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Baroness Scott of Needham Market: I would like to thank the noble Lord for that reply, but I do not feel that I can. He has concentrated on the second part of the amendment, which is to do with divergence, but nowhere in the amendment does it say that that would be the only criteria, and he has not addressed the fundamental issue of the extent to which there will be public debate on this issue. The Secretary of State, officials and other people in the department will have to go through a regular thought process and discussion about whether now is the time to revalue. That will be an ongoing process. My amendment requires, in the interests of transparency, that that thinking is shared with both Houses of Parliament to enable parliamentarians and the wider world to see what is making the Government think at a particular time that revaluation is not necessary. So if, for example, housing commentators are screaming because the housing figures are demonstrating something, the Government will have an opportunity to say that that might be the case with the housing market, but there are other considerations that have led them not to agree that that is the right time for revaluation. I am asking for more transparency in the thought process. Fear of whipping up a media frenzy through open government and discussion is a risk that we all have to take in the interest of grown-up debate. I suspect that we will return to this matter on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hanningfield moved Amendment No. 5:

The noble Lord said: This amendment removes subsection (4) from the Bill which removes the requirement for subsequent revaluation in England on the 10th anniversary of the previous one. It does, however, retain such a provision for billing authorities
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in Wales, thereby separating the treatment of Wales and England. It is this aspect that we are worried about, and this amendment addresses that.

Many people felt that the recent revaluation in Wales was a disaster. Indeed, I cannot help but think that part of the reason for the postponement of the English revaluation and the rationale behind this very Bill was that Ministers in Westminster saw what was happening in Wales and were frightened of the same happening on this side of Offa's Dyke. One in every three homeowners in Wales is now paying a higher level of council tax this year after the revaluation of homes: 55,000 Welsh homes—4.2 per cent of the total—went up two bands under the revaluation. Another 6,600 properties rose by three bands and 1,600 properties rose by four or more bands. In total, 33 per cent of homes went up one band or more, and only 8 per cent moved down.

As we have heard today, at the time of revaluation, Labour Ministers in the National Assembly for Wales said that there would be as many winners as losers and that the process would be revenue neutral. Indeed, the phrase "revenue neutral" appears quite a lot in the Government's assurances that any revaluation will not cost the council taxpayer any more. The noble Lord, Lord Bassam, said at Second Reading:

However, it does not seem that the process was terribly revenue-neutral in the Welsh revaluation last year. Indeed, the increase in council tax has been even greater in Wales than in England. Since 1997, under the Labour Government, band D council tax in Wales has risen by 86 per cent, or £425. Revaluation was seen in Wales as nothing more than yet another government attempt at a stealth tax, which has hit people in every community. Therefore, action must be taken to protect the Welsh homeowner from any more excessive increases. The amendment would remove the necessity for revaluation in Wales once every 10 years. It is very similar to some of the other amendments. I beg to move.

4.30 pm

Lord Bassam of Brighton: The amendment leaves me more confused about the Opposition's real intentions with regard to revaluation and the need for it or not. As we highlighted in our response to Amendment No. 3, on the one hand we are told that they have changed their mind about their policy and no longer see the need for it; on the other hand, this amendment would effectively mean that revaluation would have to happen, at the very least, on a regular 10-year cycle. The Liberal Democrats seem to want it to happen annually—that is my reading of their previous amendment—while the Conservatives want to have it every 10 years. Furthermore, they want more parliamentary scrutiny over the date-setting powers of the Secretary of State—a debate we will have under Amendment No. 6. On the basis of this amendment, they appear to be happy for revaluation to happen at
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pre-determined intervals, regardless of the prevailing circumstances and the need for it, and without any need for Parliament to scrutinise that timing.

Lord Hanningfield: The Bill is rather teasing us; on the basis that the legislation will go through, we are saying that it would be unfair for Wales to have different treatment from England. The noble Lord is being rather unfair because we are assuming that the Bill will be enacted. That was the purpose of this amendment; it could have been much wider. If it is necessary to make it wider on Report, we will. But the amendment seeks to treat Wales the same as England.

Lord Bassam of Brighton: The principles behind our approach may well be the same, but I do not think we should see Wales as a precedent for revaluation in England. If I am teasing the noble Lord, it is because what I enjoy most is seeing some consistency in Conservative Party thinking.

The reasons for the Government seeking not only to postpone the 2007 revaluation but also to remove the maximum 10-year cycle have been expressed on many occasions. It is appropriate that, for the record and for the benefit of Members of the Committee, I go over some of those reasons again.

In July 2004, the Government invited Sir Michael Lyons to consider options for reform of the council tax as part of his independent inquiry into local government funding and to report and make recommendations by the end of 2005. In September 2005, the Government then extended the scope and length of the Lyons inquiry so that it could consider issues relating to the wider functions of local government and its future role as well as, and prior to, making recommendations on local government funding.

The inquiry is now expected to produce its final report at the end of 2006. In the light of that, the Government decided to postpone council tax revaluation in England, and to legislate to provide a power for the Secretary of State to make orders setting a new date for revaluation, and dates for any subsequent revaluations, so that the first revaluation in England can take full account of the further work of the inquiry and be integrated with any other possible funding reforms, and—let me stress this in the context of the amendment that we are considering—so that account can be taken of relevant circumstances in determining appropriate dates for subsequent revaluations.

Subsection (4) of Clause 1 amends Section 22B of the Local Government Finance Act 1992, as amended by the Local Government Act 2003, so that the requirement for a cycle of revaluation in England at least every 10 years is removed, together with the power for the Secretary of State to specify by order a date for revaluation earlier than the 10th anniversary. That does not mean that revaluations will not occur regularly. It is simply that until we have received, thought through, and no doubt consulted on Sir Michael's final report, we cannot take a view on how
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frequently revaluation should occur. We therefore think it right that we should not be statutorily committed to revaluing on a rigid, pre-determined cycle. In other words, we seek maximum flexibility

As we have made clear on a number of occasions, the Government are committed to council tax as a method of funding local government in England. However, we accept that there is a case for reform and we look forward to Sir Michael's advice on that issue in due course. In the mean time, it remains our policy that we should postpone and not cancel revaluation, and the Bill achieves that.

Indeed, we are seeking to provide maximum flexibility by removing the requirement, which currently stands in the 1992 Act, for there to be no more than 10 years between revaluations. If we accept that it is right not to set a date now for the first revaluation, it follows logically that it would not be sensible to seek to predict when the right time would be for the second or subsequent revaluations. To remove the date for the first revaluation without, in turn, removing the pre-determined time-frame for future revaluations would reduce the flexibility that we seek. I hope that the noble Lord will accept that it is in the best interests of all to provide for maximum flexibility.

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