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Mr. Raynsford: The debate has been interesting and I shall try to respond to the hon. Members who have spoken.
The hon. Member for Brentwood and Ongar (Mr. Pickles) began by saying that capping is not necessary at this time, although he accepts that it is necessary on other occasions. Against the background of last year's 12.9 per cent. average increase in council tax, it is difficult not to see the need for capping. A number of other hon. Members recognised that the significant reduction in this year's council tax increases is because the Government made it clear that we would use our capping powers.
The hon. Gentleman said that we have reneged on a pledge not to cap excellent and good authorities, but that pledge stood in the year in which it was made—we did not cap excellent authorities last year, despite the large increases. The hon. Member for Brentwood and Ongar should be ashamed of Wandsworth council, which had the largest increase—55 per cent.—in the country, but we did not cap it because we had made a pledge. In the autumn, the Government put all authorities on notice that we would use our capping powers.
Mr. Pickles: Will the Minister give way?
Mr. Raynsford: No, I do not have time. The hon. Gentleman should pass the message back to Wandsworth. I have less than 10 minutes and a number of hon. Members made points to which I want to respond.
The hon. Gentleman also said that capping should be used only in extreme cases. When he was in government, it was not a question of using capping occasionally, because it was used crudely and universally year after year. We have taken reserve powers, but we did not cap
19 Jul 2004 : Column 93
in any of the previous five years and we capped for the first time because high council tax increases made it absolutely necessary.
Mr. Moss: Will the Minister give way?
Mr. Raynsford: No, I will not give way. I made it clear that I will respond to the hon. Gentleman's point. If he intervenes, I shall have no chance to respond to points made earlier.
My hon. Friends the Members for Nottingham, North (Mr. Allen) and for Nottingham, South (Alan Simpson) made sensible and fair representations on behalf of their authority. I am not endorsing the comments made by my hon. Friend the Member for Nottingham, South, but my hon. Friends made perfectly proper representations on behalf of their authority.
My hon. Friend the Member for Nottingham, North argued that the increase in council tax above the excess level was only marginal in the case of Nottingham. However, a 9.8 per cent. increase, one of the largest in the country for unitary authorities, is not in my view marginal. [Interruption.] Perhaps it was 9.6 per cent., but it was certainly more than 9 per cent. [Interruption.] We have dealt with the issue of re-billing costs and the saving in earlier exchanges.
My hon. Friend the Member for Nottingham, North made the point that Nottingham had not been given advanced warning of being capped. When we sent out letters to individual authorities, the figures quoted by Nottingham city council did not put it in the danger zone. As soon as it became clear that Nottingham city council was considering an increase of the order of 7 to 8 per cent., a spokesman for my Department was quoted in the local newspaper as saying, "If the increase is of that order, it is in the danger zone." Nottingham received a clear warning.
Mr. Allen: Will the Minister give way?
Mr. Raynsford: No, because I must respond to other hon. Members. [Interruption.]
Madam Deputy Speaker (Sylvia Heal): Order. The Minister is responding to the debate; let us have order.
Mr. Raynsford:
The hon. Member for Kingston and Surbiton (Mr. Davey) considered our proposals an attack on democracy, but democracy depends on responsibility. He is only too happy to defend a Liberal Democrat council that had the largest single council tax increase of any authority in the country this year. He did not say that 28.4 per cent. is an unreasonable increase, and he will not say that. It is an indication of the Liberal Democrats' departure from reality that they cannot bring themselves to condemn increases of that order, which are clearly excessive. Shepway council's 28.4 per cent. increase was the highest in the country, and, contrary to what he said, it was 50 per cent. above the average increase for district councils. He should know that that authority cannot be treated as a marginal case, because the increase was substantial.
19 Jul 2004 : Column 94
The hon. Gentleman asked why we should cap when, in his words, Government threats were successful in reducing council tax to the lowest level for several years. Those threats were successful, and it is a pity that he did not welcome them, but some authorities did not reduce their council tax. Had we not used our capping powers, people would not have believed that we were serious.
