Council Tax (New Valuation Lists for England) Bill

And if I were to stray too far into what the Lyons inquiry ought to do, Madam Deputy Speaker, you would say that I was going too wide of the point. As ever, my hon. Friend makes a valid point, as he did in his lengthy and interesting contribution to the debate earlier. He is much more numerically adept than I am. We might have to encounter gearing as a problem. Under the Bill, revaluation would be deferred but not done away with. While I want a deferral, I do not want it to be deferred into the mists of time. A revaluation will address the question of differential house price rises. When house prices rise in different adjacent parts of a constituency, city or rural area, those who have seen an above-average increase in the value of their houses pay lower council tax than they would if a revaluation had taken place. Correspondingly, those whose houses have risen in value by less than the average, assuming a revenue-neutral system, would pay more council tax than they should. That happens to some extent in the current system, but the longer a deferral continues, the more pronounced that unfair trend becomes. Of course, it favours those who have done best out of rising house prices in the booming economy under this Labour Government. The discrepancies and unfairness therefore get worse the longer a revaluation is deferred. Consequently, as I said to my hon. Friend the Minister, while I support a deferral of the revaluation pending the outcome of the Lyons inquiry, I do not want it deferred too long. I think that council tax is a good tax. There are problems with it, and I am glad that the review is going on. My hon. Friend the Member for South Ribble (Mr. Borrow), in an intervention on my hon. Friend the Member for Colne Valley, said that there is no perfect tax. Arguably, death duties are a perfect tax, because one pays them only when one is dead. Council tax is quite useful because it is on a house that one cannot move—I do not know the collection rate in your area, Madam Deputy Speaker, but in mine it is about 97 per cent., so it is important to bear that in mind in terms of revaluation. We need to consider what revenues might be brought in, but we also need a sound system that by and large works well, even though there are difficulties. I want to stress again the need for better information to accompany the deferred valuation, as mentioned by my hon. Friends the Members for Colne Valley and for South Ribble, so that people can understand the system as fully as possible and that we can have a properly informed debate. The Liberal Democrats went into the last general election saying that they would replace council tax with a local income tax. That is an entirely honourable and understandable position, although they may now have resiled from it, but we need to debate it properly if we are to consider revaluation in the context of an alternative to council tax. The amendment says that"““removal of the need for revaluation of domestic properties offers taxpayers no protection against the imposition of new higher council tax bands.””" That shows that the Opposition have a different view of what a revenue-neutral revaluation might constitute. It suggests that the six Members who tabled the amendment do not understand the system that we have, let alone what it might be turned into. No doubt the Opposition Member who winds up the debate will explain that I have misunderstood, and that those who tabled the amendment understand the mathematics and simply take a different political view, but the wording suggests otherwise, which is deeply worrying. I am sure that the Liberal Democrats do understand how the system works and take a different view—if they have a view at the moment. I would not talk about that now even if I were allowed to. It seems, however, that Her Majesty’s loyal Opposition do not understand the system that we have, but have nevertheless tabled an amendment suggesting that we decline to give a Second Reading to a Bill deferring revaluation because of all the nasty things that they think would happen in the event of such revaluation. Let us leave aside the point made by my hon. Friend the Member for South Ribble, who echoed my hon. Friend the Minister in saying that the Opposition did not appear to realise that if the Bill were not give a Second Reading, revaluation would go ahead. The Opposition seem to be telling us that the Government have got it all wrong, but it is they who have got it all wrong, because they do not understand the present system.