Before we start the debate on the motion, I invite the House to look at the motion on the Order Paper today. As hon. Members will see, it is not a general no confidence motion. It relates specifically to the poll tax. The debate should go no wider than that.I have not selected either of the amendments on the Order Paper.
On a point of order, Mr. Speaker. I apologise for delaying the House, but for weeks past—or days past—we have had promises from Opposition spokesmen that this no confidence debate—[Interruption.]
Order. I must hear what the point of order is.
Order. Will the right hon. Gentleman sit down, please? I must hear what the point of order is.
Opposition spokesmen promised that they intended to give the House an opportunity to debate a range of issues. With respect, may I ask you, Mr. Speaker, to review the decision that you have just announced and allow issues other than the single one you mentioned to be debated?
That is not within my discretion. We must debate the motion on the Order Paper.
Further to that point of order, Mr. Speaker. May I ask you for some clarification? It has certainly been clear from all that we have heard from the Labour party recently and, indeed, in a radio discussion in which I participated with the hon. Member for Copeland (Dr. Cunningham) this morning—[Interruption.] I am coming to the point of order. The hon. Member for Copeland made it clear that the purpose of the debate this afternoon was to discuss a range of policies—[Interruption.]
Order. How can I possibly hear what is being said if hon. Members bray in this manner?
From what the hon. Gentleman said this morning, it was clearly the Opposition's intention to range widely in the debate. Would it be in order to debate not only the community charge on its own but the issues of local government finance which are clearly relevant to the community charge and local government in general? That is important. As the Opposition have failed to frame the no confidence motion which they intended, is it not clear that they are unable not only to develop coherent and clear policies but to frame a motion of the sort that they wanted?
The whole House knows that under Standing Orders we have to debate the motions on the Order Paper. It will, of course, be in order to draw attention to the finances of local government within the context of the poll tax.
I beg to move,
You may be absolutely certain, Mr. Speaker, that I shall stick to the subject about which the Government wish to hear least—the poll tax. On future occasions, before the general election, doubtlessly due to the incompetence of the Government, there will be other reasons for tabling other motions of no confidence in the Government. We have tabled the motion, first, because it is the Government who have got Britain into the poll tax mess, and, secondly, because it is now certain that the Government will never get Britain out of it. In his statement last Thursday, the Secretary of State for the Environment said that the Government proposed a tax withThat this House has no confidence in Her Majesty's Government in the light of its inability to rectify the damage done to the British people by the poll tax.
As soon as he said that, it was clear that the poll tax was still alive—alive and kicking the British people. From the Government who brought us the poll tax to replace the rates we have a new epic—the poll tax and the rates. The best that they have been able to suggest is a head tax combined in some way with a roof tax, topped up by 17·5 per cent. VAT and wrapped in the cotton wool of consultation. The reason for the device of consultation is the same reason as for putting forward the mixed poll tax and property tax. It is not to do with the defence or advance of the national interest; it is to try to keep the conflicting factions in the Conservative party and the Cabinet together with some appeasement for each of them. In the Conservative party now, some want wholesale property tax, some want to keep the poll tax and some want to increase VAT to 20 per cent. or more and finance all of local government services from that. What they would do about accountability, God only knows. Therefore, the Government, faced with those factions, have tried to come up with something that will meet the needs and desires of every Tory fragment. Apart from right hon. and hon. Members who applaud the Prime Minister now just as they applauded the introduction of the poll tax, who can be reassured when the final shape of the new tax mixture is so deliberately vague? In the Tory party and the country, who can be content that Conservative candidates will have to go into the local elections on 2 May with no knowledge of whether they are supporting a poll tax, a property tax or a mixed tax? It appears that they will have to fight those local elections on g manifesto entitled, "Wait and See" and under the slogan, "Don't ask us, we're only the Government". In this whole tangle, there are assiduous attempts to blame the entire poll tax mess solely on the previous Prime Minister. Had the poll tax been introduced by a singular dictatorial flourish, it would be possible to give some credence to the idea that only the right hon. Member for Finchley (Mrs. Thatcher) was guilty, but it was not quite like that, was it? Everyone will have some understanding and sympathy with the irritation and resentment that the former Prime Minister must rightly feel when she hears colleagues who sat with her around the Cabinet table or on Cabinet committees now trying to give the impression that they were against the poll tax all the time, really. The present Prime Minister was Chancellor of the Exchequer and Chief Secretary to the Treasury. He says that he was "bounced" into the poll tax. Frankly, that says rather more about the right hon. Gentleman's character than about the right hon. Lady. Others—the present Minister of Agriculture, Fisheries and Food and the Secretaries of State for Wales, for Health and for Employment—were all local government Ministers serving their time introducing the poll tax. The Secretary of State for Transport was the Scottish Secretary, the Home Secretary was the Environment Secretary, and the present chairman of the Conservative party was the Secretary of State for the Environment when the poll tax was inflicted on England and Wales. We are at the first anniversary of the time when the right hon. Gentleman said:"a single bill for each household comprising two essential elements, the number of adults living there and the value of the property … assessing values, on a capital or a rental basis".—[Official Report, 21 March 1991; Vol. 188, c. 404.]
Does that sound like a man being bounced? In April last year—we are just a week away from the first anniversary of this—the Prime Minister said that the poll tax would be "a very much fairer and more acceptable system" I do not think that that sounds like someone in the Cabinet being dragged unwillingly and unwittingly into supporting the poll tax. Some 12 months later, the British people can draw their own conclusions about those and other members of Her Majesty's Government. Either those Minister were all innocent but gullible and did not know the truth about the poll tax, or the more ugly conclusion can be drawn: they did know the truth but a mixture of deference and ambition made dishonest men of them. Either way—-gullible or guilty—they should not be sitting here now."The Community Charge is here to stay … Maybe one day we'll have people breaking the law and painting on the sides of buildings 'Up with the Community Charge! Down with the rates'".
Does not the right hon. Gentleman agree that his proposal for the replacement of the community charge which involves the centralisation of computer records to allow the information on every citizen of the United Kingdom to be available is real dictatorship?
I shall send a copy of our proposals to the hon. Lady, who will see that they contain no proposition more centralising than that of the rates system that we intend to reintroduce.The Government ploughed on with the poll tax despite the advice coming from hundreds of Tory councillors, ssmall businesses, a variety of independent sources and those supporting them that the poll tax was wrong and could never work. They got rid of the right hon. Member for Finchley. They had a review, and then a review of the review. They introduced the poll tax capping criteria that caught some Tory councils. The whole squandering sequence cost £400 million to set up, £300 million a year to maintain, £6 billion to try to mitigate and £1·5 billion a year because of revenue lost from the 7·5 million people who could not pay their poll tax. Now, on top of that, they are to spend £4·25 billion in VAT—and still the turmoil goes on. Until Monday of this week, we were being told that 18 million people would benefit from the Government's community charge reduction scheme, then the figure became 8 million—although it came from the Minister of State, who usually gets things wrong—and then it became 16 million. When there are such variations, it is obviously necessary for everyone to have a clear description of how their reductions are being worked out. Therefore, I was glad that this morning the Department of the Environment provided the public with an explanation, reported by Mr. Timmins of The Independent. According to the Department of the Environment, the calculation will be as follows:
The Independent also states:"You take two times the reduced community charge, minus, in brackets, the old rateable value plus one £52 threshold for a couple, two for three people and so on. The result is divided by two, three or four, depending on the number of adults in the household. That gives you the amount of reduction each. That is taken away from the reduced community charge to work out what people actually pay."
Nothing could be clearer than that! I am sure that, if the Department of the Environment has got anything wrong, the Prime Minister will rectify any errors when he speaks later. Meanwhile, the costs of the poll tax system go on piling up—£18 million a day. We have a panic decision to scrap existing poll tax bills and issue revised ones. That of itself will cost the taxpayers of Britain another £200 million. After all that, what we have not got from all the cost and chaos of the poll tax system is a single additional home help. We have not got a single extra police officer, not an extra teacher, not an extra road repair—and that is not even taking into account the fact that the Government inflicted the community charge but they stopped community care. There is nothing better in any of the vital services as a consequence of having this preposterously expensive and unjust system."Those who have moved this financial year will now qualify—although not if they move again next year."
Do I understand the right hon. Gentleman to say that, during the period of the community charge in Scotland, there has been no increase in the number of local government employees? If so, it is not true.
Of course there has been a huge increase in local government employees—to run the poll tax.Tragically, it is not just that the people have not got more as a consequence of paying the extra costs of the poll tax and the poll tax system: it is the fact that they have actually got less. Tory authorities all over the country are cutting education, social services and highways maintenance in an effort to avoid capping. Every other kind of local authority is having to do the same. As today's figures show, crime is at the highest level in our history. But Mr. David Owen, the chairman of the Association of Chief Police Officers, has to report that six major urban areas in Britain face the loss of 1,700 police officers—a result of the poll tax capping system. None of that will change with the £140 poll tax cut that some will get. In Tory authorities, Labour authorities and authorities with no overall control all across Britain, spending levels are still set at the same figures. The supply of essential services about which the Prime Minister professes to care so much recently will continue to shrink. Even in the midst of their relief at the reduction of £140 that some will get in their poll tax bills, the British people know where the money is coming from. They know that it is coming from themselves. They know that they are being made to pay for the Government's errors and hypocrisies in the poll tax system. In their claim, as we have heard it over the last week since the Budget, to be using something called Government funds to mitigate the poll tax, the Government are acting like the bank robbers who return part of their loot to try to reduce their overdrafts. But I suppose that, in imposing higher VAT, the Government are at least honouring one principle of the poll tax, the cardinal orthodoxy, the centrepiece of the whole edifice—the principle that everyone should pay something. Everyone certainly will. Every pensioner will pay over the counter for the Government's poll tax fiasco. Every family buying a pair of trainers for their teenage children will pay. Every washing machine repair, every car repair, every home improvement will carry the extra charge—the poll tax VAT surcharge. Everyone must pay something, the Government say. We heard the Chancellor of the Exchequer saying it again to Mr. Walden on Sunday. He said:
The Chancellor cannot have known that at the very time, Sunday lunchtime, that he was reasserting that fundamental immutable principle to Mr. Walden on television the Secretary of State for the Environment was telling Mr. Dimbleby on television, not that "everybody" should pay, but that "most" should pay. As The Times newspaper judged on Monday,"What we have maintained is the principle that everybody ought to contribute towards the cost of local government, the so-called principle of universality."
between them"The glaring contrast
"shows the extent of the fudge which lay behind Mr. Heseltine's statement."
The implication of what the right hon. Gentleman is saying is that, under his party's proposals, there would be a great improvement, and an increase in the services which, by implication, would be through an increase in the revenue support grant from his party. If so, will he tell us—I think that it would be reasonable for him to do so and I am sure that he has worked it out—what tax increases would achieve that?
For 12 years we have been telling, together with many others—[Interruption.]
For 12 years, together with many others, we have been telling the Government—[HON. MEMBERS: "Answer."] It was a very good question and I shall give a very good answer in my own way. We have been telling the Conservative party that it should not have been making the cuts that it has made in central Government funding for essential services. Conservative councillors have been telling them the same.Last Tuesday, there was a deathbed repentance, and the Government reversed the policy of 12 years and started to make a provision. The answer to the question, "How much extra tax will we have to charge?" is, "Nothing at all." [Interruption.]
Order. I ask the House to calm down.
I think that Tory Members may be trying to make up for 12 years of past sin. We have no sins to make up for.When the Secretary of State for the Environment says that most people should pay, in this subtle shift of the cardinal principle, it seems that "most" is very broad. When the Secretary of State for the Environment was asked whether nurses, students and others on low incomes will have to pay the new double tax, he said:
How will that "incidence of liability" be recorded? Perhaps the Prime Minister can tell us this afternoon. After all, he did tell us—he told me last Tuesday—that "all" questions on the poll tax would be answered"the sort of coverage that we've got today will be carried into the new system. We intend the incidence of liability to remain where it is."
That was last week. He did not keep that pledge, due, I am sure, to circumstances totally beyond his control. So let him now give the answers that he promised. First, will there be a register in his new system? The Secretary of State said on Thursday evening, "We may not need a register." A little later he said:"by the end of this week."—[Official Report, 19 March 1991; Vol. 188, c. 158.]
On the same evening, the Secretary of State for Scotland said:"we shall not need a register. I have made that clear."
Will the Prime Minister, as the supreme arbiter that we are told he is, answer the register question now? Secondly, will the Prime Minister tell us what is to be the legal liability in the two-tax, one-bill system that the Government want to foist upon every household in the country? The Secretary of State for the Environment was asked:"Clearly, there will have to be some kind of register".—[Official Report, 21 March 1991; Vol. 188, c. 422, 474.]
He said: "It doesn't follow." If that is the case, may I ask the Prime Minister, will everyone in the household be legally liable? Surely someone has to be legally liable: who will it be? Surely the question of legal liability does not have to await consultation. It should be a basic matter of principle, and I am sure that the Prime Minister can tell us the answer this afternoon. Thirdly, will the 20 per cent. rule remain? Surely the Prime Minister can answer that straightforward question. Will it remain, or will he follow Labour party policy again—act the magpie again—and get rid of the 20 per cent. rule as we shall do? Fourthly, what will be the balance between the poll tax element and the property tax element in the new tax scheme? In Southport last Saturday, the Prime Minister said that "the principles" of the new tax should be based"Is one person in a household going to be legally liable?"
Will the Prime Minister tell us precisely where he stands in the full arc from the poll tax to the rates, in the spectrum of division in his party?"First, on the number of people in each household. Second, on the value of the property people live in".
Will the right hon. Gentleman give way?
I shall give way in a moment.A few weeks ago, the Prime Minister said:
Why does he not tell us what he thinks he is clear about, or even what he thinks that he thinks he is clear about? Will he be the father of the son of poll tax, or the father of the daughter of the rates—or will he just sit there having twins? Does the Prime Minister realise that, if he keeps a personal charge element in the two-tax system, it will be the poll tax in another form? Everyone else knows that, and the stain will never leave the Conservative party. The Secretary of State for the Environment says that these are matters of detail, and that no one should worry about the number of gainers and the number of losers. He told the Conservative Central Council in Southport last Friday:"I think I am clear in my own mind which way we are going on the Poll Tax".
To paraphrase the Duke of Wellington, I do not know if it excites them, but it makes me ecstatic. It may not matter to the Secretary of State for the Environment and the Prime Minister how many gainers and losers there are, but all over the country people are worried to distraction about how they will cope with their poll tax bills. To their credit, even a good many Conservative Members recognise that. The only way in which to relieve that anxiety is to do the sensible thing and scrap the poll tax now. The Secretary of State could do it by returning to a rating system made fairer by a proper system of rebates. That would save £300 million a year on operating costs alone."I think that this Party should raise its sights from the narrow focus of who gains what, when, and in what circumstances, and understand the excitement of what we are doing as a political party."
Will the right hon. Gentleman clarify the passage in "Fair Rates" which explains that, after going back to a rating system, a Labour Government would implement changes to help those hardest hit by the poll tax, but only as far as the situation that they had inherited permitted? Will the right hon. Gentleman confirm that only when fully implemented would such a system help seven out of 10 people?
That is directly explanatory. It is called being honest and prudent, not pretending to people that we can or will afford more than the country has at its disposal. The hon. Gentleman's question could only come from a party that can form an opinion but can never form a Government. I have given him an answer gratis and have not even charged him 7p in the pound local income tax.If the Government went back to a system of rates—as they could do straight away with the assent and co-operation of the Opposition—it would mean not only a saving of £300 million in operating costs, but a system of local taxation in which 99 per cent. of the bills were paid, because it would be an efficient system and inexpensive to operate. It would also mean that people would pay their fair share—for instance, the members of the Cabinet, all of whom gained vastly from the move from rates to poll tax. Now, scandalously, they gain again from the flat rate subsidy of £140 off the poll tax, not just on one home but on both their homes. They ought to join me in volunteering that any gains that they make out of the £140 reduction will go to charity. That would be a generous thing for them to do. It is absolutely outrageous that the Government have ensured that to them that already have well over sufficiency there shall be given even more. Come on, chip in; then we shall all give something to charity as a result of what the Government are doing. This is the Government who gave us the poll tax, with all its vast cost and all its injustices. This is the Government who are not killing the poll tax but keeping it. They are in a mire of their own making; they will not tell us what is to come; they will not tell the British people what to expect. Their consultation is a camouflage that does not convince most of the country, or many of their own party. Ministers are self-contradictory in what they say and, as ever, they are self-serving in what they do. Everything for them is a matter of expediency; nothing is a matter of democracy, morality or economy. We have no confidence in the Government, because they have no competence and no conscience. They have done terrible wrongs to this country with their poll tax. By their refusal to right those wrongs, the Government have destroyed any claims that they may have had to confidence or to trust. We have no confidence in Her Majesty's Government. If they want to consult the British people, they should do it through the ballot box, straight away.
Due to the large number of right hon. and hon. Members who wish to participate in the debate, I propose to place a 10-minute limit on speeches between 7 and 9 o'clock.
It is always the right of the Opposition to test the confidence of this House in the Government. That is always their right and, in line with the conventions of the House, we shall always make time. What this debate will prove beyond all doubt is not lack of confidence in this Government but the Opposition's lack of competence—a lack of competence that even extended to putting down their motion, which they got wrong. I believe that the whole country—[Interruption.]
