Campaigners and MPs have urged Chancellor Rishi Sunak to scrap council tax and replace it with a more "progressive system" as the country faces the worst cost of living crisis in decades.
Mr Sunak outlined the government's response to the cost of living crisis in Wednesday's (March 23) Spring Statement. The Chancellor announced a number of measures, including a 5p cut to fuel duty, a rise to the threshold for paying National Insurance and VAT relief for people installing energy-saving materials on their home.
The statement was criticised for a lack of scope, while MoneySavingExpert founder Martin Lewis expressed his disappointment at a lack of measures to address rising energy bills. Additionally, the fact that the statement didn't address the looming rises to council taxes across the country was met with frustration.
READ MORE: Money Saving Expert Martin Lewis frustrated with Rishi Sunak announcement
Council tax bills are set to increase across the country next week, adding further strain on already stretched household budgets. Both Liverpool City Council and Wirral Council will raise council tax by the maximum possible amount of 2.99% in April.
However, new research from JL Partners for the Fairer Share campaign group shows voters in the north back reforming council tax by a ratio of 9 to 1 and state that overhauling the current system could save the average household £556 a year. JL Partners polled a "a nationally representative audience of 4,000 adults in Great Britain" and found that every constituency in the country supports a new so-called Property Proportional Tax (PPT).
For example, it states that 57% of voters in the Liverpool Walton constituency would support PPT, compared with 4% who oppose.
Fairer Share says that PPT would be levied on the current value of properties and adds that such a move could lead to bills falling for 77% of the country, with the average household likely to be £556 a year better off. Currently, council tax valuations in England are based on the price the property would have sold for on the open market on 1 April 1991.
The group argues that a Proportional Property Tax introduced at a flat rate of 0.48% on the value of a property would raise a surplus of £5.6billion for HM Treasury and is a way for the government to overhaul what it calls: "a deeply regressive and unfair system." The policy also includes a surcharge for second homeowners and foreign owners of UK property, proceeds of which (£4.5 billion) could be used to lower bills for low and middle-income households up and down the country.
Walton MP Dan Carden is among the politicians calling for council tax reform. He said: “Standing by an outdated and unfair system of property taxation is a betrayal to millions of households across the country. Regressive Council Tax hikes alongside a brutal cost of living crisis mean many across the country, especially the poorest households and people in the North, will suffer and struggle to make ends meet. Not only would replacing Council Tax and Stamp Duty with a more progressive system help struggling families in communities like mine, but it has the support of voters across the country who want to see change.”
