Council Tax is unfairly burdening the North – Fairer Share suggest an alternative.
As of April 1st, Council Tax increased by 5% for most of the country after the Government allowed councils to raise Council Tax above the previous maximum threshold.
My guess is that most people reading this don’t give Council Tax much thought aside from “can I afford this?” or “where do I pay?” — maybe the odd expletive when opening our latest bill. But despite being one of the country’s most unpopular taxes, Council Tax receives a fraction of the screen time and scrutiny compared to our other taxes.
This partly explains how Council Tax has been allowed to grow into the unfair beast we see today, where disproportionately high sums of money are charged from households in low-income areas, while in many cases the richest homes in the country pay less.
As unlikely as it might sound, a £110,000 home in Easington Colliery in County Durham pays just shy of £1,950 in Council Tax. This is £125 MORE than the most expensive house in the country — valued at £250 million!
It’s not just in County Durham. We record the Council Tax burden for all areas of the country. The Council Tax burden is how much you pay in Council Tax as a percentage of your property value. Across the North, areas like Hartlepool, Burnley, Middlesbrough, and Liverpool have a Council Tax burden over ten times higher than in Westminster, Kensington, Chelsea, and Fulham — some of London’s wealthiest areas.
How has this been allowed to happen? Council Tax is based on the value of our homes in 1991. But over thirty subsequent years, house prices in London and the South East have risen much faster than those in the North. Combine this with the additional money areas of London can generate in Business Rates, there is less need for Westminster Council to hike up Council Tax bills to pay for the services they provide.
It’s easy to blame local councils when we see the latest increase in our bills. But after a decade of funding cuts that have hit hardest in the North, the struggle to balance budgets and still provide essential services with an ever-increasing demand has never been harder. Many councils simply have no choice.
Households in the North feel this burden the most. Of the twenty areas with the highest Council Tax rates in England, eighteen are in the North East, North West, and Yorkshire. This has serious consequences. Council Tax arrears were the number one debt issue for Citizens Advice before soaring energy debts took over last year. But with bills increasing by 5%, debts are likely to soar once again as the squeeze on finances continues to take its toll.
We’ve heard the words “Levelling Up” thrown around for what feels like an eternity, but any genuine attempt to prioritise areas of the country that have been “left behind” would include replacing Council Tax. Fairer Share proposes the tax should be directly linked to the actual value of our homes. It would mean everyone pays the same tax rate, no matter where in the country you live.
Another issue we wanted to help address is local people being priced out of their communities, as we’ve seen in holiday hotspots like Whitby, the Lake District, and parts of North Yorkshire. We suggest a tax surcharge on all empty homes, second homes, holiday lets, and foreign-owned investment properties. These owners would pay double the tax rate, prioritising local communities.
All of this means that the average home in the country would see a saving of £556 every year, with the greatest benefit found in northern towns such as Hartlepool, where the average annual bill would be £950 less. In fact, the combined savings to households in the North East, North West, and Yorkshire is just over £3 billion. For anyone wondering how this would be funded, the surcharges alone are expected to raise £5.6 billion, with £2.5 billion raised in London, mostly from offshore owners and empty homes.
This increase took place on April Fools’ Day, and we’d be fools not to tell our local politicians that we’ve had enough of northern households facing the burden of ever-increasing Council Tax bills, while millionaires and billionaires in the richest parts of London pay tiny fractions of their property value.
Fairer Share are asking citizens to Email your MP
Andrew Dixon is the Founder and Chairman of Fairer Share, the campaign to replace Council Tax and Stamp Duty with the fairer Proportional Property Tax.