Order. There was nothing wrong with what the Prime Minister said.
On a point of order, Mr. Speaker. Earlier you said that the motion was entirely in order. You are the person who is responsible for that. The Prime Minister said that the motion was wrong. Will you ask the Prime Minister to withdraw what he said?
The Prime Minister said that he did not agree with the motion on the Order Paper. [Interruption.] Order.
Order. Will the hon. Gentleman please sit down? The whole House heard what I said. The motion that we are debating is the motion on the Order Paper.
Order. The hon. Gentleman puts severely in jeopardy his chance of being called.
The right hon. Gentleman said that the motion on the order paper was not in order. He said that it was wrong. Mr. Speaker, will you look in Hansard to see the words that he used, and ask him to withdraw?
Order. The Prime Minister has been on his feet for only about three minutes.
Millions of people this morning heard the hon. Member for Copeland (Dr. Cunningham) say that the debate was to be about the whole range of Government policy. The motion does not permit that debate. The Opposition did not put down the motion that they wished to debate.The whole country will also notice that, after all the Opposition said in the last day or so, last night they did not oppose our Bill to reduce the community charge. Nor, after all that the Leader of the Opposition said last week, did they vote against the increase in value added tax. When the shouting and the jeering were over, they followed where we led, because they knew that what we were doing was sensible, but they lacked the courage to admit it. This must be the first recorded occasion on which a censure motion has been put down one week to be debated the next, and in the interim inflation has fallen, interest rates have fallen, the trade gap has narrowed and the exchange rate has risen against all the European currencies. If that is a precedent, I hope that the right hon. Gentleman will put down many more such motions. Precisely because the right hon. Gentleman got his censure motion wrong to meet what he wished to debate, we have no opportunity to debate the record of the Government as a whole. We can debate local government of course, and many aspects of the Government of course, but we cannot debate other matters that the Opposition would not wish to debate, like defence and matters of that sort on which their policies are highly inadequate. The reality is—[Interruption.] I wonder whether those who may be watching the debate will note how the Opposition are behaving and how little they like what they hear. I shall come in detail to local government reform, but in the week in which the House approved the Chancellor of the Exchequer's Budget by 110 votes, I shall start with the appropriate aspects of the Budget. [Interruption.]
Order. It is no good hon. Members pointing at the Chair. We have yet to hear what the Prime Minister has to say. I hope that it will be in the context of the motion.
If Opposition Members had been listening rather than shouting, they would have heard me refer to the appropriate aspects of the Budget. As its centrepiece, my right hon. Friend reduced the burden of local taxation dramatically, with £140 off the headline community charge right across the country. [HON. MEMBERS: "No."] I said, the headline community charge right across the country. That shift reversed the progressive rise in the local tax burden begun by the right hon. Member for Bethnal Green and Stepney (Mr. Shore) 15 years ago. That shift is fundamental. Since the Labour party supported the Bill last night, presumably it will not reverse that shift—or will it?
Does the Prime Minister not recall that the last three rate support grant settlements made by the Labour Government, with myself as Secretary of State, were all at 61 per cent. of local government current expenditure? Will he tell us what the percentage is now? Is it not below 40 per cent.?
I quite specifically said to the right hon. Gentleman that it has been falling consistently since 1976 when he set it. As the Opposition supported our Bill last night, presumably they are not going to reverse that stand. Our Budget proposals reduce to just 14 per cent. the burden of local spending to be met from local tax, but yesterday the hon. Member for Dagenham (Mr. Gould) said that local taxpayers should pay not for 14 per cent. but for 20 per cent. That is a critical question for local taxpayers.So which is it—our 14 per cent. or the hon. Gentleman's 20 per cent.? That is the first question for the Opposition. Do they accept the level of local taxation that we have set or will they raise it by more than one third from 14 to 20 per cent., as the hon. Member for Dagenham said? If they do, will they raise everyone's bills by more than one third as well? Will the hon. Gentleman or the Leader of the Opposition tell us? Do they know? Can local taxpayers look forward to local bills one third higher under a Labour Government than under us, irrespective of the levels of local spending? That is what the hon. Gentleman said. I am willing to give way to him. [HON. MEMBERS: "Answer."] The hon. Member for Dagenham, the Leader of the Opposition and even the hon. Member for Copeland seem disinclined to answer. I have a second question of equal relevance.
I shall give way when the hon. Gentleman has answered my question.My second question is how would they raise the money. Do they want to pay for lower local taxes which they want and we want by raising central taxes other than value added tax? In his Budget response, the Leader of the Opposition was indignant that the VAT proposals applied to children's sweets. Today's third question is, which party put VAT on children's sweets in the first place? [Interruption.]
Order. The Prime Minister.
The silence on the Opposition Front Bench provides the answer to that—they did.We already know that the right hon. Gentleman does not know whether he wants to increase local taxes, does not know how to fund the switch between central and local taxation and does not even know which party introduced VAT on children's sweets in the first place. In short, not only does the Leader of the Opposition not know where his policy is going,—he does not know where it has come from. Let there be no doubt about the far-reaching nature of the Government's review of local government. We propose to simplify its structure, to assess its functions, to increase its accountability, to improve its efficiency and to reform its finance. It is the most radical review this century; the first to look at structure, functions and finance at one and the same time. We intend to give local government back to local people, so we need their help in deciding how local loyalties are best reflected in the structure of local authorities. We seek efficient delivery of local services to the local electorate, so we need to examine thoroughly how local councils can improve their management and whether some services now carried out by local authorities might be better delivered or funded directly through central Government. The Labour party cries out for details. We could have arbitrarily decided how to proceed, but I believe that that would have been wrong. A review of this wide scope and nature demands consultation and people deserve consultation. If we had not offered consultation, we would have been rightly and bitterly criticised, not least by Opposition Members. We will listen, we will take advice and we will consider. We will do it in that order, and then decide what we are finally going to do.
I do not wish to intrude on too much private grief between two ex-Chancellors of the Exchequer. On the review, can the Prime Minister tell us what justification there is, moral or financial, for telling pensioners and those on income support this week or next week that they should pay 20 per cent. of the poll tax and that 10.8 per cent. of their disposable income should go on VAT? Will that survive the review?
Whatever any community charge payer has to pay, it would be less if the hon. Gentleman paid his community charge.I can spell out here and now the basis of our new deal for local tax payers. There are five main principles to the review. There will be a single local tax bill for every household. That will reflect the number of adults in the household and the value of their property. The new local tax will be low. In real terms, it will be lower than the old rates bills, thanks to the fundamental shift in local taxes announced in this year's Budget. The new local tax will reflect ability to pay. There will be rebates for those on low incomes and it will not place excessive burdens on those with larger properties or on higher-priced parts of the country such as the south-east. The new local tax will keep local councils accountable to the local electorate.
Will the Prime Minister give way?
I hope that the hon. Gentleman will forgive me; he has been asking for much of this information for some time. He might usefully listen to me.As I have said, the new local tax will keep local councils accountable to the local electorate. The number of adults in a household will affect the size of the local tax bill. Unlike what happened under the old rates system, a single person living alone will not pay the same as larger households. Those who use local services will be required to help pay for them. The new local tax burden will be restrained. Local government will not he allowed to impose excessive taxes through over spending. We will maintain the capping regime. Those are the fundamental basic principles of the tax system that we will introduce.
Will the hon. Gentleman forgive me?There is more than one way of meeting those objectives and it is for that reason that we propose to set out the options in a document to be published and available to the House after the Easter recess. It will be a comprehensive document and I do not propose to be drawn on individual parts of it until its publication. It will be important for people to see all the proposals and how they interlock before we proceed. That is the sensible way to proceed.
I am grateful for the Prime Minister's information about the document to be published shortly, which he says will be comprehensive. When he has abolished the poll tax, will he proceed to abolish the last old rating system? Will the proposed new system apply to the whole country?
The hon. Gentleman may be reassured to know that, for the moment, we have no plans to change the system in Northern Ireland. [Interruption.]
Order. I ask the House to settle down. There is great pressure from hon. Members to participate in the debate. Interventions take up time and will jeopardise those who wish to be called.
It is interesting that Opposition Members, after all that they have had to say in recent days, are so disinclined to listen.I have offered the House five pledges about our plans. In return, we would settle today for answers to just two questions about Labour's own proposals. The Opposition's document says:
that is, Labour's fair rates proposals—"These changes"—
That is a direct quote. The document says that that is shown by "independent research". I am very pleased to hear it. It is wise to consult and to carry out such research. The Leader of the Opposition is right to have done that, but if he has done it, he must have the calculations to back up what has been said. If he has the calculations, why has he not shared them with the House? Will he publish them? If his plans are in such a state of grace, will he lay those calculations in the Library so that we may all examine them? Surely the independent researchers, having carried out the calculations, will have given them to the Labour party Where is this document? How many of the right hon. Gentleman's hon. Friends have actually seen it? [Interruption.] Hands up, those who have seen it. I see no hands. That is extremely interesting. No Opposition Member has seen the document—not even the hon. Member for Dagenham, who told us about it. I do not for a moment think that the hon. Member for Dagenham would mislead anyone, so I ask him in a perfectly straightforward fashion, so that the doubts of everyone may be put at rest, whether he will put that document in the House of Commons Library this afternoon. [Interruption.] I am willing to give way for a reply.[Interruption.]"will mean that seven out of 10 families will gain."
Order. Let us get on with the debate.
In reply to my question, I get silence. Silence is not only golden; it is instructive.The second question to which every taxpayer is entitled to an answer is, how will the Labour party stop local tax bills soaring? We have said perfectly clearly that we will cap spendthrift councils. The Opposition have said that they will not cap spendthrift councils, so how will they keep the bills down? Will they make business pick up the bills, or will they just let their fair rates rip? If so, how will that possibly be fair for the taxpayer? Taxpayers can be reassured, however, because the hon. Member for Dagenham came galloping to the rescue today. He told the New Statesman and Society that he has an answer; that he knows how he will stop all the over spending local councils. What he said was perfectly clear and very firm. It was:
So there it is—there is the smack of firm opposition. This House——"We would certainly do all we can to encourage councils to behave sensibly."
Will the Prime Minister give way?
This House is entitled——
Order. The Prime Minister has indicated that he is not giving way.
The Opposition do not like it when they are on the receiving end, do they?This House is entitled to ask why so many Labour councils deliberately choose to set community charge bills that are far higher than they need to be. The answer is that those councils resist any measure to reduce local spending overall. They put political priorities before local needs. They put the interests of the providers before those of the public. The Audit Commission report? They ignore it. Cost-saving suggestions? They reject them. When new ideas are proposed, they do not even begin to understand them.
No.Part of our reforms must be to make such councils truly accountable, and we shall do that.
I shall give way to the hon. Gentleman in a moment.The behaviour of Labour council after Labour council has brought the financing of local government into disrepute. The story has been the same across the country—money wasted, services neglected, and the concerns of local people ignored. Which are the councils with the largest number of empty properties? Labour councils. Which councils do not collect arrears to fund the rates fund? Labour councils. Which councils produce the worst education system? [Hon Members: "Labour councils."] Yes, Labour councils. But there are some things—and I want to be strictly fair—
In a moment.I want to be strictly fair and there are some things that Labour councils do better and of which they do more. They do more town twinning, they have more foreign visits by local councillors, more nuclear-free zones, and more campaigns on international causes that lie well beyond the interests of local government. The Labour party has one policy on local government—to force costs higher. Over the past few years, too many people in this country have, sadly, come to know through their rates and community charge bills the high and bitter cost of living under a Labour council.
If the Prime Minister is so concerned about the waste of public moneys, why did he and the Secretary of State for the Environment sit back for weeks twiddling their thumbs while local authorities spent tens of millions of pounds sending out invalid bills? Was not that the biggest squandering of public money ever known?
If it were the biggest squandering of money, many community charge payers would be happy, for far more has been lost by Labour councils' activities.
I have given way sufficiently.The fundamental problem remains: Labour councils spend too much. That is why in this Budget we have made a fundamental shift from local to central tax and that is why we will reform the system to stop the burden ever being felt again. The Labour party opposed us at every step and now Labour Members challenge us today—not just the high spenders but the non-spenders sitting on the Opposition Benches. The Leader of the Opposition is concerned about the damage allegedly done to this country by the community charge. What about the damage done to this country by Labour Members who incite others to break the law? The Leader of the Opposition censures the Government, yet he does not have the courage to take action against those Labour Members sitting behind him who incite others. The Labour party has no plans to keep local bills down. Those bills would rise even further because Labour has no plans to keep inflation down either. We are winning the battle against inflation. The Opposition—no, I draw a distinction: the Labour Opposition—have fought us at every step. Every time we have had to take a hard decision, they have gone for a soft option. Every interest rate increase has been opposed. Every cut has been derided as not enough. The Labour Opposition's standard incantation has been Monklands law—whatever the prevailing interest rate, call for a I per cent. cut. They would have been better employed calling for cuts in wasteful and unnecessary spending by local Labour councils. The Budget strategy is central to our aims for local government, not only in a switch from local to central taxation but in our determination to get inflation down and keep it down. That is as important for local government and local government taxpayers as it is for central Government. Inflation has now been falling for four successive months. The next six months—[Interruption.] Wait and see; hon. Gentlemen will see the relevance of this. The next six months will see dramatic reductions. I expect a sharp drop in the inflation rate within two months. That will greatly help to ease in the new system of local government finance. By the end of this year, inflation will be down to 4 per cent. and it will go on falling into 1992. If we are to move successfully from the community charge to the new system of local government finance, low inflation is essential. It is now well on the way to being achieved.
Will the right hon. Gentleman give way?
I shall not.Our inflation rate will be half its current level by December. That lower inflation is the route to lower interest rates, lower bills for local taxpayers and a fairer system, which we will introduce, for local government finance. We have had four days' debate on the Budget presented by my right hon. Friend the Chancellor, a substantial part of which was devoted to the reduction in community charge bills and, as is proper, we have debated that fully. We are now entitled to just a few answers from the Labour party about its shadow Budget and its impact on local taxation. Labour says that it supports the switch from local to central taxation, but the Leader of the Opposition leapt to criticise the increase in VAT. Perhaps Labour would fund the switch out of VAT; perhaps it would not. Perhaps Labour has in mind raising income tax. In successive elections, Labour has pledged itself to raising the basic rate of income tax. Labour wants higher taxes, but these days it does not have the courage to admit how much higher taxes will need to be to fund its local government plans. Local government finance is not the only place where Labour's numbers do not add up. As we saw, Labour's child benefit figures add up only if Labour claws back from the poorest in the land the money that it would give to others, whatever their income. Those on income support and family credit can expect no comfort from the Labour party, yet those are the very families that we have helped with £350 million a year extra in each of the past three years. Did Labour intend to hurt the poorest, or was the reason incompetence? Can the Leader of the Opposition tell us what happened in Labour's shadow Budget to pensioners, Labour's highest commitment? They vanished completely from the shadow Budget—a very shifty position indeed.
On a point of order, Mr. Speaker.
Is it a point of order or a point of frustration?
It is a point of order, Mr. Speaker. It is very simple. At the beginning of the debate, you pointed out that the motion on the Order Paper was quite narrow and related specifically to the poll tax—[Interruption.] The Prime Minister has not referred to the poll tax.
I have not yet heard anything out of order.
We do not even have to guess what a Labour Government would be like; we can see Labour in action in local government every day of the week. Labour has brought shame on the very name of local government. Labour has overtaxed and overspent on a scale that shows its unfitness to manage our national budget. Labour has left waste and chaos in its wake. No one could believe for a single moment that a party that has failed and failed again at local level could even begin to form a Government—Labour cannot even clear the rubbish properly at local level.The motion of no confidence should be directed at the Labour party—no confidence in a party which will always be divided when it comes to standing up for Britain, no confidence in a party which would never accept the responsibilities that go with government. The House can have that confidence in the Conservative party today, tomorrow and for many years to come.[Interruption.]
Order. This is very unseemly behaviour. Members of the House of Commons should not show their feelings in that manner. Those hon. Members who are not remaining will please leave quietly.
Anyone watching the House on television or from the Galleries for the past hour or so would have been pretty depressed by the speeches that we have just heard. The speakers spent about 90 per cent. of their time excoriating their opposition instead of elucidating their policies. Any poll tax payer watching the debate so far, or reading the record, who expects to receive any information about the effects of either of the two major parties' policies will be sadly disappointed. I am bound to say that the past hour or so has shown us nothing but the worst examples of what is wrong with this House.
If the right hon. Gentleman does not like it, he should leave it.
So much cant.
It is about time that the House started to speak for the people of Britain instead of speaking for narrow, sectoral, party interests.The Prime Minister broke from what I regarded as one of his strengths by making a speech that was dedicated to an interminable attack on the Opposition's policies instead of revealing his party's policies or their implications. He did that to avoid the necessity of explaining his own policies. The Leader of the Opposition did exactly the same. Tonight we shall have a vote of no confidence in the Government and we shall vote in favour of that motion. We shall do so because it is impossible to have confidence in a Government who have presided over such a shambles as the poll tax. The lessons of that miserable fiasco, however, go much wider and do not just rest on the fact that the poll tax has uncovered the failure of the Conservative Government after 12 years in power. The poll tax has also revealed the failure of the official Opposition. That was evident today, as it has been throughout this sad, sorry tale. More than that, however, the poll tax fiasco has uncovered the way in which the House of Commons has failed in its duty to the British citizen. But, above all, the fiasco has revealed the failure of the political system that allowed this to happen in the first place. I wonder what the ordinary person, the poll tax payer, would say about the way in which we have conducted ourselves on this matter in the past four years? The poll tax is the biggest political blunder made in this half of the century. The other day, someone said that the groundnuts scheme may have been worse, but, to coin a phrase, that was peanuts in comparison. It is not as though we did not know what would happen. We all knew the consequences, about which the Government were warned. Because of the arrogance that the Government had assumed in 12 long years, they simply were not prepared to listen.
