Figures published by my Department on 27 March show that the average council tax increase in England in 2007-08 is 4.2 per cent.

We had made it clear to authorities that we expected to see an average council tax increase of less than 5 per cent. and I am pleased that overall local government has responded in a positive manner in keeping down the average council tax increase.

We have therefore decided not to exercise our reserve capping powers in 2007-08.

However, keeping council tax under control remains a priority for the Government. We will have no hesitation in using our capping powers in future, if the circumstances require it.