HC Deb 03 June 1991 vol 192 cc120-6

Queen's recommendation having been signified

Motion made, and Question proposed, That, for the purposes of any Act resulting from the Local Government Finance and Valuation Bill, it is expedient to authorise the payment out of money provided by Parliament of such sums as may be required to enable a valuation to be carried out, in accordance with the provisions of the Act, of all domestic properties in Great Britain, including sums required—

  1. (a) to enable the Secretary of State to make grants to regional or islands councils towards their expenditure for the purposes of, or otherwise in connection with, the valuation; and
  2. (b) to meet administrative expenses incurred by the Secretary of State in making any such grants.—[Mr. Portalo.]

10.15 pm
Mr. David Blunkett (Sheffield, Brightside)

I will not detain the House long, because I do not believe that we should sit after 10 pm on any evening; but I cannot let the money resolution go by without commenting on the fact that we are about to embark on expenditure in excess of £250 million. The Government often chide the Labour party on the ground that, whenever there is a problem, it throws money at it; yet every time the Government introduce proposals on local government finance, it costs the rest of us a great deal. [Interruption.]

Mr. Speaker

Order. Will hon. Members below the Bar kindly leave the Chamber quietly or come and join us, please?

Mr. Blunkett

The sum of £250 million would seem very large were it not for the fact that, as the Chief Secretary to the Treasury revealed on 21 January, excluding non-collection costs, the community charge—or poll tax—cost us a staggering £6.1 billion in increased expenditure from central Government in the years 1989 to 1991 inclusive. I suppose that £250 million looks positively slim against that.

However, we are not clear about the final sum that will be required to undertake the revaluation. As was revealed today during Second Reading of the Bill, we are not clear on what basis the valuation will take place. We are not sure whether it will be based on capital values or on capital values plus. We are not even sure whether it will be a sampling valuation to place properties in bands, or whether there will be a comprehensive valuation of individual properties.

The money resolution refers to the valuation of individual properties. It refers to all domestic properties in Great Britain". To anyone who knows anything about the valuation system, that implies that each individual property will be individually assessed. However, every other Government statement, and clause 3 of the Bill, suggest that there will be sample valuing assisted by estate agents, who have a vested interest in increasing the price of property, from which they get a cut.

Had the Government chosen tonight to accept our solutions, the amount necessary to allocate to the valuation process would have been less. It could have been done using existing valuation staff over a rational period. it could have been done while we returned to the rating system, with the valuations from 1973 in England and Wales and from 1985 in Scotland. That would have meant implementing the alternative from 1 April next year, and would have given a breathing space for the valuation process to be carried out sensibly. It would have allowed genuine consultations to take place, rather than our introducing Bills before the consultation period was over.

We could then have saved £3 billion over the next two years in under-collected tax, administrative costs and in the collection process for the poll tax. In other words, that £3 billion could have defended and protected services; it could have bought teacher time, home helps and nursery places. The Government are going to squander that money in addition to the £250 million to which the money resolution relates.

The money resolution throws bad money after bad money. I wish that we could get that message across in the media, but the media are interested in only one issue at a time. I received a letter from the director-general of the BBC, who explained that he could not cover one poll tax issue because his television crews were covering a health service issue at the time. The BBC has been brought to such penury by the Government that it can manage to cover only one major event a day.

We should make the media interested in the expenditure of sums like £250 million and why we are wasting £3 billion over the next two years by staggering on with the poll tax into 1994 instead of getting rid of it by April next year. Perhaps we could make people in the media interested in that by making them aware of what the banding system and the valuation process will mean for their properties. They should become aware that estate agents will push up the prices of their houses to ensure that they are in a higher band and pay more than would otherwise be necessary. If we could do all that, it would be possible to debate the money resolution seriously.

The Opposition know that it will cost a great deal of money to carry out the valuation. We wish that it could be carried out sensibly and rationally over a reasonable period. We also wish that we were getting rid of the poll tax by 1 April, but the Government will pay the price when the general election eventually comes.

