Council Tax debacle - revaluation cancelled

5.28.00pm UTC (GMT +0000) Sat 24th Sep 2005

The government dare not face the consequences of even higher Council Tax bills in England. It has cancelled the planned revaluation of property values on which the tax is based. Liberal Democrats campaigned against Council Tax in the general election. They demonstrated that the revaluation of property values in Wales had lead to big increases there.

Liberal Democrats warned that revaluation in England, especially in areas such as Bucks where house prices have risen faster than the national average, would mean many taxpayers moving up one Council Tax band.

An increase of one band means about a 20% increase in Council Tax, quite apart from any inflationary increase from year to year.

Labour ministers originally said that they wouldn't cancel the revaluation but they now understand the full impact of the increases and have postponed the revaluation exercise until after the next general election.

This means that Council Tax will still be based on 1991 property values and not on your ability to pay in 2005. We say that Council Tax is fundamentally wrong, unfair, and out of date. We want it scrapped and replaced by a Local Income Tax.

That would benefit millions of pensioners and others on low incomes. Families whose total income exceeded about £38000 per year and lived in an average Band D home would pay more under the Liberal Democrat proposals. However we know that some of those families would see their retired parents paying less than now.