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Last Updated: Thursday, 31 March, 2005, 09:16 GMT 10:16 UK
Lib Dems vow to ditch council tax
Charles Kennedy in front of election poster
The Liberal Democrats say council tax is unfair
Plans to replace the council tax are being unveiled by the Lib Dems, on the 15th anniversary of the poll tax riots.

The party says the council tax is unfair and should be replaced by a local income tax instead.

The party will launch its campaign with a bus tour in London - the day before a a mass re-assessment of council tax bands in England gets underway.

Labour says it would reform the council tax, while the Tories are offering pensioners a rebate on their bills.

Year-on-year increases in council tax have sparked protests, particularly from pensioners who, because they are on a fixed income, have been hardest hit by rises.

'Ticking time bomb'

On 1 April, 22 million homes in England will be revalued to determine which council tax band they should be in for the next 10 years.

The last valuation was in 1991, before house prices shot up.

A recent revaluation in Wales saw one third of properties move up one band or more.

Lib Dem local government spokesman Edward Davey said council tax was unfair.

"It hits pensioners and people on low and fixed incomes the hardest, and revaluation is going to make it worse."

He predicted that "with seven million families facing a 20% or more hike in their bills", protests against council tax would intensify.

The Lib Dems say Labour has ignored the "ticking time bomb" of council tax revaluation and called for the tax to be replaced with a new local income tax of the kind seen in the US, Norway and Switzerland.

It would be set locally, but administered by the Inland Revenue.

Alternative plans

The Lib Dems say the plans would benefit the typical household by more than 450 a year, with half of all pensioners paying no local tax and about three million being better off.

Labour says it would keep the council tax, but reform it. Chancellor Gordon Brown also offered pensioners a one-off 200 council tax refund in his Budget.

The Tories say they would offer households where all adults are over 65 years old a rebate covering up to half their bill - up to a maximum of 500.

Conservative local government spokesman Caroline Spelman said Lib Dem plans would hit the "typical working family".

"This isn't fairness - this means punishing families and pensioners who have saved hard for their security," she said.

"It is clear that if Mr Blair gains a third term, Labour will hike up council tax through fiddling revaluation and introducing new higher council tax bands," she added.

Local Government Minister Nick Raynsford said voting Lib Dem would help the Tories in "through the back door".

"The Lib Dems are not committed to 'axing the tax'. They want to replace it with a local income tax," he said.

"Far from offering tax cuts, the Lib Dem plans for a local income tax would hit hard-working families hardest."

The Scottish Executive is carrying out its own review of Scotland's local government finance including council tax and business rates.

How the political parties are tackling council tax

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