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Local Government Finance

Volume 451: debated on Tuesday 7 November 2006

I am glad that the Minister has confirmed that council tax in Cornwall remains below the national average, but can he give some reassurance that any changes to council tax will not be made in such a way as to penalise areas such as our own, where house prices—especially because of the purchase of second homes—are way above the national average, but incomes are 25 per cent. below? It is rumoured that Ministers are considering a system that would penalise those areas that are seen as most popular or attractive. In some of those areas, incomes are very low and the local population is already penalised by the huge mortgages that they have to pay.

We are very much aware of the point that the hon. Gentleman makes about Cornwall, which was also made earlier by the hon. Member for St. Ives (Andrew George). I can reassure the hon. Gentlemen that the rumours amount to nothing more than scaremongering to try to frighten people on the basis of a misinterpretation of the Government’s policy. Of course, our policy is to limit council tax increases through our capping policy.

Before the council tax bills go out next year, will my hon. Friend consider those on fixed incomes who just fail to qualify for benefits? Their real incomes are declining year on year.

I am glad that my hon. Friend reminds the House of the existence of council tax benefit. Just under 15 per cent. of council tax is paid by the benefits system to ensure that those who are least well off are not punished. He raises an important point about those just above the threshold and we have askedSir Michael Lyons to make recommendations in that area. I will bear in mind the point my hon. Friend makes on behalf of the people of Bolton, with whom I have had that conversation.