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Mr. Pike : Does the hon. Gentleman accept that in my constituency, as in many constituencies in which there are low rateable values, many pensioners living alone find it strange and inconsistent with the Government's claimed policy of getting rid of the rates, and going on to the poll tax and now the council tax, that, as a result of the concession on low rateable values, a single pensioner living alone often pays more poll tax as an individual than do two, three or four individuals living next door? People living together tend to get more relief in lower rateable
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value properties. How does the hon. Gentleman justify that, when one of the Government's original claims was that the poll tax would help single pensioners living alone?Mr. MacKay : As the hon. Gentleman knows, single people on the whole have been helped immensely by the community charge and they will be helped by the council tax as well. Much depends on the amount of relief that is given. As I have already pointed out, up to 100 per cent. relief will be given to those on the very lowest incomes to whom the hon. Gentleman referred. That has been satisfactorily addressed under the council tax and the hon. Gentleman should appreciate it fully.
I shall explain how satisfactorily the council tax will work in Bracknell and Windsor. The average house in Bracknell comes under band D. Band D will be charged £367 compared with the £230 a head which we pay at present under the poll tax. The figure was £396 before the reduction due to the VAT increase in this year's Budget. In Windsor, where the largest single band is band E--25 per cent. of people are in that band-- people will pay £495 council tax for a house compared with £287 a head poll tax. The figure was £450 before the Budget.
The council tax is a good deal for my constituents and they will also deem it a fair deal. They will be pleased that their student children do not now have to pay poll tax and they will be delighted that the least well-off in the community will get up to 100 per cent. discounts and full relief. I commend the council tax to the House. I am delighted that Ministers have listened to what I and others said in previous debates and in private.
If democracy means anything in our society and if our constituents making representations to us means anything, saying, "Yes, we are wrong and we need to amend the proposals" should be applauded and not laughed at by hon. Members such as the hon. Member for Glasgow, Garscadden (Mr. Dewar). I can remember sitting on the Opposition Benches on many occasions and seeing mistakes made by the previous Labour Government. They never retracted those mistakes.
The fact that many of us who supported, and still support, the principle of the community charge, and who voted for it, believing that it was right, but nevertheless saw mistakes in it, made representations to the Government and speeches in the House, and now have the perfect compromise in the council tax, should be commended. That is what good parliamentary democracy is all about. The average voter, the average member of the public out there, would like to see politicians change their minds more often and amend policies taking public opinion and practical experience into account. If they did so, politics and politicians in this country would have a much better name than they do now.
6.50 pm
Mr. Bill Michie (Sheffield, Heeley) : The hon. Member for Berkshire, East (Mr. MacKay) said that the Government at least had the courage to admit when they had made a mistake. I have no doubt that they are making another mistake now. The argument seems to be that there was nothing wrong with the principle or the administration of poll tax, it simply cost people too much. What sort of argument is that? That is precisely what the problem was, not just to ordinary ratepayers but to the nation as a whole.
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If the Government claim to be honestly admitting that they have made mistakes, why do they not have the honesty to say that the poll tax was a complete and utter disaster? They were told both in Committee and on the Floor of the House how bad the poll tax would be, and what effect it would have. Unfortunately those predictions came true. We cannot be glad that the poll tax died in that way, because it did so only by causing suffering to many of our constituents. The poll tax was a disaster.Mr. Michie : Indeed, the poll tax is a disaster, and will continue to be. The council tax is "son of disaster". Elements in it are the same as those in the poll tax legislation ; it will cause the same problems to the ratepayers ; it will meet the same fate. Again, it will be rushed through. We shall not be able to examine every comma, phrase and sentence. That was not allowed in the poll tax debate, and it will not be allowed in the council tax debate.
I understand why the Government want to rush the council tax through. Nevertheless, mistakes will be made again, because we shall not have enough time to scrutinise all the details. I am pleased that the Opposition Front- Bench spokesmen do not wish to delay the legislation for the sake of delay. They do not want to be blamed for keeping the poll tax in its present form. But the Opposition cannot play footsie with the Government when the Government say, "Come and help us with our Bill and share the blame as well as the glory." Unfortunately, there will be no glory, and so far as I am concerned the Government can take the blame.
