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Bill Wiggin: I will give way first to the hon. Member for Carmarthen, East and Dinefwr (Adam Price).
Adam Price
: The hon. Gentleman has raised an important point. It is a fact that the Welsh Assembly
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policy of rebanding and revaluation dates from a policy announcement of March 2002 by the Liberal Democrat and Labour Administration.
Bill Wiggin: The hon. Gentleman is absolutely right and I am grateful for that intervention; I should perhaps have pointed the finger more forcefully at the Labour and Liberal Democrat Benches.
Ian Lucas : The hon. Gentleman should also point the finger at himself. Is it not also true that neither Plaid Cymru nor the Conservatives opposed the process that was set in train by the Liberal Democrat and Labour Administration in Cardiff?
Bill Wiggin: I can understand why the hon. Gentleman wanted to intervene. His own county council, Wrexham, has an increase of eight times inflation. The only point that I would raise in response may be less than polite, Mr. Deputy Speaker, so I shall resist.
Julie Morgan (Cardiff, North) (Lab): The hon. Gentleman fails to bring to the House's attention how much lower council tax is in Wales, after revaluation, than it is in England. In fact, the average council tax payment in England is £1,009, whereas it is £790 in Wales, after revaluation. On average, council tax in England is 24 per cent. more than in Wales.
Bill Wiggin: I understand why the hon. Lady wants to make that point, but she faces a difficult time over this matter. Cardiff has seen increases of more than eight times inflation. The hon. Lady's city has a total population of 136,575, but 67,775 people have had their council tax moved up one band; 17,923 by two bands; 921 by three; and 58 by four bands or more. Perhaps she will tell us whether she lives in one of those houses.
Julie Morgan: I should draw the hon. Gentleman's attention to the fact that a band D household in Cardiff, after revaluation, pays £872 compared with a band D household in Bristol, which pays £1,296. My point is that council tax in Wales has been kept consistently lower than in England. It is important that the hon. Gentleman acknowledges that point in his discussion.
Bill Wiggin: The hon. Lady will have to make that point again and again. I believe that her constituents will be dismayed at the increases, though I understand what she is saying.
In this very Chamber in 2003, on Second Reading of the Local Government Bill, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), then Minister for Local Government—it is clear from his speech today that he has subsequently become very bitter—pledged that revaluation
"will not lead to increases in council tax yield".—[Official Report, 7 January, 2003; Vol. 397, c. 53.]
That was the very point that he made today. Unfortunately, as far back as December 2001, the White Paper guiding the revaluation legislation explicitly stated:
The sentiment was echoed in Cardiff when the process of rebranding began in 2003. The Welsh Assembly Minister for Finance, Local Government and Public Services, Sue Essex, assured us that the rebranding would not lead to increases in taxation. She stated that revaluation
"is not a means of increasing the total amount of council tax raised and it doesn't follow that all tax bills will rise. There will be movements within the Banding system and changes in bills, but we estimate that half of Welsh homes will remain in the same Band, around a quarter will move down the Banding system and a similar number will move up."
Bill Wiggin: I happily give way to my hon. Friend, who is more than aware of how untrue that turned out to be.
David T.C. Davies: I am most grateful to my hon. Friend for giving way on that point and for reminding us that Opposition Members of the Welsh Assembly supported the Minister when she went ahead with revaluation on the basis that she was telling us the full truth. The mistake that we made was failing to realise that we were being led up the river by the Welsh Labour Administration in the Assembly.
Bill Wiggin: My hon. Friend is absolutely right. I was about to say that those statements and promises, well meaning though they might have been, were absolutely untrue. It demonstrates how Labour council tax revaluations deceived the people of Wales.
On 1 April 2005, the Valuation Office Agency's rebanding of Welsh properties came into effect, leading to significant numbers—one in every three—of Welsh home owners having to pay a higher rate of council tax on being moved into a higher band. As a result of council tax rises and rebanding in Wales, the average council tax bill has risen by 9.1 per cent. for the financial year 2005–06. The average Welsh home owner will now have to pay a post-revaluation council tax bill of £790 as opposed to the £724 they paid pre-revaluation. Some of that increase can be attributed to council tax inflation, but the rest can be attributed only to the profiteering from the post-revaluation rebanding. Wages have not risen by 9.1 per cent., and nor have inflation and pensions, which makes that increase seem all the more unjustifiable.
The statistics clearly contradict the assertion made by Sue Essex in 2003 that a quarter of Welsh households would move down a banding scale and a quarter would move up. They also contradict what was promised by the then Local Government Minister and by the White Paper that preceded the Local Government Act. In 2004, Assembly Member, Sue Essex, tried to shift the blame on to Whitehall, commenting that
However, the Deputy Prime Minister, whose Department was responsible for the Local Government Act, disagreed, admitting that the Welsh Assembly had decided to use revaluation "to raise tax revenue". Additionally, the ODPM claimed in January 2005:
"Revaluation in Wales has been a good example of shared policy development between the Welsh Assembly Government, local government in Wales and the Valuation Office Agency."
The council tax revaluation in Wales has demonstrated that the rises that it has led to are harming the poorest in Wales the most.
Mr. Desmond Swayne (New Forest, West) (Con): That poses the question of what would have been a bad policy development, if that was a good one. Surely the answer to the hon. Member for Cardiff, North (Julie Morgan) is that it provides no comfort whatever to someone who has been shifted up a couple of bands to know that a band D property in England would have been even more expensive. That is the point—they have been ripped off big time.
Bill Wiggin: My hon. Friend is absolutely right. If we bear in mind the fact that Powys is one of the poorest, if not the poorest, areas in the whole of the UK, that amounts to a double whammy or even worse.
I welcome the fact that the Labour Administrations in Whitehall and Cardiff have recognised the financial insecurity that the rises are causing the people of Wales, but I do not think that the extra £11 million proposed for transitional relief will make enough of a difference, especially when one considers the fact that most of that relief is available for one year only. In addition, by 2008, the revaluation will lead to a further 5 per cent. of Welsh home owners paying higher council tax bills as a result of moving upwards into another band. That is why we want to end the need for those increases—by stopping the planned upward movements by more than one band.
My hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) raised the issue on the Floor of the House last July, but it is worth noting again that between 1998 and 2004 local government had to increase council tax in Wales by 78 per cent. in order to fund services. The grant given to local councils in Wales from central Government increased by only 40 per cent. That is why Welsh council tax payers are now paying for some 20 per cent. of all local government expenditure, as opposed to the 15 per cent. that they were paying back in 1997.
My hon. Friend also remarked that the people of Wales do not think that the rises in council tax have led to significant improvements in services. No Government can justify taking more money from the public and not providing hard-pressed taxpayers with adequate value for money. In Wales, despite the increases in council tax, hospital waiting times are still the highest in Britain and education standards are still the lowest in Britain. Welsh home owners are paying for increased red tape, paying for more waste and paying for further misadministration. That is the sad truth behind revaluation and the truth that the Labour Government are trying to shield from us.
Having drawn to the House's attention the problems that the revaluation of council tax in Wales has caused, it is important to highlight the lessons that must be learned. First, we have seen added financial misery, to hundreds of thousands of people. Secondly, the Labour Government revaluation can never be revenue-neutral, as the taxpayer will always have to pay more. Thirdly, the revaluation legislation muddies the waters of responsibility and it is not always clear who is responsible for the bills that have been created. We find ourselves asking who will take responsibility. The only thing that I can say with some certainty is that it is the Labour party that must take the blame.
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