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| Council tax report urges reform | Council tax report urges reform |
| (30 minutes later) | |
| People who live in the most valuable houses in England should pay more council tax, a review of local government funding has recommended. | 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' 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. | 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 said the reform would not mean an overall rise in the amount of tax paid. | He said the reform would not mean an overall rise in the amount of tax paid. |
| Sir Michael said: "Council tax is not 'broken' but is seen as unfair and has been put under too much pressure." | Sir Michael said: "Council tax is not 'broken' but is seen as unfair and has been put under too much pressure." |
| 'Support and understanding' | 'Support and understanding' |
| His review suggests that in the future ministers should consider ear-marking a fixed proportion of income tax to local authorities. | |
| KEY SHORT-TERM RECCOMENDATIONS Automatic rebate for those entitled to council tax benefitRaise the savings limit for pensioners to £50,000New powers for councils to charge for domestic waste levy a supplementary business rate in consultation with businessEnd capping of local authoritiesImprove transparency of the tax systemProvide incentives for local authorities to promote economic growth | |
| He said they should also consider giving councils the power to levy a local tourist tax. | 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. | 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". | 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. | 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. | 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. |
| "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." |
| KEY MEDIUM-TERM RECCOMENDATIONS Revalue council taxNew bands with higher bills for those in more expensive properties and lower bills for those in the cheapestConsider reserving a fixed proportion of income tax for local governmentGive councils the power to levy a "tourist tax"Improve incentives within the grant system | |
| 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. | 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." |
| HAVE YOUR SAY No council tax system can ever be fair to everyone Adam, Sutton Coldfield Send us your comments | |
| 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. |
| Sir Michael said earlier 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". |
| "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," he added. |
| 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. |