Islington Council Tax bills to rocket after election, warn Liberal Democrats

10.26.51am BST (GMT +0100) Thu 31st Mar 2005

Council Tax payers in Islington face a post-election tax bombshell from the Government, Liberal Democrats warned today.

Liberal Democrats brought their Axe the Tax campaign bus to Islington to warn voters that the Government's revaluation will make Council Tax bills rise by £200 or more because house prices have risen so fast in the area. The Liberal Democrats want to see Council Tax axed and replaced with a fairer local income tax instead.

Council tax is currently based on property values in April 1991 but the government is updating its valuation figures to take account of changes in property prices since then.

Islington will be the worst-hit because house prices have risen faster in the borough than anywhere else in Britain.

House prices in Islington have risen 368% since 1991, according to the latest research from the Halifax House Price Index.

Property prices TOMORROW will be the basis for Council Tax bills for the next 10 years.

Anyone whose home has gone up more than the national average since 1991 will be moved into a higher tax band. That means bills will rise by up to 22%.

In Wales, where revaluation has already happened, some families will see their council tax bill TREBLE. That could be repeated across Islington, because of house price inflation.

Liberal Democrat prospective parliamentary candidate for Islington South and Finsbury Bridget Fox said:

"Council Tax is unfair, but revaluation is going to be a disaster for the people of Islington. Bills will rise hundreds of pounds, with homes moving up three, four, or even more bands."

Liberal Democrat prospective parliamentary candidate for Islington North Laura Willoughby said:

"Islington will suffer more than anywhere else in the country under Council Tax revaluation. That is simply not fair. It's time to scrap the Council Tax and introduce a fair system based on ability to pay."

Liberal Democrat local government spokesman Edward Davey, MP for Kingston and Surbiton 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 whole Council Tax system is bust. Liberal Democrat plans for a local income tax would cut the typical family's bill by around £450 a year."

The Facts

Islington has seen house prices rise the fastest, increasing 368% since 1991. It is followed by Camden, at 365%, Westminster and Kensington & Chelsea at 349%. Current council tax bills are based on property value 1 April 1991. Council tax bills from April 2007 will be based on property value 1 April 2005 Areas where house prices have risen faster than the national average (175%) are likely to have homes moved into higher tax bands. Labour and Conservatives are committed to revaluation. Caroline Spelman, Conservative local government spokesman: 'Of course we understand that a property based tax has to take account of changes in the value of property. (Hansard, 2 March, col 992) In Wales, where revaluation has already happened, 33% of homes were moved into higher bands, but only 8% of homes moved down a band. 3 homes were moved up 8 bands, trebling their council tax bill.