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Commons Chamber

Volume 173: debated on Tuesday 22 May 1990

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House Of Commons

Tuesday 22 May 1990

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business


Order for Second Reading read.

To be read a Second time on Thursday 7 June.


Training And Enterprise Councils


To ask the Secretary of State for Employment what recent representations he has received regarding TECs.

I have recently received a number of representations regarding training and enterprise councils covering a range of issues. I warmly welcome the interest that has been shown in the councils from all quarters, and I am particularly encouraged by the enthusiastic response from business leaders. The TEC programme is currently two years ahead of schedule, with 72 TECs already having received development funding. I can announce today that I have now approved the 13th TEC to enter its operational phase, the East Lancashire TEC.

Although I welcome the greater involvement of the private sector and the decentralisation of the management training schemes, in view of the crucial importance for the future prosperity of Britain of our industry remaining fully competitive with those overseas, will my right hon. and learned Friend assure the House that he will monitor most carefully the performance of TECs in delivering to British employers the sort of highly trained work force that we will need in the 21st century?

My hon. Friend is right to emphasise the importance of performance. TECs will operate a performance-based contract and will report regularly to me on their management and financial performance. The Department's training standards inspectors will monitor the quality of the training provided.

The Department's brochure issued last year called for people who were chairmen, chief executives or top operational managers at local level to be involved in TECs. That is good as far as it goes, but does the Secretary of State recognise that that may exclude people who have expertise in training? What steps is he taking to ensure that TECs and their counterparts in Scotland, local enterprise companies, have people involved in them with some expertise in training? Is not it important to have trainers involved?

Of course, as the hon. Gentleman syggests, the involvement of trainers is important. There is ample scope for their involvement with training and enterprise councils, without necessarily serving on the boards of those councils. We now have about 1,000 chairmen and chief operating officers all over the country giving voluntarily of their time to the training and enterprise councils. They have the clout to make sure that those councils will deliver the results that I hope we all want.

Does my right hon. and learned Friend. accept that the TECs will play an important role in the training of disabled people for work, and that there is a danger that some of the existing schemes may be lost if there is no requirement that every TEC board includes someone with direct responsibility for the training of disabled people?

My hon. Friend is absolutely right to emphasise the importance of providing adequate training for disabled people. That is a matter dealt with in the TEC' contract, and about which the TECs must satisfy me before approval is given.

Will the Secretary of State confirm that according to his own Department's documents, cuts in youth training are expected of not just 7 per cent., but IS per cent. after inflation and, in some areas, 30 to 50 per cent., with the loss of thousands of training places and hundreds of trainer jobs? How can we begin Britain's training revolution by savaging Britain's training budget?

The hon. Gentleman constantly seeks to raise alarms about such matters. During the past four years, training spending by Government has increased in real terms by 60 per cent. at a time when unemployment has fallen by 50 per cent., so it is not surprising that some adjustment should be made this year. We are determined to maintain the guarantees on youth training and employment training, and the quality of training. But we have no commitment to ensure that every training provider who provided training last year should also do so this year, next year and for every year into the future. We believe in adapting to the needs of change and ensuring that those best able to provide the sort of training we want will do so.

Self-Employed People


To ask the Secretary of State for Employment how many people were self-employed in December 1989.

In December 1989, there were 3·3 million people in self-employment in the United Kingdom, an increase of no less than 70 per cent. since 1979.

Bearing in mind the fact that those are the last figures for the 1980s, how does the trend in the number of self-employed during the 1980s compare with the trend during the 1970s? Will my hon. Friend confirm that he has no plans to reduce the number of self-employed by raising a levy on the payroll of the self-employed, by removing the upper earnings limit on the national insurance contributions of the self-employed and by loosing the trade union bully-boys on the employees of the self-employed, all of which are the official policies of the Labour party?

In addition to that catalogue of the Labour party's official policies, the Labour party expects Brussels to play a significant role, with the added regulations and burdens that such EC intervention would impose on small businesses, all of which will be apparent if my hon. Friend cares to read the report of the debate in the House last night. Opposition Front-Bench spokesmen cannot get away from the fact that during the previous Labour Government the number of self-employed fell by 5 per cent. while under this Government it has risen by more than 70 per cent.

How many people entered the enterprise allowance scheme in 1987 and what percentage have survived as ongoing genuine businesses? Does not the Minister understand that such schemes do not provide a genuine means of starting up new businesses, but are simply financially more attractive than the dole in the short term and give rise to all kinds of scams, such as the one that I discovered in Dundee—a delivery service for condoms?

The hon. Gentleman is completely out of touch. We have just announced the 500,000th participant in the enterprise allowance scheme and yesterday I gave an award to a young lady who was the 10,000th EAS recipient in Nottinghamshire. More than 600,000 people are now working because of EAS who would not have been had it not been there.

British Tourist Authority


To ask the Secretary of State for Employment what resources he plans to provide in the current financial year to the British Tourist Authority.

The British Tourist Authority will receive £27·7 million in 1990–91, an increase of 11 per cent. over 1989–90.

Last year, Britain earned £7 billion from overseas tourism, £150 million of which was earned by Nottinghamshire from visitors attracted to our famous Sherwood forest. Does my hon. Friend agree that Nottinghamshire should be the site of the new national British forest?

My hon. Friend will be aware that there was a consultation exercise earlier this year on the siting of the new national forest. That is a matter for the Department of the Environment, but I accept that while the discerning tourist may not expect to see Robin Hood and his merry men, he needs the reassurance that there were sufficient trees for them to hide behind in the first place.

Does the Minister accept that we have four excellent tourist boards in Scotland, Wales, Northern Ireland and England, and that the British Tourist Authority in many ways duplicates their work? Does he agree that there would be a considerable saving of public expenditure of £27 million if it were abolished?

I cannot agree with that assessment. If the right hon. Gentleman looks at the recent tourism review he will see that the fears that had been expressed about a possible duplication have been taken care of. The work of the British Tourist Authority abroad shows that there is no such duplication. If, in the light of his experience, the right hon. Gentleman does not accept that, he will let us know, but I urge him to look at what was said in the review.

Does my hon. Friend agree that Michael Medlicott, the chief executive, and his team at the British Tourist Authority do a vital job spearheading the marketing of an industry that contributes more to Britain's gross domestic product than the automotive industry? What plans does the BTA have for stepping up tourist revenue from other European Community countries?

My hon. Friend is entirely right to draw attention to the work of the British Tourist Authority in promoting this country abroad. He may be aware that my noble Friend Lord Strathclyde, the Minister with responsibility for tourism, recently went to America and saw for himself the value of the work being done. It is for the BTA to decide, on a day-to-day basis, how to promote this country abroad. This year, however, the Government have contributed about £27·7 million, an increase of about 11 per cent. on the previous year.

As the tourism is a multi-million pound industry, why is it denied equal treatment with other industries? Why has the Department of Trade and Industry denied grants to the industry to encourage it? I draw to the Minister's attention the fact that section 4 grants are being denied to tourism. They would help to improve the number and quality of hotels and other related matters that are so important to the industry.

The curious thing about the Opposition is that whenever they see a successful industry they want to kill it off quickly by the dead hand of state support. Tourism is an extremely successful industry which generates many jobs. The pity of it is that the service jobs generated by the industry are so often decried by the Opposition. The industry is thriving and it will do much better without the measures that the hon. Gentleman has in mind.

When my hon. Friend considers giving more grants to the British Tourist Authority, with which I entirely agree, will he lean on it and ask it to encourage restaurants to print their menus in English rather than in French? Is not it a fact that tourists and British people find it totally unacceptable to have to read menus in French rather than in English? [Interruption.]

As my hon. Friend can hear from the bon viveurs on the Opposition Benches, there may not be complete consensus on that point. I do not believe that I should make generalisations upon it. I am sure that the British Tourist Authority, the English tourist board and the other tourist boards pay attention to the exchanges in the House and that they will take note of what my hon. Friend said.

Low Pay


To ask the Secretary of State for Employment if he will make a statement on Her Majesty's Government's policy on low pay.

The best way to help the lower paid is through continuing economic and employment growth and greater prosperity for all.

What action has the Department taken on the 5,528 establishments that underpaid in 1989? How many of them have the Department prosecuted, and is it a record of which he is proud?

About 30,000 inspections were carried out by the inspectorate last year. About 97 per cent. of all the inspections revealed that proper payment was being made under the terms of the orders and that the ratio of pbhzcutions to establishments underpaying is higher now than it was in 1979.

Will my hon. Friend confirm that proposals for a national minimum wage will lead either to an ineffectual gesture or, if they are effective and enforced, to the pricing out of work of people from the weakest section of the community?

I agree completely with my hon. Friend. If one accepted the Opposition proposal that the national minimum wage should be set at half male average earnings, an estimated 750,000 people would lose their jobs.

Why does not the Minister answer the question that he was asked? How many were prosecuted?

The inspectorate must take into account all the facts revealed, following the reviews that it makes after visits to premises. I shall write to the hon. Gentleman with the details.

Does my hon. Friend agree that a minimum wage would be even more damaging if it were as proposed by the European Community in the social charter, which is supported by the Opposition? Would not that damage not just British but Community interests?

I completely agree with my hon. Friend. We in Britain have been extremely successful in creating jobs—a great deal more successful than our European partners. The major reason for that is that we have followed a deliberate policy of deregulation which has led to more jobs than elsewhere.

Is not the truth that the Government are positively in favour of low pay? They have deliberately removed a whole series of protection and there has been an enormous growth in low pay in Britain. Low-paid work goes with low investment, poor training, high labour turnover and low technology and carries a large part of the responsibility for Britain's poor economic performance. Will the Minister confirm that every other country in Europe has a national minimum wage and that Britain would do better to have one?

