Orders of the Day — Council Tax (New Valuation Lists for England) Bill

House of Commons, 1 December 2005.

Clause 1 — Dates on which new valuation lists must be compiled for England

Paul Beresford (Conservative, Mole Valley)

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.'.

Greg Knight (Conservative, East Yorkshire)

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.

Michael Martin (Speaker, Glasgow North East)

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.

Eric Forth (Conservative, Bromley and Chislehurst)

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?

Michael Martin (Speaker, Glasgow North East)

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

Quentin Davies (Conservative, Grantham and Stamford)

On a point of order, Mr. Speaker—

Michael Martin (Speaker, Glasgow North East)

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

Quentin Davies (Conservative, Grantham and Stamford)

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

Michael Martin (Speaker, Glasgow North East)

Well, I shall be surprised if it is.

Quentin Davies (Conservative, Grantham and Stamford)

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?

Michael Martin (Speaker, Glasgow North East)

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.

Paul Beresford (Conservative, Mole Valley)

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 the Member for Skipton and Ripon (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 the Member for Suffolk, Coastal (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.

Greg Knight (Conservative, East Yorkshire)

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?

Paul Beresford (Conservative, Mole Valley)

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.

Eric Forth (Conservative, Bromley and Chislehurst)

The point made by my right hon. Friend the Member for East Yorkshire (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?

Paul Beresford (Conservative, Mole Valley)

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.

John Gummer (Conservative, Suffolk Coastal)

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.

Paul Beresford (Conservative, Mole Valley)

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.

Quentin Davies (Conservative, Grantham and Stamford)

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?

Paul Beresford (Conservative, Mole Valley)

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 the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), were emphatic that a national revaluation was required and that, as it was programmed, it should go ahead. Suddenly, post the election—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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.

Eric Forth (Conservative, Bromley and Chislehurst)

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 the Member for Grantham and Stamford (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 the Member for Mole Valley (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?

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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.

Quentin Davies (Conservative, Grantham and Stamford)

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 the Member for Mole Valley (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.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

I do not accept that point of order. The hon. Member for Mole Valley (Sir Paul Beresford) has been given an opportunity to give a brief explanation of the background to the amendment. The hon. Member for Grantham and Stamford (Mr. Davies) may not be quite as experienced as the right hon. Member for Bromley and Chislehurst (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.

Paul Beresford (Conservative, Mole Valley)

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."—[Official Report, 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. The hon. Member for South Ribble (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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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.

John Gummer (Conservative, Suffolk Coastal)

On a point of order, Madam Deputy Speaker. I am sorry to raise this issue. I have been carefully following my hon. Friend the Member for Mole Valley (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?

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Paul Beresford (Conservative, Mole Valley)

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.

Mark Francois (Conservative, Rayleigh)

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?

Paul Beresford (Conservative, Mole Valley)

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.

Greg Knight (Conservative, East Yorkshire)

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.

Paul Beresford (Conservative, Mole Valley)

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.

Peter Bone (Conservative, Wellingborough)

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?

Paul Beresford (Conservative, Mole Valley)

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.

Quentin Davies (Conservative, Grantham and Stamford)

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 the Member for East Yorkshire (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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. Interventions are to be brief.

Paul Beresford (Conservative, Mole Valley)

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

Alan Whitehead (Labour, Southampton, Test)

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?

Paul Beresford (Conservative, Mole Valley)

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.

John Gummer (Conservative, Suffolk Coastal)

Is not my hon. Friend being rather unkind to the hon. Member for Southampton, Test (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?

Paul Beresford (Conservative, Mole Valley)

My right hon. Friend is perhaps right. The hon. Member for Southampton, Test (Dr. Whitehead) gave a long dissertation on Second Reading and I think that it supported the assumption of my right hon. Friend.

Philip Hollobone (Conservative, Kettering)

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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. I think that I might just protect the hon. Member for Mole Valley (Sir Paul Beresford) so that he does not stray on to Wales during the debate.

Paul Beresford (Conservative, Mole Valley)

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.

Quentin Davies (Conservative, Grantham and Stamford)

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.

Paul Beresford (Conservative, Mole Valley)

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.

Grant Shapps (Conservative, Welwyn Hatfield)

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?

Paul Beresford (Conservative, Mole Valley)

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 the Member for Brentwood and Ongar (Mr. Pickles) on Second Reading. I say that with a touch of concern because when my hon. Friend the Member for Poole (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.

Quentin Davies (Conservative, Grantham and Stamford)

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?

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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.

John Gummer (Conservative, Suffolk Coastal)

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?

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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.

Eric Forth (Conservative, Bromley and Chislehurst)

Further to that point of order, Madam Deputy Speaker. Perhaps you will help by allowing my hon. Friend the Member for Mole Valley (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.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Perhaps I will not be minded to do that.

