Community Charge

– in the House of Commons at 4:56 pm on 29 March 1990.

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Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions 4:56, 29 March 1990

I beg to move, That an humble Address be presented to Her Majesty, praying that the Community Charges (Deductions from Income Support) (No. 2) Regulations 1990 (S.I., 1990, No. 545), dated 8th March 1990, a copy of which was laid before this House on 9th March, be annulled.

May I say how glad I am to be speaking from a microphone which is unlikely to be either decreased in size or moved.

The Opposition wish to pray against some of the poll tax benefit regulations. Those regulations implement what is fast proving the most detested tax introduced in this country for 600 years. In addition, the way in which the regulations have been handled shows that the Government are not only breaking down, but are hell-bent on a campaign of self-destruction.

I shall start with the Government's strongest card: the sweetener they threw into the Budget to spice up what would otherwise have been described as a wimpish Budget. The Chancellor of the Exchequer clearly believes that doubling the upper capital limit for poll tax benefit will elicit instant gratitude and, no doubt, long-term political dividends. However, it has blown up in his face, not only because, as he had the grace to admit, he clean forgot about the existence of Scotland, but because he, as Chancellor—or was it the Secretary of State for Social Security—got his sums wrong. Far from being the great concession it was cracked up to be, it has turned out to be a huge political con.

In his Budget speech, the Chancellor claimed that 250,000 people would benefit. We now know that the true figure is about half that—only 130,000. He said that two thirds of those benefiting would be pensioners. But that is still less than 1 per cent. of all the pensioners who will have to pay the poll tax. He did not say that this much-touted concession still does not compensate for the tightening of the capital rules which the Government imposed two years ago. If the Government claim credit for having eased the capital rules, they must also accept censure for having introduced the initial capital rule two years ago which deprived 700,000 pensioner households from any entitlement to housing benefit or rate rebate.

It was only when my right hon. and learned Friends raised a huge political outcry about this matter that the former Secretary of State was forced to backtrack a few months later in May 1988. A total of 100,000 pensioners were then brought back into the benefit net. With this further concession the Chancellor and the Secretary of State for Social Security will bring back another 100,000 pensioners into the entitlement net, but that still leaves 500,000 pensioners who were entitled to benefit before 1988 but are still left outside the benefit net. It is as though someone had robbed a bank, but then, under pressure, given back some of the swag. That is hardly an occasion for unqualified gratitude, more perhaps a case where humility, and perhaps an apology, from the Government are overdue.

It is not only that the numbers of the newly entitled will be distinctly modest, but much more: that most of them will find out when they claim that they will get little. Many will get nothing. As I said last night, that is because of the rule on tariff income. For every £250 in savings of more than £3,000, people are deemed, however totally unrealistic it may be, to receive an income of £1 a week. That reduces their poll tax rebate by 15p a week.

Let me take as an example—not an extravagant example—the case of a single pensioner with a small occupational pension, which takes her £10 a week over her applicable amount, and who also has £15,500 in capital —just the sort of person whom the Government are trying to help. Because of her extra £10, £1·50 will be deducted from her poll tax benefit. The tariff income from her capital would come to £50, so another £7·50 would be deducted on top of the £1·50. Unless her poll tax was more than £611 a year—I think that I am right in saying that not a single local authority has that notorious distinction—the pretend income that is attributed to her would completely extinguish her entitlement to poll tax benefit.

I stress again that that is not, as the House can see, a far-fetched or exceptional case. The sheer modesty of what is being proposed is illustrated by the Government's estimate that it is worth only about £35 million a year, which works out at less than half of 1 per cent. of the total revenue that they will receive from the poll tax. After all the excitement and ballyhoo, with Conservative Members waving their Order Papers in delight at the Chancellor's announcement, the cold reality of minimal relief will disappoint and anger many pensioners whose much-aroused expectations are about to be dashed to the ground. It is surely irresponsible for the Government to boost hopes in that way and to encourage pensioners to fill out complex forms only to find that a zero or negligible rebate is calculated to offset their massive tax bills.

There are two ways out of the dilemma into which the Government have put themselves, but they have consciously refused to take either of them. The first is to raise the lower capital limit as well as the upper one. If the lower threshold at which deductions start were doubled to £6,000, the value of the concession would be greatly increased. That is precisely why my right hon. Friend the Leader of the Opposition and I tabled a new clause to that effect during yesterday's Report stage of the Social Security Bill. As hon. Members know perfectly well, the new clause was voted down by Tory Members by 307 votes to 204. That shows that Tory Back-Benchers are a great deal more concerned to prop up a Government who are on the ropes than to protect pensioners.

The other way out of the Government's self-inflicted dilemma would be to revert to the pre-1988 system so that the actual rate of interest was counted rather than the artificial tariff rate. It is absurd for the tariff income to assume a rate of return on savings of 20 per cent. There is a bitter irony in all this. The Tory Government introduced the system two years ago to cut expenditure on housing benefits and rate rebates and they are now impaled on a device of their own making which grossly undermines the value of the poll tax concession that they now claim they wish to make. Not only the people of Scotland, but all thrifty pensioners have been insulted by the Government's incompetent handling of the poll tax rebates.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

My hon. Friend mentioned two ways to get rid of the problem, but there is a third way—to adopt the Labour party's policy and drop the tax altogether. I pray in aid a remarkable editorial in The Times today—a paper which supports the Tory party and the Prime Minister through and through—which canvasses the idea that the poll tax should be dropped and a tax based on property and the ability to pay introduced in its place. When we have support from such strange quarters it means that the poll tax is almost friendless.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

That is the obvious solution, and it is the solution which the British people overwhelmingly want. However, we know that it will not happen because the iron lady, who cannot turn, has been committed for the past 15 years to the abolition of the rates and their replacement by something like the poll tax. It is her tax and as long as she is Prime Minister it will remain.

Photo of David Winnick David Winnick , Walsall North

Does my hon. Friend agree that if there had been a secret vote in the Cabinet on the poll tax, the majority would probably have been against any such proposal and, perhaps even now, a motion to repeal the poll tax would be carried? There can be no doubt that on a free vote in the House of Commons the poll tax would have been decisively rejected, as was urged by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) and the right hon. Member for Henley (Mr. Heseltine), who is putting forward his own case for the leadership.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

None of us knows with certainty the truth of the matter, but I have always assumed that only one member of the Cabinet is in favour of the poll tax. I doubt whether it has a single other taker. Conservative Members would like nothing more than to get rid of the poll tax, but the truth is that the poll tax will get rid of them.

Photo of Mr Richard Tracey Mr Richard Tracey , Surbiton

We all accept reasonable protest, but will the hon. Gentleman repudiate those of his colleagues who are refusing to pay the community charge and so are breaking the law?

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

That is the sort of remark that we would expect from a former Minister for Sport.

I come now to what might accurately be called the Scottish embarrassment bonus or the "Rifkind" face-saver. It is increasingly clear that "we in Scotland" are becoming rather forgetful. It appears that on a recent visit "we in Scotland" failed to remember that the Scottish Labour party conference was taking place at the same time. One memory loss might constitute a significant offence, but two is decidedly careless.

The Chancellor has now admitted that he completely forgot about Scotland in the Budget and he will not be surprised if Scotland forgets about the Government when it comes to the next election. We shall be looking extremely carefully at the Secretary of State for Scotland's ex gratia scheme to see whether it guarantees full retrospection. A discretionary scheme of ex gratia payments is one thing, but a system of assured rights for all those entitled is another. We welcome the £4 million proposed in a humiliating Government climb-down, but we wish to be sure that Scotland receives a fair deal in exactly the same way as England and Wales.

Our central objection to the poll tax benefit regulations, on which we shall be calling for a vote tonight, relates to the Government's proposal to deduct income support from those on the poverty line if they fail to pay the poll tax. The first and the fundamental point that I make is that those who are poor enough to be on income support should not have to pay the poll tax at all.

Until the Fowler reviews of 1986, it was accepted by all Governments that the supplementary benefit or income support line was so low that rent and rates had to be separately provided for in full. In 1986, for the first time, the former Secretary of State for Health and Social Security decreed that even the poorest on income support would in future be forced to pay 20 per cent. of the poll tax and 100 per cent. of water rates.

The poll tax bills have been fixed at such a high level that the Goverment have been forced to backtrack, but they have done so in a way that still exposes millions of people on income support to paying a hefty chunk of poll tax. That is precisely why such draconian legislation is being introduced today.

Photo of Mr Max Madden Mr Max Madden , Bradford West

Is my hon. Friend aware that in Bradford and a number of other places a problem has arisen for couples who are in receipt of income support and housing benefit because the automatic poll tax rebates which people on income support and housing benefit were told would be paid are not being paid to partners who did not apply or sign for the housing benefit? The poll tax rebate is going only to partners who applied for housing benefit. That is resulting in tens of thousands of people who are in receipt of housing benefit and income support not getting full poll tax rebates and it is causing great hardship. What action do the Government plan to take to alert those people who will lose their poll tax rebate so that they can apply immediately for the poll tax rebate that the Government have been telling them for months they will receive automatically?

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

My hon. Friend raises one of a wide range of anomalies about entitlement to that benefit. We are all interested to hear the Minister's answer to that.

The problem with the poll tax is that it is extremely complex and the entitlement to rebate is hedged round with several conditions that are not exactly common sense. My hon. Friend has illustrated the point that, although the Government claim that a large number of people will be entitled to rebate, because of the complexity and difficulty of the regulations and people's lack of awareness, only a small number of people will gain significantly, but we look forward to the Government's answer on that.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

My hon. Friend may be interested to hear about a case in my constituency involving a single pensioner who has no savings whatsoever and has been entitled to rebate, but because his retirement pension is£46·73 a week any entitlement he has to income support has been cancelled, so he receives none. He has to pay a poll tax bill of more than £81 this year out of that small income. Because he has chronic bronchitis and circulatory troubles and needs to spend a great deal on heating his house, he has less than £30 a week to pay for his food, clothing and poll tax and he is in desperate straits.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

My hon. Friend illustrates one of the many thousands of cases which no doubt will be drawn to the attention of the Minister and his officers in the next few months. We look forward to his detailed reply on these matters.

The Government have not succeeded in compensating people on income support. They have claimed to protect them from the pressures of having to pay 20 per cent. of the poll tax by providing a 20 per cent. personal allowance for income support claimants based on the Government's average poll tax figure of £278. But that is flawed in three ways. First, as everyone knows, the figure of £278 is a Government fiction and the average figure is about £363, or £85 higher. Income support claimants will not be compensated for that shortfall. Secondly, there will be no compensation for people on income support living in areas charging above the average poll tax. The Opposition have always argued that people on the poverty line should not be treated as pawns in the Government's political battles with local government of any party, and we stick to that principle. Thirdly, the amount added to income support to compensate for the 20 per cent. of poll tax that everyone has to pay was arbitrarily reduced by the Government by about half.

The effect of those three factors is that average poll tax payers on income support in England and Wales will have to find more than £36 from their basic benefit. A couple will have to find almost £76, and in 34 local authorities couples on income support will be more than £2 a week worse off, and at income support level that really matters. In Haringey for example, a couple on income support will be £163 a year worse off. In case anyone thinks that I have particularly chosen a Labour-controlled council, in leafy south Oxfordshire they will be £116 worse off.

