Could the a Green Progressive Council Tax idea work?


9:59 am - August 18th 2013

by Guest    


      Share on Tumblr

by Mike Shaughnessy

An idea in the form of a Progressive Council Tax (PCT), from the Brighton and Hove Green party, is creating a buzz around the whole Green party. It may soon become a central policy tool for Greens in local government.

To be clear, Green party national policy is for the introduction of a Land Value Tax for raising local revenue. But we also need a credible strategy at local government level where we can and do (in Brighton and Hove) run local authorities, which is more than just implementing cuts as directed by national government, as we are at the moment.

So, how does it work? First a referendum needs to be held and won in a local authority area on raising Council Tax by more than 2%, in fact much more than 2%, with the higher the increase, the less the majority will pay.

Then residents are required to apply for a reduction in the charge, which would be means tested, with around 80% of residents receiving a reduction, meaning most would actually pay less than now. For the other 20% who do not qualify for a reduction there will be steep increase in Council Tax.

This is all based on residents’ income and ability to pay, which is perfectly fair and counter to the policies of the ConDem government. Vulnerable groups will get special help to ensure they pay only the correct amount.

I’m told that this does not require any change to the law nationally, so if voters can be convinced that this a fairer way to fund local services, and for most it will cost less, then there is nothing to stop a local council introducing this approach.

PCT has a number of advantages, I think. It is fairer, because those who can afford to pay more will do so, leaving those on more modest means either unaffected or better off. It also has the potential to reduce some of the cuts to services that are required by national government reducing direct grants to local authorities, and so at least some services and jobs are retained.

Then of course there is the politics. Would Labour run councils for example, follow suit and introduce the scheme themselves? If they saw it working in Brighton and Hove, they might consider it, but if not then the Green party will have staked out an alternative approach, which to use sales parlance, would be our ‘Unique Selling Point’, offering the voters a true choice in how local services are funded.

There is probably a huge amount of detail to work through on this idea, in practically introducing PCT, but I’m sure that can be achieved, and in principle it can be justified in terms of fairness. We need to be bold as a party in these testing times. PCT’s time has surely come.


Mike blogs more regularly at Haringey Green Party Blog

    Share on Tumblr   submit to reddit  


About the author
This is a guest post.
· Other posts by


Story Filed Under: Blog ,Economy ,Green party ,Local Government ,Westminster

Sorry, the comment form is closed at this time.


Reader comments


Second last paragraph reads as if you are saying that if it doesn’t work, at least the Green Party a unique selling point. I think they already have quite a few that don’t work in Brighton as it is.

So it involves means-testing, that costly endeavour which put paid to many a good progressive idea. Shame

“Then residents are required to apply for a reduction in the charge, which would be means tested, with around 80% of residents receiving a reduction, meaning most would actually pay less than now. For the other 20% who do not qualify for a reduction there will be steep increase in Council Tax.”

And this has been fully costed to ensure that the administrative expense of means testing every household in Brighton & Hove isn’t going to prove prohibitive.

I can see the underlying political assumption here, which is that 80% of households end up paying less that what is there not to like for voters in those households.

I suspect it’s not going to be anything like that simple. Looking at the area statistics on the ONS neighbourhood statistics site, Brighton & Hove has around 114-115,000 occupied households of which (in 2010) just over 28,000 were in receipt of Council Tax Benefit.

So let’s think about the politics of this properly. Based on those figures, and assuming households that are ineligible for a discount don’t bother to apply, you’ll be asking around 64,000 households that don’t currently received any CT benefit to turn over full details of their employment, income, savings, all bank accounts, pension(s), etc for every adult in the household to the council, assuming that the council propose to apply just the normal fraud protection measures mandated in law.

If anyone is self-employed, they’ll also have to turn over their accounts and tax records and, of course, any changes in circumstances in any of these things will have to reported promptly to the local authority, which has extensive powers to investigate claims if there is a suspicion of fraud, including powers to access people’s bank accounts without a warrant.

If I were running a no campaign on the referendum – and you can bank on at least the Tories and UKIP joining forces on that even if the LDs and Labour choose to sit back, do nothing and see how it pans out – that that’s my first line of attack and I will drag up every tawdry tale of council snooping, abuse of RIPA and data protection failures, etc., I can find to trash the scheme as a gross invasion of privacy.

I will also go after the admin costs and raise questions about the council’s ability to cope with the admin overheads. How many more people will the council need to employ to process all thee new claims for discounts? What will that cost? Won’t that push up the size of the bills for all CT payers regardless of the size of discount?

With the Greens operating as a minority administration on the back of a 32% vote share in 2011, I’m will to bet that a No campaign will easily stoke up enough paranoia over the amount of personal information the council will need to grab to make this scheme work to kill it stone dead with plenty to spare.

