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Mr. Eric Pickles (Brentwood and Ongar) (Con): The right hon. Gentleman is being extremely generous in giving way. All the things that he has just announced were known when the Government decided to move towards revaluation. They have spent £60 million on it, of which £45 million was spent on software alone. Is anyone in the Valuation Office Agency working on revaluation, and how long will the purchased software remain relevant, before becoming obsolete?
Mr. Miliband: I am afraid that I cannot allow the hon. Gentleman's assertion to remain on the record unchallenged. To take one obvious example, the creation of the dedicated schools budget was not known in 2003; it was a subsequent decision, so his assertion simply is not right. I shall deal with the Valuation Office Agency in a moment, if he will allow me. The software is state of the art and will be an efficient and effective replacement for the 22 million files that existed until now. The digitisation of that data forms the basis of effective government.
We reached the view that to proceed with the current timetable would not be sensible and we concluded, as I was saying, that we needed the flexibility to revalue as part of a fully developed package of reforms.
Mr. Mark Harper (Forest of Dean) (Con): Ministers announced that the Lyons report would be published at the end of 2006. In view of that, has the Minister decided when the Government will have considered that report and when the Government will announce their resultant policy?
Mr. Miliband: I think that the hon. Gentleman may be referring to the statement of 20 September, which was repeated before the House on 10 October. If he read on, he would see that we expect the Government to come forward with their views during the completion of the comprehensive spending review in the summer of 2007. As I said, that was made clear on 20 September.
Although this is a short Bill, it may help the House if I explain its effects. First, it removes the requirement laid down by the Local Government Finance Act 1992 for the compilation of new lists on 1 April 2007. Clause 1(3) amends section 22B of the 1992 Act by removing the duty on the listing agencyin practice, that means the Valuation Office Agencyto compile a new valuation list to billing authorities in England on 1 April 2007 and a draft of that list to be completed by 1 September next year. We have already informed the House that the VOA has stopped work on the revaluation of domestic properties in England to prevent nugatory expenditureand the provision formalises that position.
Secondly, subsection (4) removes the requirement for subsequent revaluations on the 10th anniversary of the previous one, unless an earlier date has been specified by order. Until the Government have received and considered Sir Michael Lyons' final report, we cannot take a view on how frequently revaluation should occur and we therefore think it right that we should not be statutorily committed to revaluing on a rigid, predetermined cycle.
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Mr. Nick Raynsford (Greenwich and Woolwich) (Lab): I hear my right hon. Friend's argument for postponementI do not agree with itbut I do not understand the argument for deleting the provision for a 10-yearly cycle for revaluation. That was the subject of Government consultation in 19992000 and was the subject of a White Paper, which set out a commitment to a 10-year revaluation. As far as I know, Sir Michael Lyons has not been asked to comment on whether that revaluation cycle should change. I simply do not understand the Minister's logic for cancelling a provision for regulation revaluations.
Mr. Miliband: My right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) is, indeed, my very good friend and he speaks with a great deal of authority on these matters. He will know more than anyone else that at the time of the 2002 Bill there was a great deal of discussion about the requisite period. As it happens, and ironically in the current context, the Conservative spokesman in the other place wanted to reduce from 10 to five years, the[Interruption.] The hon. Member for Meriden (Mrs. Spelman) is shouting from a sedentary position. We are all disappointed that she is not speaking today and that she has left the task to others; she may be winding up the debate, but I do not know.
Finally, the Bill replaces those two provisions for revaluation, for at least 10-yearly intervals, with a power for the Secretary of State to specify the date on which a new valuation list must be compiled. Such orders will be subject to the House's affirmative resolution procedure. That was also the case in respect of the Local Government Finance Act 1992, which created the council tax in the first place. For the sake of completeness, clause 2 simply provides for the short title of the Bill and for its extent.
I can bring the House up to date with progress at the Valuation Office Agency, which was responsible for carrying out the revaluation. Immediately following the announcement, the VOA took steps to reduce ongoing expenditure and to reshape the agency to fit the new situation. Some 420 staff employed as casuals or on fixed term contracts will have left the agency by the 18 November. A voluntary early departure scheme has been announced, with some 600 staff expected to depart between March and June 2006. Coupled with natural wastage, the total reduction is expected to amount to some 1,250 staff.
As we set out on 20 September, there will be significant short-term savings for the Government from not proceeding with revaluation. However, the Government have been explicit that £45 million of the £60 million spent so far is a prudent investment in modern and efficient working practices. The VOA will ensure that the country has an up-to-date, electronic property database, available as a source of accurate data.
Mr. David S. Borrow (South Ribble) (Lab):
When we have had regular revaluations of business rates, they
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have always been fixed for the period 1990 to 1995 and 2000 to 2005. One of the arguments for doing the revaluation of council tax in 2007 was to balance the work of the Valuation Office Agency. Does the cancellation of the revaluation mean that if we reinstate the revaluation for council tax in the future, we shall be blocked from going anywhere near 2010 because of the implications for staffing?
Mr. Miliband: My hon. Friend speaks as a former valuer and therefore brings his expertise to the issue. Nothing has been blocked by the Bill. The Government have made it clear that we do not anticipate revaluation occurring during this Parliament, and that is a clear statement of affairs.
Mr. Pickles: The Minister says that he wants to see a modern and up-to-date database of property values. Are we to understand that the dwelling house codes and the value of significance codes are still being collected in preparation for revaluation? Or will we just have a database with nothing on it? How much will the cancellation cost in staffing terms, and will he say a little more about redundancies, early leaving and ending of contracts?
Mr. Miliband: In respect of the first question, the hon. Gentleman had an exchange with my right hon. Friend the Member for Greenwich and Woolwich on 19 October in which they agreed that it was important to continue with the procedure under which if people move and it is apparent that the property has had a significant change in value, it is reflected in the banding. For that and other reasons, it is sensible to have an up-to-date and efficiently working system.
In respect of the precise costs, I have made it clear to the hon. Gentleman that some 1,250 jobs will be lost as a result of the changes. The full financial effects of that are still being worked through, but as I said on 20 September significant savings are expected.
Mr. Redwood : What was the Department's forecast for the number of grannies and granddads who would go to prison if he had not taken this action to take some of the sting out of the council tax? At what level does the number of people who think that it is an unfair tax become unsupportable?
I wish to take a moment now to explain how the Bill will not in any way affect the approach being taken in the devolved Administrations, contrary to the assertions of some Opposition Members. In our debate on 19 October, much was said about Wales, but executive local government functions in Wales are, rightly, devolved. We have consulted the National Assembly of Wales on the subject matter of the Bill and it has indicated that it is content that it has no effect on provisions relating to Wales.
The position in Northern Ireland is very different from that in England, not least because local government has continued to be funded through a
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domestic rating system instead of the council tax. The House will recall that Northern Ireland did not have the benefit of the poll tax. The Northern Ireland Executive commissioned a review of rating policy in 2000 and that has now led to the publishing of a draft Order in Council, which is currently subject to a consultation process.
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