Council Tax (New Valuation Lists for England) Bill

I am deeply grateful for your guidance, Mr. Deputy Speaker. I will try to answer the hon. Gentleman’s point in a moment in a way that I feel is relevant to the Bill. I warn hon. Members that, when re-banding was introduced in Wales, we were told that it would be fiscally neutral, just as hon. Members in this Chamber are being told that the re-banding exercise in England will be fiscally neutral. When Governments find that their estimates are not quite what they expected them to be, it is easy for them to manipulate local government funding to raise revenue directly for themselves. If hon. Members’ experience is anything like the experience of those of us who live in Wales, they may find that their surgeries are full of people complaining about council tax rises of 130 per cent. If we abandon revaluation for good, how will we overcome the problems that will result? To take the point made by the hon. Member for Preston (Mr. Hendrick), I think that there is a strong case for looking at the inflation that is occurring within local authorities. Local authority inflation is not at the same headline level as the inflation figures generally. He talks about 33 per cent. extra going into local authorities. I do not dispute that, but what has been the percentage increase in costs for local authorities? For example, a Government initiative such as the teachers work load agreement in Wales—there is an equivalent one in England—is not properly funded. The National Union of Teachers talked about a shortfall of £30 million or so in that alone. If the costs rise above the level that is given to local authorities, they will have to make up the shortfall by putting up council taxes. Therefore, the first thing that we need to do is to set up an inquiry into how expensive it is to run a local authority, to take evidence from local government leaders and to ask them about the extra increases and burdens that they have and to what extent they are being funded by Government. There is a responsibility on Government not to announce any headline-grabbing initiatives unless they are prepared to fund them properly. The second thing that all of us need to do, whether in Wales or England, is to look at the way in which the formula for local government funding operates. That again is easy to manipulate. In fact, it has been manipulated in a manner that I believe is completely unfair to the southern counties of England and to the rural areas of Wales. When assessing deprivation, it is easy to look at the number of people on benefits, which is what the formula does. The formula should take into account average household incomes, because that is a much clearer way of defining deprivation than simply looking at the number of people of benefit. We all know of people working in agriculture, tourism or the service sector for the minimum wage. They are not taking home much money and their incomes are no better than they would be on benefit, but they are not counted as being deprived for the purposes of the formula.