Thursday, July 22, 2004

The Government is drawing up plans for further increases in local taxes across Norwich and Norfolk – either via the introduction of new, higher council tax bands or a supplementary income tax levied by councils.
The plans were outlined in a report commissioned by the Government on the ‘Balance of Funding’ published on 20 July, and further development work will now commence on introducing these new taxes, which would come into effect after the general election.

The review’s report recommends ‘there is a clear case for reviewing council tax bands and the ratios between them at the time of revaluation’; under the proposals being considered, the top band of council tax in Norwich, currently £2,502 could soar to £6,672, with homes across Norwich worth more than £170,000 all seeing substantial rises in council tax. In addition, the report calls for more work on the development of a supplementary income tax -  ‘a supplement to, not a replacement for, council tax’ which could be as a high as 4 per cent on the basic rate of income tax.

Across the country, council tax has soared by an average of 70 per cent since Labour came to power, across all types of home. In Norwich, council tax has risen from £664 to £1,251 on a Band D property. But Labour are now planning for third term tax rises.

Residents whose only crime is to live in areas like Eaton, Bowthorpe, Thorpe Hamlet, Lakenham, the City Centre or the Golden Triangle, where house prices have risen rapidly over the last few years, will be alarmed at the proposals for a new ten band council tax system. Hardworking families and pensioners across Norwich face the prospect of soaring bills from 2007 as a result of revaluation and re-banding, which will be yet another contribution to Labour’s third term tax rises.

As if that is not bad enough, the Government has called for further work on a supplementary income tax that would be levied in addition to, not instead of, the council tax. This supplementary income tax would be a back door way round the Tony Blair’s pledge not to increase income tax at all.

But this assault on the middle classes would pale in comparison with the Liberal Democrats’ proposals for a local income tax, which would mean a return to 1970s-style punitive rates of income tax on hard-working people.

Besides which, £170,000 value is no longer a good indicator of an expensive home.  Perhaps the government should come to Norwich to see the trouble first time buyers have and why that figure does not indicate any threshold of wealth.

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