Prescott to cap councils in tax rises crackdown

John Prescott is expected to cap the budgets of a number of local councils today as the Government announces a further crackdown on high council tax rises.

The Deputy Prime Minister will demand a second year of restraint from local authorities amid speculation that up to 14 authorities face having their budgetscapped.

But local authorities are expected to challenge the decision and the Conservatives have pledged to force a full-scale Commons vote on the issue.

Mr Prescott will tell Cabinet colleagues: "In some cases councils are proposing unreasonable increases. We cannot allow these rises to go ahead and we will protect council tax payers in these areas."

He will make it clear that this year's pressure on council tax bills is not a one off, insisting that the Government will demand low council tax rises in next year's budget settlement, which comes ahead of the expected general election date. Mr Prescott will say: "We have been fair with local government. Every council has had a real-terms increase in grant and we expect reasonable council tax rises in return. Tory plans would slash council budgets and lead to either swingeing cuts in services or force council tax through the roof."

But any capping decision would put ministers on a collision course with councils.The Local Government Association has saidthat there is no reasonable base for capping this year. Sir Jeremy Beecham, the association's Labour chairman, said capping merely highlighted flaws in the council-tax system.

He said: "Capping amounts to a Government admission that too much of the pressure of increased spending on public services such as education and social services has been placed on an inflexible property tax that doesn't grow as the rest of the economy grows."