Cameron highlights council tax in get-tough interview with Daily Mail

On the day that he embraced the toughest of analyses prepared by his predecessor Iain Duncan Smith, David Cameron has also used a wide-ranging (and very encouraging) interview with the Daily Mail to signal a determination to stand up for 'middle class values': 

"The middle classes are the backbone of the country and I completely understand their concerns.  It is who my constituents are made up of and I have a real sense of their anger at the moment over rising council taxes, crime, dirty streets, the lack of safety; concerns about finding schools for their children, dirty hospitals...This is the context of my life as an MP.  What I would say to strivers is that I don't want to let them down by making false promises about tax that I can't deliver. A Conservative Party led by me will be able to ease the pressure on hardworking families of middle Britain.  I want to take away the endless controls and bureaucracy of local government which is causing this rise in council tax, the single most unpopular tax there is at the moment — and people fear another great clunking fist of council tax rises. I need to work harder to get that message across, and I accept that."

The reference to council tax is interesting.  An ICM survey for the TaxPayers' Alliance found out that the regressive council tax was Britain's least popular tax.  Mr Cameron has welcomed the Kirklees approach to cutting council tax for pensioners.  Any chance of the rest of us getting some relief, Mr C?

Comments

[Mark Wadsworth]

Here I go again.

Of course Council Tax is awful because it's regressive, council tax makes things worse, the next biggest tax on properties is SDLT, which is equally unfair because it punished people who move, especially people who move into expenive houses, the next biggest tax is Inheritance Tax which again is unfair (semi regressive - it hits those in the middle who can't afford fancy scheme) but the fact is that Inheritance Tax is in practice a PROPERTY tax.

Now how about a "location benefit levy" on all land values to replace all the above taxes (and more besides)? Everybody pays the same rate, no exemptions? How is that unfair?

[David Boothroyd]

Who was it who brought in this hated 'Council Tax'? Was it Michael Heseltine and John Major?

[Tory Loyalist]

Praise where praise is due. This is about the first and ONLY time Cameron has said anything worthwhile about the kind of issue that really concerns most Conservative voters (other than EPP and he reneged on that).

He must be getting worried.

Expect to see Labour back off on Council tax increases to cut the ground from underneath him, but that in itself will be very good news.

[Esbonio]

Yes Tory Loyalist "He must be getting worried."

[FJMS]

Yes David it was. But the point about CT is that it's a fairly fair tax provided it's kept at a sensible level (like it was in '97) and only raised by inflation or thereabouts. Labour has abused it and raised it by ridiculous levels.

You can't blame John Major for Labour profligacy.

[Michael McGowan]

That's true. Well done, David Cameron, but don't let the public forget that year-on-year inflation plus rises in Council Tax are the biggest monument to the waste and failure of the Blair Years.

[Richard]

What about the working classes? The Tories have always been able to garner around a third of the working class vote and it would be unwise to make them feel isolated. The BNP are waiting in the wings.

[Mark Wadsworth]

FJMS, agreed, nominal Council Tax has doubled since 1997, but then so have all tax receipts, nominal GDP has nearly doubled since 1997 (I can't find the exact figure) and taxes have risen as a % of GDP. Council Therefore council tax as a percent of all tax receipts is about the same.

Other taxes have also increased faster than inflation because GDP grows faster than inflation (hence "real" GDP growth) and taxes as a % of GDP have grown as well.

[Mark Fulford]

Cameron is going to haunt Gordon Brown with that "clunking fist". I wonder if Tony Blair has private regrets for his choice of words, or if it's a quiet triumph.

[Og]

Great title for the article. My impression that Dave has spent the last year being less than serious is confirmed.

If you squint at the picture, from the eyebrows down, you could be forgiven for thinking it a flattering portrait of Ronnie D'Ancona, the uncritical Camerooney at the Speccie. Are they perhaps related?

[johnC]

'It is who my constituents are made up of'

Rather an inelegant phrase and surely inaccurate. I drove through his constituency at the weekend and saw the usual cross-section of the social spectrum. Not much sign of dirty streets though; Burford and Chipping Norton full of Christmas shoppers were particularly charming in the autumnal sunshine.

