I made clear yesterday that increasing council tax is a wholly unacceptable way to solve the care crisis in the UK. It would be regressive, divisive and ineffective to try to solve that fundin g problem in this way.
But there is, nonetheless, one council tax solution that could help. It is simple. It could be done quickly. It would work. And it could be redistributive.
Right now every council divides properties into the following bands for council tax purposes:
House values were set on 1 April 1991 by the Valuation Office Agency. They explain more about how banding is set on their website.
Band D is an average property. In most cases a band H property pays twice a Band D property and a band A property pays 67% of a Band D property charge (but there are variations). And this is why the system is so regressive, as well as absurd for being based on outdated property values.
But this does indicate how extra revenue might be raised. It is wholly appropriate to now add up to five additional council tax bands to the above scale. Broadly speaking they would be £320,000 to £500,000, £500,000 to £750,000, £750,000 to £1 million, £1 million to to £2 million and £2 million and above. The charges would be, I suggest, 250%, 300%, 400%, 500% and 800% of the average band and still be generously low.
Valuation could be based on the likes of Zoopla: more property data is available now than ever before. And backdating is easy using known long term data. There will be some appeals, of course, but hardly insurmountable.
And the additional revenues should then be paid into a social care fund for redistribution according to need across the country as a whole, and not just for local use.
In one easy move we get a more progressive tax, a disincentive to property price speculation, and a pool of new funding. Of course there will be objections from those who will pay. I can live with that. This is the sort of tax reform we need right now.