There are 4·6 million poll tax payers on income support in England and Wales and nearly all will lose money—with the exception of people living in only two local authorities throughout the country. The steady extortion of money from the poorest in society to subsidise the cost of the poll tax is the most repulsive aspect of a most repulsive tax. Hundreds of thousands of poll tax payers on income support will simply be unable to pay.

The Under-Secretary of State, to whom I am grateful for such a full parliamentary answer, admitted on 19 February: The Department expects that in any year in England, Wales and Scotland some 850,000 applications for deductions from income support may be made in respect of the community charge, though the number will depend on the extent to which authorities choose to recover unpaid charges using this particular method. We expect about 700,000 of the applications to be enforced. That is an extremely high figure. One of the poll tax regulations that we are debating today implements that enforcement procedure to which we most strongly object. If Conservative Members believe that those consequences spelt out by the Under-Secretary of State are onerous, not to say draconian, they have the opportunity today to reject the regulations.

Where a liability order is made against the single debtor, the deduction can be 5 per cent. of the rate for a single claimant over 25, or £1·85 a week. For a couple who are both in arrears it is double that—£2·90 a week. The severity of the regulation can be judged by the fact that that amount can be deducted from benefit, provided only that a person is left with at least lop in income support.

The Government are going further still. They propose that deductions for poll tax arrears sit on top of the deductions for other debts—for example, social fund loan repayments. In other words, under this regulation to which we so strongly object, the Government propose that provided that a person will be left with 10p in benefit, he could be forced to pay up to 25 per cent. of his income on housing, fuel, water, and deductions for arrears and still have to pay a further £1·85 a week in poll tax deductions.

The great debt-collecting apparatus will cost a lot of money. I return to the answer given by the Under-Secretary on 19 February which stated: The average annual cost to the Department of servicing each application is estimated to be £26. The total staffing requirement in Great Britain is now estimated to be approximately 470 posts."—[Official Report, 19 February 1990; Vol. 167, c. 554.] But even that underestimates the costs. One has to add in the costs to local authorities for registration, billing and interviews, so the total cost is likely to be considerably more than the amount collected. I do not see how one could reach any other conclusion.

There is also the question whether the poll tax deductions take precedence over other deductions for debt. If so, the Department is likely to stop making social fund loans for essential items on the ground that they will not be repaid, or claimants will increasingly have their fuel cut off as payments to the fuel boards are stopped. Of course, councils will not be able to claim arrears through benefit deductions. Local authorities will either have to write off poll tax arrears or use distraint or other measures to recover ridiculously small amounts from the poorest in our community. In the process, councils will simply be adding to the poverty of those on income support because the cost of going to court is invariably added to the original debt. At £100 a time, it could easily amount to more than the original debt.

Why are the Government so gung-ho in pursuing the 1 million low-income families who are already known to be in serious debt when they refuse to take action against landlords who are ripping off the taxpayer by about £420 million a year by continuing to charge the same rent when they no longer have to pay rates to the local authority, when they failed to collect almost £4,000 million of assessed tax revenue in 1988 and wrote off £500 million of so-called uncollectable tax revenue, and when they have failed to collect £250 million of national insurance from the self-employed each year because they will not spend one tenth of that amount on staff to collect it?

If the poll tax is a curse, the regulations to extract tiny amounts of poll tax, at huge cost, from the poorest and most debt-ridden section of the community are an abomination, and tonight the House should reject them.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea 5:20, 29 March 1990

Although the Opposition have spoken to just one motion, I understand that we are also discussing the next three motions on the Order Paper: That the draft Community Charge Benefits (General) Amendment Regulations 1990, which were laid before this House on 13th March, be approved. That an humble Address be presented to Her Majesty, praying that the Community Charge Benefits (Permitted Total) Order 1990 (S.I., 1990, No. 533), dated 7th March 1990, a copy of which was laid before this House on 9th March, be annulled.That the draft Community Charge Benefits (General) Amendment No. 2 Regulations 1990, which were laid before this House on 20th March, be approved. The motions must be set against the background of the announcement made by my right hon. Friend the Chancellor in the Budget, that he and my right hon. Friend the Secretary of State had decided to raise capital limits for income-related benefits. I shall deal with the Opposition's criticism of those arrangements, but most hon. Members warmly welcomed that announcement.

Photo of Mr Jim Sillars Mr Jim Sillars , Glasgow Govan

The Minister admitted last night, and he did so again today, that the Treasury and the Chancellor of the Exchequer consulted the Department of Social Security. Did the Department consult the Secretary of State for Scotland or the Scottish Office before the Chancellor made his Budget statement?

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

I can only give the assurance that I gave last night: the Chancellor consulted the Department of Social Security, and we warmly welcomed the opportunity to raise the capital limits, as would any sensible hon. Member.

Photo of Mr Max Madden Mr Max Madden , Bradford West

So the answer is no.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

The matter has been raised elsewhere. My concern was to ensure that the Department was consulted. We welcomed the announcement that my right hon. Friend the Chancellor made to the House.

Photo of Mr Brian Wilson Mr Brian Wilson , Cunninghame North

The Minister said, as a man of reason, and as any sensible or rational person would, that he agreed to the change for the coming year. Was such an approach made last year? Was there any rational person in the Treasury, the Department of Social Security or the Scottish Office? How was the system allowed to run for a year without anyone noticing that this terribly sensible measure had not been taken?

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

I am sorry, but I shall not spend the afternoon jogging backwards with hon. Members from north of the border. We welcome the new arrangements. They will be to the overwhelming benefit of many people.

The hon. Member for Oldham, West (Mr. Meacher) misquoted my right hon. Friend the Chancellor on the number of people who will benefit as a result of his announcement. My right hon. Friend the Chancellor was clearly talking about the number of people on income-related benefits, not just community charge benefit. If the hon. Gentleman doubts that, I can give him the exact quotation, but I imagine that he will not want me to do so as it would further his embarrassment. It is clear that my right hon. Friend the Chancellor was referring to those on income support, housing benefit, family credit and community charge benefit. I shall deal later with the precise number who will benefit from community charge benefit.

I am sure that the House will agree that, with income-related benefits being designed to help people in greatest need, there should be a capital limit above which benefit entitlement ceases. We may argue about the level of the capital limit, but we must all agree that if we are to help those most in need there must be a cut-off point. Under all income-related benefits, the first £3,000 of a claimant's capital resources are ignored, and the lower limit—I know that this is to the regret of the hon. Member for Oldham, West—will not be affected by the announcement made by my right hon. Friend the Chancellor. Capital of less than £3,000 and the income that it generates is disregarded in the calculation of a person's or couple's benefit entitlement. For all income-related benefits, a standard tariff income of £1 a week is assumed for each £250 above the capital limit.

Apparently, the hon. Member for Oldham, West thinks that that provision is ungenerous. I looked back to discover the state of play in 1979 under the previous Labour Government. The hon. Member for Oldham, West giggles in embarrassment; he probably knows what is coming because, as he does his homework so carefully, no doubt he looked back to that period. Under the supplementary benefit rules in 1979, the first £1,200 was ignored—roughly £2,400 according to today's prices, compared with the £3,000 that operates today. The tariff, on which so much weight has been placed, was 25p a week for each £50 of capital—equivalent to £1 for every £200, compared with the £250 that we operate today.

Much play has been made of the 20·8 per cent. assumed income above the lower capital limit. I do not agree with that system of measurement, but if we accept it for one moment, the system operated by the previous Labour Government was not 20·8 per cent. but 26 per cent.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

Will the hon. Gentleman let me finish the point?

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

Be fair; allow my hon. Friend to intervene.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

The hon. Member for Oldham, West normally responds by saying, "In a moment", when an hon. Member wishes to intervene in his speeches. I hope that he will not mind if I do not give way immediately.

The Labour party, which has been so critical of us, operated a capital rule that came in at a lower level and imposed a steeper tariff above it.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

What was the upper capital limit cut-off point under Labour?

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

Under Labour, there were differing systems—

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

What was the upper capital limit cut-off point under Labour? Tell the whole truth, please.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

Two differing systems operated under Labour until reforms were introduced, mainly by my right hon. Friend the Secretary of State, in 1986. One set of rules applied to supplementary benefit, but a totally different set applied to housing benefit.

Photo of Mr Max Madden Mr Max Madden , Bradford West

So there was not one.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

Precisely; there was not one. The system for housing benefit was ridiculous because only income was taken into account, regardless of the amount of capital held. That was a completely unsustainable system. The benefits of an aligned system for income-related benefits are obvious to everyone. I think that I have made the point about the Labour party—

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

I am sure that the hon. Gentleman is keen to get on with it, because I have proved categorically that we operate a more generous system than the Labour party did.

Photo of Mr Max Madden Mr Max Madden , Bradford West

Rather than spending the last five minutes going down memory lane, the Minister should have addressed himself to the question that I put to my hon. Friend the Member for Oldham, West (Mr. Meacher). Is he aware that in Bradford, and in other parts of west Yorkshire, only one person in two-person households will receive poll tax rebate, which for months the Government said would be paid automatically to households receiving income support and housing benefit? Tens of thousands of people are receiving full poll tax demands who should be receiving a rebate. What will the Minister do about that?

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

Local authorities are empowered to treat any claim for housing benefit as a claim for community charge benefit. If the hon. Gentleman believes that things are going wrong in Bradford, his proper course is to contact his local authority to ensure that it is operating the system effectively and that it is treating those claims as claims for community charge benefit. If it is doing that properly, there should not be a problem in Bradford. I recommend—

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

I recommend the hon. Gentleman to take that step with the local authority.

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

Why do the Government still assume that every £250 of savings generates an income of £1 a week? We have just had a Budget and the Chancellor tells us about all the benefits of thrift, but for my sake and that of everyone else, will the Minister tell us where on the high street one can obtain a 20 per cent. rate of interest on one's savings? The tariff rate of £1 a week for every £250 of savings is twice the real rate that people can obtain, from Girobank or anywhere else.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

I have just been making the point that when Labour was in office and interest rates were rather lower, the Government assumed a 26 per cent. rate of interest. We debated all this yesterday, although it seems longer ago than that. We are really talking not about the principle of an assumed income, but about a rational way in which we can ensure that as people's capital assets increase they can be less dependent on benefit. The rate at which such support through the benefit system is reduced as capital increases is a matter of judgment. It is wrong to consider it in terms of an assumed return on the capital itself. We should consider what is the proper rate at which we reduce the burden on the taxpayer as people's capital increases.

Photo of Mr Lewis Stevens Mr Lewis Stevens , Nuneaton

We have been discussing the 20 per cent. tariff. Surely the real position is that up to £8,000, the first £3,000 incurs no penalty at all. At £8,000, the real tariff is approximately 13 per cent., which is a far more realistic rate and gives us a simple way of calculating benefit without the complication of people making returns.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

My hon. Friend is right. Two factors ameliorate the 20·8 per cent. most frequently quoted. The first £3,000 is disregarded and once benefit begins to be withdrawn above the level the 15 per cent. taper operates for community charge benefit, which further reduces, well into single figures, the rate that is assumed.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

This is a matter of importance. When I live down here, I live in Westminster, which has kept its level down to £195. One of the actions that it has taken to achieve that has been to discontinue the redecoration of the council houses of elderly people. As a consequence, not only will those people have to meet the cost of redecoration themselves, but they will still have to pay the 20 per cent., and 36 painters, most of whom are in my union, the Union of Construction and Allied Trades Technicians, will be thrown out of work. That is just one of the small steps taken by Westminster council to reach the level of£195. Will the Minister explain how those elderly people will be able to raise money to save, to benefit further under the Government's policies? Does the Minister believe that ordinary working people will stand for this in view of the suffering that this policy will cause them?

