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Sarah Teather (Brent, East) (LD): The Conservatives have accused the Government of confusion over revaluation, but as the debate has been relatively good natured, let me give the Labour Government credit. They have been consistently in favour of revaluation until a few weeks ago, when they did a giant U-turn, more out of political cowardice than out of ideology. The Conservatives, on the other hand, have held half a dozen diametrically opposed positions over the same period, with no obvious guiding ideology, and as we heard again from their Front-Bench spokesman today, the hon. Member for Brentwood and Ongar (Mr. Pickles), no obvious views about how local government finance should be reformed in future.
Let us consider Labour's record. When the council tax was introduced, countless Labour shadow Ministers argued passionately that a property tax required a revaluation in order to be valid, as we heard again today. Fast-forward to 1998 when the Labour Government were in power and produced a White Paper, "Modern Local Government". Their position then was essentially that revaluations are necessary, but not yet. Four years later, in 2002, the Government decided that the time had come. The Local Government Bill set out a timetable for revaluation in 2005 in Wales and 2007 in England, and every 10 years thereafter.
A few weeks ago, as we know, the Government got extreme cold feet about the political repercussions of revaluation and retreated to the comfort of the old position. As the Minister for Local Government told an audience yesterday at the meeting of SIGOMAspecial interest group of municipal authoritiesin the House of Commons, the Government postponed revaluation only after analysis demonstrated that there would be about 2.2 million losers as households moved up one or more bands. They predicted that the money that would need to be set aside for appeals could destabilise local government finances altogether. I guess their position remains, "We need revaluations, but not now, please. Not on our watch."
Sadly, Wales has not been quite as lucky. We argued for the Welsh Assembly to have powers to introduce primary legislation so that it could, for example, abolish the unfair council tax system, but the Labour Government would not give such powers to the Welsh Assembly under devolution. Revaluation was therefore foisted on Wales by the Government in the 2003 Local Government Bill. Wales was used as an experiment, just like Scotland for the poll tax. The experiment has gone horribly wrong.
I think there was an inadvertent slip in what the hon. Lady said. The timetable was not in the local government Bill or the Act passed by this House. The timetable for revaluation was chosen by the
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National Assembly Government, and the Liberal Democrats were in coalition with the Labour party in that Government at the time.
Sarah Teather: The hon. Gentleman is right that the Welsh Assembly decided to bring forward its decision to revalue, but the decision on revaluation was made in this Chamber. We have argued consistently for the abolition of council tax and its replacement by a local income tax.
A third of households in Wales went up a band, whereas fewer than one in 10 went downnot one in eight, as I heard earlier. One house went up six bands. While Labour has postponed the unpredictable misery of revaluation in England, people in Wales face the prospect of losing the transitional relief next year, so the full impact of revaluation will be felt.
The burden of local tax in Wales has moved from low house price areas to high house price areas, irrespective of income. That is the point. That is what happens when there is an unfair property tax. It is a reason not for cancelling revaluation, but for cancelling the tax itself.
Jenny Willott (Cardiff, Central) (LD): As my hon. Friend said, there are fundamental problems with the council tax that cannot be solved with sticking plaster. May I clarify the figures? In Wales, one in 12 houses went down in the rebanding and one in three went up, but does my hon. Friend agree that that does not necessarily tell the whole story? In constituencies such as mine in central Cardiff, in certain areas nine out of 10 houses went up at least one band and some went up two, three or four bands. That shows that
Dr. Lewis: The hon. Lady has almost answered my question already. In the run-up to the general election, her party's Treasury spokesman admitted that under local income tax, households with two or more wage-earners would pay more. In my constituency a household with two wage-earners would pay £721 more, which was one of the reasons why my majority massively increased over the Liberal Democrats. Can she confirm that she will remain consistent and support local income tax for the indefinite future? We should love her to do so.
I happily confirm that we shall be supporting local income tax for the indefinite future.
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Just to clarify, it was never said that two-earner households would do worse. Some will. Those who earn considerably more than the average will do worse, and we have never hidden that. This is a progressive taxation system. Some do better; some do worse. That is the point. What about the Conservatives? Could it be that rather than accusing the Government of being confused on the issue, it is the Opposition who are confused?
If we look back to 1991, we will discover that when council tax was introduced the Conservatives believed, as was stated earlier by the Opposition spokesman, it would never need revaluation because of the banding structure. The then Secretary of State for Scotland, Mr. Ian Lang, said:
"The banding system irons out much of the effect of relative changes in property values within an area which, under the rating system, brought regular pressure for revaluation."[Official Report, 12 November 1991; Vol. 198, c. 918.]
"We recognise the need periodically to revalue properties for the purpose of council tax . . . We support the revaluation being made on a regular and predictable basis."[Official Report, 7 January 2003; Vol. 397, c. 6465.]
A month later, his colleague the hon. Member for Cotswold (Mr. Clifton-Brown), a party spokesman on housing, argued for five-yearly revaluations in Committee on the Bill. Then the Bill moved to another place, and Lord Hanningfield, the Conservative spokesman, proposed no revaluations at all. The reasons he gave were interesting. He said:
Lord Hanningfield was defeated and revaluation stayed in the Bill. But the Conservatives did not seem to mind. They had flip-flopped again, and on 2 March 2005 the hon. Member for Meriden (Mrs. Spelman), who is no longer in her place, told the House:
For those who have not been paying attention, that is six separate positions on council tax revaluation: no revaluations, some revaluations, more revaluations,
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no revaluations, some revaluations, then no revaluations again. At that point, I will give way to the hon. Member for Brentwood and Ongar.
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