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Local Government Finance

Volume 448: debated on Tuesday 4 July 2006

My right hon. Friend met Sir Michael Lyons shortly after her appointment, when he discussed with her his report “National Prosperity, local choice, and civic engagement”, which was published on 8 May 2006.

The Minister will know that the inquiry under Sir Michael Lyons has cost more than £2.25 million—which does include £230,000-worth of research. It appears to endorse a new council tax on housing, which will affect more than 4 million households. Will the Minister undertake pilot schemes to test Sir Michael’s recommendations for changes to local government funding? If he does—and I recommend him to do so—where will these tests take place?

I am always willing to listen to suggestions from the hon. Gentleman. [Hon. Members: “Why?”] They normally come with common sense behind them, so I will consider the point that he makes. However, I hope that he will recognise that the report that Sir Michael published was his interim report. We are waiting with great interest for his final report later in the year.

I wonder whether Sir Michael, as part of his report on local government finance, mentioned that two-tier systems within Lancashire are far more expensive for the council tax payer. Would my hon. Friend recommend single-tier government for Lancashire, given the benefit that is enjoyed in Manchester?

I think that it would be wise for me not to do so, so I shall not be tempted to take that course of action. However, my hon. Friend may be interested to learn that we have had discussions on the economic prosperity of Lancashire with both tiers of councils very recently.

I am sure that the Minister is well aware of the grossly unfair burden of council tax on many residents, and particularly those who are just above benefit level. Will he encourage the Secretary of State to meet Sir Michael Lyons when she is in Bournemouth tomorrow and encourage him to be radical and introduce a local government finance system based on residents’ ability to pay? Perhaps the Secretary of State can play her part by linking her structural review to the Minister’s financial review, which would provide joined-up government for local democracy.

I congratulate the hon. Gentleman on, for the first time, not mentioning local income tax in a discussion about council tax at Question Time. I wonder whether that is a straw in the wind, and whether there will be a change in policy—we shall watch that space with interest. The hon. Gentleman’s point about the equity of the council tax benefit system, which was the subject of one of Sir Michael’s reports, is important, and I repeat that my right hon. Friend met Sir Michael recently.

Having endured the doubling of their council tax since 1997, my constituents are extremely concerned about the impact of revaluation and want to know where they stand. Will the Minister tell us how soon after Sir Michael Lyons’ report is published council tax revaluation will take place?

The hon. Gentleman has made an important point. The former Minister of Communities and Local Government, my right hon. Friend the present Secretary of State for Environment, Food and Rural Affairs, made it clear in his announcement to this House that we were postponing the revaluation of domestic properties in England and that he did not expect that revaluation to take place in the life of this Parliament. That remains Government policy.