, say, 18 or 20 years of age who have to pay four community charges? In the past, their rates bill may have been about £150 and they may now be asked for £1,500. That is not uncommon in my constituency. What can one say to such people? One can do more than tell them to claim the maximum rebate to which they are entitled.

There is much unfairness in the system. Chorley had a Conservative-controlled local authority—it is only a one-seat majority—and it spends exactly in line with the Government's guidelines, and all credit to it for that. However, the Labour-controlled Lancashire county council, which, again, has only a one-seat majority, has massively overspent. Its budget this year is so enormous that rates would have had to increase by 30 per cent. Instead of the standard community charge of £278, the charge in Chorley is £360, and the extra £80 is shown in each community charge form as being the result of the policies of the Labour-controlled Lancashire county council. Unfortunately, electors and voters do not read the forms carefully.

If we are to run United Kingdom Ltd. efficiently in a tight economy and difficult circumstances, we must find better means to control spending. In general, the Government's SSAs are accurate and fair. There are two years before the next general election and the Labour party has said that it will not tinker with the system immediately, so local authorities have three or four years to bring their spending down to a fair level. The SSAs take into account the needs and requirements of the population and its demography. We have had so many different systems that, by now, we should know what the spending levels should be.

We must change the rules and regulations. Rather than cut rate support grant to local authorities, the Government should have cushioned the blow and been generous. That would have ensured that the community charge was accepted as fair and reasonable, and there would have been wider support for it. We should have less tinkering to do now. We need to look carefully at how we change the system. I was interested to hear the genuine misgivings voiced by Labour Members, and Conservative Members share many of them. We want to see changes, and I am sure that the Government will get a strong message next Thursday which will ensure that in the next few years drastic changes will be made in the level of assessments and spending.

Order. The 10-minute limit on speeches has been lifted, but some hon. Members have been here throughout the debate and I hope to call everybody who wishes to speak. Therefore, I appeal for voluntary restraint.

8.2 pm

I hope that the hon. Member for Chorley (Mr. Dover) will forgive me if I do not follow his somewhat inconsistent speech. However, I shall follow the points made by the hon. Member for Staffordshire, South (Mr. Cormack), who made historic references. I often think that we should be better off if hon. Members knew more about history. If the Prime Minister had studied English history instead of the constituents of ice-cream, I doubt that this project would ever have got off the ground.

One does not have to go back to the 14th century and what happened to the last poll tax to form the fair judgment that the Conservative party has demonstrated its unfitness to have responsibility for the direction of local Government. It has been said that this is an historic change in the reform of local government finance. Some of us were Members of Parliament when, through another historic change in local government, a reorganised system was inflicted upon Britain in 1973. That was the most inflationary exercise that Britain had ever experienced. It was clumsy and incompetent, and it caused dramatic heartache to the people in local government, for they had to make that difficult system operate.

Conservative Members with experience in local government know that that is true. Now they are perpetrating a larger, and perhaps more painful and unfair, error. It will lead to an unfair and corrupt system that has been compounded by the decision to poll tax-cap authorities such as that which I represent and others in Yorkshire.

Let me make one thing clear. It has become fashionable for Conservative Members to talk about local government as spendthrift and inefficient. I have said before that, if central Government were as efficient as local government, the country would be a great deal better off after 10 years of this Administration. Look at the Sheffield Forgemasters business with Iraq. We do not know the difference between a gun and a petrol pump. Today's trade figures are twice as bad as the Government and the City were expecting.

After the Government's decision to poll tax-cap, the director of education in Rotherham, Mr. Snowden, sent me a serious letter, and I wrote to the Secretary of State for Education and Science to ask him to take the trouble to read this letter from a splendid educationist, and to respond himself. My secretary has worked for me for 16 or 17 years. She said to me, "You know what will happen." I said, "Tell me." She said, "We will send the letter to the Department and within two or three days I will get a telephone call saying that it has mislaid the letter and could I send a copy of it." I said, "I do not think that that will happen with such a serious letter." She said, "It has happened every time we have sent a letter like that to the Department of Education and Science in the past two years." Sure enough, three days later, we had a telephone call from an official asking for a copy of the letter because the Department had lost it.

I am glad that the Under-Secretary is in the Chamber. On 3 April, the Government announced that they would be capping the poll tax. My council was condemned as inefficient and spendthrift. However, on 10 April, I got a letter from the Under-Secretary paying tribute to my council for its "tremendous effort" in administering the poll tax and in managing to send out the community charge bills. My council is efficient, but it did not know where it was. Three days after the financial year began, the Secretary of State said that it was not efficient and should be punished for being spendthrift, although apparently his colleague did not know that.

The Under-Secretary of State for the Environment used to run Wandsworth council, which seems to be one of the only two boroughs about which the Government are concerned. The other is Westminster, with which I shall compare Rotherham. Will the Minister comment on some of these figures? I have already set out some of them in a motion, but that motion tells only part of the story because I did not want to occupy too much space.

Rotherham, as the Minister knows because he has been to see it, has enormous problems. It has an above-average number of old people and of children of school age, with all the financial implications that that presents. This year, its spending will be £821·93 per head. Westminster has fewer old people because many have capitalised on the housing boom and left. It has an enormous income from second homes, to which at least 60 or 70 Members of Parliament contribute. It is a compact area with little of the unemployment and dereliction that we face. It is not supposed to be a big spender, but its average spending is £1,181·54—£259 more than Rotherham.

