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Council Tax Banding

3. Shona McIsaac (Cleethorpes): What plans there are to review council tax banding. [653]

The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Dr. Alan Whitehead): A number of respondents to our Green Paper on local government finance, which we published last September, proposed that changes should be made to the structure of the council tax bands. We are considering what they had to say in the context of preparing a White Paper, which we intend to publish later this year.

Shona McIsaac: I thank my hon. Friend for that reply and welcome him to the Front Bench. I am sure that he will be hearing an awful lot from hon. Members about council tax banding. Will he acknowledge that the flawed system that was introduced by the previous Tory

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Government penalises parts of the country, such as Grimsby and Cleethorpes, where the majority of properties are in band A? In particular, will he consider introducing a new lower band to acknowledge the fact that some people live in cheaper properties, such as mobile homes, bedsits or on residential parks, which are common in seaside resorts?

Dr. Whitehead: I thank my hon. Friend for her kind remarks, and I anticipate hearing from her and other hon. Members on this subject and many other council tax matters in the not-too-distant future.

We are aware of the concerns that occupiers of low-value properties have about their council tax banding. A revaluation would be necessary to split a council tax banding, and we have no plans for such a revaluation at present. In the Green Paper, however, we invited views on whether there should be a fixed cycle for council tax revaluations and whether that would make the system fairer. Revaluations for business rates are carried out on a statutory five-year cycle, but at the moment there is no fixed cycle for council tax revaluation.

Mr. David Cameron (Witney): When looking at council tax banding, will the Minister address the concerns of residents in west Oxfordshire about the review of the area cost adjustment? That could add £100 to my constituents' council tax bills. The review is under way; when does he expect it to be completed? Will he guarantee that local authorities in the south-east, which have problems with teacher shortages, will be no worse off?

Dr. Whitehead: The Government are aware of the concerns of many people about area cost adjustment, and representations on the subject have been made by several hon. Members. The issue will be considered for the White Paper, which will be published later this year.

Lynne Jones (Birmingham, Selly Oak): Will my hon. Friend consider making the council tax system more progressive by increasing the multiplier on the top band?

Dr. Whitehead: The Government are also aware of the opposite view, which is that council tax band H could be split, or the ratio between the lowest band and the highest band could be altered to make the system fairer. All those considerations were included in the Green Paper. Responses have been received, and the Government are considering how best to respond to them in the White Paper later this year.

Mr. Nigel Waterson (Eastbourne): May I, too, welcome the Minister to his new position? Did he, early in his time at the Department, find in the bottom of one of his red boxes the infamous leaked memo from No. 10, reported recently in The Sunday Times, which said:

Does the Minister accept that whether or not he fiddles with the formulae, if council tax continues to rise at the rate that it has over the past four years, by 2005 it will be over £1,200 at band D? Does he accept also that if Labour were to introduce new council tax bands on higher value

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properties, including a new banding between bands G and H and a corresponding increase, that could mean a 40 per cent. increase in council tax for some people? That could also mean, with band D increasing at the same rate as it has so far under Labour, that people in houses in the highest bands could be paying an extra £1,600 a year by the end of this Parliament. Will he comment on those figures?

Dr. Whitehead: As the hon. Gentleman knows, whatever change one makes, either in the banding or the ratios between bands, the eventual council tax yield will remain the same, because any revaluation or rebanding results in other adjustments. The question to be asked of any revaluation or rebanding is whether it makes the distribution of council tax fairer. If a change is made, there will, of course, be winners and losers. That is an important consideration when one is deciding how best to deploy banding or valuation to ensure that council tax is as fair as possible.

Mr. Dennis Skinner (Bolsover): Is it not time that we took a serious look at what the banding would be of a big tent? First, Labour introduced a big tent; now they tell me that there is a Portillo big tent, a Clarke big tent and a couple of others—there is some money to be made here.

Dr. Whitehead: The Government have received representations about mobile homes—perhaps my hon. Friend has in mind a tent on wheels. The Opposition's tent currently appears to be on wheels because of the voyage of discovery that some Opposition Members are apparently taking.

Regional Government

4. Mr. Graham Brady (Altrincham and Sale, West): What estimate he has made of the total cost to the Exchequer of referendums on the introduction of regional government in England. [654]

The Minister for Local Government (Mr. Nick Raynsford): As my right hon. Friend the Deputy Prime Minister announced on 2 July, the Government intend to publish a White Paper on regional government in England. It will address the question of the cost of elected regional assemblies. It is too early at this stage to make any estimate of likely costs.

Mr. Brady: I hope that the Minister will ensure that accurate figures are provided to the public before they are expected to arrive at a judgment. Is it not likely that a cost of about £5 million—which is what the Scottish referendum cost—is a good starting point for his calculations? Does he agree that at a time when local authorities throughout the country cannot meet their social security budgets or pass funding on to schools and sixth forms, most people would regard spending £5 million on a referendum in each region as an appalling waste of money, given that the public manifestly do not want it?

