Council Tax Valuation Bands Bill [HL]

Lord Kennedy of Southwark Excerpts

Friday 11th September 2015 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I thank the noble Lord, Lord Marlesford, for bringing his Private Member’s Bill to your Lordships’ House today. I declare an interest as an elected member of Lewisham Borough Council in London. I am unable to give the noble Lord the full support of the Opposition today, but I wish him and his Bill well. I think we can all agree that there is an issue, and this is an important part of the discussion in seeking to resolve matters. I agree with the noble Lords, Lord Brooke of Sutton Mandeville and Lord Wasserman, about the noble Lord’s creative endeavours and his ability to get a grip on issues that may not have been looked at for some time.

As my noble friend Lord Desai said, the council tax was introduced to replace the poll tax, the very unpopular form of local taxation that the Conservative Government introduced in 1989, first in Scotland and then in England and Wales. As we all know, it led to Mrs Thatcher being deposed as Prime Minister and replaced by John Major. If I am correct, it was the first policy announcement he made: he immediately said in the other place that the poll tax was to be scrapped. The council tax is how local people pay for the services they receive from their local authority or authorities, which include housing, social services, transport, policing, and fire and rescue services. However, it covers only part of the cost, with the rest of the money coming from central government through grants and other forms of funding.

As the noble Lord, Lord Marlesford, outlined, properties are allocated one of eight bands, coded by the letters A to H, on the basis of an assumed capital value as of 1 April 1991. There are discounts for single people and other exemptions where properties are unoccupied. The noble Lord, Lord Flight, has a point about the narrowness of the bands, particularly in London, something which was also mentioned by the noble Lord, Lord Wasserman. However, my experience in Lewisham suggests that we would certainly not be self-financing on the basis of these changes.

The previous Labour Government did not proceed with a revaluation, and I am sure part of the reason for that was the effect on poorer families. The coalition Government also did not proceed with a revaluation, and I suspect this Conservative Government are going to do exactly the same thing. The point of the noble Lord’s scheme is that it does not require a revaluation but would instead deal with the issue as properties are sold. The problem that I have is that I do not want people, particularly people struggling to make ends meet, having to take on extra costs that they would not otherwise have to pay. That of course would be the effect if this Bill became law.

As a councillor in Lewisham, I was delighted that we froze our council tax this year. I believe I am correct in saying that we have frozen our council tax in all but one of the last four years, but that was before I became a member of the authority. I hope we are able to continue to freeze our council tax for many years to come.

If the Bill manages to get some time in Committee, it will be possible, through probing amendments, to see how it could be improved and the idea put forward by the noble Lord explored further in debate. The noble Lord, Lord True, made that very point about dealing with these matters in Committee. We can also look at this in terms of policy development for local government, and one thing that I will want to look at is the whole question of value for money. I am concerned about the value we get in local government when tendering out services. There is an issue there in terms of the cost that local government actually pays. I fully support wealth creation—we all need wealth creators, because they provide the tax that we need to pay for our public services.

The noble Lord, Lord Marlesford, mentioned the proposed mansion tax when introducing the Bill. One of the problems with the mansion tax is of course its application in London. With property prices ahead of many other parts of the country, family homes in London—often very nice ones—can be bought and sold for large sums of money, but they would not be, in anyone’s understanding, a mansion. That is a real problem.

One of the criticisms of the council tax is of course its perceived unfairness in not taking into account the ability to pay. Critics point out that although the capital value of a property in which a person lives might give some indication of the relative wealth of an individual, it does not necessarily relate to current income. On the other hand, benefits are available to reduce the amount of council tax paid—although we are all aware of the cuts there in recent years.

It is important to say in looking at any element of local government funding that the cuts that have been asked of local government have been difficult to absorb. Local government has risen to the challenge in recent years and delivered local services at a level that local people would expect, but that is becoming more and more difficult. I see that first hand in Lewisham, with the difficult decision that we had to take to balance our budget and deliver the best possible services with fewer resources.

I hope that the Bill gets some time in Committee for us to debate the matter further. The funding of local government is a complex area. I want fair funding for local authorities—fair for local people, fair for everyone involved, and getting the best possible value for money.