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Mr. Raynsford: As the hon. Gentleman appears to know that there is to be an election in 43 days' time—[Interruption.] He will know that none of the counties are subject to my statement. I put it to him that there is a straightforward contradiction between what he said at the beginning of his speech and what he said throughout most of the rest of it. He attacked high council tax early in his speech, yet he spent the rest of it trying to excuse authorities that made high council tax increases. That is to display complete inconsistency.

To turn to the hon. Gentleman's specific questions, there is no fixed or prescribed timetable, but most people in local government think it right that there should be certainty rather than a prolonged period of uncertainty. If he is right in his presumption about what might be happening in 43 days' time, I think most people in local government would like to know in advance, rather than having uncertainty hanging over them for a long period. Although I can understand that the authorities that will be subject to the capping regime that we have announced today may not welcome it, the general view in local government will be to welcome clarity on the issue.

The hon. Gentleman referred to the process as the slaughter of the innocents. That is a misuse of language. The overwhelming majority of local authorities kept their council tax down. They knew the Government's expectation. Only a small handful of authorities have not kept the tax down. All the authorities in today's announcement proposed council tax increases of more than 9 per cent., and one of them proposed an increase of 100 per cent. He cannot on the one hand attack high council tax increases, as he did, and then, on the other, try to exonerate or excuse authorities that increase their council tax by such amounts.

On the hon. Gentleman's questions about specific authorities, he will know, as I made clear in my statement, that there is a 21-day period when we will listen carefully to any representations that any of those authorities want to make. We shall welcome representations as well as information from the authorities and we shall take that into account when we make our final decision.

Finally, I make it clear to the hon. Gentleman that all the authorities subject to the capping regime I have announced today received an increase in grant at least
 
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equal to and in many cases substantially above the rate of inflation. That did not happen when his party was in government. The Conservatives were only too pleased to cap authorities that had often received cuts in their grant from the Government. That is not the case with the Labour Government.

Mr. Edward Davey (Kingston and Surbiton) (LD): I thank the Minister for his statement. He will know that the Liberal Democrats want to scrap council tax, not cap it. Will he explain what has changed his mind since his days in opposition, when he was so vehemently against capping? Will he also explain how capping relates to his 10-year vision of local government announced again today? How does it relate to his proposals on new localism, the so-called freedoms and flexibilities?

Capping is a sign of the Government's failure on council tax, not their success. If the Chancellor's one-year-only council tax rebate was really so good, the Government would not be capping councils today. Will the Minister tell us whether capping will be retained if Labour is re-elected and introduces its policy on council tax revaluation? Does he agree with the Conservative spokesman, the hon. Member for Meriden (Mrs. Spelman)? In the House this month she said that a property tax must take into account changes in property values, thereby reconfirming that the Conservatives share Labour's position on council tax revaluation?

On council tax rises this year, can the Minister confirm his Department's figures, which show that the lowest council tax rises this year were in Liberal Democrat-run councils? Can he also confirm that if we take a five-year average of council tax rises, by council and by political control, Liberal Democrat-run councils have constantly delivered the lowest rises? So I agree with him that it is a bit rich for Conservative-run councils to be bleating, when it is increasingly clear that Tory-run authorities cost people more. Does he think that is why the Conservatives are having to offer their rebate?

Does the Minister agree that some of the councils being capped today, such as Tory-led North Dorset, and Hambleton, and Sedgmoor, have a poor reputation in their areas for inefficiency and the waste of council tax payers' money? Does he know that North Dorset council even budgeted for re-billing this year because it knew that its council tax rise was so high it was likely to be capped? Is not that the height of irresponsibility?

The truth about council tax is that it is the most unfair tax in Britain. As the independent Audit Commission said, the council tax system is fundamentally flawed. The Minister knows that our policy will save the average household £450 a year. He knows that scrapping council tax would avoid the threat of revaluation. Surely, rather than one-off bribes and annual capping statements, it is time the Government dealt with the underlying problem and scrapped council tax altogether.

Mr. Raynsford: The hon. Gentleman says that he believes it right to replace council tax with a local income tax. People who have looked carefully at the Liberal Democrat proposals for a local income tax have
 
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concluded that they contain fundamental flaws. The Select Committee on Office of the Deputy Prime Minister, which looked at this matter very carefully, said in its clear and unanimous report that the case for a local income tax was "not remotely persuasive".

I have to say to the hon. Gentleman, for whom I have a great deal of respect, that when he gives rather more attention to the detail and the impact of his proposals, he will realise the gross unfairness of what his party is proposing. He will also realise that hasty changes in local government finance—such as the poll tax—usually lead to disaster, and I would advise him to think further before pushing ahead with a proposal that is, as the Select Committee said, "not remotely persuasive".

The hon. Gentleman asked why we had changed our view on capping. We were reluctant to cap, for reasons that he will well understand and that were spelled out in our discussions on the future of local government. However, we could not ignore a situation in which many local authorities were imposing wholly unreasonable council tax increases. Those increases averaged 12.9 per cent. two years ago. It is because this Government have shown that they are determined to cap only those authorities that have acted unreasonably—we have acted in a sensitive way, not in the blanket way that Conservatives did—that we have seen a dramatic reduction in the levels of council tax. I would have thought that all Members would welcome the average 4.1 per cent. increase this year, compared with the 12.9 per cent. of two years ago.

The hon. Gentleman mentioned Liberal Democrat council tax levels, and I am pleased that there has been a significant reduction in them this year. Last year, the Liberal Democrats held the unenviable record of imposing the largest council tax increases, and I am glad that they have heeded the warnings and acted responsibly. I hope that, in future years, Conservative councils will do the same.

Andrew Bennett (Denton and Reddish) (Lab): I congratulate my right hon. Friend on getting such low settlements for council tax right across the country—that is really good news—but will he accept that the capping mechanism is generally pretty crude and inefficient? Does he agree that, when we know the outcome of the Lyons review on council tax this time next year, we should reform council tax to create a far fairer system? We should not then need, year in and year out, to use crude mechanisms such as capping or incur the problems associated with gearing, which discredit the system so much.

Mr. Raynsford: I am grateful to my hon. Friend for his kind words about the success in getting the level of council tax down. I do not think that that would have been possible without judicious use of our reserve capping power, but I accept that our objective is to look further at the whole field of local government finance, and when we receive the report from Sir Michael Lyons, we will do that. We will certainly want to introduce proposals, following receipt of the Lyons inquiry recommendations on the future of local government finance, to ensure that high council tax increases become a thing of the past. No one wants to see high increases; we want to see value for money, and I am only sorry that
 
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we have had to take capping action because a handful of authorities this year have not heeded the warnings and have set unreasonably high budgets.

Alistair Burt (North-East Bedfordshire) (Con): This afternoon, I am seeing a delegation from multiple sclerosis centres. They are lobbying against a 45 per cent. Government-imposed increase in the charges for inspection. However, the Government are stepping in to cap Mid Bedfordshire district council for a rise of 13.3 per cent., which equates to £1 a month from the 10th lowest-charging district authority in the country. Does the Minister not see how ridiculous and pathetic his use of power is, particularly when it is set against the £100 million bill that it still outstanding against the people of Bedfordshire as a result of the Government's incompetence in settling the Yarl's Wood dispute, which they caused? This is an authoritarian measure introduced by a bullying Government who have completely lost their sense of proportion. How do you sleep at night?

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