Will the right hon. Gentleman give way?
I shall give way in a moment.The Government were not prepared to listen to the repeated warnings that they received from their hon. Friends, their supporters in local government and all the experts. They decided to ram through the poll tax whatever. At the end of the day, they were made to listen by the people of Ribble Valley who voted for the Liberal Democrats in the ballot box. It is that which killed the poll tax. Let it be known that on that single night the people of Ribble Valley did what the Labour party had failed to do for four years—they killed the poll tax.
The people who did not pay killed the poll tax.
The hon. Gentleman says that it is the people who did not pay who killed the poll tax—what nonsense. It was killed at the ballot box, just as we said it would be. It was killed by the people of Ribble Valley, not by those who disobeyed the law or those who encouraged that disobedience. It was not killed by the riots in Trafalgar square and the non-payers—it was killed by people using their votes in the ballot box. At least that was how it should be.
I am grateful to the right hon. Gentleman. I am reluctant to intervene, but the right hon. Gentleman started his speech by condemning both Front-Bench spokesmen for making what he described as party political speeches. I hate to say it, but it seems just a teensy-weensy bit as though he is now making a party political speech. Perhaps the right hon. Gentleman could change the style of his speech and go back to consensus politics so that we could all respect him a bit more.
The hon. Gentleman will find that I shall explain precisely what we would put in place of the poll tax.The poll tax will be removed from the statute book by the people of Ribble Valley. I do not follow the Leader of the Opposition's somewhat way out figures on what has been spent on the poll tax, because I do not believe that they add up. The most conservative estimates of the cost of the administration of that tax, of the set-up charges and of non-payment comes to £4 billion. Such is the waste that the Government have instituted by pursuing that tax for the past four years. That sum is equivalent to £120 for every family, and it is twice the cost of the Gulf war. What could the nation do with £4 billion to improve education and the health service and to solve the scourge of homelessness and the problems of poverty? That money has been wantonly squandered by the Government on a policy that they knew perfectly well would not succeed. They were warned of the evident miseries that accompanied it. To solve the problem, the Government now tell us that they will put 2·5 per cent. on VAT. Never again should the Government say that they are the tax-cutting Government. By a single stroke, they have raised that tax by a full 16 per cent. It is now clear that the Government will not spend money on building Britain's future, but that they will spend any money on getting out of the hole into which they have dug themselves. The Government are now attempting to fill in that hole, but they are doing so with our money. It does the Chancellor of the Exchequer no good to pretend that the Government have ridden to the rescue with another £4·3 billion to lower people's poll tax bills. The people are paying to have that money knocked off their bills. The Government's calculation is apparently simple. They will knock £140 off the poll tax bills in May and, in their gratitude, the electorate will vote for them in the local elections that month. I do not believe that the British people are that gullible. They know what has happened. They have the poll tax on the never-never—the poll tax on hire purchase. People will receive a lower bill in May, but they will pay for it for the rest of the year in instalments every time they go to the shops. Never again will the Government be able to tell us that they are the responsible managers of the nation's resources. Never again will they be able to lecture us that they are the Government who give value for money. In this instance, the Government have wasted money more fruitlessly and to a greater extent than any other Government since the second world war. We have been told that the Government have now chosen an alternative to the poll tax, but we are in some doubt about what it will be. Revelations so far tell us that that alternative will consist of not one tax, but the very two taxes that the Government derided when suggested by the Labour party.
It is three taxes.
The hon Gentleman is right, because one must add the VAT.In effect, the Government have changed the most unpopular tax in Britain, but jumbled up with it the second most unpopular tax, the rates. We do not know the fiscal emphasis that will be placed on those two parts of the new tax. The right hon. Member for Blaby (Mr. Lawson) asked about that the other day. Will the emphasis lie on the personal charge, or on the property tax? Are we talking about the rates with the poll tax added, or the poll tax with the rates added? The Government tell us that all this will be the subject of consultation. Well and good. We welcome that. But it is not possible to have consultation in a vacuum. The Government must make it clear where they stand on the matter and what they propose. The absence of any view leads everyone legitimately to question whether the Government's proposed tax is cobbled together not so much for the good of Britain as to cover up the wide and widening divisions in the Conservative party. We saw that clearly last weekend when, on one television programme, the Chancellor of the Exchequer said that the principles of the poll tax would be retained and, on another, the Secretary of State for the Environment said that the poll tax was about to be abolished. Which is it? The country is entitled to know.
It may well be.There is an alternative. It is an alternative which the Government had available to them but which they ignored. It was recommended by the Layfield committee. It was not cooked up in some fevered corner of a think tank in Downing street. It has been used and practised with full public support in the majority of other advanced nations to raise local government finance.
It is site rating.
It is an alternative which is simple, efficient, just and related to the ability to pay. It is, of course, local income tax.
Oh, it has changed. It is not site rating.
It is the solution which the Government have, wilfully or otherwise, deliberately ignored.
I am moved to put a question to the right hon. Gentleman because of the interventions from a sedentary position in front of him. I recall at a university of Bristol meeting, when I was a student there—[Interruption.] It is not that far back. I remember one of the right hon. Gentleman's distinguished predecessors, a splendid man, Jo Grimond, arguing for site value rating. He condemned local income tax on the basis that it would have produced too acute differentials between local authorities. Local income tax might be 4p in Eastbourne, but how would he justify a 20p local income tax in places such as Camden? How could young professional people cope with such an increase?
The hon. Gentleman expects me to delve back too far into history. In a moment he will hear me refer to some rather more recent comments by members of his party on the subject of rates. I hesitate to ask him, for example, what might have been the policy of Sir Alec Douglas Home on the matter.Let me be clear. We have published our figures. Those figures are available. They have been available to the party of the hon. Member for Leeds, North-West (Dr. Hampson) for some time. They show an average level of local income tax on average across the country of somewhere between 5·5p and 6·5p in the pound, depending on how it is calculated. I am happy to rest on that—or perhaps I am not. Perhaps I should quote one of the hon. Gentleman's hon. Friends to him. I could do no better than quote the words of the hon. Member for Ealing, Acton (Sir G. Young), who is now a member of the Government, on the matter. In April 1988—not nearly as far back as Mr. Jo Grimond—the hon. Gentleman said:
the then Secretary of State for the Environment—"With a dismissive sweep of the arm, my right hon. Friend the Secretary of State"—
He referred to the Bill which created the poll tax. I could not put the case for local income tax better than that. I am happy to leave it in the words of an hon. Member who is now a Minister."said that any attempt to raise local revenue by a form of local income tax was inherently impossible—ignoring the fact that that is exactly how the vast majority of civilised countries fund local government and that not one civilised country funds local government in the way proposed by the Bill."—[Official Report, 18 April 1988; Vol. 131, c. 608.]
Will the right hon. Gentleman give way?
This is the last time that I shall give way.
I am extremely grateful to the right hon. Gentleman for giving way. Will he make it clear that what he is saying may not apply in direct terms to Scotland? He will be aware that the Scottish National party put before the Secretaries of State for Scotland and for the Environment a comprehensive view of local income tax for Scotland. Of course, the figures are somewhat altered now because of the shift in the balance of taxation. A local income tax of between 3p and 4p in the pound could be introduced. Apart from that, I agree with the line that the right hon. Gentleman takes.
What the hon. Gentleman says is accurate, but he omits one fact. I believe that it would be necessary to maintain the increased level of VAT in order to introduce a local income tax of 3p or 4p.
I have been following the right hon. Gentleman's argument closely. As he says that he has carried out investigations and that the figures are well known to him, can he tell the House what the local income tax would be in Liverpool?
The hon. Gentleman asks me a detailed question—[Interruption.] Let me answer. Those figures are available. I can show him the document which contains the figures for Liverpool. I shall be happy to put it in the Library for the House to peruse. Unlike the hon. Member for Dagenham (Mr. Gould), I shall do it this afternoon, if the House requires, so that it is available to the hon. Member for Horsham (Sir P. Hordern) and any other hon. Gentlemen who may be interested. We have no confidence in the Government on this matter. They have shown themselves to be a Government who are no longer fit to govern our country by the way in which they have handled this important matter and brought misery to many. Nor do we have confidence in the official Opposition for the way in which they have handled the matter. The House has never had a better example of the negative politics which dominates our country than on the issue of the poll tax. The Government and the Opposition borrow not only each other's policies but each other's insults. When looking into the matter, my mind was drawn to the words of the Secretary of State for Wales in 1990, when he was the Minister in charge of the poll tax. He said:
Lo and behold, what did we hear from the Leader of the Opposition on 12 March 1991 in an attack on the Prime Minister? He said:
"Labour are all over the house, taxing bits of it. What next—a room tax? Window tax? bookshelf tax? three piece suite tax? What other bizarre ways will the Labour Party come up with to tax people in arbitrary, unfair and unworkable fashion?"
The two parties simply indulge in banter and argue between themselves. They both say one thing one day and do exactly the opposite the next.[Interruption.]Yes, on this matter we have been a model of absolute consistency.
"Does he want the floor tax or the roof tax, the bed-and-breakfast tax or the bedroom tax, the capital value tax or the extension tax? Does he want one tax or two?"—[Official Report, 12 March 1991; Vol.187, c. 803.]
For Conservative Members, here is how he ends:"Taxes on people's homes are unfair. Property values bear little relation to people's ability to pay. Capital value rating—which lies at the heart of Labour's proposals—would throw a tremendous burden on millions of households, particularly those in the south east whose house prices are high…It took two years to complete the revaluation of around 1·8 million business properties for our new business rate. How much time and effort do you think it would take to revalue 21·5 million domestic properties?"
That then, this now. For that is precisely what the Government now advocate. It is exactly what was criticised in those terms less than a year ago. We have heard constant complaints from the Labour party that the Government's proposals do not assist the poor over rebates and so on. But in its own proposals, the Labour party makes it clear that its rebates would not be automatic and would be paid only at the moment when the scheme was introduced——"Rates were about as rational and fair as Russian roulette. No one with a conscience, no one who really cares, could possibly advocate such a system."
On a point of order, Mr. Deputy Speaker. I cannot understand what is happening in the Chamber. We were all collectively accused before you by the right hon. Gentleman of acting unreasonably in not addressing ourselves to the debate. He then rises and proceeds to do precisely that. Is it not just blatant hypocrisy?
I have explained in detail my party's proposals. Nobody who is listening to this speech or reads it subsequently can be in any doubt about the details of our proposals. We have provided them. They are published and available.To return to the politics of the past year, today the Leader of the Opposition said that consultation was a "device". Earlier this year the Labour party was offered the opportunity of consultation with the Government, but rejected it. The Labour party refused to take part. It stood outside the process. Indeed, today the Labour leader said that to consult was evidence of indecision. You might imagine from that, Mr. Deputy Speaker, that the Labour party was opposed to consultation, yet at the end of its document it states:
That is the Labour party's commitment, yet from the start it has daily denied that in its approach to this matter. Today the leader of the Labour party denied it in his speech criticising the Prime Minister. This is a serious matter which the House should have approached with more seriousness than has been evident today. We have no confidence in the Government or in the official Opposition, who have put their desire to oppose before their desire to represent the national interest."The Labour party intends to consult widely on the basis of the proposals set out in the Paper. There is no reason why Labour should fall in the same trap as the Conservatives in announcing an immovable and predetermined policy irrespective of expert and political opinion or regardless of constructive observation."
Will the right hon. Gentleman give way?
No, I shall not give way. [HON. MEMBERS: "Sit down."] I shall not give way again. [HON. MEMBERS: "Sit down."]
I should like to consider for a moment how the House has handled the matter. What purpose does the House have, if it is not to protect the ordinary citizen from arbitrary and unjust laws such as the poll tax? Yet the House has not been doing that. The House has failed in its duties to protect the ordinary citizen. What can the average person, considering what has happened in the past year, think about the fact that, when the legislation was debated last year, Conservative Members trooped through the Lobby in Division after Division to vote through the poll tax? Now they will presumably troop through the Lobby in Division after Division to get rid of the poll tax. What judgment can be made about their judgment and interest in putting our citizens first?Above all, the poll tax fiasco points out the failure of our political system. People are entitled to ask how we got into this mess in the first place. How could a Government of intelligent people served by a civil service which is reputed to be one of the best in the world produce the poll tax? The Government were warned. They knew perfectly well the consequences of their action. In 1976 the Layfield committee considered the poll tax and said that it was unworkable. In 1981 the Government's Green Paper on the alternative to domestic rates considered the poll tax and said that it was unworkable. In 1982 the Select Committee on the Environment considered the poll tax and said that it was unworkable. In 1983 the Government's White Paper on rates considered the poll tax and said that it was unworkable. Not one local authority association, not even the Association of County Councils when under Conservative control, supported the Government's proposal. Nevertheless, the Government went ahead. The truth is that the proper process of government has been broken.
Will the right hon. Gentleman give way?
No. The hon. Gentleman must sit down.At the end of 12 years in power, the Government believe that they have——
We have a Government now——
Coward. [HON. MEMBERS: "Withdraw."]
On a point of order, Mr. Deputy Speaker. Can you tell me whether the use of the word "coward" in the Chamber reflects on the character of an hon. Member? If it does, perhaps the hon. Member for Langbaurgh (Mr. Holt), who uttered that expression, will take the opportunity of withdrawing it now.
I was not sure whether the House heard the word. Confirmation has now been received and I think that the hon. Member for Langbaurgh (Mr. Holt) will withdraw it.
You and I know each other well, Mr. Deputy Speaker, and you know that I would not wish to cast a slur on any right hon. or hon. Gentleman. However, when we are having a debate—[HON. MEMBERS: "Withdraw."]
This is disgraceful.
Order. Mr. Speaker repeatedly reminds the House that we are all honourable here. We do not reflect adversely on the character of other right hon. and hon. Members. The hon. Member for Langbaurgh should courteously and without qualification withdraw the remark that he made.
Of course, I shall bow to you, Mr. Deputy Speaker, and unreservedly apologise to the right hon. Member for Yeovil (Mr. Ashdown). I look forward to him giving way to me.
Despite all those warnings and opposition from all quarters, the Government went ahead with the poll tax. They have inevitably reaped the fruits of their folly.The Government have broken the natural process of government. They believe that they have a monopoly of the truth, and, therefore, that they had a right to force through the legislation, whatever the damage to our country and, in the end, to their reputation. It was government by ideological fiat from the previous Prime Minister. In so far as the present Prime Minister seeks to change that attitude of the Government, I welcome and support it.
The real question is: how did the Government get the power to introduce the poll tax in the first place, when six out of 10 people at the general election voted against the party that had the poll tax as a policy in its manifesto?
The Government sought to impose this and other damaging policies on Britain, having received a minority of the votes.Let us be absolutely clear. If we had fair votes, we would not have the poll tax. What is much more important is that, if we had fair votes, we would not have had any need of the poll tax. The poll tax was introduced to curb extreme left-wing councils. We heard the Prime Minister say so today. He said that he was continuing to curb extreme left-wing councils. Not one of those extreme left-wing councils would be in power if we had a fair voting system. Still the Government intend to blunder on. As a solution to this problem they will not give local councils a fair voting system. Essentially they will concentrate and centralise even more power in their own hands. They are using this as a cover for destroying much of what is left of our local government system. Reform is necessary for the proper process of our government, nationally and locally. We know that reform will come only through the Liberal Democrats. It will not come from the Labour party, which intends not to change the system, simply to inherit it. I do not know whether the Government's difficulties are temporary or terminal. I do not know whether their difficulties are to do with the new Prime Minister going through a period of passing disarray or whether the noise that we hear and the sight we see are those of a great political juggernaut breaking up. I do know, however, that more and more people will see the poll tax fiasco as a reason not just to change the Government, but to change the system of government. More and more people will recognise that the poll tax is yet another reason why the great programme of reform, which must be instituted on government, is now necessary both to the system of government and to the process of voting. As that movement gathers pace, the Tory and Labour parties will, as usual, be at the back trying to hold it up, and the Liberal Democrats will be at the front leading it forward.
