Last night’s meeting of Islington Full Council to set the Council Tax for the next year sounds like it was quite a lively affair.

At first appearance, the Labour group seem to have been the winners. They managed to overturn the wafer-slender numerical superiority of the controlling Lib Dems (the position is currently 23 Lib Dem, 23 Labour, one independent former Lib Dem, and one Green) to get their budget proposals agreed in place of the official one proposed by the (Lib Dem) Council Executive. Such a victory has been on the cards ever since the 2006 local election results returned a tiny majority for the Lib Dems (figures as above but before the former Lib Dem became a former one). But nevertheless this is something of a cause for celebration for them. At least when I was attending Council meetings, Labour managed to get all 23 of their 23 councillors to turn up to every Full Council meeting. This is no mean Whipping achievement, what with councillors’ other commitments in life and when time after time they miss other (surely more enticing) engagements to turn up at the Town Hall, only to lose every vote, time after time. But - at least at one level - it came good for them last night and for the first time since 2006 (and indeed since 1999) won a major vote in the Council chamber.

But I can’t help feeling that some of their more thinking Councillors might have wondered - privately - this morning, where that has left them in the longer term. Fun and games in the Council chamber may keep people like them and on occasion, yes, I admit it, me, entertained and amused. But to most people it is not even tomorrow’s chip paper - it is simply not interesting at all - just something that happens on another planet.

But what non-political obsessives do most certainly care about is how much of the money they get every week or every month they have to hand over to the government or the Council. And what last night did establish for residents here is that Islington Labour have put your Council tax up. For many people this is one of the very very few things that the Council does that they notice - which makes it all the more unfortunate (if you are Labour) that this is the only action on the Council that they have got successfully implemented for almost ten years.

Was this really the strategic move that Islington Labour wanted to make? Because this is an issue with some considerable history: Labour have spent years now trying to overturn their reputation for being high taxers here in Islington.

When Labour last ran the Council, in the late 1990s, Islington had the highest Council Tax in the capital. The then opposition Lib Dems made considerable political success out of this, and Labour charging you too much Council Tax was (along providing very poor services, and a range of other things) one of the major weapons they were able to use almost to win control at the 1998 elections (the result was 26-26) and then actually to do so in a byelection the following year.

To reinforce that political gulf, the by-now-ruling Lib Dems then cut the Council Tax for three years running (in 2000, 2001 and 2002). And since 2002 they have pledged to keep it below the London average which they have done. More recently the Labour group have even copied this latter pledge and this seemed to take the level of Council Tax out of the Islington political arena as a major issue. Labour have made much of saying that they have changed and are different now to the late 90s - and specifically that they are more financially responsible.

All of which makes it all the more striking that Labour have now taken this dramatic step which stains their hands afresh with the association with high Council Tax here.

I’m sure this wasn’t what they had planned - and indeed a party doesn’t just put up Council Tax for the sake of it: it does it in order to pay for some additional services. In this case Labour put forward this position in order to introduce free school meals - and also a Council Tax discount for pensioners: you can read the details on their website. They presumably think this is in itself the right thing to do; the Lib Dem group disagree and have a set of reasons why they think it is not the best use of taxpayers’ money. This may be the right or wrong thing to do, in itself.

And also considered more narrowly as a political calculation, free school meals would presumably normally be a popular thing to do - as most promises to spend more money on something are (especially when they involve children!). And Labour are understandably very pleased to have got their proposal through and I wouldn’t expect them to say anything that detracts from that publicly.

But I can’t help wondering if - privately - some of them don’t wonder if getting through these one or two spending commitments in specific areas were worth it to sacrifice their many years trying to distance themselves from exactly this kind of political positioning, as tax and spenders. They won the vote last night but the real prize - what they are surely really after and which will really allow them to have an impact on Islington - is winning control of the Council in next year’s elections. Some of them will be aware today that associating themselves with high taxing has cost them dear in the past at the ballot box, and is surely unlikely to help them in these recession-hit times.

Is free school meals for children worth more votes than continuing your efforts of the last few years to distance yourself from high taxing? Make your own judgement.

Personally, I can see that it will be popular with those who benefit directly: those parents whose children do not already receive free school meals. But I don’t think its positive impact will be felt much beyond that group. Increasing Council Tax will be felt by much more people directly - and perhaps even more importantly it is seen by almost all as emblematic of a party’s general approach. The recession and the generally very low level of Council Tax rises this year, especially in London, will also affect the way it plays politically - as will the campaign that the local Lib Dems have been running over the last few weeks for a Council Tax freeze, deftly re-associating themselves with their traditional low Council Tax position.

“Islington Labour means high Council Tax” was a successful political weapon for their opponents ten years ago, and one that last night the Labour group took down off a shelf, dusted down and put back in their hands again.

I see that Mr Brown has this morning waded in to the debate about banks and mortgages, saying he wants to restrain banks from what seem to many people some of their more extraordinary excesses, such as 100% mortgages, mortgages six times your salary, and banks paying you to live in a house in anticipation of you paying them back when you die (OK, I made the last one up but would you really be surprised to hear that such a product was actually available!).

