Caroline Spelman leads protests at use of Big Brother computers to drive new council tax rises

Caroline Spelman has reacted angrily to Labour plans to use 'Big Brother snooping technology' - being modelled in Northern Ireland - to make people living in desirable areas pay more and more council tax:

"There is growing alarm about the Labour Government's use of Big Brother computers to hike taxes.  First, they want to log and record every feature of your home, from double glazing to the number of bedrooms. Next, they want clip-board wielding bureaucrats to have the right to inspect your home.  Now, Labour intends to tax you not just for every home improvement, but also the neighbourhood you live in.  This is the hallmark of an oppressive and greedy government finding every more stealthy ways to tax working families and pensioners and trampling over privacy when it suits them."

The following factors could all drive up council tax bills if Labour's computerised modelling of an area's 'desirability' is adopted nationwide:

• Good local exam results
• Good local hospitals
• Low crime rate
• High number of local professionals
• Size of phone bills
• What sort of pets neighbours have
• Proportion of local people who pay credit card bills on time
• Where neighbours go on holiday...

Leader-writers at The Daily Mail are angry: "Don't dare live in pleasant surroundings.  Don't dream of crime-free streets or decent schools.  And don't even think of a loft conversion or a new kitchen to improve your home - not if you want to avoid being penalised and punished."

Comments

[William Norton]

Those Govmts whom the gods wish to destroy they first persuade to reform local government finance.....

So, on the principle that history repeats itself as farce, we can look forward to the entertaining spectacle of mass rioting in Sloane Square, as police horses try to ride down barbour-wearing protesters hurling empty bottles of Dom Perignon etc etc

Presumably also, the next Red Leader after His Blairness will be John Major Mk II. Who could he be?

[NigelC]

Once again NuLab demonstrate the politics of spite and envy.

Don't bother working hard and trying to better yourself - you will simply pay more tax. Another disincentive to those who are trying to escape the worst areas, to maintain their self respect and lead a decent life.

[Simon Chapman]

William,

The Learite descent into madness is already evident from some of the "desireability factors" on the list.

To take a couple of examples:

What sort of pets do my neighbours have?
Where do my neighbours go on holiday?

What would the answers "Lurchers" and "North Cornwall" say about my neighbours?

Here in South Kesteven (SW Lincolnshire) the profile might vary widely:

Friends who cannot afford a mortgage, rent an old cottage from the local agricultural estate, & exercise their hounds illegally in the food-abundant fields around here, (jugged hare being so "now", organic & also cheap if sourced in such circumstances) before hitching a caravan to the back of their very second-hand car & heading for a campsite somewhere on the cliffs.

The estate owners who keep these excellent hounds as family pets wandering decoratively across their acres before heading off to their second home just outside Padstow (a more climate-friendly and socially-exclusive choice than a cheap and polluting flight to Tuscany).

This is before you look at the in-built incentives to form a consortium with neighbours pledging to pay our credit card bills as slowly as possible because of the fiscal benefits, the rush to Skype for all of us who can afford a computer & broadband to cut our phone bills down, and the absolute nonsense, on the day of the Stern Report, of taxing those who have double-glazing.

Leaving all this to one side, Caroline is also right to focus on the underlying principle - we are becoming, if we are not already, the most over-surveyed nation in the West. Our home my be our castle, but the government is deep inside the keep.

[EdR]

Even by NuLab's standards, being penalised because people on your street pay credit card bills on time has to get some kind of award for dumbest tax idea ever.

[RB]

The idea of the awful Caroline Spelman leading anything is a joke!

[Esbonio]

FWIW, I like Ccaroline Spelman which is not something I can say about all Tory MPs. And I agree we are completely over-surveyed. Labour have completely lost the plot but the elctorate won't do anything about it until it is too late.

[Matt Andrews]

What slightly baffles me about this is that I should have thought that all the factors highlighted are already reflected in the price of houses. House prices (or at least unindexed house prices) are the basis of current council tax.

