Poll Tax

Opposition Day – in the House of Commons at 12:00 am on 5th December 1990.

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Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East 12:00 am, 5th December 1990

I have selected the amendment in the name of the Prime Minister. Furthermore, in view of the large number of hon. Members who wish to participate in the debate, I propose to impose a 10-minute limit on speeches between 6 and 8 pm. I hope that those who may be called either before or after those times will bear in mind that general limit.

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham 3:35 pm, 5th December 1990

I beg to move, That this House asserts that experience has shown beyond doubt that the poll tax is objectionable in principle and unfair and unworkable in practice; concludes that the problems it creates for local taxpayers and for local government cannot be overcome and are getting worse; notes the recent denunciation of the poll tax by many senior members of the Government including the new Secretary of State for the Environment; and urges the Government to have the courage of its changed convictions by recognising that the poll tax is beyond redemption and must be abolished. I begin by welcoming the right hon. Member for Henley (Mr. Heseltine) back to the Dispatch Box and to his new, and perhaps resumed, responsibilities. I offer him a particularly warm welcome to that bed of nails, the poll tax. The right hon. Gentleman's appointment shows that the new Prime Minister, whatever his other qualities, at least has a sense of humour—to be fair, not grey but black humour—although the right hon. Gentleman may have difficulty in seeing the joke. The issue which he made the centrepiece of his election campaign and which was to sweep the right hon. Member for Huntingdon (Mr. Major) to victory in the Tory leadership election has been used by his conqueror to shackle him to his failure. He is the first turkey trussed for Christmas this year—indeed, if it is not too indelicate to say so, a turkey stuffed on this occasion with a well-seasoned poll tax stuffing.

The right hon. Gentleman nevertheless deserves some credit. He alone of all the senior Conservatives dared to tell the truth about the poll tax. His denunciations carried conviction because they were true. He had the courage, and he alone had the freedom, to speak out. Where he went, the others dared not refuse to follow. If it were not for the right hon. Gentleman, I have absolutely no doubt that we would still be faced today from that Dispatch Box with the same mealy-mouthed protestations about the poll tax's unfailing virtues. Less than a month ago, the right hon. Gentleman's predecessor assured us that the poll tax review was over, that nothing more remained to be done. Once the right hon. Gentleman had dared to speak out, those deceptions could no longer be sustained. Even the right hon. Member for Bath (Mr. Patten)—now at least freed from the responsibility of defending the indefensible—has at last been persuaded to confess that the poll tax is a bomb which has to be unpicked.

We cannot, however, be too generous to the new Secretary of State for the Environment. He discovered the truth, or at least decided to act upon it, very late in the day. He happily supported the legislation that inflicted the poll tax on Scotland. At no stage did he vote against the principle of the poll tax in England. During the 1987 election campaign, he made it clear that he would not criticise the poll tax on any occasion, thereby putting party advantage above truth and principle.

Photo of Mr Robert Adley Mr Robert Adley , Christchurch

The hon. Gentleman is entitled to his bit of fun. As one of those who voted against the poll tax on Second and Third Reading, and throughout, may I plead with the hon. Gentleman—it is a plea that I shall also make to my right hon. Friend the Secretary of State for the Environment—to agree with me that income tax is not a controversial issue, that it is accepted to be a fair tax? Does he not think that we in this House, on both sides, could and should try to find a form of local government finance that is not a partisan matter—one that can be accepted and seen by the people of this country to be a fair and reasonable attempt by the House to establish an acceptable form of local government taxation?

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

The hon. Gentleman's intervention is interesting and constructive. It is a measure of the mess into which the Government got themselves that I believe that they are now incapable of pursuing the course that he rightly recommends. As I shall show, all the sensible options have now been excluded by senior members of the Government. The only sensible option—the one that we have adopted—is now the one least likely to be accepted, because we are there already.

The new Secretary of State's record is patchy, but it is one of shining foresight and perception when compared with that of his right hon. Friend the new Prime Minister. From his earliest days in the House, the Prime Minister revealed himself as being among the strongest supporters of the poll tax. In government, he was deeply involved, as Chief Secretary and then as Chancellor, in the development of the poll tax from his membership of the Committee that first decided to abandon the phasing in of the poll tax in favour of overnight introduction, through his preparation of the package that fought off the revolt that might have carried the amendment of the hon. Member for Hampshire, East (Mr. Mates). During an interview on "On the Record" he confirmed his intimate involvement in the most recent but now apparently inadequate fundamental review. Earlier this year, he was still at it, assuring a constituent that the poll tax will be seen to be a very much fairer and more acceptable system. The right hon. Gentleman's only real attempt at fundamental reform came in his Budget earlier this year, but that was totally flawed by the fact that he forgot about Scotland—a recurring theme in the poll tax saga—and miscalculated the number of beneficiaries and the extent to which they would benefit. No wonder the Prime Minister has been a late convert to the idea that the poll tax is now indefensible. Even when the need to move in the quest for votes for the leadership became clear to him just a week or so ago, he revealed that he had very little idea of what steps could or should be taken. In an interview in the Daily Mail on 24 November he said, memorably: I don't know what we'll have to do and neither does anyone else"— the smack of firm government if ever I heard it.

The new Secretary of State has no such difficulty. His problem is a different one. He has no shortage of ideas but a superfluity of them. He is a man who believes six impossible things before breakfast. Ideas spin off the top of his head without thought, preparation or costing. They are all mutually contradictory and unworkable and are all cheerfully abandoned in turn as new ideas occur to him. As the Prime Minister acidly observed: reforms cannot be entertained until they have been prepared, examined, costed and considered. Those are all things that the right hon. Gentleman has failed to do. There is no such caution for the new Secretary of State.

On 10 May, the right hon. Gentleman set out his stall in an ill-considered article in The Times. The ideas that he put forward on that occasion, including his revival of his 1981 peculiarity that there should be a referendum every time a council budget departs from the Government's view, were so bizarre that they were laughed to scorn. The right hon. Gentleman had to run for cover, and not a peep was heard from him for three months. When he finally resolved to enter the fray, surprise, surprise, he had a totally different agenda and a new set of ideas that were equally unworkable and ill thought out.

Photo of Mr Robin Squire Mr Robin Squire , Hornchurch

Will the hon. Gentleman put the matter in the context of the Opposition's approach, which, as he knows, has produced no fewer than 65 changes of Front-Bench opinion since spring 1987? Were all those proposals costed, too?

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

I shall come to that a little later. I am sure that the hon. Gentleman is not unaware of the existence of the excellent document, published at the end of July, setting out our proposals and available from Walworth road at £1·50 per copy. It has been selling well.

The real problem that the Secretary of State faces, however, is that each of his ideas has been categorically slapped down by the man who is now his leader. "Transfer education," he said, "from local to central Government." He suggested that on 14 November, but that idea was torpedoed by the then Chancellor two days later. He said: Resources pre-empted by shifting education spending to central government could not be spent on health, pensions, defence or other proper claims on the public purse. The right hon. Gentleman needed not have bothered: the present Secretary of State had already provided the answer himself. In that same ill-judged article of 10 May, he had written that if such a step were taken, the Government might find itself blamed for poor standards and income tax might have to rise. By 15 November, just a day after the Secretary of State had floated his ill-considered proposal, he was already backtracking, describing it as "a fallback position".

What about abandoning the flat rate principle in favour of banding? The present Secretary of State has spoken in favour of it—indeed, he voted in favour of it. In 1988, the then Chancellor condemned that proposal as having

deep and damaging flaws that would introduce a whole range of unfairnesses and anomalies that could not be defended. What about the realistic grant settlement that the Secretary of State advocated in his article on 10 May? There was very little chance of that, I am afraid, when the Prime Minister was still at the Treasury. It was under his regime that local government was again short-changed by central Government grant. The burden is again scheduled to fall on poll tax payers and, as a consequence of that gap, the poll tax bills will rise comfortably—perhaps I should say "uncomfortably"—above the Government's estimate of their likely level.

The problems that the Secretary of State faces do not arise solely from the fact that he has been systematically contradicted by his own Prime Minister. He also has problems with his ministerial team. The Minister for Local Government and Inner Cities was, we all recall, appointed to that position to act as a minder for the then Secretary of State. He was a member of the Stasi, in my preferred phrase—someone put there to ensure that there was no backsliding from the sacred principle. He alone still appears to have the courage of his party's former convictions. Less than two months ago, he was asserting to the Tory party conference—admittedly to a less than enthusiastic reception—that the poll tax, far from being a vote loser, will be a vote winner and will launch us on a fourth term. I am sure that the hon. Gentleman is delighted to hear his words repeated. Just a month later, he was confidently assuring anyone who would listen that the poll tax "review is now complete", implying that all wrinkles had been ironed out and all the problems solved.

The hon. Gentleman is not alone. It turns out that the new Under-Secretary of State for the Environment, the hon. Member for Suffolk, Salisbury (Mr. Key), is also a secret admirer of the poll tax. Just two days ago, he almost burbled with enthusiasm when he was asked whether he supported the flat rate principle of the poll tax. In response to the challenge from my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett), he made it very clear that he was nailing his colours to the mast of that sinking flagship. There is not much evidence in the ministerial team of reforming zeal or commitment to a fundamental review.

But the Secretary of State's problems do not stop there. Contradicted by his Prime Minister, by other senior members of the Cabinet and by his own Ministers, the right hon. Gentleman has also succeeded in contradicting himself. On 10 May, he proclaimed that capping, as a solution to the problem of the poll tax, would negate accountability and be an act of centralised political power outside our experience. However, just two days ago, in his first act in the House as the newly appointed Secretary of State for the Environment, the right hon. Gentleman presented a Bill, for which he then proceeded to vote, which turned the capping screw down even tighter. What hope do we have of a little consistency or firmness of purpose from the Secretary of State?

Photo of Mr Timothy Devlin Mr Timothy Devlin , Stockton South

While we are on the subject of differences of view among colleagues, is the hon. Gentleman aware that his hon. Friends the Members for Copeland (Dr. Cunningham) and for Birmingham, Perry Barr (Mr. Rooker) refused categorically to defend the rating system during the Committee stage of the Local Government Finance Act 1988? Since the hon. Gentleman has the Labour party's document with him, perhaps he can tell us from his little booklet—he does not tell us in the motion—Labour's preferred alternative to the community charge.

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

I can well understand why the hon. Gentleman is so anxious to deal with the issue of the poll tax, since it seems likely to prove to be his nemesis when the general election comes. It is precisely because we recognise that the old rating system had some deficiencies—although they pale into insignificance by comparison with the poll tax—that we are proposing a fair, modernised rating system that is brought up to date arid made relevant to today's conditions.

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

No, I shall not give way at the moment.

I was dealing with the options that have now been closed to the right hon. Member for Henley. Where do we go from here? The right hon. Gentleman may yet surprise us all. He may have up his sleeve a solution that no one has yet thought of—a solution that will leave intact the principle of the poll tax, that will make no demands on public spending but will reduce poll tax bills across the board. As a very wealthy man, perhaps the right hon. Gentleman intends to pay everyone's poll tax bill himself.

However, in reality, there is only one sensible solution. We know—because we have traversed this ground ourselves—that that solution is to restore a property-based tax, to bring it up to date and to make it fairer by linking it to the ability to pay. That is the solution that we advocate in this excellent statement in which we set out the details of our proposals. It enables us to do what the Government should have been doing all along. Instead of going off down the disastrous byway called the poll tax, we should have started with a system that we knew would work, brought it up to date, modernised it and made it fairer wherever possible and in stages.

Incidentally, that solution appears to commend itself to The Times, which does not normally support the Labour party. It commends itself also to no less than Mr. John Chatfield, the chair of the Tory-controlled Association of County Councils, who said on 24 November: elements of Labour's plan to abolish the poll tax and return to the rates could be an improvement. That solution also seems to commend itself to and to attract the support of the former Chancellor of the Exchequer, the right hon. Member for Blaby (Mr. Lawson). It is that one solution——

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

No. I have given way enough for the moment; I want now to proceed with my speech, because many other hon. Members wish to participate.

It is that one solution, set out in our fair rates proposal, which would require virtually everyone in the senior reaches of the Tory party to eat his words. It is for that single, bad reason——

Photo of Mr Ian Bruce Mr Ian Bruce , South Dorset

On a point of order, Mr. Speaker.

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

I hope that the hon. Gentleman is not seeking to make an intervention under the guise of a point of order, because many other hon. Members wish to speak.

Photo of Mr Ian Bruce Mr Ian Bruce , South Dorset

On a point of order, Mr. Speaker. Is it in order in the House for an hon. Gentleman—[Interruption.]

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

Order. I cannot hear the point of order.

Photo of Mr Ian Bruce Mr Ian Bruce , South Dorset

Is it in order for a Front-Bench spokesman to refer to a document that does not come from the House, as I understand it, is not in the Library and to which Hansard cannot refer? Should it not be read into the record?

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

Documents that are not in the Library are frequently referred to. I thought that I understood the hon. Member for Dagenham (Mr. Gould) to say that the document was available for £1·50.

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

Spurious points of order are always the last refuge of those who know that they are losing the argument. It is interesting that the Tory party, which for so long demanded to know our alternative, is now so embarrassed because we can show it a workable solution.

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

I shall not give way any more.

That one solution would require virtually everyone in the Tory party to eat their words, and for that single, bad reason, it is probably the one solution that is unlikely to be adopted. We shall have to wait for a Labour Government before sense can prevail. In the meantime, the Secretary of State is trapped. A Government who care nothing for the chaos and misery they have caused are at last compelled, by the need to save their own skin, to concede that they have made a terrible mistake. Every day that goes by makes that mistake more calamitous, but the Government and the Secretary of State cannot muster a single sensible idea between them about what should be done about it. They cannot even summon up the courage to face the truth: the poll tax is beyond redemption and must be abolished.

The British people will not be fobbed off any longer with further promises of reviews and changes. The Government's policy means that there are always solutions tomorrow, but real and painful problems today. The British people will say, with justice, "The Government have had 11 or 12 years to get the poll tax right; we now know that the truth is that the poll tax will never be right." When the poll tax bills arrive next spring, that will be the final proof—if it is then needed—that the old problems still remain, nothing has changed and the Government remain too arrogant to recognise a mistake in prospect and too weak and divided to correct that mistake when it is brought home to them.

The crisis becomes daily more urgent. The delays and confusion are crippling local government—not a matter that concerns the Conservative party very much. However, the uncertainty about what the revenue support grant should be and what further changes might be made in the poll tax make proper budgeting impossible and imposes an intolerable burden on local authority treasuries. Every day of continued confusion accelerates and exacerbates the already serious problems of collection that are crippling administrations in so many parts of the country.

There is only one thing—[Interruption.]

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

Order. Pointing across the Chamber encourages rather than discourages disturbance. Let us settle down and listen to the debate.

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

I intend to put the Conservative Members out of their misery promptly. They do not like to hear the truth, which is that there is only one thing that the Secretary of State should do to meet the poll tax crisis on his return to the Dispatch Box: commit himself and the Government to abolishing the poll tax and tell us clearly what is to be put in its place. Nothing else will do.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment 3:59 pm, 5th December 1990

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: congratulates the Prime Minister and the Government for their decision to undertake a careful and fundamental review of the community charge; and deplores the fact that despite several unsatisfactory attempts, the Labour Party has failed to come forward with any clear or workable proposals of its own.". My right hon. Friend the Prime Minister has described the Government's review of the community charge which he has invited me to lead as very thorough, very constructive and very fundamental. It is time to raise the whole tone of this debate—[Interruption.] I hope that the Labour party will not rule itself out of our continuing discussions.

The debate is not about who pays how much in each local authority. The issues——

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

The issues involved far exceed the precise financial impact on particular groups or constituencies of this or that local tax. The heart of the matter is the future relationship——

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

No.

The heart of the matter is the future relationship between central and local government, and the relationship that local government will have in its turn with its local community, in the fullest sense.

These relationships go to the heart of the sort of society that we have and want to have. I make no apology for putting that issue before the House. The question of the proper relationship between central and local government has lurked beneath the surface of policy making in successive Governments for the past quarter of a century. I believe that it is widely recognised that in those 25 years we have not been able to bring ourselves to look at the structure and finance of our local government as two sides of the same coin.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

The time has now come to address both issues together.

In seeking to improve standards, central Government have begun to change attitudes to the pursuit of value for money, significantly by the establishment of the Audit Commission, but Government have yet to see sufficient progress in raising the quality of services that many local authorities deliver. In advocating accountability, successive Governments have not dealt with the structural and functional weaknesses to make accountability a reality.

We will not solve this problem unless we are prepared to recognise the proper partnership between the different parts of our democratic system——

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

—and my first purpose must be to try to bring that about. I shall begin with the Opposition parties.

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

Before the Secretary of State goes off on a detour, perhaps he will save us all a great deal of time and trouble by answering the single question that is in the minds of millions of poll tax payers. Will he now commit himself to abolishing the poll tax—yes or no?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

There is a certain—[HON. MEMBERS: "Yes or No?"] There is a certain quaintness about the fact that the hon. Member for Dagenham (Mr. Gould) has not been able to answer any questions in three years, but he thinks that I will give him a yes or no answer in three days. [HON. MEMBERS: "Yes or No?"] Let me help the hon. Member for Dagenham and the Labour party.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I shall start with the Opposition parties. If Opposition Members could bring themselves——

Photo of Mr Alexander Eadie Mr Alexander Eadie , Midlothian

Will the right hon. Gentleman give way?

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

Order. The hon. Member for Midlothian (Mr. Eadie) is an experienced Member, and he knows that, as the Secretary of State has not given way, he must resume his seat. There is no point in persisting.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

If Opposition Members could bring themselves to do so, I should like to take this matter beyond the narrow bounds of party political conflict. The country wishes us to try to identify a stable and just basis for the future development of local government and the provision of local services. I should like to explore with the Opposition parties the extent to which we can establish common principles for the future role and direction of local government. [Interruption.] The country will not have lost sight of the fact that, when we offer to discuss these matters, all we get is baying and divisiveness. [Interruption.]

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

Order. This debate is of great interest not only to every hon. Member in the House but to many other people outside who may well be listening to it. If this din continues, they will not be able to hear it.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

What I could hear from the Opposition was not worth hearing.

I hope that the Opposition will take my proposal seriously, because it might help them in a material way. If they were prepared to enter into dialogue, it might help them to clear their own minds about the answers to questions that have escaped them for so long. I hope that local authorities will recognise that they have an important role to play. They too must help to improve the climate in order to allow these essential developments to flourish.

Photo of Graham Allen Graham Allen , Nottingham North

Perhaps there was so much noise that the Secretary of State did not hear the question that was posed earlier. Will he answer yes or no about whether he will commit himself to the abolition of the poll tax? That is an easy question. Why does the right hon. Gentleman dodge it?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

The hon. Gentleman clearly heard what I said. I said that, in our review, we wish to enter into a dialogue with Opposition parties to see whether we can find a basis of stability in our future relationships with local government.

Photo of David Blunkett David Blunkett Opposition Spokesperson (Local Government & Poll Tax), Member, Labour Party National Executive Committee

So that we may be clear about the matter, will the Secretary of State confirm that he intends to try to take the issue of the poll tax out of party politics and to go for a second review of both the tax and the structure of local government, even though he knows that he has no intention of abolishing the tax? He has no permission to abolish it, on the very simple grounds that it would be the greatest U-turn in political history and a clear admission that we have been right all along.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

The hon. Gentleman should appreciate that I am offering the Opposition the chance to contribute constructively to the establishment of a basis for stability within which local government can operate. It is quite apparent that the Opposition have no interest at all in constructive dialogue, because they can produce only negative proposals.

I hope that local authorities will also recognise that they have an important role to play. They must help us to improve the climate. In the past, I have not been slow to criticise waste and inefficiency in local government. I make no apology for that, and that will continue to be an aspect of criticism. However, I have also paid tribute to the part that local government plays—and should play—in defining and giving expression to our quality of life.

The hon. Member for Dagenham spent some time quoting speeches that I made when I was a Back Bencher. I am not sure whether he was wise to call in aid what Back Benchers say about their party's policies. If the hon. Gentleman listened to what his Back Benchers say about Labour's policies, he would realise that Back Benchers have a degree of freedom and discretion which is at the heart of our parliamentary democracy.

I do not for one moment attempt to escape from the fact that I have been involved in these matters before. Like many right hon. and hon. Members, I have views that I have expressed, and they are on the record. I have always assumed that that is what Back Benchers are for. Today, as Secretary of State, it is my responsibility to start afresh; in doing so, I neither overstate the possible, nor deny the potential.

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

The Secretary of State may or may not be aware that the offer of co-operation was made three years ago, in Committee on the Local Government Finance Bill, when my hon. Friend the Member for Copeland (Dr. Cunningham) made the then Secretary of State for the Environment the same offer. He pointed out the dangers facing the Government, and we told the Government to forget the poll tax altogether. We said that they should take the Bill back and that we should look together at a proper system of local government funding. The Secretary of State's present offer is three years too late. Does his present offer of co-operation include the abolition of the poll tax if it is found to be at fault?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

My position is absolutely clear. We are conducting a comprehensive review, as defined by my right hon. Friend the Prime Minister. In that context, we rule nothing in and nothing out. In that spirit, I believe that the Opposition will come to regret their instant hostility to my offer.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Scotland)

Does the Secretary of State accept that my party believes that his philosophical approach is correct and that we must have a system for local government that will be permanent and which will last? Does he therefore accept that we would be willing to discuss with him all possible options, provided he repeats that no options, including complete abolition, are ruled out?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I made it quite clear that no options are ruled in and no options are ruled out. The observations of the hon. Member for Gordon (Mr. Bruce) are a great deal more statesmanlike than the instant party, divisive views of the hon. Member for Dagenham.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I want to understand what is being offered to me and my right hon. and hon. Friends. The right hon. Gentleman referred to a constructive dialogue. What is he actually offering? Is he suggesting all-party talks or that other parties join the working party? What is he suggesting exactly?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

We can all welcome the thinking man's contribution from the Labour party. The hon. Member for Glasgow, Garscadden (Mr. Dewar) has suddenly spotted the trap into which the hon. Member for Dagenham fell from a million miles. My offer could not have been clearer. I am offering to consult the Opposition parties to see whether we can find a basis of stability for the relationship of this House with local government. That could not have been clearer, and it is recorded in Hansard.

Photo of Margaret Ewing Margaret Ewing , Moray

I am grateful to the right hon. Gentleman for recognising that a variety of views are held by hon. Members who represent different Opposition parties on what should replace the community charge. My party has made that clear with our amendments and in our letter to him. Is the right hon. Gentleman to introduce a time scale for the completion of the dialogue to which he has referred?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I hope that the hon. Lady will accept my assurance that that matter will be addressed in my speech as I make progress.

Photo of John Taylor John Taylor , Strangford

First, I take the opportunity of congratulating the right hon. Gentleman on his return to the Government Front Bench. I can well understand his difficulty in answering the question yes or no, but surely he can answer with a yes or a no the question whether he will extend the poll tax. There still remains one party in Northern Ireland, the Conservative party, whose spokesmen want an extension of the poll tax. It is the only party left in the nation that takes that view. Will the right hon. Gentleman confirm that he will not extend the poll tax to Northern Ireland?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I said that I rule nothing in and rule nothing out but I hope that the House will understand if I rule out the concept that the poll tax should be extended to Northern Ireland.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarfon

I welcome the Secretary of State's undertaking that nothing whatsoever is ruled out. It will obviously take time to examine such a broad scenario. Can he give an undertaking that, in the meantime, some assurance can be given to the beleagured poll taxpayers that some relief will come as from next April?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I hear clearly what the hon. Gentleman says, and my answer is the same as that which I gave to the hon. Member for Moray (Mrs. Ewing). If the hon. Gentleman will allow me to expand my speech, I think that he will find that these matters will be thoroughly covered.

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

Order. I think that the Secretary of State has now given way to all the minority parties in the House. I think that it would now be wise to get on with the debate. Hon. Members will have an opportunity later of expressing their views if they are called.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I think that the House will feel that I have tried to reflect the interests of the House. If I give way further I might be trespassing on what I have to say later. The hon. Member for Coventry, South-East (Mr. Nellist) might have a small part to play in what I have to say.

Photo of Mr Bryan Gould Mr Bryan Gould , Dagenham

I have been listening carefully to the Secretary of State. He appears to be saying that he and his party are now so bereft of ideas that they are prepared to come a-begging and to ask others whether they might be prepared to help. As we have already developed a fully worked out position, I am prepared to make a counter-offer, from a position of some strength.

If the right hon. Gentleman would care to talk on the basis of an agenda on which the abolition of the poll tax is the first item, and a proper consideration—with the help of the civil service and the Government's computers—of our alternative is the second item, I am prepared to make available to him, free of charge, our fully worked out proposal. I make a further offer. If the right hon. Gentleman recognises the merits of what we propose, we shall support him in any Division that takes place over any legislation that he brings forward to implement our proposals.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I am grateful to the hon. Gentleman for giving me an additional copy of his party's policy. It contains only one fact—the price, and that is too high. I congratulate the hon. Gentleman on a new record. He has been the proud possessor of the ability to move from policy position to policy position at three-day intervals. He has now done that in about three minutes. Having rejected what I have been saying, he now realises—with the assistance of his right hon. Friends—that I was actually giving the Opposition the most generous opportunity that they have ever been offered.

Several Hon. Members:

rose——

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I think that I should continue arid say something more about my attitudes towards dealing with the matter.

I yield to no one in my belief that central Government must exercise their mandate; that in the end, power lies in this House. Indeed, all Governments insist that the mandate upon which they were elected should prevail. The Labour party must learn to accept that in opposition, just as surely as they have always accepted it in government.

Certainly, no Chancellor of the Exchequer can tolerate a challenge to his authority to manage the economy with prudence and discipline. No Secretary of State can turn his back on inadequate standards simply because they are administered by a local authority. Indeed, I would go further—I do not believe that this House would have legislated to share so much of its responsibility for financial prudence or for the quality of services if it had believed that local authorities would claim the right to frustrate or undermine the mandate of central Government.

I have made as clear as I can my belief that, with the authority of Parliament, the will of Governments must prevail. However, that clear statement does not and should not close the options for a partnership with local government that provides for civic pride and local initiative; nor should it close the potential for men and women to have their desire to serve their community fully satisfied within their own local authority; nor should it divert our attention in Parliament, or outside in local government, from the responsibility to deliver quality of service and value for money, without which it is the nation and its people that pay an unacceptable price.

I believe that now, far more than appeared possible 10 years ago, the importance of partnership is recognised. For all the rhetoric, and despite all the difficulties in the relationship between central and local government, there is a sense of partnership and co-operation in our inner cities, very much satisfying the aspirations that I held years ago. Despite all the tensions of the past 10 years, central and local government are now able to work together to regenerate some of our worst urban areas. Local authorities throughout the country, of all parties, have accepted the vital role of the private sector in economic revival——

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

The right hon. Gentleman is saying a great deal about partnership and the role that he wants to be developed between national and local government. Would he care to reflect on the fact that, when he was previously Secretary of State for the Environment, the amount of central Government expenditure as a proportion of total local government expenditure fell from 61 per cent. to 52 per cent., and that over the same period there were education cuts of 16 per cent.?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

Those figures are not immediately in my mind. I remind the right hon. Gentleman that, when his party was in government, the collapse of local authority council building was imposed upon them by the International Monetary Fund. The reason why our waters and our sewers are in such a state today is that the Labour Government slaughtered the capital programmes. It is nothing short of hypocrisy for the right hon. Gentleman to try to deny what his Government were forced to do by the profligacy of their economic mismanagement.

I repeat what I profoundly believe—that, despite all the tensions of the past 10 years, central and local government can now work together to regenerate life in some of our worst urban areas. Local authorities are working together. Local authorities which told me 10 years ago that the message of involving the private sector was unacceptable are now at the forefront in their plans to do exactly that.

In all our big cities, there are now collaborative projects which show the right way ahead. The Birmingham Heartlands initiative is bringing together the city council, a number of private companies and central Government to regenerate east Birmingham.

In St. Helens on Merseyside, Ravenhead Renaissance is a consortium of private sector companies and the local council. With Government support, it is regenerating a large rundown area of the town.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

In Newcastle, the Cruddas park project to regenerate two council estates grew out of a private sector initiative. In Glasgow, there is a striking example of the transformation that can be achieved when central and local government work in partnership with the private sector. If hon. Members doubt the success of that partnership, I urge them to go to Glasgow and see for themselves what is being achieved by partnership between local authorities and the private sector.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

There is now a range of co-operation in the network of enterprise agencies giving advice and support to small companies. The Groundwork Trust is using the enthusiasms of the voluntary sector, the enterprise world and local authorities to clean the rural fringe in many of our older towns. [Interruption.] The nation will be dispirited by the Opposition's total indifference to all those major advances.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

For a century, the Opposition have shown a deep embittered resentment at any constructive attempts to bring new life to the inner cities. They have a vested interest in talking down the success of Scotland. Time and time again, when they get the opportunity, they shout down anyone with whom they disagree.

Several Hon. Members:

rose——

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I take a wholly more optimistic view. There has been a change of culture in Britain. Just as the flow of private sector cash into urban renewal has followed from the Government's initiatives, there is now a widening range of opportunities in our run down areas.

It is not simply a question of urban renewal. My Department has to deal with environmental issues. The entire nation is preoccupied with the view that we should develop an international presence in environmental matters. It is gravely damaging——

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

I hope that it is a point of order.

