'Unfair and regressive' council tax must be reformed, MPs tell Government
“Unfair and regressive” council tax must be reformed and more fiscal powers such as visitor levies must be granted to local authorities, MPs have said.
This would help tackle growing dissatisfaction amongst residents which has been exacerbated by the broken link between tax and service quality, a report by the cross-party Housing, Communities and Local Government Committee.
Chair Florence Eshalomi said: “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.
“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 special educational needs and disabilities (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.”
The report calls for the Government to overhaul council tax, saying it is “the most unfair and regressive tax in use in England today”.
The various bands are based on housing values from 1991 and have not been updated since.
In April, everyone in Yorkshire had their council tax bill hiked, in Bradford by almost 10 per cent.
As an interim step, the report says the Government should give local authorities more control over the council tax in their areas, including the power for individual councils to revalue properties and change the bands.
“Reform of council tax should be a greater priority for the Government,” Ms Eshalomi added.
“In the long-term, HM Treasury should devolve tax-setting powers to local authorities, allowing them to set their own local taxes, such as tourist levies.
“If, as a country, we are going to deliver growth and improve local services, Westminster needs to ease its grip and let councils have more power to control their own affairs and be accountable to their own electorates.”
Currently, England is one of the most centralised countries in the world when it comes to tax intake.
Yorkshire’s Labour mayors have been continually calling for powers to set tourist taxes in their regions, which would add a small charge for people staying in hotels and AirBnBs overnight.
Mayor David Skaith is keen to introduce a visitor levy in York and Scarborough, in North Yorkshire.
While West Yorkshire Mayor Tracy Brabin said she is interested in bringing in a tourism tax in Leeds.
The Yorkshire Post previously reported that while Angela Rayner, the Local Government Secretary, is keen on fiscal devolution, the Treasury is reluctant to hand away too many tax-raising powers.
Rachel Reeves is said to have blocked the move for fear it would reduce revenues for businesses struggling with higher national insurance contributions and a rise in the minimum wage already brought in by the Government.
Yesterday, the Prime Minister’s official spokesman would not be drawn into saying whether there were plans for such a tax.
“We have previously said there’s no plans to introduce a tourism tax in England,” the spokesman said.