I’d just move out!

I can understand the scepticism here, you always get that with a new idea, but this has been fully costed, including admin costs.

Whether the voters will accept it? It would need a campaign to support it, through the trade unions and residents associations, but it is perfectly winnable.

This has the potential to send shock waves throughout local government and even Westminster. Bring it on, I say.

According to the comments on the author’s own blog, the Green Councillors in Brighton do not support this idea and in fact consider it to be a very bad idea, as it would hit poor people living in multiple occupation who would be means tested on the basis of a combined income, and would also require all people living together to share details of their individual incomes in order to submit their means assessment.

So it’s basically some die-hard lefties floating an idea which has already been considered and dismissed by their superiors.

Some of the Green Councillors in Brighton do not support it, but they are the ones making a right pig’s ear of running Brighton anyway.

I’m with Unity on this. You don’t have the information, the infrastructure nor the legal compulsion to force everyone to tell you what their income is. The only people who have anything like accurate records are HMRC and they’re banned by law from sharing them with you.

And if you don’t know what the aggregate income in the borough is before you start then how can you set the rate properly?

9. Churm Rincewind

I’m no economist, but I can’t see how a Land Value Tax can be based on “resident’s income and ability to pay”?

I thought the whole point of a Land Value Tax was that it’s based on land value and not on income?

As the architect of the plans, I can say the majority of working family households claim tax credits and so are used to providing this information and claiming for the benefit.

Why should those on benefits be treated differently from others? It’s one scheme encompassing all households. It will also save millions on the benefit bills as well.

The shared house issues have been addressed and the Brighton councillor in question has received them today. Specific measures have been drawn up for HMOs, lodgers and joint tenancies.

We urgently need to save council services and redistribute wealth. It is time to make a stand. Does anybody have a better idea?

As for the administration, the administration is likely to cost about an additional £2 million a year, with £30 million being raised.

As an accountant, I have devised a scheme that can ensure collection and cross-checking. Information will be held locally and not passed upwards towards government.

Nobody has to apply for a reduced bill but most people are used to forms for banks, loans, bills, rents, cars etc. and will be happy to see something come back for once.

I don’t favour meant-testing but it is unavoidable. We cannot wait for national change. People need saving now. Care homes are needed now. Homes are needed now.

The proposals is both legal and practical.

Apart watching social service be slashed and privatised and councils taken over by corporate giants, action is needed NOW! This is the only positive anti-austerity and sustainable measure that exists at the moment in the country.

I would love to be proved wrong and have a whole list of options to choose from but there isn’t.

“Think carefully what you wish for.”

Assuming the reduction is stepped rather than tapered, this is going to lead to stonkingly insane marginal tax rates for households at the 79% of median income level. That’s on top of the data requirements which are, to put it mildly, nucking futs.

If you had tapering, some variant of this could conceivably make sense as a nationwide policy administered jointly with HMRC using their data. Charges could be levied on individual incomes, and then the Treasury could pay a block grant from central tax revenue that made up the vast majority of council incomes.

Oh wait, *that’s what happens*.

“redistribute wealth”

Oh Dear Lord.

You’re the architect of this scheme? And you don’t know the difference between wealth and income?

That really isn’t a recommendation in someone trying to design a tax system you know.

On what wealth will you examine who are the 20% and who are the 80%?
Income wealth or Asset wealth (or both)?

Hope both are taken into account and not only income again.

15. Man On Clapham Omnibus

13. Tim Worstall

The issue is surely as stated:-

‘We cannot wait for national change. People need saving now. Care homes are needed now. Homes are needed now’

If you have a better idea ,lets hear it.

As for your comment re income and wealth,that was really nitpicking.

“As for your comment re income and wealth,that was really nitpicking.”

No, it’s an important point. Are you going to charge people tax on the value of their hose, their paintings, their pensions, their savings? Or purely on their income? It’s a hugely important distinction.

“Homes are needed now”

Excellent. Down south, where Brighton is, more than half the value of a house is the value of the planning permissions enabling you to build on a specific plot of land. It’s local councils that issue planning permission. All Brighton has to do to make housing cheaper is issue more planning permissions so that that value falls.

It’s really terribly simple.

@ David Walker

Based on the most recent figures (2009) there just over 22,000 families in Brighton & Hove claiming tax credits, so even if we assumed none of those also claim CT benefit that would mean that only 43% of households in Brighton have any direct interaction with the benefits/tax credits system.

However, the figures also show that 16,000 families were in receipt of working tax credits, and a sizeable proportion of those low income families are likely to eligible for at least some CT benefit and will overlap with the figures I gave earlier, which means that substantially under half of the 94,000 households that would be eligible for a discount under your scheme have any kind of interaction with the benefit/tax credits system.

