Council Tax (New Valuation Lists for England) Bill

This amendment has been debated twice before in another place so it has the benefit of being consistently moved by the Liberal Democrats. However, it was moved in a slightly amended form. From my reading of the amendment, I see that we have returned to its original form. So far as we are concerned, the arguments against the amendment put forward in those debates have not changed, so I hope that I will be forgiven for repeating what has been said before. While the Government readily accept the argument for revaluation of council tax to maintain a fair alignment between house prices and council tax bands, we can see no case for the regular publication of assessments of house price movements that this amendment requires. As my honourable friend Mr Woolas said in his response to this amendment in another place, the problem that we have with it is the suggestion that there must be, as he put it,"““some sort of objective golden rule””.—[Official Report, Commons, 01/12/05; col. 407.]" that underlies the decision to revalue or not and, more particularly, that the predominant factor in the rule is divergence. The idea seems to be that a certain point of divergence would trigger a revaluation and, conversely, if that point were not reached then, then an insufficient case would be made to warrant a revaluation. Mr Howarth, who tabled the amendment in another place, denied that that was in his mind when he devised the amendment, but none the less the suggestion is there, intended or not. Of course, the factors to be considered in determining the right time for revaluation are many and complex and, sadly, we do not have a neat formula to give us the answer. Furthermore, if we did have such a formula then, by implication, if the Government were to decide for whatever reason not to proceed with revaluation, notwithstanding that evidence, then it would somehow be seen to be flunking the issue. The Government reject the implications that a particular level of property price movement necessarily justifies revaluation and that divergence that falls short of that level of property price movement precludes any case for revaluation. What level should we take this analysis of divergence to? What are we to do about the complications of house price divergence at sub-regional level? What if there were no significant variation of house price movements between regions, but real variation within billing authorities or, perhaps, within some billing authorities, but not others? The position of the official Opposition seems to be that the recent narrowing of divergence between regions removes the case for revaluation. But that simplistic view is certainly not shared by the Government. Mr Howarth in the other place tried to answer these points by proposing a revised version of the amendment that effectively said that the reasons would not be solely connected to house price divergence. However, by leaving this factor as the only one specifically listed, the overemphasis on this point remains. This overemphasis may not be the intention of the noble Baroness, but whatever the intention, that is certainly what would be inferred by many commentators before too long. As my noble friend Lady Andrews said, we should also consider the practical effects of this amendment. In order accurately to assess the level of house price divergence or convergence, there would have to be what would amount to an annual revaluation of all 22 million properties, with all the cost implications that that would imply. The assessment would have to look not just at the national picture but also at regional and local levels to reflect the fact that divergence can happen, and have an impact, at the micro level just as much, if not more, than it does at the macro level. Sir Michael Lyons himself noted this point in the interim report that he published at the end of last year. Moreover, I have no doubt that many individual householders would be tempted by this process to enter into some sort of annual debate about whether the Government should revalue that particular year, according to whether they themselves stood to win or lose by that particular set of figures. Moreover, one can well anticipate the media frenzy that will probably—and unhelpfully—ensue. We have seen in recent weeks just how interested the media are in council tax. That cannot be a sound basis on which to take forward the important decision on when, or when not, to revalue. Let us be quite clear: revaluation is not simply about reflecting divergence in prices across the property market, still less about any particular degree of divergence. The case for revaluation is simply to ensure that property values are fairly reflected in council tax bandings and that values are up-to-date and timely and can be sensibly handled by the Valuation Office Agency and all other interested parties. We are interested, above all, in fairness: but fairness does not depend on passing some sort of arbitrary test, as implied by this amendment, of the level of divergence between past and current property values. The Government’s view is that the right way forward, in the light of the Lyons review and their response to that, is to propose and justify a date for revaluation to Parliament, and for Parliament to consider the merits of that date and justification by the process of debating the affirmative order provided for in the Bill. Our view is that that would be a rational basis on which to consider our strategy. That is why we cannot agree to this amendment. I hope that the noble Baroness will feel reasonably content with my reply and will be happy to withdraw her amendment.