Essex tax hike fears

A NEW method of council tax based on the value of people's homes would be “calamitous” for Essex pensioners, it was warned last night. The Conservatives have claimed the Government is “plotting” to introduce a house price tax set at 1% of property value.

A NEW method of council tax based on the value of people's homes would be “calamitous” for Essex pensioners, it was warned last night.

The Conservatives have claimed the Government is “plotting” to introduce a house price tax set at 1% of property value.

If the scheme does get the go-ahead in England, as it already has in Northern Ireland, there are fears pensioners would be hardest hit, with the average local tax bill rising from just over £1,000 to more than £2,000 annually.

The news has been met with dismay by pensioners across Essex, whose fixed incomes have been squeezed and squeezed by above inflation council tax hikes.


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Labour have vehemently denied the Conservative claims, saying they are simply scaremongering.

But the Tories are unrepentant, saying families and pensioners who have saved and improved their homes would be penalised by a tax that cashes in on the country's housing price boom of recent years.

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They say a review of local government finance, due out next month, is actively considering how to implement such a scheme in England.

The current average council tax per property in England is £1,056 for 2006-07, but a 1% house price tax would leave the average local tax bill at £2,027 a year, according to the Tories.

Gordon Beare, honorary secretary for the Tendring Pensioners Action Group said it was “disgraceful”.

He said: “Pensioners have already been hard hit by council tax in its current form and 1% of house value would be a tremendous increase for pensioners.

“Good God - that means the Exchequer would get more in tax than he gets at the moment and would put yet more pensioners on the poverty line.

“Everybody is looking for a replacement for council tax but this would be calamitous for pensioners, it really would - it would double my local tax, but the amount we pay is not returned in service.”

Douglas Carswell, Tory MP for Harwich, said he was not in favour of the initiative but said debate was needed about the council tax system.

He added: “This is the wrong answer to the right question and this is the wrong way of solving the problem.

“But an incoming Conservative government, or any government, sooner rather than later is going to have to answer the questions about what we do about local government financing because at the moment of £4 of local council spending in Essex, £3 is coming from Whitehall.”

Mr Carswell, who has been in favour of local VAT receipts financing expenditure, said he was awaiting the outcome of a review of town hall spending across the country by Sir Michael Lyons.

Caroline Spelman, shadow secretary of state for local government, branded the idea as “sinister”.

She said: “It is increasingly clear that Labour ministers are plotting to introduce a house price tax and deliberately tap into the rise in property values in recent years.

“It has been imposed on Northern Ireland from April. Now Scotland is considering it too. I fear England is next.”

Last week the Scottish Parliament discussed a proposal from the former governor of the Bank of Scotland to introduce the scheme north of the border.

But minister for local government, Phil Woolas, said: “This report has absolutely nothing to do with council tax in England and to suggest otherwise is nonsense and scaremongering.

“Scotland has devolved powers and therefore separate policies and separate systems.

“Last week it was Northern Ireland, then Wales, now it seems that Scotland is being used in yet another desperate attempt to foster scare stories on council tax in England.

“This won't work because it is simply untrue to claim there is a read across from the devolved bodies to England.”

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