Cities and Local Government Devolution Bill [HL] — House of Lords, 2015-07-15
Topic: Macroeconomics
Patricia Hollis (Labour, Centre-left): The reply I was disappointed in was actually that of the Minister. She knows, as does everyone here who has spoken in this debate and has a local authority background—I could not speak for the noble Lord, Lord Marlesford—that what effect there is on local authority revenues can be entirely neutral. It is a way of distributing the load. Therefore, to say that if you are in favour of having extra bands at the top in the name of greater fairness, that is unfair to the very rich, is itself a bit rich, given that at the moment, many of them are paying council tax of £20 a week. That is less by far than what people on one-fiftieth of their income, with a property value of one-tenth of theirs, are paying in their local patches. My amendment is cost-neutral, in the sense that the impact depends entirely on where the individual local authority pitches its band D. It can collect exactly the same money as it collects now but in a fairer way or, going back to the point made by the noble Lord, Lord True, it can decide that it wants to use it to raise more resources, primarily from those who can most afford to pay—the broader shoulders of those who are multimillionaires, many of them billionaires—towards the cost of the additional functions of economic growth such as connectivity, transport and building our infrastructure. A lot of that will rightly be carried by local government, but it does not have the revenue to do it and has no means of finding it. You can approach it whichever way you like. You could use it to raise more revenue or you could decide, if you are of a more conservative disposition, that you do not want to raise any more revenue but none the less, you are mildly troubled by the fact that someone in a property worth £400,000 is paying the same as someone in a property worth £40 million. I myself would be mildly troubled by that, and I am surprised that that view is not shared more widely by some of your Lordships The noble Lord, Lord Marlesford, has given us a much more ambitious plan than I was proposing. What I am trying to do is simply to keep this issue in people’s minds. The longer you leave it, the worse the problem becomes. We can either try for a big bang down the road in which you will hear from the losers but not from the winners, or we can start making some incremental adjustments. The easiest way to start doing that is at the very top, where most people have a pervading sense of the unfairness of the extent to which council tax bands have outgrown the value of house prices. There is no longer the co-terminosity that existed when we devised this system—in which I was a player—back in the early 1990s The time is late, and I will stop there. Obviously, I will withdraw the amendment, but I say to the noble Baroness that it is rubbish to say that this is all about trying to raise council tax—and she knows it. She knows from her local government experience that this provision could be neutral in terms of the money it raises, or it could not be neutral and you could raise more money. It is about rebalancing in a fairer and more equitable way the relativities of property values within any local authority—full stop. If she is on the side of not balancing those relativities in a fairer way, I can only say that I am deeply disappointed in her response tonight. None the less, I beg leave to withdraw the amendment.