Let us look at the income. The poll tax in Westminster is £195, its business rate is £292, its education grant, because it is in the metropolis, is £53·32 and it has other income of £11·11 which, together with the standard spending grant of £865·84, makes a total of £1,420·78.

According to the Government, Rotherham is a wicked authority. It has set a poll tax of £334 and there is the business rate of £292. With low rateable values and the destruction of industry over the past decade, it has received the enormously generous grant of £ 18·39. There is other income of £28. The standard spending grant is £188·39. That produces a total of about £861.

Westminster's income is enormously greater than that of Rotherham's, and so is its spending. Westminster's needs are not as great as the areas which my hon. Friend's and I represent and about which we are concerned. The figures to which I have drawn attention show that the spending assessments by the Government were deficient from the start. I can only express astonishment that the Government did not foresee the horrifying consequences. Indeed, they compounded them by the unfairness and corruption of the capping list which the Secretary of State produced.

Perhaps my intervention will provide the hon. Gentleman with an opportunity to recover from his exaggerated statement. As he has acknowledged that the important feature is the standard spending assessment, I invite him to consider the positions of Lambeth and Wandsworth, which he has not included in the figures to which he drew attention. Lambeth receives one third more in grant than Wandsworth, yet there is a great disparity in the community charges that the boroughs have set. Westminster is budgeting to spend 7 per cent. below its standard spending assessment while Rotherham has chosen to budget excessively at 20 per cent. above its SSA.

Rotherham is budgeting for a modest increase in the level of services that it provides to match the increase in the number of children and old people. The growth element, as it was, is only £3 million. It is a far smaller sum than that created by the additional demands made by Government policies.

In reply to a parliamentary question which I tabled, the Under-Secretary of State replied to the effect that Rotherham will be able to obey the capping order without disrupting services. I do not know what preparation was made for that answer. If the capping order is implemented, scarcely any books will be bought by the library. Of course, the Government are not worried about that. Rotherham will have to reduce the quality of school meals. There will be implications for swimming and music facilities for schools, and I am especially concerned about music. There is a fine local tradition that I wish to be maintained but I fear that it will suffer. Facilities such as the Rotherham Valley country park would go if the order were implemented. There would be consequences for street lighting which could result in road accidents, and perhaps fatalities. I suppose that that would not unduly concern the Government because they cannot find Tories in the areas which my hon. Friends and I represent.

As the Minister knows, the area which I represent has never sought to break the law. Instead, it has sought to conduct itself with civilised balance and to build structures within the community that embrace a cross-section of society. The authority has worked with the chamber of commerce and the voluntary bodies. It has worked efficiently and inexpensively to try to surmount the problems that we face. The Minister knows that that is true. The contemptible feature of the Government's actions is that they have caused anger of a sort that I have not experienced for a long time.

The Government should understand that my constituents believe that the new tax is foul, unfair and incomprehensible. It has compounded their difficulties. How can the Minister and his ministerial colleagues tell the local authority that they can match spending pound for pound or penny for pound to deal with the dereliction and other problems which he has seen? If it were still legal tender under this inflationary Administration, we would not be able to match farthings for pounds. The authority will not be able to find its way out of the problems unless there is a Government who show that they have some sense of history and a commitment to justice. 'That is definitely not demonstrated by the apportionment, of public moneys that is the result of the poll tax.

8.14 pm

I do not share the fears of the hon. Member for Wentworth (Mr. Hardy) about education. If he examines any local education authority he will find the extent of the savings that can be made. He will find administrators in ivory towers who should lose their jobs, instead of people at the sharp end losing theirs. Like all Opposition Members who have participated in the debate so far, the hon. Member for Wentworth said nothing about what the Labour party would do if it were in government. That is extraordinary, given that this is a Supply day.

I represent a constituency which has a thriving light industrial base. There are many small manufacturers in the constituency and in the main they have done quite well out of the uniform business rate. I am concerned, however, about small retail businesses, including small village shops and retailers in the high streets of King's Lynn and Hunstanton. When the Government decided to embark upon the UBR and set rental values in April 1988, the economy was booming. At that stage, rental values were perhaps at their peak. Retail businesses were doing extremely well.

We all know that the margins of village shops are extremely tight. Those who run them struggle to provide a service to village communities, which are sometimes remote. They are often part of the key fabric of a rural infrastructure. Even in 1988, many village shopkeepers were struggling. In the present economic climate, which is very different from that of 1988, they are finding life extremely difficult. My hon. Friend the Minister is well aware of my view that the Government must reconsider the transitional scheme for small businesses.

The Government must also seriously consider a problem that was put to me only last weekend by one of my constituents. He told me that he is a baker and one of my supporters. He lives above his business with two sons, who both work in the bakery. The four members of the family are paying poll tax. I told him that his previous business rate contained an element of domestic rating. I invite my hon. Friend the Minister to try to explain that to someone who is running a small village business with tight margins. If my hon. Friend said that anyone running a village shop, a pub or a bakery and living next to it or above it would be liable for only one community charge, that would make a considerable difference. I do not think that it would cost much, but it would be recognised as a major concession and a significant move forward.