The hon. Member for North-East Cambridgeshire (Mr. Moss) asked about our definition of "excessive" and claimed that we had not issued one. I issued that definition on 29 April when I made a statement about capping, and I shall repeat it to him now. The definition in the case of a district council is a budget increase of more than 2 per cent., a council tax increase of more than 8.5 per cent. and a band D council tax above the average for district councils. Fenland district council is being capped because its budget increase, council tax increase and band D council tax are above those thresholds—its band D council tax is about 50 per cent. more than the average for district councils.
The hon. Gentleman mentioned Huntingdonshire, but he has obviously not been doing his homework. Huntingdonshire's average band D council tax is £95 and Fenland's is £206, which is why Fenland district council is in that particular position.
The hon. Gentleman discussed Fenland having its grant withheld. He had the good grace to acknowledge that we reviewed the area cost adjustment and that Fenland, like Cambridgeshire, benefited from significant grant increases as a result. He knows that the operation of the floors and ceilings system is designed to protect authorities against unreasonable short-term fluctuations in their entitlement, but one cannot have floors without supporting the ceilings.
The hon. Member for Mid-Worcestershire (Mr. Luff) had the good grace to recognise that his remarks were inconsistent with his comments on 29 April, when he said:
"On balance, I welcome the Minister's comments about Hereford and Worcester fire authority and West Mercia constabulary".—[Official Report, 29 April 2004; Vol. 420, c. 1029.]
He does not understand the logic of capping. A budget increase of 19 per cent. and a council tax precept increase of 29 per cent. are massively above the figures for any other fire authority in the country, which is why Hereford and Worcester fire authority is in that position. He acknowledged that we have listened to the representations and made changes.
The hon. Member for Torbay (Mr. Sanders) discussed his authority's dependence on Government grant. His authority received a good grant increase of 6.9 per cent. and we expect all authorities with good grant increases to budget accordingly.
I recognise that hon. Members have considerable concerns about the issues, and we listened carefully to the representations from the authorities concerned and made changes to the original proposals. The action proposed in the draft order and the separate action that we are taking on nominated authorities is a measured and proportionate response to excessive increases. Our approach makes use of the new, more flexible capping powers, which we introduced in 1997. Although I understand the concerns expressed by hon. Members, the truth of the matter is that the arguments advanced
19 Jul 2004 : Column 95
on behalf of individual authorities are, by and large, not unique—other authorities in similar positions did not set budgets that led to excessive increases.
Question put:—
