Tax bills rise by double the rate of inflation

The Times - 28th March 2007

Pensioner groups were furious last night after the Government's announcement that average council tax bills will rise by an inflation-busting 4.3 per cent from next week.

The Tories claimed that council tax had now increased by 92 per cent since Labour took office in 1997, the equivalent of a 4p rise in income tax.

Average Band D bills will go up by £53 to £1,321 across England, a rise of 4.2 per cent, partly due to big increases in police authority precepts. But average bills per dwelling will rise by 4.3 per cent.

Thirty-seven councils, including five police authorities have set rises of more than 5 per cent, and all risk being capped.

Six of the ten highest council tax rises in the country are from police authorities, with Durham Police setting a huge 34.6 per cent rise. The parish element of council tax is also high, jumping by 6.7 per cent since last year.

Caroline Spelman, the Tories' local government spokesman, said that council tax had become yet another Labour deception. "Gordon Brown has turned council tax into the ultimate stealth tax - inflating bills by the equivalent of 4p on income tax, but making councillors take the blame when weighty bills hit the doorstep," she said.

The tenth successive above-inflation rise came after ministers announced that there would be no reforms to council tax in this Parliament, as were proposed this week by Sir Michael Lyons.

Gordon Lishman, Director-General of Age Concern, said: "Yet more inflation busting increases to council tax bills will anger many pensioners already struggling to keep up with rapidly rising living costs."

He said that many pensioners would have been bitterly disappointed that the Chancellor had failed to offer any help with council tax bills in the Budget. "Since Labour came to power, council tax bills have almost doubled while the basic state pension has risen by scarcely a third."

Tomorrow the TaxPayers' Alliance and the IsitFair group will announce a joint campaign against the current system of property tax.

Andrew Stunell, for the Liberal Democrats, said: "It's scandalous that the Chancellor failed to scrap council tax and introduce a fair tax based on the ability to pay."

Phil Woolas, the Local Government Minister, said that the Government's tough action on capping had helped to keep council tax bills down. He is expected to make an announcement later this week on which councils or police authorities will be capped next year.

Council chiefs blamed the council tax rises on a shortfall of funds to cover the increased costs of elderly people, collecting and recycling rubbish, and soaring bills from private sector contracts. Sir Jeremy Beecham, vice-chairman of the Local Government Association, said: "Government grant has not kept up with the massive demands being placed on councils, such as caring for an ageing population and costs arising from new legislation."

Times, 28th March 2007