Council Tax: Government’s Proposed Increase

Part of the debate – in the House of Commons at 5:25 pm on 25th January 2021.

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Photo of Tim Farron Tim Farron Liberal Democrat Spokesperson (Environment, Food and Rural Affairs), Liberal Democrat Lords Spokesperson (Communities and Local Government), Liberal Democrat Spokesperson (Housing, Communities and Local Government) 5:25 pm, 25th January 2021

To govern is to choose, and the Government have chosen to make local authorities choose between cutting services at this time of all times and imposing a 5% council tax rise.

I have always opposed the council tax since the Conservatives introduced it in a rush in the early ’90s in the poll tax debacle. It was always a wrong form of taxation; it takes more from those who have the least, and it takes less from those who have the most. It is a regressive form of tax, and for the Government to force local authorities—red, yellow and blue—to increase that burden on the families who struggle the most during a pandemic is utterly inexcusable.

It is a choice that the Government have made to increase council tax by 5% and to hit the worst those families who struggle the most, but there are other choices that this Government have made at the same time. The stamp duty holiday has given a boost of tens of thousands of pounds to people who want to buy second homes. Therefore, people who are struggling by on the minimum wage, paying a much higher proportion of their salary in council tax now than those who are wealthier, get a hit, yet those who can afford not just one home but two or more get a benefit worth tens of thousands of pounds from this Government, who have chosen to give it to them.

I suggest to the Minister that there is something better he could do with council tax. In communities such as mine in the lakes and dales, where as many as 85% of the properties are second homes—boltholes for folks who are well-off enough mainly to live somewhere else—the impact is colossal. Every single one of those homes is sending no child to the local school and providing no demand for the post office or the bus service, and so those services and facilities end up closing, as they have done in many communities in my part of the world. Yet there are things the Government could do to ameliorate that. Instead of imposing a huge council tax burden on those who are struggling to pay now, why not increase council tax on those who are well-off enough to have more than one home and recycle that money back into local communities?

Furthermore, why do the Government not deal with their own consultation that closed nearly three years ago on whether to close the loophole that allows second-home owners to pretend that they are a business? They claim business rate relief, and get business rates taken off altogether—so pay no council tax and no business rates. If this Government cared about levelling up, they would not be levelling down Lake district communities by benefiting those wealthy enough to have more than one home while hitting those who are on low incomes to start with.

The Government have chosen to impose this council tax rise, and council tax always hits the less well-off more than those who are better off. This is the opportunity that the Government have to change their mind, to benefit not just the lakes and dales but the whole of the country as it struggles through this terrible crisis.