Parties battle over local taxation
Plans for reform of the council tax system have taken centre stage today as the Liberal Democrats have highlighted their plans for a local income tax, and the Conservatives have promised to scrap the council tax revaluation.
Launching his party’s manifesto for local government, Michael Howard said that they would scrap the revaluation of council tax bands – due to come into force in 2007.
Council tax revaluation takes place every 10 years and is meant not to increase the overall level of tax, but to even out the tax bands taking into account differing house price rises.
But, Mr Howard – who was part of the government that introduced the council tax – today branded it “the most punishing of all Labour’s stealth taxes”.
He said the Conservatives had a five-point plan for keeping council tax down, including reducing the expenditure burden on councils, ‘fairer’ funding from Whitehall, a rebate for pensioners and cancelling revaluation.
Mr Howard claimed that stopping revaluation would save £270 for the average household.
This morning, Lib Dem leader Charles Kennedy repeated his party’s calls for a local income tax, saying the local income tax had been successful in a number of developed countries, and only one quarter of the UK population would pay more under the measure.
Mr Kennedy accused the Tories of “naked opportunism” over their plans to scrap re-evaluation, pointing out they still supported the tax.
A Lib Dem briefing note later claimed that the Tory plans would in fact increase council tax bills, as by 2007/08 they would be giving £2 billion less to local government than Labour or the Lib Dems.
They also quoted the Conservatives’ local government spokespersons Caroline Spelman and Eric Pickles telling the House of Commons in March and February that revaluation is necessary. They quote Ms Spelman as saying: “Of course we understand that a property based tax has to take account of changes in the value of property.”
Labour is not putting forward any proposals on local government finance reform until after the Lyons Review reports in late 2005.
Speaking on GMTV this morning though, Tony Blair hit out at the Conservatives.
Mr Blair said: “From the Conservatives this really is the most desperate opportunism because a week ago they said they were going to proceed with the revaluation. The only reason we have got the council tax is because of the poll tax Michael Howard introduced.”
