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Andrew Gwynne : Does my hon. Friend agree that one of the inequities of the current council tax system is the fact that two identical houses can be in different bands if one was valued in 1991 and the other was subsequently sold on and thus re-banded? Does that not make a mockery of the Opposition's stance of ruling out any kind of re-banding or revaluation for ever?
Kali Mountford: It certainly does, but my hon. Friend must be careful because he might steer me into something of a rebellious mood if he reminds me of the terrible inequities that exist because we have not had the courage to go ahead with a revaluation, which I seriously believe to be necessary. Such inequities exist in my constituency and I am worried about them. What does my hon. Friend the Minister for Local Government think might come out of this period of reflection when people such as me realise that there are inequities in our constituencies and want to ensure that we will either go ahead with a revaluation at some point, or replace the system with something that works better?
Mr. Borrow: Does my hon. Friend share my worry that a long delay before a council tax revaluation will exaggerate the inequalities that already exist? Does she agree that given the link with Government grant, the longer we put off revaluation, the longer the amount of grant that goes to each local authority will not reflect the economic success or failure of each locality?
Kali Mountford: My hon. Friend makes his point well and I share his concern. That is why I have difficulties with the Bill. I can go along with the Bill at all only because we are considering it in the context of what we can do in the long term. I hope that my hon. Friend the Minister will indicate that if we do not move away from the current council tax system, there will be a revaluation at some point, because otherwise the relationship among local people, their local authorities and the Government will become fractured to such an extent that it will no longer make sense.
A huge amount of council tax capping has taken place under both Conservative and Labour Governments. There is a strong argument that that should not happen and that if a local authority chooses to tax people into oblivion, the local electorate should be able to deal with that at the ballot box. However, I see such authorities being protected. I had to cope with the then Thatcher Government, and one year I had to deal with £43 million of cuts out of the council tax
My hon. Friend talked in the early part of her speech with typical compassion for those on fixed incomes and on benefits. Does she agree that, whether
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or not revaluation takes place, it is important under whatever system of local taxation that we push ever harder to increase the take-up of council tax benefit for those who are entitled to it? Perhaps there should be a regulation to stipulate that that should be given more prominence on council tax demands.
Kali Mountford: My hon. Friend is right. Take-up does not just need to be given prominence on council tax demands; there are many places where we could encourage take-up not just of council tax benefit but of other benefits. He makes a good point, because this Bill has no relevance to those who should not be paying council tax. I agree with him that that is right, but even if we take that out of the equation we still have a responsibility to all those on fixed low incomes who are none the less just outside the remit of benefits and have huge problems. I venture to suggest that people have huge problems under today's system.
Everyone would think from Conservative Members' speeches that revaluation means only an increase in council tax for everybody concerned. That is not at all the case. As one area goes up in value, another goes down. People on fixed incomes who are just outside council tax benefit rates are suffering disproportionately, and my concern is for those people. We are talking about those who are not wealthy, who live in a property that, as against other properties, has not risen in value at the same rate. Therefore, in terms of property as a proportion of income, those people are much worse off. That seems a good reason for carrying on with revaluation. If we continue with council tax as it is now, we must look carefully at such matters. We cannot escape our responsibility to those people.
Kali Mountford: May I just acknowledge the inventiveness and compassion of my hon. Friend's proposal? I hope that Ministers will listen to it. If they do so, I for one shall be listening very carefully alongside them.
My hon. Friend points out the difficulties that we face with the council tax system, especially if we do not go ahead with revaluation. As she pointed out when she referred to credit, the present system has pitfalls, whereas a credit-based system is a gentler slope that allows people more flexibility in their arrangements and more fairness. That is what concerns me about not going ahead with revaluation. For some, not going ahead with revaluation may be a boon. They may think, "Hip, hip hooray! I will not have to spend more." There are others, however, who may not yet have realised that they would have been spending less. The only way that the council tax can work is if some fairness is built into the system.
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We may think that the only way in which a system can work is if the value of property reflects at least in part the amount of money available to a family, but that is not true, as we all know. I see Liberal Democrats sniggering; they think that the answer is to go for some local income tax, but I do not think that that is perfect either.
Mr. Borrow: Does my hon. Friend agree that there is no truly perfect form of tax? The art of local government is to have a good basket of taxes that overall leads to as much fairness as possible. A property tax should be part of that basket of taxes.
Tom Levitt : Just before the previous intervention, I could sense that Madam Deputy Speaker may have wanted to bring my hon. Friend back to the straight and narrow. As the debate has raised so many interesting side issues, which are in fact at the heart of the debate, will my hon. Friend join me in asking Mr. Speaker whether we can have a debate of an hour and a half in Westminster Hall to discuss these matters?
Kali Mountford: Were we to do as my hon. Friend suggests, I am sure half the House would be in Westminster Hall with us and the place would be full. The funding of local democracy is so complex that it is important to all of us, especially those of us who care about the neediest in our communities. If the debate serves any purpose, it is to remind us who we are here to serve. Through the relationship that we should have with our colleagues in local government, we should make sure that the services available are paid for properly, and that people who cannot afford to pay are not forced to pay more than they need to. They will be forced to pay more than necessary if we do not examine closely the proposed revaluation of properties.
Mr. Charles Walker (Broxbourne) (Con): Does the hon. Lady accept that all the other houses in that road would have gone up in value too, give or take a few thousand pounds? That is not unique to her constituency. She has said it before, as well.
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