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5 Mar 2003 : Column 884—continued

Mr. Andrew Turner: Will the Minister explain what he understands is meant by the word "tax" in new clause 8?

Mr. Leslie: New clause 8 has a number of drafting deficiencies. It is not for me to point them all out. The word "tax" could well mean precept, but it could also mean revenue for those regional bodies. If the hon. Gentleman has a different opinion, perhaps the new clause should have been drafted more precisely. However, the vagaries of the new clause are precisely what caused me to try to gauge from the hon. Member for Cotswold's remarks whether the Opposition were opposed to regional chambers. Again, answer came there none.

The hon. Member for Ludlow (Matthew Green) supported new clause 8 for entirely different reasons. I hope that the clarifications that I have given will cause him to reconsider.

Matthew Green: They will not.

Mr. Leslie: That is very alarming. If the Liberal Democrats are also saying that council tax revenues should not be used to support regional bodies, they may find themselves in the same pickle as the hon. Member for Cotswold, who said that he would not allow council tax revenues to be used for regional bodies such as flood defence committees. I know that the hon. Member for Ludlow does not like the concept of council tax, but we have no alternative to it at present. The new clause would have a very significant effect, and I urge the hon. Gentleman to reconsider his position.

Matthew Green: We shall not change our minds on this matter because we believe that council tax should not be used to raise revenue for any bodies, even local councils. Instead, there should be a local income tax.

Mr. Leslie: Presumably, therefore, the extension of that rather dubious logic is that the hon. Gentleman will oppose any changes to council tax because he disagrees with the tax in principle.

Matthew Green indicated assent.

Mr. Leslie: Will he also refuse to countenance the use of council tax in any local government revenue plans in

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the future? Will he shun that appalling mechanism for raising revenue? I do not think that that is the position of the Liberal Democrat party. Surely there must be some strand of pragmatism among its members? The party will need it if, God forbid, there is ever a Liberal Democrat Government, at some indeterminate point in the future, who want to change the system. The hon. Gentleman must work in the system as it exists at present.

I am most concerned about the love and enthusiasm for local income tax exhibited by the hon. Member for Ludlow. I would not want to pre-empt the Government's funding review because we accept that there are significant issues around how local government should raise revenue and around making sure that it is tied to local accountability and principles. While not ruling out options which that review might examine, I caution against the hon. Gentleman's enthusiasm for local income tax. There may be a lot of income in Kingston and Surbiton that could be taxed, but there is less in other Liberal Democrat authorities such as Liverpool—which may find raising revenue through a local income tax extremely difficult. I only speculate because it would not be right to address that particular issue, which is for debate another day.

Council tax does relate to wealth, albeit capital wealth, and, as many hon. Members will remember, it is more progressive than the poll tax. There are certainly ways in which it could be improved. The Bill makes provision for banding and revaluation, which we believe are the mechanisms that should be used to make sure that council tax is more relevant and up to date—and that it relates more to ability to pay. New clause 8 is wrong in its conception, design and drafting and would have a significantly detrimental effect on some regional bodies—some of which do extremely important work. We need to know whether the movers of the new clause propose to scrap regional chambers and to stop funding regional and coastal flood defence from council tax.

4.30 pm

Mr. Clifton-Brown: Occasionally when one moves a probing amendment or new clause, one strikes gold. On this occasion, it is clear that we have exposed a huge new revenue-raising power for emerging regional bodies. The part of the Bill to which the new clauses apply is anyway far-reaching. It provides for a mandatory revaluation cycle, and gives the power to change the number of council tax valuation bands and introduce transitional arrangements. There was a lengthy debate in Committee about how to enforce the payment of council tax by some of the poorest people in this country by distress of their assets. Where their assets are insufficient to cover the costs of that distress, the outstanding debt can be the subject of an attachment to earnings order.

We have suddenly discovered that all the new powers in the Bill can be used to raise money for emerging regional bodies.

Mr. Desmond Swayne (New Forest, West): Shocking.

Mr. Clifton-Brown: My hon. Friend is absolutely right. That purpose is not in itself shocking but it is not

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transparent. I pressed the Minister several times to state the costs being incurred by the transitional regional bodies but he did not give me one example. I pressed him in respect of the north-east but still he did not give me one example. I have given examples of regional planning and housing bodies—all of which will have staff, expensive buildings and a budget. How will they be funded?