As I was fortunate enough to catch Mr. Speaker's eye recently in the debate on the War Crimes Bill, I am particularly grateful for the further opportunity today to intervene. I shall make my speech as brief as possible.I listened with great interest to what was said by the right hon. Member for Yeovil (Mr. Ashdown). I am sorry if he goes away sad about today's debate. My own impression is that we have thoroughly enjoyed ourselves and both the major parties will go away happily to enjoy Easter—I cannot answer for the right hon. Gentleman's party. The only difference is that Conservative Members will go away still strongly grasping power and the Opposition will go away still vainly seizing power. That is what happens after a vote of no confidence. One thought came into my mind during the right hon. Gentleman's speech. When I listened to his scathing denunciation of both the Government and the Opposition, I began to wonder whether his recent public commitment to a happy participation in a coalition Government with either side was really quite as valuable as I thought it was to begin with. I am dismayed. The main reason I want to speak, however briefly, is to give the fullest possible support to my right hon. Friend the Prime Minister, who has embarked on an enormous task and faces formidable problems. I am sad if what I say disappoints all those Opposition Members who have so strongly and loudly supported me during the past 15 difficult years, but I am now in a position to say these few words. I believe that what my right hon. Friend the Prime Minister is doing is absolutely right—perhaps I say so the more strongly because I was one of those who previously said that the Government were absolutely wrong. In the debate during the passage of the Local Government Finance Bill on 17 December 1987, I summed up:
My right hon. Friend the Prime Minister is now limiting the damage and leading the Conservative party to recover from that damage. The size of the problems with which we are confronted is enormous. Those of us who were in the House during the royal commission at the end of the 1960s and were responsible, directly or indirectly, for the local government Acts in the 1970s, recognise exactly how big the problem is. We were then dealing with Government structure. This time, we are told, we shall deal with all aspects of local government—structure, purposes and finances. It may well be that they are interlocking—of course they are. But the task of dealing with all three aspects of local government is simply enormous, and I see no reason why the matter should be rushed. One of the lessons we should learn is that the poll tax was introduced without proper consultation or examination. As a result, the Prime Minister faces the problems he does today. Any change now requires the utmost detailed consideration. The same applies to the structure of local government. There are many different aspects of structure. What happened in the early 1970s—in 1974—was that we introduced a new structure for local government."The poll tax is unfair and unworkable. It does not increase accountability and will be immensely damaging to the Conservative party."—[Official Report, 17 December 1987; Vol. 124, c. 1263.]
Will the right hon. Gentleman now apologise to the House of Commons for the mistakes that he made in the 1974 reorganisation?
It was before 1974.
It was the Local Government Act 1972.
Yes, it was the Local Government Act 1972, long before 1974. One of the purposes of that Act was to adapt local government to the requirements of a modern society and moderntechnology——
It ignored the people.
It does not take very much to annoy my hon. Friend.
Will my right hon. Friend acknowledge that the reorganisation that we endured during his term of office was disastrous and proved to be so? It totally destroyed local loyalties, which we are now seeking to restore.
It did nothing of the sort. It established local authorities of a certain size for purposes that are required of them today. Where those changes have taken place in the past decade, they have done so largely because of bias and bile against local authorities. I do not want to go into detail, but if we take the case of London, there is now no structure for dealing overall with the problems of one of the great cities of the world. Ours is the only country not to have that. That was done through sheer bile against an authority which, at the time, did not happen to be Conservative. When we examine the issue of the number of tiers in local government, we must give the matter the utmost consideration.We said that the poll tax would not be acceptable, and it proved not to be acceptable. I know that my right hon. Friend the Prime Minister does not blame the Labour party for that, or those people who said that they would not pay it. The fact is, the poll tax was not acceptable to the public opinion of this country. If we try to put forward proposals that are not acceptable to the great majority of the public, we must remember that we shall get into difficulty again. That is a problem facing us in our examination of new taxes. The problem with the poll tax was that it was based on a fundamental fallacy, which was the result of dogma. That was perfectly expressed by my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) who said that, in local government, the duke should pay the same as the dustman. That doctrine is not held anywhere else in the world except, I am told, on one small Pacific island. If we accept that dogma and introduce the poll tax, however many variations we try to make in it, it is bound to be a failure. The 1974 Conservative party election memorandum stated that any change must be in accordance with people's ability to pay. That is the essential principle for the whole basis of future taxation of local government. The right hon. Member for Yeovil talked about local income tax. I hope that that option will not be dismissed too lightly by those examining the issue. It was recommended at the end of the 1960s by the Layfield committee and it is too easily dismissed. I believe that one reason for our present problems is that the rating system was too easily dismissed with bogus arguments-I admit that, at times, I used them myself. We asked how it could be fair to have a retired couple living in a semi-detached house and next door a couple with the husband and two sons at work, with both households paying the same rates. That would not be fair, but the fact is that that can be adjusted for fairness by a rebate system. That led us into part of the trouble which brought about the poll tax. A local income tax was looked at seriously by the Treasury in the early 1970s. We now have complete computerisation and up-to-date technology, so it is possible, with great economy of manpower, to deal with both a national and a local income tax. The two can be clearly separated, if necessary by having one in the spring and one in the autumn. A local income tax can be implemented without any breach of confidence, because the revenue authorities have both the working and home addresses of everybody who is involved. Therefore, we could produce a simple system and people could see exactly how much was going into local spending and how much was going into national spending.
How does the right hon. Gentleman overcome the problem that was mentioned earlier—that the yield per person in Eastbourne would be greater than the yield per person in Liverpool? This is a geographical flaw.
That problem arises on every form of local government finance which has yet been thought of or practised. It is tackled by the adjustment of local government benefits from central Government. It always has been done in that way and it will still have to be done in that way.Very well, we may have to accept capping of extravagant local authorities, but if local authorities are extravagant, it must be largely the responsibility of local people to deal with those local authorities.
We have a London authority called Lambeth with massive rate, rent and charge arrrears, yet its people still vote solidly Labour. Can my right hon. Friend explain that?
If they like to go on voting Labour and paying those enormous rates—[HON. MEMBERS: "They do not"] They were paying much higher rates than anyone when they were paying rates, put it that way, and if local authorities like to do that, that is up to them. People who live in Westminster do not have the same problem.I see the deputy Leader of the Opposition in his place. I am puzzled why the Opposition particularly asked that this vote of no confidence should be concerned only with the poll tax. I cannot recollect any other occasion in the House in the past 40 years when a vote of no confidence has been limited to one particular subject. I can understand one reason, which is that on previous votes of no confidence the Leader of the Opposition has, sadly for him, failed in his attack. He roamed far and wide and got into great difficulties, and he lost his party's support. I suppose that, if one sticks to one thing., that reduces the chances of the Leader of the Opposition messing up yet another vote of no confidence. That is one explanation. The other is that the Opposition are just not prepared, on an occasion when they are testing a whole Government, wanting to overthrow them, to discuss all the other issues today in modern affairs. Do the Opposition not realise that by doing that they are reducing the value of their own motion of no confidence? The country realises that clearly. Why were they not prepared to give my right hon. Friend the Prime Minister all the credit for what he has done in restoring our situation in Europe? He has changed the whole position. Why were the Opposition not prepared to discuss the part that he played in the crisis in the Gulf? Why were the Opposition not prepared to discuss the dramatic step that he took in saying, within a month of taking office, that haemophiliacs will of course receive proper compensation for being infected with AIDS as a result of bad blood transfusions, something which had been argued about in a petty way for years? My right hon. Friend dealt immediately with all that, so why will not the Opposition give him credit for it? I just do not understand, except that they are not prepared to acknowledge the good things that have been done in the past 100 days. I am, and I warmly congratulate my right hon. Friend the Prime Minister and his colleagues on that.
The right hon. Gentleman has just received a handout as an ex-Prime Minister.
I wish to give my right hon. Friend the utmost support. Of course, I immediately acknowledge my particular interest as a former Prime Minister.
How much is it?
I do not know. It is not something to which the hon. Gentleman will ever aspire.
I do not think that I have ever heard so much nonsense in all my life. The attack that the right hon. Member for Old Bexley and Sidcup (Mr. Heath) has just made on my right hon. Friend the Leader of the Opposition was nonsense. I am amazed that the right hon. Gentleman should have changed his attitude so radically. From condemning his Government, as he has been doing all these years, he has now turned into an enthusiastic supporter.A measure of the right hon. Gentleman's failure to appreciate the significance of this debate on the poll tax is his criticism of the Labour party for refusing to widen the debate. If we were to widen the debate, it would allow Conservative Members, such as the right hon. Gentleman and the Prime Minister and others, to escape the consequences of what is really a political disaster for the Government. Therefore, it is our intention today to focus narrowly on the poll tax. There is no question of reducing the value of the motion, as the right hon. Gentleman said. We are increasing the value of the motion by ensuring that we debate the poll tax and its effect. It is significant that the right hon. Member for Sutton Coldfield (Sir N. Fowler) should start the debate by objecting to its terms. The fact that he too wanted to widen it is a measure of how worried members of the Government are about the House debating the poll tax today. One thing surprised me about the defence of the poll tax by the right hon. Member for Old Bexley and Sidcup. He said that he did not want to disappoint the Opposition with his support for the Government. I was not so much disappointed as amazed that he knew what was happening, because every Minister has a different point of view. Every speech and every broadcast reveals an entirely different kind of poll tax, an entirely different kind of impost. How the right hon. Gentleman can be so enthusiastic beats me. The real clue to his speech was when he said that he commends the exercise in damage limitation. That is what the Prime Minister's speech today was all about. It was an attempt at damage limitation. Let me tell the House what the nub of the Government's problem is. The poll tax is wholly unacceptable to the general public but Tory party activists want to retain the poll tax. That is the Government's problem. They are anxious to ditch the poll tax if they can, but their own activists will not allow them to do so. That is the reason for all the wriggling and manoeuvring, all their strange words and all their problems. But I wish to concentrate on the effect of the poll tax on disabled people, most of whom are on low incomes. They have a low income and, as a consequence of Government policy, disabled people will have to pay more VAT. That is a serious attack on disabled people in view of their low incomes. Also, they will have to pay a percentage of the poll tax. As the Prime Minister told us this afternoon that that matter is still the subject of discussion, I do not yet know how much, but they will have to pay something. Therefore, they will pay increased VAT and some percentage of the poll tax, yet they will get no benefit from the £140 that has been offered. Disabled people are losing heavily, in all ways. I remind the House that the average increase in male earnings in manufacturing industry in the past 10 years has been 20 per cent. The average increase in disabled people's benefit has been 1 per cent. There is no escaping those figures. Disabled people are living in great poverty, and this impost of the poll tax and increased VAT will hit them very hard indeed. It is easy for some of us to pay the poll tax—the well-off and Members of Parliament can manage it, but disabled people cannot bear this sort of burden, which is very heavy indeed. The set of circumstances that I have outlined about increased VAT and having to pay a percentage of the poll tax will hit disabled people because they do not receive any benefit from the concession that is being given to most people. I do not understand how that anomaly can be defended. The second major effect on disabled people is the impact on social services: the money that has been allocated to local authorities has been reduced and county councils are in chaos and do not know whether they are coming or going. Social services are absolutely vital for disabled people. They are crucial. I am glad that the Government are seeking to remove mentally handicapped people from long-stay institutions. I commend that policy, but there is no financial provision for it. There is a shortage of beds in hospitals and in long-stay institutions and no proper provision in the community, and disabled people are caught—trapped in a vice. They have neither adequate provision in institutions and hospitals nor provision outside in the community. Government policy towards local authorities is disastrous for the people who are least able to bear it. It is significant that the Government have deferred implementation of their proposals to improve community care and it is potentially disastrous to the people concerned Yesterday or the day before I received a letter from a Minister saying that the Government did not intend to implement certain vital provisions—I think, sections 1, 2 and 3—of the Disabled Persons (Services, Consultation and Representation) Act 1986, what we call the Tom Clarke Act. That means that the Government are backing off from vital aspects of advocacy and assessment for disabled people. I conclude with this plea. If the problems of disabled people have been overlooked by the Government, as I believe they have been, I should like my short speech to draw attention to them and the Government to think again. I must confess that I am disappointed with the Prime Minister because, as a former Minister for the Disabled, he was active in seeking to help disabled people. He did not do as much as I thought he would. In my view, as Minister for the Disabled he certainly failed to pursue the interests of the disabled as actively as I would have wished, and I hoped that as Prime Minister he would pay special attention to their problems. However, with this controversial poll tax policy he has not done so. Tonight, I make a plea that disabled people should be given special consideration because if they are not, they will suffer even more than they are suffering at the moment.
On a point of order, Mr. Deputy Speaker. As you know, a large number of hon. Members on both sides of the Chamber wish to take part in this debate. Earlier this afternoon Mr. Speaker ruled that between 7 o'clock and 9 o'clock the 10-minutes rule would apply. Do you have any capacity to rule now, informally, that all speeches should be limited to 10 minutes, so that those of us who sit here until the end of the debate may have a chance of giving our point of view on this important vote of no confidence?
I do not have power to add to what Mr. Speaker has already ruled, but I hope that right hon. and hon. Members will have regard to the matter that has just been raised and will try to reduce their speeches, which may otherwise go on at length.
I shall try to follow the example set by the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) and keep my remarks short.First, may I congratulate my right hon. Friend the Prime Minister on a quite outstanding speech, which both devastated his critics and substantially added to his reputation in the House and in the country. May I also congratulate the former Prime Minister, my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), on his remarks. I agree entirely with his observation that it is extraordinary that this censure motion has been drawn up in such a way as to confine us to one subject. As far as I know, that is almost unprecedented. The only conclusion to which one can come is that the Opposition are afraid to expose to debate the other subjects in question. Of course, it is true that month after month the community charge has dominated the political debate. There is no question about that—the debate has gone on and on. What has been the effect on the political standing of the relative leaders? My right hon. Friend the Prime Minister has been found by the opinion polls to be the most popular Prime Minister since Churchill. When Gallup asked this month, "Who would make the best Prime Minister?", 13 per cent. thought the right hon. Member for Yeovil (Mr. Ashdown), 23 per cent. thought the Leader of the Opposition and 56 per cent. thought my right hon. Friend the Prime Minister would be the best equipped. If these are the bad days, I cannot wait to get to the good days. My right hon. Friend the Prime Minister has made as impressive a start to his premiership as it is possible to make. I concede that we have a secret weapon—the Leader of the Opposition. The smack of firm opposition will live with him for a long time. In effect, the Leader of the Opposition is our universal comforter—the parliamentary equivalent of worry beads for the Conservative party. There is no row yet invented that he cannot get us out of Westland, the leadership, the list goes on. He is at the service of successive Conservative Governments.
Now that there has been a change of leadership, and since he was a senior Minister, will the right hon. Gentleman tell us the truth about Westland?
Order. I hope that the right hon. Gentleman will not tell us anything about Westland today.
I am greatly tempted, Mr. Deputy Speaker, but as my right hon. Friend the Member for Blaby (Mr. Lawson) said, the hon. Gentleman will have to wait for the book.I am not persuaded by those politicians and newspapers that argue that the old domestic rates system was the best and fairest system of local taxation known to man. That is not the view of the public, and we know it. In the 1974 and other general elections, that was a serious issue on the doorstep and the public wanted an attempt at reform. There is no question of that. There is no doubt that the public deserve some protection from high-spending local councils. I live in two council areas, both, as it happens, controlled by Labour. In Birmingham, I live under a council that has squandered the £70 safety net in this year's settlement; in London, I live under a council that has lost some £100 million by gambling on the futures market, and whose only defence is that its action was unlawful. The public want to be defended against such activities, and it is surely entirely justifiable for the Government to act to that end. I make no apology for my membership for a Government who sought to reform the position. Had I disagreed with their policy, my proper course would have been to resign: that is the only right and sensible course for a Cabinet Minister who feels so strongly about a subject. I am not sure that such people should have the luxury of coming back several years later and saying, "The policy may have gone wrong, but you may be encouraged to know that I was secretly against it all the time." Nor am I over-impressed by the arguments of some of my former colleagues about what should be done now. My right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) talks darkly about the Ides of March; my right hon. Friend the Member for Blaby quotes Mendes France. Mendes France said that to govern was to choose, but when it came to action the tale was slightly different. The big issue that Mendes France tackled in Government was the European Defence Community and the rearmament of West Germany. For that he allowed a free vote, and the Government abstained. That does not strike me as quite the kind of leadership—a leadership of firm decisions—that my right hon. Friend the Member for Blaby probably had in mind. We memoir writers must stick together. The purpose of memoirs is to guide present and future actions. I am not attracted by standing pat on the community charge and pretending that nothing has happened. I am even less persuaded that we should raise all the money centrally; that would recreate the finance system of the health service. Devoted as I am to health professionals, I have never regarded the financial system and the management structure of the health service as the way forward for the 21st century. Such a change would entirely alter, and risk destroying the basis of good local authorities. Nor am I attracted by the suggestion of my right hon. Friend the Member for Blaby of putting 5 per cent. VAT on food, books, newspapers and children's clothing. Unlike him, I shall be standing at the next election, which may explain my caution. I fear that my right hon. Friend is getting a little demob-happy. It is not so much the Ides of March as the September song of a politician who has his eyes on a sunset seat in another place. The actions taken by my right hon. Friend the Prime Minister are correct. Whatever our views on the community charge may have been, the issue is here and now: what do we do about the present position? I support his proposal, and I applaud the local government review. It is right to consider structure, functions and finance together. That is sensible, and I welcome the consultative document that my right hon. Friend the Prime Minister has announced. I believe that local councils should be accountable to the local electorate; I welcome the fact that people living alone will not pay as much, and I believe in controlling the overspending of some councils. The Opposition say that under their plans seven out of 10 people will gain. I repeat what the Prime Minister said: before the public believe that claim, we must be given the figures on which it is based. Like one or two of my hon. Friends, including the Member for Derby, North (Mr. Knight), I remember the social security review only too well. I remember the response to the proposals that I put to the House, which was that we should provide the illustrative figures. We did so, and that is now what we require of the Opposition. They must provide the figures. I strongly support my right hon. Friend's approach. It is a good rule to proceed with a sensible amount of consultation. Governments who do not do that often find themselves in difficulties. What has impressed me about the first months of my right hon. Friend's premiership has been his handling of some of the important decisions that he now faces. At times, the Opposition's real concern seems to be not the decision-making process, but the difficulty of challenging the decisions made by my right hon. Friend. That applies to a range of subjects; child benefit is just one example. The Government of my right hon. Friend the Member for Finchley (Mrs. Thatcher) introduced many impressive reforms, and the country owes her a debt. My right hon. Friend the present Prime Minister was part of that revolution, and he is now taking it on. He has made an outstanding start. Let me make one prediction: his policies and his style will enable him to win the next general election. It is equally certain that those qualities will keep the Labour party in opposition—and looking for a new leader.
