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Lord Rooker: I rise simply to say that we oppose that objection.

Clause 79 agreed to.

Clause 80 [Transitional arrangements]:

Lord Hanningfield moved Amendment No. 175:

The noble Lord said: As the Bill stands, the Secretary of State has the power to alter the council tax bands, and dwellings may move up or down the bands as a result of revaluation. This clause makes provision for the Government to phase in changes to council tax bills following revaluation. In contrast to the previous system where, as I understand it, tax payers could pay less only during transitional arrangements, under this legislation tax payers might have to contribute more during the transitional period to offer relief to those who will be worse off. This amendment would ensure that a householder's council tax liability cannot be higher in the transitional period than it would otherwise have been before the revaluation.

We accept that the precise detail of the transitional arrangements will depend upon the outcomes of the revaluation. However, it is important that we have some clarity on how these provisions will work. As I understand the wording of the Bill, it would allow for what is known as "downward phasing". That is that where a person's tax liability has gone down relative to the average, he does not benefit immediately and in full from the corresponding reduction in council tax. Instead, part of the money that would have come off his council tax bill is used to offset the rise for the others in their council tax bills. It is a complicated issue and I hope that people understand it.

Of course we support transitional arrangements to cushion the effect of tax changes in council tax liability. Our amendment is compatible with the existing system of transitional payments which does not permit taxpayers to pay more during a transitional period than they did before revaluation. We believe

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that this principle should be maintained under the new system. I should be grateful for the Minister's views on this and I beg to move.

4.30 p.m.

Lord Bassam of Brighton: We have said in Committee on a number of occasions that the system works best when it is the simplest, and we subscribe strongly to that principle. However, as we set out in our White Paper, there has to be a transitional relief scheme following council tax revaluation. We are committed to ensuring that that is self-financing in much the same way as the transitional relief scheme will be for business rate payers. We are firmly of the view that the gainers should contribute towards the costs of the losers for that transitional period.

I take the point made by the noble Lord, but again the principle I have outlined is worth sticking to. The amendment would prevent that balance in the transitional scheme. The noble Lord said that he would like to see more detail on the kind of scheme we are likely to introduce. It is a little too early to specify exactly how it will work. Obviously we must hold detailed discussions, not least with the Local Government Association and other representative local government bodies, the professionals in the business and so forth. So we have to resist this amendment because it would take away the flexibility to change and perfect exactly what we want to do.

Obviously we are in the business of perfecting this through the process of consultation and by taking careful professional advice. Thus, some of the fears expressed by the noble Lord about how the scheme will operate may be ill-founded. I hope that he will accept that there will be plenty of scope and opportunity for detailed consultation.

Lord Hanningfield: What the Minister has said is important: the Government will consult and listen to those involved. This is a very complicated matter, but the transitional arrangements will be extremely important. I hope that, as the Bill progresses, the Government will continue to give assurances that they will listen to representations made about the transitional arrangements. Big changes could arise after the revaluation and I repeat what I said earlier about the problems that that could cause. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hanningfield moved Amendment No. 176:

    Page 42, line 25, at end insert—

"( ) No order under subsection (5) shall be made unless a draft of the order has been laid before and approved by resolution of the House of Commons.""

The noble Lord said: This clause accords the Secretary of State power to alter social security benefits in accordance with the transitional arrangements which will follow revaluation, reflecting a point made in the last amendment. The purpose of this amendment is simply to clarify with the Minister

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what opportunity Parliament will have to scrutinise any changes to social security benefits that may be consequent on these changes to council tax.

Can the Minister give an indication of the Secretary of State's intention with regard to this power, and how the transitional arrangements following revaluation may impact on current social security benefits? We would be grateful for clarification on this. I beg to move.

Lord Bassam of Brighton: I do not have a great deal to add to what I said in response to the previous amendment. Having submitted a paper to the Select Committee on Delegated Powers and Regulatory Reform, we believe that the negative resolution procedure provides the appropriate level of scrutiny and that committee did not disagree. In fact, it made no comment at all.

I believe that the noble Lord is seeking a form of reassurance on the details of the transitional relief scheme with regard to benefit payments and so forth. Again, I have to urge some caution here because we are at the earliest stages of working out all these issues. I repeat what I said when we discussed the previous amendment: there will be plenty of scope for discussion and consultation with those who will want to make representations in order to get the scheme right. Obviously a certain amount of cross-governmental work will come into that.

Representations and consultation will be very important to the process we shall go through even before we reach the point where we introduce a scheme by order.

Lord Hanningfield: Again I hear what the Minister has said. He has just pointed out that we are at a very early stage of working out the transitional relief scheme and how social security benefits will be affected. I thank the noble Lord for his response and take note of his remark that there will be wide consultation. Obviously one will want to make certain that that happens. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 80 agreed to.

The Earl of Caithness moved Amendment No. 176A:

    Before Clause 81, insert the following new clause—

In section 82(4) of the Local Government Finance Act 1992 (c. 14) (appeal procedure) for "on a point of law to the Court of Session" there is substituted "to the Lands Tribunal"""

The noble Earl said: This is a simple amendment. At present, if there is a dispute, the council tax payer can go to the valuation tribunal and, from that valuation tribunal, has an expensive and difficult time when going to the High Court. It would be much more sensible if, instead of going to the High Court, the person went to the Lands Tribunal. That is the purpose of this amendment and I beg to move.

Lord Rooker: I am not clear about this. The noble Earl said that this is a simple proposal, but he did not

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mention that he was trying to legislate for Scotland in the amendment. Have I misunderstood something? The amendment applies exclusively to Scotland. The noble Earl is attempting here to legislate for Scotland, but as a part of the devolution arrangements it is agreed that we shall legislate for Scotland only at the request and with the agreement of the Scottish Executive. It does not support this amendment, nor does the Office of the Deputy Prime Minister. However, the noble Earl did not mention Scotland in his brief remarks. There is no Court of Session.

This deals with Scotland, because that is the area covered by Section 82(4) of the Local Government Finance Act 1992. Again, have I misunderstood the noble Earl?

The Earl of Caithness: On re-reading the amendment, I think that the noble Lord probably has not misunderstood me. I sought to focus on the position in England and I did not mention Scotland specifically. However, I believe that the error must be entirely at my end and is related to the wording. I hope that the noble Lord will consider this as it relates to the English position, on which I sought to focus, rather than Scotland.

Lord Rooker: I am glad that we are clear about it. I say that because Section 82 of the Local Government Finance Act 1992 provides for the appeal procedure for council tax in Scotland. It has nothing to do with England.

On the substance of the issue, when it comes to points of law, we think that the best place to decide such matters is a court. That is what happens now in Scotland and it is also what happens now under different legislation in England and Wales. We think that this should continue and we do not consider that a change to the Lands Tribunal would be appropriate. This should continue in court, both in Scotland—if I can say that because the Executive has not asked for a change—and in England. However, that is provided for under different legislation. I make the point simply because I did not want to misunderstand the noble Earl.

His point of substance, that of transferring these issues to the Lands Tribunal, whether in England or England and Wales, is one that we do not accept. A point of law should be dealt with by a court, not by a tribunal.

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