Politics: Council tax rise is double the rate of inflation

ALTHOUGH council tax is set to rise next month by double the rate of inflation, increases are less than they would have been had councils not made considerable savings on their 1998-99 budgets, some of them involving painful cuts in social-care programmes, libraries and repairs.

The 8.5 per cent average - 12 per cent in Wales - also reflects the determination of Labour councillors not to embarrass the Blair regime. In London and the metropolitan districts, councillors have made a special effort to keep taxes down because 1998 is an election year. Long-suffering council tax payers in Lambeth will see the council - where no single party has overall control - cut tax by just over 1 per cent. Next door ,Tory controlled Wandsworth is going further, chopping the tax by one-quarter.

Changes in grant distribution have hit the shire counties hard, especially those in the Midlands and South-east. In the shires, where council tax is levied and collected by the districts, rises will average 11 per cent.

The average increase of 8.5 per cent adds pounds 60 to the tax payable on a band D property, bringing the total payment to pounds 748. But the averages conceal some large cash outlays for householders. Although council tax increased by only 5.5 per cent in the city, Liverpool residents in band D properties will be paying more than pounds 1,100 for the services of a council which, despite efforts to improve, still scores badly on tests of municipal efficiency. The council said most homes were in the lower bands and many householders were on benefits and so paid nothing.

Another council formerly considered far to the left, Hackney in east London, is this year asking its council tax payers for zero extra compared with 1997-98 - and this is despite a 20 plus per cent increase in the amount the borough has to collect on behalf of the Metropolitan Police. Labour Party factions are currently struggling for control in the borough.

The Government was busy yesterday rebutting the charge that it had discriminated against rural areas. Local government minister Nick Raynsford asserted that the distribution of grants was fair; they were working within a budget bequeathed by the Tories.

He added that the Government was reviewing the basics of local government finance and was tackling unfairnesses such as calculating tourist numbers as if they were local inhabitants - this revision would further hit Tory Westminster, which is suffering a major loss of grant this year. Westminster is increasing its council tax by nearly 7 per cent, although the average payment for Band D properties (pounds 325) will still be well below the London average.

Mr Raynsford said that variations in council tax reflected the vitality of local democratic choice. "If we wanted a standard council tax everywhere we wouldn't have local government, just administration of central government services," he added.

The Tories, true to form, claimed that Conservative councils were more careful with taxpayers' money. The Tory environment spokesman, Sir Norman Fowler, said that the average Conservative council tax in 1998-9 would be pounds 615 for occupants of band D properties, while the Labour average in 1997-98 was already more than pounds 740.

How the increases could affect you

Newbury 20%

Devon 19.4%

Hillingdon 12.2%

Wakefield 11.8%

Camden 9.9%

Newcastle 9.1%

Westminster 6.9%

Manchester 5.7%

Islington 3.7%

Wigan 0%

Lambeth -1.2%

Wandsworth -24.5%