House of Commons Hansard Debates for 12 Jun 1991

Sir Rhodes Boyson : I wait with interest to see whether my views influence the Minister's reply. I believe in the salvation of all men and the salvation of souls on the way. If that means that there may be two or three other bands elsewhere in the country that will satisfy people and lead to dancing in the streets this evening, I would not say no to that.

Mr. Bob Cryer (Bradford, South) : Is the right hon. Gentleman thinking of Rawtenstall?

Sir Rhodes Boyson : Rawtenstall is near where I was born. It is nice of the hon. Member for Bradford, South (Mr. Cryer) to guess the place of my birth from my accent.

I have obtained figures from the London Boroughs Association, which is by no means a Labour but a Conservative organisation, on the seven bands in the three areas. Of the 33 Greater London boroughs, 18 will be

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worse off--most of them are Conservative- controlled--than under the community charge system. The residents will not like that, which is putting it gently. Most people look to a new system to make them at least the same, if not better off than before.

The last thing I want--I have already referred to it--is a reverse Ribble Valley factor. To an extent, the system was changed because of what happened at the Ribble Valley by-election. I do not want the policy to go the other way because we would then have to r edeem the situation again by introducing an alternative policy.

The people of London and the south-east have as much concern for paying their bills as people elsewhere. I do not think that one part of our society is any better or worse than another. They are the same. Because of the high price of mortgages in London, people are already paying a high price for living there. Most of them were born in that city and they want to continue to live there. They know that city and it is where their friends are. In contrast to the previous recession, this one is hitting the London area and people in London are seriously concerned. The proposal for a band to cover London to ensure that we are not depleted financially or treated unfairly is, to my mind, an important one for my constituents and those in the rest of London.

The London Boroughs Association was right to work out an alternative system so that a three-bedroomed house in London should be charged the same, as far as possible, as those elsewhere in the country. That is how the decision should be made.

Mr. Douglas : Much as I love and adore the right hon. Gentleman and his speeches, will he clarify how it would be possible to treat three- bedroomed houses the same throughout the country if capital valuation is based on arm's-length deals? Presumably the right hon. Gentleman believes in the free market--I know he does--so how can one use arm's-length deals to arrive at the capital value?

Sir Rhodes Boyson : I recognise the force of that intervention, but this is a fallen world, even in Scotland. There is no perfect system. All that we can achieve is a reasonable system. The hon. Gentleman will see that I am in one of my most reasonable moods. We should move nearer the kindgom of heaven if we had four bands instead of three. We should hear the hallelujah chorus not only in Rawtenstall but in London if the Minister were to announce that there is to be a fourth band.

I should have preferred the community charge to remain in place, but that is now history. My concern is that the new system will sadly disadvantage one area of the country, in just the same way as the community charge led to low-rated properties in the north being disadvantaged. Unless there is a fourth band for London, it will become a disadvantaged area. We are not prepared to accept that. Unless banding is fair, the people of London will wreak their vengeance in the ballot boxes.

The amendment relates to banding and that is what we are really discussing. I have the greatest respect for the Minister, but I must tell him that between now and the introduction of banding he should provide at least four bands. If not, there will be a Ribble Valley backlash in the south of England if it finds that it is put at a disadvantage compared with the north. A fourth band would ensure that

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chip shops in London did not have to pay more than chip shops in the north. People in the south would then be able to pay the same for their chips as people in the north.

Mr. David Alton (Liverpool, Mossley Hill) : The right hon. Member for Brent, North (Sir R. Boyson) has made an interesting case for another bank for both chip shops and Brent, North. The amendment moved by the hon. Member for Sheffield, Brightside (Mr. Blunkett) would provide for the valuation of each domestic property, chip shops or otherwise. Ultimately, the bands that apply to each individual householder must be seen to be fair, otherwise people will compare what they have to pay with what is paid by other people in the neighbourhood. If they do not like the comparison, they will be very dissatisfied.

We have put forward various proposals since 1980. At that time I saw the then Secretary of State for the Environment, who is now back in that job, and put to him proposals for a local form of income tax, based on ability to pay. It is not a regressive form of taxation. It is fair and is based on individual banding. One day, the House will have to return to that question.

