Council Tax and Stamp Duty Alternatives

Mary Kelly Foy Excerpts

Wednesday 17th May 2023 Westminster Hall

[Mary Kelly Foy (City of Durham) (Lab)]

I thank the hon. Member for Barrow and Furness (Simon Fell) for securing this important debate. It is good to see cross-party consensus; I hope the Minister will note that it is not a party political issue. I also pay tribute to my hon. Friend the Member for Easington (Grahame Morris) for his work in highlighting the problems with council tax.

We all know that council tax is flawed. Our constituents know it, we know it and the Government know it, too. The reality of council tax is that it is making councils overly reliant on locally raised revenue streams in order to offset Whitehall cuts. What makes the situation even worse is just how regressive council tax is. It baffled me when I was a local councillor, as it still does, that council tax is based on property valuations made in 1991, over 30 years ago. It was supposed to be revised periodically, but that has never happened in England. Housing inflation since 1991 has made those valuations nonsensical. Crucially, it means that the richest households, who live in the most expensive houses, are not paying their fair share. Billionaires in London will pay the same tax as someone occupying a modest property. Council tax has become like the “community charge”—the poll tax—that it was supposed to replace.

I appreciate that the Minister could not announce a policy change here in Westminster Hall today even if he wanted to, but can he give us a sense of what is happening in the Department on this issue? Last November, at a sitting of the Levelling Up, Housing and Communities Committee, the Secretary of State said that the Department was looking into local government finance. Where has that process got to? When are we likely to hear again from the Secretary of State? Will we see a Green Paper? More broadly, can the Minister share his thoughts on re-evaluating property prices? As I said, the current valuations are over 30 years old. I would appreciate an answer from him on those points.

The cost of living crisis is affecting all our constituents. It is leaving people with extremely difficult choices to make. In many cases, their choice is between heating or eating. These are the families who desperately need our vital public services. Replacing council tax with something progressive, as well as adequate funding from Whitehall, would ease the burden on those families and strengthen our public services locally. We need to do this as a matter of urgency.

[Several hon. Members rose—]