I beg to move amendment No. 3, in page 1, line 8, at end insert—

'(1B) An order under subsection (1A) may be made in relation to an individual billing authority, a group of adjoining billing authorities or all billing authorities.'.

On a point of order, Mr. Speaker. We are dealing here with a very important piece of legislation, but it is not freestanding and does not introduce a new concept. Instead, it seeks to amend the Local Government Finance Act 1992, which makes that Act very relevant to our debate. I was shocked to be told by the Vote Office that that Act is not available. Therefore, we are being asked to debate a Bill that amends an Act of Parliament, a copy of which is not available for right hon. and hon. Members to peruse. I therefore ask that you consider suspending this sitting until such time as that Act of Parliament is available.

I think that we must continue, and I have called Sir Paul Beresford to move his amendment. However, I instruct the officials that copies of the Act must be available for the right hon. Gentleman and any other hon. Member who wishes to see it.

Further to that point of order, Mr. Speaker. I am grateful for your helpful suggestion, but can you confirm that if by any chance the Act is not available by the time we reach Third Reading, the sitting would have to be suspended because that debate might require references to the Act for the sake of completeness?

I like to deal with here and now, not any period in the future.

On a point of order, Mr. Speaker—

Order. If the hon. Gentleman is going to go on about this matter, it is not a point of order.

It really is a point of order, Mr. Speaker.

Well, I shall be surprised if it is.

As you can see, Mr. Speaker, there are many references to the Local Government Finance Act 1992 in the Bill before us this afternoon. It is impossible to understand the force of the amendments without seeing the Bill that they amend. Can you give us some indication of the point in our proceedings, if we must continue, at which we will have a copy of the Act available to us?

I knew that it was not a point of order. I have instructed officials to make the Act available and when I instruct officials, the House can believe that they move quickly. They will be moving quickly as we speak and I think that the request of right hon. and hon. Members will be met shortly.

I am sure that we will be able to limp on without that Act, although I admit that I do not know it word for word. I am honoured to move amendment No. 3, which also stands in the name of my right hon. Friend Mr. Curry. He intended to be here to support this little amendment on this little Bill. Unfortunately, the Government's last-minute decision to replace some uncomfortable business with this relatively non-urgent Bill has caused a major conflict in his diary and he is unable to join us. My right hon. Friend and I were both local government Ministers, but I note that my right hon. Friend Mr. Gummer, who was our much more learned Secretary of State, is in his place and will be able to add his support and make a few points to the discomfort of the Government and, perhaps, our Front-Bench colleagues, judging from their response to Second Reading. I am also sure that my right hon. Friend the Member for Skipton and Ripon will be able to find enough time to wheel across and join us in the event of a vote.

Bearing in mind that council tax and local authority finances are excessively complex and generally dead boring, I must express my surprise and delight at seeing so many fascinated souls in the Chamber eager to join this debate. They are even, for the moment, still awake. The intention of the amendment is quite simple and straightforward. It would enable the Secretary of State to allow, or require, a particular billing authority, a group of adjacent billing authorities, or all billing authorities to carry out valuations for council tax purposes. It is perhaps worth emphasising that because of the nature of the valuations and the banding system that applies.

On such matters, my hon. Friend's voice carries great weight with me, because I know that he has studied the subject long and hard and is an expert on it. However, I am most concerned by the scope and provisions of the amendment. Should it be added to the Bill, what would prevent a malevolent Minister from deciding to order a revaluation just for Conservative-controlled local authorities?

There would have to be some justification for doing so. An order would have to be produced, which could lead to a debate in the House and the opportunity to make points. However, given the trend of local elections, it is conceivable that there could be so many Conservative councils that a Minister had no opportunity to do anything else.

The point made by my right hon. Friend Mr. Knight also worries me. Were such a malevolent decision to be made by a Minister, could it be subject to judicial review? Does my hon. Friend think that there would be any protection, judicial or otherwise, against such targeted, political action?

My right hon. Friend answers his own question. In such a situation, a judicial review would be a protection, although I do not really envisage such a situation arising, even if the next local government elections—as I anticipate—result in a clean sweep for the Conservatives and a fall in the number of Liberal and Labour councils. We shall have such a collection of Conservative councils that that situation might be more likely than my right hon. Friend envisages.

It is remarkable that it is accepted as completely plausible that a Government might behave in the way suggested. Would my hon. Friend care to reflect on the fact that the Government have already done so in their reallocation of local government finance and the budgets for primary care trusts? Some primary care trusts are under-funded—and not over-spent—because the Government have shifted money from Conservative areas to Labour areas on purpose.

I agree, and the amendment derives from the point made on Second Reading that it would provide an opportunity to change the way in which the funding formula worked, to make it fairer and restore the balance that existed before the funding formula under which we now suffer.

I believe and I hope that you agree, Madam Deputy Speaker—the interventions may support the necessity—that it would be appropriate to explain the background to the thinking behind this short amendment. As the House will be aware, on Second Reading, it was explained that the Bill in effect stops the programmed and vastly expensive national revaluation of every home in England to place them within council tax bands. It also gives the Secretary of State, whoever that may be at the time, the power to call for a national revaluation when he or she deems it appropriate, if ever. The whole discussion on revaluation for council tax purposes was questioned during the run-up to the election. Many felt that there was no requirement for a revaluation, and my Conservative colleagues and I numbered in that group.

Because we do not have the Act that the Bill will amend before us, it is very difficult to follow even my hon. Friend's lucid argument. Clause 1 states:

"A new list must be compiled, in relation to billing authorities".

What is that new list? Is it a list of people liable to pay the council tax, or a list of properties, or a list of billing authorities? What is the list that the amendment addresses?

I should perhaps have explained that, but I was aware that in doing so I might transgress a little beyond the amendment. The new list is a list of valuations of properties within a billing authority, so that they may be put in bands for the redistribution of grant, on the basis of ability to pay, and to determine the amount collected in council tax from the owners of the properties within the billing authority's boundaries. The Government, especially Mr. Raynsford, were emphatic that a national revaluation was required and that, as it was programmed, it should go ahead. Suddenly, post the election—

Order. The hon. Gentleman said that he wanted to give a brief explanation. I was prepared to allow that, but I will not have another debate effectively on Second Reading. Perhaps just giving a brief background to the amendment will be appropriate.

On a point of order, Madam Deputy Speaker. Would you not perhaps concede that a degree of flexibility would be helpful, given that we are struggling, as my hon. Friend Mr. Davies has pointed out, because we do not have the originating statute in front of us? Would it not be more appropriate than normal for my hon. Friend Sir Paul Beresford and perhaps other hon. Members to give more of the background to the amendment and, indeed, to clause 1, given the absence of the originating statute? Would that not be helpful to the House, Madam Deputy Speaker?

I am afraid that I disagree with the right hon. Gentleman, because he is a very experienced Member and really does not struggle at all.

Further to that point of order, Madam Deputy Speaker. I am a slightly less experienced Member than my right hon. Friend and I probably know much less about local government finance, but I am trying to make a conscientious effort to participate in the discussion of this matter, which could be important to my constituents. We cannot follow the amendments because we do not have the text of the Act that is being amended. So we depend particularly on the acknowledged expertise of my hon. Friend Sir Paul Beresford to explain the background to and, therefore, the rationale of the amendment to the Government's proposals to amend an Act that we do not have before us. It would be most helpful to hon. Members in my position if he could be given a little latitude in explaining the background to both the Government's proposed amendments to the Act and his proposed amendment to the Government's amendment to the Act.

I do not accept that point of order. Sir Paul Beresford has been given an opportunity to give a brief explanation of the background to the amendment. Mr. Davies may not be quite as experienced as Mr. Forth, but I am quite sure that he is more than capable of following the debate. The Minister may be able to elucidate a little when he replies.

Thank you, Madam Deputy Speaker.

The Bill relates to a national revaluation, and as I have tried to set out, there is an opportunity for a smaller or minor revaluation in appropriate areas. Interestingly, my right hon. Friend the Member for Skipton and Ripon and I are ex-local government Ministers and we have some knowledge of the matter. On Second Reading, I asked the Minister of Communities and Local Government to confirm whether the

"Bill effectively puts revaluation in limbo, and there might be no revaluation in future if there is a rethink on the grant formula".

The Minister, in effect, confirmed that by saying that the Bill was in keeping with a situation where the Government were leaving their options open and that

"all options remain open in the future."—[Hansard, 7 November 2005; Vol. 439, c. 34.]

So such a revaluation is conceivable. That caused a bit of a flutter in the dovecotes for the right hon. Member for Greenwich and Woolwich—whom I expected to be here today but he is not—because he felt compelled to back his previous position. Mr. Borrow, who spoke as an ex-valuer, probably felt a little like a turkey at this time of the year—if not more frequently.

Valuation for council tax is different from valuation for rates and business rates in that it essentially serves two purposes. First, it serves a role in the funding formula, as it is used to give an estimate of the ability to pay. As I said on Second Reading, that could be done in different ways. Secondly, it is used to rank properties in valuation bands, thus enabling a billing authority to distribute its council tax charge. As long as that proportion of spread remains the same—generally, that seems to be so—there is no need for a revaluation, especially an expensive national revaluation. However, one can foresee occasions where a national revaluation may not be needed at all for some considerable time but a small local revaluation might be appropriate.

The example that most readily comes to mind is that the Government are following previous Conservative Governments in pushing for redevelopment on brownfield land—in particular, the Thames Gateway. It is well known that the Deputy Prime Minister wants to cover sections of the Thames Gateway with large numbers of new—

Order. Once again, the hon. Gentleman is straying very wide of the amendment, which is narrow in scope. I have given some latitude; I now expect him to adhere to the amendment.

On a point of order, Madam Deputy Speaker. I am sorry to raise this issue. I have been carefully following my hon. Friend Sir Paul Beresford. One of the difficulties with the amendment is understanding where it would be applicable, but it seems that he cannot refer to those places. This is the first time that I have been following this bit of the argument. May I ask you kindly to allow him to refer to some of those places, so that we can judge whether the amendment is a good one?

I remind the right hon. Gentleman that he is not chairing the debate—I am—and I have made a ruling.

Thank you, Madam Deputy Speaker. I am trying to set out exactly such an example, but perhaps I strayed a little far in pointing out a particular area.

It is conceivable that an area could have a large number of new properties, the valuation of which would be set by their sale price, but that would distort the gradation and, therefore, the proportional spread across the council tax bands of the rest of the authorities in that billing authority's area or the area covered by a group of billing authorities.

If I understand the spirit of the amendment correctly, it would essentially allow a localised revaluation, as opposed to a one-size-fits-all national revaluation process. New clause 1 was not selected for debate—in no way do I seek to challenge the decisions on the groupings—but, in spirit, it would have allowed both a top-down power, whereby the Secretary of State could order a revaluation, and a bottom-up request, whereby a group of authorities could come together to seek the Secretary of State's authorisation of such a revaluation. My hon. Friend may be about to cover that anyway, but will he make it clear whether he believes that amendment No. 3, which is much briefer, would work in both ways and that the bottom-up, as well as the top-down power, should exist?

I admit that my right hon. Friend the Member for Skipton and Ripon and I tabled new clause 1, but we realised in retrospect that it could have been ruled slightly out of order. If my hon. Friend looks carefully, he will see that the drive of that new clause is, in effect, contained in this much simplified amendment. In fact, the effect is still there.

I am afraid that my hon. Friend is not making much headway with me, because I have reached the conclusion that his drafting is defective. The amendment refers to

"a group of adjoining billing authorities".

Why must they be adjoining? Would not a better phrase have been "a group of comparable billing authorities"? City centre property values may well rise and a view may be taken that urban authorities, not county authorities, should carry out a revaluation, yet under his wording, they would have to be adjoining billing authorities, not comparable ones.

Perhaps that explains why the opportunity to give a broader explanation would have been helpful, because the situation that my right hon. Friend mentions is covered by the amendment, as he will see if he looks very carefully. The amendment covers an individual authority or lots of authorities. I specifically picked the term "adjoining authorities" because I chose as an example—I shall be ruled out of order if I continue with it—the Thames Gateway, which includes a number of authorities to which such circumstances might apply. Given that they are adjoining, it would be appropriate to carry out a revaluation at the same time.

I have an interest in that my constituency has suffered the biggest ever increase in council tax. Who would decide whether a group of neighbouring authorities had to revalue?

The Secretary of State would decide. My hon. Friend needs to recognise that if the ability-to-pay assessment in the funding formula were changed—as I mentioned earlier, before I ran the risk of being ruled out of order—the readjustment in a billing authority or in a group of billing authorities would make no difference to the council tax for those properties, unless the local authority's sum council tax bill for the whole billing authority increased.

I refer my hon. Friend back to what he said about the phrase

"a group of adjoining billing authorities" in amendment No. 3. Is not the word "adjoining" redundant? If the amendment referred simply to a "group of billing authorities", it could cover a group of adjoining authorities, if necessary, and, as my right hon. Friend Mr. Knight suggested, a group of authorities that, by virtue of the fluctuation of the country's real estate values, found themselves in the same position regarding the movement of average values, and should thus be grouped for the purpose of a special revaluation? Would it not be helpful for the purposes of the amendment if—

Order. Interventions are to be brief.

I think that the answer to my hon. Friend's question is that I was attempting to make the amendment sufficient, but succinct.

I, too, have followed closely the logic of the hon. Gentleman's exposition of the amendment. I understand that if the Local Government Finance Act 1992 were to remain in place, there would be a guaranteed revaluation. Indeed, his party's position coming into the debate was that it wanted the provision for a guaranteed revaluation to stay in place because that was what they voted for. Is it the case that amendment No. 3 would mean that the position relative to the 1992 Act would change, so it would be an addendum to a Bill that he would then happily support, or does he want it to replace the position in the Bill? Alternatively, does he want to change the policy adopted by his Front Bench for the debate?

I thank the hon. Gentleman for his complex twisting questions and red herrings. I think that he will accept that the Bill changes the situation by removing the programming of revaluation, but allowing the Secretary of State to set the timing for a revaluation—if that ever happens. I thus suggest that there might be an opportunity to save the enormous expense of national revaluation by having local revaluations, if that is appropriate. As the hon. Gentleman will be aware, given his interest in local government, the cry for a national revaluation is virtually nil.

Is not my hon. Friend being rather unkind to Dr. Whitehead? Is it not clear that the hon. Gentleman has misunderstood what has happened simply because his Government came into power saying that there would be a revaluation, but have now decided that there should not be one, which has left him confused?

My right hon. Friend is perhaps right. Dr. Whitehead gave a long dissertation on Second Reading and I think that it supported the assumption of my right hon. Friend.

I declare an interest as a member of Kettering borough council. I am trying to wrap my mind around my hon. Friend's amendment in the context of Kettering borough. Due to Government diktat, there will be 13,100 extra houses in the borough up to 2021, which will increase the local population by a third. Given that one of the consequences of council tax revaluation in Wales was a large increase in council tax bills, should residents in Kettering borough be worried that the Government might impose a revaluation—

Order. I think that I might just protect Sir Paul Beresford so that he does not stray on to Wales during the debate.

Bearing in mind my accent and recent sporting activities in Wales, that is probably a very good thing, Madam Deputy Speaker. I thank my hon. Friend for citing the sort of situation in which a local revaluation might be appropriate.

My hon. Friend argues the case for the law to be changed to permit individual or group revaluation instead of universal revaluation. The Government have already disgracefully spent £60 million on preparing for revaluation, although they now say that that might not happen. A general revaluation would be enormously expensive, so perhaps my hon. Friend can indicate how much that would cost. What would be the cost of an individual revaluation for an average authority? Before we agree to allow individual authorities to be revalued, surely we should have an idea of the cost of such a revaluation that the taxpayer would be obliged to bear.

Unfortunately, I do not have the figures with me. However, I am sure that the Minister for Local Government, who is smiling at me, has them in his large portfolio and that he will produce them. Presumably, the cost of revaluation for an individual authority or a group of adjoining authorities would be proportionate to the expenditure for a national revaluation. However, I suspect that the Minister will find reasons why a local revaluation would be proportionately much more expensive, if he does not accept that the amendment is a genuinely positive move that, in a funny way, supports the Bill that he brought forward in the first place.

Some 80,000 homes will be built in Hertfordshire, mostly up in Stevenage, which is above my constituency. If my hon. Friend's amendment were accepted, would it be possible for my district to opt out of the grouping for a revaluation, or would it be linked with the revaluation because of the vast number of new homes in Stevenage?

I am worried that as many hon. Members are citing areas in which they want revaluation, they seem to be supporting the view of the hon. Member for Southampton, Test that we might need to have a national one. Fortunately, there are a few hundred Members to go.

I have had ample assistance in explaining why it is necessary to make this small amendment to the Bill. I suspect, however, that the Minister will not accept it, although it would give us the opportunity, in a funny way, to support both the Bill and the reasoned amendment moved by my hon. Friend Mr. Pickles on Second Reading. I say that with a touch of concern because when my hon. Friend Mr. Syms made his winding-up speech on behalf of the Opposition on Second Reading, he said that he felt that my right hon. Friend the Member for Skipton and Ripon and I were not following the party line. Perhaps I can persuade him to follow the proper line rather than necessarily the party line in this particular case. That might even tempt the Minister to accept at least the drive of the amendment.