Amendments Nos. 27 and 28 deal specifically with the compiling of a register of the values of all domestic property. If they accept the amendment the Government would be able to take action about empty housing. When revaluation takes place they would have the opportunity, in line with Shelter's proposals, to draw up a national register of empty properties. The Government argue against requiring every local authority in the country to draw up a list of all empty properties in the area. They say that it would be a cumbersome, bureaucratic and costly exercise.

With 700,000 vacant properties, an exercise along those lines is long overdue, but the Government have set their face against it and say that they do not have the resources and that they do not wish to impose that responsibility on local government. The amendments and new clause would give us the chance, as we carry out a detailed valuation and at no extra cost, to establish the number and location of empty properties in the country today. I notified the Minister's office earlier today that I intended to raise this issue.

Mr. Rupert Allason (Torbay) : Many people regard local authorities as the worst offenders in keeping properties empty for unnecessarily long periods. Does the hon. Gentleman agree that it would be a helpful start in establishing the register that he suggests if local authority figures were published, as the information is immediately available to all local authorities?

Mr. Alton : That is a seductive argument, but unfortunately the facts do not bear out the hon. Gentleman's view. In my own city, for example, 5,289 properties owned by the local authority--8.8 per cent. of the housing stock--are vacant. That is scandalous when many people are without a home, but 6 per cent. of private properties in Liverpool--7,064-- are vacant too, as are 931--4 per cent.--of those owned by housing associations.

The situation is indeed horrifying. It is true that local authorities have empty properties--92,000 in all throughout the United Kingdom--which represent 2.5 per cent. of the entire housing stock. Housing associations have 19,700--3.5 per cent. of total housing stock. In the other part of the public sector--the Government's own properties--

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some 31,000 properties are empty. But in the private sector there are a staggering 586,000 empty properties. That comes to a total of more than 700,000.

There is a clear case for drawing up a register of such properties when the valuation is undertaken. Local authorities would then not have to make it a separate exercise, and we could see the scale of the problem and start to match that major asset of more than 700,000 empty properties with the 2 million people that Shelter estimates are in need of housing.

Mr. David Clelland (Tyne Bridge) : I follow the logic of the argument about registering empty properties, but does the hon. Gentleman agree that it is also necessary to outline why the properties are empty? Would it not be a cruel deception to tell the homeless, as Conservative Members often do, that properties are standing empty waiting for someone to move in? We know that the majority of empty properties, especially those in local authority hands, are empty for good reasons. They are being refurbished or repaired, or perhaps waiting to be re-let. There are reasons why property stands empty, and it is not always available for people simply to move into.

Mr. Alton : That is true, but one answer could be provided by the sweat equity schemes, whereby people put their own efforts and resources into renovating and doing up property currently out of the market. I would like all property which has lain empty for six months, whether it be in the public or private sector, to be submitted to the district valuer for a valuation, placed on the market and made available for families.

I agree that properties are often vacant because resources have not been made available to do them up. Rather than wait for ever for the necessary resources, it would be a better recognition of reality simply to make the properties available for families to get on with the job of improving them.

The situation is pretty grim in a number of cities. In Newcastle, as the hon. Member for Tyne Bridge (Mr. Clelland) will know, there are 6,790 empty properties ; in Sheffield there are 8,810, in Birmingham 10,900 and in Manchester 10,760.

Mr. Blunkett : I advise the hon. Gentleman to use such statistics cautiously. Statistics are often produced using figures incorporating houses under improvement, houses that have just been demolished and houses that are being held for other purposes. In Sheffield, for example, properties are being held for the world student games.

Mr. Alton : I know that, and it is fair enough to put it on the record, but I know of properties in my own constituency which have now been earmarked by the local authority for demolition when during the previous two years they have been massively improved, at great expense.