I am angry about what has happened to local authorities over the past few year, because local authorities are one of my first loves--the work they do and the services that they provide, or at least, used to provide. With the council tax, bills will go through the roof, yet it will not help local government in its function of helping the people who elected it.
Local government has suffered for at least 10 years. Even the rate support grant was fiddled, messed about and changed so much that local authorities found it more and more difficult to cope with their yearly rate assessments and bills. Our amendment at least stresses that we would get rid of poll tax immediately and replace it with a fair rating system.
The only way to cure the immediate problems of local government is to scrap poll tax entirely. That would help to stave off further suffering for local taxpayers, who have already suffered for many years, not only in financial terms but from the stress caused by trying to find out whether those such as young people, single people or unemployed people were eligible for help. The poll tax caused division within households as well as within cities.
The Secretary of State said that he believed in democracy and that the Opposition did not. I dispute that. For me, democracy does not consist in letting the Government run amok with the nation's expenditure without question, nor in saying that the Government alone can make decisions and know what they are talking about. Democracy involves the whole structure of society, including local government. Without local government we should not have a democracy for long ; there would be a dictatorship from Westminster. I do not want to hear any
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more about our people not believing in democracy because we defend local rates and local authorities. We do that because we are democrats and believe that local government is a good democratic institution which helps people and the nation as a whole. If there were not so much fiddling with the standard spending assessments, and all the extra burdens of responsibility imposed on local authorities without the wherewithal to implement the legislation, local government would be in a better position. Local authorities have no room for manoeuvre to help people in need in their areas. Local economies are in a sorry state because of Government policies, and nowadays local government has neither the power nor the wherewithal to help local people in difficulties, or even local industry--that is a factor in my constituency.This is the fag end of the Government. As several of my hon. Friends have said, there is not much in the Queen's Speech. The biggest part of it concerns the council tax. I have learnt from other Members who have spoken that we are not allowed to stray from the subject of the day's debate-- local taxation--and deal with the main issues in the Queen's Speech. But there is no doubt that the way in which local authorities are funded has an effect on the economy of cities, constituencies and regions.
Over the years, because of the restrictions placed on local authorities, democratically elected councillors have become less and less able to help people in distress or need. It is said that the Government have been trying for years to slim the nation down--to get it fit and ready to fight, to compete with other countries. They call that lean and hungry. That is not what I call it. The Government have emaciated and starved the nation. The investment which should have been made at national and local level is no longer there ; our industry is dying around us. Our nation is emaciated because training programmes are few and far between and are of nothing like the quality which should be expected in a modern society. It is emaciated, too, because of the siphoning off of our national assets and the squandering of North sea oil. The profits from those assets, and the benefits of North sea oil, have not flowed, or even trickled, down to local government.
The nation is not lean either ; it is starved. It has been starved of caring because of the idea, encouraged and perpetuated by the Government, especially the former Prime Minister, that there is no such thing as society, and that everyone is on his own. That is the sort of society that has been created ; it is not the sort of society that we want.
Local authorities are still trying their best to keep communities together and help in any way that they can, but they cannot do that without proper powers and legislation--certainly not without proper financing. Community spirit in our constituencies is now at rock bottom. There is a shortage of cash, an atmosphere of hopelessness. And what about caring communities? Even under the council tax legislation, if it gets through, if local authorities such as mine decided to help the community in any way, they would be liable to capping or other forms of restriction, as in the past.
It is not local authorities' irresponsible actions or overspending that are to blame : the local authorities have been starved of cash. It is no good the Government saying, "That is your allocation : like it or lump it," if, when something goes wrong, and when the fabric of society in an area falls down, they ask, "What was local government doing about it?" If there is a child abuse case, the
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Government immediately ask, "What was the social worker doing about it?", but we all know that the social worker in question was probably dealing with a caseload twice as heavy as that with which he or she should have been dealing and was receiving no extra resources to help.The Children Act 1989 is welcome ; of course it is. But where is the wherewithal to implement it? The Government have made what would appear to be a generous offer, but an examination of the small print reveals that the money needed to implement the Act has been taken away from other areas on the assumption that the Act will take care of them. That is not the case. More and more responsibilities are being placed on local government while less and less cash is being provided to it.
