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Mr. Raynsford: Earlier, I quoted the right hon. Gentleman's comments on 2 February, and I quote him again. On that occasion he said:
"The Minister said clearly that he did not expect to increase the yield from a rebanding and revaluation. I happily accept that"—[Official Report, 2 February 2005; Vol. 430, c. 945.]
He accepted that then and I hope that he will accept it now.
Yes, of course we will consider the question of rebanding. We have powers to adopt different bands in different regions and to introduce different bands if we feel that that is appropriate, but any such decision will be taken in the light of the evidence of the Lyons inquiry, because we want to look carefully at the evidence before decisions are reached. Our clear objective has always been that there will be no increase in yield as a result of the revaluation.
Mr. Curry: Of course I accept what the Minister says, but a constituent in my division would be unlikely to say to himself, "Oh, that's fine. There is no increase in overall yield for the Chancellor of the Exchequer", if his own council tax had gone up by a band. That is the heart of the argument as far as people are concerned. Unless the exercise means nothing except the maintenance of all the existing relativities, the Minister's assurances are welcome but will not mean much to the person paying the Bills.
Mr. Raynsford: There are two separate issues here, as the right hon. Gentleman will understand. The first is the overall yield. He accepts the commitment that I have given and I hope that the hon. Lady will. It has been made clearly often enough. The second issue is the impact on individual households. Yes, of course there will be variations because values have changed. Some will go up, some will stay the same and some will go down. Until we have the evidence from the valuation exercise, we will not know what the likelihood of those movements will be, or how it is appropriate to damp them through transitional arrangements or any other changes to the banding system. I have made it clear that we will do that in the light of the evidence because our overall commitment is not to increase yield, and we also do not want to aggravate potential turbulence as a result of changes. Those commitments have been made clear. We will act on that basis and I hope the right hon. Gentleman accepts that.
Mr. Edward Davey:
We are coming up to a general election. The Minister suggests that he can give the British electorate no indication of how revaluation will
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work. Will he admit for the record that, however it is done, revaluation will mean that millions of households will lose and receive higher council tax bills? That is the lesson not just from Wales, but from all past property tax revaluations.
Mr. Raynsford: No, and I am afraid the hon. Gentleman has, rather uncharacteristically, gone for completely unjustified scare tactics. He knows that the values are set at the date of April 2005. Until the process has begun, no one can know what the relative values of different properties are. He knows very well that, over the past two years, there have been significant variations in the movement of house prices in different parts of the country. Two years ago, the figures would have shown that in London there was a substantial increase compared with 1991 vis-à-vis Yorkshire. Latest figures suggest that Yorkshire and London are now more or less in the same relationship as they were in 1991—there is very little difference. That has been a significant move in recent years. Until we have all the evidence, examine it carefully and decide whether there should be changes in banding and, if so, what transitional arrangements there will be, it is entirely hypothetical and utterly speculative to talk about potential losses or, indeed, gains. I hope that the hon. Gentleman will in future be more serious, as he usually is in these debates.
I give way to my hon. Friend the Member for South Ribble (Mr. Borrow), who is an expert in these matters.
Mr. Borrow: May I take my right hon. Friend back to the point that the Conservative spokesman was making about unfair redistribution of grant? I have an excerpt from The Surrey-Hants Star in 2003, which quotes a comment from
of Hart district council, who said:
"Huge council tax rises are set for the south this year as the Government diverts our money from the south to its friends in the north."
Does my right hon. Friend share my concern that should the party of Lorraine Fulbrook come to power, money will be taken away from Labour Lancashire county council and redistributed to Tory county councils in the south of England?
Mr. Raynsford: My hon. Friend makes a very good point that there are some extremely ill-informed and entirely inaccurate comments from some people. I am only sorry that those on the Opposition Front Bench have compounded some of those wild and totally unjustified allegations.
Sir Paul Beresford (Mole Valley) (Con): One concern that some of us have about revaluation is that the combination of revaluation and rebanding—increasing the number of bands at top and bottom—will be reflected in the assessment of need and grant. That is where the biggest change could happen. Will the Minister consider regionalising that to diminish the effect of just using dampening measures?
