Council Tax (Hansard, 4 December 1991)

§ 9. Mr. John Greenway
To ask the Secretary of State for the Environment what representations he has received on the proposed council tax.

§ The Minister for Local Government and Inner Cities (Mr. Michael Portillo)
My Department received more than 800 representations in response to the consultation paper, "A New Tax for Local Government", most of which welcomed its principles.

§ Mr. Greenway
What changes does my hon. Friend envisage in the assessment of local authority spending needs and in the distribution of Government grant under the council tax? Is he aware that the spending assessment for Ryedale district council, which is in my constituency, is some 20 per cent. lower than that for neighbouring Hambledon, part of which is also in my constituency, even though the two districts have similar characteristics? Does he agree that if the distribution of Government grant were seen to be fair, local residents would not only be able to assess the performance of local authorities but would begin to see that our new council tax is a far better deal than the uncosted return to the rates—or, even worse. the uncosted local income tax—proposed by the Opposition parties?

§ Mr. Portillo
Our distribution is fair. The reason why Hambledon and Ryedale get different standard spending assessments is not that they are similar but that in some ways they are dissimilar. For example, Hambledon scores much higher on the sparsity valuation, and sparsity was one of the factors that we took into account and put into the process precisely because the Association of District Councils thought that it was a relevant factor. The association is right: it is more expensive to provide services in an area of sparsity than in an area which suffers less from that.

§ Mr. Bellotti
Will the Minister confirm that he has received representations from Age Concern and others about the income of single pensioners being 60 per cent. of the average income of a retired couple? In the light of those representations will he reconsider the Government's attitude towards the 25 per cent. discount with a view to increasing it?

§ Mr. Portillo
I believe that 25 per cent. is the right logical discount for single people. The tax is a 50 per cent. property tax and a 50 per cent. personal tax, so the full tax is payable if there are two or more people in the household, while half the tax is payable if the property is empty or is not a sole residence. Therefore, 75 per cent. of the tax is payable if a single person lives there.
I am glad that the hon. Gentleman and I agree that there should be a discount for single people—I am only sorry that the Labour party continues to insist that we should return to a rating system in which single people would have to pay through the nose, as they did before.

§ Miss Emma Nicholson
In view of the forthcoming reform of the common agricultural policy, farmers are naturally concerned about downward pressure on incomes. Will my hon. Friend confirm that under the council tax farms will be identified as working farms and thus avoid an unnecessarily high banding?

§ Mr. Portillo
Valuers will have to take account of what properties are really worth. If they are tied into a working farm, or if there are legal agreements that constrain the ways in which they can be used, clearly that will be a material factor in determining whether the properties have a market value and what it is. The answer to my hon. Friend's question is that of course those are relevant considerations for valuers to take into account.

§ Mr. Gould
In response to the statement by the Birmingham city treasurer that he would have to keep a register to administer the council tax, the Minister asserted that the keeping of such a register would be unlawful. Does he adhere to that assertion and, if so, what was the basis for it?

§ Mr. Portillo
The basis is that there is no power in the Local Government Finance Bill now in Committee for councils to keep a register. Nor is there any power for them either to require details from people in order to keep a register or to require people to continue to notify them of changes in any register. Therefore, I believe that my comments were valid.

§ Mr. Brandon-Bravo
Will my hon. Friend commend as compulsory reading part of our proceedings in Committee when for the first time hon. Members listened for two or two and a half hours to—[Interruption.]

§ Mr. Speaker
Order. I hope that the hon. Gentleman is not going to talk about what is going on in Standing Committee.

§ Mr. Brandon-Bravo
If people cared to read that record, they would know that for two and a half hours the Liberal Democrats proved beyond—[Interruption.]

§ Mr. Portillo
My hon. Friend is right to say that the local income tax is not an alternative to council tax which commends itself to Conservative Members—or even to most Opposition Members, and he is right to say that anybody interested in knowing why local income tax will not work could do no better than to read the report of our proceedings in Committee.