Let us consider how much cash has been wasted on the poll tax. What is it now? Almost £6 billion has been wasted in one year. That is £19 billion in total, or £173 million per week. The mind boggles. What could we not have done with that in terms of home helps, social services, children's nurses, the rising fives and so on? You name it. That money is all gone--wasted on some daft scheme arising from the Government's bitter hatred of local government and its representation of its people. What has happened? The money has been wasted, services have been slashed and local authorities are no longer in a position to identify and deal with areas of weakness and vulnerability in society. If they do, they are penalised for overspending ; if they do not, they are criticised by the local electorate.
I know from my experience of local government that, before the bad old days of Toryism, local authorities used to be able to take all sorts of initiatives. We did not just automatically help young people who wanted special training and special courses. Labour-controlled authorities went to the trouble of forming employment departments that adhered to the strict philosophy of trying to help not just local community groups but local businesses. Working hand in hand with the banks, they sought to help private businesses and small businesses--for example, by trying to help companies with cash flow problems. They bought land to enable people to set up businesses and so create jobs and wealth.
That was all down to the local authorities. If we spent that sort of time and money now, the Government would condemn us as overspenders, because such activities do not fall within the criteria that they have set. Local government has been wrongly accused--indeed, I feel, abused--by central Government, when most of the responsibility lies precisely with that central Government.
While on the subject, I have something to say about a subject connected with local authorities. The demise of the nation's manufacturing base has certainly affected my area of Sheffield, where we have lost 30,000 or 40,000 jobs. Little can be done quickly in terms of the provision of Government money, although we have quangos growing up all over the place trying to tell local government to get over a problem that it did not create in the first place. There is no way in which local authorities can get organised to help to cushion the blow of massive redundancies in such a short time. On the one hand, the Government are destroying the nation's manufacturing base while on the other the local councils in areas that are
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drastically affected by that destruction are totally restricted both financially and by legislation. That leaves thousands of our people without hope.Mr. Wilshire : Is the hon. Gentleman really saying that the only way in which a local council or local councillors can achieve anything is by spending money?
Mr. Michie : Of course, strictly speaking, that is not the case. But if the hon. Gentleman wants local authorities to give advice, he must acknowledge that they will incur costs. Or does he want people just to go to the corner shop and ask for advice? Is not it more sensible for them to go to the town hall? If one wants expert advice, one sees an expert, and that expert will be employed by the local authority. If one wants good planning, one employs a good architect, and one pays that architect.
Do the Government want children to have proper accommodation? Do they want people to be protected from abuse of all kinds? If so, they cannot send Joe Bloggs, or anyone who happens to be handy that day, to see people ; they must send the relevent expert--social workers or architects. Perhaps the hon. Gentleman is suggesting that all those services can be provided free of charge, in which case that perhaps explains why local government is no longer provided by central Government with the resources that used to be at its disposal. Local authority initiatives are no longer possible and there is little hope unless we scrap the poll tax completely and bring back some form of fair rates system. That is what the Labour party proposes, and that is what it will do on its return to government next year. In that way, we shall be able to start rebuilding the nation's prosperity. That cannot be done starting from the crackpot ideas of a Tory Government. It must be achieved starting from good initiatives from a Labour Government and, certainly, from local democracy.
7.6 pm
Mr. David Wilshire (Spelthorne) : There is nothing quite like a local government debate to clear the Benches on both sides of the House. You, Madam Deputy Speaker, may feel that you are looking at the same old faces, but I sincerely hope that you are not hearing the same old speeches even if some of what all of us say on these occasions is quite familiar.