Greg Knight (Conservative, East Yorkshire)

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.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Quentin Davies (Conservative, Grantham and Stamford)

rose—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Quentin Davies (Conservative, Grantham and Stamford)

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?

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Paul Beresford (Conservative, Mole Valley)

For a moment, I feared that the carefully thought out suggestion offered by my right hon. Friend the Member for Bromley and Chislehurst (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.

Robert Syms (Conservative, Poole)

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—the hon. Member for Southampton, Test (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.

Mark Francois (Conservative, Rayleigh)

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?

Robert Syms (Conservative, Poole)

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.

Quentin Davies (Conservative, Grantham and Stamford)

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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. Perhaps the hon. Member for Poole (Mr. Syms) will speak to the amendment.

Robert Syms (Conservative, Poole)

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 the Member for Mole Valley (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.

Paul Beresford (Conservative, Mole Valley)

Will my hon. Friend give way?

Robert Syms (Conservative, Poole)

Yes, of course.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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.

Robert Syms (Conservative, Poole)

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

Paul Beresford (Conservative, Mole Valley)

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.

Robert Syms (Conservative, Poole)

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.

Alan Whitehead (Labour, Southampton, Test)

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 the hon. Member for Mole Valley (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?

Robert Syms (Conservative, Poole)

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.

Paul Beresford (Conservative, Mole Valley)

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.

Robert Syms (Conservative, Poole)

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.

Geoffrey Clifton-Brown (Conservative, Cotswold)

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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. I understood this to be an intervention.

Geoffrey Clifton-Brown (Conservative, Cotswold)

Yes, indeed.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Robert Syms (Conservative, Poole)

My hon. Friend the Member for Cotswold (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.

Geoffrey Clifton-Brown (Conservative, Cotswold)

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

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order.

Robert Syms (Conservative, Poole)

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.

Paul Beresford (Conservative, Mole Valley)

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.

Robert Syms (Conservative, Poole)

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?

Eric Forth (Conservative, Bromley and Chislehurst)

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.

Robert Syms (Conservative, Poole)

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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Robert Syms (Conservative, Poole)

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

John Gummer (Conservative, Suffolk Coastal)

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?

Robert Syms (Conservative, Poole)

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.

David Howarth (Liberal Democrat, Cambridge)

There are two reasons why I shall be very brief. First, I am a late substitute for my hon. Friend the Member for Brent, East (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, the hon. Member for Mole Valley (Sir Paul Beresford) has made a serious point. I agree with the hon. Member for Poole (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.

Paul Beresford (Conservative, Mole Valley)

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.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

David Howarth (Liberal Democrat, Cambridge)

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.

Brian Binley (Conservative, Northampton South)

I congratulate my hon. Friend the Member for Mole Valley (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.

Greg Knight (Conservative, East Yorkshire)

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?

Brian Binley (Conservative, Northampton South)

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.

Paul Beresford (Conservative, Mole Valley)

I thank my hon. Friend for supporting the amendment. In response to my right hon. Friend the Member for East Yorkshire (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.

Brian Binley (Conservative, Northampton South)

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.

Geoffrey Clifton-Brown (Conservative, Cotswold)

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?

Brian Binley (Conservative, Northampton South)

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.

Eric Forth (Conservative, Bromley and Chislehurst)

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?

Brian Binley (Conservative, Northampton South)

rose—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Brian Binley (Conservative, Northampton South)

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 the Member for Bromley and Chislehurst (Mr. Forth), no, I do not have that faith—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Brian Binley (Conservative, Northampton South)

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 the Member for Suffolk, Coastal (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.

Geoffrey Clifton-Brown (Conservative, Cotswold)

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?

Brian Binley (Conservative, Northampton South)

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—

Eric Forth (Conservative, Bromley and Chislehurst)

There is no need to do that.

Brian Binley (Conservative, Northampton South)

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.

Mark Francois (Conservative, Rayleigh)

I rise to make a few points about the amendment. It is a pleasure to follow my hon. Friend the Member for Northampton, South (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 the Member for Mole Valley (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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Mark Francois (Conservative, Rayleigh)

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 the Member for East Yorkshire (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.

Anne Main (Conservative, St Albans)

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.

Mark Francois (Conservative, Rayleigh)

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.

Paul Beresford (Conservative, Mole Valley)

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.

Mark Francois (Conservative, Rayleigh)

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.

John Gummer (Conservative, Suffolk Coastal)

rose—

Brian Binley (Conservative, Northampton South)

rose—

Mark Francois (Conservative, Rayleigh)

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

John Gummer (Conservative, Suffolk Coastal)

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.

Mark Francois (Conservative, Rayleigh)

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?

Brian Binley (Conservative, Northampton South)

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

Mark Francois (Conservative, Rayleigh)

In that case, I shall conclude my remarks.

Geoffrey Clifton-Brown (Conservative, Cotswold)

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?

