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CMO until 31 December 1992

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CONFIDENTIAL

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THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT

FIDENTIAL

Community Charge

CABINET

LIMITED CIRCULATION ANNEX

CC(89) 30th Conclusions, Minute 2

Thursday 5 October 1989 at 10.30 am

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THE SECRETARY OF STATE FOR THE ENVIRONMENT said that the Sub- Committee on Local Government of the Ministerial Steering Committee on Economic Strategy (E(LG)) had the day before discussed transitional arrangements for the introduction of the Community Charge.

had noted that there were two areas of political concern. The first was the area safety net. There was strong pressure from any of the Government's supporters for the Exchequer to fund the safe het, so that no-one in the gaining areas would have to make any ribution. But this would cost £650m; it might encourage the local authorities concerned to increase their spending; and a considerable of the extra grant would go to improving further the position of Individuals who were already gainers, rather than to protecting intal losers. E(LG) had therefore concluded that it would not be ghep change the safety net proposals published on 19 July, a son which would disappoint some of the Government's supporters. he ancellor of the Exchequer had however offered that in the second year of the transition the Exchequer should take over paying for the safety net protection out of aggregate external finance (A that the total of AEF for that year should be increased to reflect this. The public expenditure provision for AEF would according be increased for that year in line with the GDP deflator, plus the cost of the safety net. commended this offer to his colleagues.

He

The second area of concern was the position of individuals facing large losses from the introduction of the Community Charge. With the colleagues directly concerned, he had worked a scheme for giving relief to such losers. Protection would be (pritarily targeted on former ratepayers, pensioners and disabled people rather than first- time payers since they were the very people of the community charge was meant to fall so as to broaden the t. Relief would be given if the 1990-91 community charge for an Indrual (or two charges for a pair of adults) that would be payable a specified spending assumption for the authority exceeded their 1999-90 rate bill by more than a threshold amount. The spending ass

assumption to be adopted was that authorities would spend in line with the grant settlement proposals announced on 19 July: that is, at 3 per cent

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CMO until 31 December 1992

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CONFIDENTIAL

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