Would a Labour government change the council tax bands? Here's what we know

A new poll shows more than half of Brits would not support changing council tax bands.

Labour Party leader Sir Keir Starmer during LBC's Nick Ferrari at Breakfast show, at Global Studios, London, while on the General Election campaign trail. Picture date: Tuesday June 18, 2024. (Photo by Aaron Chown/PA Images via Getty Images)
Labour Party leader Sir Keir Starmer during an interview and phone-in on LBC Radio. (PA Images)

A new poll has suggested more than half of voters are opposed to revaluing council tax bands ahead of the general election.

According to polling by Lord Ashcroft for the Daily Mail, more than half (52%) of those asked thought a revaluation would be "an excuse to charge more in council tax". Thirty per cent said it would make council tax bands fairer while nearly 1 in 5 didn't know.

The survey comes after Sir Keir Starmer refused to rule out a rise in council tax if Labour takes power on in the 4 July vote. In an interview on Tuesday with LBC Radio, the Labour leader repeatedly deflected questions about whether he would carry out a council tax band revaluation.

He insisted that none of his party's plans involve a hike, against repeated and controversial Conservative claims that Labour will raise taxes.

Labour's approach to council tax has come under increasing scrutiny in recent days - Yahoo News UK examines what they have said about the system.

The Labour leader was pressed by LBC Radio host Nick Ferrari about his party's policy on council tax following an initial question from a caller.

Sid from Caistor, Lincolnshire, asked Starmer if his party would look to change council tax bands or consider changing tax arrangements for private pensions after it ruled out increasing VAT, income tax or national insurance.

Starmer said: “None of our plans require tax rises over and above the ones we have set out."

LONDON, UNITED KINGDOM - JUNE 18, 2024: Leader of the Labour Party Keir Starmer arrives at Global Studios to take part in live phone-in with listeners of LBC's Nick Ferrari radio show ahead of general election in London, United Kingdom on June 18, 2024. (Photo credit should read Wiktor Szymanowicz/Future Publishing via Getty Images)
Labour Party leader Sit Keir Starmer arriving for his interview on LBC Radio. (Getty Images)

When asked by Ferrari if this would include a council tax band revaluation, Starmer said: “What I am not going to do is sit here two-and-a-bit weeks before the election and write the budgets for the next five years.

“What I can say is that none of our plans require a tax rise, and that is for a reason, and the reason is our focus in getting our economy going, on building, on growing, on raising living standards, on creating wealth.”

Labour's stance on council tax bands remains confusing.

Earlier on Tuesday, shadow business secretary Jonathan Reynolds was initially more strident than his party's leader, saying Labour does not plan to redraw council tax bands.

He told ITV’s Good Morning Britain: “No, we have this week said that’s not part of our plans.

"We’ve laid out all of our revenue-raising measures in the manifesto, there are things that would produce an immediate cash injection into public services.”

A close up of a United Kingdom local authorities Council Tax bill with bank notes, Pound coin and bank cards.
Council tax has become a key issue in the general election campaign. (PA)

When it was put to him that shadow chancellor Rachel Reeves and Labour’s shadow treasury chief secretary Darren Jones refused to rule out such a move, Reynolds said: “I’m saying all you need to do to look at where the revenue will come from, Labour’s manifesto, is look in the manifesto. There are specific ways we would raise money that would go into public services.”

When asked again about not ruling out a change to council tax bands, Reynolds said: “We’re not going to write a budget for a few years’ time during a general election campaign, but we’ve been absolutely clear where revenue will come from to pay for public services."

On Monday, shadow paymaster general Jonathan Ashworth told Sky News: "We’re not doing council tax re-banding.”

The Conservatives have said Labour should rule out scrapping referenda on council tax rises.

Under the current rules, parliament can set a limit on council tax increases, which is 4.99% this year.

If a local authority wishes to increase tax above that level, it must hold a referendum first.

The Tories claimed the fact that Labour had not committed in its manifesto to keeping the referendum rules suggested it would “ditch” them in power.

LONDON, UNITED KINGDOM - MAY 22, 2024: Secretary of State for Levelling Up, Housing and Communities, Minister for Intergovernmental Relations Michael Gove leaves 10 Downing Street in London, United Kingdom on May 22, 2024. (Photo credit should read Wiktor Szymanowicz/Future Publishing via Getty Images)
Communities secretary Michael Gove has called on Labour to disclose its tax plans. (Getty Images)

The Conservatives have pledged to keep the rule in place if it remains in government.

Communities secretary Michael Gove said: “We are simply holding Labour to the standard they set for themselves.

“If they can rule out higher taxes in one area, they should be able to rule out letting councils increase taxes on hardworking families.

“If Labour wanted to rule out these taxes on your home, they would.”

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Council tax bands determine how much council tax people pay, but in England and Scotland, it is based on what the value of your property would have been on 1 April 1991.

This has led many, including finance expert Martin Lewis, to call for an overhaul of the system, although critics say this could lead to higher rates for many people.

He posted on X, formerly Twitter, on Monday: "Disappointed it seems both Labour and Conservatives don't have the guts to look at council tax bands.

"In England and Scotland, these are still based on 1991 stop-gap second gear valuations (people with a clipboard driving by) which has left 100,000s homes in wrong bands, people having to try and figure out 1991 house prices to see if theirs is right, and a convoluted process of challenging bands that's stacked against consumers.

"Yes there'd be losers as well as winners but if we're going to stick with this form of local taxation isn't fairness important too?"

In England, properties are put into eight bands from A to H depending on the price they would have sold for in 1991, with band A including properties up to £40,000 and band H referring to homes worth more than £320,000.

The average rate of council tax for a band D property has risen 24.1% since 2019/20 and 53.5% since Labour was last in power in 2009/10.

David Phillips, head of devolved and local government finance at the Institute for Fiscal Studies (IFS), told Yahoo News UK it was "desperately disappointing" that the Conservatives and Labour have promised not to revalue and reform council tax.

"Properties are currently placed into tax bands based on their values in April 1991 – a third of a century ago, in the era of the Soviet Union. We wouldn’t tax people based on the relative pay of their jobs 33 years ago – but that is exactly what we do with their council tax."

He said that in that time property values have changed very differently in different areas of the country.

"That means around half or more of properties are effectively in the wrong band – those in the North and Midlands often in too high a band, and paying too much, while those in London and the Home Counties are often in too low a band and paying too little."

Dr George Dibb, head of economy policy at the Institute For Public Policy Research (IPPR) charity, said: "Council tax is based on 30-year-old property valuations, varies widely around the country and is capped at relatively low property values, meaning that a multi-million-pound property in the south east of England can attract the same tax bill as a normal family home elsewhere.

"There’s a strong case that council tax is already long overdue for reform. We believe a proportional property tax would better and more fairly address wealth inequality, and regional inequality and lead to a stronger economy."