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Last Updated: Monday, 22 September, 2003, 17:02 GMT 18:02 UK
Referendums plan on council tax
Council tax
Pensioners are already taking to the streets over the tax
Local authorities could be forced to hold referendums if they wish to impose council tax rises twice the rate of inflation, under plans being considered by the government.

The idea reflects the alarm in Whitehall at the unpopularity of hikes in council tax, which local authorities tend to blame on central government.

Nick Raynsford, the local government minister, described the plan as "an option in the future", although there were no specific proposals at the moment.

But he conceded that ministers were having to consider a range of options to deal with anger, and the threat of protests, at bills with increases averaging nearly 13% in English councils over the last year.

Do we pay too much council tax?

Over the weekend, the minister told the Sunday Telegraph bills were reaching the "limit of acceptability" for many families.

David Davis, Tory shadow to the deputy prime minister, accused the government of "deceit and incompetence" and of using the complexity of the revenue support grant system to push the burden of taxation on to local authorities.

But Mr Raynsford argued that there was "no reason for unreasonable council tax increases", saying: "We have given generous grant increases to all local authorities.

"This year was the first time ever that every local authority in England got an above inflation grant increase so we are expecting authorities to budget prudently and to come in with reasonable tax increases.

English council tax rises March 2003
North West: 9.1%
West Midlands: 9.6%
Yorks and Humberside: 10%
North East: 8.6%
East Midlands: 9.5%
Greater London: 17.9%
South West: 13.8%
Eastern: 15.1%
South East (excluding London): 15.8%
Figures for Band D households

"Many did, but obviously, unfortunately, a significant number did not.

"It is particularly significant that it was Conservative councils that came in with far and away the largest increases averaging 16%," Mr Raynsford told BBC Radio 4's Today programme.

Since 1997, grants to local authorities had increased by 25% in real terms, compared with 7% in the last four years of the previous Tory administration, he said.

The government did not expect local authorities to automatically heap the cost of new services on to the electorate, he said.

Average council tax rises March 2003
Eastbourne: 230.82 (23.6%)
Hastings: 205.16 (20.3%)
Lewes: 196.94 (19.3%)
Rother: 194.43 (19.8%)
Waltham Forest: 191.57% (19.6%)
Surrey Heath: 186.75 (19.6%)
Tandridge: 186.23 (19.5%)
Runnymede: 185.26 (20.9%)
Lambeth: 185 (22.8%)
St Edmundsbury: 184.51 (18.9%)
Mole Valley: 183.74 (19.9%)
Adur: 183.05 (18.5%)
Waveney: 182.37 (19.4%)
Islington: 182.34 (21%)
Figures for Band D households

He cited Conservative-run Wandsworth as an example of a council which had increased its council tax up by 45%, but which had cut the rate by 25% in the previous election year.

"There are many other councils that have had the same grant levels which have come in with inflation or even below inflation increases and if it is possible for some to budget prudently, we expect all to do so," said Mr Raynsford.


Asked if the government was considering making local authorities ask permission in a referendum for rises that were more than twice the rate of inflation, the minister said: "Obviously we have to look at a range of different options, but there are no specific proposals at the moment.

"It may be an option in the future, but it is not a specific option at the moment.

The government has introduced a culture of spend spend spend in the Public Services
Dan, Croydon

"What I am concerned to do is sent a message to all local authorities - the government will continue to provide generous increases in grant to fund local services."

But, he added: "We cannot fund everything ..."

But Conservative Mr Davis told Today: "You can't solve at one stroke, I'm afraid, a problem that has been created over six or seven years, frankly of deceit and incompetence.

"The deceit comes in because what the government has done is use the complexity of the revenue support grant system in a covert way, stealth tax way, to push the burden of taxation on to local councils and then on to the people who voted for them ...

"If they want to have services, they should say this is what they cost and we are going to have to raise the taxes for them, not put the burden on somebody else."

Some pensioners - including a group of about 300 in Devon and Cornwall - have begun refusing to pay, saying they are prepared to go to jail instead.

Nick Raynsford MP, local government minister
"We expect local authorities to budget prudently"

Pensioners feeling the pinch
22 Sep 03  |  Business
Councils angry at tax-cap warning
16 Sep 03  |  Politics

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