If the Minister gives the matter careful thought, he will realise that the amendment could be useful. It would have been useful if such a provision had been included in the Bill, but I suspect that he rejected that opportunity, if it had even occurred to him, because it would have looked as if he were going for no national revaluation—at least not for a considerable time—which would have made his predecessor, the right hon. Member for Greenwich and Woolwich, who sat behind him on Second Reading, really upset, instead of just mildly upset.

On a point of order, Madam Deputy Speaker. I left the Chamber a moment ago—I apologise for such discourtesy to my hon. Friend the Member for Mole Valley and hope that I missed only a small number of sentences of his speech—to find out whether I could now get a copy of the Local Government Finance Act 1992. Staff of the Vote Office tell me that the Act will not be with them for at least an hour and a quarter, so we will have had about two hours of a debate on an amendment to a Bill that refers to a text that we cannot see. Is that your feeling of how the business of Parliament should be conducted, Madam Deputy Speaker? If it is not, may we accelerate the production of the text, or else suspend the sitting until the text is available?

The hon. Gentleman was in the Chamber when Mr. Speaker made his ruling about the urgency of getting the papers into the Vote Office. That happened little more than half an hour ago. I think that we can proceed with the debate, and I will be informed as soon as the papers are in the Vote Office.

Further to that point of order, Madam Deputy Speaker. When the Speaker made those points, it occurred to most of us that we were talking about a shorter period than two hours. Can you make sure that the Speaker himself knows that it is taking two hours for us to receive the text? The Speaker's words and their tone suggested to most of us that it would be a matter of a few minutes, or perhaps half an hour. May he please be informed of the matter?

My intention, which I hope will satisfy hon. Members, is to make further inquiries into precisely how long we might have to wait. In the meantime, we can proceed with the debate.

Further to that point of order, Madam Deputy Speaker. Perhaps you will help by allowing my hon. Friend Sir Paul Beresford sufficient flexibility to expand his remarks for about two hours, so that he could give us the benefit of his wisdom and we could postpone our contributions until we had the appropriate documents in our hands.

Perhaps I will not be minded to do that.

On a point of order, Madam Deputy Speaker. I wish to put on the record the fact that the situation is more serious than you may realise. I went to the Vote Office today to ask for a copy of the Act and was told that it was not available, but I also went to the Vote Office yesterday and said that I wanted a copy of the Act before this debate commenced; I was assured that it would be available. A request for a copy of the legislation has been in force for more than 24 hours, yet we still do not have a copy of it.

I have already said that I shall make further inquires into how soon the necessary papers will be in the Vote Office.

rose—

I do not intend to take any further points of order on that issue.

On a separate point of order, Madam Deputy Speaker. Leaving aside entirely the shambles of not having the Act today, is there not an important issue to be dealt with if this is not to set a precedent for the future conduct of Parliament's business? Will you make a ruling that in future the Government must make sure that all the relevant documentation is available to Parliament at least 24 hours before the debate begins, not two-and-a-half hours afterwards?

That is a matter for the Government. Members of the Government are present and will have heard the hon. Gentleman's remarks.

For a moment, I feared that the carefully thought out suggestion offered by my right hon. Friend Mr. Forth—that I speak for another two hours—would become a request from the Chair. One of the difficulties caused by my national background is that, like my previous countrymen, I tend to make speeches that are short and sweet.

I am relieved and pleased to see so many of my hon. Friends here to support my amendment—at least I hope that that is why they are here. I commend the amendment to the House.

This is an interesting debate on an important amendment. The basic architecture of the Bill would put off revaluation. There is little difference between the Opposition and the Government on that. We think that postponement is a good thing because there is widespread concern about the revaluation originally set down in the Local Government Act 2003—Dr. Whitehead was wrong about that. The Government have had a genuine change of heart on proceeding with revaluation and referred the matter to the Lyons review.

I apologise for interrupting my hon. Friend, but he referred to the Local Government Act 2003, which is mentioned in clause 1(7) of the Bill. Is a copy of the 2003 Act available in the House this afternoon?

I am sure that the authorities have heard my hon. Friend's question. No doubt he read that legislation when it was discussed in 2003, as he was a Member at that time.

As my hon. Friend says, the Government's U-turn on revaluation in response to the arguments that we have advanced for the past year or so is welcome, but must not they still account for the money spent—misspent, rather—on the preparations—

Order. Perhaps Mr. Syms will speak to the amendment.

Thank you for your protection, Madam Deputy Speaker.

Amendment No. 3 is simple, but there is a debate to be had on whether the revaluation should be national—for the whole of England—or whether it can be done bit by bit. The amendment states that

"an order . . . may be made in relation to an individual billing authority, a group of adjoining billing authorities or all billing authorities."

That seems to leave open several policy options. The Secretary of State may lay before both Houses an order for a national revaluation. Subject to the outcome of the Lyons review, I suspect that the Government will do that at some point.

The second option under the amendment moved by my hon. Friend Sir Paul Beresford, who is an acknowledged expert on local government, is to do something less than a national revaluation. Within the terms of the amendment, there are several options available in that respect. A regional revaluation would be possible—as we discussed in the Committee, house prices change nationally, regionally and sub-regionally—so that revaluation took place bit by bit. In effect, we have already had a regional revaluation in Wales. Some of the concerns expressed by my hon. Friends arise from the consequences of that revaluation. Revaluation county by county would also be possible: in a large county such as Hampshire, one could get the agreement of all the billing authorities—the districts and boroughs—and produce a revaluation on that basis. It would also be possible on the micro-level, with revaluation only within a district or borough area.

Implicit in the amendment are major policy decisions on how to proceed, because council tax is one part of a jigsaw comprising council tax, unified business rate and the Government grant structure. Historically, both Conservative and Labour Governments have set a grant structure once they know what local billing authorities are collecting through council tax and the unified business rate, and various forms of redistribution go on. Members are often unhappy with the grant their area gets from central Government—it is a common theme. I have never heard an hon. Member say, "My local authority has more than sufficient grant," and it has been argued that the way in which grant is distributed ought to be revisited. A national revaluation, as the Government propose, leaves open the possibility of moving resources between regions and councils, which makes it the logical thing to do from a national policy perspective. My concern about the amendment is that revaluing bit by bit will prevent us from seeing the national picture and making judgments on needs and on particular areas.

Will my hon. Friend give way?

Yes, of course.

Order. Perhaps the hon. Gentlemen will not mind my intervening to inform the House that the necessary document is now in the Vote Office. It has taken only slightly longer than the half hour that Members expected. There is a slight error, which is being corrected, but the document is now in the Vote Office.

Thank you, Madam Deputy Speaker. I give way to my hon. Friend.

I am beginning to wonder whether I should do as was suggested earlier and give my speech all over again, because that might enable my hon. Friend to follow my argument. As I understand it, the system of valuation, revaluation and council tax banding gives two results. First, there is a distribution ladder within the banding system for redistribution of council tax itself. Secondly, the system is used to assess the ability to pay. I made it clear on Second Reading and very briefly today, in case I got stopped, that that would have to change and that it could be changed into a much fairer system that used Treasury figures on earnings and income tax paid within the billing authority areas.

I am glad that my hon. Friend has explained that—even though he is straying somewhat from party policy—because it is useful to the debate on amendment No. 3.

A national revaluation enables the setting of national policy objectives on the redistribution of money. That becomes much more difficult if revaluation is conducted on a regional, sub-regional or local authority basis. My fear as one whose county is not treated well by the grant system is that local revaluation might freeze an unjust distribution of the revenue support grant, which is one of the main political elements of that system.

The hon. Gentleman is right. In my previous intervention I should have referred to section 77 of the Local Government Act 2003, which derived in part from the 1992 Act. The 2003 Act is the one that requires regular revaluations to take place, which was the position of his party at the end of Second Reading. Is he saying this afternoon that because he does not feel particularly warmly disposed towards the amendment tabled by Sir Paul Beresford, he is in favour of regular revaluations, as laid down by the Local Government Act 2003, or he is not in favour of regular revaluations, as stated in the amendment moved by his party on Second Reading, or would he be prepared to cling to the lifeboat offered by the hon. Member for Mole Valley, which proposes some form of revaluation, but not necessarily that set out in the 2003 Act?

I do not want to stray too far, not because I do not want to answer the hon. Gentleman, but because I want to discuss amendment No. 3. On Second Reading of the Local Government Act 2003 the Opposition moved a reasoned amendment. I sat on the Committee which considered that Bill, as did the hon. Gentleman, I think. We had concerns about various aspects of that Bill—we agreed with some parts but not with others. At present we do not see the need for a revaluation. That is why we broadly support what the Government are doing.

My hon. Friend is very patient. I would hate to shorten his speech, but one of the difficulties with his argument is that he does not recognise a lifeline when one is thrown to him and he is starting to blow bubbles from underwater. He ought to recognise my earlier point that the ability to pay is the second way in which the valuation and the spread of valuation is taken into account for the national distribution, under the Government's present formula. That would have to change, and it could easily be changed and improved, as I have already suggested three times this afternoon.

I thank my hon. Friend for putting that again on the record. The Lyons review is examining a range of issues, including banding and alternative ways of raising money via local government. The council tax as we know it may, therefore, not remain in its existing form in the future, particularly when we come to whatever date it may be for a future revaluation. The revaluation that we are putting off today was to have taken place in 2007. If we have a revaluation in 2010 or 2011, it may be with wholly different bands, they may be progressive, and there may be changes and amendments to the system. My hon. Friend would like further reform of the manner in which we raise money, and I understand that.

I draw the attention of the House to the fact that I am a chartered surveyor, a fellow of the Royal Institution of Chartered Surveyors and involved in practice in this matter. We now have a copy of the relevant Act that we are seeking to amend—the Local Government Finance Act 1992, and section 22B of that Act, as amended by section 77 of the Local Government Act 2003. There has been some comment in the House about that, so for the edification of the House I quote subsection (6) of section 22B, which states:

"Before a list"— that is, a valuation list—

"is compiled under this section, the listing officer must take such steps as are reasonably practicable in the time available to ensure that it is accurately compiled on the date on which it is to be compiled."

There have been some comments in the press that entry into people's houses, photographs and other such intrusive measures could be contemplated in that exercise—

Order. I understood this to be an intervention.

Yes, indeed.

Interventions, as the hon. Gentleman knows, are to be brief. I hope he has now concluded. I call Mr. Syms.

My hon. Friend Mr. Clifton-Brown is speaking about the widespread public concern about Government inspectors and I do not intend to comment on that subject, as I wish to speak about amendment No. 3.

The purpose of my long intervention was to say that such measures would increase the cost of such valuations. Does my hon. Friend agree?

Order.

There is no doubt that the cost of a national revaluation is a little under £200 million—£170 million or £180 million. I think the Government would acknowledge that. When my hon. Friend the Member for Mole Valley moved amendment No. 3, he said that one of the advantages would be that a revaluation could be done in smaller chunks by moving slowly throughout the country, doing particular regions, and there might be benefits in that. I accept that that might be true.

I thank my hon. Friend for taking another risk by giving way. In fact, that is not what I said. Although what he suggested is conceivable, there is an opportunity to delay or even stop national revaluations by carrying out revaluations only in those areas or billing authorities where it became a necessity because of the spread across the banding system.

That is an interesting argument. Given the various options that amendment No. 3 allows, how would that be actioned? Would it be by public consultation? Would the Member of Parliament need to have an Adjournment debate? Would the billing authority, having decided that things were seriously out of kilter in its area, have to petition Parliament to be a special case for revaluation purposes? I cannot see that happening, but I can see that the moment one moves from a national revaluation on a particular date to a local revaluation, that raises a number of questions such as in what order, when, which authorities are included, why a particular authority is included, the appeal structure, what happens when one area undergoes a rebanding process but an adjacent area does not. Would there be complaints from residents in that area?

Does my hon. Friend not find at least slightly attractive the idea of a small expert hit squad of valuers moving seamlessly round the country valuing each district or region, instead of some massive bureaucracy attempting to value everything at once? With the nip and tuck approach, that little squad could apply the same principles around the country.

That is a point. The Government acknowledged in Committee that putting off the revaluation meant that 1,250 people who worked for the Valuation Office Agency would have to be made redundant. Many of them are on short-term contracts. An issue raised on Second Reading was how—

Order. We are not on Second Reading, and we will not have a repeat debate on Second Reading. We are dealing with the amendment.

Thank you for your guidance, Madam Deputy Speaker. I was led astray.

Perhaps I can help my hon. Friend get back to the amendment. Does he accept that although this may not be the right amendment, the Government need to embrace the concept that we need a mechanism for going to specific areas where there is such great change that any alternative would be very much worse? Will he ask the Government to do precisely that—to take that element out of the amendment, so that it can be done?

My right hon. Friend makes a very good point. The difficulty is that if the current structure of council tax were settled, we could move away from a national revaluation, as the amendment suggests, and carry out regional or sub-regional revaluations, as we would still get similar bands A to H in each area. Under the Lyons review, the Government are considering alternatives, and—this is relevant to the amendment—they have the powers to vary the number of bands or make them more progressive, less progressive or whatever the Government want to do. If there was a partial revaluation in one area of the country on bands A to H, but at a later date the policy changed so there was different banding in a different area, that would cause immense debate in the House. Until we settle the form of local government finance and the manner in which it is introduced, we cannot move from the concept of a national revaluation to the concept of a local revaluation. The Government are right that the Lyons review needs to examine all the options and report on them.

If amendment No. 3 were drafted more cleverly, the Government might want to consider it. In that case, the Secretary of State would have to return to the House and lay orders for a national revaluation. Perhaps the Lyons review should examine the matter. When the Minister replies to this important, short and specific debate, perhaps he will say that the Lyons review should consider amendment No. 3 very carefully. There are major changes in relative values and house prices, and they may occur in particular areas rather than nationally.

We must consider a range of issues, and I understand the strength of feeling among my hon. Friends on the Back Benches. I have not made up my mind how I would vote on this one: my general instinct is to say, "No", but there are good reasons why the Government should throw the matter to the Lyons committee for further consideration. I shall listen to the rest of the debate, take into account hon. Members' points and advise my hon. Friend the Member for Mole Valley which way we would go, if he were to feel so strongly about the issue that he presses the amendment to obtain the opinion of the House.

There are two reasons why I shall be very brief. First, I am a late substitute for my hon. Friend Sarah Teather, who is sadly unwell. I hope that all hon. Members will join me in wishing her a speedy recovery. Secondly, I understand that there is some annoyance on this side of the House that we are taking this business rather than another debate today, which is a point that hon. Members raised at business questions. However, it strikes me that the protest would be more effective if we were to dispatch the business of the House without unnatural prolongation to demonstrate to the Government, as I said last Thursday, that we could have had both debates on the same day. I shall reiterate my party's position. We support the Bill and want to see revaluation stopped, for the simple reason that under the system of local government taxation that we would adopt—local income tax—no valuations or revaluations would be necessary in the first place.

On amendment No. 3, Sir Paul Beresford has made a serious point. I agree with Mr. Syms that if we support the general idea of council tax, amendment No. 3 is an interesting idea that should be explored, and I hope that the Lyons committee will explore it. There is, however, a serious objection, which Conservative Members raised almost as soon as the hon. Member for Mole Valley rose to speak. As the amendment stands, the Secretary of State's power to order separate local or regional revaluations could be used in a politically biased way.

The hon. Member for Mole Valley has repeatedly raised another serious problem in the debates about the Bill—the connection between the council tax banding system and the grant that the Government hand out to particular local authorities. It would not be beyond the wit of the Government to use that connection to produce a politically interesting result, which has not been unknown in the past. In reply to that point, the hon. Member for Mole Valley said that he would institute a different system of calculating the grant. I was interested to hear him say that he would use a system based on income levels in various districts, which is the precise basis for equalisation under local income tax, and I urge him to go much further along that line of thinking.

The hon. Gentleman is being provocative, and I refer him to what I said on Second Reading. There is a distinct difference between my position and local income tax—the proposition advanced by the Liberal party is mindlessly complicated and includes all the problems of the poll tax, and more.

Order. I remind the hon. Gentleman that we are not discussing any other kind of tax; we are discussing amendment No. 3.

I was about to make the same point, Madam Deputy Speaker. I would be glad to debate the merits of local income tax on a different occasion, but we are discussing a particular amendment to a particular Bill, which is very narrow in its scope.

If we were to adopt the system proposed by the hon. Member for Mole Valley, because income is distributed more evenly than property values the equalisation system would be easier to manage and less difficult to make work. Nevertheless, the central objection to amendment No. 3 is that the system, which is a good idea, would not appear in the Bill. If amendment No. 3 were passed, it would make the Bill worse rather than better. I urge him not to press his amendment to a vote and, perhaps, to discuss the matter with his noble Friends in another place to allow the introduction of a different version of the amendment that deals with the problems raised in the course of the debate.

I congratulate my hon. Friend Sir Paul Beresford on tabling the amendment. I also declare an interest: as many hon. Members know, I am a county councillor. [Hon. Members: "Hear, hear."] Thank you very much. I am also the finance spokesman for Northamptonshire county council, which is currently battling a very difficult budget.

Let us get this out of the way, straight away—I believe that if we have a property tax, we must have a revaluation. I said that during the election and hope that I have not offended my hon. Friends on the Front Bench. That is my view and I have retained it. Amendment No. 3 is a way of ensuring revaluation, where local authorities think it necessary. Giving local authorities greater autonomy in that respect is a laudable objective.

