The Labour government is facing a call to enact the most significant reform to council tax in a generation, following a bold new proposal from a leading think tank.
A Radical Proposal for a Fairer System
The Institute for Public Policy Research (IPPR) has recommended that the government introduce a staggering 100% increase in council tax for properties in the most expensive band, Band H.
This is not the only proposed hike. The influential think tank also stated that rates for homes in bands F and G should be raised by 50%.
Conversely, the IPPR's study, published ahead of the Labour Party's crucial Autumn Budget, argues that households in the cheapest council tax bands, A to D, should see their tax bills reduced.
Financial Impact and Redistribution
This comprehensive overhaul of the system is not just about fairness; it carries a significant financial impact. The research claims the changes could generate close to £4 billion in additional revenue.
Of this sum, around £1 billion could be reinvested to provide tax relief for the vast majority of households. This would result in an average saving of £45 for the 80% of homes in bands A to D.
Expert Commentary on an 'Unfair' System
Aditi Sriram, an economist at IPPR and the paper's lead author, was unequivocal in her assessment. She said, “The current council tax system is unfair, inefficient, and long past its sell-by date. Our proposal cuts bills for the vast majority of households while asking those with the greatest property wealth to pay a fairer share.”
She emphasised that the reform would support working families, strengthen local services, and create a foundation for a fairer overall tax system.
Carsten Jung, IPPR associate director for economic policy and co-author of the report, framed the proposal as a crucial first step. “This reform can be a first step towards taxing property in a more balanced way. Millions of families would see a small decline in their bills – especially in less prosperous parts of the country,” he noted.
He concluded by stating this is the kind of policy expected from a government focused on reducing the cost of living.
In response, a Treasury spokesperson provided a measured comment, saying, “The chancellor has been clear that at the budget she will strike the right balance between making sure that we have enough money to fund our public services, whilst also ensuring that we can bring growth and investment to boost living standards.”