Mr. Raynsford:
Had the hon. Gentleman been a member of the Committee that considered the Local Government Act 2003, he would know that we have
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given ourselves powers to introduce new bands, but there is no commitment to do so. We have said, and I said it again today, that we will await the advice of the Lyons inquiry. We also have powers to adopt regional bands, if necessary. That could be a useful tool to damp the impact of variations in prices since 1991 between regions. We will consider all these issues with the evidence, when that evidence becomes available, after the valuations begin. As I have already indicated, that does not happen until April 2005 because that is the valuation date.
Mr. Patrick Hall: Does my right hon. Friend share my recollection from the Standing Committee on the Local Government Bill, as it then was, in 2003, that, when revaluation was discussed, the Liberal Democrat and Conservative members of the Committee did not seek to stir up and frighten people about the effect of revaluation? They accepted the sensible need to go ahead with it. Does my right hon. Friend agree that the proximity of a general election is leading them to try to frighten people with totally spurious scare stories?
Mr. Raynsford: I agree with my hon. Friend's observation and I would only make the point that the hon. Member for Cotswold (Mr. Clifton-Brown), who was on the Front Bench in that Committee, moved an amendment to require five-yearly revaluations, but did not press it to a Division. I suspect that the fact that he is not speaking from the Front Bench shows that it did not find favour with his party.
Mr. Clifton-Brown: What the hon. Member for Bedford (Mr. Hall) says is quite untrue. In fact, during the Bill's passage, particularly on Report, I remember saying from the Front Bench, to screams from the Government Benches, that the Government had hit on "a seam of silver" in raising extra money by rebanding. The Minister will find that phrase if he looks in Hansard.
Mr. Raynsford: It is not particularly helpful to pursue questions of what might or might not have been said. It is on the record that the hon. Gentleman pressed for five-yearly revaluations. The Government feel that a 10-year cycle is appropriate, and I am only sorry that the Opposition, in their motion today, choose some rather extraordinary words in saying that they note
which everyone here has clearly accepted is necessary to bring values up to date.
We have covered valuation in some detail and I shall move on, but first, in view of the remarks made by the hon. Member for Meriden, I want to make it clear that speculation that the recent revaluation in Wales is a precedent for England is entirely misleading. The decision to have the revaluation in Wales two years before England was taken by the Welsh Assembly Government, who also decided on a new banding scheme and transitional arrangements in Wales. Wales has always had different council tax bands from England, and what is happening in Wales is not a precedent for England.
The Opposition parties also pretend that this year's increase in grant is a one-off, and that next year there will be additional pressures on local government
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budgets. The truth is that this year's settlement, while good, is by no means a one-off. The overall increase in Government grant in 2005–06 will be 6.3 per cent. The equivalent increase in 2003–04 was 8 per cent. and, in 2004–05, local authorities benefited from an additional 7.3 per cent.—both higher than next year's generous investment. I hope that we will hear no more from the Opposition parties of their entirely misleading and inaccurate claim that this is a one-off.
The Government, unlike the Opposition, are committed to ensuring proper levels of support to local government to enable councils to deliver their responsibilities without imposing unreasonable council tax demands. We are also committed to the new burdens principle under which Government accept responsibility for meeting the additional costs of new responsibilities placed on local government. Of course local authorities will claim that they face rising cost pressures. They always do. They do it every year in the period leading up to the settlement. Some of those claimed pressures are real, some are exaggerated. Each year we look seriously and rigorously at the balance sheet, and, as hon. Members know full well, in each of the last two years we have put additional resources into the settlement in response to justified arguments put by local government that there were real pressures. We also expect local government to operate in a cost-effective way and to make savings where, as the Gershon review has demonstrated, there is scope to do so. That is the responsible way to support local government and ensure that it operates cost-effectively.
By contrast, the Opposition have no credible or serious policies to offer. They cannot even control their own councillors and their financial projections are so fanciful that they would make even Walter Mitty blush.
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