Welsh Council Tax

It is the very worst of taxes. Council tax is, as it stands, "indefensible" says the Institute for Fiscal Studies (IFS). Brutally regressive, it lets mansion owners off with a negligible contribution to their local authority, while those in cheaper homes - those least able to afford it - pay far too much. It acts as a kind of anti-wealth tax. At long last, we have a government brave enough to reform it. Not in England, of course, but the Welsh government, as so often before, dares to go where others fear to tread. Its consultation on proposals to redistribute the tax burden so that the broadest shoulders bear a fairer share ends next week, with three options for degrees of redistribution being considered.

Arenig, North Wales
James Dixon Innes (1887-1914)
Photo Credit: Tate [CC BY-NC-ND]

This is real levelling up - not something the Tories ever backed. Under the most ambitious plan, it would increase the number of council tax bands to 12, better reflecting actual values at top and bottom, meaning an area that is high in the deprivation index, such as Blaenau Gwent, would see a sharp fall in what most people pay, while those in wealthier Monmouth and Vale of Glamorgan (which both have Conservative MPs) would typically see a rise. Bills in inner-city Swansea and Cardiff would fall by between £250 and £500 a year, while the outer suburbs would pay the same amount more. This is revenue-neutral, not a plan to raise more tax but simply to make it fairer, by easing the plight of those on lower incomes...

From the start, it [Council Tax] was unjust. In his book, Follow the Money, the director of the IFS, Paul Johnson, points out that in 1991, when the tax bands were set, those living in properties in band H (the most valuable) paid only three times more than those in the least valuable band -A homes, despite their homes being worth eight times more - and now that latter gap is far wider...

It's a much-hated, unjust tax, yet no government until now has dared revalue properties. Why? Political cowardice - even if, as in the Welsh plans, there are many more winners than losers. The losers will be richer, more powerful and mostly older and louder, while the long-running survival of such an unfair tax is a reminder of how those on the lower rungs can never raise the same level of political decibels in protest...

Welsh Shepherds
David Cox the elder (1785-1859)
Photo Credit: Birmingham Museums Trust [Public Domain]

The great hope of devolution is that governments experiment with new ideas. Wales has a good record: It was the first to charge for plastic bags, first to pay the real living wage to care workers, first to pilot a basic income for care leavers; and it banned smoking in public places, cracked down on no-fault evictions for renters, and is rolling out free school meals for all primary pupils ahead of England. England often follows, dragging its feet, where devolved governments show what can be done. Westminster will be watching Welsh council tax reform to see how much noise the wealthy losers make... 

If they can lead the way with a successful council tax reform, that would be another Welsh gift to the rest of the UK.

(Polly Toynbee, The Guardian, 2024)

(Here's hoping that the much needed plans for the reform of Council Tax actually happen)