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Council tax report to urge reform Council tax report urges reform
(30 minutes later)
Council tax places "too heavy a burden" on pensioners, the author of a review of local government funding has said. People who live in the most valuable houses in England should pay more council tax, a review of local government funding has recommended.
Sir Michael Lyons is due to deliver his much-anticipated report into the role and financing of town halls. Sir Michael Lyons' report calls for a new top rate council tax band, along with a new bottom rate to cut bills for those in the cheapest properties.
He told BBC Breakfast that council tax is "workable", but said bills for the cheapest homes should be cut and those for properties worth over £2.5m raised. He said the reform would not mean an overall rise in the amount of tax paid.
He did not rule out a local income tax but said it would not be possible in the lifetime of the current parliament. Sir Michael said: "Council tax is not 'broken' but is seen as unfair and has been put under too much pressure."
'Pressure off' 'Support and understanding'
He said: "The issues for this Government to concentrate on are that council tax is a workable tax if you can take the pressure off it and if you can deal with issues of perceived fairness, and that's particularly the needs of the elderly. His review suggests ministers should consider ear-marking a fixed proportion of income tax to local authorities.
He said they should also consider giving councils the power to levy a local tourist tax.
Sir Michael added that future governments could consider introducing local income tax or "re-localisation" of the business rate.
However, he said these were issues for the longer term and such reforms would need "greater public support and understanding than currently exists".
Earlier, he told BBC Breakfast that council tax is "workable", but said bills for the cheapest homes should be cut and those for properties worth over £2.5m raised.
Sir Michael said: "The issues for this Government to concentrate on are that council tax is a workable tax if you can take the pressure off it and if you can deal with issues of perceived fairness, and that's particularly the needs of the elderly.
It's a question of some paying more and some paying less Sir Michael LyonsIt's a question of some paying more and some paying less Sir Michael Lyons
"There are some changes to be made immediately, particularly to deal with the needs of pensioners, who I think are bearing too heavy a burden under council tax.""There are some changes to be made immediately, particularly to deal with the needs of pensioners, who I think are bearing too heavy a burden under council tax."
Sir Michael, professor of public policy at the University of Birmingham, said pensioners could be assisted by replacing council tax benefit with an automatic rebate. Sir Michael, professor of public policy at the University of Birmingham, said earlier that pensioners could be assisted by replacing council tax benefit with an automatic rebate.
Public sympathy for the idea of a local income tax may not be sustained once voters realise how much it will cost them, he added.Public sympathy for the idea of a local income tax may not be sustained once voters realise how much it will cost them, he added.
"There is popular support for a move away from council tax," Sir Michael told the BBC's Today programme."There is popular support for a move away from council tax," Sir Michael told the BBC's Today programme.
"The problem is that most people think they won't pay any more.""The problem is that most people think they won't pay any more."
At the weekend Communities Secretary Ruth Kelly ruled out any revaluation of council tax bands before the next general election.At the weekend Communities Secretary Ruth Kelly ruled out any revaluation of council tax bands before the next general election.
She said that the idea of bringing in a new top band for homes worth over £1m was a "non-runner" during the current Parliament.She said that the idea of bringing in a new top band for homes worth over £1m was a "non-runner" during the current Parliament.
'Obviously difficult''Obviously difficult'
Sir Michael said today that the attitude of the government made revaluation "an issue for the future". Sir Michael said earlier that the attitude of the government made revaluation "an issue for the future".
He added: "My personal belief is that if you have a property tax it should be revalued and revalued regularly thereafter. It's obviously difficult when it's been left so long." "It's a question of some paying more and some paying less," he added.
"It's a question of some paying more and some paying less."
Chancellor Gordon Brown and Deputy Prime Minister John Prescott commissioned the report in 2004.Chancellor Gordon Brown and Deputy Prime Minister John Prescott commissioned the report in 2004.