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David Howarth (Cambridge) (LD): There are two reasons why I shall be very brief. First, I am a late substitute for my hon. Friend the Member for Brent, East (Sarah Teather), who is sadly unwell. I hope that all hon. Members will join me in wishing her a speedy recovery. Secondly, I understand that there is some annoyance on this side of the House that we are taking this business rather than another debate today, which is a point that hon. Members raised at business questions. However, it strikes me that the protest would be more effective if we were to dispatch the business of the House without unnatural prolongation to demonstrate to the Government, as I said last Thursday, that we could have had both debates on the same day. I shall reiterate my party's position. We support the Bill and want to see revaluation stopped, for the simple reason that under the system of local government taxation that we would    adopt—local income tax—no valuations or revaluations would be necessary in the first place.

On amendment No. 3, the hon. Member for Mole Valley (Sir Paul Beresford) has made a serious point. I agree with the hon. Member for Poole (Mr. Syms) that if we support the general idea of council tax, amendment No. 3 is an interesting idea that should be explored, and I hope that the Lyons committee will explore it. There is, however, a serious objection, which Conservative Members raised almost as soon as the hon. Member for Mole Valley rose to speak. As the amendment stands, the Secretary of State's power to order separate local or regional revaluations could be used in a politically biased way.
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The hon. Member for Mole Valley has repeatedly raised another serious problem in the debates about the Bill—the connection between the council tax banding system and the grant that the Government hand out to particular local authorities. It would not be beyond the wit of the Government to use that connection to produce a politically interesting result, which has not been unknown in the past. In reply to that point, the hon. Member for Mole Valley said that he would institute a different system of calculating the grant. I was interested to hear him say that he would use a system based on income levels in various districts, which is the precise basis for equalisation under local income tax, and I urge him to go much further along that line of thinking.

Sir Paul Beresford: The hon. Gentleman is being provocative, and I refer him to what I said on Second Reading. There is a distinct difference between my position and local income tax—the proposition advanced by the Liberal party is mindlessly complicated and includes all the problems of the poll tax, and more.

Madam Deputy Speaker: Order. I remind the hon. Gentleman that we are not discussing any other kind of tax; we are discussing amendment No. 3.

David Howarth: I was about to make the same point, Madam Deputy Speaker. I would be glad to debate the merits of local income tax on a different occasion, but we are discussing a particular amendment to a particular Bill, which is very narrow in its scope.

If we were to adopt the system proposed by the hon. Member for Mole Valley, because income is distributed more evenly than property values the equalisation system would be easier to manage and less difficult to make work. Nevertheless, the central objection to amendment No. 3 is that the system, which is a good idea, would not appear in the Bill. If amendment No. 3 were passed, it would make the Bill worse rather than better. I urge him not to press his amendment to a vote and, perhaps, to discuss the matter with his noble Friends in another place to allow the introduction of a different version of the amendment that deals with the problems raised in the course of the debate.

Mr. Brian Binley (Northampton, South) (Con): I congratulate my hon. Friend the Member for Mole Valley (Sir Paul Beresford) on tabling the amendment. I also declare an interest: as many hon. Members know, I am a county councillor. [Hon. Members: "Hear, hear."] Thank you very much. I am also the finance spokesman for Northamptonshire county council, which is currently battling a very difficult budget.

Let us get this out of the way, straight away—I believe that if we have a property tax, we must have a revaluation. I said that during the election and hope that I have not offended my hon. Friends on the Front Bench. That is my view and I have retained it. Amendment No. 3 is a way of ensuring revaluation, where local authorities think it necessary. Giving local authorities greater autonomy in that respect is a laudable objective.

Mr. Greg Knight: If what my hon. Friend has just said were in the amendment, I could agree with him. On reflection, does he agree that as the amendment is
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drafted, the power to order a partial revaluation rests not with local authorities, but with the Secretary of State, who may seek to use it to punish a particular area for voting for another political party?

Mr. Binley: My right hon. Friend has made a valid comment, but I argue that amendment No. 3 would at least allow local authorities to appeal to the Secretary of State for a local revaluation, which would be a step forward from the current position. As for the Government's ability to distort the measure, that power ranges over a very wide area, if they were to choose to use it. It is up to this House to scrutinise their activity and make sure that the use of such powers does not stray too far from what most hon. Members consider to be decent and fair.

Sir Paul Beresford: I thank my hon. Friend for supporting the amendment. In response to my right hon. Friend the Member for East Yorkshire (Mr. Knight), who is more paranoid and concerned than me and who is to my right in more ways than just geography, it is possible for the Government to change the funding system undercover and lay the blame on local government. However, it would be too open for the Government to distort the system in the way that he fears.

Mr. Binley: I understand that point and accept the dangers. However, I see the matter from a local government perspective, and I am sure that my hon. Friend does, too. On balance, it is in the interests of local authorities to take such action.

Turning to my other points, first, as I have said in this House and Westminster Hall, there is considerable uncertainty in local government that ranges from the revaluation being put off to the Lyons report. I therefore believe that we should give local authorities the opportunity to exercise at least some power, and I repeat the point that there is power in the ability to appeal to the Secretary of State. Unless we give local authorities some power in that respect, we will diminish them to the point where they become almost worthless. I want to increase, not decrease, their powers, and the amendment would achieve that.

Secondly, the degree of unfairness increases with every year that goes by when a revaluation does not take place. That must be so, because the need for revaluation is based on creating a fairness taking into account local changes. The amendment would enable local authorities to recognise those changes instead of being forced by a Government into a situation whereby unfairness increases. That would increase the value of local authorities in this respect.

Thirdly, there is no doubt that, by the very nature of the Government's decision on revaluation, local authorities will be increasingly under pressure with regard to appeals. My own local authority fears that as unfairness increases, so will appeals and complaints. Council tax payers put the whole issue of local taxation under considerable scrutiny as it becomes increasingly
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unfair. The amendment would give an outlet to local authorities in at least being seen to do something on behalf of their council tax payers.

Mr. Clifton-Brown: My hon. Friend makes an important point about unfairness. Does he agree that unless there are regular revaluations the differential between new and old houses, with new houses being valued as soon as they are built and old houses not being valued until revaluation takes place, will become ever wider, creating great unfairness between different constituents within the same billing area?

Mr. Binley: That is exactly the point that I was trying to make, and I am grateful to my hon. Friend for supporting me. He is absolutely right.

The sustainable communities programme will lead to massive changes in certain areas, dramatically increasing the need for revaluation. The Government say that they are fully committed to that growth agenda. In the light of that, the ability of authorities to appeal to the Secretary of State for local revaluation has considerable relevance.

Mr. Forth: I am becoming increasingly worried about my hon. Friend's touching faith in the integrity of a mechanism of appeal to the Secretary of State. He may have more faith in Secretaries of State than I have had hitherto, but can he tell me, hand on heart, that he really believes that any Secretary of State would deal even-handedly and fairly with the appeals to which my hon. Friend attaches such touching faith?

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