In March, Liverpool city council admitted that its outstanding debt on property demolished in the previous year was £1,255,000, and that was purely on the repayment of loan charges. For a city whose current debt is a staggering £800 million, that is a crazy way to proceed. 4.30 pm

We should not spend all our time simply attacking local authorities or the private sector. I recently wrote to a private landlord in Birmingham and in his reply he admitted that he did not know that he owned a property that had been vacant for some years. Having had this

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pointed out to him, he has now agreed to take out a restoration and improvement grant for the property. We should not entirely blame the Government either, although, as I have said, there are more than 30, 000 Government-owned empty properties.

A general valuation will enable us to prepare a public register that will cost nothing because it will be done as part of the valuation already taking place. I hope that the Government will seriously consider my plea to carry out such a survey and to publish the figures.

Empty houses not only represent a loss of a resource, but are often tinder boxes and a breeding ground for vermin. Like a cancer, decay spreads throughout a terrace or a neighbourhood. Hon. Members are well aware of the curse that an empty property can become. Many families would like to make use of such properties and could turn them into homes.

As part of the same valuation there should be an assessment of properties, such as those mentioned by the hon. Member for Brightside, which are listed as likely to be demolished. In the Bull Ring in St. Andrew's gardens in my constituency, several hundred properties are empty, and many of them would make prefectly good homes. I do not accept the logic of demolition for such properties. Close to that tenement is a similar one which used to be called Myrtle gardens but is now known as Minster court. It was taken over and improved by a private company, Barratts, and every flat was sold. There are creative ways to proceed, and we should not resort to demolition. There are other ways in which the register could be positively used. For instance, when arriving at valuations for individual householders, we should bear in mind the services that they receive. That is another reason for supporting the amendment. When I look at the museum of horrifying examples, in my city and at the failure to provide services, I can think of good reasons for people to receive substantial rebates and a reduced assessment.

For 13 weeks, some of my constituents have not had their bins emptied. Those areas are festering and piled high with rubbish. I wrote to a junior Minister, who suggested that I should contact the Keep Britain Tidy group asking it to run a local campaign. Many parts of Liverpool are now a public health hazard. There are rats as big as cats ; a stench from noxious refuse ; and even children's playgrounds piled high with rubbish. I am sure that the Minister will agree that people are entitled to better than that.

The Environmental Protection Act 1990 contains powers enabling the Government to bring contractors into areas in which people are not receiving services. If Horse Guards parade, the streets around Buckingham palace or even Marsham street itself were piled high with refuse, those powers would undoubtedly be used to remove it. Ministers should think seriously about intervening and not leave community charge payers to stew in their own juice.

The valuation should take account of demography and social structure. Whole communities should not be penalised because of the attitudes of a minority. I hope that this time next year my constituents will not be sent bills for £70.99 in lieu of charges that should have been levied against people who did not pay last year. That is contrary to every principle of natural justice. People who paid their full bill last year should not have to find almost £71 this year to pay for other people's services. If the local

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gas board arrived at my home and asked me to pay for gas that I had not consumed and threatened to cut me off if I did not pay, I would feel extremely aggrieved.

Labour's non-payment campaign has led to a great deal of hardship for many ordinary honest people in the city of Liverpool. They have been caught up like world war one soldiers in the trenches, while the generals fire across their heads. No doubt this is also true of many other cities. That is why I am anxious that, before we proceed any further with the Bill, the Minister gives us a categorical undertaking that there will be a right of redress for citizens. In future, residents should not be forced to pay double bills to make up for those who refused to pay in the previous year. That includes Members of Parliament, who have not paid but are perfectly able to meet their bills. I am not talking about people who are unable to pay but about those who, for political reasons, refused to pay and who have left a legacy of accumulated debts that have to be made good by those who have paid.

A valuation that does not take those factors into account will be as worthless as the unfair system that it will replace. The amendment now before the Committee would require information on the estimated value of each property. The unamended clause would only give us a list of all properties, with minimal details of the band in which they appear. That would not be enough information. The rating system advocated by the hon. Member for Brightside is not one that I would advocate, but his amendment comes closer to what I should like to see happen than would the unamended clause. Therefore, I commend it to the Committee.

