Rating Reform

Oral Answers to Questions — Environment – in the House of Commons at 12:00 am on 16th March 1988.

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Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East 12:00 am, 16th March 1988

To ask the Secretary of State for the Environment what is his estimate of the number of single pensioners who will be (a) losers or (b) gainers under the poll tax; and if he will make a statement.

Photo of Michael Howard Michael Howard Minister of State (Department of Environment) (Local Government)

In England and Wales 80 per cent.—around 2 million—of single pensioners living alone and 66 per cent.—around 2·75 million — of all single pensioners would have gained if the community charge had been introduced in full on the basis of 1987–88 local authority spending. Twenty per cent. — around half a million and 34 per cent. — just over 1 million —respectively would have paid more.

Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East

It is bad enough that a third of a million single pensioners living alone would suffer under the poll tax and be losers, often the poorest pensioners living in the lowest-rated authorities. Why has the Minister not admitted, almost until the answer today, that of the 1 million single pensioners living with their children or grandchildren, two thirds will be losers under the poll tax? Yesterday, half a million of the richest people in this country gained £2,000 million in tax cuts, while, in reality, 1 million single pensioners in England alone—just over 2,000 per constituency—will lose under the poll tax.

Photo of Michael Howard Michael Howard Minister of State (Department of Environment) (Local Government)

It is absolutely typical of the hon. Gentleman that when a measure is taken that ensures that 80 per cent. of single pensioners living alone will benefit, he complains about it. The effect of the Budget yesterday on a single adult on national average earnings will be to make him better off by more than £200 a year. That is virtually enough to pay for his community charge in the average area.

Photo of George Young George Young , Ealing Acton

Does my hon. and learned Friend recall defending the poll tax as a fair tax before the Budget by saying that households in the top 10 per cent. of incomes would pay 16 times as much as households in the bottom 10 per cent.? How does he propose to defend it now?

Photo of Michael Howard Michael Howard Minister of State (Department of Environment) (Local Government)

My hon. Friend is quite right. We have to reconsider our figures in the light of the Budget. I have to tell the House that we have not yet completed that exercise. Preliminary estimates show that instead of the top 10 per cent. of households paying 16 times as much as the bottom 10 per cent. towards the cost of local authority services, in future they are likely to be paying 15 times as much.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

Would the Minister care to tell us how much more the top earners are earning when compared to the bottom earners? Is it more than 15 times as much?

Photo of Michael Howard Michael Howard Minister of State (Department of Environment) (Local Government)

I am afraid that I tried to follow the hon. Lady's question, but I did not catch it.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Quite exceptionally, will the hon. Lady say it again?

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

The Minister said that the top earners would now be paying 15 times as much, implying that the tax changes have made very little difference the comparison about which we are talking. Those top earners may he contributing 15 times as much to local taxes, but how much more are they earning when compared with the lowest earners? Is it more, or less, than 15 times as much?

Photo of Michael Howard Michael Howard Minister of State (Department of Environment) (Local Government)

It is not how much they are earning, or even how much they are paying in national taxes, that is the figure that I gave a few moments ago. The top 10 per cent. of households in income terms will pay 15 times as much as the bottom 10 per cent. towards the cost of local authority services.