The impact of council tax reform on localism
Author: Tom Forrest, Public Finance |
Localis’ Alex Thomson warned at a recent Joseph Rowntree Foundation debate that localism would be the victim of a proposed national property tax.
At the debate, former Labour local government minister Nick Raynsford MP stated that council tax reform will require a government with a substantial majority and possibly a two-term timeframe.
‘The chance for reform relies on a government with a very large majority,’ he said. ‘The only way that the poll tax could have been brought in was with a government with a 100+ majority.’
Raynsford was a member of an expert panel at a Joseph Rowntree Foundation debate to discuss a report examining a national property tax.
The report suggested that council tax was ‘decaying and lacks credibility’. Professor Mark Stephens, one of its authors, told the debate that the tax was seen as ‘unfair’ and ‘absurd’ because of the lack of a revaluation of properties since 1991 in England.
Co-author Professor Chris Leishman suggested that two-thirds of people could pay lower bills if a progressive national property tax were introduced.
Stephens and Leishman, both from Edinburgh’s Heriot-Watt University, discussed two versions of a property tax: one at a fixed rate of 0.65% of a property’s value and a more progressive alternative, with rates varying from 0.43% to 0.83%.
But Raynsford, who was local government minister from 2001 to 2005, pointed out the political problems with reforming local taxation. He highlighted figures in the report showing that households in London could end up paying 85% more.
‘Just think about the implication of that – how would it play in the [London] Evening Standard and in our London-centric media?’
Annette Brooke, Liberal Democrat MP for Dorset and North Poole and another member of the panel, admitted that she could be ‘seduced by a tax on the wealthy’. But she was ‘wary’ of the property tax approach.
Brooke, who is also co-chair of the LibDem Parliamentary Committee on Communities and Local Government, felt that London would not be the only area to suffer. ‘There are pockets in the South West that could be discriminated against,’ she told the debate.
Final panel member Alex Thomson, chief executive of the Localis think-tank, said that localism would be the victim of a national property tax.
‘The link between money raised and spent locally could be undermined,’ he added.