I beg to move,

That leave be given to bring in a Bill to require an audit of existing or planned infrastructure in areas of significant housing development.

This Bill requires the Government to be joined up. There is a huge disconnect between the Government's diktat that many tens of thousands of new houses are to be built in West Sussex over the next 15 years and the provision being made to support infrastructure. I am especially concerned about the secondary health infrastructure, which is already in deep crisis and deteriorating fast. There are also major problems with transport and water capacity, neither of which is being addressed seriously by the Government.

The Government's approach to housing development is totally prescriptive: they call it predict and provide; it feels much more like accept and obey. The Office of the Deputy Prime Minister has made it clear to our county councils that the number of homes ordered to be built in the south-east is non-negotiable. That means that the number of new homes to be built in West Sussex is set to be 2,900 each year for the next 20 years. That would rise to 4,200 a year if the Barker proposals were accepted, as the Government seem to indicate that they might be, or if the Deputy Prime Minister sought to overrule the South East England regional assembly recommendations already made. On the smaller basis, West Sussex would have an extra 58,000 homes and an extra 85,000 people, which is equivalent to building another town the size of Crawley in West Sussex.

That level of house building is among the highest in the south-east, but West Sussex has not been designated as one of the Government's growth areas. The result of that is that we get all the new housing but without the provision for new infrastructure that accompanies growth area status. Of course, funding for key public services like health and education is based on GP lists and school rolls, which inevitably means a lag of at least two years between population increases and the increased funding. In the meantime, of course, schools and hospitals are strapped for cash.

According to the all-party Environmental Audit Committee,

"The Government's ambitions for new housing in the South East, if met with undue haste and an absence of thorough environmental appraisals, will lead to significant and effectively irreversible environmental damage."

We are still waiting for those environmental appraisals, but people in the area know that the implications for the environment are dire. Not surprisingly, there is overwhelming local resistance to the proposed levels of house building. Recent polls suggest that two thirds of local people oppose the increases, and about the same number simply do not believe that the supply of infrastructure, particularly NHS hospitals, will keep pace with new house building.

Those people are right to be concerned. Not only are hospital services not being enhanced, they are being actively and daily run down. The Surrey and Sussex healthcare trust, which runs both Crawley hospital and East Surrey hospital at Redhill, has languished at the bottom of the Government's star rating system for the last four years. Regrettably for its long-suffering staff and patients, it has never been given more than one star, and for the last two years it has been awarded none. That places it in the bottom 5 per cent. of all acute hospital trusts in England.

The trust is battling to live within its existing income. It has a rolling £30 million deficit, which is likely to reach £60 million by the end of the year. According to its chairman,

"Surrey and Sussex healthcare trust would be bankrupt if it was a company."

In recent years, there has been a consistent pattern of acute services' being moved from Crawley to Redhill. On each occasion, we are assured that this will be the last service to be removed from Crawley; then, a few months later, off goes another service. Acute trauma, maternity, and accident and emergency services have gone. More recently, operating theatres have closed, and redundancies now seem likely.

We would mind less about all that if the Redhill hospital could cope with the extra work being driven to it, but it cannot. Members may have seen television coverage of ambulances queuing outside the accident and emergency department. At Redhill, it is not how long people wait on a trolley that is measured, but how long they wait in the ambulance before even getting on to a trolley.

There is a similar picture in Mid-Sussex, with consultant-led maternity services moving from the Princess Royal hospital at Haywards Heath to Brighton. It is not absurd to speculate, given the current trends, that pretty soon there will be barely any acute hospital cover in West Sussex. The public feeling, however, is that more, not fewer, hospital services are required. The south-eastern county councils have estimated that the region will need an additional 1,800 acute and 900 general hospital beds over the next 15 to 20 years, which is equivalent to six medium-sized hospitals.

The Department of Health's own inquiry produced a recommendation that there should be a new hospital at Pease Pottage to serve this fast-growing area, but, in a classic example of disjointed, dysfunctional government, the Secretary of State himself turned down the proposal. The new hospital really is needed, however. Since the Government vetoed it, attracting permanent staff to the Surrey and Sussex trust has been increasingly difficult. In the last three years the trust has spent £58 million on temporary staff, and £21 million has been spent in the past year alone. Probably about £30 million of that was wasted; it could have been invested in hospital infrastructure to attract top teams of staff to rival those at the best London teaching hospitals. I strongly urge the Secretary of State to reopen the files, have another look at the Bagnall report of three years ago, and re-examine the case for a new hospital at Pease Pottage.

I mentioned the water capacity problem earlier. That problem is already severe, and it is growing. The Government's own favourite think-tank, the Institute for Public Policy Research, recognises the seriousness of the problem. Its commission on sustainable development in the south-east observes

"Only with significant water efficiency savings in existing and new homes, and the timely provision of new water resources, will there potentially be enough water to meet rising demand for new housing and domestic consumption."

The Bill would force a serious rethink about those infrastructure shortages. It would require a full audit of existing or planned infrastructure in areas of significant housing development. It would not preclude the Deputy Prime Minister from continuing to impose excessive housing development on the south-east, but it would make it much more embarrassing for him to do so without proper provision being made for the necessary infrastructure. It would lay bare for public scrutiny the deficiencies in Government thinking and planning.

As I have said, I oppose the huge increases in house building currently being contemplated. However, this Bill would ensure that any new house building was matched with adequate infrastructure. For West Sussex, it should lead to a new hospital being built at Pease Pottage. For all those reasons, I commend this Bill to the House.

Question put and agreed to.

Bill ordered to brought in by Mr. Francis Maude, Mr. Tim Boswell, Greg Clark, Mrs. Nadine Dorries, Mr. Nick Gibb, Charles Hendry, Nick Herbert, Tim Loughton, Mr. Nicholas Soames and Mr. Andrew Tyrie.

Infrastructure Audit (Housing Development)

Mr. Francis Maude accordingly presented a Bill to require an audit of existing or planned infrastructure in areas of significant housing development: And the same was read the First time; and ordered to be read a Second time on Friday 14 July, and to be printed [Bill 61].

I beg to move,

That the matter of the evidence given by the right hon. Member for North Tyneside to the Transport Sub-Committee of the Select Committee on Transport, Local Government and the Regions on 14th November 2001 be referred to the Committee on Standards and Privileges.

I am very grateful to you, Mr. Speaker, for allowing this important motion to be put to the House today. It is important because of what should be one of the most fundamental principles of this House and the way that our parliamentary democracy operates. Ministers may be evasive, they may be difficult, they may be downright disingenuous—but they must not lie to the House of Commons. The charge that lies on the table in front of the right hon. Member for North Tyneside (Mr. Byers) is that on 14 November 2001 he lied to a Select Committee of this House. It is not for me to judge his guilt, although I have my views, but it is for this House to judge his guilt.

