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Autumn Budget 2025

My Lords, while I welcome much in the Budget, I will raise a single issue: the reforms to council tax. On a number of occasions over recent years, I have raised in Westminster and in the northern media anomalies in the levying of council tax. The classic example is that the levy on a Cumbrian council house is the same as the charge on a £60 million house in Mayfair. Harold Pinter would have revelled in all its absurdity.

How has this come about? We need to go back not only to the antecedent valuation date, or AVD, set in 1991, but to the potential for revenue raising being available primarily from parking revenues. With that in mind, some years ago I undertook a project comparing local authority charges in the north with charges in a selection of boroughs in the south, all charging lower rates. My findings and data were widely disseminated, provoking an avalanche of mail and the use of my data in the House.

My conclusion was simple: we need to revisit the system and introduce new bandings. Earlier this year, I proposed new bandings I, J, K and L. The Government are proposing the use of cash thresholds, and I cannot quite understand why. I am sure there will be an

explanation and I wait with interest to hear it. Why can we not have new letter bandings, set perhaps at £2 million, £3 million, £4 million and £5 million-plus? We could then begin the slope of progressive movement down the scale of letter revaluations.

I am more than aware of the sensitivities in dealing with amendments to local taxation. Some say that the late Baroness Thatcher lost her leadership over her decision to introduce the community charge in the late 1980s. I understand that we need to act with care. The establishing of council tax liabilities under a 1991 AVD is becoming increasingly abused and administratively complicated. At some stage, we will have to bite the bullet and reform the system. The question is whether we can do it without generating widespread anxiety and an electoral backlash.

We have a number of options. During revaluation transition, we could freeze households to existing bandings for a number of years: let us say 20. We could freeze bandings to current occupancy or even limited successor occupancy. Whatever we do, we have to deal with a system in which problems are inherent: levels are often too high and remain unchallenged or are too low, due to factors widely recognised in the House. It is perfectly possible to progressively create a system based on current letter valuation principles, where council tax payment levels remain broadly unchanged yet which at the same time deals with the absurdities in a system that has long passed its sell-by date.

2.24 pm