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Mr. Woolas: The right hon. Gentleman is of course a former Secretary of State and he knows what he is talking about. Does he agree that the valuation process, which has been postponed, is necessary if one is to have a property tax? Alternatively, does he agree with what I understand to be his party's policy, which is that no valuation is required?

2.45 pm

Mr. Gummer: One of the pleasures of being a Back Bencher is that one does not have to be too closely acquainted with the minutiae of the way in which a particular issue has been approached by whomsoever happens to be in charge of that area at a given time. [Laughter.] The Minister must therefore ask others whether I am in that sense in order or out of order; you, Mr. Deputy Speaker, will of course ensure that I am in order in the parliamentary sense. I simply say that if one
 
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is to have a property tax, one must have a valuation system. That seems obvious, and in saying so I do not think that I am falling out with anyone. There might be a question as to when one introduces such a system. We did not say that we should never have one; we said, rightly, that we should not have one in those circumstances.

The Minister can say all sorts of things but the truth is that, as we all know, we were right about this issue at the election, he was wrong and he has now come to our opinion. We are now going to discuss what difficulties even our earlier, right decision throw up. I am merely suggesting, from what I consider a non-partisan position, that the Minister needs some mechanism. We have to ask ourselves whether the mechanism suggested by my hon. Friend the Member for Mole Valley is the right one. If it is not, we must get the Minister to take that part of the mechanism which is of value, and perhaps table an amendment himself in another place. That is the right way to proceed.

David Taylor : I agree with the right hon. Gentleman that it is acceptable for a Back Bencher to be detached from the minutiae of the matter under discussion. Is he surprised to learn that just a moment or two ago, the hon. Member for Mole Valley (Sir Paul Beresford), a former leader of Wandsworth borough council, "corrected" my geography by saying that Wandsworth and Westminster are not adjacent. They are adjacent, as the House of Commons Library has just demonstrated for me. Nine Elms faces Pimlico across the river. I wanted to put that correction of the hon. Gentleman's false correction on the record.

Mr. Gummer: I do not think it right for me to deal with the geographical issue that the hon. Gentleman raises, but the essence of his point is entirely wrong. Having attacked the money that went to Westminster year in, year out when the Conservatives were in power, on taking office this Labour Government found that the figures were absolutely right, and that they had to stick by the truth of the then Government's position. The hon. Gentleman has forgotten what has happened in the past eight years and he ought to remember it.

As I said, if we are to have a property tax, we must have a valuation system. I am in favour of a property tax, having looked at every other system. I know that it would be wrong to discuss those systems now, but I must tell the Liberal Democrats that the worst system that I came across was local income tax. It was—

Mr. Deputy Speaker: Order. A little while ago, the right hon. Gentleman said that I had missed a lot of a very interesting debate. I have been following it very closely from outside the Chamber—as, of course, I always do with such debates—and I have noticed the number of times that Members have had to be called to order to ensure that they address the amendment. I am doing that yet again to the right hon. Gentleman, and I tell all Members that I want them to speak to the amendment; otherwise, I shall pull them up rather sharply.

Mr. Gummer: I am grateful, Mr. Deputy Speaker; I should have phrased my argument in the following, slightly different way. Because I find the alternative so
 
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impossible, it is very important to make this system work, which is why this amendment is so crucial. It would not be so crucial were it not for the fact that, if we do not make the council tax arrangements work effectively, we will not have a better alternative. So this debate is as important as I suggested to you that it was, Mr. Deputy Speaker, when you first took the Chair.

So the issue is: how do we approach this part of the mix that makes the council tax? The council tax is a property tax. Few countries have been able to handle taxation without some form of property tax. Ireland tried to do without one, but I suspect that it has been trying to change back—a difficult thing to do. The real problem was identified by my hon. Friend the Member for Rayleigh (Mr. Francois). He rightly said that he represented the Thames Gateway, where the changes promised—if that word is not too generous—by the Deputy Prime Minister will make this problem especially difficult.

The difficulty is that perception and reality are often very far removed from each other when the system involves so many components working together. I do not know about the Minister's constituency—or yours, Mr. Deputy Speaker—but I am willing to bet that not many people in anyone's area would be able to explain the interpenetration of the various elements, year on year. Therefore, we need to make the system more transparent rather than less transparent.

Mr. Francois: Does my right hon. Friend agree that the great complexity of the system makes people wary about revaluation, especially after what happened in Wales? When we shifted from standard spending assessment to formula spending share as a mechanism to provide grant to local authorities, council tax rose by so much in the south-east that people believed that a revaluation in England would be, in a sense, bent. That is why they were so resistant to it in many parts of the south-east of England.

Mr. Deputy Speaker: Order. I think that the right hon. Member for Suffolk, Coastal (Mr. Gummer) might be tempted again from the straight and narrow. I hope that he will not be.

Mr. Gummer: Thank you, Mr. Deputy Speaker. My hon. Friend has made his point, and I agree with it, but I shall not go down that route.

