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Last Updated: Tuesday, 20 September 2005, 20:02 GMT 21:02 UK
Political risk of revaluing homes
John Andrew
By John Andrew
Local government correspondent

No wonder governments are nervous about revaluations. Take what happened in Scotland in the late 1980s. A rates revaluation there led to higher bills and even louder protests.

Council tax protester Sylvia Hardy
Sir Michael Lyons is to reform the controversial council tax

The furore convinced Mrs Thatcher that she daren't risk a similar exercise south of the border - already long overdue.

The rates had to go. That led to the poll tax - first in Scotland, then in England - and we all know what happened to it - and Mrs Thatcher.

There can be no doubt that Mr Blair and his ministers had that historical lesson in their minds. They would also have cast an eye over Wales, which has just gone through the pain of revaluation.

There, the Welsh Assembly government underestimated how many homes would end up in higher bands.

It's inescapable that homes that have increased in price above the national average since 1991 are more likely to go into a higher band

While nearly 60% of homes stayed where they were, a third went up by one band or more and only 8% were moved to lower bands.

And far from being "revenue neutral" - that is the promise that overall, no more money would be raised as a result of revaluation - the tax take DID go up.

Ostensibly, the government has delayed revaluation because it wants to get council tax reform sorted.

That job is in the hands of the former chief executive of Birmingham City Council, Sir Michael Lyons.

His brief has now been widened to look at the functions of councils too - so his final report won't come till the end of next year -12 months later than planned.

London houses

There can't be many people in Whitehall or town hall who don't believe that the real reason is to put revaluation into the political long grass - even though Sir Michael himself had recommended a one-year delay at most.

One finance expert told me that at the very earliest, a revaluation wouldn't now take effect on bills until 2011, 20 years after homes were first valued for the council tax.

But is delaying revaluation merely delaying the pain?

It's inescapable that homes that have increased in price above the national average since 1991 are more likely to go into a higher band.

That is true wherever you live in England.

But the largest number of these homes are in London, the wider South East-and the South West. Or looked at another way in key "middle England" election battlegrounds.

Some believe, though, that because prices in the north are still racing ahead while they've slowed significantly in the south, there's an evening out which means the regional differences won't be so startling.

Extra bands

Sir Michael Lyons is already looking at adding extra council tax price bands to the eight we already have.

The current system works so that those in the top Band H pay three times as much council tax as those in Band A.

One way to make the tax more progressive up the property values would be to add bands at the top and bottom.

That would mean the most expensive homes paying more and give the chance to those living in the cheapest Band A homes to go down a band.

Getting it right though is no easy matter and no one will envy the task facing Sir Michael.

He says, though, he's determined to produce a report which won't gather dust like some of its predecessors.


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