My hon. Friend will probably tell me that those who run the businesses to which I have referred can make use of the transitional arrangement. I accept that, but he must face the fact that there is real concern among village shopkeepers. There is genuine concern that extends beyond shopkeepers to include many other constituents, who see village shops as a key part of the fabric of rural communities. I urge my hon. Friend carefully to consider these matters.

I have always accepted the principle behind the community charge. I was heartened by recent opinion polls that showed that about 70 per cent. of the public accepted that everyone should contribute to the provision of local authority services. The results of a poll that are reported in the Evening Standard—I see that my hon. Friend the Minister has a copy of the report—are similar. Accountability in local government is needed greatly. I believe that the local elections next week will not show anything like the scale of devastation that Opposition Members are willing upon us. Instead, the results will show that many electors took a sensible choice. They know well that, if they elect a Tory-controlled council, they will pay a lower poll tax. That message is getting across.

As I have said, I have always accepted the principle behind the community charge. At the same time, I have accepted that there are problems. We have a good idea, but its implementation has gone badly wrong. The other day, my right hon. Friend the Secretary of State said that, if implementation of the community charge was a dog's dinner, a rates revaluation would have been a rottweiler's dinner. I rather like rottweilers. I think that the implementation of the community charge is worse than a rottweiler's dinner; it is a feast for a large number of rottweilers. Many things have gone badly wrong. We underestimated the extent to which local authorities would seize this window of opportunity to put up their expenditure. That has resulted in higher community charge figures.

The 1981 Green Paper "Alternatives to Domestic Rates" stated:
"The Government believes that a flat-rate annual capitation charge"
of the order of £240
"would almost certainly not be a practical proposition. If a poll tax were used to supplement another tax, however, the tax rate would obviously be lower, and it is in this way that a poll tax is most likely, in practice, to be able to contribute to a system of local revenues."
If the 1981 figure of £240 were inflation-uprated, it would be about £350—roughly in line with the average poll tax—yet in 1981 the Government said that that sort of level would not be a practical proposition.

The Government must find a way to bring down poll tax levels. The problem is how to do that without throwing money at local authorities and without that money going down the drain and being spent on pet schemes and projects. One of the tragedies of this whole exercise is that, over the past 10 years, the Government have gone a long way towards containing and controlling central Government expenditure on local government—indeed, they have been quite successful in containing public expenditure generally—yet at one fell swoop a great deal of money is going out of the window.

The Government must carefully consider taking a function away from local government. That could be teachers' pay, the police service or the fire service. They must then find a way to contain that and to ensure that the savings are dedicated to the community charge payer. They must also reconsider the rebate system. Like my hon. Friends, I have been confronted by constituents saying, "We have moved to a system of individual assessment for income tax. We thought that the community charge was a personal charge," or, "I am a mother at home looking after the children, yet I am expected to pay the full community charge."

The Government must consider a system of individual, separate assessment. I know that the Minister will say that a millionaire's wife could then claim a rebate, but I do not think that there are many people in that category. However, there are many thousands of people who would benefit from individual, separate assessment. It would then be a genuine personal charge and they could apply for a rebate in their own right.

I do not know what that would cost. Perhaps my hon. Friend could give an approximate figure. I do not have any idea about the probable uptake. However, it would be one way to make the community charge much fairer.

It is difficult to cost a proposal without more detail. Does not my hon. Friend think that it would be wrong, under such a system, to favour the non-working wife or husband of a spouse earning £30,000, £40,000 or £50,000 a year, while penalising the working wife or husband of a working spouse, both of whom were earning £8,000 a year? Such a couple would have to pay a double community charge, yet the non-working spouse and his or her partner, who had a considerable income, would pay only one charge.

I accept that, but my hon. Friend must remember that there is now a system of individual tax assessment. The community charge is going in the opposite direction. I accept my hon. Friend's example, but there are many people on the borderline who do not qualify for rebates, such as pensioners, pensioner couples and mothers who have decided to stay at home to look after their children. There is always a trailer in these matters and we are looking for ways to take the sting out of a system that is perceived to be unfair—

I am sure that my hon. Friend will have the opportunity to make her points.

Although I was pleased by my right hon. Friend the Chancellor's announcement in the Budget, I find the formula being used quite extraordinary. The first £3,000 of savings are completely ignored, while every £2·50 over £3,000 is deemed to produce £1 of notional or tariff income. That represents a marginal interest of almost 21 per cent. That is the deemed interest that people with savings of between £3,000 and £16,000 are supposed to be receiving. That is ludicrous. I ask my hon. Friend the Minister to recognise the importance of that point.

I also ask my hon. Friend to listen to the criticisms from constituents who previously were obtaining rates rebates because they were disabled or suffering from some incurable disease. For some reason, they are not receiving poll tax rebates. I hope that my hon. Friend will recognise the anomalies. He has shown that he is prepared to be reasonably open minded. He has already reconsidered the status of caravan sites. I urge him also to consider the case of disabled people who feel badly let down.

The Government must deal with the perception of inherent unfairness in the new system. Some may refer to the soft underbelly of the British people, but there is also a hard underbelly. That is characterised by a sense of fairness. I have not yet met a single top rate taxpayer who is anything but ashamed of the savings that he is making. I have not yet met a single top rate taxpayer who would object to paying more. The mood in the country has changed dramatically, and the Government must urgently and enterprisingly consider not scrapping the system, because it can work, but imposing a premium on those paying the top rate of tax. Perhaps they could pay 75 per cent. more, or even double. That would meet the argument that the Government have introduced an inherently unfair system. I am sure that every top rate taxpayer would accept my proposal and I urge my hon. Friend to find ways to implement it.