In so far as I was able to count the number of questions that the hon. Lady asked, I am confident that the answer to all of them is no.

Union Assets (Sequestration)


To ask the Secretary of State for Employment whether he has any plans to restrict the power of courts to sequestrate union assets.

No, Sir. Sequestration is a penalty which may be imposed by the courts, where appropriate, for any contempt of court. Any proposal to restrict that power would enable trade unions to flout the law with impunity.

Does my right hon. and learned Friend agree that it is essential that the courts should have full power to sequestrate the assets of trade unions if trade union law is to be enforced, and that any attempt to diminish those powers would draw the teeth of legislation that has served us so well in trade union reform since 1979?

My hon. Friend is absolutely right. It is not without significance that in the very week that Arthur Scargill calls once more for industrial action the Labour party will be introducing proposals to make it easier for him to put his bully-boys back on the streets of Britain.

But does not the Minister acknowledge that for any court to sequestrate all the assets of a trade union and thus prevent that union from paying its elderly members their pensions and superannuation benefits would be totally unjustified, and that any even-handed Government should legislate to make sure that that could not happen?

All that a union need do to avoid those consequences is obey the law. I hope that the hon. Gentleman and all his hon. Friends will encourage trade unions to obey the law so that none of those consequencies ever arises.

Does my right hon. and learned Friend agree that those who wish to repeal the legislation are

"frozen fossils locked in a time warp",
to use the words of Eric Hammond, leader of the electricians' union?

I agree with my hon. Friend, but there is perhaps one difference. Unlike frozen fossils, those proposals have the potential to wreak infinite damage on the British economy and on the economic prospects of every man, woman and child within it.

Disabled People


To ask the Secretary of State for Employment if he intends to change the 3 per cent. quota provision for the employment of disabled people.

All aspects of the quota scheme are being considered in the review of services to people with disabilities which my Department is undertaking. We expect to publish next month the consultative document giving the results of the review.

Is the Minister aware that 250,000 disabled people who are able to work and available for work have no jobs? That is not because of the failure of the quota system, but because of the Government's failure to enforce it. Will the Minister study the West German system which imposes a 6 per cent. quota and a levy on employers who evade it? Will he stop making excuses about disabled people not being available and follow the West German example?

The right hon. Gentleman knows very well that the consultative document will discuss, among other things, the quota system. Registration as a disabled person is voluntary, and only 1 per cent. of the work force have registered as disabled. So, by definition, it is not possible to meet the 3 per cent. quota. That will be explored in the document and I am sure that the right hon. Gentleman will wish to contribute to the discussion that follows its publication.

Does my hon. Friend agree that the ability of the disabled to take up the available jobs is as important as the quota? Does he agree that the employment premium for the disabled will be of enormous help, but that training is vital? Training for the disabled often involves a greater ratio of trainer to trainee than for the rest of the population. Will my hon. Friend ensure that that is taken into account when considering training for the disabled?

That is being and will be taken into account. That is also the reason why the Government consider it especially important to provide special aids to employment to get people into employment in normal workplaces. That has the general support of the community.

Does the Minister accept that the fact that there may be weaknesses in the present quota system is not an argument for doing away with it altogether, but an argument for overcoming the weaknesses to ensure that disabled people are helped into employment? In that context, will he ensure that as the training and enterprise council system develops, enough money is earmarked for the needs of disabled people so that they can have adequate training without any negative effect on the targets set for those running TECs?

We very much look forward to the hon. Gentleman's comments on the consultative document on issues such as those he has outlined. I am sure that they can be explored within the context of the document. There are many different views and it is important that we move towards a better understanding of the arguments on every side. I assure the hon. Gentleman that I know from my discussions with many TEC directors that they take their responsibilities for the disabled very seriously, and that is recognised in the contracts signed with the TECs that have gone operational.

Will my hon. Friend confirm that as the number of registered disabled people has declined in recent years, the number of disabled people obtaining work has increased? Will he say whether during his current inquiries he has examined the ability of Government Departments to meet the quota figure?

My hon. Friend is absolutely right. We have been fairly successful recently in helping people with disabilities into jobs. Last year, for example, 77,000 people with disabilities were helped by jobcentres to find jobs, and that compares with 66,000 three years ago. On Government Departments, I assure my hon. Friend that my Department tries hard to recruit and employ disabled people; 2·7 per cent. of the Department's employees are disabled.

To return to training for the disabled, if the Minister is telling the House that the Government intend to maintain the quality and the guarantees, why did the Spastics Society recently withdraw from the employment training scheme because of underfunding and why are Share Community and Lambeth Accord likely to follow suit? If such providers are lost, where are the guarantees and the quality of training, and who will train the disabled?

There was an increase in expenditure on helping the disabled from £220 million in 1986–87 to £350 million in 1988–89—[Interruption.] The hon. Gentleman should listen to the facts. Participation in training courses increased from 11,800 in 1983–84 to more than 19,000 last year. That is the record.

Tourism (Black Country)


To ask the Secretary of State for Employment what assessment he has made of the growth in black country tourism and the potential for job creation.

There is every sign of an encouraging growth in tourism in the black country. A number of major projects are either planned or under construction. The black country tourism initiative has done much to help to develop tourism in the area.

Although my hon. Friend will be only too well aware of the reputation of the black country as the heartland of traditional manufacturing industry, which is thriving under this Government, is he aware of its growing reputation for its major contribution to tourism? A number of exciting new projects are taking place and there is a huge amount of investment, with people putting their faith in the region. Jobs are also being secured and created. Will my hon. Friend do me the honour of allowing me to take him on a day trip round the black country—starting, of course, in Wolverhampton—so that I can show him some of the attractions and so that he can meet many of the employees who are doing their best to attract visitors to the black country?

My hon. Friend makes me an offer that it would be churlish to refuse, and I look forward to the visit. I am well aware of the attractions of the black country. I think that I am right in saying that my hon. Friend was a member of the executive committee of the co-ordinating body that looks after tourism in the black country.

My hon. Friend referred to the number of jobs that had been generated in the area. Black country tourism initiative staff estimate that, directly and indirectly, about 2,000 jobs will be created in tourism. I am certainly well aware of the work of the Heart of England board. From my tours in that part of the world, I can confirm that it is a delightful area, and its tourism potential has not yet been fulfilled.

My hon. Friend and I have crossed swords on this matter before, and he will know my view that while it is most gratifying to have an income from tourism and the job creation that it entails, there is also a danger of ruining parts of England, as other parts of the world have been ruined. In the west midlands, for example, Stratford-upon-Avon is so crowded that it is getting near bursting point.

I was not aware that I had crossed swords with my hon. Friend, but if he says that that is what happened, so be it. I accept that there is a paradox and that a dilemma arises: we want to attract people to particular areas because they want to see what is there but in the end tourism may destroy the very things that people want to see. My hon. Friend may have seen a perhaps slightly tongue in cheek article in The Daily Telegraph today by Lord Grimond, who draws attention to precisely the problems to which my hon. Friend refers. I cannot offer my hon. Friend an answer or solution, except to say that this is something that we shall certainly have to watch.

Technical And Vocational Training


To ask the Secretary of State for Employment if he will make a statement on the future of the technical and vocational education initiative.

The public expenditure White Paper shows planned expenditure in the TVEI of £134 million in 1990–91, £133 million in 1991–92 and £141 million in 1992–3. I am considering the future rate at which authorities can join the programme.

Do I understand from that answer that the Secretary of State is about to announce a cut in the rate of expansion of that service, which will mean that the six authorities in Scotland, including Tayside, Argyll, Ianark and Ayr, will lose out? This is an important matter because in Scotland children choose in June the subjects that they will study. They start the following year's programme in June and have already made their choices by then. A cut will demoralise teachers and pupils who have chosen courses that will not exist next month.

The figures that I quoted are well known and in the public domain. It is always made clear that the rate at which new authorities can be admitted to the programme will depend upon the availability of resources, and that is what I am considering for next year.

Some of the equipment installed in the early years of the TVEI is obviously in need of replacement. Is my right hon. and learned Friend satisfied with the speed at which that is being done?

I dare say that my hon. Friend is right, and there is always room for improvement. After the initial five years, the funding of the TVEI is, of course, a matter for local education authorities.

Why does the Secretary of State intend to cut the TVEI budget by £300 million between 1990–93 and 1994–98? Will he confirm that he regards that as part of the cuts crisis that is swamping his Department, or does he think that it is merely an adjustment?

There is no cuts crisis of any description. I do not know where the hon. Gentleman got his figures for the years from 1993 onwards. I have given the figures for the current public expenditure White Paper, and we are considering the pace at which we can admit further authorities to the programme.

Value Added Tax


To ask the Secretary of State for Employment what was the net increase in the number of businesses registered for value added tax in (a) 1978, (b) 1988 and (c) 1989.

Early indications are that the net increase in 1989 was around 80,000, compared with 64,000 in 1988. In the five years 1975 to 1979 together, the net increase was 85,000.

I thank my hon. Friend for that reply. Does not it show, by whatever criterion one would care to take, that this Government's commitment to small businesses is in contrast to that of the previous Administration? Looking to the future, how will we get those small businesses to grow into medium-sized businesses? How can they develop? In particular, they need management training to expand and become the employers of the future.

My hon. Friend is right. Almost as many businesses registered for VAT for the first time on a net basis last year as registered for the whole five years of the. previous Labour Government. My hon. Friend is also right to identify the critical importance to small businesses of management training. Most studies show that small businesses fail more as a result of poor or weak management than of any other factor. That is why my Department has put funding into businesses growth training to help small businesses and why we have played a major role in sponsoring open learning management packages.