On top of that, Tax Credits are by far the least onerous and intrusive benefits one can apply for. HMRC don’t pry into people’s private affairs to anything like the same extent as the DWP or Local Authority because they don’t need to. If you’re working and paid under PAYE they’ll get the information the need from your employer and if you receive benefits they’ll get that information direct from the DWP.

Anyone who has been fortunate enough to not to have to claim benefits in the last 10-15 years is likely to have no idea just how intrusive the system is these days. Are you aware, for example, that anyone making a fresh claim for JSA will be asked to tell their advisor how much change they have in the pocket?

As Tim’s pointed out, Local Authorities do not have access to the same levels of information as HMRC and will necessarily have to be more overtly intrusive to comply with their fraud protection duties and that is something a lot of people in Brighton will not appreciate or support.

The middle classes may be all in favour of the state grabbing every scrap of private information they can away with when they’re doing it to someone else, but it becomes a very different matter when they’re on the receiving end of that kind of treatment.

@ 11

I don’t favour means-testing but it is unavoidable.

No. It isn’t.

A fair and efficient system of local taxation would certainly avoid it.

And for the claim that it will cost only £2 million to implement this system, lets put this in perspective.

What is being proposed here will increase the annual number of CT benefit claims/renewals processed in Brighton by 230% to a level that will be 50% higher than either Manchester or Liverpool and roughly 80% of the number of active claims in Birmingham, which is by the largest local authority not just in the UK but in Europe.

And Brighton are going to achieve that for just £2 million a year???

I wonder if David has bothered to check just exactly how much work will be needed to revise Brighton’s core IT systems to accommodate these changes. If Brighton’s anything like a lot of councils then the back-end of it’s core finance systems, including its council tax system, will still be running on a 15-20 year old mini computer running bespoke software – and system rewrites don’t come cheap.

Birmingham spends close to £13 million a year on customers services alone, most of which goes on its call centre, and it’s only managed that by outsourcing the call centre to Capita and screwing the workforce over – it’s call centre staff earn £3-4k less than BCC staff they replaced did 9-10 years ago and from about 3 years ago all new employees were handed contracts with no entitlement to contractual sick pay. I know the situation in Birmingham very well because I know someone who started at the call centre when it first opened and when the recently had to change their shift due to child care responsibilities, Capita tried to shaft her and take away her sick pay and bank holiday entitlements – unsuccessfully, I might add, thanks to a bit of union intervention.

As a bit of reciprocation, I’m with Tim here – you don’t have the infrastructure, information or legal powers to make this work and because this relies on shift from a property-based system to an income-based system pretty much the first rhetorical play that any no campaign will make will be to poison the local well by calling it a poll tax…

…and that never ends well.

Wealth will be measured by property (land/buildings) and income.

The Local Authority is the local people’s and so any data collected will be not fed to the state.

People can authorise giving access to DWP/HMRC data to check or collect data. It will not be on a mass scale but an individual one unless DWP/HMRC agree to a formal transfer.

The form will not be anywhere near onerous as benefit forms and will very close to Working Tax Credit forms.

The data required to check UK property is already publicly available so it’s just the income side.

@18 Pagar
Perhaps you’d like to suggest an alternative then.

In terms of admin.
People can be asked to enter data in an online form. For the rest they complete and post.

The online form can feed straight into calculations saving masses of time and money.

In terms of checking.
It’s an operation decisions as to whether all data is verified or just random selections plus those that trigger a verification.

Let’s not be defeatist. Offer a problem but do try to offer a solution as well.

@18 Pagar
Perhaps you’d like to suggest an alternative then.

You already have it as a policy.

Land value tax.

@ David Walker

So how will you deal with wealth rich/income poor people, such as pensioners who have most of their wealth tied up in an expensive property bought decades ago, but very little income from their pension to pay your taxes?

Tyler, although this plan is ridiculous, the Poor Widow thing has been demolished, crucified, taken down, it is an ex-argument, it is no more. See any thread on LVT for a reasoned demonstration of how irrelevant it is.

(the shorter version is “roll-up charges til death or sale, job done”)

“Wealth will be measured by property (land/buildings) and income.”

And on what basis do you plan to value people’s land/buildings? Don’t forget there been no standardised revaluation of domestic property since Council Tax was introduced in 1992 and I doubt the law allows you to deviate from existing Council-Tax banding and valuations.

“The Local Authority is the local people’s and so any data collected will be not fed to the state.”

So you haven’t even bothered to read the Local Government Acts let alone understand them.