This is an Opposition Supply day, yet the Shadow Secretary of State gave a fairly abysmal performance. The hon. Member for Dagenham (Mr. Gould) did not give the House any idea about Labour's policies. That is extraordinary. It is also extraordinary that, on an Opposition Supply day—Labour's big day on the poll tax—the Opposition Benches have been marked by their emptiness. Many Conservative Members are uneasy about the community charge and they might have been tempted either to vote with the Opposition or to abstain. However, if the hon. Member for Dagenham had hoped to win us over, I have to tell him quite frankly that he went about it the wrong way. He said nothing remotely positive.

My hon. Friend the Minister has shown that he is prepared to listen. I am, of course, aware that he is moving on to new pastures. The Government, in the very phrasing of their amendment, have shown that they are willing to listen to constructive suggestions. Many Conservative Members have put forward serious and constructive suggestions. I urge my hon. Friend to show more urgency than he has previously and to consider those suggestions. Above all, I urge him to implement our proposals not in a year's time, but in the near future. We will then have a system of which we can be proud and one that will help our party and, above all, will lead to better local government

8.28 pm

I shall begin my speech by being very constructive and giving the Minister some advice: forget the poll tax. My advice is as pure and as simple as that. I hope that the reports of our debate will be read widely outside the House. I hope that people will also read the reports of the Second Reading and Committee stages of the Act, especially the speeches made by Conservative Members.

Conservative Members waved their papers and said that the poll tax was the flagship of their party and the alternative to the hated rates system. Surprisingly. the one thing that the poll tax has done is make the public appreciate how well the old system worked, even though it did contain anomalies.

Also remarkable is the number of Conservative Members who say that the poll tax is fair but go on to describe all the ways in which it is unfair. We heard repeated today all the arguments that the Opposition made in Committee. The very points made by Conservative Members were contained in Opposition amendments that Tory Members rejected. Two years ago, we told the Government, "We accept that the rate system is unfair sometimes and that it contains anomalies, but before you introduce poll tax let us sit down together on an all-party basis and find another alternative." That offer was also rejected, and the Government have poll tax around their necks as a consequence.

Last week I had the good fortune to visit Her Majesty's forces in the Falklands, and saw there a vehicle with a notice on it reading "No poll tax."

Like the hon. Gentleman, I have flown thousands of miles to attend this debate. The hon. Gentleman has made clear his views on the community charge, but will he say what he considers to be his party's alternative? The hon. Member for Birmingham, Perry Barr (Mr. Rooker) proposed a floor tax. What alternatives does the hon. Member for Barnsley, West and Penistone (Mr. McKay) think that his party offers?

I shall give a personal view and a party view—[HON. MEMBERS: "Oh!"] Conservative Members will not enjoy my party's view either. Local government organisation and expenditure is in a bigger mess now than ever before, and Labour must carefully examine the possible alternatives to poll tax. We must cost them and consider the correct machinery. However, I assure the Minister that our system will be based on a person's ability to pay. It will be fair, equitable, and accountable—and it will blow the Government's poll tax to pieces.

As to accountability, my son is in the Navy, his home is in Gosport, his ship is based at Rosyth, and at present he is at sea. Where does he pay his poll tax, and how will he be accountable? What services will be provided for the poll tax that he pays? He certainly will not receive any services at sea, or at Rosyth, and he is away from Gosport for three years, apart from occasional visits.

As to financial accountability, my local authority is accountable to the people who vote in its members, one third of whom are elected every year. Each and every year that authority is accountable. It holds public meetings on its programe and its costs, which the meetings can either accept or reject. If the authority makes mistakes during the course of the year, the electorate will show their displeasure at the ballot box. It is significant that my local authority has been Labour-controlled for 50 years. It has 60 Labour councillors, one Liberal and two Conservatives. If the council has not been providing the right services, or if they become too costly, how is it that Labour has remained in control for the past 50 years?

The poll is usually between 40 per cent. and 60 per cent., which is a very high vote.

My constituency is unique in all kinds of ways, and I really love it. It is varied from area to area. Parts of it are industrial—or they were, before 10 collieries closed. Another part of it is very rural. The problems occur in the low-value, built-up area. The larger houses are in the rural area, where the best properties are to be found. If one takes the example of the refuse service, it is far easier to make collections in the low-value built-up area than in the high-value rural area, where there are houses with drives and long paths.

An investigation of the use made of local facilities shows that the library serving the Penistone area is patronised more than the one in the built-up area. Also, I am now receiving letters about the deteriorating roads in my constituency. The worst affected are those in the rural areas, which suffer from the extremes of climate. The poll tax throws all such different considerations out of the window.

The area has a male unemployment rate of 18·6 per cent., and it is rising. Female unemployment is 5 per cent., and it is also rising. The difference is accounted for by a geographical quirk and the loss of industries such as coal, steel and engineering, whereas there has never been a great deal of work available for females. The local authority has taken upon itself to improve the situation by increasing educational attainment, which, sadly, is currently one of the lowest in Britain due to historical factors relating to a huge area that was formerly heavily dependent on industry. I have no grumbles about that. I enjoy where I live. I enjoy living among the people there and going for a drink with them. I also listen to their views and to their grumbles, and it is clear that the poll tax is the most hated of all the Government's measures.