Is not it the case that capitalism is poor and weak, at least at the lower levels and for smaller businesses, because nine out of 10 businesses fail in the first year due to the Tory Government's policies? We have learnt a lesson from that north of the border and that lesson has been learnt south of the border as well.

I know that this does not fit in with the hon. Gentleman's view of the world, but the fact is that well over 1 million more people work for themselves now than in 1979. That shows that the commitment to enterprise is alive and kicking.

Training And Enterprise Councils


To ask the Secretary of State for Employment what steps he has taken to ensure that training agencies operating under the new TEC system will be able to provide adequate services for training under their post-1 April 1990 budgets.

Training and enterprise councils set out their proposals for providing training in their corporate and business plans which they agree with me. Subsequently the standard and quality of the training being provided is regularly monitored by my Department.

How close is that monitoring within the present tight budgetary controls? In Ilfracombe, which often has the highest youth unemployment in the country, a training establishment has been brought up, closed and the young people are now trained 12 miles away at great cost to a new training establishment. How does my right hon. and learned Friend control the buying, closing and selling of businesses in that new growth industry—the training industry?

As I said earlier, the pattern by which training is provided will inevitably change from time to time. We cannot expect the same training providers to be in business year on year on year. The training and enterprise councils' operating agreement provides that non-employed trainees on youth training must be paid at least those travel costs in excess of £3 that are incurred in connection with their training. The councils will take that obligation into account in assessing matters of the kind to which my hon. Friend referred.

Is the Minister aware that earlier this afternoon the Prime Minister's Parliamentary Private Secretary was engaged in a training scheme on the Government side of the House? He was trying to get planted questions put to the Prime Minister and was going around giving training to Tory Members so that the Prime Minister would be aware of the questions that would come up when she turns up in the House at a quarter past three.

I am sure that no amount of training would enable anyone to predict a question asked by the hon. Member for Bolsover (Mr. Skinner) if he is fortunate enough to catch your eye later this afternoon, Mr. Speaker.

Will my right hon. and learned Friend liaise with his colleague the Secretary of State for Education and Science and encourage him to give greater autonomy to local education authority colleges of further education which, if given that autonomy, more self government and more responsibility for their budgets and employment policies, could market their wares far more effectively into a rapidly changing training market?

My hon. Friend will doubtless be aware of our proposals for pilot training credit schemes. Those who obtain the training buying power that the credits will provide will be able to use them at colleges of further education and I believe that that will go a long way towards achieving the objective to which my hon. Friend referred.



To ask the Secretary of State for Employment if he will estimate the numbers of employees receiving training in Britain.

Figures from the labour force survey show that, in the spring of 1989, 3·1 million employees received job-related training in the four weeks prior to the survey. That was an increase of more than 70 per cent. compared with the same period in 1984.

When will the Minister recognise that in the north-east of England the coal mining, shipbuilding and heavy engineering industries have now been decimated? They were the basis of good training schemes in the past. Such schemes need to be replaced by other means of training, which cannot be supported by the market forces philosophy. They need Government support. When will the Minister bear in mind the pleas of the Engineering Council and the Machine Tool Technologies Association for training, particularly in engineering, to be considered as a national asset, as it is in other European countries, where it does not necessarily respond to market forces?

I agree with the hon. Gentleman that training is important to the future prosperity of the north-east, as it is in the rest of the country. I am sure that the hon. Gentleman will join me in welcoming the splendid way in which the north-east has responded to the initiative to set up training and enterprise councils. Indeed, three of the first 10 TECs to be established were from the north-east.

Does my hon. Friend agree that, as the demographic trough bites in the 1990s, it is important that the reducing number of young people leaving school should receive the fullest possible training? Will he therefore liaise with his colleagues in the Department of Education and Science to ensure that, as the national curriculum develops, children leave school with the skills that they need to take advantage of the training opportunities that his Department is making available?

I completely agree with my hon. Friend. Liaison between schools and industry is extremely important. I pay tribute to the major contribution made by senior industrialists by going on to governing bodies of schools, by supporting the compacts scheme and various other schools—industry proposals that have been put forward, and are being put forward almost daily. They are extremely important. It is right that youngsters should be work-ready and training-ready when they leave school.

Noise At Work


To ask the Secretary of State for Employment whether his Department will commission any research into the effectiveness of the noise at work regulations.

The Health and Safety Executive is already planning to evaluate those regulations. During 1991 and 1992 it will be undertaking a survey of the extent to which the required measures have been carried out in industry.

Is the Minister aware that hundreds and probably thousands of people in St. Helens have had their hearing severely impaired by the dreadful noise levels that appertain in the glass industry and that they are still not covered by the noise at work regulations? Will the Minister accept an invitation from me to visit a glass factory in St. Helens so that I can convince him of the justice that those workers deserve?

I thank the hon. Gentleman for his courtesy in telling me that he wished to raise this issue. As I understand the position, the regulations apply to all places of work. I can see no reason why they should not apply to such a place of work. If the hon. Gentleman can tell me why he has been given that information or where the information has come from, I promise that I shall look into it at once.

Will the research into noise at work include the House of Commons? The noise here and the audibility of the system are such as to make work almost impossible sometimes.

The powers of the Government may be great, but they are not sufficient to take care of the level or quality of the noise in the House. I am afraid that both may defeat us.

Low Pay


To ask the Secretary of State for Employment what representations he received on low pay in the current year from the north of England.

Since 1 January 1990, my right hon. and learned Friend has received 13 representations on low pay from the north of England.

Why is it that more than 1 million people in the north and north-west of England earn what the Council of Europe defines as low pay? What possible moral justification can there be for a newspaper to publish advertisements offering people less than £2 an hour in the 1990s? People cannot live on that amount. What are the Government going to do about it?

I will tell the hon. Gentleman what the Government are not going to do. They are not going to do what the Opposition want to do—introduce a national minimum wage which will reduce the number of jobs available to the people of this country. The hon. Gentleman must remember that, if we were to introduce a national minimum wage of half average manual earnings, there is likely to be a loss of jobs of about 750,000 over three to four years. Low pay is a great deal better than no pay.

Labour Statistics


To ask the Secretary of State for Employment what was the average annual number of working days lost in (a) 1970 to 1979, (b) 1980 to 1989 and (c) the most recent 12-month period for which figures are available.

On average, there were 12·9 million working days lost a year in the period 1970 to 1979; 7·2 million in the period 1980 to 1989; and, it is provisionally estimated, 5·1 million in 12 months to March 1990. The number of stoppages in 1989 was the lowest for over 50 years.

Does my right hon. and learned Friend agree that that good news has some relationship to the massive improvement in the performance of British industry in the past decade? Does he further agree that a return to unbridled secondary picketing would destroy all the progress that British industry has made and would return us to the days of the 1970s when British manufacturing output fell under the last Labour Government?

My hon. Friend is absolutely right. Nothing would be more guaranteed to deal a death blow to this country's economic prospects than the Opposition's proposals to make striking easier, which would lower output, lower prosperity and lower the living standards of everybody in Britain.

Prime Minister



To ask the Prime Minister if she will list her official engagements for Tuesday 22 May 1990.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Will my right hon. Friend spend a few moments today recalling the material damage done to this nation, and the damage to its reputation and to individual liberties, by the episodes at Saltley, Grunwick, Wapping and during the 1984 miners' strike? Will she give a pledge to the House that, despite certain proposals from certain other sources this week, no Government under her leadership would legalise secondary industrial action or secondary picketing?

I am glad to give my hon. Friend the assurance he seeks. All who remember the scenes of the secondary picketing and the terrible intimidation recall also the admiration we felt for those who were determined to exercise their right to go to their place of work and who had the courage to go through the lines. I heard my right hon. and learned Friend the Secretary of State for Employment say a few moments ago that since we brought in our revised laws on secondary picketing and trade union reform the number of industrial stoppage last year was the lowest for a very long time.

Will the Prime Minister confirm, as her Chancellor acknowledged earlier today, that under her Government the tax burden on British families is higher than it has ever been under any Government in history?

I confirm that at all levels of income the rates of income tax have been reduced-on earned income, from 83 per cent., when we went into Downing street, to some 40 per cent. at the top rate, and, on the standard rate, from 33p in the pound to 25p in the pound. The people have done very well both as to increased income and reduced tax levels.

Yes, and after that disposable income has been obtained, people are then faced with doubled VAT, higher charges and now the poll tax, which is the reason why, as the Prime Minister should admit, she is charging the highest burden of taxation of any Government in history. Why are the Government and the Prime Minister so reluctant to claim what is truly theirs—the record for being the biggest taxers ever?

The right hon. Gentleman would put up taxes all right. [Interruption.] I doubt very much whether the British people want to go back to 83p in the pound on earned income and 98p in the pound on savings income, or to have their taxes put up, as I understand the right hon. Gentleman would like to do. Their incomes have gone up tremendously and most of them—indeed, all of them—have had a substantial increase in their standard of living.

Does the Prime Minister recall making the promise that the share of the nation's income taken by the state would be steadily reduced under her Government? She ratted on that promise, of course, but will she now admit that, after 11 years, and despite the oil revenues, the asset sales and the fiddle on the pensioners, her Government are still the biggest taxers in history?

We have by far the biggest income in history and the lowest tax rates since before the war. Perhaps the right hon. Gentleman will remember that under Labour Governments, when the spending went up and up and up, the Chancellor had not the courage to finance it honestly and took a public sector borrowing requirement that was equal to 9 per cent. of GDP, an amount that would now equal a borrowing of £44 billion a year.

