London homeowners should stand up to Burnham’s property tax grab plans
Andy Burnham has previously a ‘proportional property tax’ which would mean Londoner’s taxes going to pay for leisure centres in the North, says Charles Amos
When it comes to the question of Britain’s most hated tax, council tax is only beaten by inheritance tax. Yet for Andy Burnham its reform and increase of the upper rates represents an ideal revenue raiser because it achieves the goal of fairness while remaining efficient. Moreover, Burnham can point to the arbitrariness of council tax bands being based on 1991 valuations. While council tax as it is today should be condemned, Burnham’s possible plan to increase it, via a proportional property tax, on London and the south east must be opposed because it is unjust to make the rich pay even more tax than they already do.
In Britain today property taxes make up 3.7 per cent of GDP already making us the country that taxes it most. While this probably isn’t enough for Burnham who wants property, and land in particular, to be taxed more. Both Burnham and Jonathan Brash MP object to the unfair distribution of the council tax burden too. Disparities such as ratepayers in Wandsworth paying just £1,028 on properties of £632,501 compared to Wirral’s ratepayers forking out of £2,501 on properties of £217,500 are said to constitute a “regressive wealth tax” by Brash. Campaigners The Fairer Share have argued for a proportionate property tax of 0.48 per cent which, according them, will save 77 per cent of households an average £556, while still financing councils to the same extent.
Pay for what you use
How will this great saving for most people be achieved without a revenue reduction? By whacking up council tax on homes in London and the south east. In Wandsworth council tax would increase from £1,028 to £3,036, in Lambeth from £2,047 to £2,582, in Windsor and Maidenhead from £1,953 to £2,640. Why is this proposed tax increase on London and the south east seen to be fair? According to Fairer Share it is because it stops people in cheaper houses and poor areas paying disproportionately more in council tax relative to their house’s value; e.g., in Hartlepool people pay one per cent of the value of their houses in council tax each year compared to just 0.2 per cent per year in Westminster. This inequality is irrelevant. People should broadly pay for what they use and that means Northerners paying more and Londoners less.
As it is wrong for you to steal from your neighbour unless you’re in severe need, analogously, Northerners should not pickpocket Londoners. Today Northerners and the rest of the county collectively plunder London and the south east to the tune of £59.40bn, despite the fact they could meet all their severe needs by themselves. This means, unlike everyone else in the country, the average Londoner pays in a net sum of £4,900 and those in the south east £1,700. And it is no surprise when the economic inactivity rate in the North is 15 per cent higher than for London and a whopping 29 per cent higher than in south east.
A proportionate property tax would add £2.5bn of costs to London council tax payers. If the people of Makerfield, or anywhere else, want a leisure centre, pruned public gardens and better social care, they should pay for it themselves, not make Londoners foot the bill
By Fair Share’s own admission, a proportionate property tax would add £2.5bn of costs to London council tax payers. If the people of Makerfield, or anywhere else, want a leisure centre, pruned public gardens and better social care, they should pay for it themselves, not make Londoners foot the bill. Make no mistake, Burnham’s potential proportionate property tax would mean receipts from your London council tax going to finance his Makerfield constituency. A reformed council tax must not become another stick with which to beat hard working Londoners.
The Labour Party, of course, will argue that redistribution is necessary because wealth is a morally arbitrary accident of birth, familial upbringing or rising house prices. This is wrong. People are entitled to the things they created and acquired through voluntary exchange. Certainly, the mere fact a person has bought a home in what turns out to be a wealthy area is no excuse to either force them out via council tax or expropriate them by taxing the proceeds of a sale.
Bound by Labour’s manifesto commitment to not raise income tax, national insurance or VAT, Burnham will no doubt scramble to tax property. He must not be allowed to get away with targeting Londoners by rejigging the 1991 settlement towards greater redistribution. Londoners have been ripped off enough and it is time they said to Burnham and the rest of the country: ‘No more, fund your own ruddy leisure centre!’
Charles Amos works in the logistics industry and writes The Musing Individualist Substack