Council Tax Valuation Bands Bill [HL]
Debate between Viscount Younger of Leckie and Lord True
Viscount Younger of Leckie (Con)
My Lords, I thank my noble friend Lord True for his work on, and engagement with, this Bill. He has brought to the debate his customary passion and commitment. I am sure that everyone agrees with me that this House benefits from his experience as a council leader and the expertise which he brings to the subject.
I will not repeat all the points made by my noble friend Lady Williams at Second Reading. However, the Government have a firm commitment to keep council tax low for taxpayers, which we have successfully delivered and continue to deliver. I express my reservations that either with or without this amendment, the Bill would not support that aim.
My noble friend Lord True and the noble Lord, Lord McKenzie, raised this matter and I agree with them that operating two parallel systems for council tax valuations would risk introducing new costs and confusion into the system. I note that my noble friend Lord Marlesford himself acknowledged that a new system should be administratively easy. In the protracted transition period during which these systems would need to operate, residents could face dramatically different council tax bills, based on the arbitrary distinction of when their home was last sold. The Government believe that it is fairer, as well as simpler, to band properties in a single list on the basis of a common date.
Furthermore, the present system of council tax provides stability and certainty for households, helping them to manage their finances. It is well understood, which is evidenced by the very high collection rate of 97%. Ultimately, people know that they will be charged on the same consistent basis as their neighbours. I should add that council tax in England has fallen by 9% in real terms since 2010-11. The Government see no need to introduce turbulence and uncertainty into households’ financial management by changing the council tax bands. This uncertainty about council tax bills could generate further risk to the Government’s aims to see 1 million new homes built in England over this Parliament.
I note and appreciate the remarks made by my noble and learned friend Lord Mackay of Clashfern, who alluded to some interesting experiences in Scotland. In particular, he suggested the introduction of a new band at the top. But he also noted, in his informed contribution, that many properties in the higher bands are occupied by cash-poor households. That, in a nutshell, is the issue and the Government have no plans to introduce a new band.
My noble friend Lord Skelmersdale raised the issue of whether a property has to be registered at the Land Registry. It is indeed the case that properties purchased before 1990 might not be registered, so he makes a valid point.
The present system gives taxpayers confidence and stability. It is widely understood and payment rates are high. I hope that noble Lords will understand that, for those reasons, the Government cannot support the Bill.
Lord True
My Lords, I am grateful to those who have spoken and to my noble friend on the Front Bench for the kind things that he said. They are entirely unjustified: I can assure him that there are many, many people—leaders and former leaders of local authorities—who have far greater expertise than me. We heard from one of them, the noble Lord, Lord McKenzie of Luton, with whose intervention I very much agreed. His extremely pertinent point about disguised ownership was touched on also by my noble friend Lord Cormack. The massive capital inflows to the country are an issue and we heard, in the Chancellor’s recent forecast, the expectation of the scale of future inflows of individuals and capital that are distorting the market. Attempts are being made to chase, capture and tax that money, but it is difficult. This matter might need to be examined but it is not necessarily a matter for this Bill. Neither is it necessarily a matter that would defeat the Bill, but it is an interesting, separate point of detail.
I was grateful for what the noble Lord, Lord Butler of Brockwell, said, not least because he agreed with me in detail while making a point on substance. One difficulty with taking the value of a property at a particular time is that it is a snapshot. The current council tax system, albeit based on 1991 values, has benefits. There is a separate argument about revaluation, and I said at the outset that this debate is about my noble friend’s Bill, not about whether we should have higher bands. My noble and learned friend Lord Mackay of Clashfern made a very important intervention on that. A property changing hands is a snapshot of its value at a time, whereas the council tax basis is an assessment of relative values across the country. Although there will be anomalies in it, it is broadly—and certainly at the time it was introduced it was intended to be—fair and accurate.
I said in my opening remarks that my noble friend Lord Marlesford brought forward an interesting point and the noble Lord, Lord Butler, supported him. I understand the logic of this. But if you just take individual snapshot values you will get the variations that the noble Lord, Lord McKenzie, referred to, which will be frozen in two parallel bands. And it will not reflect the fact of market change.
