Local Government Finance

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 5:27 pm on 3rd February 2010.

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Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West 5:27 pm, 3rd February 2010

The hon. Lady should look at the data she cites. The Welsh Assembly-it believe it was my party, but I am not making an excuse for it-took advantage of the revaluation hugely to increase the total take. The bills went up, because it decided to increase the amount of money raised. I am distressed to have to explain this to the hon. Lady, but that is how the system works. As a former chair of finance, I know the way the system works. A council decides how much money it needs to raise from council tax in order to fill the gap between grant income, charge income and what it takes from the reserves. It decides on the total amount it wishes to raise and then it turns to the city treasurer and says, "Looking at our local tax base, given the people we have in each band and so on, how much do we have to increase band D council tax to raise the requisite amount of money?" It follows that if there is a revaluation, unless the council decides it wants to increase the amount raised, some people's bills will go up and others' will go down. The Welsh Assembly example, cited all the time by Conservative Members, is not an example of revaluation leading to bills going up; it is an example of an elected council or assembly choosing to increase the total take and, of course, everybody's bills going up. It has nothing to do with revaluation.

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