Mr. Richard Tracey (Surbiton) : Like my right hon. Friend the Member for Brent, North (Sir R. Boyson) I speak primarily with London in mind. He has quite rightly drawn the attention of the Committee to the wide disparities that may occur if one simple valuation is conducted across the whole of England, particularly when Scotland and Wales are to be treated differently. I speak for my right hon. Friend as well in paying tribute to the London Boroughs Association for the hard work that it has done in pointing out the many questions that need to be answered by my hon. Friend the Minister and his colleagues in the Department of the Environment before this goes ahead. I hope that my hon. Friend the Minister will give the House a number of detailed answers.

The hon. Member for Sheffield, Brightside (Mr. Blunkett) has already covered a lot of ground in a tour d'horizon. He quoted a number of the briefs that he has been sent not only by local government associations but by the likes of the Confederation of British Industry. Clearly, valuation and how it is to be conducted are at the core of the policy for local government finance that the Government are proposing.

When this alternative to the community charge was suggested by the Government, I felt that a valuation that would work, and would even out many of the regional differentials, would be one based on rebuild costs. One of the big problems in London, which causes disparity in values, is high land value. The properties do not cost that much more to build or rebuild. We all know that insurance companies are happy that valuation for properties is done by the occupiers. We are sent a chart of costs carefully worked out by expert surveyors and valuers from which we calculate, according to the number of rooms, or the size of

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the rooms, how much it would cost to rebuild our homes. Last time that I renewed my house insurance, my insurance company asked me to employ that method.

If we followed that form of valuation, it would be possible for the public to be much involved in the process. They would feel, given the questions that they were asked, that they were producing a fair valuation. If necessary, the valuers appointed by the commissioners would be able to check specific valuations to ascertain whether people were giving incorrect information. Perhaps my hon. Friend the Minister for Local Government and Inner Cities will be able to hint whether that is an avenue down which we might be going.

I ask my hon. Friend to tell the Committee what the thinking is within the Department of the Environment about the current prospect of regional disparities. The London Boroughs Association has produced charts--I know that copies have been sent to the Department in the consultation process-- that show that in greater London 0.9 per cent. of properties would be in band A, whereas 15.7 per cent. would be in Band G. There is no especially good and acceptable distribution across the bands. As has been said by the association and reported to the Committee by my right hon. Friend the Member for Brent, North, in the north 46.6 per cent. of properties would be in band A and only 1.8 per cent. in band G. The most stark example of the extraordinary banding in London is provided by the borough of Barnet, where 47 per cent. of houses would fall into band G. That cannot be acceptable to London Members for various reasons which I shall spell out. The only region where there is an acceptable spread across the bands which does not change under the calculations made by the LBA is the south-west. In band A there would be 8.9 per cent. of properties. There would be 16.1 per cent. in band B, 24.4 per cent. in band C, 20.8 per cent. in band D, 15.2 per cent. in band E, 7.9 per cent. in band F and 6.7 per cent. in band G. The south-west is the LBA's model because in its new plan for regional banding the percentages remain the same.

The result of the LBA's new plan is that 6.8 per cent. of properties in greater London would be in band A. There would be a spread of properties across the bands, with 7.8 per cent. coming into band G. With regional banding, it is possible to come close to having 7 per cent. of properties in band G and 7 to 8 per cent. in band F without the enormous disparity that currently occurs when we come to band A.

It is important to those of us who represent London constituencies and who speak for the London boroughs to ask my hon. Friend the Minister to tell us at least that the Government are not ruling out the possibility of regional banding. There should not be only one English band. There should not be a London band and then a band for the rest, as I think my right hon. Friend the Member for Brent, North was suggesting. There is an argument for perhaps five or six bands for the English regions.

The amount of Government grant that local authorities will receive under the new finance system that is introduced by the council tax will depend on the moneys that they are able to raise locally. In areas such as London, where house prices are high, more money will be raised through the new tax under the suggested banding system, and I assume that the boroughs will receive less in grant. As a result, London taxpayers will be subsidising the services that are enjoyed by their counterparts further north.

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4.45 pm

The LBA's argument should be accepted by the hon. Member for Dagenham (Mr. Gould). The borough within his constituency is one of the sensible Labour- controlled authorities. Barking and Dagenham are still fully participating members of the LBA, as are the boroughs that are controlled by the Liberal Democrats in London.

