Council Tax

I beg to move,"That the draft Council Tax Limitation (Maximum Amounts) (England) Order 2008, which was laid before this House on 26th June, be approved." The order will be made under section 52F(4) of the Local Government Finance Act 1992. As you have said, Mr. Deputy Speaker, it caps the rise in council tax levied by Lincolnshire police authority this year. It is the only one of our decisions on eight designated authorities that requires parliamentary action at this stage, and that decision is therefore the focus of our debate this afternoon. Subject to the House's approval, the order will be made, and I will issue a notice to the Lincolnshire authority about its maximum 2008-09 budget requirement—in other words, its cap. The authority will then have to recalculate its budget so that it is at or below that maximum, and recalculate its precept on the council tax. It will then have to arrange for the district councils, as billing authorities, to send out revised council tax bills for the current year. In December and February, I said in statements to the House on the formula grant distribution for 2008-09 that keeping council tax under control remains a high priority for the Government. I said that we expected the average council tax increase in England to be substantially below 5 per cent. this year. I also said that we would not hesitate to use our reserve council tax capping powers as necessary to protect council tax payers from excessive council tax increases. No authority could have been unclear about our intent. Most authorities recognised the public concern about council tax levels, particularly at this time, when all households are under pressure. Some 98 per cent. of authorities did not set excessive increases; two thirds set increases below 4.1 per cent.; one in six set increases below 2.5 per cent. this year; and a further 21 authorities either did not increase council tax or reduced it. That means that this year there has been the lowest average increase in council tax for 14 years at just 4 per cent. Alongside that, by 2010-11, central Government grant for local government will have increased by 45 per cent. above inflation, and it has consistently remained above inflation each and every year for the past decade. Also, investment in police has more than doubled since 1997, with an extra £3.6 billion. Funding is higher and councils are deciding to keep tax rises lower. The threat of council tax capping is helping to keep those rises down. However, a small minority of authorities imposed excessive increases on their council tax payers. As a result, as I explained in my statement to the House on 27 March, we designated eight authorities—seven police authorities and one local authority—with a view to capping them in-year. All eight authorities challenged their proposed cap, as is their right. My right hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing and I met all seven police authorities together to hear their cases in person, and I also met Portsmouth city council to hear its case. Having considered carefully the representations that they made to us, I made a statement to the House on 26 June.