Tories say voters should be able to veto Council Tax rises. But would it work?

By Jayne Warren - 13/11/2007

The rising cost of Council Tax has long been a thorn in the side of many older people - so much so that prison has been an alternative to 'paying up' for some brave pensioners. So Tory leader David Cameron's statement today (November 13th) in which he says that voters should have the right to veto above-inflation increases should strike a chord with many Mature Times' Readers. It also highlights the growing resentment against what is seen as an unfair tax by millions across the country.

But what does it actually mean in practice? According to Cameron, it means that, under a Tory government "Councils that want to introduce high council tax rises will have to submit their plans to a local referendum, and explain to local taxpayers why they want to raise taxes by so much.''

Ironically, of course, it was the furore over local government taxation introduced in 1990 which helped lead to the downfall of Margaret Thatcher. Her 'per-person levy' Poll Tax was replaced with the current Council Tax system in 1993, with tax levels determined by the notional value of people's properties. The government said there would be regular revaluations, but each one has been postponed. The result is that people moving into homes built since then find themselves paying a tax based on what their council estimates their home would have been worth in 1991.

But under Labour, Council Tax revenue has doubled since 1997, with the average tax increase peaking at 13% percent in 2003. A delayed government inquiry in March suggested the U.K. should increase taxes on people who live in the most expensive homes and begin the revaluation, which would push many people into higher tax brackets.

Cameron's suggestion of Councils holding referendums if they want to bring in "high" council tax increases, means that people who vote against a rise would get a rebate the following year - replacing the current system of central government "capping" in England and Wales. Under his proposal - outlined in a speech in east London - there would be a "trigger threshold", above which councils would have to hold a referendum. In England this would be set by Parliament, and by the Welsh National Assembly in Wales. Bills sent out to households would ask whether they supported any "excessive" increase, with a referendum form attached.

Mr Cameron told BBC Radio 4's Today programme: "It would mean in many cases that councils would not be able to increase tax because people wouldn't want that to happen, but I think it's right to give people the ultimate say." Whilst not stating how often it would be used, he emphasised the need for "More local control and more local discretion." Effectively, the democratisation of Council Tax.

But how much difference would - or could - this really make in practice? Is it just more hot air over an issue that has become a red-hot political potato? Some local authorities such as Croydon, Milton Keynes and Bristol, have already trialled council tax referendums in the past, and both Croydon and Bristol residents voted for the lowest possible rise. Not surprisingly.

Labour's Communities and Local Government Secretary, Hazel Blears MP, responding to David Cameron's speech, said: "If David Cameron's so-called new power would have any practical effect it would be to allow council tax rises to be set above current levels of capping.
 
"Labour is already giving local communities more power to decide how the money they get from central government is spent locally. And powers for local councils to hold a referendum on the level of council tax increase already exist, and have been used before in Bristol, Milton Keynes and Croydon.

"The reality is it is Tory councils across the country who are driving up levels of council tax, it is Tory councils who are cutting local services, they are not asking local people what they think about that, and that is the real issue David Cameron needs to address."

Christine Melsom, from IsItFair? campaign, told the Mature Times: "The real problem is that so much local government spending is determined by central government.  However we welcome the idea of local referenda.  If nothing else, they might make central government realise that Council Tax is already too high.  Many more Croydons and Bristols would help to ram the message home."

Meanwhile the Local Government Association (LGA) said that voters were already able to vote against rises in council tax via the ballot box in local government elections.

Do YOU really think it will make any difference whatsoever?