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Mr. Quentin Davies: Further to that point of order, Madam Deputy Speaker. I am a slightly less experienced Member than my right hon. Friend and I probably know much less about local government finance, but I am trying to make a conscientious effort to participate in the discussion of this matter, which could be important to my constituents. We cannot follow the amendments because we do not have the text of the Act that is being amended. So we depend particularly on the acknowledged expertise of my hon. Friend the Member for Mole Valley (Sir Paul Beresford) to explain the background to and, therefore, the rationale of the amendment to the Government's proposals to amend an Act that we do not have before us. It would be most helpful to hon. Members in my position if he could be given a little latitude in explaining the background to both the Government's proposed amendments to the Act and his proposed amendment to the Government's amendment to the Act.
Madam Deputy Speaker: I do not accept that point of order. The hon. Member for Mole Valley (Sir Paul Beresford) has been given an opportunity to give a brief explanation of the background to the amendment. The hon. Member for Grantham and Stamford (Mr. Davies) may not be quite as experienced as the right hon. Member for Bromley and Chislehurst (Mr. Forth), but I am quite sure that he is more than capable of following the debate. The Minister may be able to elucidate a little when he replies.
Sir Paul Beresford:
Thank you, Madam Deputy Speaker.
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The Bill relates to a national revaluation, and as I have tried to set out, there is an opportunity for a smaller or minor revaluation in appropriate areas. Interestingly, my right hon. Friend the Member for Skipton and Ripon and I are ex-local government Ministers and we have some knowledge of the matter. On Second Reading, I asked the Minister of Communities and Local Government to confirm whether the
"Bill effectively puts revaluation in limbo, and there might be no revaluation in future if there is a rethink on the grant formula".
The Minister, in effect, confirmed that by saying that the Bill was in keeping with a situation where the Government were leaving their options open and that
So such a revaluation is conceivable. That caused a bit of a flutter in the dovecotes for the right hon. Member for Greenwich and Woolwich—whom I expected to be here today but he is not—because he felt compelled to back his previous position. The hon. Member for South Ribble (Mr. Borrow), who spoke as an ex-valuer, probably felt a little like a turkey at this time of the year—if not more frequently.
Valuation for council tax is different from valuation for rates and business rates in that it essentially serves two purposes. First, it serves a role in the funding formula, as it is used to give an estimate of the ability to pay. As I said on Second Reading, that could be done in different ways. Secondly, it is used to rank properties in valuation bands, thus enabling a billing authority to distribute its council tax charge. As long as that proportion of spread remains the same—generally, that seems to be so—there is no need for a revaluation, especially an expensive national revaluation. However, one can foresee occasions where a national revaluation may not be needed at all for some considerable time but a small local revaluation might be appropriate.
The example that most readily comes to mind is that the Government are following previous Conservative Governments in pushing for redevelopment on brownfield land—in particular, the Thames Gateway. It is well known that the Deputy Prime Minister wants to cover sections of the Thames Gateway with large numbers of new—
Madam Deputy Speaker: Order. Once again, the hon. Gentleman is straying very wide of the amendment, which is narrow in scope. I have given some latitude; I now expect him to adhere to the amendment.
Mr. Gummer: On a point of order, Madam Deputy Speaker. I am sorry to raise this issue. I have been carefully following my hon. Friend the Member for Mole Valley (Sir Paul Beresford). One of the difficulties with the amendment is understanding where it would be applicable, but it seems that he cannot refer to those places. This is the first time that I have been following this bit of the argument. May I ask you kindly to allow him to refer to some of those places, so that we can judge whether the amendment is a good one?
Madam Deputy Speaker:
I remind the right hon. Gentleman that he is not chairing the debate—I am—and I have made a ruling.
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Sir Paul Beresford: Thank you, Madam Deputy Speaker. I am trying to set out exactly such an example, but perhaps I strayed a little far in pointing out a particular area.
It is conceivable that an area could have a large number of new properties, the valuation of which would be set by their sale price, but that would distort the gradation and, therefore, the proportional spread across the council tax bands of the rest of the authorities in that billing authority's area or the area covered by a group of billing authorities.
Mr. Mark Francois (Rayleigh) (Con): If I understand the spirit of the amendment correctly, it would essentially allow a localised revaluation, as opposed to a one-size-fits-all national revaluation process. New clause 1 was not selected for debate—in no way do I seek to challenge the decisions on the groupings—but, in spirit, it would have allowed both a top-down power, whereby the Secretary of State could order a revaluation, and a bottom-up request, whereby a group of authorities could come together to seek the Secretary of State's authorisation of such a revaluation. My hon. Friend may be about to cover that anyway, but will he make it clear whether he believes that amendment No. 3, which is much briefer, would work in both ways and that the bottom-up, as well as the top-down power, should exist?
Sir Paul Beresford: I admit that my right hon. Friend the Member for Skipton and Ripon and I tabled new clause 1, but we realised in retrospect that it could have been ruled slightly out of order. If my hon. Friend looks carefully, he will see that the drive of that new clause is, in effect, contained in this much simplified amendment. In fact, the effect is still there.
Mr. Greg Knight: I am afraid that my hon. Friend is not making much headway with me, because I have reached the conclusion that his drafting is defective. The amendment refers to
Why must they be adjoining? Would not a better phrase have been "a group of comparable billing authorities"? City centre property values may well rise and a view may be taken that urban authorities, not county authorities, should carry out a revaluation, yet under his wording, they would have to be adjoining billing authorities, not comparable ones.
Sir Paul Beresford:
Perhaps that explains why the opportunity to give a broader explanation would have been helpful, because the situation that my right hon. Friend mentions is covered by the amendment, as he will see if he looks very carefully. The amendment covers an individual authority or lots of authorities. I specifically picked the term "adjoining authorities" because I chose as an example—I shall be ruled out of order if I continue with it—the Thames Gateway, which includes a number of authorities to which such circumstances might apply. Given that they are adjoining, it would be appropriate to carry out a revaluation at the same time.
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Mr. Peter Bone (Wellingborough) (Con): I have an interest in that my constituency has suffered the biggest ever increase in council tax. Who would decide whether a group of neighbouring authorities had to revalue?
Sir Paul Beresford: The Secretary of State would decide. My hon. Friend needs to recognise that if the ability-to-pay assessment in the funding formula were changed—as I mentioned earlier, before I ran the risk of being ruled out of order—the readjustment in a billing authority or in a group of billing authorities would make no difference to the council tax for those properties, unless the local authority's sum council tax bill for the whole billing authority increased.
1 pm
Mr. Quentin Davies: I refer my hon. Friend back to what he said about the phrase
in amendment No. 3. Is not the word "adjoining" redundant? If the amendment referred simply to a "group of billing authorities", it could cover a group of adjoining authorities, if necessary, and, as my right hon. Friend the Member for East Yorkshire (Mr. Knight) suggested, a group of authorities that, by virtue of the fluctuation of the country's real estate values, found themselves in the same position regarding the movement of average values, and should thus be grouped for the purpose of a special revaluation? Would it not be helpful for the purposes of the amendment if—
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