The suggestions that have been made by the LBA during the consultation process should be taken seriously by the Government, who should respond to them. I look forward to my hon. Friend the Minister shedding more light on the direction in which the Government will be heading to correct what are clearly possible disparities.

Mr. James Hill (Southampton, Test) : My hon. Friend the Minister for Local Government and Inner Cities will be visiting Southampton on Friday and I wish to suggest one or two points that could be made when, I hope, he radiates to the public. The hon. Member for Liverpool, Mossley Hill (Mr. Alton) talked about the extra charges that are the result of non-payment of the community charge. In Southampton, that charge is £50.95 per person. Part of that sum reflects the interest charges on the moneys that had to be borrowed to enable the authority to make its budget. My hon. Friend can make great play of that.

It is clear that amendment No. 27 is a wrecking amendment. If every individual house and outbuilding and every individual piece of land has to be valued, the task will not be completed before it is necessary to start again. Simplicity will be the answer. I even think that a seven-band system will have one band too many. In a city such as Southampton there could be duplication of styles, so that entire council estates could be valued simply by obtaining plans from the local authority and making a valuation on that basis instead of setting out with tape and measure. If valuations are not carried out on that basis, we shall be faced with overwhelming costs and we shall not be ready for 1993.

Mr. Portillo : In reply to my hon. Friend the Member for Southampton, Test (Mr. Hill), I am astonished when he tells me that the Southampton local authority has had to levy a £50 non-collection charge. I understood that that authority liked to posture as a model of modern Labour Kinnockite government. For that local authority to be so inefficient and inept at collecting the community charge says much about its administration.

If I were a citizen of Southampton I should be angry at having to pay £50 to compensate for the fact that other people had not paid, which must be largely attributable to the failure of the city council.

Mr. Bryan Gould (Dagenham) : Does the Minister of State recall the Prime Minister describing the poll tax as uncollectable? Is not the fault implicit in the poll tax and nothing to do with efficient, hard-working local authorities struggling with an unworkable system?

Mr. Portillo : No, it is not implicit in the community charge. The collection figures for last year have already reached 86 per cent. and will rise further. Some local authorities, including inner-city and even Labour- controlled authorities, have managed to make a fair fist of collecting the community charge, while others, including Southampton, have failed dismally to collect it.

Mr. Martin M. Brandon-Bravo (Nottingham, South) : My hon. Friend the Minister of State was recently in the

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city of Nottingham. To illustrate the point made by my hon. Friend the Member for Southampton, Test (Mr. Hill), may I point out that the city of Nottingham is charging every resident £44.70 because of the iniquitous slip-up of not collecting last year, whereas the Conservative-controlled neighbouring authority of Gedling is charging only £3.40? Neighbouring Rushcliffe council was to charge £9 as a result of non-collection and other financial clauses, but made savings of £9, so that the residents of Rushcliffe have not a penny more to pay. That is the difference between Labour-controlled Nottingham city council and two neighbouring Tory-controlled councils.

The Second Deputy Chairman : Order. Perhaps we can now return to the amendments before us.

Mr. Portillo : The comments of my hon. Friend the Member for Nottingham, South are, none the less, revealing. The most remarkable example is Lambeth, where the charge for non-collection is £140, compared with Wandsworth, where the total charge is £36.

Mr. Allen McKay (Barnsley, West and Penistone) : Before the Minister leaves that point, he should think more carefully about what he is saying about local government. The Secretary of State quoted my local authority as one of the best collectors of the community charge. It is charging £19.77 for non-collection, of which £14.80 is interest charges for money that it had to borrow simply because the community charge was so much more difficult to collect than the rates.

It is apparent from local authorities throughout the country that the charge is being made not because people have not paid--they have paid--but because they have paid at the end of the year, whereas they used to pay rates every month. That is the main cause of the problem. People have been taken off the register because they have died or left the district and the local authority's calculations have been unable to take that into account. The fault lies not with the local authority or the collectors, but with the silly system under which they have had to work.

Mr. Portillo : I am most grateful to the hon. Gentleman, because he makes my point for me. In Southampton, the full year--

The Second Deputy Chairman : Order. I have been very tolerant, but I shall not allow a debate that does not relate to the amendments before us.

