My Lords, my noble friend has made it clear that he does not like the Bill and would not wish it to make progress. It is difficult not to make a very brief Second Reading point on why we have the Bill at all. It is because the existing system is totally out of date. It is totally irrelevant. One has only to note the public complaints that there have been about the fact that the difference between the council tax paid by the humblest dwelling and the most expensive, luxurious penthouse in London is only 3:1.
My noble friend spoke about fixing on particular dates. Indeed, it is fixed on the date of the original legislation in the early 1990s. That is not something I seek to perpetuate. I seek very simply to say that we need a change that will be administratively easy, relatively. The argument always used against change has been the need for revaluation. That is precisely the need that I seek to avoid by using the actual prices paid as
recorded in the Land Registry and in any subsequent transition, including, of course, in the case of inheritance, where a valuation is made for that purpose for probate, and, indeed, in the case of gift for other tax purposes. There is a rather limited number of valuations. The number of properties that transfer in ownership between inheritance and gift is probably a relatively small proportion of the total transfers. They need evaluation. All the other transfers are recorded, when they are made, in the Land Registry. It is the Land Registry that I seek to use.
Frankly, my noble friend does not think it worth proceeding with this change, which is well overdue. It is the outrage, in a sense, at the present system that caused the invention of the so-called mansion tax, which was not a great success and has far more difficulties. I do not think that it is particularly on anybody’s agenda.
I take the points about the detail. I am not trying for one moment to prescribe the bands, nor am I trying to prescribe the proportional increases. I have illustrated them in the Bill, but as my noble friend said, the committee in your Lordships’ House that scrutinises the legislation said—I read its report—that this would be a matter to be done by statutory instrument, as an order. There will be a long time before it is decided exactly what bands are appropriate, but I certainly suggest something much closer to the bands that I propose. At present, as your Lordships know, band A is up to a value of £40,000 and band H up to £320,000. In the illustrative tables I produced there is no difference between the council tax to be charged for band A and not very much difference for band B. Instead of being 17% more, it will be 33% more. The difference, of course, is that band A will cover anything up to £250,000 and band B, in my suggestion, everything up to £500,000. As for houses worth £1 million or more, again, it is only a relatively small increase, because we are talking about a council tax which, give or take £100 or £200—it varies, of course, throughout the country—is £1,000 for band A and only about £3,000 for band B. Those are the actual figures that people pay, as noble Lords will know. Therefore, in the illustrative tables I have put in the Explanatory Notes, based on what is in the Bill, there is no enormous difference for the lower rates.
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A £1 million house will be paying four times the rate: £4,000 rather than £3,000. That is not an enormous increase. It is only when you get to £20 million that you come, in my proposal, to the high proportionate increase to 42 times. I know that my noble friend is a councillor in a very affluent and delightful area of London, and I am sure there are some properties there that would come into my new band H, but perhaps not so very many, and maybe not so very many of their owners are constituents, because quite a lot of them probably do not have votes in England.
My noble friend is perfectly entitled to say that he does not like the Bill and that he would like us not to proceed but I believe that it is high time that we use some new thinking and produce something that is more acceptable and seen to be fairer. It will be easier to administer because the prices recorded in the Land
Registry are very easily available—you can look them up straightaway. It will not be a question of having to do it each time, because once they are fixed, until they are renewed they will remain at the same level for the council tax bill. Council tax bills will be extremely easy to issue—I do not take very seriously my noble friend’s argument about the administrative work being wildly disproportionate and all the rest.