Will my right hon. Friend confirm that her meeting last Saturday with President de Klerk of South Africa was extremely satisfactory and that she found him to be a man of integrity and courage and a man in a great hurry for reform? In those circumstances, will she continue to relax what few economic sanctions we have against that country, and withdraw from the innocuous Gleneagles agreement and resume sporting links with South Africa?

I think everyone has been impressed with President de Klerk's integrity and courage. He has embarked on a reform that will bring an end—[ Interruption.]

Order. We cannot have conversations across the Chamber. The Prime Minister is answering a question.

I shall start again, Mr. Speaker.

I think everyone who saw or heard him has admired President de Klerk's integrity and courage. He has embarked on reforms which are irreversible, which will bring an end to apartheid and which will, through negotiation, bring about a democratic Government on a non-racial basis. I believe that he deserves to be fully supported for the courageous reforms that he is making. I believe that there is now no place for sanctions and that they are almost irrelevant. Those people who want South Africa to have a prosperous economy should not support sanctions in any way.


To ask the Prime Minister if she will list her official engagements for Tuesday 22 May.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Is the Prime Minister aware that last year 514 fatal accidents were reported to the Health and Safety Executive, reversing the long-term downward trend in deaths at work? Given that background, can the Prime Minister explain why the HSE is seeking to make cuts in its establishment? Will she give the House the guarantee that, if the HSE wants more money to maintain or to improve the level of services that it now provides, that money will be made available?

As the hon. Gentleman knows, we believe that health and safety are of prime importance in the work force. Last year there were one or two terrible accidents that may have added to the total. We shall fully support the Health and Safety Executive in its arduous and very important work.

In view of my right hon. Friend's successful meeting last Saturday and the terrible killings in Palestine during the past few days, does she see any sign of an Israeli equivalent to Mr. de Klerk in Palestine?

As my right hon. Friend is aware, two of the great problems of the Arab-Israel situation at the moment are, first, that there is no Government of Israel with whom to negotiate and, secondly, there are no signs of talks beginning. We have done everything that we can—and will continue to do everything that we can—to try to get those talks started. Events almost every day show the importance of that. We shall pursue the matter through our usual channels.


To ask the Prime Minister if she will list her official engagements for Tuesday 22 May.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Does the Prime Minister agree that the subject of public health is above party politics and that the issue of BSE and beef has been subjected to the antics of politicians? Does she further agree that that issue needs to be tackled more firmly by the Government? Although British beef is indeed safe to eat, does the Prime Minister accept that she needs to consult further with scientists in the Department of Health and the Ministry of Agriculture, Fisheries and Food and with independent scientists? Will she please make a statement on that?

I am not certain whether the hon. Gentleman heard or read the debate yesterday. If he did, he will have heard my right hon. Friend the Minister of Agriculture point out that we commissioned the Southwood report some time ago, and took action upon all its recommendations. We could not have used a more distinguished scientist. We then appointed Dr. Tyrrell of the medical research council to advise my right hon. Friend further, and any advice that he has given has been taken by my right hon. Friend. We can do no better than take the best scientific advice available. The chief medical officer has also given his advice. We foresaw some of the problems, we appointed the scientists and we have taken their advice. The hon. Gentleman cannot ask for more.


To ask the Prime Minister if she will list her official engagements for Tuesday 22 May.

Will my right hon. Friend join me in condemning the disgraceful attack on graves in the Jewish cemetery in Edmonton? Will she send her sympathy to the family and friends of those who are buried there who have suffered?

I gladly respond to my hon. Friend's invitation, as would every hon. Member. Those attacks, wherever they occurred in the world, were appalling and should never have happened. We shall all do all that we can to ensure that they never happen again. We wish to express our sympathy for those who have suffered, and for all Jewish people everywhere who have been reminded again of such terrible events.

Does the Prime Minister agree that she would not be prepared to retain any individual in her Cabinet if it could be demonstrated that that person had been prepared to advocate an armed coup against the last Labour Government? Will she take action in relation to the letter from General Sir Walter Walker, in which he recounts details of a meal at which he was present with several City financiers, along with the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), and had to reprimand the right hon. Gentleman for taking exactly that line?

The hon. Gentleman brings out all kinds of tittle-tattle that is not worthy of reply. The last Labour Prime Minister answered the fundamental part of his question, and I have nothing further to add.


To ask the Prime Minister if she will list her official engagements for Tuesday 22 May.

Will my right hon. Friend confirm that her Government will not increase taxes on people with relatively modest incomes—such as graduate and medium-ranking teachers with responsibility allowance, local government officers or nurses in grades H and I—and then turn around and describe them as high-income earners, as the Leader of the Opposition did in Bootle yesterday? He would skin them alive.

My hon. Friend puts her own view in her own way. I entirely agree that many medium-income people such as some teachers, nurses and policemen would be adversely affected by the increases in taxation proposed by the Labour party. I hope that it will never be put into office to implement those increases.

Was not it very unwise, given the political situation in Northern Ireland, for the right hon. Lady to allow her Ministers in Northern Ireland—who do an excellent job within the community, far better than any other Minister—to campaign for a Conservative candidate who ended up in the last six in the election? That was lower than the Irish Independence party, Sinn Fein and the Workers party. Surely the Prime Minister cannot let that happen again.

In a democratic system, people are not precluded from putting up for a by-election if they wish to do so-unless they have to have a licence to do so in the Labour party.


To ask the Prime Minister if she will list her official engagements for Tuesday 22 May.

I am sure that my right hon. Friend will agree with me that on this side of the House we have history and tradition on our side. [Laughter.]

Does she think that it would be a good idea if we had a flag day to commemorate a day that is important to the Conservative party, such as the day on which Winston Churchill became Prime Minister—10 May 1940—or perhaps the day on which the task force set off for the Falklands to show the world that sovereignty and freedom came before everything else, or perhaps even the day that my right hon. Friend became Prime Minister? On the other hand, she might agree with me that the most significant day for the Conservative party was 1 October 1983, when the Leader of the Opposition became leader or the Labour party, went to Brighton beach and fell flat on his face. He has done just that every Tuesday and Thursday ever since.

I congratulate my hon. Friend on his ingenuity and clarity of expression. I entirely agree with him that we are the party with the longest history behind us and the longest future before us, all in serving the people.

New Member

The following Member took and subscribed the Oath:

William David Trimble, Esq., for Upper Bann.

Ballot For Notices Of Motions For Friday 8 June

Members successful in the ballot were:

  • Mr. Ian McCartney
  • Mr. Doug Hoyle
  • Sir Trevor Skeet.

Statutory Instruments, &C


That the draft Police (Dispensation from Requirement to Investigate Complaints) Regulations 1990 be referred to a Standing Committee on Statutory Instruments,&c—[Mr. Chapman.]

Drug Testing (Schools)

3.33 pm

I beg to move,

That leave to given to bring in a Bill to allow random—[Interruption.]

I hope, Mr. Speaker, that I get injury time for that.

I beg to move,
That leave be given to bring in a Bill to allow random drug testing of schoolchildren; and for connected purposes.
The opportunity to introduce this Bill would not have been afforded to me had it not been for the efforts of my hon. Friend the Member for Jarrow (Mr. Dixon), who spent most of the early hours one morning patiently waiting to reserve this spot, for which I record my gracious thanks.

The Bill aims to assist the many people who, over the years, have vainly attempted to stop children and others ruining their lives, and, more often, the lives of their families, by taking drugs. We are thankful for all the efforts to fight this curse in society, but while consoling some, those efforts cannot resolve the problem. Something more positive must be done, and that is what my Bill aims to do.

Over the years many attempts have been made to introduce similar Bills. On 9 December 1970, my hon. Friend the then Member for West Lothian, now Linlithgow (Mr. Dalyell) introduced his bill, Medical Inspection (Evidence of Drug-Taking) (School Pupils) Bill, as reported in the Official Report at column 429. That Bill was introduced 20 years ago, but Parliament has not yet legislated to solve a problem that is a menace to our children and a tremendous strain on our teachers and headmasters—the educationists—medical officers, doctors, the Health Service and many others. Above all, that menace is a strain on the sick society that allows our young to be trapped in the drug nightmare.

The Serjeant at Arms is interested in this subject and in recent discussions with me he referred to an ode, "The Old Dope Peddlar". I shall quote one verse that is particularly relevant to the Bill:
"He gives the kids free samples because he knows full well
That today's young innocent children arc tomorrow's clientele".
That highlights the problem. That ode was no doubt written many years ago, yet we still have that old dope peddlar, and he is a greater menace in 1990 because of the harder and more dangerous drugs that he peddles. Please let us make efforts to stamp out the menace.

In April the Princess of Wales spoke at a conference on drug abuse among children. She said:
"we should catch them in the classrooms before the dealers catch them at the school gates".
The problem is how to catch them and how to stop children taking drugs before they are hooked. I am sure that the Bill will have all-party support in its efforts to license legally agreed random testing to diagnose the source of the problem. The children, once identified, would be treated with care and compassion. The Bill is a further attempt to eliminate drug abuse from among our children and our grandchildren.

Britain now has a major problem because of drug taking in schools. Drug abuse is increasing despite the best efforts of our police forces, doctors and customs officers. How many more ruined young lives are we prepared to accept before action is taken? The cost to our nation of drug-related crime and violence is enormous.

Something practical and reasonable can be done to prevent drug abuse. I propose to tackle the problem of drug abuse where it starts, in the schools. There are almost insurmountable problems in treating established addicts, so why not prevent and deter the addict to begin with? There is hardly a secondary school that has not had a drug problem. Because most addicts start on drugs while at school, the introduction of random drug testing is essential. If schoolchildren knew that they were likely to be tested at any time, they would be less likely to experiment with drugs. It is important to identify the children already on the drug train, and to offer them early help to minimise future problems.