Am I missing something?

[Given Up]

These proposals may well kill the property mkt. They could cause many pensioners to sell up and downsize. The buy to let schemes will go negative in terms of finance, putting many more properties onto the mkt thus destroying any capital gains potential, which in turn will make the banks nervous as the value goes below the lending, which could force liquidation.

[jane davis]

The Tories should concentrate on attacking the local income tax proposals. That really would be at tax on nice areas.

[Ted]

So we are coming back to Rates - this time based on the total value of your home as against its potential leasing value (which inherently included things like neighbourhood, improvements etc...).

The bit I don't undestand is why there has to be such a vast bureaucracy to do the valuation - surely Upmystreet.com plus the Land Register provides sufficient info to create an index of house values close enough to use?

Then why a standard 0.68% of value tax - surely there should be some relationship between what you pay and services your council provides? This way there's even less accountability as you pay whoever runs your council.

Over-engineered, over-complex and unfair - must be a New Labour intiative.

[Mark Wadsworth]

Matt, that is the whole point. All these factors are "already in the price".

So either it is Tory MPs getting in a lather about nothing, or else Nulab are really looking forward to having a good snoop.

Don't forget the millions our beloved government spends on adverts reminding single Mums to tell HMRC if they get a new partner!

BTW they are scrapping bands in Northern Ireland and will charge Council Tax at a flat 0.78% percent of a home's market value from next April. You can check up on interweb, there doesn't seem to have been that much snooping going on.

I didn't think that they'd introduce it in England until Peter Hain denied it in the paper this morning. In other words they will.

[Mark Wadsworth]

Ted - there IS a direct relationship between the value of your property and the standard of local services. Homes in the catchment area of a good school, or in an area with more police (and less crime) are getting better services than, let's say in Hackney in East London.

Now of course some things that boost the value of your home, the nearby golfclub, a nice shopping parade, whatever, are not provided directly by the council, but it still the council in charge of sorting out planning permission and car parking and transport and so on that attracts businesses/employers etc to an area.

Now you might point out that BETTER services are not necessarily more expensive that POOR services, fair enough. One copper is money better spent than two "five a day" advisors. But that is a different topic.

[William Norton]

Mark, Matt et al: not quite. Banding works off the 1991 capital value, and new homes are assigned a notional 1991 value. So, if your area has relatively improved since then in theory you're under-paying CTax and if it has gone down you're over-paying. There is no direct flow-through from today's sale price and CTax, subject to the ability to appeal against banding (and as I recall, when CTax was introduced during the early 1990s property recession most appeals demanding an upgrading of the band because owners felt it impacted on their sale prospects to have their home marked-down).

New Labour shied away from a general revaluation before the 2005 Election and this idea is an attempt to carry one out through the back-door. The better result would be to join up the Land Registry (which has contemporaneous sale price data) and CTax banding (so you would have continuous re-banding) but nobody has worked out a convincing formula for doing so.

[Simon Chapman]

William,

Wouldn't the best result of all be a local sales tax, as Direct Democracy & others have been proposing?

[Mark Wadsworth]

William, Ted, yes of course the whole valuation proces could be carried out using Land Reg, upmystreet, mouseprice and so on for very little expense, as long as the appeals process is simple and easy.

Nobody here seems to like the revaluation idea. Fair enough, it's Nulab in charge and they can completely foul up anything, but I don't see how notional banding as at 15 years ago is somehow fairer.

[William Norton]

Mark/Simon - once you move outside CTax as we know and love it you can have hours of endless fun designing a new system of local govmt finance. Like the Giant Rat of Sumatra, the world is not yet ready to hear my own solution.

