Previous SectionIndexHome Page

Kali Mountford: I am dreadfully sorry. I was not aware that I was in "Just a Minute". I was about to
7 Nov 2005 : Column 104
address the point that the hon. Gentleman makes. The value of the village has risen, as the value of the house has risen. In a village 2 miles further on, which does not have the same attractive postcode, does not have film crews up and down its lanes every day and does not attract the same tourism, property prices have levelled off and started to descend. Although the houses are of the same type, there is a huge difference in property values between the two villages, and between the amount that those families should pay and can afford to pay. It does not reflect their family income and how they deal with it. That is why, if I am to support the Government tonight, it is on the basis that we consider how the system in future will protect those constituents and make sure that the poorest pay fairly and appropriately, but no more than they have to pay. If the Lyons review does not come up with something—

Mr. Lindsay Hoyle (Chorley) (Lab): My hon. Friend makes a valid point. She mentioned alternatives. One alternative is an income tax to replace council tax, as other parties may suggest. Does she agree that that would place a burden on the poorest council tax payers, and that it is the wealthiest who would benefit? That is a danger, and it is why we must get this right tonight.

Kali Mountford: That is precisely the problem. Opposition Members have not missed that point. There is a flaw in the suggestion, but let us all try to achieve consensus across the House. It is clear from the debate that Members from all the main parties recognise the   difficulties. We need to reach a consensus on the solution. If we cannot do that, it makes sense to use council tax as it should be and to go ahead with revaluation.

Mr. Hoyle: My hon. Friend has been very generous with her time. Buildings do not move, and people will always pay a tax on their property. In the past, people refused to accept a personal tax and preferred to return to a tax on property. The danger is that people who do not work in this country and who get paid abroad, for example, airline pilots and people who work on ships—

Madam Deputy Speaker: Order. We are now going very wide of the Bill before the House.

Kali Mountford: My hon. Friend has said that we need a system that provides stability, which is a point that I   made earlier, and property taxes provide an element of stability. If stability derives from the facts that property is fixed and does not move and that those people who own property owe a responsibility to the community where their property is located, we must make sure that the system properly recognises property values. As long as the system reflects property values and locations and provides stability, we cannot escape the need for revaluation.

The Government must return to revaluation at some point, because they cannot escape it for ever. As long as it is politically expedient for Conservative Members to say that delaying revaluation will save people from a huge hike in council tax in the short term, the political danger exists of not protecting those people who would do rather better out of revaluation than has been suggested in tonight's debate.
7 Nov 2005 : Column 105

Sir Peter Soulsby: Does my hon. Friend agree that the problem with council tax is the imbalance between the   funding that it provides at a local level and central Government funding? She has provided an example of a   council that receives more than 80 per cent. of its funding from central Government and less than 20 per cent. of its funding from council tax. Does she accept that, where that imbalance exists, comparatively small   changes in central Government funding have disproportionately large effects on local council tax? Does she accept that that situation is unhealthy—

Madam Deputy Speaker: Order. That is a very lengthy intervention, and I am not sure whether it is appropriate.

Kali Mountford: I shall try to use some ingenuity, Madam Deputy Speaker, to ensure that it is appropriate.

Earlier, an Opposition Member discussed his dissatisfaction with the gearing effect in the current system. The proportion of funding that is raised locally is the essence of local democracy, and when I was a chair of finance, it was about 50:50. I recently met a former Cabinet member from those days—I will not mention his name to save his blushes—who said that he wished that he had not moved in the same direction as the Tory party, because he now sees the problems caused by breaking the link between the effects of local decisions and the amount of money raised locally. As long as local democracy is supported by a cushion, decisions will be made centrally rather than locally, which is a danger.

My hon. Friend the Member for Chorley (Mr. Hoyle) has discussed property taxes and stability. As long as we continue to relate council tax to property, an element of stability will be required in order to uphold the very democracy that we are discussing. As I have said—I   have said this so many times that I am sure that my hon. Friend the Member for Chorley must have heard me—an element of revaluation is required, otherwise the system will continue to be nonsense.

