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Beaten to it again

September 28th, 2010 · Posted by Skuds in Politics · 3 Comments · Politics

Last week I was about to write something about the ConDom government’s announcement about council tax revaluation, and then lost the urge when Danivon beat me to it and said at least half of what I wanted to say, but I might as well have a little belated rant.

When I read about this, the first thing I thought was that it was a pretty desperate move and therefore a good thing.  Nice to see the Tories having to scrape the barrel so early.  As far as I can make out, the formula is:

  • pick something that that nobody was planning to do anyway
  • say that Labour woud have done it
  • exaggerate or invent bad things about it
  • announce that you are not going to do it

In this case I suspect the tactic is as successful as it is because so many people reach the word ‘revaluation’ and then fill in the gaps themselves, thinking that if their house value has doubled since the original valuation then their council tax will double.  Of course a revaluation would be nothing like that, else council revenues would go through the roof: it is all about relative values and in truth there is nothing wrong with expecting a house that has been improved to move up to a higher band if it has been improved enough.

There would not be a problem if houses were routinely revalued whenever an improvement was made, say when planning consent was given there was a check to see if the work would change the banding.

Given that a revaluation should only affect the relative values of properties I’m not sure about the claim that revaluation would hit the poorest hardest, as Eric Pickles says.  It is very unlikely to have any effect on anybody in social housing which tends to be maintained keep to a standard, would not impact any houseowners who have not been able to make significant changes (i.e. beyond enclosing a porch or having a conservatory), and probably would not affect private renters – private landlords not tending to have major extensions built.  Still.  Nice of Pickles to shed a few crocodile tears for the poorest who would not be affected anyway.

The next time such a story makes a splash in all the media it is worth looking deeper to see what other announcements made the same day are being obscured.

The real problem with the council tax system is the fundamental unfairness of having a cap on it whereby the band H can only be three times higher than band A or twice as much as for band D.  A quick look at property websites shows that you can buy a 1-bed studio flat for £85,000 or a 6-bed house for £800,000.  Despite having 6 times as many bedrooms, gardens and costing about ten times as much the council tax can’t be more than three times what it is for the flat.

Put it another way: however big you want to build your house, you won’t pay more than £2908 a year in Crawley.

In that respect Pickles was half-right because one group who would not be affected by a revaluation at all is anybody living in a house worth well above teh threshold for band H.  They would continue to underpay relative to the rest of us.  This is somethn ght eLib Dems appreciated while they were in opposition, hence the proposal for a ‘mansion tax’ just one year ago.

I wonder what happened to that?

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3 Comments so far ↓

  • Ash

    “This is something the Lib Dems appreciated while they were in opposition, hence the proposal for a ‘mansion tax’ just one year ago.

    I wonder what happened to that?”

    Didn’t they ditch it after the Labour Treasury spokesman said:

    “Their mansion tax muddle is typical of the Lib Dems. Because they are trying to face both ways, their plans keep falling apart.

    They’ve made a complete mess of costing their proposals. The only thing that is consistent is that their sums don’t add up.”

  • Skuds

    Quite right too – but even if it was impractical (though I dare say more practical than their local income tax) there was a principle behind it and even that has gone now.

  • Danivon

    Oh, god yes, local income tax was a really bad idea. 600 different tax rates for HMRC to add to PAYE? Self Assessment would be a nightmare. And people who move during a tax year.

    I like Ash’s idea that the Lib Dems dumped their policy because Labour said it was silly, though. Who’d have thought, eh? Not that the Tories ruled it out as part of the coalition deal or nuffink.

    I think the problem was they were going to use ‘mansion tax’ to pay for something else, and just made up the numbers.

    Still, I do like Land Tax in place of Council Tax (and from Andy Burnham, also replacing Inheritance Tax and Stamp Duty). Most people would be better off, and the vagaries of bands causing step-changes would go.

    (oh, and a pleasure to gazump your post, Skuds 🙂 )