Relatively, all houses in an area will go up and down with the market. There will be variations. But let us say that there is a property crash, which is quite possible with some of the excessive values we have now. Under my noble friend’s scheme, if you have scrimped and saved to buy a house worth £525,000 and the market goes down, you will find yourself paying a council tax which is twice that paid by people who paid £495,000. If it is on the excessive value that has been charged before, what does the person do when the value goes down and they find themselves paying twice as much as their neighbours who have just bought the house next door?
Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord True
Viscount Younger of Leckie
I think that I explained that earlier, by saying that we needed to look at both sides, and to use the principle of fairness. The fact of the matter is that unless we intervene and there is a status approach, the value of land is what it is. I believe that the existing regulations are fair. Land will always have its existing value, but the hope value needs to be taken account of as well.
As I said, in some situations there will be no hope value, because the individual claimant could not have obtained planning permission for some more valuable use. For instance, the land might be in an isolated rural location where permission for development would have been unlikely to be granted. Therefore, compensation under the code is paid at the open market value of the land in the “no-scheme world”. This provides a fair level of compensation. I hope that these explanations have reassured noble Lords. I have spent a bit of time expanding on the arguments raised, particularly by the noble Lord, Lord Campbell-Savours, and I hope that noble Lords will feel able not to press their amendments.
Viscount Younger of Leckie
My Lords, I thank my noble friend Lord True for his interest in improving the Bill, and I recognise his years of experience in local government. His amendments relate to clauses regarding the Mayor of London. I have spoken today about the importance of supporting growth through the planning system, and the Mayor of London plays a key role in harnessing this growth. I have also spoken about the importance of decisions being made at the local level wherever possible, and I believe my noble friend and I agree on that. I thank him for his comments on these clauses, but I do not believe that Amendments 89B to 89K are necessary, and I hope that I can provide some reassurance to noble Lords about the purpose of Clause 135.
Amendments 89B to 89E would remove the ability of the Mayor of London to revise a development plan document when invited to do so by the Secretary of State. First, I should like to clarify that Clauses 132 and 133 are concerned only with documents that comprise the local plan for an area; they are not concerned with the spatial development strategy for London—the so-called London Plan. I will also seek to clarify what is meant by “revise”, as I believe that these amendments may be based on a misinterpretation of its definition. At this late hour, perhaps I may write to my noble friend with the details of that definition.
I turn to Amendment 89F, for which I will again start with some context. For a development plan document to be adopted or approved, regardless of whether it has been prepared by a local authority or the Secretary of State, it must be submitted for examination. Following the examination, the local planning authority must publish the recommendations of the person appointed to examine the plan and their reasoning. The amendment would remove the ability of the Mayor of London to require a local planning authority to help ensure that local people are made aware of the recommendations of the person appointed to examine the plan.
Amendments 89G and 89H would disable the mayor’s ability to approve a development plan document. Approval is a necessary step if a plan is to come into force. Not doing so would fail to provide the community and others with the benefits and certainty that come from having a plan. Only once it is approved does a plan become part of the development plan for an area and the starting point for determining planning applications. I hope I have been clear that the Mayor of London may prepare or revise a plan only for a London borough that has failed to progress its own plan and only where the Secretary of State invites him to do so.
That brings me to my noble friend’s Amendment 89J. I suspect that this amendment does not fulfil the purpose that my noble friend intended. As currently drafted, where the Mayor of London has been invited to prepare a plan and the plan has been examined, he may direct an authority to consider adopting a document as an alternative to the mayor approving it himself. The change proposed by Amendment 89J does not alter the practical effect of the provision and the outcome would still put the authority under no obligation to adopt the plan where the mayor decides not to approve it himself.
I hope that I have given some brief reassurance to my noble friend and that he will agree to withdraw his amendment.
Lord True
My Lords, I accept that and look forward with interest to the letter. I leave on the record the comments I made about the ongoing discussions with the GLA and the future way we should operate. I did not get a specific reply on Clause 135 but, again, we can pursue that. I am happy to have discussions with my noble friend between now and Report and, on that basis, I beg leave to withdraw my amendment.