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Sarah Teather: But some people, such as those who rent, have no assets to liquidise and for council tenants in particular there is no relation whatever to the worth of their property.
Mr. Curry: If we have a property-based tax, a remorseless logic follows from it, which is that properties must reflect market value, albeit with some delay. The hon. Lady went into review of review of review. I thought that there was a Liberal Democrat review of their local government finance policy, but it appears to have passed her by. The Liberal Democrats did comprehensively badly in the south-east of England and a significant explanation for that may be the amount that bills would have hit home for property owners in the region.
It is cloud cuckoo land to think that we will have a period of no turbulence. Of course, there is a period of minimum political turbulence coming up—roughly in 2007, funnily enough, just when the revaluation was timed to hit. A Government who usually have an unfailing eye for timing appear to have missed that. The real problem is that the Government have discovered that there will be losers. They do not like losers; we cannot have losers under a Labour Government. Everybody has to be a winner all the time at the coconut shy. However, it is possible to deal with that, as I shall say in a moment.
We are heading for conflict and much barren argument. Inevitably, old age pensioners, the canon or deacon of somewhere or other or belligerent elderly ladies will turn up at our surgeries—we wish that our agent could spot them in advance—all determined to set the world to rights. I wonder how much it will cost the taxpayer by the time they have gone through that long process, but they will manage to avoid paying fifty seven pounds, four shillings and threepence ha'penny, or whatever the amount happens to be.
There is a way through, however. It is not rocket science, although I hate to use such well-worn expressions; I do not do rocket science as anyone familiar with my difficulties in handling the video will know. The first solution would be to link revaluation and re-banding. They go together; they are the salt and pepper of the process. Secondly, it would be perfectly possible to limit changes to a single band. In my part of the world, which might be described as regionally depressed, there are none the less areas that might be described by the right hon. Member for Greenwich and Woolwich as hot spots—Harrogate is one of them. We could stop that; the process does not have to be too sophisticated. There could simply be a shift of one band.
I would add an upper band. Madonna has a predilection for large houses in London and large country estates. I find it charming that someone should wish to adopt the English way of life so comprehensively and expensively, but I see no reason why she should not pay an extra bob or two at the top of the band in London for that privilege. We could also add a lower band, to catch the trailer parks or areas in industrial east Lancashire that the hon. Member for South Ribble
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(Mr. Borrow) will know about, where there is a long history of deprivation and empty property. It is possible to manage all those things.
The sensible thing is to drop all the fancy stuff. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) was busy detailing all the sophisticated knobs and whistles that might be attached to the process. We should forget all that. The original valuation was simple, and we should keep the current one as simple as possible.
I want to return business rates to local government, with the proper safeguards. We only need to read the snappy little document put out by the ODPM to realise that when council tax was introduced in 1993–94 business rates represented 28 per cent. of local government revenue and council tax 21 per cent. However, the estimates for the current year are that the figures will be 21 per cent. for business rates and 25 per cent. for council tax. The position has been inverted. Business has had an easy ride over the past decade compared to council tax. It is possible to set up safeguards that would reassure business about abusive increases. Furthermore, we might just as well recognise the reality of education expenditure and take the education block back into central Government. That would pretty well solve the problem. We would have gone an enormously long way towards creating a sustainable council tax and we would have returned to local government a much wider range of local resources over which it had control.
The history of local government funding is dismal. It is a long tale of prevarication and delay. I once described the search for a sustainable local government funding system as like the search for the north-west passage. The problem was that first, it did not exist, and secondly, there was a terrible danger of getting stuck in the pack ice. The Government are stuck in the pack ice. If they are not careful, council tax protests, difficulty in funding public expenditure and the annual demand for some sort of bung to make things easier will cause the structure of the vessel to be crushed by the pack ice. The Government will find themselves in a wholly justified mess, which I shall rue from the point of view of my constituents but applaud in seeing the Government get their just deserts.
The worst thing is that it will be 2011 at the earliest before anything like a proper package can be introduced. There will be a long interregnum. There may be light at the end of the tunnel, but the light is entirely at the discretion of the Minister and it is a hell of a long tunnel. The light is faint and flickering and as the right hon. Member for Greenwich and Woolwich says, the Government have taken away a proposal for action and replaced it with a void. They have removed the prospect for any long-term action.
