In Hackney, on the outskirts of Central London, my property’s value has grown considerably over the past ten years. Without a revaluing of the bands it would move from Band D to Band G and my council tax bill would increase by 67 per cent.

Council tax raises only a small percentage of local government finance. I would abolish it (and any variation), increase grants from central government and raise VAT or income tax instead. On this issue, only the Liberal Democrats seem to be getting near this by proposing local income tax.

Yours, etc,
PETER BRIDGES,
Flat 2, 88 Southgate Road, N1 3JD.
February 4.

From the Minister for Local Government and the Regions

Sir, You claim that I have “admitted that homes would go up a council tax band in many areas of the country”. This is untrue. What I have said on numerous occasions is that anyone whose home has risen in value in line with averages is unlikely to pay more tax.

Revaluation isn’t about raising more money overall. Even properties which have increased in value by more than the average will not necessarily move up a band (if, for example, the current property is valued in the middle or towards the bottom of an existing band).

Making council tax fairer is what the Balance of Funding Review wants; what the select committee on the Office of the Deputy Prime Minister wants; what taxpayers want; and what the Government wants. That’s why we appointed Sir Michael Lyons to investigate in detail how to do it. Revaluation of council tax in England is part of that process.

Yours,
NICK RAYNSFORD,
Office of the Deputy Prime Minister,
26 Whitehall, SW1A 2WH.
February 4.

From the Chief Executive of the Local Government Information Unit

Sir, Sir Michael Lyons’s review of local government finance is not due to report until later in 2005. Ministers are leaving it late to introduce reforms that would make council tax fairer at each end of the banding structure and relieve the excessive pressure that has built up on council tax.

To do this and remove the present “gearing effect”, whereby small variations in council spending or government grant distribution cause disproportionate fluctuations in household bills, most council funding must be raised locally from a wider range of sources.

This should include a phased return of the business rate to local control, restoring a fairer balance between what business and domestic taxpayers contribute towards local services. There has been a relative fall in local taxation of businesses since 1990, when the business rate was nationalised and index-linked. Then business accounted for 29 per cent of local government spending. Now the figure stands at 19 per cent. Council taxpayers have met the resulting shortfall.

Until ministers grasp the nettle of reform, they will be under pressure at least to reassure the public about the taxes that await them in 2007.

Yours sincerely,
DENNIS REED,
Chief Executive,
Local Government Information Unit,
22 Upper Woburn Place, WC1H 0TB.
February 4.

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