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Local Taxation

Part of the debate – in the House of Commons at 6:38 pm on 4th July 2005.

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Photo of Eric Pickles Eric Pickles Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party 6:38 pm, 4th July 2005

It is a pleasure to follow my hon. Friend Mr. Hunt, who made an excellent speech in which he spoke with great integrity about the problems that his constituents face.

The Minister of Communities and Local Government said three things with which Conservative Members can agree. He is not in his place, but with his customary kindness and courtesy he has given me a note saying that he regrets that he cannot be here as he has a prior engagement. First, we should like to associate ourselves with his remarks about Mr. Raynsford. The second matter on which we agree is that those on dual incomes would indeed be disadvantaged through a local income tax. The third point on which we agree is the link between council tax and Government grant and the importance of devolution not only to councils but to citizens. If that is the hallmark of the right hon. Gentleman's approach to local government, he can look to the Conservative Benches for some co-operation.

I was, however, shocked that the Minister did not know that two out of three people who are eligible for council tax rebate fail to claim it. That marks a deterioration; it used to be three out of four people. It must be the only example of deterioration in the take-up of a benefit. I hope that the right hon. Gentleman will examine the matter urgently to encourage those who are entitled to the rebate to take it up.

It was a pleasure to hear Sarah Teather speaking from the Front Bench. However, she appears to be in denial about whether the Liberal Democrats voted for revaluation. We have given her the dates and column references for 2003. She has been out of the Chamber for most of the debate, so surely she has been to the Library to check and is in a position to apologise to us for the Liberal Democrats' vote for revaluation.

We voted against revaluation. I confess that there was a time when I believed it was a good idea, but I fear that I was deceived by the emperor's new clothes. Once we realised that the difference between the north and the south and between authorities would remain roughly the same as it was when the council tax was introduced, we did not see the point of spending hundreds of millions of pounds on a revaluation that would get us to precisely the same place. At least we found out that the hon. Member for Brent, East was one of the few remaining true believers in local income tax on the Liberal Democrat Front Bench.

My hon. Friend Mr. Turner spoke with great passion about the problems caused by local Liberal Democrats on that fine island. He managed to elicit from the Liberal Democrats some discussion of resource equalisation. Under the proposal, there would be more resource equalisation. I therefore look forward to meeting my hon. Friend on the streets of Cheadle, where he will bang on doors and explain that the position in the Isle of Wight and in Durham means that local income tax in Cheadle would have to be a little higher. I was shocked by the accounts of the incompetence of local Liberal Democrats.

The hon. Members for Cambridge (David Howarth), for Brent, East and for Kingston and Surbiton (Mr. Davey) learned a valuable lesson: one should never intervene on my hon. Friend Sir John Butterfill unless one is sure of one's facts. One of the pleasures of being here this afternoon was listening to my hon. Friend demolish the local income tax and the interventions.

The right hon. Member for Greenwich and Woolwich appeared to be more robust about revaluation than his successor. The Government, certainly in the press, appear to be wobbling on it, and I look to the Minister for Local Government for a robust statement to the effect that revaluation will go ahead. For our guidance, we have some views from Mr. Geoff Mulgan, who is now director of the Institute of Community Studies but was formerly the Prime Minister's head of policy. He told the Chartered Institute of Public Finance and Accountancy, as he doubtless told the Prime Minister, that

"revaluation is a complete nightmare just ahead", and that it was making local government reform "hard to sell". I am sure that he is right and that Ministers have inherited a poisoned chalice. If they have any sense, they will do their best to spit out the poison as soon as possible.

My hon. Friend Mr. Dunne spoke of unease about taxation. He spoke especially well about the problems of Stockport. My hon. Friend Anne Milton considered the problems of hard-working families. She gave us the example of a police officer married to a teacher and provided a long list of Liberal Democrat taxes. If she will forgive me, I should like to quote her predecessor, Sue Doughty, who was defeated at the general election:

"local income tax was a real sticking point for them . . . young professionals such as two teachers living together struggling to pay the mortgage really didn't like the policy".

Andy Mayer, the director of Liberal Future—if that is not a contradiction in terms—said that

"we're not convinced that the association of income tax with fairness is correct".

My hon. Friends the Members for Preseli Pembrokeshire (Mr. Crabb) and for Clwyd, West (Mr. Jones) spoke with great knowledge of the catastrophe that awaits the people of England following revaluation. On Second Reading of the Local Government Bill in 2003, which legislated for revaluation in England and Wales, the then Local Government Minister pledged that

"revaluation will not lead to increases in the council tax yield."—[Official Report, 7 January 2003; Vol. 397 c. 53.]

Sadly, that was not the case.

No wonder the Association of London Government recently warned of the likely effect on London of revaluation, based on the Welsh experience. It stated:

"The worrying prospect for London is that Cardiff appears to have fared badly as a result of the revaluation."