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

If I were to stand at the Dispatch Box this afternoon and explain exactly how each local authority is operating and how it has managed to fix its poll tax or community charge limits I should spend a great deal of time here. I have done my best to be generous in giving way to hon. Members of all parties. [HON. MEMBERS: "Too generous."] My hon. Friends say that I have been too generous, but I am a generous fellow. It is about time that I got on with the remarks that I want to make.

The hon. Member for Oldham, West described our actions yesterday in defeating the new clause that he had tabled. He must have taken note of the particular anomaly to which I drew his attention and I do not want to go over all that today. However, the hon. Gentleman had every opportunity to draft the new clause properly and sensibly. He did not do so, so we were right to reject it. We are not discussing the level, but whether there is a different rate for single people and couples. The hon. Gentleman seemed to accept my point yesterday, although he said that it was a quibble. It is up to him to get a new clause right.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

I do not want to take further time on the issue, but I must say that the Minister is scraping the dregs of the barrel if that is his only point. He is acknowledging a weakness in his proposals. The poll tax is concerned with individuals, yet single persons and married couples receive the same. That is hardly logical. The Minister said that if one of an elderly married couple died, the amount received would be halved under our proposal. However, the whole point about the poll tax is that it is directed at individuals and it would be wrong for such people to receive double. The Minister's objection is worthless.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

I am interested to hear that the Labour party is prepared to say that, when an elderly partner dies, the community charge rebate is reduced. That would be the consequence of accepting the new clause.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

With the greatest respect, I must say that the hon. Gentleman is wrong. By increasing the limit for everybody, we have made it possible for almost 200,000 individuals to benefit from community charge benefit. Of those, 150,000 are pensioners. I am not prepared to accept an anomalous new clause which would lead to people having benefit reduced.

It is about time that I continued, otherwise I shall talk out the whole debate and I should not want to do that. Doubling the capital limit for community charge benefit will help almost 200,000 individuals, of whom 150,000 are pensioners. Sixty-five thousand couples will be helped—half of all new cases. The benefit cost in 1990–91 is expected to be about £35 million. The extra cost will be charged to the reserve and will not increase the public expenditure planning total. On average, gainers will gain a £5 a week, or £260 a year, reduction in the community charge bill.

There have been groundless allegations that there is an automatic cut-off at £10,000 of capital resources or savings. As I implied in shorthand terms in the debate yesterday, I can assure the House that 70,000 benefit cases with capital over £10,000 will be able to receive benefit and about 50,000 benefit cases involving pensioners will be affected. They too will gain an average of £5 a week, or £260 a year. It is wholly incorrect to assert that only those whose savings are just above the current £8,000 limit will benefit as a result of our proposals.

It may be helpful if I now explain the way in which the rules regarding the treatment of capital work in practice. The House is familiar with the broad details about the £3,000 and the £1 for every £250. In our exchanges across the Floor of the House, we have cleared all that out of the way.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

We have. We may not agree, but at least we understand the basis of both arguments. We have acknowledged in the course of our discussions yesterday and today that the community charge benefit scheme, incorporating a taper that is more generous than the old rate rebate scheme under housing benefit—15 per cent. compared with 20 per cent.—is another step in the right direction.

The hon. Member for Oldham, West picked out a few examples and, of course, he chose those least helpful to the Government. I want to give some more average examples about the outcome of our proposals for the community charge benefit scheme. Let us consider a pensioner couple, one of whom is over 80 years old. They pay £30 a week rent and their community charge is £350 each. If they have savings of £15,000 and a weekly income of £75·35—and that does not include income from capital—they would gain £4·51 a week community charge benefit. Therefore, it is clear that many pensioners will gain.

We may also consider the example of an unemployed couple with two children aged 10 and 14. They pay rent of £30 a week and a community charge of £325 each. They have savings of £15,000 and a total weekly income of £74·90. They would get £5·70 community charge benefit. It is clear that considerable benefits will flow to a wide range of people as a result of the changes.

I believe that the overwhelming majority of hon. Members welcome the changes. Of course, it is the Opposition's job to nit-pick and criticise, but most people accept that we are taking an important step in the right direction. Hon. Members accept that the conscientious efforts of people with low incomes who have built up savings for retirement should be recognised in the system of community charge benefit.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

The Minister has quoted examples that he believes confirm the Government's case. As he always talks about the spread of occupational pension schemes and the amount that people receive in occupational pensions, does he accept that if the people in the cases that he has quoted had an occupational pension of as little as £30 or £40 a week the benefit accruing would be nil?

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

With regard to occupational pensions, that may well be so. However, I was referring to people in the precise circumstances that I outlined. Just as one's capital affects the calculation of benefit in any income-related benefit scheme, so too does income from any other source. We cannot get away from that fundamental principle.

I want to refer now to claims for benefits, and the hon. Member for Bradford, West (Mr. Madden) might be interested in this.

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

Does the Minister have any information about the number of people in receipt of occupational pensions, in relation to the number of people who have between £15,000 and £16,000 in savings? There must be a few million people with works pensions, who have worked 30 or 40 years, who will be hammered while the rebates, which the Minister described as generous, will be extended to people with savings.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

My hon. Friend the Under-Secretary of State will have listened to that point with great care and we shall see whether we can be helpful to the House—if I ever get to the end of this speech.

The House will be aware that the changes come into effect on 1 April this year. The regulations provide for backdating claims from people who will become entitled to benefit as a result of the new benefit rules. That will mean —and this is important—that so long as people make claims by 27 May, they will be able to receive any benefit for which they were eligible during the period after the increase takes effect on 1 April. As the hon. Member for Oldham, West will understand, it is unusual in social security matters to allow backdating.

Photo of Mr Allen McKay Mr Allen McKay , Barnsley West and Penistone

As the Minister will be aware, many people receive cash in lieu of concessionary fuel, which affects housing benefit. Such a case is at a tribunal; the tribunal chairman found that the Department was wrong in taking that into consideration. If the Department does not take the case any further on appeal or if it is lost on appeal, will there be retrospective payments for people whose benefits have been affected?

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

I would have to see the final outcome of that case before I commited myself to replying to that question. I gave way to the hon. Gentleman because I respect him highly. However, he would not expect me now, in advance of the tribunal's decision or in advance of an appeal by either side, to give a commitment about backdating.

We shall ensure that so long as people claim by 27 May, they will be able to have benefit backdated to 1 April. I hope that that will be helpful because I am aware that a new benefit such as this can confuse people. We want to ensure that people are aware of their rights and are given the maximum opportunity to claim. We have discussed those matters with the local authority associations and they gave general support to the changes. Local authorities are making every effort to get benefits to the new claimants as soon as possible.

Photo of Mr David Nicholson Mr David Nicholson , Taunton

I am most grateful to my right hon. Friend for his great patience. Will he take the opportunity in this debate to give the lie to an allegation made in another part of the Palace today, by the hon. Member for Dagenham (Mr. Gould), that young people living at home with their parents face eviction because of the rebate scheme? Will he confirm that parents are not legally responsible for meeting the community charges of their children who are over 18? Will he also confirm that any young person who is genuinely unemployed will receive maximum help, irrespective of the income of his parents?

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

That is absolutely right, as one would expect.

Photo of Mr Nicholas Scott Mr Nicholas Scott , Chelsea

No. The hon. Gentleman will have other opportunities to make his points and my hon. Friend the Under-Secretary of State will reply. However, I believe that it is the mood of the House that I should conclude my remarks as soon as possible. That is certainly my view and I believe that it is widely shared.

I want to consider briefly the amending regulations that were laid before Parliament earlier this month. I do not believe that the House would welcome a line-by-line explanation of them and I do not intend to embark on that. However, the regulations make a number of important changes that affect several groups of people. For example, they provide for an increased disregard of £10 a week for war widows' pensions and war disablement pensions, which was announced last July. They also provide that the special payment to war widows whose husbands served before 1973, which was announced before Christmas, shall be disregarded totally when assessing claims for community charge benefit. Those payments are also tax free. The regulations provide that such payments are to be disregarded completely for community charge benefit. That means that the additonal help being provided for war widows whose husbands served before 1973 will not affect the help to which they are entitled under the scheme.

I want now to consider the Community Charges (Deductions from Income Support) (No. 2) Regulations 1990, which were laid before Parliament on 9 March 1990 and which come into effect on 1 April. The House will be aware that the main principle behind these deduction regulations is that there should be some measure of equality of treatment between those in employment and those receiving benefit. Deductions from income support for those receiving benefit represents a parallel measure to attachment of earnings for those in work where people fail to pay their community charge.

To achieve a liability order, the charging authority must first obtain a liability order from a magistrates court to prove that it is owed the money by the claimant. The liability order triggers the operation of the regulations, which provide that when a local authority has obtained a liability order for a community charge debt it may then apply for deductions from income support to meet that debt. In applying for deductions, the local authority must provide sufficient information to enable the local social security office to identify the debtor. If the adjudication officer decides that there is sufficient income support in payment, the standard rate of deduction will be £1·85 a week, and £2·90 a week for a couple if an order is made against both of them and income support is payable for both of them.

The regulations fix those weekly rates of deductions; there is no provision for them to be varied. The lower rate of deduction is the same as for any other third-party debt. We have taken great care to ensure that the regulations are in harmony with the rules governing payment to any other third party, which are contained in schedule 9 of the Social Security (Claims and Payments) Regulations 1987.

To sum up, the Government believe that it is right that deductions from income support should be made where the claimant fails to pay his community charge and the charging authority has a liability order to prove the debt. Those regulations are an extension of the Department's existing procedures. Accordingly, I invite the House to reject the prayer against them since they strike a fair balance between the needs of the local community which has to pay the community charge and those who fail to do so. I also invite the House to reject the prayer against the permitted total order.

The Community Charge Benefits (Permitted Total) Order 1990 allows local authorities to make additional payments of community charge benefits to claimants where they consider the circumstances to be exceptional. Those discretionary powers restrict the payment to no more than the maximum community charge benefit. Therefore, however exceptional the circumstances, the charge payer still has to pay 20 per cent. of the charge set by the authority. Primary legislation requires the Department to set a ceiling on the amount of discretionary payments that an authority may make. Similar arrangements apply to housing benefit. We therefore decided that the prescribed ceiling for those discretionary payments should be set at 0·1 per cent. of the total amount of community charge benefit that an authority pays out in a year. We have no evidence that the limit causes difficulties for local authorities and I believe that it offers welcome flexibility for dealing with exceptional circumstances.

I commend the order to the House.

Several Hon. Members:


Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Unless hon. Members are brief from now on, many hon. Members who wish to speak will be extremely disappointed.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr 5:50, 29 March 1990

I shall take those words to heart, Madam Deputy Speaker, and be extremely brief.

People on income support are not being treated equally regarding deductions from benefit when compared with people on earnings. Some people in receipt of income support would like their poll tax payments to be deducted from their benefit automatically—similar to what happens with a direct debit for people with earnings. But they will not be allowed that facility, so they are not being treated equally. They will be treated in that way only if a debt builds up. That unequal treatment is grossly unfair.

