My Lords, I congratulate the Government on accepting the advice of the Electoral Commission. Certainly, it is sensible to adopt the new wording although, as the Minister pointed out, there are other recommendations that the Electoral Commission made concerning how to promote interest in and understanding of the issue should a referendum take place. I note from the Government’s response and the noble Lord’s remarks that the Government will continue to work with the commission—and, I hope, the Local Government Association—about how that might be effected.
The timetable is ridiculously short in most cases between a council’s final budget decision—even after, as is the case in many authorities, months of consultation about their financial situation—and the date on which the referendum has to take place. It is less than two months—normally it is about six weeks—between the
final date for making a budget and a referendum. That is a difficult timescale and the Government need to look at how people might best be informed.
However, the principle of a referendum is extremely questionable. The Minister makes a virtue of the fact that the Government have facilitated a council tax freeze. That generosity would be more welcome if it had not been financed by topslicing the local government grant in the first place so that, in effect, money that would have come to local government is still coming but only for this particular purpose. It creates problems for local authorities because while the council tax is frozen, the base revenue budget is also in effect frozen. There is a growing gap between the council’s expenditure and its base budget and, as the noble Lord, Lord Shipley, pointed out in a debate the other week, this can and will ultimately cause greater problems. However, we are where we are.
I would like to ask a question—not about the levying authorities, which were dealt with in the Secretary of State’s Written Statement last week; I understand the position about that even though I do not necessarily go along with the whole argument—in relation to the police commissioners’ right to impose a levy because they, unlike other bodies, are not effectively accountable to local authorities. The regulations will place the precepting authority in the frame, so to speak, of the referendum question and that might be thought to be enough. However, I doubt it will be because the levy will be collected via the council tax and that needs to be made clear to people. It needs to be made clearer even than perhaps baldly stating in the referendum question that this element, if it is in excess of 2%—I know of at least one police commissioner who is proposing a 3.5% increase in the levy—is not the responsibility of the council that collects the tax and sends out the bills. That matter ought to be addressed in more detail in the course of the review that will, no doubt, go on.
There is more to the recent debate about council tax referenda than these technical matters. Recently the Secretary of State came out with an extraordinary threat to penalise councils which opt to increase council tax below the Government’s imposed limit of 2%, above which a referendum would be required. The Secretary of State has accused councils which refuse to increase council tax by less than 2%—I refer to that document of record, the Daily Mail, for the remarks that he made—as being “democracy dodgers” by creeping under the radar and cheating their taxpayers. Of course, the councils would simply be applying the law and the system he pushed through and, indeed, levying a council tax increase below that which would trigger a referendum.
This is remarkable. My noble friend Lord Smith inquired of me whether the Secretary of State for Transport might say that people caught travelling—it is perhaps timely to mention such matters—at 69 miles an hour should nevertheless be deemed to be breaking the law because it is under the speed limit. What the Secretary of State is saying is that councils which levy council tax increases below 2% are somehow creeping under the radar and cheating their taxpayers. This is an appalling statement. It also ignores the fact that councillors remain accountable for their decisions through
the ballot box at local elections. A referendum that he seeks to impose is in his view somehow superior to accountability through the ballot box at local elections. He does more than criticise; he actually threatens to take into account decisions to levy an increase below 2% and effectively claw it back or impose tighter limits next year. Where is the justification for that threat?
I have to point out that the Government have sought no approval for their swingeing increases in VAT or the devastating cuts in council tax benefit, housing benefit and other welfare benefits which hit millions of people and will cost many households a great deal more than a 2% council tax increase, assuming that were being levied. In my authority, which I think is not going to increase the levy, a 2% increase would amount to something like £20 a year for 70% of the households in Newcastle. I repeat that the council is not proposing to levy a 2% increase. That pales into insignificance beside the amounts that those households will lose in the benefits to which I have referred.
Mr Pickles was recently on “Desert Island Discs”. He should have opted to take with him as his book a collection of his own speeches about localism and freedom for local authorities, and a copy of his own Localism Act.