- Written by Jack Fenwick
- bbc politics
image source, Getty Images
A group representing northern businesses has called for a complete overhaul of England's council tax bracket to solve the council's financial crisis.
The Northern Powerhouse Partnership (NPP) argues that the decades-old valuation of assets on which bands are based needs to be reworked to make them more fair.
The government is asking Prime Minister Jeremy Hunt to commit to a reassessment in his budget in March.
The government has said there are no plans for a nationwide reassessment of bands.
NPP chief executive Henri Murison told the BBC that the current local tax system is “essentially broken”.
In a letter to Mr Hunt, he said the Treasury should carry out a revaluation of all homes in England before the next general election, expected later this year.
The NPP's proposed overhaul also includes higher bandwidth for expensive foreign-owned real estate to level the playing field between wealthier and poorer councils.
Current council tax ranges are based on property values in 1991 for England and Scotland, 2003 for Wales and 2005 for Northern Ireland.
The NPP, set up by former chancellor George Osborne to promote economic growth in the north of England, says the current banding is unfair.
In a letter to the Prime Minister, Mr Murison said the changes would address “the emergency needs of local authorities, particularly councils with the lowest tax bases and greatest needs”.
This week the government announced an extra £500m to Parliament next year, which Mr Murison said was “a start, but far from enough”.
The NPP says a Hartlepool homeowner living in a home worth £150,000 pays more than £200 more in council tax a year than a homeowner living in a home worth £8m in Westminster. Ta.
Mr Murison admits “it will actually take a long time to resolve the issue”, but is calling on the government to make council tax more fair within local authorities before the next general election.
“At the moment you could be living a short distance from someone else’s house in a house worth twice as much and potentially paying less council tax,” he added.
“And that's not very fair to future people, right? And that could be resolved relatively easily and quickly if the reassessment work was done.”
Local Government Secretary Michael Gove, who is responsible for UK council taxation, has announced that the system will be reviewed in November 2022.
But a year later, a cabinet minister told MPs that “no review has taken place in a formal sense.”
Mr Murison said Mr Gove had been a “great reformer” but had been “a bit thwarted by his colleagues in government” in the area of ”smoothing out” economic disparities between regions.
“If he had been given free rein, I think he could have gotten tax reform in the Legislature before the general election, but I'm not sure Number 10 necessarily has as much reform enthusiasm as Michael.”
The NPP is also calling for an additional council tax allowance to be created for foreign-owned properties worth more than £2m.
They will be known as superbands and their funds will be redistributed to councils across the country, the group suggests.
“Physically impossible”
Conservative Lord Pickles, who served as Communities and Local Government Secretary in David Cameron's government from 2010 to 2015, said council tax reform would be “hugely unpopular”.
He told the BBC: “There should be reform. Reform is long overdue. There should be a reassessment, business rates should be reformed, because if you don't reform one, you won't reform the other. Because I can't do it.”
“And governments have avoided doing that for generations because it would be very unpopular.
“As regional secretary I avoided it, but I think there was a reasonable excuse given the economic situation.”
The revaluation of England's real estate is likely to have a negative impact on voters seen as part of the traditional Tory constituency, such as older voters, wealthier voters and southern voters.
Lord Pickles said it was “physically impossible” to introduce meaningful changes to the system before the next general election.
But he recommended that “whoever wins the next general election will do this immediately.”
One senior Westminster source said: “Reappraisals are always problematic because those who do well with their appraisals will thank you but forget about it later in the year, and those who don't will not. body,” he said. [do well out of it] Remember until the next election. ”
They said major reforms “will not be possible on this side of the election, but we are not going to ignore them to show the next administration something they can build on.”
A spokesperson for Mr Gove's Equalization Authority said: “There are no plans to carry out a national reassessment of council tax ranges.”
“The council is ultimately responsible for its own finances and for setting its own council tax,” they added.