When I contacted Mr. Speaker earlier to ask him whether I might speak, I explained to him that, although I fully understood that the topic for today was the council tax and the Opposition amendment connected to it, I wanted to speak particularly about the other local government Bill which is to come before the House, which is much more relevant than you, Madam Deputy Speaker, and other hon. Members may suppose. [Laughter.] You see, Madam Deputy Speaker, they laugh before they hear anything, which shows that they do not want to listen. If Opposition Members read history books-- no matter the country in question and no matter the political philosophy of its Government--they will discover that, in the long term, structure is much more important to the health of local government than finance. My second reason for wishing to speak about the Local Government Bill is that I do not believe that the House can expect to get the finance of local government right without
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knowing exactly what it is that we are seeking to finance. I hope that that second point will keep me in order during the rest of my speech, Madam Deputy Speaker.The snag about the Local Government Bill is that it covers three topics-- the extension of powers to the Audit Commission, the extension of competitive tendering, and restructuring. All three matters could be the subject of long speeches but, because of the constraints of time, I shall confine myself to just one of them--restructuring. Let me first explain why I think that the subject of restructuring needs to be thought about at this stage. Someone needs to urge our colleagues, both in this House and in the other place, to avoid the mistakes that have been made in the debates that have taken place so far outside the House and in the lead-up to the legislation that we are now considering.
For my sins, I have listened carefully to a huge number of people in the course of this year. I have studied submissions from 282 of the 335 affected councils, and they do not make happy reading. The process has been profoundly depressing. Throughout my listening and my reading I have found errors resulting from a failure to understand what we are all about. All the time, one finds the same muddle and confusion arising from the failure to think through what it is we are trying to restructure and refinance.
Let me give the House one or two examples. The first error is that the size of a local government area's population matters ; it does not. It does not seem to matter in the Scilly Isles, where a couple of thousand people get all their services, nor does it matter in cities with more than 1 million people. Both communities seem to get on quite well. Therefore, population does not matter.
Another error is that the resource base matters. No, it does not if the House gets the Local Government Finance Bill right because that Bill and the contribution from the centre will deal with that. Another error that crops up time and again is that council and service boundaries must be coterminous. That belief led to the foul-up and disaster when we last restructured local government. On that occasion, we drew up the boundaries for service delivery convenience.
An example of the muddle and confusion is that far too many people claim that meeting needs equals providing services. The hon. Member for Sheffield, Heeley (Mr. Michie) exhibited that confusion. Meeting needs means ensuring that services are provided, and that is very different from providing them oneself.
More confusion and muddle is revealed by the statement, "I'm in favour of unitary authorities because I believe in all-purpose authorities." No one, not even someone on the far out-of-sight, left-wing of the Labour party, would suggest that local government should have all-purpose authorities to run every supermarket, and do-it-yourself shop and every solicitor's and doctor's practice. We must be grateful about that confusion.
Another mistake is to believe that accountability means local democracy. It does not. The deliverer of every service, from a corner shop to a hospital, is accountable to every client or customer. Accountability does not necessarily need the intervention of a councillor or any other politician.
How should we avoid those traps? We should home in on and think seriously about one small part of the Local Government Bill. Clause 13(5) provides that the review that is to take place must have
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"regard to the need--(a) to reflect the identities and interests of local communities ; and (b) to secure effective and convenient local government." That provision raises four big issues which should be at the heart of the debate that will take place in this House during the winter : what are the identities of local communities? What are their interests? What is local government? How are we to make local government, when we have defined it, effective and convenient? The first issue--to identify local communities--sounds simple, but mistakes have been made about it on so many occasions that I have almost lost count of them. Only that issue should be allowed to determine local government boundaries. There is only one way to identify local communities, and that is to ask and trust local people and therefore resist temptations to impose solutions from the centre.
However, we must be clear about what we mean by local communities if we are to get things right. That requires us to have regard to the fact that human society, wherever we find it, is highly territorial. In the real world, human society has many levels of community. The implication is that we all belong to several communities so that there is no such thing as one natural community which, if we could find it, would make everything well. We must be clear about what the local government community should be doing. It should respond to service needs and define the area in which people move around for their services. That is the fundamental issue, but we are still talking about local communities.
