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Ms Celia Barlow (Hove) (Lab): Members on both sides of the House are aware of the importance of a good relationship between people and their local authority. Like many Members here today, I seek improvements to the system that will not only enable a more efficient collection of funding and delivery of local services but strengthen the relationship between local councils and their stakeholders.
During this year's general election campaign, I read with interest and not a little disbelief the Opposition parties' proposals for collection and for reforming
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the council tax system. The Conservatives proposed the postponement of revaluation and promised simple council tax cuts which were unaffordable and would lead to an inevitable loss in service provision. The Liberal Democrats, who now say in the House that revaluation would be a waste of time, offered a local income tax system which would be expensive to run and would penalise hard-working people across the country. Two contrasting proposals—one irresponsible, the other unworkable.
David Howarth: If the local income tax system is unworkable, why does it work in Denmark and the United States?
Ms Barlow: The circumstances of the local income tax, as outlined in the Liberal Democrats' proposals, were unworkable.
The system is in need of reform. I am aware from correspondence and conversations with my constituents that a growing section of our population feels that a more equitable means of funding local government is needed—not just revaluation. That Opposition parties have been unable to capitalise on that sentiment for electoral gain demonstrates the sensitivity with which the electorate view this subject. People want real solutions based on considered inquiry.
Those points show that we can do better. Now is not the time for tinkering around the edges of council funding. We stand at the beginning of a new Parliament—time enough to investigate thoroughly the many ways forward, to listen to the needs and aspirations of all concerned parties, and to present to the people a bold, more equitable future for local government.
I have been contacted, as I know have a number of Members present, by the IsItFair campaign group. Its proposal to scrap local taxation and to replace it with higher centrally collected VAT and income tax would be a disastrous move in the wrong direction.
Madam Deputy Speaker: Order. May I remind the hon. Lady that we are asked to confine the debate today to the Bill before us, which is about the dates of revaluation of council tax rather than local government finance?
Ms Barlow: I thank you for your guidance, Madam Deputy Speaker. The challenge that we are faced with today is not just revaluation or re-banding but how to bring local councils closer to the people they serve.
Mark Pritchard (The Wrekin) (Con): The hon. Lady has clearly thought through her speech; it is a measured speech. I am interested in her comment about equity. Does she think that it is equitable that as a result of revaluation in Wales 33 per cent. more homes are paying more? Is she in favour of revaluation?
Ms Barlow: I understand from guidance from Madam Deputy Speaker that we are dealing with matters in England rather than in Wales.
In the south-east of England—
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Madam Deputy Speaker: Order. May I clarify matters? A passing reference to Wales is acceptable. What cannot take place is a whole speech referring to Wales, because this Bill and revaluation do not affect Wales.
Ms Barlow: Thank you, Madam Deputy Speaker.
If I may return to England, in the south-east and in my local authority of Brighton and Hove, revaluation would have done little to redress inequalities without an accompanying restructuring of bands. According to housing statistics published by the Council of Mortgage Lenders and the Office of the Deputy Prime Minister, between 1992 and 2004 house prices in the south-east rocketed by 210 per cent., while average earnings of mortgage borrowers increased by only 93 per cent. Meanwhile, in the north-east of England, for example, house prices went up by 167 per cent. and earnings by 83 per cent. Therefore, the gap between house prices and earnings is widening across the south-east.
While it is increasingly difficult for younger people in my constituency to get on to the property ladder, there is great concern among older people about council tax increases. The burden of council tax is higher for pensioners than for many other households. The council tax benefit system is a great help for them, but many who are entitled to the benefit still do not claim, and most of those are pensioners. Therefore, we need to look at the operation of the council tax benefit system as well.
We need not just to revalue but fundamentally to rethink the way in which local government is funded. That is the only way to revolutionise people's relationship with their local council and to increase the effectiveness of local service delivery. Some good and imaginative work has already been done, adding greatly to the debate. I read with interest the paper written by my hon. Friend the Member for Southampton, Test (Dr. Whitehead), which outlines proposals showing the potential for local revenue collection. Some contributions add to the ongoing deliberations on the Labour Benches on how to be equitable with tax collection yet fair to economically vulnerable members of our communities—pensioners in particular. Unlike the opportunistic approaches demonstrated by some Opposition Members, those meaningful contributions demonstrate the potential for improving the relationship between people and their local councils, as opposed to driving a wedge still deeper.
I support the call of my hon. Friend the Member for South Ribble (Mr. Borrow) that if there is a revaluation it should not be too far in the future. However, I also voice my support for Sir Michael Lyons' review process, especially now that his remit has been extended to include the future of local government in a wider context. This is a one-off opportunity to look afresh at the situation and to offer the people of this country a bold new vision of local government and service delivery. That vision has the potential to be fair to the regions as well as to local communities, in addition to fostering a more equitable relationship between local councils and the communities that they serve.
6.27 pm
Mrs. Maria Miller (Basingstoke) (Con):
I welcome this opportunity to speak about council tax, because the issue is causing immense concern in my constituency.
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I speak for many Basingstoke families and pensioners who face staggering increases in council tax as a result of the actions of this Government. Those families and pensioners would face almost untenable costs if the Government implemented their intention to revalue, so I support scrapping revaluation in its entirety.
We are told that the proposal is revenue-neutral, but the actions towards householders in many other aspects of our lives suggest that the cynicism expressed from Opposition Members may be justified. If I may, I shall look at this issue from a slightly different angle—from that of our constituents. A house is a home where we raise our families and live our lives. If we are fortunate enough to own our own home, our families are offered a certain level of security. This Government are using our homes as another way to punish hard-working families for doing the best for their children and to punish pensioners in their retirement.
House price inflation does not deliver an additional income to householders. It does not put an additional pressure on local services, and as we have heard today the relative level of house prices has not changed regionally for a decade. Under this Government, house price inflation has been seen as an opportunity for an additional back-door tax on pensioners and hard-working families. Council tax revaluation is just the latest in a long line of such measures.
The Government are happy to recognise an increase in property values when it comes to council tax, but not when it comes to inheritance tax. They have continually failed to raise inheritance tax thresholds to reflect house price increases, and in the process have added about a £1 billion tax take to the Chancellor's coffers. Under Labour, stamp duty has tripled in my constituency, with the stamp duty bill for an average detached house being almost £4,000. In Basingstoke, stamp duty is slapped on even the average flat that would be within reach of a first-time buyer. One in three children aged 10 today will be able to own their own home in the future. Contrast that with the last Conservative Government, who helped 2 million people get on the housing ladder under right to buy. The Government have declared war on our home owners of the present and the future.
Delaying revaluation will leave the sword of Damocles hanging over the heads of pensioners and families who have already been penalised enough for doing the right thing, working hard to provide a safe and secure environment for themselves and their families. The Government have tried to paint a different picture and claim that revaluation will be revenue neutral, but that assertion has been blown out of the water by what has happened in Wales, as we have heard today.
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