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Council Tax

Part of the debate – in the House of Commons at 4:08 pm on 15th June 1995.

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Photo of John Gummer John Gummer Secretary of State for Environment 4:08 pm, 15th June 1995

I certainly would be happy to discuss with my hon. Friend his views on the formula and I know that my right hon. and learned Friend the Home Secretary will be happy to do the same. One needs an objective scheme to share out money in central funds if the taxpayers' interests are, in fairness, to be protected, and my hon. Friend will understand that one problem with any formula is that those who benefit tend to be quiet but not very grateful and those who find it difficult want a different formula. I shall be happy to look into the matter. Of course, it is the first year of full operation and my hon. Friend may well have some points that we shall be able to take on board.

Norwich city council was the only one of 294 districts that did not set a budget at the level implied by the capping principles. It has known for some time that its spending relied on an unsustainable rundown of reserves. It has taken some steps to moderate spending, but nevertheless could have done more to adjust its budget and avoid the necessity of late change. The council chose not to do so. I considered carefully the council's representations, but concluded that the cap that we propose is reasonable and achievable, and should be confirmed.

If the order is approved by the House, we shall serve a statutory notice on all nine authorities, formally setting their cap. With the exception of Somerset and Lincolnshire police authority, the capped authorities will have 21 days to reduce budgets in line with their cap and to set new, lower council taxes.

I conclude by reminding the House of the long period of consultation that underlies our decisions on capping. Our intentions for the capping principles were published with the rest of the draft settlement in early December and again at the time of the local government finance debate in February. At each stage, we have listened to the arguments put to us. In February, the provisional capping principles were amended to relax caps for authorities that had been affected by major reductions in standard spending assessments in the 1993 review and to allow greater increases for metropolitan fire and civil defence authorities.

In April, when we confirmed the principles and designated authorities for capping, we accepted the particular problems of South Yorkshire fire and civil defence authority, and I am grateful to my hon. Friend the Member for Sheffield, Hallam (Sir I. Patnick) for his thanks on that subject. We therefore set the cap at the budget that the authority proposed. We now propose relaxations for a further three authorities.

That record shows that we have taken the greatest care to implement what was certainly a tough settlement as fairly as was practicable, and that we are prepared to make adjustments when there are especially severe problems. As my right hon. and hon. Friends will no doubt have noticed, however, that means that it is important to make the distinctions, in their counties and districts, between those that have been put in a position that it is difficult for them to meet because of the nature of the system and those that wished to blame central Government for the consequences of their own actions as county councils. County councils that have failed to deliver what their electorate expected must take the responsibility. The hon. Member for Cheltenham, who is no longer in the Chamber, has been trying to press the Government to take the blame instead of the local authority that he sought to control and now does control. He ought to take his own responsibility.