Families in large houses win most from council tax freeze

George Osborne's council tax freeze will benefit families in large homes more than families in smaller houses, research showed today.

Londoners living in the top council tax band properties stand to gain an average of £131.52 while those in the lowest value homes will benefit by only £43.84, a leading charity found.

The average saving across the capital for people in Band D homes - a standard measure of council tax - will be £65.76 or just £1.26 a week next year, according to Family Action.

The Conservatives said average families would save up to £72 a year when Mr Osborne hailed his tax break at the party conference last week. The Chancellor said the £805 million move - the second year in a row that council tax has been frozen - was "help for families" at a time when household bills are soaring.

But the Family Action chief executive Helen Dent said: "Low income families living in the poorest neighbourhoods of the capitals will find their saving buys them a great deal less than those living in its smartest suburbs."

Shadow Treasury chief secretary Rachel Reeves said ministers were "out of touch" if they thought the sums would help offset the impact of the Government's VAT rise, which Labour claims adds £450 a year to family bills.

But a Treasury spokesman said: "This means real help in difficult times for households in London and could save taxpayers living in an average Band D home up to £72 next year."