Ex-minister admits tax is unfair
ONE of Tony Blair's closes allies is due to admit that the "unfair" council tax system means that pensioners and the poor are subsidising businesses.This comes as the Evening Star has battled to keep down the level of this year's council tax after a hike of around 18.
ONE of Tony Blair's closes allies is due to admit that the "unfair" council tax system means that pensioners and the poor are subsidising businesses.
This comes as the Evening Star has battled to keep down the level of this year's council tax after a hike of around 18.5 per cent hike last year.
This year Suffolk County Council is planning to increase its share of the council tax by around 3.8 pc.
In a speech to the New Local Government Network conference on the future of council tax tomorrow, former cabinet minister Stephen Byers is due to say that firms do not pay their fair share.
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He will say that business rates were pegged to inflation in 1993, resulting in poorer people paying hundreds of pounds more.
Mr Byers will tell the conference: "The unfair nature of the council tax is becoming increasingly clear. The poorest 10% pay over four times more of their income in council tax than the richest 10%.
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"The burden of council tax on pensioners is nearly twice as great as for the average person. So it is pensioners and those in poverty who are paying the price for the business rate being pegged to inflation.
"The present system of council tax is unsustainable. It needs to be replaced by a new system which protects pensioners and those in greatest need while ensuring that business pays its fair share."
This is a view echoed by Suffolk pensioner Reg Hartles, who is the chairman of Protest Against Council Tax Suffolk (PACTS).
He said: "If businesses have been let of lightly, they should pay. It is ridiculous that business rates are pegged to inflation, while council tax is not.
"Last year it was 18.5 per cent, which was around six times the rate of inflation and it looks like it will be above the rate of inflation again.
"It is a stealth tax and it is a serious erosion of the less well off."
He added he would like council tax replaced: "The cost should be borne throughout the population. Those who can pay should pay more.
"We have to replace this system of paying according to the value of property by spreading it more fairly.
"I would like the government to take it as a central tax - they should be responsible for the distribution of the money."
Figures from the House of Commons library reveal that the proportion of local authority spending in England and Wales paid by business has falled from 30pc to 24pc - because business rates have been pegged to inflation since 1993.
But the burden on domestic council tax payers has increased from 23pc to 29pc.
If the proportion had remained the same as in 1993 the average Band D council tax - now almost £1,100 - would be cut by £234 - more than 20pc.
Mr Byers' comments come amid mounting speculation that the Government is to reform the council tax.
Reports this weekend suggested it could be replaced by a combination of a property levy and income tax, in an attempt to defuse growing public anger about bill increases.
The Government is carrying out a review of local government funding, which is due to report in the summer.
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