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Does the hon. Gentleman accept that the policy of offering discounts to pensioners is regressive because the better-off pensioners, who pay the whole of their council tax, would get the whole discount, whereas
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poorer pensioners, who are on council tax benefit, would not get the whole discount. Such a policy would give more of the discount to better-off pensioners.
Mr. Bone: I am interested in the spin that the hon. Gentleman puts on that. It is clear to me that if we asked the pensioners of Wellingborough whether they wanted 50 per cent. off their council tax bills, they would be happy. The Government have placed many obstacles in the way of pensioners claiming reliefmany pensioners who should get relief do not receive it. Labour Members also acknowledge that the forms are complicated and the people who deserve the help do not get it.
Revaluation would mean that our council tax bills would hit the roof. Revaluation of properties in England would give local authorities the gift of increasing their base tax and blaming the Government for the resultant increases in council tax. If the Government are trying to claim that council tax revaluation would be broadly neutral and that there would be both winners and losers, they are living in cloud cuckoo land. All council tax payers would lose out from revaluation because it would be an opportunity to increase a stealth tax by the back door.
If hon. Members do not believe me, let us consider what happened in Wales, where only 8 per cent. went down a band. However, the greater problem is that, for the change to be neutral, the rate of council tax would have to be reduced because so many properties would go up a band. There would therefore be an automatic increase in tax revenues. Does any hon. Member believe that that would happen?
We need a Government who reduce council tax and introduce proposals to change the way in which local councils are funded centrally. Talking is not good enough. The Government make the excuse that they will not introduce revaluation yet, because it needs to be considered as part of a wider review of how local authorities are funded, but they have been reviewing since 1998. Is not it time for action or are another four years of talking shops and wasted millions in store for the people of England?
Local councillors often tell me that the Government require local authorities to take on more and more responsibility and more portfolios but without the necessary money from the centre to fund it. Wellingborough council has been consistently underfunded by any objective formula. Perhaps the Government should focus their efforts on how to fund local authorities fairly so that pensioners throughout the country, especially in Wellingborough, do not suffer year after year, as they currently do.
Council tax is a huge, genuine issue for the most vulnerable in our society. It affects people on low incomes and fixed incomes. It causes massive hardship to those in our communities who can least afford it. Council tax is a regressive tax and hon. Members of all parties acknowledge that and are crying out for the Government to tackle the issue quickly. Council tax revaluation is not the way forward.
Mr. Clive Betts (Sheffield, Attercliffe) (Lab):
I have a few reservations about the Government's proposals, and I shall come to those in a moment. I want to begin
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by echoing the point raised by my hon. Friend the Member for Southampton, Test (Dr. Whitehead), that if we are in favour of a property taxI know that the Liberal Democrats are not, but the Conservatives apparently areit is illogical never to revalue a property to bring it into line with the current situation. It does not matter whether the system is based on bands or on the actual value of the property; at some point, a revaluation is needed.
Are the Conservatives seriously saying that, while they support a council tax or similar property tax, they would never revalue, even after 20, 30 or 40 years? The longer we go on without revaluation, the more irrelevant the tax becomes and the less people are able to see any reality in it. And all the time, we have the nonsense of artificially revaluing new properties. That is an unsustainable position. The Conservatives try to pretend that the Government have changed their position for reasons of political advantage, but I suspect that the Conservatives' position is very much one of political advantage, in that they do not want to be associated with any revaluations whatever.
David T.C. Davies : Is it not the hon. Gentleman who is missing the point? Is not our position now his position? The Labour party is now against revaluation and is copying exactly what the Conservatives suggested.
Mr. Betts: The hon. Gentleman should read his party's motion. Members on his own Front Bench have drawn the distinction between deferral and cancellation, and the Government's position is clearly one of deferral.
As I have said, I have some reservations about the Government's position. It has already been established that 10 years is about the right period between revaluations. The timetable that had been agreed would have taken it to 15 years, and now we are talking about perhaps 20 years. My concern is that the longer we go on, the greater the scope for differences between the changes in the value of different properties. I can certainly see that happening in my constituency. I also have reservations about carrying out a revaluation at the same time as introducing other potentially significant changes in local government taxation, as that could lead to confusion among the public as to which change had affected which element of their bill. That could be very difficult to disentangle.
However, the Government are right to lay down that we should establish the precise functions of local governmentI welcome the widening of Sir Michael Lyons's remit in that regardand then agree on an appropriate financial system to fit in with those functions. Local authorities have an important central role to play as the strategic authority for their area, covering a wide range of services. May I suggest that my hon. Friend the Minister has a friendly chat with his colleagues in other Departments to ensure that they are on board with this agenda as well? With regard to the regional government proposals, when it became clear that the Office of the Deputy Prime Minister was in the business of devolving and decentralising functions, it was not equally clear that Departments such as the Department for Transport and the Department for Education and Skills were on the same wavelength.
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I want to cite two examples from my constituency. I am anxious to encourage the local collegeit now seems anxious to respondto build a new post-16 vocational centre. However, every secondary school now has the right to develop its own post-16 arrangements. It is difficult to see how we can encourage one educational institution to invest, while there is a risk that another will do precisely the same thing with no overall planning at local authority level, effectively wasting resources and undermining the collective, coherent provision of services.
Secondly, over the past 10 years, South Yorkshire has lost 30 per cent. of its bus passengers. Local government has no strategic ability to plan and deliver local public transport. I hope that those two issues will be seriously considered by the Lyons review, which should not pertain only to those issues that are directly in the remit of the ODPM, but must also consider the strategic responsibilities of local government and its ability not necessarily to deliver but to co-ordinate the delivery of services on the ground in a constructive and proper manner.
Adam Afriyie : The hon. Gentleman seems to be arguing that revaluation is important. If the revaluation was to have been revenue neutral, why is he suggesting that it should be deferred?
Mr. Betts: I was expressing my reservations about the deferral and my concern that the revaluation might get confused with lots of other issues, rather than being helpful. The longer we go on, the more difficult it will be to deal with the revaluation because of the potential for ever greater differences between the changes in value of different properties.
I want to return to the point made by the Lib Dems. I do not accept their argument that the only fair form of tax is income tax. If they are arguing that a tax has to be related to people's income, will they at some point also suggest that VAT or excise duty should be replaced by income tax? The reality is that we tax a whole range of different things, and that those taxes collectively form the revenues of government. I believe that it is perfectly reasonable to have some tax on property, as most countries do. I accept that for a minority of people who rent a property, that property does not represent a store of wealth for them. However, most of those rented properties are in band A. Many people do have a store of wealth in their property, and it is not unreasonable to tax someone's major store of wealth. Council tax is also easy and cheap to collect, and difficult to evade. Those are important elements of a taxation system.
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