---

Mr. Greg Knight: What would my hon. Friend's constituents say if amendment No. 3 were incorporated into the Bill and became law, and the Secretary of State made an order that one of my hon. Friend's billing authorities should revalue, but not the other?

Mr. Chope: My constituents would be angry with the Government for using such perverse reasoning. My right hon. Friend identifies what I see as a weakness in the amendment, but it is not such a weakness that we should not support it today. The amendment demonstrates some lateral thinking about how to try to introduce greater fairness into the system, rather than leaving things drifting under this Government. The prospects are that council tax will continue to increase way beyond the rate of inflation, and will increase by a higher rate in small district council areas such as Christchurch and East Dorset than in the metropolitan, urban areas that used to be regarded as Labour heartlands.

There is a problem, and I am not saying that the amendment is the perfect solution to it, but it contains the prospect of introducing some increased fairness. A revaluation in Christchurch or East Dorset would show which houses had increased in value by more than the average for the area, and which had increased by a lower proportion. The bills that were issued could then be adjusted to reflect that new equity. That should be a zero sum game within each local authority area, because otherwise we would end up having to pay much higher bills because of the redistributive effects of the national
 
1 Dec 2005 : Column 431
 
grant system. Provided that it was a zero sum game, such a measure might have a role to play within an individual local authority area. The Secretary of State might decide which local authorities to include, but he might also want to start off by saying that the pensioners are really the ones complaining most about the unfair burden of council tax, and that, therefore, in all local authority billing areas where the proportion of the population aged 65 and over is higher than, say, 25 per cent., there should be revaluation to see whether the burden on pensioner households could be reduced.

At the moment, the council tax is essentially a stealth wealth tax, and the value of properties is being used as a proxy for ability to pay. We know jolly well that the ability to pay of many pensioner households is very small.

David Howarth: I accept that what the hon. Gentleman says is true in part, but one problem with his argument is that about a quarter of households that pay council tax—those in council housing, housing association housing or private rented accommodation—do not own the property on which the tax is calculated. To that extent, therefore, it is not a wealth tax.

Madam Deputy Speaker: Order. I think we are straying a little wide of the amendment.

Mr. Chope: I accept that council tax is not wholly a wealth tax, but it is being used as one by the Government, which is one reason why we were so strongly against—

Madam Deputy Speaker: Order. I hope that the hon. Gentleman will relate his remarks to the amendment.

Mr. Chope: I shall certainly go back to the argument that I was deploying, Madam Deputy Speaker.

Another criterion that the Government could use when deciding in which billing authorities a revaluation should be held could be the percentage of households receiving council tax benefit. When I was a Minister in the then Department of the Environment, one of the Treasury's biggest concerns was the increased bills that resulted from high rates. The Government could decide to hold a revaluation in areas where the percentage of take-up of council tax benefit was relatively low. In Christchurch and in East Dorset, council tax benefit is available to far fewer households than it is nationally, and in East Devon the figure is only 13.7 per cent.

Anne Main: As my hon. Friend has so far mentioned only pensioners and people in receipt of council tax benefit, is he suggesting that, as part of the revaluation process, we should look more at the occupants of the property than the property itself?

Mr. Chope: I am illustrating a possible criterion upon which the Government might choose to exercise their discretion under the amendment. Does not my hon. Friend agree that the burden on pensioners is particularly great? Indeed, the Halifax paper pointed out that the burden of council tax had risen most among the pensioner population.
 
1 Dec 2005 : Column 432
 

Anne Main: There may be many elderly pensioners suffering in that way in my hon. Friend's constituency, as there are in mine, but they often occupy larger homes than they need and cannot afford to downsize, so they could be disproportionately disadvantaged in a revaluation.

Mr. Chope: That remains to be seen. As I said, it would be a zero-sum game. In my constituency, more modern bungalows, where people moved in more recently, or bungalows that have been modernised and extended would probably rise in value relative to properties occupied by more senior pensioners—people in their 80s and 90s, of whom we have a large number in Christchurch.

Sir Paul Beresford: May I slightly disagree with my hon. Friend? The whole point of the driver that I am proposing is that there would be revaluation where a change in the value of properties in a billing area needed to be reflected. He is drifting on to a point that I covered on Second Reading: rather than using valuation, there is a fairer way to redistribute council grant. That would cover what he seeks.

2.15 pm

Mr. Chope: I shall not refer to Second Reading, Madam Deputy Speaker, as it is a verboten subject, but I am sorry that my hon. Friend thinks that my support for his amendment is misplaced. It gives one the opportunity to point out just how unjust the present system is and how unfairly it impinges on particular billing areas and councils and particular groups of people in those areas.

The other part of my hon. Friend's amendment has great virtue, as it would enable the revaluation process to be carried out incrementally—if it has to be carried out at all. Having studied the Valuation Office Agency report, I was horrified, as it shows that an enormous number of staff were taken on for the national revaluation and, despite the fact that the Government have said that there will be no national revaluation during the lifetime of this Parliament, a large number of those extra staff are still in post, because the VOA has a no-redundancy policy.

The Minister is grimacing, but I can illustrate what I said by reference to figures from the VOA annual report and accounts for 2004–05. On page 29, the VOA crows about the fact that it has taken 1,200 extra staff to deal with the national revaluation, yet the Minister told the Standing Committee, that as a result of the Government's decision not to go ahead with the revaluation, there had been a number of redundancies. However, the number fell far short of the 1,200 extra staff taken on during the last financial year. He said:

"The immediate impact is that some 420 staff working on casual and fixed-term contracts will leave the agency by this Friday."

I think that was the Friday before last. He continued:

"The agency is also running an early departure scheme for permanent employees"—[Official Report, Standing Committee A, 15 November 2005; c. 24.]—

Madam Deputy Speaker: Order. Will the hon. Gentleman help me by indicating how that relates to amendment No. 3?
 
1 Dec 2005 : Column 433
 

Mr. Chope: It would be the consequence of having a national revaluation in one big chunk. Amendment No. 3 would give the Government scope to carry out revaluation in bite-size chunks, which would mean that the VOA did not need to employ so many staff, as those working on a valuation in one year could move on to another one in the next year. That is what happened in Wales. Some of the VOA staff employed for the revaluation in Wales were redeployed to deal with the start of revaluation in England.

I am illustrating the consequence of the peaks and troughs in demand for VOA staff necessitated by a national revaluation. Those peaks and troughs could be ironed out if revaluation was in bite-size chunks. I am trying to illustrate the benefits of the amendment by drawing attention to the costs, which are on the public record—how much the Government have wasted by moving from what was to be a national revaluation to no valuation at all. They took on extra staff and are keeping many of them on, doing I know not what.

Mr. Forth: My hon. Friend pre-empts something of what I thought I might explore myself. I have a similar reference, which I may cite should I catch your eye, Madam Deputy Speaker. Has he any feel for the relative costs of the national structure—buildings, staff and so on—on the one hand, which would be required by a national valuation approach, as opposed to a more transient, small, mobile force that could move around the country, on a local or regional basis, as he described? We might be able to tempt the House to vote for the amendment of our hon. Friend the Member for Mole Valley (Sir Paul Beresford) if we could demonstrate that benefit.

---