Martin Ham (Your Letters, August 26) quite rightly pointed out that our maximum projected annual precept rise is above the rate of inflation and I am in total agreement with him that this is an unacceptable state of affairs.

However, unlike Malvern Town Council which has a fixed set of responsibilities and inherited an unusually high sum of cash reserves from a previous administration which it has used to fund its precept reductions, MHDC has extra statutory functions imposed upon it by central government on an almost annual basis.

This year, for example, we have had to take over the licensing of pubs from the magistrates. Once the initial flurry of activity has died down the cost of administering this function will equate to approximately an extra one per cent on our annual precept.

Therefore, I feel it is in no way smug against this fiscal backdrop to claim that we are indeed fiscally prudent in our projections. The real culprit is that master of stealth taxation Gordon Brown.

I must take issue with Martin Ham's remarks regarding our attitude to wealth creation in Malvern. He conveniently forgets we are currently giving new traders a six month business tax break to help get up and running. He should also take note that it was MHDC, in partnership with others, that provided the start- up funding for the Malvern Hills Science Park.

Clive Smith, Greenfields Road, Malvern Link.