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David Howarth: The hon. Gentleman's proposal is a halfway house. It is technically possible—in fact, it would be part of a reform that would introduce a different sort of taxation; it would be part of the equalisation necessary for the introduction of a local income tax. However, it does not go far enough. Collectability was discussed in Committee, but a point that is often missed, although the hon. Member for Manchester, Blackley (Graham Stringer) made it, is that often the published statistics on collection assume that
 
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the tax is properly due as recorded, but if a lot of people claim falsely to be living as single people there is a lot of evasion going on that the statistics do not pick up.

Mr. Francois: I do not wish to misrepresent the hon. Gentleman, but I think he said a few minutes ago that there was very little discussion of housing association and council tenants during consideration of the Bill. May I correct him? On Report, some of us mentioned such people, not least in the context of housing redevelopment. Does he accept that some of those people at least get full or partial council tax benefit, which helps to ameliorate the effects of council tax on people in those categories?

David Howarth: What the hon. Gentleman says is, in part, true. Council tax benefit partly offsets the regressive nature of the tax, but the tax remains the most regressive major tax in the Government's taxation armoury, even after the use of council tax benefit.

Revaluation would probably make the council tax even more unpopular. That is presumably why the Bill allows revaluation to be called off. On the other hand, failure to revalue makes the council tax more unfair and more out of date. That sums up one of the reasons why we oppose council tax. It is simultaneously bad to revalue and bad not to revalue.

I am still puzzled by the Conservative party's position on the Bill. Conservative Members voted against Second Reading. The effect of voting against, if it had been taken up in all parts of the House, would have been to defeat the Bill. If the Bill had been defeated, the present law would remain. The present law mandates a revaluation in 2007. By contrast, when the Committee considered whether clause 1, which is really the only clause in the Bill, should stand part of the Bill, the official Opposition failed to divide the Committee. I shall be fascinated to see what they do tonight on Third Reading. I hope they discovered the error of their ways on Second Reading and have realised that others may have noticed that what they proposed was, in effect, to carry on with revaluation, which is the opposite of their announced policy.

I shall not detain the House further. We are happy to speed the Bill on its way to another place. It is a very small part of a major reform of local government finance, which we all wish to see, and we wish to see the Bill pass through the House tonight.

5.47 pm

Mr. Francois: I declare something of an interest in an historical sense at least, having served in local government in the mid-1990s. I am pleased to follow the hon. Member for Cambridge (David Howarth), and I listened carefully to what he said. I was slightly disturbed to hear earlier this afternoon that his hon. Friend, the hon. Member for Brent, East (Sarah Teather), was not able to be with us as anticipated, because unfortunately she is not very well. The hon. Gentleman may not know that I was the Conservative candidate in Brent, East at the 1997 general election, when I fought against a chap called Mr. Ken Livingstone, who was then a Member of Parliament. I ran him fairly close—just another 16,000 little votes and I would have defeated him. Having some familiarity
 
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with the hon. Lady's constituency, I should be grateful if the hon. Gentleman would pass on my regards and, I am sure, those of all other hon. Members, and wish her a safe and healthy return to us next week.

It is a pleasure to speak shortly after my hon. Friend the Member for Upminster (Angela Watkinson), who worked in local government in Essex earlier in her career. Her knowledge of these matters was clearly reflected in the quality of her contribution a few minutes ago.

The Bill has just two clauses. It is one of the shortest that I have debated in my time in the House, but it serves an important purpose in that it delays the revaluation of properties for council tax purposes in England. In a briefing note that was produced in October, the Royal Institution of Chartered Surveyors pointed out that the proposed revaluation which was to be undertaken by the Revaluation Office Agency would have represented

As such, the decision to delay it, which the Bill facilitates, represents one of the first major post-election climbdowns by the Government—although given recent events, I trust that it will by no means be the last.

It is a truism that no one likes paying taxes, but the level of council tax, even on the existing valuations, which will run for several more years at least, is one of the major features of my constituency mailbag. That is particularly true in the spring, when council tax demands go out, and in responses from pensioners, many of whom live on relatively fixed incomes and find that their council tax bill is their biggest single monthly outlay, particularly if they have paid off their mortgage. Many people experience considerable difficulty in meeting those bills, so at least they will not face the added burden of a revaluation in the short term.

As part of the debate on this Bill has related to the subject and process of billing, I want to make a few brief points on how changes in the billing system have affected public attitudes to the spending of funds by precepting authorities. The breaking-down of components on the overall council tax bill into individual line items, such as policing and fire and civil protection, has, I think, been a positive move on the whole. It certainly tends to concentrate constituents' minds on how money is actually spent on those particular services, once they are itemised.

For instance, when I was first elected to this House back in 2001, I think that some of those items were still effectively subsumed within the overall totals. However, it is interesting to note that now that those have been broken out, constituents have started to ask more specific questions about how such itemised money is being spent. I see that one or two Labour Members are nodding in assent to that proposition.

Policing precepts, for example, have generated quite a bit of correspondence from my constituents in the past few years. Indeed, one of the reasons why I am so opposed to the regionalisation of police forces in East Anglia is that Essex has a relatively low police precept compared with other East Anglian forces, so any regional merger would probably lead to a rounding-up of precepts, which could lead to proportionately higher increases in Essex on the policing precept and thus on the overall bottom-line level of council tax. I shall say nothing more about that subject this afternoon for fear
 
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of straying out of order, Mr. Deputy Speaker, but suffice to say that people pay enough council tax in Essex as it is, without having to pay an even higher bottom-line figure to prop up unpopular reforms that have little or no public support.

I suspect that part of the Government's rationale behind backing away from short term revaluation has been the howl of protest that followed the change to the formula determining the level of grant paid to local authorities by Her Majesty's Treasury. Because between two thirds and three quarters of the eventual council tax is determined by that level of grant, however the individual properties within the local authority are banded, any changes to the formula clearly have important implications for the remaining element, which has to be raised directly by the local authority. That then falls across the council tax base, which we now know is not likely to be revalued in the short term.

I must challenge the Minister on a point that he raised on Report. Any alteration in the grant formula normally creates winners and losers, and the change, which took place a few years ago, from the standard spending assessment system to the revised formula spending share system certainly did that all right. The Minister contended on Report that there are very few specific examples where that has been a problem. I shall answer his point directly: most of the losers in the transfer of resources that took place in the switch from SSA to FSS were not exclusively, but overwhelmingly local authorities—both county and district councils—concentrated in the south-east of England; most of the gainers, although not exclusively, were urban and metropolitan authorities in the midlands and the north of England. There was effectively an important shift of resources from the south-east to the midlands and the north, which had important knock-on effects on the council tax bills subsequently levied on council tax payers.

In the year in which the switch took place, the county council precept in Essex went up by 16 per cent. in one hit, because millions and millions of pounds in grant were removed from Essex and given to Labour's friends in the midlands and the north.


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