The cost of living crisis. It’s a handy phrase that’s been bandied about for years on end now, but it never seems to actually improve. New Prime Minister Andy Burnham says he’s serious about addressing the spiralling cost of simply existing in modern day Britain, yet so far he’s backed away from one of the clearest examples of runaway household bills that’s unfair, regressive and rarely rooted in reality.
This is exactly what happens with council tax every government. The funding is used as a football kicked between Labour and Tory areas, but there’s no winner, only more and more losers. When the Conservatives hold central government, funding for Labour-voting areas is slashed. Sheffield Council, for example, lost more than £200M of central government funding in five years in the 2010s under the Tories, leading to years of services getting gutted and council bills increasing. I remember, because I lived there and reported on it at Sheffield paper The Star at the time too.
Now Labour is in power, Tory councils see their budgets cut, forcing rises in council tax and likely services to be cut. And the cycle will no doubt repeat again, as it has for years now, as this fiscal-cum-political power struggle between central and local government swings back and forth across the spectrum. At best, it’s political point scoring, looking after your own voters. At worst, it’s a deliberate attempt to run down areas inhabited by your opposition base to make their lives worse so you might change allegiance.
The system doesn’t work, and years of this kind of back and forth have also led to completely unfair differences in bills depending where you live – a real postcode lottery.
Analysis by Fairer Share shows a standard Band D property in Makerfield faces a council tax bill of £2,152 this year.
This is more than twice the charge for residents in a Band D property in Westminster, who it says pay just £1,048. Households living in £280,000 homes in Makerfield, the new PM’s seat, pay more Council Tax than owners of £10million mansions in Westminster, the seat of power Mr Burnham says he wants to pivot away from with his ‘No 10 in the North’ project. The effective property tax rate on the Makerfield home is around 0.75%, compared with just 0.02% for the Westminster mansion.
For us, a family of three with a four-bed semi in Leeds, Council Tax now makes up our single largest bill after the mortgage. When we moved in six years ago, our Band D bill was ‘just’ £180. Six years later, it’s £229. Those 5.99% annual increases quickly add up, and despite what’s happened to our energy market, it’s outpaced gas and electricity price rises. When we moved in, our gas and leccy was a mere £100 (can you imagine), but today after many ups and downs, it sits at £175. And with energy, you can quite rightly cut your bill by being more careful with usage, reducing unneccesary waste, switching to energy efficient bulbs and appliances and being thrifty.
No matter what you do, your council tax bill will keep flying up and up. With council tax already at £229, I dread to think what it’s going to cost in another five years. Ten years. Retirement. Will most of our state pension – if we get one – be spaffed on the council tax bill?
Council tax has had its day. It’s regressive, routinely fails to reflect the reality of a local area’s financial needs or demands and is liable to political table tennis. But these are real people’s lives, not numbers to be pushed around to score political points – and if Messrs Burnham and Healey want to attack the cost of living crisis, they need to start with this most unbalanced and unfair of living costs.
