Prescott to repay thousands in council tax

John Prescott was forced to apologise today and repay several thousand pounds of council tax after what he described as a "genuine misunderstanding" over his grace-and-favour flat, his office admitted today.

In a written answer slipped out in the Commons, the deputy prime minister conceded that a total of £3,830.52 has been paid out of public funds for council tax on his flat at Admiralty House, near Trafalgar Square in central London, since 1997.

The flat is one of four residencies owned or used by Mr Prescott - the others are his gothic-style constituency home in Hull, an official residence at Dorneywood in Buckinghamshire, and a rented flat in London.

Mr Prescott described the payment as "an inadvertent error ... based on a genuine misunderstanding".

In the written statement, Mr Prescott explained the complicated situation. He said the government had paid a discounted amount of council tax on the flat since 1997 - continuing the arrangements in place for the previous Conservative government.

The total bill was £3830.52. Mr Prescott said he was paying council tax on his home in his Hull constituency and on a rented flat in south London, which he moved out of in November 2003. He said he believed he was paying the tax on all three properties.

Because Admiralty House was his primary residence he paid additional income tax on the benefit in kind - equivalent to 10% of his ministerial salary. He said he thought the council tax was included.

When Labour came to power in 1997 the government carried on paying council tax on the flat - at a discounted rate on the basis that it was a second home. But Mr Prescott said he was not told about this.

In the written statement, he said: "On reviewing the situation, I am now aware that an inadvertent error has occurred, based on a genuine misunderstanding. To avoid any doubt, I have therefore issued this answer to a parliamentary question to correct the record and to fully apologise to the House."

Mr Prescott has further insisted future council tax bills are sent straight to him personally. As well as reimbursing the government departments he is to pay full council tax on Admiralty House for the whole period since 1997 - although he has no legal obligation to do so.

Mr Prescott said Commons officials had confirmed he did not break any rules. The cabinet secretary has also confirmed that he is putting procedures in place to ensure ministers given official residencies get clear guidance on dealing with council tax.

Mr Prescott also has an official country residence, Dorneywood in Buckinghamshire. It is owned by an independent trust, which meets the cost of the council tax. There is no cost to public funds.

Downing Street tonight defended Mr Prescott. The prime minister's official spokesman said: "It is a classic case of left hand-right hand. The matter was drawn to his attention in a public way and he discovered the misunderstanding."

But Caroline Spelman, Mr Prescott's shadow on the Conservative frontbench, insisted: "At a time when pensioners are being jailed for not paying their council tax, the public will find it galling that the man who has forced up their bills hasn't had to pay it himself."

It is not the first time Mr Prescott has had difficulties over his accommodation. Six years ago Mr Prescott was criticised by the then parliament standards watchdog, Elizabeth Filkin, for not declaring a £220-a-month rented flat in London provided by the RMT union.

However the Commons standards and privileges committee later overruled Ms Filkin and exonerated Mr Prescott.