The House divided: Ayes 278, Noes 175.
AYES
Ainger, Nick
Ainsworth, Bob (Cov'try NE)
Anderson, rh Donald (Swansea E)
Anderson, Janet (Rossendale & Darwen)
Atherton, Ms Candy
Atkins, Charlotte
Austin, John
Bailey, Adrian
Baird, Vera
Barnes, Harry
Barron, rh Kevin
Bayley, Hugh
Begg, Miss Anne
Benn, rh Hilary
Bennett, Andrew
Benton, Joe (Bootle)
Berry, Roger
Best, Harold
Blackman, Liz
Blears, Ms Hazel
Borrow, David
Bradley, Peter (The Wrekin)
Brennan, Kevin
Brown, rh Nicholas (Newcastle E Wallsend)
Brown, Russell (Dumfries)
Browne, Desmond
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Byers, rh Stephen
Cairns, David
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Caplin, Ivor
Caton, Martin
Cawsey, Ian (Brigg)
Challen, Colin
Clapham, Michael
Clark, Mrs Helen (Peterborough)
Clark, Dr. Lynda (Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, rh Charles (Norwich S)
Clarke, rh Tom (Coatbridge & Chryston)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann (Cynon V)
Cohen, Harry
Cook, rh Robin (Livingston)
Corston, Jean
Cousins, Jim
Cox, Tom (Tooting)
Crausby, David
Cruddas, Jon
Cummings, John
Cunningham, Jim (Coventry S)
Cunningham, Tony (Workington)
Dalyell, Tam
Davey, Valerie (Bristol W)
David, Wayne
Davidson, Ian
Davies, rh Denzil (Llanelli)
Davies, Geraint (Croydon C)
Dawson, Hilton
Dean, Mrs Janet
Denham, rh John
Dhanda, Parmjit
Dobbin, Jim (Heywood)
Dodds, Nigel
Dowd, Jim (Lewisham W)
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Efford, Clive
Ellman, Mrs Louise
Etherington, Bill
Farrelly, Paul
Field, rh Frank (Birkenhead)
Fitzpatrick, Jim
Fitzsimons, Mrs Lorna
Flint, Caroline
Flynn, Paul (Newport W)
Follett, Barbara
Foster, Michael (Worcester)
Foster, Michael Jabez (Hastings & Rye)
Foulkes, rh George
Gapes, Mike (Ilford S)
George, rh Bruce (Walsall S)
Gerrard, Neil
Gilroy, Linda
Goggins, Paul
Griffiths, Jane (Reading E)
Griffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)
Grogan, John
Hain, rh Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, David (Midlothian)
Hamilton, Fabian (Leeds NE)
Hanson, David
Healey, John
Henderson, Ivan (Harwich)
Hendrick, Mark
Hepburn, Stephen
Hesford, Stephen
Heyes, David
Hill, Keith (Streatham)
Hinchliffe, David
Hodge, Margaret
Hope, Phil (Corby)
Hopkins, Kelvin
Howarth, rh Alan (Newport E)
Howarth, George (Knowsley N & Sefton E)
Howells, Dr. Kim
Hoyle, Lindsay
Hughes, Beverley (Stretford & Urmston)
Hughes, Kevin (Doncaster N)
Iddon, Dr. Brian
Illsley, Eric
Irranca-Davies, Huw
Jackson, Helen (Hillsborough)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W)
Jones, Helen (Warrington N)
Jones, Jon Owen (Cardiff C)
Jones, Kevan (N Durham)
Jones, Lynne (Selly Oak)
Jones, Martyn (Clwyd S)
Joyce, Eric (Falkirk W)
Keeble, Ms Sally
Keen, Ann (Brentford)
Kemp, Fraser
Kennedy, Jane (Wavertree)
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby)
Knight, Jim (S Dorset)
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, David
Laxton, Bob (Derby N)
Lazarowicz, Mark
Lepper, David
Leslie, Christopher
Levitt, Tom (High Peak)
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Linton, Martin
