Labour council tax record slammed

THE Government's record council tax rises have left households worse off overall since 1997 - and undermined moves to tackle the work-shy, a damning report by independent experts claims.

The Institute for Fiscal Studies (IFS) found that Chancellor Gordon Brown's tax credit give-aways were wiped out by rises in council tax and National Insurance.

The IFS's latest election briefing, Tax and Benefit Changes: Winners and Losers, concluded that the tax burden had gone up since Tony Blair came to power.

The findings will embarrass Labour, which claims to have made the public better off. Average take home pay is £148 lower than it would have been without the tax changes.

According to the IFS, the average two-earner couple with children will earn £850 less this year than they would have without the rises. If the same couple were unemployed, tax credits would make them almost £2,500 better off.

'Increases in council tax outweighs the give-away by central government and leaves households overall worse off,' the IFS's Mike Brewer said.

The Treasury refused to comment but a Government source said they did not take into account lower interest rates and lower borrowing costs. 'The average family with two children is £1,300 better off under Labour and the poorest family is £2,000 better off,' the source said.