The speech by the right hon. Member for Sutton Coldfield (Sir N. Fowler) may have led the right hon. Member for Old Bexley and Sidcup (Mr. Heath) to reflect that at least his Cabinet was rather more dignified and restrained in its utterances than the Thatcher Administration have proved to be. The right hon. Member for Sutton Coldfield has come back to the fold, having left that Administration when he saw the clouds gathering; the House will know how to assess his speech.The right hon. Member for Old Bexley and Sidcup, however, is not only a former Prime Minister but a former Chief Whip. I suspect that that is why his speech supported the complaint made earlier that the content of the motion was too narrow. Such an important subject merits the concentration of minds. As former Chief Whip, the right hon. Gentleman will know that a broader debate would have allowed Conservative Members to be dragged in to talk about everything except the flagship that the poll tax was once said to be. Lest the right hon. Member for Old Bexley and Sidcup should believe that his Administration deserved great respect, let me tell him that the Opposition are entirely justified in claiming that over the past two decades the Conservative party has continually demonstrated its utter unfitness to have any responsibility for local government. The reorganisation of 1973 was probably the most inflationary exercise that the country has ever experienced. At that time, we witnessed an example of duplicity. In his announcement of the rate support grant settlement immediately before the 1974 election, the then Secretary of State promised the House that the average rate increase would be 3 per cent., and that nowhere would the increase exceed 9 per cent. In many parts of the country, the increase amounted to more than 100 per cent. In March 1974, an incoming Labour Government had to sort out an appalling muddle; I suspect that, in 1991–92, an incoming Labour Government will be faced with exactly the same task—a task made unavoidable by the demonstrable incompetence displayed by the Conservative party. That statement can be justified, and I propose to justify it. Local government reorganisation led to a substantial explosion in local government expenditure. The Labour Government were criticised for failing to control it. In March 1974, I went into the Department of the Environment as the Parliamentary Private Secretary to Tony Crosland who set up the consultative body on local government finance. Local finance was very much under control between 1976 and 1981. That was due to a consistency and decency of treatment that led my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) to intervene during the Prime Minister's speech and point out that during the last three years of the Labour Government's life they provided 61 per cent. of local government finance. Then the Thatcher Administration took office. No Conservative Member can deny that the right hon. Member for Finchley (Mrs. Thatcher) said that the burden must be shifted from the backs of the taxpayer to the backs of the ratepayer, with the result that the Treasury now provides 43 per cent. instead of 61 per cent. of local government finance, which more than doubled, in real terms, the burden placed on the domestic ratepayer. Then came the problem. Having doubled the domestic ratepayer's burden, the former Prime Minister then complained about the rates explosion and promised to abolish domestic rates. Despite all the warnings, which have been listed in the debate, not one of the right hon. Members who were part of both the last and the present Administration was prepared to stand up and tell the Prime Minister that there was something in that advice and that it would be stupid to embark upon a tax that would be as unacceptable as the right hon. Member for Old Bexley and Sidcup described it. He said that it was unfair to tax the dustman and the duke in exactly the same way, but the fact remains that the north country dustman was probably paying twice as much as the south country duke. Whatever may be the other faults of the poll tax, one of the major causes of its unpopularity is the degree of corruption inherent in it. Some hon. Members will have heard me provide on a previous occasion a detailed comparison of the treatment of the city of Westminster and the metropolitan borough of Rotherham. The Minister for Local Government and Inner Cities is well aware of the figures, because he has heard them from me before. In 1990–91, we found that, under the Government's inexplicable and corrupt determination, Rotherham was treated as one of the most prosperous and least deprived areas in the country. I have the largest area of dereliction and, in parts of my constituency, perhaps the highest unemployment to be found anywhere in the country, but Rotherham was regarded as more prosperous than anywhere in the affluent counties of Surrey, Kent, Hampshire and Sussex. The result of Rotherham being told that it was prosperous was that that metropolitan borough, which has no reputation for extravagance or irresponsibility, received per head a very much smaller sum in grant than most other areas. By comparison, the city of Westminster, with a smaller proportion of children in its schools and a smaller number of old people needing care—a more compact area with a smaller population and with all the advantages that accrue to an area that enjoys the double poll tax revenue that many hon. Members, and others, had to pay—received last year 455 per cent. more per head than the metropolitan borough of Rotherham. Despite all our protestations and the clear evidence that we provided of the problems that face the borough, in 1991–92 the proportion of support would have risen to the extent that the people of Westminster would have received 475 per cent. more per head than the people in the metropolitan borough of Rotherham.
The hon. Gentleman puts his case with his usual force, robustness and clarity, but we are debating present policies rather than what happened in the last few years. A motion such as this focuses attention not only on the policies of the Government of the day but on the policies of the Labour party. Is the hon. Gentleman convinced by the statement made by Opposition Front Bench spokesmen that seven out of 10 households will benefit from the Labour party's proposals, and has he seen the documentation and figure work that led them to that conclusion?
I must confess that I cannot say that I am absolutely informed of all the details of my party's policy. However, I intend to respond to the hon. Gentleman's question. I had intended to do so, anyway, because it would have been utterly unproductive and unprofitable to sit down without referring to the alternatives. No Opposition Member can refrain, however, from uttering critical comment about that most appalling, wasteful and foolish exercise in British politcal history, the poll tax It is an example of complete lack of wisdom and complete absence of judgment. It was an exercise which was cynical in its approach. It inflicted on the country and on the world of local government in particular an arrangement for the determination of support that was insanely and impossibly inexplicable.The fact remains that a return to a property-based tax such as the rates has a great deal to commend it. It is economic. Vast sums of money have been spent during the last two years and will be spent during the next two years, whatever the outcome of the consultations. Therefore, I ask myself what could have been done with that money. Despite the fact that my local education authority is responsible and good, as the hon. Member for Dartford (Mr. Dunn) will recall from his days in the Department of Education and Science, I find when I visit primary schools in my constituency that this year they can afford to buy only one paperback book for every 25 children. Then the Secretary of State for Education and Science has the gall to talk about standards. While such glaring needs exist, money has been thrown away on the poll tax. The right hon. Member for Sutton Coldfield left the Cabinet, but the whole lot should have gone; now they cling to office and will also cling to the son of poll tax with the enthusiasm that they displayed for its father. The Conservative party claims to have an interest in and a knowledge of local government. That claim has been exploded during the last 12 months. It claims to represent the rural shires of our islands. Only the other da y, I received a letter—the hon. Member for Richmond, Yorks (Mr. Hague) may find this interesting—from Wentworth parish council—not a hotbed of socialist belief—asking me to speak and lobby fiercely in its interests and those of other parish councils. They appear completely and utterly to have escaped the attention of the Department of the Environment during the last three years. I hope that at some stage—whether at the end of this debate or later—the Under-Secretary of State, the hon. Member for Salisbury (Mr. Key), or his more senior colleagues will relieve the anxieties of those who are deeply offended and disappointed by the Conservative Government's attitude towards the leaders of our rural communities.
I shall seek to put the hon. Gentleman's mind at rest right away. I believe strongly that there is an important role for parish councils. However, we must remember that only 50 per cent. of this country has parish councils, that there are community councils in some parts of the rest of it, while in other parts there are not. My right hon. Friend the Secretary of State for the Environment said in his statement that he is looking at the parishes. When we publish our consultation paper in the near future, we hope to listen to the voice of the parishes which represent not only rural but urban England.
But the Government have not listened to them so far. When the last local government reorganisation took place, the Government said that they were prepared to establish successor parish councils in urban districts, especially in those with a population of between 10,000 and 20,000. What they did, in effect, was to grant successor parish council status to every Tory urban district, especially if it was above or below the parameters that they had established, but they refused to give successor parish council status to Labour urban districts that did fit in with the Government's criteria. I could go on at length about that, as I did at the time.The Government's approach to and handling of local government have been deplorable. They should learn to co-operate with local government because there is no more efficient way of administering services. They must resist the temptation to follow the advice of hon. Members like the right hon. Member for Blaby (Mr. Lawson) who would centralise education. Centralisation is extravagant, inefficient and wasteful. It is probably too late for the Government to begin to work with local government in the way the Labour Government did between 1974 and 1979, when control was exercised without a large stick, through consultation and through good faith. The sooner the Government put behind them the appalling record of Boadicea, who is not with us today—of all hon. Members, the right hon. Member for Finchley should have been present—the better local government will be. After the experience of recent months I have no faith that those who occupy the Treasury Bench, who were servilely obedient to the right hon. Lady and who bear the responsibility that she conferred upon them, are fit for office. The motion is entirely justified.
I shall follow your injunction, Madam Deputy Speaker, and that of Mr. Speaker to speak briefly, if for no other reason than that I thought the motion was one of no confidence in the Government and I had prepared a wider speech.I wonder why the Opposition have chosen to restrict the debate simply to the community charge. I do not know what the process of thinking and discussion was during consideration by the shadow Cabinet, but I can imagine the right hon.and learned Member for Monklands, East (Mr. Smith) saying to the Leader of the Opposition, "Whatever you do, Neil, do not get tangled up with figures." That is no doubt one reason why the subject has been narrowed to the community charge.
The plot thickens the more one looks at it. I understand that the right hon. Gentleman who will be replying to the debate on behalf of the Opposition has nothing to do with the portfolio of Environment, but is the deputy Leader of the Opposition, whose concern is Home Affairs. Of course, that puts him in the happy position of not being expected to know anything about what Labour would do.
My right hon. Friend has elucidated something for me and helped the whole House. I had no idea that that was the case. I had not regarded the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) as a repository of knowledge about the community charge; no doubt we shall learn a great deal when the time comes.There was confusion about the subject for debate. I am not surprised when we realise that we have just had the best trade figures for many years and when we have seen the rate of inflation falling. We know that it will fall much more and that interest rates will come tumbling down during the year as well. Therefore, I am not surprised that the Opposition chose to narrow the debate to a single subject. We are debating a motion of no confidence in the Government, and the Opposition want to defeat the Government by voting us out. It is a forlorn task. If they had chosen a general vote of no confidence, and if the Leader of the Opposition had made such a hash of it as he did on the last occasion, would not the party have tried to get rid of him? It occurred tome that there might be difficulty about that, given the leadership rules of the Labour party. I do not know whether my right hon. and hon. Friends have had an opportunity to peruse those rules, but I have. It is extraordinarily difficult to get rid of the leader of the Labour party, not just because the trade unions have the largest block vote and the leadership can be changed only during a party conference. If the leader is changed, he has to be replaced by the deputy leader, none other than the hon. Member for Sparkbrook. When my right hon. Friend the Member for Aylesbury (Sir T. Raison) said that the right hon. Member for Sparkbrook is to reply to the debate, I immediately thought that the reason must be that the Labour party is going to get rid of the Leader of the Opposition and is preparing the right hon. Member for Sparkbrook to take his place.
The hon. Gentleman is not addressing the motion, but that is for the Chair to decide; I was about to raise it on a point of order. The hon. Gentleman mentioned my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley). If the hon. Member for Horsham (Sir P. Hordern) reads the history of my right hon. Friend and of his family, he will realise that they have been in local government all their lives, and that my right hon. Friend's mother was a great lady on Sheffield city council for many years.
Order. Both hon. Gentlemen are out of order. Perhaps they would do the House the courtesy of returning to the motion.
Of course, Madam Deputy Speaker, but I should have expected the Opposition spokesman on environmental matters to reply to a debate which is confined to the poll tax.I listened carefully to the Leader of the Opposition, and I distinctly heard him say that no more money would be necessary to pay for the Opposition's policy and that there would certainly be no poll tax. He said that there would be no increase in taxes. I do not know how a Labour Government would get more money, unless they borrowed it. That is a perennial problem for the Opposition. They are keen on spending, but they say that they would not cap local councils if they spent more than they should. Therefore, they would be driven to increase taxation or to borrow. That has always been the case with Labour Governments in the past. I was interested to hear the right hon. Member for Bethnal Green and Stepney (Mr. Shore) rightly claim in an intervention that in his time the rate support grant was 61 per cent. I also recollect that that proportion was reached by a drastic reduction imposed by the International Monetary Fund through Dr. Johannes Witteveen's letter—that admirable letter of intent-when he drove the Labour party to make slashing cuts in expenditure. The right hon. Gentleman was forced to reduce the rate support grant from 65 per cent. to 61 per cent. almost straight away.
There was a reduction from a high of 66 per cent. to 61 per cent., but the impression that it was the long-term policy of the Labour Government to reduce the proportion of Government funding is not right. The 61 per cent. was held for three years. I have discovered that, according to a written reply last year, the Government's rate support grant equivalent was reduced to 38 per cent. from 61 per cent. No wonder the Government are in trouble and will not get out of it easily.
The right hon. Gentleman talks about a reduction which was not in his mind. It was Hobson's choice because the Labour Government were compelled to make the cut by the International Monetary Fund. If the Leader of the Opposition were ever to become Prime Minister, a Labour Government would undoubtedly fall into the same trap again. They would spend more, borrow more and fall into the hands of the International Monetary Fund. I am encouraged by the hon. Member for Middlesbrough (Mr. Bell) nodding his head in agreement.
In the lifetime of the Labour Government, the overall percentage might have come down for the reasons just mentioned by the right hon. Member for Bethnal Green and Stepney (Mr. Shore), but is it not also the case that within the figures there was a bias towards metropolitan authorities and against the shire counties which distorted the figures? Some inner-city authorities got considerably more grant from the centre, and many shire counties got considerably less. The results are still felt today.
Under the Government, the county of West Sussex has always done extremely badly by the rate support grant. I fail to distinguish between Labour and Conservative Governments in my disrespect for the rate support grant, which has never been very good for shire counties.We have had endless debates about the nature of the community charge and about rates before it. What was endemically at fault in both systems was simply that the degree of Government support available was far too low and the bills to households were far too high. That will remain endemic so long as major services such as education are run by local authorities. Teachers' salaries have risen and are bound to rise faster than the rate of inflation. There is no party point in this. As the right hon. Member for Bethnal Green and Stepney knows, the proportion of the rate support grant fell under his Government as it has under the present Government. We are belatedly realising that the level of grant to local authorities must be raised, and that is what we are doing now. I wholly commend my right hon. Friend the Prime Minister on having the initiative to do that. I am in favour of consultation. It is an important matter of courtesy and good manners. I congratulate my right hon. Friend and the Government, as I think that they are going exactly the right way. However, if there is to be a high level of Government spending in support of local authorities, the Government must have greater control over the expenditure of local authorities, particularly in major services. That is what leads me to think that it RS now necessary to review carefully the role of education which is run by local authorities at present. I say that not just because of the severe financial aspects of the problem but because of the totally unacceptable variation in standards between one part of the country and another. It is a disgrace that in certain parts of the country it is not possible for young people to get a good education because of the nature of their local education authority. For that reason, I wholly applaud what I understand to be the Government's policy of devolving responsibility upon the schools themselves. It is also necessary to revise and review the role of inspectors and to tighten up the curriculum. My right hon. Friends are already doing that. Far from today's debate being a matter of censure, it is an opportunity for me and other Conservative Members to applaud what is being done, the range of consultation taking place and the fact that it has now been recognised that support grant to local authorities has not been sufficiently high and is now being properly addressed. I wholly support the Government's policy, not only in this respect but right across the field, and I wish my right hon. Friend the Prime Minister and his colleagues every success.