[Andrew Woodman]

Yes Mark, I was just thinking the same about the clunking fist phrase. It will be interesting to see how often this phrase is used now. Will Blair regret using it or not I wonder!!!

[Tory Loyalist]

Cameron is going to haunt Gordon Brown with that "clunking fist".
_________________________________________________________________

Not half as much as Cameron will be haunted by "Hug a Hoodie" and "Love a Lout".

[Esbonio]

Mark Wadsworth

Whilst the council does appear to have doubled since 1997, nominal GDP has not almost doubled as you suggest. During the period 1997-2005 it only seems to have risen by 51%:

http://eh.net/hmit/ukgdp/ukgdp_answer.phpHence

Hence you appear to be underplaying what in reality has been a grotesque real increase in the council tax.

Of course we can have a debate about alternatives to the council tax; I am not in favour of a wealth tax which is waht I suspect a "location benefit levy" would be. I would rather have a totally transparent local income tax.

[JimJam]

A local sales tax replacing VAT would be the most flexible way to raise money - more deprived areas could lower their rates to enable shopping tourism to boost their economy. It would also competitively drive down taxes as councils go head to head to avoid consumers heading for nearby counties/regions.

Internet sales subject to VAT could be divided equitably between councils.

[Rachel Joyce]

Absolutely agree, JimJam

[Andrew Woodman]

Agree Jimjam. The proposal is impossible until we leave the EU though. Still, I have no problem with that.

[ukfirst]

The next tax on properties will be according to the EU plan and based on a percentage of value.

[Richard Carey]

Expect to see Labour back off on Council tax increases to cut the ground from underneath him, but that in itself will be very good news.

You and I are in complete agreement on this one, TL (don't look so shocked, we are both Conservatives...). It's satisfying in some ways to steer the agenda from opposition, but annoying in terms of losing wedge issues to campaign on!

Not half as much as Cameron will be haunted by "Hug a Hoodie" and "Love a Lout".

Well, it won't help if Conservatives keep parroting Labour spin, to be honest. Quite alongside the fact that those were thoughtful positions on serious issues, but you don't seem to want to acknowledge that. We did get outflanked on the comms on that one, and need to do better on that, but bringing it into debates in such a gleeful manner every time isn't helping.

A local sales tax replacing VAT would be the most flexible way to raise money - more deprived areas could lower their rates to enable shopping tourism to boost their economy.

I'm very attracted by this as a radical policy idea - it was expounded by Direct Democracy in 2005 in their book "An Agenda for a New Model Party" in some detail, and an outline of their ideas can be found here. By the way, I'm interested (AW @19:29) in the specific EU competence that prevents us from doing this - would it be claimed to be a harmful practice in terms of "unfair" tax competition, I wonder?

Great title for the article. My impression that Dave has spent the last year being less than serious is confirmed.

Interesting that I couldn't find the "I'm ready to get serious" quote in context in the body of the text. Did DC actually not say that, or have I missed it? "Og", do you know, or has your impression simply been "confirmed" by the headline spin of a Daily Mail sub-ed?

[Justin Hinchcliffe]

It's astonishing that a Socialist Councillor in Britain's lowest-taxing local authority is complaining about the Council Tax. DB: if Labour-run council spent less on politically-correct projects, the more likely that people would have lower taxes. Ever wondered why you're in opposition?

[matt wright]

Yes why does "Tory Loyalist" keep parroting Labour propaganda?!

Matt

[Ray Gillespie]

According to 'Tory Loyalist' David Cameron "must be getting worried".

How worried must 'Tory Loyalist' be not to have the balls to use his or her own name?

[Mark Wadsworth]

Esbonio, you are right, thanks. That is a cool link once you delete "Hence" from the end of it! So Council Tax has increased faster than other taxes.

But I am not budging on property taxes in general, read anything by Fred Harrison or the relevant chapter of "The Wealth of Nations" or Winston Churchill's or Milton Friedman's musings.