“People can authorise giving access to DWP/HMRC data to check or collect data. It will not be on a mass scale but an individual one unless DWP/HMRC agree to a formal transfer.”

Wrong.

Data transfers between local authorities and the DWP already happen automatically because the passporting of benefits but direct transfers from HRMC will require primary legislation.

“The data required to check UK property is already publicly available so it’s just the income side.”

So are you talking about Council Tax valuations or valuation data from the land registry – it makes a hell of difference.

“In terms of admin.
People can be asked to enter data in an online form. For the rest they complete and post.

The online form can feed straight into calculations saving masses of time and money.

In terms of checking.
It’s an operation decisions as to whether all data is verified or just random selections plus those that trigger a verification.”

This is from the current Brighton and Hove Adult Learning Strategy…

“The large number of graduates and residents with high level qualifications masks the number of residents with very low skills: more than 40,000 individuals aged between 16 and 74 hold no qualifications and almost 12,000 lack basic literacy skills and 60,000 lack basic numeracy skills.

According to the 2011 Census, for more than one in twenty residents their day to day activities are ‘limited a lot’ due to a long term health problem or disability; For one in twelve residents aged three or over, English is not
their first or preferred language. ”

Yeah, an system based on filling in internet forms is really going to work with those numbers.

“Let’s not be defeatist.”

Let’s try operating in the real world and not the People’s Republic of Narnia.

27. chris Gilmour

What would be the end for someone unable to pay their progressive council tax, but unwilling to submit to means testing?

@ UK Liberty, thanks for the link.

@ Unity, assessing the site-only rental value of UK residential land for LVT or progressive Council Tax purposes is an absolute doodle.

http://kaalvtn.blogspot.co.uk/p/valuations-and-potential-lvt-receipts.html

Even that arch-Home-Owner-Ist Fatty Pickles admitted that it would cost about £10 per home for a full revaluation.

it looks like this is a measure thats being discussed in green party circles rather than a proposal so even though the writer may be undermining his own case with that headline. if this is a good idea then i think it would be best to promote it outside of electoral politics intially. two last point councils are working in government sraight jackets any trick they pull to raise revenue could be challenged by central government and will likely divide anti-cuts campaigners many of whom expect rightly are wrongly councilors should resign or be dismissed rather than try and put together a legal budget. secondly its not enough to have this idea even if it turns out to be good you would need the agency your method of acheiving it. in brighton for example you would need both a strategy for getting the referendum through the council chamber and a strategy for winning it. the greens dont have a majority is something critics of there adminstration in brighton often forget.

PCT appears to have some merit in principle; but can Greens afford to take a gamble on a ” NO ” to a referendum ?

Where would our Elected Members be then if we were defeated?

Means-testing is a major stumbling block politically and practically.

Land value tax is the only progressive, fair and practical new tax we should be fighting for.

A re-assessment of local property value should also be ” Worth Fighting for” !

The agenda for the Party Conference gives very little detail, apart from a +100% tax starting point and an estimate of 60% paying less and 40% paying more. When will more details of the proposals and costings be published, please, so that others can make an estimate of the impact a scheme would have in their area ? Thanks.

A progressive council tax could only work well if it were to be both administratively simple and fair. For example, it could just involve increasing Council Tax in the highest bands, G and H, by fixed percentages. People who had owned such properties for a long time will have benefitted from many years of tax free capital gains. Those who have acquired such properties recently must have been very wealthy to have afforded to buy them .So the measures I have suggested here would be both simple to administer and fair to the vast majority of people affected. Use of any sort of local means tax would be an administrative nightmare.


Reactions: Twitter, blogs
  1. Liberal Conspiracy: Could the Green party’s Progressive Council Tax idea work? | moonblogsfromsyb

    […] via Sunny Hundal Liberal Conspiracy http://liberalconspiracy.org/2013/08/18/could-the-green-partys-progressive-council-tax-idea-work/ […]

  2. Next month’s Autumn Conference could solidify the Greens’ place on the left | Bright Green

    […] Philosophical Basis change (don’t get me started …), and proposals for a locally-implemented Progressive Council Tax to stop the cuts – made more urgent by the recent refuse-worker pay […]

  3. Autumn Conference could solidify the Greens’ place on the left | March the Fury

    […] Philosophical Basis change (don’t get me started …), and proposals for a locally-implemented Progressive Council Tax to stop the cuts – made more urgent by the recent refuse-worker pay […]

  4. What role for the Greens when we have Left Unity for our arguments? | Scrapper Duncan

    […] a powerhouse of ideas about how to avoid austerity. Witness the recent debate about the so-called Progressive Council Tax, Councillor Ben Duncan’s call for a posh hotel room levy or speculation about the possibility […]





Sorry, the comment form is closed at this time.