Prevention cannot be left to schools and teachers. Their role is primarily to educate and not to police. Existing anti-drug, and indeed alcohol and tobacco, policies within schools are not working. Parents are often the last to know that their child has been abusing drugs.

Drug testing in sport has been established for years. Most of us recall the fight against it, based on the freedom and liberty of the individual, for which I have a high regard and which I support. The fine balance between protecting people's rights and freedoms and protecting them from a life of misery from drugs is a balance of conflicting freedoms, but with a full knowledge of the horrendous harm done by drugs, without hesitation I ask those who might want to oppose the Bill on civil liberty grounds to give the matter further thought or Parliament will still be trying to resolve the drug problem in schools, and perhaps quoting the Bill, in 20 years' time, with all the further drug misery that will have been caused.

I do not claim to be an expert. For information on research and dedication to fighting drugs in schools, I have relied on Dr. Hugh McCollum of Lynton, Staffordshire, who rightly claims that the problem can be reduced by certain methods, random drug testing being one. Random drug testing would involve only the collection of a urine sample. It would not involve asking private or personal questions or a medical examination, a body search, a belongings search or a blood test. Objection was voiced to testing in sports, but the principle is now fully accepted, without objection, by sports men, women and children. Let us remember that testing within sports is not limited to adults or the elite.

Testing would be done on the whole school or on sections, such as the fourth form upwards or those aged 14 upwards. There would be at least one test per school year. It is anticipated that a complete house would be tested at one go, together with an alternative group such as fourth year mathematics pupils, so that no one would be sure of not being tested at any time.

Testing would be done in such a way as to guarantee no errors. Pupils and parents should be convinced that there could be no errors. Samples would be split, with half being retained for parents and schools to double check the preliminary result. Samples would be tested only to a level where 100 per cent. concentration of the drug found could be assumed. Procedures would be such as to exclude any possibility of spiking or contamination.

The method that we would use in schools is highly effective, 100 per cent. accurate and reasonably cheap. It can detect whether a child has been taking cannabis, cocaine, crack, heroin, morphine, LSD, ecstasy, barbiturates, some hypnotic drugs and pain killers. We must all be aware of the huge threat of crack, a relatively new drug to the United Kingdom. Fortunately, it is not yet widely available and is hardly used so far. Crack is so addictive that most people become absolutely hooked, often after only trying the drug once or twice. Crack is commonplace in New York and its terrible effect can be seen in some areas of the city. In the Bronx, for example, the life expectancy of a male born today is only 38 years. The reason is drugs and related problems, such as murder, violence, AIDS, suicide, hepatitis and overdoses.

I hope that the House will support me and agree that this policy must be introduced on a wide basis within schools for the good of society. We have not only an obligation to educate our children, but a duty of care and responsibility. To carry out those responsibilities, we must do everything reasonable and practical, especially where drugs are involved.

Drugs may not always cause death, but they destroy lives. I ask for sympathetic support in the light of the overwhelming positive response I have received from parents and the media. Therefore, if there is any step, however bold, radical or innovative, that we in the House can take to reduce the risk of anyone's child succumbing to the lure of drugs, we should grasp the opportunity and take the necessary steps now.

Question put and agreed to.

Bill ordered to be brought in by Mr. Ray Powell, Mr. Don Dixon, Mr. Frank Haynes, Mrs. Llin Golding, Mr. Ken Eastham, Mr. Allen McKay, Mr. Geoffrey Lofthouse. Mr. Stuart Bell, Mr. Tam Dalyell, Mr. Tony Banks, Mr. John McFall and Mr. Donald Coleman.

Drug Testing (Schools)

Mr. Ray Powell accordingly presented a Bill to allow random drug testing of schoolchildren; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 6 July and to be printed. [Bill 145.]

Points Of Order

3.47 pm

On a point of order, Mr. Speaker. As I understand it, Ministers are answerable to the House and we are in a position to table questions to Ministers. What about the new situation that has arisen, whereby the Secretary of State for Energy has become the Government co-ordinator? Am I therefore in a position to go to the Table Office and table questions directly to him about that particular aspect of Government policy?

Order. We are well past the time of points of order. Mr. Donald Thompson.

On a point of order, Mr. Speaker, on the next business. You will remember, Sir, that yesterday I asked you, on a point of order, what it would be in order to mention today with regard to some of the communities that had been community charge capped. I repeat, what are the parameters within which we can debate?

I am pleased to clarify the position now that I have seen the motion on the Order Paper. In respect of today's motion, I see no need to relax the sub judice rule, which means that the legality of charge capping proposals should not be questioned. However, the general principle of charge capping may be referred to. Of course, when the individual orders are before the House, the sub judice rule will not apply.

Mr. Speaker, last week you chided me for trying to speak from the Front Bench, and I understand that that is merely a convention of the House, and have no real disagreement with you about it. However, you will have noticed that Government Ministers restrict themselves to speaking from the Front Bench and do not take the opportunity to move to the Back Benches; they are not in suspended animation and do not become peripatetic. However, numerous Opposition Front-Bench Members live in an atmosphere of suspended animation, floating between the Front and Back Benches. I have no hesitation in accepting versatility, but I am seeking some understanding of the Speaker's restrictions on the use of the Front Bench. You will have noticed, Mr. Speaker, that there are extreme advantages in speaking from the Front Bench, particularly now that television is in the House.

My hon. Friend can go and sit there if he wants, but I notice that he occupies the Front Bench. There are extreme advantages, particularly now that television is in the House. Will you, Mr. Speaker, review your views on restricting people from using particularly the Opposition Front Bench, and allow those in the minority parties, who choose to do so when it is their day, to take advantage of glasses of water, the lecterns and the other paraphernalia that the alternative Government think are their right?

The hon. Gentleman deserves an answer, and I am pleased to clarify the position. An hon. Member must speak from the place whence he has been called. I called the hon. Gentleman from his usual seat and he then moved to the Dispatch Box. Had he simply moved to another Back-Bench seat, I would still have called him back to his original position. That is the long-established rule of the House.

I am constantly enjoined not to take any notice of the television cameras, but when I see the House of Commons on television Members look rather better against the panelling on the Back Benches than they do on the Front Benches.

On a point of order, Mr. Speaker. You may have noticed that the Labour party has this morning denounced the All-Britain Anti-Poll Tax Federation as being dominated by the Trotskyist Militant Tendency. Has the Leader of the Opposition asked to come to the House to make a statement on the withdrawal of the Whip from those Labour Members who support that Trotskyist Militant organisation and are refusing to pay the poll tax?

I do not receive requests to make such statements from the Leader of the Opposition. With a little ingenuity, that is the sort of matter that could perhaps be raised in today's debate.

Further to the point of order raised by my hon. Friend the Member for Walsall, North (Mr. Winnick), Mr. Speaker. It is a matter of concern to the House that hon. Members should be able to question the new Government co-ordinator who is responsible for Government funds. Before the previous election, Central Office increased fivefold the amount of money spent trying to explain Government policy. The legislature should be able to challenge the Executive on that expenditure through questions on the Order Paper to the Government co-ordinator.

I understand that a probing question to the Prime Minister has already been put down on that matter and that it is in order.

On a point of order, Mr. Speaker. For better or worse, I seek your guidance on whether an hon. Member has the right to propose amendments to a Bill which is to be scrutinised by the Select Committee on Unopposed Bills.

Without knowing the particular Bill to which the hon. Gentleman is referring, it is difficult for me to give an instant ruling on the matter. Will the hon. Gentleman write to me or, even better, come and see me?

On a point of order, Mr. Speaker. Further to your ruling on today's debate and the sub judice rule, may I take it from that that when the orders are laid each will be debated separately?

I do not know, because they have not yet been laid. That will depend on whether any agreement is reached. The orders are statutory instruments, so they are not subject to the sub judice rule, which was the purport of my ruling.

Opposition Day


Local Government Finance

3.53 pm

I beg to move,

That this House believes that the Government should take immediate action to bring help to hard-pressed poll tax payers this year and backdate it to the introduction of the poll tax in Scotland, and should seek to change the tax so that from next year it is directly related to each individual's ability to pay.

It would have been a tragedy had you not, Mr. Speaker.

I welcome the Minister for Local Government and Inner Cities to his first debate on this important topic. I have been engaged in debates on the subject for a long time, having represented the Social and Liberal Democrats when the Local Government Finance Bill went through the House and subsequently. I hope that the Minister will find it an interesting topic, though it will be a difficult one for him.

The Minister was appointed to his new post at a time when the local elections were a topic of immense debate among all parties. People were greatly influenced by the impact of the poll tax and believed that the Government were to blame for it. In the vast majority of cases, votes fell away from Conservative candidates, though not from all: it is interesting to note what happened in London.

In the post-election period, as we survey the wreckage, it is important to consider what the Government said immediately before the elections about the need for change, and what is happening. Certain Conservative Members, such as the right hon. Member for Henley (Mr. Heseltine), had a lot to say on the subject before the local elections. They are noticeable by their absence today. I hope that that is not a reflection of opinion within the Cabinet. We are told that a special Cabinet committee has been set up to consider what urgent amendments to the poll tax need to be made to bring order and fairness to a system which, only two months after coming into force, has proved itself to be unaccountable, unfair and inefficient. According to reports last week in The Times, in some areas as many as 50 per cent. of those liable have not yet paid any poll tax. That is a measure of the difficulties and problems that face the Government.