If my memory serves me right, the Minister said that the provisions will relate to the court costs as well as to the debt. Without checking the Minister's figures, I do not think that, once the costs are added to the 20 per cent. debt, people will be able to pay off those sums during the first 12 months. As they approach the next year and the next poll tax, their debt will go up and up and up.

When the Under-Secretary of State for Social Security replies to the debate, I should like a commitment that the House of Commons will be given the information that it requires. Hon. Members need to know how many people at each local office are having a liability order slapped against them for deductions from benefit. On 14 November last year, I asked the Secretary of State to list how many claimants on income support at each local office in Birmingham had had their names and addresses sent to the community charge registration officer by the local office. The Minister gave the standard answer that the information was not readily available and that it could be obtained only at disproportionate cost.

Not to be put off, the next day I wrote to the managers of the two local offices that serve my constituency. Both managers replied by return of post stating that they had contacted their headquarters about it and could not give me the information. Although eventually they were advised by their headquarters that they could tell me, initially Ministers tried to stop the information coming out. When I went to my local office, the staff there were instructed, "Do not answer him; we will think about it."

A lot of trouble would be saved all round—for local managers and local staff—if we could be given such information at the Dispatch Box when hon. Members ask questions about their local offices and the number of income support claimants who are affected. We should be given that information without the rigmarole of having to write to the local managers or even the Minister. We simply want answers to parliamentary questions about a matter for which the Minister is directly accountable to the House. I should like that point to be clarified when the Minister replies.

Before mentioning some of the anomalies with rebates, I wish to make a point about the independent living fund. Although I do not have it with me, I received a written answer on this from the Minister some weeks ago, and some clarification would be desirable. I have only one constituency case that relates to the independent living fund, and although I do not have to declare an interest, I freely admit that it involves a member of my own family. But the person concerned is a constituent and is entitled to her Member of Parliament's services, just like anybody else.

In effect, the lady concerned has all her income above income support levels subvented to the independent living fund as her contribution to its contribution. Therefore, all her graduated pension and all her occupational pension have to be paid to help meet the independent living fund's contribution to the care and other arrangements made by the local authority. In effect, she has been told, "You do not have anything above income support levels because we need it to help with the contributions." That lady cannot apply for a poll tax rebate because she could not fill in the form and state honestly that she is in receipt of income support, because she is not. She has an occupational pension and a graduated pension.

One of two things must happen. Either people who are involved in independent living fund arrangements have to have their poll tax discounted above income support levels —in other words, they can keep the poll tax amount so that they can pay the tax—or they should be able to apply for a rebate like anybody else who has a net disposable income at only income support level. The position must be clarified. Like me, the social services department. in Birmingham has attempted to clarify this anomaly, but without success. Although the Minister's answer was clear, what we were told should happen is not happening. Despite its problems, the independent living fund is of enormous benefit to many people in helping to keep them in their own homes. It is crucial, but the penalty that will be imposed if changes are not made is unacceptable.

I shall not rehearse all the arguments about student nurses, but I must refer to some of the anomalies. The Minister said earlier, "We have set it all out now. Everybody understands it. It is simple. Everybody knows where they stand on poll tax rebates." I must advise him that most people do not and that even those who understand do not think that the system is fair. I have received a parliamentary answer about the position of Royal Air Force officers. The Ministry of Defence has said that it is aware of the 411 trainees at RAF Halton and that it is telling all the other service stations to ensure that their trainees and students are similarly classified. That is fine for them, but some of them have incomes of as much as £9,000 per year. It is wrong that they should get the rebate when student nurses do not.

One of my constituents wrote to me only last week. She was a health visitor with earnings of £12,000 per year and was due to go on a course at Birmingham polytechnic. It had been agreed that she would be classified as a student and that she would be entitled to an 80 per cent. rebate on her poll tax. Circumstances that I need not go into have meant not only that she is unable to go on the course, but that she has had to leave her job. She is now a housewife with no income and she will receive no rebate because of joint and several liability. She asked me how, when she was earning £12,000 per year, going on a course and married to a husband who was working, she would get an 80 per cent. rebate on her poll tax, whereas now, when she is not working, has no income and is not going on that course, she has to pay her full poll tax. It does not make sense. If the system is shot full of anomalies like that, the Minister has not heard the end of the difficulties about poll tax rebates.

Poor people will be in real trouble. I should like to share with the House a couple of sentences that were uttered when these issues were debated on 23 February 1988, which seems a long time ago now. I refer to the 17th sitting of the Committee that considered the Local Government Finance Bill: Above all, I am worried because in recent years we have seen the development of two societies….I am not over-dramatising the position, but I have noticed the haunted look in the eyes of people who shuffle into my surgery. They have been caught in the poverty trap which has come about by a combination of our benefits and tax system and low income….We have a get-rich-quick, materialistic environment. It scorns people who cannot keep up with it. That is also distressing for parliamentarians. People need our help; they must not be kicked in the teeth by a system that is becoming increasingly hard on them."—[Official Report, Standing Committee E, 23 February 1988; c. 884.]

I am not quoting a Labour Member of Parliament; I am quoting a Conservative Member of Parliament. I shall not embarrass him by identifying him. The hon. Gentleman is no longer in his place, as he was a few minutes ago—[Interruption.] Very well—it is public knowledge—it was the hon. Member for Harrow, East (Mr. Dykes)—

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

Conservative Members are trying to dismiss that statement. A Conservative Member of Parliament has seen the "haunted look". Two years ago, when we were discussing the poll tax rebate system and how it would work, the Secretary of State said, in effect, "Why should what the duke has to pay be different from what the dustman has to pay?" That is the kind of attitude that we are facing.

The system is unfair. It is shot through with anomalies. With the best will in the world and, at the Department of Social Security, with the finest of dedicated civil servants —I am making up for last night—who do their best to serve Ministers, and who, of course, do not ask questions about the effects of the policies in the first place, the system will not work. The poll tax does not deserve to work. In fact, the rebate system will be the final nail in its coffin.

6 pm

Photo of Mr Timothy Raison Mr Timothy Raison , Aylesbury

Hon. Members may recall that I did not support the introduction of the community charge when the legislation was passed two years ago. I am bound to say that many of the gloomy predictions made at that time have been fulfilled. However, in this debate we are concerned not with fundamental principles but with the very important question of how to implement the charge, and whether that can be done in as reasonable, perhaps even humane, a manner as possible. Elements of the instruments before us today show that Government are trying to ensure that implementation is eased. They have taken certain important steps to ease the impact of the charge.

My right hon. Friend the Minister referred to the generous rebate taper level. It is exceptionally generous compared with almost anything else. Then there is the transitional relief, designed to limit increases where charges are more than £156 above what the Government deem to be a sensible level. In addition, the Chancellor, in the Budget, raised the capital limit to £16,000. That is the subject of the fourth of the instruments that we are considering.

All those things are welcome in principle; they are genuine attempts to ease the introduction of the community charge. However, we still have not done nearly enough to ease the burden on many people who are hit hard by the community charge. Some of the concessions, which were certainly intended to be helpful, have not had the effect that, at first sight, it appeared they would have. In the process of easing the transition into the new system, the Government must go further.

How can that be done? I shall briefly offer one or two thoughts. First, I return to a point that has been raised already. I refer to the capital limits—in particular, to the effect of the assumption that each £250 of capital above £3,000 should add £1 a week to the level of income on which rebates are assessed. As my right hon. Friend the Minister reminded us, this matter was debated here only a few hours ago, but I do not think that the debate has been put to rest. We cannot say that we have got the system right. We really are assuming the equivalent of a 20·8 per cent. yield on capital. That cannot be justified.

I accept that, so long as someone remains within the rebate range, he will have to pay only 15 per cent. of the increase, and I have referred already to the fact that there is a generous rate of taper. However, the real problem is that this level of deemed income will take certain people right out of the income range within which they can get help. Under the provisions that we are debating, they might qualify in terms of capital, but because of their income they will fail to qualify. The Government really must face up to that fact.

The answer must be provided by doing something like dropping the assumption that £250 of capital will yield an income of £1 a week and assuming that the yield will be about 50p a week. One could try to tie the level more precisely to prevailing interest and yield levels, but, for administrative simplicity, a rough and ready yardstick such as that would probably make more sense. I hope that my right hon. Friend will see the force of this point and will take it very seriously.

Photo of John Stanley John Stanley , Tonbridge and Malling

My hon. Friend has referred to the generous rate of taper. In historical terms, this is correct, but I should like to draw my hon. Friend's attention to a written answer that I received from the Parliamentary Under-Secretary of State for Social Security on 23 March 1990. That answer, which is recorded in column 788 of Vol. 169 of the Official Report, reveals that a pensioner couple aged between 60 and 74 on an income of £75·55 would get the maximum rate of community charge benefit, but that if that income rose to £106·23, even on the assumption of a £600 community charge between them, they would lose 50 per cent. of their entitlement to community charge benefit.

Photo of Mr Timothy Raison Mr Timothy Raison , Aylesbury

My right hon. Friend has made a significant point, which the House will have clearly heard.

I want to turn to the next element in the package that the Government have offered in an attempt to ease this process—the transitional relief, the help for single people and couples where charges are more than £156 above current rates. This too is welcome, but it assumes sensible spending by the local authority. The judgment as to what is a sensible level of spending is rather hard to justify. In the debate earlier this week, we heard that it was based on an assessment of what the local authority received in the current year, plus 4·64 per cent. Clearly 4·64 per cent. is below the rate of inflation. As a result, the £156, especially in so far as the scheme touches on the assumed level of spending, has its weakenesses.

This too is a matter that could be tackled. If I were to pick out the most useful single short-term action that could be taken to relieve the pressure of the community charge, it would be a reduction of the £156 to £104, or perhaps even £52. That could be done without enormous administrative complication, and it would have immediate effect. Every penny of the money being provided by way of benefit would, by definition, go to the people who needed it most. I realise that this is not the direct responsibility of my right hon. Friends, but I urge on them the need to think very carefully about my proposition. It could very rapidly do enormous good.

I hope to goodness that the Government will not get sucked into the business of extensive rate capping. That would only prolong the agony, month after month. It would also confirm the belief that the community charge is not achieving its objective. It would undoubtedly lead to endless court actions and to local authorities making cuts in those services in which they felt that cuts would have the greatest and most dramatic effect. I ask my right hon. Friends to pass those points on to their colleagues.

I want to return to a point that has cropped up in this debate—whether those who are on income support should pay any community charge at all. One has an instinctive initial sympathy with the argument that anyone on income support should not have to pay the community charge. On reflection, however, one must accept that, since we have the community charge system anyway, interfering with the objective of achieving greater accountability in local government would make total nonsense of the whole thing. I have therefore come reluctantly to the view that those on income support should have to pay the notional sum—or the 20 per cent.-plus, which I accept is more than notional. But that makes it all the more important that they should be helped in other ways to maintain their standard of living.

As other right hon. and hon. Members want to take part in the debate, I shall not go further, save to say that the Government must immediately take further steps to make the system operate more fairly and to win more acceptance for it among the public at large. Over the coming year, it will be crucial to think again about the fundamental problem of whether there is some way of relating the community charge much more closely to ability to pay.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Education), Chair of Communications, Liberal Democrat Party 6:09, 29 March 1990

The debate is reactive to the outcry against this unfair and regressive tax. That is the background to the comments of every hon. Member. The regulations, particularly those which came through the Budget, are an attempt to make some adjustment in view of the unprecedented response, across the generations, to the tax. I am still surprised at how many Conservative Members did not see the gathering storm clouds. There are a number of hon. Members in the Chamber who served, as I did, in Committee on the Local Government Finance Act 1988, which introduced the tax. Hon. Members on this side warned the Government what would happen; some of their own Back Benchers warned them, and so did almost every outside body. Yet a succession of hon. Members who voted the legislation through seem to be surprised by what has happened.