Mr. Leslie: I suspect that the hon. Member for New Forest, West was describing the hon. Gentleman's contribution. The hon. Gentleman is well aware of the millions of pounds raised from council tax precepts towards perfectly reasonable expenditure on regional flood and coastal defence committees, which the new clause would prevent. Does the hon. Gentleman really intend that those regional bodies should be bereft of that funding? Does he say that existing regional chambers should also be wound up and be bereft of funding?

Mr. Clifton-Brown: With great respect to the Minister, who is a pretty straightforward man, he is equivocating. He will still not give us a clear answer as to how much money is likely to be raised through those mechanisms, and for what regional bodies. He has now introduced to the argument the fact that we might have regional arts bodies, regional tourism bodies or regional flooding bodies. How many more regional bodies are we to have? That council tax could be used as a mechanism to fund all those regional bodies in performing functions that are currently paid for from general taxation. We can thus conclude only that there will be an additional tax-raising power for all the functions that those regional bodies will have and which do not currently exist. The Minister has still told us nothing about that.

We have still not had straightforwardness as to how much of that regional council tax will fund the elected regional assemblies to be set up under the Regional Assemblies (Preparations) Bill that is currently in another place. It is all very well for the Government to say that the Bill does not give the detail for each region; I realise that that information will be separate from the Bill. Nevertheless, the Bill is the paving measure that will give rise to those elected regional assemblies, if we ever get as far as a referendum and a positive vote in favour of them.

Mr. Leslie: I repeat that we envisage that elected regional assemblies might levy a precept of about 5p a week from a band D taxpayer. To aid the hon. Gentleman, that amounts to £2.50 a year, not £25. However, before we even get to elected regional assemblies there are existing regional bodies that receive revenue from precepts. Is the hon. Gentleman saying that the new clause will stop that, or not? I have asked him about four times and I should appreciate an answer.

Mr. Clifton-Brown: When will the Government be straightforward about their proposals? They are making the decisions; the job of the Opposition is merely to probe them as to their intentions, not to state our policy. We want to know something about the costs of those regional bodies and how they will be funded. Will they be funded from council tax?

I shall give the Minister some figures so that we can see whether we are in the same ballpark. We already know about the costs for the new Parliament building in

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Edinburgh and the Assembly building in Wales, and that when public sector buildings are needed for the new regional bodies, significant costs will be involved. The abolition of Humberside alone cost £80 million. Extrapolate from that the cost of abolishing all county councils and the sum would run into billions.

As we advance towards elected regional assemblies, we are entitled to know what sort of sums the Government have in mind and how those bodies are to be funded. Will they be funded in full by the regional council tax or will there be other tax-raising powers?

We could continue to press the Government and embarrass them further. Suffice it to say that very large sums are involved and it is not clear that the functions taken over by those regional bodies will cease to be undertaken by somebody else—for example, the Minister's Department. Would the departmental budget then be reduced? It would have been useful had the Minister told us about that. Perhaps he will intervene again. If he plans to raise all that money for regional bodies through the regional council tax, will his departmental budget be reduced in lieu? As taxpayers, we are entitled to answers. The Minister shakes his head, but we, as taxpayers in general, are entitled to answers to those questions.

How many more regional bodies will be set up? The Minister has already referred to regional arts boards, regional tourism boards and regional flooding boards. How many more? Regional planning bodies and regional housing bodies do not yet exist. How much will they cost? How many buildings will be needed to house all those functions? We have not heard a single word from the Minister about the costs of those regional bodies. Council tax payers throughout the land who are likely to have to fund the cost of those bodies are entitled to some answers.

There has been a singular paucity, indeed a complete lack, of answers from the Government. Taxpayers can only conclude the worst. We may have been told that the amount will be only 25p a week in the first instance, but, by golly, in a year or two that amount will escalate many, many times.

The Minister laughs, but council taxpayers up and down the land will not laugh when they begin to get increased council tax bills of well over £1,000 for a band D house this year. They will not be laughing; they will be pointing an accusing finger at the Government because those increases are very significant.

We have heard no answers from the Government this afternoon. I respect the Minister, but it is fairly typical of the Government that they have failed to give us any answers. The only mechanism that we can use to protest vigorously is to press this matter to a vote, and I ask the House to accept new clause 8.

Question put, That the clause be read a Second time:—

The House divided: Ayes 178, Noes 298.

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