Photo of Mr Brian Wilson Mr Brian Wilson , Cunninghame North

It is a genuine point of order, Mr. Speaker. As I understand it, the debate is entitled "Abolition of the Poll Tax". It is not an opportunity for a tour d'horizon to cover the five years during which the Secretary of State has been out of government. May we have your guidance on whether the Minister should address himself to the subject of the debate?

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

If the hon. Gentleman looks at the Order Paper, he will see that the Secretary of State is moving his amendment, and that is what he is addressing himself to.

Several Hon. Members:

rose——

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

Before we proceed, in what I hope will be good order, I should add that many of those hon. Members who are seeking to intervene are the very same hon. Members who are seeking to participate in the debate. It will be difficult for the Chair to call them if they seek to delay the proceedings in this way.

Photo of Stuart Bell Stuart Bell , Middlesbrough

Further to that point of order, Mr. Speaker.

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

Order. As there was no point of order, the hon. Member cannot raise anything further on it.

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

It is really not good practice to seek to intervene in a speech by making a point of order, but I will allow the hon. Member to do so on this occasion.

Photo of John Home Robertson John Home Robertson , East Lothian

You, Mr. Speaker, drew attention to the fact that the Secretary of State is speaking to his own amendment, which is all about the poll tax. His comments about urban renewal and the international perspective are fascinating stuff, but they have nothing to do with the business before the House.

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

Every right hon. and hon. Member has a right to make points in his own way. I have heard nothing that is out of order. If the hon. Member will examine the Government amendment, he will clearly see that the Secretary of State was perfectly in order.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

It is inconceivable that one could address the subject of financing local government by whatever means and not be preoccupied with local government structure or the quality of the services for which the money is to be raised. I am glad that, despite the Opposition's totally artificial and almost irrelevant attitude, local Labour councils know that they must co-operate with central Government in the ways to which I referred.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

At the moment, no. The hon. Gentleman does not even pay his poll tax.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

Does my right hon. Friend agree that, given the way that he has presented the review, which provides for open and honest consultation, the electorate and others outside the House who are watching this debate will not understand artifically imposed conditions on his offer of discussions, designed to avoid councils participating in what many of them accept is an absolutely necessary reform of local government finance?

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

I am grateful to my hon. Friend. The general public will understand exactly the role that the Labour party is playing this afternoon. I greatly regret it, because from my talks with councillors of all political persuasions, I know full well that they want stability. They want to know the nature of the relationship and that it will stretch into the future. The Opposition are trying to frustrate a genuine attempt to find a constructive way forward.

I must refer to one more area in which co-operation is essential in the national interest. Local and central Government have an inseparable role in attracting inward investment—discretionary and footloose—to depressed areas of Britain where jobs need to be created. That will not happen if an alien atmosphere is created by Labour for party political reasons.

In all those matters, it is increasingly obvious that a new relationship is emerging between local and central Government. Local authorities are beginning to perceive and come to terms with their new strategic role as enabling authorities, as opposed to providers of all services. All that is fostering a new spirit of co-operation at local level, as private companies compete with local services, as owners intermingle with tenants, and as parents and teachers play an increasing role in school management. All those trends are to be welcomed, and are characteristic of the change in attitudes that occurred under the premiership of my right hon. Friend the Member for Finchley (Mrs. Thatcher).

The 1984–86 review of local finance, which led to the proposals for the community charge, concerned itself very much with the issue of accountability. It explored the mechanisms of central funding, which produced local tax rates, which bore little relation to local spending decisions. It found that, in many areas, only a minority of voters contributed to the cost of local services, and it found that in some areas much of the extra cost of services was met by those without a vote. That situation had to be addressed.

In practice, under our previous arrangements, many who consumed the local services were paying relatively little or nothing for them. That is why there has been a broad measure of support for the simple idea that nearly everyone should make a contribution to the cost of the local services that they consume. It is not that principle which has caused difficulty.

One thing that I have always made absolutely clear is that there is no quick fix for this problem. For next year, my predecessor announced some important proposals, which will significantly improve the financial position of local authorities and local charge payers. I am now considering the response to the consultation on those proposals. I will place the statutory reports before the House in the light of those comments, once colleagues have considered the matter.

As all right hon. and hon. Members know, there is no prospect whatsoever that a final answer can be designed, passed through Parliament and implemented in under a two-year time scale. A complete solution may require a longer time scale. That is a matter of hard reality. But: that is not an excuse for procrastination or delay. The issues involved have been explored many times. I must keep open, however, a proper sense of timing. Our review could well identify a programme, divided into quite different time perspectives. It may well be that what is required is a programme of building blocks, constructed logically and carefully towards a clearly defined objective.

In the context of such a review, it is obviously right to explore why it is that the ambitions originally set for the community charge have not found the necessary degree of public support and understanding.

An argument which is much advanced is that, if the charge had been introduced at a lower level, its underlying principles of accountability and broad coverage of most of those who benefit from local services might have been more readily accepted. We shall consider whether that is true; but there is one truth which cannot be avoided. Local authorities as a whole increased their spending by nearly 13 per cent. this year—and by nearly a quarter in only two years. It is difficult to escape the conclusion that local authorities have sought to use the turbulence of the changeover to mask their spending increases and to pass the blame on to others.

There is another truth. The law is the law. Bills legally issued under the authority of this place must be collected. There can be no dining a la carte with the law of the land. I want to say just a brief word to Opposition Members who hold to the constitutional novelty that they are the arbiters of what is legal and what is not, and particularly that they are justified in refusing to pay. I cannot abide the concept that many on low incomes from limited savings in their twilight years—[Interruption.] Of course the Opposition do not care, but we care. I cannot abide the concept that such people should be expected to pick up the tab for those who are elected to this House in the name of the world's foremost parliamentary democracy, and then claim a bogus veto over the mandate of the people. It is neither moral nor fair; nor is it constitutionally justified. The Labour party would never tolerate it from us if we were in opposition, and it is unforgivable that they should allow it to themselves in the present context.

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

Is it not a fact that, had it not been for the 14 million who have yet to pay the poll tax, the Secretary of State would not be here this afternoon announcing a review suggesting changes or possibly abolition? Furthermore, if the right hon. Gentleman is so concerned about people on low incomes, why—despite his announcement of a two—year review-is his right hon. Friend the Secretary of State for Social Security still imposing on every local authority in the country a £100 million cut in the Government payments made to them to provide rebates for the lowest paid? He is cutting those Government rebates from 97 per cent. to 95 per cent.

Photo of Mr Michael Heseltine Mr Michael Heseltine Secretary of State for Environment

As the hon. Gentleman knows, one in four people receive a rebate. He has asked the wrong question: the question for the House is whether, by majority decision, we create the legislation that governs the country, or whether the hon. Gentleman's entrenched bigotry imposes a veto on what the majority of us decide here. But it is not just a question of the hon. Gentleman's having a veto; it is a question whether a large number of people who are a great deal less well off than he is should be expected to pay for his self-indulgent hypocrisy.

We are determined that the taxes that we advocate should be seen to be fair, and the British public must be persuaded that the arrangements proposed at the conclusion of the review will be fair. Our priority must now be to address their concerns as fully as possible.

Our second priority is to put the relationships between central and local government on a healthier footing—to replace conflict with partnership, preferably within a widely accepted consensus about their proper roles. This is not a debate about complete localism or complete centralism; a myriad of options lie in the middle ground. Some we may be quick to implement, while others will take longer. The task now is to identify what is available, and what will serve us best in the long term. That is why the Government have decided to include in its review issues of structure alongside issues of finance. If we can resolve those matters, there is, I believe, a chance for a new, constructive phase in the development of local government.

In all my consideration of these difficult issues, I cannot escape the fact that some of the greatest moments in British history have coincided with the times of resolve, civic pride and municipal initiative in our great towns and cities. I am therefore determined not to set a rigid timetable for our review. I cannot anticipate what agreements can be found; I can only promise to listen with care, to decide, with my colleagues, on the way forward once our review is complete, and then to act with determination. That is the responsibility of Government, and the responsibility that we shall discharge.

Photo of Joe Benton Joe Benton , Bootle 4:43 pm, 5th December 1990

On the occasion of my maiden speech, let me first thank those hon. Members who have extended a welcome to me, proffered all sorts of advice and helped me to settle in. I truly appreciate that.

Let me also pay tribute to previous Members of Parliament for Bootle—Simon Mahon, Allan Roberts and Mike Carr. I fully appreciate that I follow a long line of Members who were devoted to the Labour movement and to the people of Bootle. I pay particular tribute to my immediate predecessor, Mike Carr, who, very sadly—as we all know—spent a very short time among his colleagues in the House. In that short time, however, he endeared himself to the people of Bootle by showing such diligence, concern and general good feeling towards them. I am sure that hon. Members will wish to reiterate their sympathy and condolences to Mike's wife Lynn, his family and his parents.

In his maiden speech, Mike paid particular regard to education and training. Let me say, on behalf of the people of Bootle, that he was right to do so. I do not wish to be controversial, but Bootle is a classic example of the deterioration of our modern society over the past decade.

Bootle contains a wonderful collection of young people—witty, sparkling, exuberant and full of life. However, the ravages of unemployment have dulled that sparkle, and those young people are now wandering around aimlessly. It is not uncommon now to meet people in my constituency who have had no experience of a working life, despite being in their mid or late twenties. This is a tragedy for this country's economy—but, more important, it is a tragedy for the people themselves, who cannot feel positive and part and parcel of the society and the community to which they belong. That is the real tragedy.

I believe that any Government, of whatever complexion, must apply themselves to the problem. A Government who do not recognise the needs of their young people are doomed to failure in any event.

Bootle has many problems. At least 50 per cent. of the adult population receive some kind of state benefit. That seems a remarkable statistic, but it is true. It demonstrates the absence of an economic miracle on Merseyside. I must make that point, because I am here to plead on behalf of the local people. I am also here to plead on behalf of the 2,000 people in Bootle who are waiting for homes, and the 7,000 in the metropolitan borough of Sefton. All those people face very difficult problems.

It is fortunate that I should be making my maiden speech on the day when we are debating the poll tax. I must agree with what some of my hon. Friends have said: I have heard little evidence from Conservative Members of any discussion about the matter. I am sorry about that, because, on top of all its other problems, Bootle has a problem with the poll tax—not because anyone wants deliberately to confront the law, but because people are genuinely unable to pay.

A remarkable conflict is taking place in homes throughout Bootle, of which I have first-hand experience: law-abiding parents are trying to prevail on their children not to break the law. Meanwhile, the old and the sick must rely on friends and relations to pay their contribution for them. It is inconceivable—it is un-Christian, and a scandal in a modern society—that people should have to condition themselves to live in such a fashion.

I still do not know what the Conservative party's intentions are regarding the poll tax. By the time we vote tonight, I hope that I shall be clear about that. Only one course will resolve the problems in Bootle and elsewhere: the utter and outright rejection and repeal of the poll tax and its replacement by something that takes into account people's ability to pay so that they can be treated with compassion and concern. I believe that that is what the Labour party's alternative to the poll tax proposes.

Photo of Mr Robin Squire Mr Robin Squire , Hornchurch 4:50 pm, 5th December 1990

It is a particular pleasure and honour to follow the hon. Member for Bootle (Mr. Benton), who has just made an excellent maiden speech. The tradition that maiden speeches should not be controversial has undergone change, even during the relatively short time that I have been a Member of Parliament. I do not suppose that any of my right hon. and hon. Friends would have expected the hon. Member for Bootle to be other than forthright in setting out the issue as he sees it, and we appreciate that. I am sure that he will be advised by his colleagues that the next time he speaks he may not be listened to in silence, as happened on this occasion.

Hon. Members in all parts of the House will join the hon. Gentleman in his tribute not just to one predecessor but, sadly, to two within the same year. A most unfortunate series of circumstances hit Bootle. Although few of us got to know the hon. Gentleman's immediate predecessor, I worked for a number of years alongside Allan Roberts on housing issues. Whatever may have been our differences of view, I was never in any doubt about the clear and honest way in which he viewed housing issues. He did his bit to try to improve our understanding and knowledge of them. I welcome the hon. Member for Bootle to the House. We look forward to hearing from him on future occasions.

I should also welcome, albeit now in his absence, my right hon. Friend the Member for Henley (Mr. Heseltine) back to the Treasury Bench. He is perhaps the best qualified among us to deal with the subject. He will probably find that things have changed in the Department of the Environment since he was last there. Green issues overwhelmingly dominate discussions in the Department, subject only to the issue that we are discussing today. He is well qualified, as an evangelical speaker, to be Secretary of State for the Environment.

If I have any criticism of my right hon. Friend, it is that he was too generous to those who sit on the Opposition Front Bench, taking into account everything that has happened since the 1987 general election. As I said in my intervention, there have been no fewer than 65 changes of position or argument by Opposition Front-Bench spokesmen. The House will be relieved to know that I do not intend to go into each of them. but I have the information here. They include a local income tax, a roof tax, a combination of both, a floor tax, a supplement on national income tax and a return to the rates—the one tax that, above all, the Opposition were convinced had to be abolished. For a Labour party supporter it has been a grim journey.

The speech of the hon. Member for Dagenham (Mr. Gould) was long on introduction and on peroration but there was a predictable absence of anything in between the two. Nevertheless, the Opposition had the cheek to bring this motion before the House today. In their 1988 policy document on local government finance, they say that rateable values are mystifying and out of date, giving rise to all sorts of anomalies. Despite that, we know what their policy is. In case that be thought to be a purely Conservative viewpoint, may I quote from the Local Government Chronicle, a well-respected local government paper, which on 12 October said: The end of poll tax would be popular. But its replacement looks expensive and to be as ephemeral. The debate, however, provides us with an opportunity to debate the issue at precisely the right time.

My right hon. Friend the Member for Henley has already set out how open-minded he is. I trust that, after second or third consideration, Labour Members will recognise the advantage of contributing to that open-minded and open-ended discussion. No one party or any one Member of Parliament can claim to be all-knowing in this area. Far too many other alternatives and options have been offered for us to believe in such a thing as perfection.

I was a member of the Select Committee on the Environment in 1982 when it considered the possible replacement of the domestic rating system. I chaired the sitting that drew up the Select Committee's recommendations, so I bear a heavy responsibility. The Committee said that there was scope for improvement of the domestic rating system, but it rejected wholesale reform. The Committee persuaded the Government of the day to go along with that proposal, but a few years later the Government of the day had other views.

When the community charge first surfaced in 1986 in a Government Green Paper, I made two central objections to it. They are worth reiterating. The first was that, for about 75 per cent. of the population, the community charge would not be related to ability to pay. Secondly—this has turned out to he just as important—there was no consensus for change. Those two criticisms remain.

To take up a suggestion made by my right hon. Friend the Member for Henley, I intend to split what I am about to say between what I believe to be important short-term changes and long-term strategic change. I fully accept that we are not talking about the abolition of the community charge during the next two years. That idea has to be nailed straight away lest hon. Members should proceed on a false premise. Nevertheless, some helpful changes could be made that would improve the present system while the possibility of long-term strategic change was discussed, as suggested by my right hon. Friend.

We must accept that the existing rebate system must move further up the income scale. I know that some of my hon. Friends will put to me the problems that are associated with the poverty trap. I find it difficult to accept that apprentices earning £75 or £80 a week should be expected to pay the full community charge. My right hon. and hon. Friends could quote other cases that damage the operation of the community charge, even in the eyes of those who are its keenest supporters.

I am also worried about the fact that one-income households are denied the opportunity of a rebate for the non-earning spouse, who is not always the wife. I am open-minded as to what proportion of the community charge should be paid, if it is suggested that full eligibility for rebate ought to be denied. We must, however, offer something if the community charge is to gain wide acceptance, particularly among people with relatively modest incomes. I am also concerned about the elderly who live with their relatives. There is justifiable concern about the impact of the community charge upon them.

Let me highlight two important matters. The first concerns the existing system and the other relates to the old rating system. It is possible to envisage a long-term solution by means of which a flat-rate charge of £100 or £150 is paid by every adult over the age of 18. With a flat-rate charge of that kind, people may ask whether a rebate system is needed. However, it would take account of what many people have discovered: that there is support for the concept that everyone should pay something. Such a system would recognise that everybody ought to pay something. It also recognises that, although some 60 years ago there was usually one wage earner in a family, there are now often two, three or more wage earners all enjoying local authority services.

I shall not go into detail about the idea of a property tax, but recent research by the Institute of Revenues, Rating and Valuation and the Institute of Fiscal Studies showed that there is a 90 per cent. link between the value of people's homes and their incomes. I know that there are exceptions and problems such as widows living alone, but there is a considerable correlation. The research said: The old domestic rating system, which included rebates to the poor, was closely related to ability to pay, despite claims to the contrary. As colleagues know, the cost of assessing and collecting the tax is much lower—[HON. MEMBERS: "Hear, hear."] I hear some support from the Opposition, but the research went on to show that the administrative and economic costs would be higher under the Labour party, which plans to impose higher rates of property tax on higher income groups. I am simply pointing out that it is an approach which means that everybody pays something, while retaining a rebating system for the property tax element.

I have always thought that a property tax plays an important role in encouraging a more effective use of property and encouraging movement of small families to smaller properties. I see no harm in that. Almost in contradiction to that, I notice that a survey in March this year showed that only 6 per cent. of those surveyed thought that payment for local government services should be restricted to ratepayers alone. I agree with that, and that is why I have put forward my proposal for a two-tier system.

On structure, there is a growing move across the House towards single-tier local government and a reduction in the number of local authorities. I am looking closely at the suggestion made by several people, including my right hon. Friend the Secretary of State, of a directly elected mayor to run local authorities. A higher profile for a prominent local councillor might reduce the amount of correspondence to hon. Members in the mistaken belief that they are also councillors.

I have tried to keep my speech short, because many hon. Members want to contribute. However, I must mention consensus. For some reason, my right hon. Friend the Secretary of State did not consult me, so I prepared my speech in advance of knowing what he would say. As The Times pointed out, with the present disagreement across the House and within each of the parties, there is great advantage in hon. Members on both sides being prepared to say, "Yes, we could look at something on which we could reach about 90 per cent. agreement."

There will always be scope for disagreement on the rate of a tax, whether it is income tax or some other tax. However, with a tax of this importance, raising revenue of the size we are talking about, there should not be the sort of divisions that we have seen over the years. In part, that stems from what I said some time ago, which is that the abolition of the original system did not follow broad consensus and nor did the policy adopted to replace it. We can see that more clearly now. I do not want us to repeat that mistake, and I do not think that there is any need to do so. There are sufficient areas of disagreement between the parties over this and a range of other issues to allow for the disagreements to continue but for some consensus to emerge on the intelligent way to fund local government in the 21st century. I do not think that it will be as we are funding it now.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Scotland) 5:04 pm, 5th December 1990

Like the hon. Member for Hornchurch (Mr. Squire), I should like to congratulate the hon. Member for Bootle (Mr. Benton) on his maiden speech. As has already been said, it was forthright and direct. I have some knowledge of Merseyside, having spent some of my early life there, and I understand his concern about what has happened there and the severe scale of the problems that exist. He demonstrated clear and deep local knowledge and a commitment to ensuring that the issues are brought before the House. I commend the way that he did that, and look forward to hearing from him further.

I welcome the approach taken at the outset by the Secretary of State. He is right to say that local government finance is of paramount importance. Given that the Government, whether by force or humility, now recognise that the current system is unsatisfactory, it behoves all parties in the House to seize this opportunity in a constructive spirit and to reach a settlement that will last not for five years but for 50. I can say on behalf of the Liberal Democrats that we will be willing to become involved in constructive dialogue and hope that all options will be taken on board. The Secretary of State made it clear than no option was ruled out. We do not believe that, in those circumstances, preconditions for talks are required. The talks have been set out as an open proposition.

I am concerned that there is a suggestion from both sides of the House that we might return to the rates or some variation on them. Many of us have been through that hoop many times and have heard all the speeches about why rates were unfair. Those who think that they want to stand in front of the British public and defend the reintroduction of the rating system will have a lot of egg on their faces, probably literally, not just metaphorically.

Also, the suggestion has been mooted in one or two quarters that local government finance should be replaced by a levy on VAT. I hope that that will not be pursued. It is not the right connection between local services and local accountability. Also, it would be inflationary and would fall unevenly.

In the context of our amendment, I shall return to the view that a local income tax has a great deal to commend it. I hope that that option will be given clear, fair and objective analysis by the Government and the Secretary of State. I promise that I will not say it again but, during the leadership contest, the Secretary of State was asked why, if he was in favour of banding the poll tax, he would not acknowledge that the way to achieve it would be to introduce a local income tax as suggested by the Liberal Democrats. His reply was that he was not a Liberal Democrat.

I hope that the hon. Gentleman will acknowledge that that is not the best reason for rejecting a policy option. It should be considered seriously and in depth. It comes not just from the Liberal Democrats but was a recommendation of the Layfield committee. It works in many other countries, and we will enter into a constructive dialogue about that.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

It is a myth that the Layfield committee proposed a local income tax. It did nothing of the sort. It was strongly in favour of a property tax. It suggested that, in the longer term, one might replace some of the rate support grant with a local income tax. In other words, Layfield suggested as a long-term measure that one might have dual system of taxation, both property and local income tax.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Scotland)

The hon. Gentleman is forgetting that the Layfield committee was addressing the issue in the context of the technology available to it at the time. It made it clear that a local income tax was a developing option. Now that income tax is computerised, a local income tax would be simple to collect, but in 1976 it was not. Even so, Layfield pointed out its advantages.

Photo of Mr John Cartwright Mr John Cartwright , Woolwich

As one of the original members of the Layfield committee, I can confirm that it came out clearly in favour of a local income tax, which it said was the only serious candidate for a new source of local revenue that could give a substantial yield and, at the same time, maintain and enhance accountability.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Scotland)

I am grateful to the hon. Member. The idea of a local income tax has a great deal of authority behind it. I simply ask the Secretary of State to accept that, if he is serious about a review with no options excluded, that option must be considered and not rejected because of its origins.

Photo of Mr David Ashby Mr David Ashby , North West Leicestershire

In the new spirit which says that we must consider all options, does the hon. Gentleman agree that the implementation of a local income tax would need to be recovered by units of local government larger than the small district councils or even the county councils that we have at present?

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Scotland)

Given our modern systems of computerised technology, I do not accept that that is necessary. The Secretary of State made it clear that he was considering an overall review of local government. Many of us feel that we could simplify local government, and perhaps the two things could go together. The hon. Gentleman's suggestion may be helpful, but I do not think that it is necessary.

Let me put on record some of the changes to the poll tax which are urgently needed and which should be considered in the first phase. The poll tax has tipped the balance against rural areas in terms of where the money comes from and where the services are provided. Because it is a flat rate, which does not take account, as rates did, of lower valuations, people in rural areas are paying the same per head as those in urban areas without having access to the same range of services

All of us who represent rural areas could give examples. One of the more extreme examples, passed to me by my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), is the community of Ardmore, to which access can by gained only be a two-mile footpath. With the possible exception of education, none of the normal services are accessible. Not even social work support services can easily be provided. A crofting couple who had to pay a rates bill of about £20 a year now have to pay more than £400 a year, even though the local authority is in no position to provide additional services. That anomaly should be addressed.

Hon. Members have referred to the immediate problem of the crisis in the Gulf. It has been suggested that local authorities should charge only 20 per cent. for those involved in training for service in the Gulf. That would cost local authorities with a high proportion of service men in their areas—Gosport, for example—a substantial amount. I hope that it will be recognised that those local authorities should be fully reimbursed, because such action, taken in the national interest, can fall very unevenly on local authorities.

The anomaly of second homes is still causing considerable problems. Let me cite an example from my constituency to emphasise the fact that there is a real injustice. More than a year ago, a lady moved to my part of Scotland from Peterborough, where she owned a flat in a sheltered housing complex. She has been unable to sell the flat at any price because of the state of the market, yet Peterborough council is treating the flat as a holiday home, on which she has to pay double poll tax in addition to the poll tax that she is paying to my local authority in Grampian. Peterborough council has offered to enter negotiations with her on the basis that the amount should not be paid until the flat is sold, but she has been in real distress about the level of debt that is accruing. She simply cannot pay.

One immediate relief for which everyone will be hoping is the abolition of the 20 per cent. requirement. If people's income is so low that they qualify for full social security benefit, it is anomalous to require them to pay. Full reimbursement is a nonsensical bureaucratic arrangement, but if people are not fully reimbursed, their hardship is aggravated further. That is the major step that the Secretary of State could take now to increase the acceptability of the tax—in that income range at least—not just to people on the receiving end but to the local authorities, which are finding it impossible to collect the money. Very often, the cost of collection outweighs the revenue that could be accrued.

According to the Government, the rates were abolished in favour of the poll tax to ensure a fairer system. I have here an election pamphlet produced by a certain John Major when he was a candidate in Holborn and St. Pancras constituency. It says: The Conservatives believe this"— the rating system— is unfair and will abolish domestic rates within a normal parliament. We shall replace them by a more broadly based tax, relating to people's ability to pay. The Prime Minister must now realise that the poll tax does not satisfy the criteria that he then identified.

It is worth reminding the House what happened. We had a rating revaluation in Scotland—something that Governments have not dared to do in England since 1973. The five-year review in Scotland caused such an outcry among Conservative voters in Scotland that the Scottish Office and Scottish Ministers approached the Cabinet and said, "Please give us an alternative." Scottish Ministers who now claim that the poll tax was imposed on them by their Cabinet colleagues will have difficulty in justifying that claim. We are waiting with interest to see how the Secretary of State will fare in the convoluted changes that he now faces.

When the present Secretary of State for the Environment was asked why he had not opposed or objected to the poll tax in Scotland although he opposed its introduction in England or Wales, he said, "Because I thought that Scotland wanted it." In future, the right hon. Gentleman and the Prime Minister will have to be very careful not to confuse the voice of the Conservative party in Scotland with the voice of the Scottish people. There is little correlation between the two. Had they recognised that in the first place, the difficulty might not have arisen.

On last year's poll tax, the Scottish local authorities face a shortfall of £142 million, or 14·7 per cent. Allowing for the amount that was budgeted for in respect of non-payment, the shortfall amounts to £98 million, or 11 per cent. We are talking not about this year but about last. This year, the local authorities have collected only 40·8 per cent. of what is due, although they calculated that they would manage to collect 57·6 per cent. by now. The shortfall looks as though it may be worse this year than it was last.

Let me make a comment in passing about non-payment. The vast majority of cases of non-payment have arisen because people have had difficulty in finding the money. I do not believe that there is a mass non-payment campaign—although some people are trying to claim credit for one. I can testify to the fact that there is considerable anger among those who have paid against those who can pay but have not paid. I do not accept that the "Can pay, won't pay!" campaign has been popular in Scotland. It has been deeply resented in many quarters, and it has not brought down the poll tax. The poll tax has been brought down by the fact that it is difficult to collect and administratively cumbersome.

The other problem, which I think the Secretary of State addressed, was that the poll tax is, by definition, a flat rate charge. One issue that must be taken on board is the fact that local authorities should have the right of access to funding which has natural buoyancy built into it. That is an important point of principle that needs to be established. The more enthusiastic right-wing members of the Conservative party were attracted to the poll tax simply because it did not have that buoyancy, and they thought that they could screw down the local authorities.

However, that is not compatible with what the Government are increasingly asking the local authorities to do. The Secretary of State acknowledged that the Government have asked the local authorities to take on more and more responsibility to deliver services locally, and to do so under statutes passed by this House. The Environmental Protection Act 1990 is the most recent example. As the Secretary of State again acknowledged, simply keeping pace with inflation in those circumstances leads to excessive increases in poll tax charges. It also puts pressure on the Government, who must at least acknowledge the problem and provide additional grants. Therefore, it is in the Government's interests to allow that a proportion of the income of local authorities—the poll tax accounts for only 20 to 25 per cent.—is buoyant and has a natural relationship to the overall increase in economic activity.

If the Government squeeze grants and control the business rate in such a way that it does not take account of inflation, and if the local authorities must provide additional services, their only source of flexibility, apart from increased efficiency, is the poll tax. Because it accounts for only 20 to 25 per cent. of their income, a 1 per cent. increase in revenue across the board for the council would require an increase of between 4 and 5 per cent. in the poll tax. That means that the poll tax is inevitably inflationary.

Furthermore, it does not have the effect that the Government think, because people have a relationship with their local authority and do not believe that it has simply been extravagant. People recognise the difficulties facing many local authorities. That is another factor that is contributing to the breakdown of the poll tax. Even the Government must recognise that denying any buoyancy to the local authorities is not ultimately in anybody's interest.

The Secretary of State and his predecessors have used extravagant Labour councils as their excuse for justifying their changes, but I can advise them only that the way to deal with the problem is to ensure that local councils are democratically and fairly elected. If proportional representation or some system—[Laughter.] The hon. Member for Hendon, South (Mr. Marshall) is laughing. However, if the local authorities were elected in proportion to the votes cast, most of the militant Labour authorities that the hon. Gentleman has used as a stick to justify the poll tax would never have got into power in the first place.

It is interesting that Conservative Members talk about the supremacy of Parliament and refer to what is, frankly, the humbug of the historic association of this Parliament, but fail to recognise that we have the most antiquated, corrupt and decadent political system in the western world. That is what they are presiding over when they fail to recognise the opportunities of a radical change that would make local authorities genuinely accountable, both financially and in terms of the way in which they are elected.