I do not intend to make a long speech to propose this motion, but I do need to give the House a little of the background to it before Members decide whether or not this matter should be considered by the Standards and Privileges Committee. In November 2001, I was a member of the Transport Sub-Committee, under the chairmanship of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). It was six weeks after Railtrack had gone into administration, and we were in the midst of an inquiry into the future of the railways and the circumstances that had led to administration.

The story that we had been told was that the Government had begun the process to force Railtrack into administration only after a meeting that had taken place some three months earlier, on 25 July of that year, between the chairman of Railtrack, Mr. John Robinson, and the right hon. Member for North Tyneside. We were told that Mr. Robinson had warned at that meeting that if Railtrack were to survive, it would need additional Government support. Without that support, its future was in doubt.

During an evidence session that formed part of our inquiry, I asked the right hon. Gentleman:

"was there any discussion, theoretical or otherwise, in your department before 25 July about the possibility of a future change in status for Railtrack, whether nationalisation, the move into a company limited by guarantee or whatever?"

He replied:

"not that I am aware of."

You will be aware, Mr. Speaker, that the right hon. Gentleman has since admitted that that response was inaccurate, and he has apologised both to the House and to me. So why have I not accepted that apology, and why do I believe that the House should not do so? The right hon. Gentleman has accepted that he commissioned a review of the future of Railtrack—from a joint working party comprising representatives of his Department, the No. 10 policy unit and the Treasury—well before that date. In his personal statement on Monday, he said that

"the commissioning of work to be carried out on the future options for Railtrack did not represent discussions in the true meaning of that word."—[Official Report, 17 October 2005, Vol. 437, c. 640.]

I have to say, Mr. Speaker, that I regard that answer as utterly unconvincing. It alone might have been enough to persuade me to press ahead with today's motion. However, the latest evidence to emerge from this period is, in my view, decisive.

My hon. Friend the Member for Rutland and Melton (Mr. Duncan) obtained on Monday copies of the minutes of a meeting held at No. 10 Downing street on 6 July 2001. That meeting was attended by the right hon. Member for North Tyneside, the permanent secretary of his Department, the then Chief Secretary to the Treasury, the head of the No. 10 delivery unit and the Prime Minister. That minute refers very clearly to a discussion about the future structure of Railtrack.

In that light, I cannot and do not accept the statement made to the House on Monday by the right hon. Gentleman. It is of paramount importance that Members can rely on the testimony given to us by Ministers. That is why I hope that the House will join me in supporting the motion, so that the matter can be properly examined. If the right hon. Gentleman is innocent, his name will be properly cleared; if he is guilty, he deserves the censure of the House.

The Government support the motion because it is necessary for the House to refer possible breaches of the rules to the Standards and Privileges Committee for investigation. The Government respect the privileges of the House and we will uphold them. They are crucial to the independence of Parliament and the strength of our democracy.

It would be wrong of me to anticipate the Committee's report and I hope that hon. Members on all sides of the House will wait until it has reported before passing judgment on my right hon. Friend the Member for North Tyneside (Mr. Byers). In particular, I urge Members to refrain from treating the matter as a party political question. I know that my right hon. Friend welcomes consideration of this issue by the Standards and Privileges Committee. Indeed, with the leave of the House, I would be willing to respond to any further points, as necessary.

May I say how much I welcome the views just expressed by the Leader of the House? There is a well-established mechanism within the House for dealing with these matters—through the Standards and Privileges Committee. It is a Committee on which I served during the last Parliament, so I know how seriously it takes its responsibilities. Notwithstanding the comments of the right hon. Member for North Tyneside (Mr. Byers) in his personal statement on Monday, on which I say nothing at this stage, I believe that there is a prima facie case for investigation. It is right for the Committee to have the opportunity to investigate further. Although this is a House matter, I recommend that my right hon. and hon. Friends support the motion if it is put to a vote today.

Select Committees of the House are set up to monitor the work of Government Departments. They must be able to do that fairly and freely. I know that we all support that idea and the work of those Committees has expanded because they have the support of the House.

It is neither the time nor the place to debate the wider implications of this matter, but it is clear that, in future, the House will have to consider the powers of Select Committees to ensure that the evidence given to them is not only reliable but can be verified. I hope that we will have the opportunity to return to that issue in future. In the meantime, on behalf of my Select Committee and myself, I support the referral to the Standards and Privileges Committee.

Question put and agreed to.

I inform the House that I have selected the amendment in the name of the Prime Minister.

What a difference a few short months make in the Government's view of the world. It seems but a moment ago—the mere passing of slight time—that I was standing at the Dispatch Box extolling the virtues of abandoning a council tax revaluation, only to be met with vitriol and abuse from Government and Liberal Democrat Members. In fact, it is only the Liberal Democrats who remain in favour of an immediate and complete revaluation. Three times that once great party has voted for revaluation and I suppose that those votes were not entirely wasted. In modern politics, we are supposed to have a degree of empathy with other people and the Liberal Democrats can now feel empathy with Labour Back Benchers, because they also now know how it feels to be let down by Labour.

The Government were steely in their determination to bring about revaluation and unwavering in their support for an immediate one. For example, the Prime Minister commented in the Daily Star on the Conservative pledge at the last general election to cancel revaluation. He said:

"It's a complete con. From the Conservatives this really is the most desperate opportunism."

We had an even more robust view from the right hon. Member for Greenwich and Woolwich (Mr. Raynsford)—it is a pleasure to see him in his usual place—in July, when he said:

"it is intellectually and economically illiterate to suggest that one can have a system of council tax without a need for periodic revaluation. That is why we introduced arrangements for a regular, 10-yearly revaluation."—[Official Report, 4 July 2005; Vol. 436, c. 51.]

I expect that he was surprised when, within 11 short weeks of those words, they blew up in his face. I would not have liked to have been in the Minister's shoes when he made the phone call to tell the right hon. Gentleman that all his hard work had been torn up as soon as he left office.

What has caused the Government's near Damascene conversion to the Conservative position? I say "near" because the Government propose a postponement, not a cancellation. There are two possible explanations for the U-turn. The written statement on 10 October announced that the Government intended to introduce legislation to postpone the revaluation for council tax in England. It stated:

"The case for council tax revaluation . . . is linked to wider questions about the structure of the council tax, and to the operation of council tax benefit. It is also relevant that there are a number of other imminent changes in the local government finance system, including the move to three year budgets, the review of the local government finance formula, and the creation of a dedicated schools budget."—[Official Report, 10 October 2005; Vol.437, c. 5–6 WS.]

I was surprised only that the statement did not add that the revaluation had to be postponed because the letter "r" appeared in the month of September. Every single thing mentioned in the statement was known when the Lyons review was set up and revaluation was planned.

