Council Tax (New Valuation Lists for England) Bill

My hon. Friend makes an excellent point. With council tax increases of over 70 per cent., it is not surprising that people are uncomfortable with the current situation. If more evidence were needed—not that I think it is—that revenue neutral arguments can be less than honest, perhaps we should consider the business rate revaluation. The Government said that that was aimed not at changing the amount of money collected nationally, but at ensuring that individual rateable values reflected the changes that have taken place in property markets since the last revaluation in 2000—very much the arguments that have been rehearsed today. However, the business revaluation hiked taxes on local firms by more than £1 billion a year across the country, pushing up average firms’ bills by three times the rate of inflation. In Basingstoke, which is one of the most important hubs of business and enterprise in the south of England, the average bill paid by local firms has risen by 6 per cent. to over £16,000 a year, despite the Government’s claims that the business rate revaluation would be revenue neutral. Almost 2 million businesses across England were sent revised business rates in April. That money will not be kept by local government, but will be snatched back by central Government. Higher taxes on local firms will damage the economy and increase the prices in our shops. Our experience to date is that re-banding is no revenue-neutral balancing exercise, as suggested by the Government today. There are more deeply rooted reasons for the Government’s climbdown on revaluation, which some of my hon. Friends have touched on. It is a symptom of a growing realisation of the crisis in local government finance. We have noted the fact that we are paying over 70 per cent. more in council tax under the Government, analogous to 3 per cent. on income tax. But those accountable to the voters at local government level have little control over council tax levels for which they are judged at the ballot box, despite what the Minister said in an Opposition day debate only a few weeks ago. The Government have in essence broken the link between taxation and representation, with 75 per cent. of local government spending coming from central Government and only 25 per cent. from local council tax payments. For many councils, the cost of providing additional statutory services outstrips the funding that they receive from central Government. My constituency is in the county of Hampshire, designated excellent by the Government for its levels of efficiency. I agree with that. Hampshire has achieved great savings over a number of years in response to the pressure under which it finds itself, but this year the sums simply do not add up. In 2006–07 the projections are that, after the Government have ring-fenced the revenue support grant into the new dedicated schools grant and removed the one-off grant support designed to keep council tax figures low in a general election year, Hampshire will see a 1.7 per cent. increase in Government grant, yet it needs an increase of 5.4 per cent. to finance the Government’s local spending plans and maintain current levels of service. This means that my constituents are facing a further 8.4 per cent increase in council tax, on top of the vast rises in recent years under the Labour Government. If the council is not allowed to put such an increase in place, the result will be cuts in services to the tune of £8 million, according to current projections. That would mean 130 fewer residential care places for elderly residents; 200 fewer day centre places for adults with physical, learning or mental health disabilities; 150 fewer children in full-time foster placements; and further backlogs in road maintenance, despite continued pressure from the South East England regional assembly to increase house building. We are at the tipping point. The people of Hampshire, along with many thousands of other residents throughout the country, are paying more and getting less. Revaluation, whenever it came, would make the situation even worse. We heard earlier that the situation is particularly perilous for pensioners. In my constituency a third of their basic state pension is taken up by higher council tax payments, which is unacceptable. We do not need the revaluation at any time. We need tangible support for pensioners, as I have mentioned before. I will continue to campaign for the 50 per cent. discount that I highlighted in the general election campaign, and for the reinstatement of the link between local taxation and local accountability. We must call a halt to the Government’s war on home owners by stopping once and for all the measure being debated today.