IPPR Proposes Major Council Tax Overhaul Ahead of Budget

The Institute for Public Policy Research (IPPR) has recommended a significant increase in council tax for higher property bands in the United Kingdom. In a report released ahead of the Labour Party’s Autumn Budget, the think tank suggests a 100% increase in council tax for properties in the most expensive band, band H. Additionally, homes in bands F and G should see a 50% rise in their tax rates.

According to the IPPR’s analysis, this proposed overhaul could generate nearly £4 billion in revenue. Of that amount, approximately £1 billion could be utilized to lower tax bills for the 80% of households residing in the cheaper bands A to D, with an average reduction of £45 per household.

Addressing Inequality in the Tax System

Aditi Sriram, an economist at IPPR and the lead author of the report, criticized the current council tax system as “unfair, inefficient, and long past its sell-by date.” Sriram emphasized that the proposed changes would alleviate the financial burden for the majority of households while ensuring that those with greater property wealth contribute a fairer share.

“This reform supports working families, strengthens local services, and lays the foundations for a fairer tax system,” Sriram stated. The IPPR argues that the reform could serve as a vital step toward creating a more balanced approach to property taxation.

Carsten Jung, IPPR’s associate director for economic policy and co-author of the report, echoed these sentiments. He suggested that millions of families, particularly in less affluent areas, would benefit from reduced bills under this new structure. “This is exactly the kind of policy we should expect from a Government relentlessly focused on reducing the cost of living,” Jung remarked.

Government Response and Fiscal Balance

In response to the IPPR’s proposal, a spokesperson for the Treasury stated that Chancellor of the Exchequer has committed to balancing the need for adequate funding for public services with the necessity of fostering growth and investment to improve living standards.

As budget discussions loom, the IPPR’s recommendations may play a crucial role in shaping policies aimed at addressing economic disparities and enhancing local services. The potential impact of these changes on households across the UK will be closely monitored as the government prepares to unveil its financial strategy.