The second explanation therefore has a ring of truth, and it comes from the mouth of the Minister of Communities and Local Government. When asked outside the Table Office by one of his colleagues from the west midlands why the Government had postponed the revaluation, he said that it would be too difficult, too hot to handle and had to be dropped. It is a sad fact that, on occasions in this place, having a clear voice can be a disadvantage.

This is not a policy; it is a postponement for others to pick up when the Minister has moved on to pastures new. Many will agree with the judgment of the right hon. Member for Greenwich and Woolwich, who wrote in this week's Municipal Journal that the Government had a

"loss of nerve over revaluation".

Why revalue? A myth has grown up around the need to revalue, but it is a conventional wisdom that needs to be challenged. I know that because I was once seduced by the conventional orthodoxy. I was once persuaded that the emperor was wearing a shiny new suit rather than being naked of ideas or legitimacy. I was not alone. Even such august bodies as the Royal Institution of Chartered Surveyors have been persuaded that the emperor is not in the altogether. In its otherwise excellent brief prepared for this debate, it states:

"Fundamental to the fairness of the tax base for Council Tax is an up to date valuation list supported by frequent and consistent revaluations. The current valuation list is based on 1991 values. Since 1991 . . . average house prices have increased by some 216 per cent."

It is neither fundamental to the council tax nor to its fairness that revaluation takes place—and it entirely misses the point. As my colleague Lord Hanningfield said in the other place:

"Statutory revaluations will take council tax further towards being solely a property tax . . . Council tax was originally devised as a tax which was part property based and part service based."—[Official Report, House of Lords, 17 July 2003; Vol. 651, c. 976.]

When the council tax was first introduced, there was no provision for revaluation. The purpose of a revaluation is to correct grossly disproportionate movements in the housing market. It may be that, over a 10-year period, those movements are negligible, and that going through the expense of a revaluation cycle is unnecessary. What matters in council tax valuation are comparative prices between different parts of the country. Those have remained unchanged for the last decade. That is why Northern Ireland has operated quite happily on valuations set 30 years ago and that is why Scotland's First Minister, Jack McConnell, has been at pains to make it clear that

"There are no plans for a property revaluation in Scotland for the council tax or for any other purpose".—[Scottish Parliament Official Report, 12 May 2005; c. 16822.]

The hon. Gentleman is making an interesting speech, but is he saying that he would never favour a revaluation? Would he support a revaluation if property prices were to diverge?

I could not make it clearer that the Conservative party would support the abandonment of the revaluation. It is absurd to pursue revaluation when there is no divergence in the property market and the Government propose to postpone it. Why spend millions of pounds on a revaluation for no purpose? Would not that money be better spent in our schools, on teachers and children? Would the hon. Gentleman prefer that money to be spent on computer programmes?

In which case, why did the hon. Gentleman tell the House that

"Any council tax system inevitably requires some form of revaluation."—[Official Report, 2 February 2005; Vol. 430, c. 929.]

That does not work. The Minister may recall the last opportunity we had to debate this issue, when I stood like a supplicant before the inquisition, confessed that I had made a mistake and apologised to the House. Where is the gracious response from the Minister? He should encourage such forthright confession. I admit that I was fooled, but I have realised that the emperor is naked and a revaluation would be pointless. People should be prepared to admit when situations have changed. The Minister presumably wishes to try to persuade me that the emperor is wearing a handsome suit.

As it appears that hon. Members on both sides of the House are making a virtue of making U-turns, can the hon. Gentleman tell us why he is not prepared to take his logic further? When a property changes hands it is subject to revaluation, so why does he not propose that that should also cease?

Because that falls within the existing rules and, over a period of time, there would naturally be a change. I understand why the right hon. Gentleman wants to pursue the original policy. Indeed, in my mind's eye, I can see the great handover between him and the Minister of Communities and Local Government. There may have been a glass of sherry. Pleasantries were uttered and, to be helpful, the former Minister handed the new Minister an envelope—[Interruption.] The Minister says that it was a six-course dinner. How very new Labour. No doubt there was a choice of wines.

To be helpful in a time of trouble, the right hon. Member for Greenwich and Woolwich told the Minister, "I'll leave you some advice. I'll leave you three envelopes." The Minister made the mistake of opening the first two envelopes, which said, "Blame me", and "Send things to a restructuring committee." The Minister has only one envelope left, and he knows what it says—"Prepare three envelopes".

I have listened to the hon. Gentleman's arguments carefully both today and in previous debates. Is he saying that he stands by everything in the Conservative Government's introduction of council tax, including the consultative paper, "A New Tax for Local Government", which certainly mentioned rebanding and revaluation? Does he stand entirely by that, except for revaluation, or is he suggesting that there should be a new council tax or a completely new tax? If so, it would be interesting to hear what it is.

I think that I can rely on the assessment of the incoming new Labour Government. Perhaps I may be permitted to quote from their document "Modern local government: in touch with local people", which states:

"The council tax is working well as a local tax. It has been widely accepted and is generally very well understood. This has been borne out by the responses received to the consultation paper."

We have established that the same level of valuation has existed in Northern Ireland for 30 years. Scotland will have none of it, while Wales has seen the effect of revaluation, which I suspect played a part in the Government's decision to make a U-turn. However, the full effects of revaluation in Wales have yet to be felt. In 2005–06, initial bills were kept down by transitional relief to limit sharp increases, yet most of that relief is for only one year, meaning further automatic tax hikes next year. Relief is to be phased out completely within three years. Why should the Welsh have to suffer when the English are temporarily spared? When the postponement Bill is debated, we shall move amendments to retain transitional relief for Welsh revaluations until decisions in England have finally been made.

I thank my hon. Friend for pointing out that people in Wales are being treated as second-class citizens in the United Kingdom. Over the past few years, they have been confronted with council tax rises of up to 130 per cent. as a result of the Labour Administration in the Welsh Assembly. Will he do everything possible to ensure that our motion is carried and that Wales is treated fairly, in line with the rest of the UK?

My hon. Friend makes a powerful point. What happened in Wales demonstrates clearly what would happen in England. The Conservatives are determined not to abandon the Welsh people.

Is not the simple truth that council tax rebanding is just another stealth tax? In my constituency, there will be a double whammy. House price increases are up to 13 per cent. higher than the regional average over the past year and all those houses will face rebanding, with bills soaring by more than £300 a household. At the same time, Hampshire county council is warning of an inflation-busting council tax rise next year because it received one of the lowest grants in the country. Is not it time to scrap rebanding?

My hon. Friend is right and makes a powerful point. Given the announcement of the postponement of that stealth tax, we might say that the stealth tax has fallen to a stealth axe.