Mr. Bill Michie : Who is going to pay?
Mr. Wilshire : Perhaps the hon. Gentleman will stop and think about it. Obviously local people and central Government would pay--or does he want all local government to be paid for locally, irrespective of how we define it? That would be grossly unfair. Alternatively, if it was all paid for by central Government, the element of local democracy would disappear. I am not suggesting anything vastly expensive. I am simply suggesting that we should listen to local people. If they say that they want something small, let them have something small. If they want something big, let them have it. Irrespective of issues such as finance, rate capping and charge capping, boundaries must not be drawn for service convenience or for financial consideration. They must be drawn according to what local people want for themselves. There is no ideal or minimum size and there is no standard solution. The Cornish may want to remain Cornish and simply retain Cornwall. However, I am certain that Bristolians do not have the slightest desire to remain in Avon or to be put in Somerset or Gloucestershire.
Mr. Illsley : The hon. Gentleman appears to be saying that, no matter what size the local community wishes to be, it can be classed as a local authority perhaps alongside a large area in which, speaking purely in geographical terms, the people want to be a large authority. Surely there would be losses through economies of scale if that was the case. Surely there must be a minimum size.
Mr. Wilshire : The hon. Gentleman reveals one of the muddles--that meeting needs and delivering services are the same thing. There are different ways of achieving economies of scale in a small community as opposed to a big one. If the natural community boundaries with regard
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to the Local Government Finance Bill are defined for service convenience, we will fall into the trap that people fell into years ago.We must also consider the interests of local communities. It is important to be clear what those interests are not. They are not simply confined to local government services. A local community is as interested in its hospital as it is in its dustbins--
Mr. Bellotti : It is not allowed to be.
Mr. Wilshire : Yes, it is. That is the point. That confuses being interested and allowing councillors to be involved.
The interests of local authorities do not involve who employs the people who empty the dustbins or who employs swimming pool attendants. It is all about the quality of those services. The interests of the local community are not about who owns the electricity company, but about the quality of service provided. They are not about how hospitals--which are topical at the moment--are managed, but about the quality of the service provided.
If that is so, what does it mean for the interests of local government? It means that we should be talking not about economies of scale or about size, but about whether the values of local communities are upheld ; whether the needs of local communities are met--whoever meets them ; whether local priorities are being set and followed and whether they are being set by local people instead of being foisted on them. Local people are interested in service quality being of the highest possible level and service costs being at the lowest possible level. That is the true role of local government and of councillors.
The next consideration in the Local Government Bill is effective and convenient local government. However, we must first be clear what we mean by local government. There are two concepts floating around on both sides of the House--this is not a party political point--about what local government means. The first is that local government is owned by central Government, and the other is that local government is owned by local people.
This Government, the previous Labour Government and virtually every other Government that I have ever come across have tended to focus on ownership of local government from the centre. But the truth is that central Government simply devise the local framework, and then central Government allocate services, but central Government and this House do not own local government. Local government is owned by local people. The implications of that--
Mr. Donald Dewar (Glasgow, Garscadden) : The hon. Gentleman is against capping.
Mr. Wilshire : I shall put the hon. Gentleman out of his misery. I am not against capping, and he will see why in a moment.
The implications of what I have said are profound. The hon. Gentleman is quite right to intimate that I have said something significant, but it is not what he thinks I have said. The implications are profound for the Local Government Finance Bill, but not for the reasons that the hon. Gentleman gives, and they are even more profound for the future of local government itself. If we cannot get
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back to the concept of local government being owned by local people, the future of local government looks pretty bleak.Mr. Graham : It is bleak just now.
Mr. Wilshire : It is bleak because too many people, particularly in the hon. Gentleman's party, are locked into spending money on interfering in things that local people do not want them to interfere in, or they are wasting money. All those things make the future of local government pretty bleak at the moment.