Conservative Members have talked about refining the poll tax, but every time that it has been refined it has cost local authorities more money. The computer system that it was necessary for my local authority to install to collect poll tax cost £3·5 million more than that needed to collect the rates.

If the cost of changing from the old system to poll tax is a reason for objecting to it, given the hon. Gentleman's comments that a future Labour Government will change the system again, he highlights a major practical argument against so doing.

The answer is an overall rating and tax system. I entirely agree with the remarks about tax made by the hon. Member for Norfolk, North-West (Mr. Bellingham).

Grants to local government over the past nine years have fallen from 74 per cent. to 34 per cent. Poll tax is high in our areas because of a history of a lack of grants, lower rateable values, and the absence of any compassion or care. I agree with Conservative Members that the old system had faults but poll tax will not do away with them.

I wish that I had more time because a lot remains to be said about the issue.

Hon. Members have asked why a married couple should pay two taxes. Time and again people have asked me why they have received a poll tax notification form with their husband's income on it. We must ask ourselves who pays if 50 per cent. of that income is taken away. Is it the husband, who then has to pay twice as much, or is it central Government?

Every time we tinker with the poll tax to try to refine it, it costs someone something. However, it does not cost the Government anything. They make sure of that, but the fault lies with them; the costs stem from them.

I agree with a certain lady, for whom I have a great deal of respect, who said that, if the Government had been a charity, they would have considered the poll tax and thrown it away, because they do not mind saving face. But the Government do mind saving face; and if they spoke the truth honestly and considered the anomalies they would forget the tax.

Let us all sit down together to devise a proper system to finance local government not only for next year or the year after but for decades to come, irrespective of what political party is in government.

8.41 pm

The hon. Member for Halifax (Mrs. Mahon) said earlier that she did not intend to pay the community charge. I was appalled when she said that apparently there are bishops and other Church leaders who support her in that non-payment. We are not far past Easter, and I seem to remember that in the Bible Jesus advocated a lawful approach to the payment of tax. I do not recall that Jesus advocated a greedy approach to the law, or said that one should obey the laws that one likes and flout laws that one does not like. When Church leaders are so out of touch with biblical principle, is it any wonder that churches are empty?

I wish to draw attention to the community charge in Wales and how it affects my constituents. I have a strong complaint against my own Front Bench, because the list of councils to be capped, which was announced on 3 April, did not include any councils in Wales. I know that that is not the fault of the Secretary of State for the Environment, because it is the responsibility of the departing Secretary of State for Wales.

In Wales, total spending by all county and district councils will increase by £223 million this financial year—a 12 per cent. increase. That burden will fall disproportionately on my constituents. Cardiff council wants an increase of £10·2 million and South Glamorgan an increase of £26 million, which is more than £36 million out of the total for Wales of £223 million.

The increase is not widely spread, because South Glamorgan comprises only five constituencies and Cardiff, with an increase of some £10 million, represents approximately three and a half constituencies. In other words, my 54,000 constituents in Cardiff, North will have to bear an impost of an extra £8 million, and that is merely the extra this year.

On 3 April, the same day that the Secretary of State made his announcement about English councils, my right hon. Friend the Secretary of State for Wales, in a written answer, responded to my question about capping Welsh local councils. He said that he had similar powers to the Secretary of State for the Environment and that he had determined the principles upon which local councils in Wales would be capped. He had determined that no councils in Wales should be capped.

If the same formula was applied to Wales as to English local councils, that decision was wrong. In Wales, the figures for the community charge are slightly lower, I am glad to say. The charge is only meant to raise some 15 per cent. of the total of local council spending. It was laid down that the increase over standing spending assessment for English councils should be at least 12·5 per cent., an increase of £75 per adult, and capping would have to result in a reduction of at least £26 per adult. In Cardiff we satisfy at least two of the three tests.

I have it on the good authority of my colleague Councillor Martin Davies—the shadow chairman on the South Glamorgan council finance committee—that each council could easily have been capped by £50 per adult without affecting the essential services that either South Glamorgan or Cardiff council provide. Therefore, we satisfy the test of a reduction of at least £26. We also satisfy the 12·5 per cent. test. When calculated in total, the community charge for the two councils exceeds the standard spending assessment by 60 per cent. That is the size of the imposition upon my constituents.

As the figures are lower in Wales than in England, we do not satisfy the requirement where the increase has been more than £75 per adult, because the charges—some of my English colleagues may think that we are in a preferential situation—are £175 for the county council and £78 for the city council making a total of £253.

It is ironic that the neighbouring district council is the Vale of Glamorgan, which is Conservative-controlled, and which provides almost the same services as Cardiff. Whereas Cardiff is charging £78, the Vale of Glamorgan which is a smaller council and a more rural area is charging only £24. The Vale of Glamorgan has a Labour Member of Parliament, and he has directed attention to his council, saying that it is spending significantly in excess of the standard spending assessment. I know that many of my constituents would cheerfully swap their charge for the charge being levied there.

Many of us in Cardiff, North feel let down. It is significant that there is to be a change of Secretary of State for Wales. I know of and appreciate the courage of many Conservative councillors on both councils in Cardiff who did not want capping. They preferred to go into the next election in May next year better armed. However, I regret that the Secretary of State for Wales did not give that relief to my constituents and that we do not have capping.