Is the hon. Gentleman aware that in Wales all political parties supported revaluation for this year, including the Conservatives and the Liberal Democrats? The measure had all-party support in the Assembly.

I am certainly aware that, in the hon. Lady's constituency, council tax has gone up by eight times the rate of inflation, but there was a constitutional settlement in Wales—we had a devolved settlement—[Interruption.] The Under-Secretary of State, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick), says from a sedentary position that that was not in our motion, but he will recognise that the House set up the National Assembly for Wales, so we should not shirk our responsibilities. It is a pitiful sight when Labour Members of Parliament and Assembly Members try to blame each other for those savage rises.

Although I accept that all parties recognised the principle of revaluation, does the hon. Gentleman agree that the real issue is Labour's inability to implement that process in anything that resembles a just and fair settlement? As a result, council tax has not only become random, but it hits the people—often the elderly—who can least afford to pay the increases.

I shall certainly come to those points. The relationship between revaluation and its effects on total tax take and resource equalisation is something that I could go on about for hours, but I know that Welsh Members will want to make those points.

The costs of revaluation were spiralling out of control. In 2004, the Government estimated that revaluation would cost £108 million, but by 2005 the figure was £178 million, an increase of almost two thirds. Millions of pounds were lost before postponement and it is a criminal waste to continue the process and spend more.

As I demonstrated in my quotation from the Government White Paper, council tax was working well before Labour took over. It was well understood and was popular—if that is possible for a tax. Under the Labour Government, council tax has become deeply unpopular. That is hardly surprising with increases of 76 per cent., or when the Government cap councils that increase council tax by a few pence a week yet ignore others where the increase is in pounds, or when pensioners are being thrown into prison—[Interruption.] The hon. Member for Rhondda (Chris Bryant) may find the spectacle of pensioners with a previously unvarnished record languishing in our jails amusing, but I do not. It is little short of a disgrace that he and his hon. Friends forced pensioners into that position.

Can the hon. Gentleman explain what his position was when he voted for the implementation of council tax? How did he imagine that increases in local government expenditure would be met in ensuing years? Did he think that council tax was a temporary measure, and if so what did he envisage would follow it?

Unlike the hon. Gentleman I voted against revaluation. Indeed, I voted against it three times. The only substantial problem with council tax is its size. It is unpopular because it falls disproportionately on the backs of poor people. It is little short of a disgrace that a third of the increase in the basic state pension is taken up by higher council tax for a typical pensioner. The Government's increased use of means-tested benefits and complex application forms has resulted in reduced take-up of council tax benefit, which means that more people on lower incomes are paying higher council tax. Fewer than two thirds of eligible pensioners claim the council tax benefit to which they are entitled, compared with more than three in four before Labour came to power.

Thanks to the Audit Commission, we all know why council tax has risen since Labour came to power. There are three reasons: changes in the grant formula, the implementation of often unfunded Government initiatives, and national pay rates. Each year, the fiasco drags on; each year, it gets worse. The imbalance between local and central Government funding grows, which, in turn, will force Ministers towards crude, universal capping in the vain hope that the public's ignorance of the arcane details of council tax gearing will pass the blame for the unacceptable increases on to local authorities.

The public have rumbled the Government. A stealthy postponement of the revaluation will not hide the true responsibility for Labour's favourite tax. The Local Government Association forecasts a £1 billion shortfall next year. Ministers may try to gag the LGA for a couple of weeks so that the result of the survey is not discovered, but trying to push issue upon issue into the long grass will not work.

rose—

Will the hon. Gentleman give way?

I shall give way in a moment. I said that I wanted to make a little progress, and I have been very generous in giving way.

Those imbalances in the system and the effect of how a revaluation will hit the total tax take of each council are important. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) is not here, but I had the opportunity of going through his council's budget in some detail not so long ago. The more that that council raises in council tax because of the higher bandings that occur, the less it receives in grant and the more it must put up council tax, so the risk of capping is greater. That is not a sensible way to run local government finance.

I am very pessimistic about the Lyons review. I have no great hopes for its deliberations. After all, the Lyons review was originally set up as a device to avoid taking a decision. It was the ultimate long grass into which to kick the Government's balance of funding review. Just when the Government were beginning to hear the odd stirrings from the undergrowth, they gave it another substantial kick backwards, and we can still hear it pinging around the shrubbery. We have indications of the issues that Sir Michael is considering because we know that the Government are looking at them too.

The hon. Gentleman was talking about Wales and the fact that there was unfairness in the way that the council tax was made up and that it was unhelpful for some pensioner groups. The Welsh Assembly Government changed the spending assessment to help the poorest local authorities, yet the Conservative group in the Welsh Assembly voted against that change. How does he square that circle?

I shall give the hon. Gentleman a serious, non-partisan answer. I have rapidly come to the conclusion that council tax is too crude an implement to be used for social engineering—that goes to the heart of the dilemma—and in a few moments, I shall make some suggestions about how we can improve it. The situation has become complex and difficult. That is not a party political view.

The hon. Gentleman has identified the balance of funding crisis as a problem in the steep rises in council tax year on year, but what are the Conservative party's proposals for addressing that imbalance? What about localising business rates, for example?

The hon. Lady has attended many debates in which we have given a whole list of measures, such as removing a lot of restrictions on local authorities and freeing them up. [Interruption.] That would make a significant difference, but I am about to make some other suggestions in a few moments if the hon. Lady will be patient and not just rely on interventions drafted by her researcher.

Will the hon. Gentleman put clearly on the record his view of the decision that was taken in the Welsh Assembly, where a proposal opposing revaluation could have been made by any Opposition Member, but not a single vote was registered in opposition to revaluation in Wales? Were his own colleagues—some of whom are present now, with a dual mandate—wrong not to vote in opposition?

rose—

Will my hon. Friend give way?

I spy the cavalry. Of course I will give way.

I wonder whether my hon. Friend is aware that Members of the Welsh Assembly voted to support revaluation when they were specifically told by the Labour Minister responsible for local government that there would be as many winners as losers. They had no conception that she could have misled them by creating a system whereby one in three people were moved up by at least one band—two or three bands in several cases—and only one in eight went down.

It is extremely unlikely that a Yorkshireman who represents an Essex constituency would ever aspire to become a Member of the Welsh Assembly, but after those two interventions, there is not a chance that I will do so.

On an entirely non-partisan point, I should like to take the hon. Gentleman back to his earlier confession of his change in point of view, because it would be interesting to know more about it. There are some real problems with revaluation whenever it is undertaken. Often, it is not just the house price at a certain moment that is of importance, but how it has changed over the past three, four or five years. For example, in the Rhondda we had virtually no house price changes for several years, but suddenly over the past three years we have had dramatic changes in house prices. In the past year, they have gone up by 56 per cent. Sometimes, it can seem extremely unfair merely to base revaluation on a snapshot. I wonder whether the hon. Gentleman would like to reconsider the Tory party position. Although delay might be a good idea because we might need to ensure that any future revaluation is more sane than other revaluations that have happened, I merely point out to him that, in the Rhondda, quite a lot of people went down a band, not up.