Mr. Portillo : In that case, Madam Deputy Chairman, the point will have to remain for another day.

Although the hon. Member for Sheffield, Brightside (Mr. Blunkett), who opened this debate, made a clever speech, by his own high standards it was not outstandingly honest. He made a series of claims which, on reflection, he might regret. For example, he said that, as from today, valuers would value property on the basis of the Bill. He knows that that is not true and that the Bill must make progress to another place and receive royal assent, which will all take time. He also knows that valuers will not be able to make valuations before they know many of the important details to which he referred.

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The hon. Gentleman tried to make the House believe that there was some inconsistency between the Bill's introduction and a consultation period on the exact details of the council tax. There is no inconsistency between those two points. We have always said that we want to introduce the council tax by 1 April 1993. To make that possible, we need Parliament's authority to spend money to start the valuation process. Clearly, all the details of that valuation have not yet been worked out.

I say that perfectly straightforwardly--moreover, I make a virtue of it, because we are in a consultation period. We have made firm proposals for the outlines of the tax, but have never claimed that all the details of the tax were already in place or should be in place, because we have always recognised that the tax will be run by local authorities to collect their own revenue. We must have the opinions of local authorities and experts.

The hon. Member for Brightside seemed to imply that the Audit Commission opposed the council tax. In an interview on the "Today" programme this morning, Mr. Peter Hobday asked Mr. Howard Davies whether he was suggesting that the tax was unworkable, and he said that he was not. Mr. Howard Davies has now written to The Times and said :

"You reported that the Audit Commission believes the Government's new council tax is unworkable in its proposed form'. This is not so."

That could not be a clearer denial of the points that the hon. Gentleman sought to attribute to the Audit Commission.

Mr. Blunkett : I, too, heard Howard Davies on the "Today" programme. He said that the system proposed by the Government could not be worse than the poll tax.

Mr. Portillo : The way in which I quoted Howard Davies was perfectly accurate.

The hon. Member for Brightside then seemed to imply that the Royal Institution of Chartered Surveyors was against the new tax. I had a private lunch with members of the RICS yesterday and am not at liberty to divulge exactly what was said. They have not yet put in their representation but will do so by the end of this week. Without betraying a confidence, I can reveal that they were supportive of the council tax, in particular the principle of a tax that allocates properties to bands, as they could see the immense administrative advantages in such a system. As professionals in that area, they had no difficulty with the concept that large swathes of property could be readily allocated to bands, which appealed to them as administratively simple and straightforward. Naturally, they will have detailed comments to make on the council tax and I shall welcome those. I am anxious that my officials should develop a close working relationship with professional bodies like the RICS, because I am determined that we should get the details of the Bill right. The speech of the hon. Member for Brightside was not outstandingly honest because he tabled an amendment that sought to bring about a return to the rating system and then chose not to speak to it. He made a great speech about the council tax, but his amendment was about returning to the rating system. I am not surprised that he chose not to talk about that. If he intends to do so under the next amendment, I shall give my riposte then--or one of my hon. Friends will do so if they have the good fortune to wield the mallet.

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Perhaps I should explain to the hon. Member for Liverpool, Mossley Hill (Mr. Alton) that the council tax will be based on a banding system of values. For that reason, it will not be susceptible to the treatment that he should like to give it. It will not necessitate detailed knowledge of every property but will be much more broad-brush that the old rating system. Many properties will not have to be inspected because they will clearly fall into one band or another. Therefore, the hon.Gentleman's idea of having a register of empty properties, although ingenious with merits in its own right, does not flow well from the Bill.

As the hon. Gentleman comes from Liverpool, I understand that he should want to raise that important issue. One is outraged not only by the non- payment--to which I shall not allude further--that has occurred in Liverpool but by the empty properties there. Although my hon. Friend the Member for Teignbridge (Mr. Nicholls) said that there may be reasons for empty properties, there are tremendous disparities between local authorities. Liverpool's performance on empty properties has been lamentable.

