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Mr. Deputy Speaker: Order. Before the hon. Member for High Peak (Tom Levitt) gives way, I want to steer him much closer to the confines of the Bill. He is starting to essay a much wider point and he must know that he is out of order.
Tom Levitt: I am grateful to you, Mr. Deputy Speaker. Structure and funding are so intertwined that it is impossible to divorce funding from what councils are expected to do, but I shall obey your strictures. I give way to my hon. Friend the Member for Colne Valley (Kali Mountford).
Would not it be useful to consider what my hon. Friend the Member for High Peak (Mr. Levitt) said about structure and function, to ensure that the partnerships he mentioned become a wider reality across all services so that the silos to which he referred do not exist?
Mr. Hendrick : Perhaps I can help my hon. Friend in bringing us back to discussion of revaluation. One of the Opposition parties wanted to cut the budget by £2.6 billion and would have increased council tax bills by 11 per cent., while the other would have increased payments through local income tax to about £260 per couple per year. Are not their crocodile tears simply to hide their proposals?
I want to offer my hon. Friend the Minister for Local Government a few more ideas, as he takes forward the Bill and associated processes, including the Lyons review. We should look at the idea of funding police authorities separately from the local authority process, especially if we move to regional police authorities. There is something to be said for giving 100 per cent. national funding to such local authorities. They must be flexible in their deployment, however. Although police forces may move towards regionalisation at the higher level, they are also moving towards neighbourhood policing at the local level. I expect to see such trends throughout local government services.
Andrew Gwynne (Denton and Reddish) (Lab): I am pleased that my hon. Friend made that important point. Does he acknowledge that the precept system for raising finance for police and fire authorities and other countywide structures is often confusing for many council tax payers? That needs to be addressed by the Lyons review as part of the overall picture
I want to take up the point that my hon. Friend the Member for Leicester, South made about property-based taxation. It is predictable and collectable, and there is a rough justice about it. As my hon. Friend the Member for South Ribble (Mr. Borrow) said, we shall probably continue to have a property-based taxation system, simply because it is easier to understand in relation to local services. As my hon. Friend the Member for Hove (Ms Barlow) said, the system must be transparent. There must be some sort of local collection for local services. Accountability and effective delivery of services must be related to that local funding. Although council tax accounts only for one pound in every five of
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local government spending, it gives local authorities flexibility on the margins, to focus their services on local needs.
My hon. Friend the Member for Leicester, South also referred to day-time visitors. As the Member representing much of the Peak national park, where there are 22 million visitors a year, I saw cash registers ringing as he spoke.
From my history books, I remember that in America people talked about no taxation without representation. In the context of this debate, we are saying that we must have a local funding system, but that there must be confidence in it. That is why we cannot separate structure and function. That is why the delay is absolutely right, to give us time to consider the Lyons review; and that is why, after due consideration, we will come up with a funding system that is effective, accountable, local and just.
Kali Mountford (Colne Valley) (Lab): When I first heard the proposal to delay the revaluation of council tax, I admit I felt some dismay. If we are to carry on with council tax, revaluation is a necessary part of that system, given that house prices are rising erratically, with prices in areas differing from one another, not just regionally, but in my constituency, where a house that sold for £60,000 two years ago was sold for £148,000 last week. There has been a similar increase in the value of similar houses in that village, so what fear is there from revaluation overall? Very simply, the fear is that if we do not take time to take stock of how we raise local funds and make local democracy count, we will face some difficulties. I could not support the Bill if it did not run alongside proposals to consider the way that we fund councils overall.
I have a small degree of experience: when I was a chair of finance, I had to consider exactly those issues in the context of the moneys that we raised for the local area. At that time, about 50 per cent. of revenues were raised directly from the local population, and the other 50 per cent. came from the revenue that we got directly from the Government. Of course, such revenues are not the total amount that a council spends. We must also consider the grant, direct funding and capital systems, all of which must be applied for. Under the previous Government, such applications were made in terms of a huge, competitive arena, with one council set against another. I am not convinced therefore by Conservative Members' arguments that the council tax system, which they set up, has now become so inherently flawed that revaluation should never be necessary. That is a ludicrous, ridiculous argument. If we carry on with council tax, revaluation is an essential part of the system; otherwise the existing inequities will not only persist, but broaden.
My hon. Friend suggests an interesting and innovative idea that has not yet been
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tried by our country. Other countries have regional systems. I can imagine hearing Conservative Members immediately crying foul over Europe, where that system is popular. They would immediately start to say that such a system was a precursor to the federalisation of the European Union
Kali Mountford: I am grateful to you for your guidance, Madam Deputy Speaker, but this just shows that no legislation stands in isolation from any other issue or from comparisons with what happens elsewhere. I suggest that there is a lot for us to learn from what happens in other places and that there are some innovative ideas to consider. If we are to go along with the Government on the proposal to delay the revaluation, dare I venture to suggest, Madam Deputy Speaker, that it only makes sense to consider the suggestions made by my hon. Friends and other hon. Members?
A consensus across the House suggests that some people have not been well served by the council tax. A lot has been made of people on pensions, but they are not the only people on fixed incomes or the only ones who have faced difficulties. Of course, if we consider the number of people who do not pay council tax because of their fixed incomes, that takes away a tranche of the argument about revaluation, because revaluation is nonsense if no council tax is paid, so why worry about it? I venture to suggest, however, that some people are about to fall off the edge of benefits.
It makes sense to ensure that we look at a system that has longevity. The council tax system, which was introduced by Conservative Members who suddenly seem to hate it, has had some longevity, but not enough. If we are to have stability in the system, we must take account of such things as how people deal with their benefits, how they build family income and how they deal with family expenditure.
The idea proposed by Liberal Democrat Members does not provide all the answers. We have not heard how they would deal with people on fixed incomes if we were to adopt a local income tax system. We do not know how they would deal with the complexities of raising money throughout the country, maintain a democratic element in the system, or ensure that that system would address all the inequities about which we have heard.
I would not throw out the idea entirely, however. The Lyons review should examine such a system. I do not want to go on and on about the Lyons review because we have already been told that the subject of the debate is quite narrow, but given that we are buying ourselves some timethat is the only way in which I can cope with the Billit would be sensible at least to consider the proposal. The system has inherent problems, and I think that the hon. Member for Somerton and Frome (Mr. Heath) acknowledges that, because he seems to be nodding at me. It would not deal with such matters as
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local accountability and people on fixed or low incomes. How would we ensure that such people would not have to pay more than they already do?
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