How do we make the process more transparent? One way is proposed in the amendment. Where it is obvious that the incidence of the council tax has ceased to reflect properly the nature of the area involved, there needs to be a way to remedy that by means of a local revaluation. That is the justification behind this proposal.

However, if it is a question of perception, whose perception matters? I disagree with my right hon. Friend the Member for East Yorkshire (Mr. Knight) about that. He and I worked at the Department of the Environment in close harmony and, as far as I am concerned at least, with considerable pleasure. However, in this instance, I believe that he has thought too much about the central issue, and too little about the local issue. Because of that, in the end I decided that I could not support the amendment quite as I had hoped.

If there is a perception of unfairness of incidence in a locality, local people should be able to ask, through the local council, for a revaluation. Councils in East Dorset,
 
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Christchurch, Suffolk Coastal or Waveney could say, "We want a revaluation because we can't fairly deal with our population as a result of the huge change that has taken place. We need, therefore, to check out the incidence of the council tax, so as to be fair to the people who elect us."

In such circumstances, I believe that it should be necessary for the Secretary of State to allow a revaluation. He should not be able to say, "You can ask, but I'm not going to do it." He should be required to allow the revaluation, because many people outside the House may be surprised by the mechanisms available to the Secretary of State to put pressure on people. It is for that reason that I dissent about the amendment.

I cannot go into detail, for fear of straying out of order, but we have been talking about the Thames Gateway in particular. In that area, it might not be possible to build many of the houses intended because of the flood plain. What would happen if the Deputy Prime Minister insisted that the houses were built and the insurance industry refused to insure them? The valuation situation would then be very complex, but it would be localised, not nationalised. At the moment, the Secretary of State has outrageously bamboozled the insurance industry by ensuring that the life offices put pressure on those that insure houses by saying, "If you get uppity with the Secretary of State, we will be in trouble over pensions provision, so don't do it." We all know the institutional corruption that goes on—Governments use their power over one lot to make others not do something. I hope that the insurance industry will develop some toughness in that area.

If the houses are built in the Thames Gateway, their value will be crucially affected by whether they can be insured, and a local revaluation will be essential if there is to be fairness in the incidence of the tax. I hope that we do not reach that situation because, as an environmentalist, I do not want those houses to be built. I do not understand why we are trying to shove into the south-east of England houses that could, in today's world of communication, be spread more evenly over the nation. But then this is about the least environmental Government that we have had for a long time. My right hon. Friend the Member for Bromley and Chislehurst does not help by holding up the one Bill that has been introduced that has been worth having. I hope that he will change his mind about that.

The local revaluation suggested by my hon. Friend the Member for Mole Valley would be essential if significant local changes occurred that needed to be taken into account. I note that even those who have opposed this particular formulation, who come from a local government background, have emphasised the need for such a change. It would therefore be foolish of the Government to avoid it.

This is an issue of transparency and perception. Therefore, one has to face up to the second difficulty that the amendment presents. It could be used for purposes totally other than those that were conceived. Some of those purposes might be reasonable, but would not be suitably covered by this amendment. Let us for a moment accept that it might be sensible to have an elite group of people who went round the country carrying out valuations, as my right hon. Friend the Member for Bromley and Chislehurst suggested, which might be cheaper. The people need not even be employed by the
 
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Valuation Office Agency, because they could be employed privately, or seconded, or paid for under some tender system.

The trouble is that the amendment would give no guidance to the Secretary of State as to the basis on which that sequential activity should be performed. My hon. Friend, in explaining that, gave us to understand that that was not really his purpose for the amendment, although my right hon. Friend rightly identified it as a possible advantage. I would go further. One of the reasons I liked the amendment was because it would enable pilot schemes to be carried out in several places, so we would be able to see whether the perception of our constituents that a change in valuation would be unfair to them was true or not.

Indeed, one of the problems, Mr. Deputy Speaker—you represent a neighbouring constituency to mine—that we have all found in this debate, across party lines, is that people feared that whatever the valuation was, it would do them down. The only way to deal with such a fear may be to carry out a localised valuation in certain places that are sufficiently different so that one could discover whether revaluation had the effect in England that it had in Wales.

Of course the amendment would have an advantage. Unlike in Wales, where no ceiling was imposed and such things were not done in the same envelope, if a revaluation took place in an area, it would have to reach the same total that obtained before the reassessment realigned the weight on any property. The problem in Wales was that a lot more money came out at the other end. Of course, everyone knows that that is what the Government intended, which is why we opposed the revaluation in the first place.

3 pm

Such a system could be used for the valuable purpose that I propose, but only if regulations were laid down to ensure that it could not be misused. For example, a revaluation should be triggered only by the local authority, except if a pilot scheme was restricted to a certain number to ensure that it was used for the intended purpose. There is a disadvantage in the amendment, because we have not covered that issue and we should try to do so.

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