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Council tax report urges reform Council tax report urges reform
(40 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.
The savings limit for pensioners should be higher and council tax benefit be paid as an automatic rebate, it adds.The savings limit for pensioners should be higher and council tax benefit be paid as an automatic rebate, it adds.
Sir Michael said: "Council tax is not 'broken' but is seen as unfair."Sir Michael said: "Council tax is not 'broken' but is seen as unfair."
'Support and understanding' Local tourist tax
In the short term, he says the burden on pensioners should be eased by raising their savings limit to £50,000.In the short term, he says the burden on pensioners should be eased by raising their savings limit to £50,000.
The review also calls for council tax benefit to be paid automatically as a rebate, so that £1.8bn in unclaimed benefit reaches the poorest.The review also calls for council tax benefit to be paid automatically as a rebate, so that £1.8bn in unclaimed benefit reaches the poorest.
In addition, it says councils should be able to charge householders for how much rubbish they throw away.In addition, it says councils should be able to charge householders for how much rubbish they throw away.
In the future ministers should consider ear-marking a fixed proportion of income tax to local authorities, Sir Michael said.In the future ministers should consider ear-marking a fixed proportion of income tax to local authorities, Sir Michael said.
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 and 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 KEY SHORT-TERM RECOMMENDATIONS Automatic rebate for those entitled to council tax benefitRaise savings limit for pensioners to £50,000New powers for councils to charge for domestic waste and levy a supplementary business rate in consultation with businessEnd capping of local authoritiesImprove transparency of 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.
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
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.
'Profligate councils''Profligate councils'
Shadow local government secretary Caroline Spelman said the report was a "tax bombshell" for families.Shadow local government secretary Caroline Spelman said the report was a "tax bombshell" for families.
KEY MEDIUM-TERM RECOMMENDATIONS Revalue council taxNew bands for most expensive and cheapest propertiesConsider reserving a fixed proportion of income tax for local governmentGive councils power to levy "tourist tax"Improve incentives within the grant system
She said: "Nice neighbourhoods and the rising value of homes will all mean higher council tax bills.She said: "Nice neighbourhoods and the rising value of homes will all mean higher council tax bills.
"Regular revaluations will turn council tax into a home improvement tax - taxing your patio, your conservatory and garden.""Regular revaluations will turn council tax into a home improvement tax - taxing your patio, your conservatory and garden."
Blair Gibbs from the TaxPayers' Alliance said the review was a "missed opportunity".Blair Gibbs from the TaxPayers' Alliance said the review was a "missed opportunity".
He added: "It gives the green light to profligate councils to spend and waste even more of our money by raising council taxes and introducing a raft of new ones. He added: "It gives the green light to profligate councils to spend and waste even more of our money by raising council taxes and introducing a raft of new ones."
HAVE YOUR SAY No council tax system can ever be fair to everyone Adam, Sutton Coldfield Send us your commentsHAVE YOUR SAY No council tax system can ever be fair to everyone Adam, Sutton Coldfield Send us your comments
VisitBritain said it opposed the tourist tax proposal.VisitBritain said it opposed the tourist tax proposal.
A spokesman said: "Accumulative taxes on tourism already make Britain the second-highest taxed country in the world for tourism."A spokesman said: "Accumulative taxes on tourism already make Britain the second-highest taxed country in the world for tourism."
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.
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.