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Another headline reads, "U-turn is bad news for hopes of reform". That is too hurtful to read out in public. Under the headline, "Revaluation is a ticking timebomb", the Local Government Chronicle says:
As the right hon. Gentleman has assured No. 10 that he can get revaluation away from all the problems, he cannot have been very pleased with the weekend's newspapers or this morning's or the decision by The Sun to call this new tax the patio tax.
Hugh Bayley: We are all capable of reading newspaper cuttingsin fact, I expect that most hon. Members who are attending this debate have already read through the newspapers on this topicbut will the hon. Gentleman tell the House whether he would have been happier if the Government had gone ahead with the revaluation?
Mr. Pickles: No, I am not in favour of the revaluation, and I cannot imagine, given all the fuss, why the hon. Gentleman could possibly have been deluded into believing that I would. I apologise to him for reading out those pieces, but I wanted to bring home to the right hon. Gentleman that no one thinks that his method makes any sense. Those who wanted a revaluation think that the Minister is not doing a good job and so do those who did not want one. He has managed to unite the nation in believing that he has made a bad decision.
We are not persuaded of the need for revaluation. The purpose of a revaluation is to correct grossly disproportionate movements of the housing market compared with the last revaluation, but house prices are currently converging relative to the last revaluation. As we argued when the council tax was introduced in 1992,
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a system of bandings means that there is no need for regular or frequent revaluations. The only reason why Labour wants to revalue and re-band the council tax is to tax the uplift in property values that has taken place since the early 1990s.
We oppose the plans for higher taxes on hard-working families and pensioners. The revaluation has already taken place in Wales, so we will move amendments in Committee to continue the transitional relief and thus stop further tax hikes next year, after the relief is phased out.
As the Minister has said, the Bill essentially does three things. It removes the requirement for a new valuation by 1 April 2007we agree with that. It will take away the 10-year rule for revaluation, on which we agree with the right hon. Gentleman. Finally, it will empower the Secretary of State to determine when a revaluation should take place, with which we do not agree. As Labour Members will testify, the Library has produced an excellent brief that details the problems that have occurred because of revaluation in the past and all the problems due to the postponement of revaluation, especially. Given the nature of the council tax and the bandings, we think that the most sensible thing would be for a decision to be taken on the Floor of the Houseby way of primary legislationeach time revaluation needs to takes place. That is important because such a decision should be taken not at the whim of the Secretary of State, but by Parliament.
Mr. Borrow: I am one of those Labour Members who believes in regular revaluations, so I have some worries about the cancellation of the revaluation. It would thus be logical for me to vote for the Opposition's reasoned amendment. Does the hon. Gentleman want me to vote in favour of his amendment?
Dr. Alan Whitehead (Southampton, Test) (Lab): Just for the avoidance of doubt, will the hon. Gentleman refer the House to section 77 of the Local Government Act 2003, which specifically states that new valuation lists should be compiled and that there should be regular revaluations? If the reasoned amendment were accepted, that measure would be kept on the statute book. Does he think that allowing revaluation to proceed is the right course of action, or does he think something else? Perhaps it is time for a review of the process by which the Conservative party drafts its resolutions for the House.
The hon. Gentleman makes a reasonable point. There was a limited way in which we could draft a reasoned amendment because the Bill is narrow. If we had tried to draft an reasoned amendment of the type that the hon. Gentleman seems to suggest, there would have been a strong possibility that Mr. Speaker
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would not have selected it for debate. It was important to us to table an reasoned amendment so that we could discuss such an important issue.
The essential problem is this: the council tax has increased by 76 per cent. under this Government and as a direct consequence, it has become deeply unpopular. That represents a complete reversal of the public's view since Labour first came to power.
Mr. Graham Stuart (Beverley and Holderness) (Con): I wonder whether my hon. Friend thinks that the Prime Minister decided to postpone the revaluation because he wanted not only to protect the future career of the Artful Dodger but, more importantly, to stop the Fagin of the Labour party, Gordon Brown, yet again using revaluation not for fiscal neutrality but as an excuse to raid the pockets of pensioners and hard-working householders across the country. That is why the Prime Minister went for itnot for any other reason.
Mr. Pickles: My hon. Friend makes a powerful point and could have done so within the terms of debates in this House. I have no objection to saving the skin of the Minister of Communities and Local Government. We have great affection for him on the Conservative Benches and wish him well in his future career.
Robert Key (Salisbury) (Con): My hon. Friend is wholly right to point out that when the council tax was introduced it was received with some acclaim on both sides of the House, and we did not then hear such arguments from the Labour party. I was the Minister who had the misfortune of taking the legislation through the House with Michael Portillo. We specifically looked at how property could be revalued from time to time, and I remember an exchange in debate in the middle of the night between the right hon. Member for Sheffield, Brightside (Mr. Blunkett), who has just left the Government again, and my right hon. Friend, as he then was, about whether we should have inflatable balloons floating over people's back yards, which is no sillier a suggestion than those we have heard this weekend. This is not just a question of balancing function and who pays. The Minister of Communities and Local Government has forgotten that the whole point about whether local government finance is to succeed is where the balance lies between Treasury funding and the raising of tax locally. That is what the Government have failed to address.
Mr. Pickles: My hon. Friend comes to these matters with considerable knowledge and I entirely agree with his point about the balance of funding. If I am allowed to make a little progress, I shall come precisely to that point.
It is worth reminding the House that in 1998 the Command Paper, "Modern Government: In Touch with the People", examined the popularity of the council tax and in clear and unambiguous words endorsed the tax by saying:
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That is understandable when the Government cap councils that have increased council tax by a few pence a week and ignore others that have introduced increases many times that size. It is understandable when pensioners are being thrown into prison. It is understandable when a third of the increase in the basic state pension has been taken up in higher council tax for a typical pensioner.
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