Photo of John Home Robertson John Home Robertson , East Lothian

The people who could best have warned the Government were the Scottish Conservative Members who served on the Standing Committee on the legislation which imposed the poll tax on Scotland, but most of them lost their seats at the last election.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Education), Chair of Communications, Liberal Democrat Party

I was about the say that they would have found it harder to warn the Government because they are no longer here.

In regard to the regulations about deduction from income support, all the other deductions associated with loans and all the rest come first and the poll tax deduction comes on top, so we see how penal and draconian the measure is. A person might have 25 per cent. of his income support deducted even before the poll tax is considered. Many people whose income is on or just above the exemption limit do not know how they will pay the tax.

On Monday night, I addressed a meeting in my constituency about the poll tax. The people there do not normally come to political meetings. They were angry and were reacting in an extreme way. I tried to explain the penalties and difficulties. The reason for their reaction was that they cannot afford to pay the tax. When some of them spoke to me privately after the meeting, they were more friendly but they were frightened because they do not know how they will pay. That is what we find about the people who are coming to our surgeries.

The explanatory memorandum on the Community Charge Benefits (General) Amendment Regulations says: Regulation 78 is amended so that collective community charge contributions may in specified cases be paid direct to the collective community charge payer without the consent of the person entitled to the benefit. Perhaps the Minister would explain that. It seems that the people who are entitled to the benefit will not actually be the people who are expected to have paid it. I am not sure why the benefit should go to the landlord.

I should like Ministers to take up with their colleagues the case of a mature student in my constituency. She has two children and is studying in Plymouth, where she has to live for part of the week. She is expected to pay the 20 per cent. contribution there. Otherwise, because she is on income support, she would have been paying 20 per cent. in my constituency. Because she has a property in my constituency, where her children live during the week, she will have to pay a standard community charge, a double poll tax. The problem has not been properly resolved by the Government. I cannot believe that it is intended. If it cannot be dealt with here, I hope that Ministers will see that something is done about it, because it is clearly nonsense.

The Chancellor's announcement about capital limits, intentionally or otherwise, misled many people. When they heard that the limit was to be increased from £8,000 to £16,000 they believed that they would be entitled to considerable extra help. Certainly they believed that they would be entitled to some extra help. When councils dealt with the flood of problems, more often than not people found that they will not get any help or that the help will be minimal.

We have to explain that the concession is based on the idea that they are getting a return of 20 per cent. on their savings investment. Although they might not be pleased about it, people might understand it if the deduction was based on actual income. The problem is that they are not getting a 20 per cent. return on their savings, apart from the fact that they have already paid tax on the money before putting it aside. Instead of increasing the capital limit to £16,000, the Chancellor should have tackled the limit of £3,000 or the rate of reduction which, more than anything, is divorced from reality.

If the concession is to be based on people's income, why is there a cut-off limit? If we could find someone with savings of £16,000 who is still entitled to help—I think we would be hard-pressed to do it—it is not logical to say that that person will not get help. By definition, the person needs help.

Not only did the Chancellor not think about Scotland: he did not think through his policy as a whole. It does not add up. He has admitted that it was rushed through at the last minute, with insufficient consultation. I think it was rushed through without any thought. The Government had read in the newspapers that it would be a good idea to increase the capital limit to £16,000, so they bunged it through, and ever since they have been wondering what they got up to. We know that they forgot about Scotland. That is not surprising. They forgot about Scotland all the way through. It was not just Ministers who forgot about it, but all the Conservative Members in England who pushed through for Scotland what they now find unacceptable.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Education), Chair of Communications, Liberal Democrat Party

I beg the hon. Gentleman's pardon. A few Conservative Members—three, I think—paid attention to what was being done north of the border.

The Government are attempting to ameliorate the problems associated with the poll tax. They are trying to deal with the reality of people's inability to pay. Every time Ministers try to come up with a solution, they throw up more problems for themselves. The tax is not based on ability to pay. However much the Government try to adjust it, they cannot do it. It will not work.

Throughout all the debates it has been pointed out that one other country, Papua New Guinea, was foolish enough to precede the Government down this path. However, that is not true. Papua New Guinea did not bring in a poll tax. It was debated there in 1906 but was rejected as too unfair and difficult to introduce. Instead, a local income tax was introduced. Ministers would be wise to follow that example.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley 6:20, 29 March 1990

I particularly welcome the uprating of the rule on savings because the old system was a disincentive to savers. We must increase saving levels in Britain—[Interruption]—and rather than sniggering, the hon. Member for Cunninghame, North (Mr. Wilson) should reflect that the previous Labour Government, instead of giving incentives to savers, had negative interest rates and taxation at 98 per cent., at the highest rate, on savings.

We had a ludicrous state of affairs. That reflects Labour's commitment to savings. We must increase saving levels because the higher they are, the larger the pool of investment for industry—[Interruption.]—and the more—

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. There is clearly nothing wrong with the microphones in the Chamber. The problem is the barracking that is going on underneath them.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

Opposition Members do not like hearing pertinent facts about the policies of Labour in power.

A high level of savings provides a larger pool of capital for industry to invest, which puts downward pressure on interest rates. That is why countries such as Japan, which have been economically successful, have concentrated their efforts on persuading people to save. We in Britain have learnt that lesson late, but I am glad that action is being taken to redress the balance.

The new regulations do not help many people who do not qualify for rebate, but who are suffering as the result of high levels of community charge. Media cover to date has concentrated on Conservative areas that have problems of their own, problems which are largely irrelevant to my county of Derbyshire.

Some Conservative county councils receive little by way of Government grant. Surrey, for example, gets only £60 a head. In addition, some of those areas are paying substantial sums—as much as £75 a head—into the safety net. They may complain that they are subsidising Labour areas such as Derbyshire.

We in Derbyshire do not have that excuse because not only are we getting a massive amount by way of Government grant—three or four times Surrey's level—but in my constituency we are also benefiting from the safety net at levels ranging from £51 to £58 a head. Unfortunately, the media have concentrated on Conservative areas, which have one set of problems, and ignored the fundamental problems in Labour-controlled counties such as Derbyshire.

Derbyshire has no excuse for having a high community charge because it is generously treated by the safety net and has a huge grant, much higher than almost every other shire county.

Photo of Michael Jack Michael Jack , Fylde

Is my hon. Friend aware that the situation to which he refers in Derbyshire is reflected precisely in Lancashire, where Government grant of £533 a head is not sufficient to dissuade the county council from increasing its expenditure by 17 per cent., equivalent to a 30 per cent. increase in the old rates? The result is a community charge £60 to £70 higher than it should be.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

My hon. Friend makes the point well. It is a shame that the media have not paid more attention to areas such as Lancashire and Derbyshire, where the real problem comes from very high county council spending.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

I hope that the hon. Lady will forgive me if I do not give way because time is short. Opposition Members have intervened on many occasions during the debate and the hon. Lady has already intervened, and I see the hon. Member for Coventry, South-East, (Mr. Nellist) bursting at the seams to take part in the debate.

Many people have told me that they would consider a community charge in the county of £250 or even £300 to be fair, but not £400. Many who will not qualify for rebate cannot afford £400. The community charge is at that level in Derbyshire because of the policies of the Labour-controlled county council.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

I shall not give way to the hon. Gentleman, who has just come into the Chamber, while many of his hon. Friends have sat patiently through the whole debate. No doubt he will have a word with me outside in the Lobby after the Division.

Hon. Members:


Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

Had the hon. Gentleman been here for the whole debate, I should have happily given way to him. But he wanders into the Chamber from the Tea Room or wherever else he has been and expects to make an intervention.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The hon. Member who has the floor has made it clear that he does not intend to give way.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

We have a ludicrously high community charge in Derbyshire because of the irresponsible and profligate spending policies of Derbyshire county council. My constituents are expected to pay a community charge close to £400 a head, despite benefiting from the safety net and from one of the most generous Government grants available to any shire council, because the county council has decided to have a £34 million contingency fund, equal to almost £50 per charge payer. Having done its best to keep rate rises low last year—election year—it is setting the community charge as high as possible this year so that it can blame the Government.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

In addition, the county council has spent £1 million a year on a public relations department that produces nothing short of socialist propaganda. Just after the community charge level of nearly £400 was announced, the county council threw an expensive party, at the charge payers' expense, to celebrate the release of Nelson Mandela. Many people are happy that he has been released, but they do not want to contribute to a beano at which councillors can celebrate it.

In addition, those councillors have spent £600,000 on an equal opportunities and race relations department; £140,000 on twinning arrangements mainly with towns in China and Russia; and nearly £15 million on a dubious so-called community education programme that most people believe is of little educational benefit.

Derbyshire county councillors have no interest in efficiency and in keeping costs down. That is why—[Interruption.]—since 1981, the number of staff employed by the county council has increased by 8,000, a 20 per cent. increase, and the largest increase of any shire county. The county council leadership seems to believe not that it is running a council to provide services for the people of Derbyshire—

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

—but that it is running a huge, bloated job agency for its friends in NUPE and COHSE.

Photo of Mr Peter Pike Mr Peter Pike , Burnley

On a point of order, Madam Deputy Speaker. Although there are specific motions before the House, the hon. Member for Amber Valley (Mr. Oppenheim) seems to be spending much of his speech on items that are not relevant to those motions.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

That is the most genuine point of order that has been put to me in my three years in the Chair. The hon. Gentleman is quite correct, and perhaps the hon. Member for Amber Valley (Mr. Oppenheim) will now address his remarks to the regulations and the question of their annulment.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

The purpose of the regulations is to reduce the burden of the community charge on poorer people. I am suggesting other ways of reducing that burden. The massive, wasteful and profligate spending policies of counties such as Derbyshire are a significant factor in increasing the burden. Were those councils more sensible in pursuing proper policies, the burden on community charge payers would be substantially reduced. I shall give an example. When district council leaders in Derbyshire got together and produced—

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I have given a ruling. I am sure that the hon. Gentleman will wish to follow it and return to the subject under discussion.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

I always abide by your rulings, Madam Deputy Speaker.

The regulations will prove to be important in making the community charge fairer. On the other hand, we must retain the principle of accountability in relation to the charge, with everyone making a contribution towards the costs of local government.

We must go further and do our utmost to make the community charge fairer. Most people now realise that not everyone pays the same amount because, after all, there is the rebate system. On top of that, throughout England and Wales, 70 per cent. of local government spending is funded by business or directly by the Government. The funding that comes directly from the Government is financed primarily by income tax, which is disproportionately paid by better-off people. We must do as much as possible to make sure that the community charge is fairer.

Local government also has an important responsibility to ensure that it reduces wasteful spending and does not put unnecessary burdens on poor people who cannot afford to pay them. We do not yet have the accountability that we should, because many people voted for county councils last year under the old system without realising what the new system would mean. As the system develops and is fine tuned, it will introduce a great deal of accountability. Until we have greater accountability—which we may not have for two or three years—it is important to defend less well-off people who do not benefit from rebate or benefit only partially. In a county as irresponsible and wasteful as Derbyshire, the only way to defend people is to cap the council.

Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East 6:31, 29 March 1990

The poll tax and the rebate regulations that we are discussing become law in three days—on April fool's day. I am almost tempted to rest my case there, but as I have a few minutes, I shall push on.

During the past two or three weeks we have watched Tory Members of Parliament race around in panic. They were compared to headless chickens. I think that that is unfair. Headless chickens are a model of sobriety compared to the way Conservative Members have panicked in the past few weeks both inside and outside the Chamber. However, their concern was synthetic.

Conservative Members were not worried about low-paid workers presently in low-rated property who will be pauperised by the poll tax. They were not worried about women throughout the country and in every industry who earn on average two thirds to three quarters of the wage of a man but have to pay the same poll tax as a man. They were not worried about young people, 80 per cent. of whom, when they leave school, find jobs that earn less than the Council of Europe decency threshold of £150 a week but who pay the same poll tax as higher paid workers. They were not worried for the 11 per cent. of West Indian families and 29 per cent. of Asian families who have six or more adults in their household and will face bills in three days' time of £2,000, £2,500 or £3,000.

They were worried about Conservative seats. The Daily Express predicted that 81 Conservative Members would lose their seats because of the poll tax alone. I do not know about the right hon. Member for Henley (Mr. Heseltine), but if the Prime Minister were run over by a bus tomorrow morning, half that lot on the other side would vote for the bus driver to be the next Prime Minister in grateful thanks.

The regulations before us are supposed to make a fundamental difference to the mass opposition to the poll tax throughout the country. We should remember that only 19 per cent. of the population support the poll tax; 81 per cent. are against it. The regulations will do nothing of the sort. Many families, particularly the 3 million families who are already in serious debt, and arrears for mortgage, rent, gas, water and electricity, must find tonight's debate a joke. What the hell does it matter if the rebate threshold is increased from £8,000 to £16,000 if one is already deep in debt? If one had that level of savings, one would not be in debt in the first place. For millions of families, tonight's debate is irrelevant.

Everyone in the country should apply—I shall use the same date as the Minister used—before May 27 for the rebates to which they might be entitled from every local authority in England and Wales. The reason why they should do so is that those who will pay should not pay any more than they have to. Those who will not pay should not owe any more than they have to. What is more, anything that gives the councils a bit more work to do in the next few weeks so that they cannot get round to court orders suits me down to the ground.

The rebates are paltry. To take my own borough of Coventry—

Photo of Mr Nicholas Bennett Mr Nicholas Bennett , Pembroke

What about Wandsworth?

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

I shall come to Wandsworth in a minute. The hon. Gentleman has just walked in from the bar, obviously after a good lunch, as they say. He should pipe down and let us get on with the serious debate.

In Coventry, the poll tax is £394. That is £7·56 a week. Therefore, the maximum rebate is £6·04. Everyone has to pay a minimum of £1·52 or 20 per cent. For those under 25, that is a net loss of 88p a week. For those over 25 there is a net loss of 85p a week. For couples, there is a net loss each of 88p.

What about those in work? Someone under 25 in Coventry who takes home more than £70·85 a week receives no rebate whatever. Someone over 25 who takes home more than £78·75 a week receives no rebate whatever. A pensioner between the ages of 60 and 74 with an income of more than £85·55 a week receives no rebate whatever. A couple with two children under the age of 11 with a net income of more than £177, including all income from family credit, child benefit or anywhere else, even out of two low-paid jobs of, say, £88 or £89 a week, receives no rebate whatever. That is notwithstanding the regulations that we are discussing.

Young people in Coventry and throughout the country on such levels of low wages will owe from next Monday 2 April a month or a month and a half of their total annual income just to pay Maggie's tax. A hell of a lot ain't going to do it.

The regulations cover two main areas. First, we have the concession of raising the savings allowed from £8,000 to £16,000. My hon. Friend the Member for Oldham, West (Mr. Meacher) dealt with the perfect example of those who thought—probably until tonight—that they would gain. Someone with £15,500 in the bank thought until the Budget that they would get no rebate. When they heard that the figure had been increased to £16,000 they thought they were okay. He dealt with the example of a pensioner with a small occupational pension which took her £10 over the applicable amount, and with £15,500 savings. Even if she lived in an area where the poll tax was £611, there would be no rebate. That is bad enough, but most hon. Members, particularly the Tory headless chickens, do not realise that, if the poll tax was £350—let us remember that three quarters of all councils in England and Wales have set a poll tax higher than that—that pensioner is limited to a maximum of £4·51 a week in rebate. When the Tories next do their surgeries, they will not have a lot of grateful pensioners coming along to say, "Thanks for doubling the amount." We have gone into all the reasons for that.

I should have still voted against the poll tax, as the Minister knows, but it would have been a bit better if he had done what several of his hon. Friends suggested and lifted the £3,000 at which people start to lose rebate to about £8,000. Parallel to that—no one else has argued for this tonight—he should have increased by £20 or £25 a week the applicable amount of other items such as works pensions which are disregarded before the loss of rebate. We heard from the Chancellor about thrift. But pensions are only deferred wages. It is a way to set aside wages for the future. That is thrift. But people are being penalised by that lower limit of weekly income.

As the right hon. Member for Aylesbury (Mr. Raison) said in response to a question that I put to the Minister, the idea that for every £250 above the savings limit of £3,000 one receives £1 a week in interest is wrong. No Tory Member could point me to any bank, savings institution or other high street institution to which ordinary people have access—I am not talking about Lloyd's—that gives 20 per cent. interest and would give £1 a week for every £250. Millions of people have been conned by that.

The second area covered by the regulations is income support. From Monday, one of the three penalties, other than gaol, which the Government and local authorities can use to force people to pay is benefit arrestment. It is worth noticing—it does not seem that any Scottish Member will get into the debate—that Scotland has had 12 months of the poll tax but not one person has had his or her benefit arrested in Scotland by exactly the same powers as are available here. That is because of the huge number of people affected.

In Scotland, people do not worry about debates such as this, because they have their own rebate system—more than 1 million people have not paid the tax. The Scottish are successfully implementing their own rebate system.

Photo of Mr Brian Wilson Mr Brian Wilson , Cunninghame North

It is true that no hon. Member representing Scotland will have the opportunity to participate in the debate. That is unfortunate, but I know it is not the fault of the Chair. However, that does not give my hon. Friend the Member for Coventry, South-East (Mr. Nellist) the right to misrepresent the situation in Scotland. An enormous amount of suffering has been caused in Scotland by the poll tax. The vast majority of people included in my hon. Friend's fanciful figure are not involved in non-payment campaigns. The greatest recruiting sergeant for non-payment or underpayment in Scotland is poverty. Inability to pay and poverty is what it is all about. I will not allow anyone, on either side of the House, to claim a trophies people in my constituency who are unable to pay the poll tax and who are not involved in any campaign. The poll tax is an evil imposition, but one must get the politics of it right. The way to defeat the poll tax is to defeat the people who have imposed it on us.

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

I do not necessarily disagree with my hon. Friend. The vast majority of people in England who will not be paying will be unable to pay the tax. My hon. Friend says that the figure I gave is fanciful, but it is based on the returns of Strathclyde, Lothian and other regional councils of those who have not paid since last April, who are now more than five months in arrears and who have stopped paying the tax. I maintain that more than 1 million people in Scotland are unable to pay that poll tax.

The regulations raise the amount that can be deducted from income support to £1·85 for a single person and £2·90 for a couple. It is deplorable that people already on the poverty line and in receipt of income support should have anything deducted from that benefit. One third of claimants in this country are already deeply in debt. On average, those in debt owe £84 for fuel, £135 for housing, £132 on purchases, £210 on loans and £119 in other debts. They owe a total of £680, and for them to be driven further into debt by deductions from their income support is absolutely disgraceful.

There is a small silver lining in the cloud. If the poll tax is £500, as it is in Tory Maidenhead and Basildon, those on income support must pay 20 per cent. towards it—£100. That means that, even with the increases announced today, it costs less to have the poll tax taken out of one's benefit than to try to pay it. I am sure that quite a few people will follow that line.

In recent weeks, I have received an enormous number of letters and they have made me proud of the things I have said inside and outside the Chamber. I have received, for example, a letter from a former beach commando who was strafed and bombed for five and a half years during the second world war. In the past two days, I have received letters from pensioners living in Cheshire, Exeter, Wallsend, Birmingham and Tamworth who tell me that they cannot afford to pay. They say that they are pleased that someone is standing shoulder to shoulder with them in their battle.

I make no apology to those Tory Ministers who were egged on and organised by Dr. Julian Lewis in their attempts to smear those who will not pay the poll tax. It will not work.

A couple of years ago, the Prime Minister said that the poll tax was the flagship of her third term of office. From Monday, millions of people will show that it ain't no flagship, it is her Titanic. She is going down with the ship.

Photo of Clare Short Clare Short , Birmingham, Ladywood 6:43, 29 March 1990

Tonight we are discussing one set of regulations that try to modify a deeply unjust tax. It is no good, however, fiddling around at the margins—that will not help. The fundamentals behind the tax are unjust and cannot be put right. The country has begun to realise that such is the Government's problem. The other regulations relate to taking away money from those on benefits who get into debt.

The hon. Member for Amber Valley (Mr. Oppenheim)

—I am sorry that he has left the Chamber—failed to give way to anyone and made a disreputable attack on Derbyshire county council. I do not know about that county council in detail, but we all know that Tory authorities have set their poll tax 31 per cent. above the Government-set figure, and that Labour authorities have set it 34 per cent. above that figure. We know that the Government figures are wrong, and statements from associations representing Labour and Tory local authorities back our claim. To say that the debate centres on Labour councils is equivalent to lies and fibs.

The hon. Member for Amber Valley also attacked the equal opportunities policy of Derbyshire. Clearly the hon. Gentleman is not in favour of black people and women having equality in the county. He also attacked the party given to celebrate that lion of a man, Nelson Mandela, on his release from imprisonment, and community education. His attack on the county council was disreputable in all respects.

The first set of regulations relates to deductions from those on income support to meet their arrears on poll tax. We know that those on income support are already being ripped off because the 20 per cent. contributions that they must pay towards the poll tax in their local area is based on the Government's figures, but the real rates of poll tax are much higher. Everyone on income support will be poorer because of the poll tax and the Government's implementation of it.

The principle of deduction from income support is a worry, because we are taking money from people who are given the minimum on which it is calculated they need to live. The people who are unlikely to be able to pay the poll tax are those who are already in debt for other things. The level of debt in Britain is higher than it has ever been; our level of indebtness is higher than that of any other European country.

People on low incomes, low-paid workers and people on benefits are being squeezed by the Government so that they can give more in tax handouts to their rich friends. Loan sharks and creditmongers have pushed their credit at those on low income and many people are now suffering deeply as a result of indebtedness. Many people are already paying money out of their income support to pay off debts that they have collected.

The regulations mean that a deducation of £1·85 a week can be made from a single person—nearly £100 a year—and £2·90 a week from a couple—nearly £150 a year. Given that those deductions will not cover the debt, it will carry on in subsequent years, as my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) has made clear. The deductions can be made, providing a person is left with at least 10p per week in income support. Deductions might already be made from that support to pay for housing, rent, fuel and water debts as well as the overpayment of benefit, whether it was the fault of the recipient or not. A person's income support might also face a deduction for the social fund.

