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Mr. Woolas: Of course, different authorities of the same nature in similar geographical areas often have different budgets and apply different council tax increases. I remember following closely debates in this House that compared Lambeth and Wandsworth boroughs. I do not suppose that the residents of Lambeth were satisfied with the outcome, either, but that is the nature of local authorities. One has to start from where one is, and from the point of view of the council tax payer. However, if the hon. Member for North Dorset (Mr. Walter) is successful in catching your eye, Mr. Deputy Speaker, perhaps he can amplify his point.

Mr. Jim Cunningham (Coventry, South) (Lab): Does my hon. Friend not accept that we will always be in this predicament until we sort out the banding system and the standard spending assessment?
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Mr. Woolas: I take my hon. Friend's point, but it would be wise of me to exercise caution and to refrain from commenting on the banding process at the moment. As we know, the Lyons review is examining the future of local government finance, and the standard spending assessment has been replaced by the formula spending share. Members who have followed these debates closely will have noted that yesterday I laid before the House a written ministerial statement announcing the consultation document on the future of the formula. We are consulting on whether we should continue with what is referred to as the notional level of council tax, which often causes confusion and is used by parties across the political spectrum to attack their political opponents. I understand why that happens, but on the whole it does not benefit local government.

We believe that the action proposed in the draft order, and the separate action that we are taking in respect of Sedgemoor, represent a measured and proportionate response to excessive increases. As we have said on previous occasions, capping decisions are not taken lightly. Indeed, I should like to make it clear for the benefit of the record that capping is very much a last resort, and that 98 per cent. of councils avoided the capping regime. In the first instance, it is for local authorities to set their council tax levels and to justify them to their local electors. But the Government also have a duty to protect council tax payers from the small percentage of authorities that set excessive increases. Indeed, the House agreed to that principle when it discussed local government finance legislation.

Miss Anne McIntosh (Vale of York) (Con): Why is the Minister so hooked on percentages? Surely the bottom line for council tax payers such as me who live in Hambleton is that it has the third lowest council tax in the country. Why is he penalising prudent Conservative-run councils that are keeping a low council tax?

Mr. Woolas: The hon. Lady has made a very strong case on behalf of her area on this issue, and in respect of other difficulties that it has suffered in recent times. I should perhaps take advice from those hon. Gentlemen who are about to instruct Hansard to insert laughter, but I must say that there is no party political element in this matter—[Laughter.] There is no pre-ordained position and even the most cynical of Front-Bench Opposition spokesmen on local government could not contrive to imagine that I would be ingenious enough to predict that this would affect only Conservative councils. Indeed, some of the local authorities affected have independent, Labour and Liberal Democrat members, some of whom are opposed to the decision and some of whom are in favour.

I believe that I have already answered the substantial point made by the hon. Member for Vale of York (Miss   McIntosh), but let me cite two reasons for our decision. One is that we have to start from where we are. It is the excessiveness that is at issue, as specified under the legislation, and I am rightly obliged to follow up what that legislation specifies. It is the excessiveness involved in moving from A to B that matters. Secondly—[Interruption.] I am going to repeat this second point because the hon. Member for South Cambridgeshire (Mr. Lansley) is looking either threatening or puzzled—and quite possibly both. If he
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can contain himself and listen to my argument first, he can then disagree, although he will doubtless disagree with me whatever I say. My second argument is that using percentages covers the point about step changes and differences. Percentages help to address the real problem faced by Governments of any colour—the danger of the self-fulfilling prophecy.

Alistair Burt (North-East Bedfordshire) (Con): I thank the Minister for his courtesy in giving way and for the way in which he is manifestly making the best of an unbelievably appalling job. Whatever the formulaic procedure, I put it to the Minister that what constituents demand of us and what the people demand of the Government is a judgment: sometimes something that is set out in black and white becomes patently ridiculous or nonsensical, at which stage the Government should take the decision not to proceed with it. If the Minister applied his personal judgment to what he is reading out, he would not be in the position that he has to defend this afternoon.

Mr. Woolas: I thank the hon. Gentleman, who is among the most courteous Members of the House and a champion of his constituency. I recognise that what he says today is spoken on behalf of his constituency. The House will notice that no Member who has intervened so far, apart perhaps from my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts), has disagreed with the principle of capping—[Interruption.]

Several hon. Members rose—

Mr. Woolas: Well, my preparations for this debate have just proved to be accurate in this regard, because if we can have a statement from the Opposition Front-Bench spokesman to say that his party would rule out any form of capping—universal, crude, targeted or otherwise—that would be interesting to hear. [Interruption.] Already, I hear some qualifications, but I look forward to Conservative policy being put clearly on the record when the hon. Member for Brentwood and Ongar (Mr. Pickles) speaks. I am sure that the hon. Member for Brent, East (Sarah Teather) will want to put her party's position on the record, too. Very high local income tax rates would, of course, follow any such pronouncement.

Mr. Andrew Lansley (South Cambridgeshire) (Con): We were on the subject of excessive spending and the Minister implied that he was effectively constrained by the legislation, but he knows that that is not true. The intention behind the Government's changes of 1999 was precisely to allow discretion in respect of the circumstances in which capping is applied as an exceptional measure. As far as South Cambridgeshire is concerned, the Minister has demonstrated such discretion by raising the cap, but where in the local representations has anyone suggested to the Minister that reducing the spending of South Cambridgeshire district council by 13 per cent. in comparison with last year's budget is an appropriate use of discretion?

Mr. Woolas: There will inevitably—and, I suppose, quite rightly—be some hon. Members who will want to make specific points about the budgets of their own
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councils and the consequential council tax increases. I will attempt to answer all the points if we can proceed to debate the issues sensibly within the time allotted. I can tell the hon. Member for South Cambridgeshire that the points that his council made have been listened to and its representations and correspondence have been answered, although not necessarily to its satisfaction.

I am confident, to answer the point raised by the hon. Member for North-East Bedfordshire (Alistair Burt), that these decisions are consistent not just with the letter of the legislation, but with the general point that the Government have a duty to perform on behalf of council tax payers. In 98 per cent. of cases, the policy has been successful.

Several hon. Members rose—

Mr. Woolas: I will give way one more time, but I am conscious that Mr. Speaker has had to apply limits to Back-Bench speakers and that every intervention I take limits the opportunities of hon. Members to contribute to the debate.

Sarah Teather (Brent, East) (LD): I just want to put on record our party's opposition to capping in principle and remind the Minister that it was not so long ago that his party was also opposed to capping in principle. How far we have moved since!

Mr. Woolas: I thank the hon. Lady for being clear about her party's policy—that there will be no capping regime of any sort whatever under a Liberal Democrat regime.

Mr. Jonathan Djanogly (Huntingdon) (Con) rose—

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