I support the no confidence motion, and I should like to explain why it has been related solely to the poll tax. The Government labelled the community charge their flagship, so now that they are in such a mess over the poll tax, the Opposition have every right to table a motion of no confidence.I represent an area which has been capped under the poll tax legislation not once but twice. As I have said in previous debates, my local authority is not high-spending or profligate. It is a responsible local authority which faced immense difficulties in trying to implement budgets because the grant it received was insufficient to meet local needs. The administration and implementation of the poll tax has been a complete disaster and billions of pounds have been wasted on collecting the poll tax and compiling a register which put the electoral register in jeopardy as people believed that the electoral register and the poll tax register were one and the same thing. There was also the cost of the shortfall in collection. I should point out that my local authority has already collected 96 or 97 per cent. of its poll tax, unlike some authorities that have been mentioned. The poll tax was based on two principles—accountability and universality, in that everyone contributed something. Those principles have now disappeared. The idea of accountability was removed last year, when poll tax capping was introduced. No capped authority has been allowed to test its spending or its budget at the polls. In Barnsley the poll tax was set at £320. It was then capped for something like £270. Yet even with a poll tax of £320, one third of local authority seats were uncontested Labour victories at the May elections. There was no accountability but simply the Government's intention to cut local government expenditure by capping budgets. Time and again in the House, my hon. Friends and I have attacked the credibility of standard spending assessments upon which budgets were based. My hon. Friend the Member for Wentworth (Mr. Hardy) pointed out the difference between the local authority in Rotherham and Westminster council and the difference in the amount of money that a local authority is allowed to spend to provide a standard level of service. The SSAs have been a complete fiction. The points raised by Opposition Members about SSAs have never really been answered. Standard spending assessments bear no relation to the particular needs of an area and take no account of levels of unemployment, deprivation or anything else. They are based on out-of-date and irrelevant information. As I have pointed out previously, the SSAs for my area are based on the 1981 census information and are absolute rubbish. This year the Government laid down percentages by which budgets could be increased to avoid capping. The figure for my local authority was 7 per cent. There was absolutely no accountability; simply more management from the centre. As the right hon. Member for Blaby (Mr. Lawson) pointed out, if there is to be more centralisation why not simply abolish local government altogether and go one way or the other instead of hanging about in the middle? The hon. Member for Horsham (Sir P. Hordern) mentioned the revenue support grant and its reduction from 60 to about 40 per cent. It is interesting that the revenue support grant this year has increased by 1.9 per cent. External finance has increased by something like 19 per cent. The burden is on business rates and poll tax and not on the revenue support grant from the Government. The Prime Minister referred to profligate councils and high-spending authorities. Councils are simply not allowed to spend profligately, particularly those in my area which have been capped. On the subject of profligacy, perhaps someone should say something about Westminster council selling off cemeteries at 5p a time and the rest of that lunacy. The second principle was that everyone should contribute. Even people without any income were required to contribute 20 per cent. That could never be fair. Even now, because of the £140 reduction, the people in Wandsworth will pay nothing for local goverment services, yet my authority's budget is capped yet again. We simply do not have the grant that we need to maintain our services. So what price the principle that everyone contributes if people under one authority will pay absolutely nothing this year? The idea that everybody should pay is linked to the idea of joint and several bills. Under the rating system both members of a joint household would have been responsible for the bills. It was a fiction for the Government to believe that only one person in a household was responsible for paying the rates bill, while everyone else in the household over the age of 18 was allowed to vote for whatever council they chose. Obviously, other members of a household would contribute jointly to its management and there is nothing wrong with allowing the head of the household to be responsible. As I have said, my local authority has been earmarked for capping for a second time, despite following to the letter the Department of the Environment's guidelines. It followed the guideline of a 7 per cent. budget increase. It also followed the guideline issued as the result of an announcement in December 1990 by the Minister for Public Transport that money would be available for the Sheffield light rapid railway transit system—supertram. Because of the removal of South Yorkshire county council, my authority, together with that of my hon. Friend the Member for Wentworth, have jointly to fund that project with Rotherham and Doncaster. On a visit to the area, the Minister for Public Transport said that the money would be available. Yet, because my authority took the Minister at his word and thought or hoped that £387,000 would be provided in respect of our contribution for the supertram, we were marked down for capping because the budget was £387,000 above the Department of the Environment's limits. My authority was misled by the Minister in December. The authority was led to believe that the money would be in addition to the budget, yet my authority now has to cut its provision for child care in order to fund the public transport system for another area.
I should be grateful if the hon. Gentleman would allow me to respond to his accusation that Ministers have misled him. That is not the case. That is a complicated problem. I have spoken to local authority leaders in the Dearne valley and corresponded with them, as has my right hon. Friend the Secretary of State. We are trying to get to the bottom of the problem and to be as helpful as we can.
My authority met last week to take £387,000 out of the budget that had been put aside for child care because it has to fund the supertram. Unless someone says, "Okay, put that back in your budget," that is what will happen. I am grateful for the Under-Secretary's offer of help, but it should have been made a little sooner.
We shall be placing on the Table the evidence that the Minister has just described. The letter from the Department of the Environment can be read two ways. The statement from the Department of Transport can be read only one way. The statement published in the local press from a speech by the Secretary of State for Transport can be read only one way. He said openly that costs will not fall upon the community charge payer but will be entirely tax-borne.
It would be helpful if, in the near future, the Minister were to meet me and my hon. Friend the Member for Wentworth together with members of the authority to sort out the proposals.
I acknowledge the contribution made to the important debate on the supertram by the hon. Member for Barnsley, West and Penistone (Mr. McKay). I shall pass on that request to my right hon. Friend the Secretary of State.
I am grateful for that. Unless some action is taken about the problem facing my authority and Rotherham and Doncaster, the future of that transport system will be in jeopardy. My authority will not be willing to fund it by using money that would have been spent on other provisions.That is an example of the problems of capping brought about by the introduction of the poll tax. The Secretary of State said last year that there would be a parade of bleeding stumps when we informed him of the cuts that authorities had made. Already, the fire service and police provisions in my area are below Home Office recommended levels. This year the Secretary of State boasted about a newspaper produced by the National and Local Government Officers Association which refuted cuts that had taken place in local authorities around my area. In my area, we have sacked teachers and closed a music teaching centre, and charges have been increased or introduced for all social services provision. The light rail transit system is now in jeopardy and the funding for the passenger transport authority has put in jeopardy other projects, one of which is the reorganisation of my local authority's town centre passenger interchange. Those are real cuts in service provision for the people in my area. This is a halfway house—a bed-and-breakfast tax added to a property tax. The Secretary of State asked the Labour party to take part in the review of local government finance, presumably because he wanted to adopt some of the proposals in the fair rates document. The Government are between two stools—abolishing the poll tax and returning to the old rates. Of course, there is the £140 reduction, but that will only be for the better-off. People on low incomes in receipt of community charge benefit will not qualify for the payment because it comes off the headline rate. They are the hardest hit, but they will receive no reduction as a result of the increase in VAT. If it is right for everybody to contribute to the poll tax, is it not also right that everybody should receive a rebate when they are allocated? Value added tax is a regressive tax and the increase in VAT will be detrimental to people on lower incomes. What is to happen in future years? The poll tax is not going away. Legislation to introduce the new system will take time and people will have to face the fact that the poll tax is here for another year and perhaps a further year after that. The Prime Minister said that people deserve consultation. I agree entirely. They deserve consultation through the ballot box, and the sooner the Government call an election, the better off we will all be.
It is always an experience to listen to the leader of the Liberal Democrats. He is such a persuasive exponent of the politics of certainty. His speech today was no exception. Of all subjects, the tangled issues of local government should inspire the most circumspection rather than the most easy-going certainty. I say that in the context of the House grappling with the situation where, as my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) observed, what is desired is the synchronised reform of the structure, powers and financing of local authorities. A synchronised reform would be the most logical and comprehensive, yet we know from the experience of post-war politics that that is a holy grail with very little likelihood of success.My right hon. and hon. Friends have been confronted with an attempt to fashion local government on a medium-term basis that will pay regard to structure, powers and finance, but not necessarily on a comprehensive basis. It is my view that, on any judgment, they have made a commendable start to that task, and I shall enthusiastically offer my support in the Lobby. I shall race through my speech under the exigencies of time. However, I should like to judge the proposal by six immediate criteria. First, there is the necessity of increasing central Government's finance of local authority activity. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) is no longer in the Chamber, but he was confronted with the fact that he had increased the local content of local authority financing. He looked rather shamefaced about the parentage, but those are the facts. I am much more brazen. I went into office in 1979. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe). who at that time was in charge of the Treasury team, consigned my right hon. Friend the Member for Blaby (Mr. Lawson) and myself to the job of securing a higher local authority contribution. I remember the experience well. Confronted with this request, my right hon. and learned Friend the Lord Carlisle of Bucklow, who was then Secretary of State for Education and Science, appealed to my heart, as, clearly, my judgment had been concreted over by Treasury officials. It was quite simple. My right hon. and learned Friend said, "Don't you know that people pay their taxes in sorrow but their rates in anger?" He was absolutely right. We have now lived with the consequences. We have placed upon the local content of local authority finance a burden that simply cannot be borne politically. The tangled events of the last couple of years have demonstrated that. Let there be no misapprehension: we experimented with the community charge because the rates could not bear politically what was demanded of them. That being the case, the value added tax decision was crucial. Everything else that I say is in the context of the financing of local authority spending. To my mind, this was the most important single judgment. Secondly, it was right to preserve the uniform business rate as a Whitehall determinant in local authority finance, and not to expose it to local authority determination. That very important decision might be said to amount to nationalising the structure of local authority finance. I am certain that, if we are to protect business from high-spending local authorities, which would use business rates as a way out, it is quite right that this type of protection should be preferred. It would be nice to know that it was underwritten by the Opposition. Thirdly, it is quite wise to be modest and evolutionary about the recasting of local authority responsibilities. Inevitably, authority will follow money. If this House is to use central taxation increasingly as a means of providing local authority services, the functions of local services will inevitably be recast. I welcome the decision in respect of further education. It is the beginning of a debate that will continue. We must be quite undogmatic in our approach to the question of single-tier local authorities. I am glad to see the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) in his place. For once, the Liberals are aligning themselves with the more progressive House of Commons elements, whose Members sit on the Government side, in Saying that that is an objective. We must have a rigorous system of capping. It is not possible for central Government simply to walk away from the total activities of local authorities. These will continue to represent a major sector of the economy, even if on an attenuated basis. The most crucial element in this debate is the local authority tax that is to be established. I take no strong view on this matter. I am sad to part company with my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) in accepting that property will be an element of that tax system. When I consider how property is taken into account in the overall system of taxation in this country, I cannot say that it is treated unfairly. I do not start by resiling from the principle that there must be a property element, but I quite understand that, in terms of equity, there should be some adjustment to take account of occupancy. That will not be an easy task, and I guarantee that the outcome will not be popular. Unpopularity is inherent in the system. In respect of this matter, I do not travel with the politics of certainty; I travel with the politics of nervous hope. All of which I have said should be underpinned by a certain philosophy—insistence that the United Kingdom is a unitary state, and that we do not see a situation in which powerful disaggregated elements can challenge the authority of Government. I do not want to raise the temperature unnecessarily, but I have to say that this principle will be even more important when there is a developing relationship between the institutions of the European Community and this country. In particular, the Commission will be looking for points of reference within this country that leap over national government and find other ways of fulfilling and extending Community influence and Community finance. We shall be no less good Europeans if we wish to maintain the structure of a unitary authority, and we have that clearly in mind as we proceed with the reforms that are now in hand. I told my right hon. Friend the Member for Blaby that I would make a reference to his contribution to the Budget debate. That contribution was dramatic, and it certainly embellished the debate. I have shared office, including office in the Treasury, with my right hon. Friend, and I have warm recollections of those times. He was a good colleague, who has made a very powerful contribution to the fortunes of this Government and of the Conservative party. However, I should like to make a slightly dissenting observation about his speech this week. In any political situation, I am the statutory vegetarian, whereas my right hon. Friend is carnivorous by temperament. It was in that sense—although it may have led to undue indigestion—that he approached the reforms that he had in mind. It is very easy to talk about the elimination of all local government. Would that mean all authority being attached to the money, or would some authority be subcontracted to be free of the money?
That is what the Liberals believe.
My hon. Friend should not incite me. I am merely saying what the questions are. There is no point in strutting in here, making headline remarks, and thinking that people will not bother with the footnotes.My right hon.Friend the Member for Sutton Coldfield (Sir N. Fowler) has referred to the financial implications of changes in value added tax. A change from zero rating to 5 per cent. would result in a charge on books and newspapers, talking books for the blind and the handicapped, wireless sets for the blind, fuel and power, construction, transport and, above all, food. Let us not think that a Chancellor can breeze into the House on a Tuesday afternoon with an imaginative Budget and produce these increases for starters. Government is not quite like that. I suggest that government should be government by explanation, government by trying patiently to guide, especially in this instance, when the Government have in mind a major switch in taxation policy. I am not saying that there should not be a switch. Indeed, the Liberal party, at one stage, enthusiastically endorsed the idea of a major switch towards extension of value added tax. This is a legitimate area for public debate, but it is not something that should simply be asserted from the Dispatch Box. That might be good for the Government, but it is thoroughly bad for the House of Commons. Consultation has been our tradition. Corporation tax, capital transfer tax and nearly all other major fiscal changes have been subjects of consultation. The speech of my right hon. Friend the Member for Blaby was immensely unfair in respect of my right hon. Friend the Prime Minister. However, as usually happens in no confidence debates, my right hon. Friend the Prime Minister has emerged in no particular need of friends or allies. We have had the debate. Inevitably, the Opposition will believe that their best bet for the next election is this relatively narrow issue. They are almost latter-day Disraelis—Disraeli having had such great faith in sanitation as a political issue. This is the ground on which the Opposition have chosen to mount their attack. We have watched the debate, and heard the argument. The Prime Minister will lead, and we shall proudly follow.
It is always a pleasure to follow the right hon. Member for Shropshire, North (Mr. Biffen) and to imagine him in Cabinet with the right hon. Members for Sutton Coldfield (Sir N. Fowler), for Cirencester and Tewkesbury (Mr. Ridley) and for Blaby (Mr. Lawson), and with the present Prime Minister. What a Cabinet that was. Even with hindsight they cannot get it right. The right hon. Member for Sutton Coldfield paid a great compliment to his right hon. Friend the Member for Blaby, and the right hon. Member for Shropshire, North made another attack on him. What must they have said to each other in Cabinet? Can one imagine the harmony that reigned in all those years in office.?When the right hon. Member for Shropshire, North began his speech, he seemed to be saying, "Yes, local government finance is complicated and difficult and, yes, local government needs finance," but he was really telling the House that it is a mess. Who has created that mess? Who has been in government all these years? Who reduced central Government's contribution to local government finance from 61 to 38 per cent.? It was the Tory Government. I was a member of Newcastle city council when the Government began all this. The education committee had to consider where to start making cuts. We began with buildings and moved on to school books. Over the years, we saw how things unravelled and how arithmetic, reading and writing were affected. A succession of Secretaries of State for Education and Science have tried to explain that away. The Tories are now talking about taking the education budget away from local government. They are saying that it is all the fault of local government. If central Government squeezed local authorities over education spending, how much more did they squeeze them on housing? The housing investment programmes were cut, and what happened? The number of homeless increased. When the Government then came along with their doctrine about selling council houses, we found that the councils were not allowed to spend the money that the sales generated and that they had to put it all on deposit, apart from only 20 per cent. That was what happened when the Government began to squeeze local government's money. However, the Government have not only squeezed local government on money; they have added to the burdens of local government. On 1 April the Environmental Protection Act 1990 will come into force. The provisions of the Children Act 1989 also have to be implemented. Who is to finance those new Acts of Parliament or the new duties that they impose? To implement even part of the Environmental Protection Act would cost £3 per head on top of the old poll tax figures. Implementing it fully would cost £12 per head. Who will finance that? We have heard a lot from the Government about community care. They have said that care should take place in the community, not the national health service—what a fine concept. We have heard about how we should liberate hospital beds and look after the house-bound. All that is fine policy, but where are the resources? Where is the money? Will the Government find the money for that? Will they tell us today where that money will come from? No, they have no idea. They simply pass the responsibility to local government and, like Pontius Pilate, wash their hands of it. Former Cabinet Minister after former Cabinet Minister has attacked our motion of no confidence, but seek to wash their hands of all the rest.
I hesitate to interrupt the hon. Gentleman's entertaining flow, but if his thesis is correct, can he explain why local government expenditure has increased by 25 per cent. in two years? He knows very well that the factors that he has mentioned, including the new legislation, are included every year in the standard spending assessment arithmetic.
The standard spending assessment was well dealt with by my hon. Friend the Member for Barnsley, Central (Mr. Illsley), who pointed out that the figures that are used go back to 1971——
No, it is 1981.
My hon. Friend said 1971, but the year may well be 1981.I remember the regression analysis that was used in 1977. All the figures were poured into a computer. It churned around the arithmetic and mathematics, and out came the standard spending assessment. Middlesbrough was given a standard spending assessment and we tried to comply with it, notwithstanding all the additional obligations that had been placed on our council. We are still short and will probably be faced with community charge-capping. The Government and the poll tax are confusion confounded. Not only do we not know whether there will be a poll tax after the review or whether the poll tax will be based upon rental or capital values, but we in Middlesbrough still do not know today whether we will be community charge-capped at the end of the month.
The Minister will have overlooked the fact that in the 1990–91 determination of the standard spending assessment, Yorkshire and Humberside region lost about £500 million in central support while an equivalent sum went to the south-east, the richest area in the land. I suspect that my hon. Friend's area was a net loser in that exercise—as well as Yorkshire and Humberside.