In conclusion, the Secretary of State has shown some recognition that this debate is not just about how we finance local authorities; it is about the proper place of local authorities in our society. I welcome that initiative. The right hon. Gentleman is right: that debate should unite all parties in the House. I have not been afraid to state where we differ from the Tory party or the Labour party. We will enter into a constructive debate on this matter as long as it i genuine and open, and as long as the views of the people in our local communities are taken into account, so that they can be assured that, in the future, they will have local authorities that they can trust, to which they can relate, which they can hold accountable, and which are financially secure.

Several Hon. Members:

rose——

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I remind the House that Mr. Speaker appealed for brief speeches.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North 5:23 pm, 5th December 1990

I welcome the speech of my right hon. Friend the Secretary of State for the Environment, who dealt with both the financing and the organisation of local government. I know that many hon. Members of all parties will want to contribute to that debate.

Let us consider the genesis of the community charge and the reasons why it was introduced. In the beginning, people in certain areas, including London, felt that everybody who was voting should pay at least something towards what they were voting for. There is no morality in voting to spend other people's money. Revolutions were made on the grounds of "no taxation without representation", but we had "representation without taxation." We all remember that—[Interruption.] Obviously, Opposition Members are upset at what I am saying, but that principle is still one of the great strengths of the community charge.

I am sure that I shall not take the whole House with me at the beginning of my speech although I may do later, but we must remember the loony left-wing councils in London, of which Brent was a classic example. That council should be given to the Victoria and Albert museum to warn people—now that eastern communism has gone—about what we suffered then. People said that something must be done and that, if the rating system contributed to that state of affairs, it must be changed.

I am one of the first to admit that the community charge has created problems, but everything in this fallen world creates problems. The Labour party never understands that all that we can do is to try to make life tolerable. If we try to make it good, we finish up shooting people. Making life tolerable is a right old triumph in a fallen world.

The first problem with the community charge is that a flat rate tax becomes intolerable if it is set too high. One can argue about the level, but at some stage it will become too high. At levels of between £400 and £500—it is £470 in Brent—the community charge is already beyond that level.

The second problem is that of the low-rated properties in the north. I trust that my hon. Friends the Members for Pendle (Mr. Lee) and for Lancaster (Dame E. Kellett-Bowman) will catch your eye later, Mr. Deputy Speaker, because they know about those problems. There may be four small houses to every big house in those areas. The penalty of the community charge on those small houses was never even imagined by the Department of the Environment. Those two things have worked against any popularity that the community charge might have enjoyed.

However, one must pay tribute to the fact that the Government have put in a lot of money, both for transitional relief and for other purposes. Billions of pounds have been put in over the past two years to try to ease the burdens of many people.

The question is whether we should look at the community charge to see what we can do with it to make it more tolerable to society, given its advantages which I still defend, or whether we go for something else entirely. I have always believed that if one can amend something to make it work, that is better than digging up the plant and starting over again.

The principle of the community charge is good. I do not believe that anybody with any income at all should vote without paying something towards the services for which they are voting. To do so is political immorality.—[Interruption.] I say that again, and I am surprised that Opposition Members disagree with me. I trusted that I could have taken them with me on that. I repeat that it is political immorality.

If we changed the system, we would have a new set of losers. Whenever a system is changed, those who gain say, "Thank you very much," and go away and forget all about it, but those who lose remember it to the ballot box. If we change the system again, another set of losers will be queuing up to ask what can be done.

The hon. Member for Gordon (Mr. Bruce) referred to the fact that the property rating was highly unpopular—so it was not as though we were moving from the garden of Eden, having eaten the wicked apple, and are now seeking to return to the garden of Eden again. Wherever I went in the country—whether to a Conservative party meeting or a public meeting—somebody would stand up and ask, "When are you going to get rid of the rating system?" My right hon. and hon. Friends will have had similar experiences.

We must cut the level of the community charge and anaesthetise some of the pain. Then we can see where we are——

Photo of Mr John Marshall Mr John Marshall , Hendon South

Does my right hon. Friend accept that the fact that the community charge in Brent is 40 per cent. higher than in Barnet underlines the relative efficiency of those two councils, and that we need to improve the efficiency of local councils rather than tinkering with the community charge?

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

I am sure that the burghers of Barnet will welcome that intervention, and that it will increase my hon. Friend's majority by at least 10,000 at the next general election. I shall point out to the burghers of Brent that if they elected a council which was wholly Conservative—as is the case with their Member of Parliament in Brent, North—the glorious image of Barnet would be seen in Brent.

We must reduce the community charge, and to do so we must take education out of local government expenditure. I want education to be taken out of local government control regardless, because the grant-maintained school system is one of the most successful ways of improving education standards in this country. I trust parents before bureaucrats, which the Labour party never does. We should give responsibility to parents, not inspectors from the Department of Education and Science who led us down and are now being paid to help solve the problems. Parents should be in charge of schools, and I will back their vote.

I recently visited Claremont school in my constituency, which has become grant-maintained and been totally transformed. There are now queues of parents waiting to send their children there. Unless the Labour party catches up with us on the issue of grant-maintained schools, it could lose the next election even more heavily than the previous one. I am a friendly man, and I say that to be helpful to Labour Members.

Some 42 per cent. of local government expenditure goes on education—38·6 per cent. in Brent and 42·3 per cent. in the whole of the country. Education costs local government £17 billion. We should not take the entire £17 billion away, but £12 billion—exactly the amount of the business rate—which makes the equation neat. That will leave local authorities £5 billion more to spend elsewhere. I shall say later where that sum comes from—it does not come out of undiscovered space. That extra £5 billion would mean that throughout the country the community charge could be reduced, on average, from about £400 to about £250. The pressure would be considerably lessened by a 40 per cent. decrease in the community charge.

Where can that extra money come from? The winter is with us and I noticed squirrels digging up their first nuts in my garden this morning. The Treasury always has nuts in case something happens. Now that the squirrels are gathering theirs, the Treasury must pick up its nuts. A second alternative would be to borrow the money. We have the lowest borrowing against national income of practically any country in the world.

The third, long-term option would be to have a series of different taxes. Almost no other country in the world relies on one tax system for local government. On the continent, countries have four or five streams, including hotel and sales taxes——

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

What about a property tax?

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

There could be a small property tax. I am grateful to the hon. Gentleman, who is taking my thinking further—the debate between the two sides of the Chamber has begun.

Photo of Mr Keith Hampson Mr Keith Hampson , Leeds North West

If we were to move education to the central Exchequer, due to the fact that it makes such a major contribution to the community charge, which feeds into the retail price index, we would reduce the RPI by 2 per cent., thus reducing the cost of benefits to the Treasury. Therefore, in addition to privatisation and the other means of raising resources mentioned by my right hon. Friend the Member for Brent, North (Sir R. Boyson), it seems that, instead of cutting taxes, we shall be able to cut the community charge.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

I did not realise that I was Merlin the magician and could achieve so much. Taking education out of local government spending would, to an extent, solve the community charge problems and would also improve education the length and breadth of the country, so we would get two advantages for the price of one.

Three other steps should be taken to anaesthetise the pain. A wife at home should never have to pay on her husband's wage, and a husband should not have to pay according to his wife's wage. A wife is the only person who has to pay 100 per cent. when she has no income, which is wrong and totally anti-family.

Secondly, if a pensioner is put into a community home at local authority expense, no community charge is paid. If a pensioner is kept at home by the family, where he should be, community charge has to be paid. That policy should end—the easiest option would be to abolish the community charge for all pensioners, because if we discriminate, we shall find pensioners moving backwards and forwards like yo-yos.

Thirdly, in large families with more than four or six members, the community charge for the fourth, fifth, sixth or seventh member should be reduced to 50 per cent., 25 per cent., and so on. At present, the community charge in London forces young people out of their families and increases accommodation problems.—[HON. MEMBERS: "We told the Government that."] But Opposition Members have not accepted the first principle, which I still stand by, that nobody should vote until they pay something towards it. Otherwise, we have political immorality.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

No, I shall not give way any more.

One point which follows from the speech of the hon. Member for Gordon is that there is great indignation in my constituency about Brent not collecting all the community charge. If people in my constituency who have paid have to pay a heavier burden next year because others did not pay this year, there will be uproar. All the community charges due must be collected properly.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

Will the right hon. Gentleman give way?

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

I shall not give way any more. I said that I would not do so, and I like to be a man of my word; otherwise, people will be disappointed.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

I was only trying to help.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

As one Lancastrian to another, I welcome that phrase.

At present, there is no discount for people who pay the community charge early—certainly not in Harrow. Therefore, why should people bother to pay early when they can put the money in the bank at the present interest rate. A good discount system would encourage people to pay early. At present, people are sent 10 pieces of paper and can pay over 10 months—I do not understand that system because it does not encourage people to pay.

How many people have avoided payment and how many other people are having to cover for them?

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

What about identity cards?

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

I think that the hon. Gentleman would agree that if we had identity cards, we could find out who had paid. The only way to achieve full payment is through national identity cards—I am glad that I have the hon. Gentleman's approval.

I welcome what the Secretary of State said about looking at local government functions and their relation, nationally and locally. Unless we entirely separate national finances from local finances, the battle will go on—and I hope that we achieve that in the next two years. The finances are separated in Germany and Scandinavia. All local government expenditure should be raised locally, and national Government expenditure should be raised nationally; otherwise, the resulting continual tension does no good to national or local government.

In many districts of London, the 1974 local government reorganisation is still highly unpopular. If we got rid of education from the local government remit, we could have smaller boroughs in which people knew their councillors and had a sense of identity, as with bringing back Wembley. Nothing would be more popular in my district than bringing back the previous boroughs that were destroyed and put into massive conglomerations with tower blocks.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

The Conservative party did that.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

We did it, but unlike the Labour party, we say when we have got it wrong. We do not continue over the cliff edge to total destruction. I must not be agitated by Opposition Members, and I draw my sentence and speech to an end.

Photo of Mr Allen McKay Mr Allen McKay , Barnsley West and Penistone 5:37 pm, 5th December 1990

I do not agree entirely with the right hon. Member for Brent, North (Sir R. Boyson), who would be surprised if I did. The remarkable factor in this debate is the number of different views about how local government should be financed.

I have not yet decided whether the Secretary of State was setting up a smokescreen or looking for someone to pull chestnuts out of the fire because the Government now concede that they made a monumental cock-up three years ago when they introduced the poll tax. Nothing that can be said will get away from that. To their credit, some Conservative Members acknowledged that the system was fundamentally flawed from the beginning.

Whatever we do with the poll tax, however we tinker about with it at the edges, whatever is put in or taken out of it, it will still remain flawed. It cannot be anything but a flat rate tax—fundamentally wrong and absolutely hated. Even if poll tax payments are reduced, the tax will still be wrong because of the great inequalities throughout the country. That is why the people have rebelled against it—because of the sheer hypocrisy and disparity involved in it.

People were told that they would pay for what they got. Then they found out that they did not receive the services anyway. They asked why they should pay for schools when they had no children. These questions were first asked in this House. Payment for local government is and always has been a collective charge within a community for services that people in that community vote for.

The Secretary of State says that he is looking for a new structure. I have spent 20 years in local government trying to find one. The West Riding county council, one of the best education bodies ever known, has gone; so has South Yorkshire county council, and so have the urban district councils. Since then, we have witnessed the rise of the parishes, but what has the poll tax done for them? It has taken money away from them. The rating system used to bring in money for parish works but that has now disappeared because this is a national tax. The Conservative party, supposedly the protector of parish and town councils, has helped to destroy them.

People do not see why they should pay extra taxation when others do not, so they think that we should get rid of parish councils. Co-operation and responsibility should be mutual. Local government has not received much co-operation in the past nine years; it has experienced imposition by central Government, which is why local government has reacted as it has.

Any new scheme must take all these elements into account, but above all we must accept that the poll lax is wrong, both for local government and for the people it represents. I think that the Secretary of State has admitted as much; why else would he have said that we should look together for a different system? If he were convinced that the system was right or that it could somehow be altered, he would not have said what he did. He has realised that it is seriously flawed and must be got rid of.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

The Secretary of State did not tell us what was wrong with the poll tax. All he said was that it was very unpopular, and he gave its unpopularity as the reason for reviewing it. He should have analysed why it was unpopular. Instead, he offered no ideas or agenda for discussion.

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

That explains my remark about a smokescreen. Nothing positive seems to have been offered, except for a consensus approach.

This House got rid of the rating system, which was in some cases unpopular and which included some anomalies. It is true that some people did not like it, but the poll tax has at least made people like the rating system because they could understand it and it was fairer.

The rating system was a good way of paying for local finance. By and large, the house a person dwelt in showed that persons's wealth. Of course there were exceptions. We all know about the little old lady who paid huge rates for her house while five people next door paid the same or less. Of course, nine times out of ten those little old ladies brought up families who later made a larger contribution to central Government taxation.

The problems with local government date not from the advent of the poll tax but from 1972, 1973 and 1974, when local government was reorganised. That was when the trouble started.

Photo of Mr Keith Mans Mr Keith Mans , Wyre

If, as the hon. Gentleman says, he and his party like the rating system so much, why did they fail again and again when in office to carry out a revaluation of property?

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

I did say that local government has been in continual flux and has never had the time to settle down while we have been scratching away at it. But since 1979, the Tory Government have compounded its problems by continually reducing central Government's contribution to local government—from 79 per cent. to 33 per cent. Local government reacted in the only way it could and put up the rates.

When central Government realised what was happening, they started talking about rate capping. They then rate-capped authorities, thereby removing flexibility from the system and making it much worse.

Photo of Mr James Couchman Mr James Couchman , Gillingham

Does not the hon. Gentleman agree that returning to the rating system would just be a large electoral bribe to the 18 million people who made no contribution to local government expenditure before? Would it not be an attempt to entice them to vote in the hope that they could make no contribution to local government in future?

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

When did we have problems with local government before the Conservatives started messing about with the system? I admit that the trouble started in 1974, following which the Labour Government put into practice what the Conservatives had begun. They should not have done that.

I believe that people who can pay should pay something towards local government, based on their ability to pay. We could have made the rating system work on that pattern. That is why I was interested to hear the Secretary of State talk about working together, but first we must all determine that the poll tax must go.

There is nothing wrong with a Secretary of State admitting that the Government have been wrong for three years and deciding to get rid of the poll tax, following which we could search for a new system of local government finance together. I was, however, disappointed to hear the Secretary of State say that the process will take two years. In all my 20 years in local government, I never found different systems that worked. They were either too easy to evade, they cost too much to collect, or they were unfair and unwieldy. The poll tax exhibits all those faults. It places an unbelievable administrative burden on local authorities.

During October my local authority, which is a small one, received 5,115 phone calls of inquiry and 3,040 letters of inquiry, and sent out 8,784 reminders. In the same period, it dealt with 4,326 summonses, and 20,322 people have yet to make a payment. The housing benefit of 8,108 people has had to be altered and the poll tax has changed 6,198 times in one month. All that demands a great many members of staff, which is why it costs my local authority £3·5 million a year more to collect the poll tax than it did to collect the rates.

Why should it be said to cost about £800 a year to educate a child in my area, while other authorities receive £1,200 for the same purpose? Why should it cost less in my local authority area to educate children? That is leading to a deterioration of education standards in our area. All those matters must be examined.

Why should a wife who does not work pay poll tax or why should her husband have to pay it for her? What are they getting out of it? I am sure that my constituents would welcome genuine dialogue on local government finance. We must make up our minds that the poll tax has to go. Conservative Members will never have a better chance to show whether they are for or against the poll tax. I invite them to vote with the Opposition, thereby forcing the Secretary of State to alter the poll tax.

Photo of Mr Richard Tracey Mr Richard Tracey , Surbiton 5:50 pm, 5th December 1990

I congratulate the hon. Member for Bootle (Mr. Benton) on his maiden speech. He was elected in difficult circumstances following the sad and sudden death of Mike Carr who, as some of my hon. Friends have said, we hardly got to know. The new Member for Bootle is a member of the Labour party and on this subject, above all, he had to be slightly controversial or his speech would not have been believed by his hon. Friends or by many others. I also congratulate my two right hon. Friends, the Secretary of State for the Environment and the Secretary of State for Scotland who have just taken up their appointments. My right hon. Friend the Secretary of State for Scotland is on the Front Bench, so I assume that he will deliver the winding-up speech.

Despite the speech by the hon. Member for Barnsley, West and Penistone (Mr. McKay) there is no doubt that the old rating system was deeply unpopular and had to go. It was put in place 200 or 300 years ago and it is ridiculous for anyone to suggest that it should be brought back. In case some Opposition Members think that there is a chance of convincing the British people that the rating system should be brought back, I will give the House a couple of quotes. Lord McIntosh of Haringey was deposed by the hon. Member for Brent, East (Mr. Livingstone) who assumed the leadership of the GLC when Labour won control there. Lord McIntosh, a leading Labour member in the other place, said that rates were, desperately inadequate as a fair basis for raising revenue for local government."—[Official Report, House of Lords, 23 May 1988; Vol. 497, c. 652.]

Photo of Mr Richard Tracey Mr Richard Tracey , Surbiton

No, because I am short of time and many hon. Members want to participate in the debate.

A Labour party official policy statement was contained in a document entitled "Local Services, Local Choices, Local Taxes". That document stated: A system where rateable values are based on a notional annual rate is mystifying to most people. To make matters worse, the values are out of date, giving rise to all sorts of anomalies.

Photo of Mr John Evans Mr John Evans , St Helens North

Perhaps the rating system was unpopular, but can the hon. Gentleman quote any instances in Great Britain where rate collectors were physically assaulted by the public? There have been many instances of poll tax collectors being physically assaulted.

Photo of Mr Richard Tracey Mr Richard Tracey , Surbiton

The hon. Gentleman should look to the people who stir up feelings which bring about such law breaking. No hon. Member can condone such behaviour, and neither rate collectors nor community charge collectors should be attacked by anybody. I totally condemn those Opposition Members who refuse to pay the community charge. I wish that Opposition Front-Bench spokesmen would also condemn them because the lack of such condemnation gives credibility to law breakers.

An even weightier argument against the rates was advanced by the Opposition. In 1980, the right hon. Member for Islwyn (Mr. Kinnock), who at that time was not the leader of his party, said: the most unjust of all taxes, local rates, take most from those who can afford least". That is a sample of a procession of Opposition Members or senior Members of the Labour party in local government who attacked the old rating system and all that it entailed. That view has been shared for years by many people, especially by old ladies who live on their own next doer to a house with three or four adults, three of whom paid nothing. Such unfairness bred discontent and for many years the Conservative party said that the rating system must be abolished.

The principle eloquently advanced by my right hon. Friend the Member for Brent, North (Sir R. Boyson) is that those entitled to vote should pay a share of local government costs. That is the whole basis of the community charge and the thinking of the Conservative party. Whatever changes emerge from the review by my right hon. Friend the Secretary of State for the Environment, I hope that we shall not move from the cardinal principle that every adult who has the vote should pay a share of local government costs. That principle is agreed by everybody.

In attempting to denigrate that principle, the Labour party has on 65 occasions in the three and a half years since the 1987 general election changed its policy on the system of local government finance. I have the documents which prove that. Every one of the 65 changes has been documented, and the documents show 20 splits between Opposition Front-Bench spokesmen on local government finance. The Opposition know perfectly well that it will not be easy to change the system that we have put in place.

Photo of Mr Richard Tracey Mr Richard Tracey , Surbiton

No, because it is almost 6 o'clock, from which time hon. Members will be restricted to 10-minute speeches. I apologise to the hon. Gentleman, but I assume that he will have a chance to speak in the debate.

The Opposition know that it will not be easy to put in place the changes that they glibly talk about. In its 65 different changes of policy over the past three and a half years, the Labour party has failed to address the central problem of drawing up an alternative. The Opposition have not agreed who should pay the tax or on what it should be based. They tried the roof tax which the hon. Member for Glasgow, Garscadden (Mr. Dewar) proposed because he felt that something was needed before the Labour party confronted the electorate in the local government elections. The roof tax was replaced with a floor tax, which would have entailed taxing properties according to the floor area. That was proposed by a not inconsiderable authority, the hon. Member for Birmingham, Perry Barr (Mr. Rooker), a former environment and housing spokesman for the Labour party.

More recently, the Opposition came round to the suggestions from the hon. Member for Dagenham (Mr. Gould) for a tax base which included the valuation that insurance companies place on houses for rebuilding purposes. He first brought that up in March in a television interview with Mr. David Frost in a desperate attempt to put something before the electorate in advance of the local elections in London in May.

Then some intellectual rigour was brought to the matter by the Leader of the Opposition. When interviewed by The Independent in April, he explained that the Labour party would consider several different tax bases and produce some figures to bung into the computer. That is an example of deep thinking from the Labour party.

In that morass of thoughts and possibilities, the Opposition must decide who should pay their replacement tax. The hon. Member for Copeland (Dr. Cunningham), who for some time spoke for the Opposition on environment matters, said that there was no question of making people pay who are not paying income tax. He made that statement in March on the "Eye Witness" programme on ITV. However, when the hon. Member for Dagenham was asked a similar question three days later in the "Today" programme on the BBC, he said: Well, that's the one issue which we have yet to decide … we will reach a decision very shortly. The Labour party cannot decide when it will be possible to introduce the changes. The hon. Member for Dagenham said that it would be at least two years after the Labour party had achieved the—unlikely—prospect of becoming the Government of this country, before they could make the changes. I noticed that, although the hon. Member for Dagenham said that, when my right hon. Friend the Secretary of State said that it might well take a full two years before any workable changes could be introduced, the hon. Gentleman did not rise to intervene although there were the usual catcalls from the Opposition Benches.

Once again, there is confusion in the Labour ranks. After the hon. Member for Dagenham spoke about the two-year period, the hon. Member for Copeland said: there's no question about our commitment to abolish the poll tax as soon as we have a Labour Government. This whole matter is not so clear as the Opposition would like, in their motion, the British public to think. The Opposition have changed their minds 65 times in the past three and a half years. They still have no definite policy to put before the British public. There have been at least 20 splits on the Opposition Front Bench on the issue. I have the evidence of that and I will gladly provide chapter and verse for each of those splits.

My right hon. Friend the Secretary of State invited the Opposition to engage in sensible discussions to reach a consensus on this matter. Let us see whether the Opposition can put their words into action.

Several Hon. Members:

rose——

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I remind hon. Members that speeches should not exceed 10 minutes between now and 8 o'clock.

Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East 6:05 pm, 5th December 1990

In previous debates, I have compared the former Prime Minister's description of the poll tax as the "flagship" of her third term to the Titanic. Her Titanic met its iceberg in the form of the 28 million people who are worse off under that tax, almost half of whom have refused to pay it. The captain has already gone overboard and the officers are now reshuffling the deckchairs a bit. That will not do them much good.

Resistance to the poll tax has possibly been the largest campaign of civil disobedience this century. It has involved thousands of meetings, marches and rallies, and it shows no sign of abating. In fact, we are only weeks away from a new season, and that may have given urgency to the Secretary of State's review. While there were deathbed conversions among the leadership contenders last week who recognised that the Conservative party was in terminal crisis unless they did something about the poll tax, the poll tax became the catalyst, the crystal within the saturated solution, because it represented, on top of everything else, the last straw. On top of the sell-offs of gas, water and the electric and on top of mortgage and inflation increases, the poll tax was the last straw for the working people in this country.

On 14 August, the Council of Mortgage Lenders produced figures for the repossession of homes comparing the first six months of this year with the last six months of last year. They showed that the number of people between six months and 12 months behind on their mortgage payments had increased by 32 per cent. and that the number of people more than 12 months behind had increased by 56 per cent. In addition to that debt, millions of people go further into debt by trying to pay the poll tax. In the words of another Government campaign, many of them "just say no".

Millions of families face not just debt, but winter bills. For three years now, I have said on behalf of, and alongside, my constituents that I would stick it out and not pay the poll tax so long as they did the same. In Coventry, three quarters of adults in two adult households are worse off. A quarter of all households—60,000 people—are more than £450 worse off net a year. That is equivalent to £600 if we take tax and national insurance into account. All that, so that 3 per cent. of the city's population—just 6,000 adults—can be £450 better off.

I get called a freeloader. The real freeloaders under the poll tax are the Cabinet, including the new Secretary of State for the Environment, who are saving thousands of pounds under the poll tax. The real freeloaders are the top 5 per cent. of the population who have saved so much money through the poll tax at the expense of millions of ordinary families at the bottom of society.

The hatred for the poll tax has spread into areas where I never thought I would see it. I never thought that, a month ago, I would see a finalist in the national tennis finals put a bit of cardboard before his towel with "No to the poll tax" written on it. Is it not a crime that Andrew Castle was fined £2,400 for that, while Aggasi was fined only half that for spitting at an umpire in the United States. That is an indication of how far through society the hatred of the poll tax extends.

The Cabinet realised the extent of that hatred. They realised that the inability to collect or enforce the poll tax meant that they had to change it. The Government have had to face all those problems with the poll tax when fewer than one quarter of the councils in England and Wales have yet to go to court to enforce the tax.

If Lambeth is to enforce the poll tax, it must get it from 73 Mickey Mouses, nine Donald Ducks and eight Adolf Hitlers. A vicar in Lambeth has received four bills—one for himself, one for God the Father, one for God the Son and one for God the Holy Ghost. That may be funny, but the Audit Commission has stated that, in the shire counties, between 1 December last year and 31 August this year—nine months—on average 24 per cent. of the register changed; 30 per cent. changed in the metropolitan areas; 35 per cent. changed in the outer London boroughs and 40 per cent. changed in the inner London boroughs. There have been millions of changes, and that is one reason why the poll tax is unenforceable.

Only a quarter of the councils have gone to court, but we have seen a huge denial of rights. A harder line is being taken by the courts, just like that which was adopted during the miners' strike. It has been a right of the people since 1831 that those who cannot afford to buy a lawyer can take a friend to court. That was re-established in the Court of Appeal in 1971 in MacKenzie =. MacKenzie. Throughout the country, however, from Coventry, Leicester and Gateshead down to Bournemouth, magistrates are denying working-class people the right to have a friend in court. They are acting on instructions from the Home Office.

We are told that the poll tax is an individual tax. Why is it that, in Warrington, batches of eight non-payers of the poll tax are dealt with by the magistrates collectively? Why is it that, at Lymington in Hampshire, they are dealt with 10 at a time? If an individual refuses to be dealt with as one in a batch, he will be found liable and could be held for contempt of court.

Conservative Members allege that I am a generalised law breaker, but during my 38 years I have appeared in court on only two occasions, once at Battersea and once at Coventry. Both appearances related to the poll tax. We are told that nothing can go wrong with the system. We are assured that everything is checked and double-checked before summonses are issued or reminders to pay are sent out. Why is it that in Coventry a 17-month-old baby was summonsed? That happened to a 21-month-old baby in Battersea. In Coventry, summonses were sent to several people who were deceased. [Laughter.]

If that seems funny to Conservative Members, I ask them to put themselves in the position of a recently bereaved family who read in the newspaper that the deceased had been summonsed. That happened only four months ago.

Photo of Mr Jacques Arnold Mr Jacques Arnold , Gravesham

Will the hon. Gentleman give way?

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

I shall not give way now.

Teenagers have been summonsed. Once someone has been through the courts, the bailiffs—mediaeval thugs—are called in. They represent a system which the National Consumer Council, and even the Tory-appointed Law Commission of four years ago, reckon should be abolished. The first family in Coventry to be threatened by the police coming to arrest it, a court appearance and imprisonment was Asian. That happened eight or nine days ago. The husband was in receipt of invalidity benefit and the wife was a diabetic. The two sons were low-paid. Councils throughout the country have been pushed into taking that sort of action by the laws that the Government have introduced.

In effect, the Tories say, "Don't worry; it will settle down." To use a cricket term, which it is fashionable to adopt these days, we are told that the poll tax will "play itself in". But as Nye Bevan said: Why look in the crystal ball when you can read the book? In Scotland, the poll tax has been operated for 21 months. What has happened? At the end of October 1989, the uncollected poll tax amounted to £142 million, or 14·7 per cent. of that due to be collected.

Are things settling down in Scotland? At the end of October this year, £623 million was uncollected, or 59·2 per cent. of that due to be collected. At the end of the financial year, which was in March, 850,000 Scottish people had paid nothing or were three months in arrears. It appears that 1,208,000 summary warrants have been issued this year by the sheriffs—33 per cent. of the population of Scotland have been summonsed—compared with the 1 per cent. who were summonsed for non-payment of rates before the introduction of the poll tax. That may not have concerned Conservative members, because they have only 10 parliamentary seats in Scotland to defend. They began to wake up, however, when summonses began to be issued in England and Wales, especially in the Tory-controlled area of Windsor and Maidenhead, for example, in what is supposed to be the soft south.

Last Monday, the Government finally gave me the figures for England and Wales. I had spent weeks trying to get them from the Department of the Environment. Incidentally, the Scottish Office and the Welsh Office, which each employ about 20 statisticians to deal with local authority finance, do not collect these statistics. In England alone, 4·5 million people have not paid their poll tax. In addition, it appears that 45 boroughs are not included in this list.

In the past 11 years, 4,329 people were imprisoned for not paying their rates. That was 400 a year. There was one imprisonment each year for every local authority in the country. The local authority in my constituency has issued 26,000 liability orders so far. Where the hell will the Government find prison accommodation for these people? It would have been impossible to do so even before Strangeways got done. The Government will never be able to find the necessary prison accommodation. That is why the Secretary of State for the Environment is running scared and talking about abolition.

