HC Deb 19 May 2004 vol 421 cc969-70
6. Lawrie Quinn (Scarborough and Whitby) (Lab)

What plans he has to make council tax liability more closely related to income. [173984]

The Minister for Local and Regional Government (Mr. Nick Raynsford)

The balance of funding review is looking at possible reforms to council tax. We intend it to report this summer.

Lawrie Quinn

I thank my right hon. Friend for that answer. Can he confirm that the evidence given by the Chartered Institute of Public Finance and Accountancy to the balance of funding review suggests that the proposed pay-as-you-earn scheme for local income tax would be impractical and far from fair? Is it not time that the parties in this House recognised that the public know when they are being sold a pup, and is it not time that we achieved transparency and fairness in terms of local government income?

Mr. Raynsford

The balance of funding review has received very good evidence from a variety of sources, including from CIPFA, whose report has certainly poured a great deal of cold water on the Liberal Democrats' over-optimistic assumptions about a local income tax. Such assumptions were well exposed during Monday evening's debate in this House.

Mr. Edward Davey (Kingston and Surbiton) (LD)

Will the Minister confirm that he failed to read out on Monday all the very positive things that CIPFA said about local income tax? Has he decided totally to reject the idea of a local income tax, even though it is used in America, Japan, Sweden, Denmark and Swinland—[Interruption.] Sorry, Mr. Speaker, I meant to say Switzerland.[Interruption.]

Mr. Speaker

Order. I can hear some hon. Members, but not the hon. Gentleman.

Mr. Davey

Sorry, Mr. Speaker, that was very Prescottian of me. Was the Minister pre-empting the conclusion of the balance of funding review and ruling out local income tax at any time, in any form?

Mr. Raynsford

Well, I say to the hon. Gentleman what I said to his colleagues on Monday evening. They invited me to read out the four recommendations that supported a local income tax, and I said to them that, in all fairness, if I did so I would have to read out the six recommendations that were against the idea. In the interest of economy and of proceeding smoothly, I thought that I would spare the hon. Gentleman and his colleagues that pain. We know that the Liberal Democrats love to live in never-never land; now we realise that they want to live in swindleland.