Not only are we a net loser in that exercise, but the people of Middlesbrough and my constituents wonder why they should pay more in VAT to subsidise the people of Wandsworth. Why should the people of Wandsworth not pay any poll tax and the people of Middlesbrough pay an extra 15 per cent. in VAT to subsidise them? Where is the accountability principle about which we have heard year after year when the cry of the right hon. Member for Cirencester and Tewkesbury was "Make your local council accountable"? I may have missed out the right hon. Gentleman in my litany of Cabinet Ministers sitting around the green baize table in Downing street all those years ago. But what has happened to accountability? It has completely disappeared.When I asked the Chief Secretary to the Treasury about accountability in Wandsworth last week, he said that there was still accountability, but how can there be accountability if no money is being paid to the local treasury? What about all the services to which the right hon. Member for Shropshire, North referred, such as books that have to be translated into braille for the blind? Where is the accountability for services if no one is paying the poll tax? How can it be? The answer is that it cannot be. All that we get from the Government is the confusion and obfuscation that we have heard tonight. One good thing that has come out of our debates in the past few days has been the reference to Pierre Mendes France, the French socialist leader. I never thought that he would be so popular among Tory Members, Cabinet Ministers and the like. The right hon. Member for Sutton Coldfield referred earlier today to the former Chancellor of the Exchequer, the right hon. Member for Blaby, and the phrase "To govern is to choose". He said that there had been a free vote on German re-armament in 1954. However, he did not tell the House that Pierre Mendes France was the Prime Minister of the time who extricated France from its involvement in Indo-China, which was the most important and significant event of the post-war years. I remember Pierre Mendes France for saying that people are not tools, and that they cannot be used as tools or disposed of as tools. The Conservative Government, however, have used people as tools for more years than we can remember and are indifferent to their plight. My hon. Friend the Member for Workington (Mr. Campbell-Savours) said that about £4 million has been spent sending out poll tax bills that will have to be torn up. That is using people as tools and being indifferent to them. We all know that the House is living theatre. We come into the Chamber every day to see the play acting. Today, we saw a former Cabinet Minister raising points of order before the speech of my right hon. Friend the Leader of the Opposition. We saw flag-waving when the Prime Minister sat down. I kept looking at the monitor but it said "The Prime Minister". I had begun to wonder because I thought I was listening to a speech from a Leader of the Opposition I thought that the right hon. Member for Huntingdon (Mr. Major) was getting some practice. He is obviously going to have a long time to practise in the future. It was knock-about stuff, but he said nothing that his right hon. Friend the Secretary of State for the Environment did not say the other day. I have read the Hansard report of the right hon. Gentleman's speech and know that the Prime Minister stood at the Dispatch Box today and almost quoted, word for word, the speech made the other day by his right hon. Friend. He did not answer any of the questions that were asked by my right hon. Friend the Leader of the Opposition, such as who in a household is to be legally liable for the poll tax bill and will the 20 per cent. rule still apply? We may know in due course whether the rental or capital values will be used. But it is not surprising that there is confusion in the country about whether the poll tax is to stay or to go, the status of the new tax and who will be responsible for it, because, having listened to the Prime Minister this afternoon, I suggest that he is really the Leader of the Opposition and should be referred to as such in the House. I was reminded that Stanley Baldwin ran an entire election campaign on "Safety first". If the Prime Minister continues in his present vein, he will say, "Wait and see"—wait and see on the poll tax, capital values, rent values, implementation, legal liability and the 20 per cent. The waiting must stop soon. Then the voting will begin, and we will see the Prime Minister as the veritable Leader of the Opposition.
Order. I remind the House that hon. Members speaking between now and 9 o'clock should limit their speeches to 10 minutes.
It is always interesting and enjoyable to listen to the hon. Member for Middlesbrough (Mr. Bell), but I do not believe that his heart was in his speech. Those who listened to the Leader of the Opposition move the motion realised that we were listening to a void. The hon. Member for Middlesbrough has been a Member long enough and was in politics long enough before then to know that the electorate is not that gullible and that the Labour party will not be able to dance around the issue much longer.When my right hon. Friend the Secretary of State for the Environment announced last Thursday that Cabinet had decided in principle to embrace a property tax, I wished to have the opportunity to speak out and in due course to vote against that proposal. I therefore tendered my resignation. I should like to place on record my thanks to my hon. Friend the Minister of State, Welsh Office, who gave me the opportunity to serve as Parliamentary Private Secretary from 1988. He is a man of infinite patience and kindness, as is recognised by hon. Members on both sides of the House. If I had been able to garner some of his wisdom, perhaps I would not be in my present position. My experience as parliamentary private Secretary was interesting At first, I found Welsh Members, particularly Labour Members, particularly Labour Members, slightly intimidating, but I came to know them as a rather good crowd I confess that I was a bit terrified by my first Welsh Grant Committee and the working over I was given by the hon. Member for Ogmore (Mr. Powell), whose bark turned out to be worse than his bite and who subsequently discovered that I, a Member representing an English seat, was required many times to keep the quorum in that Committee Many of us have observed the procedures of the House which, rightly, give Privy Councillors priority, but I had not realised that it would be such an educative experience. Perhaps its purpose is to enable former Cabinet Ministers to snap at one another. Over the past few days, I have found that a less than edifying experience. It was regrettable. We cannot deny, and will not be able to fool the electorate, that we are in something of a mess on this issue. Many of those at senior level who have contributed to this debate must carry the blame. So, too, must those of us who tamely voted for them as they led us. As the Local Government Finance Bill was moving through its 188 hours of debate in this place, several of us issued warnings. I remember sitting around a table in the office of the then Prime Minister, my right hon. Friend the Member for Finchley (Mrs. Thatcher), and arguing that we had to have a rates revaluation to make a community charge acceptable and that it was essential that we limited the base budgets of councils in the year of transition, or they would screw our backs to the wall, as ultimately they did. As my right hon. Friend the Member for North Shropshire (Mr. Biffen) knows, Shropshire left the rating system spending £140 million and now, under the community charge, spends £246 million. That is not the Government's policy; it is the action of the Labour Liberal-supported controlling group of Shropshire county council. At meetings with Ministers, I argued constantly for single-tier councils. I do not believe that any of us who argued for that wanted the abolition of parish councils—far from it. Either the district system or the county system must go, and I should prefer the county tier to go. Whatever is left must be subject to rotating annual elections. My right hon. and hon. Friends cannot avoid the fact that we must abolish the community charge. When we introduced it, we were scared to go the whole hog, and we are now paying the price. During the past few days, several of my hon. Friends have urged me to be quiet and not to rock the boat. Sadly, many of our earlier warnings went unheeded. Members representing northern seats know the famous Geordie saying, "Catch me once, shame on you. Catch me twice, shame on me." I hope that some of us will have the courage not to be caught twice. My right hon. Friend the Prime Minister, in his defence of consultation, is right to take that attitude and not be bounced quickly on this issue. Sadly, Cabinet endorsed the property tax. Regrettably, it may yet be called a "Heseltax" and haunt him. It will not work. Environment Ministers have put on record many words explaining why a property tax will not work. There is a proposal to calculate a percentage discount for occupancy. As no more money will come from central Government, we have yet to find out where the balance will come from for local government. Presumably, the jam will have to be spread even more thickly over existing property taxpayers. The House cannot escape the conclusion that local government is spending £66 billion this year. With only £7 billion of that raised locally, according to the Red Book, and an administration cost of £750 million to obtain that minor sum, is it worth the bother for the sake of 10 per cent.? My right hon. Friend the Member for North Shropshire, in a typically powerful speech and in the entertaining way in which he always addresses the Chamber, rightly related pay to accountability. What is "accountability" at 10 per cent.? Is it worth having? Perhaps we should accept that in this country Parliament has democratic control. We live in a parliamentary democracy, and we are proving this to local government by rushing through in the past 24 hours and the next a Bill to change the way in which they operate. That is proof positive of the power of this House over local government. Yes, abolish the community charge, but raise the entire cost of local government through income tax, VAT and excise duties. Spread the burden and ease the pain. The no confidence motion will fail, because people know that the economy is on the right track. My right hon. Friend the Prime Minister is undoubtedly the best Prime Minister for which this country could wish. He pointed the way ahead in his speech on Friday, and I am sure that many of us will support his approach. But his suggestions are too good to risk. My right hon. Friend the Chancellor told the House in the Budget that the art was to pluck the goose without it hissing. I warn Ministers that if they do not grip the neck of local government finance once and for all, the goose will not only hiss but bite. I still have no difficulty in voting for the Government. Although they are wrong about the property tax, this is a good and able Government. I suspect that their curse will be the property tax. Shrewsbury has a long Tory tradition. This year, on 29 June, we celebrate the 150th anniversary of Disraeli's election as Member of Parliament for the town in 1841. I accept that the standard of Member has declined somewhat—[HON. MEMBERS; "No."] My hon. Friends are too kind. Fortunately, the standard of its people has not declined. It is a decent place and the majority are good, hard-working folk. Those who know me best in the House know that I do not regard Shrewsbury as a ticket to the House of Commons. It is a town where my youngest son and daughter were born and where my family, home and closest friends are. This bond has caused me to conclude that, if the choice is between ambition for office and serving what I sincerely hold to be the best interests of Shrewsbury, I cannot and will not deny them.
It is a pleasure to follow the hon. Member for Shrewsbury and Atcham (Mr. Conway), having watched him in the Welsh Grand Committee abiding by his oath of silence and suffering those long hours. I am sure that he values his freedom now.I congratulate everyone who campaigned against the poll tax, often at considerable expense to themselves. Good riddance to it. This debate is a bit of a shambles and somewhat unreal. Local government finance is certainly in a shambles, but that is not altogether unwelcome, because that has been caused by the Government's attempt to disembowel the poll tax, which is to be welcomed heartily. I welcome the £140 reduction in most bills—I should like to see the bills for those on lower incomes disappear. I am glad that we now see the end of the poll tax. I have some difficulty in understanding why the Labour party has confined its no confidence motion to the poll tax. To some extent we are at a burial service because the poll tax and the problems it has caused to our constituents are finished. There is no question about that. Many more pressing issues, however, will come on to the agenda.
Will the hon. Gentleman give way?
I should like to, but time is pressing as we are bound by the 10-minute limit on speeches.There are many more pressing items that will come onto the agenda in the coming months including housing, regional policy, the failure to implement the Disabled Persons (Services, Consultation and Representation) Act 1986, cuts in railway services, the astronomical water rates—a near relation of the poll tax—the disastrous high interest rates and the high level of unemployment. They are worthy subjects of a no confidence motion, but I shall confine my remarks to the motion before us as it is the only one that we have. I accept that no one should have any confidence in a Government who introduces as vicious a tax as the poll tax. For that reason, I shall support the motion. It is worth noting that the present chaos has arisen from the axing of the poll tax—I welcome its demise. The lack of confidence in the present Government arises from the appalling 12-year-record of the Thatcher Government. The present Government are only just starting to emerge in their own right, but I suspect that they stand condemned by virtue of their complicity in previous policies, including the poll tax, which caused so much anguish in Wales and elsewhere. I doubt whether the present Government will be able to strike an independent profile this side of a general election. The sooner we have that election the better, because all parties will then have to spell out their detailed policies. Sadly, those details have not been revealed in today's debate. I accept what the Secretary of State for the Environment said in December about the need to know the future functions and structures of local government in order to work out its future financing. Failure to do so has been a common mistake in the past and it is right that we should grasp that problem now. In Wales all four parties support the idea of a unified, all-purpose local authority. Given that consensus I hope that we shall be able to move towards that aim rapidly. There is also a growing consensus on the need to have an elected democratic forum for Wales. It is interesting to note that the Conservative Members for Delyn (Mr. Raffan) and for Clwyd, North-West (Sir A. Meyer) have advocated that recently. The need for such a tier of democracy in Wales has been recognised. I regret that the Labour party, in its paper on Wales, has advocated such a level of democracy only as part of local government. I am not willing to accept that proposal, as it implies the centralisation of local government, while we want to decentralise central Government. I suppose that we do not have to worry, because the Labour party has said that that would not happen in its first five years of government, whenever that may start. The principle that we should accept in terms of the structure of government is that laid down in the European context—subsidiarity. Decisions should be taken as close as possible to the communities that they affect. We should have an all-purpose tier of local authorities with the power to take all decisions—those decisions that could not be taken on a local level should go to the all-Wales tier, and then be passed to Westminster or Europe. The Government talk about the need for answerability. The government of Wales is represented by the Welsh Office, which spends £5,000 million. The three Ministers at the Welsh Office are not directly answerable to the people of Wales, and that vacuum in the decision-making process must be addressed. The poll tax was not introduced because of problems associated with local government in Wales. Successive Secretaries of State have acknowledged that the record of local government in Wales is not one of gross overspending. There has even been close co-operation between Conservative Secretaries of State and Labour-controlled authorities in Wales. There has been a willingness to reach solutions that are not doctrinaire. The poll tax has been unfair to those on low incomes, disabled people, students and nurses. I informed the Welsh Office of one case—the Secretary of State for the Environment may also be aware of it—of a man with a disabled wife who earned £102 a week gross, £93 net. He lived seven miles from his job. There was no bus service and he had to have a car to get to work. That couple were charged the two full poll taxes. That man either had to do away with his car, and therefore give up his work, or pay his car licence and not the poll tax. That case was indefensible and it was wrong that the poll tax should hit people in such circumstances. The poll tax had to be abolished. About four weeks ago, I went to the court in Caernarfon, which was a sad occasion. About 1,000 non-payment cases came before the court and only about 50 people turned up to defend themselves. We were aware of the difficult circumstances of many in the court that day. I am sad to note that the unified business rate has not been abandoned, as the problems associated with that must be addressed. My party wants a local income tax, and that was the policy we advocated to the Layfield commission in the 1970s. That tax could be collected through the Inland Revnue system. It could use the same personal allowances as the income tax and it could be pitched at a level of 4p in the pound. Side by side with that tax, businesses that are not incorporated would pay local income tax on their profits. There could also be a surcharge on corporation tax for local purposes for those businesses that are incorporated. The local income tax is used in many other European countries—predominantly in the Scandinavian countries. We could use such a tax. Who knows, we may yet have to reconsider it. My party has advocated a structure of uniform authorities, but we also need democratic control of functions connected with health, transport and water. In Wales the water rates will become as hot a political issue as the poll tax once was. Water rates are now about £200 per household—perhaps occupied by one person. No rebate or help is offered. That is an iniquitious situation and the Government must address it. We must have a rebate system to help those faced with such bills. The Labour party's alternative to the poll tax has many problems. Unfortunately, those problems have not been spelt out in the detail that I require. It would also take time to introduce the Labour party's alternative. It is interesting to consider what is said in the Labour party document:
"The costly shambles of the poll tax provides a salutary reminder of the need to undertake the most thorough and exhaustive testing before introducing significant changes in a local taxation system. We would, in any event, wish to consult widely on any proposals.
Presumably we shall not get the full benefit of the Labour party system at once. One wonders how long it will take to get that system implemented. I regret to say that the Labour party's performance on the poll tax has been appalling. I recall its lack of policy in the early days when the issue was considered in Standing Committee and the answers were not forthcoming. The performance of local Labour councils in Wales has also been appalling as they have rushed to implement the poll tax and to take people to court at the drop of a hat. Meryl Davies of the Rhondda was taken to court at 11 o'clock in the morning, and by 3 o'clock in the afternoon the bailiff was at her house. In another case in the Rhymney valley, a pregnant woman found the bailiffs landing at her door before she was given any attempt to explain her circumstances. Yes, we have a lack of confidence in any Government who introduced a poll tax, but we also have a lack of confidence in the official Opposition who do not have any coherent alternative to it.By contrast with the Tories, the advantage of the step-by-step approach which we propose is that it gives us adequate time after our return to government for consultation and for testing any new scheme before it is introduced."
I agreed with a surprising amount of what the hon. Member for Caernarfon (Mr. Wigley) said. I shall deal with some of his points later. In an interesting intervention, my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) referred to his predecessor, Mr. Disraeli. The debate today has shown clearly the truth of what Disraeli said. He said how much easier it was to be critical than to be correct. My right hon. and hon. Friends in the Government are trying to be correct.As the hon. Member for Caernarfon said, it is astonishing that we are having a debate on a motion of no confidence in the Government on one issue. It is admittedly an important issue, but there are many other great issues around. Perhaps the Labour party has no criticism of the Government except on that one issue. It is an astonishing admission that they have to confine themselves——
Will the right hon. Gentleman give way?
I am sorry, but I have only 10 minutes. Otherwise, I would give way to the hon. Gentleman.A motion of no confidence in Her Majesty's Government can seldom have been less justified. The Prime Minister and his colleagues have been in office since November. They are already being challenged with a motion of no confidence, after a short period during which they have played a distinguished part in winning a war and have faced challenges which few Governments have had to face. They have introduced a radical Budget which will meet a great deal of acceptance. We are having a debate on a motion of no confidence in the Government on one item—the community charge or poll tax—at a time when the trade figures are improving, inflation is coming down, interest rates are falling and the economy is clearly improving. It is an astonishing time at which to table a motion of no confidence. Of course I understand the anxieties of those who are worried about the reform of local government and local government finance. It is an important issue, which we must tackle better than it has been tackled in the past. But it is absurd to expect the Government to produce final solutions to all those problems. If they had done so, they would rightly have been criticised for not giving themselves time to think out the essential answers to the questions of structure and taxation. Everyone in the House knows that most of our constituents dislike the present structure of local government. It would be ridiculous arbitrarily to change it without obtaining other people's views. We would risk yet another local government reorganisation which would turn out to be disastrous. It must be right to spend time considering the matter and consulting. A wholly satisfactory solution to raising local government finance has never been available. England hates local taxation. I suspect that Wales and Scotland do, too. Perhaps the hon. Member for Linlithgow (Mr. Dalyell) will tell us about Scotland, if he is called. Local taxation arouses more anger than any other form of taxation. The idea that the period when the rates were in operation was some golden period when we were all blissfully happy with the system of local government taxation is historically not true. There was more feeling about the rates in my constituency and probably in many other constituencies than on any other topic of domestic concern. That is why the Government of the day decided to change the system. The rates were extremely unfair, especially for people who lived alone, such as a widow who had perhaps been left by her husband a house which was too large for her but in which she had lived for many years and from which she did not wish to move. The rates caused great distress. I cannot tell from the Labour party's proposals what they would do to help people such as the widows whom I mentioned.