I think that council tax has gone up by eight times the rate of inflation in the hon. Gentleman's constituency, so I can understand the pain that he feels. However, the important point is not the relationship between individual properties in Rhondda, but how that affects the difference between prices in our constituencies and the relative values in the various parts of the United Kingdom. A revaluation should exist for the process of realigning the housing market, but the rise in the market is not out of line and is much the same as 10 years ago. I suppose that there was a time when it looked as though it was starting to get out of line. That is why we consider such things over a long period. A decent period is needed for the housing market to readjust.

Does my hon. Friend agree that the debate is somewhat missing the point? It is not a question of preventing future rises in council tax. The current level of council tax is unacceptably high. Even if we introduced a system that pegged the current levels, it would not be good enough. We need to consider radical reform to reduce current bills.

My hon. Friend is absolutely right. If the debate is missing the point, all I can say is that I am doing my absolute best. Ultimately, there would have been no U-turn nor any question of revaluation but for the fact that council tax has simply got out of control.

We know what Sir Michael is looking at because we know that the Government are looking at it. We know that Northern Ireland is being selected as a guinea pig, with discrete capital values, which would make the council tax more progressive and target social needs. In plain English, council tax bills in Northern Ireland will soar. Northern Ireland is being selected for another experiment that involves a variation on the council tax: the death tax, in which a deferred local tax bill can be paid by pensioners. Vulnerable people must either forfeit their children's inheritance or face the prospect of bailiffs at the door.

Oh no.

Yes—another smash-and-grab raid against middle England's savings. Only the Labour party and the Minister of Communities and Local Government could find ways to pursue poor people beyond the grave—[Interruption.] Apparently, it is suggested from a sedentary position that the Under-Secretary is at fault. Nevertheless, the right hon. Gentleman must accept some responsibility.

We know that the Government are examining information technology as a way of bringing in more money. They sent out a questionnaire on tax rebanding to IT firms in which they asked about four additional council tax bands and higher band multipliers so that people in higher bands would pay more money, although the band of their properties had not changed. They have suggested cutting eligibility for discounts and exemptions. They have also considered discount schemes to cushion millions of council tax payers who move up two or more bands. The Government claim that the suggestions are not proof of likely reforms, but if that is the case, why are they asking such questions?

The Lyons review is just another depressing example of the ping-pong between structure and finance. We seem to go through a process of trying to change the way in which local councils are financed or structured. Revaluation and regionalism are two extremes of the massive ping-pong process. That is a great pity, because changes in local authorities are taking place without anyone really understanding their impact. Strategic partnerships and local area agreements clearly show how adaptable local authorities can be.

I firmly believe that function and finance are two sides of the same coin. If we were sensible, we would give local authorities the ability to share their sovereignty, responsibilities and resources. We would allow money to follow services and function to determine structure. Local authorities with a common concern could thus band together to provide better services for their electorates. It will be a good thing if Lyons recognises that change, but it will be bad if the review just leads to a further extension of the salami-slicing that has affected local government for so long.

Local government is one of the most adaptable of our institutions. We should give it freedom, and instead of trying to control the way in which local grant is distributed, we should allow money to follow services. We should work for local diversity. If we could do that, we would have the chance of building a real consensus, instead of worrying about the knock-on effects of one specific change.

For too long I have been listening to debates in this Chamber during which we have put together various schemes that have required transitional periods. Those periods become complicated, so another scheme comes along, which requires another transitional period that must be related to the first transitional period. That process must stop. We have an opportunity to give local government its head and some freedom, and that is essentially what new localism should be about.

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"welcomes the Government's decision to postpone the revaluation of council tax in England in order that it may take full account of Sir Michael Lyons's further work on the functions of local government as well as its financing; supports the Government's extension of Sir Michael's terms of reference, which will enable him to review the strategic role of local government and therefore set any proposals for the reform of the funding system within the context of that role and of councils' accountability; recognises that the devolution settlement for Wales gives responsibility for council tax matters to the National Assembly for Wales, and that the context for rating reform in Northern Ireland is very different from that in Great Britain; refutes any suggestion that Northern Ireland is being used as a testing ground for reform in England; and looks forward to the final report of Sir Michael Lyons's inquiry which it is confident will provide a real opportunity for fundamental and lasting reform."

I am delighted that the Opposition have chosen to debate this issue. I was genuinely thrilled when I found out the date of the debate, because I now have the opportunity to put on the record the Government's future intentions on policy and to respond to criticisms that have been made outside the House. I genuinely welcome the debate.

The last time that we debated council tax in the House was 4 July. Since that date we have made an important announcement on postponing the revaluation, which was described by the hon. Member for Brentwood and Ongar (Mr. Pickles) and others—and, indeed, by my right hon. Friend the Minister of Communities and Local Government—as a U-turn. We were honest and up front about the decision, which I shall explain in some detail today.

The announcement of 20 September was important not only because of what it said about the revaluation exercise, but because of the extension of Sir Michael Lyons's independent inquiry. After reaching the decision to postpone the revaluation, we thought it right and proper for several reasons to make the announcement at that time, not least because the preparation work undertaken by the Valuation Office Agency could be stood down to minimise costs. The hon. Member for Meriden (Mrs. Spelman) has tabled questions about the matter and made points about it, but not all the money spent could fairly be described as having been wasted. The vast bulk of the money was for computerisation and data collection, and that work will be valid in the future. If we had continued the work and waited until the House had returned to make the announcement, she could have made such a charge.

rose—

rose—

May I put the situation on the record, after which I will be more than happy to take interventions?

Given the importance of the announcement and the widespread interest in it, I regret that we were unable to make it when the House was sitting.

Will the Minister give way?

May I put the background on record? Then we can move on to policy points.

My right hon. Friend the Minister of Communities and Local Government wrote at the time to all hon. Members with English constituencies to explain the decision. No discourtesy at all was intended to you Mr. Speaker, or to the House.

There has been a huge amount of posturing by the Government's opponents and a lot of misinformation has been produced about the revaluation decision and policy, so the debate is a useful opportunity to clear the air and get the facts straight before we debate the Bill to postpone revaluation, which received its First Reading on 14 October. Copies of the full text of the 20 September announcement are of course available in the Library. Nevertheless, I think that it is important that I set out fully what it says.

