Council Tax (New Valuation Lists for England) Bill

We have heard several thoughtful speeches—the last two were good examples. It must be accepted that there is no outcry, with the possible exception of two Labour Members, in support of a national revaluation. However, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) pointed out that there are local cries for revaluation, which I accept, so I thought that I would try some lateral thinking about that. My right hon. Friend and I used to take that approach in a little office down the road when we discussed such matters previously. Today, however, I want to use the reasoned amendment as a way to look for a slightly different approach. Although the council tax is a property-based tax, we must remember that it is not actually based on property values in the same way as business rates or the domestic rates. The slightly different approach behind the council tax has two effects. Valuation is used to put properties into bands through which the tax is distributed locally. Importantly, especially for people in the south-east, such information is used by the Government in their assessment of ability to pay when grant is distributed, which has led to a dramatic shift of grant from the south-east to northern urban areas since the new system was introduced. We should be able to think about a slightly different approach. It would be sensible enough to accept the Government’s proposal to delay—perhaps completely—a national revaluation. However, we should also set the situation legally so that the Secretary of State could allow regional authorities—if we end up with regional authorities, heaven forbid—or at least the taxing authorities to reflect any dramatic changes that might occur in their areas. We could thus go for localised revaluation. I cite that specifically in response to the point made by my right hon. Friend the Member for Skipton and Ripon that there are areas—the Thames Gateway will probably be a classic example—in which huge amounts of building will occur, so revaluation due to the sale of such properties would obviously be appropriate, and perhaps necessary. That might mean that the value of the bands in such areas would shift. The major effect of the council tax that we must consider is the fact that the Government mistakenly base ability to pay on the value of properties. That is why a national revaluation could have a dramatic effect on the south-east and London, while being positive for council tax payers in the north-east and the north in general. Using slightly lateral thinking to find a different approach, albeit perhaps from a rusty base, I think that we should be considering a different way of judging ability to pay. An obvious approach would be for the Treasury to produce each year a borough-by-borough estimate of individuals’ income throughout the country. That assessment could be a substitute for the valuation bands with which we currently judge ability to pay and grant distribution. Such an assessment should be complemented by a system to assess people’s cost of living. Part of the cost of living, especially in London and the south-east, is dependent on the value of properties because of the size of their mortgages. That factor should be reflected when the grant from central Government is calculated, but it is not. I support the Government in one aspect because the delay will create the opportunity for more radical thinking than Sir Michael Lyons would have been likely to achieve without the Bill. I support the reasoned amendment because we must move away from a national revaluation of properties that are not business properties because of the reasons that I have outlined. I especially support my Front Bench colleagues because I have deep concern, contrary to the view of my right hon. Friend the Member for Skipton and Ripon, about the proposal to create extra bands instead of changing the valuation of the existing bands, because that would shift dramatically the proportion of grant allocated throughout the country, which could cause damage. So, I half welcome what the Government are saying but more particularly I welcome the approach taken in the amendment, because it gives us a chance—I suspect that the Government will not accept it—to come back with the product of a slightly deeper re-think than what my right hon. Friend the Member for Skipton and Ripon has described as a grubby little Bill.