Council Tax 2006–07

My Lords, it is true that it is just London taxpayers, because the benefits will go to London. The figure of 4.5 per cent is spread out across the country to illustrate that. The noble Baroness, Lady Hanham, asked about capping of what she described as ““two hapless councils””. We are pleased that there are only two and no more. Having set principles within a capping regime, as we are required to do, we have to apply them. It is unfortunate that the two councils have fallen into that category. They will be able to challenge the decision. They have that right. Indeed, they may choose to challenge the billing cost. They are free to do that. Nevertheless, they have fallen outwith the regulations. Both noble Baronesses ask me what budget reductions would be required. In Medway, it would be £382,000 and in York, it would be £285,000. Those are the figures that we are talking about. The noble Baroness, Lady Scott, asked me about Lyons and, in particular, whether we could look forward to the scrapping of the capping system after Sir Michael’s report. Would that I could anticipate what the gentleman will come up with. We shall have to wait and see. It is one of many aspects of the funding regime and the form and functions of local government that he will be looking at, and I am afraid we will have to be patient. I believe that I have dealt with the other questions on the Lyons report that were put to me. I take the point on which the noble Baroness concluded. We are obviously keen to keep council tax down, but we believe, and this Statement demonstrates, that this year we have a settlement that is fair and negotiated and that will fully fund the services that are needed. With the LGA, we are looking at many other hard issues about new burdens; for example, adult social services, and so on. We look forward to working with the LGA as we approach CSR07 to make sure that we have as rational, fair and efficient a system as possible.