Nick Herbert challenges Secretary of State on new property tax

Arundel & South Downs MP Nick Herbert has written to Ruth Kelly, the Secretary of State for Communities and Local Government, to raise local concerns about council tax rises and the idea of a new property tax.

 

Mr Herbert took up the issue after a number of local residents expressed their concern to him, in letters and meetings, about the level of council tax and the prospect of even bigger rises under a new levy.

A new property tax would be based on the value of a property, rather than bands as is currently the case under council tax.  Fears that such a tax might be under consideration have grown after a report commissioned by the Scottish Executive recommended a 1 per cent property tax to replace council tax.  In Northern Ireland, a 0.6 per cent levy on the value of property is already being introduced from this April.

The Government has commissioned an inquiry by Sir Michael Lyons into the future of local government funding in England.  The Inquiry's interim report, published in December 2005, outlined several options for reform including "moving to the use of detailed point valuations for properties rather than assigning them to bands".  The final report is expected to be published in March.

In his letter to the Secretary of State, Mr Herbert highlighted how the average council tax bill has "doubled across the country since 1997 - increasing at three times the rate of inflation and twice that of average earnings" and how "a third of the increase in the basic state pension has been taken up in higher council tax for a typical pensioner".

He said that a new levy "would have a particularly adverse impact on the elderly and those on fixed and low incomes who are already struggling under the growing burden of council tax."

Based on the latest figures from the Halifax, a 1 per cent levy on the value of homes in the Arundel & South Downs constituency would mean the average homeowner paying over £3,200 a year - double the level of council tax.

Before this year's increases, the average council tax per dwelling in the Arun district is £1,187; Chichester district £1,293; Horsham district £1,355 and Mid Sussex district £1,328.

Mr Herbert also highlighted the poor financial deal that West Sussex County Council receives from central government.  For the fifth consecutive year, the Council has received the worst funding settlement of any local authority.

As a result, in spite of making savings and cuts, the County Council has been forced to propose a 4.9 per cent in council tax this year.  Mr Herbert said that, alongside rising utility bills, such an increase would be greeted with "dismay" by local people.

Mr Herbert drew the Secretary of State's attention to two typical letters from his constituents, in which a pensioner couple say they have saved all their lives but "could not possibly afford to pay" a new levy, while another retired resident says "I simply do not know how people like myself will cope".

Concluding his letter to the Secretary of State, Nick Herbert said:

"It is clear that the current funding arrangements for local government need reform, but a property tax which penalises local people to an even greater extent cannot be the answer.

"I would be grateful to know your response to the concerns of my constituents, both about the rising levels of council tax and the prospect of a property levy to replace it."

Ends

Joe Coombes