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Mr. Edward Davey (Kingston and Surbiton) (LD): We are right to keep debating council tax in this House, because it is the most unfair major tax in Britain today, and because it causes huge problems. We all know that the council tax is bust, which is why the Government set up the balance of funding review and asked Sir Michael Lyons to examine the matter, and why we have seen so much unrest among pensioners in many communities throughout the country.

Since we last debated council tax, two major issues have arisen: first, the Conservative party has a new policy, which, although it has been a long time coming, we can at least debate; secondly, the revaluation issue has occurred. I would like to spend a little bit of time on those new issues.

If one examines Conservative policy, five facts leap out. First, the Conservatives intend to keep the unfair, discredited council tax system. Secondly, they would introduce a new unfairness into that system, which is a matter that I shall discuss at some length. Thirdly, they have forgotten all pensioners in Scotland and Wales, on whom they have obviously given up. Fourthly, as the Minister has said, the figures are unbelievable—the cheque will bounce because the costings are questionable at least and specious at most. Finally, if one compares the Conservative policy with other polices—particularly ours—it is not generous to pensioners.

The Conservatives have clearly nailed their colours to the mast of council tax. Given that the Leader of the Opposition introduced council tax and the ill-fated poll tax, it might have been embarrassing for him to renege on council tax.

Dr. Julian Lewis: Will the hon. Gentleman give way?

Mr. Davey: No.

The Conservatives have kept their commitment to the council tax, but that means that they have no long-term solution to the problem of local government finance, which the Government, to give them credit, are at least examining. We have heard nothing from the Conservatives about how they would deal with problems such as gearing.

As we have heard from the hon. Member for Meriden (Mrs. Spelman), the Conservatives are tied to a post-election council tax hike because they are committed to council tax revaluation, which is surprising, because we have all read the same Audit Commission report, which states that council tax is fundamentally flawed. They have made the mistake of keeping council tax.

Mr. Pickles: Will the hon. Gentleman explain why the Liberal Democrats chose to side with the Government when they were given three opportunities to vote against the rebanding? Were they trying to wreck the rebanding process?

Mr. Davey: I am glad that the hon. Gentleman has raised that point. Like the Minister, I refer him to the
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hon. Member for Cotswold (Mr. Clifton-Brown), who moved an amendment to the Local Government Bill, which was not subject to a vote, on 11 February 2003, to introduce a five-yearly review of revaluation. The Tories in the other place U-turned on that policy, and Lord Hanningfield tabled an amendment to get rid of revaluation. In that debate, my noble Friend Baroness Hamwee said that the Tory spokesman

She was right. We oppose council tax revaluation because we want to get rid of council tax, and I hope that the hon. Member for Brentwood and Ongar (Mr. Pickles) will intervene on that point later.

I want to move on to my next point about why the Conservatives' new policy is bad for pensioners—at least for the 2 million pensioners who are paying council tax and would get absolutely no help from the Conservatives. The 2000 census for England and Wales gives the figures. Some 1.6 million pensioner households have a non-pensioner living with them. Of those, 400,000 have more than one pensioner living with them. I am not talking about the people who do not pay council tax and get council tax benefit—of course, they will get no help from this policy—but the 2 million people who are really suffering. Let me cite some cases.

Dr. Julian Lewis rose—

Mr. Davey: I will let the hon. Gentleman intervene in a minute, but he must recognise what his party's policy means.

Some pensioner households are looking after adult disabled children, while some are being cared for by adult children, but they will get no help from the Conservatives. They are against families who are caring for each other: that is scandalous.

Mrs. Spelman: The hon. Gentleman is talking about my party's proposals and would expect me to know them in more detail. The regulations would obviously have to be framed when we come into government, but I want to make it clear that pensioner households with a disabled adult would not be precluded from being in receipt of the discount. Perhaps he is unaware of what has happened since the ruling that the Government had in the High Court regarding the winter fuel payments. Under a European directive, benefits cannot be discriminatory by gender—that is, against women aged 60 who enter retirement age before then; although according to the Government that will change in due course. That is why the joint age of 65 had to be chosen.

Mr. Davey: It is interesting that the Conservatives are now blaming Europe for not being able to help our pensioners. That is really something. If they have changed their policy within the space of a week, they should have told their leader, whom I heard saying on "Woman's Hour" that pensioner households with adult disabled children would not get their benefits. The problem is that 42 per cent. of pensioners would get no help from the Conservatives.
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Dr. Lewis: The hon. Gentleman referred back to what is commonly known as the poll tax. Does he accept that one of the reasons why the poll tax ended up so disastrously was that where there were two or more wage earners in a household, that household as a whole paid an enormous amount of money in local taxation? Does he accept that under his system of a local income tax, the amount that a typical two-earner household in my constituency paid for local taxation purposes would increase by £721 per household, and by even more if there were more wage earners? Surely the answer is to compromise—not to have that burden on the wage earners but to have targeted help to the pensioners, which is precisely what the Conservatives recommend.

Mr. Davey: The poll tax was fundamentally flawed: it was not related to ability to pay and was introduced completely incompetently and unadvisedly by the hon. Gentleman's party leader. Let me deal with his point about double earners. The Conservatives are saying that a household of full-time average earners would pay more—indeed, because they would be bringing in a household income of more than £51,000. That applies to fewer than 10 per cent. of households. The figures that the hon. Gentleman cited from his constituency are completely wrong. I know the New Forest, because my grandmother lived in that area, and incomes are nowhere near the level that he suggests. That suggests to me that he is completely out of touch with his constituents, which many hon. Members will not be surprised about.

Mr. Raynsford: The hon. Gentleman has referred to some aspects of the Conservative proposals. As they are drafted—although judging from the comments of the hon. Member for Meriden they may well have changed before this debate ends, as we are getting instant policy on the hoof—Baroness Thatcher would receive the benefit, but a retired couple, one of whom is aged over 65 but the other is not, would get nothing at all. Is that, in his view, a fair assessment procedure?

Mr. Davey: The Minister is right. It is completely unfair, and 2 million pensioners, many of them struggling, will ask why Baroness Thatcher is getting £500 from her successor as leader of the Conservative party, while they are not.

Dr. Lewis rose—

Mr. Clifton-Brown rose—

Mr. Davey: I will give way in a second, but I want the next Conservative Member who intervenes on me to answer this question: what have they got against pensioners in Scotland and Wales that they refuse to give them any discount? I know that they are not doing very well in Wales in Scotland, but this policy shows that they have given up completely. [Interruption.] The Minister tells me that they are about to change their policy. It is quite possible that we could have three such changes in the course of my speech.

The Minister rightly focused on the Conservatives' questionable costings, including the fact that inspection costs are completely overstated. As I said earlier, 235,000 civil servants would be laid off were the
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Conservatives' plans ever to come to fruition. In other words, the civil service would have 10 per cent. fewer employees than in 1997, after 18 years of cuts. That is a joke. I have to say to Conservative Front Benchers that if they are really telling the electorate that they plan to sack those people to create money for the first year to provide this discount, that lacks any credibility whatever.

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