Minister warns of future caps on council tax

The Government ruled out capping town hall budgets this year despite the record 12.9 per cent council tax increase householders are facing.

But it said it was prepared to limit local authority spending in 2004-05. In a written Commons statement yesterday, Nick Raynsford, the Local Government minister, saidministers were disappointed with the increased council tax because councils had already received above-inflation grant increases. "The current trend in council tax rises is not sustainable," Mr Raynsford said. "Local authorities should be aware that we are prepared to use our targeted capping powers in 2004-05."

On average, bills are rising by more than £100 in 2003-04, although in some councils the increase has exceeded £200.

Eric Pickles, the local government spokesman for the Tories, said it would have been "hypocrisy on a grand scale" if ministers had capped authorities when the Government itself was responsible for the huge increases.

He said: "If the Government caps councils next year, it will be capping them simply to protect people from the consequences of its own actions. It will be a cheap electoral ploy."

Elsewhere the Evening Standard reported that new legislation could result in London's council tax bills passing £3,000 for the first time.

David Davis, the shadow Deputy Prime Minister, said: "This disgraceful new proposal by Labour will place even more burdens on over-taxed households."