Council Tax (New Valuation Lists for England) Bill

This is a grubby little Bill that reflects a very English mess. If we build new houses—and the Deputy Prime Minister wishes to build very many new houses—we will all have to pretend that they were built in 1991 for the purpose of valuation and a fictional value will be associated with them. Let us suppose that I buy one of those houses and put on a conservatory and a granny annexe—although they are unlikely to be big enough to allow the latter addition—and, a couple of years later, I sell it. It will be revalued for council tax purposes and will probably go up a band. Let us suppose that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) lived next door and had decided to spend the rest of his life in his house, so he had added a conservatory, a granny annexe and an extremely well appointed garden shed. He would pay less council tax, even though he had a much more valuable asset. There are between 1.6 and 1.8 million house sales a year in Britain, or some 34,000 a week. Even allowing for sales of properties to which no substantive change has been made, a relatively high proportion of houses have been revalued—some more than once, depending on property turnover in the area—and that creates anomalies. Across the country, people ask, ““Why on earth is he paying the same as I am? He has a much bigger house.”” My colleagues talk about the battles and the discontent that a revaluation would bring, but we should remember how much seething discontent can be caused by failing to have a revaluation and the continuation of the anomalies. I know that you do not wish us to trespass beyond Offa’s Dyke, Madam Deputy Speaker, but the situation in Wales is interesting. There was a revaluation in Wales because the Welsh authorities decided that they wanted to get more revenue out of the system. It was not revenue neutral, because they set out to make it into a tax-raising venture, which was very successful. However, one consequence of the present situation is that the council tax will come under increasing strain. Local government finance has a wonderful capacity to start as a dot on the horizon no bigger than a man’s fist and grow to emerge as a subject of colossal emotive and totemic power. We have hit just such a rough patch in the last couple of years. The Minister will say—I remember saying it myself and the right hon. Member for Greenwich and Woolwich also said it—that council tax yield is not the same as average council tax. Of course it is not, because more houses are built and houses are revalued, but it does provide a good rough indication of likely council tax increases. We are now destined to spend the next five or six years going through the same sequence of minatory arguments, including threats of capping and blaming the local authority. The silliest argument of all pretends that the amount of money a council raises has nothing to do with the nature of the property in its area, as though somehow there was a curious moral perversity in the fact that Westminster manages to raise more money than Burnley on the basis of its council tax stock. More and more pressure will be felt because public expenditure is coming under strain and chickens are coming home to roost—as I forecast last year. There are reasons for a postponement for one year, and Sir Michael Lyons accepted that that was reasonable. For example, the changes in education funding and the introduction of three-year budgets make it reasonable to pause to see how all the bits will fit together. However, Ministers have suggested that we wait until there is no turbulence in house prices. What a wonderful notion. After all, the Chancellor of the Exchequer set up the Barker review to discuss why we had permanent turbulence in house prices. The link to structures is one of the most grotesque non sequiturs that I have come across, even from this Government. Ironically, we may have been living through a period when price disparities were closing to some extent. Select parts of my constituency are approaching the levels of the south, but as the hon. Member for Somerton and Frome (Mr. Heath) would say, the variation regionally, and even locally, can be very significant indeed.