Some of the ideas of a citizens' charter which the Conservative party is developing seemed to run through the hon. Gentleman's speech. Yes, people have a right to better service from local authorities and the indicator of empty properties is important. It is a scandal that local authorities are keeping properties empty when there are people in temporary accommodation. We shall want to pursue directly some of those issues in our proposals for a citizens' charter. I rather doubt whether the Government would be in favour of a national register of such properties, but I shall refer that to my right hon. Friend the Secretary of State for his consideration. However, we need to look carefully at requiring local authorities to deliver decent standards of service against objective criteria. 5 pm

Mr. Alton : I am grateful to the Minister for agreeing to refer that matter to the Secretary of State, and I hope that he makes progress on it. He will recall that I also asked him about the right of redress where there are discrepancies in services provided in different banded authorities, so that, for instance, in areas where bins have not been emptied for 13 weeks citizens would have the right of redress. Will the Minister ensure that something is done to put some teeth into the legislation and that it is enforced? I referred to the Environmental Protection Act 1990, which has not been enforced with regard to councils in Liverpool.

Mr. Portillo : The Environmental Protection Act gives the citizen the right to take action against a local authority. Citizens may not yet have availed themselves of those rights, perhaps because they are not aware of them, but the rights are there. The citizen is already enfranchised, but we may wish to look further at other ways in which to enfranchise the citizen.

Where I might to some extent part company with the hon. Gentleman is that I would put more emphasis than he would on the desirability of arming the citizen with choice and competition, whereas he might put more emphasis on if I might describe them as such--bureaucratic solutions to such problems. However, we are on the same ground in saying that the citizen needs to be enfranchised,

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needs to have defence and needs to have redress against local authorities which fail to deliver the services to which people are entitled.

I come with pleasure to the points made by my right hon. Friend the Member for Brent, North (Sir R. Boyson). He and my hon. Friend the Member for Surbiton (Mr. Tracey) raised difficult issues to which the Government have given serious thought. My right hon. Friend was right to describe this as a fallen world and cautioned us against looking for perfection in these matters.

One is faced with two possibilities. If we went for regional bands, someone in the north-east of England might ask why he, living in a £50,000 house, should pay as much in council tax, which has a property element within it, as someone living in the south-east in a £150,000 house. I think that my right hon. Friend would agree that that question would cause considerable difficulty. My right hon. Friend raised the other point, which is why a person in the south-east living in a three-bedroomed house should pay more than someone living in a similar house in the north-east.

We have given considerable thought to those matters. We have put forward the firm proposal that we should base our council tax on a national banding system and, furthermore, that there should be seven bands, and we have suggested what the values of those bands should be. We are in a consultation period and we have made a firm proposal. I anticipate that the Government will continue to find that attractive. But it would be absurd to go through a consultation period without listening carefully to all the representations made, not least from someone who speaks with the authority and experience of my right hon. Friend. Therefore, we shall have to consider carefully what he said. But I am bound to say that we gave much thought to the matter before introducing the proposals.

Sir Rhodes Boyson rose --

Mr. Portillo : After I have given way to my right hon. Friend, I will put some other points to him that I should like him to consider.

Sir Rhodes Boyson : I am grateful to hear that the Minister is still in the consultation period, and I shall be interested to see how much today's debate influences the outcome. I remind my hon. Friend that my hon. Friend the Member for Surbiton (Mr. Tracey) said that, if we adopted rebuilding values rather than capital values, the great discrepancies which the price of land gives rise to in London compared with elsewhere would be largely minimised.

Mr. Portillo : My right hon. Friend is right in that respect, but then another problem arises. My right hon. Friend should remember how, under the rating system, one of the great problems was the obscurity of the rateable value. People could not relate to a rateable value. They would never be in the business of renting their properties, on which the rateable value was based. There was scarcely any market in rented housing, so people were left with entirely synthetic spurious values. The same problem arises with rebuilding costs or anything like that. Those are synthetic, spurious values which the average person would not recognise. Under the council tax that we propose, they will be able to see clearly the relationship between the

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value on which they are paying the tax and the value of the house as they recognise it--as, for example, it might appear in an estate agent's window.

