With Pembrokeshire County Council proposing to increase council tax by either 5 per cent or 12.5 per cent, it is clear that many local authorities are using Westminster's cuts as an opportunity to squeeze households during a time they have felt the pinch enough. Pro-liberty group Forge Wales said if this county council can afford to award its former chief executive with a £280,000 payment on top of their £190,000 a year salary, why is it Pembrokeshire residents may have to foot the bill for their awful spending habits?
"It is apparent council tax also impacts many households"
Introduced in 1991 to replace Thatcher's hated poll tax, council tax is based on valuations that are 25 years out of date. The eight council tax bands determining this regressive tax that funds local services are still based on 1991 property prices. Families residing in properties worth £320,000 and above pay the highest Band H levy. A house in London worth that much in 1991 would now be priced at £1.6 million, that's according to property agent Savills.
"The entire system is based on a postcode lottery"
The entire system is based on a postcode lottery. Band H homes in Westminster pay an average of £1,400 a year. In Weymouth, that bill would come to £4,000 a year.
The Financial Times argued that by reforming these bands, councils, whose budgets are being squeezed by soaring social care costs, would be able to charge properties based on their value in certain parts of the country.
However, business rates were reformed earlier this year. They were based on 1993 property values and many of them were landed with significant bills that they could not afford at a time of uncertainty caused by Brexit and soaring National Living Wage costs.
Towns have been losing shops since the 2008 Recession and business rate rises are only likely to make that worse as time progresses.
It is the same with council tax reform. Many households' budgets are being squeezed and unless the Government formulates a plan that will compensate families losing out as a result of a reform of this annual levy, they should leave it well alone, as they did in 2005.
The political consequences could be devastating. And many local authorities would use it as an opportunity to charge residents even more than they currently do.
"That does not mean council tax reform should be avoided"
That does not mean council tax reform should be avoided altogether. But Pembrokeshire County Council's plans will impact low-income families the most. They have not explained how they will be compensated. It is guaranteed there are areas of spending they can slash to prevent this rise. The problem is with parties' management of local councils, not a lack of money.
This is the wrong time to change council tax bands and Mr. Hammond was sensible to avoid it this time.
