---

Local Authorities (Conduct of Referendums) (Council Tax Increases) (England) Regulations 2012

My Lords, I thank everybody who has taken part in this short debate. I am asking for approval of these orders today, but equally, as I made clear in my opening remarks, we understand and recognise the important role the commission has in commenting on the referendum questions and the need to ensure that the questions are neutral and comprehensible. We will therefore go back and work with the commission over the coming weeks, and we intend to come forward with updated proposals in due course. However, as the noble Lord said, we need the regulations to go ahead as they are in case any council is moving to have an excess council tax this year. We think that that is probably unlikely, but the Government have made a commitment to discuss further with the Electoral Commission what the question should be. I hope that that is helpful. I thank noble Lords for all the criticisms. I am not sure that I can say anything other than that. I can still hear my noble friend Lord Jenkin saying all that when we were debating this subject during the passage of the Localism Act. The concern there was over heavy regulation. I think everybody heard that. I understand that the regulations are not welcome, but I think that they are good guidance about how things should be run and managed. If anybody is in any doubt, they are there in print so that they can be used. It is correct that capping was not a well-loved system. I do not think that it was well loved by anyone, but there is a way that we need to limit—for local people apart, from anything else—any council that thinks it will go on a Swanee and raise its tax above a certain extra amount each year. That is why the Secretary of State has taken powers to limit any access and then put it into the hands of local people to decide whether that excess is accepted or not. It is excess as well as excessive—it is over and above what is considered a reasonable amount extra for people to have to spend. They are then asked whether or not they agree with that. The noble Lord, Lord Smith of Leigh, raised the question of council tax freeze. This comes up pretty regularly, and I should like to explain that this is the second year of a grant for the freeze. Last year the money went into the base. So the base is already there, and it has been raised because of that freeze. It has always been made clear that from this year the freeze money would not go into the base. Local authorities have known that all along. They might think that the concerns that have been raised are justified, but they are justified only because they wanted to say them and not because they did not know. That has been the case right from the start. The noble Lord, Lord Grocott, asked me how much local authorities would have to spend on the referendum. I did have that information on a piece of paper. The amount varies, but I think that it is around £850,000. I should not have so many bits of paper. It would have been so helpful not to have them. I know that I have that information—I will find it as I go through what I am saying. On the question of the amount that will trigger a referendum and why local authorities should not have the right to put tax up to any amount without having that tested, Governments always have to have some control over expenditure and over the amount that will be raised from council tax and the general grant. No Government, including the previous one, can be in the position of allowing councils to let rip with what they want to raise. There has always been concern about how much council tax will have to be raised at any one time. As I say, if local authorities do that, they will then have to test it out with their local electorates; and if the local electorate thinks that it is a good idea, then it can go ahead. The other question was about whether a council tax freeze might trigger a referendum. I do not think that that is the case. I do not think that a freeze in council tax can generate one. What would generate a referendum —and I must put this carefully because I had to work at it very hard all morning—is where a levying authority lowered its council tax demand and a local authority had not reached freeze level but decided to take up the slack. So it would be a situation in which the levying authority had lowered its rate and the local authority then had a gap of the difference between the previous rate and the new rate. If it decided that it would still not be in breach of the 3.5 per cent and it would put in extra expenditure that then tipped it over 3.5 per cent, there would have to be a referendum. But that is not a freeze that would trigger a referendum. If that is still wrong, somebody will come back to me, but I think I am reliably informed that that is the situation. I heard what my noble friend Lord Jenkin said about the excess of regulations. I am afraid that, at this stage, that is what they are. I am asking the Committee to approve the regulations so that we can go ahead. I think that I have picked up all the points raised. If I have not, I will make sure that I let noble Lords know. In answer to the noble Lord, Lord Grocott, I was right that the likely cost of holding a council tax referendum will be between £85,000 and £300,000 depending on the size of the authority. Motion agreed.