10.21 pm
Mr. Bob Cryer (Bradford, South)

I want to raise a few points in respect of the financial effects of the Local Government Finance and Valuation Bill. The Bill's explanatory and financial memorandum states blandly, under the heading "Financial effects of the Bill": The charge capping provisions of the Bill have no significant effects on central government expenditure. Of course they do not. The Bill demonstrates the Government's centralisation of power. They are issuing an order or decree to local authorities which, for 100 years or more, have exercised their own tax-gathering powers without the interference or involvement of central Government, by virtue of the democratic accountability of local authorities to their local electorate. Issuing a centralised jackbooted decree in the way in which the Government are exercising the charge-capping powers does not cost much more than the price of a postage stamp. However, the cost to local residents in terms of cuts in education, services for the mentally handicapped, social services and a whole range of local government services will be savage.

I want to consider the £250 million that the Government are throwing at the problem. We should have some information about how that money will be spent because that is the purpose of a money resolution. The provisional estimate is £250 million. Clause 3 provides powers for the Secretary of State to make regulations and establish the principles by which the valuation will be conducted.

The Government are clearly unprepared for this legislation. They are demanding in primary legislation that the principles that will apply should be included in subordinate legislation because they are not ready to be placed in primary legislation. It really is a topsy-turvey world when the Government introduce primary legislation and then say that the principles that they have not yet grasped or grappled with will be contained in subordinate legislation to be presented at some future date. Surely they have some notion of how that will be carried out.

Page 2 of the Bill shows that the number of public sector posts required to carry out the valuation is not known, because the Government are not certain how much of the valuation work will be contracted out to private sector professionals.

The Government say that the principles of their legislation have yet to be presented, and they tell the House that the amount to be spent is £250 million, but they do not know how much will be spent in the private sector and how much will be retained in the public sector. Will expenditure in the private sector be of the open cheque book variety for the chums of the Tory Government, or will expenditure be within the £250 million set out in the money resolution?

It is not unknown for the Government, having got a money resolution through the House, to have to come back two or three times after discovering that they do not have the authority for the expenditure. That is because they have treated the House with their usual arrogant contempt and have put through a money resolution which does not cover the whole of the expenditure. I invite the Minister to make it clear that the provisional estimate of £250 million will be adhered to and that the Government will not hand huge sums to the private sector.

As my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) said, estate agents will have a vested interest in raising the amount of work that they do and the value that they place on houses. How will they maintain objectivity? Will payments to them be strictly compared with the rates for civil servants, or will they work on commission? Such issues are implied by the money resolution, and the House needs some answers.

Because of the dithering and confusion surrounding this legislation, the Government will soon have to come back to the House to ask for further authority for expenditure. I hope that that will not happen. The Opposition are protecting taxpayers against this lavish, spendthrift Government, who have already hurled £6 billion at this horrendously absurd poll tax in a vain attempt to rescue it.

The Government are asking for what they regard as a trivial amount, but £250 million is a very important item of expenditure. If it were applied to Bradford, it could solve some of its education problems. [Laughter.] Conservative Members laugh. There are 600 temporary classrooms in Bradford and about £40 million is needed to replace them with permanent extensions which are needed to cater for Bradford's expanding school rolls. No new houses are being built in Bradford, and there is a waiting list of several thousand. We need such money to put Bradford on an even keel, but in the past 10 years hundreds of millions of pounds have been drawn away from local authorities, including Bradford, by the Government.

It is outrageous and unjust of the Government to take Government grant from local authorities, introduce wider charge-capping measures and then produce £250 million for an airy-fairy scheme whose principles the Government know nothing about.

Mr. Frank Haynes (Ashfield)

I agree with everything that my hon. Friend says. He queried whether the Government would return to ask for more money. They always do. That has happened regularly over the years, when they have been looking for a bit of additional cash: they sneak it through in the early hours of the morning. It is people like my hon. Friend and myself, who are regular attenders, who have to put up with that kind of thing. When the Tories come to that Dispatch Box, they are really saying, "We've come for a bit more money for our friends."

Mr. Cryer


Mr. Deputy Speaker (Sir Paul Dean)

Order. Before the hon. Gentleman responds, I ask him to bear in mind the fact that the money resolution deals with the valuation of domestic properties, and that he should confine his remarks to that subject.

