Council Tax (New Valuation Lists for England) Bill

I apologise for not having been here for Second Reading and thank Members of the Committee for their kind words, which are much appreciated. I left things in the very safe hands of my noble friend Lord Bassam, who did his usual sterling job. This is my first opportunity to explain our policy on council tax and where we are with this Bill, and I do so with pleasure. This is a useful amendment in that it allows me to set out some of the implications. I should like to talk about the implications of the amendment first, because they are rather serious, and then answer the questions on the potential date of revaluation, the powers of the Secretary of State and the implications of the process of valuation in terms of the temporary stop put on it and of gearing it up when revaluation happens, as we intend it will. This is very much a postponement, not a cancellation. The amendment raises some critical issues. I will not over-egg the pudding, but I want to point out the implications. It would delete subsection (2), which would prevent the insertion of new subsection (1A) into the Local Government Finance Act 1992. That is what provides the power for the Secretary of State to set the date on which new valuation lists are to be compiled. Without that power, and without revaluation in 2007—which is removed by subsection (3)—or a requirement for regular revaluations at 10-yearly intervals—removed by subsection (4)—there can be no uprating of valuation lists ever. In moving the amendment, the Conservatives seem to want to cancel rather than just postpone revaluation. The noble Lord and noble Baroness may be adopting a rather more definitive position than their colleagues in the other place, or their party, may intend. At Second Reading, the noble Baroness made it clear that,"““we do not object to revaluation being postponed; in fact, we welcome it; and, indeed, we would be much happier if the whole thing was abandoned””.—[Official report, 9/1/06; col. 36.]" But when, in the other place, the Front Bench was challenged to clarify whether the Conservative Party would ever carry out a revaluation, the response of Mrs Angela Watkinson was, ““We never say never””. That position is not dissimilar to our own; we recognise that now is not the right time for revaluation, but we want to maintain the flexibility for it to happen in the future when the time is right. That is a clear position; in contrast, I find the Opposition’s current stance rather confusing. In a debate in another place in 2003, my right honourable friend Mr Miliband noted that previously, in a debate with Mr Raynsford, Mr Pickles said:"““We recognise the need periodically to revalue properties for the purpose of council tax . . . We support the revaluation being made on a regular and predictable basis””—[Official Report, Commons, 7/1/03; cols. 64-65.]" Two years later, he said:"““Any council tax system inevitably requires some form of revaluation””.—[Official Report, Commons, 2/2/05; col. 929.]" In March 2005, Mrs Spelman said,"““a property-based tax must take account of changes in the value of the property””.—[Official Report, 2/3/05; col. 983.]" Indeed, Mr Howard, when Leader of the Opposition, said on 20 February 2005, ““You have to revalue””. So clearly the Opposition were supporting the principle of revaluation. But in April 2005 they decided to argue for postponement. Mr Howard was clear: on 20 April he told Sky News that his new policy was a postponement of revaluation and not a cancellation. For the avoidance of doubt, he added ““for the first Parliament”” when he was questioned about delay. Therefore, I suggest, it has been a rather confusing debate. Adding to the confusion, of course, was the Opposition’s reasoned amendment at Second Reading in the other place, which effectively would have meant that revaluation would have had to go ahead. This amendment would now remove entirely the prospect of revaluation at any time in the future, regardless of any conditions that may prevail. But, whatever the policy of the party opposite, the cancellation of revaluation for all time and the removal of any level of flexibility is hardly a way forward that the Government could commend to this House. We have gone on record many times in recent months stating our conviction that council tax is a fair and equitable source of a proportion of local government funds. Added to that is the continued belief in the case for revaluation and that it is right to maintain a fair alignment between house prices and council tax bands. We are not alone in this position; many other experts support that view. In a very useful interim report at the end of last year, Sir Michael Lyons said:"““Council tax remains important and continues to have real benefits as a local tax””." He also recognised that:"““One of the ways to improve council tax as a property tax would be to update the property valuations on which it is based””." Prior to that, as noble Lords will probably remember, the Balance of Funding Review and the ODPM Select Committee report, both published in July 2004, were equally supportive of council tax as a source of local government funding and both recommended that the system would benefit from reform and revaluation. The amendment would fundamentally overturn that position and the overall viability of council tax, but it would do so without providing for any credible alternative.