Under our system, a maximum of 25 per cent. of a person's income support can be deducted without his or her consent. That deduction is made from the minimum which it is judged people need to live on. Today the Government are suggesting that, on top of that 25 per cent., £1·85 or £2·90 can be taken from that benefit, provided that 10p a week is left in income support.

Tonight the House is being asked to approve regulations penalising those on little, who are already in debt. Those people are facing a deeply unjust tax and they are now to have money compulsorily deducted from their income support. Will Conservative Members vote for that? What will they say to their constituents? When they vote this through and find out how unpopular it is, they will try to distance themselves and pretend that, for some reason or other, they do not really support the change.

The other regulations implement the Chancellor's misleading concession in the Budget. There is no doubt that he misled elderly people with savings into believing that they would receive a rebate on the poll tax. I do not believe that the Chancellor knew what he was doing, as the figures he quoted do not make sense. He said that 250,000 people would benefit, at a cost of £120 million. From my desk in the Cloisters, I heard a Tory Member with a marginal seat who rang his agent to say that 500 people in a certain area would get £400 each. Suddenly, different figures were given by the Department of Social Security. We are now told that 195,000 people will benefit at a cost of £35 million. Where did all the other money go?

I think that the arrangements were cobbled together in panic. I do not believe that the Department of Social Security was properly consulted. Opposition Members tabled an amendment to the Social Security Bill on this very point, and were told by the Minister that there was no possibility of a concession. Shortly afterwards, the Chancellor made such a concession and messed it up—probably because he did not properly consult the DSS, any more than he thought about Scotland or the needs of its people.

The concession on capital limits has been a mess from beginning to end. It has misled Tory Members into waving their Order Papers because they thought that they had obtained some relief; more seriously, it has misled many elderly people who have more than £8,000 in savings and who thought that they would be given significant help with their poll tax. That is wrong: the poll tax is wrong. It is wrong to mislead people in that way.

I believe that even the Government's so-called concession will blow up in their face. The anger of those elderly people when they find out what really went on will cost the Government politically even more dearly than the poll tax is costing them now.

Photo of Mrs Gillian Shephard Mrs Gillian Shephard Parliamentary Under-Secretary (Department of Social Security) 6:50, 29 March 1990

I should dearly like to answer all the detailed questions that have been asked during this short debate, but time does not permit it. Some, in any event, would be dealt with more appropriately by my right hon. Friend the Secretary of State for the Environment. The hon. Member for Birmingham, Perry Barr (Mr. Rooker), however, asked one question that needs to be passed on to the trustees of the independent living fund. The hon. Gentleman also asked about information from local officers. I assure him that local office managers have approached the divulging of information with proper care, although of course they were able to answer his inquiry in a proper way as well. We have nothing to hide in that regard.

Today's debate has centred on two issues—tariff income and capital, and deductions. Hon. Members' concern about tariff income and capital limits is understandable, because community charge benefit is not the simplest benefit in the world to explain. Nevertheless, there has been some misunderstanding about the £1 of weekly benefit per £250 of capital, and of the fact that the deduction represents a very generous taper of 15p a week.

Let me give some examples, as a good deal of misleading information has been given. Let us take a married couple in their 50s. The husband is disabled, and is cared for by his wife. Their rent is £23 a week, their community charge is £400 each and their savings stand at £13,000. Their total weekly income is £138·90, not including income from the capital. That couple will receive £6·96 a week in community charge benefit.

Now let us take a single pensioner in her 80s, paying a rent of £25 a week and a community charge of £400. She has £12,000 in savings and a total weekly income of £47·15, not including income from her capital. She will gain £5·89 a week in housing benefit, and £1·73 a week in community charge benefit.

As the hon. Member for Birmingham, Ladywood (Ms. Short) pointed out, however, the prayer is against the provisions for deductions. The enforcement of community charge arrears is, as she will appreciate, a matter for local authorities, and my right hon. Friend the Minister of State has already explained how that will work. I feel, however, that I must clarify the misrepresentation that has been repeated today by the hon. Members for Ladywood and for Oldham, West (Mr. Meacher) about the 10p a week. It is entirely misleading to say that the Department intends to take large amounts of benefit away from people in order to leave them with only 10p a week on which to live.

Photo of Mrs Gillian Shephard Mrs Gillian Shephard Parliamentary Under-Secretary (Department of Social Security)

That was the implication, and neither hon. Member corrected it.

Photo of Michael Meacher Michael Meacher Shadow Secretary of State for Work and Pensions

What we said was that large sums could be deducted in poll tax arrears, as long as people were left with 10p in income support. We did not use the words "in order to leave". Does the Minister not consider that disgraceful?

Photo of Mrs Gillian Shephard Mrs Gillian Shephard Parliamentary Under-Secretary (Department of Social Security)

I should like to continue my explanation, because I still think that the hon. Gentleman is giving a misleading impression. He is giving the impression that the 10p is all that people will have to live on. The fact is that benefit can be reduced to lop a week only if the income support was very low in the first place because the claimant had other income—for example, from other contributory benefits. The 10p minimum level of income support is retained precisely to retain for the claimant automatic eligibility for free NHS dental treatment, prescriptions and vouchers for glasses. It is important to clear that up.

As an amount is included in income support for the payment of 20 per cent. of community charge, we think it only right that a separate deduction should be made to pay any community charge arrears, as would happen if the claimant were in work. Deductions can be made from income support to meet debts relating to housing costs and fuel or water charges: clearly that is necessary for the claimant to retain tenure of the property and the supply of essential services.

From April, those deductions for arrears will be limited to a maximum of £5·55 a week. If the income support being paid is not enough to meet the debts and the community charge arrears, the regulations provide that the other deductions shall take precedence over community charge. Obviously, deductions from income support for housing, fuel and water costs must be given a higher priority, to protect claimants and their families.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

The debt deduction from income support will be possible only if a liability order has been obtained from the courts, and that will involve court costs. The local authority will add them to the debt, which will mean a minimum of £60 on top of the 20 per cent. payment. How will that money be collected?

Photo of Mrs Gillian Shephard Mrs Gillian Shephard Parliamentary Under-Secretary (Department of Social Security)

As I have said, the enforcement of orders will be a matter for local authorities.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

Who will pay the court costs?

Photo of Mrs Gillian Shephard Mrs Gillian Shephard Parliamentary Under-Secretary (Department of Social Security)

I really cannot answer the hon. Gentleman in any better way; that is the position.

It is extraordinary that Opposition Members should choose to ignore the positive aspects of the regulations. Perhaps, on the other hand, they prefer not to know about them. According to an advertisement about the community charge that was issued recently by the Labour-run Association of Local Authorities, a few might find themselves entitled to a rebate". That is misleading, as one might expect; but it is misleading on two counts. It will be not a few, but a large number, and it is not "might" but "will". The increase in the limit of the savings that people can have while still receiving help with the community charge has been widely welcomed.

Let me repeat that the increase will help 195,000 individual charge payers, of whom 150,000 will be pensioners. The backdating arrangements and the publicity will ensure that people will be able to benefit, provided that they apply before 27 May. The regulations also provide special arrangements for specific and vulnerable groups—although Opposition Members, of course, did not mention that.

The £40-a-week payments announced in December for war widows whose husbands served before 1973 will be entirely disregarded, and the disregard for war disablement pensions will be doubled to £10 next month. All lump sums from the Macfarlane Trust for haemophiliacs with an HIV infection will be totally disregarded, and the disregard for regular and charitable payments will also be doubled. That move has been widely welcomed by charitable and voluntary organisations throughout the country.

The sums allocated for the benefit are very generous indeed. The planned expenditure on community charge benefit for next year is £2·5 billion. The more generous taper of 15 per cent. instead of 20 per cent. will bring a further 650,000 people on to the benefit, and half of all benefit claimants will be helped. Help is to be given to 10 million people in all—one in four of the population.

The regulations are sensible, fair and generous. I commend them to the House and invite the House to reject the prayers.

Question put:

The House divided: Ayes 190, Noes 298.