Ms Barlow: Does my hon. Friend agree that one of most important aspects of revaluation, should it come,   will be transparency? Transparency between stakeholders and local councils is one of the most important aspects of local government democracy.

Kali Mountford: My hon. Friend is right. The stakeholders are council tax payers, who need to know why they are paying the amount that they are and what it is going towards. They should be able to find that out from the local authority's annual report. However, what is often invisible in the council tax process is the amount of money that comes in from central Government, not only to the local authority but directly to services. That has been happening a lot more in recent years. For example, money is going directly to schools—

Madam Deputy Speaker: Order. Hon. Members are once again trespassing wide of the mark. We are narrowly considering revaluation.

Kali Mountford: I apologise, Madam Deputy Speaker. The point that I was inadequately trying to make is that there are many ways in which we can raise
7 Nov 2005 : Column 106
a council tax. The element that is dependent on property, and therefore on its revaluation, makes up only a small part of that. The transparency of the transaction must be absolutely clear, but in the context of transparency about all such matters.

Mr. Hoyle: Revaluation happens across the board, especially where there is a shire district, a district, a parish and then police rates on top, and it is important that council tax payers understand it. Does my hon. Friend agree that they should be given better information?

Kali Mountford: Absolutely. If and when we reach the point where revaluation is necessary, people should be given full information about the effects of not having it—not only on the family concerned but on the amount of money available for all those services. The gearing effect, which Conservative Members acknowledged, is particularly pronounced when it comes to the police and fire services, where a precept is built upon it. It can be made to sound as though not revaluing will have a disproportionate effect on the amount that is raised locally for those services. People will say, "I'm not prepared to pay a 74 per cent. increase", not realising that the burden on an individual family is not 74 per cent. of the total council tax payable but 74 per cent. of a certain part of it. The effect on the family's budget is small compared with what some Members have suggested.

If that stability is to persist, and if it is to be based on property, we have to be honest about what that means to people. We cannot go on basing it on the current valuations ad infinitum, otherwise in the long term we might as well pluck a figure out of the air and say, "This is the amount we will all pay", with no more reasoning behind it than that.

We will do ourselves and the country a disservice if we do not engage with the Lyons review properly, are not transparent about what we do, and do not use this opportunity to look at the relationships between local   government and national Government, and the population whom we are here to serve and all the   services that we decide to provide. We need to look again at the moneys that we raise from property and accept that under that system revaluation will continue to be necessary.

9.4 pm

Rob Marris (Wolverhampton, South-West) (Lab): Revaluation is a classic example of something that lasts longer than one expects. That often applies, although not necessarily to a pint of beer. We should consider the history of revaluation because it has always been a problem in this country.

The official Opposition's reasoned amendment decries the fact that Second Reading would merely delay rather than cancel council tax revaluation. We have a mixed and often unfortunate history of revaluation being delayed for too long. I am pleased that the Bill provides for a delay—I shall explain the reason shortly—but I urge my hon. Friend the Minister for Local Government and the Department not to delay for   too long.

The Rating and Valuation Act 1925 provided for five-yearly revaluations of properties for rating purposes in England and Wales, but they kept getting
7 Nov 2005 : Column 107
postponed. A revaluation was managed nine years later in 1934 and one was due to start in 1938 but was postponed for two years. Of course, in 1939, the war began and one could not conduct a revaluation during a war, especially as so many properties no longer existed. However, we were back on track with the Local Government Act 1948 and revaluation was supposed to take place in April 1952. As the Library points out, that was rather ambitious and it was postponed until 1953 by   ministerial order. The provisions in the Bill for ministerial order to delay revaluations should not therefore surprise hon. Members. It has been done in the past.

The 1956 revaluation was partial because residential property was assessed—believe it or not—on its value in 1939, before the second world war.

Next Section IndexHome Page