If what my hon. Friend has just said were in the amendment, I could agree with him. On reflection, does he agree that as the amendment is drafted, the power to order a partial revaluation rests not with local authorities, but with the Secretary of State, who may seek to use it to punish a particular area for voting for another political party?

My right hon. Friend has made a valid comment, but I argue that amendment No. 3 would at least allow local authorities to appeal to the Secretary of State for a local revaluation, which would be a step forward from the current position. As for the Government's ability to distort the measure, that power ranges over a very wide area, if they were to choose to use it. It is up to this House to scrutinise their activity and make sure that the use of such powers does not stray too far from what most hon. Members consider to be decent and fair.

I thank my hon. Friend for supporting the amendment. In response to my right hon. Friend Mr. Knight, who is more paranoid and concerned than me and who is to my right in more ways than just geography, it is possible for the Government to change the funding system undercover and lay the blame on local government. However, it would be too open for the Government to distort the system in the way that he fears.

I understand that point and accept the dangers. However, I see the matter from a local government perspective, and I am sure that my hon. Friend does, too. On balance, it is in the interests of local authorities to take such action.

Turning to my other points, first, as I have said in this House and Westminster Hall, there is considerable uncertainty in local government that ranges from the revaluation being put off to the Lyons report. I therefore believe that we should give local authorities the opportunity to exercise at least some power, and I repeat the point that there is power in the ability to appeal to the Secretary of State. Unless we give local authorities some power in that respect, we will diminish them to the point where they become almost worthless. I want to increase, not decrease, their powers, and the amendment would achieve that.

Secondly, the degree of unfairness increases with every year that goes by when a revaluation does not take place. That must be so, because the need for revaluation is based on creating a fairness taking into account local changes. The amendment would enable local authorities to recognise those changes instead of being forced by a Government into a situation whereby unfairness increases. That would increase the value of local authorities in this respect.

Thirdly, there is no doubt that, by the very nature of the Government's decision on revaluation, local authorities will be increasingly under pressure with regard to appeals. My own local authority fears that as unfairness increases, so will appeals and complaints. Council tax payers put the whole issue of local taxation under considerable scrutiny as it becomes increasingly unfair. The amendment would give an outlet to local authorities in at least being seen to do something on behalf of their council tax payers.

My hon. Friend makes an important point about unfairness. Does he agree that unless there are regular revaluations the differential between new and old houses, with new houses being valued as soon as they are built and old houses not being valued until revaluation takes place, will become ever wider, creating great unfairness between different constituents within the same billing area?

That is exactly the point that I was trying to make, and I am grateful to my hon. Friend for supporting me. He is absolutely right.

The sustainable communities programme will lead to massive changes in certain areas, dramatically increasing the need for revaluation. The Government say that they are fully committed to that growth agenda. In the light of that, the ability of authorities to appeal to the Secretary of State for local revaluation has considerable relevance.

I am becoming increasingly worried about my hon. Friend's touching faith in the integrity of a mechanism of appeal to the Secretary of State. He may have more faith in Secretaries of State than I have had hitherto, but can he tell me, hand on heart, that he really believes that any Secretary of State would deal even-handedly and fairly with the appeals to which my hon. Friend attaches such touching faith?

rose—

Order. May I remind the hon. Gentleman to make his remarks relevant to the amendment, not just revaluation?

I understand and take your guidance, Madam Deputy Speaker. My point was that the amendment would enable local authorities in a growth situation to ask for their own revaluation, which would alleviate pressure on them. That has a relevant connection to the debate.

In response to my right hon. Friend Mr. Forth, no, I do not have that faith—

Order. I think that the hon. Gentleman's right hon. Friend might be leading him somewhat astray.

That certainly would not be for the first time, Madam Deputy Speaker, and I am grateful to you for pointing it out. Under your guidance, I shall ignore my right hon. Friend and continue with the points that I wish to make.

I want to refer to the comments of my right hon. Friend Mr. Gummer, who is no longer in his place. He suggested that the Secretary of State might have too much power and asked whether he would be fair or could act politically. I simply repeat that this House is the scrutiny body in this respect, and I hope that it would act in that way. However, I understand my right hon. Friend's point.

Does my hon. Friend, with his huge experience of local government matters, agree that a Secretary of State does not actually have to use a power that he is given, but the mere threat of his having it could force some local authorities to carry out a revaluation?

As I understand it, local authorities could carry out a revaluation only if the Secretary of State agreed to it. I have faith in the goodness of humankind. I see good when I look at the Government Benches, and I hope that that will be repaid to me by the Minister when he winds up.

To sum up very quickly—

There is no need to do that.

Well, I wish to do so. Again, I refuse to take the advice of my right hon. Friend.

The amendment would be good for local government administration and for the perception of local government. It would place in its hands at least the opportunity to request revaluation where it thinks it fit and proper and I hope that the Secretary of State would respond in good part to such a request. The amendment would give local authorities greater autonomy and a greater field of action in this respect, and as a champion of local authorities I would be in favour of that.

Local government has always been a political football, but this particular issue has added to the intensity of the game. That is sad. The amendment would help to relieve that situation by giving local authorities a safety valve where growth, whether forced on them or otherwise, is such that there is a real need for action that is not a national need. I thank my hon. Friend the Member for Mole Valley for presenting it to the House.

I rise to make a few points about the amendment. It is a pleasure to follow my hon. Friend Mr. Binley, who is in effect the chancellor of Northamptonshire in this context. I wish him good luck with the challenges that he faces.

On Report, we can debate only the amendments that are before the House. I have some reservations about the way in which amendment No. 3 is worded and shall try to explain the reason for my concern. I have some sympathy with what my hon. Friend Sir Paul Beresford is trying to achieve, but I think, in all sincerity, that he may have tripped himself up slightly. Let me refer to new clause 1(2) to illustrate my point. That would give the Secretary of State a top-down power to permit a localised revaluation, which is the spirit of what my hon. Friend is trying to achieve in the amendment, but would also allow for a bottom-up request to the Secretary of State to exercise that power. I am worried that the way in which amendment No. 3 is drafted could allow the Secretary of State to decide, for some arbitrary reason—

Order. Perhaps the hon. Gentleman could address the Chair.

I am sorry, Madam Deputy Speaker. I was looking at my hon. Friend the Member for Mole Valley to try to emphasise my point.

The Secretary of State could, for some arbitrary reason, decide to impose a revaluation on a local authority or group of local authorities that are adjoining rather than comparable—as my right hon. Friend Mr. Knight pointed out—and there might be some suspicion that that was being done for an open, or perhaps less open, political reason. If there were two separate amendments—the first to make the same provision as amendment No. 3 and the second to provide that the power could be exercised only in response to a request from the bottom, so that it could be effected only when a group of local authorities had got together to make that request—I would have more sympathy with the aim of my hon. Friend the Member for Mole Valley. In those circumstances, the Secretary of State could grant a revaluation only when there was clear evidence that the local authority or authorities had made the request.

Does my hon. Friend have any concerns about pressures, for example, to provide land for development more quickly—perhaps every five years when we are considering a 10-year revaluation—which could mean even greater pressures on revaluation? If land and buildings are provided more quickly, the revaluations can be done more quickly. Clause 1 would allow for that.

My hon. Friend makes a good point, which I intended to raise because it is the second reason for my concern about the amendment.

I have reservations about the amendment's drafting because the power is too broad. I would be more inclined to support it if it were drawn so that revaluation could take place only when a request had been made from the bottom up—from the relevant authority or authorities. I hope that I have made my first worry clear.

My second concern relates to growth, which several hon. Members mentioned, including my right hon. Friend the Member for East Yorkshire and my hon. Friends the Members for Northampton, South and for St. Albans (Anne Main). I am a Thames Gateway Member of Parliament, but the point does not apply only to that area. Some of my hon. Friends have argued that an area of especially high growth might give the local authority an incentive to revalue. I understand the logic of that but it is no secret that, in some of the proposed high growth areas, there is much local resistance to the amount of house building that the Government want. That is true of parts of the Thames Gateway and I believe it to be true of the other growth areas that have been mentioned.

If we allowed local authorities to revalue specifically in those areas on the basis of growth, residents and council tax payers might feel that they were being doubly punished. Not only would they be asked to accept all the additional housing—to which many constituents and I are resistant—and the attendant pressures on infrastructure, which I do not need to repeat in case I stray out of order; all hon. Members are familiar with the arguments, but they would also get a revaluation thrown in. That is not likely to be popular with residents and council tax payers even if the local authority wanted a revaluation for understandable financial reasons. However, people just over the border of the development area would not have to accept so many houses, suffer the infrastructure pressures or get the revaluation thrown in.

My hon. Friend must take account of the point that, if the local authority does not increase its total tax take, the distribution in the area will be evened up only if the Government recognise that the way in which they assess ability to pay—based on valuation band spread—must be corrected and moved not towards local government, as the Liberal party suggests, but a Treasury assessment. The Treasury already conducts such assessments.

I understand my hon. Friend's point. I, too, served in local government, albeit not at the same senior level. My hon. Friend successfully led Wandsworth council in London. However, although I understand his technical point, I was making a more avowedly political point. We all know that the growth is controversial and a potential consequence is that people would get a revaluation thrown in on top. Those people are suffering enough.

rose—

rose—

I shall give way to my right hon. Friend first.

Will my hon. Friend consider the other side of the argument? If the people who live near the new development feel that they are unfairly taxed because of the change, would not revaluation on a local basis have the opposite effect to that which he adduces? The revaluation would make them happier because it would be fairer not only to the new people but to them.

I understand my right hon. Friend's point, but if one considers, for example, the experience in Wales, revaluation has been relatively unpopular. If one could guarantee that the bulk of the people in a growth area would be pleased to be revalued, his argument would carry more weight. However, I believe that they would be happy to be revalued in isolation when people who lived nearby did not have to accept the additional houses and the attendant pressures or revaluation. I hope that I can deal with that matter in more detail if I am lucky enough to catch your eye on Third Reading, Madam Deputy Speaker. I understand the constraints on the current debate.

The overall problem is with the inequitable nature of the funding formula whereby so much local government money derives from the Treasury. I shall not go further but changing the formula and making it more equitable, not accepting the amendment, is the way to deal with that.

Does my hon. Friend the Member for Northampton, South want to intervene now?

No, my hon. Friend has now covered the point that I wanted to make and I thank him.

In that case, I shall conclude my remarks.

My hon. Friend is an expert on the matters that we are considering. He served on the Committee that considered the Local Government Act 2003. He knows that, when tax is raised by revaluation, the system already provides for redistribution to transfer money from higher-based to lower-based authorities. Would not accepting the amendment create a genuine incentive for that to happen?

My hon. Friend and I both served on that Committee and I greatly enjoyed the debates. I genuinely understand the aim of my hon. Friend the Member for Mole Valley in amendment No. 3, but the way to tackle the problem is by dealing with the inequity of the funding formula in the round. That is the nub of the problem. I hope that we shall take that on instead of accepting the amendment, which simply tweaks a much larger problem.

I understand what the amendment tries to achieve. If two separate amendments along the lines of the subsections in new clause 1 had been tabled, I might have been tempted to vote for one but not the other. Unfortunately, I am worried about supporting the amendment as drafted because the power is too broad and the Secretary of State could abuse it in certain circumstances.

I support amendment No. 3, which was tabled by my former colleague on Wandsworth council, my hon. Friend Sir Paul Beresford. It is an ingenious amendment, which introduces flexibility and could go a long way towards dealing with the problem of perceived and actual unfairness in specific local authority areas.

I should like to show what the amendment could do in the case of the two billing authorities in my constituency, Christchurch and East Dorset. Those local authorities have experienced much higher than average increases in council tax per dwelling since 1993. A much higher than average percentage of people who are 65 and over live there. There is therefore probably a strong case for considering revaluation to get a fairer distribution of the burden within those local authority areas without affecting the overall grant distribution mechanism.

Before my hon. Friend becomes too enthusiastic, does he agree that the original wording in the Bill makes it clear that the Secretary of State will take the action? Sadly, all the amendment would do is allow the Secretary of State to use his discretion in determining whether action should be taken locally or regionally. Why does my hon. Friend, even in the early stages of his remarks, appear to imply that we should be hopeful that the anomalies, which he is about to describe in some detail, could be corrected by the Secretary of State, of all people?

I think that the anomalies could be corrected by a Secretary of State of a Conservative hue. That is why I think that there is some merit in the amendment. I accept the reservation articulated by my right hon. Friend and others who think that such a power given to the current Secretary of State would indeed be abused. There is some evidence that the Secretary of State's capping powers have been abused and used to bear down unfairly on small Conservative-run local authorities.

To drive the point home again, the reservations of some of us, to draw another parallel, are based on some of the planning decisions made by the First Secretary of Sate. I know that we are not debating planning this afternoon, Madam Deputy Speaker, but on a number of occasions local inquiries have found one way and the First Secretary of State has overruled the decision of the local inspector. Real practical examples therefore exist of the Secretary of State going beyond the merits of his powers. Those are additional reasons for our concerns.

My hon. Friend makes an excellent point. Of course, the First Secretary of State talks a lot about localism, but in reality he is in favour of centralisation. The amendment tabled by my hon. Friend the Member for Mole Valley would introduce a degree of localism into the process, and it would be useful for that reason.

I am not sure whether Members realise the extent to which average council tax per dwelling has increased since 1993–94. The Halifax has done some useful work on the subject, and the average council tax per dwelling in 1993–94 was £456, whereas this year it is £1,009. That is an increase of £553, or 121 per cent., when average net income has gone up by 82 per cent. That is an increase of about 50 per cent. more than the increase in average net incomes.

Does the hon. Gentleman accept that the Halifax survey, by its own admission, did not take into account the effect of council tax benefit and age-related payments?

Certainly. That does not undermine my argument, however, that the overall average council tax bill has increased by 121 per cent. since 1993–94, when the national average net income has increased by 82 per cent.

Does my hon. Friend agree that we knew that that would happen because it became clear from the Red Book that the Government intended to move a greater weight of local authorities' costs to the council tax, and then to blame the local council for the increase in tax?

Order. We are not discussing the clarity of local government finance.

My right hon. Friend is right.

Beyond the Government's overall policy to increase the national burden of council tax faster than the rate at which national incomes have increased, the situation is much worse in some local authority areas and the amendment might address that. For example, in my constituency, under the Christchurch borough council billing authority, in 1993–94, the average council tax per dwelling was below the national average at £441 per dwelling. This year, however, it is £1,193 per dwelling—an increase in the average bill of 171 per cent., which is 50 per cent. more than the England average. To take up the Minister's point that that does not take account of council tax benefit, the amount of council tax benefit in Christchurch is very small, with only 16.2 per cent. of households receiving it. We know, however, that more than 30 per cent. of the population are aged 65 and over. It is a privilege to be one of the younger people living in Christchurch. I am conscious of the burden faced by pensioners and those on fixed incomes.

The situation is similar under East Dorset district council billing authority, which covers another part of my constituency. There, in 1993–94, the average council tax per dwelling was £516, significantly above the then national average, but it has continued to increase, going up by 163 per cent. since then, and is now no less than £1,356 per dwelling. That is about £350 more per dwelling than the national average. It is not surprising, therefore, that my constituents come to see me frequently to complain about the actual and perceived unfairness of the council.

What would my hon. Friend's constituents say if amendment No. 3 were incorporated into the Bill and became law, and the Secretary of State made an order that one of my hon. Friend's billing authorities should revalue, but not the other?

My constituents would be angry with the Government for using such perverse reasoning. My right hon. Friend identifies what I see as a weakness in the amendment, but it is not such a weakness that we should not support it today. The amendment demonstrates some lateral thinking about how to try to introduce greater fairness into the system, rather than leaving things drifting under this Government. The prospects are that council tax will continue to increase way beyond the rate of inflation, and will increase by a higher rate in small district council areas such as Christchurch and East Dorset than in the metropolitan, urban areas that used to be regarded as Labour heartlands.

There is a problem, and I am not saying that the amendment is the perfect solution to it, but it contains the prospect of introducing some increased fairness. A revaluation in Christchurch or East Dorset would show which houses had increased in value by more than the average for the area, and which had increased by a lower proportion. The bills that were issued could then be adjusted to reflect that new equity. That should be a zero sum game within each local authority area, because otherwise we would end up having to pay much higher bills because of the redistributive effects of the national grant system. Provided that it was a zero sum game, such a measure might have a role to play within an individual local authority area. The Secretary of State might decide which local authorities to include, but he might also want to start off by saying that the pensioners are really the ones complaining most about the unfair burden of council tax, and that, therefore, in all local authority billing areas where the proportion of the population aged 65 and over is higher than, say, 25 per cent., there should be revaluation to see whether the burden on pensioner households could be reduced.

At the moment, the council tax is essentially a stealth wealth tax, and the value of properties is being used as a proxy for ability to pay. We know jolly well that the ability to pay of many pensioner households is very small.

I accept that what the hon. Gentleman says is true in part, but one problem with his argument is that about a quarter of households that pay council tax—those in council housing, housing association housing or private rented accommodation—do not own the property on which the tax is calculated. To that extent, therefore, it is not a wealth tax.

Order. I think we are straying a little wide of the amendment.

I accept that council tax is not wholly a wealth tax, but it is being used as one by the Government, which is one reason why we were so strongly against—

Order. I hope that the hon. Gentleman will relate his remarks to the amendment.

