Motorists should pay more to park in town centres to force them to walk more and reduce traffic congestion, according to a Government minister.
Local Government minister John Healey said that local councils should charge more for basic services such as off-street parking, despite people in many parts of the country experiencing inflation-busting council tax rises.
In a speech to the Local Government Association, he said: "Only one in five councils are using charging to the full potential. Not just to cover costs but to shape their area."
In a clear sign that he believes motorists should be targeted, Mr Healey said that charging more would result in "reducing congestion, improving levels of health and exercise, encouraging the use of local shops".
It comes after it was disclosed that the Government is set to press ahead with a series of technology trials for a national road pricing scheme, which could lead to drivers paying up to £1.30 a mile during peak periods.
The Daily Telegraph has been running a campaign calling on the Government to offer a fairer deal to motorists at a time that has seen soaring fuel prices and plans for changes to vehicle excise duty which will leave most motorists with larger bills.
Despite soaring council tax bills, the money raked in by councils just from fees has more than doubled from £5.5billion in 1997/98 when Labour came to power to £12.6billion in 2007/8.
Much of this has come from higher charges for parking and use of leisure centres, as well as other fees such as those for planning applications.
The amount of money made by councils from parking charges alone jumped by 14 per cent in three years to reach £635million in 2006-07.
Council tax bills rose by 10 per cent over the same period, with town hall revenues for all local authorities across the UK rising from £20.1billion in 2004/5 to £22.2billion in 2006/7.
In Westminster, central London, motorists using a council car park can be charged up to £6 for one hour or as much as £35 for nine hours.
Small business groups called into question the claim that charging more for parking could help protect small shops by encouraging people to walk to their local store.
John Wright, the national chairman of the Federation of Small Businesses, said: "The practice of local authorities using excessive parking charges to raise revenue is killing town centres.
"The minister doesn't seem as though he knows what he is talking about. One of the most important aspects of this is to encourage people to use the high street, a lot of businesses rely on passing trade but which customer is going to pay parking charges if they just wish to call in for a bottle of milk at a local high street shop.
"These proposals are diabolical in respect of enabling local high streets and local business to survive. We have found that where high streets are surviving there is free parking and the minister should be aware of this.
"Is Mr Healey then going to insist on all supermarkets charging for their car parking?"
Officials close to Mr Healey said he was referring to charges for council car parks, rather than increases in on street parking, as well as other council-run services such as local theatres.
Mr Healey told The Daily Telegraph: "It is up to local councils to make these decisions. If they choose to do so, it must not be used to make a profit and or as an alternative to cutting out waste and driving down expenditure."
But Eric Pickles, the Tories' Local Government spokesman, said Labour was intent on "clobbering the public with another Gordon Brown stealth tax".
He said: "It is shocking that Whitehall is pressing councils to use parking charges as a cash cow to raid the pockets of public. You would have thought the excessive rises over the past decade in council tax would be enough.
"Ministers are calling on councils to use to squeeze more money out of the public who are already struggling with the spiralling cost of living."
Matthew Elliott, Chief Executive of the TaxPayers' Alliance, added: "The last thing taxpayers need is even more stealth taxes and charges.
"It's outrageous that Government ministers are going round in public claiming to understand the financial pressures people are under, but behind closed doors they are urging councils to squeeze everyone for even more money.
"Councils already raise far too much by charging for things that used to be included in return for council tax."
Mr Healey also revealed that the Government was considering "new funding tools" for local authorities to help them raise more cash.
He said: "When I debate the economic role of local Government, I always hear the argument for more freedoms and financial powers. I'm always receptive. And I'm looking at new funding tools at the moment.
"Half of councils don't even have a clear policy on charging to guide their decisions on how to use their powers."
Town hall leaders defended Mr Healey's call for councils to charge more for local services.
Sir Simon Milton, chairman of the Local Government Assocation, said: "Local councils have to make tough choices between spending cuts, council tax rises and charging fees.
"In certain parts of the country the money councils have received from central government will make it the worst settlement for a decade.
"That different councils have different charging policies should come as no surprise. Every area has its own unique issues and councils will rightly adopt charging policies to local circumstances.
"Charges and fees would be better exercised through a buoyant, open and progressive local tax system, but under the current system, councils are doing the best they can to put people first with the tools they've got."
Although council parking fines are set by Whitehall, town halls are free to charge what they wish for car parks and on street parking.
While cash raised from fines must go back into transport, councils are free to use remaining parking revenue as they see fit. Mr Healey's remarks drew an angry response from motoring organisations.
"Drivers are already being hit with expensive fuel and the increased cost of a tax disc," said Paul Watters, head of public affairs at the AA.
"If they arrive at their destination and find that they have to pay an extortionate amount, they will vote with their wheels and go elsewhere."
Sheila Rainger, head of campaigns at the RAC Foundation, said: "Charging for a scarce resource is one way of allocating. But city centres are in competition with out of town retail, where parking is free.
"Parking has always been a service to communities and not a revenue-raiser. Motorists are fed up with being seen as wallets on wheels by local and national government.
"Drivers should not be expected to pay for meals on wheels or other services, I am worried that this could be the thrust of Mr Healey's remarks."
