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Local Taxation

It is all very well the hon. Lady shaking her head, but if the tax base were to be based on income rather than property, it would be narrowed. A greater burden would therefore fall on those people paying income tax, who are, on the whole, members of hard-working families. The Lyons review’s remit is to consider whether an element of income tax could be used in balance with the existing property element—[Hon. Members: ““Ah!””] This is not news. If hon. Members had read the Municipal Journal—or, indeed, the answers to the parliamentary questions that someone has been writing for them—they would know about this. We have requested the Lyons review to consider the balance of funding, building on the work that my right hon. Friend the Member for Greenwich and Woolwich has done, and to make recommendations on how best to reform the tax, taking into account the possible impact of revaluation. It will also assess the case both for providing local authorities with increased flexibility to raise additional revenue and for making the shift in the balance of funding that I have just mentioned, and conduct a thorough analysis of options other than council tax for local authorities to raise supplementary revenue. This has been an interesting debate, if only because it has teased out the differences between the two Opposition parties, both of which are clearly concentrating on what is going on in Cheadle rather than in the Lyons review. This Government’s record in providing a 33 per cent. real terms increase in resources to local authorities since 1997, providing incentives to councils such as those in Surrey that were mentioned, and giving better freedoms to improve services, as the Audit Commission is reporting sustained increases in local services, is one of which we should be proud. We look forward to Sir Michael Lyons’s recommendations, and to further debates on this matter.