I shall certainly go back to the argument that I was deploying, Madam Deputy Speaker.

Another criterion that the Government could use when deciding in which billing authorities a revaluation should be held could be the percentage of households receiving council tax benefit. When I was a Minister in the then Department of the Environment, one of the Treasury's biggest concerns was the increased bills that resulted from high rates. The Government could decide to hold a revaluation in areas where the percentage of take-up of council tax benefit was relatively low. In Christchurch and in East Dorset, council tax benefit is available to far fewer households than it is nationally, and in East Devon the figure is only 13.7 per cent.

As my hon. Friend has so far mentioned only pensioners and people in receipt of council tax benefit, is he suggesting that, as part of the revaluation process, we should look more at the occupants of the property than the property itself?

I am illustrating a possible criterion upon which the Government might choose to exercise their discretion under the amendment. Does not my hon. Friend agree that the burden on pensioners is particularly great? Indeed, the Halifax paper pointed out that the burden of council tax had risen most among the pensioner population.

There may be many elderly pensioners suffering in that way in my hon. Friend's constituency, as there are in mine, but they often occupy larger homes than they need and cannot afford to downsize, so they could be disproportionately disadvantaged in a revaluation.

That remains to be seen. As I said, it would be a zero-sum game. In my constituency, more modern bungalows, where people moved in more recently, or bungalows that have been modernised and extended would probably rise in value relative to properties occupied by more senior pensioners—people in their 80s and 90s, of whom we have a large number in Christchurch.

May I slightly disagree with my hon. Friend? The whole point of the driver that I am proposing is that there would be revaluation where a change in the value of properties in a billing area needed to be reflected. He is drifting on to a point that I covered on Second Reading: rather than using valuation, there is a fairer way to redistribute council grant. That would cover what he seeks.

I shall not refer to Second Reading, Madam Deputy Speaker, as it is a verboten subject, but I am sorry that my hon. Friend thinks that my support for his amendment is misplaced. It gives one the opportunity to point out just how unjust the present system is and how unfairly it impinges on particular billing areas and councils and particular groups of people in those areas.

The other part of my hon. Friend's amendment has great virtue, as it would enable the revaluation process to be carried out incrementally—if it has to be carried out at all. Having studied the Valuation Office Agency report, I was horrified, as it shows that an enormous number of staff were taken on for the national revaluation and, despite the fact that the Government have said that there will be no national revaluation during the lifetime of this Parliament, a large number of those extra staff are still in post, because the VOA has a no-redundancy policy.

The Minister is grimacing, but I can illustrate what I said by reference to figures from the VOA annual report and accounts for 2004–05. On page 29, the VOA crows about the fact that it has taken 1,200 extra staff to deal with the national revaluation, yet the Minister told the Standing Committee, that as a result of the Government's decision not to go ahead with the revaluation, there had been a number of redundancies. However, the number fell far short of the 1,200 extra staff taken on during the last financial year. He said:

"The immediate impact is that some 420 staff working on casual and fixed-term contracts will leave the agency by this Friday."

I think that was the Friday before last. He continued:

"The agency is also running an early departure scheme for permanent employees"—[Official Report, Standing Committee A, 15 November 2005; c. 24.]—

Order. Will the hon. Gentleman help me by indicating how that relates to amendment No. 3?

It would be the consequence of having a national revaluation in one big chunk. Amendment No. 3 would give the Government scope to carry out revaluation in bite-size chunks, which would mean that the VOA did not need to employ so many staff, as those working on a valuation in one year could move on to another one in the next year. That is what happened in Wales. Some of the VOA staff employed for the revaluation in Wales were redeployed to deal with the start of revaluation in England.

I am illustrating the consequence of the peaks and troughs in demand for VOA staff necessitated by a national revaluation. Those peaks and troughs could be ironed out if revaluation was in bite-size chunks. I am trying to illustrate the benefits of the amendment by drawing attention to the costs, which are on the public record—how much the Government have wasted by moving from what was to be a national revaluation to no valuation at all. They took on extra staff and are keeping many of them on, doing I know not what.

My hon. Friend pre-empts something of what I thought I might explore myself. I have a similar reference, which I may cite should I catch your eye, Madam Deputy Speaker. Has he any feel for the relative costs of the national structure—buildings, staff and so on—on the one hand, which would be required by a national valuation approach, as opposed to a more transient, small, mobile force that could move around the country, on a local or regional basis, as he described? We might be able to tempt the House to vote for the amendment of our hon. Friend Sir Paul Beresford if we could demonstrate that benefit.

My right hon. Friend makes a good point but unfortunately I have no figures to illustrate it. All I can do is to illustrate the costs of a national scheme with its inherent inflexibility. As I understand it, despite the fact that that role has been withdrawn from the VOA, the Minister said in Committee that 600 staff would leave the agency between 30 March and 30 June 2006. What are those 1,200 staff doing in the meantime? Why were they not made redundant immediately, given that the function that they performed was removed? The Minister may feel for the families and the employees—

Order. The hon. Gentleman's concern has been noted, but that is sufficient.

I am grateful, Madam Deputy Speaker. I am sure that you are right that the House has noted our concern about the plight of people who are seduced into jobs that they believe to be long-term only to find that that is not the case.

Order. I remind the hon. Gentleman that we have heard sufficient on that particular point. He may now continue with his remarks.

Certainly, Madam Deputy Speaker. My hon. Friend's amendment would require a much smaller cohort of staff who, as my right hon. Friend Mr. Forth said, could be sent around the country at the behest of the Government to carry out a rolling valuation. The amendment has two great virtues. It is not perfect, but it is much better than nothing, and it demonstrates the imagination that Conservatives bring to the subject, given our constituents' frustration with the fact that the Government insist on maintaining an unfair system that penalises many of them.

You will be aware, Madam Deputy Speaker, that I raised my concern at the outset about the absence of a copy of the Local Government Finance Act 1992. May I place on record my gratitude to you, the Speaker, the Clerks of the House and everyone involved in producing that document? In the past few minutes I have received a hot copy fresh off the photocopier. It is nearly 2 in thick, and consists of more than 200 pages, so I do not know how I am supposed to digest it while addressing the House. I believe that the Speaker will support my view that that must never be allowed to happen again.

I appreciate my right hon. Friend's frustration. Even though his ability to digest material his legendary, he may wish to concentrate on the provisions in the Act that are explicitly referred to in the Bill and the amendment. I have done a little work on that, and I hope to help the House with the fruits of my labour later. If my right hon. Friend concentrated on section 22 of the Act, referring to section 21 on which it rests, that would naturally lead him to the amendment and the Bill itself. My right hon. Friend need not be alarmed—

Order. Mr. Knight has had sufficient help.

I thank my right hon. Friend Mr. Forth for his advice, and I shall peruse the Act in greater detail as we proceed. However, given that I asked for a copy yesterday, it is not satisfactory to have to mug up and refresh my memory of an Act of Parliament that I helped to steer through the House as a Whip.

I pay tribute to my hon. Friend Sir Paul Beresford for initiating this debate. Whatever one's view of the sloppy drafting of his amendment, this is an important debate. There are merits in the broad principle of his amendment, because it has often been impossible for Governments to conduct national revaluations. The revaluation scheduled for 1938 was deferred for two years, but the second world war broke out, so it never took place. A revaluation was scheduled for 1952, but it was deferred until 1953, and was eventually carried out in 1956. A revaluation was scheduled for 1961 under a Conservative Government, but it was deferred until 1963. The Labour Government that followed deferred the 1968 revaluation.—[Interruption.] Indeed, that Government did not carry out a revaluation at all, and it was Edward Heath's Conservative Government who carried out a revaluation in 1973. Throughout our history, therefore, there have been occasional problems with getting national revaluations off the ground. If we cannot undertake a national revaluation we should consider whether it is worth undertaking a regional or partial revaluation.

I therefore do not oppose the principle behind my hon. Friend's amendment but, given its poor drafting, I am afraid that I cannot support him. I have explained why in my interventions. A politically motivated or malevolent Secretary of State, for example, may decide to make a blatant political order to carry out a revaluation of properties in areas that voted for another political party—perhaps the Conservatives or the Liberal Democrats—to teach the residents a lesson. My right hon. Friend the Member for Bromley and Chislehurst asked about judicial review, but I am not confident that such a review would work in those circumstances, because that Minister would be unlikely to say publicly that the basis of his decision was his wish to punish voters, even though that was the motivation behind his order.

The right hon. Gentleman is talking about a politically motivated or malevolent Secretary of State. He was the well-regarded MP for Derby, North when, for many years, the Conservative Government were politically motivated against my adjacent county of Leicestershire. Does he not agree that they were notorious for their politically motivated council funding?

You will stop me if I stray too far in responding to that question, Madam Deputy Speaker. I do not accept the hon. Gentleman's allegation. For a period, I was sponsor Minister of the city of Derby, and I did whatever I could, whenever I could, to bring more money and investment into the city.

Make no mistake that bullying takes place. Birmingham city council has removed one of the Government's precious bus lanes to reduce congestion, and the Secretary of State has threatened the council with loss of grant unless it reinstates that lane. Ministers do make threats to local authorities, so my concern is not exaggerated or far-fetched.

My hon. Friend the Member for Mole Valley described me as paranoid on this issue. I would put it this way: I am rightly concerned about corruption of power. Are we to pass a sloppily drafted amendment that gives a Secretary of State the unfettered right to make an order in any circumstances that he chooses? The amendment puts no limitations on the exercise of his power; nor does it say that he has to consider what has happened to property values or to population movement. I am deeply concerned that the provision could be used in an unfair way.

My right hon. Friend is making a serious statement and, more serious, it is now almost universally accepted that such pressure, such institutional corruption, is part and parcel of the means by which the Government operate.

I am making a serious point and I do not make it lightly. In the process of legislating, we should come to the Chamber to put our concerns on record. I have some sympathy with the principle behind the amendment, but because the House is not a debating society and because we are making legislation, I must tell my hon. Friend the Member for Mole Valley that I cannot support him if he pushes the amendment to a vote. I fear that, potentially, the amendment would give unbridled power to the Secretary of State, who might use it in a malicious way against certain local authorities.

Does my right hon. Friend agree that the other problem is that the amendment could be a means whereby the Secretary of State could cover up the fact that the real reason for the heavy cost of local government in particular areas was the manipulation of the grant, rather than the incidence of the council tax?

That is another of my concerns. Given the wording of the amendment, I am not satisfied with the phraseology that my hon. Friend has used. He says that the Secretary of State may make an

"order . . . in relation to an individual billing authority, a group of adjoining billing authorities".

I cannot grasp why my hon. Friend felt it necessary to use the words "adjoining billing authorities". If the amendment merely referred to a number of billing authorities and omitted "adjoining", I could understand that approach. As I said when I intervened on him earlier, the use of a limiting word in the amendment means that the Secretary of State may not be able to make orders for comparable billing authorities.

In my view, the drafting of the amendment is dangerously defective. For that reason, it cannot be supported.

From memory, I think that it was Lord Acton who said that power corrupts and that absolute power corrupts absolutely. Does my right hon. Friend agree that the problem with the amendment is that it does not give the Secretary of State absolute power, but gives him too much power? That is not counter-balanced by a requirement that a request for revaluation must be seen to have come from the local authority or authorities in question. Does my right hon. Friend share my concern?

My hon. Friend is right; I share his concerns. He has put his finger on the problem. If the amendment stated that an order may be made only where a billing authority has made the request, all my objections would disappear. It is as simple as that. It is a dangerous precedent if a Secretary of State can instigate a review without a local authority wanting it. That is why I cannot support the amendment.

I aim to be of assistance to the right hon. Gentleman. The amendment refers to "adjoining . . . authorities". It was pretty well known during the period of London government when the Conservative party was in power that particular favour was shown to what I believe are adjoining authorities, at one point at least, of Westminster and Wandsworth. Are we to allow for the possibility of that approach in future, with generosity and the distribution of largesse on the part of a Tory Government, should there ever be one in the first half of this new century?

In this debate I have left my political axe outside the Chamber. I would be against the amendment being put into the Bill even if we had a Conservative Government. It is our duty to build into legislation the checks and balances that prevent a Minister from any political party from abusing his position.

Perhaps I can help my right hon. Friend with the intervention of David Taylor, which was geographically and factually wrong. In the distribution of council tax, the inner London area—Wandsworth and Westminster—regularly received the lowest or second lowest grants.

I am obliged to my hon. Friend for that intervention.

Does my right hon. Friend agree that the Office of the Deputy Prime Minister has undertaken a redistribution from struggling midland counties to northern counties that are in many respects better off in terms of local government grant, exactly as has been described?

Indeed—and the drafting of amendment No. 3 would allow the Deputy Prime Minister to pursue a regional policy. He could decide to order a revaluation in a whole region.

When considering whether we should allow a piecemeal approach, we should consider the wider issues of national planning. My hon. Friend Mr. Chope made a good point in saying that staff costs could be blown out of all proportion when a national revaluation was deferred. I accept that that would not be a consideration if amendment No. 3 were passed, because the staff costs would be much lower, but I do wonder why those carrying out the task must be employees of the state. Why not involve the private sector? Why can the service not be bought for the period during which it is required? That, however, is a debate for another day.

Another defect of the amendment is that it does not provide for an appeal process. If the Secretary of State is to instigate the review and if it will not rely on a trigger from a local authority, the local authority ought at least to have a voice. It should at least be able to ask not to be made to undertake a revaluation as a billing authority, and to list its reasons for not wishing to undertake the revaluation. The Secretary of State should then be obliged to consider those reasons.

Far be it from me to be fair to Sir Paul Beresford, but I assume that he intended the order to be subject to parliamentary approval.

That is right.

My hon. Friend says, sotto voce, that that is right, but I am not reassured. That is not what I mean by an appeal process. We all know what would happen: a Secretary of State who made an order, perhaps for the wrong reasons, would simply whip members of his party to vote it through. We see that time and again. It is not an appeal process; it is what the late Lord Hailsham described as elective dictatorship, and I do not regard it as a satisfactory safeguard. If we are to accept the principle of amendment No. 3, we need a proper appeal process whereby the Secretary of State's decision can be challenged and he can be required to reveal why he has made the order. We have not yet reached amendment No. 4, but it at least requires the Secretary of State to

"give reasons for his decision".

Amendment No. 3 does not, and that is yet another area in which it is deficient.

My hon. Friend the Member for Mole Valley did the House a service by allowing us to debate this issue, but the wording of his amendment renders it a wholly unsatisfactory vehicle, and I hope that he will withdraw it. Someone asked earlier why we should not refer it to the Lyons committee, but I should prefer it to be withdrawn completely, and I should like a rethink to take place.

I too thank Mr. Speaker for ensuring that we were provided with the Local Government Finance Act 1992, on which the amendments rest. I hope that the House will never again have to debate without such information. I also hope that the cost of providing it, which must have been considerable, will be met not from the House of Commons appropriation but by the Minister, because it was incurred as a result of a change in the order of today's business. Governments should take seriously the cost of changes that are often made for not altogether wholesome reasons. I like to know that if people cause the cost, they pay the cost.

This is an important amendment and I came into the Chamber, what now seems like a long time ago, to support it—but the more I have heard the debate, the more I think that there are some key issues that need to be teased out. I hope that I can encourage the Minister to take the gravamen of the proposal seriously, even if he does not accept the format in which it is presented.

I agree with my right hon. Friend that this is an important debate—so does he share my disgust that at this moment in our proceedings, there is not one Labour Back Bencher, apart from a Parliamentary Private Secretary, in the Chamber?

I was not going to draw attention to that. It was so surprising that a matter of such importance to the future of local government had not attracted even one person with any interest in the subject from the Labour Benches, that I had almost forgotten how to say so in a polite manner. That is outrageous—unequalled, I would have thought. I cannot remember a local government debate of this nature in which the Government party has not had a single Back Bencher here. Perhaps they are all as confused as the one whom we heard from earlier—

Order. The right hon. Gentleman is a seasoned speaker in this House, and I think that he would now like to come to the amendment before us.

I quite agree, Mr. Deputy Speaker. As you will have noticed, I was meaning to go on without mentioning the absence of Government Members, but I was led astray by my right hon. Friend. May I suggest, however, that the debate has been extremely valuable, and that you have missed a great treat by not having been in the Chair for most of it? At stake is an issue of huge importance, concerning the complex way in which the local government impost relates to the central Government grant.

The difficulty that my hon. Friend Sir Paul Beresford has addressed in his amendment is the difficulty that anybody has in understanding why the council tax in his particular locality is what it is. Council tax is subject to three differing pressures, one of which my hon. Friend has tried to address. The first, of course, is what the Government decide is a suitable sum for that local authority to have in grant. The second is what the local authority decides is a suitable sum to raise in council tax. The third is the incidence of that council tax as spread over the whole area.

My hon. Friend talked about the Government's determination in the Bill. I agree with that determination, and I only wish that the Government had agreed with me on the hustings in my constituency, when I explained so clearly why a revaluation would be entirely wrong at that time. I was told by my opponent, who belonged—and, I think, still does belong—to the Labour party, that a valuation was essential. As a country councillor, he was determined to explain to me that I did not understand the issue, and why we had to have a valuation. Now I understand that it was not essential, and that despite being a county councillor, he was wrong. I only hope that the Minister has written to him to explain how foolish he was to have accepted that doctrine from the Labour party during the election campaign.

