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We will have to wait and see. When we consider council tax bills, we must bear in mind the council tax benefit and rebate system to get a fair picture. We can then debate the policy on the basis of the facts, not false assumptions.
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Finally, I do not understand why Conservative Members continue to undermine the council tax, when the Conservative party introduced it and when they have no alternative tax policyyet they campaign to seek to undermine it every week. I hope that we can have a proper debate and dialogue based on the facts of the Bill and recognise that the council tax system has received support from both main parties since it was introduced. I commend the Bill to the House.
Angela Watkinson : The Bill is very narrowly drawn, but it enables the Government to delay revaluation and to choose when it will take place in the future. It has aroused some very strong feelings in the debates this afternoon. This debate on Third Reading is the last opportunity for hon. Members to raise their concerns and put them on the record.
The Minister's first major decision after taking up his post was to put off the revaluation and refer the issue to the Lyons inquirymuch to the dismay of his predecessor, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford). The Government have essentially ensured that the revaluation will not take place before the next general election. So this is not goodbye to revaluation but au revoir, and the British people are highly likely to face a revaluation that significantly increases their council tax bills sooner or later, unless they show their disapproval in the ballot box at the next general election.
Amendment No. 3 sought to introduce local revaluation, and we had a long and interesting debate that raised more questions than it answered about the great complexity of revaluation and how to make it fair.
As hon. Members know, the level of council tax is one of our constituents' main concerns, and it occupies much of our time in correspondence and advice surgeries. That makes council tax one of the most explosive political issues that the Government face. Bills have already increased by 26 per cent. since 1997. As one person said to me only today:
It was noted on Report that the value of a property is not always a reliable indication of ability to pay. I am sure that the Minister and other hon. Members know of examples of people who are cash poor, yet live in valuable properties. Elderly people, such as surviving spouses, may remain in a family home that has risen in value over the decades, although they have a modest disposable income. However, four working adults might live in a more modest property, so the value of a property is not always a reliable indication of its residents' ability to pay their council tax.
The Bill will postpone the revaluation of properties for the purpose of council tax that was to have occurred on 1 April 2007, with council tax bills being based on the updated valuations that year. Conservative Members oppose the revaluation, not least in the light of the outcome in Wales. The revaluation in Wales was used as a tool to increase the overall tax take, so it was a stealth tax. If a typical house in England were moved up a band, it would become liable for an extra £257 a year on top of any other changes to the council tax bills. Of the 21 million homes in England, 7 million would be moved
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up a band, but only 1.5 million would move down a band. The Minister is looking puzzled, so I should explain that those figures have been extrapolated from the experience in Wales.
The Bill does not go far enough. It only postpones revaluation, rather than scrapping it altogether. Approximately £60 million of taxpayers' money has already been spent in preparation for revaluationincluding on a new computer systemmuch of which will be wasted. It is ironic that an information technology project that the Government claim is excellent will not be used for its intended purpose. It is not clear whether the cost of the reduction of 1,020 staff by June 2006 is included in that £60 million figure. Perhaps the Minister will clarify that point later.
Even more alarming to council tax payers is the worrying fact that revaluation procedures will allow inspectors to enter people's homes. It is a great pity that the amendment on that matter was not selected for consideration on Report. I do not know whether you will indulge me, Mr. Deputy Speaker
If the revaluation is not to proceed, why are the Government still collecting data on dwelling codes, as the Minister confirmed to my hon. Friend the Member for Meriden (Mrs. Spelman) in Hansard yesterday? What use will those data be in five years' time?
Countless people make enormous sacrifices to buy a home of their own. It often leaves them with little disposable income, so they go without holidays and other forms of leisure activity so that they can afford their mortgage payments. Such people are by no means rich, but the Government see them as the milch cow of the nation.
Improvements and maintenance must be budgeted and saved for. If the implication is that improvements to, and the maintenance of, houses will put people in a higher council tax band in the future, will we see falling general standards of upkeep as people wish to avoid paying more council tax? Some of my constituentsordinary law-abiding peoplehave already expressed their concern to me about the likelihood of someone knocking on their door and demanding access. That is a worrying element of the revaluation exercise.
Under this Government, an Englishman's home is no longer his castle. The Bill will allow the Government to impose a revaluation date through secondary legislation with little debate in Parliament, although that could change the entire funding of council tax. Such a change must be carefully thought through and prepared so that we have a properly balanced tax on property and services, not simply property.
Last Thursday, in answer to a question that I put to him during business questions, the Leader of the House said that he thought that the idea of
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programming Report stage and Third Readings raised constitutional questions. I am not sure that I agree. A lack of strict programming of this afternoon's business might have made things much worse. During the debate on amendment No. 3, I was fascinated to see what it is like to attend a meeting of the 1922 committee, but the Bill survived that unfortunate experience.
The Minister of Communities and Local Government emphasised on Second Reading, and the Minister for Local Government repeated in Committee, that the context of the Bill was the revision of the remit of the Lyons review of local government to encompass function in addition to finance. That context has now changed and we are looking forward to a White Paper on local government which will take into account not only finance and function, but structure. I welcomed that announcement, especially as I called for a White Paper last Wednesday in Westminster Hall. I had no idea that the Government were so responsive to Opposition calls made in Westminster Hall debates. The Bill started out as a small part of a large picture and has now become a very small part of a very big picture. I hope to see a much more long-term constitutional approach to local government, rather than the short-term political approach that produced the Bill.
As we have said all along, the Bill has its uses. We stated our support for it on Second Reading and we shall continue that support on Third Reading. We support it largely because our proposed reform of local government finance would involve the cancelling of the next revaluation, for the obvious reason that a local income tax requires no property valuations of any sort. Whether the Bill is passed or not, council tax will remain a bad tax. As the hon. Member for Upminster (Angela Watkinson) said, one of the great problems of council tax is its weak relationship to ability to pay, and revaluation does not affect that much. A group of people who are rarely mentioned in our debates are tenants, especially tenants of councils or local housing associations. It is often assumed that council tax is a type of wealth taxthat it is related to the wealth of the taxpayer. In fact, for a quarter of the population that is not so and any revaluation does not affect that.
Sir Paul Beresford: Will the hon. Gentleman reflect on what was said on Second Reading and consider the possibility of changing the way in which ability to pay is assessed, combining that with a broad-scale income assessment, and feeding it into the funding formula in place of the current banding system? The resulting tax would have the advantages in terms of collectability that council tax has because it is property based. I believe that that would blow the Liberals' suggestion out of the water.
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