Appeals may cut council tax base

TOWN HALLS received a flood of inquiries yesterday from householders anxious to discover how high their council tax might be as Labour predicted that the 'chaos and injustice' of the new system would surpass that of the poll tax.

Valuations went on display at local councils throughout the country, with councillors and officials predicting a large number of appeals against the eight bands. Appeals cannot, however, be lodged until 1 April.

The Association of District Councils said that some people were angry when they discovered they could not appeal immediately against the valuations - based on April 1991 prices - and there was no guidance available from the Department of the Environment on how to appeal.

The Government is expecting about a million appeals against the 19.5 million valuations in England - compared with about 500,000 after the last English rate revaluation in 1973.

Those households facing the biggest losses in the switch from the poll tax next April will be protected by transitional relief. For them, a successful appeal down a band in the first year will save only 25p a week, or pounds 13 a year. That saving, by being in a lower band, could rise sharply as transitional relief, amounting to pounds 340m this year, winds down in succeeding years, but, of course, the bill itself will rise.

One worry for councils and ministers, however, is that large numbers of successful appeals would cut the tax base, pushing up average bills.

Margaret Beckett, Labour's deputy leader, predicted 'millions of appeals', saying the banding 'will be a devastating reminder of the way the Government has let people down by pursuing policies which have destroyed the value of their only major asset'. House prices had fallen in many areas and by about pounds 11,500 in Greater London alone.

Sir Rhodes Boyson, Tory MP for Brent North and a critic of the tax, said: 'I suspect that in the north country it will be a very favourable settlement for practically everybody. There are difficulties in London and the South-east which can only be solved by switching more money from the North to the South.'

The valuations were released as local authority associations, which have been computing last week's grant figures, warned that scores of councils would have to cut spending or keep it well below the inflation rate because of the harshest capping regime imposed by Government. Councils will set their tax levels next year.

Service cuts and job losses are inevitable in some councils, finance officers believe, even if the government recommendation for wage rises of 0-1.5 per cent holds. The Association of County Councils said spending was so tight that the 4.9 per cent fire brigade pay deal, agreed last month before the grant settlement, could push some councils over capping limits.