Mr. Cryer

Absolutely, Mr. Deputy Speaker. I would not dream of straying outside that subject. In fact, I have had quite a bit of practice at speaking on money resolutions. I find myself able to stay within the bounds of Standing Orders while at the same time pointing emphatically at the way in which the huge sum of money that is to be spent on valuation could be used for better purposes than to help the Government out of the financial mess in which they have got themselves over the poll tax.

I remember that on one occasion, the then Home Office Minister, the hon. and learned Member for Grantham (Mr. Hogg), was forced to return to the Dispatch Box two further times because the Government had made such a mess of their money resolutions.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg)

You have made your point.

Mr. Cryer

And it is not the only point I have scored against the Government. That is not difficult to do, given the mess into which they have got themselves in a large number of areas.

I hope that the Minister has some answers, and that he will not be coming back to the House. I want to restrict public expenditure on this kind of escapade. The valuations will create all kinds of problems, with the system of appeal and the move from one band to another. The notion that properties will remain in certain bands in perpetuity is quite ludicrous—as one Environment Minister has already suggested. We will need a much more complex system to meet all the problems that will arise.

A better solution would be to end the poll tax and to replace it with Labour's proposals. We have already told the Government that we will co-operate in the introduction of a fairer tax. Then public money can be spent in the areas in which it should be spent—education, housing, and social services—rather than on propping up a tottering edifice.

10.32 pm
The Minister for Local Government and Inner Cities (Mr. Michael Portillo)

It was most amusing to hear the hon. Member for Bradford, South (Mr. Cryer) try to pose as some kind of friend of the taxpayer—a defender of the citizen. The Second Reading that preceded this debate was remarkable for the clarity with which Labour expressed its refusal to contemplate any capping or to defend the local taxpayer, and its determination, should it ever return to office, to let local authority spending rip.

It was remarkable also to hear the hon. Member for Dagenham (Mr. Gould) claim that the Government's council tax will in some way lead to higher bills per household than Labour's scheme, which the Opposition somewhat amusingly call "fair rates". Labour's figures are based on local authority spending this year—which has been brought extremely close to the Government's £39 billion target because we have been willing to cap, and have capped, and because the threat of capping persuaded many local authorities to adjust their budgets. It will not wash for the hon. Member for Dagenham, or for other members of the Opposition Front Bench, to claim to be the taxpayer's friend. They have spent much of the afternoon proving that they are not.

Mr. Haynes

On a point of order, Mr. Deputy Speaker. You pulled me up because I did not mention the question of valuation, but neither has the Minister. It would be fair if you pulled him up now.

Mr. Deputy Speaker

I am grateful for the hon. Gentleman's assistance. I was becoming slightly worried when the Minister was talking about capping.

Mr. Portillo

I am sensitive enough to have been able to feel some of the vibes that were emanating from the Chair.

The hon. Member for Bradford, South said that the explanatory memorandum stated that the capital provisions have no significant effect on expenditure and spoke of the cost to local taxpayers. They are not costs but savings to local taxpayers. Derwentside, despite its small budget, has been levying a community charge £95 per head higher than the Government believe to be appropriate.

The hon. Member for Sheffield, Brightside (Mr. Blunkett) castigated the Government for what he saw as an expensive and spendthrift proposal. I was surprised by his remarks. I remind the House that, in contrast to the £250 million proposed to allocate single properties to bands—the provisional estimate made in the explanatory memorandum, on which the money resolution is based—the Labour party proposes a return, in the short term, to the old rating list, a second change of system within 12 months and, following that, a valuation carried out not on a banding basis but on an exact valuation of all properties, which should be based on four different methods of valuation—rental, capital, rebuilding costs and repair and maintenance costs.

In addition, Labour proposes a new element to take into account ability to pay. In contrast to the £250 million that the money resolution proposes for a most simple valuation by allocating all properties to bands, the Labour party seeks to have two changes of system within a short period, and a valuation based on four different factors.

Mr. Blunkett

Perhaps the Minister would clarify the difference between clause 3 and the money resolution, the stated purpose of which is to provide the money for the valuation of all domestic properties.

Mr. Portillo

That was my next point. I am surprised that the hon. Gentleman is puzzled. All domestic properties in Britain must be allocated to a band. Therefore, they are being assigned a value—not an exact value, as the Labour party proposes, which would be an expensive process, as it would require a valuer to look at the details of every property—which will enable many properties to be valued without exact inspection.