Mr. Raynsford: I can assure the hon. Gentleman that we have set out full costings in the White Paper. I counsel him against pursuing the analogy that he drew with Scotland, for two reasons. First, the figures that the Conservative party has recently been bandying about are

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based on extrapolations and are entirely misleading and unfounded. Secondly, he will recall that the Conservatives initially opposed devolution in Scotland, then had to change their mind when they realised the will of the people; they opposed the restoration of citywide democratic government in London, then had to change their mind when they realised the will of the people. He will know that we are committed to holding referendums before introducing regional government in England. The Conservatives would do well not to prejudge the view of the electorate, or they will make themselves as irrelevant as they did on 7 June.

Mr. Stephen McCabe (Birmingham, Hall Green): It is amazing to hear the concerns of the hon. Member for Altrincham and Sale, West (Mr. Brady). Does my right hon. Friend recall that current Conservative party policy is to impose a referendum before—

Mr. Speaker: Order. Conservative party policy has nothing to do with the Minister.

Joyce Quin (Gateshead, East and Washington, West): I welcome the fact that my right hon. Friend is to be dealing with this matter. May I press him on the timing of the White Paper: when does he expect it to be published? Does he agree that regional government elsewhere has shown itself to be good for jobs and prosperity and that to worry about the cost of a referendum at this stage is bizarre, especially when the questioner is a member of a party that was not at all worried about costing and paying for a referendum on the Nice treaty?

Mr. Raynsford: My right hon. Friend makes an extremely valid point, and I shall make two points in response. First, in the White Paper, we shall of course examine carefully the benefits of a regional tier of government and set out the important factors she mentions in connection with regional economic development, as well as all the other factors that will bring advantage to those in the regions who want a regional assembly. Secondly, we are working hard on the matter, but, as she will understand, there are complex issues. We shall publish the White Paper at the earliest opportunity, but at this point—a mere three weeks into a new Government—it would be premature to give a definitive date for publication.

Mr. Andrew Turner (Isle of Wight): Does the Minister accept that the people of the Isle of Wight find it hard enough to cope with a police authority run from Winchester and a health authority run from Portsmouth and that they certainly do not see why their taxes should be spent on a referendum that might result in more of their services being run from places like Woking?

Mr. Raynsford: I simply counsel the hon. Gentleman to take care before he offends one of his hon. Friends, who probably has a strong case to make for Woking. We have indicated that progress towards regional assemblies will be based on the consent—indeed, the expressed wish—of people within each region. Where there is no wish, it will not happen.

Mr. David Clelland (Tyne Bridge): Does my right hon. Friend agree that the question from the hon. Member

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for Altrincham and Sale, West (Mr. Brady) is typical of an Opposition who want to know the cost of everything, but understand the value of very little indeed? Will he confirm that the Government's continuation of the devolution process will be based on its value to good government and our democracy, and that regional government is the natural next step along that road?

Mr. Raynsford: My hon. Friend makes an extremely valid point. The Government have a proud record over the past four years of developing a devolution agenda and extending to the people of the United Kingdom greater opportunities to play an effective role in the government of their nations and regions. We do not see that as a process that has ended; we shall continue to explore options to improve the quality of our democracy and extend opportunities along the lines indicated by my hon. Friend. Of course, we are concerned with value, rather than just cost.

Tim Loughton (East Worthing and Shoreham): Can the Minister clear up the mystery of the absence of any mention of regional government in the Queen's Speech and, indeed, any apparent urgency to give a timetable today? Has the whole enterprise gone west, along with the Deputy Prime Minister, or has it simply been delayed? As the right hon. Member for Hartlepool (Mr. Mandelson) claimed last month:

Will the Minister now say exactly what form those referendums on regional government will take? What tier of existing local government will be scrapped to make way for it, and will it be financed by the 5 per cent. regional income tax so beloved of Liberal Democrat Members?

Mr. Raynsford: The hon. Gentleman was obviously not paying much attention last night, when his colleague, the hon. Member for Eastbourne (Mr. Waterson), spoke for the Opposition on the Homelessness Bill and made the valid point that, although there was no mention of the Bill in the Gracious Speech, it was the first Bill to be introduced in this Parliament. The hon. Gentleman should therefore not draw any inferences at all from what is, or is not, in the Queen's Speech.

I have indicated clearly to the House this afternoon that we are committed to publishing a White Paper, which will set out in detail the practical and factual basis on which we can proceed along that particular route. I am afraid to tell the hon. Gentleman that it will not fuel the kind of fantasies that he has voiced this afternoon. Those fantasies are all too typical of the Conservative party, which is prejudiced against devolving power to local communities and is fixated on cost, rather than value.

Mr. Peter Mandelson (Hartlepool): Does my right hon. Friend agree that a reasonable timetable would be a White Paper this autumn, followed by legislation in the 2002-03 Session, with a view to regional assembly

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elections taking place in regions that want them in 2004, to coincide conveniently with the European parliamentary elections that year?

Mr. Raynsford: My right hon. Friend has set out a perfectly reasonable timetable; we shall consider it and other representations before reaching our conclusions. I am sure that he will accept that, at this stage, it would be premature to give a definitive date for the introduction of the White Paper before the necessary work has been done to ensure that it covers the important range of issues that must be covered.

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