One thing I would say is that there is limited mileage in devising new additional top-up taxes for local authorities to charge: there's less buoyancy in that and not much scope for local tax competition and cost control (they'd all simply add on the same extra taxes and we'd be back where we started). Councils should be given scope to charge new taxes at the same time as there is a reduction in central grant AND central taxes - the incentive for a council to control expenditure is then reflected by the amount they choose to add back in new taxes; exposes the less efficient more clearly.

e.g. if you wanted a local income tax (I don't) you would allow councils to charge up to, say, 5% (or whatever) and reduce existing basic rate income tax by 5% (picking example numbers at random).

[Londoner]

The only logical explanation is that the Government's objective is to discredit Council Tax to such an extent that people are begging for a local income tax, which must be Labour's (but not our) truly preferred outcome.

Personally I have no objection in principle to Council Tax, provided there are means tested rebates for those on particularly low incomes, probably with some extra rebate for those over 65. If that is ones position, then we should bite the bullet and support a new valuation, thereby dispensing with all this nonsense. Adjustments can be phased in over as long as 10 years to avoid precipitate leaps. So long as the adjustments up as well as down come in over the same period the transitional period would be revenue neutral.

Ironically the Government's present proposal would appear to favour someone like me living in an inner London borough where the crime is high, the (State) education poor, and the local government Ward on average very deprived (because it is 75% social housing but this masks the 10% expensive owner occupied in which I live). However, none of these have stopped the price of a good sized family house near to the centre of London (such as mine) having gone through the roof since 1990. The reason is that markets cannot be analysed by reference to objective factors - they are about supply and demand and governments cannot invent what the price should be.

Regarding Caroline Spelman, I am in the "underwhelmed" category. She is moderately likeable but I have rarely seen much evidence of strategic thinking. Local government finance is fiendishly complicated and needs someone at the brainier end of the political spectrum, which she does not seem to be. Could be a good job for Oliver Letwin when the policy groups have all reported and it is time for him to move on.

[George Hinton]

Envy, jealousy and spite against those who they percieve to have more than their allowance.

[sjm]

If I wish to buy a bed, a loaf, a holiday or a private medical opinion, I am charged what it costs to produce, advertise and sell the product/service, plus a profit margin.

At no time am I asked for a detailed account of my financial status, in order to determine the price I will be charged.

Councils are (or should) be providing the community with services - they need the community to therefore pay for them. The process should be the same as listed above, without the profit margin. Whether I live on the minimum wage, whether I'm a pensioner or whether I'm rich as Croesus should have nothing to do with it.

[Mark Wadsworth]

sjm, fair enough, but why stop at "local" services?

Why not replace ALL taxation with user charges and/or a simple poll tax of around £12,000 per adult per annum, enough to cover all government expenditure?

I for one would be delighted with this system, as my family's total tax burden (including income tax, NI, council tax, VAT and so on) is currently somewhat more than £24,000.

But I don't think it will go down too well with the majority of people who don't earn as much as my wife and I.

[Graeme Archer]

I agree with everyone who has said "what a dreadful idea", how iniquitous, etc etc.

And yet and yet ... surely there's got to be SOME kind of reward for living in Hackney? Judging by the bullet list in the original article, I would probably qualify for a rebate from central government.

Since that's never gonna happen, no doubt there'll be a Hackney special list to make sure my Hackney privelege charge continues to rise relentlessly, eg no. of times you are mugged in a month, no. of times you see car windows being smashed, no. of times you have to scream at schoolchildren to switch off their wretched phones on the bus &c &c

[Patsy Sergeant]

Ted @ 11.30 - I can tell you why there has to be an army of bureaucrats to do the 'work', -- another bunch of people beholden to this government for their wages, and therefore most likely to be supporters at an election!!

[sjm]

Well, way to go Mark! Flat Taxes R Us! I have no problems with your suggestions.

[Richard]

I can't believe Labour would actually introduce this in England. They would be obliterated in the next election. Unless this only affected Tory areas...

[Sally Roberts]

You make a good point there, Patsy! Invariably in Labour strongholds there are the largest number of public sector workers...no coincidence there I think!

