COUNCIL TAX RATE INCREASE

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Town hall chiefs fear that council tax will rise to pay for Labour’s push to teach immigrants to speak English. They believe the costs of the scheme, backed by Communities Secretary Ruth Kelly, are likely to fall on local taxpayers. Miss Kelly’s Commission on Integration and Cohesion is expected to support the idea of encouraging new migrants who speak no English to abandon their home languages in the interests of integration.

But a behind-the-scenes row is rumbling on over who will foot the bill. There are fears that local councils will have to find the cash. Local government leaders have complained that ministers have frozen the money Whitehall spends on the colleges which run courses in ‘English as a second language’. The move means that in future most working migrants will no longer get lessons free. Instead they will be asked to pay up to £100 a week for English courses. (Source: Daily Mail, Jun/07)

New research shows council tax bills in England have almost doubled since the charge was introduced 10 years ago. The average council tax on a band D home in England soared by 94% over the decade, according to a study published by Halifax to mark the 10th anniversary of the charge. The figures include this year's big increases which take the annual tax for a band D home in England through the £1,000 mark for the first time, to £1,102 in 2003-2004, compared with just £568 in 1993-1994.

The tax - which is based on the value of properties graded in bands from A to D, with A as the cheapest - was introduced by John Major's Conservative government in April 1993 to replace the poll tax. Halifax said the 94% rise in England is almost three times the rise in inflation over the period - which was 29%. But in Scotland the rise was lower at 81% - taking an average band D home from £556 to £1,009 over the same period. While the biggest rise in percentage terms was in Wales, where council tax soared 155% over the decade, council tax bills are still much lower.

The average tax for band D households in Wales in 2003-2004 is £837, compared to just £328 a decade before. England was also worst hit by this year's big rises, with average band D bills rising 12.9% compared to 9.9% in Wales and just 3.9% in Scotland, according to the Halifax calculations. The highest bills in the country are found in Newark and Sherwood in the East Midlands where the average band D charge is £1,294. But the lowest council tax charges in Britain are in Westminster in the heart of London where band D bills are just £570.

Council tax is to soar by another £100 a year for millions of homeowners because Gordon Brown has got his sums wrong, top analysts will warn. The Chancellor will be forced to order a ten per cent hike in council levies because consumers have stopped shopping. And he may even slap another 1p on National Insurance bills for every worker and employer in the country to fill a growing black hole. Britain’s economy has slumped to a ten-year low leaving Treasury coffers dangerously empty. The Centre for Economics and Business Research, is warning that Mr Brown must increase taxes to meet the shortfall AND cut £2billion from his spending pledges.

Putting up taxes still further would be another hammer blow to Tony Blair’s election hopes. The latest growth figures reveal Great Britain plc expanded by just 0.1% in the first quarter of the year. And the nation’s annual growth will fall dangerously short of Mr Brown’s Budget forecast of 2.5%. This means his public spending spree is under threat because he won’t have the cash. Council tax has already soared under Labour and the average tax on a Band D property in England could now rise from £1,102 to £1,200.

Millions of householders face massive hikes in their council tax bill with soaring house prices pushing many properties into a new tax band. Currently the tax is calculated using the 1991 value, but this will soon be updated to the 1 April 2005 value. In and around London will be hit hardest, says the Lib Dem study, which uses the Halifax house price index. Other parts of England affected are the South West, where 81% of homes outstrip the national average, and in the East. The government has called for a reassessment to bring charges into line with the housing market boom over the last 14 years. They will come into force on 1 April 2007.

It is claimed some homes could jump two or even three price bands, adding £600 to their bill in a year. In the South East four out of five town have seen prices rise above the national average, Witham, Whitstable, Littlehampton, Tring, Berkhamsted, Brighton and Hove, Teddington and Hatfield have seen the biggest rises so will be the biggest council tax losers. Bills could rocket by £300 in more than 60 regions in London and the South East, according to the Lib Dems. In the South West, Yeovil, Redruth, St Austell, Newquay, Barnstaple, Helston and Camborne, face the biggest hikes.

While in the East, two-thirds of towns have seen house prices rise above the average, with Wymondham, Diss, Stowmarket, Haverhill and Bury-St-Edmunds set to be hardest hit. Ed Davey, Lib Dem local government spokesman, said, "Labour is set to turn the warm glow of house prices into a post-election tax time bomb. The government claims council tax revaluation will make the system fairer. But this research shows it will be arbitrary, random and unfair. People are about to be penalised for the market forces that have pushed up house prices. Revaluation is a typical Labour stealth tax."

He added, "Millions of families will see their council tax bills rocket once the election is over but ministers have refused to come clean about it." A spokesman for the Office of the Deputy Prime Minister said, "The system is based on 1991 values. And that isn't fair, or rational. Revaluation isn't about raising more money overall, we've made that quite clear. Anyone whose home has risen in value in line with averages is unlikely to pay more tax. We will have a transitional scheme to protect those whose property has risen by more than average. Council tax benefit is available for those who have difficulty paying. And we have made quite clear that we will take action against councils who set excessive rises in council tax."

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