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Politics Matters

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LGA Labour group leader Sir Jeremy Beecham on the two-faced take on revaluation

The Domesday book, it was recently announced, is now available online. That early exercise in valuation provoked nearly as much protest by the Saxon opposition as the possibility of a revaluation for council tax does from today's Tory opposition. And the Tory press is even more vehement than their monkish forebears in the Anglo Saxon Chronicle. Time, therefore, for a reality check.

Council tax was created in 1991 as an escape route from the horrors of the polltax. But the restricted number of bands; the limited ratio between them; and the retention of a personal aspect through thesingle person discount, meant the new tax effectively contained an element of poll tax within it. This perpetuated, albeit on a more modest scale, the unfairness of its unlamented predecessor. The valuation process was risible, with estate agents in Ford Escorts reputedly driving round residential areas and allocating streets of houses into bands.

Over time any valuation becomes outdated, and it becomes increasingly difficult to place new properties into bands long since overtaken by changes in house prices. In order to preserve any element of fairness and comparability, periodic revaluations are required - and were always envisaged.

The longer revaluation is postponed, the greater the unfairness, between individuals and arguably between areas, becomes. If a property tax is to remain part of the local government finance system, and there are strong arguments for it doing so, revaluation must be on the agenda. Of course that does not mean that other measures to improve the tax are not required.

In the mythology propounded with his characteristic enthusiasm - or as his critics might say, bluster - Eric Pickles denounces revaluation simply as a means of increasing local taxation. He points to the record of Wales, where there were more losers than gainers, and where in the year of revaluation the total tax take rose. But there is no reason why the yield of council tax should be increased by revaluation.

What will determine the yield is the rate at which tax is levied on the newly valued properties. In Wales a fundamental mistake was made when no new lower band was introduced, and the revaluation coincided with an unrelated increase in expenditure.

Now, in addition to the inherent hypocrisy in the Tories complaining about the government's alleged plans to "revalue by stealth", Eric Pickles complains about people being placed in the wrong band, something which a proper revaluation would resolve. And of course the last Tory Government cut financial support for councils and planned increases in council tax.

Tony Blair was right to denounce the Tory campaign against revaluation in the 2005 election, and wrong to dismiss the calls of Nick Raynsford and Sir Michael Lyons to proceed with it, or to improve council tax. Additional bands at the top and bottom,and especially a radical change in council tax benefit to promote much wider take up are both required. Not to mention wider changes like returning business rate over time and assigning a share of other taxes to create buoyancy.

Of course there will be losers and gainers, the former will protest and the latter are unlikely to strew rose petals in the path of their council leader. But the Tory alternative is presumably to allow the 1991 valuations to endure forever, acquiring Domesday book's legendary status, and without a word about other local government finance issues.

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