According to figures published by the Government and others, money has been transferred from those who could least afford it—the majority of the poor who have lost out—to the majority of the already rich who have gained from the imposition of the poll tax. However, when I spoke to people on their doorsteps during the local elections, I found that those who have gained are often the most embarrassed about the effects of the poll tax and that they do not support it. That is remarkable. I have heard Conservative Members say that that has also been their experience. It is unusual for a tax to cause embarrassment and to be rejected by those who have gained from its imposition.

The motion provides the House with an opportunity to consider the alternatives that may be put before the Cabinet committee and to debate them, rather than that a decision should be taken be the committee and sprung upon the House. The problems and drawbacks connected with some of the alternatives can now be aired.

The official Opposition are supposedly taking the lead in suggesting alternatives to the British public. It is therefore worth turning to the Labour party's alternative, or lack of it, to the poll tax.

I shall give way to the hon. Gentleman when I have dealt with the Labour party's alternative, or lack of it. He must first listen to what I have to say on the subject.

The Labour party's alternative has proved sketchy in the extreme. No figures and no details have been given. Throughout the local election campaign no facts were put forward by the Opposition. It is at least an improvement that they have now put forward some general ideas, which is more than they did throughout the entire proceedings on the Local Government Finance Bill in 1988.

I wanted to intervene on the matter that the hon. Gentleman raised a moment ago. He talked about substantial reductions in the rates paid by people in various parts of the country. Is he aware that the rates bill of thousands of households in Westminster, Kensington, Chelsea and central London has fallen from £2,000 or £3,000 last year to but a few hundred pounds and that it is not uncommon for their new poll tax bill to be only 10 or 20 per cent. of their rates last year? Is not that quite shocking?

It is certainly shocking. I have made the point that the poll tax transfers money from the already poor to the already rich.

The Labour party's lack of an alternative is a genuine cause for concern as the Cabinet committee would undoubtedly consider an alternative had the Labour party produced one but it did not. In the Evening Standard on 6 April, the hon. Member for Birmingham, Perry Barr (Mr. Rooker) mentioned a floor tax. We have heard about the possibility of a roof tax, which is seen as a modernised version of the rates, but it may be based on the cost of rebuilding houses and flats. In The Independent on 6 April the hon. Member for Dagenham (Mr. Gould) stated:
"We are proposing a modernised version of the rating system, a locally based property tax in which the poundage will be set by the local authority in accordance with local property values, as with rates, but updated and made fairer by being related to ability to pay"—
but he does not tell us how. He also confirmed that Labour was considering basing the valuation on the square footage multiplied by regional rebuilding costs as an alternative to house prices.

Labour is still undecided about whether bills would apply to individuals or to households. All that is in addition to its rejection of its 1988 plans for a mixture of a local income tax system and a property system. Nobody could understand how that would work. It simply amounted to an attempt to impose two taxes where one would do.

Is not it the clearest demonstration of the Labour party's embarrassment at its inadequacy in producing an alternative that there are only nine hon. Members on the Labour Benches—the same number as are on the other Opposition Benches? The Labour party cannot produce the Members to put forward the alternatives.

I suspect that the Labour party prefers to stick with only nine different views rather than putting forward any more.

I am afraid that there is no consistency among Conservative Members either. I suspect that most Conservative Members take the view that some change needs to be introduced. I have scarcely heard a Conservative Member who has not argued that the poll tax needs amendment. Some argue rather more than others and I shall concentrate on those who have put forward the most interesting or the most widely publicised alternatives.

Certainly the most publicised alternative recently has been that put forward by the right hon. Member for Henley. He said:
"most people in my party now agree that it"—
meaning the poll tax—
"needs considerable modifications."
He outlined an extremely complicated set of amendments which few people believe to be practical. He argued for a fundamental reform of the local government system, including directly elected mayors and value-for-money audits. He suggested that local authorities would be free to set their own budgets, but that if those budgets exceeded a sum set by the Government they should immediately be subject to election. One wonders what would happen immediately following an election putting a local authority in power and it subsequently set a budget on the basis of that election. Would it go straight into another election? If the same council or one even more likely to exceed the Government's calculation of the need to spend is elected, does that solve the problem? I suspect that the Treasury would not feel that that was adequate simply because the electorate had put a high-spending council back in power. What action does the right hon. Member for Henley suggest should be taken when the electorate casts votes one way, but the council that is elected does not reflect the majority opinion in the council chamber as a result of the electoral system?

More interestingly, the right hon. Gentleman also proposes specific changes to the poll tax itself. He makes suggestions about the transitional arrangements. Our motion refers to "immediate" short-term help to those in desperate need. The right hon. Member for Henley says that there should be no withdrawal of safety net support next year. He says that the transitional relief scheme must be improved and expanded, and calculated with greater reference to actual charges, not notional figures of assumed spending. I entirely support his comment that the Government's standard spending assessments must reflect reality in a wider range of authorities. We were told by Ministers when the SSAs were first developed that they were intended to simplify and make visible the local government support system, and to get away from the complications of the old rate support grant. We were told that, under that system, one fed in figures and got them out until the computer came up with a set acceptable to the Government, and that no one knew how the figures were generated. The standard spending assessment has not achieved its aim, as the right hon. Member for Henley was right to point out.

The most crucial element of the right hon. Gentleman's argument—and several other important Conservative Members have put the same argument—is for a form of banding and for a move towards a system that pays some attention to ability to pay above the very basic level of those who are entitled to rebates under the present system. The right hon. Member for Henley says:
"Banding upwards can in practice, in the short term, only be based on income. There are no insurmountable obstacles, although there will be crudities and criticisms … The Government should instruct its civil servants to work up proposals based on the assumption that everyone will pay something, but that the significantly better off, by which I mean top rate taxpayers, will contribute more."
Is the right hon. Gentleman suggesting that that is a long-term or a short-term solution? He says that a banding system should be used only in the short term. If it is not his long-term solution, what is?

The fundamental problem with a banding system is, by definition, that it goes up in jumps. It is far closer to our proposals for a local income tax system than the Government's proposals, but it would go up in jumps in the same way as the national insurance scheme. If one is unfortunate enough to cross the barrier between one level of income and another, a pay increase will make one worse off. That is the inherent problem of a banding system.

A banding system is only roughly related to ability to pay because no attention is paid to the variation in income within each band. The right hon. Member for Henley seems blissfully unaware of those problems, or perhaps he simply dismisses them as "crudities" and "criticisms". If the right hon. Gentleman believes that a system should be tied to the ability to pay, why does not he simply adopt a policy for a local income tax system, which is the logical extension of that position?

I am sure that the hon. Member for Truro (Mr. Taylor) will never hesitate to bow to the experience of my right hon. Friend the Member for Henley (Mr. Heseltine). We accept the hon. Gentleman's expertise in the matter. Will he tell the House therefore, when he is considering the available alternatives, where his party stands on unitary local government and where it stands on the ability of the electorate to get its hands on county councils through the introduction of a third rotating annual election? Those matters are crucial for my constituents in Shrewsbury, who have been handled in a most duplicitous way by his party's supporters. They want to know where the parliamentary Liberal party stands because they have been unable to find out where the local Liberal party stands.

We are about to publish a document that will answer the hon. Gentleman's question about local government tiers, and I recommend that he reads it. There is only one way of making local authorities accountable, and that is proportional representation. In numerous areas, although the majority of people voted for one party, another party is running the local authority, and while that remains the case, no one can argue that there is genuine accountability, because the wishes of the people are not being reflected in the way in which the local authority is constituted.

I think that the hon. Gentleman will accept that that is not the case in Cornwall, which is his county and mine. In effect, the Liberal Democrats are the leading party on the county council. Does he really think that the Liberal Democrats were accurately reflecting the wishes of the people in Cornwall when they increased their budget by more than 18 per cent., with all the consequences that that brought for the charge payers of Cornwall?

The hon. Gentleman knows very well that we have one of the lowest poll tax rates in the country—substantially lower than in neighbouring Conservative-controlled Plymouth and Devon. Moreover, it is pretty rich for the hon. Gentleman, who only a few days ago shared a platform with me and argued that we needed to spend more on our local schools, to press for cuts in the local authority's budget, which would have meant school closures in our area. The hon. Gentleman knows that I would love to have a debate on Cornwall, but now is not the time for it.

Two Other Conservative Members have argued for banding.

I want to make progress, if I may. The hon. Member for Hampshire, East (Mr. Mates) tabled the amendment which almost succeeded in introducing a banding system when the poll tax arrangements were originally debated. He said:

"To tinker at the margins will only make a bad situation worse."
I agree with him. The hon. Member for Ealing, Acton (Sir G. Young), who is in his place at the moment, said:
"If one believes the concept is structurally flawed, as I do tinkering does not tackle the problem. The basic problem is that it is not a charge for services at all; it is a tax."
I agree with him, too.

Both hon. Members have argued for a graduated or banded tax.

I will give way to the hon. Lady when I have finished my point.

The hon. Member for Acton is present. Why does he argue for a banding system, which would create poverty traps and all the difficulties that we now have at the low end of the national insurance scale, when we have the opportunity to introduce a local tax system? I heard what the hon. Gentleman said in an interview on the radio this morning, in which I was also involved. He suggested that there would be no accountability because a local income tax would be levied through the tax system. But under the system that we propose, at the end of the year every local income tax payer will either receive a rebate, if he lives in a low-spending area or pay the difference, if he lives in a high-spending area. Few things are more likely to make a local authority accountable than a system that resulted in a local income tax payer in one area receiving a bill while his next-door neighbour in another received a rebate.