Mr. David Bellotti (Eastbourne) : In the light of the comments that the Minister has just made, I remind him of some comments that he made on 19 October last year, the day after my election to the House. I am informed that he said :

"Taxes on people's homes are unfair. Property values bear little relation to people's ability to pay."

Have you done a U-turn, are you standing on your head or do you have some other information to give us?

Mr. Portillo : I am sure that you, Miss Boothroyd, to whom those questions were addressed, are doing none of those things, and it is extraordinary that the hon. Gentleman should suggest it.

I have frequently expressed my disappointment that we were unable to convince people of the fairness of the community charge. However, I am deeply satisfied that we are now proposing a council tax which has two elements--a property and a personal element. What makes me unhappy about the Labour party's proposal is that it still makes no distinction between households with one person and those with a larger number of people. One of the strengths of the council tax is that different rates of tax will be applied depending on the number of people in the household and that rate will vary according to what the local authority is spending.

Mr. Tracey : Let me bring my hon. Friend back to the question of valuation based on capital values as opposed to rebuilding costs. I cannot accept that a rebuild cost valuation is spurious in the way that the old rateable value based on some theoretical rent was. He is right to say that nobody could recognise that theoretical rent, but people could certainly recognise the rebuild cost. The insurance companies recognise those rebuild costs and if an owner is unfortunate enough to have his house burnt out or severely damaged, the insurance company rebuilds it on those values. Therefore, it is relevant and recognisable by the people.

Mr. Portillo : My hon. Friend and I may not entirely agree on that point. I think that there is a real problem in telling people that they will be taxed on a value which is not the value that they think of as the value of their house--the value for which they can sell it if they so choose. Rebuilding costs have many problems. For example, pre-1920 houses have different rebuilding costs from houses built after that date. One just introduces another area of dispute when one goes for something such as rebuilding costs. One then ends up with the problem that within, for example, the borough of Westminster, the rebuilding cost of a small penthouse in the most salubrious part of Kensington is rather low because it is only a small property, whereas the rebuilding cost of a five- bedroomed dilapidated house in north Kensington, perhaps under the flyover, is much higher. It would be difficult to convince people that that was a fair system. I return to the defence of my right hon. Friend the Member for Brent, North, who said that it was difficult to achieve perfection in these areas, but I am concerned to protect the taxpayers in my right hon. Friend's constituency and in my own. Let us face it, that is why we

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have done a number of important things. For example, we have suggested that, within the council tax, the maximum variation in the tax that households of equal size should pay would be that those at the top end should pay about two thirds more than the average and those in the least valuable properties should pay about two thirds of the average. That provides protection, and it is a great improvement on the rating system.

We have taken £140 off the community charge and put it on value added tax. In doing so, we have massively altered the balance between what is raised locally and what is raised nationally. The proportion of nationally and locally raised taxation will continue under the new system, which will provide a great deal of protection for my right hon. Friend's constituents. I should not be surprised--indeed, I would lay odds on it--if many of his constituents were not better off under the council tax than they were last year under the community charge or under the rating system the previous year.

Although people will compare the difference between what they were paying in the last year of the community charge and the first year of the council tax, it is a robust defence to say that we have made an important change in what we seek to take from local people. That will be continued under the new council tax, and we shall seek to raise from people sums of money that we believe are sustainable and fair. For all those reasons, the Committee would be right to give Parliament the authority outlined in the clause to provide the funds so that we can begin the valuation process. As the Audit Commission said, it would be desirable to introduce the new tax by 1 April 1993. The Labour party has claimed that it would like the community charge to go as fast as possible, but it now seems unwilling to co-operate in ensuring the means to replace it by 1993.

The consultation period on the council tax has not ended. We shall take seriously the points made by my right hon. Friends, by the professional bodies and by local authorities. The fact that we are today seeking authority to begin the process of financing the valuation process in no way touches the consultation period, nor does it seek to prejudge it. I am sure that my right hon. and hon. Friends will agree that it is right that we should settle the details as quickly as possible and be able to start the valuation process. Despite the important doubts that my right hon. and hon. Friends have expressed today, I hope that they will accept the clause and reject the amendments.

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