Labour MPs call on Reeves to scrap council tax
A group of Labour MPs has called on Chancellor Rachel Reeves to consider scrapping the council tax.
Thirteen MPs, mainly from seats in northern England, wrote to Reeves last month asking her to abolish the tax and replace it with another system that better accounts for the steep rise in house prices in London and the south-east over the last 35 years, the Guardian reports.
“If we are to succeed in our mission to transform Britain and fight back against Reform, we must be bold and embrace new ideas that put more money back into the pockets of working people,” the letter states.
“One place we can start is by looking at ways we can abolish the outdated, deeply regressive, and increasingly indefensible council tax system.
“Created in the early 1990s and still based on property valuations from 1991, it bears little resemblance to the realities of today’s housing market. The result is a system that punishes communities like ours in the nations and regions outside London and the south-east.”
Economists have argued for years that the council tax in the UK was rushed in and badly thought out.
Councils in England are being asked to deliver more than ever before, without adequate funding to allow them to do so effectively, a new report by the cross-party Housing, Communities and Local Government (HCLG) has found.
The report, which was published in July, found that the broken link between tax and service quality is leading to a growing dissatisfaction among residents and risks undermining trust in local democracy in England.
The report also points to widespread cuts to preventative services over many years, having exacerbated the financial crisis in local government.
The report recommends the Government overhaul council tax, “the most unfair and regressive tax in use in England today”, and look at greater fiscal devolution, allowing councils to set their own forms of local taxes, such as tourist levies, to help make the local government system fair and effective.
“When residents are paying more and more in taxes but seeing less and less in regular, everyday services, such as libraries and fixing potholes, then trust in local democracy is at risk of being undermined,” said Florence Eshalomi, Chair of the Housing, Communities and Local Government (HCLG) Committee.
“Government in England is overcentralised. The current financial pressures on local government are also driven largely by mandatory, high-cost, demand-led services, such as social care and SEND, where councils have little control over these needs. Councils are trapped in a straitjacket by central government, with local authorities lacking the flexibility or control to devise creative, long-term, preventative solutions which could offer better value-for-money.”
