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Local Government Finance Bill

My Lords, I thank all noble Lords who have spoken in this short debate. I am sorry but not surprised at the response from the coalition Benches. In particular, in responding the noble Baroness went back to the mantra of saying that the scheme has to run until 2020 to ensure that there is an appropriate incentive, yet at the same time she said that the Government are going to keep it under review. The purpose of setting down the need for an independent review after a fixed period is, in a sense, to force the Government of the day, whoever they are, to take stock of where things are at that point. Otherwise, should this Government continue after 2015, there is a risk that nothing will happen until 2020. I thought that the position taken by the noble Lords, Lord True and Lord Tope, was, “Yes, give me a review but just

not now or just not by this mechanism”. If not by this mechanism, what will force the review? Of course, there will be ongoing discussions and representations—that is an automatic part of government business. However, that is not the same as saying, “We have a new system here”. We are placing great reliance on calculations done for tariffs and top-ups right at the start of the system and those will be locked in place for a minimum of seven years and potentially longer. That does not seem sensible to me.

That does not address the issues that the noble Earl, Lord Lytton, made about the volatility of what is happening in the valuation of property and the domestic rating system generally. Although we had some very valuable input from the noble Earl in Committee about what is happening in that system where it is administered by central government, the risks are increasingly with local government. To allow that to continue without some formal check for seven years, or maybe longer, does not seem right to me.

I am grateful for the support of the noble Lord, Lord Williamson, on this. As he said, other amendments go further, and this is a very moderate amendment. He made the important point that growing a local economy does not necessarily always equate with growing the business base rate, particularly as high-tech matters come into play.

As ever, the noble Lord, Lord Smith, put his finger on the issue. This is a huge gamble in the new system. We need to ensure that it is fair and flexible, and not only at the start of the system—and we would challenge that it is. However, even if it is, we need to ensure that fairness is maintained throughout the period before it can be readjusted by way of a reset.

The noble Lord, Lord Palmer, said that it was building uncertainty on uncertainty. I do not accept that. The right of the Secretary of State to change things on a yearly basis is embedded in the Bill. We know that the current one is not likely to do that and would not do it before 2020. This amendment simply requires the process to review the system along the way. We will not have a meeting of minds on this so I would like to test the opinion of the House.