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Last Updated: Sunday, 29 October 2006, 19:16 GMT
Row over 'nice areas' tax claim
Council tax bill
England's council tax system is under review
Peter Hain has dismissed claims the government is to base council tax bills in England on how "nice" areas are.

He said taxing people on the value of their homes would only happen in Northern Ireland where there was a different local government system.

But the Tories say sophisticated software is also being used to study factors affecting English house prices.

"Why are they collecting all this data on schools and crime if they don't intend to use it?," a spokeswoman said.

Information used to set council tax bills in England is currently based on house prices in 1991.

But the government is carrying out a comprehensive review of the system, led by Sir Michael Lyons, which is due to report in December.

In Northern Ireland, we are introducing a new arrangement to replace one which is three decades old and clearly unfair to those on lower incomes
Northern Ireland and Welsh Secretary Peter Hain

The Tories have discovered through a series of parliamentary questions how the government uses sophisticated software to analyse forces affecting the housing market in England and rank neighbourhoods accordingly.

The system is currently less advanced than the one used in Northern Ireland but every home in England will still have a "locality adjustment factor" built in to their council tax bill, the Tories say.

'Invasive system'

If the government decides to go a step further and replace England's banding system with an annual bill levied at 0.78% of the value of each property, areas with good schools and low crime rates could see their council tax bills quadruple, the party claims.

Caroline Spelman, shadow secretary of state for local government, said: "If Labour introduce this invasive system fully in England, your council tax bill will depend not just on the features of your house, but whether you have good schools or clean streets, and whether you have low or high rates of crime.

"This is the hallmark of an oppressive and greedy government - finding ever more stealth ways to tax working families and pensioners, and trampling over privacy when it suits them."

But Mr Hain said it was "Westminster politics of the most juvenile kind" for the Tories to claim the government was about to introduce such a system in England.

"In Northern Ireland, we are introducing a new arrangement to replace one which is three decades old and clearly unfair to those on lower incomes.

"The decision to base rates on the value of homes emerged after a period of consultation and had its genesis in the last Assembly.

"It is tailor-made for Northern Ireland's different local government finance system and there is no read across for the rest of the UK," said Mr Hain.

Northern Ireland does not have council tax - rates will be paid on the basis of the value of domestic property from April 2007.

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