Now there will not be a revaluation for the foreseeable future. However, in certain specific parts of the country there will be significant, untoward, out-of-kilter changes for houses that have been built relatively recently. That will cause real local problems, for which the Minister has no remedy—and my hon. Friend the Member for Mole Valley has been trying to produce a remedy for him.

The right hon. Gentleman is of course a former Secretary of State and he knows what he is talking about. Does he agree that the valuation process, which has been postponed, is necessary if one is to have a property tax? Alternatively, does he agree with what I understand to be his party's policy, which is that no valuation is required?

One of the pleasures of being a Back Bencher is that one does not have to be too closely acquainted with the minutiae of the way in which a particular issue has been approached by whomsoever happens to be in charge of that area at a given time. [Laughter.] The Minister must therefore ask others whether I am in that sense in order or out of order; you, Mr. Deputy Speaker, will of course ensure that I am in order in the parliamentary sense. I simply say that if one is to have a property tax, one must have a valuation system. That seems obvious, and in saying so I do not think that I am falling out with anyone. There might be a question as to when one introduces such a system. We did not say that we should never have one; we said, rightly, that we should not have one in those circumstances.

The Minister can say all sorts of things but the truth is that, as we all know, we were right about this issue at the election, he was wrong and he has now come to our opinion. We are now going to discuss what difficulties even our earlier, right decision throw up. I am merely suggesting, from what I consider a non-partisan position, that the Minister needs some mechanism. We have to ask ourselves whether the mechanism suggested by my hon. Friend the Member for Mole Valley is the right one. If it is not, we must get the Minister to take that part of the mechanism which is of value, and perhaps table an amendment himself in another place. That is the right way to proceed.

I agree with the right hon. Gentleman that it is acceptable for a Back Bencher to be detached from the minutiae of the matter under discussion. Is he surprised to learn that just a moment or two ago, Sir Paul Beresford, a former leader of Wandsworth borough council, "corrected" my geography by saying that Wandsworth and Westminster are not adjacent. They are adjacent, as the House of Commons Library has just demonstrated for me. Nine Elms faces Pimlico across the river. I wanted to put that correction of the hon. Gentleman's false correction on the record.

I do not think it right for me to deal with the geographical issue that the hon. Gentleman raises, but the essence of his point is entirely wrong. Having attacked the money that went to Westminster year in, year out when the Conservatives were in power, on taking office this Labour Government found that the figures were absolutely right, and that they had to stick by the truth of the then Government's position. The hon. Gentleman has forgotten what has happened in the past eight years and he ought to remember it.

As I said, if we are to have a property tax, we must have a valuation system. I am in favour of a property tax, having looked at every other system. I know that it would be wrong to discuss those systems now, but I must tell the Liberal Democrats that the worst system that I came across was local income tax. It was—

Order. A little while ago, the right hon. Gentleman said that I had missed a lot of a very interesting debate. I have been following it very closely from outside the Chamber—as, of course, I always do with such debates—and I have noticed the number of times that Members have had to be called to order to ensure that they address the amendment. I am doing that yet again to the right hon. Gentleman, and I tell all Members that I want them to speak to the amendment; otherwise, I shall pull them up rather sharply.

I am grateful, Mr. Deputy Speaker; I should have phrased my argument in the following, slightly different way. Because I find the alternative so impossible, it is very important to make this system work, which is why this amendment is so crucial. It would not be so crucial were it not for the fact that, if we do not make the council tax arrangements work effectively, we will not have a better alternative. So this debate is as important as I suggested to you that it was, Mr. Deputy Speaker, when you first took the Chair.

So the issue is: how do we approach this part of the mix that makes the council tax? The council tax is a property tax. Few countries have been able to handle taxation without some form of property tax. Ireland tried to do without one, but I suspect that it has been trying to change back—a difficult thing to do. The real problem was identified by my hon. Friend Mr. Francois. He rightly said that he represented the Thames Gateway, where the changes promised—if that word is not too generous—by the Deputy Prime Minister will make this problem especially difficult.

The difficulty is that perception and reality are often very far removed from each other when the system involves so many components working together. I do not know about the Minister's constituency—or yours, Mr. Deputy Speaker—but I am willing to bet that not many people in anyone's area would be able to explain the interpenetration of the various elements, year on year. Therefore, we need to make the system more transparent rather than less transparent.

Does my right hon. Friend agree that the great complexity of the system makes people wary about revaluation, especially after what happened in Wales? When we shifted from standard spending assessment to formula spending share as a mechanism to provide grant to local authorities, council tax rose by so much in the south-east that people believed that a revaluation in England would be, in a sense, bent. That is why they were so resistant to it in many parts of the south-east of England.

Order. I think that Mr. Gummer might be tempted again from the straight and narrow. I hope that he will not be.

Thank you, Mr. Deputy Speaker. My hon. Friend has made his point, and I agree with it, but I shall not go down that route.

How do we make the process more transparent? One way is proposed in the amendment. Where it is obvious that the incidence of the council tax has ceased to reflect properly the nature of the area involved, there needs to be a way to remedy that by means of a local revaluation. That is the justification behind this proposal.

However, if it is a question of perception, whose perception matters? I disagree with my right hon. Friend Mr. Knight about that. He and I worked at the Department of the Environment in close harmony and, as far as I am concerned at least, with considerable pleasure. However, in this instance, I believe that he has thought too much about the central issue, and too little about the local issue. Because of that, in the end I decided that I could not support the amendment quite as I had hoped.

If there is a perception of unfairness of incidence in a locality, local people should be able to ask, through the local council, for a revaluation. Councils in East Dorset, Christchurch, Suffolk Coastal or Waveney could say, "We want a revaluation because we can't fairly deal with our population as a result of the huge change that has taken place. We need, therefore, to check out the incidence of the council tax, so as to be fair to the people who elect us."

In such circumstances, I believe that it should be necessary for the Secretary of State to allow a revaluation. He should not be able to say, "You can ask, but I'm not going to do it." He should be required to allow the revaluation, because many people outside the House may be surprised by the mechanisms available to the Secretary of State to put pressure on people. It is for that reason that I dissent about the amendment.

I cannot go into detail, for fear of straying out of order, but we have been talking about the Thames Gateway in particular. In that area, it might not be possible to build many of the houses intended because of the flood plain. What would happen if the Deputy Prime Minister insisted that the houses were built and the insurance industry refused to insure them? The valuation situation would then be very complex, but it would be localised, not nationalised. At the moment, the Secretary of State has outrageously bamboozled the insurance industry by ensuring that the life offices put pressure on those that insure houses by saying, "If you get uppity with the Secretary of State, we will be in trouble over pensions provision, so don't do it." We all know the institutional corruption that goes on—Governments use their power over one lot to make others not do something. I hope that the insurance industry will develop some toughness in that area.

If the houses are built in the Thames Gateway, their value will be crucially affected by whether they can be insured, and a local revaluation will be essential if there is to be fairness in the incidence of the tax. I hope that we do not reach that situation because, as an environmentalist, I do not want those houses to be built. I do not understand why we are trying to shove into the south-east of England houses that could, in today's world of communication, be spread more evenly over the nation. But then this is about the least environmental Government that we have had for a long time. My right hon. Friend the Member for Bromley and Chislehurst does not help by holding up the one Bill that has been introduced that has been worth having. I hope that he will change his mind about that.

The local revaluation suggested by my hon. Friend the Member for Mole Valley would be essential if significant local changes occurred that needed to be taken into account. I note that even those who have opposed this particular formulation, who come from a local government background, have emphasised the need for such a change. It would therefore be foolish of the Government to avoid it.

This is an issue of transparency and perception. Therefore, one has to face up to the second difficulty that the amendment presents. It could be used for purposes totally other than those that were conceived. Some of those purposes might be reasonable, but would not be suitably covered by this amendment. Let us for a moment accept that it might be sensible to have an elite group of people who went round the country carrying out valuations, as my right hon. Friend the Member for Bromley and Chislehurst suggested, which might be cheaper. The people need not even be employed by the Valuation Office Agency, because they could be employed privately, or seconded, or paid for under some tender system.

The trouble is that the amendment would give no guidance to the Secretary of State as to the basis on which that sequential activity should be performed. My hon. Friend, in explaining that, gave us to understand that that was not really his purpose for the amendment, although my right hon. Friend rightly identified it as a possible advantage. I would go further. One of the reasons I liked the amendment was because it would enable pilot schemes to be carried out in several places, so we would be able to see whether the perception of our constituents that a change in valuation would be unfair to them was true or not.

Indeed, one of the problems, Mr. Deputy Speaker—you represent a neighbouring constituency to mine—that we have all found in this debate, across party lines, is that people feared that whatever the valuation was, it would do them down. The only way to deal with such a fear may be to carry out a localised valuation in certain places that are sufficiently different so that one could discover whether revaluation had the effect in England that it had in Wales.

Of course the amendment would have an advantage. Unlike in Wales, where no ceiling was imposed and such things were not done in the same envelope, if a revaluation took place in an area, it would have to reach the same total that obtained before the reassessment realigned the weight on any property. The problem in Wales was that a lot more money came out at the other end. Of course, everyone knows that that is what the Government intended, which is why we opposed the revaluation in the first place.

Such a system could be used for the valuable purpose that I propose, but only if regulations were laid down to ensure that it could not be misused. For example, a revaluation should be triggered only by the local authority, except if a pilot scheme was restricted to a certain number to ensure that it was used for the intended purpose. There is a disadvantage in the amendment, because we have not covered that issue and we should try to do so.

That is an interesting argument. Is my right hon. Friend volunteering Suffolk for a pilot scheme?

It would not be for me to volunteer my own county; it would be for the local authority to make those decisions. Indeed, just as I do not interfere in my local authority's decision making, I do not expect it to interfere in mine. That is why I felt strongly when the Government lent on chief constables in relation to the issue that we are not discussing now because the Government are ashamed of it. That is why we are debating the amendment and not that issue, but I will not continue down that line, Mr. Deputy Speaker, because I may get into trouble.

I agree that localities would have to volunteer, but I suggest that, for the greater good, it may be necessary to give the Secretary of State a limited power to carry out a small number of pilot revaluations to discover whether the system was usable in the way that I propose.

I am worried about the amendment for a third reason. My hon. Friend the Member for Mole Valley lost the House a little in explaining the amendment at the point at which he distinguished between the use of the valuation as means to share out locally the total bill and its use in the Government's hands as means to determine the grant. That is a complicated issue, and it is one of the very difficult issues that we face in trying to deal with our constituents. The amendment's transparency is insufficient to help my constituents to understand what is in any event a very detailed problem.

Hon. Members will remember that it has always been thought that there are three attributes that give one the right to read mediaeval philosophy. To understand the philosophy of the mediaeval schoolman, one must be able to understand the monetary compensatory amounts in the European Union's common agricultural policy, or the way in which grants under the previous rating system worked, or the present Government's grant-giving system. I am happy to say that I understand all three, but that has not given me a taste for mediaeval philosophy. That is merely an accident of history, but it leads me to believe that the amendment is deficient, because our constituents must be able to understand the legislation without also being enabled to read mediaeval philosophy. It seems to me that we must make the system easier for them.

The Minister will wind up the debate after having had the considerable benefit of hearing the wide range of views that Conservative Members have had to present owing to the total absence of Labour Members. He really cannot complain if I am slightly out of kilter with my Front-Bench colleagues, or that my right hon. Friend the Member for East Yorkshire and my hon. Friend the Member for Mole Valley have different views. The Minister could have got us out of that problem by bringing some of his hon. Friends, who are known not always to agree with each other, into the Chamber to extend our understanding of how they get away with bigger grants than anyone on this side of the House—perhaps they are too ashamed to explain it.

Even though the Minister is bereft of support on the Labour Benches—[Interruption.] Of course, Chris Mole is sitting behind the Minister. The hon. Gentleman's tenacious support for Government policy, contrary to the interests of his constituents, has got him where he is, and will no doubt get him further very soon. That is why he has not been fighting for his local hospital, although I have. I am sorry, Mr. Deputy Speaker, but that is one sentence that in your heart you will find it hard to attack me for. Hon. Members should understand that Mr. Deputy Speaker and I share the same hospital.

The Minister must understand that the real issue is his ability to meet people's needs. I happen to like him, and do not think that he has been too involved in some of the shenanigans that have been going on. I happen to think that they have almost entirely come about due to the Deputy Prime Minister, for whom shenanigans are a way of life.

I think that the Minister wants to make the system, such as it is, as effective as possible and that he wants to have the powers necessary for that. He ought to have limited powers to be able to use such a technique for what I call polling testing—to find out whether it works—because that is a useful thing in government. He should also have the duty to enable a local authority that wants a local revaluation to carry it out, but I do not want him to have the powers that amendment No. 3 would give him.

I am drawing to the end of my speech, but my difficulty now is knowing what to do. If the Minister says that he will take on board the points that we have made and look favourably on trying to finding a better-suited mechanism through which he could give himself the elbow room that he needs—given the Lyons inquiry and the like—but that would not require revaluation for a property tax for some time, perhaps along the lines of that which I humbly presented, which would not be too difficult to implement, I know exactly what I will do: I will ask my hon. Friend the Member for Mole Valley not to press the amendment to a Division. However, if the Minister says, "No, I certainly will not. What a load of old rubbish; we don't want that at all," my difficulty is that if I do not support the amendment, I will not have made the point that something must be done.

I am grateful for having the opportunity to catch your eye, Mr. Deputy Speaker, and to explain the basis on which I have approached the matter. Despite all my caveats, if the amendment is pressed to a Division, I will have to vote for it so that the Minister understands that the issue cannot be escaped. Their lordships will understand that they should address the matter, albeit perhaps more elegantly than my hon. Friend the Member for Mole Valley had time to do—I put that as delicately as I can because I do not want to make him unhappy. By that time, perhaps their lordships will have proper copies of the 1992 Act so that they will know what to do.

I was in the Chamber at the beginning of this illuminating debate, but had to leave to consider a statutory instrument. Will the right hon. Gentleman confirm that the amendment would cover all the properties whose values have risen during the course of the debate?

If the hon. Gentleman gets in touch with some property people, he will find that prices are rising and falling almost simultaneously. I declare an interest as a regular columnist for the Estates Gazette, which is one reason why I know a little bit about these matters. It is now more difficult to forecast property prices because they are going in different directions in different places and in different bands. His question is more complex than it appears, so I shall not answer it—and if I did, I suspect that you would stop me, Mr. Deputy Speaker.

I believe that a change has to take place, but that it is impossible to give the powers in the amendment to the Government because in the distribution of grant and of national health service funds and in a range of other examples, they have shown that they make party political and not objective decisions. I do not know of a Government of any kind—Labour, Conservative or, looking back a long time, Liberal—who have behaved as the present Government have done. That is an extremely sad thing for our democracy, because it undermines the ability to support this place and the way in which our democratic system works. It is noticeable that, for example, the major criterion in determining how much money goes to the NHS is no longer age, but deprivation, which is much more difficult to fix but has to do with the problems affecting a particular area, which may have nothing to do with health. The result—surprise, surprise—is that the areas with some of the oldest populations in the country do not get as much as some of the areas where there are far fewer health problems. That happens because of the technique that has been introduced.

I cannot accept the amendment because I cannot trust the present Government. To be fair to the Minister, I do not take him in the same way, but like my right hon. Friend the Member for East Yorkshire, I do not believe that this House should trust any Government with any powers that it can avoid giving them. Governments exist to do as little as possible, not as much as possible, and the House must keep in its hands the powers of ensuring that Governments behave properly. Ultimately, that is why I am most unhappy about the amendment. Whether a Government are Tory or Labour—I am referring to likely Governments—they should not be trusted with the powers in the amendment, and the present Government should certainly not be trusted with anything that would enable them to manipulate the system for party political purposes. I do not want them to be tempted down a road that they are already further down than any previous Government.

If the Minister assures me that he will give the matter his consideration, make some changes and table an amendment, I shall seek to ensure that the amendment is not pressed to a vote, and if it is pressed I shall vote against it. If, on the other hand, he cannot do that, I shall hope that the amendment is pressed and vote in favour of it.

I am delighted to follow my right hon. Friend Mr. Gummer. To make the arid subject of local government finance cogent and amusing shows what considerable skill and experience he has.

My hon. Friend Sir Paul Beresford has done the House a huge service, because we have had an interesting and much needed debate this afternoon, but if he presses his amendment to a vote I shall probably not vote with him. My main reason for not supporting the amendment is that I believe that it is premature. The Government set up Sir Michael Lyons' inquiry to look into local government finance and it will be interesting to see what Sir Michael comes up with; only then, after careful consideration, should we decide what is to be done.

Local government finance has got into an almighty muddle. When council tax accounted for a relatively small proportion of income, people were not so worried, but now that it takes up so much greater a proportion of income—particularly for people on fixed incomes such as pensioners and other poor people—it is becoming a much greater problem. Any property tax should, as far as possible, reflect open market value. My hon. Friend's amendment is therefore on the right lines—although, as many of my hon. Friends have said this afternoon, it would have been much better and would more accurately have reflected my party's policy on the matter if it had allowed local authorities, not the Secretary of State, to make the decision.