Lloyd, Tony (Manchester C)
Lucas, Ian (Wrexham)
Luke, Iain (Dundee E)
Lyons, John (Strathkelvin)
McAvoy, Thomas
McCabe, Stephen
McCafferty, Chris
McDonagh, Siobhain
MacDonald, Calum
MacDougall, John
McFall, rh John
McGuire, Mrs Anne
McIsaac, Shona
McKechin, Ann
McNamara, Kevin
Mactaggart, Fiona
McWalter, Tony
Mahon, Mrs Alice
Mallaber, Judy
Mandelson, rh Peter
Mann, John (Bassetlaw)
Marris, Rob (Wolverh'ton SW)
Marsden, Gordon (Blackpool S)
Martlew, Eric
Meacher, rh Michael
Meale, Alan (Mansfield)
Merron, Gillian
Michael, rh Alun
Miliband, David
Miller, Andrew
Moffatt, Laura
Mole, Chris
Moran, Margaret
Morley, Elliot
Mountford, Kali
Mullin, Chris
Munn, Ms Meg
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Naysmith, Dr. Doug
O'Brien, Bill (Normanton)
O'Hara, Edward
Olner, Bill
Organ, Diana
Owen, Albert
Perham, Linda
Picking, Anne
Pickthall, Colin
Pike, Peter (Burnley)
Plaskitt, James
Pollard, Kerry
Pond, Chris (Gravesham)
Pope, Greg (Hyndburn)
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prescott, rh John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Ken
Purnell, James
Quin, rh Joyce
Quinn, Lawrie
Rammell, Bill
Rapson, Syd (Portsmouth N)
Raynsford, rh Nick
Reed, Andy (Loughborough)
Robertson, John (Glasgow Anniesland)
Robinson, Geoffrey (Coventry NW)
Roche, Mrs Barbara
Rooney, Terry
Ross, Ernie (Dundee W)
Roy, Frank (Motherwell)
Ruane, Chris
Ruddock, Joan
Russell, Ms Christine (City of Chester)
Ryan, Joan (Enfield N)
Salter, Martin
Savidge, Malcolm
Sawford, Phil
Sedgemore, Brian
Sheerman, Barry
Sheridan, Jim
Short, rh Clare
Singh, Marsha
Smith, rh Andrew (Oxford E)
Smith, Angela (Basildon)
Smith, rh Chris (Islington S & Finsbury)
Smith, Geraldine (Morecambe & Lunesdale)
Smith, Llew (Blaenau Gwent)
Soley, Clive
Southworth, Helen
Squire, Rachel
Stewart, David (Inverness E & Lochaber)
Stewart, Ian (Eccles)
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Stuart, Ms Gisela
Sutcliffe, Gerry
Tami, Mark (Alyn)
Taylor, Dari (Stockton S)
Taylor, David (NW Leics)
Thomas, Gareth (Harrow W)
Tipping, Paddy
Todd, Mark (S Derbyshire)
Touhig, Don (Islwyn)
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr. Desmond (Brighton Kemptown)
Twigg, Derek (Halton)
Twigg, Stephen (Enfield)
Tynan, Bill (Hamilton S)
Vaz, Keith (Leicester E)
Vis, Dr. Rudi
Ward, Claire
Wareing, Robert N.
Watson, Tom (W Bromwich E)
Watts, David
White, Brian
Whitehead, Dr. Alan
Williams, Betty (Conwy)
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Woodward, Shaun
Woolas, Phil
Worthington, Tony
Wray, James (Glasgow Baillieston)
Wright, Anthony D. (Gt Yarmouth)
Wright, Tony (Cannock)
Tellers for the Ayes:
Mr. John Heppell and
Vernon Coaker
NOES
Ainsworth, Peter (E Surrey)
Allan, Richard
Allen, Graham
Amess, David
Ancram, rh Michael
Arbuthnot, rh James
Atkinson, David (Bour'mth E)
Bacon, Richard
Baker, Norman
Barker, Gregory
Baron, John (Billericay)
Barrett, John
Beith, rh A. J.
Bellingham, Henry
Bercow, John
Beresford, Sir Paul
Blunt, Crispin
Boswell, Tim
Bottomley, Peter (Worthing W)
Bottomley, rh Virginia (SW Surrey)
Brady, Graham
Brazier, Julian
Breed, Colin
Brooke, Mrs Annette L.
