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.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.