I have considerable worries about the Secretary of State being able to make such an order. If the Minister is inclined to accept the amendment, will he tell us on what basis the Secretary of State would make an order obliging an individual authority or a group of authorities to undertake revaluations? The measure amends section 22 of Local Government Finance Act 1992, as amended by the Local Government Act 2003, and we are seeking again to amend that section.

On what basis would the Secretary of State make such an order? I can think of a number of reasons why he might, but I wish to probe the matter further. In an area where, when the council tax was originally introduced, property prices were not rising at anything like the present rate, it was envisaged that properties would be put into a band and, provided they were put into the correct band, all properties would increase in price relative to each other. However, in the past few years property prices, particularly in the south of England and the commuter belt of London, have increased very fast. That has led to a huge disparity not only within individual billing authorities, but between billing authorities.

As I mentioned in an intervention, new properties are immediately put on to the valuation list in their full market band, whereas older properties are not. That immediately leads to a distortion. One could see good reason for ordering a revaluation in an authority that had had fast rising prices, such as my own in Cotswold, or in another authority—perhaps that of my hon. Friend Mr. Binley—where a large number of new properties had been built. Those are two good reasons for ordering a revaluation. A third reason might be that large numbers of properties had been extended. The moment a property is extended, it tends to be revalued and put in an upper band. Because of the distortion of stamp duty, many people are finding it cheaper to extend their property than to do what they would have done in the old days—sell a smaller property and buy a bigger one. That is happening to a lesser and lesser extent.

Does my hon. Friend agree that another reason could be that property values have changed and there are two houses or more in the same turning with different bandings? Local authorities should have the right to alter that, so that it is fairer for everyone.

I entirely agree. I shall return to that, if my hon. Friend will allow me, a little later in my speech when I deal with the problem of appeals and the cost of appeals.

Is my hon. Friend sure that if a new house is built, it is valued at today's price rather than the 1991 price? If he is right about that, almost all new houses would be in bands G and H.

My hon. Friend raised that with me privately earlier. I should like to research the point further. I hesitate to contradict somebody as knowledgeable as my hon. Friend. He may well be right.

A fifth reason for ordering revaluations in a particular local authority is that a large number of properties are bought and sold. A property can be revalued if its original value is severely out of kilter with its price when it is bought and sold. In the south of England, for example, many more properties are bought and sold in an individual billing authority than in some of the more northern authorities.

Those are some of the reasons for revaluations. I should like the Minister to tell us why he would want to order an individual billing authority to undertake a revaluation. What about the distortion that would cause between one authority and its neighbouring authorities?

My hon. Friend Mr. Chope has mentioned that his constituency contains two billing authorities. My constituency also contains two billing authorities: Cotswold district council, where property prices tend to go up very quickly—the rate of growth is probably one of the highest in the United Kingdom—and Stroud district council, where property prices are not increasing so quickly. Under the amendment—this is why I am going to vote against it—the Secretary of State might order a revaluation for the Cotswold area, but not for the Stroud area. In those circumstances, what would happen to properties on the border? What would happen to people who live in Cotswold and who have low-paid jobs in Stroud? All sorts of distortions could emerge.

May I suggest another potential category—areas in which large numbers of houses have been demolished? I am sceptical about the Government's programme of demolishing houses, particularly in the midlands and the north of England, and I am not sure whether they are doing the right thing. Such demolitions could affect other properties in the area, in which case residents might want a revaluation.

My hon. Friend, who has a huge knowledge of the subject, must be clairvoyant, because he has read my mind and anticipated my next point.

A fifth reason to revalue an individual billing authority is because it contains either a large number of empty properties or, as my hon. Friend has said, a large number of properties that have been demolished. A large number of such properties tends to distort the lists and make them out of date, and my central theme this afternoon is that lists should be up to date because values should reflect the amount of tax paid.

A sixth reason why the Secretary of State might want to instruct billing authorities to carry out revaluations is because the area contains a large number of second homes. As my hon. Friend Mr. Francois knows, because he and I served on the Committee that considered the Local Government Act 2003, it is now possible for local authorities to exercise their discretion and charge council tax on second homes by abolishing up to 90 per cent. of the rebate, which means that people pay almost full council tax. That has happened in Cotswold, where people pay nearly full council tax on their second homes. If there is a large number of second homes in a local authority area, it can cause distortion, which is another reason why the Secretary of State might want to order a revaluation.

Perhaps the Minister will tell us how such revaluations will work. Indeed, I think that my hon. Friend the Member for Mole Valley will have the opportunity to sum up amendment No. 3, so perhaps he, too, will tell us how such revaluations will work. I am worried about the timing of the Secretary of State making an order because the amendment does not deal with timing. From when would the Secretary of State make an order and for how long would the listing agency have to compile the lists? If the lists were very out of date in the six categories that I have mentioned, the task would be much greater than that in authorities in which the lists are up to date—[Interruption.] I shall give way to my hon. Friend Mr. Swayne, who no doubt has an excellent new angle.

With respect to my hon. Friend's fifth category—authorities in which there has been a great deal of demolition—it would not take very long to compile the list.

Indeed, it would not. Nevertheless, if demolitions had occurred, presumably new buildings would have been constructed, and they would need complete revaluation, which would be an onerous task.

If a peripatetic group of valuers were employed to save money, we would be short of staff if a rash of applications occurred.

Indeed. In her customary way, my hon. Friend has made a good point. The Valuation Office Agency is staffed on a regional basis. If there were a lot of revaluations in, for example, the north-west, and if the Government in their wisdom had redirected local authority staff towards the north-east, which they tend to do, we would find ourselves in a muddle.

My hon. Friend will have heard my hon. Friend Mr. Chope explain the use of the private sector, which I should have thought would interest him.

That is an interesting point. I reiterate my declaration in the Register of Members' Interests that I am a fellow of the Royal Institution of Chartered Surveyors, and I think it an excellent idea to contract out some revaluation work. I seem to have unwittingly provided the very reason why it should happen—because then the Valuation Office Agency would not need such a huge permanent overhead. I am beginning to think that my hon. Friend's amendment might not be so bad after all. When there was a rash of revaluation, it would be a good idea for the private sector to do some of the work.

I want to move on to the next section of my speech—

Before my hon. Friend moves on, can I take him back to an argument of his that I did not find very convincing? Where there has been demolition in an area that is in the course of being redeveloped, is not there a good case for not having a revaluation but waiting until it is fully redeveloped, because that will have a huge effect on property prices?

My right hon. Friend makes a partly good point. When I held my party's housing and inner-city brief, I found that large-scale redevelopments in areas such as Moss Side in Manchester tended to take place over several years. It is highly unlikely that the entire demolition in a redevelopment of any size would take place in one go—it would be phased over a number of years. The effectiveness of the revaluation in dealing with the problem that my right hon. Friend mentions would depend on the stage in that process at which it was ordered. Any big redevelopment of that kind would have areas that had been demolished and rebuilt, areas that had been demolished but not rebuilt, and areas still waiting to be demolished. The point at which the revaluation was ordered would be a matter of judgment.

Does my hon. Friend accept that that does not necessarily have to be the case? In some developments, the whole area is cleared at once—for example, railway marshalling yards, where the land is cleared and then brought into use all in one go.

That is entirely possible. Of course, in the bigger cities the scale becomes bigger. That would have to be considered carefully. I am sure that the Minister will tell us whether it is one of the factors that he would take into account in ordering a revaluation.

Does not this whole debate make the argument for introducing more flexibility into the whole system of revaluation, which is the point that my hon. Friend Sir Paul Beresford is making in his amendment?

Yes, with one gigantic caveat—that it should not be ordered by the Secretary of State but be in the control and at the discretion of individual local authorities. Those of us who believe in localism and in local government per se must agree with the democratic system whereby we elect local councils such as that of my hon. Friend. I am aware of the excellent work that he has done, and continues to do, in Northampton. We elect such people to do this work on behalf of us, the people, and we should hold them accountable for the decisions that they make. If they make the right decisions, they will be re-elected. I have no doubt that my hon. Friend will be re-elected for many years to come.

In the light of my hon. Friend's professional and political experience, is it his view that large-scale demolition would force the value of local properties up or down?

I was about to come to that point. My hon. Friend must be clairvoyant, too, because he has read my mind and anticipated the next section of my speech.

The subject of the valuation base is very interesting, if dry. The whole business of local government finance is incredibly complicated. It involves about 200 different sections, including algorithms and all sorts of complicated mathematical formulae, one of which relates to the council tax. House prices are rising in almost all areas in the United Kingdom and that means that the valuation base would probably increase on revaluation. I suspect that that would happen because the general area would improve. Moss Side is a prime example of such improvement. Houses were demolished, new houses were built and green parks, new schools and new doctors' surgeries were created, thus improving the whole area to the extent that one of the most crime-ridden areas in Europe is now a pleasant place to live. The private sector has built houses in the area that sell for a great a deal of money. That proves what successful wholesale refurbishment of an area can do. I suspect that if an area were sensitively demolished and refurbished, the council tax base would increase.

I want to make another important point about the increase in the council tax base. My hon. Friend the Member for Mole Valley did not agree, but the complicated algorithms and formulae that are used to calculate the rate support grant settlement include a redistribution mechanism if the valuation tax base is higher than average. For example, areas such as the Cotswolds, where the council tax base is high, lose out on the rate support grant settlement because some of our council tax is redistributed. The Government redistribute from areas with high council tax bases to areas with lower council tax bases.

I am sure that my hon. Friend shares my concern that areas that are deemed wealthy contain areas of relative deprivation. They will be hit even worse by the measure.

My hon. Friend is a clairvoyant.

Will my hon. Friend give way?

I should like to answer my hon. Friend Anne Main. I am flattered that so many colleagues wish to intervene on me. It shows that my speech is either very bad or raises more questions than it solves.

The latter.

My hon. Friend the Member for St. Albans made a good point. The core theme of my speech is that a property tax must reflect market value as closely as possible. If we allow them to get out of kilter, we create increasing unfairness in the system. One unfairness affects people on fixed incomes, who tend to be fixed in their houses. If their houses become relatively more valuable than other houses, the system is unfair to them, and especially to retired people. The third highest number of people aged over 85 in the country live in the Cotswolds, and the problem therefore worries me greatly. That is one reason for keeping the matter reviewed and up to date.

My hon. Friend is making an excellent speech, but I echo the comment of my hon. Friend Mr. Swayne that it raises many questions. His explanation of the equalisation system suggests that local authorities whose rateable value is below average have a disincentive to go for revaluation, because if their council tax base increases they would lose the benefit of the transfers from south to north that penalise council tax payers in my constituency.

My hon. Friend has hit the bull's eye. That is what is wrong with the amendment. I believe that the Secretary of State will use the power for the wrong reasons and my hon. Friend outlines one of them. I should therefore like the power to be vested in local authorities because they know what is best for the area and whether they should order such a power. My hon. Friend raises a genuine, worrying possibility.

My fear is that whether the power is ordered by the local authority or the Secretary of State, it may inadvertently have the same effect. The Secretary of State could order it to cause a transfer of resources, but even if the local authority ordered it for some other purpose, it could have the same effect. Local authorities would not wish to use such a power lightly.

My hon. Friend makes a good point. Indeed, I made it earlier in an intervention. The Secretary of State could use the power for punitive reasons. For example, instead of council tax capping an authority, he could use the threat of the power to encourage it to keep its percentage increase of council tax down to a level that he deemed acceptable. Again, I would think that totally reprehensible, but one can imagine a certain Secretary of State—not the Minister for Local Government—who is very honourable, doing exactly what my hon. Friend says.

As I said earlier in the debate, I have a particular interest in this matter because Wellingborough has had the biggest increase in council tax since the council tax was introduced. My concern is that the proposal would be a backdoor way of increasing the amount that my constituents have to pay in council tax.

rose—

I will give way to my hon. Friend in a moment, although I think that I can answer what he is about to say—that a revaluation per se does not necessarily give rise to an increase in council tax, although it probably will do so for the very reasons that I mentioned. Even if it does not give rise to an increase in council tax immediately, the revenue support grant will be reduced to support the redistribution mechanism about which I have talked. I therefore have a lot of sympathy with the point made by my hon. Friend Mr. Bone. I think that my hon. Friend the Member for Mole Valley wants to contradict me.

I thank my hon. Friend for the opportunity to do so. I think that he fails to understand something that I have stressed time and again. The aim of a revaluation locally is a fairer distribution within the local area, but a national revaluation will make a difference to the way in which the grant is distributed, which was also a point that I made. Ability to pay should therefore be estimated on a basis of tax paid or income earned within billing areas, which has already been done by the Treasury.

My hon. Friend has huge knowledge of the way in which local government works and I am hesitant to contradict him. The way of the world, however, is that a revaluation will put considerable pressure on a local authority to increase council tax. To stick to the mechanism whereby council tax should not go up, if the revaluation causes an increase in the entire list the rate of council tax would have to go down. I cannot imagine many councils explaining to their council tax payers that they have put the rate of council tax down in order to keep the council tax the same. The way of the world is that the valuation would go up and the council tax rate would stay the same, so the actual amount payable would go up. I do not know whether my hon. Friend wants to come back on that point—he is shaking his head. It is not necessary. There we are. The whole purpose of this kind of debate is to get differences of opinion out in the open—parler, to speak, is what Parliament is all about. I am pleased to take part in this debate.

I have almost come to the end of my speech, but suffice it to say that when the Lyons' committee comes to report on this matter—next year, I gather, in tranches—I hope that the Government will take it very seriously. We have had some excellent debate this evening. There is a lot of merit in the principle proposed by my hon. Friend—that there should be an ability to have local revaluations, provided that it is under the democratic control of locally elected councillors. I hope that the Lyons' report will deal with that matter.

Before I conclude, I want to deal with the problem of appeals. At the moment, appeals only take place in the categories that I have mentioned. Were there either a local or national revaluation, however there would be a lot more appeals. That would increase the work of the Valuation Office Agency, and perhaps it would be useful to sub-contract that to the private sector, too. Appeals take time, cost money and cause a lot of angst to our constituents, so we should try to get valuation lists accurate. Where changes do not take place for individual streets and houses within individual streets, whatever revaluation takes place under my hon. Friend's proposal or any future Government proposal the number of individual differentials could be kept to a minimum and the number of appeals reduced.

My hon. Friend makes an interesting point about appeals and I should like to draw a brief analogy with the planning system. As resistance is hardening to many planning applications, particularly but not exclusively in the south-east, the Government are running out of planning inspectors to adjudicate, so it often takes more than a year to obtain a public inquiry as there are not enough planning inspectors to go round. That is becoming a real problem in the planning process, so does my hon. Friend agree that it could be an additional problem in the valuation system?

My hon. Friend, with his huge knowledge of such matters, is right. The Government are having to produce a special planning grant to try to encourage local authorities, such as mine, that are extremely short of staff due to high housing costs to employ planning officers. The same would apply for valuation officers in the listing authorities. Of course, as has rightly been suggested, the solution would be to employ the private sector to do the work. There would then be no need for a permanent overhead.

The amendment is premature. It contains many good intentions, as is always the case with proposals made by my hon. Friend the Member for Mole Valley. However, we should wait for Sir Michael Lyons to make his report and reconsider the amendment in due course.

This obviously essential debate has raised many subjects, and I should like to touch on a few of them in my brief contribution. I made a note that we have talked about local accountability and flexibility, the relative costs of different approaches, the impact of local developments, whether anomalies could be better corrected nationally or locally, the Valuation Office Agency and the role of the Secretary of State, to say nothing of appeals, which my hon. Friend Mr. Clifton-Brown has just mentioned. All are relevant and I shall touch on them as I go through my speech.

To set a context, we need to establish the provenance of the matter. That takes us back to the beginning of the debate, when Mr. Speaker very graciously and with enormous efficiency was able to produce the missing Act—if I may call it that: for we started the debate without the very Act on which the whole matter is based. Fortunately, we now have it and I want to ensure that the House understands that the amendment proposed by my hon. Friend Sir Paul Beresford refers to an order under subsection (1A), which in turn refers to the Bill where subsection (1) of clause 1 refers to section 22B of the Local Government Finance Act 1992. That is where we got into immediate difficulty, as we were all wondering how on earth the debate could be properly conducted without the missing Act. It is fair to say that initially we were floundering in a mist, which is unusual for us as we are always clear-eyed and sharp of mind. On this occasion, however, we started at a disadvantage.

Mr. Speaker sorted all that. He waved his wand. He exuded and exerted his authority and the Act was quickly to hand.

I have a copy of the Act. It is a bundle of photocopied sheets and it looks as though there are about 1,000 pages to go through. Is not it a bit late to do that?

I shall help my hon. Friend. I am glad that he made that point, although I do not need to go through 1,000 pages—not yet anyway, unless I am tempted. I zeroed in with my laser-like focus on the very parts of the Act that form the foundation of the Bill from which the amendment flows. He will be able to see that direct connection, as I hope will everyone else in the Chamber.

In section 20, we find the genesis of the whole matter that we are discussing. It states:

"The Commissioners of Inland Revenue shall appoint a listing officer for each billing authority."

We can see immediately that the matters dealt with by the amendment flow from clause 20. Section 21 spells things out:

"The Commissioners of Inland Revenue shall . . . carry out . . . valuations of dwellings in England and Wales" and

"furnish listing officers with such information obtained in carrying out the valuations or in the exercise of the powers conferred by section 27 below."