Does the hon. Gentleman agree that sheer bureaucracy adds much to the costs of extravagant councils such as Lancashire county council? Is he aware that, although Hampshire county council has 125,000 more people in its area, it manages to run it with 10,000 fewer staff? Does not that highlight the appalling burden on the people of Lancashire, whose Labour-controlled county council has increased its expenditure by 176 per cent. since 1981? This year alone, the council has increased its budget by £123 million, or £81 per inhabitant.

The hon. Lady pleads a special case, and I do not want to comment in detail on that part of the country. However, she should consider the needs of those areas and the services that are provided. She should also consider the support among the public for what is happening there. She must remember that the cost of introducing and administering the poll tax, including the tens of thousands of people required to implement it, amounts to between £650 million and £750 million.

I want to consider the options available under the Government's review of the poll tax. The Government have canvassed the possibility of increasing central Government's grants to local authorities. However, an extra £1 billion would save each adult only £28. It would also miss those people most in need of help. It is hard to believe that the Government will follow that route. The cost of making that option effective on any scale would put the Government off.

The Government could also consider transferring the control and financing of the police, education and fire services. However, that would have a knock-on impact on income tax levels nationally. It would also centralise education, which is a service that most hon. Members believe should remain at the discretion of local authorities and be able to respond to local needs.

The Government could also improve the transitional relief scheme which is currently very limited in its application. If that relief were extended now and retrospectively in Scotland, it would target money more effectively than increased grants. When the Government announced the transitional relief scheme, they said that no one would be more than £3 a week worse off. That has not happened because local authorities have not been able to set poll tax levels at the level that the Government argued that they should. If the Government are to respond to the needs of the most hard up, they should consider extending transitional relief. They could also extend it to all adults.

The Government have also considered improving the benefits system which targets money, although less efficiently. Under that option, the minimum poll tax payable could be reduced from 20 per cent. to 10 per cent. However, the problem is that all those options simply tinker at the margins and do not tackle the fundamental problem, as the hon. Member for Acton has said.

I do not want to apologise for the standard spending assessment system of which I have been critical in my constituency, particularly with regard to its impact in the shire counties. I am sure that Cornwall and Somerset have similar problems with the SSA system. However, will the hon. Member for Truro (Mr. Taylor) acknowledge that both the noble Lord who initially made the statement in another place and my right hon. Friend who is now the Secretary of State for Wales, but who previously had responsibility for the community charge, made it clear that the £3 a week limit extended only in so far as local authorities spent in terms of the somewhat fictitious SSA limits?

The problem is that, when the public heard the announcement, they did not see the fine details. That was inevitable. Whether intentionally or otherwise, they were grossly misled and that is one reason why hon. Members have been attacked by the public, who have said that they thought that they would be protected. The public did not understand what was happening. Moreover, as the hon. Member for Taunton (Mr. Nicholson) said, the SSAs are fictitious and very few of us believe that they amount to anything more than that.

The Government could also relate the poll tax to income in some form, perhaps through a banding system. However, I have already explained why I believe that that option would not be effective.

The motion that the hon. Member for Truro (Mr. Taylor) moved asks the House to relate the poll tax to ability to pay from next year. He must know that in no way could the kind of system that he advocates be introduced next year. However, it is possible to move away from the present system, with the flat rate, to a banded rate from next year. Whatever the arguments against the scheme put by the hon. Member for Truro—and there are powerful ones—there are strong arguments in terms of realism for accepting the present position and changing that instead of trying to turn the whole system upside down and starting again with the hon. Gentleman's proposal. We can overcome the objections to which the hon. Gentleman referred by having more than three bands to remove the discontinuities in the system.

The more bands there are, the closer we get to a local income tax system. However, as we move from one band to the next there is a problem in that people end up worse off. That may be to a lesser degree, but that problem remains. Nevertheless if the hon. Member for Acton is right and a local income tax system could not be in place for next year, the Government should consider that option. However, our advice is that setting aside the legislative process—of course, in Scotland with the UBR it was done extremely quickly—the introduction of local income tax and providing absolutely accurate income figures district by district would take only about six months. The process is not as long as the Government have claimed.

The final alternative canvassed by the Government is the capping of most or all authorities. On average, 1 per cent. of local spending would reduce the charge by 3 or 4 per cent. To reduce the total poll tax bill to the £10 billion suggested would require cash cuts of about 7 per cent. in local budgets in 1990. Cuts in real terms are nearer 15 per cent. Such capping would be a disaster for local services and would take away the very principle that local government exists to defend—local flexibility—and would be a grotesque centralisation of power.

I have referred to several matters that we could introduce in the short term. I was interested in the point raised by the hon. Member for Acton, but let me now tackle the local income tax system and the specific criticisms that have been made about it. I do not wish to go into great detail, but I shall refer to the four or five criticisms that have commonly been made and say why I believe that they are based on a fiction of what a local income tax system would be.

I assume that a local income tax system would be based on a person's income or ability to pay, just as the national income tax system is. If the hon. Gentleman does not believe in equalisation rates, how do we come to terms with the problems of an area such as mine where there is low earning and high unemployment? A local income tax system without equalisation rates would be disastrous.

My answer is very simple. As with the present poll tax system or the old rates system, we would have a central Government grant system that would be specifically tailored to a local income tax system, the major element of which would be to ensure that we levied the same levels of income tax to provide the same levels of service in different areas. In other words, we would take account of income levels in each district. That is what our figures are based on. The calculation could be refined further by an expanded Inland Revenue survey of 500,000 individuals to make sure that the basis was accurate. That is not difficult to do and it is similar to the present grant support system.

Would the local income tax that the hon. Gentleman's party is proposing be based on taxing income after national tax allowances have been claimed?

It would be based on precisely the same tax allowances as the national income tax system.

After allowances. The basis of the local income tax system that we propose—it is not the one that the Government talk about, which comes as no surprise, because ours makes more sense—is that we would set a local income tax rate to provide services. Under our system, the range is between 3 and 8 per cent., and the average is 4·7 per cent. across the nation. We would then levy nationally a standard local income tax of 5 per cent., the nearest full figure to the average. That would be collected through the existing PAYE taxation structure with no local variation at all. It would simply be collected at the national rate. At the end of the year, on the basis of the tax paid and the relevant local area details that are already held by the Inland Revenue—people would receive a letter saying, "You live in an area that has a higher than average income tax, and this is the amount that you owe," or, "You live in an area with a lower amount, and here is your rebate cheque." That is the basis of the system.

Is not there a flaw in that? I did not realise that there might be a flaw of this nature. The flaw is that one is taxing income after one has been able to use all one's allowances on the great number of Government schemes that have been introduced, such as small business investment or whatever, after those tax allowances have been taken into account. Is there a danger that, in effect, people might fix their income after tax by way of using all those mechanisms to reduce their ability to pay local income tax to local authorities?

That is a criticism of the income tax system and the allowances that operate under it, and it applies equally to national and local income tax. It is for the Government to decide the allowances, and a Government run by the hon. Gentleman would set different allowances from a Government run by Conservative Members or by me.

It is said that our system would drive people out of the inner cities. That is not a relevant criticism because the grant support system would ensure that it did not happen. It is said that the administration costs would be unduly high. We would use the existing Inland Revenue structure and save the £750 million that is involved in the bureaucracy of the poll tax, and in the process get rid of all the bureaucrats involved. The extras needed for the Inland Revenue would be small because the basic structure already exists.

Sweden and Canada already operate such combined systems. The collection costs in terms of the tax take are 30 per cent. in one case and 50 per cent. in the other—lower than the costs in this country because of the introduction into the system of an incentive for individuals to make their own tax returns.

I will tackle some of the likely questions that hon. Members may have, and then give way if they still wish to intervene.

It is said that the system of collection would be complex. But our proposed method is already being used simply and cheaply in many countries. Moreover, it is also already being used simply and cheaply in this country for national income tax, so that a new complex system would not need to be introduced.

It is claimed that local income tax would be difficult to enforce. Those who are introducing the poll tax can hardly argue along those lines because they have allowed for much higher default rates than occurred under the old rating system, for example, and we are experiencing the much higher default rates that are occurring in Scotland.

I have listened with interest to the hon. Gentleman's argument thus far, but two points arise. First, he has not addressed his remarks to anything concerned with the efficiency of local government. In Lancashire, for example, we identify the fact that the community charge would be £60 a head lower if the local authority had pursued a prudent and efficient budget. What pressures would the hon. Gentleman's party bring to bear on a local authority to improve its efficiency?

Secondly, the hon. Gentleman says that under his system people would get a supplementary bill if a council overspent. How could somebody plan a domestic budget with such an open-ended commitment to spend? Let us remember that some Labour authorities love to spend public money.

People will not receive a supplementary bill if a local authority overspends. The amount is taken from the local income tax rates, so people know the amount in advance, because they know at what rate the local income tax has been set. If one is paying 5 per cent. and the local income tax rate is 5·3 per cent., one will have to pay that 0·3 per cent. of taxable income at the end of the year, a bill which for most people will not be nearly as significant as the poll tax bill.

An example of that is that in the Minister's constituency of Enfield, Southgate the average household is currently being asked to pay a poll tax bill of £658. Under our system of local income tax, which has been fully set out, that same household with average income would pay in total £356. In Southampton, ltchen, an average household poll tax bill of £614 would become a local income tax bill of £303.

Those figures show the advantages that would accrue to people, although some would, of course, pay more. Hon. Members would pay more and the Minister would pay a lot more, but he can afford to pay. Judging from the smile on his face, he, too, thinks that he can afford it. That is the nature of a system which is based on ability to pay. We ask for less from those who can afford less and more from those who can afford more. We retain local accountability through end-of-year adjustments, as I have explained, and at a stroke we get rid of the bureaucracy of the system that has been introduced by the poll tax.

