Why Tory rank and file see end to capping as fight for democracy

Donald Macintyre examines the disillusion among local activists with government interference in councils

The row over capping which comes to a head today at a meeting of the Cabinet committee on local government has a complex political background. But on every level it points to the growing demand within the rank and file of the Tory party for more local democracy.

First those councillors who lost their seats in Labour's landslide victory in the local elections in May are in many cases understandably fed-up. Having in many cases run efficient, even popular local councils, they found that they were booted out for no better reason than the Government's deep unpopularity.

For such people, who form the backbone of the voluntary party, capping has come to be a symbol of the pointlessness of local politics.

Christopher Gill, a Tory MP in Shropshire, one of the capped authorities, summed up their mood in the Commons debate on capping on 15 June when he said it allowed electors to vote for Labour councillors with "impunity" and had left Tory councillors "demoralised, demotivated . . . and defeated".

To which the Treasury has a brutal, but also understandable answer. It may be tempting for the Government to allow the new army of Labour councils to spend as freely as they like and charge punitive council tax to pay for it; after all, such councils could yet prove to be Tony Blair's weak flank. But there is no guarantee, says the Treasury, that voters would blame the councils. If, at a time when there is every reason for ensuring taxpayers start to feel the fruits of economic recovery they are hit in the pockets by council tax increases, they may well blame not their councils but the Government.

Indeed, there is some anecdotal evidence that electors in former Tory councils which have gone Labour do not even know that they have done so.

To which there is a counter-response. First, it may not be that spending will go through the roof quite as much as the Treasury expects. Because central grant and the uniform business rate are constants - beyond the control of local authorities - the impact on council tax of increasing spending is disproportionately adverse. And even the most potentially reckless of local politicians can reckon the political cost of that.

Secondly, politicians who argued for a one year experimental easing of capping during the Tory leadership contest, point out that if Labour councils do allow spending to go through the roof then it is quite simply up to Tory politicians to expose them.