Council Tax Valuation Bands Bill [HL]

Lord Skelmersdale Excerpts

Friday 22nd April 2016 Lords Chamber

[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.

[Lord Cormack (Con)]

My Lords, my noble friend Lord Marlesford has done a great service in bringing this matter to the attention of your Lordships’ House. However, I am reminded of Ernie Bevin saying that if you open Pandora’s box you do not know how many Trojan horses will come out. We have to tread carefully here. As one of only two Conservative Members of Parliament who did not support the introduction of the poll tax in Scotland, and who consistently voted against it on every conceivable and possible occasion, I hope that we will tread extremely carefully.

As I said, my noble friend has done the House a service in bringing this matter before us, but I think that perhaps we should look at differentiating between those who are truly resident in this country and those who are not. The escalation of property prices, particularly in London, has had enormous repercussions for the native population. We should consider some form of surcharge for those who merely buy properties as investments and rarely, if ever, live in them. There has to be some consideration of how we deal with that.

As I say, we have to tread extremely carefully but, of course, we know that because of the lateness of this day in this Session of Parliament, which will shortly come to an end, there will not be time for an exhaustive Report stage on this Bill. We should thank my noble friend Lord Marlesford for bringing this matter to our attention and consider how best we can approach it in the forthcoming Session.