The House will recall that the Government appointed Sir Michael Lyons in July 2004 to carry out an independent inquiry into local government funding. He has made good progress with that remit and I should stress that the original remit stands. We have extended the remit, not replaced it. Sir Michael has discussed with Ministers his work so far. His initial conclusion is that well-founded recommendations on possible reforms to the funding of local government cannot sensibly be made in isolation from a proper consideration and understanding of the developing role and functions of local government, not only by central Government but by the population at large.

Sir Michael has made it clear that any proposals for reform of the funding system raise complex issues. The Government have agreed that they need to be set firmly and explicitly in the wider context of a clear and shared understanding of the role of local government and of the accountability of councils to service users, residents and taxpayers. It was for that reason that my right hon. Friends the Chancellor of the Exchequer and the Deputy Prime Minister extended the terms of reference of the inquiry.

The Government have agreed with Sir Michael that he will review, through a series of discussion documents, the current and emerging strategic role of local government in the context of national and local priorities for local services, including the implications of that for accountability. He will also review how the Government's agenda for devolution and decentralisation to local councils, together with changes in decision making and funding, could improve local services, the responsiveness of those services to users and, of course, local authorities' financial efficiency. In the light of that work, Sir Michael will address critical funding issues, including fairness, accountability, clarity, efficiency and effective management. He will produce his final report at the end of 2006. I know that when taking forward the new remit Sir Michael will want to work closely with local government as well as drawing on the assistance of Government Departments. I hope and expect that other parties present will participate in those discussions.

The additional work that Sir Michael will undertake will add value to the Government's current work on a strategic view of the role and functions of local government under the local vision programme, about which I shall say more later. It will also contribute to the comprehensive spending review 2007, which will set the path for local government funding for the medium term. To set the scene for that work, later this autumn Sir Michael will set out his preliminary thinking and publish research and analysis undertaken so far, drawing out the relationship between local government function and finance.

It is obvious to everyone that the future of local government is critical to the future of the country, of local communities and of individuals.

I thank the Minister for his kindness in giving way. I am in the business—or at least my business is in the business—of data collection, databases and related matters, and I can tell him that the average database degrades at a rate of 15 per cent. per year compound. Given that, does he accept that the data collected over the past two years will be almost totally useless?

No, I do not. The hon. Gentleman regards that as a valid point, but he misunderstands the one that I was trying to make. Ministers, rightly, must listen to the advice of the Valuation Office Agency. The figures that I have put before the House in written answers and here today are the agency's figures and I have to take its advice. I doubt that the hon. Gentleman would like it if Ministers strode around pretending to be experts on software programming.

The Minister will be pleased to learn that my question is not about software. He said that the research papers would be published in the autumn. The leaves are now falling; when does he think that autumn will have ended? Are we talking about next week, or some time in November, or will we have to wait until the actual end of autumn, which is 21 December?

It is a rolling programme. [Laughter.]

A rolling autumn? That is a good one.

Autumn is defined as the period before Christmas. My right hon. Friend the Minister of Communities and Local Government answered this question during oral questions a short while ago. The scene-setting report is expected this term, but we do not have a specific date. To be serious, Sir Michael's report is independent and the process that he follows is under his control.

I fully understand the logic of a wider remit for a full-scale review, but will my hon. Friend touch on how it relates to Wales, where local government functions are a devolved matter? Is a parallel process expected to take place in Wales? Will the Minister discuss the ramifications with the Secretary of State for Wales and the First Minister? Although the finances translate across England and Wales, the detailed restructuring of local government has significant implications from the point of view of the Welsh Assembly Government.

My hon. Friend makes a valid point. Our policy is that matters relating to local government in Wales are, rightly, devolved. Having said that, there is a relationship, which is why I have been engaged in correspondence with my counterpart in Wales and why meetings are due to take place as the process unfolds. Whether the shape of the debate is the same in Wales as in England is a matter for Welsh representatives, but I am aware of the interaction between the two.

I was outlining the importance to the country and to communities of the role of local government. That has to be placed in the context of our manifesto commitments to public service reform. From continuing the improvement in our schools to making social services more responsive to the people who use them, local government will be in the forefront of driving up performance. However, the communities that our local councils serve are growing ever more diverse, with a greater range of needs and higher aspirations than ever before. We should celebrate that, but we should also acknowledge that it means that local government's role will have to change along with the communities that it serves.

There are several pointers to that debate, in which we are now engaged. The local council must lead and represent the local area by harnessing the efforts of local people and representing their interests. It must lead the community through building partnerships with other local service providers, voluntary and community groups and the private sector. Hon. Members may know that every area in England will have a local area agreement by April 2007. In my view, local area agreements, whereby councils come together with other public service partners, the voluntary and community sector and the private sector to serve their area in a joined-up way, are a significant development in local government—one of the most significant developments since the second world war.

The debate on the role of local government within the local area agreement takes place alongside other debates—for example, the debate on neighbourhood and community empowerment, the debate on how we achieve a step change in service delivery to users, and the debate on how we involve the disadvantaged and improve services to them as well as to everyone else. Those significant local government changes are in the pipeline, which is why the decision to postpone the revaluation was the right one.

Does the Minister agree that the test of the worth of local area agreements will be based on highly practical issues—for example, the junction between the medical assessments of children with special educational needs and the services that they receive? Such children often cannot get the assistance that they require because the bodies involved do not communicate. Only if my LAA deals with specific issues such as that will I think that it is worth while.

I agree. I think that it was Chairman Mao who said that the goat that belongs to everyone starves to death. That is never more true than in the context of local services.

Will the Minister give way?

May I finish my Chairman Mao analogy before the hon. Gentleman mis-times another intervention? I hope that he is not about to throw Leon Trotsky back at me.

The point made by the hon. Member for South-West Bedfordshire (Andrew Selous) is a serious one. Local area agreements help to join services together and ensure that objectives are shared. Crime can be tackled better if the police have the active co-operation and participation of other public service agents, such as schools, the probation service and local councils. That type of change is being driven forward in parts of the country and the best examples are showing the way to others. Sir Michael Lyons said on that subject:

"One of the strongest conclusions emerging from my work to date is that well-founded recommendations on possible reforms of the funding of local government need to be based on a clear understanding of the expectations and responsibilities of local government, which continue to change".

In other words, the responsible thing to do is to put reform of finance after the debate on reform of role and function.

I have been listening carefully to my hon. Friend and I understand entirely his point on the need for a wider remit for Sir Michael. Does he accept, however, that Sir Michael was not convinced of the case for a postponement of revaluation of longer than one year? Sir Michael has stated on the record that he understood why Ministers would seek to postpone for one year, but, by inference, he is not supportive of the Government's position.