What is happening to services and jobs? No one has mentioned this so far. In Wandsworth, thousands of people will be marching through the streets tonight. The marchers will be workers, parents and others who are concerned about services. Why are they marching? The answer is that poll tax attacks jobs and services. What is Sir Paul Beresford's borough doing? It is closing three of its nine secondary schools and 11 of its 18 social service day nurseries. Twelve of the borough's primary schools are being closed, along with all five of its junior clubs. Half of the half-term play centres are being closed. All the lunch and holiday play centres are being closed. It is privatising 10 old people's homes. School meals provision, cleaning services and ground maintenance are also being privatised. All services are subject to attack. Jobs and services will be lost as a result of the poll tax.

The Secretary of State's review may find one or two ways in which to ameliorate the effect of the poll tax, but that is all. I welcome the commitment of my party to repeal the poll tax legislation as soon as it forms the next Government. If the Labour party and the trade unions would use their undoubted strength to support the 14 million who have not paid their poll tax, we could get rid of the poll tax well short of the two years that will elapse while the Secretary of State's review takes place, and shorten the Government's life. That is what we shall do.

Photo of Sir Peter Emery Sir Peter Emery , Honiton 6:15 pm, 5th December 1990

I have seldom heard a more disgusting speech than that delivered by the hon. Member for Coventry, South-East (Mr. Nellist), who claims to be a democrat. In the coldest terms that I can use, he is a man who was elected to this place to obey the laws that we pass. It seems that he is trying to uphold civil disobedience. Anyone who condones those who break the law deserves the greatest condemnation.

I have seldom heard a speech that so changed the climate of opinion as that which was made by my right hon. Friend the Secretary of State for the Environment. It was one of the more brilliant speeches that I have heard during the 31 years that I have been a Member of this place. There is no doubt that it will lead to an attempt to bring about unity of thought within the country as we come to consider how we can deal with the problem of local government finance and, if necessary, the structure of local government—it is difficult to separate one from the other—in a way that will prove satisfactory to the House generally for the next 20, 30 or more years.

I do not intend to attack the Labour party as some of my hon. Friends have done so brilliantly. If we wish to establish a climate in which we can begin to enjoy some co-operation, let us stop attacking one another. We shall do somewhat better if we co-operate instead of attacking. If we are genuine in our desire to see something that is good and lasting for all the people, let us see what we can do together.

One of the difficulties is that the Labour party thought that suddenly it had the Government over a barrel with the poll tax. Instead, it is we who have the Labour party over a barrel. One of the features of the community charge that has, I think, been accepted by everyone is that it is right and proper that everyone in the community should make some contribution to the services that he or site is receiving. The Government published as the likely level of community charge for east Devon the figure of £245 plus the parish precept. In fact, Devon county council had to introduce a community charge of £345.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

It must be a Labour council.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

It is a Conservative council. A couple had to pay £690, and if they had an elderly relative with them, for example, the charge was £1,035. In my constituency, 35 per cent. of the electorate are retired My constituents were faced with a charge that they neither accepted nor could afford. Many retired people moved to areas in which there was low-rated property. They expected to be able to live comfortably in those areas. They found themselves suddenly having to pay a community charge which they never expected and could ill afford. There was unfairness.

One difficulty is that the accountability factor is not working because there is a three-year period between local government elections. It is no good suggesting that an authority can be accountable for what it spends in one year if it is not subject to re-election for another three years. We have to deal with that problem.

Another unfairness that has come to light is the position of those living in rural areas where there are next to no services. Previously their properties would have had a low rating. Now they are having to pay the same community charge as people living in towns, where a considerable number of services are provided.

I am immensely pleased that the Government are willing to undertake an overall review of the approach to the financing of local government. Anyone with a reasonable approach must know that to make any massive changes will require a period of consultation and then a parliamentary year to deal with the necessary legislation—[Interruption.] Opposition Members should not crow. If they were ever to be in government, which they will not be, they would also need a year to deal with the legislation necessary to replace the poll tax with their preferred system. The time scale is common to both parties.

A number of people find it difficult to pay the poll tax, and they will find it even more difficult next year, even though the estimated increase will be only about £40 or £50. The Government should consider providing some relief for those people.

Let us compare the provision of such relief with the repayment of national debt. The former Chancellor of the Exchequer, now the Prime Minister, announced that £3 billion had been set aside for repayment of the national debt this year. Britain has made two such repayments during the past two years, totalling £14 billion. I welcome that, and it is a major step in the right direction. However, if I had to choose whether, for the 12 months hence, to use that £3 billion for national debt repayment or to prevent an increase in local government expenditure but to reduce the burden of the charge on the lower paid and others unable to pay it, I should choose the latter. That would be the sort of caring attitude that I believe our new Prime Minister wishes to embody in the structure of his Government.

There should be some provision for relief for the ordinary community charge payer while the review and any necessary legislation are undertaken. I hope that any new system will have the agreement of all parties. The Liberal Democrats appear willing—although they have now left the Chamber—[Interruption.] I fight the Liberal Democrats in my constituency, where the Labour party would lose its deposit. A spirit should be engendered to enable us to introduce a structure that will last for a long time. That is what most hon. Members want, and I am sure that it is what the country wants.

Photo of Mr John Cartwright Mr John Cartwright , Woolwich 6:22 pm, 5th December 1990

The problem facing the Government was clearly summed up by Rita Hale—who is known to many hon. Members as head of local government matters at the Chartered Institute of Public Finance and Accountancy—in a statement in The Daily Telegraph on 30 November. She was asked what the Government could do about the poll tax, and she said: I think that the answer comes down to whether the community charge is saveable. I suspect that it is not … To carry on with the community charge you have to put so much money into the system that it becomes questionable whether it is worth doing so to get the yield. That is a clear statement of the obvious.

The more the Government try to reduce the impact of the charge by extending rebates, through transitional relief, and so on, the more expensive it becomes and the bigger the bureaucracy that is built. We all know that it is an expensive bureaucracy—which, in many local authorities, is already creaking under the strain. Every time help is given to one group to make life a little easier for them, there is another group next in line who become extremely aggrieved that they have been left out. The more the Government go down that road, the deeper they will be sucked into a morass from which they will never dig themselves out.

Those who argue that banding the poll tax is a solution really do not have the answer to the problem. There are many practical difficulties in trying to band poll tax into broad bands of income. It would involve local authorities knowing a great deal about the tax affairs of their poll tax payers. More seriously, the whole concept of broad bands involves the application of a poverty trap. When people cross over the threshold into the first band of poll tax liability, they will be worse off despite an increase in income. There are already far too many examples of that in the social security system. It is not a sensible solution to the problems of the poll tax.

Some Conservative Members have suggested that there should be a switch of responsibility for some services from local taxation to national taxation. They think that that would be a painless solution to the problem. National taxation might be fairer than the poll tax, but the services still have to be paid for. Those of us who cut our teeth in local government would be apprehensive about further examples of local authorities administering services over which they had no financial control. That would be an unpleasant and unaccountable position for local authorities.

I have heard some people arguing that it would be quite simple to transfer responsibility for education from local to central Government, and that all schools could be administered by the Department of Education and Science. That would mean an extraordinary level of central Government interference and a centralisation of services which many of us would not regard as acceptable. Again, it would involve an expensive central Government bureaucracy.

The most important reason why the Government simply cannot continue with the poll tax is the public's reaction to it. However carefully and expensively the Government try to dress it up in fancy new clothes, the basic injustices of the system show through. The country has made it clear that such an unfair and unjust system is not acceptable. Even some of those who have gained by the introduction of the poll tax say that it is unacceptable, so it is obvious that the system cannot continue for any length of time.

What are the alternatives? There is a limited range of options, none of which is overwhelmingly appealing. Tory Members yearning for a painless way of paying for local services are in for a sad shock. The search for some generally acceptable way to pay for local services is rather like the search for the philosopher's stone—it is doomed to failure. I was one of the original members of the Layfield committee charged by the late Tony Crosland with trying to find a solution to the problem of replacing the rating system. That experience convinced me that there is no easily acceptable solution. Every system we can think of has some flaws. Every scheme we put forward will upset somebody. In effect, we are looking for the least worst solution.

That boils down to a choice between a rating system and a local income tax. The only way in which the rating system can appear in any way attractive is by comparison with the extraordinary and unpleasant experience of the poll tax. We cannot go back to the rating system. It does not share out burdens fairly and it results in a substantial number of people with incomes not contributing to a local taxation base. To make local rates income related, the local council needs to know a lot about the financial position of its citizens and a complex system of rebates has to be built which, again, is expensive and difficult to administer.

No one who has ever tried to explain the concept of notional rental value as the basis for rateable values would want to return to that. I accept that capital values are much easier to understand and to explain, but they are also far more volatile and problems of revaluation will result. Capital values can go up but, as we have seen in recent years, they can also go down.

Last week, the right hon. Member for Blaby (Mr. Lawson) argued for some system under which a property is revalued on a capital basis only when someone moves. That would create the marvellous situation where two people lived side by side in identical properties, one paying a different set of rates from the other because one had moved recently and the other had not. That illustrates yet again how fraught with problems a return to the rating system would be.

A local income tax system is the only sensible and fair way of paying for local services, and the Layfield committee identified it as the only serious candidate for a new source of local revenue which would improve local government accountability. It is worth mentioning in passing that the Layfield committee examined every possible sort of local government finance that one could think of, but it did not spend 30 seconds looking at the poll tax because something so nonsensical was never on the agenda.

There are problems with a local income tax. There are difficulties with its administration. It is much easier with large local authorities than small ones. That is why I was glad that the Secretary of State held out the prospect that the review would not look simply at local government finance but at local government structure as well. We have suffered under the piecemeal reorganisations since the war because we have looked at finance in isolation from structure and at structure in isolation from finance, when the two should go hand in hand.

I recognise that some people will be concerned about the risks of a local income tax giving local authorities the ability to levy excessive levels of taxation or to undermine the position of central Government in terms of economic management through the taxation system. That could be safeguarded by a system of fair voting in local government. Proportional representation in local government would provide a substantial safeguard. If we cannot have that, let us at the very least have a system in which some councillors retire every year with annual elections rather than the four-yearly all-out elections which London suffers.

I endorse what the Secretary of State said about the kernel of the problem being the relationship between local and central Government. Layfield also asked that question. First, said the Layfield committee, we must make up our minds about what sort of local government we want—whether we want it to be the agent and creature of central Government or to be an independent organisation reflecting local views. I come down firmly in favour of the principle of local self-government. I therefore come out strongly in favour of local income tax as the best way of breathing new life into the local government system.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster 6:32 pm, 5th December 1990

I congratulate the hon. Member for Bootle (Mr. Benton) on joining us in the House. Having been a social worker in his part of the world, I know the problems he faces, and I know, too, the great efforts that my right hon. Friend the Secretary of State for the Environment made to help to solve them. I also congratulate my right hon. Friend the Secretary of State on his welcome return to the Dispatch Box and my right hon. Friend the Secretary of State for Scotland on his translation.

My right hon. Friend the Secretary of State for the Environment knows well that the majority of people, including my constituents, consider it fair that everyone should make some contribution to the services that they demand and use. But for those who have the misfortune to live under the heel of the profligate Labour-controlled Lancashire county council the burden is simply too onerous.

My right hon. Friend has promised that he will at last look at the structure of local government at the same time as its financing, as the hon. Member for Woolwich (Mr. Cartwright) said. There is no doubt that the burden would certainly be considerably lightened if the major towns and cities, such as Blackburn, Lancaster, Preston and Burnley, were to be removed from the county and became all-purpose authorities like the old county boroughs, each carrying the can for its own spending decisions and not for those of the county.

The burden would be lightened still further if more schools were to cast off the wasteful bureaucracy of the Lancashire education authority and go for direct funding, as two of my schools have wisely done to the great benefit of pupils and staff alike. But, even with such measures, some unfairnesses would remain, and high on the list of those would be the position of mobile home dwellers, on whose behalf I have frequently written to my right hon. Friend's predecessor.

I have a large number of mobile homes in my area—614 to be precise. Many of them are occupied by retired couples who have lived prudently all their lives and saved for independence in their retirement. Many have sold their previous homes and moved to low-rated mobile homes to keep down their expenses only to be faced with an excessive county charge and a district charge on top.

Those people do not think that they should be charged the full community charge because they do not require or receive full services. As one of my constituents put it, "We pay for the roads, the lighting, the cleaning and general maintenance of our site, covering quite a large area, in our site rent, as well as in the community charge." That does not seem fair to them and it does not seem fair to me. Even if something is done to reduce the county council's extortionate demands, something should be done to help mobile home owners in any new system that we may devise.

As my right hon. Friend knows, we regard the all ages social index as being weighted unfairly against Lancaster and in favour of higher-spending, less-prudent local authorities, such as Blackburn, which spends 55 per cent. per head more than Lancaster and yet has a £20 lower community charge because of the weighting of that index. We hope that that will be remedied in any new proposal that may be introduced.

I hope, too, that proper allowance will be made for the older low-rated property referred to by my hon. Friend the Member for Honiton (Sir P. Emery), of which we have more than 10,000. Transitional relief helps little, because Lancaster spends wildly above the Government's target and the charge payers pay the penalty for the county's profligacy. I hope that my right hon. Friend will give those people more reliefs now, whatever the new system may eventually be.

Photo of Tommy Graham Tommy Graham , Renfrew West and Inverclyde 6:37 pm, 5th December 1990

It will be apparent to the country tonight that the Tory party is in the biggest mess of its own creation that anyone has ever seen. Scotland has had the poll tax for a considerable time and many people are in deep trouble because of the unthinking, uncaring way in which it has been implemented by the Government in Scotland.

I welcome the Secretary of State for the Environment, who has come out from the wilderness, but it looks as if he has returned to the Tory jungle. In the speeches of Tory Members tonight, there is no evidence of any compassion or warmth. If the Secretary of State wishes genuinely to review the poll tax, it is clear that he will be in among the animals of the Tory party, and I do not think that he will come out unscathed.

I understand that the Secretary of State is paying his staffs poll tax. Perhaps he was frightened that some would not pay it and would end up in court. Instead of abolishing the poll tax, the Secretary of State may say, "It is unfair and unjust, which is why I pay the poll tax for my staff. I wish that every other employer in the country would do the same, and then the Government could look after the desperate people who cannot afford to pay."

The Secretary of State is supposedly against the poll tax, yet he voted for its introduction in Scotland. I hope that he will listen to the people of Scotland, who have said for years that it should be chucked in the bin. The Secretary of State for Scotland knows very well the problems that the poll tax has created, not only for ordinary men and women but for those on low incomes, invalids, pensioners, and students. It has created problems also for the registration officers, with so many people looking for work moving in and out of districts. Given the Tory party's recent public squabble, I do not know how the Westminster registration officer will manage, because he will need to establish who spent how much time at Chequers and Downing street. The Government have created so many problems for registration officers that they must be going barmy.

We witnessed tonight the ranting and raving of the Secretary of State for the Environment, yet the poll tax was introduced by the Tories, and it is they who should fix it. They should completely abolish it. The Secretary of State huffed and puffed tonight, but what did he tell us? Conservative Members may smile, but I will be smiling when Labour achieves victory at the next general election. The Secretary of State said that he will review the poll tax to see what can be done, and will take on board all the opinions that have been expressed—but that it will take more than two years to abolish it. I call that a miserable situation for some of my constituents.

Perhaps this will get rid of some of the Tory smiles. One of my constituents is unable to pay the poll tax through no fault of her own. Her husband got into difficulty and was bailed out, and when the police tried to arrest him they discovered that he had not paid any poll tax. I have written to the Secretary of State for Scotland about that case, but he can offer no help. Neither can any assistance be given by the local authority, so that that woman is left to pay. How can one get blood out of a stone? How can one get blood out of a woman who is trying to bring up a family on her own? The poll tax makes no allowance for such women, and nor do the Government. If anyone wishes to challenge me, I am happy to produce every document that I have received from the Secretary of State about that case. I do not hear any laughing and joking from Conservative Members now.

Another case concerns a war hero who had half his brain blown away and who is looked after by his caring and adoring wife. He is deemed eligible to pay 20 per cent. poll tax. I think that it is a sick tax on heroes—on people who have sacrificed everything for their country. I have also sent the Secretary of State the letters that I have received from that man's wife in which she makes a plea for a sympathetic hearing of her case by the Government. The Government have shown no sympathy. The pillage continues. The Government are still trying to drain the energies and the pockets of people who desperately need help and support—among them, the elderly, invalids and students.

The Government claim that it is a simple matter to seek poll tax relief, but one is presented with form after form after form. One needs to be a Philadelphia lawyer to understand and complete the paperwork involved, particularly if one is elderly, infirm, or feeling slightly below par. Welfare rights advisers, the staff of unemployment information centres and citizens advice bureaux spend hour after hour trying to sort out the Government's bureaucratic bungling. Yes, Minister—it goes on and on and on, and it is time to bring it to an end.

The Government produced one of the most complicated tax collection systems ever devised. It is a disgrace, and it is not what the people of this country want. Clearly the British people want a property tax based on ability to pay, and on the particular needs of the people about whom I have spoken. It should take into account the circumstances of the mentally handicapped, the less able, and the unemployed. There should be 100 per cent. rebate in such cases. I am here to defend those people—not just the rich or the very wealthy, such as the man who lives in a castle. I must represent also the man living in a tenement or, worse still, the children living in the cardboard cities that the Government created as a consequence of the poll tax.

I am delighted that a former Chancellor of the Exchequer, the right hon. Member for Blaby (Mr. Lawson), agrees with me that there should be a property-based tax in place of the poll tax. I hope that when the Secretary of State for Scotland replies tonight he will extend some hope to the millions of people who, for many reasons, are unable to pay the poll tax. It may be because of the huge escalation in their rent or their electricity, food or heating bills. The Government have clearly shown that they are interested only in the welfare of the people at the top of society and in ensuring that they can hang on to their millions. I told the Secretary of State the other night that he ought to hang his head in shame. Tonight the right hon. Gentleman has a chance to hold it up high, by joining us in the Lobby to support the abolition of the poll tax.

Photo of Mr Roger Moate Mr Roger Moate , Faversham 6:47 pm, 5th December 1990

We should be grateful to Labour for tabling tonight's motion, because it provides the Government with an opportunity to emphasise that there will be a fundamental review from which no option will be excluded. I warmly welcome that, as does the whole country. The debate has also produced another lamentable performance from members of Labour's Front and Back Benches. The more such opportunities they provide, the more we shall be grateful.

Neither the hon. Member for Dagenham (Mr. Gould) nor Labour Back Benchers referred in any way, shape or form to Labour's own policy document, in which it professes to have so much pride. I do not blame them for failing to mention it, because, in the unlikely event of Labour ever being in a position to implement its provisions, the problems that accompanies our attempts to reform local government taxation will be as nothing by comparison to what they would face. Any attempt to return to the old rating system, as Labour proposes, would be akin to a kamikaze mission.

The previous Government's experience with the rating system and with the Scottish revaluation of the rating system should have made anyone understand, without any shadow of a doubt, that that system was bad and unfair and provided no democratic accountability. Frankly, I am sorry that it took us so long to get rid of it.

My message is simple. The rates were an appalling system of taxation. I argued for many years that we should abolish it as soon as we possibly could. One of the strong arguments against the system was that it provided no democratic accountability, as there were about 12 million ratepayers compared to 35 million voters. However, that was only part of the problem.

Photo of Mr George Buckley Mr George Buckley , Hemsworth

Will the hon. Gentleman give way?

Photo of Mr Roger Moate Mr Roger Moate , Faversham

No.

A property tax is alien to the concept of fairness. One of the arguments in favour of the community charge is that it would provide better accountability because 35 million people would, in theory, be paying the tax.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

No, I shall not.

If the tax had been set at a low level, it is just possible that it might have gained acceptance. I do not believe that any practical system of local government taxation can raise a significant amount of revenue, and that is why I welcome this fundamental review. I fail to understand why, in all the debates on this subject over the years, in every twist and turn that we have made to make the system more fair or more workable, we have never faced up to that fundamental problem. Given our circumstances—the geographical nature of the country and the density of the population—there is no workable and acceptable system of local government taxation.

In support of that proposition, I urge my right hon. Friend to bear in mind the fundamentals, and I remind the House of the figures. All the turmoil which we and the Opposition Front Bench have plunged ourselves into, is due to a form of taxation—[Interruption.] Let me make this point clear. It is due to a form of taxation which raises only about 6 per cent. of all Government revenue—with about 100 per cent. of the pain. Total revenue raised in this country is about £200 billion. At present, after rebates and relief, net community charge amounts to £11·4 billion. Why do we torture ourselves in this way to raise a relatively small part of total taxation? Compare it with the amount raised in tobacco taxes, which is £5 billion, value added tax, which raises £30 billion, fuel tax, which raises £9 billion, national insurance receipts of £33 billion and income tax, which is about £55 billion.

That point is important. If one asks the man in the street how he would like to pay for Government services, including local government—through the community charge, a property tax, the rates or on a pay-as-you-earn and pay-as-you-spend basis—I have no doubt that the vast majority would say that they wanted to pay as they earned, and as they spent. [Interruption.] I am advocating that we should do it, and I am on the record as saying exactly the same thing many years ago. None of the forms of taxation that hon. Members seem to be crying out for seem to be workable or acceptable. If we are genuinely looking for a system of taxation which is to work into the 21st century, and be accepted, I urge that we consider the fundamental principle of whether to transfer the tax on to central taxation and work on the principle of a central Government grant to local authorities.

Of course, many will argue that that would undermine local government, but I do not believe that local government would be destroyed by it. It would still be accountable to the electorate for the manner in which it spent the money.

Photo of Mr George Buckley Mr George Buckley , Hemsworth

How can the hon. Gentleman make such a contribution to the debate? He has ruled out all the options. The Minister said that all options were open. Now the hon. Gentleman has suggested a central levy of taxation, which will be distributed to local government on an agency basis. If the Minister is going to have direct control of local government finances, where is the accountability?

Photo of Mr Roger Moate Mr Roger Moate , Faversham

I am glad that all the options are open. However, I am urging that we consider the option of transferring all revenue-raising power to central Government—[interruption] I hope that Opposition Members will listen to my point of view, because I think that they will get themselves into just as big a tangle as every other Government have done for the past 20 or 30 years.

As regards accountability, we already accept that 75 per cent. of revenue from taxation is raised centrally, and passed out by way of Government grants. In every proposition, whether increasing the range of exemptions, which is put forward by the Opposition, or by transfer ring teachers' salaries to central Government, we reduce the total net benefit which comes from local taxation revenue. Must there not come a time when total net yield becomes so low that it undermines the argument about accountability? I suggest that we have virtually reached that point.

More and more, when I talk to local councillors, I find that they would be more than ready to accept an increase in grants, and to do away with this nonsense and farce of local government taxation. We are virtually at that point. Services which were previously administered by councils are moving out of the political arena. In some constituencies, such as my own, housing is now entirely controlled by housing associations. Many functions which were previously political are no longer political. Is that not another argument—that the more we struggle to raise local government revenue, the more trouble we shall get and the more irrelevant it will be?

My message is simple. We are torturing ourselves over an illusion. We are seeking to raise a small amount of tax locally and we are creating systems that are painfully unjust to a vast number of people. There is only one way to arrange for everyone to make a contribution to the services that they enjoy—a mixture of pay-as-you-earn and pay-as-you-spend. I urge my right hon. Friends properly to consider and analyse that simple proposition.

Photo of Mr John Evans Mr John Evans , St Helens North 6:57 pm, 5th December 1990

As a Merseyside Member of Parliament, I join other hon. Members who have congratulated my hon. Friend the Member for Bootle (Mr. Benton) on an excellent maiden speech, and I hope that he will give us the benefit of his experience of the manifest and many problems of Merseyside on many occasions.

In a very thin speech, the Secretary of State said that his review of the poll tax would cover a period of two years. That has more to do with the Tory party timetable and prospects for the general election than with anything else, and I view it with some scepticism.

The Secretary of State does not require two years to correct the disgraceful unfairness of his Department's standard spending assessments. I hope that the Secretary of State for the Environment—free from the threat of the prime ministerial handbagging, which accompanied his predecessors' every move—will listen carefully to my argument about standard spending assessments.

St. Helens was capped, despite the evidence that the spending assessments, rather than the council's decisions, had caused the problem. The political overtones of that capping are obvious. Even though St. Helens had the second lowest rate on Merseyside, before the poll tax, it was capped. The obscenity was that other Tory council budgets, set after poll tax, were wildly above their spending assessments, yet they were not capped.

St. Helens council is committed to providing decent, basic services, especially for the elderly, good education services and help for the needy. Indeed, most urban councils have a higher expenditure burden because of the non-statutory services needed to help redress disadvantage. That needs to be understood if the Secretary of State does re-examine the SSAs. The greater the spread of social problems, the higher will be the cost of council services.

The point that I want to drive home to the new Secretary of State is that the level of poll tax in St. Helens has little to do with the council's efficiency, and everything to do with the size of Government grant. The poll tax level rests on the foundation stone of the spending assessment—of decisions made by the Secretary of State. He decides the amount of assistance that every council in the country should receive to provide its services.

The original argument—that poll tax would increase the accountability of councillors—has long since evaporated. Councillors' fortunes are now largely controlled by central Government decisions on spending. Let me give an example. It might be thought that a child at risk of abuse was in need of the same help regardless of where it lived, but that is not how the Government see it. Tory Westminster council receives twice as much central Government money for children at risk as Labour St. Helens. No London weighting can account for such a disparity. In this instance, higher grants mean a smaller burden for poll tax payers.

When Westminster's spending assessments are compared with those of St. Helens, the result looks positively corrupt. If the Minister consults, for instance, the Macmillan guide to retirement, he will see that the average rates bill per head in St. Helens was less than half that in Westminster—£208, compared with £501. Now, St. Helens' poll tax is twice Westminster's. The poll tax spending assessments carry more than a whiff of political favour.

Unemployment, which was taken into account in the old rate support grant, is not now considered a factor in the spending assessments. If it were still included, St. Helens would receive a much higher grant; but, for political reasons, it was dropped by previous Secretaries of State.

Unemployment creates poverty, and poverty creates children in need. Unemployment increases the demands on education, because low achievement goes hand in hand with unemployment. Unemployment creates extra needs across the range of services, from advice shops to libraries. Unemployment is running at about 10 per cent. in my constituency. Why, then, have the Government ignored such a vital factor?

We can see what sort of record Tory councils are busy establishing. They receive massive SSA handouts to cover basic needs, which immediately reduce the poll tax bill in authorities that the Tories regard as "flagships". Then, to drive the poll tax down further, they look for what they call "efficiencies". What are these "efficiencies"? Let me tell the Minister: they are the non-statutory services which have always been designed to improve the quality of life for the less affluent and the poor.

Wandsworth is closing down day centres for the elderly. Tory authorities across the country fail to provide decent nursery education. Meals-on-wheels services are slashed. Schools' resources are cut, not for educational reasons but to drive down the poll tax. And who benefits? Of course, those on the margins of poverty pay a slightly lower poll tax; but, if those same poorer people need legal advice, they cannot obtain it if, as in Wandsworth, the law centres are being closed. If they have to work and cannot afford private care for an aging relative, they are in a bind, because help centres have been closed. The fact is that the affluent benefit most from the poll tax.

There is one shining example of the real motivation of Tory poll tax cutters. The new leader of Hillingdon council, Tory Andrew Boff, supported one increase in expenditure while cutting anything else that looked remotely social. He raised councillors' expenses by 70 per cent. while cuts were being made in care for the elderly.

The spending assessments tabled by the former Secretary of State made everyone associated with local government in St. Helens despair. Most Cabinet Ministers, including the present Secretary of State, send or have sent their children to private schools. If we had a voucher system for education, tied to the unit cost of the state secondary education demanded of St. Helens, and a Government rule that no parent could supplement that amount by more than 10 per cent. of its value—the capping rule—Tory Cabinet Ministers would not be able to find a private school in this country for their children.

Tory Ministers pride themselves on paying attention to careful spending. The bald facts speak for themselves: if the Government's SSAs were sufficient to provide quality education, they would not spend their money on sending their own children to private schools. I want the same treatment for children in St. Helens whose parents could not afford to send them to private schools even if they wanted to. But that is not good enough for this Tory Cabinet. Its members spend thousands each year in school fees, and then tell my council that, if it spends half that amount per child in its schools, its budgets will be capped. That is an absolute disgrace.

My constituents—whose average income is somewhat smaller than those of Tory Cabinet Ministers—do not have the choice. The cruel irony is that the children in my area need the investment far more that those who are already privileged. I believe that this is known as "equal opportunity". But the position is even worse than that. The spending assessment per secondary pupil for St. Helens is £1,433; in neighbouring Liverpool, it is £1,717. That means that every school with 1,000 pupils is better funded by no less than £284,000 a year in Liverpool than in St. Helens, yet participation levels in further education and examination grades in no way justify such wide differentials.

In St. Helens last year, every poll tax payer had to contribute £8 per head to pay the debts of the Mersey tunnels, which my constituents do not use. In other words, the margins on extra permissible spending were already diminished by nearly 2 per cent. for a service that the people do not use. I fail to see why authorities that already benefit from tourism should receive additional special grants while the Government refuse to dislocate the costs of the tunnels from St. Helens' poll tax.

Any Minister who walks around my constituency will see that it does not begin to compare with the affluence of Wandsworth or Westminster, let alone that of the ranks of Tory authorities elsewhere in the south-east; yet if my authority received as much SSA as Wandsworth—which used it to set a poll tax amounting to a mere £148—it could have given everyone in St. Helens a substantial cheque.