Mark Francois (Conservative, Rayleigh)

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.

Christopher Chope (Conservative, Christchurch)

I support amendment No. 3, which was tabled by my former colleague on Wandsworth council, my hon. Friend the Member for Mole Valley (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.

Eric Forth (Conservative, Bromley and Chislehurst)

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?

Christopher Chope (Conservative, Christchurch)

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.

Mark Francois (Conservative, Rayleigh)

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.

Christopher Chope (Conservative, Christchurch)

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.

Phil Woolas (Labour, Oldham East and Saddleworth)

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?

Christopher Chope (Conservative, Christchurch)

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.

John Gummer (Conservative, Suffolk Coastal)

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?

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Christopher Chope (Conservative, Christchurch)

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.

Greg Knight (Conservative, East Yorkshire)

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?

Christopher Chope (Conservative, Christchurch)

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.

David Howarth (Liberal Democrat, Cambridge)

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.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Christopher Chope (Conservative, Christchurch)

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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Christopher Chope (Conservative, Christchurch)

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.

Anne Main (Conservative, St Albans)

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?

Christopher Chope (Conservative, Christchurch)

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.

Anne Main (Conservative, St Albans)

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.

Christopher Chope (Conservative, Christchurch)

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.

Paul Beresford (Conservative, Mole Valley)

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.

Christopher Chope (Conservative, Christchurch)

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.]—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Christopher Chope (Conservative, Christchurch)

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.

Eric Forth (Conservative, Bromley and Chislehurst)

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 the Member for Mole Valley (Sir Paul Beresford) if we could demonstrate that benefit.

Christopher Chope (Conservative, Christchurch)

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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Christopher Chope (Conservative, Christchurch)

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.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Christopher Chope (Conservative, Christchurch)

Certainly, Madam Deputy Speaker. My hon. Friend's amendment would require a much smaller cohort of staff who, as my right hon. Friend the Member for Bromley and Chislehurst (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.

Greg Knight (Conservative, East Yorkshire)

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.

Eric Forth (Conservative, Bromley and Chislehurst)

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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. The right hon. Member for East Yorkshire (Mr. Knight) has had sufficient help.

Greg Knight (Conservative, East Yorkshire)

I thank my right hon. Friend the Member for Bromley and Chislehurst (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 the Member for Mole Valley (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.

David Taylor (Labour, North West Leicestershire)

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?

Greg Knight (Conservative, East Yorkshire)

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.

John Gummer (Conservative, Suffolk Coastal)

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.

Greg Knight (Conservative, East Yorkshire)

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.

John Gummer (Conservative, Suffolk Coastal)

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?

Greg Knight (Conservative, East Yorkshire)

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.

Mark Francois (Conservative, Rayleigh)

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?

Greg Knight (Conservative, East Yorkshire)

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.

David Taylor (Labour, North West Leicestershire)

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?

Greg Knight (Conservative, East Yorkshire)

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.

Paul Beresford (Conservative, Mole Valley)

Perhaps I can help my right hon. Friend with the intervention of the hon. Member for North-West Leicestershire (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.

Greg Knight (Conservative, East Yorkshire)

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

Brian Binley (Conservative, Northampton South)

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?

Greg Knight (Conservative, East Yorkshire)

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 the Member for Christchurch (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.

Phil Woolas (Labour, Oldham East and Saddleworth)

Far be it from me to be fair to the hon. Member for Mole Valley (Sir Paul Beresford), but I assume that he intended the order to be subject to parliamentary approval.

Paul Beresford (Conservative, Mole Valley)

That is right.

Greg Knight (Conservative, East Yorkshire)

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.

John Gummer (Conservative, Suffolk Coastal)

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.

Greg Knight (Conservative, East Yorkshire)

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?

John Gummer (Conservative, Suffolk Coastal)

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—

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

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.

John Gummer (Conservative, Suffolk Coastal)

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 the Member for Mole Valley (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.

Phil Woolas (Labour, Oldham East and Saddleworth)

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?

John Gummer (Conservative, Suffolk Coastal)

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.

David Taylor (Labour, North West Leicestershire)

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, the hon. Member for Mole Valley (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.

John Gummer (Conservative, Suffolk Coastal)

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—

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

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.

John Gummer (Conservative, Suffolk Coastal)

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 the Member for Rayleigh (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.

Mark Francois (Conservative, Rayleigh)

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.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. I think that the right hon. Member for Suffolk, Coastal (Mr. Gummer) might be tempted again from the straight and narrow. I hope that he will not be.

John Gummer (Conservative, Suffolk Coastal)

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 the Member for East Yorkshire (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.

Greg Knight (Conservative, East Yorkshire)

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

John Gummer (Conservative, Suffolk Coastal)

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, the hon. Member for Ipswich (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.

The rest of the debate is in Hansard.