I am afraid that that is all of a piece with the Government's actions. We have backed away from a referendum on the European constitution. We have backed away from a sensible outcome for public sector pensions. We have backed away on local government funding. I just hope that the Government back away from their proposals on terrorism, the one thing that they should back away from, but we see that the Prime Minister intends to remain obdurate.
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The Bill is silly. It will not get anybody out of a mess. The Government have exchanged what might have been a brief spurt of indignation for the certainty of five years of increasingly violent guerrilla warfare, which they cannot win and that will continue to gnaw away at them. It needs only one little old lady to chain herself to the proverbial railings, to turn up before the magistrates, and the Government will be right back in the syndrome. The issue is totemic. The Government cannot win because they have deliberately chosen not even to try.
5.58 pm
Graham Stringer (Manchester, Blackley) (Lab): My contribution will be short. When Albert Einstein wrote the general theory of relativity it was said that only three people in the world, including him, could understand it. Similar things were said when Isaac Newton wrote the "Principia". No such lavish claims have ever been made about the number of people who understand local government finance, although I suspect that over the years it has become so complicated—
Graham Stringer: The hon. Gentleman may completely understand local government finance, and I shall give way to him in a second.
Local government finance has become so complicated and difficult that I do not believe that even the gurus in the ODPM completely understand it. Now is the time, with the review of form and function, when the system could be simplified, and I shall deal with those points in a minute.
David T.C. Davies: I wonder whether the vast majority of the population's lack of comprehension explains why Ministers do not seem to accept responsibility for the fact that council tax increases are a direct response to central Government policies and have very little to do with local authorities' behaviour?
Graham Stringer: The hon. Gentleman makes his point aggressively, but when the council tax was set up by a Conservative Government after the failure of the poll tax, a large gearing effect was inherent in its structure because most of the money for local government came from central Government. The hon. Gentleman should not be quite so aggressive about a point that relates to the consequence of the Conservative Government's policies of 10 or 12 years ago.
The issue before the House is relative simple. In a sense, one could say that one agrees with it or does not agree with it. It is whether the revaluation of council tax should be deferred and the power handed over to the Secretary of State to determine whether that should happen. If that were all that was being asked of the House, the answer should be no. The right hon. Member for Skipton and Ripon (Mr. Curry) made a perfectly good point, as did two Labour Members, for regular revaluations. My hon. Friend the Member for South Ribble (Mr. Borrow) said that the longer the revaluation is left, the more a property-based tax is undermined. What surprises me about the debate is that Labour and Opposition Members think that that is necessarily a bad thing while the Lyons review is
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considering the functions and finance of local government. I do not necessarily think that it is a bad idea because the council tax was introduced in a panic after the Conservative party had politically assassinated a Prime Minister. The poll tax, which Conservatives introduced because they had failed to revalue the previous rating system, turned out to be probably the most unpopular tax that this country had seen in the previous 200 years.
The council tax itself was better than the poll tax—the community charge—but is it something that, 12 years on, Labour and Opposition Members should be going to the barricades to defend? I think not. That is why I will vote in the Lobby tonight with my hon. Friends who sit on the Front Bench. If we were simply asked whether giving the Secretary of State the power always to determine when a property-based tax should be revalued was a good thing, I would say that, on its own, it was not. However, in the light of the Lyons review of form and function, it is just about justifiable to look at the situation 12 years after the council tax was introduced, after many changes have been made in local government structures and when some are still in the pipeline.
I do not want to stray too far off the point—this relates to the Government's argument about why we should delay the revaluation—but at the bottom of the debate lies what we think local democracy's future is in this country. The simple answer, which is difficult to reach, is that local people in cities, towns and shires should be able to take decisions about the matters that they want to determine and that they can relate to, and they should be able to raise a lot of that tax locally themselves. We have got the balance wrong in this country, when only between 20 and 25 per cent. of tax is raised by the council tax, and when, if taxation is considered across the board, 2 or 3 per cent. of tax is the responsibility of local democracy.
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