Question, Newbury Weekly News
Why has Berkshire been so unfairly treated? The Conservative County Council is not a high-spending authority, yet our community charge is over £400 - while Westminster is half that.
MT
Berkshire has not been unfairly treated. It received a very generous increase in the level of support it got from Government and business rates: 23.5 per cent or more than twice the rate of inflation. But the Council has decided to increase its spending by more. In 1989-90 Berkshire's total expenditure was £326 million, including the use of balances. This year it is planning to spend £411 million - a 26.1 per cent increase in the amount raised in grant and rates in 1989-90. The high community charge inescapably follows the Council's decision to raise spending by very nearly three times the current level of inflation.
Question, Newbury Weekly News
Is it fair that we should subsidise Westminster, where many of the residents are wealthy. Newbury residents have to pay a £60 safety net contribution to help “inner city” areas. Westminster is a beneficiary of that money.
MT
Westminster does not benefit from the safety net. It actually contributes £22 for each adult. More generally it is true that people in Newbury contribute £60 to the safety net.
It is worth saying what the safety net is. Under the old rates, people in areas like Berkshire had for years subsidised those living in areas with low rateable values. The subsidy was hidden but nonetheless very real. I do not think it would have been reasonable for those who used to benefit from that subsidy to lose it in one go. The shock would have been too great. Instead those areas like Berkshire which gain under the new system are sharing about half their gains this year with the low rateable value area.
But as from next year Berkshire, like other authorities, will not pay anything towards the safety net. That responsibility will be taken on by the general taxpayer. So Berkshire residents should be so much better off next year. And they will be if they stay vigilant and demand value for money. [end p1]
Question, Newbury Weekly News
Why are Berkshire's figures so high, when the burden will be borne by a far greater number of people? Newbury used to have 52,000 ratepayers. There are now 105,000 charge payers.
MT
As I have said, Newbury's community charge is high because of the level of county council spending. Certainly the number of charge payers has doubled as compared with rates, though remember that one in four chargepayers will get relief with up to 80 per cent of the charge.
But the Government has brought in one other important change in the financing of local government - the unified business rate. Under the rates, if a Council wanted to increase its spending by more than the increase in its grant from Government it could put up the rates not just for residents who vote in local elections but also by milking industry and commerce who had no vote. Too many did so and the long-term result was to drive away business and jobs.
Under the new system the contribution which shops and factories make to local government is fixed and overall is limited to the rise in inflation. This will have a beneficial effect on jobs.
But it does mean that if councils now decide to spend more than they get from the business rate and Government grants, every penny extra spent goes on to the community charge. You have a vote to make your council accountable for its spending. It is up to you to make your voice heard and ensure that the council spends your money wisely.
Question, Newbury Weekly News
How will the proposed changes at this stage affect the level of charge in Berkshire?
MT
I cannot tell you how Berkshire will be affected because we are only at an early stage in our review of the operation of the community charge, as distinct from the principle. I must make it clear that the community charge as a near universal tax upon adults who use local authority services is here to stay. But we shall be looking closely at how this new tax operates just as we look at the operation of every new tax. Scotland, which has had the community charge a year longer than in England - and where the average increase was held at around 9 per cent this year - has already refined the system through legislation. [end p2]
Question, Newbury Weekly News
What is your reaction to Mr Heseltine's proposals?
MT
As I said in the House of Commons, Mr Heseltine had many good ideas in his article in The Times last week and his suggestions will be considered along with many others. But Mr Heseltine has not challenged the principle of the community charge and has indeed said that the present Conservative Government “would fight and win the next general election with the community charge in place”.
Question, Newbury Weekly News
Why has the whole thing gone so badly wrong? Is it because of Whitehall bungling?
MT
The whole thing has not gone badly wrong. And no-one has bungled. No-one could conceivably expect the introduction of any new tax, requiring 17 million more people to make a contribution than did under the rating system, to go absolutely smoothly. But already we have seen enough to know two things: Labour councils cost you most. Councils with no overall control are expensive. Conservative councils cost you least. The profligate and inefficient councils are coming under severe democratic pressure. That is exactly what the community charge was intended to do?
Question, Newbury Weekly News
Is it not true that the community charge will be very expensive to administer? Why not have a local income tax, levied by the local authority?
MT
No, the community charge will not be very expensive to administer. It will cost roughly double the amount it cost to administer the rating system. Why? Because as I have said, there will be roughly double the number of people paying community charge as paid rates.
As regards local income tax, many people would rightly be deeply concerned about having to reveal details of their personal income to local authorities. It would be a major invasion of personal privacy. Nor do most people pay income tax where they live. They pay it where they work through PAYE. So collecting local income tax would impose a massive bureaucratic burden on employers, and indeed on local councils who would have to take on more staff to deal with separate returns and assessments for each individual.
In 1981 the Inland Revenue estimated it would require an extra 55,000 staff to operate it. At today's prices that would cost £750 million compared with the £400 million cost of collecting the community charge. [end p3]
Question, Newbury Weekly News
How do you perceive the vociferous public reaction to the tax?
MT
I am confident that the more the public comes to understand the principle of the community charge the more they will appreciate it and use their vote to secure economy and efficiency in the conduct of their local council.
Question, Newbury Weekly News
Berkshire's Conservative politicians have a very gloomy view of the future. Can you do anything to stop them being voted out at the next local elections? How do you view your own future?
MT
I am not in the least gloomy about the future. The prime need is to reduce inflation. We shall. With lower inflation will come lower interest and mortgage rates. And the community charge, as we refine its opinion, will come to be seen as a crucial weapon in the hands of the people against spendthrift and wasteful councils. For myself I intend to lead the Conservatives into the next election and win a fourth term.