St. Helens has been praised by visiting Ministers, the CBI, local business men and, most of all, the voters who re-elected the council last May. It has played a central role in helping to cement an economic partnership between industry and the community. It is a hard-working council, which acts for and is accountable to the community. The most recent spending assessments, however, did nothing to build on that effort; indeed, they jeopardised it.

I call on the new Secretary of State to abolish what the former Chancellor, the right hon. Member for Blaby (Mr. Lawson), called a grave error of judgment"— the poll tax. Before doing so, however, he has the chance to prove his mettle by restructuring the SSAs, especially those relating to education and social services, and reintroducing unemployment as a factor in grant support. If he fails to do that, we shall know that his leadership promises, and the speech that he made today, were simply empty rhetoric.

Photo of Mr John Lee Mr John Lee , Pendle 7:07 pm, 5th December 1990

The first mistake in this sad and sorry saga was the original commitment to abolish the domestic rates. That commitment should not have been made until we had agreed that there was a specific, demonstrably better alternative.

My own view has always been that it would have been relatively easy for us to adjust the old-style rating system to deal with its unfairnesses—perhaps using a multiplier to take account of the numbers in a household, or some form of earnings multiplier, together with, possibly, a national uniform charge payable by non-ratepayers so that everyone would make a contribution. That would have proved incomparably easier and cheaper than the quagmire in which we find ourselves now: a policy that, as has already been said today, has—sadly—moved money from the have-nots to the haves.

The reality is that there was no expert independent support in the country for the community charge, and no one now claims any credit for it. Its godfathers have gone for good. This wretched policy was driven through the House—our parliamentary party was clubbed and conned—and was carted around the country by a succession of Ministers, with limited conviction and even more limited success.

Of course, once the Government realised the full horror of what they had unleashed, they tried to make amends. Exemptions, transitional relief, safety nets, area protection, rebates, capping—we dug the hole deeper and deeper. It is true that some measure of accountability arose and that charge levels were hotly debated, but the public—except in areas of gross excesses by certain Labour authorities—became totally confused. In my Pendle constituency, where there is a Liberal local authority, a Labour Lancashire county council and a Conservative national Government, everyone throws grenades at each other. It is well known that a local authority such as Pendle, an historically low-rated area, has suffered greatly from the charge. Indeed, the "Pendle factor" is now an acknowledged term in any poll tax debate.

Let me give the House a few facts that demonstrate our problem. Pendle has 17,000 terraced properties where the average rateable value was £60 and where the average rates payable amounted to £166. Our first year community charge of £299 meant that 75 per cent. of my constituents were worse off and that 90 per cent. of two-person households were worse off. The average increase for a three-person household was no less than 423 per cent. In a thrifty, predominantly low-earning community with a high ethnic factor, the scale of hardship and ensuing bitterness can be appreciated.

Approximately 30 per cent. of charge payers—19,000 people—receive some form of community charge benefit. There have been no fewer than 46,000 separate movements in community charge benefits locally. Moreover, 23 additional staff are needed to administer the poll tax and benefits. The cost of collection amounts to £11·82 per charge payer—twice that for rates. By 30 November, 8 per cent.—or 5,000 people—had paid nothing. Only 57 per cent. of the total collection had been received after seven months, compared with 78 per cent. for rates at the same period. The resulting revenue loss means that each Pendle charge payer will have to find £21 next year.

What is to be done? My local authority would like the safety net to be phased out over 10 years rather than four, with transitional relief based on actual rather than notional expenditure. My 371 parliamentary colleagues seem to have 371 pet schemes to improve the community charge. I wish my right hon. Friend the Secretary of State for the Environment and his ministerial colleagues well as they take soundings.

For myself, if we are just trying to ameliorate the worst effects of the community charge in the short term, I would favour a simple discount formula, with the head of household paying 100 per cent. of the charge, the second person in the household paying perhaps 50 per cent. of the charge, with the third and any additional occupiers paying 25 per cent. of the charge. If that formula could be afforded, it would substantially ease the compounding effect of the charge on many households.

I am now of the view, however, that there is a limit to the amount of propping up and repair work that can be done. In our next manifesto I believe that we must commit ourselves to total repeal and start again. A change of Prime Minister has given us that opportunity. We must look again at the structure of local government financing. There must not be another occasion in history when an admiral has been destroyed by his own flagship.

Photo of David Clelland David Clelland , Tyne Bridge 7:12 pm, 5th December 1990

When the poll tax was first proposed, we were told that one of its objectives was to abolish the inequities of the rating system. Another objective was local accountability. No Opposition Member would disagree that there were inequities and anomalies under the old domestic rating system and that it would be good to abolish those inequities and anomalies. That is precisely what the next Labour Government intend to do, as we have heard today and in recent weeks. However, as we know to our cost, the Tory Government abolished the rating system and replaced it with the poll tax which, in terms of inequity and anomaly, leaves the domestic rating system standing. All the problems and suffering of which the Tory Government were warned have come to pass. Only now, when the Tory Government realise that they too will be held accountable by the electorate, have they decided to embark on a damage limitation exercise.

What has been the Government's answer to the problem? They have decided to ask the Labour party to help them out. If a group of bandits were to set fire to my home and stand back laughing as it burned, I could not be expected to be grateful to them if they helped to douse the fire when the wind changed and the flames turned on them. That is the position of the Tory party over the poll tax. The Government have inflicted great suffering on millions of people. They imposed it in the full knowledge of what they were doing and of the damage that it would cause. They therefore cannot expect to be forgiven because they now see that they have created a danger for themselves and want to save their own skin. The goings-on of the last two weeks have been part of that process.

On Second Reading of the 1987 Bill, the right hon. Member for Henley (Mr. Heseltine) warned of the potential damage that the poll tax would do and predicted that it would be dubbed a Tory tax, but he was concerned not so much about its effects on people as about its effect on the Tory party. The new Prime Minister cannot escape his responsibility, either. He supported the poll tax throughout by voting for it, arguing its merits and deriding those who opposed it. The Government know that the change of face at the top will not resolve their problems. They will therefore step up the propaganda and promise policy changes at some future date—jam tomorrow, as it was described by one of the Secretary of State's own Ministers.

The Government will first engage, however, in their now common strategy of trying to shift the blame on to local councillors. The former Secretary of State for the Environment, the right hon. Member for Bath (Mr. Patten), fired the first shot in the latest round on 30 November. On Radio 4, he said: Local government expenditure has been surging over recent years. That statement was supported on Monday of this week by the Minister for Local Government and Inner Cities when he, too, referred to enormous increases in local authority spending".—[Official Report, 3 December 1990; Vol. 182, c. 42.] Today, the Secretary of State has made similar allegations.

The facts are completely contrary to what these "honourable" gentlemen proclaim. If we look at table 2.2 of the Chartered Institute of Public Finance and Accountancy's finance and general statistics for 1989–90, what do we see? At constant prices, local authority expenditure between 1979–80 and 1987–88 increased by an average of only 1·5 per cent. per year, or a total of 15 per cent. over the period, whereas central Government expenditure over the same period, using the same basis, increased by 22 per cent. Who, therefore, are the overspenders?

What is true is that there has been a huge increase in local taxes—first the rates and now the poll tax—but people might ask, how can that be if expenditure has not increased significantly? The answer is that, in 1979, about 63 per cent. of local government expenditure was met by Government grants; now, it is less than 50 per cent. For the same expenditure, therefore, local payers—business and domestic—now have to find over 50 per cent. of the bill, as opposed to only 37 per cent. 10 years ago.

For proof of what I say, I need turn to no less an authority than the hon. Member for East Lindsey (Sir P. Tapsell), who was one of the principal lieutenants of the new Secretary of State for the Environment during the race for the Tory leadership two weeks ago. When asked in a television interview how his candidate would deal with the problem of the poll tax, he said: We will shift the burden of local expenditure from local to central Government. It has all been going the other way over recent years. I think that I quote the hon. Gentleman accurately. How right he was when he said that it has all been going the other way over recent years. What he did not say was that it was his man who was one of the principal architects of the process. That is why bills have increased while services have been cut. That is why poll tax bills are so much higher than they should be, or need to be.

The Tory party has tried to create the illusion of being the party of tax cuts, when in fact it has been the party of tax increases. While it is true that income tax has been cut, as the hon. Member for East Lindsey rightly observed, the burden of tax was not removed but shifted on to local government and the poll tax payer. The Tory party now hopes that it can fool the voters into believing that the poll tax was something invented by "`er indoors" and has nothing to do with the new regime. The Tory party would need an entire flock of sheep before it could get anywhere near to pulling the wool over the eyes of my constituents, not because they can quote chapter and verse of expenditure statistics but because they are living at the sharp end of the cuts in services and the effects on their quality of life. They know the real results of poll tax and poll tax capping.

They certainly know a lot better than the Minister for Local Government and Inner Cities, the hon. Member for Enfield, Southgate (Mr. Portillo) who on Monday said that councils bleat about cuts which never occur. Perhaps the Minister should take his head out of the sand and stop talking through his poll tax cap. Is he not aware of the massive cut in housing provision over the past 10 years? In 1979, Newcastle upon Tyne built 1,300 houses for its people. As a result of deliberate Tory Government policy, last year it built just four bungalows, despite the fact that the need is as great as if not greater than, in 1979.

Would the Minister care to visit the old lady I went to see last Monday? She has just lost her home help because the council was forced to decide who needed a home help the most. That is as a result of budget cuts over the past three years and cuts of 86 staff, resulting in 500 pensioners losing the help that they rely on. The lady I visited is almost deaf, she is 80 years old and is scarcely able to walk. She can just about flick a duster if she holds it in a certain way in hands crippled with arthritis. She has been declared not as frail as others, who have therefore taken a higher priority.

Does the Minister understand that that is the sort of decision that local councillors and their officers have to take day by day under this Government? If he does not, the people at the sharp end certainly do. They know who is to blame. Because of poll tax capping, the screw will be tightened further next year. In Newcastle, six old people's homes are threatened with closure. Home help services will be cut yet again, and charges may be imposed. Meals on wheels may be axed and services to the needy and the voluntary sector, supported by the council, such as Newcastle law centre, the centre for the unemployed and many others, are in danger of losing their funding and closing down. Are those the benefits of capping to which the Minister referred on Monday and which he said should be passed on to the poll tax payer?

Even at this stage on their road to Damascus, the Tories fail to realise that people are not stupid. I recently met the people of Scotswood to discuss the ever-increasing chaos and disturbance caused by mindless hooligans driving recklessly through housing estates in stolen cars—a practice that recently resulted in the tragic death of a small baby. They were only too painfully aware of the effect on their quality of life of 11 years of Tory Government and of how the council has its hands tied behind its back. They are crying out not for cuts but for help.

However, the Government's poll tax policies were firmed up on Monday under the new Prime Minister and the Secretary of State and, even if the people were to say to the council, "Look, put a couple of pounds on the poll tax and spend the money on providing a decent environment for our families," it could not do it. The wishes of the people, even if they voted for the council at the local election, will be ignored. They will be ignored not by the council but by the Government, the Secretary of State and the Prime Minister. So much for local accountability.

No doubt the Minister will tell us again, as he did on Monday, that the Government are putting £3 billion extra into local government next year. However, that money will not help increase or improve education, social services, housing or any other service, because councils' expenditure levels are still determined by the Government. That £3 billion is to keep down the level of the poll tax and thereby the level of hostility against the Government. That £3 billion is not for the services or the people but for the Tory party.

Photo of Mr Michael Irvine Mr Michael Irvine , Ipswich 7:22 pm, 5th December 1990

I was one of the Conservative Members who voted against the community charge on Second and Third Reading. I did so because, although I acknowledged that there were unfairnesses in the old domestic rating system which needed to be put right, I feared that the community charge would simply replace the old unfairnesses with new and more serious ones. I am very much afraid that my fears have been proved right—[Interruption.] Before Opposition Members become too over-confident, I must remind them that by no means all the unfairnesses of the community charge are the fault of the community charge itself. Many of them stem from high-spending Labour councils.

My constituency of Ipswich is an example of that. At £440, we have the 20th highest community charge in the country. It will come as no surprise to hon. Members to hear that we have a Labour-controlled borough council. It is true that the greater part of the community charge is the responsibility of the Conservative-controlled county council, but that is because it is has to meet the large spending elements of education and the social services. The real key is the contrast as regards standard spending assessments. Conservative-controlled Suffolk county council exceeded its standard spending assessment by 9 per cent. while Labour-controlled Ipswich borough council exceeded its standard spending assessment by a staggering and disgraceful 97 per cent.

It sickens me when Labour councils which indulge in such over-spending then weep salt tears over the plight of community charge payers who have difficulty meeting their bills. It sickens me nearly as much as the kind of speech—rant is probably a better word—that we heard from the hon. Member for Coventry, South-East (Mr. Nellist), putting forward the views of the "can't pay, won't pay" school. That is totally contemptible. I t is contemptible, too, for other Opposition Members to indicate agreement with the hon. Gentleman's views. Those who do that must face the consequence that because they are not paying, their less well-to-do constituents will have to pay more. Someone has to stump up the difference, and it is the ordinary community charge payer who does so—[Interruption.] I can tell Opposition Members who are cheering that many community charge payers who are highly critical of the Government for the community charge are also intensely indignant at those who do not meet their community charge commitments.

For all that, and for all my criticisms of the Opposition and Labour-controlled councils, there are unfairnesses stemming from the operation of the community charge which need to he put right. That is why I welcome the Government's commitment to a thorough, constructive and fundamental review of the kind that we have been promised. I welcome the fact that heading the Department of the Environment as Secretary of State we have one of the initial mainline opponents of the community charge, supported by my hon. Friend the Member for Ealing, Acton (Mr. Young) as Minister of State, who also honourably opposed the community charge at the outset. The fact that they are both in the Department of the Environment and charged with carrying out the review gives me much greater confidence that there will be an effective review. I know that that feeling is shared by many of my constituents.

There are certain points that I should like to ask my right hon. and hon. Friends to take into account as they carry out their review. I was glad to hear my right hon. Friend the Secretary of State enunciate the principle that everyone should contribute something. That principle is right and commands a wide measure of cross-party support. There must also be better accountability. Accountability was put forward as the great merit of the community charge. It may work where there is a unitary authority, but it comes under strain where there are two local authorities. Where in a constituency such as mine there are two local authorities of different political persuasions, it breaks down altogether.

Conservative-controlled Suffolk county council and Labour-controlled Ipswich borough council could not agree what proportion of the community charge each was responsible for, and accountability broke down completely. I sought expert advice and was told that what was needed was a "standard disaggregation formula". When I asked the Department of the Environment what that was, I was told that no such formula was on offer. We need to establish better accountability.

The third principle is that the new system must be seen to be fair. In my view, that involves linking the tax more effectively to people's ability to pay and ending the unfair anomaly whereby, if a wife gives up employment to stay at home and look after the children, she and her husband have to pay two community charges out of one income. [HON. MEMBERS: "He is learning."] I am not learning—I realised that from the start, and that is why I voted against it. Such unfairnesses cause real hardship and they must be fairly and squarely put right in the review.

Finally, it is most important that, in deciding how to raise money for local government finance, my right hon. and hon. Friends at the Department of the Environment should give great weight to administrative efficiency—to the principles of cheapness and the certainty of collection. That will not only save money and thus help to reduce everyone's contribution to local government finance; it will be good in itself. It is easy to call for administrative efficiency and agree on the need for it, but it is devilishly difficult to achieve it. Nevertheless, it is most important that those charged with the review should keep it in mind as their principal aim.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West 7:31 pm, 5th December 1990

I shall not try to follow the hon. Member for Ipswich (Mr. Irvine). As he is a pretty fair hon. Member, however, I hope to explain to him why I have taken a stand and perhaps to convince him that there is a certain efficacy in not paying.

The Secretary of State tried to take the heat out of the debate by promising a long review and trying to lure hon. Members on both sides of the House into his deliberations. Perhaps the Minister of State, who is on the Front Bench, will ask the Secretary of State for Scotland, who is to reply to the debate, to answer this question: what did the Secretary of State for the Environment mean by a "stable and just basis"? May we have an explanation of that? The Secretary of State for the Environment will have to spell that out before any of us enters into discussions to try to assist him.

It is all very well for Conservative Members to repent now and tell us how wrong the poll tax is. It is a matter of shameful record that in Scotland we have had it since 1989. The amendment tabled by my hon. Friends in the Scottish National party calls on the House to congratulate the people of Scotland in maintaining principled resistance to the poll tax". The heat may have been taken out of the debate, but I can tell the House that the heat is still on in Scotland. Lest there should be any doubt about that, I refer the Minister of State to the various meetings that Ministers have had with the Confederation of Scottish Local Authorities. The poll tax in Scotland is collapsing and the process will not wait for a two-year review. Once it gets out that Ministers intend not to ameliorate the poll tax but to abolish it in all but name, it will collapse apace. [Interruption.]Do I get injury time for this, I wonder?

In 1987, the people of Scotland rejected the tax through the ballot box. The poll tax became a priority subject for Labour's 50 Scottish Members. A statement of policy at the 1988 party conference in Perth said: many individuals, understanding the consequences of their action, will chose to accept the civil penalty involved in non-payment. The Labour Party does not rule out a non-payment campaign. In a further statement, made in September 1988, the Labour party said: Labour does not believe that a campaign of non-payment … can be considered as a way to defeat the tax. We were told that the only way to defeat the tax was to elect a Labour Government. But the statement recognised: many individuals view this tax to be so abhorrent, its introduction to be so vindictive that they may make their own personal stand by not paying it … We recognise their right to do so. "But," said the Labour party, "for God's sake, don't tell anyone. Don't have a mass campaign. Sit at home and do not let on." That is the posture of the Labour party.

It is against the background of those statements that we must set the position of the Leader of the Opposition, who made his views plain in January 1988, telling people that to disobey the law would be "futile illegality". The right hon. Gentleman expressed his views in ringing tones. I told the right hon. Gentleman that I intended to refer to him, so I make no apology for my remarks. [Interruption.] It would have been better to have the organ grinder rather than the monkey, in the form of the hon. Member for Glasgow, Garscadden (Mr. Dewar).

What has happened in Scotland? So many people have disobeyed the law that its legitimacy has been called into question. Of 3·7 million poll tax payers, 1,200,000 have been issued with summary warrants—700,000 of them sheriff officer warrants. Have we had 1,200,000 instances of futile illegality? Some of those involved can pay but will not pay as a matter of principle. The vast majority cannot pay. Is that futile illegality?

The Labour party promised to set up mechanisms to ensure that everything possible was done to protect the poorer sections of the population. What it did not say was that those mechanisms would include making poll tax deductions from income support—59,000 applications to obtain £1·85 a week from single people and 2·90 from married couples and 59,000 expressions of a forced illegality visited on the poorer sections of the population. In his remarks last week, the Leader of the Opposition offered them sympathy. Will his sympathy cards be wrapped up inside sheriff warrants sent out by Labour regional councils? [Laughter.]The hon. Member for Garscadden may find that humorous; I do not think it is humorous. I have had warrants sent to my home under a system administered by a Labour council. I have had sheriff officers breaking down my door, terrorising my disabled daughter.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

Yes, in the house. The hon. Gentleman should get up. Get up, then I will give way.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

The hon. Gentleman should have thought about it.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

Of course I thought about it. The hon. Gentleman said that it would never happen to me but it did, and the warrant was declared void. Get up now.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I have not risen to my feet on the hon. Gentleman's instruction.

If the process was so traumatic, why did not the hon. Gentleman think about the position in which he was placing his family in the first place?

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

I did that. The door was broken down illegally. What will the hon. Gentleman say, as a lawyer, if somebody goes to him in those circumstances? Will he tell that person to obey the law?—[HON. MEMBERS: "The hon. Member for Glasgow, Garscadden (Mr. Dewar) is not a lawyer."] He is a lawyer. I apologise to the Chair. The poll tax is a farce. The warrant was declared void, but the regional council is appealing, as it may be entitled to do. That is what happened on the basis of one warrant. What a farce.

The Labour banners that I stood up for and under were those with the badges of John MacLean, Jimmy Maxton, Lansbury and Hardie. I was brought up on that heritage on Clydeside. My earliest memories are of standing beside——

Photo of Mr John Marshall Mr John Marshall , Hendon South

The hon. Gentleman will be giving us Ramsay MacDonald next.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

No; it is Ramsay MacKinnock.

When I was about five, I stood beside neighbours when their doors were broken down by fire axes and their furniture dragged out. Those memories burn deep within me. However, that tradition of resistance cannot be seen in the current Labour party, with the exception of a few hon. Members, such as the hon. Member for Coventry, South-East (Mr. Nellist), if I can embarrass him by so applauding him. That tradition is no longer there, because it would not suit the Mandelson image of respectability. It would not get those in the Labour party a shot at the limousines.

In Scotland, the tradition of John MacLean is married to a more ancient tradition that goes back to the 14th century. I make no apologies for quoting the Declaration of Arbroath, which stated: For it is not glory, it is not riches, neither is it honour, but it is Liberty alone that we fight and contend for, which NO honest man will lose but with his life". If other people had thought about liberty and freedom rather than being party hacks and marching through Lobbies, we would not be having this debate. If more people had put liberty and freedom first, as did members of the Scottish National party and, to their credit, some Labour supporters, we would not be having this debate today, because we would not have the poll tax.

Photo of Patrick Cormack Patrick Cormack , South Staffordshire 7:41 pm, 5th December 1990

I do not think that the hon. Member for Dunfermline, West (Mr. Douglas), for whom I have a high regard, would regard me as Lobby fodder on this issue. I did not support the introduction of the poll tax or the community charge in Scotland; nor have I voted for it on any occasion since. However, much as I respect the hon. Gentleman's principles, on this occasion I believe that they are misplaced. There is a heavy duty on all hon. Members to obey the law whether we like it or not.

I was greatly encouraged by the remarkable speech this afternoon of my right hon. Friend the Secretary of State for the Environment. It was one of the most remarkable speeches that we have heard in the Chamber for a long time. It addressed the fundamental issues of local government—the importance of not divorcing financing from structures—and it put forward some positive proposals, to which I shall return later.

As someone who has been a long-standing and continuous opponent of this charge or tax, I should like to say that of course it will take time to have a thorough review. All hon. Members must be realistic; we must not delude those who look to us from outside, who are following the debate with great interest and concern. However, certain categories of people can and should be helped immediately. I should like to make a plea, through my hon. Friend the Member for Eastwood (Mr. Stewart) who is in his place on the Treasury Bench, to my right hon. Friend the Secretary of State to look at certain categories.

I have in mind couples who are living in terraced houses. There are not many in my constituency, but there are in the constituencies of my hon. Friends, and in the west midlands generally. Those low-rated properties are often occupied by couples who have been frugal and prudent but who do not have the necessary qualifications for a rebate. Nevertheless, their rates charge of £200 or £300 has been translated into a community charge of £700 or £800. A gentleman came to see me not so long ago and asked, "What shall I give up, my holiday or my motor car? " We should not put people of that sort into that position. I hope that my right hon. Friend will give them his earnest consideration.

My hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) referred to mobile homes. I, too, have many constituents living in mobile homes, which are strangely named because most of them are far from mobile. Many of them are beautiful, with lovely gardens, and are tended with great care. They are "homes" in every sense of that word. It is wrong that the people living in them should be taxed in the same way as I am taxed. The flat rate has always been my fundamental objection to the charge.

I also hope that something can be done about students. Although the fact that they pay 20 per cent. means that they have an 80 per cent. rebate, nevertheless, if they are coping with a loan and other things and are dependent upon their parents, that 20 per cent. can be a substantial charge.

I hope that something can also be done to assist non-earning spouses—most, but not all, of whom are wives. Those categories of people can and should be helped immediately. They can be helped in the very short term, and I hope they will be.

I have always felt that there is merit in a property-based tax because it bears some relationship to ability to pay. On several occasions in the 1970s, I introduced a private Member's Bill on rating reform. I even had my right hon. Friends the Members for Shropshire, North (Mr. Biffen) and for Cirencester and Tewkesbury (Mr. Ridley) as my co-sponsors on one occasion. The aim of that particular Bill was to keep the rating base but to make each adult wage earner pay something. That is still possibly the best solution.

I was delighted that my right hon. Friend the Secretary of State made it plain that he has ruled out nothing because that is the only way to have a fundamental review. Great credit accrues to any Government who are prepared to say, "Yes, we have listened, and yes, we have realised." I have enormous respect for my right hon. Friend the Prime Minister for his courage in saying that so quickly after assuming the highest office, for bringing into the Cabinet my right hon. Friend the Member for Henley (Mr. Heseltine), who is a man of infinite experience and wisdom in these matters, and for saying to him, "Please deal with this."

I have one suggestion for my right hon. Friend the Secretary of State. He talked this afternoon about bringing hon. Members of all parties into the discussion. That is a sound idea. After all, if we are going to alter the structure of local government finance, this time we want to alter it for a generation or two, not for just a few years. If we can have a basis of consensus on the structure—not necessarily on the levels, because there will, of course, be many arguments about that and about the detail—that will be very much for the better, and local government will be properly served.

Therefore, I suggest that we do something that we have not done very often in the past and that we set up a Special Select Committee to deal with this subject. We should not simply refer the matter to the Select Committee on the Environment, admirable though it is. A Special Select Committee should be set up, consisting of hon. Members of known experience and expertise in this area, of whom there are many in all parties. They should be asked to look at this matter and to report back to the House.

I am not suggesting that my right hon. Friend should not do other things simultaneously—of course he should, and doubtless he will. He will consult those who serve in local government and take opinions from all over the realm, because he is a man who really listens. That is absolutely right and proper. However, I believe that hon. Members have a particular role to play. I hope very much that the sort of Committee to which I have referred could be given serious consideration and the remit that I have outlined.

One of the best things about the House—I have now been a Member for 20 years—is that Select Committees quickly push aside partisan considerations and look at the merits of an issue. I found that when I served on the Select Committee on Education, Science and Arts. We produced very good reports in the 1979 Parliament, which were almost always unanimous. Hon. Members put aside their party differences to look at the issues and discuss them on their merits. This issue is so important that it deserves the setting up of a Special Select Committee, and I hope that that suggestion will be passed to my right hon. Friend.

We all bear a share of the responsibility for the mess we are in—and there is a mess. We do not have a satisfactory system, but, as my hon. Friends have rightly pointed out, we would not be in that position if it were not for the profligate spending of many authorities, most of which—I should say, all of which—are Labour-controlled.

I should like to end, not on a partisan note, but on one on which I hope we shall all agree.

Photo of Mr Anthony Favell Mr Anthony Favell , Stockport

My hon. Friend has just said to Opposition Members that the problem has been with us a long time and they tried to say that it had not. But we are now in the 25th anniversary year of Anthony Crosland's great speech to the effect that "the party's over". He was an honoured member of the Labour party, who said that local government had had their own way for years. Some one in nine of the working population of this country are employed by town halls and have not been accountable for years. Now, for the first time, they are accountable, and whatever happens as a result of the review, they must remain accountable.

Photo of Patrick Cormack Patrick Cormack , South Staffordshire

I am sure we would all agree that accountability is important, but we have not got it right yet.

We have a chance to look at the system again—we have a new Prime Minister and Secretary of State, both of whom have pledged that they will get it right and said that it is sensible to consult widely. My right hon. Friend the Secretary of State made some specific appeals and suggestions this afternoon. I have suggested how one of the problems might be tackled—[Interruption.] It would be helpful if Opposition Members did not engage in a slanging match with my hon. Friend the Member for Stockport (Mr. Favell).

We are on the eve of a major and beneficial change and I am delighted to pledge my total support to my right hon. Friends the Secretary of State and the Prime Minister.

Photo of Richard Caborn Richard Caborn , Sheffield Central 7:51 pm, 5th December 1990

I do not deny the sincerity of the hon. Member for Staffordshire, South (Mr. Cormack) and his constructive response to the Secretary of State, but I advise him that, as I was walking out of the Chamber, I overheard one of his hon. Friends saying, "That's good—it's better than setting up a royal commission; it will see us through the next general election." There seem to be different views on and responses to the Secretary of State's offer.

Many of this afternoon's contributions have involved the effect of the poll tax on individuals, but I shall concentrate on the destruction of a city by the poll tax. I was concerned when I heard the Secretary of State mention the period of two years, because some cities in this country cannot last two years. The city from which I come, Sheffield, will have to face horrendous problems in the next two financial years. The anomalies of the poll tax calculation affect the city of Sheffield.

I was interested to hear the Secretary of State's remarks about the regeneration of our great cities. It is true that many of those cities were devastated in the early 1980s. Sheffield did not escape: it suffered 50,000 job losses in the steel and engineering industry. The knock-on effect created an almost unmanageable position.

Photo of Richard Caborn Richard Caborn , Sheffield Central

Yes, I was the convenor of shop stewards at Firth Brown. When I left in 1979, there were 8,000 people in that sector of the industry; there are now 2,000.

We all came together in Sheffield in the mid-1980s—the chamber of commerce, the trade unions, the universities and polytechnics. We started to look at the restructuring and regeneration of that great city, and we considered the diversification of the industrial and economic base. Part of the regeneration package was to change the institutions, upgrade the city's skills, develop its infrastructure and ensure technology transfer within the city, with the science and technology parks. Those developments occurred in the private and public sectors, and now they are all at risk because the standard spending assessment under the poll tax has devastated the city.

The second aspect of the city of Sheffield that militates against an objective standard spending assessment is its boundaries. I represent Sheffield, Central, the 10th poorest constituency in the United Kingdom. One of the five other constituencies in Sheffield has the highest level of academic qualifications per head of population anywhere in the United Kingdom. Therefore, it is a city in which some parts are poor and others are affluent. When the figures are averaged out, they do not look too bad, but the inner-city problems in Sheffield are as acute as in any other major city in the United Kingdom. Sheffield's demographic composition militates against an objective standard spending assessment.

If there were 7 per cent. inflation under the 1991 level of spending, in 1991–92 the city council would require £410 million compared with the maximum budget we could get under the new poll tax arrangement of £354 million—the figure permitted under the Government's poll tax capping criteria. The anticipated level of reserves for 1991–92 to bridge that gap is £20 million—and that would be scraping the bottom of the barrel. That leaves us with a deficit—I hope that the civil servants are listening, because the figures have already been presented once—of £36 million on the year 1991–92. When the figure is rolled on to the year 1992–93, it is compounded and there is a £60 million deficit, because of the narrow base on which the SSA is calculated and the historical factor.

In 1980, Sheffield was entering the recession. Calculated on the census of 1981, the SSA does not reflect the social problems related to the restructuring of Sheffield. It seems ridiculous that the overall growth allowed for Sheffield is 9 per cent., whereas Westminster can have 35·1 per cent. growth and Wandsworth can have 23 per cent. growth, when they do not have Sheffield's social problems.

There are many individual cases in Sheffield, as in other cities. This afternoon, the Secretary of State referred to restructuring and regeneration, of which education was a major component. The national average for education under the SSA is 9·7 per cent., but Sheffield's SSA is 5·6 per cent. Some £6 million has been taken off the Sheffield figure because we cannot reduce the capacity in the schools and reorganise the system to reflect the changes in pupil numbers as fast as the Government want us to. That has been criticised by the Audit Commission, which said that the Department of Education and Science were asking for the impossible.

My hon. Friend the Member for St. Helens, North (Mr. Evans) referred to the additional educational needs index. How can Sheffield be granted £400 less per secondary pupil than that calculated for Manchester when they are similar cities? The formula for calculating SSAs for education is based on outdated, narrowly based information, and the multiplying factor involved compounds the errors of the calculation. In Sheffield, when we distribute that expenditure evenly with the local management of schools, we find that those who suffer live in the inner-city districts—that pattern is repeated throughout the education service.

The other sector that is crucial to the regeneration of any major city is other district services which are part of the build-up for the SSAs and the poll tax. We have been told about a great partnership throughout the country, but on average, authorities have received a 4 per cent. increase in funds for economic regeneration and planning and for the environment. Sheffield has received a 9 per cent. cut, which will have a major long-term effect on the regeneration of the city.

My hon. Friend the Member for St. Helens, North went into great detail about social services; I shall give only two statistics—[Interruption.]These are serious matters; we should forget protocol when there is poverty around. Sheffield can spend £2,864 for each child at risk in 1991–92. How is it that the comparable figure in Liverpool is £3,813 and in Manchester £3,811? Where is the parity in that? We were told that the poll tax would bring about equalisation, but a child at risk in Sheffield is worth £1,000 less than one in Manchester or Liverpool. I am not attacking those cities; I am merely asking for a reasonable deal for Sheffield—the more so in the light of the Secretary of State's remarks about so-called regeneration.

We do not need to wait two years to make a real change in the poll tax. The submissions by Opposition Members should be implemented immediately to mitigate the worst circumstances. As a final suggestion, I propose reexamining credit approvals and European funds, which could have a major effect on the north and on the more deprived areas of the United Kingdom.

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley 8:01 pm, 5th December 1990

I welcome the new Ministers in the Scottish Office on the Front Bench, but I hope that they will forgive me if I extend a special welcome to my right hon. Friend the Secretary of State and to my hon. Friend the Member for Ealing, Acton (Sir G. Young). I well remember the time the three of us went into the Ayes Lobby together to support the so-called Mates amendment. We did not win the vote that night——

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley

That is right. But the key point about the appointment of my right hon. and hon. Friends to the Department of the Environment is that it shows that the political will now exists in the Government to make the necessary changes to the community charge.

I welcome the link described by the Secretary of State between the review of local government finance and the review of local government structure. We need to examine the arrangements under which local services are provided. Perhaps a certain proportion of councillors should have to stand for election every year, and we should form unitary authorities whenever possible. On a local note, I hope that Kirkles council can be split in two to create a Huddersfield metropolitan district council and a Dewsbury district council.

For any tax to work properly, it must enjoy a measure of public acceptance. One does not need to be a great political sage to recognise that the poll tax does not have the necessary public acceptability. There are two reasons for that. First, the community charge is perceived as unfair because it is flat rate. Secondly, the levels of charge set by local authorities are too high. The first factor is exacerbated by the second.

The Government face three tasks. First, in the short term, we must ensure that there is proper protection for the thousands, if not millions, of ordinary English men a nd women whose poll tax bills far exceed what they paid in rates. Many of them live in terraced houses whose rateable values were low. Many of them live on comparatively modest incomes but are disqualified from claiming rebate because they have been prudent and saved. Many of them are pensioners whom we have a special responsibility to protect—and many of them live in my constituency. My hon. Friend the Member for Staffordshire, South made a similar point and I hope that the Government will give it serious thought.

The transitional relief scheme is the best-suited vehicle to provide short-term protection, but it needs reexamination so that it is no longer linked to standard spending assessments and councils' actual spending. What matters is the level of protection that the Government decide that people need, and which should then be provided.

Secondly, we need to devise a system of local government finance which is sustainable in the long term and will enjoy public acceptance. I agree with the Secretary of State that the one principle of the community charge which is now widely accepted is that everyone should make some contribution to the provision of local government services. We need to tackle the high level of charge being paid by everyone regardless of ability to pay. A flat-rate poll tax would be acceptable if it were £100 or perhaps a maximum of £200. That could be achieved if we stripped out expenditure on education, the police or the fire service—or perhaps all three—from local government spending, although I realise that the cost to the Exchequer would be high.

The sensible approach would be a combination of increased Government support with relating the community charge to people's ability to pay. I know that some of my colleagues have expressed reservations about banding the charge, but it is the most sensible way forward and could be achieved without increasing bureaucracy too much.

On 15 May, I made a speech in an Adjournment debate on this very subject. I put forward a concrete proposal as to how we could band the community charge. Time is short, so I will not go into all the details of how my system would work—[HON. MEMBERS: "Hear, hear."]—but I ask my hon. Friends to read my Adjournment debate—[HON. MEMBERS: "We will."] There seems to be a large measure of assent to that proposition.

I know that some of my hon. Friends would complain that we would create a new poverty trap, since a slight increase in income would take a person from one band to the next. That would be a problem, but it pales into insignificance when compared with the current problems of the poll tax and with the different sort of poverty trap that a return to the rates would create. For instance, people living in houses with high rateable values might enjoy only modest incomes. My mind is no more closed than that of my right hon. Friend the Secretary of State, and I am receptive to any sensible ideas on the subject.

The Government's final task is to ensure that whatever system is finally chosen it is not undermined or abused by Labour local authorities, which have unquestionably used the new system of local government finance to jack up their spending and have then blamed the increase on the new system. Had the rating system still been in use this year, for instance, Labour-controlled Kirklees council would have needed to increase the rates by 35 per cent. to generate the same amount of money as it raised through the community charge this year. Similarly, two months ago the council was talking about a poll tax for next year of £311—an increase of 8 per cent. However, as soon as the capping criteria were announced by the former Secretary of State and, by a quirk of the system, Kirklees could increase its poll tax by significantly more than it had originally thought, the Labour council said that next year's poll tax would be £352—a massive 22 per cent. increase.

I urge the Secretary of State to look again at the charge-capping criteria so that Kirklees, at least, cannot get away with that. The behaviour of Labour councils in hiking the poll tax up to whatever level they think they can get away with is cynical and immoral, and it shows that socialists do not give a damn about the effect that their decisions will have on local people. I hope that my constituents will remember that when the leader of Kirklees council offers himself for election against me in Colne Valley at the next general election.

Photo of Patrick Cormack Patrick Cormack , South Staffordshire

My hon. Friend will double his majority.

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley

I hope that I will more than double my majority.

In view of the contemptuous way in which Labour councillors have abused the current system, the Government would be entirely justified in acting firmly to keep council spending down over the next few years until the new system of finance is properly bedded in.

After three years of arguing for changes in the community charge system, I am delighted to see that the Government now clearly have the political will to do something to rectify matters and to ensure that the Labour party does not reap the political benefits for which it had hoped. The hon. Member for Dagenham (Mr. Gould) has proved that the Labour party has nothing serious to offer. I am confident that my right hon. Friend the Secretary of State for the Environment will deliver a system that is workable, fair and acceptable to the British people.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley 8:11 pm, 5th December 1990

I had intended to scratch my name from the list of speakers in this debate due to my sore throat and bad cold, but having listened to the Secretary of State trying to make bricks without straw I have been tempted to throw my cap into the ring. The new Prime Minister has handed the Secretary of State a poisoned chalice, and it was somewhat disingenuous of the Secretary of State to try to pass it on to the Opposition. We certainly do not intend to pick it up.

Photo of Mr James Couchman Mr James Couchman , Gillingham

Is the hon. Gentleman saying that the Opposition's tunnel vision is such that they will not pick up an offer from the Secretary of State to discuss the relationship between central and local government? If that is so, it is quite extraordinary.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

It was extraordinary for me to give way for such an intervention—I should have had more sense. If the hon. Gentleman is patient, I will tell him why I do not want to take that chance.

We had an amazing offer of dialogue from the new Secretary of State. At the time of the leadership crisis in the Conservative party, it was a toss-up between whether it would be men in grey suits or people in white coats who came to No. 10. However, it was the men in brown trousers from the Tory marginals who persuaded the Government to make today's statement about the poll tax.

The Secretary of State's offer of a partnership with local government was also amazing. I came to the House from local government, and I have watched aghast for the past 11 years while the Government hammered local government into the ground. Local government has suffered an erosion of powers that I would never have envisaged. More than 60 Acts of Parliament have restricted the ability of local government to deliver services for which people have voted and paid. The Secretary of State had the cheek to talk about improving the local government finance, but we have also heard claptrap from Conservative Members about profligate Labour councils.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

It is not true. I represent two local authorities, Wigan and Salford. From time to time, both are visited by Ministers who laud the councils' partnership deals with Marsham street and the Treasury. This week a Minister visited Wigan and praised it for its partnership deals. Salford quays and Wigan pier have had a procession of Ministers visiting, talking about the wonderful partnerships being entered into and saying how marvellous it is that the councils are embracing the private sector as the Government asked them to do.

There is talk about pragmatic councillors, but the reality is that this year Salford has to find another £8 million worth of cuts, which will hurt the badly off. Some 11 years ago 62 per cent. of local government finance was provided by the Government. The Government have reduced that to about 34 per cent. Starting the process had nothing to do with it. We are talking about cash in the till, and that is down to 34 per cent. A sensible Government would have realised what they were doing and would not have continued the process. They would have realised that greater support was needed. Partnerships are a little too late for some of the people whom I represent.

There has been a madcap rush to cut housing investment. In 11 years, it has been cut by 83 per cent. in Salford and 78 per cent. in Wigan. That shows on the council estates, where houses were sold on the promise that money would be available to improve the remaining rented houses. Time and again, the Government have eroded that promise. That is another reality which faces local government in trying to look after ordinary people.

I shall now explain why I think that the Secretary of State for the Environment is offering us a poisoned chalice. I sent a letter to the right hon. Gentleman when he became the first stalking horse in the leadership campaign, and I sent the same letter to the right hon. Member who is now Prime Minister and to the Secretary of State for Foreign and Commonwealth Affairs who was also a contender. I congratulated them on having the scales fall from their eyes and finding that the poll tax was indeed a bad tax which militated against ordinary people. I made five points in the letter, and said that if they were serious about changes and accepted that it was a bad tax which had damaged poor people, they would accept those five precepts.

I probably paid my poll tax quicker than I ever paid my rates because I knew that money would be slow in coming to the local authorities, although not because people were protesting by not paying, as such people are few. The greater proportion of those who have not paid the poll tax cannot pay it because they do not have the means to pay even the 20 per cent. None of the three right hon. Members replied to my letter—not that I expected them to do so although, as usual, I was trying to be helpful.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

They are refusing consultation.

Photo of Mr Terry Lewis Mr Terry Lewis , Worsley

That is right—they always refuse to consult.

I said in my letter that any retrospective changes had to address the problems of non-payment for those without the means to pay. The second point asked them to take steps, exceptionally, to ensure that the franchise is restored with immediate effect to those who are unable to pay and who have sought avoidance by voter non-registration. The Government have also given the vote to 1 million people in South Africa, but that is beside the point.

I also argued that those who genuinely could not pay should be compensated for incurring court or bailiff costs. If it is a bad tax now, it was a bad tax when it was introduced and it has been a bad tax while it has been in operation.

I called for the removal of the stigma of having court judgments against people who do not have the means to pay the tax. In particular, I was thinking of the elderly. Many elderly people in my constituency have been driven into debt for the first time in their lives by this cruel legislation.

I also called for the non-collection element of poll tax bills to be funded from central sources for 1988–89 in Scotland, and for the rest of the United Kingdom this year. The Government must recognise that those precepts should be accepted because people have been hurt badly as a result of the madcap introduction of the poll tax.

It ill behoves Conservative Members to say that it will be two years before a fundamental review can reach a conclusion. The poll tax legislation was introduced on the back of an envelope at the speed of light. It even caught Conservative Back Benchers on the hop. The poll tax is another of the former Prime Minister's prejudices to be translated into legislation, and it will require an extra payment from Conservative Members.

If Conservative Members doubt how many people are suffering, have suffered and will continue to suffer through the imposition of the poll tax, let me do a commercial for a document entitled, "The Impact of Poll Tax", which was produced by Church Action on Poverty. The report shows the depths into which poor people have been driven as a result of the imposition of the poll tax, and that organisation would be happy to assist in the Government's proposed dialogue.

I have given the reasons why I suspect that the new Secretary of State is offering an olive branch which is in fact a poisoned chalice. The Government must solve their own problems. If Conservative Members reflect carefully, they will realise that it is those who have most to lose electorally who are making the most noise now. We should not be blinded by that. We have said from the start that the tax is bad and that it militates against the poorest. We would never have introduced it and we should not be expected to pull the Government out of trouble now.

Photo of Mr James Couchman Mr James Couchman , Gillingham 8:22 pm, 5th December 1990

I am delighted to follow the hon. Member for Worsley (Mr. Lewis) and to question again his extraordinary rejection of the most sensible offer made by my right hon. Friend the Secretary of State for the Environment for wide-ranging talks and consideration and review of the relationship between local and central Government. I regret that so much enmity between local and central Government has built up over the years partly through the actions of some irresponsible councils and partly as a result of a lack of trust, perhaps on central Government's part, of the motives of local government.

It is particularly important that the review and attempt to rebuild the bridges should come at this time for the care in the community policy in which I take a considerable interest as a former chairman of a health authority and of a social services committee. I welcome my right hon. Friend's promise of wide-ranging talks and to rebuild the relationship.

The Opposition's motion was moved by the hon. Member for Dagenham (Mr. Gould) in what must have been the most threadbare speech from the Opposition Front Bench to which we have been treated for a very long time.

Photo of Mr John Marshall Mr John Marshall , Hendon South

Does my hon. Friend agree that it was the most threadbare speech since the speech made by the Leader of the Opposition only a few days ago?

Photo of Mr James Couchman Mr James Couchman , Gillingham

I would not like to be a judge in that competition.

Labour's 65th policy on local government finance——

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

That sounds like the brief of the hon. Member for Surbiton (Mr. Tracey).

Photo of Mr James Couchman Mr James Couchman , Gillingham

I do not have a brief and I cannot offer the hon. Gentleman one. I do not have a copy of the brief belonging to my hon. Friend the Member for Surbiton (Mr. Tracey).

Labour's 65th policy on local government finance could also be referred to as Labour's big bribe. Under a reversion to the rates as they were in 1989, some 18 million people would be relieved of the necessity to pay towards local government finance. That was the great weakness of the rates as a way of funding local government. No doubt there will be some enticement to those 18 million people who may be tempted to vote for Labour at the next general election in the hope that they will not have to contribute to local government.

However, I understand that that policy is linked to some ill-defined form of ability to pay. I spoke to an Opposition friend of mine in the Corridor and he suggested that that meant a local income tax. I thought about that, because we have already talked about such a tax. When the community charge replaced rates, it was estimated that, if we had opted for a local income tax in the boroughs of Camden and Islington people would have had to pay up to £6,000 a year. I do not fancy making a tax return to the Inland Revenue, but to have to make one to the town hall, of which there are 400, is even less appealing.

If registration for the community charge was difficult, getting people to make an income tax return to the town hall would be impossible. No doubt those who were not householders and did not fill in their local income tax return would pay nothing. Avoidance would become genetic among non-householders who did not want to pay their contribution to local government finance.

Photo of Eric Martlew Eric Martlew , Carlisle

The hon. Gentleman seems to be under the misconception that the Labour party is in favour of a local income tax. Our policy is simple: we will go back to the rates.

Photo of Mr James Couchman Mr James Couchman , Gillingham

The hon. Gentleman has revealed far more than the hon. Member for Dagenham was prepared to reveal in his threadbare offering earlier. If there is a return to the rates, 18 million people will be enticed to vote Labour because they will want to pay nothing towards local government finance. That is one of the shoddiest bribes to be offered by the Labour party in a long time. I am very grateful to the hon. Member for Carlisle (Mr. Martlew). I am sure that not only Hansard but the press will have recorded his comments and his promise.

Let us pursue the responsible view that has apparently been offered from the Opposition Front Bench that there will be some form of local income tax. Who will collect it? I am a small employer. Do not look to me to collect the tax. People who work for me do not necessarily live where I run my business. I do not want to collect for their boroughs. The situation would be impossible, and I suspect that the local income tax would be rejected very quickly as it was rejected by Layfield.

The greatest weakness of the community charge is its collectability. As an employer in the hotel and catering trade, I know how uncollectable it is. My staff come and go. If they register, they forget to deregister. They certainly never get bills because they move on so quickly. I have some sneaking sympathy, therefore, with the Opposition for having decided that they would revert to the rating system. Rates were easily collectable, but the great weakness of the system was the unfairness with which it treated people who lived in like accommodation and who had unlike incomes. We have all heard of the little old lady living in one half of a pair of semi-detached houses who paid the same rates as the four wage earners who lived next door. That is a problem that would have to be overcome. That would be possible by reverting to domestic rates and introducing a capitation factor, an idea that we rejected out of hand, and too easily.

We could revert rapidly to the rating system, and perhaps more quickly than my right hon. Friend the Secretary of State was prepared to accept, by using the 1989 rating bills and introducing a capitation factor that was based on either the electoral roll or the community charge register. I personally favour a hybrid rating scheme. It would be easier to collect than the poll tax and responsibility for paying it would lie with the householder, who would have to pay whatever capitation formula was introduced. Such a scheme could be introduced quickly and simply. I suspect that the necessary legislation would not be complicated.

If we are not to see a wholesale reform of the community charge, or even a return to the rating system as a method of raising local government finance, one of the greatest unfairnesses of the present system is the imposition of a standard community charge at double the personal rate when someone dies. The double imposition falls upon his or her beneficiaries for whatever time it takes to sell the property.

With the present stagnant property market, I have had to deal with an especially difficult constituency matter. One of my constituents is having to pay a bill of nearly £500 for a small unoccupied flat in Thanet because the local financial and central services director has taken the view which is set out in a letter, part of which I shall quote: On reading the letter from your local MP … I am surprised at his comment that, and I quote, 'the Government certainly never intended that any Council should levy a standard community charge of twice the personal community charge in these circumstances.' If that is the case then why I wonder was legislation not amended on its passage through Parliament. Surely the Members of Parliament are not that unaware that they did not expect Charging Authorities to exercise their discretionary powers to the maximum allowed to the benefit of local chargepayers as a whole. That is one of the most disgraceful things that I have ever read in a letter written by a local government officer. If local government officers have advised their councils to impose a double personal charge as a standard charge where someone has died and the property has yet to be sold, I must look to my right hon. Friend the Secretary of State to put that right post haste.

We must get out of the trap of a flat rate charge. I have expressed my thoughts, and I am sure that others will offer theirs, to my right hon. Friend the Secretary of State. With the distillation of those thoughts, I hope that he will be able to offer us a sensible way forward. I also hope that the Opposition will accept his offer of all-party talks on how we should rebuild the relationship between central Government and local government.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire 8:34 pm, 5th December 1990

There has been only one speech of substance by a Conservative Member this evening, and that was the one delivered by the hon. Member for Pendle (Mr. Lee). It is a pity that his speech was not the speech of the Secretary of State for the Environment. If it had been, it would have opened up possibilities for the discussions that the right hon. Gentleman has talked about. The hon. Gentleman said that a property tax would be a better form of taxation than the poll tax and he suggested that it should be linked and related to the ability to pay. That would mean that the Labour party's rebate scheme would be attached to the property tax that it proposes.

The hon. Gentleman has advocated the agenda that the Labour party has put forward. He had some ideas on how to handle the short-term emergency problem with which we would be confronted before we abolished the poll tax. I do not think that what he suggested would necessarily work smoothly, but at least he offered ideas that could be discussed and considered.

Apart from the hon. Member for Pendle, Conservative Members have either defended the poll tax, subject to minor adjustments, or have talked in vague and woolly terms about a review and everything being open for discussion. They have repeated the language of the Secretary of State.

The Secretary of State said that he wanted talks. If so, why did he attack the very people with whom he would have them? He is supposed to want talks with the representatives of local government, but his language was the traditional approach of those who supported the introduction of the poll tax all along. He spoke of profligate authorities and claimed that high poll tax charges were the fault of the Labour-controlled local authorities rather than the grant system and the standard spending assessment that the Government have implemented. His language was distorted. He attacked also the Opposition, and not only because of the furore that arose in the Chamber. The attack had been prepared and was in his speech. He said that he was seeking negotiations and then he attacked the very people with whom he wished to negotiate. It was rather like the Americans saying that they wanted to enter into negotiations with Saddam Hussein and claiming that they could force him into accepting negotiations.

The Government have a majority of 100 Members in this place, and there should be discussions and negotiations among Conservative Members before any all-party talks take place. The Government should come forward with ideas. They cannot merely say, "Everything is open and we shall discuss everything." They must say, "These are our ideas. These are the thoughts that we shall throw into the talks. We might be willing to adjust them or alter them, and we may even accept fundamental reform."

How many ideas did the Secretary of State present this afternoon? The answer is none. It seems that he wishes to talk again about the poll tax or to introduce what the Evening Standard describes as a new poll tax because of the problems that have arisen with the public. It seems that the poll tax must be reconsidered, because it has proved to be unpopular. The right hon. Gentleman did not say why he thought that it has proved unpopular and why there are problems with it. He did not suggest why the public have reacted so strongly against it. He seemed to be saying that the opinion polls show that the public are strongly opposed to it, that all the signs are that the public are against it and that we had better reconsider it. What sort of position is that when it comes to negotiations?

What are the basic problems with the poll tax? The major defect is the one that was raised by the right hon. Member for Brent, North (Sir R. Boyson). He said that there should be no representation without taxation. That is what is wrong with the poll tax. The notion of accountability that accompanies the poll tax is wrong. The hon. Member for Colne Valley (Mr. Riddick) said that everyone should contribute something towards local services if he or she is to be entitled to a vote.

The very concept that led Conservatives to go forward with the poll tax is the thing that is wrong with it. It means that the entitlement to vote is based upon taxation, and that is not the way to run a democratic society. People should have a birthright to exercise the franchise, and only at a later stage should it be decided what people should pay. The franchise would never have been advanced on the basis of poll tax. In the 19th century, the franchise was based on a property qualification, and only certain people were entitled to it.

Some people are being excluded. Records show that there is a shortfall of 600,000 on the electoral registers for England, Scotland and Wales. That has not happened in Northern Ireland. What is the difference between Northern Ireland and England, Scotland and Wales? It is that Northern Ireland does not have the poll tax, and its franchise is therefore in a much healthier state. That should worry all hon. Members.

During Question Time, the hon. Member for Colne Valley suggested that the franchise should be taken away from those who did not pay their poll tax. He should be ashamed of making such a suggestion in the House. We are all beneficiaries of the democratic process.

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley

Will the hon. Gentleman come clean and tell us the real reason why he opposes the poll tax? He gave an explanation in some rag called "Seven Days" in August 1988. He wrote: People paying a high poll tax—especially in inner city areas—will feel punished by having a Labour council. People will then ask: why should I pay so much money so that the council can help drug addicts and fund lesbian and gay activities? … Long term, I am doubtful that what is left of local government can remain a useful site for our electoral struggle. Why does not the hon. Gentleman tell us the real reason why he opposes the poll tax? It is because he knows that the party is over.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

If councillors do not want to levy over-high levels of poll tax, they have to cut services. If they want to provide services, they have to charge astronomical levels of poll tax. That is not a choice that Parliament should place upon local councillors, because it is no choice. Whichever they choose, it hammers local people. It is a fix and a fiddle. The hon. Member for Colne Valley must show me the article that he quoted, because I do not recognise it. Perhaps he is not aware of who I am. However, it may be that, having studied it closely, I would not find too much with which to disagree.

The main problem with the poll tax is not just that it is a tax per head, but that it has consequences for electoral registers and polling. Another problem is that its level has been pushed up and up by Government actions to cut rate support grant in recent years. It would have been bad enough if there had just been a standard, low-level poll tax to be paid by most people, but it is even worse than that, because Government actions have foisted high levels upon us.

My reason for not paying my poll tax relates to the point that I made about electoral registration. I was elected by the people of my constituency, and a large number of them have been forced off the register. Indeed, 8·5 per cent. of the electorate even in Finchley have disappeared from the register during the past two years. That has led to a distorted electorate. It would have been bad enough if those who have been forced off the registers had been chosen at random, across the political spectrum, but the reality is even worse—people from specific sets of political views are being hammered. They have the most to fear from the continuation of the poll tax, because they have been forced off the franchise and therefore have no opportunity to vote for changes.

I intend to argue in the courts that the Government have undermined the operation of the Representation of the People Act 1983 and that, de facto, many, many people are being excluded from the franchise. The law must recognise that as undermining the Act. It is disgraceful that a modern-day Government should introduce a measure that undermines the Act. It is the worse form of taxation ever introduced into any western democratic system. That is why people are rebelling against it. No other Government in western Europe or in the developing democracies of eastern Europe—or, indeed, anywhere else in the world—would introduce a poll tax.

The only way forward is to state clearly that the poll tax will be abolished. We do not want a new poll tax, a graduated poll tax, or a poll tax with changes here and there. We want an entirely different system, and the easiest way to achieve that is to revert to the rating system. We need to move quickly, and that would allow us to do so. A review that goes on and on, with people discussing different ideas, will only make matters worse. The poll tax must be abolished, and if the Secretary of State can offer some ideas about that, we might then begin a dialogue. Members of the Conservative party, which has a vast majority, should get together and find an alternative to the poll tax.

Photo of Mr Keith Hampson Mr Keith Hampson , Leeds North West 8:46 pm, 5th December 1990

I welcome the return of my right hon. Friend the Secretary of State for the Environment to the Front Bench. I know how much he believes in what he called the integrated approach—the structure of local government, the relationship between it and central Government, the relationship of both with the community, together with the financing of local government. Unless we consider all as a whole, we will continue to make grave errors.

I wish to deal with three issues. The first is the aspect of fairness mentioned by the hon. Member for Derbyshire, North-East (Mr. Barnes). My right hon. Friend has stressed many times that he places great weight on the public's perception of a lack of fairness in the community charge. I wrote an article in The Times almost three years ago and received a lot of flak about it. I calculated that well under 20 per cent. of the electorate in my constituency would benefit by more than £50. That calculation was based on a Government poll tax figure of £178 per person. Therein lies one of the problems. Leeds ended up with a poll tax of £345 per person—and, under the current Labour council, we are heading for £400 or more. It does the Government no good to pitch expectations at one level if the reality turns out to be very different. It simply heightens the sense of injustice.

I accept that there is an attractive principle in the poll tax, which is that it is a tax per head: everybody makes some contribution to the cost of local government. Huge costs were involved in creating the registers and if the system is to continue to be used, one suggestion is to apply it in broad bands related to income. I do not envisage any real difficulties, except that a poverty trap would be created at the bottom of the banding. It would not be a problem at the top because doubling the rate for someone moving into the top tax band, which might mean paying an additional £200 a year, would not really be a disincentive. But to move from a 20 per cent. rate to a full rate in a rough and ready banding system—there could not be too many bands or it would be a local income tax—would create disincentives. Therefore, there are some difficulties.

I never accepted that passing information from the Inland Revenue to local councils was a problem in principle. The poor have to give every bit of information about their earnings in order to claim benefit. But better would be a system of self-assessment whereby people ticked a box saying whether they were a top taxpayer or paid no tax. There could be an ad hoc checking of that system, but, by and large, if such a system were adopted, people could be trusted.

An alternative would be to keep the poll tax and relate it broadly—I stress broadly—to property. No revaluation imposes a huge cost and, despite all the best efforts of the experts, it is always pretty rough and ready. People are aggrieved by differentials. They do not see why properties in the same street should have different rateable values. Any revaluation system can be perfect, so why not accept a rough and ready system of broad bands?

