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Local Taxation

Part of the debate – in the House of Commons at 4:53 pm on 4th July 2005.

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Photo of John Butterfill John Butterfill Conservative, Bournemouth West 4:53 pm, 4th July 2005

The hon. Lady must let me say a couple of sentences before she tries to intervene, but I will give way in a moment.

The council tax has become unpopular simply because of the large increase in costs. It is therefore not unreasonable for thoughtful people such as the Liberal Democrats to say, "Ah, but wouldn't it be more reasonable if we had a local income tax, because that would be fairer and more attuned to people's ability to pay?" I believe that they are well intentioned, but misguided.

First, who would pay it? According to the Library, where I got some statistics today, there are approximately 38.3 million people of working age in this country, of whom 12.2 million do not pay income tax. On the other hand, 5 million pensioners pay income tax. Students, who do not currently pay council tax, would pay local income tax if they earned money to sustain themselves in their time at university. However, if we had local income tax in my constituency, the hundreds of foreigners who own holiday homes there would not contribute because they do not pay tax in this country. Probably 1 million foreigners, who would not pay local income tax, own property in London. Yet they use services, often placing a huge burden on the services that local authorities provide.