Labour MP Not Afraid To Be “Unpopular” In Calling For Council Tax Reform

Jonathan Brash (left) joined then-Leader of the Opposition Keir Starmer and Shadow Home Secretary Yvette Cooper on a visit to Hartlepool when he was a parliamentary candidate last year (Alamy)

5 min read01 December

Having been elected as the MP for Hartlepool in July, Jonathan Brash has set up a new All-Party Parliamentary Group (APPG) for Council Tax Reform, which includes Labour, Conservative, Liberal Democrat and Green Party parliamentarians representing constituencies nationwide.

Describing the current council tax system as an “obvious inequality”, Brash told PoliticsHome he hopes the APPG will be able to come up with an alternative system and present it to the Government “within the next year”.

“It’s a completely broken system that’s not fit for purpose,” he said.

In the early 1990s, council tax replaced the deeply unpopular poll tax that had been introduced by Conservative prime minister Margaret Thatcher a few years earlier. Rather than charging households a fixed sum, council tax is charged by assigning each property a band based on the property’s value.

But more than thirty years later, these bands have not been updated across the UK and in Brash’s words, there is “thousands and thousands of pounds difference just because of your geography”.

“The worst thing about it is because of the nature of the system, it hammers areas in greatest need,” Brash said.

“If you’re somewhere like Hartlepool, the proportion of band A and B properties is much, much higher.”

There are plenty of experts who agree with Brash. David Phillips, an Associate Director at the Institute for Fiscal Studies (IFS) wrote earlier this year that the council tax system is “out of date, and highly regressive with respect to property value”.

An IFS study in 2020 showed how council tax bands – based on the value of their property relative to others in England on 1 April 1991 – are significantly out of step with changes in property values across the country in the 30 years since. 

Council tax is a much higher share of property value for low-value properties than high-value properties, and the IFS predicted that revaluing council tax to match property values would result in a fall in average bills across most of the North and Midlands, but increases in average bills in London and much of the Home Counties. Some areas in the southwest of England also face disproportionate council tax bills.

If the council tax system were to be reformed, residents in areas such as London could likely end up paying significantly more at a time when thousands of people in the capital city already face extortionate rent prices and a lack of affordable housing.

“It’s a completely fair point, which is why you have to sit down and genuinely do the work to look at the impact of new systems and how you could ensure that there weren’t unintended consequences, where you actually start hammering people who are struggling in other parts of the country,” Brash said.

The Hartlepool MP said ministers would therefore have to be “creative” about reforming the system, and would also have to think about changing what local authorities are responsible for. Adult and children’s social care takes up a huge proportion of local authority expenditure, for example.

However, there is seemingly little appetite for council tax reform in No10. During the General Election campaign earlier this year, Labour ruled out changing council tax bands. Now in office, the Labour administration is likely to see council tax reform as a high-risk move at a time when its public approval ratings have fallen significantly.

Brash said he knew there would be an “enormous amount of nervousness” about pulling apart the entire council tax system and admitted that it would lead to some people having to pay more than they do now in order to “rebalance the system”.

“I have no fear whatsoever about being unpopular in government circles about this, because it’s a really difficult conversation, but we have to have it,” Brash said.

“It’s always going to be unpopular in some circles when you are arguing for a complete change to a system where there will be losers.”

The Labour Government has already made numerous “tough choices” – a phrase repeated by Prime Minister Keir Starmer and Chancellor Rachel Reeves. Since the election, Starmer and Reeves have overseen the introduction of means testing of pensioners for the winter fuel allowance, committed to keeping the two-child benefit cap, made controversial changes to inheritance tax rules, and increased National Insurance contributions for employers.

Brash admitted he felt the threshold for the means testing of the winter fuel allowance was “too low”, but overall found it “heartening” that ministers were willing to tackle difficult topics. 

“What you’ve got now is a government that’s going ‘we live in the real world’, unlike the last government,” he said, adding that he, therefore, hoped that the Government would be open to having council tax reform on the agenda.

Brash thought the Government had so far been reluctant because “no one has actually yet offered a genuinely comprehensive alternative” and “the conversation is not being had” – and hoped his APPG would help to change that.

“We have to elevate it now to make it a national conversation because that’s the only way you’re going to get an appetite for change.”

But Brash does not expect change straight away: “It is going to take time to completely reform a system that has been with us for 30-odd years, and it’s a complex ask to work out how to do it better.”

He added that he would like to see politicians get away from “a tendency in national government to deliberately create a disconnect between the central government and councils”.

“Central government needs to stop pretending that the local authorities and lots of mayors have real choice when it comes to expenditure, because they don’t.”

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe