My Lords, there are currently no plans to reform council tax. I suppose I should sit down now. It is a widely understood tax with a high collection rate and contains a range of discounts and exemptions to reflect personal circumstances. Local authorities are also required to run local council tax support schemes to provide reductions to those on low incomes.
I thank my noble friend, but how is it that a £12 million penthouse in Islington pays £1,000 less in council tax than a £1.5 million manor house in Hartlepool? It is eight times the value, yet it pays £1,000 less. This is why council tax is so regressive, and no tough decisions have been taken for 34 years. When people no longer know what a tax is for or how it is fixed, and they see this unfairness, that risks bringing the whole system into disrepute. It is a major political and social risk. Why are we taking it?
My Lords, we all know that there are problems caused by outdated valuations and the regressive nature of council tax. However, a widescale reform of the system would be time-consuming and complex, and we are committed to keeping tax on working people as low as possible. The Government will carefully consider the impact on councils and taxpayers before taking any further decisions on council tax.
If there were to be a revaluation, there would be winners and losers. This is one of those issues where whatever we did would cause further problems in the system. It is a widely understood tax and there are high levels of collection. However, the Government are taking part in the fair funding review—we have issued a consultation on that—to make sure we level up the playing field for local authority funding, so that areas which need the money most get the most money.
My Lords, council tax is a regressive tax and for the past 10 years, Governments have been loading part of the increasing cost of adult social care on to council tax. Poorer households are therefore having to pay more in council tax than they otherwise would. The Government are going to spend the next three years coming up with a plan for adult social care. Is that delay fair on poorer households?
My Lords, we are more than aware of the issues in tackling adult social care funding; however, the best way to resolve them in the long term is make sure that we do the job properly by looking at what is needed. We recognise the important role that councils have in delivering those services. That is why we announced in the provisional settlement a further £200 million for adult and children’s social care, bringing the total additional funding to £3.7 billion.
Absolutely not. The range of legislation we have brought forward has shown just how progressive this Government are being in both fiscal and social policy.
My noble friend, with her long experience in local government, knows well enough that, when there are major reorganisations in local government, you can be absolutely certain they will cost a lot of money, whatever the savings in the long term may be. Can she assure us that in the plans being considered, which are already costing local authorities preparation money to defend themselves or to decide which groups to join, the cost of this will not fall on the council tax payer?
My noble friend makes a very important point about the cost of devolution. We want to see all of England accessing that devolved power, and efficiencies will be generated in the long term. My honourable friend the Minister will be setting out the local government finance settlement later today, and I am sure he will include the details then.
My Lords, when the Minister says there will be winners and losers in any reform of council tax, does she not agree with the way in which the noble Lord, Lord Rooker, put it: that the winners are those who, at the moment, are living in high-value properties and the losers are those who live in low-value properties?
My Lords, the party opposite had 14 years to sort this out and did nothing about it. Council tax levels are decided by each council. We maintain the previous Government’s policy on the referendum levels. We are tackling the fair funding that was started off by the last Government but never finished. That will level the playing field for areas that need more funding support.
My Lords, local authority council tax support schemes are failing to provide adequate protection for many low-income council tax payers, either because of their restrictive nature or because of low take-up. Will the Government therefore consider increasing and ring-fencing the funding for these schemes, and look into introducing an automatic trigger for a council tax support application when a universal credit application is made?