Prescott's council tax warning

Prescott's council tax warning

Prescott said there were no excuses for tax hikes

Deputy Prime Minister John Prescott has warned local authorities he may limit excessive council tax rises.

Despite his party abolishing universal capping, Mr Prescott said he retained powers to slash excessive rises by "irresponsible" councils.

Households across the south-east are facing the biggest increase in bills since the charge replaced the poll tax 10 years ago.

The Conservatives blame this on changes in the way government grants - which make up about 75% of council income - are handed out.

'Bigger grants'

They say amendments to the funding formula for local authorities have led to southern Tory councils being punished.

Speaking to Labour's North-West conference in Southport, Mr Prescott said: "This government has abolished the Tories' crude universal capping.

"But it is only fair to warn those authorities proposing excessive council tax rises - some as high as 40% or 50% - that I do not rule out, on a case by case basis, using reserve capping powers."

What Mr Prescott has done has capped his own exercise in financial gerrymandering with an outbreak of political hypocrisy

David Davis
Conservative shadow to John Prescott

The deputy prime minister said Labour had increased funding for local government by 25% in real terms since 1997.

Tory flagship borough Wandsworth in south London is expected to increase council tax by 45%.

Average bills in shire counties are predicted to rise by around 13% - almost five times the inflation rate of 2.7%.

Mr Prescott said there were no excuses for large tax hikes.

"People see through the cynical Tory propaganda about robbing the South-East for the benefit of the North.

"Why? Because every single authority - north, south, east or west - received a grant increase greater than inflation.

Some households face 50% tax rises

"No-one was robbed. They all got more. Every single one of them."

He added local government had received "more money, more jobs, more services, more powers, more freedoms, more flexibilities", but must act more responsibly in return.

Mr Prescott's Conservative counterpart, David Davis, said: "What Mr Prescott has done has capped his own exercise in financial gerrymandering with an outbreak of political hypocrisy.

"The grants that supposedly match inflation for many Tory councils do not even meet the 6.6% required increase in education funding and the 8.6% increase in social services that make up the major part of many councils' costs."

Capping was introduced by Margaret Thatcher and in practice means limiting town hall spending in order to keep council tax down.