Council Tax (New Valuation Lists for England) Bill

I have no intention of going down that line, Mr. Deputy Speaker. The Conservative party wants to keep the council tax in its original, unformed, half-baked, semi-organised form, which resulted from the panic in 1992 following the poll tax. The hon. Member for The Wrekin (Mark Pritchard) appears to be adding another string to the bow of that crude and unformed tax by saying that he is pleased that it does not seek to reflect the value of property. When the Conservative party introduced the council tax, however, it introduced bands to reflect the difference in property values. Incidentally, the 1992 council tax legislation did not include a revaluation provision because it was widely believed at the time in Government circles that placing the bands on the statute book and maintaining council tax within them would remove the need for valuation, because property price movements would be absorbed by movements within the bands. Over time, that thinking has proved to be hopelessly and ridiculously off target. The hon. Member for The Wrekin appears to be saying that revaluations should not take place within the council tax system. As properties rise in value, however, so council tax should levy a tax on a fair and equitable basis across the bands, reflecting property price increases. It is not a question of taking more money from particular houses; it is a question of taking the right amount of money from particular houses. I shall illustrate the problem of the way bands work in different parts of the country by briefly considering two boroughs, one of which is in the south of England and is not ridiculously rich, and the other of which is in the north of England and is not especially deprived. An examination of which houses are in which bands illustrates my point. The London borough of Merton has 8,391 properties in bands A and B and nearly 10,000 properties in the top three bands. The borough of Wakefield, which is 80 per cent. larger in terms of total number of properties, has 1,882 properties in the top three bands—a fraction of the number in a much smaller borough in London—and 97,000 properties in bands A and B. The geographical differences in banding around the country are already enormous. Given that property prices are drifting upwards, if there was no revaluation that differential would remain in place and continue to widen. In the case of boroughs with a larger number of properties in the top bands, the number of properties that would jump into the top bands would be considerable, thereby creating a flat tax effect. As my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) said, those in the lower bands would not gain any credit from that, because it is not possible to go below the lowest band. The flat tax effect works at the other end as well. The consequences of the Conservatives’ rather strange position can be clearly spelled out, but another party is involved in this debate—the Liberal Democrats.