Government's cowardice over council tax has left it in a mess

When council tax bands have little to do with today's value, how can it replace a mansion tax?

Simon Jenkins writes in today's Guardian that it's strange that Vince Cable carries on talking about a mansion tax when we already have one, called the mansion tax:

England's property-based council tax stops at the present H-band. This means that the same tax is paid on all houses valued at more than £320,000 at 1991 prices (roughly £950,000 today). In parts of London, this means half the houses pay the same. Nick Clegg is right to protest that "it cannot be right that an oligarch in a £4 million palace in central London pays the same council tax as someone in a four-bedroom family home". It is ludicrous.

So what is the problem? The answer is no politician dares change it. All are cowards. They bid the rest of us to show spine, come to the mark, tighten our belts and take cuts without complaint. Yet faced with an equitable fiscal reform that could net billions in revenue, they cringe and whimper and protest it is all too hard. Like tackling drug illegality or the criminal justice system, politicians who think that something is politically toxic end up making it so.

Jenkins suggests that if the Liberal Democrats weren't cowards, they would introduce new tax bands, above band H, and charge increasing levels of council tax on them, "perhaps triggered at half-million pound steps".

But the real way we can tell that governments – not just the Lib Dems – are cowards is that, even aside from using council tax to introduce a mansion tax by proxy, they haven't even done the most basic housekeeping.

As Jenkins suggests, council tax bands are levied on the value of houses in 1991. If a rising tide floats all boats, then that's not too problematic – the most expensive houses in 1991 would still be in band H now, and the right people would be taxed the most. But it doesn't float all boats. Some houses have risen in value faster than the average, while some have risen in value less fast.

Despite this, there has never been a reassessment of council tax bands, and so many people are paying tax based on assets they do not actually have. Introducing higher tax bands without reassessing the existing houses would merely compound that error.

Doing so has nothing to do with raising revenue, and everything to do with basic fairness. If governments can't even bring themselves to do that, don't expect them to go much further with actually using council tax for good.

Houses for sale. But what's the council tax on them? Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Commons Confidential: What happened at Tom Watson's birthday party?

Finances, fair and foul – and why Keir Starmer is doing the time warp.

Keir Starmer’s comrades mutter that a London seat is an albatross around the neck of the ambitious shadow Brexit secretary. He has a decent political CV: he was named after Labour’s first MP, Keir Hardie; he has a working-class background; he was the legal champion of the McLibel Two; he had a stint as director of public prosecutions. The knighthood is trickier, which is presumably why he rarely uses the title.

The consensus is that Labour will seek a leader from the north or the Midlands when Islington’s Jeremy Corbyn jumps or is pushed under a bus. Starmer, a highly rated frontbencher, is phlegmatic as he navigates the treacherous Brexit waters. “I keep hoping we wake up and it’s January 2016,” he told a Westminster gathering, “and we can have another run. Don’t we all?” Perhaps not everybody. Labour Remoaners grumble that Corbyn and particularly John McDonnell sound increasingly Brexitastic.

To Tom Watson’s 50th birthday bash at the Rivoli Ballroom in south London, an intact 1950s barrel-vaulted hall generous with the velvet. Ed Balls choreographed the “Gangnam Style” moves, and the Brockley venue hadn’t welcomed so many politicos since Tony Blair’s final Clause IV rally 22 years ago. Corbyn was uninvited, as the boogying deputy leader put the “party” back into the Labour Party. The thirsty guests slurped the free bar, repaying Watson for 30 years of failing to buy a drink.

One of Westminster’s dining rooms was booked for a “Decent Chaps Lunch” by Labour’s Warley warrior, John Spellar. In another room, the Tory peer David Willetts hosted a Christmas reception on behalf of the National Centre for Universities and Business. In mid-January. That’s either very tardy or very, very early.

The Labour Party’s general secretary, Iain McNicol, is a financial maestro, having cleared the £25m debt that the party inherited from the Blair-Brown era. Now I hear that he has squirrelled away a £6m war chest as insurance against Theresa May gambling on an early election. Wisely, the party isn’t relying on Momentum’s fractious footsloggers.

The word in Strangers’ Bar is that the Welsh MP Stephen Kinnock held his own £200-a-head fundraiser in London. Either the financial future of the Aberavon Labour Party is assured, or he fancies a tilt at the top job.

Dry January helped me recall a Labour frontbencher explaining why he never goes into the Commons chamber after a skinful: “I was sitting alongside a colleague clearly refreshed by a liquid lunch. He intervened and made a perfectly sensible point without slurring. Unfortunately, he stood up 20 minutes later and repeated the same point, word for word.”

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era