Having local rates of VAT would be administratively a nightmare and, all things being equal, cutting the rate would just mean that landlords can put up rents they charge to retailers (who would prefer to do business in those areas), so who benefits? Not the retailers, not the shoppers but the landowners.

If you want to replace Council Tax with local income tax (also an administrative nightmare!) then vote LibDem!

[David Boothroyd]

Actually Wandsworth is lower on band D council tax. The reason the council tax is low in Westminster has nothing whatsoever to do with the 'efficiency' of the council, because it's actually tremendously inefficient. It's because it gets so much out of central government. They have been nicknamed 'the best New Labour council in London' because they always go for anything central government promotes.

Council tax is a crude tax and not the one Labour would have introduced (either at the time or since). However, it is not present Conservative policy to replace it, and nor does David Cameron here suggest that this stance is going to change. You're really stuck until you come up with something better, aren't you?

[Perdix]

"Tory Loyalist" - Cameron did not renege on the EPP - it has been postponed for practical reasons. I think you are a closet or actual UKipper, determined to make mischief.

[Opinicus]

If you want to replace Council Tax with local income tax (also an administrative nightmare!) then vote LibDem! - Mark Wadsworth

With ID cards, a local income tax is not an admin nightmare but a sharing of information already held within government. Income tax is the most progressive tax, unlike property taxes it is related to current ability to pay and unlike sales tax cannot be avoided by going 10 miles (2 miles in London) to do your shopping. There are no EU barriers to it and for 70% of the adult population it can be collected by PAYE with existing beaurocratic systems. Introducing it allows for a restructuring of income tax and provides an excuse for moving over to a flat tax system.

That the Lib Dems of all people should have got there first is a standing inditement against all those right wing think tanks on which the Conservative Party used to be able to rely.
Of course, having a leader setting his heart against policy initiatives can't have helped any.

[Opinicus]

@Perdix
Can we be quite clear?

Is it leaving the EPP which is postponed or the reneging of his promise to do so?
Or both?

[Opinicus]

bureaucratic

I am dyslexic but I am also thick.

[TomTom]

With ID cards, a local income tax is not an admin nightmare but a sharing of information already held within government. Income tax is the most progressive tax,

Nice, but people like Abramovitch, Berezovsky, Mittal, Ecclestone, Rausing don't pay either and live in splendid houses............that's the attraction for foreigners living here and paying neither property taxes nor income taxes

[Tory Loyalist]

"Tory Loyalist" - Cameron did not renege on the EPP - it has been postponed for practical reasons. I think you are a closet or actual UKipper, determined to make mischief.
________________________________________________________________

You'd better tell that to Malcolm or whoever else it was who called me a Labour troll. I know it upsets the shape-shifters that some Tories with principles have not yet joined UKIP but there you go.

Cameron's promise to leave the EPP within a spified time was a reckless pledge given solely to gain Eurosceptic votes from the likes of Hannam and Helmer.

As widely anticipated, he has reneged upon it. No ifs and buts. Renege is the word.

[John Marsh]

Renege is NOT the word if it has been delayed.

[Esbonio]

Mark Wadsworth/TomTom et al

I believe the tax burden should be kept to a minimum and any (new) property tax would increase that burden.

Property taxes are essentially a wealth tax (however you define wealth). As Tories we should encourage the accumultaion of wealth and not penalise those who save and invest. In addition, since taxes distort the market and should thus be avoided, a property tax would increase market distortion. (Assets should either not be taxed or taxed equally to neutralise any distortion; if we are to tax houses and land based on their value then all things being equal we should do the same to pension funds, employee share options, private holdings of equities and bonds, antiques, precious metals, jewellery, the list is endless.)

Those people who argue that a property tax would free up the property market appear to me to be looking at the problem the wrong way round. Relax planning and tax rules and
property holders will increase supply.

Another problem with wealth/property taxes is that they bear no relationship to ability to pay. TomTom's point about the super-rich living in the UK is a fair one. The UK has long been a tax haven, even in the worst days of the 70s. Failure to tax the apparent income of the rich is no reason to tax the assets of all. The tax authorities should be more robust in their approach. And whilst I am not advocating it, we could always adopt the US approach of taxing worldwide income.