In fact, Sir Michael did not even go that far: he said only that there was a case for postponement of a year. I acknowledge that he did not recommend a postponement such as the one that we announced. I hope that we have never given the impression that we are hiding behind Sir Michael. We have extended his remit because it is the job of Government to ensure that reviews of financing such as his complement other areas of public service reform and wider social and economic policy. The advancement of local area agreements to ensure that they cover the whole of England by April 2007 is a significant step change in our policy that builds on the tremendous work of my right hon. Friend.

I agree that local area agreements are a sensible and practical way of joining up things that have been divided because of the way in which central Government organise their financial regime for local authorities. Surely, however, local authorities themselves should join things up? If we allowed local authorities more flexibility to think across portfolio areas, we would not need mechanisms at the other end to join things up.

We would all agree with the sentiments behind that, but, although I hate to use the word, the hon. Lady is being naive. Of course, it is desirable that public service agencies work together and there are many good examples of them doing so. Local strategic partnerships existed for many years before Government guidelines were issued, and the best ones work well together. Public services use taxpayers' money, and the review is predicated on the belief that the funding system is not as fair as it could be. If we give that responsibility to local authorities, as devolution allows, we have to give them the financial mechanisms to work meaningfully with public sector partners. The hon. Lady has clearly never read Chairman Mao, who was absolutely right about that.

No, I have not read Chairman Mao.

That probably says more about me than it does about the hon. Lady.

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I will accept one more intervention before turning to the specifics of council tax revaluation. I have a duty to the House to do so before drawing my speech to a close.

Further to the question about deferral asked by my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), has revaluation been postponed so that it can be implemented at the same time as any changes arising from the Lyons review—it will probably take four to five years in the legislative process to bring such changes into effect—or are the Government simply delaying and deferring revaluation until they know what Lyons is going to report on? Perhaps revaluation will start then pending any further changes.

My hon. Friend's question allows me to put the situation on the record again. In the statement announcing the postponement of revaluation, we made it clear that we did not believe that revaluation would take place during this Parliament. We went no further than that, and it is for Parliament to decide the future. Second Reading of the Council Tax (New Valuation Lists for England) Bill is imminent, giving us an opportunity to debate these issues in more detail. The decision rests with Parliament but, none the less, the Government's policy is that revaluation has been postponed, not cancelled. The exact timing partly depends on any actions that may arise from the recommendations of the Lyons report.

It is right to maintain a fair alignment between house prices and council tax bands. The case for council tax revaluation is linked to wider questions about the structure of the tax and to the operation of council tax benefit. A number of other changes in the local government finance system are in the pipeline, including the move to three-year budgets, the review of the local government finance formula and the creation of a dedicated schools budget located in the Department for Education and Skills.

Does my hon. Friend agree that one group suffers particularly badly from the way in which council tax is devised? By definition, housing association tenants do not benefit from the open market value increase of their property, so it is extremely unfair that they should be expected to pay towards that increase.

My hon. Friend has made an interesting contribution. It is because of such questions that I put the other side of the coin, which opponents of the council tax rarely acknowledge. A substantial proportion—13 per cent., I believe—of income generated by council tax is repaid through the council tax benefit system. Indeed, a pensioner on guaranteed pension credit does not pay council tax—[Interruption.]The hon. Member for Cambridge (David Howarth) was trying to make a point, but I did not quite catch it. I am sure, however, that I will answer his concerns in a few moments.

The Government have decided that it would not be sensible to proceed with the current timetable for revaluation. Sir Michael's analysis so far has led him to conclude that there may be a case, as I told my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), for a delay of up to a year in the implementation of revaluation. However, the Government concluded that the balance of advantage lies with allowing the flexibility to revalue as part of a fully developed package of funding reforms, rather than as a precursor to them, and at a moment of greater financial stability for local authorities. That is the background to the decision.

I should like to make the Government's position on council tax quite clear. First, as we said in our response to the balance of funding review, we accept that council tax should be retained but reformed. That was why we appointed Sir Michael Lyons in the first place. Secondly, as I have said, we remain committed to council tax revaluation even though 2007 is not the right time for it. Council tax is related to property values. As we said in our 2001 White Paper, the Government fully recognise the importance of keeping property values up to date. That remains our position. We are postponing, not cancelling, revaluation. We need to ensure that we get revaluation and reform of council tax right, and that is why Sir Michael is conducting an extended inquiry. There was a great deal of unnecessary scaremongering by the Opposition about the effects of revaluation. Revaluation would not mean that individuals would pay more council tax just because their house had gone up in value. Nevertheless, many people believed that it would because of statements made to that effect. Many properties would stay in the same band. That has been made perfectly clear all along, despite reports that appeared in the press. Thirdly, the Bill that we have introduced and which we will debate in due course is simply concerned with timing requirements. All the other provisions are unaffected. I trust that the Bill will receive the full support of the main Opposition party, as it is keen to cancel the 2007 revaluation.

I must now address some myths and accusations about council tax. The Government are often accused of letting council tax rises get out of control. That accusation misses an important point. It is local councils that set council tax levels, not the Government. We have reserve capping powers, which we have used to deal with excessive increases over the past 2 years. There is no excuse for excessive council tax increases, but we should not confuse the principles of the council tax with council tax increases. There is an important difference.

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I am afraid that, to be fair to hon. Members who wish to make speeches, I do not have time to give way.

Since coming to office, the Government have provided local councils with grant increases of 33 per cent. in real terms. Local authorities know that we are serious about capping and that we will use those powers if we have to.

The Government are also accused of under-funding local authorities by not paying sufficient grant and by letting unfunded pressures build up, despite the 33 per cent. real-terms grant increase to local councils. We will shortly be announcing the provisional local government finance settlement for 2006–07. That will see a move to three-year settlements for individual authorities, with allocations for the authorities covering next year and 2007–08. We will also be announcing individual allocations for those two years for specific grants which it is possible to allocate in advance. For others, such as performance-related grants, it is not possible to do so.

After the considerable extra funds provided this year—an increase of 6.3 per cent. overall compared with last year—and the transfer of schools funding, the overall increase in formula grant for local authorities is likely to be lower than in previous settlements. However, it is important that the spending power that this grant will deliver for authorities is taken into account. Because of the shift to 100 per cent. Government funding of schools, council tax will fund more of the other local services, so unless the whole picture is looked at, the increase next year cannot be compared with grant increases in earlier years.

It is often said that the present system is unfair to pensioners. The Government recognise the concerns of many pensioners, particularly those on low or fixed incomes, about excessive council tax increases. However, as I have already said, it is local authorities, not central Government, that set the increases in council tax. Keeping council tax increases down is only one side of the coin; improving pensioner incomes is the other. We have already done a great deal in that regard, spending nearly £11 billion extra on pensioners in 2005–06, compared with 1997. On average, after allowing for inflation, pensioner households are about £1,500 better off this year than they would have been under the system that operated in 1997. The least well-off third of pensioner households are, on average, £2,000 better off.

