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Mr. Hendrick: Before this year's general election, did not the leader of the hon. Gentleman's party say that if the Conservatives won that election, they would not examine the issue of revaluing properties for council tax purposes in their first term in office? So the leader of the Conservatives accepted that point, as well as our leadership.

Mr. Jones: That is certainly the case so far as England is concerned, but of course, my party's amendment is founded inter alia on the reasoning that should this exercise proceed, inequality would be created between England and Wales. Real pain is being felt in Wales, and it is exacerbated by resentment at other parts of the country being let off the hook by the Government.

We have heard much today about the Lyons inquiry. It is certainly extremely important, but in his evidence to the Welsh Assembly's Local Government and Public Services Committee earlier this year, Sir Michael said:

in the English context, of course. He said that


 
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Well, fine. I am sure that the people of Wales are delighted to have performed such sterling service to Sir   Michael and his interminable inquiry.

Mr. Hendrick: Is the hon. Gentleman saying that what this Government have done with the council tax in Wales is similar to what the previous Conservative Government did with the poll tax in Scotland?

Mr. Jones: What I would say is that the fact that the people of Colwyn bay are not manning the barricades is a tribute to the self-restraint for which, of course, my nation is known. But as I said, real pain is being felt in my country.

John Bercow: Does my hon. Friend agree that neither revaluation nor the proposed Lyons inquiry does anything to address the question of the simplification of local government finance? That is an important issue when one considers that local government finance is often thought broadly analogous to the Schleswig-Holstein question, to which, it was said, only three people ever knew the answer. One of them went mad, the second died and the third forgot what the answer was.

Mr. Jones: Absolutely, and the longer that this debate continues, the more inclined I am to agree.

The fact is that this Bill potentially creates great inequalities between the constituent parts of the United Kingdom. The Government could, if they wished, intervene, with the assistance of their colleagues in the Assembly, to ensure that revaluation in Wales is reversed. But that will not happen. Wales will continue to pay more. If this Bill is enacted, let the Government remember that for their own political advantage, they have saved the skin of English council tax payers and let Welsh ones twist in the wind.

8.6 pm

Sir Peter Soulsby (Leicester, South) (Lab): I had the privilege of leading Leicester city council for some 17 years. It has been said that that is longer than a life sentence, and at times it certainly felt like it. But in that capacity my city and I survived the rating system, the savage revenue and capital cuts of the early 1980s, and the rate capping and attendant confrontations that took place in what was a pretty painful period. We also survived the poll tax and the disastrous disruption and confrontation that it caused in our city, as it did elsewhere. We are now surviving the council tax and the attendant capping.

It is with mixed feelings that I speak on this Bill, because I do not know that many of my constituents are likely to benefit from a revaluation, were one to take place. I realise that there are many different predictions about the possible outcome of such a revaluation, but it seems that my constituents and others in Leicester have suffered from the fact that house prices have risen less significantly there than elsewhere. So there is perhaps some benefit in revaluation, but set against that is the obvious pain that would be caused to those whose revaluation moved in a less favourable direction.

Far outweighing any of those considerations is the enormous benefit that is to be gained from a thorough review of the functions and the funding method of
 
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local   government. I am enormously heartened by what   the Minister said in introducing this debate about   the Government's commitment to devolution and decentralisation in respect of local government. The Lyons review provides a unique opportunity to look at local government root and branch, and to consider not just its funding but ways of ensuring that its future is healthier than the preceding decades have been.

On balance, I very much favour the deferment of any revaluation, and I look forward to a radical reform of the finance and functions of local government.

Mark Pritchard: The hon. Gentleman mentions his support for deferment. Does that support extend to supporting Government Front Benchers in their apparent desire to abolish local education authorities to reduce future council tax bills?

Sir Peter Soulsby: As I understand the proposals in the White Paper, the Government envisage a new role for local education authorities. I do have some concerns about what that role might be. However, I look forward to a vigorous debate over the White Paper to ensure that local education authorities continue to play a vital role on behalf of local people who elect them to serve their local communities. I look forward to vigorous debate, but I do not envisage that the White Paper will end local government's vital involvement in local education.

Tom Levitt: Conservative Members have got the history wrong, as I recall that it was the Conservative party, from Nicholas Ridley onwards, that went into elections with a policy of abolishing local education authorities. We need to say categorically—

Mr. Deputy Speaker: Order. I have heard quite enough to realise that we are now moving into a debate on the future of local education authorities. However, that is most certainly a debate for the future, not for now.

Sir Peter Soulsby: Thank you, Mr. Deputy Speaker. That was precisely the point that I was making.

I welcome the Minister's commitment, in introducing the debate, to a continued role for a property tax in the funding of local government. I welcome it because a property tax is predictable, collectable and just—albeit sometimes a rough justice. I urge Ministers to pass the message back to the Lyons review about the vital need for a much wider range of sources of funding for local government. A property tax undoubtedly has its place, but we need a wider range of sources so that the funding that local government receives from central Government becomes a diminishing proportion of its total expenditure. It is certainly not healthy for local government to depend, as it increasingly has in recent years, on central Government funding. That is not healthy for local democracy, so we need a much higher proportion of local government funds to be raised locally if we are to increase the accountability of local government to local people.

Mr. Hendrick: In achieving that aim, would it be sensible to review the role of the uniform business rate and its contribution to local government?

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will not go too far down that road in his
 
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reply. We are debating a Bill about the postponement of the revaluation of properties in England, and we should stick as closely to that subject as we possibly can.

Sir Peter Soulsby: I shall certainly take your advice, Mr. Deputy Speaker, and stick to the matter in hand—except to acknowledge that I agree with my hon. Friend's point.

If, as I hope will be the case, the Bill is successfully enacted, I hope that the Government will recognise that the postponement reinforces the need for them to look into the inequities of the present system of support for local government and will acknowledge that certain issues must be dealt with in the interim period before the Lyons review. I hope that they will reflect on how the   area cost adjustment works at present and how its funding should be restricted to authorities that experience higher-than-average wage pressures. I hope that they will look carefully into how resource equalisation works and the need for the current system to keep pace with reality. Full resource equalisation needs to take place every three years. I also hope that the Minister will look into the way in which daytime visitors are factored into the present arrangements, as the present estimates are long out of date, being based on a survey that took place some 15 years ago. We should bring the system truly up to date and make it truly more realistic.

I heard Liberal Democrat Members argue earlier in the debate—as we expect them to do—in favour of local income tax. I know that there is a general view within local government that such a local income tax would be   uncollectable, expensive, confusing and, most particularly, a burden on employers. At least, however, Liberal Democrat Members are consistent in their views. I also heard Conservative Members argue powerfully for opposing revaluation. In doing so, however, they were asking the House to support an amendment that, if approved, would have the effect of providing just such a revaluation as they purported to oppose this evening.


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