We would provide rebates.
There are rebates now, and there were rebates under the rating system, but they did not meet the point adequately.Of course, the community charge was unpopular, too. In the first instance, it was right to cut the proportion of expenditure financed by central Government. My right hon. Friend the Member for Shropshire, North (Mr. Biffen) admitted that it was right to make that change. It was the total sums demanded which made the tax so unpopular and unfair. Everyone must be pleased that the bills have been reduced by £140 a year. The leader of the Liberal party spoke about local government finance. As someone who has had the misfortune to have a constituency controlled by the Liberal party from time to time, I can tell the House that, when the Liberals left office last May, they were proposing a community charge of £420. Thanks to the Government's activities, it will now be about £208. So the Liberal party cannot be acquitted of extravagance either. Of course, we must get the new tax or charge right. What is there to criticise in the principles of my right hon. Friend the Secretary of State for the Environment? He wants the balance of funding to remain the same, so that the bills can be much lower. He wants protection during the transitional period. He wants—this is important—to make sure that there are no disproportionately high bills in high-priced areas in the south-east, where naturally there is great anxiety among many constituents, who believe that a return to the rating system would adversely affect them. That has to be arranged. As the hon. Member for Bransley, West and Penistone (Mr. McKay) said a few moments ago, there must be proper rebate arrangements. There must be no excessive bills caused by overspending of local councils. My right hon. Friend the Secretary of State has already promised that in his consultation document. He became Secretary of State only four months ago. If he had produced a consultation document earlier, it would have been inadequate, and sufficient thought could not have been put into it. We are promised legislation next Session, either just before or just after the next general election. I am sure that we shall have a highly constructive document showing us the way forward after Easter. There will be differences among all parties in the House about the details of local government taxation, but I see no reason to assume that we shall not make proposals that are acceptable to the Conservative party and to the country at a general election. Of course the Opposition can tease us about the community charge, but it was entirely right that the Government should reconsider the matter. The level of the charge made it much more unpopular than anyone imagined. The level was far higher than anyone had any right to expect when the Government began on that course a few years ago. We are asked to vote that we have no confidence in the Government. I do not know what other hon. Members think, but I am brimful of confidence in the Government. The record on the community charge and many other issues makes me fully confident of the result of the next general election and that our leaders and our party have the right ideas for the next Parliament and throughout the 1990s. We have heard little today from the Opposition of the detail of their proposals. I shall be interested to see whether the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) gives us details when he replies to the debate. I suspect that he may not, but let us see what happens. We look forward to hearing him later. We have not heard the figures. The proposals do not stand up. We still do not know how much the Opposition would raise in local taxes or, indeed, the detail of their so-called fair rating system. Today's motion of no confidence was spurious. It has backfired, and I am sure that my right hon. Friends and, later, the country, will reject it with enthusiasm.
People have short memories. All the Conservative Members who have spoken tonight voted at least nine times for the poll tax. I remember the conference at which the poll tax started. The previous Prime Minister shot from the hip and said that the Government would get rid of the rates. Therefore, they had to do so. They had to do it so quickly that they made a holy mess of it. That is why the motion of no confidence has been tabled. The Government will make another mess of it if they are not careful.It is no use Conservative Members saying that the poll tax has gone. It has not. The Government propose two taxes—one on property and one on the number of people who live in it. Therefore, it is a poll tax, because it is based on the number of people. If that is not a poll tax, what is? When people talk about the rates, they forget that the rates are 600 years old. For 600 years, local government or whatever system was in operation levied a rate on property. The rates stood the test of time. We acknowledge that there were many anomalies in the rating system, but the Government threw the baby out with the bath water. They needed only to deal with the anomalies and get rid of them. They did not need to get rid of the rating system, which had operated for 600 years. They should not have done so until there was something better to put in its place. I spent 20 years in local government looking for an alternative to the rates. There had to be one. No one came up with one. No one brought in a system of taxation that was easy to collect, less easy to evade and fair up to a certain point. When Tory Members talk about the little old lady who lives alone in a big house, they must remember that they introduced a Housing Bill which turned her out of her home if she wanted to receive housing benefit. They said that, if the house was too big for her, she should not be in it, and if it was too big, she would not qualify for benefit. They should not shut out that little old lady when she is not convenient and pray her in aid when she is. When the poll tax came on the scene, the Secretary of State for the Environment refused to take it through the House. He knew then and has known since what problems it would cause. The then Prime Minister looked for someone who would do the job, and it had to be the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) who was fool enough to do it. As I shall remind hon. Members time and time again, on the first day of the Committee, we said to the Government, "For heaven's sake, take the Bill away. Let us get down to looking for an alternative. Let us shove those alternatives through any machinery you like and come up with a system of local government taxation that will stand the test of time, as the rates have stood that test for 600 years." But no, the arrogance of the Government at that time was like the arrogance of the Government now in introducing this new system. They did not want to know or talk about it. The legislation was their flagship. When it was introduced in the House, Tory Members all waved their Order Papers. They thought, "Great, we've got something. Eureka." They did have something and it was eureka, but it was not based on the ability to pay or on fairness. It was easy to evade and hard to collect—by God, it was expensive to collect. The rating system cost my local authority £972,000. The first year of the poll tax cost it £1,900,000, and the second year £1,900,000. It cost £1·3 million to install the software to run the poll tax system. Now the authority has a revenue problem of £900,000 from installing the system. That is as much as it cost to collect the rates. That is why we have tabled a censure motion. The Government are running into exactly the same problem again. We do not know what the system will be, but we know what system we should like—one based on the ability to pay. I shall again be the first to say that everybody who can afford it should help to pay for local government. Yet, what is happening in Wandsworth? Who is paying there? If my local authority got the same grant as Wandsworth, it would be giving £10 to everybody. Not only would everybody in the authority not have to pay, but it would give them £10. A new system is to be introduced, and the censure motion is tabled because areas such as Wandsworth will live off the backs of others. Wandsworth intends to provide schools and all the other local authority services free of charge. The money must come from somewhere. My old dad had a saying that nobody gets nowt for nowt, but Wandsworth is getting summat and somebody else is paying for it. Sadly, that is what is happening. The 20 per cent. is ridiculous. It costs more to collect it than it is worth. Why should local authorities have to collect it? When we asked the Minister of State, he said that, if the 20 per cent. was not collected, it would be up to the auditor. What a foreign thing for him to say. In effect, he was saying that if it costs too much to collect, and we use our common sense and do not collect it, but the auditor says that it should be collected, the authority will be surcharged. Yet that is the guidance that came from the Government. They cannot argue that local government must co-operate with and obey central Government, if the Government do not say what local government should be doing except when it suits them. We have tabled the censure motion because the Government have ruined local government. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) spelled out a great many matters and I shall spell out one or two more. People liked the old rating system because it was easy to collect and less easy to evade, and everybody paid because it was based on property which does not move up and down. The problem with the poll tax is that authorities cannot keep a check of the people on the register. If the register were different, it would still be as bad and as costly. Another problem is that local authorities can no longer provide their services. In Barnsley, under the rating system, physically and partly mentally handicapped people had a job provided by the local authority. Their produce was sold and at the end of the week they got their £4 wage packet, so they felt that they had a place in society. Now the authority must charge them £1·50 a day to go to work because of the poll tax. Without the poll tax, the charge would be nil. I have no argument with any Government, whatever their political persuasion, for saying how much money they will supply to local authorities, but thereafter local authorities should be accountable to their electors for the services that they provide with the rest of the money. Where is accountability now, and all that was rammed down our throat in Committee? The Government said that they were introducing the tax to increase accountability. There was no accountability. It was all a whitewash. The Government introduced the poll tax because they thought that the local authorities would be blamed. The Government are in a mess because local authorities and many other people realise that the blame lies with the Government Front Bench. That is why the Government are having to change the system. If the Secretary of State wants to see how a good local authority is run, he should come and see ours. The books are open and the system is available. Every year, a third of the council is elected. The councillors hold surgeries every Saturday. The local populace are consulted before an increase in rates. That is the way to run a local authority. The Secretary of State and the Government have killed that system because of their hatred of local authorities. We know why they started on it and why they brought in the poll tax. It has nothing to do with local authority inefficiency: it was because they could not run local authorities exactly as they wanted. The Government talk about consultation, but consultation should have come first, not as a second thought.
I am delighted to follow the hon. Member for Barnsley, West and Penistone (Mr. McKay). In his strong commitment to the rating system, he should recall that revaluation is crucial to its efficiency and success. Revaluation was last done by the Government of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath). Under the Governments of Lord Wilson and Lord Callaghan, no revaluation took place, and we know why. None has taken place since. It is because of the consequences on the market value of housing and the poundage of the rates in a high inflationary period. Tonnage and poundage was a happy little tax in its day, but rateage without poundage is not too easy to tax either.We are discussing a motion of no confidence, yet there are not many Labour Members present on the Opposition Benches. [Interruption.] This is supposed to be the big setpiece debate before we go on our Easter holidays, yet there does not seem to be much support for the motion. [Interruption.] There has been much criticism of the motion, but I do not hold with it. It is rather a good one. It states:
About the one thing that can be said is that from day one of my right hon. Friend becoming leader of the party and Prime Minister, action was taken on the poll tax. From day one, when my right hon. Friend the Member for Henley (Mr. Heseltine) joined the Government—I am delighted to see him return to the Department of the Environment—the problem of the poll tax was addressed. In the 100 days of dealing with the problems associated with the replacement of that tax, several things immediately happened. First, a new scheme for the community charge reduction was immediately introduced at double the scale of expenditure involved in the previous transitional scheme, so that one out of every two charge payers would be able to benefit. Secondly, my right hon. Friend the Secretary of State made major efforts to deal with the existing tax and a proposed successor tax. Thirdly, he it was who said early on that it was impossible to deal with the individual matter of local government finance without, at the same time, looking at local government structure and functions. My right hon. Friends the Prime Minister and the Secretary of State for the Environment have agreed on what should be done about those three issues. They agreed that there should be consultation. For some reason that I do not understand, consultation has become almost a dirty word among some of my right hon. and hon. Friends. My right hon. Friend the Member for Blaby (Mr. Lawson) was upset about it. He is not present this evening, which is entirely my fault because I did not let him know that I was going to address the House—otherwise he would be here. I was surprised that he was against consultation. I thought that he was now officially engaged as a consultant to a major bank, Barclays. It sounds as though his consultation may not get far if he does not believe in it, but that bank is not the listening bank. There are other problems associated with consultation. There would be absolutely no reason in proceeding to refine local government structure, financing and functions without thorough consultation with those who matter a great deal, not just the public, but those who run local government. I understand that my right hon. Friend the Secretary of State for the Environment will be setting about that shortly after the Easter break. The publication of what is required will be laid before the public to give them a chance to comment on the options, refine the system and, in the light of consultation, definite decisions will be taken. That seems a far preferable way to go about the process. It reflects the widespread feeling of hon. Members who have spoken tonight that the Government cannot afford to ride roughshod over public opinion with a new and unproven system and enter it in the list as a successor to the community charge. We must refine the alternative, and take it carefully. I should be happy if my right hon. Friend the Prime Minister agreed to take it slowly. There is no need to rush the issue because we know, and the House knows, that the community charge has to be in place for at least two years before new legislation to introduce a new system can become effective. That is why, in the Budget, my right hon. Friend the Chancellor introduced a massive shift of £4·25 billion into local authority financing—there have been no complaints about that from any hon. Members. That action has ensured that the reduction in' the community charge of £140 for the coming two years will be in place. If that is not a response, in the terms of the Opposition motion,"That this House has no confidence in Her Majesty's Government in the light of its inability to rectify the damage done to the British people by the poll tax."
I do not know what is. The motion is a non-starter, because action has already been taken to finance the tax, and matters are in train to determine the future system that will be necessary. The Opposition chose the motion for another reason, as has been said by my right hon. and hon. Friends. On other issues—the wider parameters of government and what has happened in the 100 days that the Government have been in power—there has been a remarkable series of successes. After only 100 days in office, the leadership of my right hon. Friend the Prime Minister has been shown to be a fantastic success. That is true in terms of his handling of the Gulf crisis and the completely new system of European relations that has been established, in particular the relationships with the German republic—which are now on a level where speaking and listening are part and parcel of the membership of the Community. In addition, he has developed relationships with Moscow and President Bush and travelled to Moscow, the Gulf and in the west. All that has been done in 100 days. He has also made major shifts in policy in relation to child benefit and other social expenditure matters such as dealing with haemophiliacs. My right hon. Friend faces his first vote of no confidence as Prime Minister, but it is absolutely no contest. My right hon. Friend has demonstrated his capacity to lead and to succeed. The Conservative party certainly takes for certain both his leadership and his ultimate victory at the election."to rectify the damage done",
In the past, confidence motions have been tabled because Governments lack majorities, as in 1979, or because they have made appalling messes throughout their term of office, or on single issues, as in 1940 over the failure of the campaign in Norway. It is not a new idea to have a no confidence vote on a single issue.
It is the first time in living memory that a no confidence motion has been tabled in such narrow terms.
I have not looked at the 1940 motion, but I have certainly looked at the debate, which was on the Norwegian campaign.However, most hon. Members agree that the introduction of the poll tax was a blunder. Most of them also agree—I have been talking to quite a few Conservative Members during the past few weeks—that the way that the Government are handling the disposal of the poll tax is also pretty disastrous. In the short time available, I shall devote my speech to considering what their handling of the poll tax reveals about the Conservative Government. We are perfectly entitled to table a no confidence motion, because the Government's handling of the poll tax reveals that they are no longer fit to govern. I shall consider the Government's handling of the issue under separate headings. The first is what it reveals about their competence. They must be extremely incompetent to introduce such a foolish tax, one which is now recognised, even by Conservatives, to be pretty disastrous. The Chancellor of the Exchequer admitted before the Select Committee on the Treasury and Civil Service that it was a regressive tax. Certainly Ministers were not saying that a year or so ago, but they are admitting it now. Secondly, the tax has been extraordinarily difficult to collect. It is not a matter of the persuasive power of one or two hon. Members or the anti-poll tax campaign. Hon. Members know well—the Prime Minister has admitted as much in the secrecy of the Cabinet—that many people could not afford to pay the poll tax. That was the problem with it, which was why it was difficult to collect. Thirdly, it was administratively very expensive. It was twice as expensive to collect as the rates. If we look at all the new buildings that had to be built in every local authority to cope with the collection of the poll tax, we can see why. It was incompetent to introduce such a foolish tax and incompetent to persist with it when it became clear what a foolish tax it was and how widespread hostility to it was, as shown by public opinion polls and successive by-elections. Ribble Valley was not the first by-election to be fought on the tax. The Mid-Staffordshire by-election was a poll tax by-election that was won decisively by the Labour party. But the Government persisted in the poll tax and then tried to mitigate its effects by throwing money at it. That was a disastrous failure. If they had spent some of that money on improving services rather than trying to buy popularity for the poll tax, we would be in a better state today. I also submit that the Government are incompetent because they have not completely abolished the poll tax. Instead, they are producing this fudged compromise—even Conservative Members know very well that it is a fudged compromise—between two different types of tax, a property tax and "son of poll tax," as the right hon. Member for Blaby (Mr. Lawson) called it a few days ago. As the Government have proved themselves incompetent on that scale, I submit that they are not fit to govern. The Government are also divided. We have had plenty of evidence of that. In a sense, the battles of the Thatcher Cabinet are being fought out publicly. The right hon. Member for Blaby said that he was against the poll tax and had argued against it in Cabinet. He thought that it was a bad idea. The right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) told us in The Times today what an excellent tax it was. If only the Chancellor of the Exchequer had been prepared to give him a bit of money, it would have been successful. But there is also a division within the Cabinet. Let us be honest about that. We know perfectly well that the Secretary of State for the Environment is in favour of a property tax. He does not believe in a poll tax element. As a faithful member of the Conservative party, he will argue faithfully for it, but he does not believe in it. He has to do that in order to reconcile other elements in the Cabinet, such as the Secretary of State for Scotland and the Minister for Local Government and Inner Cities, who still believe that there should be a poll tax element. I believe that the Chancellor thinks that as well. That division reflects a wider division in the Conservative party in the House of Commons, between those who want completely to abolish the poll tax, some of whom I can see here, and those who want to retain an element of the poll tax. Therefore, the Conservative party is very much a quarrelling, factional party. Many groups with strange titles are now cropping up. I am reminded of the Labour party in the early 1980s. Some Conservative Members feel so strongly about issues such as the poll tax that they do not even want the Conservative party to win the general election. That is the state that they have got themselves into. Because they are divided in that way, they are not fit to govern. Finally, I want to consider what the poll tax reveals about the leadership of the Conservative party. It shows that the Prime Minister is not prepared to take decisions. He was elected primarily by right-wing Members of Parliament; that is why he beat the right hon. Member for Henley (Mr. Heseltine). He had their support and he owes them some favours. He has to appease them. The majority of the people who elected him still want a poll tax element. Rather than produce an effective system of local taxation, the Prime Minister has chosen to appease the right-wing Members who