Mike Hedges Questions Minister On Council Tax Reform

Mike Hedges Questions Minister on Council Tax Reform

Speaking from the Senedd, Local  Swansea East MS, Mike Hedges said.. ‘ Council tax is a regressive tax which hits the low paid hardest. I welcome the statement from the Minister and the consultation announced this week. I hope that at the end of it we can have a system that which reflects the ability to pay more than the current system does.

I would urge everyone to take part in the Welsh Government consultation on Council Tax – : https://gov.wales/fairer-council-tax” 

 15:15

Mike Hedges MS15:16:17

I thank the Minister for her statement. We know we need more regular revaluations. Every 20 years is not acceptable. We know two other things: a local income tax is preferred by the rich because it will save them money via tax reduction schemes. But we also know that, under the current system, those with the least ability to pay spend a greater portion of their wealth on council tax. Someone living in a property worth £100,000 pays around five times as much council tax relative to the property value as someone living in a property worth £1 million. A £420,000 house only pays twice as much as a £120,000 house. To me, this is unfair, because payment is not proportional to the value of the property and value of property is a good indicator of personal wealth.140

My recommendation is that an additional band is added at the bottom and at least two higher bands are added at the top, followed by adjustments on the multipliers being used to ensure fairness. Questions are: should single people on band G and above have a single person’s discount? Who benefits from the student discount, students or landlords? And finally, should the bands be split in two, therefore making it much closer to the value of the property?141

Rebecca Evans MS15:17:29

I’m very grateful to Mike Hedges for those contributions and for his ongoing engagement on the issue of council tax, and I share his concern about the importance of more regular revaluations. I think that it has been far too long since the last revaluation. Painful though I understand them to be, I think it is more important that we do it more regularly, and then the changes won’t be so extreme in some cases. So, I think that that kind of regular revaluation is important and that’s something that we’re consulting on in our consultation that is launched today—so, keen to have those views formally expressed through the consultation as well.142

And then, looking to the future, we can consider what technology might be available to us. Can we do rolling revaluations? What would we do with information as it comes through in terms of house sales? How can we be sure that we’re not picking up a spike in house sales at that moment in time? So, there are lots and lots of different things for us to be considering in terms of the regularity of revaluations. But that’s absolutely our intention, to make revaluation much more frequent.143

I think Mike Hedges described perfectly how council tax is a regressive tax; it’s not a progressive tax, as we would normally want a tax to be. It very much means that people who have the least and who are least able to contribute are ending up being asked to contribute a larger share. So, this is one of the things that our approach to making council tax fairer is aiming to deal with as well—rebalancing the council tax that local authorities collect.144

And I’ve heard Mike’s arguments in terms of the way in which he would like to see the additional bands, and potentially the splitting of the bands to have that much more nuanced size of band as well, so, obviously, we’ll be considering that as part of our overall consultation. I think we also need to consider as part of that the appeals system and to what extent we create a system where we get the balance right in terms of not creating too much confusion or likelihood of appeals, but having appeals where they are genuinely in a sense ones that are likely or potentially to be changing the band which people are in. So, lots for us to consider. I think the contributions so far have been really helpful and I think have started to kick off our consultation very well.145

 15:20