I am well aware that the incoming Secretary of State for Wales is sitting on the Front Bench. I am glad to take the opportunity to mention an important Welsh matter when he is to reply to the debate. Perhaps this is the first reference to his new office. He may think that this is not the most appropriate occasion to refer in detail to what I have said about Cardiff, but I know that he is taking full notice.

I realise that it is now too late for Cardiff and South Glamorgan councils to be capped. Instead I look forward to the introduction of accountability. People in Cardiff are now much more interested and better equipped to see how our money is spent. I fear that the money will not be spent in the Conservative constituencies of South Glamorgan. In the two constituencies in the north of Cardiff there are but two leisure centres, and our roads are the last to be maintained—

No, I do not think that I should give way because the hon. Gentleman has not had the courtesy to attend any part of the debate before and I know that many of my colleagues have sat here all day. In the interests of brevity I shall not give way.

When spending decisions are being made by the left-wing controlled councils of Cardiff and South Glamorgan, there is a political dimension and they discriminate against Conservative areas. Some of our schools are in the poorest state. For example, Llanishen high school is in such a bad state that even the local Labour party acknowledges the state for neglect that the Labour-controlled county council has reduced it to.

Of course, two of our wards last year made the mistake of electing Labour councillors, including the ward of Llanishen. That is a self-defeating, futile objective. It confirms, if confirmation were necessary, that the Labour group can continue to discriminate against Conservative areas, such as Llanishen high school. As long as there are Labour councillors, there will be no effective complaint.

Local management of schools might provide relief, but capital spending and major repairs would still be the responsibility of the Labour-controlled county council. For the benefit of the hon. Member for Cardiff, South and Penarth (Mr. Michael), who was not here earlier, the county council will be spending £234 million, an increase of £28 million, but how much has it found to rectify its neglect of schools? It has found £1·6 million.

The catchment areas of our schools are also being manipulated. Political manipulation of the education policy in South Glamorgan means that I sympathise with the proposal that education spending should be taken away from county councils. I do not support it in principle, but the experience of my constituents tempts me to adopt it. Accountability will come into play. Two local community councils in south Wales are already coming under the most intense scrutiny.

Last week, a packed meeting voted that one of the community councils should be disbanded because of the excessive community charge. That was not in my constituency, or in a Conservative-controlled area; that was in Vaynor, which is in the Merthyr Tydfil and Rhymney constituency, the safest Labour seat in the country. Electors are now deploying the accountability weapon to try to bring their community councillors to heel. Roll on next year and the Cardiff council elections. I predict that the skids are under the left. It cannot fool all the people all the time. Accountability will bring the left to heel.

Several of my hon. Friends have already referred to the standard community charge. Constituents are going to see their Members of Parliament and telling them that they have two homes, not because they want a second home but because they have moved jobs and cannot sell their former home. One of my constituents was advised at the city hall in Cardiff, I hope facetiously, that he should separate from his wife—that he should live in one of the homes while his wife lived in the other—as the only way of avoiding the standard community charge. If people cannot sell when they move jobs, or if they inherit a house and cannot sell it, they may face hardship.

The second home will not be liable to the standard community charge for only three months. I hope that the Department of the Environment and the Welsh Office will look again at that problem. It is unsatisfactory to leave this merely to the discretion of local councils. Already we regret the fact that local councils have not exercised discretion over setting the level of the standard community charge. I should like the exemption period to be extended from three months to at least 12 months, or even for as long as it takes if people can show that they are genuinely trying to sell the second house. They ought not to have to bear the cost of the second standard community charge when the house is clearly not their second home. I hope that there will soon be action to resolve that problem.

8.52 pm

If I express the same sentiments more gently and more softly than my hon. Friend the Member for Glasgow, Hillhead (Mr. Galloway), I hope that Ministers will listen to a Scot.

In his absence, about which I do not complain, I wish to make one remark to the hon. Member for Gravesham (Mr. Arnold). He said that Labour Members of Parliament are enjoying this. In truth, the discomfiture of political opponents can be delicious, but this matter goes far beyond the cheap discomfiting of political opponents. For a reasonably assiduous constituency Member of Parliament trying to do his job, like me, the poll tax in the second year of its operation is misery. I am not trying to have anyone on; there would be no point in doing so. However, it gets worse, not better. Any Conservative Member of Parliament, or anybody else, who thinks that these are teething troubles and that the problem will go away is mistaken. There is a geological flaw in such an argument: property is static but people are mobile. As long as people are mobile, the problem will continue.

I have been privileged to be a Member of Parliament for 28 years. My constituency surgeries now are the most embarrassing, fraught and difficult that I have ever experienced, by any exponential factor. I see that some Conservative Members are nodding; I think that they have some idea of the taste of things to come.

My hon. Friend the Member for Wentworth (Mr. Hardy) referred to the anger that has been injected into the debate. I have three questions. The first concerns a reference to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). Despite all the criticism that has been levelled at him, my hon. Friend has been intellectually rigid and has worked hard to obtain some solution. In the deepest sense, my hon. Friend is a very honest man. He has been struggling to find some an answer to the problem.

As for the question of a property tax, I make no bones about the fact that I should be in favour of returning to something similar to the rates. In the early 1980s, there was panic in Scotland about something that was not fully understood. Scottish rating is not the subject of the debate. However, wrong lessons were learnt as the result of an outcry by a comparatively small section of the community.

