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Mr. Borrow: I am grateful to the hon. Gentleman for giving way. When valuations in the current valuation list for council tax are defended, a precise valuation based on purchase prices in the early part of the 1990s is used. Does the hon. Gentleman agree that there is no difference in effect between a revaluation before bands have been set in stone and a revaluation when bands   have been agreed, which was the situation before the current valuation list?

Mr. Pickles: That is an interesting view, but the valuation office notes, which are extensive, do not mention it. Sadly, the notes do not agree with the hon. Gentleman.

Turning to the dwelling house codes, I took it from what the Minister of Communities and Local Government said earlier that the patio tax will be worked out in readiness for the revaluation.

The new dwelling house codes include: number of bedrooms; number of floors; lowest floor level; conservatory type and area; outbuildings; and a new system to count the number of garage spaces and parking spaces. They include the introduction of new value significant codes, which in January 2005 were expanded to cover 66 different property features, such as: balconies; near a golf course; in a conservation area; large garden; large patio; roof terrace; sea views and views of hills or lakes; and gated estates.

In other words, someone who has worked hard to manage and improve their home will be penalised and taxed more. The council tax of a low-paid agricultural worker living on their own in a modest home overlooking Lake Coniston will rocket. Pensioners who have retired to little bungalows by the sea had better watch out. Under new Labour, only the rich can afford to enjoy a view or a well-placed patio. The result is that the codes ensure that properties with these indicators are pushed into a higher council tax band. In short, the patio tax becomes a new window tax. As The Sunday Telegraph commented yesterday in its editorial entitled, "Pay per view homes",

"The plan will allow ministers to increase council tax with a minimum of Parliamentary debate. It is true that they have not found a way of taxing happiness directly. But just give them time—they will."

We should be grateful for this important lesson in life under new Labour. As a gentle summer light caresses patios and plant pots around this sceptred isle, as hollyhocks and forget-me-nots bob in the warm breeze in this green and pleasant land, we should console ourselves with the thought that this is the clearest example of there being no such thing as a free view or a peaceful garden—all must be taxed and all pleasures must be stamped out.
 
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That is the logical conclusion for a Government who have selected Northern Ireland as a guinea pig, with so-called discrete capital values that would make the council tax more progressive and target social needs. In plain English, council tax bills in Northern Ireland will soar. It has been selected for yet another experiment that involves a variation in the council tax—the death tax, whereby deferred local tax bills will be paid by pensioners. Vulnerable people must either forfeit their children's inheritance or face the prospect of bailiffs at the door. Only the Labour party could find ways to pursue poor people beyond the grave.

The Local Government Chronicle has described revaluation as "a ticking time bomb". All that the Government have done is to wind up the clock and adjust the hands. Revaluation and re-banding will still have a devastating effect. A disaster postponed is not a disaster averted. What seems like clever politics now will seem like cowardice a few years down the road.

5.3 pm

Mr. Nick Raynsford (Greenwich and Woolwich) (Lab): I regret to say that I cannot support the Second Reading of the Bill. Having said that, the speech by the hon. Member for Brentwood and Ongar (Mr. Pickles) was extraordinary. Before he got carried away in his flights of floral fantasy, he said that he agreed with the postponement of the revaluation and with the removal of the obligation to carry out revaluation on a regular 10-yearly cycle. I would have wholeheartedly agreed with him on both counts, but he does not appear to want my support.

Everyone who has considered this issue starts from the simple proposition that if we have a system of local government taxation based on local property values, those values must be revisited periodically. No one has argued credibly that the current values based on 1991 levels should remain the basis of council tax for ever more.

Mr. Curry : Is not it true that between 1.6 million and 1.8 million properties are revalued every year because they are sold?

Mr. Raynsford: The right hon. Gentleman rightly highlights that the existing framework provides for revaluation if a property's value has materially changed and it has been sold. However, that does not apply if the property remains in the hands of the existing owner. That is one of the many inherent anomalies in a system which has prolonged gaps between regular revaluations, and one of the strong arguments in favour of a regular cycle of revaluation. I was therefore especially disappointed to hear the hon. Member for Brentwood and Ongar opposing the provision of such a regular cycle.

Sir Paul Beresford: Does the right hon. Gentleman agree that, although the council tax is based, for collection purposes, on property, the valuation is required only for distribution of grant and tax?

Mr. Raynsford: The hon. Gentleman tries to lead me into territory that I shall probably cover when I reach a later part of my speech. I want to set out the principles
 
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that should inform a proper system of tax based on property values that allows for revaluation. I hope that the hon. Gentleman will bear with me for a moment.

The problem with the Government's position is that, although they say that they are postponing, not cancelling, revaluation, they have given no indication about when the postponed revaluation will take place. The date of 2007 was set for revaluation after a lengthy period of consultation. The Green Paper, "Modernising Local Government Finance", which was issued in autumn 2000, invited views on whether there should be   provision for regular revaluations and, if so, how   frequently. It was suggested that there might be six-yearly, eight-yearly or 10-yearly gaps between revaluations.

The 2001 local government White Paper, which I had the privilege of preparing and implementing, made it   clear that respondents to the consultation overwhelmingly supported the principle of a fixed cycle. The White Paper announced the Government's conclusion that there should be a regular 10-yearly cycle of revaluation, with the first being based on 2005 values and taking effect from 2007. There was a logic behind that.

As my hon. Friend the Member for South Ribble (Mr.   Borrow) pointed out—as a former valuer, he is experienced in such matters—the cycle for valuation must be co-ordinated with the current five-yearly cycle of business rates revaluations to avoid imposing unreasonable pressures on the staff of the Valuation Office Agency. It was therefore considered sensible to conduct the first revaluation of council tax as soon as possible after the completion of the 2005 business rates revaluation and well before that of 2010. That was the logic behind choosing 2007.

That was not only agreed through all the usual channels of Government but, because legislation was required to effect the decision, debated at length in 2003 during the passage of the Local Government Bill. The measure was passed, arrangements were made to begin the revaluation in 2005 and the Valuation Office Agency undertook a great deal of preparatory work. I   understand that some £60 million of work had already been done before it was decided a couple of months ago to stop the process.

Mr. Hurd : Does the right hon. Gentleman accept that regional property price disparities are at the heart of the case for revaluation? If so, does he accept the evidence from the Halifax that those disparities have narrowed since 2001? Does he agree that, if the trend continues, the case for an expensive wholesale revaluation is critically undermined?

Mr. Raynsford: No, I do not. I shall deal with the evidence from the Halifax shortly. Regional trends, which are part of the picture, conceal many local variations, with both hot spots and cold spots in any one region. The proposition that regional price differentials might be narrowing does not obviate the need for revaluation because there will be considerable variations in property prices in every region.

Mr. Borrow: Does my right hon. Friend agree that, if there has been little change in relative property values,
 
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as the hon. Member for Brentwood and Ongar (Mr.   Pickles) alleged, a revaluation would not lead to large increases in council tax for many people?

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