 LIVERPOOL will not be allowed to raise its own "tram tax" to rescue the threatened Line One scheme, a government minister said yesterday. David Miliband, the communities minister, told a conference fringe meeting that a local authority could only boost spending on transport infrastructure by making cuts in its other budgets. His words will dash any slim hopes Liverpool City Council might have had of raising its own funds to save Merseytram. Last week, council leader Mike Storey demanded the right to slap a special levy on council tax to pay for major infrastructure developments, such as light rail. Speaking at the Liberal Democrat conference, Cllr Storey said the extra tax could plug the £68m gap between the £238m cost of the scheme and the government's pledged £170m. And he insisted residents would pay for the hike if they knew the money was earmarked for a popular project. Cllr Storey's call was echoed by the leader of Bristol City Council and - at yesterday's fringe meeting in Brighton - by Manchester's leader. In reply, Mr Miliband told the meeting it was "completely legitimate" for local authorities to query whether they had sufficient powers to fund badly-needed local schemes. But he warned: "With that distribution of powers must come a trade-off. If Manchester, Leeds, or anywhere else, decides transport is a big thing for them, there will have to be a trade-off with housing or other services, a balancing off at local level." Council leaders have pointed out how other European cities with more financial muscle, such as Lyon and Bordeaux, have succeeded in building light rail schemes. And recently residents of Los Angeles voted to pay extra tax to fund improvements in local transport. The Government is awaiting the conclusions of a wide-ranging review into the future of local government spending, including freedom from Whitehall control. But that report will now be delayed until 2007 because of last week's decision to include the flashpoint issue of revaluing homes for council tax. | 
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