We are providing money to pensioners specifically to help them pay their council tax bills. We gave £100 to households with someone aged 70 or over in 2004–05. In 2005–06 households with someone aged 65 or over will receive an extra £200. The money will usually arrive with their winter fuel payment and is in addition to that, unless they are receiving the pension credit guarantee. People getting the guarantee element of pension credit are already entitled to a 100 per cent. rebate of their council tax bills. Households with someone aged 70 or over getting the pension credit guarantee will receive £50 to help with general living costs.

We need to look at both sides of the coin when we discuss the funding of local government. I look forward to the debate and I am keen to hear hon. Members' views as a contribution, I hope, to a serious consideration of the future role and function of local authorities. The Government are firmly committed to developing strong local government, given its vital role in improving life for people in our communities, so that they are proud to live there. That is the goal of our policy. I invite everyone to embrace the opportunity that the Government have provided to support Sir Michael Lyons in the next phase of his work, and to help him and us to ensure that a sustainable and secure funding base supports the changing and challenging role of local government, which is being developed.

The Conservatives have accused the Government of confusion over revaluation, but as the debate has been relatively good natured, let me give the Labour Government credit. They have been consistently in favour of revaluation until a few weeks ago, when they did a giant U-turn, more out of political cowardice than out of ideology. The Conservatives, on the other hand, have held half a dozen diametrically opposed positions over the same period, with no obvious guiding ideology, and as we heard again from their Front-Bench spokesman today, the hon. Member for Brentwood and Ongar (Mr. Pickles), no obvious views about how local government finance should be reformed in future.

Let us consider Labour's record. When the council tax was introduced, countless Labour shadow Ministers argued passionately that a property tax required a revaluation in order to be valid, as we heard again today. Fast-forward to 1998 when the Labour Government were in power and produced a White Paper, "Modern Local Government". Their position then was essentially that revaluations are necessary, but not yet. Four years later, in 2002, the Government decided that the time had come. The Local Government Bill set out a timetable for revaluation in 2005 in Wales and 2007 in England, and every 10 years thereafter.

A few weeks ago, as we know, the Government got extreme cold feet about the political repercussions of revaluation and retreated to the comfort of the old position. As the Minister for Local Government told an audience yesterday at the meeting of SIGOMA—special interest group of municipal authorities—in the House of Commons, the Government postponed revaluation only after analysis demonstrated that there would be about 2.2 million losers as households moved up one or more bands. They predicted that the money that would need to be set aside for appeals could destabilise local government finances altogether. I guess their position remains, "We need revaluations, but not now, please. Not on our watch."

Sadly, Wales has not been quite as lucky. We argued for the Welsh Assembly to have powers to introduce primary legislation so that it could, for example, abolish the unfair council tax system, but the Labour Government would not give such powers to the Welsh Assembly under devolution. Revaluation was therefore foisted on Wales by the Government in the 2003 Local Government Bill. Wales was used as an experiment, just like Scotland for the poll tax. The experiment has gone horribly wrong.

I think there was an inadvertent slip in what the hon. Lady said. The timetable was not in the local government Bill or the Act passed by this House. The timetable for revaluation was chosen by the National Assembly Government, and the Liberal Democrats were in coalition with the Labour party in that Government at the time.

The hon. Gentleman is right that the Welsh Assembly decided to bring forward its decision to revalue, but the decision on revaluation was made in this Chamber. We have argued consistently for the abolition of council tax and its replacement by a local income tax.

Will the hon. Lady give way?

No. A third of households in Wales—

Will the hon. Lady give way?

In a moment.

A third of households in Wales went up a band, whereas fewer than one in 10 went down—not one in eight, as I heard earlier. One house went up six bands. While Labour has postponed the unpredictable misery of revaluation in England, people in Wales face the prospect of losing the transitional relief next year, so the full impact of revaluation will be felt.

The burden of local tax in Wales has moved from low house price areas to high house price areas, irrespective of income. That is the point. That is what happens when there is an unfair property tax. It is a reason not for cancelling revaluation, but for cancelling the tax itself.

As my hon. Friend said, there are fundamental problems with the council tax that cannot be solved with sticking plaster. May I clarify the figures? In Wales, one in 12 houses went down in the rebanding and one in three went up, but does my hon. Friend agree that that does not necessarily tell the whole story? In constituencies such as mine in central Cardiff, in certain areas nine out of 10 houses went up at least one band and some went up two, three or four bands. That shows that—

Order. Interventions must be brief.

Indeed, Madam Deputy Speaker.

Does my hon. Friend agree that the only fair way to redress the balance is to scrap the council tax and introduce local income tax in accordance with the ability to pay?

I agree, and I stand corrected on the figures. I give way to the hon. Member for New Forest, East (Dr. Lewis), who has been waiting patiently.

The hon. Lady has almost answered my question already. In the run-up to the general election, her party's Treasury spokesman admitted that under local income tax, households with two or more wage-earners would pay more. In my constituency a household with two wage-earners would pay £721 more, which was one of the reasons why my majority massively increased over the Liberal Democrats. Can she confirm that she will remain consistent and support local income tax for the indefinite future? We should love her to do so.

I happily confirm that we shall be supporting local income tax for the indefinite future. Just to clarify, it was never said that two-earner households would do worse. Some will. Those who earn considerably more than the average will do worse, and we have never hidden that. This is a progressive taxation system. Some do better; some do worse. That is the point. What about the Conservatives? Could it be that rather than accusing the Government of being confused on the issue, it is the Opposition who are confused?

Will the hon. Lady give way?

I will give way in a moment.

If we look back to 1991, we will discover that when council tax was introduced the Conservatives believed, as was stated earlier by the Opposition spokesman, it would never need revaluation because of the banding structure. The then Secretary of State for Scotland, Mr. Ian Lang, said:

"The banding system irons out much of the effect of relative changes in property values within an area which, under the rating system, brought regular pressure for revaluation."—[Official Report, 12 November 1991; Vol. 198, c. 918.]

But in 2003, the hon. Member for Brentwood and Ongar changed his party's mind. Responding to the debate on the Local Government Bill, he said:

"We recognise the need periodically to revalue properties for the purpose of council tax . . . We support the revaluation being made on a regular and predictable basis."—[Official Report, 7 January 2003; Vol. 397, c. 64–65.]

A month later, his colleague the hon. Member for Cotswold (Mr. Clifton-Brown), a party spokesman on housing, argued for five-yearly revaluations in Committee on the Bill. Then the Bill moved to another place, and Lord Hanningfield, the Conservative spokesman, proposed no revaluations at all. The reasons he gave were interesting. He said: