Tory curb on council tax

MILLIONS of homes will be spared a typical council tax hike of £270 a year under Tory plans to be unveiled today. Michael Howard will promise to stop Prime Minister Tony Blair's next stealth tax rise in its tracks by scrapping a revaluation of homes in which 7m properties are expected to move up a band.

The Conservatives say home owners are being kept in the dark about the scale of the huge council tax increases until after the General Election.

The Government's revaluation, which starts this year, is expected to bite hardest in the South, where house prices have soared in recent years. Bills are likely to rocket in four out of every five towns.

In a major policy announcement that will delight the party faithful and put tax at the heart of the election campaign, Howard will pledge to scrap the revaluation for the lifetime of the next Parliament if the Tories win power on 5 May.

There is already widespread anger among council taxpayers who resent a 70% rise in their bills since Labour came to power in 1997. Tory aides hope their new policy will win voters.

The only purpose of the revaluation, Howard will argue, is for Labour to 'raise tax revenues by stealth'. The Tories say Labour has timed the revaluation so the full impact of the change is not realised until after the election. They claim the Government is aiming to rake in an extra £ 1.8bn through council tax to help plug the black hole in its own spending plans.

Howard said: 'Under Mr Blair, millions of families have been hit by soaring council tax. His plans for revaluation would mean even higher bills. I believe in rewarding families who work hard and do the right thing. So I am going to stop Mr Blair's next stealth tax by cancelling revaluation.' He added: 'There will be a clear choice at this election - higher taxes under Mr Blair or lower taxes with the Conservatives.'

This year's revaluation - the first since the council tax was introduced in 1991 - will take account of house price rises since then. If Labour wins the election, bills reflecting the revaluation will be issued from April 2007.

The Government has signalled that anyone whose home has risen in value by more than the average rate - 160% since 1991 - will move to a new band. In the South West, 81% of towns have seen house prices rise by more than the national average since 1991. In the South East, the figure is 78%, and in East Anglia it is 66%. By contrast, in the Labour heartland of the North East, there are no towns which have seen prices rise faster than the average.

The Tories' figures suggest a total of 7m homes in England - one in three - will move up a band. An average Band D home in England moving up to Band E can expect a tax hike of 22%, from £1,214 to £1,484 - a rise of £270 a year, they say.

The figures show a revaluation of properties already carried out in Wales has led to an average 9% rise this year - five times the rate of inflation. A third of homes in Wales were moved up to a more expensive band, with only 8% moving into a less heavily-taxed category.

The Tories say the experience of council tax payers in Wales demolishes Government claims that average bills would not rise because of revaluation. Their figures - provided by the Welsh Assembly local government finance statistics unit - show a rise in average council tax bills of 9.1% this year across Wales.

The rise in some parts of the principality was more than seven times inflation, even though price rises there have been less than in the South of England.

Council tax under Labour has increased by more than 70%, provoking localised protests across Britain among the elderly. Pensioners on fixed incomes have been among the worst hit as average council tax bills have broken through the £1,000 a year barrier.

The Tories have already committed themselves to using £1.3bn of their tax cuts to pay for a 50% council tax discount for all pensioners over 65, up to a maximum of £500.

Carrying out the Government's revaluation will cost an estimated £100m over the next two years - money which the Tories say would be better spent on improving schools and hospitals.

Local government minister Nick Raynsford accused the Conservatives of ' scaremongering' on council tax. He insisted the impact of revaluation in Wales could not be used as an indicator of the consequences in England.

'Council tax revaluation is not about increasing the overall take in tax,' he said. 'Wales has always had different council tax bands from England and what is happening in Wales should not be in any way seen as a precedent for England.'

But the Liberal Democrats' local government spokesman Edward Davey - who set out his party's plans to replace council tax with a local income tax - claimed council-tax revaluation would be a 'massive tax bombshell for millions of English families'.