asked Her Majesty's Government:
Whether they are considering introducing any additional council tax bands.
My Lords, we believe that the council tax is working well as a local tax. It has been widely accepted by local taxpayers and is generally well understood, although we will keep the situation under review. A number of respondents to our recent Green Paper on local government finance raised the issue of the banding structure. Although that was not a matter on which the Government had consulted, we will consider what was said.
My Lords, I thank the Minister for that Answer. Are the reports which appeared in the Sunday Times on 7th January—that her right honourable friend the Deputy Prime Minister is studying a wide-ranging restructuring of the council tax system and has promised a White Paper later this year—correct or not?
My Lords, it is correct that we published a Green Paper in September. We shall consider the responses and as a result will be producing a White Paper later this year. In undertaking a process of consultation, the Government will consider all the points raised by respondents, but they have no plans to vary the tax band structure as proposed by the noble Lord.
My Lords, is the new system of floors and ceilings to the council tax, which appears to have arisen, likely to continue in view of the unsatisfactory way it is working?
My Lords, the Government believe that in order to avoid major changes of between 1 and 10 per cent it is wise to allow the floors and ceilings to exist. They protect not only local authorities but local people from wide variations. At present, we cannot envisage a circumstance in which that would be necessary in all years but we shall keep the matter under review.
My Lords, given the preponderance of finance which comes from the centre to local authorities, the Government have my sympathy in dealing with local government finance. The Minister will be well aware of my views on the subject. Does she agree that such problems will continue and will be insoluble while the dominating position of central finance continues?
My Lords, I understand and have known for years the point of view taken by the noble Lord, Lord Dixon-Smith. The position which has faced local government during the past four years—that is, a 13.6 per cent real terms increase in grant—has enabled local authorities to respond more accurately to the needs of their communities. The noble Lord's view was expressed by other colleagues in local government and will be taken into account in considering responses to the consultation.
My Lords, are the Government and the Minister thinking of taxing your Lordships' castles at a higher rate?
My Lords, I must admit that I do not know whether noble Lords' castles are in Scotland. If so, it will be a matter for the Scottish Parliament. If they are in Wales, it will be a matter for the Welsh Assembly. However, if they are in England I can tell him that at present we have no proposals to vary the tax bands.
My Lords, is not one of the reasons for the proportion of tax to be found by local taxpayers that the business rate was removed from local authorities? Are the Government considering properly returning that tax to be raised by local authorities?
My Lords, although I have not seen the responses to the consultation, I am certain that collectively and individually local authorities will have raised that point in response to the Green Paper. We must bear in mind two issues when considering the future of the business rate. The most important is the belief of some local authorities that all the business rate which would be collected within their areas would necessarily go only to that local authority. However, all in local government would accept that in equity it must be redistributed. The noble Lord's view has been expressed and no doubt will continue to be.
My Lords, may I urge the Government to re-examine the position of park home owners? The Minister will know that in recent months a working party in which the DETR is involved has been examining the legislation and issues surrounding park home owners. One of the big issues raised by those owners was the level of council tax banding because many properties are at a lower rate than band A. I heard what the Minister said but the matter is urgent. Will she reconsider it?
My Lords, the issue was raised by my honourable friend David Borrow the Member for South Ribble in another place. Many people living in park homes have put the points expressed by the noble Baroness. We shall bear them in mind.