Anne Main (St. Albans) (Con): Does my hon. Friend agree that the Government had a working model in Wales that they could have examined to extrapolate how the revaluation model would work, and that it would have been quite simple to have brought that forward? I cannot see why they needed to delay, other than that it seemed expedient with an election on the way.
Mr. Binley: I understand my hon. Friend's point, but I must refer the answer to the Minister, as I can see no reason other than political advantage. No doubt the Minister will reaffirm his position later, unless he wants to do it now.
May I point out to the House that the decision to postpone the revaluation was taken after the election? If the reason had been the naked opportunism that we are accused of, and that we accuse the Opposition of, we would not have done it at that time, would we?
19 Oct 2005 : Column 886
As well as the uncertainty in local government, there is a growing belief that this Government have lost their appetite for reform. There is no doubt that that is seen in the Government's actions in relation to the review of property values. The Government have prevaricated, and while they have prevaricated, the revenue support grant has continued to fall as a percentage of local government income, creating even more hardship, uncertainly and doubt.
Since Labour came to power, the average council tax bill has increased by 76 per cent., and by even more in my county, because revenue support grant has fallen and public sector inflation has increased way beyond inflation in the economy generally. Public sector inflation averaged 5.5 per cent. in the second quarter of 2005 against an overall inflation rate of 2.7 per cent. It therefore increased by more than twice the rate of general inflation, and that was in a very benign quarter. Yet the Government have the temerity to say that successive settlements have been above the inflation rate, having increased by 33 per cent. in real terms.
Of course the Government can make such a statement by setting the settlement against overall inflation of 2.7 per cent., but that is a confidence trick, which looks foolish when measured against public sector inflation well in excess of 45 per cent. during the eight years that this Government have been in power. That is the inflation figure that local government must deal with, and it is in many respects created by the Government themselves. I wish that the Government would show some humility in that regard.
When the Government came to office, 20.5 per cent. of local government revenue spending was financed by council tax. That has now risen to 25.3 per cent., which tells the real story much more effectively. No wonder local government is uncertain when national Government give such false and misleading information.
I could go on to speak about the burdens placed on local government. I could go on to describe how they affect core services, and how we are constantly top-slicing. There is no time for me to do that, however. Instead, let me return to the issue of uncertainty: a damaging cancer at the heart of local government, which is undermining confidence and undermining belief in the Government's wish to see successful local government.
Local government believes that more importance is being ascribed to quangos, unelected bodies and officer-led partnerships than to local government itself. The Minister smiles. I believe in local democracy and I hope that he does as well, but his actions suggest that that is not the case. Certainly, the Government's actions suggest that it is not the case.
Let me ask again what the Government can do to eradicate the uncertainty and restore the confidence that I believe is vital to our local democracy and our local
19 Oct 2005 : Column 887
democratic structures. They should start by reviewing local tax-collecting vehicles quickly, although the setback to the Lyons review neither helps the process nor inspires us with confidence. They should either get on with the revaluation or scrap it altogether. I understand some of the arguments in favour of regular revaluations, and the fact that the next revaluation may be delayed until the next Parliament is extremely worrying. I understand that one of the Minister's colleagues made that point as well.
The Government can help us by providing a fair revenue support grant that recognises the true cost of public sector inflation. We do not want spurious arguments that tell us that we have more money than we have when we are forced to accept public sector inflation that is well above the level of general inflation. The Government can also help us by doing what they say they will do: all too often they have suggested that they will do something, and then abandoned the plans that they have outlined to local government. Finally, they can restore to local government the power and freedom to get on with the job that it was established to do.
There is nothing more efficient or effective within the confines of national Government than in local government. The only difference is that national Government think they know best, while local government know that they do not. It is time to trust local democracy. I just wonder whether the Government have the courage to face up to that challenge.
Mr. Nick Raynsford (Greenwich and Woolwich) (Lab): I hope that I will be forgiven if I do not take up the remarks of the hon. Member for Northampton, South (Mr. Binley). Not only did they fail to address the subject of the debate, revaluation, but they demonstrated a rather depressing failure to understand the difference between rhetoric and reality. I want to deal directly with the important issue of revaluation, and I begin by saying that I have little or no sympathy with the stance taken by either Opposition party today.
The Conservatives were consistent only in their opportunistic criticism of the Government, which revealed a vacuum in place of any positive policy of their owndespite the characteristically good-humoured presentation from the hon. Member for Brentwood and Ongar (Mr. Pickles), whom I am always delighted to see here. As was pointed out by my hon. Friends the Members for Southampton, Test (Dr. Whitehead) and for Sheffield, Attercliffe (Mr. Betts), it is nonsensical to support a council tax system based on property values without making any provision for revaluation from time to time to reflect changes in values.
The Liberal Democrats could lay claim to consistency, but only in terms of economic illiteracy. We heard two extraordinary propositions today. The hon. Member for Brent, East (Sarah Teather) suggested that the poorest pensioners were liable to spend 10 per cent. of their incomes after council tax benefit on council tax,
19 Oct 2005 : Column 888
although the poorest pensioners are entitled to 100 per cent. council tax benefit, and thus spend zero per cent. of their incomes on the tax.
The hon. Member for Brent, East has already had a good opportunity and made a mess of it. She should hear a few facts. There is a problem with take-up of council tax benefit. Had she put the case for those who do not receive it, I would have had some sympathy with her, but she advanced the extraordinary proposition that the circumstances she described applied to the poorest pensioners after their receipt of benefit. I am sorry, but that is economically illiterate.
The second example of economic illiteracy was the response to the challenge issued by my hon. Friend the Member for Sheffield, Attercliffe, who asked how a PAYE-based system of local income tax would deal with those outside the PAYE system. The hon. Member for Brent, East said that they would be subject to a different form of taxation, based to some extent on business rates. That would of course mean every property in the country having to be valued, yet the hon. Lady persisted in her claim that ending property valuations would save £300 million. That is typical of the Liberal Democrats. They do not do their sums, or their sums do not add up, and no one believes that a local income tax would generate the benefits that they claim for it.
Having said that, I should add that I have serious reservations about the Government's wish to postpone revaluation. Revaluation is an essential component of any system based on property values, as has been pointed out by my hon. Friends this afternoon and also by the Royal Institution of Chartered Surveyors in its excellent briefing paper.
The year 1991, the current basis for valuation, is now 14 years behind us, and it is increasingly unreal to base valuations on 1991 values. In my constituency, areas that were derelict industrial wastelands in 1991