Having decided what local government means, we can then consider how to make it effective and convenient. If we want to make it effective, we need to look at what the dictionary has to say about the word "effective" and then what it has to say about "convenient". Effectiveness is one of the three Es of the Audit
Commission--effectiveness, efficiency and economy. It is interesting that only one of them is mentioned in the Bill. That is absolutely right, because effectiveness is about meeting needs and it is highly political, which is why the Audit Commission and others have always found it difficult to have anything helpful to say about effectiveness.
Efficiency and economy are left out of the Bill for one simple reason--that is, efficiency and economy are about delivering services, not meeting needs. Thus, if we think about effectiveness, we focus our debate upon the needs of local people, and that is absolutely fundamental. Effective local government is about working with local people in areas with which local people identify, irrespective of how the services are provided, and in ways that best meet the needs of local people and not the convenience of service deliverers. If we want to achieve convenient local government, the dictionary becomes very unhelpful indeed. I wish I could be more positive about that, but I cannot. My dictionary says that convenience means freedom from difficulty or trouble. I wish that it were possible to have freedom from difficulty or trouble in local government, but it is not. Tension is inevitable, for three good reasons.
First, local government is subservient to central Government in any nation state, and that is bound to bring conflict and tension--it is inevitable. Secondly, in the United Kingdom, there is no formal regional organisation. It is perfectly possible to do without it, but it does not half make for additional tension if the absence of a regional organisation is not handled carefully. The third reason why tension is inevitable is that change in society is rapid and great and totally outside the control of politicians. I suspect that, in respect of trying to achieve convenient local government, the best the House could hope for is to achieve the least inconvenient, because that is the reality of the situation.
Thus far I have quite deliberately said little about services, because that is what the Bill wants us to do. It is about local people, local communities and their needs, not about services or the convenience of their managers, and it is not directly about the economy and efficiency of service provison. However, outside the House, the debate about the Bill has been dominated by such issues. It has been dominated by considerations of who controls which service. It has been dominated by debates about making sure that there are areas big enough for efficient provision. But both are issues totally separate from the issues that we should consider when we restructure local government.
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The correct way forward for services is that each and every service must be designed separately and independently of natural community boundaries. Surely nobody suggests that the service boundaries of the gas supplier or the Post Office, for example, should automatically coincide with local government boundaries. Of course we do not say that. Why, therefore, should we automatically assume that education, social services or refuse collection boundaries should automatically coincide with a natural community boundary ?The other point about making progress in that direction is that each and every service needs to be allocated separately to the person--
Mr. Bellotti : Is the hon. Gentleman suggesting that every local authority service could have a different boundary ? If so, it is rather incredible, and I should like the hon. Gentleman further to explain.
Mr. Wilshire : The hon. Gentleman makes my point for me. He said "every local authority service". We should not be considering simply local government services. If local government is to be truly effective on behalf of local people, it will have just as much interest in the Post Office, British Rail, the local supermarket and so on. If, however, the hon. Gentleman and his party wish to focus upon those services that are provided by local government, we will fail all over again, because the debate will focus on who controls what. We will be talking about efficiency of service delivery, we will draw up boundaries and have councils which reflect service delivery, and people will simply not identify with them. However, if we go down my track, we will welcome the Bill and make the Bill serve the purpose of local government.
I hope that what I have had to say has alerted the House to the errors that have been made elsewhere and to the muddle and confusion. I very much hope that the forthcoming consideration will seek to define natural communities, not service territories. I hope that it will focus on the needs of people rather than on the services that are delivered to meet them. It must detach the designing of services from drawing council boundaries.
If we do that, we will secure once and for all the future of local government, improve service delivery at the same time, and enhance local democracy. If we do not do that, we will live to rue the day. The wish for a good future for local government unites all parties and all people inside and outside the Chamber. If that is so, the needs of people and respecting them must come first, and then we will get it right.
7.27 pm
Mr. Gerry Steinberg (City of Durham) : I quote :
"The community charge is here to stay. I don't think that by the time the next election comes the idea that we should overhaul once again the whole system of local government finance will be regarded by the electorate as a terribly cheering idea. Maybe one day we'll have people breaking the law and painting on the sides of buildings Up with the community charge' ".
