Soaring council taxes rake in ?18.9bn

Households in Tony Blair's constituency of Sedgefield in County Durham will pay the highest council tax in Britain this year, yet the prime minister's neighbours in Westminster will enjoy the lowest charge in the country.

Research by Halifax, Britain's biggest mortgage lender, also found that council tax rises have far outstripped growth in prices and earnings since the charge was introduced by John Major 10 years ago this month.

The average council tax bill in England has jumped from £568 in 1993 to £1,102 this year, an increase of 94%, compared with an increase of 29% in prices and 50% in earnings over the same period.

In Scotland the average increase has been 81% - from £556 to £1,009 - while in Wales the tax has shot up by 155%, lifting the typical bill from £328 to £837.

In Sedgefield the average band D property charge for this year is £1,294. But a spokesman said the council was the butt of unfair criticism, as the lion's share of the charge goes to Durham county council, with Sedgefield borough picking up £161. "For every £1 we collect, we get only 13p," said a spokesman.

Sedgefield shares top spot with Newark and Sherwood district council in Nottinghamshire, also at £1,294 for a band D household.

The third and fourth-highest charges are being imposed by Easington district council in County Durham (£1,272) and Richmond upon Thames in London (£1,268).

At the other end of the scale is the London borough of Westminster, boasting an average band D charge of just £570. Another London borough, Wandsworth, has a charge of £584. Boroughs in Wales make up the majority of the low-charge councils.

The Halifax research also showed that this year's average 12.9% council tax increase in England is higher than in any previous year, and is more than double the 6% envisaged by John Prescott, the deputy prime minister.

In total, the taxman is expected to haul in around £18.9bn in council tax in 2003-04 compared with £7bn when it was first introduced.

Halifax chief economist Martin Ellis said: "The council tax is now an integral part of the UK general taxation system. Local government finance has become a minefield. Some councils argue that there is not a level playing field while central government believes that it caters for factors such as social deprivation when it allocates grants to local authorities."

Contrary to what many people might expect, a number of very big cities had managed to keep council tax charges relatively low, said Mr Ellis.

"Birmingham, Leeds, Liverpool, Manchester and Newcastle upon Tyne do well on this score," he added.

Some London authorities were among those with the highest charges in 1993, but in relative terms they have kept increases low over the past 10 years, said Mr Ellis. Examples include Hackney, Haringey, Camden and Islington, which all feature in the list of 30 areas with the smallest rises since 1993.

The government has indicated it might look at taking action against authorities which have posted record council tax increases. Mr Prescott said he was monitoring the finances of several councils to see whether he could justify ordering cuts in their budgets. He did not name names but the London borough of Wandsworth has imposed a 45% increase.

Mr Prescott said there was no excuse for huge rises because Labour had increased council funding by 25% since 1997. "In some cases they are what I consider to be excessive."

Average bill has doubled

· Council tax is 10 years old this month, introduced by then prime minister John Major in 1993 to replace the poll tax.

· The average council tax bill has doubled over the past 10 years, from £568 to £1,102, far outstripping the rise in inflation of 29%, and in earnings of 50%, over the same period.

· Ten years ago Wellingborough in Northamptonshire had the lowest council tax in Britain, at £245. Since then it has gone up 324%, the biggest percentage increase in Britain, with the average band D house now charged £1,037.

· The average bill in Wales is significantly lower than England and Scotland. Newport is lowest (£671), Neath Port Talbot highest (£1,030).

· In Scotland council tax is up 81% over the decade to an average of £1,009. Glasgow has replaced Edinburgh as the highest charger at £1,163, with the Western Isles ousting Shetland as the cheapest at £867.

· Authorities in the east, east Midlands and north-east account for 21 of the 30 highest charges. Authorities in Wales and the west account for 22 of the 30 lowest.

· The total revenue from council tax is projected to be £18.9bn in 2003/04, compared with £7bn in 1993/94.