Taxation

Part of Prayers – in the House of Commons at 12:03 pm on 8 June 1990.

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Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedfordshire North 12:03, 8 June 1990

No, I want to make only a comparatively short speech.

The hon. Member for Derbyshire, North-East (Mr. Barnes) referred to the community charge. On that, I must depart from the generality of feeling in the House which is totally in support of the Government. There are nearly 11·2 million married women in the United Kingdom, of whom 3·9 million have no paid employment and 3·4 million are termed economically inactive. Of them, 2·4 million state that their main reason for staying at home is to look after their husbands and families. That is a very creditable motive with which many people would agree. If we argue that those non-earning married women should have a considerable rebate on their community charge payments—as much as 80 per cent.—it will cost the Government a great deal of money. However, I do not argue for an exemption because I think that it would be unqualified. The community charge is a good tax—if it may be termed a tax. Formerly only 18 million people paid rates out of a total of 36 million. Therefore, the community charge is a good tax in the sense that its coverage is wide and accountability is there for all to see.

I predict that in future the Labour party will throw aside its roof tax and adopt the existing tax on the statute book. However, the community charge has some ragged edges. Although reform may be expensive for the Government—in one scenario the cost would be £1·8 billion—the problem could be abated because many people involved are eligible to receive rebates anyway and it would be unfair to suggest that if women had considerable investment income or had large capital funds of their own, they would qualify for rebate. Of course, they would have to pay the full sum.

Many people are caught between Scylla and Charybdis. Some have minuscule earnings. On the one hand they face the rapacity of local authorities, which seem to have little desire to control expenditure, and on the other an absurd structure for local government which accommodates too many tiers of administration. We must overcome that problem. I am trying to help the Government, who are going to review the community charge shortly. I hope that they will consider that problem very carefully.

Why do I argue that the non-working married woman should qualify for rebates under the community charge? Those women are now taxed separately under section 32 of the Finance Act 1988. If they are separately taxed, the burden should be distributed equally between the parties and they should be accountable for their share. If they are accountable for their share, but cannot pay it, some compensation must be paid in the form of a rebate. I suggest that they should pay only 20 per cent. of the charge unless they fall within exceptional circumstances.

Another of my arguments why non-working women should qualify for rebates is that many wives do not wish to approach their husbands for money because relations in marriage as a consequence might prove difficult. We must recognise that 35 per cent. of marriages break down. Some are very shaky and asking for money is a real problem.

Another argument is that those women have no legal right to a specific part of their husband's salary. He may be irritated at having to bear the legal responsibility for her charge. That is very significant and the further one travels north, the more powerful that point becomes until it is very powerful in Scotland. In England we are trying to be a little more reasonable.

Another argument is that most married women have no savings. Of a total of 13 million women, 65 per cent. have under £3,000 in savings, 30 per cent. have between £3,000 and £10,000 and 5 per cent. have more. It is obvious that most married women have no money from which to pay the charge except through the leverage from their husband and the law that stands behind him. It is unreasonable not to modify the law in that regard.

Another argument relates to the difficult position of widows and single parents who look after children. It might be helpful to the Goverment, as they are reviewing the community charge, if I offer a few suggestions. I am certain that the review will be successful and when it is successful people will say to themselves, "Why didn't we think of that?"

The hon. Member for Derbyshire, North-East made one good point. Under the Rating (Disabled Persons) Act 1978 all severely handicapped persons were entitled to a rates rebate. However, under the community charge, relief is allowed only for the mentally disabled. I see no reason for that restriction. Perhaps the relief could be extended.