Lib Dems detail plans to scrap council tax

The Liberal Democrats have today been setting out their plans to replace council tax with a local income tax.

The party says scrapping the tax would lead to a reduction of around £450 a year in the typical family’s bill, and contrasts it with Labour and Conservative plans to re-band homes for council tax to take account of house price inflation.

It comes a day ahead of the revaluation date for council tax. Property prices as of 1 April 2005 will form the basis for council tax bills for the next ten years.

This will affect areas where house prices have risen faster than the national average, because homes in these areas are likely to be moved into higher tax bands.

In Wales, where revaluation has already taken place, council tax bills have risen by 22 per cent on top of the annual increases, according to the Lib Dems.

Liberal Democrat local government spokesman Edward Davey said: “Council tax is simply unfair. It hits pensioners and people on low and fixed incomes the hardest, and revaluation is going to make it worse.”

He added: “Both the other parties try and deny it, but they simply have no solutions to the ticking time-bomb of spiralling council tax bills. The biggest post-election tax rises will come from the Labour- and Tory-backed plans for council tax re-banding.”

Mike German, Lib Dem leader in the Welsh Assembly, said the 22 per cent increase in Wales bore no relation to income or ability to pay.

He added: “The whole revaluation process is random and arbitrary, with some poorer areas seeing bills rise by hundreds of pounds, while some richer areas get tax cuts.”

The Liberal Democrat’s pledge also comes 15 years to the day after the most prominent of the poll tax riots.