So we can begin to see how we are building up the approach, the philosophy and indeed the bureaucracy—to which we shall return later; it has of course been touched on already.

Does the 1992 Act require one commissioner for the whole country or individual commissioners for each separate authority? If there were more than one commissioner, they may have different interpretations of property values in their area. How can we be sure of achieving consistency?

My perusal of the Act has not elicited that information, but I guess that, sadly, the reference is a general one. Section 21 states:

"Commissioners of Inland Revenue shall . . . carry out valuations of dwellings in England and Wales".

We can infer a national approach from that provision, but section 22 states:

"In accordance with this Chapter, the listing officer for a billing authority shall compile, and then maintain, a list for the authority (to be called its valuation list)."

There is therefore a trickle-down from the national approach with which the commissioners are taxed to the local level, so we are getting into the nitty-gritty of the amendment and the Bill. The 1992 Act provides the infrastructure for the Bill and the amendment.

May I echo my right hon. Friend's concern about the fact that certain documents were not available earlier? The Bill refers to the Local Government Act 2003, copies of which were not available in the Chamber when we began our debate. On investigation, I discovered that it was available in the Vote Office. That is important, because the Bill repeals schedule 7 of that Act. Paragraph 52 (4) of the schedule states:

"In subsection (3) (instruments subject to negative resolution), in paragraph (a) (exceptions), after '11(3),' there is inserted '22B(3)(a),'."

I hope that that reassures my right hon. Friend.

I am glad that my hon. Friend mentioned section 22B of the Local Government Finance Act, as I have a copy of that provision in my hand. As always, he and I are working in concert. As was said in an intervention, section 22B says that the listing officer

"must take such steps as are reasonably practicable in the time available" to ensure that the list is accurately compiled. Such phraseology is worrying.

I raised this matter in an intervention. There has been much speculation in the press because, for the first time, listing officers may enter people's houses to take photographs. Does my right hon. Friend agree that that is unacceptable? An Englishman's home should be his castle.

Order. I would not want Mr. Forth to be tempted down that road. The availability of the Act, too, is not quite as crucial as he has suggested. I am sure that hon. Members know where to find these things in the House of Commons.

I was simply referring to section 22B of the Local Government Finance Act, which I had in my hand. I thought that I was on safe territory, but these days, who knows?

My hon. Friend Mr. Clifton-Brown has identified a tension in the Bill. The listing officer can take such steps as are "reasonably practicable" to ensure accuracy. That is where the process that he described comes in. Indeed, it is where the heavy-booted tax inspectors come in.

Is not the way in which the revaluation is undertaken in one billing authority, two billing authorities or nationwide relevant to the amendment? I favour a pilot scheme for revaluation in my own area, but I would not if I thought that regulation-ridden, form-filling, pen-pushing nincompoops were going around with cameras photographing my constituents' properties.

Indeed. My right hon. Friend knows all about his constituents' dwellings. Accuracy is important and there is a contradiction in section 22B. It refers to steps which are "reasonably practicable", goes on to talk about "the time available" and ends with a reference to accuracy. In many circumstances, the three requirements could well prove contradictory. The practicality is one thing and the timing another, but where does that leave the accuracy? Those contradictions have not been resolved, and even the amendment does not resolve them.

Labour as well as Conservative Members need to ask themselves to what extent they want to keep faith with the new mantra of localism. The practice has become popular among politicians of constantly reasserting how strongly they support the concept of local decision making, whether in schools, hospitals, local authorities or anywhere else. On the face of it, that is one of the attractions of the amendment. In some ways, it seems to move us in that direction by providing an opportunity for much more local decision making than has been available hitherto in this great valuation exercise. That in turn, however, poses a number of questions, some of which have already been touched on today.

The most fundamental of those questions is whether we believe that, in the whole business of valuation of properties to establish a tax base, a national approach is preferable to a local approach. I must admit that, having listened to the debate so far, I have not yet made up my mind. I can see both sides of the argument, which is rare for me. As many of my right hon. and hon. Friends pointed out, there must surely be a strong case for saying that, because this is potentially such a local matter, we must give priority to the local decision-making element that the amendment would allow. Many examples have been given, ranging from new build to demolition.

The new build case is clear. My expert friends have observed that, with new build, the valuation tends to be at current market rates, if I have understood them correctly. Some doubt has been raised about the effect of demolition, however. It could perhaps move us in either direction. While demolition in a blighted area that was then cleaned up and made into a community facility would undoubtedly enhance the area, I am sure we can all imagine other circumstances in which the effect would be the reverse.

I am glad that my right hon. Friend is exploring the anomalies. The Lyons report does not refer to assessment triggers such as whether a house is in a conservation area. In my constituency the small, modest two-bedroom cottages are in a conservation area, while the big five-bedroom houses are not.

My hon. Friend has, typically, given a good example of problems that feature throughout the valuation exercise, and with which we must all grapple. That is part and parcel of the important debate about the extent to which we believe that local circumstances and variations should override any other consideration. Again, on the face of it the argument is appealing, but I have my worries. I shall say more in a moment about the malign political influence that has already been touched on.

Will my right hon. Friend give way?

I do not know whether my hon. Friend wants to talk about malign political influence, but I give way to him.

Perhaps, in a way, I do want to talk about malign political influence. May I return to wholesale demolition and its effect on the charge base in an area? If it reduces the charge base, will not large equalisation payments be made to the local authority to enable it to provide services?

That worries me as well. Underlying much of the debate is the assumption that a beneficent Government, aware of the process described by my hon. Friend, would automatically compensate for it from central funds. I am not sure that we can make that assumption. Indeed, a number of my right hon. and hon. Friends have said that we must not make such assumptions about Governments, especially this Government. We have seen ample evidence of the Government's ability to move central funding so as adversely to affect the constituents of Conservative Members, so we have to be very careful about that.

There is another issue associated with demolition. With a relatively large-scale demolition, such as that of a big 1960s council estate, when modern properties are to be built, working with a housing association, the people who live on the estate first have to be moved out and found somewhere to live. In the jargon, that is called decanting. Then rebuilding begins, and gradually people start to move back into the new properties as they are built. That process can take several years, so at what point do we revalue? Presumably that will happen when the process is complete, so demolition could be going on for several years, and people would then have to wait for revaluation when the estate had been rebuilt, which could take a long time.

I am grateful to my hon. Friend for that suggestion, because he brings me to the timing of such activities, although I shall not myself get to that point quite yet. The "timeline" is, I think the modern phrase, and it is relevant.

Already we can see emerging a kaleidoscope of criteria on which the matter could be judged. There is the question, "How local do we get?" We have not explored that thoroughly yet, although it was touched on earlier. Are we talking about district authorities, counties or regional authorities? The amendment leaves all that open. We could have individual billing authorities, an undefined

"group of adjoining billing authorities", or, indeed, all billing authorities. Those are all options under the amendment. Who is to decide? I shall come to that rather later in my meanderings, but at this stage we shall leave it as an unanswered question.

With large-scale demolitions, it is important to get some of the original tenants and owners back to the area to keep the community together. If they thought that their council tax would be increased as a result of a local revaluation, might that not be a disincentive for them to move in the first place?

Indeed it would, if people had that information available. However, the process by which that would come about—indeed, the very predictability of it—would depend on the factors that we are now debating with regard to the amendment, the Bill and the underpinning Act. The flow of the sort of information that my hon. Friend mentions would depend on who had the flexibility, and who made the decisions about the nature and timing of the revaluation. Until we can resolve such matters, the innocents will not have the information that they require. That should worry us all very much.

When my right hon. Friend mentioned individual billing authorities or adjoining ones, he used the dread word "regional". Given the nature of so much guidance from the Government, would it be possible for a valuation officer to consider a group of adjoining authorities in such a way as to cross the magic Government office line, which the Government seem to reluctant to do?

One problem with the amendment is that it deliberately leaves that open, which gives rise to the danger that my hon. Friend points out. By using a phrase as vague as

"a group of adjoining billing authorities", the amendment may leave too much flexibility, for the reasons that he describes. I shall come back to that thought later, because I do not want to get distracted. [Interruption.] Not half.

I thank my right hon. Friend for his generosity in giving way again. Without wanting to get too bogged down in demolition, may I remind him that there is another important facet? To continue my example, if someone wants to knock down an old housing estate and redevelop it with a housing association, that often involves tenants voting for a transfer—say, from the council to the housing association. For the redevelopment to go ahead, the tenants have to vote for it positively. I have been involved in such cases.

In the real world, the tenants want to know what the additional costs will be—first, what will happen to their rent, and secondly and increasingly, what effect will moving into the new properties have on their council tax? That can affect how they vote in the ballot, and thus whether the whole redevelopment goes ahead. Does my right hon. Friend agree that having such information available could be important in allowing the redevelopment of some of the worst estates in the country?

My hon. Friend is right and he displays yet again his intimate and profound knowledge of these matters, but I am not sure whether that takes us in the direction of localism or of national decision making. He poses a very fair question and I suspect that the answer could be found in either of the two options that I am just beginning to explore.

We have touched on the tempting potential allure of local decision making in this context, but I am not sure that that necessarily determines the issue; I am worried about anomalies and relativities in a national context. If we are too quick to accept the local solution offered in the amendment tabled by my hon. Friend the Member for Mole Valley, there is a danger that even bigger distortions could be created. Once we allow too much local decision making in this crucial area of valuations and listings, we immediately lose control of the relativities that are so important to the whole process.

Several hon. Members:

rose—

I shall give way first to my right hon. Friend Mr. Gummer. I do so because he claimed—he is of course correct— that he is one of only three people in the country who understand any of this. For that reason, we are honoured to have him with us today.

Does my right hon. Friend agree that the danger—if it exists—is less than it might otherwise be, given that the revaluation would have to be done within a fixed maximum and that the difference between different local authorities would therefore be maintained? The point that he makes would be much more powerful were it not for that fact. There may be reasons why problems remain—perhaps he would like to adduce them—but I am a rather keen on a bit of variety within those limitations.

I of course accept, hesitatingly, my right hon. Friend's guidance on this issue for the reason that I touched on, so perhaps it is now resolved more or less completely and we can move on.

At the start of this debate, I was considerably confused as to whether to support the amendment; thankfully, on listening to the speeches the situation is much clearer. My Wellingborough constituents are fearful of any revaluation, and the amendment tabled by my hon. Friend Sir Paul Beresford would allow for an earlier revaluation than they want, so, unfortunately, I cannot support it, because it would make revaluation easier, rather than more difficult.

My hon. Friend touches on one of the key issues, which I shall now consider, if I may; it will not distract me from my main argument.

My right hon. Friend touched on localism, so let us consider the very small picture. A large supermarket retailer has bought a considerable number of properties and a small industrial area in a blighted part of my constituency. This situation has been ongoing for several years and under a local system, local people would be pushing the council for a devaluation on the ground of blight. A very local system could lead to the sending of very mixed messages.

That illustrates well the inherent dangers. When we vote on the amendment tabled by my hon. Friend the Member for Mole Valley, we will have to weigh up the various factors and decide in which direction we want to go.

One problem is that, in areas such as the Thames Gateway, which takes in a number of different authorities, too much localism could lead to completely different revaluation results. A wider approach would need to be taken in such areas.

I think that that would depend on the trust that we place in the integrity of the valuation process, a point to which I shall return. First, I want to consider an issue that has been raised a number of times and which we need to discuss in some depth, so that we can establish which is preferable: a central bureaucracy that runs matters nationally; a much more localised approach; or, as we have speculated on throughout this debate, a staggered approach involving a small, compact, expert unit working sequentially, thus potentially saving money.

My right hon. Friend is making a typically thoughtful contribution, but I do not want him to get away from the interesting point raised by my hon. Friend Mr. Bone. Does my right hon. Friend think that this amendment would lead to revaluations taking place sooner? That is an important issue and I should be grateful for his views.

I want to deal with the point made by my hon. Friend Mr. Bone, which highlighted what many of us see as an omission or lacuna in the amendment, as it still leaves the discretion with the Secretary of State. The initiation of the valuation process must be a local decision, but the amendment does not allow that. It goes halfway, and then stops. Although my hon. Friend's local people may be anxious for a revaluation in the cause of fairness—or not—they would have no say if the amendment were adopted. The local decision makers would not either, as the matter would rest with the Secretary of State.

As so often happens with this Government's legislation, the Secretary of State will decide everything. The Government pay lip service to local decision making but in the end, according to the Bill, matters will be

"specified by order made by the Secretary of State".

I shall explore that later.

Will my right hon. Friend spend a few minutes exploring the power that the Secretary of State would have if the amendment were agreed? He could use it as a threat against local authorities in all sorts of ways. I mentioned rate capping, but he could also use performance indicators to force revaluations on local authorities that did not want them.

One problem with the debate is that it has revealed so many difficulties that it has become more and more difficult to make progress. That is why I shall soon invite the Minister to guide us through and clarify matters. How do we balance local and national interests? What about costs, and appeals? Many hon. Members consider the appeals process very important, but it remains undefined.

All in all, this has been a useful debate, and we are only halfway through, with another amendment to consider and Third Reading still to come. We are all looking forward to that enormously, as it will allow us to expand our remarks. However, I judge that we are so anxious for the Minister to resolve our difficulties that I shall conclude my contribution.

I am delighted to try and clarify the amendment's possible implications. This has been an interesting debate, with some good points made, but many hon. Members seem to have misunderstood what is involved in the valuation process. It is to that question that I shall try to address my remarks.

Various Opposition Members adopted a partisan approach, and one accused the Government of being responsible for a "corruption of power". I assure the House that the formula is not being manipulated. Interestingly, only one accusation of that sort was made, when Mr. Gummer spoke about the allocation of health money and claimed that the pendulum had swung away from the problems of an elderly population and towards health issues. I point out that in areas where people have a lower life expectancy, in general that is due to the incidence of disease and illness. To me, that seems a perfectly reasonable criterion to govern the allocation of money. It certainly does not involve party-political bias.

The Minister has not looked at what the deprivation index covers. The real problem is that the national health service should perhaps be an ill health prevention system, but it is not. It is a treatment system, and as long as that is what it is, the treatment needs to be provided where it is most needed, which is where there are most old people. Deprivation has several other elements that have nothing to do with health.

I disagree, but I doubt that you, Mr. Deputy Speaker, will allow me to stray too far down that road—

Order. I understand the Minister's difficulty. Many issues have been raised this afternoon that were perhaps not spot on the amendment, but I trust that he will not be tempted down too many of those byways.

I shall direct my remarks to the amendment and its implications. The assumption behind several contributions this afternoon has been, frankly speaking, wrong. It concerns the fear of potential political manipulation, and it assumes that the relative increase in property prices within an area and between areas has taken place only or mainly in areas with higher incomes. However, statistics published by independent bodies show that that is not the case. In layperson's terms, the Conservatives assume for the purposes of this debate that "oop north", we are all poor and live in terraced houses. I should point out to them that Cheshire is the second richest county in the country—and a very beautiful county it is.

The second mistake that has been made is to assume that those areas that have had relative increases in prices, where a revaluation would increase the tax yield, are all under the control of the Conservative party. That is not the case. The Conservatives make the same mistake as my party made in the 1980s, which is to assume that certain parts of the country are naturally aligned with one party and parts are aligned with another. If a revaluation were to increase the tax yield and therefore reduce the resource equalisation element—Sir Paul Beresford covered that point—the implication is that that would take place entirely in non-Labour areas. One could not achieve that outcome even if one wanted to, and I shall explain why. I reject the allegation about the allocation under the formula and I reject the allegation, also made by some Opposition Members, that that would be used in a politically manipulative way.

The Government will ask the House not to support the amendment. I was a little confused when I saw the amendment, but I now have a much clearer understanding of what the hon. Gentleman is trying to achieve. He gave the example of a particular area in the country, but Madam Deputy Speaker ruled it out of order, so I shall not repeat it—but it is by a big river in the south-east of England. The hon. Gentleman seemed to think that all the new properties that are built in that area will be revalued when they are first sold, and that therefore it is necessary to have a local valuation of the existing properties. However, the new properties will be valued and allocated to council tax bands, based on the values of the antecedent valuation date of 1991, the same date at which all properties in the country continue to be valued.

If there were to be a subsequent resale of those properties, they would be revalued only if they had been significantly improved, for example, by the addition of a swimming pool, but perhaps not by the addition of a patio, as some hon. Members have suggested. That is the policy that has been in place since 1991. Even then—this is the crucial point—the revaluation would still be based on the 1991 antecedent valuation date. That addresses the point that was drawn to our attention by Mr. Clifton-Brown.

As is so often the case, the devil is in the detail. I have some practical arguments about why the amendment would not work, as well as policy ones. As many hon. Members have said, at first sight, the amendment seems consistent with the policy of devolution, given the flexibility to carry out a revaluation limited to a single billing authority or a group of adjacent billing authorities if a such a revaluation is demanded locally. However, the detail shows the difficulty of the amendment's practical implications.

First, let us consider the implications for the Valuation Office Agency. Perhaps I can give the House some information that will be useful in considering the amendment. Following significant investment in modern technology, which essentially involves the computerisation of manual records, and the development of the automated valuation model, whereby a computer is given the details of different properties, it is true that the VOA could calibrate the system to cope with different valuation and revaluation dates for the billing authorities. Modern technology could allow what the hon. Member for Mole Valley suggests. However, let us consider for a moment the situation that could prevail in years to come.

