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1. Proceedings on Consideration and on Third Reading shall be completed at the sitting this day and shall be brought to a conclusion, if not previously concluded, five hours after the commencement of proceedings on this Motion.
Questions to be put

2. For the purpose of bringing proceedings to a conclusion in accordance with paragraph 1 the Speaker shall forthwith put the following Questions (but no others)--
(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

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(d) any other Question necessary for the disposal of the business to be concluded.
3. On a Motion made for a new Clause or a new Schedule, the Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

4. Standing Order No. 15(1) (Exempted business) shall apply to proceedings on the Bill at the sitting this day; and the proceedings shall not be interrupted under any Standing Order relating to the sittings of the House.
5. The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after commencement; and Standing Order No. 15(1) shall apply to those proceedings.
6. Standing Order No. 82 (Business Committee) shall not apply in relation to proceedings on the Bill.
7. No Motion shall be made, except by a Minister of the Crown, to alter the order in which proceedings on the Bill are taken or to recommit the Bill; and if a Minister makes a Motion to alter the order of proceedings or to recommit the Bill, the Question shall be put forthwith.
8. No dilatory Motion shall be made in relation to the Bill except by a Minister of the Crown.
9. If at the sitting this day a Motion for the Adjournment of the House under Standing Order No. 24 stands over to Seven o'clock and proceedings on this Motion have begun before that time, the Motion for the Adjournment shall stand over until the conclusion of proceedings on the Bill.
10. If the House is adjourned at the sitting this day, or the sitting is suspended, before the conclusion of proceedings on the Bill, no notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.

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Local Government Bill

As amended in the Standing Committee, further considered.

New Clause 6

Endorsement of council tax by referendum

'.--(1) Schedule 1 shall not apply when the council tax proposals of a relevant local authority have been endorsed in a referendum of electors registered within the local authority area.

(2) A proposal shall be deemed to have been endorsed if it is supported by a simple majority of voters where at least 50 per cent. of the electorate have voted.'.--[Sir Paul Beresford.] Brought up, and read the First time.

4.23 pm

Sir Paul Beresford (Mole Valley): I beg to move, That the clause be read a Second time.

Madam Speaker: With this, it will be convenient to discuss the following amendments: No. 98, in clause 28, page 15, line 37, after 'regulation', insert 'and limitation (capping)'.

No. 1, in page 15, line 38, at end add

'but shall cease to apply on 1st April 2005.'.

No. 101, in clause 29, page 16, line 14, leave out 'authorities or'.

No. 102, in page 16, line 15, after 'authority', insert

'and the Greater London Authority'.

No. 103, in page 16, line 17, at end add

'provided that any criterion referring to an authority's budget requirement for the financial year beginning on 1st April 1998 shall be deemed to refer to the greater of the budget requirement and the amount of the authority's Standard Spending Assessment for that financial year.'.

No. 105, in page 16, line 37, leave out 'authorities or'.

No. 106, in page 16, line 37, after 'authority', insert

'and the Greater London Authority.'.

No. 84, in page 16, line 39, leave out subsection (7).

No. 85, in page 17, line 8, leave out subsection (11).

No. 42, in schedule 1, page 19, line 26, at end insert--

'( ) must include the principle that if the budget requirement is set below the total Standard Spending Assessment for an authority, it shall not be regarded as excessive.'.

No. 43, in page 19, line 26, at end insert--

'( ) must include the principle that if the budget requirement is set within twelve and one half per cent. in excess of an authority's total Standard Spending Assessment, it shall not be regarded as excessive.'.

No. 108, in page 19, line 33, at end insert--

'(c) it is between the Council Tax Band D for the authority and for the other authorities in its category of authority'.

No. 113, in page 19, line 34, leave out subsection 5.

No. 109, in page 19, line 34, leave out 'If'.

No. 111, in page 19, line 34, after 'State', insert 'will determine'.

No. 110, in page 19, line 34, leave out 'determines'.

No. 114, in page 19, line 43, leave out

'If he does not determine such categories,'.

No. 115, in page 20, line 2, after 'relevant', insert 'and is reasonable'.'

