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Mr. Pickles: I should like to put the Baroness Thatcher point to bed. As she lives in Westminster, which has a Conservative-controlled council, she would receive only a £227 discount. With regard to Scotland, the Scottish Conservatives have announced a reduction in council tax of a third through paying education directly, and have also agreed to adopt our scheme.
Mr. Davey: We will look with interest at the Scottish Conservative party's costings, because if they are anything like those of the Conservative party in England, they will not be worth the paper they are written on.
Mr. Davey: I am not going to give way.
The Minister compared the Conservatives' policy with the Government's, so let me do likewise in respect of our policy. Under the Liberal Democrats' plans for local income tax, some pensioners will gain more than £1,000 a year—double the maximum that the Conservatives offer. Liberal Democrat plans for local income tax would benefit 3 million more pensioners than the Conservative plans, with 3.2 million pensioners better off by more than £500 a year.
Mr. Adrian Sanders (Torbay) (LD): Is it not the case that under our policy, unlike the Conservative policy, low-paid households would gain?
Mr. Davey: My hon. Friend is absolutely right. Interestingly, Christine Melsom from the IsItFair campaign has said:
"The Tories' proposals will do nothing to help the many younger people on low incomes who are already struggling with the effects of previous increases".
The Conservatives' policy is opportunist and unprincipled, and does not even do what they say it is trying to do. The Conservatives plan to help 5 million pensioners, but the average pensioner couple in that group would be £100 better off under our local income tax plans. We are looking forward to debating this with the Conservatives, because pensioners will much prefer our proposals.
Mr. Clifton-Brown:
I want to nail the issue of the five-year revaluation. As the hon. Gentleman, who served on the Committee, will remember, the Local Government Bill was huge and hundreds of amendments were tabled. The amendment was not pushed to the vote because it was a probing amendment and we had heard what the Minister had to say about it.
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On a different matter, did the hon. Gentleman see last Sunday's "Politics Show", in which the BBC consulted a Liberal website and found a household of three relatively modestly earning public servants who will be more than £800 each worse off under his party's proposals? What does he have to say about that? His colleague the hon. Member for Twickenham (Dr. Cable) was left burbling—all he could say was that the website must be wrong.
Mr. Davey: I have examined the example closely because I was worried about the reports that I heard. It appears that the household in question had a combined income of £100,000. I know that the Conservatives are worried about well-off households, but it is interesting that they are not concerned about people on low incomes. Liberal Democrats are worried about those on low incomes and we will stand up for them because we believe in fairness.
Dr. Lewis: Will the hon. Gentleman give way?
Mr. Davey: No, I have not finished answering the question that the hon. Member for Cotswold asked. He described an amendment that he tabled as "probing". I have a copy of Hansard for the relevant debate, and "probing" never crossed his lips. That is especially interesting.
Dr. Lewis: Will the hon. Gentleman give way?
Mr. Davey: I shall, because it might help the hon. Gentleman's blood pressure.
Dr. Lewis: I am delighted to hear that, but it will not help the blood pressure of my constituents in the New Forest, with which I am pleased that the hon. Gentleman has a connection. The £721 extra was calculated according to Liberal Democrat figures, which appear to mislead everyone. He refers to households of perhaps four people on incomes of £25,000 or less each and asks whether they should contribute more. I have news for him—they all pay income tax nationally. Why should they pay local income tax, too? If there is anything wrong with the income tax that they pay, let it be adjusted nationally. Liberal Democrats' local income tax proposals will slaughter people on relatively low incomes.
Mr. Davey: The hon. Gentleman is completely off beam. He should read the report of the independent Institute for Fiscal Studies, which Conservative Front Benchers cited earlier. It shows that our policy is massively progressive and helps all those in the first six and seven deciles of income distribution. The people who would lose are in the top two deciles. He talks about our figures. If he calculates the average earnings of households in his constituency on his figures, the result will be more than £60,000. That is the sort of figure on which Conservative calculations are based. Clearly, he needs to do some more arithmetic.
Mr. Betts:
The hon. Gentleman says that the wealthy would lose and the poor would gain under his proposals.
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However, he has not tackled the point that foreign nationals in this country who pay no national income tax but pay council tax would not pay local income tax and would thus get their local services free, whereas trainee nurses, who do not pay council tax, would pay local income tax. Is not that a redistribution of wealth from the poor to the rich?
Mr. Davey: Student nurses can be protected through extra bursaries. I did not realise that there were so many foreign millionaires. The Chancellor said that he would ensure that they paid their fair dues, and I support him on that.
Revaluation is the next new factor in the council tax debate, because it is imminent. It is happening in Wales now, and if the Labour party or the Conservative party wins the election, revaluation will go ahead. If we win, we will get rid of the tax altogether. The Minister, in his usual charming way, tries to claim that we can wait until Sir Michael Lyons reports, and that there is nothing to worry about. He says that we must wait till 1 April to know the figures for 2005. We are looking forward to knowing those figures, because they should make for an interesting press release from the Halifax building society at the beginning of an election campaign. However, the Minister cannot get away with refusing to state Labour party policy between now and 5 May. He and his colleagues will be harried by the Conservatives, the Liberal Democrats and the media until they give an answer. People want to know what constitutes the ticking time bomb, to use the phrase that the hon. Member for Meriden stole from me.
I was especially interested to hear Conservative Members' statements today. They have been welcome because at least they have been up front and clear for the first time and said that they support a revaluation. I hope that they will explain how they propose to revalue.
It is worth reminding hon. Members of the damage that revaluation can do. The Minister claims that revaluation in England would not be like that in Wales. However, I must stress that Welsh people will have to pay those council tax bills this April. Many people will experience huge increases. In Cardiff, the council tax for 64 per cent. or more of households will increase by one or more bands, whereas it will decrease for only 2 per cent. Some of those increases through the rebanding exercise will happen in the poorest wards in Cardiff. There is therefore no relation between the increases and ability to pay. The council tax for some pensioners whom I met when I was last in Cardiff will increase by three or more bands. I met one person who explained that the council tax for one property had increased by six bands. That is the extent of the pain that may be created through the exercise.
The Government may say that revaluation in England will not be like that in Wales, but we want to know what it will be like.
Mr. Hammond:
The hon. Gentleman heard the Minister say that the revaluation exercise would be revenue neutral in overall terms. However, he knows that, because of the way in which resource equalisation works, it can be hugely redistributive. The Minister did not give a commitment, either in the proceedings on the
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Local Government Act 2003 or today, that the exercise would be neutral in distribution terms. Does the hon. Gentleman agree that that is worrying?
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