[John Moss]

Councils need more options as to how they raise their income. It is simply not possible to swap C-Tax for a single something else. We tried and failed, even though the main reason for the C-Charge being introduced a year early in Scotland was the rage felt there at - you guessed - a rates revaluation.

Give Councils lots of different tax rasing powers, like hotel room charges, local income tax, local sales tax, property charges etc. Say this was phased in and the chnages added up to enough to move the percentage of their income raised locally by about 5% a year for 5 years. That should see them raising about half their income by then, instead of the paltry 20-25% they raise now. National taxes would be cut accross the board, local taxes would rise to compensate, but there would be competition!

Localities would do what was right for them. Poorly managed councils would be voted out as turnout in local elections rose, swelled by the ranks of the over-charged. Strange results will ensue, but if we can run Councils like Eddie used to run Wandsworth - the only Council ever to give their residents a rebate - we can win anywhere.

Graeme Archer will be Mayor of Hackney one day!

[Penultimate Guy]

Until the Conservative Party announces how it intends to fund local councils, if not by council tax, then Spelman's so-called protest is nothing but hot air. If you base tax on the value of people's houses, then there is no reason why all these factors should not be taken into consideration in an (objective) valuation.

[sjm]

Eureka!

How to fund councils?

How about a flat-rate per capita charge?

What's that you say? Too easy, too fair, doesn't give enough work for an army of bureaucrats, no opportunity for social engineering?

Quite.

[Penultimate Guy]

Ah, yes. How well I recall the army of pin-striped bureaucrats rioting in the streets, hurling their paperclips in protest at the overwhelming ease and fairness of the poll tax.

[Huntarian]

The Council Tax inequality as between one property /location and another has been a disaster waiting to happen since Heseltine introduced the tax and was foolish enough to exclude periodic revaluations from the legislation. As another contributor has pointed out, the poll tax was an answer to an outcry in Scotland (and to a lesser extent in England) over the 1985 revaluation which saw rateable values of homes soar, not just because of revaluation but because the Assessor in Scotland and the VO in England and Wales altered their interpretation of the so called hypothetical rental value towards a more realistic view of the levels of value.
We now have the utterly crazy situation where all Council tax bands have to be adjusted back to 1990 levels of value, which takes no account of what has happened in the times in between in the property market.
Equally crazy is the quinquennial rating revaluation which thanks to Malcolm Rifkind and the 1985 revaluation in Scotland, we now have a monumentally complex system of transitional relief where by irrespective of increases in rateable values at revaluations in real terms rates (payable) increases are capped to 10% on the previous year and to add insult to injury if the rateable value goes down inverse transitional relief applies to ensure that the ratepayer actually pays more.
All of the above is a longwinded way of saying that as a property professional with more years at the coalface than I care to remember, I have only one thing to say about property based taxes; they are pants!
Council tax is totally iniquitous as less that 30% ( even less in Scotland) of the electorate actually pay it and it accounts for 15% at most of local government spending. No small wonder that in the socialist republic of Scotland there is absolutely no shame amongst the spendthrift Labour councils about council tax almost doubling since 97.
The UBR was an honest attempt to create a level playing field as between Basildon and Barra but then came transitional relief and inverse transitional relief and the revaluation became merely an expensive but pointless exercise to keep a small army of civil servants employed.
Tax on property as a means of paying for local services is an outmoded, iniquitous method of funding services and should have no place in Conservative thinking.
In stead of sounding siren cries about the nosey parker from the VO etc what we should be developing is well argued case for a local sales tax which would be easy to collect and would at a stroke create local accountability, especially if all local government services were funded by it. In so doing we could also argue the case to fund education directly to school boards and put social services where they belong in a centrally funded department accountable to government.
Of course Caroline Spellman is right to point out the further Labour stealth tax in the making , but why not go the extra mile Caroline, and lets have some serious reassessment of how local government is funded and how it operates.

[Prodicus]

Wandsworth. Wandsworth. WANDSWORTH.

[NigelC]

Will we pay extra council tax if we install solar panels or wind turbines?