Division No. 148][7 Pm
Abbott, Ms DianeBanks, Tony (Newham NW)
Allen, GrahamBarnes, Harry (Derbyshire NE)
Archer, Rt Hon PeterBarnes, Mrs Rosie (Greenwich)
Armstrong, HilaryBarron, Kevin
Ashley, Rt Hon JackBeckett, Margaret
Beggs, RoyHughes, Robert (Aberdeen N)
Bell, StuartHughes, Roy (Newport E)
Bermingham, GeraldHughes, Simon (Southwark)
Bidwell, SydneyIllsley, Eric
Boateng, PaulJanner, Greville
Boyes, RolandJones, Barry (Alyn & Deeside)
Bradley, KeithJones, Martyn (Clwyd S W)
Bray, Dr JeremyKaufman, Rt Hon Gerald
Brown, Gordon (D'mline E)Kilfedder, James
Brown, Nicholas (Newcastle E)Kinnock, Rt Hon Neil
Brown, Ron (Edinburgh Leith)Lamond, James
Buckley, George J.Leighton, Ron
Caborn, RichardLestor, Joan (Eccles)
Callaghan, JimLewis, Terry
Campbell, Ron (Blyth Valley)Litherland, Robert
Campbell-Savours, D. N.Livingstone, Ken
Carlile, Alex (Mont'g)Lloyd, Tony (Stretford)
Cartwright, JohnLofthouse, Geoffrey
Clark, Dr David (S Shields)Loyden, Eddie
Clarke, Tom (Monklands W)McAllion, John
Clay, BobMcAvoy, Thomas
Clelland, DavidMcCartney, Ian
Clwyd, Mrs AnnMacdonald, Calum A.
Cohen, HarryMcFall, John
Cook, Frank (Stockton N)McKay, Allen (Barnsley West)
Cook, Robin (Livingston)McKelvey, William
Corbett, RobinMaclennan, Robert
Corbyn, JeremyMcNamara, Kevin
Cousins, JimMcWilliam, John
Crowther, StanMadden, Max
Cryer, BobMaginnis, Ken
Cummings, JohnMahon, Mrs Alice
Dalyell, TamMarek, Dr John
Darling, AlistairMarshall, Jim (Leicester S)
Davies, Rt Hon Denzil (Llanelli)Martin, Michael J. (Springburn)
Davies, Ron (Caerphilly)Martlew, Eric
Davis, Terry (B'ham Hodge H'l)Meacher, Michael
Dewar, DonaldMeale, Alan
Dixon, DonMichie, Bill (Sheffield Heeley)
Dobson, FrankMolyneaux, Rt Hon James
Doran, FrankMoonie, Dr Lewis
Duffy, A. E. P.Morley, Elliot
Dunnachie, JimmyMorris, Rt Hon A. (W'shawe)
Dunwoody, Hon Mrs GwynethMorris, Rt Hon J. (Aberavon)
Eastham, KenMullin, Chris
Fatchett, DerekMurphy, Paul
Faulds, AndrewNellist, Dave
Fearn, RonaldO'Brien, William
Field, Frank (Birkenhead)Orme, Rt Hon Stanley
Fields, Terry (L'pool B G'n)Owen, Rt Hon Dr David
Fisher, MarkPatchett, Terry
Flannery, MartinPendry, Tom
Flynn, PaulPike, Peter L.
Foster, DerekPowell, Ray (Ogmore)
Foulkes, GeorgePrescott, John
Fraser, JohnPrimarolo, Dawn
Fyfe, MariaQuin, Ms Joyce
Galloway, GeorgeRandall, Stuart
Garrett, John (Norwich South)Redmond, Martin
Garrett, Ted (Wallsend)Rees, Rt Hon Merlyn
George, BruceReid, Dr John
Godman, Dr Norman A.Richardson, Jo
Golding, Mrs LlinRooker, Jeff
Gordon, MildredRoss, Ernie (Dundee W)
Grant, Bernie (Tottenham)Rowlands, Ted
Griffiths, Nigel (Edinburgh S)Ruddock, Joan
Griffiths, Win (Bridgend)Salmond, Alex
Grocott, BruceSedgemore, Brian
Harman, Ms HarrietSheerman, Barry
Hattersley, Rt Hon RoyShore, Rt Hon Peter
Heal, Mrs SylviaShort, Clare
Healey, Rt Hon DenisSillars, Jim
Heffer, Eric S.Skinner, Dennis
Hinchliffe, DavidSmith, Andrew (Oxford E)
Hoey, Ms Kate (Vauxhall)Smith, C. (Isl'ton & F'bury)
Hogg, N. (C'nauld & Kilsyth)Smith, J. P. (Vale of Glam)
Home Robertson, JohnSmyth, Rev Martin (Belfast S)
Hood, JimmySpearing, Nigel
Howells, Dr. Kim (Pontypridd)Steinberg, Gerry
Hughes, John (Coventry NE)Stott, Roger
Straw, JackWigley, Dafydd
Taylor, Mrs Ann (Dewsbury)Williams, Rt Hon Alan
Taylor, Matthew (Truro)Williams, Alan W. (Carm'then)
Thompson, Jack (Wansbeck)Wilson, Brian
Turner, DennisWinnick, David
Vaz, KeithWise, Mrs Audrey
Wall, PatWray, Jimmy
Walley, JoanYoung, David (Bolton SE)
Wardell, Gareth (Gower)
Wareing, Robert N.Tellers for the Ayes:
Watson, Mike (Glasgow, C)Mr. Frank Haynes and
Welsh, Michael (Doncaster N)Mr. John Battle
Aitken, JonathanDorrell, Stephen
Alexander, RichardDouglas-Hamilton, Lord James
Alison, Rt Hon MichaelDover, Den
Allason, RupertDunn, Bob
Amery, Rt Hon JulianDurant, Tony
Amess, DavidDykes, Hugh
Amos, AlanEggar, Tim
Arbuthnot, JamesEmery, Sir Peter
Arnold, Jacques (Gravesham)Evans, David (Welwyn Hatf'd)
Arnold, Tom (Hazel Grove)Evennett, David
Ashby, DavidFairbairn, Sir Nicholas
Aspinwall, JackFallon, Michael
Atkins, RobertFarr, Sir John
Atkinson, DavidFavell, Tony
Baker, Rt Hon K. (Mole Valley)Field, Barry (Isle of Wight)
Baker, Nicholas (Dorset N)Finsberg, Sir Geoffrey
Baldry, TonyFishburn, John Dudley
Banks, Robert (Harrogate)Fookes, Dame Janet
Batiste, SpencerForsyth, Michael (Stirling)
Bellingham, HenryForth, Eric
Bendall, VivianFowler, Rt Hon Sir Norman
Bennett, Nicholas (Pembroke)Franks, Cecil
Biffen, Rt Hon JohnFreeman, Roger
Body, Sir RichardFrench, Douglas
Boscawen, Hon RobertFry, Peter
Boswell, TimGale, Roger
Bottomley, PeterGardiner, George
Bowden, Gerald (Dulwich)Garel-Jones, Tristan
Bowis, JohnGill, Christopher
Boyson, Rt Hon Dr Sir RhodesGlyn, Dr Sir Alan
Brandon-Bravo, MartinGoodson-Wickes, Dr Charles
Brazier, JulianGorman, Mrs Teresa
Bright, GrahamGorst, John
Brooke, Rt Hon PeterGow, Ian
Bruce, Ian (Dorset South)Grant, Sir Anthony (CambsSW)
Budgen, NicholasGreenway, Harry (Ealing N)
Burns, SimonGreenway, John (Ryedale)
Burt, AlistairGregory, Conal
Butcher, JohnGriffiths, Sir Eldon (Bury St E')
Butler, ChrisGriffiths, Peter (Portsmouth N)
Butterfill, JohnGrist, Ian
Carlisle, John, (Luton N)Ground, Patrick
Carlisle, Kenneth (Lincoln)Grylls, Michael
Carrington, MatthewGummer, Rt Hon John Selwyn
Carttiss, MichaelHague, William
Cash, WilliamHamilton, Hon Archie (Epsom)
Channon, Rt Hon PaulHamilton, Neil (Tatton)
Chapman, SydneyHampson, Dr Keith
Chope, ChristopherHanley, Jeremy
Churchill, MrHannam, John
Clark, Hon Alan (Plym'th S'n)Hargreaves, A. (B'ham H'll Gr')
Clark, Dr Michael (Rochford)Harris, David
Clark, Sir W. (Croydon S)Haselhurst, Alan
Clarke, Rt Hon K. (Rushcliffe)Hawkins, Christopher
Colvin, MichaelHayes, Jerry
Conway, DerekHayward, Robert
Coombs, Anthony (Wyre F'rest)Heathcoat-Amory, David
Coombs, Simon (Swindon)Hicks, Mrs Maureen (Wolv' NE)
Couchman, JamesHiggins, Rt Hon Terence L.
Cran, JamesHill, James
Critchley, JulianHind, Kenneth
Currie, Mrs EdwinaHogg, Hon Douglas (Gr'th'm)
Davies, Q. (Stamf'd & Spald'g)Hordern, Sir Peter
Davis, David (Boothferry)Howard, Rt Hon Michael
Day, StephenHowarth, Alan (Strat'd-on-A)
Devlin, TimHowarth, G. (Cannock & B'wd)
Hughes, Robert G. (Harrow W)Mayhew, Rt Hon Sir Patrick
Hunt, David (Wirral W)Mellor, David
Hunt, Sir John (Ravensbourne)Miller, Sir Hal
Hunter, AndrewMills, Iain
Hurd, Rt Hon DouglasMitchell, Andrew (Gedling)
Irvine, MichaelMitchell, Sir David
Jack, MichaelMoate, Roger
Jackson, RobertMontgomery, Sir Fergus
Janman, TimMoore, Rt Hon John
Jessel, TobyMorris, M (N'hampton S)
Johnson Smith, Sir GeoffreyMorrison Rt Hon P (Chester)
Jones, Gwilym (Cardiff N)Moss Malcolm
Jones, Robert B (Herts W)Moynihan, Hon Colin
Jopling, Rt Hon MichaelNeale, Gerrard
Kellett-Bowman, Dame ElaineNeedham, Richard
Key, RobertNelson, Anthony
King, Roger (B'ham N'thfield)Neubert, Michael
King, Rt Hon Tom (Bridgwater)Newton, Rt Hon Tony
Kirkhope, TimothyNicholls, Patrick
Knapman, RogerNicholson, David (Taunton)
Knight, Greg (Derby North)Nicholson, Emma (Devon West)
Knight, Dame Jill (Edgbaston)Norris, Steve
Knowles, MichaelOnslow, Rt Hon Cranley
Lamont, Rt Hon NormanOppenheim, Phillip
Latham, MichaelPage, Richard
Lawrence, IvanPatnick, Irvine
Lawson, Rt Hon NigelPatten, Rt Hon Chris (Bath)
Leigh, Edward (Gainsbor'gh)Patten, Rt Hon John
Lennox-Boyd, Hon MarkPawsey, James
Lightbown, DavidPeacock, Mrs Elizabeth
Lilley, PeterPorter, Barry (Wirral S)
Lloyd, Sir Ian (Havant)Porter, David (Waveney)
Lloyd, Peter (Fareham)Portillo, Michael
Luce, Rt Hon RichardPowell, William (Corby)
Lyell, Rt Hon Sir NicholasPrice, Sir David
McCrindle, RobertRaffan, Keith
Macfarlane, Sir NeilRaison, Rt Hon Timothy
MacGregor, Rt Hon JohnRedwood, John
MacKay, Andrew (E Berkshire)Renton, Rt Hon Tim
Maclean, DavidRiddick, Graham
McLoughlin, PatrickRidley, Rt Hon Nicholas
McNair-Wilson, Sir MichaelRifkind, Rt Hon Malcolm
McNair-Wilson, Sir PatrickRoberts, Wyn (Conwy)
Madel, DavidRoe, Mrs Marion
Major, Rt Hon JohnRossi, Sir Hugh
Mans, KeithRost, Peter
Marland, PaulRowe, Andrew
Marlow, TonyRumbold, Mrs Angela
Marshall, John (Hendon S)Ryder, Richard
Maude, Hon FrancisSackville, Hon Tom
Mawhinney, Dr BrianSayeed, Jonathan
Scott, Rt Hon NicholasThompson, Patrick (Norwich N)
Shaw, David (Dover)Thurnham, Peter
Shaw, Sir Giles (Pudsey)Townsend, Cyril D. (B'heath)
Shaw, Sir Michael (Scarb')Tracey, Richard
Shelton, Sir WilliamTredinnick, David
Shephard, Mrs G. (Norfolk SW)Trippier, David
Shepherd, Colin (Hereford)Trotter, Neville
Shersby, MichaelTwinn, Dr Ian
Sims, RogerVaughan, Sir Gerard
Skeet, Sir TrevorViggers, Peter
Smith, Tim (Beaconsfield)Waddington, Rt Hon David
Soames, Hon NicholasWakeham, Rt Hon John
Speed, KeithWalden, George
Speller, TonyWalker, Bill (T'side North)
Spicer, Sir Jim (Dorset W)Waller, Gary
Spicer, Michael (S Worcs)Ward, John
Squire, RobinWardle, Charles (Bexhill)
Stanbrook, IvorWarren, Kenneth
Stanley, Rt Hon Sir JohnWatts, John
Steen, AnthonyWells, Bowen
Stern, MichaelWheeler, Sir John
Stevens, LewisWhitney, Ray
Stewart, Allan (Eastwood)Widdecombe, Ann
Stewart, Andy (Sherwood)Wiggin, Jerry
Stewart, Rt Hon Ian (Herts N)Wilkinson, John
Stokes, Sir JohnWolfson, Mark
Stradling Thomas, Sir JohnWood, Timothy
Sumberg, DavidWoodcock, Dr. Mike
Summerson, HugoYeo, Tim
Tapsell, Sir PeterYoung, Sir George (Acton)
Taylor, Teddy (S'end E)
Tebbit, Rt Hon NormanTellers for the Noes:
Temple-Morris, PeterMr. Alistair Goodlad and
Thompson, D. (Calder Valley)Mr. John M. Taylor.

Question accordingly negatived.

It being after Seven o'clock, MR. SPEAKER proceeded, pursuant to Order [23 March], to put successively the Questions on motions made by a member of the Government.

Motion made, and Question put,That the draft Community Charge Benefits (General) Amendment Regulations 1990, which were laid before this House on 13th March, be approved.—[Mr. Scott.]

Question agreed to.

Motion made, and Question put,That the draft Community Charge Benefits (General) Amendment No. 2 Regulations 1990, which were laid before this House on 20th March, be approved.—[Mr. Scott.]

Question agreed to.