It is right to begin the Opposition’s response to this issue by reminding the House that the noble Lord, Lord Heseltine, to a large extent removed the poll tax and replaced it with the council tax, which was a distinct improvement, although it must be said that the council tax contains an element of the poll tax within it. That is what leaves us in an anomalous situation, more than 20 years on, with this now outdated tax base.
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I declare an interest—I have a general local government interest, but I also have an interest as a householder with a house in band F that is worth some 20 times the value of some of the smaller houses in the ward that I represent in Newcastle. That is a function of how out of scale matters now are. The suggestion that there should be a rebanding is very timely, although my noble friend has not insisted on any particular formula; she is asking for a proper review. I concur with her in deeply regretting the fact that the Labour Government twice missed an opportunity to do this, or rather rejected an opportunity to do it. The first time was in respect of a report that was assembled by a committee of which I was a member, chaired by my former right honourable friend Nick Raynsford, and the second time by Sir Michael Lyons. Both of those reports were kicked into touch. But nobody has yet mentioned the fact that there was a change in Wales, which took the form of increasing banding at the top, with two extra bands—but no split was made at the bottom of the scale, which perhaps should have been the case. However, there is a precedent, at least, for making a change something along the lines of my noble friend’s suggestion.
The noble Lord, Lord Marlesford, has clearly got some very interesting ideas about how to reform the council tax, but there is an element that needs to be considered. When we look at those very high valuation figures, we are essentially talking about London—and, perhaps, one or two places outside. But there is a case —examined by Nick Raynsford’s review and the Lyons review—for looking at regional banding. That would seem to me a potentially more equitable way in which to change the system. But we do not have to take a particular view about the outcome of the process that my noble friend suggests, except that change is clearly
necessary. It is intolerable that these vast differences apply, and the noble Lord adequately demonstrated the huge disparity in valuation that now takes place, which is not reflected in the tax paid. That is particularly irritating when so much of the property in London that is of that value is owned by people not resident here anyway, yet they still pay a very modest contribution. In a sense, the noble Lord is proposing something like a mansion tax; the Chancellor has taken over a few of the Labour Party’s suggestions in the past and reissued them in blue covers, and it may be that the noble Lord can persuade the Chancellor to do likewise with this. But let us not call it a mansion tax; let us call it a local tax, or a council tax, but a modified and improved council tax.
As to the total quantum, that is a separate issue. I do not think that my noble friend’s amendment necessarily involves an increase in the total to be raised, although it is probably time that that was the case. But it is somewhat odd that there is regular revaluation of commercial rateable values for the purposes of the business rate, which, incidentally, gives rise to huge problems with appeals that take ages to deal with and are very difficult—particularly when the Government expect in the event of a successful appeal not to have to return to councils moneys that councils have handed over to the Government. But that is perhaps a separate issue. This Government set their face against any revaluation of the domestic system.
It is time that that process was begun. My noble friend’s modest and restrained amendment, and the way in which she described it, offers an opportunity which I hope the Government can accept. I apprehend that she may not test the opinion of the House on this, but I hope that she has planted a seed in the minds of the noble Baroness and other Ministers in an effort to update the good work the noble Lord, Lord Heseltine, commenced 24 years ago. It would produce a more equitable system between taxpayers and between different areas of the country. That is the objective. I hope that ultimately— and over not too long a period—we will see progress.