Council tax bills have soared by three times the rate of inflation and twice the rate of earnings over the past decade, according to research released today.

The study into how council tax has changed since 1997 found that the average bill has increased by 91 per cent from £564 to £1,078. Over the same period, the retail prices index, the measure of inflation that includes housing costs, has increased by 31 per cent while average earnings have grown by 51 per cent.

The survey found that more than half of all areas have seen council tax double since Labour came to power. The biggest percentage increase was in Monmouthshire (184 per cent) followed by Powys (150 per cent), suggesting that the revaluation of council tax bands in Wales in 2005 has contributed to higher bills.

The lowest increase was in West Dunbartonshire in central Scotland, where bills have risen by just 21 per cent from £761 to £920.

Opponents of council tax seized on the survey as evidence that local taxation needs reform. Andrew Stunell, the Liberal Democrat’s spokesman for communities and local government, said: “Council tax is a deeply unfair tax. It penalises the poor and wrongly rewards the rich. Hard-working families and pensioners are being squeezed. All over the country, councils struggle to make ends meet because of Gordon Brown’s refusal to scrap council tax and bring in a tax based on people’s ability to pay.”

The survey, by Halifax, also uncovered some surprising regional variations in the amount households are paying. Residents of the London Borough of Wandsworth pay the lowest council tax in the country, with an average bill of just £641. Four miles down the road, in Richmond upon Thames, residents face the highest average bill in the country at £1,665. Regionally, average council tax bills are highest in the South East at £1,255 and lowest in Wales at £871.

Edward Lister, the leader of Conservative-run Wandsworth Council, said his borough maintained a low council tax by keeping a close eye on costs. “We have spent the last 25 years constantly reviewing services and making sure that nothing costs more than it needs to without sacrificing standards of service.”

Cormac Smith, a spokesman for Liberal Democrat-controlled Richmond Council, said it was unfair to compare council tax rates because they varied greatly depending on the level of central government funding. “We are not a spendthrift authority. In fact, we have one of the lowest levels of spending per head of population and the Audit Commission recently gave us the highest score possible for value for money. But because we are a relatively affluent area, we receive one of the lowest grants from central government, meaning that we have to raise a lot more money through tax than other boroughs.”

The average London borough gets about 50 per cent of its funding from the Government but Richmond receives only 19 per cent. Local authorities in the main cities of northern England and Scotland, such as Liverpool, Manchester and Glasgow, also receive large subsidies from central government and feature prominently among the areas that have experienced the smallest percentage increases in council tax.

Stephen Knight, the deputy leader of Richmond council, said the Government had skewed its funding criteria to favour traditionally Labour-supporting areas. “The very fact that most government ministers represent constituencies in the north suggests some form of policy bias in the way resources are allocated,” he said.

Last year £23.8 billion was raised through council tax, an increase of 138 per cent on the £10.5 billion raised in 1997. The increase is the equivalent of a 3p in the pound rise in the basic rate of income tax.

Hate rate

75 Age of Richard Fitzmaurice, the oldest person jailed for nonpayment of council tax

28 Number of days Alfred Ridley, 71, was jailed for not paying a £63 council tax bill

69 Percentage of authorities where the average council tax bill is more than £1,000

100,000 Number of pensioners on low incomes who are in the highest council tax bands

1.8m Downloads of council tax appeals guide

Sources: Help the Aged, Joseph Rowntree Association and Halifax

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