Council Tax Valuation Bands Bill [HL]

Lord Mackay of Clashfern Excerpts

Friday 22nd April 2016 Lords Chamber

[Lord Marlesford]

Of course there are two schedules: it is the whole purpose that properties migrate, when they change hands, on to the new schedule. People who are currently occupying a property, if it was acquired before 2000, will be on the old schedule and there will be no change at all. Even in my illustrative table, for most people there will be no change anyway, because although the bands will be different and there will be some losers and some gainers, they will not be very big ones.

On the noble Lord’s very important point about overseas people, I have always believed that one way of dealing with the abuse of the overseas purchase of property should be that British law should be so administered that ownership is not recognised unless the property has been properly registered by the Land Registry in the name of a person. If that happened, people would be very hesitant to acquire expensive property without getting a proper Land Registry entry, because that is the proof of ownership—if you are going to buy something, you want to be absolutely certain who you are buying it from. The noble Lords raises a perfectly valid point which should be dealt with, although it is not dealt with in this Bill.

I think that this is an idea worth pursuing. It may be that we will want to make further amendments on Report—if there is time to do it before the new Session, which is probably rather unlikely—but I think that the Bill is an advance worth making and I therefore ask my noble friend to withdraw his amendment.

[Lord Mackay of Clashfern (Con)]

My Lords, this subject of property valuation has proved rather difficult over the years. I spent my early years at the Bar in Scotland on a considerable number of these valuation cases. Then, of course, my noble friend the Minister’s father, as Secretary of State—and a distinguished Secretary of State he was—agreed to have a revaluation in Scotland. When that revaluation came, it was discovered that domestic properties were going to pay a rather higher amount of the local taxation than they had previously. Many people who were interested in politics were owners or occupiers of residential property and the result was an urgent desire to do something to deal with the injustice which this seemed to throw up, and we all know what the effects of that ultimately were. I am not sure that anybody has discovered a really good method of dealing with local taxation. When I made visits abroad when I was Lord Chancellor, I used to ask about these matters. It was pretty clear that nobody in any of the countries that I visited had developed a satisfactory system.

The present system is certainly by no means perfect, but it could be improved by extending the bands. As has been pointed out, the Secretary of State has the power to do that. There are, of course, difficulties with that. As my noble friend Lord True pointed out, it is difficult to know on what basis the new bands would be applied. It is argued that a revaluation would be necessary. I believe that it might be possible to have a fair system which extended the bands using the previous valuations. That would still produce a change in favour of fairness, although perhaps not such a substantial change as that proposed in my noble friend’s Bill. As has been said again and again, one of the difficulties with this kind of tax is that, through succession or something, people may find themselves in properties which are highly valued, but they may be very short of cash with which to pay the local taxation. That problem is not likely to be solved, albeit that the market conditions may force people to change the properties in which they live.

It is certainly very worth while considering whether to extend the bands without doing too much more. If that happened, it might to some extent deal with the situation better than it is dealt with at present, although it would not by any means be a perfect solution. The detailed difficulties that my noble friend Lord True pointed out could be modified considerably if something of that kind was done. I am keen for the Secretary of State to consider this issue extremely carefully, although I know, of course, about the political risks inherent in doing anything at all in this area. However, courage is required if you are to be fair.

[Lord Skelmersdale (Con)]

My Lords, I am sure that my noble friend on the Front Bench does not want to get involved in this amendment and, indeed, series of thoughts produced by my noble friends Lord True and Lord Marlesford. However, there is a technical point. Can he confirm whether a property has to be registered at the Land Registry? I rather suspect that the answer is no.