4.29 pm

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

'believes that most adults should contribute towards the cost of local services with relief for the less well off; welcomes the embodiment of those principles in the community charge and notes in particular that 10 million people have received bibs reduced by rebates whilst 7·5 million have been protected by transitional relief; welcomes the willingness of the Government to listen to constructive suggestions for further improving the new arrangements; and contrasts the fairness and clarity of the community charge with the injustice and impracticability of a local income tax favoured by the Social and Liberal Democrats and the total lack of any clear proposals from the Labour Party.'.
I begin by saying a warm "thank you" to the hon. Member for Truro (Mr. Taylor), both for his kind words of welcome and introduction and for what I thought was a thoroughly entertaining speech. I also thank the hon. Member for Sheffield, Brightside (Mr. Blunkett) for writing to me to welcome me to this new subject.

The title of this debate, chosen by the Social and Liberal Democratic party, invites the House to consider amendments to, and alternatives to, the community charge. I am glad to do both. I intend to demonstrate that the community charge is the best of the options for raising that part of local authority funding that should be raised locally. Moreover, the House will know that the Government are considering whether any amendments to the operation of the charge should be made to improve its working.

I should like today to take the House through the options for raising local authority finance. Our discussion must begin with the rates. Labour is supposedly against the rates. The SLD describes them in an early-day motion as an "injustice"; I thoroughly agree—and we have abolished them.

Perhaps on a subject where we are unanimous I need not dwell too long, except to make a couple of points. First, the rates were grossly unfair. I make that point because it may help us to colour our view of the fairness. of the community charge. Secondly, the unfairness of the rates derived mainly from the fact that property values are no proxy for wealth or income and any system based on property will repeat the injustice of the domestic rates.

Many of us, especially those of us from the north of England, remember my hon. Friend's success in saving the Settle-Carlisle line, so we take an optimistic view of his new appointment. One reason that hon. Members such as myself, who represent constituencies in the north-west, are particularly unhappy about the present community charge is the gap between the amount that a household may pay collectively under the community charge, despite transitional relief and the safety net, and the very low rates that we have paid historically. I hope that my hon. Friend will consider that aspect, during his speech, but especially during the review.

I intended to continue by telling my hon. Friend that we shall, of course, listen to suggestions that are made to us. Indeed, I have been listening to suggestions already. My hon. Friend well knows that part of the problem in Pendle, which has a community charge of about £299, is that Lancashire increased its spending by 20 per cent. and Pendle increased its income by 22·8 per cent. I know that my hon. Friend understands that, and recognises that it has added to the problems that his area faces.

When he is considering amendments to the community charge, will my hon. Friend bear in mind the fact that it is absolutely no good giving more money to extravagant councils such as Lancashire county council? Does he accept that any money that is dispersed must go direct to the charge payers, such as pensioner wives or the mothers of young children, so that they get the benefit because, if it is not, those bandits in county hall in Preston will simply swallow the loot and will not give any abatements whatsoever in community charge? The benefit must go directly to the charge payers.

I understand my hon. Friend's point. As she has said, Iancashire has increased its spending by about 20 per cent. My hon. Friend knows that Lancaster has increased its income by nearly 28 per cent. by comparison, the other council with which my hon. Friend deals, Wyre, which is under Conservative control, has been more moderate in its increase, which was just under 14 per cent.

Should we not be fair and put the figures in the proper perspective? The Minister has referred to Lancashire and to the increases there. If the standard spending assessment for Derbyshire had been calculated on the same basis as that for Westminster, we would not have had any poll tax in Derbyshire; we would have handed out £309 to every single poll tax payer. We would not have been collecting money. Because of the different political complexion in Derbyshire, our poll tax is much higher than Westminster's. Let us all have the same calculation as the one that resulted in the bribery at Westminster and Wandsworth; then there will be no complaints.

I do not know what the hon. Gentleman is referring to. The standing spending assessments were worked out on the same basis throughout the country, and, as he will know, in Bolsover the SSA is nearly 15 per cent. higher than the grant-related expenditure figure under the old system. The increase in income in Derbyshire is 19·5 per cent., while Bolsover has increased its income by 17·3 per cent. That is what has made the difference.

Is not the point that, in local government, as in national government, the Labour party is always highly profligate with public money? The rates in Ealing in 1987 increased by 65 per cent.—

It was spent on, for instance, homosexual activities and parties for lesbians. Certainly no letters to the town hall were answered. While the rates and the community charge have increased in Ealing under Labour—[Interruption.] Labour Members may shout, but, despite those increases, efficiency went down, the streets were not properly swept, expenditure on education was reduced and people had a disgraceful deal. They always do from Labour.

My hon. Friend makes his point extremely well. The latest increase in income in Ealing appears almost moderate in comparison, at some 14·5 per cent. My hon. Friend does well to point out that that increase was on top of the horrendous increase in the previous year's rates, which resulted in a community charge in Ealing of £435. My hon. Friend will be satisfied that those who were responsible for those increases have received their come-uppance.

My hon. Friend the Minister made his reputation in the Department of Health and Social Security by targeting public assistance on those most in need. Many people in low-spending areas such as the one that I represent, who are just above the line of eligibility for rebates but by no stretch of the imagination well off, now have substantial difficulty in paying their community charge because of low rateable values leading to their previous light contributions. Surely that has major implications for transitional relief, and for next year's rebate. Can we look to the Minister to help those people, who are finding it difficult to make ends meet?

I assure my hon. Friend that I shall weigh carefully what he has said. I shall continue to listen to him, and to other hon. Members who intervene. He referred to targeting. I ask him to go to his local authority and target this point on it: at present his local charge payers are contributing £44 a year each to the safety net. It would be excellent if that money could be used to bring the community charge down next year, which would greatly help all Chichester's community charge payers.

The Minister should ignore the blandishments of his hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), who is the only hon. Member for Lancashire who publicly advocates cuts in public services in her constituency, and stands condemned throughout the community for so doing.

I have done some work on the question of the Westminster settlement. Why was that settlement inflated by a substantial amount of money for flood relief? Is not the calculation on enhanced population for Westminster grossly inflating its central Government grant? Would not an inquiry reveal that the Westminster settlement was nothing but a fix to get Lady Porter out of a corner?

The criteria used for flood relief works were applied nationally. It is true that, in the first year, the criteria are particularly helpful to Westminster. They will not be particularly helpful to Westminster in the second year. The criteria were given to us by local authority associations and certainly were not skewed to any particular authority. That still leaves the hon. Gentleman with a great deal of explaining to do about why other Conservative authorities that did not have the benefit of flood damage relief, such as Wandsworth, set such low community charges and are so commended for their good management.

It is time that the Labour lie was nailed. It is undeniable that both Wandsworth and Westminster received substantially less external aggregate grant than any other inner-London borough. The net result was that an authority such as Lambeth, which is Labour-controlled, and which received grant of £324 a head more than Wandsworth, set a community charge of £350 more than Wandsworth.

My hon. Friend is right that Wandsworth and Westminster were towards the bottom of the list of the amount received from Government by inner-London boroughs. That is a perfectly valid point and I am glad that my hon. Friend has made it.

The Minister knows that I have respect for him. I ask him to think of a new way of calculating standard spending assessments. Could he not suggest that, instead of the Government coming up with the formula—which would be open to the allegation of fixing, whoever was in government—they could offer the local authorities the chance to agree it? If they can agree on a formula, that should be the one by which grant is given to local authorities. If they cannot agree, the Government will, as always, have to make the decision. Would that not be a fairer system, less open to allegations that the Government had distorted the figures?

The method that the hon. Gentleman suggests is that which we attempt to use. We get together with all the local authority associations and try to agree the criteria with them. The hon. Gentleman will recognise that different local authorities have different views. Even the local authority associations, which represent different sorts of local authorities, have different views. We do our best to agree on the criteria. I am listening to representations made to me about standard spending assessments that seem to fall short of expectations or perceived reality in some way.

The problem with the rates was that 40 per cent. of those in properties above average rateable value had incomes below the average. A person on low income could, and often did, pay more to the local authority than other people on higher incomes in the same area. Under community charge, that simply cannot happen.

Furthermore, the rates were paid by only half the adult population and that half was selected arbitrarily—so arbitrarily that it consisted largely of widows and pensioners, but excluded many wage and salary earners. It was therefore possible for some local authorities to follow expensive, and expansive, policies knowing that they would be paid for by that ill-chosen minority of the population.

The second major option for local government funding which I ask the House to consider is the community charge, with any amendments which the Government may propose. The basic principle of the community charge is that nearly every adult should contribute to the costs of local services. As the charge has settled down in Scotland and is settling down in England and Wales, I believe that that basic principle that everyone should contribute is well accepted. We do not seek that the charge payer carry all the costs of the local services provided. In principle, we look to the charge payer in England, for example, to contribute only about a quarter on average. The balance comes from revenue support grants, the uniform business rate and the £2·75 billion worth of community charge rebate, transitional relief and income support payments, all funded from central Government. So businesses and national taxpayers meet three quarters of the cost. That is the measure of the subsidy from the common pot to the individual.

Does the Minister accept that the tax has settled down in Scotland to be a costly, ineffective, bureaucratic mess which is hated by the population and not paid by almost I million Scots? If he is worried about the burden of extra costs on poll tax payers, should he not worry about the burden of the poll tax itself? In Scotland last year, there were about 2 million changes in the register in one year alone. That is a foretaste of what is to come in England. In London, annually updating the register will be a bureaucratic mess. That puts extra unnecessary costs on poll tax payers.

Mr. Portillo