Michael Heseltine – 1990 Speech on the Community Charge (Poll Tax)

The speech made by Michael Heseltine, the Secretary of State for the Environment, in the House of Commons on 5 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——

Mr. Alexander Eadie (Midlothian) rose——

Mr. Heseltine

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——

Mr. Eadie

Will the Secretary of State give way?

Mr. Heseltine

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.

Mr. Eadie rose——

Mr. Heseltine

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——

Mr. Eadie rose——

Mr. Heseltine

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

Mr. Gould

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?

Mr. Heseltine

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.

Mr. David Clelland (Tyne Bridge) rose——

Mr. Heseltine

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

Mr. Eadie

Will the right hon. Gentleman give way?

Mr. Speaker

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.

Mr. Heseltine

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.]

Mr. Speaker

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.

Mr. Heseltine

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.

Mr. 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?

Mr. Heseltine

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.

Mr. David Blunkett (Sheffield, Brightside)

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.

Mr. Heseltine

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.

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?

Mr. Heseltine

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.

Mr. Malcom Bruce (Gordon)

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?

Mr. Heseltine

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.

Mr. 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?

Mr. Heseltine

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.

Mrs. 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?

Mr. Heseltine

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

Mr. John D. 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?

Mr. Heseltine

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.

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 beleaguered poll taxpayers that some relief will come as from next April?

Mr. Heseltine

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.

Mr. Dave Nellist (Coventry, South-East)

Will the Secretary of State give way?

Mr. Speaker

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.

Mr. Heseltine

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.

Mr. Gould

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.

Mr. Heseltine

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——

Mr. Heseltine

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——

Mr. Neil Kinnock (Islwyn)

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.?

Mr. Heseltine

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.

Mr. John Evans (St. Helens, North) rose——

Mr. Heseltine

In Newcastle, the Cruddas park project to regenerate two council estates grew out of a private 321sector 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.

Mr. John Battle (Leeds, West) rose——

Mr. Heseltine

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.

Mr. Thomas Graham (Renfrew, West and Inverclyde) rose——

Mr. Heseltine

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——

Mr. Heseltine

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——

Mr. Brian Wilson (Cunningham, North)

On a point of order, Mr. Speaker.

Mr. Speaker

I hope that it is a point of order.

Mr. Wilson

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?

Mr. Speaker

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——

Mr. Speaker

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.

Mr. Stuart Bell (Middlesbrough)

Further to that point of order, Mr. Speaker.

Mr. Speaker

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

Mr. John Home Robertson (East Lothian)

On a point of order, Mr. Speaker.

Mr. Speaker

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.

Mr. Home Robertson

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.

Mr. Speaker

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.

Mr. Heseltine

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.

Mr. Harry Barnes (Derbyshire, North-East)

Will the right hon. Gentleman give way?

Mr. Heseltine

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

Mr. Kenneth Hind (Lancashire, West)

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 artificially 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?

Mr. Heseltine

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.

Mr. Nellist

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.

Mr. Heseltine

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.