Local Government Finance

The hon. Gentleman provides just one example of what can happen, and we could all give other examples of what will happen if council taxes are not increased to the level necessary to preserve services. As I have said, it is important to have the direct relationship between the electorate and the council, and between the services that the council provides and the amount that it charges. That should be the responsibility of the council, not at the behest of the Government. I hope that the Minister will review the situation and allow local authorities to charge above the 5 per cent. level that has been suggested. The council tax system is a bad system. The bandings favour the rich and the failure to revalue locked in the growing inequities. It was designed to be unfair and it has become even more unfair as the basic band D council tax increases. The Lyons review proposed several good ideas and we should have a national debate on what kind of system we want for local government. The council tax is not sustainable in the longer term, so we need a system that is sustainable not for just 10 or 15 years, but for 30, 40 or even 50 years. We cannot just change the formula, because that will not solve the problem. We need a change in the system. The settlement is tight, and we always knew that it would be, but it is fair. It gives those authorities with the greatest needs the resources that they need to address the difficulties that their communities face. I congratulate the Secretary of State and the Minister of State on producing a local government settlement that does that.