Browning, Mrs Angela
Bruce, Malcolm
Burns, Simon
Burnside, David
Burstow, Paul
Burt, Alistair
Cable, Dr. Vincent
Calton, Mrs Patsy
Cameron, David
Campbell, rh Sir Menzies (NE Fife)
Carmichael, Alistair
Cash, William
Chapman, Sir Sydney (Chipping Barnet)
Chidgey, David
Chope, Christopher
Clappison, James
Clarke, rh Kenneth (Rushcliffe)
Clifton-Brown, Geoffrey
Collins, Tim
Corbyn, Jeremy
Cotter, Brian
Cran, James (Beverley)
Cryer, John (Hornchurch)
Curry, rh David
Davey, Edward (Kingston)
Davies, Quentin (Grantham & Stamford)
Djanogly, Jonathan
Doughty, Sue
Duncan, Alan (Rutland)
Duncan Smith, rh Iain
Evans, Nigel
Fallon, Michael
Field, Mark (Cities of London & Westminster)
Flight, Howard
Forth, rh Eric
Foster, Don (Bath)
Gale, Roger (N Thanet)
Garnier, Edward
Gibb, Nick (Bognor Regis)
Gidley, Sandra
Goodman, Paul
Gray, James (N Wilts)
Grayling, Chris
Green, Damian (Ashford)
Green, Matthew (Ludlow)
Grieve, Dominic
Gummer, rh John
Hague, rh William
Hammond, Philip
Hancock, Mike
Heald, Oliver
Heath, David
Heathcoat-Amory, rh David
Hoban, Mark (Fareham)
Hogg, rh Douglas
Horam, John (Orpington)
Jack, rh Michael
Jackson, Robert (Wantage)
Jones, Nigel (Cheltenham)
Kennedy, rh Charles (Ross Skye & Inverness)
Key, Robert (Salisbury)
Kirkbride, Miss Julie
Knight, rh Greg (E Yorkshire)
Lait, Mrs Jacqui
Lamb, Norman
Lansley, Andrew
Laws, David (Yeovil)
Letwin, rh Oliver
Lewis, Dr. Julian (New Forest E)
Liddell-Grainger, Ian
Lidington, David
Loughton, Tim
Luff, Peter (M-Worcs)
McDonnell, John
McIntosh, Miss Anne
Mackay, rh Andrew
Maclean, rh David
McLoughlin, Patrick
Malins, Humfrey
Maples, John
Marsden, Paul (Shrewsbury & Atcham)
Mawhinney, rh Sir Brian
May, Mrs Theresa
Mercer, Patrick
Mitchell, Andrew (Sutton Coldfield)
Moss, Malcolm
Murrison, Dr. Andrew
Norman, Archie
O'Brien, Stephen (Eddisbury)
Öpik, Lembit
Osborne, George (Tatton)
Ottaway, Richard
Page, Richard
Paice, James
Paterson, Owen
Pickles, Eric
Price, Adam (E Carmarthen & Dinefwr)
Prisk, Mark (Hertford)
Randall, John
Redwood, rh John
Rendel, David
Robathan, Andrew
Robertson, Laurence (Tewk'b'ry)
Roe, Dame Marion
Rosindell, Andrew
Ruffley, David
Russell, Bob (Colchester)
Sanders, Adrian
Sayeed, Jonathan
Selous, Andrew
Shephard, rh Mrs Gillian
Shepherd, Richard
Simmonds, Mark
Simpson, Alan (Nottingham S)
Simpson, Keith (M-Norfolk)
Smith, Sir Robert (W Ab'd'ns & Kincardine)
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spink, Bob (Castle Point)
Spring, Richard
Stanley, rh Sir John
Streeter, Gary
Stunell, Andrew
Swayne, Desmond
Swire, Hugo (E Devon)
Syms, Robert
Taylor, Ian (Esher)
Taylor, John (Solihull)
Taylor, Dr. Richard (Wyre F)
Taylor, Sir Teddy
Teather, Sarah
Tonge, Dr. Jenny
Tredinnick, David
Turner, Andrew (Isle of Wight)
Tyler, Paul (N Cornwall)
Tyrie, Andrew
Viggers, Peter
Walter, Robert
Watkinson, Angela
Webb, Steve (Northavon)
Whittingdale, John
Wiggin, Bill
Willetts, David
Williams, Roger (Brecon)
Willis, Phil
Winterton, Ann (Congleton)
Winterton, Sir Nicholas (Macclesfield)
Yeo, Tim (S Suffolk)
Young, rh Sir George
Younger-Ross, Richard
Tellers for the Noes:
Hugh Robertson and
Mr. Peter Atkinson
Question accordingly agreed to.
19 Jul 2004 : Column 98
Resolved,
That the draft Council Tax Limitation (England) (Maximum Amounts) Order 2004, which was laid before this House on 8th July, be approved.
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