My Lords, I am grateful to the noble Lord, Lord McKenzie, for his final statement in confirming that the Opposition will not resist these amendments. In response to comments made both by the noble Lord, Lord McKenzie, and my noble friend Lord Shipley, I remind your Lordships that the coalition agreement committed the Government to remove capping and to bring in a fairer system of addressing excessive council tax increases. Parliament agreed the principle of removing the old capping regime and instead giving local people the final say on excessive increases during the passage of the Localism Act 2011. The time to debate whether that was the correct approach was then and not now.
As far as timing is concerned, subject to your Lordships agreeing these amendments today, we hope to have Royal Assent as soon as possible. While that is of course a matter for the Crown, we envisage that we should have it in time for the changes to the council tax referendum provisions to take effect for the 2014-15 financial year. Those principles will be announced in due course.
I do not agree with the point put forward by the noble Lord, Lord McKenzie, about the issue of including levies being a retrospective provision. The Secretary of State considers all relevant factors when setting referendum principles and that always includes past council tax-setting decisions. That was done for 2013-14 when he gave low-spending authorities the ability to set a £5 council tax increase, even if that meant a percentage rise above 2%. This provision simply makes it clear that he can take into account changes in levies in 2013-14 and 2014-15 when setting next year’s principles.
The Government were clear before council tax and levies were set for 2013-14 that they might take account of council tax decisions in setting future principles. No change will be made to the money raised in 2013-14 and both authorities and levying bodies can plan for 2014 accordingly. Local tax payers deserve fair and equal treatment no matter where in England they live. There must be measures to protect taxpayers from excessive increases brought in through the back door by a small number of authorities without seeking local agreement.
I clearly hear the arguments that have been put forward today but I am afraid that we beg to differ. The clause and the principle of including levies in the calculation of what constitutes an excessive council tax increase has now been debated at length in both Houses and approved. The principle and practicalities of holding council tax referendums were agreed in 2011 via the Localism Act. The amendments before us do not alter them. They were proposed to ensure that local authorities were not disadvantaged by any delays in the Bill becoming law. As I said, the referendum principles will be announced in due course, but we believe that authorities should not wait for them to be published. They should look to freeze council tax levels next year and we have made funds available to support them in doing so. I beg to move.