Those are the very profound words of the right hon. Member for Bath (Mr. Patten) in an article in The Spectator only a little more than a year ago. As usual, he got it wrong. As usual, the arrogance of the Conservative party could be seen in the words of its chairman. The Tories got it wrong with the poll tax, but they were not prepared to admit it. The Government misled the electorate, but they were not prepared to admit it. They
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blindly carried on saying how popular the poll tax was, when, from day one, everyone knew that it was a disaster and that eventually it would have to go.Today we are discussing a new tax to replace the poll tax--the poll tax that has hardly been with us any length of time and yet has been a disaster. Statements by the chairman of the Conservative party and by many other leading Tories have shown them to be totally inept in not being able to glean just what a disaster it was. The Government have disgracefully squandered billions of pounds on the poll tax. Billions of pounds of taxpayers' money have been wasted on a tax which everyone except the Conservatives knew would fail.
Even at the end of 1990, when everyone knew that the poll tax was becoming a liability and a disgrace, the hon. Member for Enfield, Southgate (Mr. Portillo) said at the Conservative party conference : "The community charge is a courageous, fair and sensible solution. Far from being a vote loser, with your help it will be a vote winner and launch us on our fourth term. Let's go out from this hall together and proclaim its advantages. The community charge makes local government accountable ; the community charge revives local democracy ; the community charge puts power into the hands of local people. That, ladies and gentlemen, is an achievement to be proud of."
If it is such an achievement, why are we discussing the new council tax today, a tax that is intended to get rid of the dreaded poll tax? The reason is that the Conservative party is an arrogant party that will not listen or take advice.
When the poll tax was originally introduced in the House, my right hon. and hon. Friends pleaded with the Government not to introduce it, saying that it was a bad and unfair tax. But the Government did not listen and we can all be sure that they will not listen today either. Just like the poll tax, the council tax is deeply flawed. It is not a fair or a practical tax and it certainly will not stand the test of time.
The administrative complexity of the system is likely to be worse than that required by the poll tax. The whole thing will be a shambles and as unpopular as the poll tax. The new council tax will be based on an inadequately banded valuation of property, with a fixed upper limit that is designed to protect the very rich at the expense of everyone else. Is not that exactly the same as the poll tax? As we said when the poll tax was introduced, the council tax is just another tax that has been designed to protect the very rich. There is no doubt that it is a flawed and a doomed tax.
The appeal system is vague. The banding and discount schemes will mean that bills will not be related to people's ability to pay. The discount scheme will cause tremendous problems and will be a bone of contention causing disruption, just like the poll tax. Every property in Britain will be banded. Why is the difference in property values between band A and band H in the ratio of 1 : 8 while the difference in bills for households between those in the bottom band and those in the top band will be only in the ratio of 1 : 3? The council tax proposals are and will remain contentious. The number of bands and the fact that they are national and do not allow for regional variations will cause great resentment throughout the country. The use of estate agents to carry out the valuations will cause tremendous problems. Different estate agents will have different views. The assessment process will be seen to be totally unfair. Valuations will be carried out not on individual properties, but on packages of about 20,000
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properties. Individual properties will not be given an actual value. The operation of such a simple and crude system is bound to cause tremendous problems and to trigger masses of appeals from people who do not accept that their property has been valued correctly.Mr. Brandon-Bravo : Before leaving his point about valuations and his criticism of the fact that there is only a national scheme, will the hon. Gentleman agree that the old rating system often led to properties in low-rated areas having a high rate in the pound, while in high-rated areas, some properties had low rates in the pound? I do not see what the difference is. Perhaps the hon. Gentleman can explain it, because it is his party that wants to return to the old rating system.
