PRESS RELEASE

26 September 2003

New threat of council tax hikes from Whitehall

Richard Ottaway, Conservative MP for Croydon South has warned that council tax bills across Croydon could soar yet further under new laws recently passed by the Government. The Local Government Act 2003 gives Whitehall new powers to change the banding of council tax, and levy extra charges on higher-valued homes across England. As a result; council tax bills in Croydon could top £2,900 a year.

Richard Ottaway says:

"Across the country, council tax has soared by three times the rate of inflation every year since Labour came to power. In Croydon, council taxes have risen by £461 since 1997 on Band D bills. But worse could be to come.

"The Labour Government, supported by Liberal Democrats, is planning to increase council taxes on higher valued homes by changing the banding of council tax. Someone in a Band H home in Croydon could see their council tax bill go through the roof, reaching up to £2,900 a year. Whitehall will snatch back the extra revenue, so local services will not benefit in any way.

"This will hammer pensioners and families who have lived in their homes for a long time, the value of whose homes have risen, but who are on modest incomes and cannot afford even larger bills.

"This will hit a substantial number of homes in the Croydon South consituency. Labour and Liberal Democrats are turning council tax into a stealth tax - engineered in Whitehall but with local councillors taking the blame."

Notes to Editors

• The Local Government Act 2003 received Royal Assent on 18 September 2003.
  http://www.hmso.gov.uk/acts/acts2003/20030026.pdf
  Section 78 gives the Government power to change council tax bands as it sees fit. Currently households in Band H pay 200% that of Band D rates. It is feared the banding will be changed so the top Band could pay 267% of Band D.
  
  
• In Wales, the Welsh Assembly Executive has already used changes in bands to increase council tax. On 24 September 2003, Labour announced plans to alter the bands, including introducing a new top 'Band I' on high-valued homes. At least 1 in 4 homes will pay more. (Source: http://news.bbc.co.uk/1/hi/wales/3136302.stm)
  
  
• Conservatives in Parliament opposed these new powers - Labour and Liberal Democrats voted to support them.
  (Lords Hansard, col. 339, 10 September 2003).http://www.publications.parliament.uk/pa/ld199900/ldhansrd/pdvn/lds03/text/30910-13.htm
  
  
• Liberal Democrats have long supported these new bands. As they have said, "Liberal Democrats are calling for its [council tax] replacement with a Local Income Tax that will be charged according to ability to pay. As an early first step, the government should increase the number of bands at both ends of the council tax scale. Councils should be free to set the banding for council tax at levels appropriate for their area" (Don Foster MP, A Liberal Democrat Vision for Local Government, December 2001, section 1.4).
  
  
• One can check which council tax band a property falls under on the Valuation Office's website.http://www.voa.gov.uk/cti/InitS.asp?lcn=0