NO HOUSEHOLD in England will face an increase above #3.50 a week when

the council tax replaces the community charge next year, most increases

will be less and many people will be better off than under the poll tax,

the Government indicated yesterday .

Introducing the Government's financial settlement for the first year

of the tax Mr Michael Howard, Environment Secretary, told the Commons

that English councils would be allowed to spend #41.1 billion, 3.1% more

than last year (about #1.2 billion). Government assistance would amount

to #33.5billion, up by 3.7% (also about #1.2 billion).

Scottish Secretary Ian Lang will make a similar statement next week.

Mr Howard said that, provided councils observed the Government's pay

target of from nil to 1.5% rises, there was no reason why jobs should be

lost or services cut.

He said a system of transitional relief would mean that no household

in the lowest value band of housing would pay more than #1.75 above

their last community charge bill.

Reliefs in the other eight bands would rise in 25p-a-week steps to a

maximum of #3.50 in the most expensive properties- in England homes

worth more than #320,000.

A notional council tax for houses in band C -- most English homes are

in bands A to C -- would be #439, Mr Howard said, but he emphasised that

this was not a prediction of a national average as it was up to each

council to set its own local tax. The figures for Scotland will be

different.

Mr Jack Straw, the Labour spokesman, predicted cuts in jobs and

services. His criticisms were echoed by other Labour MPs, but Tories

confined themselves to either praising the new tax or pleading

particular cases for their own

local authority.

The atmosphere was much less frenetic than in the days of the poll tax

and Mr Howard made the point that his meetings with leaders of Labour

local authorities convinced him that they mostly want the new tax to

succeed unlike the Labour Opposition in the Commons.