Mr. Cryer

Whole streets?

Mr. Portillo

As the hon. Member for Bradford, South is saying, it may be possible to consider whole streets at a time and say that it is clear that all the properties in the street share certain characteristics. For that reason, the cost of valuation can be kept as reasonable as our provisional estimate of £250 million.

Mr. Cryer

The valuations may be made streets at a time, but surely the Minister is aware of the differences between houses in streets and roads. Corner houses are different and often have larger gardens, so does he not think that the Government's proposals will give rise to many problems? For example, an appeal system would be necessary so that people do not resent their houses being put in the same band, whatever the differences between them. This will create enormous problems.

Mr. Portillo

I am well aware that, within streets, there can be houses of different character. I am proposing only that a valuer might choose that approach where he is aware that all the houses in the street were basically of the same sort. I am not sure why the Labour party is being so obtuse about a banding system. I should have thought that it was an obvious way of proceeding which would commend itself to the Labour party, particularly as the Labour party now claims some interest in value for money.

The Government are interested in using the private sector to help in the valuation exercise because we believe that the private sector may be able to offer us value for money. Because that is the basis on which we would use the private sector, I am not able to say what proportion of the money will be spent with the private sector arid what proportion will need to be spent with the public sector. I should want to use the private sector where it offers value for money. If I were to prejudge matters now, I should not be able to argue convincingly to the House that I was obtaining value for money.

The hon. Member for Brightside talked about the possible loss of revenue on the community charge over the next two years of its existence. Two points make me believe that the way ahead will be better than recent experience—the enforcement procedures are up and running and local authorities are being urged to pursue non-payers to the limit of their considerable powers, and the community charge has been reduced by £140, which means that, even in high-spending Labour authorities, it is now possible for many more people to pay the community charge without difficulty.

If the hon. Member for Brightside is really concerned about the workability of the community charge over the next two years, it still lies in his hands and in the hands of his hon. Friends on the Opposition Front Bench to say unequivocally that they expect everyone to pay the community charge, including Labour Members of Parliament and Labour councillors. Until that is said loudly and clearly, the House will have little sympathy.

Mr. Allen McKay (Barnsley, West and Penistone)

Will the hon. Gentleman give way?

Mr. Portillo

The hon. Gentleman may make the statement again. Once he has made it, he can also explain why, despite that, there are still Labour Members and Labour councillors who advocate non-payment.

Mr. Blunkett

I shall deliberately and calculatingly rise to the bait. So that we do not have to go through all this in the Committee of the whole House, may I say unequivocally that we have made it clear on innumerable occasions to every Labour party member and elected representative that we expect them to pay the poll tax. We have made that clear in our resolutions and in our conference statements.

We do not yet, however, live in a totalitarian society—[Interruption.] We in the Labour party do not, which is why I do not have the power—nor should anyone else—to compel individuals to do something. The Government should not have the power; nor should I. We should have the ability to persuade and encourage, and to ensure that people understand our policies. I hope that the Minister accepts that that is a clear statement of what we stand for and where we are at. If we could say the same for Conservative Members and their friends about the manipulation of methods of ensuring that everything that should be paid was paid, we would all be much better off. Last year, the National Audit Office showed that £5 billion of national taxation was going missing. It is time that the Government did something about that.

Mr. Portillo

When I next have the pleasure of meeting Joan Twelves, I shall discuss the Labour party's lack of totalitarianism—[Interruption.] She has also been thrown out of the Labour party.

I am happy to commend the money resolution to the House.

Question put and agreed to.

Resolved, That, for the purposes of any Act resulting from the Local Government Finance and Valuation Bill, it is expedient to authorise the payment out of money provided by Parliament of such sums as may be required to enable a valuation to be carried out, in accordance with the provisions of the Act, of all domestic properties in Great Britain, including sums required—

  1. (a) to enable the Secretary of State to make grants to regional or islands councils towards their expenditure for the purposes of, or otherwise in connection with, the valuation; and
  2. (b) to meet administrative expenses incurred by the Secretary of State in making any such grants.