A taxing time for residents hard hit by rising charges

A survey of the first 10 years of the council tax shows interesting winners and losers

Wellingborough in Northamptonshire was revealed yesterday as the UK's unluckiest council tax area. In the 10 years since the then Prime Minister, John Major, introduced council tax to replace the hated poll tax Wellingborough's average payment has risen by 324 per cent – the biggest increase in the country and more than twice as much as the next hardest hit, Tewkesbury, Gloucestershire.

It may be more than coincidence that Wellingborough's parliamentary constituency has switched from Conservative to Labour since council tax first appeared. And in 1996 Mr Major famously criticised Wellingborough's local authority for raising council tax by 58 per cent, wrongly labelling it as Labour-controlled when it was still in Tory hands.

However, a clutch of London authorities, including Wandsworth, Greenwich, Islington, Lambeth and Camden are among the 10 to boast the lowest council tax increase over the decade. In Wandsworth, south of the Thames, the annual tax in band D has risen from £449 in 1993 to only £584 for the new tax year. Band D is used as the basis for setting an area's tax because it lies in the middle of the range. The other bands are then a percentage of that rate.

The exhaustive survey into the first 10 years of council tax has been carried out by Halifax, the mortgage division of the HBOS banking group. Martin Ellis, Halifax's chief economist, said: "Our analysis demonstrates that there has been considerable change over the last 10 years, particularly with regard to those councils charging the highest bills. Local government finance is a minefield. Some councils argue that there is not a level playing field, whilst central government believes that it caters for factors such as social deprivation when it allocates grants to local authorities. There is no doubt that these disputes will continue."

The research shows that more councils in Wales than anywhere else in Britain have low council tax charges, while Scottish ratepayers also do better than their English counterparts.

"Contrary to what many people might expect," Mr Ellis said, "a number of very big cities have managed to keep council tax changes relatively low. Birmingham, Leeds, Liverpool, Manchester and Newcastle upon Tyne do well on this score."

Not only have parts of London enjoyed the lowest increases in the past decade, a number of other councils in the capital have the lowest charges, led by Wandsworth and Westminster. These have both been run by Tory councils elected on the basis of keeping costs low, and Westminster has the benefit of collecting more revenue than other boroughs from parking and other tourist-related charges. Westminster's low band D rate is also partly due to its high incidence of high-priced houses in bands G and H. However, Havering, Harrow, Kingston upon Thames and Richmond upon Thames in Greater London are among the 30 authorities with the highest charges.

Over the last 10 years the average area council tax bill in England for a band D property has increased by 94 per cent to £1,102, making this the first year in which the figure has been above £1,000. This compares with a 29 per cent rise in retail price inflation over that period. And, as council tax is an element in the price index, it has itself helped to push even that figure up higher than it would otherwise have been.

The average area tax bill for a band D property in Scotland has risen from £556 a decade ago to £1,009 in 2003/04, an increase of 81 per cent. The average in Wales has gone up 155 per cent, more than other parts of Britain, but it remains lower than in England or Scotland.

In England in 1993, Newcastle upon Tyne and Greenwich had the highest charges, at £792 and £783 respectively. Now, Sedgefield and Newark and Sherwood take that unwanted title jointly, at £1,294 for a Band D property in 2003/04.