Localism Bill

Indeed. I was not suggesting that the noble Lord would have judged council tax to be one of those things, but I think there is an argument that it is. The impact assessment reminds us that some 36 authorities have been capped under legislation that this Bill will replace—I think that is since the power was first used in 2004-05—and 16 of those were subject to in-year designation and had to redo their calculations. Indeed, the architecture of the Secretary of State setting principles with the opportunity to look at different categories of authorities has been imported from the existing capping regime. We feel constrained in denying the Government powers which effectively amount to capping powers and their right to influence levels of taxation in the broader interests of the management of the economy, anti-poverty strategies, et cetera because the reality is that each year the Secretary of State will set the benchmark for council tax increases and it is probably right that few councils will run the gauntlet of a referendum, given the costs and consequences of an adverse outcome. The impact assessment estimates the cost of a council tax referendum to be between £85,000 and £300,000. Should a referendum not be successful, the administrative consequences could be convoluted, with year-end refunds or credits against future liabilities and the possibility for people to ask for an in-year refund, so the systems and costs involved in those choices could be significant. We are coming on to discuss the powers that the Secretary of State has taken for himself in framing how the referendum question is to be put and the constraints around expenditure. According to the impact assessment, the authority will not be able to campaign for its proposed council tax level. Given the debate we have just had about the authority’s role in referendums, perhaps the Minister will confirm that an authority cannot campaign for the council tax increase that it thinks is appropriate. Of course, we might expect the cards to be stacked against those proposing the increase. Councils are facing unprecedented dilemmas at present with budgets severely constrained and with front-end loading because the coalition Government’s approach to the deficit is to cut too far and too fast. The system will have to cope with the challenges of the localisation of non-domestic rates. If this is to happen, will not local councils be forced to look to that as a source of extra income before running the risks of referendums that would increase council tax? I am not sure that that would be good news for the business community, but perhaps the Minister will tell us—I know these things are embryonic at the moment—whether there will be equivalent capping-type regimes for a localised, non-domestic rate and, if not, what the likely impact of having these effective capping powers on council tax increases might be for the NNDR. One of the other issues that arise from this in making an assessment about whether council tax levels are fair is how council tax rebate is going to work in the future. The Government are localising council tax rebate. Not only are they cutting 10 per cent off it in aggregate, but it seems as if it is going to be left to local authorities to make individual judgments about the scheme that they want to introduce and maintain. That runs contrary to giving powers to government to manage these things centrally, and is an added complication. For the present, we will focus our efforts on trying to improve the provisions in the Bill rather than to do away with them, but we are mindful of the strong localist argument for not having these powers at all.