Julian Knight: Pickles says 'nay', but our out-dated council tax badly needs a rejig
Sunday 26 September 2010
So we are free from a council tax revaluation – in England – for the next five years, Communities Secretary Eric Pickles has announced.
The decision is straight out of the same popularist play book as tearing down speed cameras, easing up on health and safety and the "bonfire" of quangos. Instantly, it was spun in the media as a good news story. Snooping council officials won't be able to shunt you into a higher band all because you've added a conservatory or put in an en suite. All good stuff ... but is it?
Of course the Tories will never touch local government finance again – it did for Thatcher remember – and Pickles, a born naysayer if ever there was one, can trot out some evidence for doing nothing. In 2005, Wales had its council tax re-evaluated. As a result, a third of homes were moved to a more expensive band and bills went up. Far fewer homes were downgraded. There was a real sense that the Welsh were unfairly hit, and this came at the height of the splurge in public spending. In other words the council-tax revaluation was seen – with at least part justification – as a means to screw money out of ordinary families in order to pay for bigger government. Never likely to win hearts and minds, that one.
Yet how can it be sensible to have a major tax based on information decades old? Millions of properties across the country have changed fundamentally since 1993. And we're not talking about DIY here. Small properties get knocked into bigger ones all the time and vice versa, annexes and extensions are added and gardens are built on. And the idea that there is an army of intrusive local government officials ready to stomp around people's homes dying to spy on us is frankly risible. For a tax to be fair you need the best data possible and that means revaluation, but with the pre-requisite – unlike the Welsh experience – that it should be revenue-neutral. A government of naysayers is no government at all.
Love your Mamils, Mr Taxman
I know middle age is nearly upon me and I'm not just talking about love handles or greying hair. I've developed my first hobby. I've become a keen cyclist, shunning the gym and hitting the open road. I find myself reading about the Tour de France, staring at bikes online and measuring my heart rate at any given opportunity (currently 58). There's an acronym for what I am: a Mamil – a Middle-Aged Man In Lycra. So what sent me hurtling into the world of the Mamil? Well, it's the Independent's ride-to-work scheme.
I used this to buy a rather lovely Italian road bike (I referred to it as a racer in the bike shop and the look I got from the assistant showed me I was beneath contempt). In short, ride-to-work lets you buy a bike in instalments from your pre-tax salary. It can equate to 50 per cent off a new bike, and has got tens of thousands cycling and revitalised the industry. But some bright spark at the Revenue decided this was all too good and issued a "clarification". Basically, employers are now compelled to ask employees for a one-off payment of up to 25 per cent at the end of one year to finally purchase the bike. At a stroke, ride-to-work becomes largely pointless for basic-rate tax payers. The Revenue won't be saving taxpayers money in this – in fact it will cost them. Fewer bikes will be bought under the scheme, and this will reduce VAT receipts and lose jobs. What's more, cycling reduces the chances of heart attack and stroke, which cost the NHS dear. The Revenue needs to look after us Mamils.
Clamp down on the vultures
Very soon the Office of Fair Trading will release its report into the murky world of debt-management firms which use slick advertising and high- pressure tactics to tempt desperate debtors into signing up to their fee-laden individual voluntary arrangements. Sensing that the OFT will be critical, the industry has already started squawking and citing voluntary codes and what a necessary service they offer. Don't believe a word of it. This industry feeds off misery and needs clamping down on hard. Let's hope the OFT is up to the job.
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