Millions 'face council tax hike'

COUNCIL tax has again become a key General Election issue as independent experts warned that seven million homes face paying hundreds of pounds a year more under Labour plans.

A survey by the Royal Institution of Chartered Surveyors predicted that one in three households in England would be sucked into higher council tax bands.

The Institution's chief economist said many could leap not one but two bands after the controversial revaluation exercise is completed. RICS research suggests councils will collect an extra £2.04bn in tax every year from 2007.

Prime Minister Tony Blair has been thrown on to the back foot over council tax by Michael Howard's pledge to save families hundreds of pounds a year. The Tory leader announced last week that he would scrap Labour's revaluation of homes if he wins the General Election on 5 May. His surprise announcement electrified the election campaign and left Labour floundering over its own plans for council tax reform.

Ministers insist the council tax revaluation will be 'revenue neutral' and is not intended to increase the amount of money raised, but the Tories insist it will be used to fill Labour's spending black hole - with rises in bills postponed until after the election.

They say the typical band D home, moving up to band E, will face a hike of £270 a year - on top of annual increases levied by local authorities. The Tories are also pledging to halve council tax bills for pensioner households, up to a value of £500 a year.

The RICS survey calculated what would happen in England if the Government's revaluation followed the pattern established in Wales, where all properties have been revalued and revised bills are being sent out this year.

It concluded that under an identical exercise in England, about a third of homes would move up at least one band, while only 8% would move down.