This exercise looks to me as if it’s about trying to reassure us that he is coming from the same place as those of who thinks all this kind of thing sounds just crazy - rather than a serious attempt to tackle the roots of the problems in consumer financial services. Indeed it doesn’t seem to have many specifics at all, other than simply asking the FSA to look into all this.

And specifically it won’t challenge what seems to me to be one of the main ways that banks have insinuated their ways into our lives, which is this.

Quite simply, thirty or forty years ago it was possible to buy a house without having to involve a bank.

Now, however, for almost everyone it is effectively not possible to buy a house without handing over quite a lot of money to a bank, for a mortgage.

I don’t claim to understand exactly how banks have managed to pull this off, but it seems to me a very effective trick by a whole sector - effectively ensuring that you can only get access to one of life’s essentials by paying a lot of money, normally on an ongoing basis over several years, to a private sector. And I really can’t see why anyone would think this is in the public interest. Just compare it to the political debates about other “essentials” of life such as health and education, and the extreme watchfulness and lengths that we as a society go to in order to ensure that no charging regime is able to get between a citizen and these. It seems to me extraordinary that we allow a situation where it is impossible to get access to buying a house without handing over a lot of the money that you ought to be spending actually on the house, or indeed on any of life’s other essentials or desirables, to a financial services institution.

Clearly the point above does not apply to social housing - but unless anyone is actually advocating that private ownership of housing should be abolished, and we should live in social housing, this does not seem to me to answer the point (and unlike health and education where the proportion of the public using the private sector is very small, most of us are in the private housing sector is far higher: I believe the figure is about 70%).

And obviously the comparison between the picture thirty years ago and now is not completely black and white: mortgages did exist then, and certainly some portion of society needed them, and equally there are some still who can afford to buy a house without one now.

But by tying the whole market inextricably into using mortgages, banks have managed to inflate house prices to an extent where the house prices to average earnings ratio is such that for most people, it is now simply not possible to buy a house without a mortgage.

I certainly see that for each individual planning to buy a house, a mortgage can be very helpful in making it more affordable. And certainly banning all mortgages seems somewhat extreme (even leaving aside the not negligible issue that such a move would entail a huge overnight cut in the value of most families’ principal asset!).

But it seems to me that a serious approach to reforming the housing finance sector in the public interest would address this point of why, in stark contrast to health and education, for most people the private sector is able to insist on getting its cut, in order to provide access to housing.

Earlier this week David Cameron launched a policy green paper entitled “Control Shift – Returning Power to Local Communities”. According to the party website this sets out “a series of policies that will see powers transferred from the central state to local people and local institutions”.

If true, this is surely very welcome: it is indeed quite right that power in Britain is far too centralised, and that many decisions would be very much more effectively and democratically made closer to the people they affect.

But does the Conservative party actually really believe this? They have started to talk of localism more in recent years, but the test is in their deeds, not their words.

The history is not promising: the last Conservative government famously centralised all sorts of elements of power, from abolishing regional government in London to, for example, introducing national control of local taxation (rate-capping).

Cameron Conservatives of course claim that the party has changed radically since those days, and it’s not fair to judge them today on actions of two decades ago.

Fair enough. So are they are now proposing to, say, remove central control of local taxation?

Hardly. In fact on the contrary, they seem to believe that the level of local taxation should not just operate within nationally-set parameters, as Mrs Thatcher thought, but in fact have its actual level set by the national tier. Here is George Osborne making a national pledge about the level of every Council in the country at their party’s autumn conference last year. Mr Cameron himself confirmed the pledge again at Christmas.

They are not crude enough to propose formally removing this power from local authorities, but make it very clear that they expect Councils to fall in line, and when local authorities receive the vast majority of their funding not through local taxation but in a grant from central government – a system Cameron does not appear to be proposing to change – and are regulated and inspected to the nth degree, then central government can have overwhelming influence on what Councils actually do.

Quite simply, you cannot be taken remotely seriously as actually believing in decentralisation of power, while simultaneously making policies to set every Town Hall’s Council Tax from the centre.

Not everything they suggest in their paper is itself a bad idea: some of their proposals might, at the relative margins, improve local Councils’ control of their local area.

But they do not address the real, big questions about greater local control. Will their proposals give local people greater control over, say, their education and health services? They will not. Above all, they make no proposal to give local communities greater control of their finances, and without control of the money, much of their talk of empowering local communities is just playing with shadows.

The truth is that, away from the margins, at heart the Conservatives fundamentally believe that real power belongs uniquely in Whitehall. In their minds, there is simply something special about the national level.

In the twenty first century, this is simply wrong. Certainly many things are best done at the national level. But others are best done locally – and others best done at a global or European level.

So while the Cameron Conservatives might talk some of the talk about local empowerment, the reality is that when it comes down to it, this idea doesn’t even run as far as their own policy proposals while in opposition. Why on earth would we think that when in government - where the temptations are much greater - they would reverse some of the centralisation that they themselves introduced last time?