Tories targeted over council tax `racket'

Tory MPs in marginal seats will be targeted by Labour for voting tonight in the Commons for a local authority grants system which allegedly leaves their council tax payers worse off than those in wealthy Westminster.

The MPs high on Labour's hit list include Jerry Hayes, the MP for Harlow, and David Amess, the MP for Basildon, whose local councils, Labour claims, do badly out of the grants system, compared to the Tory flagship borough of Westminster.

It is the opening shot in a battle over council tax bills, which could rise in April by an average of 8 per cent. Labour blames the Government for the increases, but ministers are ready to blame Labour councils for excessive spending.

John Gummer, Secretary of State for the Environment will today ask for Commons approval for the grants which will trigger the council tax demands, after the councils set their budgets.

"In Tory Westminster - Belgravia and Mayfair - people contribute 10 per cent towards the council tax, but people in Harlow and Basildon contribute four times that amount. It is a racket for Westminster, which is painful and expensive to other people across the country," said Frank Dobson, Labour's environment spokesman.

"Our candidates will be reminding voters how their MP voted and challenging them to say why they did so."

The Government has insisted that Westminster has special needs, including inner-city problems. The figures produced by Labour show that more than 50 Tory MPs have council tax payers contributing more to their council budgets than Westminster, including Mr Hayes (Harlow, 45 per cent of the council's budget); Mr Amess (Basildon, 42); David Evans (St Albans, 38 per cent), Tim Wood (Stevenage, 37 per cent).

Peterborough, in the present constituency of Brian Mawhinney, the Tory party chairman, takes 25 per cent of its budget from the council tax. Labour claims that its council tax payers would get an pounds 862 rebate if they were on an equal footing with Westminster.

Mr Hayes dismissed Labour's challenge. "It's rubbish. It's arithmetically illiterate. Harlow is one of the most inefficient, high-spending, Labour-controlled councils in the country. It costs more to have the rubbish collected here than almost any other council."

Simon Carter, former chairman of Tory group on Harlow council, which now has no Tories and comprises 40 Labour and two Liberal Democrats, said: "The Government assesses how much they ought to be spending, and provides so much grant to each of the 250 district councils. They are assessed on the same formula which is designed to provide 85 per cent of their expenditure. Westminster come in below it, because it is more efficient. Harlow spends more."

Labour is proposing an overhaul of the grants system, although Mr Dobson has warned that he will not bail out high spenders if his party gains power. The Audit Commission found the present system provided a "rough approximation" between need and historic funding patterns, but it added: "There is increasing discontent among local authorities. Comparing the system with a checklist of objective criteria reveals that it is deficient in several ways ..."

More than 90 councils have made representations to the Government over the way their grants had been assessed.