My first question is this: what are the English doing? Are they looking at the Scottish experience? If I were an incoming Minister, I would spend a week in Scotland and look at what is happening there. It has been put about by Conservative Members of Parliament who are friends of mine that they were told, "We do not know very much about Scotland, old chap. English Ministers do not have very much to do with Scotland." That is an extremely unwise attitude. The experience of the poll tax in its second year of operation is wholly different.

I ask my second question not in banter but in seriousness: what are Ministers going to do to protect the officials who have to handle the poll tax? My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) referred to the fact that benefit claims have been stopped in social security offices. In my region, Lothian, it is a matter of public record that courses in self-defence are now offered to social security staff, poll tax staff and local government staff. I have tabled a question as to what form of karate, tae kwan do or judo will be offered. In one sense, that is ribaldry, but when serious authorities are offering courses in self-defence, what on earth is Britain coming to?

The figures given by my hon. Friend the Member for Hillhead are accurate. In Strathclyde, 400,000 people are behind with their payments. That represents 23 per cent., or £101 million. Comparatively few people are refusing to pay as a political protest. They are mostly people who genuinely cannot pay.

That brings me to my third question, which involves sanctions. What do Ministers propose should be done, because in year two the system is that much more advanced? It is not just a question of putting letters through letter boxes but of having to deal with people who have not paid. Are there to be sanctions against 400,000 people and, if so, what sanctions will they be? For heaven's sake, we are not talking about prison, are we?

If we are, what else? My hon. Friend the Member for Wentworth has returned to the Chamber. I referred to his comment about anger. That is what we are facing.

I promised not to speak for long, so I leave it at those questions: the Scottish experience and what is being done about it, what is being offered to staff in the way of protection and, finally, the sanctions that will be applied when it comes to the crunch, because for us in Scotland it has come to the crunch.

9 pm

A number of right hon. and hon. Members who have spoken this evening have blamed high spending by local authorities as one of the chief causes of difficulties with the community charge. I would not depart from that practice in referring to Gloucestershire. If the same amount of money as has been collected in community charge this year were collected under the rating system, the rate increase this year would amount to no less than 55 per cent. or an average rates bill of £664. But that is not the respect in which I wish to blame the local authorities this evening. They stand charged with a much more serious offence which has not been covered to a great extent in tonight's debate.

I wish to focus most of my remarks on the operation of the standard community charge and pick up some of the points made by my hon. Friend the Member for Cardiff, North (Mr. Jones). The standard community charge has been characterised by a failure on the part of local authorities to exercise appropriately the powers that they have been given to set different multipliers for different classes of property and personal circumstances.

I am bound to say that the standard charge is something of a misnomer. It is inaptly named because the community charge system is essentially based on a personal charge. In common parlance, people would regard the personal charge as standard or basic, so the use of the word standard to imply something other than what the majority of people pay is a mistake. It would be better to call it special, adjusted or exceptional to show that it is not what the average person pays. It is often but not always double what the average person pays. The average person who comes into the category of having to pay a standard charge that has been set at double rate—it is often but not always double what the average person pays—in the overwhelming majority of cases is paying a triple rate because he is also paying his original personal charge.

The main failure on the part of the local authorities in relation to the standard charge seems to be in distinguishing between its application in relation to second homes and second properties. My hon. Friend the Member for Cardiff, North made the point that second homes that are furnished and lived in for half the week or the year are deliberately retained as an additional place to live represent a category of dwelling that is completely different from a second property that a person is endeavouring to sell, but because of the difficult market is unable to do so.

When I listened to my hon. Friends the Members for Chorley (Mr. Dover) and for Staffordshire, South (Mr. Cormack) I began to wonder whether they had paid sufficient attention to the scope given to local authorities to recognise the difference in circumstances between those who have second homes and those who have second properties. I refer them to a written answer in Hansard on 21 March, column 658, which was given in reply to my hon. Friend the Member for Gillingham (Mr. Couchman) by my hon. Friend the Minister for Local Government and Inner Cities. He set out in great detail the scope that is available for local authorities to recognise individual circumstances when they set the standard community charge. The important factor is that much of the bad publicity about the community charge, and much of the condemnation of it as a system, have arisen because people have picked out one or two highly emotional examples which have often related to what has been a manifestly unfair imposition of the standard community charge, normally in its double format.

Let me cite a couple of examples from close to my constituency. Miss Jean Godbold of Hucclecote lodge lives in the Gloucestershire, West constituency, but she was the talk of virtually everyone in Gloucester. She had been living in the upstairs part of her property. Owing to failing eyesight and health, she moved into the lower part of her property, and the upper part was made into a self-contained unit. She immediately received a bill for her personal community charge for the lower part of the property—correctly—and one for standard community charge for the upper part of the property. The standard community charge was levied at the double rate.

Tewkesbury council—her local council—said that that was unfair in theory and in practice. However, it did not acknowledge that, had the local authority got its act in order at the correct time—before 1 April—the problem could have been avoided. It could have created a class that made the multiplier zero-rated, and then Miss Godbold would not have been obliged to pay a double rate. The local authority then decided to blame the Government on the wrong grounds, and sought retrospective discretion to put right its mistake. [Interruption.] I appreciate that Labour Members do not wish to hear such examples, but I would like to give another.

