Domestic Rating System (Hansard, 11 July 1984)

§ 8. Mr. Knox
asked the Secretary of State for the Environment what representations he has received in the past year opposing the domestic rating system.

§ Mr. Patrick Jenkin
I have received many representations which seek the reform or abolition of the domestic rating system. However, after our extensive review, it is clear that there is as yet no generally acceptable alternative.

§ Mr. Knox
Is my right hon. Friend aware that rate capping and the abolition of the GLC and the metropolitan counties is no substitute for radical reform of the rating system? Will he go away and think again and bring in proposals for a fundamental reform of the rating system?

§ Mr. Jenkin
As my hon. Friend knows, in the past two or three years there has been the most thorough investigation of alternatives to rates undertaken by any Government since the war. Moreover, as he knows from a written answer, more than half the respondents to the Government's Green Paper on alternatives to rates favoured retention of the rating system. I am well aware that a wide spectrum of opinion would like an alternative, but, as the Select Committee concluded, there is no sign of any acceptable alternative at present. Of course, I never say "never" and a time may come when it will be possible to consider whether some reform would gain general public acceptance.

§ Mr. Cartwright
Does the Secretary of State accept that some domestic ratepayers are bearing more than their fair share of the burden because local authorities are forced to base rate bills on 1973 valuations? If he will not reform the system, will he at least ensure that it is based on up-to-date valuations?

§ Mr. Jenkin
The question of non-domestic revaluation is being considered urgently. That is a major task. As the hon. Gentleman knows, the valuation office would require a large number of extra staff to carry out the valuation and deal with the inevitable spate of appeals. I assure him, however, that the effective date for the non-domestic revaluation will be announced as soon as possible. On domestic revaluation, we intend to issue a consultation paper in due course and I hope that we shall not have to wait too long for that.

§ Mr. Squire
Is my right hon. Friend aware that those who have studied the problem have considerable sympathy with him in the difficulties that he faces, but that the central inequity of the present system under which two or more wage earners in the same household face the same rate burden as a household with just one wage-earner makes reform essential? Does he appreciate that he might be surprised at the favourable reception that proposals to tackle that central objection would receive?

§ Mr. Jenkin
I note my hon. Friend's reticence about what the proposals might be. Proposals were canvassed at length in the Green Paper and before the Select Committee. The Select Committee acknowledged that there might be a case for local income tax, for instance, but recommended that it should not be introduced unless there was widespread consent to such a change. I detect no such widespread consent.

§ Mr. O'Brien
Having assured the House that the domestic rating system is to be retained, will the Secretary of State consider section 21 of the Local Government Act 1974, which creates anomalies in the rating system, and will he give the problems of the domestic rating system equal status with those of the non-domestic system?

§ Mr. Jenkin
We are aware of the anomalies created by section 21. That will have to be taken into account when revaluation takes place. The fact that non-domestic and domestic revaluations take place at different times is already taken into account in the legislation, which provides for the necessary adjustments to be made.

§ Mr. Nicholas Baker
In view of the inadequacies of the present system, will my right hon. Friend ensure that neither he nor the Conservative party undertakes to reform the rating system unless it is absolutely clear which system is to be introduced?

§ Mr. Jenkin
My hon. Friend makes a very sound point. It is easy for hon. Members in all parts of the House to call for reform. It is a great deal more difficult to know what that reform should be.