The Times has reported that:
Council tax in some areas is set to be increased up to eight times the rate of inflation next month.
Local authorities have confirmed they are preparing for rises in excess of the current inflation rate of 0.6 per cent.
Midlothian believes it will impose a council tax increase of almost 5 per cent next month, with several other councils likely to demand 3 per cent.
I am not for one second disputing the scale of the financial crisis that is hitting local authorities: it is real, and has been developing as a result of persistent underfunding across the UK, forced upon those authorise by central government choice. The aim was always to pass the burden of austerity onto the most vulnerable by cutting services.
But now to increase council taxes when other taxes are not raised is to add insult to injury. Council tax is one of the most regressive taxes in the UK. At the top of the scale the tax is capped - and for many in the richest boroughs in the country the obligation is insignificant as a result.
In contrast, at the lower end the charge behaves like a poll tax, with even the poorest property being expected to pay a fixed proportion of the sum owing by the mean property in the council tax bands. The result is that council tax features very heavily in the overall tax bills of the lowest paid in the country.
Ability to pay is not taken into account in most council taxation.
And so it would seem that Rishi Sunak has chosen those on lowest pay to suffer the highest proportionate tax increases in the coming year. You literally could not make such poverty-creating programmes up, except for the fact that they are deliberate government choice on a routine basis now.
And remember, there is no reason why central government could not provide local government with all the funding that it needs, costlessly. QE could deliver that right now. But the government would rather penalise people.
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My local Council will no doubt still put up its Council Tax despite telling as that it does not have to legally collect garden waste and is now prepared to charge us £50 per for this service.
I agree that Councils are in a bad position and need to earn cash. For my part however, this charge and the CT rise that follows will wipe out any gains I have made in wages – small as they are.
It’s like treading water these days with income – no matter how fast you paddle, I think most working ordinary people just seem to stand still.
Until a political party comes along and deals with the actual problem of lack of money in society, our prospects are rather grim.
And so divide and conquer politics will rule as politicians lack the testicular material to change the narrative to a technically more accurate one that gets out of the austerity, act-of-God-nothing-we-can- do-about -it death spiral we are in.
I could rant on about business rates (still set centrally I believe) and council tax but it wouldn’t change anything it is all a hiding to nothing, little to no change and nodding dog local authorities without an idea between them.
No alternative gets a fair and balanced discussion.
I’m taking my ball in now.
Humph!!!!
Just watching Aneliese Dodds in the universal credit debate. I thought very well expressed. Noticed one of books is titled modernising money. Can we hope she is informed on MMT? AND that she is sympathetic?
I have not heard it….
There is an alternative
http://www.andywightman.com/writings/publications
With LVT proposals for England, Scotland and Northern Ireland.
My personal view would be to have a banded system so that the cheapest properties and small farms are zero rated, with higher levels of tax for the most expensive properties.
In the short term why not do what they do with the Norther Irish Rating system where the owner is liable – not only that but it would save an awful lot of work, ditto for Business Rates
“Since the 2012-13 financial year, local authorities, fire authorities, and Police and Crime Commissioners have been required to determine whether the amount of council tax they plan to raise is ‘excessive’. A set of principles defined by the Secretary of State, and approved by the House of Commons, is used by authorities to decide if the amount to be raised is excessive. Any authority proposing an excessive increase in council tax must hold a local referendum and obtain a ‘yes’ vote before implementing the increase. An authority proposing an excessive increase must also make substitute calculations, based on a non-excessive council tax level. This takes effect if the excessive increase is rejected in the referendum”
Didn’t go so well in Bedford !!
“One referendum has taken place to date. The Bedfordshire Police and Crime Commissioner, Olly Martins, proposed a 15.8% increase in council tax for 2015-16. The poll was held on 7 May 2015. 91,086 voters (30.5%) supported the proposal, whilst 207,551 (69.5%) opposed it”
https://commonslibrary.parliament.uk/research-briefings/sn05682/
To clarify: The proposed increase was 15% in THE POLICE PREBEND, not in the overall rate.
People just didn’t read the proposal correctly (hardly surprising since govt set the actual wording).
And it cost the local police authority the cost of the referendum!
https://www.bbc.co.uk/news/uk-england-beds-bucks-herts-31533051