Labour pledge to end capping: Fairer grant system promised

COUNCIL TAX bills should be allowed to rise without being capped by the Government to stop the rising toll of unemployment among council workers, Labour leaders said yesterday.

A survey of local authorities showed that since February, the total of anticipated job losses had risen to 34,643, according to figures released by Jack Straw and Frank Dobson, the spokesmen on local government.

Mr Straw said Labour would tackle the job losses by abolishing the capping of local authorities' council tax demands and by introducing a fairer system of grant distribution, which, he claimed, was biased towards Tory authorities.

Ministers are certain to make political capital at the local elections in May out of Labour's proposal to allow higher council taxes. But Mr Straw said: 'We believe local authorities should be free to raise their own local taxation according to their own decisions. That is called local democracy. They should be made more accountable by having annual elections. Our judgement is the national finances would be better off rather than worse off.'

Mr Straw said that under the present system, councils tended to cluster around the capping figure. But prior to capping, many underspent the average, while others were above it. 'My guess is the average council tax across the country would not have been that much different. There would be bigger variations,' he said.

Attacking the bias in the grant allocations, Mr Straw said the Prime Minister's constituency of Huntingdon was regarded as more deprived than Chester-le- Street in County Durham, which, he said, 'defies belief'.

The unemployment survey, carried out by the Centre for Local Economic Strategies, excluded jobs transferred to the private sector through compulsory competitive tendering, Mr Straw said. Among the biggest job losses in the past month were 1,035 at Labour-controlled Derbyshire county council, which said yesterday it was having to make job cuts across the board, including teachers, administrative, social services, home helps and school meals. However, many would be voluntary redundancies.