Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Hanham: I wish to pick up a point in the Explanatory Notes and ask whether the Minister would be kind enough to explain it. Paragraph 149 states:

that is reasonably clear from the Bill—

    "e.g. individual hardship, in cases where the taxpayer is not eligible for council tax benefit, for example, where the dwelling is not their sole or main residence)".

We have ifs and buts on different categories already. If that will be the situation regarding individual cases, why limit it to those? The whole clause begs more questions than it answers and probably creates more complications than the Government might expect or wish it to make.

Lord Rooker: We should never give examples; you cannot cover all the cases. The noble Baroness makes a fair point.

Clause 77 inserts a new section 13A into the Local Government Finance Act 1992 giving billing authorities discretion to reduce the amount of tax payable. I do not want to start a row but it was interesting to listen to local government bosses saying that they did not want the flexibility to reduce council tax.

In our 2001 local government White Paper we made clear that we are aiming to devolve more decisions on council tax discounts and exemptions. Allowing more decisions to be made locally will give local government greater flexibility to design policies appropriate to their area and give them the ability to respond to difficult cases which are not covered by the present nationally set council tax discounts and exemptions.

This clause does just that by giving billing authorities power to reduce the council tax for a class of dwellings, for example those affected by flooding in a particular location, or for individual circumstances, for example where there is hardship. The billing authority would, of course, have to act reasonably and would have to justify to its auditors what it had done.

To accept the noble Lord's amendment would remove the possibility of billing authorities granting discounts in individual cases. It suggests that Members of the Committee opposite—I refer only to council tax "bosses" opposite—do not trust local authorities to have that kind of freedom. But we on this side believe that local authorities should have that flexibility.

In the old days when we had rates and rateable values—this did not apply to the poll tax—it was always difficult to get reductions. But I did my bit before I entered another place to encourage people to seek rate rebates and discounts when they lived, for example, near factories and quarries. I dealt with the bureaucracy on their behalf. People obtained those discounts through revaluation. There is enormous scope for the pavement politicians of this country to

16 Jun 2003 : Column GC218

exploit the flexibility that I mentioned. Councils may not like that but giving that extra flexibility locally can sometimes assuage people's frustration when they feel as if the council does not care and they cannot get a reduction when it is justified.

I do not say that the flexibility is a panacea, far from it, as the amount of money available is notional. However, people can experience incredible frustration when they believe that their local circumstances are not taken account of. The flexibility to which I referred may let the steam out of the bottle in those cases. As I say, we think that local authorities should have that flexibility but they must use it reasonably. Under the clause, billing authorities will meet the cost of providing discounts. There is no recalculation of revenue support grant. This is a genuine local decision for which billing authorities must pay to meet local demand.

Lord Hanningfield: Most of England is covered by two-tier authorities. A billing authority gets about 10 per cent of the tax whereas 90 per cent goes to the county council for such things as education, social services and such matters as flooding measures. Is the Minister saying that the whole cost of what we are discussing would be funded by the billing authority?

Lord Rooker: I am sorry, I did not read the final sentence. There would be no impact on the preceptors.

Lord Hanningfield: Obviously we are talking about a limited power. I accept what the Minister has said today. We may consider the matter further in terms of how local authorities will work within the new regime. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 77 agreed to.

Clause 78 [Statutory revaluation cycle]:

Lord Hanningfield moved Amendment No. 167:

    Page 40, leave out lines 27 to 29.

The noble Lord said: We have tabled a number of amendments whose purpose is to probe the Government's thinking over the introduction of a statutory revaluation cycle.

The first of the amendments in the group is clearly probing. We should be grateful, first, for an explanation as to why revaluation is necessary at all. Assuming that, since the Government are introducing this provision, they have strong arguments at their disposal for justifying it in principle. We should be grateful for clarification as to why the Minister has hit on 10 years for the revaluation cycle rather than five years, as I believe is currently the case with non-domestic rates and is the period recommended by the Royal Institution of Chartered Surveyors for council tax revaluation. After all, would not a five-year cycle reflect fluctuations in the property market more accurately and ensure a fairer distribution of council tax charges across local authority areas and between local authority areas nationally? Why does not the Minister propose a five-year cycle? Will he answer that question after he has said why the measure is necessary at all?

16 Jun 2003 : Column GC219

If the issue is one of resources, I should be interested to know whether the Minister's department has made any evaluation as to how much a revaluation will cost.

I also oppose the Question that Clause 78 stand part of the Bill. We are unconvinced of the need for a statutory revaluation cycle and therefore propose that this provision be removed from the Bill. I beg to move.

Lord Rooker: Amendment No. 167 would remove the requirement for the listing officer to compile and then maintain a new list for council tax purposes. This would leave no one responsible for the compilation of new lists.

The Government set out their policy with regard to council tax revaluation in the 2001 White Paper entitled, Strong Local Leadership—Quality Public Services. In that we said that there should be a 10-yearly cycle of council tax revaluations with the first one taking effect in 2007. The existing powers in the Local Government Finance Act 1992 made some provision for changing the valuation bands and the ratios between them, but there was no provision for replacement of the valuation list or a statutory cycle of revaluation. We think that council tax revaluation is necessary. That is why we have this clause in the Bill and why the Government are pressing ahead with seeking parliamentary approval for these powers.

I am assured that there is no surprise about this. It is true that I was dealing with other matters at the time. In the Green Paper, White Paper, draft Bill and this Bill there is no surprise about revaluation. If all the properties in the county always increase at the same average, there is no point in revaluation. Relative differences do not change. However, life is not like that. If anything, we should have had a revaluation after the first five years in 1997. I suspect that the then Government could not have got a Bill through the House of Commons let alone through the House of Lords on this issue. It is a very sensitive issue. Areas where values have increased more than average are at an advantage compared to areas where values have increased less than average.

Paragraph 367 of the Explanatory Notes estimates the cost of the proposed revaluation of domestic properties to be in the region of 200 million, including the cost of handling appeals. That is only a broad estimate because the costs would be affected by the method used. Decisions have not yet been taken on this issue. We are some way down the road in 2003 in that respect. I can tell from the other amendments that that will not satisfy the noble Lord. However, that is the reason. If everything always stayed the same there would be no reason for revaluation, but things do not always stay the same.

Lord Hanningfield: One of the problems of establishing council tax, which replaced community charge/poll tax, which replaced rating, and the reason that rating was unpopular, concerned revaluation. The community charge/poll tax was introduced in Scotland because of revaluation. I know that because I listened to Ministers talking about it at the time. There was chaos in Scotland with revaluation. The then

16 Jun 2003 : Column GC220

Conservative government thought that they did not ever want to revalue again. Governments tend to lose elections after revaluations, so perhaps we should have the revaluations in 2004 rather than later.

I do not believe that the Minister has given an adequate answer as to why 200 million has to be spent on revalution. I know that property values move around, but the system could be left the same and the 200 million spent on something better, such as services for elderly people. I do not believe that the Minister has given an adequate answer. I am sure we shall come back to this. There are other amendments. The whole issue of revaluation, the cost, whether or not it is needed, and banding is a large area which will be contentious. We shall obviously debate it in Committee and I am sure at later stages in the Bill. In the spirit of moving on, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Next Section Back to Table of Contents Lords Hansard Home Page