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Mr. Raynsford: The hon. Gentleman sometimes goes a little bit over the top. If he looks at the background, he will understand that Mid Bedfordshire district council has, in previous years, maintained relatively low levels of council tax increase. I am sorry that this year—exceptionally, and despite all the warnings, which were absolutely clear cut—it chose not to do so. That was not, however, because it did not receive a decent grant increase from the Government: it got an increase of 5.2 per cent. Many authorities that got lower grant increases have managed to keep their council tax levels down. He would serve his constituents better by reflecting on the unfair impact of large council tax increases from his council, and by urging the council to be more careful in its budgeting in future.

Mr. Tony McWalter (Hemel Hempstead) (Lab/Co-op): I congratulate my right hon. Friend on the service that he has done to local democracy with this statement. What these authorities have in common is that they are district authorities that propose low increases in the years in which they are up for re-election, and then ram it all on when there is a county council election and they are not faced with any accountability to the electorate. Is it not about time that this ruse was rumbled, and that proper levels of council tax were set year on year, so as to avoid these steep increases in certain years?

Mr. Raynsford: I am afraid that there is a tendency for some local authorities to impose very varied increases in council tax, depending on whether they are facing the electorate. I believe, however, that the electorate are increasingly conscious of these devices, and that they will punish authorities that act in that way. However, we cannot stand aside, in a year in which there are no elections for those authorities, and allow them to impose unreasonable council tax increases. That is one of the factors that is relevant to capping. Our criteria were set out very clearly, they apply to all authorities, and all authorities were aware of them. It is only those authorities that failed to heed the criteria that have put themselves into a position of being subject to capping today.

Mr. Robert Walter (North Dorset) (Con): North Dorset district council has a council tax level of
 
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£79.50 for a band D taxpayer. The average for all districts across the country is £140. North Dorset's neighbouring local authority of Weymouth and Portland, in the Labour-held South Dorset constituency, has a council tax of £210. North Dorset is a well run authority, but it has to cope with the new burdens that have been imposed on it by central Government. However, it will still have the lowest council tax of any local authority in Dorset, even after the increase. We heard the sideswipe from the hon. Member for Kingston and Surbiton (Mr. Davey) earlier, but the Liberal Democrats on the council actually wanted a council tax increase of 19 per cent.

Mr. Raynsford: The increase that North Dorset has proposed is, at 23 per cent., one of the highest this year. It is also out of line with what the council has proposed in previous years. Again, this increase is not being proposed because the council did not receive a good grant settlement: North Dorset received a 4 per cent. increase in grant from the Government, which was better than the average for district councils. If most district councils are able to budget prudently and avoid large council tax increases, I do not see why that should be impossible for North Dorset. As I have said, however, local authorities are free to make any case that they wish to make over the next 21 days, and I shall listen carefully to their representations before we reach our final decision.

Dr. Alan Whitehead (Southampton, Test) (Lab): May I add my congratulations to my right hon. Friend on his efforts to ensure that the vast majority of local authorities introduced moderate and reasonable council tax rises this year? Does he agree that part of his success is due to the availability of formula funding from his Department, which is enabling good settlements to be produced this year and, potentially, in the future? Has he reflected on the consequences for council tax rises, had that formula funding availability been frozen, perhaps for this year and next? Does he agree that it would have been very difficult, even for well run local authorities, to introduce moderate council tax settlements if that had happened?

Mr. Raynsford: My hon. Friend is an expert in these matters, and he has done his homework. He has rightly identified the appalling consequences that would flow from the freeze in local government grants that would follow from the policies of the Conservative party. It is of course blatant hypocrisy for the Conservatives to criticise the Government—who have increased grants to local authorities by 33 per cent. in real terms over the past eight years—when their own policies would lead to putting very serious pressure on local authorities, which would force them to impose large council tax increases. That is a measure of just how confused the Conservatives are.

Sir Teddy Taylor (Rochford and Southend, East) (Con): Southend council, which has one of the lowest rates in the country, has avoided capping only by imposing pretty savage spending cuts, so is the Minister willing to have another look at the scandalous situation that has been created by the Government alleging that the population in Southend has fallen by 18,000, or
 
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18 per cent., on the basis of the census returns, although every other piece of evidence shows an increase, including, for example, the number of people on GP lists? Will he have a look at something that is unfair and obviously incorrect?

Mr. Raynsford: We have had representations from a number of authorities on census matters. These, of course, are ultimately decisions for the Office for National Statistics, rather than the Office of the Deputy Prime Minister, but I am more than happy to pass on to the ONS concerns expressed about the validity of the census data. I give an undertaking to do that in respect of Southend. I hope the hon. Gentleman is pleased that Southend council, which was threatening large council tax increases, has moderated those increases. I am very pleased that it has. Consequently, it is not subject to today's capping announcement.

Mr. David Lidington (Aylesbury) (Con): Can the Minister confirm that council tax in Aylesbury Vale is below the level assumed by the Government when they calculate their grant support to local authorities? Can he therefore explain the logic of seeking to cap a local authority at a level below that which the Government think is right for it to provide decent public services?

Mr. Raynsford: It is three years since we made it absolutely clear that the formula that we use to distribute grant to local authorities makes no assumptions whatever about appropriate spending. That has been made crystal clear to authorities all over the country, and most of them understand it. I hope that the hon. Gentleman will relay that to his authority, if it is still labouring under the illusion that there is some notional level of spending that the Government expect. There is not.

We give good grant settlements to all authorities, including Aylesbury Vale, and we expect all authorities to budget prudently and keep their council tax demand as low as possible. The criteria for capping relate not to the level of council tax but to the increase in budget and the increase in council tax this year. That is a statutory obligation. However, as with the other authorities, I make it quite clear that if Aylesbury Vale wants to make representations on my announcement today, I will of course consider them very carefully indeed during the next 21 days.

Miss Anne McIntosh (Vale of York) (Con): Does the Minister accept that Hambleton has one of the lowest council taxes and, as my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) said, the lowest in North Yorkshire, which represents prudent spending
 
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and value for money? It is also why my husband and I choose to live there. Will the Minister admit that Hambleton finds itself in this position because of fiddled funding from the Government's grants? Why has his Department seen fit to transfer to urban or non-rural councils resources that would otherwise have been budgeted for Hambleton district council?

Mr. Raynsford: I am afraid that the hon. Lady has not done her figures very carefully. If she had, she would see that Hambleton district council has received good grant settlements over all recent years: a 4.4 per cent. increase in 2002–3; 3.3 per cent. in 2003–04; 4 per cent. in 2004–05; and 3.4 per cent. in 2005–06. Those are all increases above inflation, but this council has consistently increased council tax by large amounts—12 per cent. in 2002–03; 10.7 per cent. in 2003–04; 9.7 per cent. in 2004–05; and 17.6 per cent. this year, against a shire district average of 4.5 per cent. She should be explaining to her constituents why her council sees the need to increase its council tax by several times the shire district average. I am afraid that her case is not convincing.

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