In Leeds there are essentially five bands. In band A there would be odd houses such as Harewood house, with rateable values under the old system of more than £2,000. In band B, would be the housing in the suburbs with rateable values of between £400 and £1,000. The next two bands could contain the largest number of properties, those with rateable values under £400 and under £200—band D—and lastly there would be a band containing the smaller older properties, of which there are many in Leeds with rateable values of less than £50.

The average rateable value under the old system in Leeds, was £150, so most people would fall into band D. Any subsequent revaluation could be done by a local authority altering the bands, when judged necessary. Each authority could make its own judgment. People would well understand why in one part of a town people were in band B, whereas elsewhere they came in bands D and E. The bands would affect the rate at which one paid the poll tax. That would give a certain perception of fairness.

Whether we move to a property-based system or simply retain a per capita system, the burden falling on individuals at local authority level is too high. When, more than 10 years ago, I was in the Department of the Environment and we looked at all the options, it was obvious to me that, if we were to reform the rating system, the scale of local authority expenditure had to be reduced.

The dominant expenditure falling on local authorities is education. I have always argued that, as education is a national investment, and as there are national standards which it is critical should be provided for our people, central Government should finance education directly and not assume that the whims, prejudices and philosophies of local councils will be the same as those of the Government. Clearly, often they are not. It was only last year that Leeds accepted the technical and vocational education initiative, one of the most important vocational developments. It was almost the last education authority in the land to do so, simply because, for some reason, it thought that it was the tainted priority of a Conservative Government requiring tainted Conservative money.

Let me refer to the excellent pedigree of the scheme put forward by Lord Joseph, as he now is, in 1982 for a 75 per cent. central grant earmarked for education. We could go beyond the first stage—of allowing local authorities to disburse it—reinforcing the current direction of Government policy, which is that schools should themselves have a greater say over their budgets and what they want to do. In other words, we are talking not just of the relationship between central and local government but about the relationship generally of services to the community.

The cost of schools could be funded directly using the formula that has been established under the local management of schools. The governors and head of a school could then decide how much to spend on teachers as against equipment. Instead of all teachers' salaries being paid from the centre, there would be more devolution of negotiations on teachers' pay and how many teachers should be employed.

The Government's intention of the grant maintained status of schools was, according to the circular, to leave the balance of support for education between national and local tax payers unchanged. In other words, although we try to encourage schools to opt out from the local authority system, the local authority still pays. That point is often overlooked. The money is recouped from the local education authorities. That is a wasteful procedure anyway and it does not redirect costs from the local authority to the centre. It lifts no burden from the community charge payer. If we were to move to direct payment from the Treasury to the schools so that the schools, governors and parents could assess priorities themselves, existing policies would be reinforced and that would have important consequences.

An education block grant covering all education in the region of just under 3p would fall on income tax. I do not know where the local government correspondent of The Timesgot his figure of 10p from. However, it could be done in phases and involve no tax increase. At the same time, we could do something with the police block grant, which is currently 51 per cent. The Metropolitan police grant has just been increased to 52 per cent. There are powers in the police Acts to enable the Secretary of State to change the amount of grant. The police could immediately go up to 75 per cent., which would save another £billion to the benefit of the community charge. I would not include the fire service. That is a local, not a national, service. However, police and education are national services which could be moved towards a 75 or 80 per cent. block grant, thereby lifting enough of the community charge to halve it.

A package of different approaches could be put together which would have the effect of lowering the burden on charge payers and it could be phased in. There is no reason to hesitate. It would be possible to use existing powers under the education support grant system, because, with effect from last April, there is no ceiling to the amount that can be channelled directly from the Department of Education and Science to education. One could start the process of transferring education costs to the centre, together with police costs, before next April. If one wanted to do something about the fairness of charges, the old rateable values are still in existence because the water authorities use them. So one could equally do something about broad property banding before next April.

I urge my right hon. Friend the Secretary of State urgently to consider how to move forward in a number of directions, not just as part of the long-term restructuring of local government, including provision for elected mayors, of which I approve, but so that a new system can be implemented before next year.

Photo of Eric Martlew Eric Martlew , Carlisle 8:58 pm, 5th December 1990

There will be great disappointment among my constituents tonight, because they were looking forward to hearing the right hon. Member for Henley (Mr. Heseltine) say that he intended to scrap the poll tax. That is the action that the right hon. Gentleman implied that he would take when he stood for the leadership of the Conservative party. One has the feeling that he was given the post that he now holds as a form of punishment.

Seventy-nine per cent. of my constituents are worse off with the poll tax than under the old rating system, which accounts for my advocacy of a return to the old arrangement. It is not only the Secretary of State for the Environment who does not appear to have a clue about what he should do; the same is true of Tory Members in general. I suspect that there are no members of the No Turning Back group in their places.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

The hon. Gentleman is wrong again.

Photo of Eric Martlew Eric Martlew , Carlisle

If Government Members do not turn back, they will be heading for political oblivion—[Interruption.] If any member of the No Turning Back group wants me to give way, I shall be happy to do so.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

The hon. Gentleman is not worth it.

Photo of Eric Martlew Eric Martlew , Carlisle

Immediately the new Prime Minister took office, I wrote to him suggesting that he put a Bill before the House to repeal the community charge—to give it the Conservative title, but really the poll tax, to give its true name—and to reintroduce the old rating system from 1 April 1991. The House would ensure that such legislation had a speedy passage through Parliament. There would be no objections to it from Labour Members, and I am sure that Conservative Members too would agree to it, knowing that the Government had made a mistake.

Instead, we are told that the poll tax might be reformed after the next general election. I warn the electorate not to believe the Conservatives. If they are re-elected, the poll tax would have a very low priority, and it could be towards the end of another Conservative term of office before they decided to change the system. The Prime Minister has kept silent, and the Secretary of State for the Environment asked Labour to help him out of a mess. It reminds me of the old Laurel and Hardy phrase, "This is another fine mess you've gotten us into." We are expected to help out the Conservatives and to save their political skins.

We want a return to the old rating system and a fairer rebate scheme. Conservative Members have long denigrated the old rating system, but problems with it a only when a Conservative Government decided to reduce rate support grant. The electorate saw rates shooting up but services reducing. That happened because the Tories cut rate support grant and gave the money back in the form of personal tax cuts. It is a myth that people who did not pay rates contributed nothing to local government services. Anyone who pays income tax pays for local government services, and the Government know that to be true. The Tories wanted to be seen to be reducing income tax, but blamed local authorities for rate increases. They did that even to the extent of criticising Tory-controlled councils. That did not bother Conservative Members of Parliament.

People live in the houses that they can afford because of the tax incentives that they enjoy—in the form of the £30,000 mortgage interest relief limit, and the absence of capital gains tax when they sell their properties. However, we must take account also of the little old lady who lives in a house that she cannot afford to run. There are also many people who calculated that they could afford a particular level of mortgage and rates but who now find that they can afford neither because of high interest rates and the poll tax respectively.

The House should pass a Bill before 1 April 1991 that gets rid of the poll tax and re-establishes the old rating system.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley 9:04 pm, 5th December 1990

I have detected a certain amount of gloating among Opposition Members over the possibility that the Government might have to change their policy, but I do not think that the Opposition have any right to gloat. How can they criticise us for supposedly not listening and them blame us when we listen and propose to make changes? I am also not sure what right the Opposition have to criticise us for possibly changing policy when they have gone through a series of dizzying and sickening policy gyrations of their own in the past few years. Two years ago they were telling us that nuclear weapons were immoral and evil, yet a nuclear deterrent is now part of their policy. They should remember that fact before they start to criticise us for changing our policies.

Ralph Waldo Emerson said: A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. There is no shame in the Government making changes, or developing their policies. The difference between us and the Opposition is that we remain true to our basic principles, but are prepared to change when necessary, compared with the Opposition who are ready to throw off all their most heartfelt principles in an opportunistic attempt to win power—[Interruption.] Opposition Members may laugh, but they know that virtually every policy on which they fought the general elections of 1983 and 1987 is now in the rubbish bin.

I accept that the Government made some mistakes in implementing the community charge, allowing irresponsible and profligate local authorities to increase their spending massively in the hope that the blame would rest with the Government. The first mistake we made was that the safety net blurred the distinction between careful and profligate local authorities. The second mistake was to introduce the community charge in the year after the county council elections. Everyone knows that local authorities keep their spending low in county council election year, and spend up with a vengeance the year after, and that is exactly what they did this year—with the result that the community charge was far higher than it needed to be.

The Government should have frozen spending increases by local authorities in the first year of the community charge to no more than the rate of inflation. In that way, the community charge would have been introduced at a rate of more like £250, which would have been far more acceptable to the majority of people, bearing in mind that it is the level of the charge, rather than the principle, which is disliked by many people.

Whatever mistakes the Government have made, poor coverage by the media compounded the problems. For months at the beginning of the year there was no coverage of waste and profligacy by many Labour councils. My hon. Friends the Members for Derbyshire, West (Mr. McLoughlin) and for Derby, North (Mr. Knight) know that I could go into great detail about profligate expenditure by Derbyshire county council—how it wastes millions of pounds on a bloated publicity department, the huge sums of money that it spent on a millionaires' playground in the Soviet Union, and how it increased staff, especially office staff, by more than any other county council.

I could go into detail about the report issued today by Her Majesty's inspectorate of constabulary, which gives a damning indictment of bureaucracy and waste by the Derbyshire county council police committee. I could go into detail, but if I ran through all the wasteful spending by Derbyshire county council, I should overrun my time and I do not want to do that.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

No. Normally I would give way to the hon. Gentleman, as it is always a pleasure to hear what he has to say, but he has spoken already in the debate and he knows that we only have a short time.

Nothing epitomises waste in local government so much as the sterile and ludicrous debates about the contracting out of services. It is daft that we should debate contracting out. Local government should contract out services when private contractors would do the job best, and should keep services in house when an in-house team can do the work best. Labour local authorities do not accept that—they have to keep everything in house, regardless of value for money and performance.

It is interesting to note that, in France, even socialist and communist local councils accept the principle of contracting out, yet in England, Derbyshire county council rejected one low tender because it arrived in an envelope of the wrong colour. Keeping in with its NUPE paymasters is far more important to that council than providing good services at a reasonable cost.

Too many local councils in recent years have lost sight of the basic fact that they are there to provide reasonable services at a good cost. Instead, they concentrate on empire building and playing politics, and their profligacy has been cheered on in a disgraceful and irresponsible way by Opposition Members. Whatever system is implemented over the next few years, whichever party is in government, they will have to face the fact that local government cannot continue to increase its spending as it has done without causing grave economic problems to the country.

And I remind Opposition Members that, when they were last in power, they faced the problems of high local government spending. It was their Prime Minister who said that the "party had to end", and their Government who ended the principle of a standard automatic percentage of local government spending coming from central Government.

Whatever the problems caused by the high spending of local government, I accept that the present Administration have made some mistakes in their implementation of the community charge arrangements. I believe that, over the summer, our former Prime Minister was badly advised and did not realise the extent of the damage done by the botched introduction of the community charge. It is ironic that some of her most loyal supporters were guilty of giving her that bad advice.

That does not mean, however, that the Opposition have anything to be smug about. Labour's policy of returning to the rating system shows the bankruptcy of its thinking. Labour is content to criticise the Government without being in the least constructive itself. Having produced review after review, the party has come up with little more than a return to the rates—which would mean a return to the days when half of the electorate was able to vote without having to bear any of the burden of local authority spending.

We now need to consider the possibility of increasing rebates to help the most needy. I believe that the rebate system is the best way of targeting any help. There is no doubt that the poor need more protection from the profligate spending of Labour authorities such as Derbyshire county council.

If, in future. it is decided to change the system., the principle that everyone should contribute could probably be incorporated in a capital-values property tax. That could involve one-person households having to pay on only half the capital value of their homes, with households consisting of more than two people paying an extra 25 percent. for each extra adult. Everyone would have to pay a minimum of 25 per cent. of the average charge. I also consider it crucial for us to increase the accountability of local government by moving to a system of unitary authorities through the abolition of county councils.

Whatever happens, however, the principle of everyone having to make a contribution must be retained. If one good thing has come out of the community charge, it is the now wide acceptance of that principle. We should remember De Tocqueville's warning in "Democracy in America": Countries where lawmaking falls exclusively to the lot of the poor cannot hope for much economy in public expenditure; expenses will always be considerable, either because taxes cannot touch those who vote for them or because they are assessed in a way to prevent that.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden 9:13 pm, 5th December 1990

First, let me congratulate my hon. Friend the Member for Bootle (Mr. Benton)—as many others have done—on a very dignified and effective maiden speech. He spoke with a good deal of feeling, and some justifiable anger, about the impact of the poll tax on the area that he represents. I know that he will prove an extremely worthy and welcome representative of that area.

One recent event—the arrival of a new Secretary of State for Scotland—will probably have slightly more of an impact on my life than it will on those of some other hon. Members, but it is none the less not without interest. I note that the new Secretary of State for Scotland has been quoted in the press as speaking about compassion and idealism, not ideology. At one point, he referred to dialogue, not discord. I expected to see photographs of him standing on the steps of St. Andrews house, ready with a handy quotation from St. Francis of Assisi. His good intentions are to be welcomed, but one of the crucial tests against which his intentions will be judged is what emerges from the great poll tax debate within Government.

We live in heady and stirring times. In every corner of Westminster, Tories can be seen gathering to declare their dislike of the poll tax. On every side, the cry, familiar to all Scots, is heard: "It wasna' me." Up to now, the Scottish Office has shown no sign of conscience or remorse. A wealth of proposals have been put forward, some defined. Half-promises have been made. Policy formation depends on myths and prophecy. Shell-shocked Back Benchers have returned from the battlefronts of the by-elections desperate to see the back of the poll tax.

I give credit to the right hon. Member for Henley (Mr. Heseltine) for his attempted coup. He himself, unfortunately, died in the rubble, but for all that it was a brave attempt, and it opened the floodgates. I listened with considerable interest to his speech. At one moment, he spoke, for reasons that were not clear to me, about the greatest moments in British history. I do not believe that the present shambles in the Conservative party is likely to be seen in that light. There was, however, little hard news in his speech, so the odd phrase helped.

Briefly stated, the newsline was that there is to be a thorough, constructive and fundamental review of the poll tax, although no one is clear exactly what that means. Then we had a very speculative offer—one so ill defined and vague as to have attracted the attention of the Office of Fair Trading if it had been made in the world of commerce. It was what the right hon. Gentleman was pleased to call "constructive dialogue".

In an intervention, I tried to tempt the right hon. Gentleman to say a little more about it, but I had remarkably little success. I hope that we shall hear more about it from the Secretary of State for Scotland. We know that a working party has been formed. I am not sure whether the constructive dialogue is to be within the working party. It was suggested that Opposition parties should join it, although I guess that that will not happen. I understood the right hon. Gentleman to say that the constructive dialogue is more likely to be in the form of inter-party talks, but the composition, the standing of the inter-party talks in terms of policy formation, the framework within which they will be held and the agenda were left remarkably vague. I was not impressed.

I am not anything like so battle-scarred a veteran as the right hon. Gentleman in the ways of this House—and certainly not so battle-scarred in the ways of government—but my brief experience leads me to believe that, if any serious attempt is made to set up a dialogue across the party divide, feelers are put out and private discussions take place in advance. I hope that the right hon. Gentleman will not resent it when I say that, when such offers are made in that way, as a sort of political while rabbit out of a hat, I doubt the sincerity of the offer and of the man who makes the offer. It is so ill structured and so lacking in shape and form that the right hon. Gentleman might just as usefully have proposed putting a suggestions box outside Tory party headquarters.

Despite all the other issues that were included in his Tory party leadership manifesto by the right hon. Member for Henley—almost everything, but not the kitchen sink—the one thing that was not included was the suggestion that we should proceed with poll tax reform by consensus, with decision making being taken, at least in part, by Opposition parties. I suspect that it was not included in his manifesto because it did not occur to him at the time. If the right hon. Gentleman had made such a suggestion, it would have been greeted with ridicule and dismay by those who voted for him.

We listened today to a Minister bereft of ideas. Like the Prime Minister, he does know what to do about the poll tax. We must remember that the Prime Minister is on record as saying that no one else does, either. Having decided that he does not know what to do about the poll tax, the Secretary of State for the Environment has concluded that the best thing to do is to ask someone else to supply a few ideas.

We are delighted to do that. As the right hon. Gentleman knows, we have a well-defined document already on offer. (Interruption.]I listened to many Conservative Members say that they do not like the specifics or that they do not like the theory or practicalities of it. However, they cannot say that it cannot be debated or discussed if they insist on attacking it so violently. It is there and it is a suggestion.

It is a good deal more specific than what we had from the Secretary of State today. He suggested that there were some ideas in the middle ground, some of which might be introduced quickly and some of which might not. One outstanding feature of his speech was that he did not give a single clue about what any one of those suggestions might be. It was a vacant and empty performance, full of style but with no content.

I am not satisfied. If the Secretary of State is prepared to work out an agenda and have as a starting point the fact that the poll tax will not survive the review, we may be in business and we may be able to consider what he is saying. However, I have no intention of advising my hon. Friends to accept what is no more than a political pig in a poke, a presentational device of little worth and little real value, and presented with little sincerity.

I want to ask about the Scottish Office's position, because the Secretary of State for Scotland is with us. I know a good deal about the Scottish Office's record. No one would doubt the determined loyalty of the hon. Member for Eastwood (Mr. Stewart), who is now in charge of the poll tax in the Scottish Office. He has been, over the years, an unashamed signatory of No Turning Back tracts.

No one would doubt the loyalty to the poll tax of the hon. Member for Stirling (Mr. Forsyth), who will keep the lost leader's cause alive long after she has gone. The hon. Member for Stirling will be pleased to know that I do not normally look upon him with a romantic eye, but in this matter he is likely to be the last of the political Jacobites, drinking toasts to his departed heroine when she is but a footnote in the history books.

The Secretary of State is of more interest. He is not a man given to the flashing phrase. In fact, he is not a phrase maker at all. However, on the poll tax he is a proven cold warrior. He has defended the indefensible at every turn. He has been the man put up to deny that any problem exists or that any radical rethinking is necessary. He never flinches from the task. If a hard heart is to be shown, whether it is to students, the disabled or those suffering from Alzheimer's disease, the Secretary of State is there to do his duty. If the evident chaos of the system has to be denied, he is there to enunciate the Government's point of view. He has told us many times that his system is "working well" and is a "remarkable success story". Even he must feel a little embarrassed about his position at this moment.

On 17 November, when the present Secretary of State for the Environment was in Scotland threatening death and destruction to the poll tax, the present Secretary of State for Scotland was blaming the local authorities, proclaiming, "Not a penny more," and talking of "minor changes" and a system that was in essence here to stay. If that is an example of the flexibility of the Scottish Office in the present crisis, the Secretary of State for Scotland will understand why I and my hon. Friends are sceptical about the offer produced unexpectedly today by his colleague, the Secretary of State for the Environment.

The Secretary of State for Scotland's record is not one to warm the cockles of the heart as Christmas approaches. Before we go any further, we should have from the Government some respectable effort, not perhaps in detail but at least in outline, to define their position. No attempt has been made today by Front-Bench Members. There have been honest attempts by some Back-Bench Members who have different views, but it is totally unsatisfactory that we have had nothing from the Government Front Bench.

Does the Secretary of State for Scotland want a fundamental review? Is he prepared to consider total abolition, or is the review simply a cosmetic cover that will allow the faults of the poll tax somehow to survive, despite their unpopularity? Would the Secretary of State for Scotland switch education spending from local government to the Exchequer? Perhaps, like me, he is rather doubtful about that.

From the campaign speeches of the Secretary of State for the Environment, it looks as though—to use a metaphor from earlier in the debate—he has discovered the philosopher's stone. I am extremely interested in the fiscal conjuring trick that would allow that massive switch to the Exchequer with no increase in income tax and an increase in public expenditure. It is a remarkable triumph of hope over experience. I hate to think of the sarcasm and contempt that the right hon. Gentleman would have heaped on our heads had we produced a fiscal formula of that kind. At least we know one thing: the Secretary of State for the Environment will never again be able to attack us for our spending plans, given his own fraudulent prospectus.

The right hon.Member for Brent, North (Sir. R. Boyson)—who I always find an endearing figure in his own quaint way—had a solution. He likened the Chancellor of the Exchequer to a squirrel. and I see his point; the right hon. Gentleman does look a little like a squirrel. He suggested that the squirrel should bring out its nuts. A good deal of that went on on the Conservative Benches during the debate.

The strength of the argument for the switch was diminished by the article in The Timesof 10 May, in which the Secretary of State contradicted himself and undermined his argument so thoroughly. That was not the only expression of doubt. In April 1988, a splendid speech by the Secretary of State appeared in Hansard. I should not have known about it had it not been kindly brought to my attention by the hon. Member for Stirling, who wrote about it to his constituency chairman—a tactic with which the Secretary of State may be familiar. I do not know whether the hon. Gentleman received a reply.

The hon. Gentleman recorded the remarkable statement made by the Secretary of State for the Environment in April 1988, in which he completely demolished the idea, which he was then advocating in the public prints, of a switch of education expenditure. To his surprised constituency chairman, the hon. Gentleman belaboured the Secretary of State and explained that that was why he would certainly not vote for him. As far as one can gather, the general drift of the hon. Gentleman's remarks was that the right hon. Gentleman was an intellectual shambles, although I do not want to pry further into that private grief.

We want to know a bit more about the options. Perhaps the Secretary of State for Scotland will tell us whether he is in favour of a referendum every time a council's spending exceeds a certain limit. Perhaps he will tell us whether he is in favour of banding, which he has condemned so strongly in the past, or whether he is even prepared to consider it.

One fact that emerges from the confusion in this debate is that the Labour party alone has a coherent defined policy.[Laughter.] Conservative Members may disagree with it, but it is there. Let us look at some of the other parties—for example, the Scottish National party, which is also in an embarrassing position. I accept entirely that many of the nationalists feel very strongly and passionately about the effectiveness of the non-payment campaign and espouse it most sincerely. They must be dismayed by the fact that their leader, the hon. Member for Banff and Buchan (Mr. Salmond) has said publicly in the prints that the banding of the poll tax would be equivalent to the abolition of the poll tax and that the SNP would then call off its campaign of resistance.

Let me quote from The Guardianof 28 November: Yesterday Alex Salmond, the new SNP leader, climbed on the back of the Heseltine-Major-Hurd poll tax review"— that must have been extremely uncomfortable for him— to argue that, once the charge is banded 'it ceases to be the poll tax'. The SNP, therefore, would end its rebellion when amended legislation was tabled. I put it kindly to the hon. Gentleman, because I do not want a major debate, that there is now some doubt, at least, about his party's stance.

Photo of Alex Salmond Alex Salmond Leader, Scottish National Party

The hon. Gentleman did not have the pleasure of being at the conference that I attended, which was reported by The Guardian. What was under discussion was under what terms the Scottish National party would reduce its level of opposition to the poll tax to the same level as that of the Labour party. The answer is, when the tax reflects ability to pay and when the poorest sections of the community are properly and immediately protected. The hon. Member for Glasgow, Garscadden (Mr. Dewar) should be familiar with that formulation, because I used it on a radio programme to which the hon. Gentleman also contributed, and his reply was that the formulation was "obvious".

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

This debate will run and run.

I had the advantage of listening to the speech of the hon. Member for Dunfermline, West (Mr. Douglas') who genuinely made the point that the only effective way of opposing the poll tax was his road of non-payment. However, we are now told that, if there is amending legislation, of some sort as yet undefined, the SNP will abandon non-payment and will reduce the level of its opposition. That will have a ring of insincerity to most people in Scotland. I have a lot of sympathy with the leader of the SNP, who has a problem, but he is in this position because he knows that non-payment has lost credibility and is increasingly unpopular with the vast majority of Scots.

I want to make it clear that, for Labour, the only acceptable answer to this discredited tax is its abolition. We are the true radicals in this matter. On coming to government, the Labour party will act immediately to abolish the 20 per cent. rule, and will introduce a property-based assessment that is linked to the ability to pay. We are not going to hang around, and I shall tell Conservative Members why. One of the many disappointing features of the Secretary of State's speech was that, on the basis of accountability, he came close to ruling out any relief for the poorest members of our community.

I genuinely do not understand the Conservative party's position on this matter. If the Government argue, as I understand they do, that a tax which raises about 50 per cent. of the revenue of local government has to be paid if people are to qualify for the vote, the logic is that anyone who is below the threshold for income tax should lose the vote as well. However, Governments of both persuasions rightly say that raising the tax threshold is an important social objective, because it helps the poorest in our society. If that is right for income tax, it is right for the poll tax as well.

Hon. Members:

Oh.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

The hon. Member for Glasgow, Garscadden (Mr. Dewar) should give way.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

Well, I cannot imagine that my hon. Friend the Member for Coventry, South-East (Mr. Nellist) would disagree with what I have just said—[HON. MEMBERS: "Give him a chance."] Let me make it clear——

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

No, my hon. Friend is not assisting. I have only three or four minutes, and I intend to try to make a point of some importance.

Helping the very poorest is particularly important in my constituency, and in Scotland generally. The problems of the collection of local government finance have been appallingly exacerbated by the introduction of the poll tax. In Strathclyde, 877 staff—an increase of 145 per cent.—have had to be brought into post. That is a disgrace.

Another frightening statistic is that 800,000 people in Scotland depend on income support, and 22 per cent. of all children in Scotland under the age of 16 live in families that depend on income support. There is no grace in income support. There is no room for gracious living. The whole crux of the social argument against the poll tax is that the burden has shifted on to those people—it falls on the people who can least afford to pay it. It is for that reason that I deplore and regret the fact that the Secretary of State appeared to shut the door on the immediate help that could be achieved by the abolition of the 20 per cent. rule.

The Secretary of State for the Environment gave us a rash of ideas which were often incompatible. He frequently contradicted himself as he went along. We have had nothing at all from the Secretary of State for Scotland. Clearly, it is important that we should hear something tonight explaining his position. I want to be sure that we are in possession of at least some outline of the Government's plans in Scotland.

I know that the Secretary of State for Scotland will try to attack our proposals. I am not afraid of that—he is entitled to do so. However, one person who has not been present during today's debates, but who is in people's minds, is the right hon. Member for Blaby (Mr. Lawson). He could have endorsed Labour's plans when he argued in Cabinet and repeated last week in his lecture: Taxes on property are cheap to collect and difficult to avoid. They have a clear local base. They bear a rough-and-ready relationship to ability to pay. I hope he will not think me presumptuous when I say that that could have been me defending the Labour party's plans.

The right hon. Member for Blaby also said that his property-based scheme would have acted as a dampener on the great house price boom that was to make the conduct of economic policy so difficult. No one is better equipped than the right hon. Gentleman to talk about how difficult the conduct of economic policy became under this Government. He said, in terms that might have echoed it, that which, during his campaign at least, the Secretary of State for the Environment said. The right hon. Member for Blaby warned the Cabinet that the scheme was completely unworkable and politically catastrophic". Those terms have been borne out by the facts, and the Secretary of State for Scotland should bear them in mind when he comes to reply. He may yet have to eat his words and, before long, explain his conversion to a scheme based on a property assessment, while the Minister of State, Scottish Office, sings extracts from "Fiddler on the Roof".

The poll tax must go because it is esentially unjust. It has reinforced inequality and divided communities. The administrative nightmare and the bitterness have justified in full measure the charges laid against the tax from the beginning of the Scottish debate. I remember with some pain the cutting contempt with which some of my colleagues were treated by Scottish Office Ministers during our arguments in Committee. Now, the Tory party, horrified by the electoral damage the tax has done, has abandoned the Prime Minister and is searching in blind panic for any way out.

The case against the poll tax was put strongly in 1987 by the right hon. Member for Henley (Mr. Heseltine), when he said: All of these resentments against the poll tax will build on a platform of crude regression which seeks to make equal in the eyes of the tax collector the rich and the poor, the slum dweller and the landed aristocrat, the elderly pensioners living on their limited savings and the most successful of today's entrepreneurs."—[Official Report, 16 December 1987; Vol. 124, c. 1141.] I cannot think of a more concise, eloquent and effective demolition job of the essential principles of the poll tax. I hope that I can give the right hon. Gentleman the credit for thinking that he is consistent in his moral attitudes and beliefs, and that what happens at the end of the review will measure up to that devastating indictment of an unjust tax, which should never have been put on the statute book.

I warn the Scottish Office that the electorate in Scotland will expect such a root and branch attack on the principles of the tax. The people expect abolition and nothing less. They will not accept compromise that merely repackages the unacceptable in a vain effort to save political face.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale 9:38 pm, 5th December 1990

I congratulate the hon. Member for Bootle (Mr. Benton) on his maiden speech. His predecessor, Mike Carr, was here a tragically short time, but during that time he showed a commitment to the welfare of his constituents that will long be remembered. I compliment the hon. Gentleman on his knowledge of Bootle and on the commitment that he has shown to its people and problems. He is welcome in the House, and we look forward to hearing more from him in future.

I also thank the hon. Member for Glasgow, Garscadden (Mr. Dewar) for his welcome to me. Thereafter, however, his speech degenerated into his usual fast-talking and frenetic exposition which on this occasion, I suspect, betrayed the air of a man who knows that his party has only just saved its skin in two by-elections—[Interruption.] Nevertheless, we welcome the new hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster), and we shall have an opportunity to welcome them more fully on another occasion.

I shall come shortly to suggestions by Opposition Members in this debate, but from my hon. Friends came a number of positive and well-argued proposals. I have taken careful note of the comments of my hon. Friends the Members for Colne Valley (Mr. Riddick), for Gillingham (Mr. Couchman), for Amber Valley (Mr. Oppenheim) and others.

