Lib Dems pledge to scrap 'unfair' council tax

The Liberal Democrats have vowed to scrap the "unfair" council tax, on the 15th anniversary of the poll tax riots.

The party said that the council tax should be replaced with a local income tax, based on the ability to pay.

The Liberal Democrats announcement comes ahead of the revaluation date for future council tax bills for homes in England and Scotland. Council tax bills are due to be set for the next ten years, based on property prices as of April 1, 2005.

The Liberal Democrats say that scrapping the council tax would save an average family around £450 per year, compared with Labour and Conservative plans to re-band homes to take house price inflation into account. The party says that this has led to council tax bills rising by as much as 22% on top of annual increases in Wales.

Mike German, leader of the Liberal Democrats in the Welsh Assembly, said: "This increase bears no relation to income or ability to pay. 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. That is why more and more people are coming to the conclusion that the council tax must be scrapped."

Liberal Democrat local government spokesperson Edward Davey said: "Fifteen years ago, the unfairness of the Poll Tax led to rioting in the streets. Council tax has already brought out the protestors, but with 7 million families facing a 20% or more hike in their bills, the protests are going to get worse. 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."

Both Labour and the Conservatives have already announced plans to offer council tax rebates to pensioners in a bid to woo the grey vote.

Chancellor Gordon Brown announced plans to give pensioners a £200 council tax rebate in the recent Budget, while Conservative leader Michael Howard pledged to give all households where both adults are aged 65 or over, a rebate of up to half their bill, up to a maximum of £500, in February.

Commenting on the Liberal Democrats announcement, Labour Local Government minister, Nick Raynsford, said: "The Lib Dems' are not committed to 'axing the tax', they want to replace it with a Local Income Tax. Far from offering tax cuts, the Lib Dem plans for a Local Income Tax would hit hard working families hardest. For a couple on average earnings with a combined income of £41,000 this would mean an increase in income tax of £1,170. Compared to an average council tax per dwelling of £908 this would leave a couple on average earnings over £260 worse off under Liberal Democrat plans."

(KMcA/SP)