Mr. Steinberg : The difference is that someone whose property is too highly valued and placed in the wrong band will pay more than he or she should. If the hon. Gentleman cannot recognise that, it is easy to see why his party is in its present difficulties. The biggest complaint that I hear about the poll tax is that people whose house may be exactly the same as that of their neighbours and who may earn exactly the same wage are paying a different amount. That causes tremendous resentment--and rightly so. Another complaint is that a single pensioner may have to pay more than the working couple who live next door. Again, that causes tremendous resentment. We must get away from such a state of affairs. However, under the council tax, the bills received by identical households with the same income may differ simply because of the identity and status of the person who is nominated as the "liable" person, thus causing exactly the same resentment.
It is now almost certain that, despite what the legislation may say, local authorities will have to compile a register or list if they are to administer the tax efficiently. Although we were told by the Secretary of State that there would be no need for a register, a register or list of adults will be required to administer the system of the 25 per cent. single person and status discounts.
The importance attached to the head count element of the new tax is obviously the result of pressure from the right wing of the Tory party and is most clearly revealed in the proposals for the complex system of discounts. Despite what the Government have said, the system of discounts and household liability will make administering the tax almost impossible without a register listing every adult, similar to that which was needed for the poll tax. For most households, councils will need to know the number of people living in a house and the relationship between them.
If ever there was an infringement of people's liberty, this must be the ultimate example of it and, frankly, it is even worse than with the poll tax. Help with bills will be lost if additional individuals move into households. In many cases, the income of every adult in the household will need to be known by the local authority before the bill can be calculated. Is not that crazy? Is not that exactly the same system that the poll tax produced and was it not that system that caused so much hatred towards the poll tax?
The Government got the amount of the poll tax bills wrong. When they introduced the poll tax, they said that the average bill would be about £178. They soon revised
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that and said that the bills would average £278, but when the bills were sent out for the first time, the average amount turned out to be £357. The signs are that, yet again, the Government have got their sums wrong. They have already made the mistake of overestimating property prices when establishing the bands.Recent figures from the building societies show that house prices will be well below those used by the Government for their council tax calculations. Although the council tax retains a head tax element, it has been devised as a property tax. Each household will receive a tax bill that is based on the value of the property, but that value will not necessarily be the property's actual value. Is that not an incredible U-turn from the Government? Is that not an amazing volte-face?
I am sure that hon. Members will recall that only recently the hon. Member for Enfield, Southgate said :
"Any system based on property will repeat the injustice of the domestic rates taxes on people's homes are unfair. Property values bear little relation to people's ability to pay."
How can anybody ever again take seriously anything that the hon. Gentleman says--that is, if he was ever taken seriously in the first place?
The Government aim to have the new tax up and running by April 1993. That means that the Local Government Finance Bill will have to complete its parliamentary passage quickly. Therefore, as was the case with the poll tax, much of the detail does not appear in the Bill but will be introduced later through regulations. Again, as with the poll tax, it will be a total catastrophe and a total nonsense. When the poll tax was introduced, we repeatedly warned the Government not to go ahead, but they are yet again introducing a tax without any thought, research or real idea of what will happen. Again, Opposition Members are warning them that they are moving towards disaster.
Last year, the Prime Minister said :
"One of the difficulties we got into with the community charge was being bounced into decisions before they were fully thought through and before we knew precisely how they would affect people". That attitude is typical of everything that the Government have done. But the Prime Minister is now set to do the same thing all over again with the council tax by trying to rush it through even more quickly than the poll tax. The new tax will prove as disastrous for the British people as was the poll tax.
Will the council tax be fair? As we all know, unfairness was the reason why the poll tax failed, but many people to whom I have talked already believe that the council tax will be unfair because, once again, it will not be related to people's ability to pay, which should be a characteristic of any good tax.
Early indications are that the Government's predictions are all wrong and that, as happened with the poll tax, when the first bills go out they will be twice as much as the Government have estimated. I welcome the Government's decision to get rid of the poll tax and to reintroduce a property tax, because that is basically what the Labour party would do. But this Conservative council tax is the wrong option. It is ill thought out and badly prepared, just like the poll tax, and the Tories are making it up as they go along.
First they were going to have 14 valuation bands, then seven, then nine, then seven again, and now we have eight. Despite the Government's promises and the chaos of the poll tax, the poll tax is still with us and poll tax bills will
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