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Last Updated: Tuesday, 2 March, 2004, 12:31 GMT
Capping threat on 'excessive' tax
Council tax demo
Council tax rises have sparked protests in many regions
Ministers will use capping powers to hold down council tax rises in England, minister Nick Raynsford has warned - as an average 6% increase was predicted.

The local government minister's signal came as an independent survey confirmed the 6% average rise for England, with a 5.7% increase for the UK as a whole.

CIPFA, the Chartered Institute of Public Finance and Accountancy says the average rise will be 62 for 2004-05.

Mr Raynsford said ministers would cap councils to avoid "excessive rises".

After all the huffing and puffing we have seen from Labour... we still see council tax increases of over three times inflation
David Curry
Conservative local government spokesman

CIPFA - in a survey conducted in conjunction with BBC Radio 4's Today programme - said the predicted 62 Band D increase in England, Scotland and Wales would push the average annual payment to 1,142.

Mr Raynsford claimed Labour council areas would see an increase of 4.8%, with Tory local authority increases averaging 5.5% and the Lib Dems 6.2%.

'No need'

He pledged the government would use capping powers where an "unreasonable burden" was placed on council tax payers.

"With the kind of levels being talked about in some areas, which are in double figures and imply quite large budget increases, then I think it is likely we will be using our capping powers," he told BBC Radio 4's Today programme.

AVERAGE BAND D BILLS
England up 6% to 1,168
Wales up 5% to 879
Scotland up 4.4% to 1,053
GB up 5.7% to 1,142
The minister said he wanted to see council tax reforms, but warned: "This is a notoriously complex field and over-hasty attempts to reform, sadly, often have produced really disastrous consequences as the poll tax demonstrated 15 years ago."

Mr Raynsford said he was encouraged by evidence that some councils have listened to calls to lower their council tax increases to an average of around 6%.

But he said there was no room for complacency, adding: "There are still authorities whose increases are significantly above this average.

"Central government funding of councils has increased by 30% in real terms since 1997."

'Burden'

Last year's average tax increase was around 12.9% and CIPFA said its findings suggested March's increases would be the lowest in Band D since 1996.

But Conservative local government spokesman David Curry said New Labour could not "escape the charge" it had put a "massive burden" on councils.

BAND D BY REGION
Greater London up 5.7% to 1,118
Yorks & Humber up 6.1% to 1,135
West Midlands up 6.3% to 1,163
South East up 6.3% to 1,167
South West up 6.6% to 1,187
North West up 4.8% to 1,189
East of England up 6.5% to 1,188
East Midlands up 6.3% to 1,196
North East up 5.7% to 1,227

Source: CIPFA

"After all the huffing and puffing we have seen from Labour - councils threatened by letter and in person with capping - we still see council tax increases of over three times inflation."

He insisted that the lowest council tax levels in the UK came from Tory councils.

Lib Dem Edward Davey said the council tax system was "unfair and flawed".

"With the scale of threats and bribes, rises of nearly three times inflation are actually a failure," he said.

"Ministers cannot duck major reform of this failing council tax. The best option remains to scrap it altogether."

Mr Raynsford's comments come after it emerged pensioners would be encouraged to claim help in paying their council tax.

The Department for Work and Pensions says four out of 10 elderly people are missing out on council tax benefit worth an estimated 750m.

In many parts of the UK pensioners are conducting a high-profile campaign against big rises in council tax, with some risking jail if they fail to pay up.

Last month Elizabeth Winkfield, 83, appeared in front of Barnstaple Magistrates Court for non-payment of 98.80 of council tax.




WATCH AND LISTEN
The BBC's Annita McVeigh
"The government believes it's been fair with grants to councils"



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