Mr. and Mrs. K. Smith now reside at Woodend Cam, in the Stroud constituency, but one of them came from my constituency. They were a widow and a widower who decided to get married. They had two houses, but then they married and consolidated into one, and received a bill for the double community charge in respect of the house that they had left. The headline in the local Gloucester paper said:
"Triple poll tax a disgrace".
However, as far as I am aware, neither the press nor any of the radio stations mentioned that that problem could have been avoided if the class had been changed before 1 April, and an extension been made to what is clearly set out as class C.

Class C refers to properties that are unoccupied or unfurnished. They are allowed a zero multiplier for three months, but, provided that the local authority has created the class in advance, it has the discretion to extend the period for longer. That is especially important in the present housing market conditions. The failure to set the appropriate classes at the right time has caused more trouble, inconvenience and hardship, and has given the community charge a worse name, than almost anything else.

Three months' grace is nowhere near sufficient in the present housing conditions. Realistically priced houses are taking not three months to sell, but over a year. The people who happen to live or have properties in areas where local authorities have not taken the action when they should have are being unduly penalised as a result of a deficiency on the part of the authorities, which are seeking to blame the Government. The local authority could have extended those three months to 12 months or two years if it had thought about it at the right time and had applied it to all classes of such property in its area.

Some local authorities are using a discretion whereby they defer collection of the charge for properties that Call in that category until they have been sold. I do not know whether this is permissible under the rules—that is a matter for them and their auditors—but it makes it fairer and easier on the vendor's cash flow. However, that would not be necessary if local authorities had acted at the correct time.

I have mentioned how local authorities have not exercised the powers that they should have, but there are many examples of them exercising their powers on the basis of a misunderstanding. I am referring to those examples, plenty of which have appeared in the press, of couples who propose to get married and are living at their respective parents' homes. They buy a property to do it up with the prospect of moving into it later, but in the meantime they receive a personal community charge bill at both homes and a standard community charge bill for the house into which they propose to move, which more often than not is levied at the double rate.

Class A of the description of classes clearly refers to property requiring structural work to make it habitable. Such property is zero rated for standard community charge purposes for six months after the work is completed. If local authorities took the trouble to look at that, they would realise that there is no need for people to be caused the anguish of being sent an erroneously calculated standard community charge bill.

Similar provisions apply to property that has been inherited. There have been much publicised cases of the community charge bill arriving within days of the death of the owner of the property and being picked up by their next of kin. Several local authorities have clearly ignored the perfectly clearly set out example of class E, which provides for zero rating of standard community charge for three months after probate has been granted.

All those examples are different from second homes being occupied not as the sole or main residence but because for one reason or another someone needs or wants a second home. It may be argued that the validity of applying a double community charge is doubtful because such a second home does not require further expenditure on the roads that lead to it, that the risk of calling fire engines is no greater and that its demands on the education service are much the same as a main residence. None the less, one could sustain the argument that in parts of the country a double community charge is desirable to discourage people from having a second property. If the argument is made out that a double charge is valid in those circumstances, it follows that the argument is not made out in respect of second properties which are not occupied or wanted as second homes.

The hon. Gentleman said that he would talk about the second home tax, but he has considered its effect outside his constituency. Should hon. Members assume, therefore, that in Gloucester everyone who is running a business is happy about the uniform business rate and that all the poll tax payers are happy with the poll tax?

That was an extraordinary intervention. I am talking about the standard community charge. The views of many people in Gloucester were greatly influenced by the much publicised examples that I have given. That is why I emphasise them now. It is high time that more people realised that often this is the fault not of the Government but of the local authority.

On a different point, quite serious newspapers, such as The Times, The Sunday Timesand the Financial Times—rom which I recall specific examples—have argued that somehow Members of Parliament can choose the property where they would pay the personal community charge and the property on which they would pay the standard charge. Although this news was much publicised, Members know that that is wrong and that the decision rests with the community charge registration officer. It is important to place it on record that many people have misinterpreted the position.

Mention has been made several times of mixed hereditaments where the standard community charge can apply. A flat above a shop may have been used for many years, not for residential purposes but to provide storage space for the shop. Nevertheless, it is categorised as residential property. It is therefore possible for the uniform business rate to be applied to the shop premises but for the flat above to attract a standard community charge. Such places could be covered if local authorities were to create a class order at the right time.

The Government may not have as much information as they should about the standard community charge. They do not appear properly to have registered the list of multipliers and classes that have been decided at local level. My questions to elicit that information have revealed that it has not been properly collected. On 4 April, I was disappointed to receive the following answer from the Under-Secretary of State for the Environment—my hon. Friend the Member for Southampton, Itchen (Mr. Chope)—
"I have not yet gathered the information requested except on an informal basis from a few authorities on a basis which did not imply that it would be published."—[Official Report, 4 April 1990; Vol. 170, c. 665.]
I was pleased to learn subsequently that local authorities are now required to make a return by the end of May which will set out the multipliers and classes.

I hope that when those returns come in my right hon. Friend the Secretary of State will, if necessary, exercise his powers. It may be possible to have a resolution applying from 1 April that would override the powers of local authorities that had failed to exercise the discretion that they were given. That would be desirable, especially for properties for sale. A local authority could establish a class providing zero rating for 12 months. If that is not done, an undertaking must be obtained from the local authority that it will get its act in order in time for next year. Unless such an undertaking is forthcoming, my right hon. Friend the Secretary of State should exercise his powers to