As a result of the amendment, we could face a national taxation system based on multiple valuation dates and a host of different banding structures. Of course, we cannot revalue without rebanding. That is an essential point. If we assume that each valuation would involve a transitional scheme—the hon. Gentleman may want to address that point if he wishes to respond to the debate—we would be left with a hotch-potch of systems operating in different parts of the country and the confusion for the public would be too dire to contemplate.

In my constituency, which is adjacent to the border with Wales, the situation that the Minister describes already exists. There is a different system in Wales, where a revaluation has already taken place. Many of my constituents already face such confusion because there is a different system on each side of the River Wye. The systems on either side of the border differ under this Government.

I appreciate that point. I thought of it myself when I was preparing for the debate last night. As the hon. Gentleman knows, the difference is caused by devolution, but the answer can be drawn out by considering what happened when the poll tax was introduced. The amendment would allow different valuations and bandings across boundaries in the same communities. In other words, the borders of Wales and England are well known and understood. Huge confusion was caused by the difference between one side of Narbonne avenue, which is in Lambeth, and the other side, which is in Wandsworth—I think that that was the boundary—and the danger of the amendment is that such boundaries would be drawn not just in communities and neighbourhoods, but along streets.

Is not the real confusion created by the different rates that are levied, rather than by the base on which the rate is levied? That will always be the case, so the Minister's argument does not work.

The hon. Gentleman says that that will always be the case, but if he were to read the 1992 Act and, more importantly, the Hansard report of the debates on that legislation, he would understand that an essential part of resource equalisation—the notional effort made by banding to equalise the system—would not be possible, so the amendment would throw out the baby with the bathwater. There would thus be a confused situation with different banding systems operating in different billing authorities. If the hon. Gentleman stays with my argument, he will understand the position.

Perhaps I should have explained a little more clearly that I thought that the power would be used in relatively isolated cases and that it would still be maintained by the Secretary of State, which my right hon. Friend Mr. Forth would perhaps deplore. However, local people would feel a difference if the revaluation were reflected in the assessment of ability to pay in the funding formula. If that were changed, the difficulty that the Minister cites would be offset.

I understand the hon. Gentleman's point and assume that that is why the amendment provides for groups of billing authorities. If he will allow me to stick with my argument for a moment longer, I hope that he will understand why the amendment is not workable.

The hon. Gentleman argued that such small-scale revaluations could help with the costs of revaluation, which Mr. Chope also mentioned. Taken in isolation, he is, of course, right, but taken in aggregate, across all the many different revaluations that could ensue, I believe that he is mistaken. There is a widely accepted theory that economies come from scale. Under national revaluation, even with the automated valuation model, that is still the case. The VOA could gear up to deliver one national revaluation and would calibrate its software with one valuation date in mind in such an event before revaluing in one concentrated effort.

The fact that any revaluation creates winners and losers has not yet been mentioned. Those who are losers will call for transitional arrangements under section 79 of the Local Government Act 2003. Does the Minister agree that it is almost certain that such revaluations would trigger transitional arrangements?

I mentioned briefly my assumption that a transitional relief scheme would be needed in such circumstances, as was the case when the poll tax was abolished and the council tax brought in. That was also the case with the business revaluation, which proved to be successful and did not cause the controversy of the Welsh revaluation.

Under local or local area revaluations, the VOA could be faced with a constant cycle of recalibrating, revaluing and publishing draft lists, and then providing compiled lists to individual billing authorities. That would inevitably lead to more costs and, in the long term, the use of more staff resources.

Let me turn to the impact that the amendment would have on the finance settlement and the grant distribution system. Imagine for a moment a scenario in which one billing authority was revalued. Let us say that in that case revaluation led to a reduction in its overall tax base because properties, on average, moved to lower bands—hon. Members have cited examples of circumstances in which that could happen. At the outset, that appears to be entirely desirable for the householders concerned.

The expectation would be that the grant distribution system would compensate the billing authority for its reduced tax base by shifting a larger proportion of the overall grant pot into that area. However, we encounter a problem at that point because the grant pot is of course finite. Without another authority revaluing and increasing its tax base at the same time, which would effectively rebalance the whole system, we would not have the extra funds that would be needed. Everyone else would thus get less, effectively on the say so of the authority concerned.

Without any compensation through the grant distribution system, the billing authority would be faced with two options: either cover the deficit through efficiency savings or service reductions; or increase its tax rate, which would effectively mean asking its council tax payers to pay the same amount of council tax overall as they did before the local revaluation ever happened. Any overall benefit from revaluation would therefore be cancelled out. On the other hand, a billing authority with an increasing tax base going through a similar revaluation would be handed a windfall increase in tax yield, which would be left unadjusted until the next three-year settlement period.

We have gone on record on many occasions saying that we accept the case for revaluation and that it is right to maintain a fair alignment between house prices and council tax bands. The amendment implies that it might be right to realign one subset of properties while leaving all the others unaligned, but how can it be fair that one person benefits from a reduction in band through a revaluation while their neighbour, who happens to be in a different authority that is not revalued, does not? As some speakers noted, we would be faced, I fear, with a flood of appeals as the public became increasingly concerned and confused by the ensuing unfairness.

The amendment appears to be based on an assumption about the factors influencing the housing market—an assumption that is fundamentally flawed. It is that influences on the market could—indeed, must—operate at a local level in isolation from national factors. Why else would we ever conceive that revaluation could be justified in one billing authority separately from all others? Micro-economic factors play their part, but to revalue only on the basis of such factors would destabilise what is, after all, a national tax system based on relative values across the whole housing market.

My major concern is the enforced growth imposed by the Government themselves. If the Government enforce growth, they should at least give the local authorities affected the ability to have a say in revaluation and its timing.

I answered that point when I said that valuation was based on an antecedent valuation date of 1991.

There is a wider policy at stake. The right hon. Member for Suffolk, Coastal said that he was against growth areas, and other speakers complained of a problem because of increased house prices. The argument that revaluation is needed has arisen from the increase in the differential between earnings and house prices that is caused by the excess of demand over supply, which is precisely why growth areas have been proposed.

rose—

rose—

I am prompting interventions, but we have more amendments to deal with and Third Reading to come. Perhaps right hon. and hon. Members can make their points then.

The Minister did mention my speech.

I give way to the right hon. Gentleman.

I rise to correct the Minister. I did not say that I am against growth; I said that I am against piling growth into the south-east of England instead of spreading it over the whole of the United Kingdom when modern techniques of transport and IT make that possible.

I understand that the right hon. Gentleman said that. I muttered across the Chamber to the Liberal Democrat spokesman that I was not sure that local people in the right hon. Gentleman's constituency who wanted to buy a home in the area would necessarily agree with that point. Of course they are welcome to move to Oldham and Saddleworth, but I have to point out that house prices in some parts of my constituency are as high as, if not higher than, prices in his. It is not true that all housing growth areas are in the south-east, or that the relative increase in prices has occurred exclusively in the south-east, yet that was the assumption implicit in many of the speeches made by Opposition Members this afternoon. I am more than happy if they continue to make that assumption, because it does them electoral damage.

I conclude my remarks on the amendment by asking the House to reject it. I thank the hon. Member for Mole Valley for tabling it because it has allowed us have a clearer debate on the purposes of revaluation and the methods involved, but I hope that he understands that his proposal has the potential to create significant problems for local government finance and the operation of the council tax system.

I thank the Minister and all Members for the support—mixed support. We have had a substantial discussion, much more so than I anticipated, and the spread of knowledge of local government finance has been incredible—from next to nothing to absolutely everything. As my right hon. Friend Mr. Gummer pointed out, the subject is difficult for people to understand. Clarity is needed, and that was part of the inspiration behind the amendment. The difficulty, however, is that because of the wording of the Bill, the amendment had to be very tight. I could only touch on some of the consequential effects and answer them in a way that would enable the amendment to be carried forward. I shall study the amendment and the Minister's comments carefully, and we can return to the matter another day. For the moment, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment No. 4, in clause 1, page 1, line 8, at end insert—

'(1B) The Secretary of State shall decide at least once in each calendar year whether to exercise the power granted by subsection (1A), and shall give reasons for his decision.

(1C) The reasons referred to in subsection (1B) shall include, but shall not be restricted to, the Secretary of State's assessment of the degree of divergence in relevant property values since the original valuations made under this Act or since any subsequent revaluation.'.

The amendment is about giving reasons, and its origins lie in the different reasons that various people have for being in favour of the Bill. Our reasons are simple. Since we will replace council tax with a different tax system altogether—local income tax—we have no need of any revaluations, and therefore believe that any expenditure on revaluation would be wasted.

There is more dispute about the Government's reasons for introducing the Bill. Their stated reasons are to do with the expansion of the remit of the Lyons review, but even Sir Michael Lyons said that a delay of only one year would be justified by the extension of his remit to function rather than just finance. In any case, there is no obvious connection between Lyons and revaluation, since Lyons has been told that council tax is Government policy—the Minister repeated that in Committee—so I see no reason to stop work on a revaluation as council tax will continue, under the Government's policy, to be the central tax for local government purposes after the review.

The addition of structural change to the remit of Lyons and the announcement of a White Paper that includes structural change make no difference, as far as I can see. I welcome the announcement of a White Paper, which will increase the amount of policy direction given to the Lyons review. Since council tax is Government policy and will continue to be Government policy throughout the White Paper stage and the Lyons review stage, there is no reason for them to abandon revaluation.

The second possible reason for the Government's move is the accusation that there are political reasons that explain the Bill. Throughout its consideration hon. Members in all parts of the House have pointed out that the problem with revaluation is that the political costs almost always outweigh the technical merits of conducting one. That is true even of this revaluation. The New Policy Institute estimated that under the revaluation as proposed for 2007, the winners would outweigh the losers by 5.5 million to 3 million. The trouble with that is that in such exercises the winners tend not to be very grateful, as they think they have been overpaying for many years, whereas the losers are furious, so the political cost is always very great.

There is a rather less cynical reason contained in the New Policy Institute's analysis of the possible reasons for a revaluation, and that is a reason of fairness—the revaluation would tend to benefit better-off people in some areas of the country at the expense of worse-off people in other areas. That is not a simple north-south divide, as some people think, but a geographical change and a change in the distribution of wealth and income that would be adverse. The problem of the unpopularity and the unfairness of revaluations is confirmed by the history of revaluations that Mr. Knight partially recounted in his remarks on the previous amendment. He did not get to the last example, when the threat of revaluation caused the poll tax, which is perhaps the most impressive error ever committed in the history of local government finance.

A third possible reason to support the Bill is that property values have not diverged significantly. Until about 2001, property values diverged throughout the country, which was followed by a convergence, but in itself that is not enough to explain calling off revaluation, because the subsequent convergence has not yet outweighed the previous divergence. If we take property values in 1991 as a base and count that as an index of 100, London was at 557 in 2004, whereas the north-west was at 466.5. Although there has been convergence in property values since about 2001, it is not yet sufficient to outweigh the previous divergence.

As the Minister said several times in previous debates, in particular areas of the country convergence and divergence do not follow the regional pattern. Is that the reason why the Government have introduced the Bill? The problem is that the Government refuse to take that point. Before the Bill was introduced in the autumn, they had not commissioned a study of divergence or convergence in property values. There is a lack of clarity on why the Bill was introduced.

The amendment's purpose is not to decide the debate about what has happened in the past or to explain why the Government have introduced the Bill, but to put any future debate on the same issue on to a more rational and informed basis. The amendment states that the Government must give reasons for not only going ahead with a revaluation—if they decided to go ahead with a revaluation, one imagines that they would be keen to give the reasons why—but a decision to decline to go ahead with a revaluation. We believe that that would help Parliament and the public distinguish between technical reasons and other reasons for a decision not to go ahead with a revaluation.

The amendment also states that the reasons that the Government give must include a statement on divergence in property values, but it would not require them to state only their view on divergence in property values. The point is to obtain the Government's view of what the divergence has been and of what level of divergence would be intolerable, given the other possible factors.

We moved a similar, although not identical, amendment in Committee, where a number of reasons were given for opposing it. The Minister said that the amendment appeared to require an objective view on when divergence in property values is enough for a revaluation, but that was not its purpose. It was designed to seek not an objective view whether divergence has become too much, but the Government's view of when divergence has become too much.

Does the hon. Gentleman have any worries about the cost of that part of his amendment? If we are to have an annual statement by the Secretary of State giving reasons, and if, by implication, there will be an annual assessment of the degree of divergence, the exercise could be very costly.

I was about to come to that point.

The second objection mentioned in Committee was that the amendment implied that divergence is the only reason why a revaluation might or might not proceed, but that is not what we are saying. We are saying that divergence is one reason that must be dealt with in the debate, whether or not the Government think that it is their central reason.

The third point concerned cost, which Mr. Forth mentioned. It was said in Committee that there would be a cost in officials' time. However, the figures are generally available from the Land Registry and from the series maintained by the Halifax building society and by the Royal Institution of Chartered Surveyors. There would be no great cost in compiling the figures, but it would involve a good deal of effort from Ministers in constructing their reasons based on the information available to them. That is not an unreasonable burden for the political heads of Government Departments to bear in the interests of greater openness.

I do not want to detain the House any further. The amendment is a proposed addition to the Bill from a party that is generally friendly to it. It would increase transparency and allow us to have a better debate, were these questions to arise again, than we have had on this occasion.

The Liberal Democrats' amendment would require an annual decision to be made, with reasons, on whether a revaluation exercise should be undertaken, with an assessment of the divergence in property values. Such an undertaking would involve enormous cost and administrative time. Conservative Members oppose the amendment.

As David Howarth said, the amendment is similar, although not identical, to the one that we debated in Committee. The Government's position remains the same. Let me emphasise that the Bill obliges the Secretary of State to come before the House at the time of a revaluation date and subject the order to debate and, no doubt, a vote. I assure the House that that will give it the opportunity to consider and challenge his reasons.

The amendment has been slightly reworded to make it clear that the duty on the Secretary of State to consider at least once each year whether to set a date for revaluation and to give reasons should include, but not be restricted to, an assessment of the degree of divergence in property values. Not least because it still refers to an assessment of the degree of divergence, I ask the House to oppose it if the hon. Gentleman wishes to press it to a vote.

Although we readily accept the argument for a 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 statements. When we debated the similar amendment in Committee, it received no support from the official Opposition. Indeed, Mr. Syms said that he was not sure that it would be terribly helpful and that it was probably unnecessary. I would go slightly further than that. The mere fact that there would have to be a statement at least once a year would undoubtedly stir up excitement and controversy among hon. Members, particularly Opposition Members, the press and the general public, and that would in turn lead to considerable uncertainty and anxiety for council tax payers.

Even more of a problem is the specific requirement for an assessment of the degree of divergence in property values. Whatever the hon. Gentleman may say, that would simply encourage the view that there must be some sort of objective "golden rule" that would lead, or even require, the Secretary of State—or anyone else—to determine whether a particular level of divergence justified a revaluation.

I appreciate that the hon. Member for Cambridge said in Committee that the similar amendment that we considered there did not assume the existence of any such golden number. He also said that he and his party were not trying to get an objective view of the conditions for revaluation. However, publication of the sort of assessment that he envisages would inevitably encourage people to think that if, for example, X per cent. of houses in band Y had increased in price by more than Z per cent., there would be a case for revaluation more or less automatically. Furthermore, they would infer that, if the Government then decided for whatever reason not to proceed with revaluation, notwithstanding that evidence, they would somehow be flunking the issue. Conversely, it would be inferred that, if a specific level of divergence had not been established, an insufficient case would have been made for revaluation.

The Government reject the notions that a specific 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 it.

The main point of the amendment is to encourage the Government to be consistent from one year to the next so that the reasons they give one year are not contradicted the following year. Those reasons do not have to constitute an objective rule but they should be consistent over time.

I understand the hon. Gentleman's point. I believe that the provision to require the Secretary of State on the appropriate occasion to justify his or her decision or proposal to the House is sufficient. I stress that I studied the points that he made in Committee after that debate and that I understand them, but I believe that the amendment would inevitably lead people to conclude that there must be a golden rule.

Revaluation is not simply about reflecting divergence in prices across the property market. 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 can be sensibly handled by the Valuation Office Agency and other interested parties.

Above all, we are interested in fairness but it does not depend on passing some sort of arbitrary test on the level of divergence. Indeed, if the focus were to be too heavily weighted towards divergence as the overriding factor predicating a revaluation, according to the amendment, a virtual annual revaluation of all properties would have to take place in order to assess divergence.

I agree with Angela Watkinson about the resources implications. The assessment would have to consider not only the national but the regional and local picture to reflect the fact that divergence can and does happen, and has an impact at the micro level—the billing authority level—as well as regionally and nationally.

I have no doubt that many individual householders would be tempted by the process to enter into some sort of annual debate about whether the Government should revalue that particular year according to whether they would win or lose—the hon. Gentleman mentioned winners and losers—by that specific set of figures. That would not offer any prospect of a sound basis on which to make the important decision of when to revalue.

The right way forward is for the Government, in the light of the Lyons inquiry and our response to that, to propose and justify a date for revaluation to Parliament, and for Parliament to consider the merits of the date and the justification by the process of debating the affirmative order for which the Bill provides. On that basis, I ask hon. Members to oppose the amendment if the hon. Gentleman pushes it to a Division.