Kennedy: My plans for Council Tax
As the Government carries out a review into the fairness of the Council Tax, the Liberal Democrats, outspoken critics of the current system, yesterday unveiled their plans for an alternative – a local income tax.
As the Government carries out a review into the fairness of the Council Tax, the Liberal Democrats, outspoken critics of the current system, yesterday unveiled their plans for an alternative - a local income tax. Here leader of the Liberal Democrats CHARLES KENNEDY describes his party's proposals
This week, the Liberal Democrats are stepping up our campaign to axe the much-hated council tax and replace it with a fairer, local income tax. For many years we have argued strongly that this dreadful successor to the poll tax, dreamt up by the Tories, makes unfair demands on people with its often arbitrary and excessive calculations. It's a slap in the face to sensible, balanced politics.
The problems have been especially severe here in East Anglia. Pensioners and ordinary families have been hit hard by above-inflation council tax rises, forced upon local councils since Labour came to power. Let's make this clear - Suffolk councils have raised taxes in excess of 19%, in Norfolk in some cases it's over 15%. These are unacceptable and unsustainable increases.
At the root of the problem is inadequate funding and excessive central control of local government and the regions from Whitehall. Gordon Brown has made the problem much worse by shifting large expenses from central to local government and insisting that somehow local councils come up with the money. It's pretty sneaky. A local income tax would be much more honest, and much fairer.
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It's no wonder that pensioners have been outraged and started their own campaigns. I am outraged! That's why the Liberal Democrats have sought an answer. The local income tax would be directly related to the ability to pay. If you are on a low income, you would pay less - and in some cases a lot less - than your council tax. Pensioners in particular have been hard hit by council tax, with the poorest 20% of pensioners paying nearly 6 times as much in council tax, as the richest 20% of non-pensioners.
Overall, we think, that a local income tax should mean that 70% of people would be gainers, paying less in local income tax than their council tax, or would be largely unaffected.
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Another benefit of a local income tax is that it could be much more efficient. It would be easy to collect. Instead of the current costly bureaucracy we propose to do it through the national tax system. I believe that, in a little over three years, such a system might generate over £1 billion pounds which would otherwise have been spent on unnecessary administrative costs.
The Liberal Democrats have always been a party devoted to the idea of building better communities with greater control over local circumstances. This proposal would provide a framework which would enable a Liberal Democrat government to cut national taxes and genuinely enable citizens to have greater influence through their local authority over spending on the principal priorities for their area.
Amazingly, neither of the other two parties seem to have grasped how much damage the council tax is doing. The Prime Minister isn't really interested in dealing with the problem and the Conservative party is no better. It has no ideas, it has come up with no plans or proposals except to accept the status quo. I find this complacency quite breathtaking.
The Liberal Democrat message is that you don't have to pay these taxes, you shouldn't have to pay these taxes, there is another way - let's scrap this unfair tax and find a better system.
For more information on our council tax proposals see our website at www.axethetax.org.uk