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No. 117, in title, title, line 3, after 'regulation', insert 'and limitation (capping)'.

Sir Paul Beresford: Unusually perhaps, I shall start by speaking to the amendments, because they set the scene for the new clause. They all relate to two different forms of capping in the Bill--the crude and universal council tax benefit subsidy capping and the subjective, or selective, capping that was so proudly introduced by the Secretary of State earlier this year.

On Second Reading, I pointed out that the Bill, as far as it has been decorated for Labour Back Benchers, has a sugar coating of best value and removal of compulsory competitive tendering, but its core is an extremely bitter and unpleasant pill. The capping rules and regulations in the Bill are more unpleasant, more manipulative and more vicious than anything ever proposed by a Conservative Secretary of State, but, as Liberal Democrat Members have pointed out, they may be in the hands of a Conservative Secretary of State post-election.

I am tempted to suspect that the restriction of discussion on the Bill by the guillotine motion may be seen as a plus point for the Labour Whips because I am convinced that not only people in local government but many Labour Back Benchers are opposed to this double form of capping--or they would be, given half a chance. They recognise the measure as a manifesto about-turn--their manifesto, their about-turn.

No amount of scurrying and huffing and puffing by the Minister for Local Government and Housing in Committee covered the fact that the council tax benefit subsidy limitation is a crude, universal form of capping. Worse than that is the capping of a number of local authorities at a point below the standard spending assessment level. The secondary capping is selective capping; the powers have been renamed reserve powers.

The Department's own explanatory note makes clear just how extensive those powers are in comparison with the current arrangements. There are four such powers. First, the Secretary of State

meaning the current financial year. Secondly--this is an additional power--the Secretary of State

    "may designate the authority for the following year".

Thirdly--this is another additional power--he

    "may set a notional budget requirement to be used for the purposes of comparisons instead of the actual budget requirement to decide if budget requirements are excessive".

Fourthly--another additional power--he

    "may designate the authority over a number of years, starting in-year or the following year."

Those powers are more excessive than any that have ever been considered, which is why amendments Nos. 98 and 115 were tabled. The amendments make it clear that the Bill provides for a very heavy-handed form of double capping. No doubt, for spin-doctoring reasons, amendments Nos. 98 and 117 will be rejected, but I can see no reason for rejecting them other than the fear of losing face.

Mr. Patrick McLoughlin (West Derbyshire): Is there anything in the Bill to prevent a recurrence of what happened in Derbyshire this year? The county was capped

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for £1 million on a budget of £470 million, and it cost £320,000 to change that. It was the tightest cap ever imposed on a local authority.

Sir Paul Beresford: I thank my hon. Friend for reminding us of that ludicrous situation, which raised a smile, although it was expensive for the people to whom it applied. Under the Bill, however, they could experience three further versions.

Amendment No. 103 refers to council tax benefit subsidy capping, but to only one aspect of it--perhaps the most insidious aspect. A number of local authorities will be capped at a level set below SSA. They are the authorities that set their budgets for 1998-99 below SSA. I realise that the SSA for 1999-2000 has come to mean what Ministers wish it to mean. The local government finance report states that

That means whatever Ministers wish it to mean at the time. However, for the year 1998-99 the same report defined the SSA as

    "representing an appropriate level of budget requirements to provide a standard level".

That means that, having set an SSA that indicates the level of services that they expect and by setting a capping level for council tax benefit subsidy below the SSA, the Government are forcing local authorities to provide substandard services.

For many years the SSA has been accepted as a floor below which various Secretaries of State have sought not to push local government. Now this Labour Government have done precisely that in the case of a number of authorities, including some quite poor ones, such as Brent, Newham and Ealing.

As I made clear in Committee, I oppose the regulations, but I am particularly opposed to the Government's outrageous attempt to hit local authorities by fixing their benefit subsidy level below SSA. Not only will the subsidy limitation mean that the nearly poor are paying for the poor; in the case of some local authorities, the setting of the level below SSA may well impinge to a small degree on the financing of the services that people require and expect. The amendment is designed to bring back the floor below which the Government cannot go--the floor that has always been there, and ought to be there.

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