From the libertarian perspective, a property tax would involve even further meddling by the state in our private affairs. I find it amazing Tories would endorse a tax which would give the councils and tax authorities even more scope to interfere in our private lives.

In any even it strikes me as absurd to tax people on the basis of a "valuation". To all intents and purposes (other than taxing us) that valuation would be meaningless. It would be out of date overnight; to be fair there should be frequent revisions of value; you would then have the associated costs.

I would rather pay more under a local income tax than pay more (or perhaps even the same) under a nosey interfering anti market property tax.

[ToMTom]

Actually I favour a very nominal property tax, but Sales Taxes being allocated where raised to encourage Internet-based businesses to set up outside the South-East.

I think the super rich foreigners should pay a Minimum Tax based on lifestyle.........and that there should be a requirement that whomsoever lives in a £70 million mansion pay at least £1 million a year in taxes.

That land-banks held by supermarkets be heavily taxed, and that IHT exempt the average price of a family home plus the IHT exemption, and that CGT cannot be levied simultaneously with IHT as at present.

[Opinicus]

@TomTom
So we abandon the only sensible reform of local govt finance because you're jealous of 5 rich men and determined that they should pay. Any of those 5 probably pay more VAT in a year than you you will pay in total in your life.
Take £2m off them each for a peerage and call it a wealth tax if it makes you happier.
This is a Conservative thread? Even in the days of the New Model Party this seems a bit chippy.

[Esbonio]

Jonathon

I am against the (semi?) socialist relative poverty argument for various reasons but in particular because I reckon the (super) rich would go pretty much unscathed. It has to be noted however that at time when the income of the rich as a multiple of the average has increased geometrically if not exponentially, I cannot endorse a tax system which hits those at the botton and in the middle far harder than those at the top. I have seen at first hand the iniquities of our tax system. Instead of mouthing centre left platitudes the Tories would do well to do some work at the coal face to simplify and make our tax system fairer.

[Justin Hinchcliffe]

Labour's David Boothroyd, a Westminster City councillor, says that the Council Tax is a "crude" form of taxation. Maybe. But why hasn't Labour replaced it? They've been in power for over 9 years - and nothing! The fairest system was the Poll Tax - let's have it back and do a better job in PR terms in selling it!

[TomTom]

@TomTom
So we abandon the only sensible reform of local govt finance because you're jealous of 5 rich men and determined that they should pay. Any of those 5 probably pay more VAT in a year than you you will pay in total in your life.

Jonathan I find you most amusing. You think FOREIGNERS should have superior rights to British Nationals in Great Britain.

I find it strange that the Met pays out more on Anti-Terrorism + Diplomatic Protection than on Burglary and Normal Crime. I feel priorities are skewed against the vast majority of the population by sectional interest groups.

I do not believe News International should pay so little tax; nor do I think Rausings should be funding British political parties but paying NO taxes.

Jonathan you might not realise but by virtue of their not paying Income Tax in the UK they are also not paying VAT. The use of offshore companies to avoid income tax becomes the invoicing centre for VAT liability in the UK and thereby a business expense to be relieved.

I doubt Philip Green pays any personal VAT. Tiny Rowlands used to invoice his grocery bills through a coal company in South Africa.

I am sure Michael McGowan can give you professional advice on how to avoid paying any UK taxes as a non-domiciled alien and yet avail yourself of policing, roads, defence, Parliament etc.

I am determined they should pay - and a significant contribution. This is not Switzerland it is a nation of 61.5 million heading towards 70 million and I am not a Conservative like you Jonathan who thinks the very rich should not contribute because the lower middle class can pay for everything

[esbonio]

My thoughts entirely, TomTom.

[tired and emotional]

If you delay reforms to taxation policy that affect 60-70 million people just so you can try and come up with a way to punish the billionaires then you are cutting your nosse off to spite your face.

Guess what, their advisers are cleverer than HMRC and will find ways to avoid anything you throw at them. Get over it.

[Opinicus]

My thoughts entirely, tired and emotional.