When calling for change in varying degrees, however, it is important to keep in our minds a fact which sometimes escapes the Opposition—that local government must be paid for. There is no magic formula to wish the problem away. The review that we are undertaking under my right hon. Friend the Secretary of. State for the Environment will be detailed and thorough. Some changes may be feasible in the short term—any major change would take some time—but local government must continue to be paid for while we carry out the review and while any changes, major or minor, are considered and possibly introduced. Local services must continue to be provided, and local authorities must fulfil their statutory duty to collect what is due to them.

Photo of Mr Anthony Favell Mr Anthony Favell , Stockport

I congratulate my right hon. Friend on his new position and wish him all the best. Parties on both sides of the House have long sought to make local government accountable. Tony Crosland tried to do that 25 years ago, and this Government have tried it too. Are not 2,934,000 people employed by local government—one in nine of the working population? Whatever else the community charge has done, it has at long last made those people accountable to the people who paid for theirservices—[Interruption.]

Photo of Mr Anthony Favell Mr Anthony Favell , Stockport

Will my right hon. Friend assure the House that local government will continue to be accountable, whatever happens under the review?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

My hon. Friend touches on an important principle, to which I shall come shortly.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I hope that the irresponsible hon. Members who abuse their status as hon. Members by urging non-payment or by indulging in it themselves will abandon their disgraceful posture, which so damages the interests of the most vulnerable members of society who might follow their example. I agree with my hon. Friend the Member for Ipswich (Mr. Irvine) about that. The hon. Member for Coventry, South-East (Mr. Nellist) is in that category, and he asked me about the state of collection in Scotland. His reprehensible campaign and that of his hon. Friends has failed there. When registration was taking place, a number of Opposition Members began a non-registration campaign—a "stop it" campaign. The hon. Member for Cunninghame, North (Mr. Wilson) said that it would develop into Scotland's biggest campaign movement since the second world war. But registration succeeded among 99 per cent. of the population.

As for payment, which the hon. Member for Dunfermline, West (Mr. Douglas) said was collapsing in Scotland, he might like to know that more than 90 per cent. of budgeted revenue from the community charge is now being collected. As that accounts for only one fifth of total expenditure by local authorities, that means that 98 per cent. of their revenue is available to them, and any local authority which cannot adapt its spending programmes to account for a shortfall of 1 or 2 per cent. should not be running a local authority.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

If things are so good, why are they so bad? Why the review?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

We are looking at the structure of the tax and at objections to it, and at propositions which have been put to us as to how it can be further improved——

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

My right hon. Friend the Secretary of State for the Environment said earlier in the debate that there could be no quick fix or easy solution. We are determined to find the best and fairest way forward to ensure that the system is fair and seen to be fair by the whole electorate.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

This is an important matter. The right hon. Gentleman says that the committee will consider whether any change is feasible and whether to look at the structure of the tax. In that context, he appears to be ruling out radical change or abolition. Is that correct?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

No, the hon. Gentleman must have misheard me—we rule nothing in and we rule nothing out. [Interruption.]

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

Order. I hear a phrase that has been used before in the debate.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I said that some changes might be feasible in the short term and that some might take longer. If the hon. Gentleman reads the Official Report tomorrow he will see that that is what I said.

In our enthusiasm to achieve our objective, we must not lose sight of the strength of the underlying principles that are already embodied in the community charge. In that context, I am entirely at one with my hon. Friends the Members for Stockport (Mr. Favell), for Leeds, North-West (Dr. Hampson), for Hornchurch (Mr. Squire), for Surbiton (Mr. Tracey) and for Lancaster (Dame E. Kellett-Bowman), and with my right hon. Friend the Member for Brent, North (Sir R. Boyson). The principle that everyone should pay is widely acknowledged as a fundamental part of a healthy democratic system. The community should be involved in the affairs of its council not only by electing its members but by having to bear some responsibility for the decisions taken by those members, and contributing towards the cost is an important principle.

The community charge is a broad-based system of taxation. There is now a transparent relationship between the spending decisions of local authorities and community charge levels. There is also greater local accountability which, over time, will strengthen the cause of local democracy.

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

The right hon. Gentleman talks about accountability. I should like to ask the question that one of my hon. Friends tried to ask. The Minister's right hon. and hon. Friends spoke of everyone having to pay something towards local services or they would lose the right to vote. Can he explain why those same Tory Members voted for the Government to spend £425,000 to extend the vote to 18,000 South African and Spanish residents who have paid nothing towards local services for 20 years? They pay nothing, so why should they have a vote?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

If the hon. Gentleman thinks that that is relevant to a review of the functioning of the community charge, he is welcome to make a submission to me, my right hon. Friend the Secretary of State for the Environment and those who will be considering the matter, but his recommendation would carry more authority if he would pay his own community charge and thus for his share of local services.

The review will be fundamental. It proposes no options. I guarantee to the House that we shall not lightly throw away the ground that has been gained in recent years in establishing the principle that I have outlined. We shall seek to build on the greater accountability and fairness that have already been won. Any change in the current arrangements will be introduced only if and when it is seen to be fair and workable. The search for improvement is natural and sensible, and it is consistent with our record. Anyone who considers what has happened in the past couple of years will see a whole raft of changes to the community charge to refine the system and make it more acceptable.

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley

Is my right hon. Friend aware that the non-payment campaign by the hon. Member for Coventry, South-East (Mr. Nellist) has come to a rather ignominious end because that excellent organisation the Freedom Association has paid the hon. Gentleman's poll tax in Lambeth for him? It is somewhat hypocritical of the hon. Gentleman to continue to urge others not to pay the poll tax when he knows perfectly well that he is now safe from the law.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

My hon. Friend's intervention is a remarkable revelation and puts the hon. Gentleman's smiling face in a clearer perspective.

Plainly, there is a need for a more wide-ranging review than we have had hitherto.

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

Order. There can be only one hon. Member on his feet at a time. If the Secretary of State does not give way, other hon. Members must resume their seats.

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

Order. That is just the point. The Secretary of State is not giving way.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I would be more inclined to give way to the hon. Member for Falkirk, West (Mr. Canavan) if he could stand up and tell me that he has paid his contribution, but I know that he has not.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

We have heard some sensible suggestions for change today. My hon. Friend the Member for Honiton (Sir P. Emery) suggested that accountability might be strengthened by moving from a system of elections every three years to a system that created greater accountability on a year-by-year basis. We shall certainly consider that.

Photo of Dennis Canavan Dennis Canavan , Falkirk West

On a point of order, Mr. Speaker. Is it in order for the Secretary of State to refer to an hon. Member without giving way to him?

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

That often happens. The point that I want to make to the hon. Member for Falkirk, West (Mr. Canavan) is that, if the Secretary of State does not give way to him, although I suppose that he may, the hon. Gentleman must resume his seat.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

Many sensible and interesting suggestions were made by my hon. Friend the Member for Hornchurch and my right hon. Friend the Member for Brent, North and by the hon. Members for Gordon (Mr. Bruce) and for Renfrew, West and Inverclyde (Mr. Graham). They suggested ways in which the community charge benefits system might be changed. I can assure them that we will look carefully at those suggestions as we will at the suggestion made by my hon. Friend the Member for Staffordshire, South (Mr. Cormack) about the possibility of a special Select Committee.

I want to consider what the Labour party has to offer. Where does the Labour party stand? We are interested in the Opposition's suggestions. Let us begin with the Leader of the Opposition. We know that he is against rates, because he said so. He described them as the most unjust of taxes. The right hon. Member for Manchester, Gorton (Mr. Kaufman) said that rates were an irrational, inefficient, highly resented form of taxation. If a thing does not make sense—and the rating system makes no sense whatsoever, the right thing to do is to abolish it once and for all. Fine—we know where we are, or do we? Today, the hon. Member for Dagenham, brandishing a pamphlet entitled "Fair Rates" with all the profoundity of someone who supports sunny weather, said that the basis of local government finance must be the rating system. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that two years ago as well.

Where does that leave the Leader of the Opposition? A month after the right hon. Member for Sparkbrook had said that, Lord McIntosh, the Labour local government spokesman in another place said that rates are desperately inadequate as a fair basis for raising revenue for local government."—[Official Report, House of Lords,23 May 1988; Vol. 497, c. 652.] Then the hon. Member for Sheffield, Brightside (Mr. Blunkett) said that he wanted a local income tax: I have been an advocate of this as an addition to—not a replacement for—the rating system for a long time. Where does that leave the Leader of the Opposition? His private office announced in April last year that he wanted "a period of reflection", according to The Independent. By July, the reflection had concluded and he said: we are sophisticating the policy.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I am just trying to define the terms of the debate. Is it the Secretary of State's understanding that the working party of which he is a distinguished member has turned its back on and ruled out any form of property-based assessment?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Gentleman has not listened to what we have been saying. We have ruled nothing in and we have ruled nothing out. However, I can understand why he does not want to hear more about the "sophistication" of policy promised by the Labour party. What does this new sophistication of domestic rates involve? Is it sophisticated to have a system under which less than half the adult population makes any contribution? Is it sophisticated to have a method of payment for local services based solely on the bricks and mortar in which one happens to live? Is it sophisticated to have a system that disregards the capacity of individuals to pay and that ignores the ability to pay of millions of adult wage earners who are not householders? Is it sophisticated to have a system that demands from a single parent in one house the same amount as from four or five working adults in the house next door?

We know more about sophistication in Scotland because the policy there has gone one step further. The Opposition have promised domestic rates to start with and then, by courtesy of the Scottish Assembly—in itself no more than a tax-raising body—a roof tax.

Photo of Mr Brian Wilson Mr Brian Wilson , Cunninghame North

Will the right hon. Gentleman give way?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

No; the hon. Gentleman was not present for most of the debate.

Scotland is to be the guinea pig for this so-called sophisticated instrument, which will be based on capital values. If a house in Aberdeen, for example, varies in price, its owner's contribution to local services will vary accordingly. It will be in accord with the spot price of oil in Rotterdam. We shall have the turbulence of revaluations. They would not bear on every house, as the Labour party has said, but on one house in each area. The Labour party would pick what it has called a beacon.

In my mind, a beacon is something to which one sets fire to deliver a message. The Labour party means by a beacon that we would pay rates based not on our own house but on someone else's in the same area. If that someone else had a garage, double glazing, central heating or a granny flat, it would be tough on those who did not have those facilities in their houses. They would have to pay more because someone had more than they.

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

I have listened to the Secretary of State with considerable interest. I remember reading a headline in this week's Scotland on Sunday. It read: "Heseltine Prefers a Return to the Rating System". If the Secretary of State for the Environment proposes a return to the rating system, what will the right hon. Gentleman and his hon. Friends do, bearing in mind that they have been such loyal defenders of the poll tax?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

As I told the representatives of the Scottish press on Monday, they should not believe everything they write in the newspapers.

Consider the problems of a widow under the Labour party's roof tax. One spouse dies, the house is too large for the remaining spouse, but all the furniture is there so he or she remains in it, despite the fall in income. Under the community charge, the system is benign because the cost of local services halves, but under the roof tax the charge will continue accelerating while income declines. f the widow cannot pay, under the Labour party's proposal the local authority, year by year and piece by piece, would start to take over ownership of her house. It would be, "Don't worry, love, we shall get it when you're dead." It is "live now, pay later." It is "pay as you die."

Consider the accumulating anxiety and distress of an elderly widow as, year by year, the security of her house is stripped away from her. Contemplate her mounting terror when, alone and aging—just when life's problems should be receding—she sees herself running out of credit and wonders how it will all end. That is the Labour party's sophisticated plan for Scotland's funding of local government. That is the obscenity that it would foist on the people of Scotland, which would be not the guinea pig but the sacrificial lamb.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

The right hon. Gentleman's rather intemperate attack sounds rather like one that could be mounted against the rent-to-mortgage scheme of which he is so proud. In the few minutes that remain before the debate must end, will he answer some of the positive questions that the Opposition have asked about the structure of the proposed consultation and the agenda, so that we can understand what is being offered to us?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

It seems that we have made progress during the debate. At the beginning of it, Opposition Members threw up their hands in horror. They wanted nothing to do with the offer of consultation and discussion that was made by my right hon. Friend the Secretary of State for the Environment. They want now to know what is on the agenda. That is progress. They have had their opportunity to put forward what they regard as being relevant and suitable. If they put forward all the proposals for local authority funding that they have developed over the past few years, we shall have to spend a long time ploughing through them.

The truth is that Labour is not interested in the taxpayer or in individuals generally. It is interested only in taxes. It does not want taxation to be fair but only to be easy. As a new Labour Government built up their raft of new and higher taxes to pay for their usual extravagant programme—the rake's progress of high spend, high taxes and high inflation—the ability to pay, which we would regard as important, would become no more than a sick joke.

A new Labour Government would impoverish us, just as their predecessors did. Those in the Labour party are tax maniacs. A former leader of the Labour party, Hugh Gaitskell, said that he would fight, fight and fight again to save the party he loved. Now, it wants to do is tax, tax and tax again to destroy the country we love.

It will be a thorough review, it will be a constructive review, it will be a fundamental review. It will put the interests of the charge payers first. It will seek justice, fairness and good local government. We shall persevere with it until that is what we achieve.

Question put, That the original words stand part of the Question:-

The House divided: Ayes 254, Noes 311.

Division No. 20][10 pm
AYES
Abbott, Ms DianeCousins, Jim
Adams, Mrs. KatherineCox, Tom
Allen, GrahamCrowther, Stan
Alton, DavidCryer, Bob
Anderson, DonaldCummings, John
Archer, Rt Hon PeterCunliffe, Lawrence
Armstrong, HilaryCunningham, Dr John
Ashdown, Rt Hon PaddyDalyell, Tam
Ashley, Rt Hon JackDarling, Alistair
Ashton, JoeDavies, Rt Hon Denzil (Llanelli)
Banks, Tony (Newham NW)Davies, Ron (Caerphilly)
Barnes, Harry (Derbyshire NE)Davis, Terry (B'ham Hodge H'l)
Barnes, Mrs Rosie (Greenwich)Dewar, Donald
Barron, KevinDixon, Don
Battle, JohnDobson, Frank
Beckett, MargaretDoran, Frank
Beggs, RoyDouglas, Dick
Beith, A. J.Duffy, A. E. P.
Bell, StuartDunnachie, Jimmy
Bellotti, DavidDunwoody, Hon Mrs Gwyneth
Benn, Rt Hon TonyEadie, Alexander
Bennett, A. F. (D'nt'n & R'dish)Evans, John (St Helens N)
Benton, JosephEwing, Harry (Falkirk E)
Bermingham, GeraldEwing, Mrs Margaret (Moray)
Bidwell, SydneyFatchett, Derek
Blunkett, DavidFaulds, Andrew
Boateng, PaulField, Frank (Birkenhead)
Boyes, RolandFields, Terry (L'pool B G'n)
Bradley, KeithFisher, Mark
Bray, Dr JeremyFlannery, Martin
Brown, Nicholas (Newcastle E)Flynn, Paul
Brown, Ron (Edinburgh Leith)Foot, Rt Hon Michael
Bruce, Malcolm (Gordon)Forsythe, Clifford (Antrim S)
Buckley, George J.Foster, Derek
Caborn, RichardFraser, John
Callaghan, JimFyfe, Maria
Campbell, Menzies (Fife NE)Galbraith, Sam
Campbell, Ron (Blyth Valley)Galloway, George
Campbell-Savours, D. N.Garrett, John (Norwich South)
Canavan, DennisGarrett, Ted (Wallsend)
Carlile, Alex (Mont'g)George, Bruce
Cartwright, JohnGilbert, Rt Hon Dr John
Clark, Dr David (S Shields)Godman, Dr Norman A.
Clay, BobGolding, Mrs Llin
Clelland, DavidGordon, Mildred
Clwyd, Mrs AnnGould, Bryan
Cohen, HarryGraham, Thomas
Coleman, DonaldGrant, Bernie (Tottenham)
Cook, Robin (Livingston)Griffiths, Nigel (Edinburgh S)
Corbett, RobinGriffiths, Win (Bridgend)
Corbyn, JeremyGrocott, Bruce
Hardy, PeterNellist, Dave
Harman, Ms HarrietOakes, Rt Hon Gordon
Hattersley, Rt Hon RoyO'Brien, William
Heal, Mrs SylviaO'Hara, Edward
Healey, Rt Hon DenisO'Neill, Martin
Henderson, DougOrme, Rt Hon Stanley
Hinchliffe, DavidPaisley, Rev Ian
Hoey, Ms Kate (Vauxhall)Parry, Robert
Hogg, N. (C'nauld & Kilsyth)Patchett, Terry
Home Robertson, JohnPendry, Tom
Hood, JimmyPike, Peter L.
Howarth, George (Knowsley N)Prescott, John
Howell, Rt Hon D. (S'heath)Primarolo, Dawn
Howells, GeraintQuin, Ms Joyce
Howells, Dr. Kim (Pontypridd)Radice, Giles
Hoyle, DougRandall, Stuart
Hughes, John (Coventry NE)Redmond, Martin
Hughes, Robert (Aberdeen N)Rees, Rt Hon Merlyn
Hughes, Roy (Newport E)Reid, Dr John
Hughes, Simon (Southwark)Richardson, Jo
Illsley, EricRobertson, George
Ingram, AdamRobinson, Geoffrey
Janner, GrevilleRogers, Allan
Jones, Barry (Alyn & Deeside)Rooker, Jeff
Jones, leuan (Ynys Môn)Rooney, Terence
Jones, Martyn (Clwyd S W)Ross, Ernie (Dundee W)
Kaufman, Rt Hon GeraldRoss, William (Londonderry E)
Kilfedder, JamesRowlands, Ted
Kinnock, Rt Hon NeilRuddock, Joan
Kirkwood, ArchySalmond, Alex
Lamond, JamesSedgemore, Brian
Leadbitter, TedSheerman, Barry
Lee, John (Pendle)Sheldon, Rt Hon Robert
Leighton, RonShore, Rt Hon Peter
Lestor, Joan (Eccles)Short, Clare
Lewis, TerrySillars, Jim
Litherland, RobertSkinner, Dennis
Livingstone, KenSmith, Andrew (Oxford E)
Lloyd, Tony (Stretford)Smith, C. (Isl'ton & F'bury)
Lofthouse, GeoffreySmith, Rt Hon J. (Monk'ds E)
Loyden, EddieSmith, J. P. (Vale of Glam)
McAllion, JohnSmyth, Rev Martin (Belfast S)
McAvoy, ThomasSnape, Peter
McCartney, IanSoley, Clive
Macdonald, Calum A.Spearing, Nigel
McFall, JohnSteel, Rt Hon Sir David
McGrady, EddieSteinberg, Gerry
McKay, Allen (Barnsley West)Stott, Roger
McKelvey, WilliamStrang, Gavin
McLeish, HenryStraw, Jack
Maclennan, RobertTaylor, Mrs Ann (Dewsbury)
McMaster, GordonTaylor, Rt Hon J. D. (S'ford)
McNamara, KevinThomas, Dr Dafydd Elis
McWilliam, JohnThompson, Jack (Wansbeck)
Madden, MaxTrimble, David
Maginnis, KenTurner, Dennis
Mahon, Mrs AliceVaz, Keith
Marek, Dr JohnWalker, A. Cecil (Belfast N)
Marshall, David (Shettleston)Wallace, James
Marshall, Jim (Leicester S)Walley, Joan
Martin, Michael J. (Springburn)Warden, Gareth (Gower)
Martlew, EricWareing, Robert N.
Maxton, JohnWatson, Mike (Glasgow, C)
Meacher, MichaelWelsh, Andrew (Angus E)
Meale, AlanWelsh, Michael (Doncaster N)
Michael, AlunWigley, Dafydd
Michie, Bill (Sheffield Heeley)Williams, Rt Hon Alan
Michie, Mrs Ray (Arg'l & Bute)Williams, Alan W. (Carm'then)
Mitchell, Austin (G't Grimsby)Wilson, Brian
Molyneaux, Rt Hon JamesWinnick, David
Moonie, Dr LewisWise, Mrs Audrey
Morgan, RhodriWorthington, Tony
Morley, ElliotWray, Jimmy
Morris, Rt Hon A. (W'shawe)Young, David (Bolton SE)
Morris, Rt Hon J. (Aberavon)
Mowlam, MarjorieTellers for the Ayes:
Mullin, ChrisMr. Frank Haynes and Mr. Ken Eastham.
Murphy, Paul
NOES
Adley, RobertEvennett, David
Aitken, JonathanFallon, Michael
Alexander, RichardFavell, Tony
Alison, Rt Hon MichaelField, Barry (Isle of Wight)
Allason, RupertFishburn, John Dudley
Amery, Rt Hon JulianFookes, Dame Janet
Amess, DavidForman, Nigel
Amos, AlanForsyth, Michael (Stirling)
Arbuthnot, JamesForth, Eric
Arnold, Jacques (Gravesham)Fowler, Rt Hon Sir Norman
Arnold, Sir ThomasFox, Sir Marcus
Ashby, DavidFranks, Cecil
Aspinwall, JackFreeman, Roger
Atkins, RobertFrench, Douglas
Baker, Rt Hon K. (Mole Valley)Fry, Peter
Baldry, TonyGale, Roger
Banks, Robert (Harrogate)Gardiner, George
Batiste, SpencerGarel-Jones, Tristan
Beaumont-Dark, AnthonyGill, Christopher
Bellingham, HenryGilmour, Rt Hon Sir Ian
Bendall, VivianGlyn, Dr Sir Alan
Bennett, Nicholas (Pembroke)Goodhart, Sir Philip
Benyon, W.Goodlad, Alastair
Bevan, David GilroyGoodson-Wickes, Dr Charles
Biffen, Rt Hon JohnGorman, Mrs Teresa
Blackburn, Dr John G.Gorst, John
Blaker, Rt Hon Sir PeterGrant, Sir Anthony (CambsSW)
Boscawen, Hon RobertGreenway, Harry (Ealing N)
Boswell, TimGreenway, John (Ryedale)
Bottomley, PeterGregory, Conal
Bottomley, Mrs VirginiaGriffiths, Peter (Portsmouth N)
Bowden, Gerald (Dulwich)Grist, Ian
Bowis, JohnGround, Patrick
Boyson, Rt Hon Dr Sir RhodesGrylls, Michael
Brandon-Bravo, MartinHague, William
Brazier, JulianHamilton, Hon Archie (Epsom)
Bright, GrahamHamilton, Neil (Tatton)
Brooke, Rt Hon PeterHampson, Dr Keith
Brown, Michael (Brigg & Cl't's)Hanley, Jeremy
Browne, John (Winchester)Hannam, John
Bruce, Ian (Dorset South)Hardy, Peter
Buchanan-Smith, Rt Hon AlickHargreaves, A. (B'ham H'll Gr')
Budgen, NicholasHarris, David
Butcher, JohnHaselhurst, Alan
Butler, ChrisHawkins, Christopher
Butterfill, JohnHayes, Jerry
Carlisle, John, (Luton N)Hayhoe, Rt Hon Sir Barney
Carrington, MatthewHayward, Robert
Carttiss, MichaelHeathcoat-Amory, David
Cash, WilliamHeseltine, Rt Hon Michael
Channon, Rt Hon PaulHicks, Mrs Maureen (WolV' NE)
Chapman, SydneyHicks, Robert (Cornwall SE)
Chope, ChristopherHiggins, Rt Hon Terence L.
Clark, Hon Alan (Plym'th S'n)Hill, James
Clark, Dr Michael (Rochford)Hind, Kenneth
Clark, Sir W. (Croydon S)Hogg, Hon Douglas (Gr'th'm)
Colvin, MichaelHordern, Sir Peter
Conway, DerekHoward, Rt Hon Michael
Coombs, Anthony (Wyre F'rest)Howe, Rt Hon Sir Geoffrey
Coombs, Simon (Swindon)Howell, Rt Hon David (G'dford)
Cope, Rt Hon JohnHughes, Robert G. (Harrow W)
Cormack, PatrickHunt, David (Wirral W)
Couchman, JamesHunter, Andrew
Cran, JamesIrvine, Michael
Critchley, JulianIrving, Sir Charles
Currie, Mrs EdwinaJack, Michael
Davies, Q. (Stamf'd & Spald'g)Jackson, Robert
Davis, David (Boothferry)Janman, Tim
Day, StephenJessel, Toby
Devlin, TimJohnson Smith, Sir Geoffrey
Dicks, TerryJones, Gwilym (Cardiff N)
Dorrell, StephenJones, Robert B (Herts W)
Douglas-Hamilton, Lord JamesKellett-Bowman, Dame Elaine
Dover, DenKey, Robert
Dunn, BobKing, Roger (B'ham N'thfield)
Durant, TonyKirkhope, Timothy
Eggar, TimKnapman, Roger
Emery, Sir PeterKnight, Greg (Derby North)
Evans, David (Welwyn Hatf'd)Knight, Dame Jill (Edgbaston)
Knowles, MichaelRidsdale, Sir Julian
Lamont, Rt Hon NormanRifkind, Rt Hon Malcolm
Lang, IanRoberts, Sir Wyn (Conwy)
Latham, MichaelRossi, Sir Hugh
Lawrence, IvanRost, Peter
Lawson, Rt Hon NigelRowe, Andrew
Leigh, Edward (Gainsbor'gh)Ryder, Richard
Lester, Jim (Broxtowe)Sackville, Hon Tom
Lloyd, Sir Ian (Havant)Sainsbury, Hon Tim
Lloyd, Peter (Fareham)Sayeed, Jonathan
Lord, MichaelShaw, David (Dover)
Luce, Rt Hon RichardShaw, Sir Giles (Pudsey)
Lyell, Rt Hon Sir NicholasShaw, Sir Michael (Scarb')
McCrindle, Sir RobertShephard, Mrs G. (Norfolk SW)
Macfarlane, Sir NeilShepherd, Colin (Hereford)
MacGregor, Rt Hon JohnShepherd, Richard (Aldridge)
MacKay, Andrew (E Berkshire)Shersby, Michael
Maclean, DavidSims, Roger
McLoughlin, PatrickSkeet, Sir Trevor
McNair-Wilson, Sir PatrickSmith, Tim (Beaconsfield)
Madel, DavidSoames, Hon Nicholas
Major, Rt Hon JohnSpicer, Sir Jim (Dorset W)
Malins, HumfreySpicer, Michael (S Worcs)
Mans, KeithSquire, Robin
Maples, JohnStanbrook, Ivor
Marland, PaulStanley, Rt Hon Sir John
Marlow, TonySteen, Anthony
Marshall, John (Hendon S)Stern, Michael
Marshall, Sir Michael (Arundel)Stevens, Lewis
Martin, David (Portsmouth S)Stewart, Allan (Eastwood)
Mates, MichaelStewart, Andy (Sherwood)
Maude, Hon FrancisStewart, Rt Hon Ian (Herts N)
Mawhinney, Dr BrianSumberg, David
Maxwell-Hyslop, RobinSummerson, Hugo
Mayhew, Rt Hon Sir PatrickTapsell, Sir Peter
Mellor, DavidTaylor, Ian (Esher)
Meyer, Sir AnthonyTaylor, Teddy (S'end E)
Miller, Sir HalTebbit, Rt Hon Norman
Mills, lainTemple-Morris, Peter
Mitchell, Andrew (Gedling)Thompson, Patrick (Norwich N)
Mitchell, Sir DavidThorne, Neil
Moate, RogerThornton, Malcolm
Montgomery, Sir FergusThurnham, Peter
Moore, Rt Hon JohnTownend, John (Bridlington)
Morris, M (N'hampton S)Townsend, Cyril D. (B'heath)
Morrison, Sir CharlesTracey, Richard
Moss, MalcolmTredinnick, David
Moynihan, Hon ColinTrippier, David
Mudd, DavidTrotter, Neville
Neale, GerrardTwinn, Dr Ian
Nelson, AnthonyVaughan, Sir Gerard
Neubert, MichaelViggers, Peter
Newton, Rt Hon TonyWaldegrave, Rt Hon William
Nicholls, PatrickWalden, George
Nicholson, David (Taunton)Walker, Bill (T'slde North)
Nicholson, Emma (Devon West)Walker, Rt Hon P. (W'cester)
Norris, SteveWaller, Gary
Onslow, Rt Hon CranleyWalters, Sir Dennis
Oppenheim, PhillipWardle, Charles (Bexhill)
Page, RichardWarren, Kenneth
Paice, JamesWatts, John
Patnick, IrvineWells, Bowen
Patten, Rt Hon Chris (Bath)Whitney, Ray
Patten, Rt Hon JohnWiddecombe, Ann
Pawsey, JamesWiggin, Jerry
Peacock, Mrs ElizabethWilkinson, John
Porter, Barry (Wirral S)Wilshire, David
Porter, David (Waveney)Winterton, Mrs Ann
Portillo, MichaelWinterton, Nicholas
Powell, William (Corby)Wolfson, Mark
Price, Sir DavidWood, Timothy
Raffan, KeithWoodcock, Dr. Mike
Raison, Rt Hon TimothyYeo, Tim
Rathbone, TimYoung, Sir George (Acton)
Redwood, JohnYounger, Rt Hon George
Renton, Rt Hon Tim
Rhodes James, RobertTellers for the Noes:
Riddick, GrahamMr. John M. Taylor and Mr. Nicholas Baker.
Ridley, Rt Hon Nicholas

Question accordingly negatived

Question, That the proposed words be there added, put forthwith pursuant to standing Order No.30 (Questions on amendments):

The House divided: Ayes 310,Noes 232.